07/26/2012 Council Packet - Laserfiche WebLink

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These factors combine to produce the following: Use of Fund Surplus — 2012 268,183 Tax Shift from Debt to Operations (13,851) Reductions in Non -Tax Revenue 196,701 Street Maintenance 22,250 Capital Equipment Replacement 75,000 Reductions in other budget areas (102,914) Total Budget Gap $445,369 Preliminary Tax Levy. As previously mentioned, the tax levy presented in the draft remains constant from 2012 to 2013. The state legislature chose not to re- impose the levy limitation for 2013. For comparison purposes, the levy presented is still $1,422,089 below the 2011 levy limit of $8,624,258. While there is no proposed increase in the tax levy, the effect of decreased property values results in an estimated increase in the city tax rate from 42.894 to 46.297. A home valued at $200,000 in 2012, revalued at $186,940 for 2013, is estimated to maintain city taxes at the 2012 level. Discussion. There are many factors to consider relative to the budget discussion. These include discussions on fees, utilities, capital outlay, among other areas. Staff would like to have this discussion with the Council during the initial budget work session. The remainder of the budget is very lean. Most adjustments to supplies, contracts, consulting, capital outlay, etc., result in a net decrease in spending. The greatest potential for meaningful cost reduction would be achieved through staffing adjustments. Staff reductions in the past have come through early retirement incentive, staff furloughs, attrition, leaving vacant positions unfilled, or through position eliminations. Careful consideration to the effect on service areas and service levels must be given to achieve the desired level of services while considering quality of life vs. cost of services for city residents. Staff is looking for direction from the City Council on service levels and service areas that may be affected. Staff can then make recommendations on how best to cost - effectively deliver the desired services. Budget work sessions may be scheduled at the discretion of the Council to achieve the desired budget level for 2013. The Council must take action at the September 10 meeting on the preliminary tax levy and set a public hearing date in December on the budget and tax levy. The preliminary levy set at this time may not be increased thereafter, but may be lowered before approving a final levy in December. We look forward to this discussion with the Council. •