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<br /> <br />ITEM # 5.3 <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />Mayor & City Council <br /> <br />FROM: <br /> <br />Lori Johnson, City Administrator <br /> <br />DATE: <br /> <br />June 11, 2007 <br /> <br />SUBJECT: <br /> <br />Budget Discussions <br /> <br />We will start very general budger discussions on Monday with the public works departments, <br />including streers, snow plowing, equipment services, engineering, and building maintenance. <br />These budget worksessions with department heads and division managers are an opportunity <br />for them to explain their staff and capital outlay requests and to present their 2008 goals to <br />the Council. It is also an opportunity for the Council to ask questions, give staff their goals <br />and program requests for the upcoming year, and to discuss other items of interest with each <br />department head. We will not be discussing each department's budget in detail; budget <br />detail will follow in August and September after the Council's preliminary comments are <br />incorporated. <br /> <br />First, we will be discussing the public works budgets, focusing mainly on staff additions, <br />capital outlay, and program changes. Phil Hals, Street Superintendent, has several items he <br />wants to discuss including policy changes for snowplowing and mailbox replacement. We <br />also want to formalize a sidewalk and trail maintenance policy addressing the sidewalks and <br />trails that the city will plow and the ones that are the responsibility of the adjacent property <br />owner. <br /> <br />Second, I would like some input from the Council on your target tax rate for 2008. For the <br />past several years, the Council's goal has been to keep the tax rate constant; that goal has <br />been met and the tax rate even dropped slightly for taxes payable 2007. We've seen <br />increases in net tax capacity from 12-15 percent over the last few years that have allowed the <br />city to increase the tax levy without increasing the tax rate. Obviously, the amount of new <br />development, particularly housing, has slowed considerably and the value of existing <br />property is not rising as quickly as in the past; therefore, we do not expect the net tax <br />capacity to increase as much this year as in the past. In fact, the increase may be <br />substantially less. The net tax capacity for taxes payable 2008 is based on the property value <br />as of January 1,2007, which includes new construction started or completed in 2006. That, <br />plus the addition of the YMCA debt, will affect the tax rate which ultimately determines how <br />much tax revenue is available for other non-debt funds including the library and general <br />