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   <br />  <br />  STAFF REPORT  <br /> <br /> <br /> <br />TO: Mayor Keis and Members of City Council <br /> <br />FROM: Sam Magureanu, Finance Director <br />REVIEWED BY: Chris Heineman, City Administrator <br /> <br />DATE: September 14, 2022 <br /> <br />RE: Financial Policy Revision – Other Revenues Policy <br /> <br />ACTION REQUESTED: <br />Approve the Financial Policy revision as presented <br />BACKGROUND: <br />It is the current City Policy that a “safe margin” to allow for property tax collections of 97.5% (Rather than 100%) <br />in any given budget year be in place. As a result of this policy the City has been levying an additional 2.5% of <br />the tax levy revenues each year. As noted in the graph bellow there were several years 2006-2009 when the City <br />collected under the 97.5%. It is important to note that the graph only looks at the current portion of the levied <br />amount collections and excludes any delinquent amounts typically collected each year in addition to the current <br />levied amounts. <br />Further, for the past twelve years the City current portion of the tax levy has been over the 97.5% threshold with <br />an average of 98.55% collection rate and for the past six years the average collection rate has been 98.90%. <br /> The policy revision recommended will allow city staff and city council the flexibility to make decision on the <br />“safe margin” amount each year rather than use a predetermined amount. <br />Current Policy: <br />Other Revenues Policy <br />The City will maintain a diversified and stable revenue system to shelter it from short-run fluctuations in any one <br />revenue source. The City will conservatively estimate its annual revenues by an objective, analytical process. All <br />existing and potential revenue sources will be re-examined annually. The following considerations and procedures <br />will be used to comply with this policy. <br /> The total sum appropriated for the General Fund shall be less than the total estimated revenue by a safe <br />margin. It is the policy of the City that this “safe margin” will allow for property tax collections of 97.5% <br />in any given budget year. A safe margin for property tax revenue collections shall be determined in any <br />given budget year for the General Fund by city staff and presented to city council for approval. The “safe <br />margin” should take in consideration the average property tax revenue collection rate for the past ten years