7.0. SR 08-25-2003 - Laserfiche WebLink

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Budget Workscssion Memo August 25, 2003 Page 5 of 13 The city reserve share for this funding approach comes from the street reserve, which gets its revenue from the landfill surcharge. As previously noted in the discussion on the barn floor and government buildings reserve, this surcharge is soon to become a host fee. The revenue into this fund in 2002 was approximately $190,000 based on an allocation of 15¢ per cubic yard. At this rate, this fund should be able to finance it's share of the PRP. The tax levy part of this funding equation will be discussed when we review the 2004 general fund tax revenues and the tax levy resolution. However, it should be noted that the past and current tax levy for this program has come from within our levy limit and now that as we are assessing out some of the project, we could bond for the improvements and the tax levy part of this project could be outside of the levy limit. This approach would then free up some monies for general fund activities; however, the net result would be a tax increase to the property owners. With regards to the tax share of the PRP, we will have collected shghtly over $466,000 by the end of 2003. (This includes the money that was in the 2001 and 2002 tax levy.) This means that we can either pay cash for the 2003 project or bond and pay for the project over time. Bonding and to do the tax levy outside of the limited levy seems to be an appropriate approach; but the reasonableness of this approach depends in part on current and future growth in the net tax capacity. 2004 GENERAL FUND BUDGET- Overview Two major issues that the city has had to deal with in putting together and implementing the 2004 budget are the local government aid (LGA) cuts and levy limits. Levy l/mits are in place for municipal/ties for 2004. Unlike previous years, the levy limits do not provide for any increases over the proceeding year for growth factors. The city lost $644,138 in LGA in 2004. Unlike when the city lost $644,138 in LGA in 2003, the city can in 2004 make up 60% of this LGA reduction by way of a tax increase. This recapturing of 60% of the LGA cuts is the only increase in taxes allowed by state law within the limited levy. There are items outside of the levy limits that can be added to the tax roll. An example is an equipment certificate tax levy. Overall, the city is facing the same issue in 2004 as it has in previous years. This issue is how to provide funding for more services and programs. As in the past, the number one revenue source for the operating budget is taxes and the number one expenditure is for employees. The big difference in 2004 is that our resources are very limited to provide adequate services for our growing community. In a sense, the city will be asked to provide more services in 2004 with a similar amount of manpoxver as to what we had in 2002. The proposed general fund expenditures for 2004 are $7,764,950. This compares to an amended (in June) 2003 general fund expenditure budget of $7,248,400 and an original 2003 general fund budget of $7,687,900 EXPENDITURES Personal Services There are no reductions in hours proposed for any employees in 2004 and there are no lay offs proposed for 2004. The typical wage adjustment of 3% for cost of living increase, normal pay plan step increases, and an increase of $10 per month for insurance is included in the budget. If the city