07-29-2019 Council Packet (Budget)

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The 2019 budget included the use of $594,773 in general fund reserves, as well as the commitment of a portion of the general fund balance as follows: $375,000 for the Recreation Complex Phase I, $50,000 for a Veteran’s Memorial, and $30,000 for the Building Permit Automation and Integration project. The 2020 draft presented for discussion does not include the use of general fund reserves. If the 2019 budget uses the full amount of budgeted reserves, there are no additional dollars available for use in 2020 if the Council wishes to maintain a reserve balance of 50%. Preliminary 2020 Taxable Market Values have increased 8.42%. The increase in property values is estimated to increase the City’s Net Tax Capacity Value by $1,909,246 or approximately $738,640 at the Current Tax Capacity Rate. The preliminary levy would increase 13.08% given the needs and requests included within this draft budget. The projected tax capacity rate would increase to 44.389% from 41.817% in 2019. Two drivers of the significant proposed levy increase are the use of $594,573 in general fund reserves in 2019 and the additional debt service levy of $281,799 required for the 2018 Street Reconstruction Project (West Shadow Lake Dr and LaMotte Areas). Staff is prepared to discuss the draft budget with the City Council during the initial budget work session on Monday, July 29th. Budget work sessions may be scheduled at the discretion of the Council to achieve the desired budget level for 2020. Council action is requested by the September 23rd meeting in order to set the preliminary tax levy and to schedule a public hearing date in December on the budget and tax levy. The preliminary levy set at the September meeting may not be increased thereafter, but may be lowered before approving the final budget and levy in December. Attachments 2020 Draft Budget & Tax Levy