09-05-1983 Council Agenda - Laserfiche WebLink

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Joe Chlebeck September 23, 1983 Page 3 We also compared actual transactions for 1982 with the projected transactions for the remaining bond issues. The 1971, 1973 and 1976 Bond Funds were all ahead of projections at December 31, 1982. However, these improvements are nominal in relationship to these bonds and their remaining terms. The two 1978 Bond Funds reflect a $34,000 improvement over the projected amounts as follows: 1. City collection of special deferred assessments (i.e. no scheduled collection terms) 2. Interest earnings above a 7% yield 3. Tax collections below 95% 4. Assessment collections below 95% 5. Penalities and interest on delinquencies 6. Other - net $ 1,500 32,900 (1,700) (900) 2,600 (400) Total $ 34,000 The above improvement (which is also an actual improvement as apposed to a pro- jected improvement) means that the City can reduce further the scheduled tax levies for the 1978 Bond Issues. Accordingly, Proposed #2 reflects an addi- tional decrease totalling $29,900 for these Bond Issues. We have also eliminated the $11,000 1983/1984 tax levy for the 1973 Building Bonds. This bond issue will be fully retired in 1984. Existing cash assets plus the collectible 1983 tax levy will be more than sufficient to meet the debt obligations for this bond issue. The total result of the above is a $69,962 decrease in proposed tax levies for debt purposes. The City Council should be made aware that Proposed #2 is a reversal of past City policy. For the first time in recent history, the City will be reducing debt levies. I feel comfortable in making this recommendation due mainly to the additional information provided by the Debt Study and expect to use such data in computing future proposed tax levies. The General Fund tax levy is being proposed at the maximum allowed state level. The financial position of the General Fund (especially after the effects of funding the Senior Citizen's Project) requires that this levy be maximized. The City used $70,000 ($45,000 - 1983 Budgeted Reserve plus $25,000 Past Reserve Balance) from the General Fund to finance one -half of the Senior Citizen's Project. Accordingly, the 1984 operating budget should include a provision to increase the General Fund Reserve Balance by a minimum of $70,000 to $100,000. Exhibit B details the City's General - Purpose Revenue Base for the years 1979 through 1984 Proposed #2. This Exhibit clearly shows two important items: 1. State Financing (local government aid) decreased from 51% of this base in 1979 to 24% in 1984. Alternatively, Local Financing (local tax levy increased from 49% to 76% over the same period. This is the "shift" we have been projecting for the past three years. 003