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The draft expenditure budget reflects an increase of $128,714 (1.7%). The expenditure section of the <br />Major Budget Impacts (attachment E) lists expenditure increases and decreases of $5,000 or more. <br />Expenditures changing by $10,000 or more will be discussed in the following paragraphs. <br /> <br />Wages and benefits have the greatest impact on the General Fund budget. 2016 is the final year of the <br />three year labor contracts with both the Sergeants and Patrol Officers. The contracts include a 2.75% <br />increase in wages ($35,000). In addition, required step increases and longevity pay increases ($35,000) <br />results in a total wage increase of $70,000 for our union employees. The contract also includes an <br />increase in insurance contributions for employees with family health coverage equal to 50% of the <br />annual premium increase. For 2016, the premium increase is $180 per month; qualifying employees <br />will receive an additional $90 per month. This is an $11,800 increase in the police budget. <br /> <br />One of the major decision to be made during the budget process will be non-union wage and benefit <br />adjustments. The draft budget has been prepared with the same increase that the union employees are <br />receiving. For wages, this would be an increase of $51,700 with an additional $8,640 increase in <br />insurance contributions. If the Council chooses to provide amounts that are different from the union <br />amounts, the budgeted amounts will be adjusted to reflect that decision. Also included in the draft <br />budget is the 1% lump sum that was approved for 2015. If the council does not extend this payment, <br />the budget would be reduced by $18,800. <br /> <br />Other major expenditure increases include the following. Assessing is being increased by $20,000 to <br />total of $180,000. Part of this increase is related to the increased construction activity and costs <br />associated with new construction. 2016 is an election year which results in a $16,000 increase in the <br />elections budget. An amount of $11,000 has been added to the fire budget. This is an estimate only <br />and final numbers will not be available until later this year. <br /> <br />In the Planning department there are a number of changes. The new Community Development Director <br />was hired at the top of his pay scale. This results in a $20,000 increase of the previous director’s wages <br />and benefits. The Inspection Services line is being increased by $28,000 (38%) to reflect the increased <br />building inspection services being provided by Metro West. This increase is offset by the increasing <br />building permit revenue. A change in staffing at the end of 2014 eliminated a position at the front <br />counter. The 2015 budget still included an amount of $25,000 for the eliminated position. <br /> <br />Special Services include hired police security and pass through engineering and legal costs. These <br />expenditures are variable and include offsetting revenue amounts. Staff is looking at removing these <br />costs and related revenues from the General Fund and into a Special Revenue Fund. Because <br />applicants receive a $500 credit towards their legal and engineering costs staff is working on <br />determining what amount to leave in the General Fund. Any change would not affect the tax levy. <br /> <br />There are a number of expenditure lines that are being decreased in 2016. The change in the City <br />Administrator’s work schedule will result in a reduction of $34,400 in the administration department. <br />In the Public Works Department, the lines for Street Materials and Contracted Street Maintenance are <br />being reduced by a total of $46,725. These items will be budgeted in the Pavement Management Plan <br />and will still require a funding source.