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11. 2024 Preliminary Budget Report Staff Report Date of Meeting: September 19, 2023 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: 2024 Preliminary Budget Discussion Background: Staff presented the preliminary 2024 budget for Council review at their July 5 Work Session. The Capital Investment Committee met twice to review the CIP funds and discuss future projects. Their recommendations have been included in the CIP fund budgets. The General Fund budget was prepared using past revenue and expense practices and a six-month review of 2023 spending as guides for future revenue and expense projections. Staff prepared a 2024 Preliminary Budget presentation outlining the recommendations of the CIP Committee, detailed the 2024 revenues and expenses for each CIP fund, and outlined the assumptions made in assembling the preliminary budget. Also included are the individual CIP Fund documents and a Summary Budget document that shows the complete levy picture and the proposed 2024 tax rate. At the August 2 Work Session, Councilmember Benson asked for a 2024 budget that kept the City’s tax rate similar to the rate established in 2023. Staff accomplished this by reducing the proposed funding for Broadband expansion within the 401 CIP fund. Currently, the proposed 2024 tax rate is 26.449%, which is a reduction of 0.010% from the final 2023 rate. At the September 6 Work Session, the Council approved the replacement of the hockey rink boards, removing that project from the 2024 Park CIP budget. Council also heard from Bob Wilmers, Chairman of the Internet Action Committee, about the proposed reduction in broadband funding. At Council’s direction, the broadband funding has been restored to its original request level of $250,000 in 2024 and 2025. Staff has also made minor adjustments to various line items within the budget to reflect rate increases from contracted services. Discussion: The CIP Fund documents have been adjusted since our last meeting. The 401 Fund reflects the restoration of the broadband funding. The 404 Fund shows the change in project year for the hockey rink board replacement. The 406 and 408 Funds remain unchanged. The 2024 Preliminary Budget, Budget Presentation, and Summary Budget have been updated to reflect the revised 2024 numbers. The 2019 Salary Study document has been included to show how the 2024 wages compare to the study results. The proposed preliminary 2024 levy amount is $3,021,852. This represents a $218,295 increase over 2023 (7.79%). The preliminary levy is the maximum amount the City can certify in December. This amount is being presented to account for unknowns in future staff wages (negotiations with the union are ongoing), to allow for line-item adjustments for unexpected expenses, and to allow for the increase in broadband funding. As these expenses are clarified between now and the December Truth-in-Taxation hearing, they and the final levy amount will be adjusted. Staff has included Resolution 09 19 23 10 certifying the preliminary 2023, payable in 2024 tax levy for review and approval. Recommendation: Approve Resolution 09 19 23 10, certifying the preliminary 2023, payable in 2024 tax levy. Attachments: 2024 Preliminary Budget Presentation Summary Budget Worksheet 401 CIP Fund 404 CIP Fund 406 CIP Fund 408 CIP Fund 2024 Preliminary Budget 2019 Salary Study 2024 Tax Impact Worksheet