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MEMORANDUM <br /> DATE: July 10, 2003 <br /> TO: Mike Mornson, City Manager <br /> FROM: Roger Larson, Finance Director <br /> ITEM: REVIEW OF 2003 - 2004 BUDGETS <br /> In balancing the State budget, the Legislature finalized cuts in Local Government Aid and <br /> Market Value Credit. In addition, they established the guidelines for 2004 Levy Limits. <br /> A review of how the adjustments affect St. Anthony is as follows: <br /> 2003 <br /> 1) Local Government Aid ($198,563) - 100% is Cut <br /> 2) Market Value Credit 68,785) - $134,750 Remaining <br /> Total Reduction ($267,338) <br /> 2004. <br /> 1) No additional loss in aid, however, a new distribution formula will be <br /> implemented over several years. Present law allows for no more than a 10% <br /> increase or reduction in aid can occur in one year. <br /> 2) Strict levy limits been approved for 2004 (None in 2005). The levy limit is <br /> set by taking last years general fund levy and adding 60% of the loss in LGA <br /> and Market Value Credit($2,168,627 = $160,409= $2,329,036). <br /> 3) The debt levy for roads, the equipment certificate for fire truck, the tax <br /> abatement bonds for central park and the new public works/fire station lease <br /> revenue bonds are exempt from levy limits. In addition, the requirement to <br /> have voter approved debt issuance was dropped. <br /> At this year's goal setting, to offset the cuts in aid, staff and council agreed on a <br /> contingency plan totaling$194,100(see attachment#1). When the actual cuts were <br /> finalized by the State, the reductions totaled$267,348. To balance the 2003 budget, the <br /> City Manager recommends we transfer$73,300 from the Tires Plus Building Fund <br /> (12/31/02 Balance= $416,582.41). <br />