ITEM 1 Budget meeting #60
OtCITY OF
se a
MINNESOTA
TO: Mayor and City Council
FROM: Adam Flaherty, City Administrator & Finance Director
DATE: August 26, 2019
SUBJECT: Budget Meeting 46
On Monday, Council and staff will resume the review of the draft 2020 General Fund budget. I have
developed an outline of discussion topics below.
Confirm Assumptions
The draft budget document assumes a 2.75% cost of living adjustment to the City's pay plan for
2020. This assumption was reviewed at previous budget meetings and the Council concurred on
May 281h to include this assumption for the budget review process.
The three regional indices from the Bureau of Labor Statistics have all issued new reports since our
first budget meeting. The consumer price indices are mostly unchanged, with the Minneapolis -St.
Paul -Bloomington regional index showing a 2.20% increase from one year ago. The employment
cost index for the Minneapolis -St. Paul regional area show an increase of 2.80% from one year ago.
Based on this information, staff would recommend the Council continue with the assumption of a
2.75% cost of living adjustment.
Budget Review
Council and staff will be reviewing General Fund department budgets as outlined in the attached
review schedule.
Fund Summary
The preliminary budget is being presented as a balanced budget, with both revenues and
expenditures totaling $6,302,944, which is an 8.44% increase from the prior year.
Property Tax Levy
Attached with the packet for this meeting, is an updated summary. Staff will review and explain any
changes that have occurred since the last budget meeting.
City of Otsego 113400 90t1' Street NE, Otsego, MN 55330 1 Tel. (763) 441-4414 Fax (763) 441-9163
Next Steps
There is one additional budget review meeting scheduled for September 9th. Staff is seeking
direction from the City Council on whether this meeting is necessary.
The Council will need to adopt the preliminary property tax levy, which is the maximum amount
the City can levy for taxes payable 2020. This action will take place at a regular Council meeting,
either on the 91h or the 23`d of September.
It should be noted that the preliminary property tax levy is the amount used for truth -in -taxation
notices that are sent to the taxpayers by Wright County.
The final budget and property tax levy will not be adopted by the City Council until December.
Changes to the budget can still be made between now and then, but increases to expenditures
become difficult because the primary revenue source to pay for those increases is property taxes.
The property tax levy can be decreased between now and then, but the levy cannot be increased.
Staff is seeking direction from the City Council on how they would like to proceed.
Materials Attached for Discussion
1) Department Expenditure Review Schedule
2) Property Tax Levy Summary
City of Otsego 113400 90" Street NE, Otsego, Iv1N 55330 1 Tel. (763) 441-4414 Fax (763) 441-9163