08-05-13 Council Packet - Laserfiche WebLink

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Preliminary Tax Levy. For the first time in 2013 , the pr eliminary levy includes a voter - appr oved levy of $181,151 for the signalization projects at the Lake/Main and Birch/Ware intersections. Slight increas es for existing debt service have reduced the levy amounts available for operations. P roperty values declined 0.69% for 2014, a significant improvement from declines of 7.96% in 2013, 8.25% in 2012, and 10.43% in 2011 . The preliminary operating levy has been reduced by $61,616 to reflect the drop in values. However, the addition of the voter -approved levy results in an increase in the total pr eliminary levy of $125,701 . Levy Limits. The State Legislature imposed a levy limit on counties and cities with a population over 2,500 for 2014 . The levy limit base for 2014 is the greater of the 2013 or 2012 levies, net of approved special levies (primarily debt service levies). The levy limit base is increased by a factor of 3% and reduced by LGA received from the state to arrive at the entity’s levy limit. The MN Department of Revenue will certify our final levy limit on or before September 1. Based on our calculations according to the above formula, the City’s estimated levy limit for 2014 is $7,408,603. The City’s projected levy subject to the levy limit (net of special levies) is $7,128,922, leaving the pr eliminary levy $279,681 below the es timated levy limit. Discussion. Staff is ready to discuss the budget draft with the Council during the initial budget work session. The remainder of the budget is very lean. The greatest potential for meaningful cost reduction would be achieved through staffing adjustments. Staff reductions in the past have come through an early retirement incentive, staff furloughs, attrition, vacant positions, or through position eliminations . Careful consideration to the effect on service areas and service levels m ust be giv en to achieve the desired level of services while considering quality of life vs. cost of services for city residents. Consideration must also be given to the use of one -time funding sources and the potential effects on future budgets. B udget work sessions may be scheduled at the discretion of the Council to achieve the desired budget level for 201 4 . The Council must take action at the September 9 meeting on the preliminary tax levy and set a public hearing date in December on the budget and t ax levy. The preliminary levy set at this time may not be increased thereafter, but may be lowered before approving a final levy in December.