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REQUEST FOR COUNCIL ACTION <br />DATE: November 27/2002 <br />ITEM NO: <br />Department Approval:Administrator Reviewed:Agenda Section: <br />Name Ron Moorse i/7 //]City Administrator’s <br />Title City Administrator Report <br />Item Description: Tmth in Taxation Hearing <br />Attachments: I. Tax Levies-Actual 2002 vs. Proposed 2003 <br />2. Tax Capacity, Local Levy, and Tax Capacity Rates <br />3. Effect of 2003 Tax Levy and Budget on Property Owners <br />4. Hennepin County news release re: Truth-in-Taxation statements <br />Truth in Taxation Hearing <br />The Truth in Taxation hearing is an opportunity for the public to ask questions and provide <br />comments regarding the proposed 2003 budget and tax levy. <br />Proposed 2003 Budget <br />The proposed 2003 budget reflects an effort to limit expenditures in order to comply with a state- <br />imposed levy limit, as welt as to deal with other limited revenues, while maintaining current service <br />levels and providing funding for upcoming Are equipment and facility needs. <br />General Fund Budget <br />The proposed 2003 General Fund budget expenditures are $4,712,880. This is an increase of <br />$105,283, or 2.28% over the 2002 budget. While the proposed budget reflects necessary' <br />expenditure increases related to items such as annual compensation adjustments, fire service costs, <br />enhanced information technology, and motor fuel; the small overall expenditure increase was made <br />possible by a number of significant reductions in other expenditure items. The most significant <br />expenditure reduction resulted from the elimination of two staff positions. <br />Tax Lew. Tax Rate, and Impact on Property Owners <br />The total tax levy required to fund the proposed 2003 budget is $3,098,400. This is an increase of <br />$172,065, or 5.88% over the 2002 Levy. This increase is necessary both to fund the General Fund <br />budget expenditures, and to provide funding for upcoming fire equipment and facility needs. <br />The estimated tax capacity for taxes payable in the year 2003 is $15,549,329. This is an increase of <br />$ 1,701,834, or 12.29% over the 2002 tax capacity. Based on the City's increased tax capacity and <br />the proposed tax levy , the tax capacity rate will be 19.809%. This is a reduction of 5.49% from tlw <br />2002 tax capacity rate.