7.1 SR 12-05-2022 - Laserfiche WebLink

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City of Qk*l River Request for Action To Item Number Mayor and City Council 7.1 Agenda Section I Meeting Date Prepared by Public Hearing December 5, 2022 Lori Ziemer, Finance Director Item Description Reviewed by 2023 Budget and Tax Levy Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, the 2023 General, Special Revenue, and Enterprise Fund budgets. Adopt, by motion, the resolution authorizing the property tax levy for collection in 2023. Background/Discussion In May, staff began the budgeting process by developing their 2023 department goals and budget requests. Over numerous work sessions, the City Council and staff reviewed in detail each department's operating budget and the property tax levy. In September, the Council approved the preliminary tax levy that was used to calculate the proposed property tax notice that was mailed to each property owner. General Fund Budget The 2023 General Fund budget is $20,490,000 compared to $18,913,650 in 2022. The greatest portion of the city's General Fund operating budget is dedicated to public safety programs and services, with general government, public works, and parks and recreation making up the balance. Due to the fact that city government is primarily a service industry, 76% of the operating budget is for personal service expenditures. Tax Lew On September 6, the City Council adopted the preliminary tax levy of $15,202,106. Since then, additional reductions of $107,150 have been made for a proposed tax levy of $15,094,956 for 2023. The county estimates the city's Net Tax Capacity (NTC) value increasing about 20.6%, attributable to new growth and market value increases. The final NTC may change slightly as the county continues to update property values before calculating property taxes in early 2023. Based on the current NTC values, the proposed tax rate is 39.618%, a decrease from last year's rate of 43.967%. The city accounts for about 37% of a homeowner's total property tax bill. The remainder is attributed to the county (36%), the school district (25%), and other jurisdictions (2%). For businesses, the city's share is about 28% of the total. The majority of the property tax levy (92%) funds city services such as police, fire, street maintenance, parks and recreation, and general government. The remaining 8% pays for debt service, tax abatement, and library operations. AR