7.1. SR 12-03-2018 - Laserfiche WebLink

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Request for Action To Item Number Mayor and City Council 7.1 Agenda Section Meeting Date Prepared by Public Hearing December 3, 2018 Lori Ziemer, Finance Director Item Description Reviewed by 2019 Budget and Tax Levy Cal Portner, City Administrator Reviewed by Action Requested  Adopt, by motion, the resolution authorizing the property tax levy for collection in 2019.  Approve, by motion, the 2019 General, Special Revenue, and Enterprise Fund budgets. Background/Discussion Staff began the budgeting process in May developing their 2019 department goals and requested budgets. The City Council and staff have since met in numerous work sessions reviewing in detail departmental operating budgets and the property tax levy. In September, the Council approved the preliminary tax levy used to calculate the proposed property tax notice that was mailed to each property owner in November. Tax Levy On September 17, the Council adopted the preliminary tax levy of $11,938,765. Since then, reductions have been made to the General Fund Budget; however, staff recommends maintaining the preliminary levy as the proposed final levy. The proposed levy reflects the initiatives of the new compensation plan as well as Council’s goal of establishing capital reserves for future financial sustainability. The county estimates Net Tax Capacity (NTC) values increasing over 9%, attributable to new growth and market value increases. The final NTC may change slightly as the county continues to update property values before calculating taxes in early 2019. The tax capacity rate, as determined by the county, based on the preliminary and final levy is 45.467%, a reduction from last year’s rate of 46.01%. City tax accounts for about 35% of a homeowners total property tax bill. The remainder is attributed to the school district (26%), the county (37%), and other jurisdictions (2%). For businesses, the city’s share is about 27% of the total. The majority of the property tax levy (94%) is used to fund city services such as police, fire, street maintenance, parks and recreation, and general government. The remaining 6% pays for debt service, tax abatement, library operations, and capital reserve. General Fund Budget The 2019 General Fund budget is $16,221,200, a 4.9% increase over 2018. The greatest portion of the General Fund operating budget is public safety programs and services, with general government, public works, and culture and recreation making up the balance. Because city government is primarily a service industry, 77% of the operating budget is personal service expenditures and reflects the implementation of