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The revenue sources identified above represent 90% of the General Fund Revenue budget. The <br />remaining revenue sources will likely be flat and are unlikely to significantly impact the overall <br />revenue budget. <br />Expenditures: <br />1. 2017 was the start of a 3 year labor contract with the Patrol and Sergeant Unions. <br />Wages represent a significant portion of the Police budget. The wage increase will <br />be 2.5%. Which is approximately $60,000. <br />2. Two new employee unions will make it difficult to project wages at this point. <br />Contract negotiations will play an important role in the 2018 General Fund <br />budget. If there was a 2.5% increase, the cost is estimated to be around $40,000. <br />3. Workers Compensation insurance is estimated to be increasing between 3-6%. <br />Our experience modification factor is projected (subject to change) to go down <br />from 1.0 to 0.93. <br />4. 2018 will be an election year. The expenditures in 2016 totaled $18,725. With <br />Absentee Voting rising in popularity, Council might want to consider keeping this <br />at the same level. <br />The Expenditure changed listed above are the increases that are known at this time. As the <br />budget process progresses, additional increases or decreases may be identified. <br />Issues for discussion: <br />Tax Levy <br />Staff is requesting guidance on the amount that the Council is comfortable with for a tax levy. <br />The 2017 budget the council did include an additional levy increase of $253,000 specifically for <br />road funding. Council has indicated they would be comfortable with a $500,000 levy for 2018 <br />and $750,000 for 2019 for roads. A fully funded road program would be $1,050,000. <br />Wages <br />As already mentioned there are two new unions and contract negotiations are just beginning or <br />have yet to begin. The draft budget will include an amount in the contingency line item to cover <br />estimated costs associated with a new labor agreements. The council will need to make a <br />decision on step increases and cost of living increases for non-union employees. <br />Health Insurance <br />The contribution that the City makes toward health insurance represents a significant General <br />Fund expenditure. In 2017 the contribution is $1,255 per month for families, and $915 per <br />month for individuals and waivers. The LOGIS group completed the RFP process and selected <br />Health Partners as the insurance carrier for 2017 — 2021. In 2018 the cost will go up by 9% to all <br />plans. <br />Attachments <br />Exhibit A. 2017 Year -to -Date Reports (Unadjusted) <br />Exhibit B. 2018 Budget Process <br />