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Memo - City Council 2016 Proposed Preliminary Budget and Tax Levy 3 appeals were settled with the Ford Motor Plant earlier this year, which will impact the Fiscal Disparities pool and the Count-wide rates/values. TAKING A LOOK AT ARDEN HILLS LEVY TAX RATE HISTORY The State of Minnesota has granted local municipalities the authority to levy taxes to fund operations and debt payments. The City’s entire tax levy goes for General Fund expenditures. For the City of Arden Hills, the property tax levy accounts for approximately 79% of the General Fund revenues. Historically, the City does not use reserves to balance the City’s budget, however, due to the current economic environment $41,201 was used to balance the budget for 2010 and $20,000 was used in 2011, no reserves were used in 2012, $20,454 were used in 2013, no reserves were used for 2014, and $58,305 were used to balance the budget in 2015. The following table provides a historical view of the City’s property tax levies: % Year Tax Levy Change Tax Rate 2002 2,201,002$ -25.092% 2003 2,265,712$ 2.94%23.930% 2004 2,333,337$ 2.98%23.367% 2005 2,440,453$ 4.59%21.299% 2006 2,537,520$ 3.98%20.191% 2007 2,688,944$ 5.97%20.206% 2008 2,797,348$ 4.03%19.585% 2009 2,948,646$ 5.41%20.520% 2010 3,016,465$ 2.30%22.647% 2011 3,040,964$ 0.81%24.180% 2012 3,096,994$ 1.84%25.544% 2013 3,191,230$ 3.04%27.931% 2014 3,257,456$ 2.08%27.954% 2015 3,359,775$ 3.14%27.228% In 2009 the LJFD duty crew implementation began, while 2010 and 2011 saw the unallotment of the MVHC to cities. The City Council has been very conservative in budgeting and has reduced department budgets or used reserves to deal with the increased costs of our contracted services while still maintaining services the last few years. OPERATING BUDGET Salary and Benefits The 2016 preliminary budget is currently being prepared assuming a 2% wage adjustment for all staff. In surveying surrounding communities most have included a 2.0% - 3.0% COLA increase in their preliminary estimates for their 2016 budgets.