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P~D~ <br />Item # 12.B. <br />MEMORANDUM <br />TO: Mayor and City Council <br />FROM: Tim Simon, Finance Director <br />DATE: October 17, 201 <br />SUBJECT: 2012 Budget Update <br />2012 Expenditure Update <br />On September 12, 2011 the general fund budget summary indicated an expenditure amount <br />of $12,580,750 and with the $157,950 cost of living adjustment included in the preliminary <br />budget the amount is currently at $12,738,700. It should be noted that Council has not <br />approved the cost of living adjustment at this time, but it is included for comparison <br />purposes. Over the next two months we will have some adjustments for fuel, property <br />insurance, and some other miscellaneous expenditures as more information becomes <br />available. <br />Net Tax Capacity (NTCI <br />We recently received an updated net tax capacity (NTC) estimate from the County. The new <br />estimate of a 5.66 percent decrease in NTC related to values is very close to our original <br />estimate. The new state law change in regards to the Market Value exclusion calculation <br />decreased our NTC another 5.41 percent. Overall if you combine the change in value plus <br />the Market Value exclusion the NTC decreased 11.07 percent. Keep in mind that the final <br />NTC typically changes slightly after abatements and other corrections are made by the <br />County before the final NTC is calculated. <br />Tax Levy Discussion <br />Tonight we will have discussion on the tax levy for 2012. On September 12, 2011 the <br />Council adopted a maximum tax levy of $11,112,391 which includes no additional tax <br />revenue from the 2011 levy amount. That levy and the amount allocated to the general fund <br />is reflected in scenario's three and six of the 2012 budget summary worksheet. That <br />maximum levy reflects a $140,254 gap before we adjust our MVHC loss of $300,000 <br />(negative revenue) which was an estimate based on the old system prior to the law change <br />for MV exclusion. <br />Adopted 2012 maximum levy is broken out as follows with a comparison to 2011 adopted <br />levy: <br />N:\Public Bodies\City Council\Council RCA\Agenda Packet\10-17-2011\2012budget101711[1].docx <br />