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5) Police service contract revenue is being increased by $39,570. The increases for <br />Minnetonka Beach and Spring Park are based on the wage increase for police <br />officers. The Mound increase is based on the CPI -U. <br />The revenues listed above account for the majority of the revenue increases. The overall increase <br />for all General Fund revenues is $416,600. <br />Expenditures: <br />1. The expenditure budget has been prepared with a 2.5% contractual increase for the <br />Local 12 and local 49 employees. The police budget includes 3% for wages. Non- <br />union employees are included with a 3% increase. This number may change based on <br />the police contract currently being negotiated. Total COLA increases add $155,000 <br />to the budget. Scheduled step increases total an additional $40,000. <br />2. The City generally pays 50% of the increase in family insurance premiums — required <br />in the Local 12 and 49 contracts — this year the premium increase is $252/month so <br />the Cities contribution increase is $126/month. This totals an additional $35,000. <br />3. The City's contribution to the Public Employees' Retirement Association (PERA) for <br />police officers is increasing from 16.95% to 17.70%. This adds $18,000 to the police <br />budget. <br />4. 2020 is an election year. The 2020 budget will see an increase in election <br />expenditures of $69,000. Some of this increase is due to the reallocation of wages <br />from Administration to Elections and does not impact the overall budget. There is an <br />additional $31,000 for election judges and $6,900 in other expenses that does increase <br />the overall budget. This is a one year increase and 2021 will see a decrease. <br />5. The City's liability insurance is increase by $40,000 due to increased premiums for <br />police and a poor experience modification factor (1.35) due to recent land use law <br />suits. <br />6. As indicated in the Revenue section, the contracted street maintenance line item is <br />increasing $80,000 in the Public Works Department. This is not an increase in actual <br />spending; it is a reallocation of the fund that is spending the money. By having it <br />funded in the department budget, it presents a more accurate picture of the annual <br />operating costs of the city. <br />7. The 2019 budget included an amount of $100,000 in the Contingency Line Item. <br />This amount was reduced to $30,000. <br />8. The large increase in Professional Services is the result of a change in accounting for <br />IT related expenditures. Starting in 2019, IT expenditures are being paid by the IT <br />2019 Budget — Page 2 <br />