7.5. SR 06-09-2003MEMORANDUM
TO:
Mayor and City Council
FROM:
DATE:
Pat Klaers, City Admistra~
June 9, 2003
SUBJECT: 2003-04 Budgets Update
Item ~ 7.5.
Over the last couple of months, the possible budget amendments to address the cuts in state aids
has become more clearly identified. The last two City Council updates on April 21 and May 12
provided some comments on possible additional revenues and some tentative reductions in the
personal services, supplies, other services and charges, and capital ouday expenditures categories.
Now that the State Legislature has made its fmal decision regarding state aid reductions, it is
appropriate to present some more detail on the proposed budget amendments.
Attached for your information is a listing of possible amendments to the adopted 2003 budget. As
previously reported to the City Council, the department heads have done an excellent job in
evaluating their budgets and coming up with some reductions.
The city is scheduled to receive a reduction in its Local Government Aid (LGA) funds in 2003 in the
amount of $644,138. This is the adjustment that needs to be made in the adopted 2003 budget. The
attached list identifies changes in the amount of $447,000. It is anticipated that this list is
conservative and that there will be some additional reductions "sprinkled" throughout the
departments and throughout the expenditure categories. Also, some additional revenues are
anticipated. The amount of reserves that are needed is uncertain at this time. The final amount will
be determined towards the end of the year. Any shortage can be addressed with a transfer in from
the liquor store enterprise fund or by using the general fund reserve.
Overall, the city is in a reasonable position in 2003. There will not be a major impact in city services,
nor will there be a major drain on the city reserves.
2004 Budget Notes...
We have just started work on the 2004 budget. In 2004 the city will also receive $644,138 less in
LGA than what was in the 2003 adopted budget. Of this amount, 60% can be made up i_f the
Council chooses to increase property taxes.
Previous levy limits included some growth factors. This allowed our maximum amount of taxes to
be levied to increase. During these years the city increased tax revenues in the general fund by about
$400,000 per year. Also, as the net tax capacity increased, this additional tax levy did not result in a
substantial change in the city tax rate.
If the city does increase its levy by the 60% of state aid cuts, then we will have about $386,000
available to offset our LGA cuts. This would be similar to the amounts that have been added to the
general fund in previous years when the levy limits included a growth factor. Even with this increase,
the 2004 city budget would start with revenues at a lower level than what was adopted in 2003.
Some of the attached 2003 budget adjustment are "repeatable" in 2004 but some are not as they are
one-time reductions. Also, we know that there will be some additional expenditures for programs in
2004 which are not in the 2003 budget, including such things as: an increase in the payment to the
county for assessing services, a payment to the Boys & Girls Club for renting of the gymnasium, and
the initiation of a complaint tracking software program. Additionally, the city is looking at the
general fund impact for various increases in employee insurance, wages, and pay plan steps. At this
time, it is also unknoxvn whether or not any use of reserves in 2004 will be proposed but this may be
reasonable when all things are considered.
The cuts to the city in state aids are deep but they are better in 2004 than what was originally in the
Governor's proposal. Over two years, the city will lose approximately $1,288,000 but this is much
better than the Governor's proposal of approximately $1.9 million over two years. Additionally, the
availability to make up some of the cuts in 2004 with an increase in property tax will help.
Recommendation
It is recommended that the City Council approve the budget amendments as attached.
S:\COUNCIL\Pat\Budget\060903budgetupdate.doc
2003 BUDGET AMENDMENTS
As Proposed by Department Heads
April, 2003
Department
MAYOR & COUNCIL
CABLE TV
ADMINISTRATION
ELECTIONS
FINANCE
INFORMATION TECHNOLOGY
LEGAL
PLANNING
GOVERNMENT BUILDINGS
CONTINGENCY
POLICE
FIRE
EMERGENCY PREPAREDNESS
BUILDING & ENVIRONMENTAL
STREETS
SNOW REMOVAL
EQUIPMENT SERVICES
ENGINEERING
PARK MAINTENANCE
RECREATION
SR. CITIZEN PROGRAMS
ECONOMIC DEVELOPMENT
ENERGY CITY
TRANSFERS
TOTAL
Personal
Services
35,550
4,050
42,150
100,500
6,000
41,400
8,600
10,000
47,000
Other
Services &
Supplies CharRes
$ 1,100 $ 1,000
2,500
600 3,600
1,500
3,500
6,300
(13,700)
1,550 (850)
8,000 6,700
3,200
21,600 16,200
8,000 7,000
Capital
Outlay
37,400
Expenditure
Reductions Revenue
Total Additions Grand Total
$ 2,100
38,050
4,200
- $
2,100
38,050
4,200
1,500
1,500
7,550
6,300
28,450
7,550
6,300
28,450
138,600
20,700
138,600
20,700
44,600
46,400
15,000
44,600
46,400
15,000
9,000 7,000
4,050 3,000
2,000
4,000
26,000
54,050
2,000
4,000
2,500
5,000
26,000
56,550
2,000
4,000
5,000
$295,250 $53,900 $ 52,950 $ 37,400 $ 439,500 $ 7,500 $ 447,000
Possible Additional Transfers In:
Garbage - $5,000
Liquor - $10,000
6/4/20038:16 AM
April D H Suggestions (2)
NOTES ON 2003 BUDGET AMENDMENTS
·
Police
·
·
·
·
·
·
·
·
Fire
·
PERSONAL SERVICES
Cable Tv
· Not filling the Cable Tv Assistant position
Legal
· Not filling the secretarial support 20 hour per week position that was scheduled for
October 1
Government Buildings
· Not replacing Sue Herrboldt (and hiring a cleaning firm for services at City Hall and
the Library)
Reducing Allan Pudlick to half-time status at the end of April.
Department
Not fill/rig the Secretary/Receptionist position that was scheduled to start October
Keeping one Police Officer position vacant
Officer Besser being gone for 4 months while being called up to active duty
A Secretary position moving to 3/4 time
Savings during an Officer's vacancy while being replaced
A clerical position being vacant for a few months while being replaced
Hiring a cleaning service instead of using city employees
Some reorganization with the Chief's retirement
Reduced part-time inspector hours
Building/Environmental
· Funding most of the Environmental Assistant position with landfall monies based on
the employee working more on waste abatement and landfill activities
Streets
· Fewer part-time employee hours
Park Maintenance
· Fewer part-time summer employee hours
Recreation
· Reduction in part-time hours at softball complex, concession stand, and Lions Park
Center Night Supervisor; no Park Ranger program and warming house attendants
SUPPLIES
Mayor and Council
· Fewer public relation "trinkets" ($600)
· No Council recognition being necessary ($500)
Administration
· Not purchasing digital computer ($600)
Police
· Cutting the Police motorcycle program by 50%
Fire
·
Streets
·
·
·
·
Savings related to not filling authorized additional Firefighter positions
Less crack filler material ($10,000) due to material being available from 02 program
Not purchasing a new paint striper ($5,350)
Not purchasing a new rototiller ($5,350)
Miscellaneous minor reductions ($900)
Snow Removal
· General cuts throughout operating supplies
Park Maintenance
· Reductions in fertilizer ($6,000), landscaping materials ($1,000), athletic field paint
($1,000) and ban field chalk ($1,000)
Recreation
· Miscellaneous reduction in program supplies for such items as water hordes, shirts,
safety camp, and theme days.
OTHER SERVICE AND CHARGES
Mayor and Council
· Fewer funds needed for conferences and schools
Cable Tv
· Conferences ($1,000)
· Promotions ($1,000)
· Publishing ($500)
Administration
· Conferences (no national conference for City Clerk and miscellaneous cuts)
Finance
· No national conference
Legal
· Conferences ($3,000)
· Equipment R/M ($500)
Planning
· Dues ($500)
· Publishing ($500)
· Conferences ($5,300, which includes no national conference for Planning
Commissioners)
Government Buildings
· This category increases for the cleaning contract which slightly offset the personal
services savings
Police
·
This is a net increase due to the cleaning contract. This work was originally proposed
to be a staff (personal services) expenditure. This increase is offset by a reduction in
conferences (approximately $3,900) and a projected reduction in radio maintenance
of $5,250
Fire
·
·
Parks
·
·
Reduction is based on some of the savings for not hiring the full allotment of part-
time Firefighters and the Jackson Avenue station doors being repaired rather than
replaced (saves $4,000). Additionally, there is a minor reduction in training and
conferences expenditures
Building/Zoning
· Conferences-no out-of-state conferences
Streets
· $10,000 reduction in contractual services for overlay and sealcoatmg program
· $2,200 reduction in the telephone line item (no telephone pagers)
· $4,000 reduction in equipment rental (not renting the roller)
Snow Removal
$7,000 reduction in contractual services for snow removal activities
Saving $1,000 by not doing the fish stocking program
Saving $500 by not having a telephone in the warming house (as no warming house
will be used in Lion's Park next winter)
· Saving $5,500 in bathroom rentals (this is somewhat based on a high original
estimate)
Recreation
· Advertising reduction
Senior Citizen
· No national conference
Energy City
· Less conferences/schools and publishing expenditures
CAPITAL OUTLAY
Police
· $37,400 moving this expenditure to equipment reserves
There should be some additional savings which are not listed in Administration for personal services
now that the City Clerk has resigned and we are going through the hiring process. However,
offsetting some of the Police reductions in personal services will be a severance pay expenditure for
the retired Chief of Police.
Some of the proposed changes are "fluid" and some minor changes may need to be made per
department head discretion. For example, if we need to spend a little more money on field chalk or
portable bathrooms, we will incur these expenses if appropriate.
It also should be noted that we may get some additional revenue from the school for the liaison
program as only 6 months of revenue is in the adopted 03 budget. As far as other revenues are
concerned, the growth related revenues are slightly above the 03 budget projection as the building
department is very busy in terms of single-family and townhome construction permits.
S:\COUNCII.\Pat\2003\EXPLANATION OF 2003 BUDGET AMENDMENTS.doc