6.0. SR 09-07-2004 - Laserfiche WebLink

Home Browse Search

September 7, 2004 _Page 3 of 4 Budget Memo The 16.1 Net Tax Capacity increase provides the City Council with lots of options in addressing city needs for 2005 and the 2005 budget. This is especially tree when considering the following: the fire vehicle associated with the fire prevention specialist (if this position is hired) can be purchased this year or with equipment reserves and not be part of the budget; some proposed new positions could begin after the January 1, 2005 date (please note that if too many of these positions are scheduled to start later in the year, then undo financial pressure will be put on the 2006 budget); more than the $90,500 gap discussed on August 23 was made in cuts; and if the fire prevention specialist is hired then an additional $15,000 budget reduction can be made by deleting the contract for apartment inspections. As noted earlier, at the 16.1 Net Tax Capacity increase amount, the city has available an additional $402,807 in taxes without any tax rate change. Even with some of these funds being allocated to streets and equipment, a substantial amount of additional funds are available to be used in the general fund at the discretion of the City Council. This amount nearly matches the amount needed for the recommended additional employees. Please see the attached list of possible 2005 staff additions. With the 16.1% NTC increase and by way of shifting a few expenditures around and hiring some employees after January 1, the City Council has numerous budget and tax options available to them including the following: Add another employee, specifically the CSO Officer Shift some equipment into the general fund. This shift would be especially relevant as the first payment on the fire truck is planned to come from equipment reserves versus the tax levy. (The truck is being financed with equipment certificates but reserves and not the tax levy is being proposed for the 2005 payment.) Equipment financing is getting to be a more significant CIP issue and this will be a big discussion point with the City Council when the five-year CIP is updated later in the year. Add back into the budget some of the supplies that were cut. Reduce the city tax rate...A 1% tax rate (about .04...going from 43.78 to 43.38) is approximately $75,000. Or, a combination of some of the above. A couple of issues for the City Council to take into consideration during their deliberations are that 1) levy limits may not be gone forever and that we may see them put on municipalities again in the future, and 2) I believe that growth is slowing and that the NTC increases will begin to be lower after 2006. In this regard, I think that we have one more "good year" (so that the catch up from the LGA cuts will be complete) but after 2006, the increases will be more modest. Finally, the City Council should note that while the proposed budget increase and tax increase is one of the largest in recent memory, it is following a 2004 budget that had one of the smallest increases in recent memory. (The city budget increased by 9.15% over two years, from 2004 to 2004, and this did not keep pace with inflation and our growth.) RECOMMENDATION It is recommended that the City Council include in the 2005 budget the 7 full-time and 2 part-time positions that were previously discussed and which are shown on the attachment. This includes the community development director starting in July 2005.