09-08-2003 Council Packet - Laserfiche WebLink

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r mm « Levy Limit The legislature placed levy limits on cities for 2004. The levy limit freezes levies at the 2003 level, with the exception that the levy can be increased to recoup 60% of the lost Market Value Credit Aid and Local Government Aid. For Orono, this means that although we lost $63,000 in State Aid, we can only recover 60% of the aid loss through a levy increase. Tax Levy The tax levy required to fund tlie proposed 2004 General Fund budget is $2,596,820. This is an increase of $46,780 or 1.83% over the 2003 General Fund Levy. The total tax levy required to fund the proposed 2004 budget is $3,143,520. This is an increase of $99,530, or 3.27%. The total levy includes a Fire Facilities and Equipment Bonds debt ser\’ice levy of $73,250. This levy will be used to pay the debt service on the bonds used to finance the Navarre Neighborhood Fire Station, and the purchase of fire apparatus and equipment needed for the Navarre Fire Station. The total levy also includes a special levy of $83,000 to fund the repayment of one-year equipment certificates for the purchase of three replacement police squad cars, and a special levy r <'$125,000 to fund icpayment of equipment certificates for the purchase of replacement equipment for the Public Works Department. Tax Capacity Rate, and Impac' of Tax Levy on Propert>* Owners The estimated tax capacity for taxes payable in the year 2004 is $ 18,153,975. This is an increase of $2,568,328, or 16.48% over the 2003 tax capacity. Based on the City ’s increased tax capacity and the proposed tax levy, the tax capacity rate will be 17.32%. This is a reduction of 12.90% from the 2003 tax capacity rate. The reduction in the tax capacity rate will result in a reduction in the City ’s share of the property tax bill Even assuming a 10% increase in a home's property value, the City s sha.'c of the property tax biP for a home valued at $350,000, would be reduced by $27.75, or 4.1 %. For a home \ alued at $500,000, the reduction would be $41.07, or 4.1%. .\doption of Proposed Budget and Tax Levy The City is required to adopt a budget and tax levy so that the levy can be certified to the County by September 15. After adoption, the proposed levy cannot be increased, but can be reduced prior to final budget adoption in December. Resolutions adopting the preliminary 2004 budget and proposed tax levy are attached for Council adoption. COUNCIL ACTION REQUESTED: 1. Motion to adopt a resolution approving the proposed tax levy to frmd the 2004 budget. 2. Motion to adopt a resolution approving the proposed 2004 budget. 1