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STAFF REPORT <br /> JULY 15, 1993 <br /> PAGE 3 <br /> The effect upon property taxes of the five percent <br /> increase is to increase the tax capacity rate by <br /> 2.066%; from a 1993 rate of 21.057% to 23 .949%. The <br /> Ramsey County Assessor's Office has increased the <br /> Estimated Market Values of residential properties in <br /> Mounds View by an average of 2 .3% for taxes payable in <br /> 1994. The City's portion of 1994 property taxes on the <br /> average home ($84, 000) will increase $37. 01 as a result <br /> of the tax increase and the increase in the Estimated <br /> Market Value. The taxes on homes of other values are <br /> contained in an attachment entitled "Tax Comparison on <br /> Selected Residential Homestead Properties. " <br /> EXPENDITURES VS REVENUES <br /> General Fund Expenditures of $3,249, 117 exceed General <br /> Fund Revenues of $2,994,511 by $254, 606. This is down <br /> from the first draft in which expenditures exceeded <br /> revenues by $375,574 . The gap between revenues and <br /> expenditures was reduced by $120,968 between the first <br /> and second drafts of the budget. Further action needs <br /> to be taken to achieve a balanced budget. <br /> POSSIBLE SOLUTIONS <br /> • Reduce expenditures <br /> - The City Administrator will present a <br /> separate memorandum outlining possible <br /> reductions in expenditures of capital outlay <br /> items. <br /> - Do not fund new positions. Not funding the <br /> Economic Development Coordinator ($43,902) <br /> and the Housing Inspector ($36, 636) positions <br /> would save $80,538. <br /> - Freeze employee salaries. The General Fund <br /> Budget presently has a 2 .5% increase in <br /> employee salaries for 1994. That appeared <br /> reasonable in light of a 2 . 6% increase in the <br /> Consumer Price Index (CPI) for 1992 and an <br /> increase of 2 .2% for the first half of 1993 . <br /> Subsequently the Governor has called for <br /> restraint in public employee salaries. If <br /> employees salaries were kept at 1993 levels <br />