12-12-2005 Council Packet - Laserfiche WebLink

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■■■' ®• */ REQUEST FOR COUNCIL ACTION DATE: December 9,2005 ITEM NO: 4 Departmeat Approval: Name RonMoone Title City Administiator Administrator Reviewed:Agenda Section: City Administrator’s Rqwrt Item Description: Budget Adoption Hearing-2006 Budget and 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 Approving the 2006 Tax Levy 5. Resolution Approving the 2006 General Fund Budget 6. Resolution >^roving the 2006 Special Revenue Fund Budgets sed 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 ciqrital need is street rehabilitation. The budget reflects a measured funding plan th^ nuuiages the impact of the tax levy on property owners. Tax Capacity Rate Reduction Results in Minimal Property Tax impact on Property Owners The City's tax capacity (tax base) for 2006 taxes has increased by 16.65% over the tax capacity for 2005 taxes. Applying the proposed tax levy to the higher tax capacity results in a tax rate of 15.272%, which is a substantial reduction from the 2005 tax rate of 16.22 %. Using this tax rate, the City’s share of the property tax bill on a home valued at S300,000, assuming an 8% value increase, will increase by $8.33, or 1.7%. For a home valued at $800,000, again assuming an 8% value increase, the City’s ^bare of the property tax bill will increase by $39.58, or 2.8%. TlwLfiYY The total tax levy required to fund the proposed 2006 budget is $3,801,960. This is an increase of $340,290, or 9.8 % over the 2005 levy. 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 % over the 2005 levy amount. In addition, the Infrastructure levy in the PIR Fund (for street rehabilitation) has been increased frfom $69,950 to $120,000. The City has a number of local roads, not eligible for State funding, that will need major rehabilitation in the coming years. It is important that we increase the funding that is being provided for these types of projects.