Agenda Packets - 2002/07/01 - Laserfiche WebLink

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Item No. 1D Supplement Type of Business: WK WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Budget Calendar, Truth in Taxation Requirements, Levy Limitations, and LGA Date of Report: July 1, 2002 This is additional information to supplement the report that was distributed with the agenda packet. Since last Thursday, we have been in contact with the Minnesota Department of Revenue and learned a little more about levy limits and Truth in Taxation (TNT). My earlier memo refers to a 0.7618% limit on increases in the property tax levy. If the City stays under this limit, it will not need to comply with TNT requirements. The City may increase its property tax levy by more than 0.7618%, but by no more than the overall levy limitation. Levy limitations are basically the same as last year. Components of the levy limitation are: the implicit price deflator (0.7618%), change in commercial/industrial market valuation, and population change. I expect that Mounds View will pick up something on either commercial/industrial market valuation or population change, but not a huge gain. The State will complete its calculation of these factors and release the results by July 31, 2002. The League of Minnesota Cities has estimated that Mounds View’s local government aid will increase $84,886 from $789,466 in 2002 to $874,352 in 2003. This of course is before the State of Minnesota deals with its projected 2003 budget deficit. We can also expect some increase in other General Fund revenues. The following table charts out some possible scenarios. Property tax increase % 0.7618% 1.00% 1.50% Property tax increase $$ $20,121 $26,412 $39,618 Local Govt. Aid increase $84,886 $84,886 $84,886 Other revenue increase $40,000 $40,000 $40,000 Total General Fund increase $145,007 $151,298 $164,504 We haven’t started working on the expenditure side of the budget yet, but it is possible to do some gross estimates. One employee bargaining unit has a contract settled for 2003. The City can probably take the position that it can offer no more to other employee bargaining units, but they will probably settle for no less either. Salaries and wages are set to increase by 3% in the settled contract. The maximum city contribution to family health insurance will increase from $451.00 per month in 2001 to $557.55