10 - PROPOSED 2016-17 BUDGET - Laserfiche WebLink

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Item No. 10 memorandum TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: PROPOSED 2016 -17 BUDGET DATE: September 7, 2016 BACKGROUND: Since I provided you a proposed draft budget in July, we have had very few changes. With up -to -date appraised values from the LOAD, we did increase funding for tennis court repair and bridge replacement on Lake Crook Road, and, I am suggesting $8,000 for the Northeast Texas Trail program. STATUS OF ISSUE: We conducted the one required budget hearing on September 6. Any amendments to the proposed budget will be addressed by a separate public hearing on September 19, the same day we approve a final budget. Therefore, the council needs to provide any final direction on September 12. Ms. Lancaster has indicated she has an item she wants to address on the 12th, and of course we will also discuss a requested cost of living increase for retirees. To reiterate some of what we talked about on the 6th, TMRS was asked to provide the impact of providing a COLA increase to current retirees. To provide an annuity increase equal to 70% of the inflationary change since the last update and to continue to do that automatically on an annual basis would increase the city's contribution rate by $1,330,807 per year. To provide a one -time raise for retirees at 70% would increase our annual costs by $293,815. If that inflationary percentage were reduced to 50 %, costs would be $212,336. The lowest inflationary percentage allowed by TMRS is 30 %, and that would cost us $146,907 each year (coincidentally equal to one cent on the tax rate). Every retiree's monthly check would be impacted differently depending on age, sex, retirement option, and date of retirement; many would see not receive this one -time raise. BUDGET: The current proposed budget is balanced, so increases in costs would require shifting from other locations. The budget covers all planned operating expenses and revenues for the October 1, 2016 to September 30, 2017 fiscal year, including debt service interest and principle. RECOMMENDATION: Provide direction to the staff for a final budget.