City Council Study Session Agenda and Packet 2011 10 11 SP 2012 BUDGET

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: MALCOLM FLEMING, CITY MANAGER DATE: OCTOBER 11, 2011 SUBJECT: DISCUSSION /DIRECTION - 2012 PROPOSED BUDGET ORIGINATING DEPARTMENT: CITY MANAGER'S OFFICE /FINANCE SUMMARY: City Council had its first preview of the proposed 2012 Budget at the October 4, 2011 City Council meeting. A number of comments /suggestions for revisions to the budget were provided at that meeting. Those items have been addressed in the attached Revised 2012 Proposed Budget — Summary by Programs and Funds (Attachment A), Revised Capital Improvements Plan, 2012 -2016 (Attachment B) and a modified PowerPoint presentation (Attachment C). Those changes include the following: 1) The McCaslin /Washington underpass has been moved from 2015 to 2012 and 2013 in the CIP. Design costs of $175,000 were included in 2012 and $1,025,000 in 2013 for construction for a total of $1.2 Million. The funding was charged 50% to Conservation Trust -Land Acquisition Fund, 33% Capital Projects Fund and 17% Water Utility Fund. 2) General Fund transfer to the Capital Projects Fund of $2 Million remains in 2012, but could be delayed until 2013. Staff will discuss implications of both scenarios at the meeting. 3) The South Street Underpass funding was changed slightly to charge $100,000 to Storm Water. 4) Changed the increase in water rates to 6% per year from 2012 through 2016. 5) Changed the increase in wastewater rates to 3% per year from 2012 through 2016. 6) Increased the current year (2011) sales tax projections to 1 % over 2010 (was 0 %). This is supported by current trend analysis and, in effect, increases the amount in 2012, so the 0% increase for 2012 remains. Also increased the 2013 sales tax from 0% to 1% over 2012. 7) Re- labeled "North Plant Tank roof Replacement" to "3MG Tank Rehabilitation and increased the amount from $1,000,000 in 2012 to $185,000 in 2012 and $1,140,000 in 2013. These changes are based on a resubmitted 2011 -2015 request from Public Works. 8) Delay in Shops Project - In 2011 staff initiated work on the City Shops project. During the time initial space needs were being reviewed it was concluded that the sight was impacted by an existing floodplain. Work was commissioned to gain further understanding as to the impact the floodplain may have on possible site plans. During this effort it was found the existing City Shops area had never been platted or obtained a PUD. It was concluded this would be a necessary part of the current City Shops project but was not allotted time in the conceptual schedule. SUBJECT DISCUSSION /DIRECTION - 2012 PROPOSED BUDGET AGENDA ITEM 5) 2