12-10-2001 Council Packet - Laserfiche WebLink

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laiMrmBO While the increase in workers ’ compensation and liability insurance costs are not large in relation to the total budget increase, the costs for these insurances have increased significantly. The workers ’ compensation insurance costs have increased due to two large claims in the police department. The liability insurance has increased due to several very expensive land use lawsuits that were defended by the city’s liability insurance carrier (League of Minnesota Cities Insurance Trust) in recent years. Other Eanriei The three main items causing the increase in other expenses are a $5,000 cost to provide high speed internet access througliout the city offices, an increase in the police radio expenditure from $15,000 to $23,000 to reflect the required replacement of the current police radios \\ ith 800 meg.'»hertz radios, and a $4,539 increase in the cih ’s share of the LMCD levy . REVENUK REDUCTIONS The City will experience substantial reductions in three main revenue sources in 2002. These arc state HACA aid, federal COPS grant revenue, and recycling grant revenue. As part of the state tax reform package, HACA aid was eliminated for all cities. For Orono, this results in a $309,630 reduction in HACA aid revenue. Ilie tax reform legislation does allow cities to replace the lost HACA aid with tax levy. This additional levy is included in the city’s levy limit. The proposed 2002 budget docs include a levy increase to replace the lost HACA aid. In the years 1999 and 2000, the city received a total of approximately $200,000 in COPS grants to enable the hiring of additional police officers and the provision of a full-time school liaison officer. The grant funds were to be us^ over a three-year period with the city providing full funding after the three-year grant period. For 2002, the amount of grant funds w ill be reduced from $72,900 to $37,500. This will be the lost year of the availability of the COPS grant funds. Since the time the curbside recycling program was initiated, the city has received an annual grant from the county to offset a portion of the recycling program costs. For the year 2002. the grant amount has been reduced from $14,860 to $6,720, a reduction of $8,140 or 54.8%. A summary’ of all General Fund revenues is attached. TAX LEVY The tax levy required to fund the proposed 2002 budget includes the $309,630 amount to offset the elimination of HACA aid. For comparison purposes, the proposed 2002 ta.x levy e.xcludinu the HACA replacement lev-y is $2,616,705. This is a $173,355 or 7.09% increase over the 2001 levy. The proposed tax levy including the HACA replacement levy is $2,926,335. This is a $482,985 or