09-12-2005 Council Packet - Laserfiche WebLink

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DATE: September 9,200S ITEM NO: ^ REQUEST FOR COUNCIL ACTION Department Approval: Name Ronald J. Moone Title City Administrator Adminintrator Reviewed: Agenda Section: Administrator's Report Item Description: Preliminary 2006 Budgerand Tax Levy Attachments: 1. Tax Levies—^Actual 2005 vs. proposed 2006 2. Tax Capacity, Local Levy, and Tax Capacity Rates 3. Effect of2006 Tax Levy on Property owners 4. Resolution Adopting the preliminary 2005 Tax Levy collectible in 2006 5. Resolution adopting the preliminary 2006 Budget Proposed 2006 Budget The proposed 2006 budget reflects an effort to begin to re-establish sufficient funding levels for both short term and long term capital needs, after recent State Aid cuts and levy limits caused the reduction in the level of capital funding. The key short term needs relate to necessary major maintenance items and improvements to the city facilities, as well as equipment replacement and technology upgrade needs. The major long term capital need is street rehabilitation. The budget reflects a measured funding plan that manages the impact of the tax levy on property owners. Tffiv Tapiigitv Rate and Property Tax Impact on Property Owners Based on the proposed budget and tax levy, and the increase in the City’s tax capacity (tax base), the City’s tax capacity rate will be slightly reduced. Applying the proposed tax levy to the estimated tax capacity results in a tax rate of 16.195% which is a slight reduction from the 2005 level of 16.22 %. Using this tax rate, the City’s share of the property tax bill on a honie valued at S300,000, assuming the home nas increased in value by 8% over the past year, will increase by $38.28, or 7.9%. For a home valued at $800,000, again assuming an 8% value increase, the City’s share of the property tax bill will increase by $127.85, or 9.0 %. Tax Lew The total tax levy required to fund the proposed 2006 budget is $3,801,960. This is an increase of $363,740, or 9.8 % over the 2005 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 required to fund the proposed 2006 General Fund budget is $3,282,710. This is an increase of $277,240, or 9.22 % oyer the 2005 levy amount. In addition, the Infrastructure levy in the PIR Fund (for street rehabilitation) has been increased from $69,950 to $120,000. iBiTh