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1998 Budget Memo <br />October 27, 1997 <br />Page 4 <br /> <br />which JeffAsfahl schedules for general use during the summer. At <br />this time it appears that by having the city and school each fund about <br />$6,000 worth of improvements, and by getting some donations, we can <br />have additional fencing, water for field maintenance and a fountain, <br />and a scoreboard installed. It is recommended that the Council <br />authorize spending approximately $6,000 of park equipment reserves <br />for improvements to the Varsity field which would be matched by a <br />similar amount of funding by the School District. <br /> <br />Proposed 1998 Budget <br /> <br />Since the August 25 budget worksession, a number of changes have been <br />made in the proposed 1998 budget. All of the changes are noted in the <br />budget outline under 3-A i and ii. In these adjustments is the fire <br />department part time salary change which the Mayor will want to discuss <br />with the Council. Information on the proposal was distributed earlier this <br />week. <br /> <br />The good news is that the changes noted in 3 A i and ii have balanced the <br />budget, but the bad news is that we need to cut between $120,000 and <br />$240,000 from the tax revenue line item in order to keep the city tax increase <br />at a reasonable rate. A decrease in tax revenues needs to take place because <br />of the low increase in the city net tax capacity (NTC). This low increase, in <br />spite of a significant market value increase, was caused in part by legislative <br />action on the tax class changes. The city needs to reduce its tax revenues to <br />lessen the impact of the city budget on homeowners. Information on the city <br />taxes and NTC was distributed earlier this week. <br /> <br />This budget worksession is mainly a Council discussion about the city tax <br />rate. Once this is decided, staff will be in a better position to recommend <br />budget adjustments. <br /> <br />The figures included under Item 3 B (Taxes) iii, offers information on what <br />the city tax rate change would be with various cuts in tax revenues. I think it <br />is reasonable to expect that the city can reduce the tax revenues by <br />somewhere in the $120,000 to $150,000 range with only a moderate ($40,000- <br />$70,000) dependence on city cash flow reserves. <br /> <br />These 3 B iii tax rate figures do not reflect any property value changes. Even <br />if the city shows little or no change in its tax rate, the homeowner may pay <br />significantly more city taxes if the property has increased in value. <br /> <br />The Mayor has indicated to staff that he supports a zero tax rate change and <br />he plans to present his position to the Council on Monday evening. A zero <br /> <br /> <br />