08-13-1990 Council Packet - Laserfiche WebLink

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8790.2 C TO: FROM: DATS: Mayor and City Council Mark E. Bernhardson, City Administrator August 1, 1990 13 SUBJECT: 1991 Budget Attachment:A. Propose Maximum Levy for 1991 B. Propose 1991 Budget (to be transmitted prior to 8/27 meeting to Council) C. Tax Extension P.ate in Hennepin County INTRODUCTION - As discussed at the last meeting, the City is required to set its maximum levy for Truth in Taxation hf*arings in November or forepart of December. In addition the City is to adopt a preliminary budget. The preliminary budget may either be increased or decreased after the initial submission, however, the maximum levy can only be decreased for the 1991 budget. The same type of newspaper notice that was required for the 1990 Budget will be used. For the 1992 Budget, in Hennepin, Ramsey, and St. Louis Counties property specific notices will be prepared and sent to each property taxpayer in advance of the Hearings. DISCUC .ION - The proposed maximum levy, as outlined in Attachment A, una.^rtakes a full levy limit increase of 3.7%. This is a combination of an allowed 3% inflation rate plus approximately 1/2 of the growth the City realized in households between *88 and *89. In addition to this recommendation for that maximum levy the City staff is recommending special levies which monies would go directly to the General Fund together with levies for the various debt funds. In the case of the 1980, *82 and *85 bonds these are levies to assist in paying off the debt. The levy for the 1989 oonds however, is a proposed levy to assist the City in allowing to retain its strong financial rating by having money available to pay off the bonds when they are callable in about 1996, at which point the City could then eliminate the balance of that debt. While tax monies would be used for this initially, the special assessments over ‘the original length of the bonds would then go directly into the general fund and reimburse the City for the monies it raised through taxes. This however, would provide the City with cash that it would not in the long terra otherwise be able to raise. Together with placing the City in a stronger position over the longterm the net effect would be property taxpayers would not, in fact, be paying for the bond issue. This is done, in part, as a result of the fact that the City as being a "good steward" lost $200,000 worth of levy ability back in 1988. ISSUE - Determination of maximum levys and establishment of budget in advance of Truth in Taxation deadline of September 1, 1990 for the 1991 Budget.