Agenda Packets - 1987/01/26 - Laserfiche WebLink

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November 24, 1986 Page 4 1971. A City is permitted to levy beyond it's levy limits for special purposes. Those levies are known as special levies. The City has used special levies for a number of years, i.e. debt service, forestry, property tax abatements and decreased mobile homes tax. Some have not been used. Using special levies to fir;ance park improvements would be accomplished in the following manner: 1) A special levy is permitted for the increase in cost of liability insurance presently purchased over the cost of liability insurance purchased in 1971. For taxes payable in 1987 the City could have levied $44,932 to cover increased insurance over and above the amount of the levy subject to levy limitations. The City levied $742 under this special levy. $44,190 could have been levied but was not. Increased costs of liability insurance were paid from levies subject to levy limitations instead. 2) In the future the full amount permitted under this special levy could be levied. Monies received from this levy would be used to pay for the increased costs of liability insurance as required by law. 3) Since the increased cost of liability insurance is now paid from the special levy whereas before these increased cost4 were paid from levies subject to levy limitations, there now exists an amount, in this example $44,190, which was raised by the levy subject to levy limitations which may be used for other purposes. Another special levy that is available to the City is for the issuance of capital notes. The City may issue Capital Notes to finance the purchase of police, fire, street or ambulance equipment for a period of up to five years. Then the City may specially levy to repay the notes. This levy is available to statutory and charter cities. When the City was a statutory city a similar financing mechanism was used for a number of years to purchase police squad cars. Equipment Debt Certificates were sold to the Water Fund. The proceeds were used to purchase the squad cars. The special levy was used to repay the Water Fund. After adoption of the Charter the City Attorney advised that the levy for equipment debt certificates did not apply to charter cities. Subsequently legislation was adopted authorizing Capital Notes. That legislation specifically authorizes their issuance by statutory and charter cites. Use of the special levies for liability insurance and capital notes could generate enough revenue to fully finance the Perk Improvement Plan. As previously indicated using the property tax levy to finance the Parks Plan would require a levy of 1.25 - 1.67 mills annually for a period of five years.