5.4. SR 12-06-2010 - Laserfiche WebLink

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tax notice, the City tax on this residential property will decrease 1.6 percent or $15.59 in 2011 based on the proposed levy. There are three main entities, the county, school district, and city, that each receives part of the property taxes paid by property owners. On the property mentioned above for instance, the City receives approximately 30 percent of the total property tax the property owner will pay. The balance, approximately 60 percent, goes to Sherburne County and Independent School District 728. Additionally, the State of Minnesota also receives part of the property taxes on commercial and industrial property. Although the actual allocation of tax dollars changes depending upon the classification of the property, the City's share of the property tax is approximately 30 percent of the total tax. That percentage received by the City decreases below 30 percent for those properties that pay State tax. That means that for every $1,000 that a home owner pays in property tax, the City receives around $300. The remaining $700 goes to the other taxing jurisdictions. The City uses its property tax revenue for several purposes: The majority, 88 percent, is used to fund General fund expenditures such as police, fire, street maintenance, general government, parks and recreation programs. The remaining 12 percent pays for debt service, economic development, library, and storm water management expenditures. General Fund Budget: The 2011 General fund budget is proposed to increase slightly to $12,500,050. Part of the $455,250 increase is due to the additional municipal state aid allocation the City has requested in 2011 to fund increased road maintenance. This budget neutral change of $197,050 accounts for 1.64 percent of the tota13.78 percent increase. The balance of the increase is due to capital needs at the Ice Arena, mandated emergency management siren updates, and general operating and capital outlay increases. Again this year, public safety expenditures (police, fire, emergency management, building safety, environmental) account for 45 percent of the General fund budget. General government, public works, and culture and recreation make up the majority of the balance. Personal service expenditures are the largest type of expenditure due to the fact that the City's core objective is to provide service to its residents. Personal service expenditures are 70 percent of the operating budget. The budget does not include any cost of living pay adjustment for employees again in 2011. As you can see by reviewing the attached budget summary, other than the items mentioned above, there are no significant changes proposed in the General fund budget in 2011. Most of the department budgets are similar to last year even though costs of supplies, utilities, and fuel have increased. Employees have been diligent in utilizing resources efficiently to allow service levels to remain high even though budgets have not increased with the demand for service. At the November 8 meeting the Council reviewed options to eliminate the draft budget deficit of $205,000. The deficit was eliminated by agreeing to delay $188,900 of capital outlay purchases until LGA is received and by increasing the use of fund balance by $16,100 for capital outlay items that could not be delayed. After funding all capital outlay requests, an additional $497,900 of LGA will be available if the full LGA allocation of $686,800 is received. If LGA is not received, some of the requested capital outlay such as replacing carpeting at the senior center maybe delayed unti12012 while other more urgent items may be funded through the capital outlay reserve fund. The Council will review the delayed capital outlay later in the year when the outcome of LGA payments is known. At that time the Council can decide which items to authorize for purchase in 2011. N:\Public Bodies\City Council\Lori\2010\Budget Memo 12 0610.doc