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Q: The full cost of salaries and benefits is budgeted at 100 percent. In the past we have budgeted less than 100 percent based on our actual experience each year with unfilled vacancies and so forth. What has been our experience lately comparing budgeted to actual for these costs? If we budgeted these costs at 97 percent, how many additional dollars would be available for other areas of the budget?
A: Fully funding salary and benefit costs will assist the city in maintaining a fund balance of 30 percent of revenues each year for the city’s Aaa bond rating. Funds in excess of the 30 percent fund balance target are then available to be spent on one-time capital projects, reducing the amount of debt used to fund projects.
Staff generally anticipates 2 percent salary savings each year. Each 1 percent of vacancies budgeted in the General Fund equates to approximately $1.3 million.