09-26-2016 Council Packet - Laserfiche WebLink

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REQUEST FOR COUNCIL ACTION DATE: September 12, 2016 ITEM NO: 22 Department Approval: Name Ron Olson JWJC Title Finance Director Administrator Reviewed: Item Description: 2017 Budget and Preliminary Levy Agenda Section: City Administrator's Report Overview The Council has discussed the preliminary budget as part of the last three council work sessions. At the August 28 work session, the Council expressed agreement with the General Fund expenditure budget and revenue budgets as they were presented. The General Fund budget information presented to the Council in August is included as attachment 1 for your review. At the August meeting, the Council also indicated support of refunding the Series 2008 Pavement Management Bonds which is projected to result in an average annual savings of $29,100 for the years 2017 through 2023. A debt payment schedule and a bonding timeline for the refunding issue is included as attachment 2. The main issue remaining to be decided is whether to fund needed road maintenance by increasing the property tax levy by an additional $218,000; or to finance the road improvements by issuing bonds. Tonight's meeting provides the Council an opportunity to discuss this matter and provide staff direction to prepare the preliminary tax levy for adoption at the September 26th council meeting. This meeting also provides another opportunity for the public to provide input on the budget and tax levy. Tax Lew As discussed in August, the total levy can be increased by $399,250 without increasing the tax rate. The City's tax levy is made up of three parts: General Fund Operating, Debt Service, and the Pavement Management levy. As presented, the current budget would increase the tax levy $399,250. The increase is split between the General Fund ($180,744) and the Pavement Management Fund ($218,506). This would be a total levy increase of 8.06%. The tax rate would remain flat (0% increase) at 17.325. Another option that was discussed at the August work session was to issue bonds to fund upcoming road needs; and to increase the Debt Service levy needed to fund the debt service on the bonds. On a $1,000,000 bond issue, the debt service levy required would be $111,062 in the total debt service levy. A portion of this would be offset by the savings realized by the refunding of the 2008 bonds ($34,563 in 2017). The net increase in the debt service would be $76,499. When added to General Fund levy increase of $180,744 this results in a total levy increase of $257,243 (5.19%). The tax rate would decrease to 16.865%. 2017 Preliminary Budget & Tax Levy Attachment 1- Page 1 9/12/16 Memo