9. SR 08-03-2009 - Laserfiche WebLink

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Item #9 MEMORANDUM TO: Mayor and City Council FROM: Lori Johnson, City Administrator DATE: August 3, 2009 SUBJECT: Budget Worksession At Monday’s worksession we will begin discussions on the 2010 tax levy and budget. As you are very well aware, the Legislature and Governor took action this year that affected the 2009 budget and also will affect the 2010 budget and tax levy. Those changes will be addressed in detail later in this memo. Briefly, they include reductions in aids, changes in levy limits, and changes in the truth in taxation process. Another item that will impact the 2010 levy is the dramatic change from past trends in market value and net tax capacity (NTC) increases. The City’s market value and resulting net tax capacity are projected to decrease for taxes payable in 2010; these decreases follow many years of increases, some that were significant increases that allowed the City to generate additional tax revenue without increasing the tax rate. Later, I will address how the decrease will affect the tax rate and the tax paid by property owners. The majority of the initial budget discussion on Monday will focus on the tax levy as the proposed levy must to be certified by September 15. The budget can not be adopted until later in the year. Additionally, for the most part, the budget will remain relatively unchanged; it will be similar to last year’s amended budget. Once the Council sets the tax levy, the budget can be balanced to fit within the general fund tax revenue generated by the proposed tax levy. Again, because much of Monday’s discussion will center on the tax levy, the entire general fund budget is not included as an attachment to this memo. However, the public safety and general government budgets and goals are attached in anticipation of reviewing those budgets on Monday. At the August 10 worksession, the general fund revenue and the remainder of the expenditure budgets and the library, golf course, ice arena and safety budgets will be presented. Department heads and division managers will be present at the meetings to answer questions about their budget and goals. The goals included are the items identified by the department heads; however, because of the limited funds available, not all of those goals will be achievable as the funds needed may not be included in the adopted 2010 budget.