4. SR 12-11-1995 - Laserfiche WebLink

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1996 Budget Memo Page 3 December 7, 1995 revenue budget page. Accordingly, when looking at the budget increase, the information is skewed by approximately $40,500. This is how much money is being taken out of equipment reserves for purchases in 1996. When references are made to tax revenue increase being a certain percentage of the total budget increases, or increases in personal services being a certain percentage of the total increase in the budget, it should be kept in mind that this $40,500 budget change has taken place and the numbers are slightly skewed. With that being said, almost all the total 1996 budget increase is in personal services. The budget increase is $362,500 and personal services are projected to increase $324,350. This is due to cost of living and step increases for existing employees and due to the hiring of new employees in 1995 to provide additional services. All of the cost of living increases and expenses for new employees in 1996 are included in the City Council contingency budget. As these increases are approved and new employees are hired, funds will be transferred out of the contingency budget into each departmental budget. Of the total budget increase of $362,500, most of this revenue increase is in general taxes. The increase in General Fund tax revenues is $337,400. However, the city tax rate did not change and all of this revenue increase is generated through additional tax capacity. The city tax levy was 23.958 in 1995 and is the same for 1996. As you can tell by the figures in the above paragraph, most of our increase in spending is for employees and most of our increase in revenues is from taxes. Hopefully, our tax capacity will continue to increase so that our tax rate can remain stable and the city can still generate additional revenues for additional expenses. However, if our tax capacity doesn't increase in the future, we will either have to increase the tax rate to finance new employees or we will not be able to hire new employees and may even have to freeze wages. I wish the relationship between taxes and employees was not so close, but when all other revenue sources are being used, then this becomes the case in Elk River and in most Minnesota cities. MISCELLANEOUS NOTE Before concluding this budget memo, it should be noted that the city taxing districts have changed for 1996. Nineteen ninety -five was the last year when there were separate urban and rural taxing districts. In 1996, there is only one tax rate for the entire city. This is a modest change as in 1995 the rural rate was 95 percent of the urban rate. r: