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MINUTES <br />CITY COUNCIL <br />DECEMBER 3~ 1996 <br />also received indirectly in the form of a Community <br />Development Block Grant for renovations to the old fire <br />station. <br />Carson asked if dollars are transferred from utility <br />revenue to the General Fund. The Administrator replied <br />that some expenses are posted to utility funds, but <br />there is no transfer of net revenue from utilities back <br />to the General Fund. <br />John Schwalbach asked how many new homes have been <br />constructed in Little Canada during the past year and <br />the impaot these new homes have on property taxes. <br />The City Administrator estimated that 30 to 50 new <br />homes have been constructed including townhomes. It <br />was pointed out that the first year a new home would <br />still pay lot taxes only. Property taxes on the new <br />home would go on the following year. The Administrator <br />indicated that the City's portion of property taxes on <br />a$125,000 home are approximately $365 and on a <br />$150,000 home are $460. The biggest gain in property <br />tax revenue for the City would be on commercial and <br />industrial development. <br />Carson asked about the General Fund carry-over to the <br />General Fund Reserve. <br />The City Administrator explained the City's reserve <br />policy which involves a reserve amount for cash flow <br />equaling half of our projected property tax and State <br />aid receipts. These revenues are not received until <br />July of each year. The City also has a 15% rainy day <br />reserve as well as a reserve for prepaid expenses and <br />deferred absences. There is also a fund to cover <br />anticipated LGA/HACA penalties connected with Tax <br />Increment Financing. <br />Schwalbach asked what the impact on property taxes will <br />be once the Rice Street/Little Canada Road project is <br />completed. <br />Fahey replied that the impact on property taxes will <br />depend on the amount of value that is added and how <br />long before the project is done. Fahey pointed out <br />that in the year 2000, the City's debt levy drops <br />dramatically and in the year 2003, the City will be out <br />of debt. Provided there are no major expenditures <br />needed, the City should be able to pass on a <br />significant tax reduction to residents. Whether the <br />redevelopment of the Rice Street area will result in a <br />5 <br />