7.1. SR 12-02-2019 - 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 Hearin December 2, 2019 Lori Ziemer, Finance Director Item Description Reviewed by 2020 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 2020. ■ Approve, by motion, the 2020 General, Special Revenue, and Enterprise Fund budgets. Background/Discussion City staff began the budgeting process in May developing their 2020 department goals and requested budgets. The City Council and staff have since met in numerous work sessions reviewing in detail department's operating budgets and the property tax levy. In September, the Council approved the preliminary tax levy that was used to calculate the proposed property tax notice that was mailed to each property owner in November. Tax Lew On September 3, the City Council adopted the preliminary tax levy of $12,953,570. Since then, additional reductions of $87,800 have been made to the General Fund budget. The $12,865,770 proposed tax levy reflects a one-time city contribution for the Lake Orono dredging project, as well as Council's goal of establishing capital reserves for future financial sustainability. The county estimates the city's Net Tax Capacity (NTC) values increasing about 7%, attributable to market value increases and new growth. The final NTC may change slightly as the county continues to update property values before calculating taxes in early 2020. Based on the current NTC values, the proposed tax capacity rate is 46.171%, a slight increase from last year's rate of 45.907%. The city accounts for about 36% of a homeowner's total property tax bill. The remainder is attributed to the county (37%), the school district (25%), and other jurisdictions (2%). For businesses, the city's share is about 27% of the total. The majority of the property tax levy (93%) is used to fund city services such as police, fire, street maintenance, parks and recreation, and general government. The remaining 7% pays for debt service, tax abatement, library operations, and Lake Orono dredging. General Fund Budget The 2020 General Fund budget is at $17,019,600, which is a 4.9% increase over 2019. The greatest portion of the city's General Fund operating budget is dedicated to public safety programs and services, with general government, public works, and culture and recreation making up the balance. Due to the fact AR