6. SR 12-05-1994 - Laserfiche WebLink

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1995 Budget Memo December 1, 1994 Page 3 e Some additional information to help everyone understand the status of taxes in Elk River is included in the attachment from the Economic Development Coordinator, Bill Rubin. This attachment discusses homeowner taxes on a hypothetical $90,000 home. This memo and attached information from the 8/16/94 Minnesota Journal indicates that on a hypothetical $90,000 home, the City of Elk River has the lowest tax rate of the 27 largest non-metro cities and of all of the 95 metropolitan cities and towns. While our number one ranking may not last forever, it certainly is indicative of how reasonable the tax rates on single family homes are in the City of Elk River, as compared to other communities in Minnesota. THE BUDGET As previously noted, the budget is proposed in the amount of $3,732,250. This is a $337,500 or 9.94% increase over the adopted 1994 budget. Of this increase in the budget about 85% or approximately $310,000 of this increase is in personal services. If the City Council wants to reduce the budget, it really needs to look at personnel issues. e There are three main reasons for personnel increases in the proposed 1995 budget. Approximately $130,000 of the increase is for employees hired in 1994 that were scheduled to begin at mid-year and now must be budgeted for the entire year, or which were completely non-budgeted personnel additions. Also, it is estimated that approximately $73,000 will be needed for increases in wages and benefits for existing employees. Finally, approximately $68,000 are anticipated to be needed for the hiring of new employees. The balance of the personnel increases in 1995, which is approximately $39,000, is for additional overtime in the Police and Street Departments, wage increases for the City Council, step increases for police officers and increases in part-time pay for the Fire Department members. Once again, we can discuss all the "ins and outs" of the proposed budget as much as the City Council desires, but if reductions are to be made, we really need to look at the personnel area. THE TAX LEVY As previously noted, the City tax levy can go up without any change in the tax rate if the City's net tax capacity increases. Taxes are scheduled to go up in 1995 for two reasons. One is an increase in government spending which includes the City, County, School District and special taxing districts. The e second reason is an increase in the taxable market value of property.