09-08-1997 Council Packet - Laserfiche WebLink

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1'^b:i90‘ t ) .^1 REQUEST FOR COUNCIL ACTION <? DATE: September 4^9^ ITEM NO: Department Approval: Name Ron Moorse Title City Administrator Administrator Reviewed:Agenda Section: City Administrator's Report Item Description: ^ ' Proposed 1998 Budget and Tax Levy - Resolutions Proposed 1998 Budget The proposed 1998 Budget accommodates a number of necessary expenditure increases while holding the tax levy to the planned increase of less than 3%. A number of expenditure requirements have occurred simultaneously to cause the need to increase expenditures beyond the normal level. Although the General Fund expenditures are proposed to increase by 5.53%, these expenditures can be accommodated within a tax levy increase of less than 3% because several of the increases are offset by related revenue increases. Expenditures and Tax Lew The city’s 1998 General Fund budget expenditures are proposed at $3,638,095. This is an increase of $190,490 or 5.53% over the 1997 budget. The tax levy required to fund the general fund budget is $1,750,000. This is an increase of $69,020 or 4.11% over the 1997 General Fund tax levy. The total tax levy required to fund the overall 1998 city budget is $2,225,130. This is an increase of $63,500 or 2.94% over the 1997 levy. Property Class Rate Reductions and Tax Tanacitv Rate The 1 997 Legislature enacted property class rate reductions for both residential and commercial property. The most significant changes in property class rates were the reduction of the residential rate for value over $75,000 from 2% to 1.85%, and the reduction of the conunercial class rate for value over $100,000 from 4.6% to 4.0%. Due to the property class rate reductions, the city's tax capacity growth for 1998 taxes is minimal. The tax capacity for 1997 taxes was $14,874,819. Without the reduction in property class rates, the tax capacity for 1998 taxes would have been $16,178,830, an increase of 8% over 1997. With the reduction in property class rates, the tax capacity for 1998 taxes is projected to be approximately $14,921,498 or an increase of .3% over 1997. Based on the proposed 1998 tax levy, and the minimal increase in tax capacity, the city’s tax rate will increase from 14.251% to approximately 14.690%. This is an increase of 3%.