9.1. SR 09-06-2011 - Laserfiche WebLink

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ITENt 9.1. MEMORAiNDUM Elk TO: Mayor and City Council FROM: Tim Simon, Finance Director DATE: September 6, 201 I SUBJECT: 2012 Budget Discussion The City is required to certify its maximum City tax levy and the HR.A and EDA tax levies to the County Auditor no later than September 15, 2011. The levy adopted in September may be reduced on December 5, 2011, when the final levy is adopted, but it may not be increased. The levy adopted on September 12, 2011 will be used in the tax notices mailed to property owners in November. In addition, the Council must also schedule one regular meeting at which the budget and levy will be discussed and public comment will be taken. This meeting date, scheduled fox December 5, 2011, must also be set by September 15, 2011. Budget review updates The complete general fund including revenues has been reviewed with City Council as well as Pinewood, Ice Arena, Library, Storm Water, and Equipment Replacement Fund. In addition, personnel requests and capital outlay have also been reviewed. The remaining budgets are the enterprise funds that are not tax levy supported (Sanitary Sewer, Liquor, and Garbage). These budgets will be presented in October and November along with the complete capital improvement plan (2012-2016). Net tax capacity (NTC) and market value homestead exclusion program The County has indicated that they do not have an update on the net tax capacity for the City at this tune. We are hopeful that they will have an update by our adoption of the maximum levy on September 12, 2011. The reason for the delay is that the County is working on this new market value exclusion program for homestead properties with property values under $413,800. As you recall, this will shift the burden away from homesteads to other properties. Since we will no longer have the market value homestead credit with the new law, we could reduce our negative $300,000 (anticipated loss of MV credit) to zero and lower the tax levy to offset some of the shift to all property tax owners with the new exclusion program. We anticipate that not only will we have a change in values for 2012, but this market value exclusion program will reduce ourNTC also. The $300,000 offset will be a starting point and as we get the final information from the County we can see the full impact of the market value exclusion. We will discuss in further detail at the meeting. N:\PubGc Bodies\Ciry Counci]\Finance\Tim\20] 1\budgetmemo0906.docx