City Council Agenda and Packet 2020 09 29 SP

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SUBJECT: PROPOSED 2021-2022 OPERATING & CAPITAL BUDGETS DATE: SEPTEMBER 29, 2020 PAGE 2 OF 4 5) Staff received a question about how much it would cost to add an additional percent to the merit increases for employees provided in 2021 and 2022. To raise the average merit to 2% rather than the current proposed 1 % would cost approximately an additional $185,000 in 2021 and an additional $190,000 in 2022. Staff does intend to have discussions with City Council in mid-2021 regarding future market adjustments and other possible employee compensation/ staffing levels as the revenue assumptions become clearer. 6) As stated in the previous council communication for the September 22 meeting, staff attempted to include most requests within the CIP based on discussion at the July budget retreat (as time allows, per the solar and fleet discussion above). However, in 2022, the CIP is projected to have less than $1 million in fund balance, which is the typical minimum threshold/marker for that fund, although no minimum fund balance is required. Staff can provide some real time analysis at the September 29 Special Meeting to reflect possible budget impacts with additions and/or deletions to the CIP Fund. 7) Staff has learned that the projected funds for the Boulder County Sustainability Matching Grant will be reduced by $5,000. The grant has been used to fund the City's Sustainability Specialist position, which has increased to 29 hours per week since the beginning of 2020. Staff proposes reducing the projected revenue by $5,000 to account for the reduction in Boulder County funds. 8) An updated draft purchase agreement with terms and conditions for Renewable Energy Credits (RECs) from Xcel has been provided. Minor changes have been made to the version that was included in the September 22 Council packet. 9) For Diversity, Equity and Inclusion efforts staff has included $20,000 in the 2021 budget, however there may be additional need in the future to augment funding or staffing based on further direction/City Council initiatives. 10) There are no specific dollars in the current budget for defined recovery efforts. This could entail additional programming and/or grant funding for businesses or additional staff to consider City wide efforts related to internal services and/or infrastructure. SUMMARY: On September 22, 2020, staff presented the City Manager's Recommended 2021-2022 Operating & Capital Budget, 2021-2026 Capital Improvements Plan, and 2021-2026 Long -Term Financial Plan. The City Council set the public hearing on the budget for October 20, 2020. CITY COUNCIL COMMUNICATION