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Item # 5.1. <br />City of <br />~. <br />~~ <br />ever <br />MEMORANDUM <br />o a~or and its ounc~l <br />Lor~ohnson, dt~ dn~~nistraor <br />° u~~st ~, 2 o <br />udet or[~sess~on <br />0n Monday we will continue the 2010 budget discussions by going through the remainder <br />of the general fund budgets as well as Pinewood, Ice Arena, and Libra~.y budgets as each a~ <br />thane also impact the tax levy. Following review of the budget detail, we can resume <br />discussions about the tax levy. <br />Attached is information on the proposed 2010 tax levy based on a couple o~ different <br />scenarios and changes in net tax capacity ~NTC}.The resulting change i~ general fund <br />revenue is determined for each of the scenarios. The general fund revenue difference has <br />been calculated assuming 1} the same tax rate as taxes payable in 2009; 2} the same levy <br />amount as in 2009; and 3} a two percent levy increase. Those three scenarios have been <br />calculated based on the preliminary net tax capacity received From Sherburne County in July <br />o~ a decrease of just over £our percent and on an eight percent decrease in net tax capacity. <br />The p~•eli~r~inary NTC decrease was doubled to an eight percent decrease fox information <br />purposes only so the Council could see the impact a further reduction in net tax capacity <br />would have on the tax rate and the amount o~ revenue available in the general fund. <br />As we discussed last Monday, most residential properties decreased in value For taxes <br />payable 2010 while most commercial/industrial properties had no change in value. Some <br />commercial/industrial property, mainly commercial in the downtown area, did decrease in <br />value, but that represents a small portion of the total commercial/~.adustrial property. This <br />means if the tax rate stays the same, the city tax would decrease on residential p~.•operties <br />whose values decreased and the city tax on commercial/industrial properties tax would <br />remain constant assuming the property value did not change. This gives you a bench mark to <br />gauge how changes in the levy and tax rate will al'~ect property owners ~or• taxes payable <br />2010. <br />Property tax revenue mares up the majority o~ the revenue in the general fund. with the <br />reduction in state aids and slight decreases in other revenue sources, the tax levy will be an <br />even larger portion of the 2010 general fund revenue, Attached is revenue detail for 2014 <br />