09-12-2005 Council Packet - Laserfiche WebLink

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.. . •- \ A portion of the tax levy increase is needed to offset the cut in the State-paid Market Value Homestead Credit (MVHC) revenue of $34,710. This revenue is not generally listed as a separate revenue source, because it is part of the tax ievy revenue. The MVHC shows up on individual property tax statements as a reduction in the property tax payable. The property owner does not have to pay this portion of the property tax, because the State pays it instead. However, the State Legislature has decided to cut the amount it pays to local governments related to the MVHC. This effectively reduces the amount of property tax revenue received by the City. The tax levy is proposed to be increased an additionad $34,710 to offset this reduction in revenue. General Fund Budget Expenditures The proposed expenditures in the General Fund are having the greatest impact on the tax levy. The proposed 2006 General Fund expenditures are $5,544,740. This is an increase of $411,790, or 8.02% over the 2005 budget. The main items causing the General Fund expendimre increase include annual compensation adjustments, a substantial increase in the transfer from the General Fund to the Improvement and Equipment Outlay Fund for city facilities repairs and improvements and vehicle and technology replacement funding, election costs, Navarre Fire Station operating costs, and increased fuel costs. ■ Annual pay adjustments. The annual pay adjustments include the economic adjustment to the pay schedules, as well as scheduled pay steps, and a State-mandated increase in the employer’s contribution to the PERA pension —from 5.53% to 6.00% for non-police employees, and from 9.3% to 10.5% for police employees. $125,000 ■ Insurance Contribution increase. The proposed expenditures reflect a $50.00 per month increase in the City’s contribution tovrard employee health insurance and other insurance options. The budget increase is larger than usual because the 2005 budget reflected a contribution of $540.00 per month. Thi.s amount was increased to $565/month, based on a Police Officer contract arbitration award. The proposed increase to $615/mo. for 2006, is a $50/month increase over the 2005 actual amount, but a $70/month increase over the 2005 budget amount. $27,700 • Elections expenditures. Due to 2006 being an election year, elections expenditures are increasing from $250 in 2005 to $17,560 in 2006. $17,310 • Navarre Fire Station operating costs. The budget reflects an increase from $30,000 to $40,000 in operating costs, to reflect the actual necessary expenditure level. $10,000 • Fuel Costs. The budget reflects a $10,000 increase in expenditures for fuel, to reflect the major increase in fuel prices. $10,000 1