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<br />A.( -'( <br />( II <br />IIi< River <br /> <br /> <br />TO: <br /> <br />MAYOR & CITY COUNCIL <br /> <br />FROM: <br /> <br />PAT KLAERS, CITY ADMINISTRATOR <br /> <br />DATE: SEPTEMBER 2, 1993 <br />SUBJECT: BUDGET WORK SESSION <br /> <br />At the first budget work session on 8/30/93, the City Council <br />reviewed overall City financial issues, the status of the 1993 <br />budget, the 1994 proposed special revenue funds, and the <br />proposed 1994 general fund expenditures. Also at the end of <br />this work session, the proposed 1994 general fund revenues were <br />handed out and this will be the starting point for the work <br />session on 9/8/93. <br /> <br />1994 PROPOSED GENERAL FUND REVENUES <br /> <br />e <br /> <br />State law changes have influenced some adjustments in the 1994 <br />City revenues. The changes include the reclassification of <br />the equalization aid away from the Homestead and Agricultural <br />Credit Aid (HACA) account and into the Local Government Aid <br />(LGA) account. This change has made comparisons between 1993 <br />and 1994 revenues difficult. Another change which affects the <br />tax rate and paYments by property owners relate to the <br />commercial, industrial, and residential tax rate classification <br />changes approved by the state last year. <br /> <br />Taking into consideration taxes alone, this revenue source is <br />up 16.4% or $216,750. The tax rate will not go up 16% due to <br />growth in the net tax capacity (NTC) of the City. Taxes amount <br />to about 45% of the total general fund revenues. <br /> <br />When taxes and HAC A are combined, the proposed increase in 1994 <br />is then 10.5%. This is because HACA allocated to the general <br />fund is decreasing by $20,100. This is due to the shifting of <br />equalization aid away from HACA and into LGA. <br /> <br />When taxes, HACA, and LGA are combined, then the proposed 1994 <br />revenues are up 12.6%. These three categories combined show an <br />increase of $259,050. This is a substantial portion of the <br />total proposed increase of $365,900. <br /> <br />e <br /> <br />Taxes, HACA, and LGA are the "big three" as far as City <br />revenues are concerned. When levy limits were in place, all <br />three of these revenues were controlled by the state. These <br />three revenue sources combined equalled 68.3% of the total <br />general fund revenues in 1993 compared to 68.5% of the total <br />revenues as proposed in 1994. This leaves a balance of less <br />than 32% of the total general fund revenues for City Council <br />consideration. <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />