09-12-2018 Council Packet - Laserfiche WebLink

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STAFF REPORT TO:Mayor Keis and Members of City Council FROM:Sharon Provos, Finance Director DATE:September 7, 2018 RE:2019 Preliminary Budget The first draft of the proposed 2019 Budget is being presented for your consideration. With this information, we need to establish our preliminary levy by September 30th. While this budget document includes the General Fund, Special Revenue Funds, Debt Service Funds, TIF/HIA Funds, Capital Improvement Funds, the Water Fund, and the Sewer Fund. The primary focus of our review is the funds that require tax levy support; predominately the General Fund. The 2019 levy included in the budget document reflects a 3.41% gross levy increase and a 4.68% net levy increase (see page 1 of the budget document). This reflects a dollar increase in the gross levy of $110,655 plus a decrease in our fiscal disparities distribution of $20,202. With our 6.59% tax base growth, our projected tax rate is down 1.79% from last year. This budget maintains our current amount of Local Government Aid (LGA) usage in the General Fund ($86,901) even though our LGA allotment is increasing by $1,996 for 2018. We are certified to receive $434,379 of LGA in 2019 versus the $432,383 we received this year. The balance of $347,478 is going to the General Capital Improvement Fund per previous direction. On the General Fund revenue side, most categories are relatively flat with the exception of property taxes. We also continue to budget building permit revenues very conservatively for two reasons. One reason is without much undeveloped land, it is tough to plan for consistent new construction given redevelopment is usually needed. The other reason is we want to avoid shortfalls during economic downturns that would force other expense reductions to keep the budget balanced. In a year when activity is higher than those projections, we will typically see a transfer to the General Capital Improvement Fund which also helps keep pressure off levy increases. One other revenue growth area is our Rental Housing License fees. Our rental licenses are renewed in the odd numbered years, so we see the bulk of the revenue then.