08-11-2009 Council Work Session Packet

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1 , TO: Mayor White and Council Members FROM: Ron Olson, Finance Director DATE: August 1l, 2009 SUBJECT: 2010 Budget • The proposed 2010 budget reflects an effort to address current operating needs during a period of decreasing revenues and limited taxing ability. Tax Lew The total tax levy required to fund the proposed 2010 budget is $4,663,600. This is an increase of $98,913, or 2.17% over the 2009 levy. The breakout of the use of tax levy revenues by fund is shown on the attached chart titled Tax Levies. The General Fund expenditures have the greatest impact on the proposed tax levy. The tax levy to fund the proposed 2010 General Fund budget is$3,87,430; it is an increase of$30,000, or .78% over the 2009 levy amount. This is the maximum levy allowed under the term limits imposed by the 2008 legislature. Tax Capacitv Rate and Impact of the Tax Levy on Properh� Owners The County has provided an estimate of the City's tax capacity, based on the annual property revaluation conducted by the County Assessor. It is estimated that the City's tax capacity(or tax base) has decreased by appro�:imately .50%. Applying the proposed tax levy to the estimated tax capacity results in a tax rate of 13.536%;this is an increase from the 20091evel of 13.183%. Using this tax rate, the City's share of the property tax bill on a home valued at$500,000 will increase by 17.65, or 2.7%. For a home valued at $1,000,000, the City's share of the property tax bill will increase by $39.71, or 2.7%. General Fund Budget General Fund Expenditures The proposed 2010 General Fund expenditures are $6,6217,841. This is an increase of$53,991, or .88% over the 2009 budget. The major factor to the General Fund budget increase is w�ages and benefits. For 2010 the budget currently includes a 1%wage increase and a $50 per month increase in the City's insurance contribution.