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CrJ^Xlir^EETlNG <br />HEQUEST FOR COUNCIL ACTION <br />SEP 1 I 1995 <br />cmroFORONO <br />DATE: Sept. 5. 1995 <br />ITEM NO: / <br />Department Approval: <br />Name Ron Moorse <br />Title Citv Adnunisiraior <br />Administrator Reviewed:Agenda Section: <br />City Vdmlnistrator ’s <br />Report <br />Item D^ription: <br />Adoption of Preliminary 1996 Budget and Tax T <br />Attachments: 1. <br />2. <br />Resolution Adopting the Tax Levx’ Required to Fund the 1996 Budget <br />Proposed 1996 General Fund Budget Expenditures and Revenues <br />Background <br />State law requires cities to tdopt a preliminary budget an tax lev\' by September 15 ot each <br />year. The levy approved as of this date will be reflected in the Truth In Taxation information <br />provided to all property owners. This levy can not be increased but can be reduced prior to <br />final budget adoption after the Truth In Taxation hearings in December. The budget itself can <br />also be changed during this same time period. <br />Proposed 1996 Budget <br />The proposed 1996 budget is fiscally ctniserv ative in that it maintains current serv ice levels while <br />addressing a number of long term fiscal issues. These issues include: <br />1. <br />3. <br />4. <br />Funding for infrastructure (replacement of roads and bridges, a.id storm water <br />drainage projects). <br />Funding for a storm water management plan. <br />Establishment of funding reserves for potential State HACA Aid reduction. <br />Establishment of funding reserves for potential loss of revenue related to <br />contracted services provided by the city. <br />Expenditures and Tax l^vv <br />The proposed 1996 General Fund Expenditures, those with the greatest impact on the ux levy, <br />do not require a tax levy increase. P'-oposed General Fund Expenditures are $3,347,755. Tliis <br />is an increase of $102,740 or 3.17% over the 1995 e.xpenditure amount. <br />The tax levy required to fund the total 1996 budget is .s2.080,840. This is an increase ot <br />$64,670 or 3.21% over the 1995 levy. The major rea.son for the tax levy increase is the <br />establishment of a $40,000 levy for infrastructure replacement (road, bridges, and storm water <br />drainace). Because of a significant increase in the city ’s tax base, the proposed tax levy will <br />result in a reduction in the city ’s tax capacity rate from 15.604% to 14 843%. This will enable <br />Orono ’s tax rate to remain one of the lowest in Hennepin County.