7.1 SR 12-07-2020 - 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 7, 2020 Lori Ziemer, Finance Director Item Description Reviewed by 2021 Budget and Tax Levy Cal Portner, City Administrator Reviewed by Action Requested  Approve, by motion, the 2021 General, Special Revenue, and Enterprise fund budgets.  Adopt, by motion, the resolution authorizing the property tax levy for collection in 2021. Background/Discussion City staff began the budgeting process in May developing their 2021 department goals and requested budgets. The City Council and staff met in numerous work sessions to review in detail each department’s operating budget 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. General Fund Budget The 2021 General Fund budget is at $17,532,500, which is a 3% increase over 2020. 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 parks and recreation making up the balance. Because city government is primarily a service industry, 77% of the operating budget is for personal service expenditures. Tax Levy On September 3, the City Council adopted the preliminary tax levy of $13,510,920. Since then, additional reductions of $407,100 have been made to the General Fund budget and the debt service levy for a 2021 tax levy of $13,103,820. The county estimates the city’s Net Tax Capacity (NTC) values increasing about 6%, 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 2021. Based on the current NTC values, the proposed tax rate is 44.486%, a decrease from last year’s rate of 46.241%. 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 28% of the total. Most 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, and library operations.