4. Discussion of 2009 Budget
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
www.ci.chanhassen.mn.us
1
MEMORANDUM
TO:
Mayor and City Council
r 'T.
Greg Sticha, Finance Director IJl'
FROM:
DATE:
December 1, 2008
SUBJ:
Budget and Levy Discussion
Staff has now completed all budget presentations for council consideration. Prior
to setting the final levy, the council should review the additional information
provided in response to questions or new information that has been received since
the preliminary levy was set back in September.
Healthcare and Wages: Healthcare costs came in at a 9% increase as opposed to
the anticipated 25% increase which was in the preliminary levy. This will save
the general fund $36,000. Staff has set wage increases at 3.5% as instead of
4.5%, which saves the general fund $17,000.
Fuel Costs: We have also revised the line item for fuel costs due to the reduction
in fuel costs we are seeing, which results in a $45,000 savings. These three
reductions total $98,000.
Elections: In 2006 the city spent $41,000 on the election and we are estimating
the final cost of the 2008 election to be around $48,000.
Utility Costs: The Council requested that the utility budgets of city hall and the
library be reviewed. In 2008, the library budget for utilities was $67,000. In
2007 we spent $72,000 and we are on-track to spend $75,000 in 2008. The
preliminary budget for utilities at the library was $90,000. Based on the
moderation of fuel and gas prices, staff feels comfortable lowering this budget
line item by $10,000 to $80,000.
In 2008, city hall utility costs are budgeted at $54,600. We spent $52,000 in 2007
and are on-track to spend about $56,000 in 2008. Therefore staff feels
comfortable lowering this line item for 2009 to $60,000, down $8,300 from the
original preliminary budget of $68,3[00.
Delaying Projects: Staff was also asked to review programs and projects that
could either be delayed or re-allocated for other higher importance projects and/or
to prepare for the shortfall of building permit and other revenues in 2009.
Chanhassen is a Community for life - Providing for Today and Planning for Tomorrow
Budget Wrap Up
December 1,2008
Page 2
Staff has prepared a spreadsheet with the list of resources available and the needs
for various projects in the city. All of the items listed could be used to either
lower the levy, for our street reconstruction costs in the revolving assessment
fund, for future utility costs on the new public works building, to set up a new
park maintenance reserve fund for maintaining our park and trail systems, or for a
contingency in case of revenue shortfalls in the general fund in 2009.
RECOMMENDA TION
After reviewing all the needs listed, staff recommends the following:
The first recommendation is to use $100,000 of the resources/cuts available to
maintain the levy at $10,074,565. This results in a levy increase of 2.4%, but no
property tax increase for the average home in Chanhassen, and in most cases a
property tax decrease.
The second recommendation is to use the remaining $16,300 from the previously
noted cuts and the following:
. Elimination of the Maple Leaf publication
. Delaying the Citizen Survey
. Delay hiring the police patrol position to 2010
. Remaining portion of previously noted cuts
Total
$10,000
$16,000
$20,000
$16,300
$62,300
This money would be set aside for future increased utility costs associated with
the new public works facility.
The last recommendation is to use the $217,000 for sealcoating in 2009 only as a
contingency in case of revenue shortfalls in the general fund.
Staff looks forward to reviewing the recommendations listed above as well as any
other ideas City Council has for any of the items listed above or on the attached
spreadsheet.
A TT ACHMENTS
1. Wrap up discussion spreadsheet
City of Chanhassen
2009 Wrap Up Discussion
Reduction of
Expenses Needed
Levy
Levy Goals
Reduction to Get to Preliminary Levy
Reduction to get to Zero Increase on Avg Property Tax Bill
$
Resulting Levy
Increase
44,551 $
100,000
Resources/Cuts
Adjust Wages from 4.5% to 3.5%
Healthcare Costs adjusted from 25% increase to 9% increase
Adjust Fuel Costs
Adjust Utility Costs at Library
Adjust Utility Costs at City Hall
$
Amount
$
17,000
36,000
45,000
10,000
8,300
116,300
Resources/Cuts with service reductions
Eliminate Maple Leaf
Conduct Citizen Survey every four years rather than every two
Don't do Sealcoating in 2009
1/4 Patrol position in 2009 Delayed until 2010
Catastrophic Reserve Fund
$
10,000
16,000
217,000
20,000
1,300,000
Needs
Lower Levy
Revolving Assessment Construction Fund
Develop a Park Maintenance Fund for future maintenance and improvements to existing parks
Utility Cost increase for new Public Works Building
Contigency Plan for revenue shortfall in 2009
10,130,014
10,074,565
3.0%
2.4%