08-14-2013 Council Agenda - Laserfiche WebLink

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reverse referendum. Essentially, we hold a hearing on the project. If we receive a petition signed by five percent or more of the number of votes cast in the last election, then we would move the project to a referendum. However, we can forego this process if the petition is received and move to another option (cash or G.U. Revenue Bonds). In our last election 5559 votes were cast. Five percent of that amount is 278. Both bonding options also provide us the opportunity to associate a levy with the project that could be in play with our 2014 budget. In future years, we can reduce /eliminate the levy by the use of depreciation funds. At this point in time, we are not sure of the size of the project either physically or financially. Mark will walk us through some options for you to consider in deciding how we want to move forward. Financial Planning "What Ifs" As was discussed at our last Info Update Workshop, we know what our Local Government Aid will be for 2014 ($344,818 or an increase of $148,975) and we know that we have levy limits in place for 2014. One option to levy above those limits is to use a special levy for debt. (The debt would be associated with the Public Works Garage Project discussed above.) Staff has prepared some additional scenarios for your consideration based on our previous discussion and the debt levy option. (Attachment #3) I must emphasize that these number are still very preliminary in that we projected all expenses at a 3% increase except police and fire is projected at 4% increases. Revenues are held constant except for LGA and property taxes. It is a given that these numbers will change as the 2014 Budget is developed. Here is a quick summary of the options generated: • Sheet #1 shows the effect of a 0% levy increase and the elimination of LGA from the General Fund. You will note this generates a deficit of 5178,71.6. It also provides $215,570 of additional funding to the General Capital Improvement Fund (GCIF). • Sheet #2 uses LGA to eliminate the deficit in the General Fund while maintaining a 0% levy. This increase LGA dependence to $178,716 from $66,595 ($112,121 more). • Sheet #3 eliminates LGA from the General Fund but uses a special levy to accomplish this. The GCIF gains the same benefits as it did with Sheet #1. You will note this creates a levy increase of 6.59 %! It would be a special levy associated with the Public Works Building. • Sheet #4 keeps the same level of LGA in the General Fund as existed in 2013 ($66,595) without a special levy (0% levy). This results in a deficit of $112,121. • Sheet #5 also keeps LGA at the same level as 2013, but uses a special levy to eliminate the deficit. This results in a levy increase of 4.13% while also increasing the LGA amounts into the GCIF by $148,975. • Sheet #6 starts with a 3% special levy ($81,520) and then uses additional LGA ($30,601) to balance the General Fund. At our last workshop, their seemed to be some appetite for the option shown in Sheet #6. Obviously, many other scenarios are possible. The basics are is we lower the levy below 3 %, more LGA will be needed in the General Fund. 2