4.6. SR 08-24-1998 - Laserfiche WebLink

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ity of iver Item #4.6. MEMORANDUM TO: FROM: DATE: Mayor & City Council Pat Klaers, City A Strator August 24, 1998 SUBJECT: Budget Update The first budget worksession is scheduled for Monday, August 31, 1998. I hope to keep the regular business items to a minimum so that most of the evening can be dedicated toward the budget. It is anticipated that a special meeting of the Council will be needed the day after Labor Day (Tuesday, September 8) in order to complete the budget review. Last year we got through the budget in one meeting, but having two worksessions before September 15 is very common. The most significant factor in determining 1999 revenues is the growth in the city's net tax capacity (NTC). Unfortunately, this information is not expected to be available from the county until the end of October. This is the same situation we experienced last year and part of the reason for the delay is the compression of the tax classes. This compression took place in 1998 based on action of the state legislature and this compression is also taking place in 1999. In 1996 and 1997, the city's NTC grew by 14.9 and 11.5 percent and last year the NTC increased by less than 4 percent. The compression of the tax classes has a significant impact on the city's NTC growth and, in turn, our ability to generate additional tax revenues without impacting the city tax rate. We don't know what the result of the tax class compression is going to be in 1999, but we really need more than the 4 percent NTC increase that we experienced last year. We have enough additional tax money available within the state mandated levy hmit, but if the NTC doesn't increase accordingly, our tax rate will increase. 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425