Budget Special Meeting and Work Session Notes
August 18, 2014
TAX RATE – The mayor went through an extensive exercise that showed when valuations go up, revenues to the Town, go up (DUH! Think we all knew that). His math also was also focused on reducing the tax rate to keep income to the Town the same as last year. CFO Eric Cannon noted that the Town had sold $44 million in bonds since 2012 with NO tax increase to cover the interest, thanks to increasing property values. Voters were told in the last election they could expect up to a 6 cent tax increase if all bonds were sold. City Manager Lea Dun noted that the proposed budget reflects instructions she received from the Council at the Council retreat earlier this year and does NOT include a tax rate INCREASE.
ECONOMIC DEVELOPMENT – The Council had asked for an additional briefing on the economic development fund as there seemed to be some confusion regarding the available funds for tax incentives and how they were being computed. When the Department was set up in 2011, that Council dedicated 2 cents of the tax rate for department expenses, marketing and incentives.
CITY RESERVES – CFO Eric Cannon noted that general fund reserves can only be used for nonrecurring expenses. He noted that most cities have reserves of 10-15% while Addison’s reserves are 34.8%. Council policy is to keep 25% in reserves, given the Town’s “boom/bust” economic cycles.
EMPLOYEE COMPENSATION – Considerable discussion was devoted to employee compensation. Chris DeFrancisco noted that the HR consultant reported it would take $439,000 in additional funds to bring all employees up to competitive market standards. The staff prepared a chart showing the number of people in each department who were being paid below competitive rates. The City Manager also noted that information on employee insurance costs will not be available until November. A reduction in benefits to employees but an increase in cost to the Town was expected. She also noted that the compensation budget figures were based on Council direction and that compensation corrections could be a multi-year effort.
| DEPARTMENT* | NUMBER OF FULLTIME EMPLOYEE |
NUMBER OF SALARIES BELOW MARKET RATES |
| Finance |
7 |
2 |
| Human Resources |
3 |
2 |
| Information Technology |
6 |
3 |
| Police |
89 |
23 |
| Fire |
52 |
11 |
| Parks |
20 |
10 |
| Recreation |
9 |
8 |
| Conference Centre |
7 |
1 |
| Economic Development |
3 |
3 |
| Infrastructure/Development Services |
16 |
11 |
|
212 |
73 |
*Some Departments would not be affected and are not shown
NEXT BUDGET WORK SESSION: 5:30 pm Tuesday, August 24 at Town Hall