12-14-1998 Council Packet - Laserfiche WebLink

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1 - - PROPOSED 1999 BUDGET AND TAX LEVY Proposed 1999 Budget The proposed 1999 budget reflects an effort to address a number of current needs (some requiring increased service capacity, and others requiring the City to clarify and strengthen the implementation of its Comprehensive Community Management Plan), and to position the City to address a number of long-term public infrastructure needs. Tax Le\-v The total tax levj' required to fund the proposed 199^ budget is $2,291,880. This is an increase of $66,754 or 3.0% over the 1998 levy. The major items causing the tax levy increase are as follows: 1. Additional costs for services the City obtains on a contracted basis, particularly fire protection and assessment services. 2.Additional expenses related to public infrastructure to begin to position the City to address long-term infrastructure needs in the areas of parks and open space, streets, and stormwater management. 3. Annual compensation adjustments for City employees. Property Clas.s Tax Rate Reductions. Tax Capacity Rate, and Impact on Properties The 1998 Legislature approved additional property class tax rate reductions for higher valued residential properties and commercial/industrial properties. The combination of the property class rate reductions and the increase in tax levy will cause the City's tax capacity rate to increase from 14.716% to 15.678%. Without the property class rate reductions, which have significantly reduced the City's tax capacity, it is estimated that the proposed tax levy would have resulted in a reduction in the City's tax capacity rate to 14.506%. • The general affect of the property class tax rate reductions on propeity ’ owners is to shift taxes from higher valued residential properties and commerciaLdndustrial properties to lower valued residential properties. For example, a home valued at $100,000 would have a $3.22 increase in City taxes, assuming no increase in value; and a home valued at $300,000 would have a $15.63 reduction in City taxes. General Fund Budget Expenditures General Fund expenditures are highlighted as part of the proposed budget information because they have the greatest impact on the tax levy. The proposed 1999 General Fund budget expenditures are $3,850,000. This is an increase of $211,905 or 5.8% over the 1998 budget. The tax levy required to fund the general fund budget is $1,771,350. This is an increase of $21,350 or 1.2%overthe 1998 General Fund tax levy. The proposed General Fund budget includes expenditures related to increased costs for contracted services such as fire service and assessing service. The General Fund budget also includes a number of substantial expenditures related to providing increased .service capacity, such as hiring a full-time Assistant Zoning Administrator and hiring a full-time animal control officer, that are offset by increased revenues generated by the services provided. Sewer and Water Rate lncreasc.s To provide adequate funding to address sewer and water infrastructure needs, water rates are proposed to be increased 2.9% for 1999 and sewer rates are proposed to be increased 3.2%.