09-11-2023 Council Work Session Packet

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2024 Budget – Page 1 MEMORANDUM To: Mayor Walsh and Orono City Council From: Ron Olson, Finance Director Subject: 2024 Budget Date: August 11, 2023 Attachments: 2024 Budget Work has been progressing on the on the 2024 budget. The draft preliminary General Fund budget was reviewed by the Budget Committee and was presented to the full council on July 7, 2023. Since that time staff has been updating budget amounts as more current costs have become available. Tonight’s information is being presented in advance of the adoption of the preliminary budget and tax levy that will occur on September 25, 2023. By statute, the city must certify the preliminary tax levy to Hennepin County by September 30, 2013. There are a couple of variables that could still impact the budget and the tax base. • Health Insurance – The budget has been created with an assumption that the city contribution for employee health insurance will increase by $100 per month. We will not the actual amount of any rate increase from PEIP until the end of September. We have also request quotes from a number of other vendors and expect to have them any day. • Property Values – The final property values will not be received from the Hennepin County Assessor until December. The tax rate calculations are based on the most recent numbers available and generally do not change significantly in either direction between now and the final. The City of Long Lake has provided the draft budget for the LLFD. This budget forms part of the Orono general fund budget and is funded by the Levy. As currently drafted the Orono portion is $682,638 (Budget at exhibits H and allocations at I). This is a $130,901 (23.7%) increase over the 2023 budget. The majority of the increase comes in the wages and benefits section of the budget. Part of the increase is due to an increase in wages and part for duty Crew pay. Orono’s members of the fire Advisory board have communicated they are in favor of the wage increase. The duty crew program is a new initiative by the department. Long Lake did provide supporting documentation (attached at exhibit F). It is important to note the budget and allocation as proposed do not take into account the reduction of the Navarre service area from LLFD in July of 2024. Both city staffs have agreed the best way to handle that will be to reduce the 3rd and fourth quarter payments to account for the change. The Orono Fire Advisory Board representatives are looking for council feedback on this budget proposal. The final LLFD fire Advisory board meeting prior to the adoption of the preliminary levy and general fund budget is on September 18th.