12-13-2004 Council Packet - Laserfiche WebLink

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! The 2005 budget is the first opportunity the City has had to address the deferred needs, in order to have a substantial inpact on the level and quality of ser\'ices provided in the areas of Police, Fire, Streets, Stormwa;er Management, Sewer, and W,itcr, as well as substantially strengthening the City ’s ability to usi and manage teclinology to improve productivity and customer service. Tax Capacity Rate Reduction Results in Minimal Property Tax Impact on Property Owners Based on the proposed budget and tax levy, and the substantial increase in the City's tax capacity (tax base), the City ’s share of the property tax bill for Orono property owners will increase by 1.1%, Tlie City's tax capacity has increased by approximately 17.9%. Applying the proposed tax levy to the estimated tax capacity results in a tax rate of 16.22%, which is a substantial reduction from the 2004 level of 17.641 %. Using this tax rate, the City ’s share of the property tax bill on a home valued at $300,000, assuming a 10% value increase, will increase by S6.03, or 1.1%. For a home valued at $800,000, the City ’s share of the property tax bill will increase by $37.86, or 2.5%. Tax Levy The total tax levy required to fund the proposed 2005 budget is $3,461,670. This is an increase of $263,740, or 8.25 % over the 2004 levy. Tlie 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. In addition, the Infrastructure levy in the PIR Fund (for street rehabilitation) has been increased from $35,450 to $69,950. The tax levy required to fund the proposed 2005 General Fund budget is $3,005,470. This is an increase of $354,240. or 13.36% over the 2004 levy amount. Of this amount. $80,000 is not a levy increase, but rather is a shifting of tax levy from the Impro\ emcnt and Equipment Outlay Fund to the General Fund. Excluding the $80,000 of expenditures shifted to the General Fund, the levy increase is $274,240, or 10,3%. General Fund Bu dget Expenditures The proposed expenditures in the General Fund arc having the greatest impact on the tax levy. The proposed 2005 General Fund expenditures are $5,132,950. This is an increase of $431,460, or 9.18% over the 2004 budget. The largest expenditure increase is the transfer of $80,000 of vehicle replacement expenditures from the Improvement and Equipment Outlay Fund to the General Fund. The other main items causing the General Fund expenditure increase include the addition of a police investigator and a narcotics investigator, the addition of a part-time Finance Clerk, annual compensation adjustments, Navarre Fire Station operating costs, and funding for consultant assistance related to the turnback of current Highw ay 12 from the State to the County. Adoption cf Final 2005 Budg et and Fax Levy* It is recommended that the Council adopt the 2005 budget and tax levy at this time. The necessary resolutions are attached for Council adopMcn.