Staff recommends that the City Council conduct a public hearing on June 22nd and approve the resolution approving and adopting the Fiscal Year 21 budget.

The attached resolution and exhibit provides for the formal adoption of the Fiscal Year 2021 budget. The proposed budget has been available for review since April 30, 2020. City Council has committed six (6) meetings regarding the proposed budget. Section 2 of these resolutions allows the City Administrator to amend this budget for Debt Service Funds, Federal and State Grants, Special Assessment and donations accepted and approved by the City Council. The City Council authorizes issuing debt and acceptance of grants and donations, other than donations which are handled per administrative order. Approving budget amendments to allow these expenditures is therefore redundant.

The following changes are recommended to the original proposed budget, and are identified in the budget resolution:

At the City Council work session on June 15,2020, City Council directed staff to bring back a budget that included the following changes:

1. Leave most of the Parks, Recreation, Public Lands (PRPL) Department expenses in the General Fund. Council wanted to see $1.0M of eligible PRPL expenses moved from the General Fund to the Park District 1 Fund. This is being accomplished by moving the Parks & Forestry division operation and maintenance costs into Park District 1.
2. Reduce Police, Fire, and PRPL budgets in the General and Public Safety Funds by $750,000
   1. Fire – Reductions in the Fire Department budget include reductions in fuel, deferred station maintenance, overtime, and apparatus maintenance. ($258,000)
   2. Police – Reductions in the Police Department budget are recommended through reduction in fuel and vacancy savings by holding open 4 vacant positions. ($269,632)
   3. Parks – The Parks department accomplished this through a combination of cuts in expenditures and proposed increases in revenue. The reductions consist of vacancy savings, removal of the Buckthorn Invasive Species program, cemetery software purchase, senior center fitness equipment purchase, website update, and the elimination of the forestry contract services. Rate increases are proposed for all pool admissions and passes, park shelter and building rentals, and park use permits. A proposed fee schedule is attached for reference.
3. Remove the Public Information Officer & Lean Six Sigma expenses from the proposed budget.
4. Remove the Asset Management position from the Proposed budget

Other Recommended Changes
At the City Council work session on June 1^st, 2020, the staff presented the following budget changes to the proposed budget:

1. Reduction in estimated FY21 fuel expenses
2. Reduction to the Airport Fund capital budget, as a project was entered twice.
3. Reduction in anticipated Liability insurance premiums, as actual premiums are known
4. Increase in Fleet Services Budget for fleet management software. This project was budgeted based upon an estimated amount, but the RFP has now been completed and actual costs are known. A contract award will come to council in the future, pending budgetary approval.

The original proposed budget was $319,384,083 for FY21. With all of the changes above, the total FY21 budget is reduced to $316,496,155.

Original Proposed FY21 Budget	319,384,083
Removal of duplicate Airport Project	-300,000
Reduction in Liability Insurance	-300,000
Additional Fleet Services Expense	115,000
Reduction in Fuel Expense	-102,000
Police Department Reduction	-269,632
Fire Department Reduction	-258,000
Parks Department Reduction	-166,000
Removal of PRPL Asset Mgmt Position	-75,029
Removal of Public Information Officer and Lean Six Program	-902,000
Reduction in General Fund Transfer to Public Safety Fund	-630,267
Net Change in FY21 Proposed Budget	-2,813,928
Total FY21 Proposed Budget	316,496,155

The City Council must hold a public hearing on June 22nd and then may:

• Approve the resolution, or;
• Disapprove the resolution, or;
• Delay adoption of the resolution

Delaying approval of the resolutions beyond July 1, 2020, may cause City departments to delay capital projects and purchasing some operating supplies or services.  Not approving the resolutions may violate State law, which requires cities to adopt their budgets and to set tax levies no later than 30 days after receiving the Dept. of Revenue Certified Taxable Value Statement (approximately August 1).

The resolution sets the spending limits for each City Fund.  Amendments during the year are accomplished in exactly the same manner as the original adoption, with the few exceptions noted in the resolutions.  The total budget for FY 2021 is $316,570,155.  The summary of the FY21 budget attachment (Exhibit A) is as follows:

General and Public Safety Funds  $  89,610,389
Special Revenue Funds                     62,999,171
Debt Service Funds                             4,758,842
Capital Project Funds                          5,990,363
Enterprise Funds                             122,317,676
Internal Service Funds                      30,814,114
Permanent Fund                                         5,600
Total                                              $ 316,496,155