Division Managers, Department Directors, and I met with the City Council last night in a 2 � hour special workshop to continue the Council�s discussion about its budget options for 2006. While the Council approved a tentative budget for 2006 at its September 6 meeting, there have been continued discussions since then at Council meetings and in the community about the appropriate size of the budget and the City�s proposed tax levy for 2006.
At last night�s workshop, a majority of the Council expressed support for a compromise 2006 budget with the following elements:
1. It would increase General Fund spending in 2006 by approximately 6.2% over the 2005 budget. The September 6 budget proposed projected a 2006 spending increase of 8.4%.
2. It would reduce proposed 2006 General Fund spending by $200,000 from the September 6 proposed 2006 budget. It�s important to note that, even with this proposed reduction, proposed 2006 spending is projected to increase just over $2,000,000 in 2006 with this budget option.
3. It would reduce the City�s Capital Improvement Plan tax levy from $1,200,000 per year to $1,000,000 per year.
4. It would require the use of $500,000 of the City�s reserve funds to be used for 2006 General Fund one-time purchases, such as new furniture, police department equipment, and other small capital purchases.
5. It would decrease the City�s proposed 2006 Total Tax Levy increase from the September 6 budget projection of 8.6% to 3.7%. By comparison, our Total Tax Levy increase in 2005 was 5.2%.
This budget option has only minor impacts on the City�s proposed 2006 operations and service levels. There would be no loss of employees in this budget option. This budget option also provides sufficient funding for our proposed wage and benefit packages for 2006.
The downside to this budget proposal is that it requires the City to spend some of its reserve funds, which decreases long-term funding for our Capital Improvement Plan. Currently the plan has sufficient funding to the year 2019. If this budget option is adopted by the Council, that will decrease secured funding to the CIP to 2016.
The next step in the budget process is the Truth-In-Taxation public hearing at the December 5 Council meeting. This public hearing gives citizens the opportunity to comment on any aspect of the budget, including the budget option that resulted from last night�s workshop. The Council considers the feasibility and advisability of the public’s input from December 5-13. The Council is scheduled to take final action on the 2006 budget at their December 13 Council meeting.
