12-08-1997 Council Packet - Laserfiche WebLink

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■%) REQUEST FOR COUNCIL ACTION 6 JS$/ DATE: Decen,b.?5?te7 ITEM NO:/ Department Approval:Administrator Reviewed:Agenda Section: Name Ron Moorse City Administrator ’s Title City Administrator Report Item Description: Adoption of the 1998 Annual Budget and Tax Levy - Resolutions 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*''o, 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 Tax Class Rate Reductions The 1997 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 commercial class rate for value over $100,000 from 4.6% to 4.0%. Impact of the Budget and Tax Lew on Residential Properties Because the property class rates were reduced, the city's tax capacity rate will be applied to lower tax capacity amounts for individual properties. The result is that the city ’s share of the property tax bill for homes in Orono will be reduced, assuming no change in valuations. For example, a home valued at $100,000 paid $182.41 in city property taxes in 1997. A home valued at $100,000 would pay $178.12 in city property taxes under the proposed 1998 budget. This is a reduction of 2.4%. Program Highlights The 1998 budget addresses several program needs. Two of the most significant are a planning intern and a police sergeant. The need for the planning intern is caused by a very high level of plan .ing A