Workshop Item: - Joe Huss, Finance Director
Title
2020 BUDGET UPDATE - INITIAL FINANCE REVIEW
Background
At the July 13 workshop, staff will present for Council review and discussion an overview of the 2020 General Fund Budget that incorporates initial departmental requests. Although the 2020 Proposed Budget has received only a cursory, high level review from the Finance Department and the City Manager, Department heads have been extremely diligent in preparing a budget that reflects the cost containment efforts put in place in April 2020. Along with those containment efforts was direction from the City Manager to thoroughly review all needs and develop a budget that addresses basic service needs to achieve the priorities of the city’s 2020-2022 Strategic Plan. Department Heads responded and presented the City Manager with initial budget requests that are, in total, just 1% above the 2020 Adopted Budget appropriations. This is commendable, considering that salaries and benefits (over 72% of the General Fund Budget) are projected to increase 3% in 2021 per approved labor contracts. Initial budget requests are below the 2020 Adopted Budget in all Categories except salaries and benefits, as shown here:
|
2020 Adopted |
|
2021 Request |
|
|
$ 24,616,745 |
|
$ 25,342,496 |
2.9% |
|
2,181,130 |
|
2,093,900 |
-4.0% |
|
6,718,375 |
|
6,462,260 |
-3.8% |
|
1,199,130 |
|
1,162,430 |
-3.1% |
|
|
|
- |
|
|
34,715,380 |
|
35,061,086 |
1.0% |
It should be noted though, that the above represents more of a crisis or downturn budget and does not include any new staffing for General Fund activities and includes limited program enhancements. As the 2021 budget is refined and the 2021 revenue picture (especially the tax levy) becomes clearer, it is likely that proposed staff additions and program enhancements will be presented to Council as separate decision packages for inclusion in the 2021 Budget.
As discussed in previous Council retreats and workshops, staff is preparing various levy scenarios for Council to consider as part of the development process for the 2021 Budget. Levies for the Council to consider would be:
• A total levy (including not only the General Fund levy, but also levies for debt service, the EDA, and Parks & Trails) such that the estimated overall tax rate is the same as the overall tax rate for all levies in 2020
• A total levy (including not only the General Fund levy, but also levies for debt service, the EDA, and Parks & Trails) that is a zero dollar increase from that levied in 2020
• A levy that allows for an increase on only new construction (no increase for inflation) for 2021
At this point the 2021 Preliminary Budget is under City Manager review. It is expected that the City Manager’s recommended 2021 General Fund Budget will be reviewed with Council at the August 10 Workshop. As part of the review process, staff will be reviewing division level responsibilities and identifying programs and activities that fall within the City’s strategic plan and are relative to the City’s five-year budget model.
Recommendation
Upon review of its current status, staff is seeking Council comment and direction on the 2021 preliminary budget.