12-06-2010 Council Minutes Truth in Taxation

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IV MINUTES OF THE TRUTH -IN- TAXATION MEETING Monday, December 6, 2010 7:00 o'clock p.m. • Olson stated taxes go up because the city, county, and school district have increased their levies. A number of factors that have affected the general fund expenditures are union contracts, insurance contributions for the employees both for 2010 and 2011, PERA, and increased bond debt service. In addition, the city administrator's salary in 2010 was only budgeted for 75% of the year, which needs to be increased in 2011 by $28,000. The budget also reflects a one percent increase in wages for nonunion employees. Those items resulted in approximately $80,000 in increased expenditures over 2010. Olson reported the City's other general fund revenue sources are decreasing. Police service revenues are budgeted to decrease by $312,940. Olson noted they have made a number of permanent cuts in the police department budget for 2011. MSA funds from the State of Minnesota will be credited to the MSA fund instead of the general fund. The $55,000 will be used to pay interest on the bonds sold for the reconstruction of Old Crystal Bay Road. The amount budgeted for interest has been decreased by $30,000 to reflect the current interest rate environment. These revenue reductions total $397,940, which is a decrease of 6.72 percent from 2009. The proposed 2011 general fund expenditures are $5,815,630. This is a decrease of $142,580 or -2.41 percent from the 2010 budget. When the additions of the golf course expenditures to the general fund are excluded, the 2011 general fund budget is $317,035 less than the comparable 2010 budget. When compared to the 2009 budget year, the general fund budget has decreased by $522,675 (8.97 percent) in two budget years. Currently the City has the following unfilled positions: building inspector, planner, public works maintenance worker, and two police officers. As part of the 2011 budget, four additional positions will be eliminated: two full -time police officers, a part-time office person, and a part-time clerk. The budget includes an increase of $5 in the annual septic program fee and a 3 percent increase in the • recycling charges. With the exception of a small increase in the amount budgeted for building permits, construction- related revenues are budgeted at the same level as in 2010. The total levy for debt service is increasing by $15,780 or 2.05 percent. This is needed to pay the debt service on the City's existing debt. In 2010, the City utilized a special levy in order to increase the debt service levy by an amount greater than the levy limit. In 2011, the City will not take advantage of any special levies. Olson displayed a graph depicting the number of full -time equivalent employees over the last 10 years, which reflects a decrease of 18 percent in personnel. Olson commented in his view that decrease reflects the City's responsiveness to the poor economy. ' The City's 2011 general fund revenues consist of 68 percent in monies received in the form of taxes. The City has cut over half a million dollars in general fund expenditures over the years. Mayor White opened the public hearing at 7:29 p.m. Ronald Esau, 1230 Orono Oaks Drive, commented it would be nice to see the differences between the preliminary budget and the final budget. Esau noted the City's budget is approximately a $6 million expenditure budget. White note it is approximately a $4.7 million budget. Olson stated the general fund budget is approximately $4.7 million. LJ PAGE 2 of 6