5.4. SR 09-12-2005 - Laserfiche WebLink

Home Browse Search

Item 5.4. MEMORANDUM TO: Mayor and City Council DATE: Pat Klaers, City Admi~,~t~~ ". . // VM r""Y:<Je/Za September 12, 2005 / FROM: SUBJECT: 2006 Budget The City Council reviewed parts of the 2006 draft budget at the August 8, 2005 worksession. At a special City Council worksession on August 22, 2005, a very good discussion took place regarding the capital outlay part of the 2006 draft budget. At this special meeting, staff received some City Council direction as how to proceed in order to balance the draft 2006 budget. The 2006 draft budget started with a significant budget gap when comparing requested expenditures to proposed revenues. This budget gap was in part a result of putting all of the equipment and vehicle capital outlay items into the general fund budget. (This is a financial goal the city hopes to achieve within the next few years.) Another reason why there was a significant budget gap in the draft 2006 budget was due to a conservative estimate in the expected increase in the city net tax capacity (NTC). It should be noted that staff prepared the budget based on the assumption that the City Council desired to see no change in the status in the city tax rate of 43.78%. Attached is a budget outline that shows one way to balance the draft 2006 budget. This outline includes some explanation notes and comments. There are other ways to balance the draft 2006 budget but this approach seems to be reasonable and one that is consistent with feedback that was received from the City on 8-22-05. One of the biggest changes since the August 22, 2005 meeting is the NTC increase. County information has been received and next year the increase is expected to be 15.737%. As discussed on 8-22-05, this rather large increase in the city NTC for 2006 results in additional tax revenues being available for general fund expenditures without a change in the city tax rate. The attached resolution authorizing the property tax levy for collection in 2006 shows a total of $8,823,793. This is a 15.737% increase over the adopted 2005 tax levy resolution. (The general fund tax revenues are proposed in the ~mount of $7,220,500. This is a $1,222,700 or 20.39% increase from the adopted 2005 budget.)