12-04-06 Council Special Minutes

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MINUTES CITY COUNCIL DECEMBER 4, 2006 buy down the levy. Blesener highlighted thaC the 2007 Net Levy increase proposed is 2.86%. The Director reviewed the various components of the City's tax levy, and noted thaC total levy for 2006 was $2,185,498 and proposed 2007 is $2,251,678. The Director noted that with the restoration of the Markey Value Homestead Credit in 2007 the levy for the Infrastructure Capital Improvement Fund was restored to its previous level. The $50,000 reduction proposed for the General Capital Improvement Fund recognizes the greater interest earnings gained by this fund due to the City's new reverse policy. This was essentially shifted from the General Fund accounting for $50,000 of the General Fund levy increase. The Director then reviewed a graph which depicts the City's tax levy history from 1997 through 2007, noting that levies had remained generally flat prior to 2002. Most recent years' increases are attributable to Property Tax Reform, and more specifically the State's elimination of HACA Co cities in 2002. The State then used Chese dollars for education funding. The Director noted that in 2003/2004 the State reduced Local Government Aid and Market Value Homestead Credit (MVHC). The MVHC is being restored for 2007; however, it is unlikely that Little Canada will see LGA restored. The Director reviewed 2007 General Fund revenue highlights, noting that revenues are up by 3.4%, property taxes are up 4.9%, MVHC was restored in the amount of $98,311, the loss of LGA continues ($94,686), and fine revenues are up by $15,000 The Director reviewed a graph reflecting General Fund revenue trends, noting that revenues have had only slight growth since 1997, averaging 3.96% per year. She also noted that the City's reliance on property taxes has shown a dramatic increase pointing out that in 1997 property Caxes accounted for 54% of the General Fund revenues compared to 73% Por 2007. The Director reviewed 2007 General Fund expense highlights noting that expenses have increased by 4.6%, with Street costs up $22,437 or 9.0%, Streetlight costs up $9,500 or 21.3%, Sheriff contract up $25,343 or 3.0%, and Fire Department costs up $22,771 or 7.9%. The Director noted that the increase in Public Works expense is attributable to personnel cost increases involving step increases for relatively new employees, an added shared position between the Public Works and Parks Departments, along with added health insurance cosC and projected health insurance increases of 15%. With regard to street lighting costs, Excel Energy has implemented an interim rate increase of 6.2% for 2007. The Sheriff's contract increase includes $7,942 for the full year's cost of Little Canada's