08/17/2005 Council Minutes - Laserfiche WebLink

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• CITY COUNCIL WORK SESSION AUGUST 17, 2005 APPROVED 1 Finance Director Rolek distributed the 2006 Proposed Budget. He stated staffs goals in 2 preparing the budget were to maintain current service levels to citizens, ensure each 3 department has adequate resources to perform their functions, provide resources for 4 maintaining local streets, provide for the replacement of work equipment and provide a 5 small contingency for unforeseen circumstances that may arise throughout the year while 6 maintaining a level tax rate. It is incumbent upon staff to present a budget that represents 7 the needs of the community and is fiscally responsible to the taxpayers. 8 9 City Finance Director Rolek advised the state legislature has again suspended payment of 10 Market Value Homestead Credit (MVHC) in 2006. While the state continues to offer a 11 credit on property tax bills, the amount of which is deducted directly from the City's 12 certified levy, the amount is not being paid back to the City through the MVHC program. 13 In other words, the state is not paying their portion of the property tax, causing a 14 significant gap in the funding of services. In order to avoid cutting back on service levels 15 to residents of the City, staff must include an overlevy along with the general levy to fill 16 the gap, which results from the suspension of the state aid payments. 17 18 Finance Director Rolek reviewed the highlights of the proposed budget. He advised the 19 budget as proposed for 2006 is $8,952,114, an $807,403 (9.91%) increase from the 20 budget adopted for 2005. The City's tax base over the last year grew by 11.92%. The 21 City's total levy is proposed to increase by 15.58%. This percentage includes the MVHC 22 overlevy as explained. The tax rate is estimated to increase from 42.223% to 23 approximately 44.479% (42.442% before the addition of the MVHC overlevy). (This is 24 an estimate based upon a number of factors that were also estimated. Adequate 25 information is not available at this time to calculate a more accurate figure.) Because 26 much of the tax base increase is market-driven, it is expected that the City portion of the 27 tax bill will increase between 5 —11 % before factoring in the market value homestead 28 credit overlevy. Much of the increase pertains to needed capital outlay and to goal - 29 oriented expenditure. While the proposed budget results in a property tax increase, staff 30 feels that the budget presented fulfills most needs of the community and is fiscally 31 responsible to the taxpayers. 32 33 Finance Director Rolek noted the City must set the maximum tax levy and be certified to 34 the Anoka County Auditor by September 15, 2005. 35 36 Finance Director Rolek distributed a list of possible areas to decrease expenditures to 37 maintain a level tax rate, disregarding the market value credit. The list also included 38 expenditure requests the City has received and are not included in the proposed 2006 39 budget. 40 41 The Council directed staff to schedule a special budget meeting Tuesday, August 30, 4:30 42 p.m. Council also requested staff provides many options of possible reductions to 43 eliminate $350,000 to $500,000 from the proposed 2006 budget without eliminating 44 personnel.