08-22-2016 Council Work Session Packet

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MEMORANDUM To: Mayor McMillan and Orono City Council From: Ron Olson, Finance Director Subject: 2017 Budget Date: August 22, 2016 Attachments: A) Revenue Budget B) Expenditure Budget C) Street Funding Memo D) Bonding Information E) General Fund/Tax Levy Stats F) Tax Capacity Rate G) Current Debt Service H) Budget Decisions I) COLA Information J) Golf Course Plan This is the third budget work session for the 2017 budget. By law, the preliminary budget and tax levy must be adopted by September 30th. Based on the Council's input at tonight's work session, the preliminary budget will be updated and presented to the public at the September 12 meeting. The preliminary budget and tax levy will be adopted at the September 26th meeting. Expenditures The draft expenditure budget has been updated from the budget presented in July. The biggest change ($30,000) was to add a 2% COLA to the non-union wages. This was done based on the Council's direction at the July work session. The Public Works budget was increased by $15,000 to reflect the wage and benefits of hiring an experienced Public Works supervisor. The position was started at step 3 and is receiving the family insurance contribution. An additional $10,000 has been added to the transfer to the Improvement and Equipment Outlay Fund that has not been increased since 2008. There are some additional minor changes to other line items like fire services and memberships as final numbers became available. The current budget represents an increase of $279,294 (3.62%) over the 2016 expenditure budget. This increase can be funded while maintaining the tax rate at 17.325% Revenues As discussed in July, revenue line items are projected to be relatively flat for 2017. Of the revenue amounts that are increasing, the largest is an increase of $61,000 for contracted police services. Plan Check fees are being increased by $15,000; with the related Variance and 2017 Budget — Page 1