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picity ofif PRCCM1UN the city y that w?rks for you Memo To: Mayor and Council of New Brighton From: Dean R. Lotter, City Manager Subject: 2013 Budget Date: August 22, 2013 The 2013 Budget has been assembled and in draft form calls for a 2.2% increase in spending and a 1.39% increase in the tax levy. Council has previously stated that their ideal tax levy would be a 0% increase in the tax levy. While this is obtainable, there are some items worth consideration. Those items will be discussed later in this memo. Long-Term Financing for Capital Asset Replacement Typically my budget memo will start with discussion on the operating budget. While most of this memo's focus will be on the operating budget; I thought it appropriate to focus on the success we have had with long-term financing for capital otherwise known as our fleet/non-fleet and pavement management. In the spring of 2012 Council adopted a financing plan for the City's Fleet, Non-Fleet and Pavement Management. This financing plan is a cash plan. Council adopted this plan on May 8, 2012. The plan consists of the following points: 1) Continue annual installments from the general fund operating budgets. 2) Plan on redirecting debt service levy from the Public Safety Center in 2016. 3) Continue contribution of$172,000 from the tax levy. 4) In 2010 $1,100,000 was transferred into the Fleet, Non-Fleet and Pavement Management plan. 5) Council also authorized in 2010 the use of MSA dollars for the Pavement Management Plan. The City now has a long-term plan for financing capital assets. This means that no debt will be issued to finance capital assets. The City will not have to pay interest and issuance costs related to debt used for replacement of capital assets. Part of the financing plan does include continuing to make transfers from the general fund operating budgets. So the H-\Budget and TNT Presentations\Budgel 2013\2013 Budget Draft August 22,2012 doc