08-02-2018 Council Special Work Session Packet

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Construction and development activities have improved over the last year, while other revenue areas have declined, such as intergovernmental and municipal fines. Other miscellaneous revenues have remained relatively flat. The 2018 budget included the use of $725,000 in general fund reserves to fund $500,000 in parks & trails improvements and to reduce the strain on property tax levels. The 2019 draft presented for discussion does not include the use of general fund reserves. If the 2018 budget uses the full amount of budgeted reserves, the current General Fund reserve balance would continue to be maintained at a level approximately 53% of annual expenditures. There is $375,000 available for use in 2019, to maintain the reserve balance at 50%. Preliminary 2019 Taxable Market Values have increased 6.43%. The increase in property values is estimated to increase the City’s Net Tax Capacity Value by $1,371,841 or approximately $615,813 at the Current Tax Capacity Rate. The preliminary levy would increase 6.52% given the needs and requests included within this draft budget. The projected tax capacity rate would increase slightly to 42.931% from 42.826% in 2018. Staff is prepared to discuss the draft budget with the City Council during the initial budget work session on Thursday, August 2nd. Budget work sessions may be scheduled at the discretion of the Council to achieve the desired budget level for 2019. Council action is requested by the September 24th 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 2019 Draft Budget & Tax Levy