To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Ordinance Adopting the 2017 Budget for the Town of Castle Rock, Colorado (Second Reading)
Body
________________________________________________________________________________
Executive Summary
The Ordinance was approved on first reading on September 6, 2016 with a vote of 7 to 0 with no changes.
Town staff provided an overview of the Proposed 2017 Budget to Town Council and the community at the August 16, 2016 Council meeting. Following that meeting, Councilmembers were further briefed on the budget, and some posed additional questions to staff, which were addressed in the agenda memo provided at first reading on September 6, 2016 (Attachment C). During and subsequent to first reading, additional items were discussed, which are addressed within this memo.
Retirement Contribution Update
Council heard at first reading that analysis supports increasing the Town’s retirement contribution from 6% to 7% for all employees. Council asked at that time whether the employee portion of the retirement contribution would also be increased. Staff had inquired with retirement plan provider ICMA-RC and responded with the information available as of first reading, which was that changing the employee contribution was not possible with the Town’s current 401(a) plan, due to IRS regulations.
Following the September 6 Council meeting, staff discussed this further with ICMA-RC, and a course of action emerged whereby the Town can adopt a new 401(a) plan that would establish a new rate for employee contributions. Council could direct staff to increase the required employee contribution through this method if desired.
Benchmarks for employee contributions average 4.2%, compared to the Town’s 4%. Given this nominal difference, staff’s recommendation is to leave the employee contribution at its current level. Staff will report to Council any changes that may drive recommendations for further changes.
Additional information is available in Attachment D.
Impact Fees Update
A recent study of the Town’s impact fees, collected on new construction, identified that the Town should be charging significantly more for the fees in order to maintain current levels of service. Staff discussed the needed increases with the development community and presented Council on September 6 a recommended fee structure that would phase up the fees closer to the cost-justified level over multiple years.
Staff in October will present to Council an ordinance to increase the fees by 9% in 2017 and by 8.5% - exclusive of any needed utility fee increases - in 2018. The impacts of these proposed increases are not reflected within the 2017 Budget, but they are planned to be included in the 2017-2019 Balanced Financial Plan, which will be brought to Council for adoption later this fall.
Conclusion
The Proposed 2017 Budget is being presented tonight on second and final reading. Public input on will be solicited at the meeting.
Attached to this memo are the ordinance to adopt the budget on second reading (Attachment A) and the 2017 Budget Message (Attachment B), which provides an explanation and summary of the proposed budget and major issues.
The complete Proposed 2017 Budget, along with revenue and expenditure details and a four-page Budget in Brief document, is available on the Town’s website at CRgov.com/2017budget.
Proposed Motion
“I move to approve on second reading an ordinance adopting the 2017 Budget for the Town of Castle Rock, Colorado.”
Attachments
Attachment A: Ordinance
Attachment B: 2017 Budget Message
Attachment C: First Reading Agenda Memo
Attachment D: Updated Memo Regarding Town Retirement Contributions