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ITEM 6. <br /> <br /> ity of <br />E, <br /> <br />iver <br /> <br />MEMORANDUM <br /> <br />Mayor & City Council <br /> <br />FROM: Pat Klaers, City Administrator <br /> <br />DATE: <br /> <br />December 16, 1996 <br /> <br />SUBJECT: Consider 1997 Municipal Budget and <br /> Tax Levy Resolution <br /> <br />In September the City Council adopted its proposed maximum budget and <br />tax levy resolution. In a budget worksession on November 25, 1996, the City <br />Council balanced the proposed 1997 budget in the amount of $4,535,850. The <br />proposed budget reflects a 10.77 percent or $441,100 increase over the <br />adopted 1996 budget. <br /> <br />The net tax levy for 1997 is proposed in the amount of $2,986,809. The <br />proposed net levy is $389,370 more than the adopted 1996 net levy. The <br />majority of the net levy (approximately 83 percent) is for general fund <br />activities and almost all of the net levy increase is for general fund purposes. <br />The gross levy proposal of $3,570,055 is $406,236 more than the adopted <br />1996 gross levy. <br /> <br />The Truth in Taxation public hearing was held on December 2, 1996, in order <br />to receive public input on the proposed budget and tax levy resolution for <br />1997. After a 30 minute presentation on the proposed budget and tax levy <br />there were no citizens who spoke at this public hearing. <br /> <br />The tax levy resolution as presented reflects a 3.9 percent increase in the city <br />tax rate. Originally the tax rate increase was projected to be 3.1, but this <br />was based on growth in the net tax capacity (NTC) of about 12 percent. The <br />city has recently been advised that our NTC will increase by about 11 <br />percent, and, therefore, to generate the same amount of tax revenues, the city <br />tax rate will go up slightly more. If the City Council desires to have the tax <br />rate increase closer to the 3.1 percent, then $25,500 worth of reductions in <br />the tax levy will have to be made. This reduction in tax revenue can be made <br />up in the budget by either cuts in expenditures or additional non tax revenue <br />being added. If this $25,500 tax levy reduction takes place, it is <br />recommended that the budget be adjusted to add revenues from the cash flow <br />reserves. Hopefully then at the end of 1997, this transfer can be canceled <br />through a budget amendment if revenues exceed the budgeted amount. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />