HomeMy WebLinkAbout4.b. Final budget preparation for 2010AGENDA ITEM: Final budget preparation for 2010
A t
AGENDA NO. 1'v
PREPARED BY: Dwight Johnson, City Administrator
ATTACHMENTS: none
APPROVED BY:
DDJ
RECOMMENDED ACTION: Discuss final budget for 2010
4 ROSEMOUNT
CITY COUNCIL
City Council Work Session October 14, 2009
EXECUTIVE SUMMARY
BACKGROUND
On September 1, 2009 the City Council approved a preliminary budget and tax levy for 2010 that would
lower taxes on the average home by $77. The actual levy proposed for 2010 was 2.3% less or $264,145
under the total levy for 2009. Once the preliminary budget and levy are approved, they may be reduced
further, but cannot be increased except in special situations under Minnesota law. The public hearing and
adoption of the final budget and tax levy are scheduled for the December 1, 2009 council meeting. At the
last workshop meeting on the budget, council members agreed upon the proposed levy, but indicated
possible interest in reviewing it further before the final adoption in December.
UPDATES
One of the items in the proposed budget was a personnel contingency amount since no contracts with our
bargaining units have been settled and the status of our health insurance quote for 2010 was not known.
Our health insurance carrier, Blue Cross /Blue Shield, has now quoted a 0% increase for 2010. Therefore,
we now recommend that the personnel contingency line be reduced by $44,000. There are still no
settlements with any of our four bargaining units.
We have also reviewed our revenue estimates again and propose to reduce our projected income from
investments from $170,000 to $150,000, a reduction of $20,000. This is based on Finance Director Jeff
May's ongoing review which indicates that investment rates are somewhat lower than he projected earlier
this year and seem likely to remain low throughout 2010.
Finally, new figures have been received from Dakota County regarding the valuation of property within
our Tax Increment Districts. The value affects the overall tax base of the City, and therefore also affects
our tax rate and the impact on the average home. These new figures were favorable for taxpayers and will
result in an additional decrease in the taxes on the average home.
The net result of these three items, if approved by the Council, would be to further reduce the City's levy
by $24,000 and reduce the overall annual City tax on the average home by an additional $3. This means
that overall the City tax on the average home would therefore be reduced by a total of $80 rather than the
$77 estimated on September 1
Some council members also expressed interest in what other metro cities are doing with their budgets. A
recent Star Tribune article forwarded to the Council indicated that Rosemount is one of only seven cities
in the metro area to actually reduce its proposed levy for next year by any amount.
OTHER OPTIONS
The budget memo for the August 12 workshop session outlined several other options for reducing the
levy further: (1) transfer all remaining SKB funds from the capital budgets to reduce the operating levy;
(2) eliminate budget line item for new trails and sidewalks; (3) reduce the personnel contingency
(recommended above) and (4) reduce the levy for equipment replacement. These options were also
discussed in some detail on August 12 and staff still finds that options 1, 2 and 4 should not be
implemented because they may help cause tax increases in future years.
SUMMARY AND CONCLUSION
With the changes and new information noted above, the recommended revised budget would now reduce
the overall tax levy by $288,145 or 2.52 percent. This would mean that the reduction of the taxes on the
average home would now be reduced by $80 instead of the $77 noted upon adoption of the preliminary
levy on September 1st
The Council should determine if further discussion and consideration of these or other options is desired
before final preparation of the 2010 budget takes place.
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