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AGENDA ITEM— 1C <br /> ,-iI�EN HILLS <br /> MEMORANDUM <br /> DATE: August 16, 2021 <br /> TO: Honorable Mayor and City Councilmembers <br /> Dave Perrault, City Administrator <br /> FROM: Gayle Bauman, Finance Director <br /> SUBJECT: Preliminary General Fund Budget <br /> Budgeted Amount: Actual Amount: Funding Source: <br /> N/A N/A N/A <br /> Council Should Consider <br /> Staff is requesting City Council to review and provide feedback to the attached preliminary General <br /> Fund budget for the 2022 fiscal year. <br /> Background <br /> Annually, City staff prepares and submits a preliminary budget to the City Council for review and <br /> feedback. Attached to this memo is the City's preliminary General Fund budget for the 2022 fiscal <br /> year. Each department provided their respective forecasts for this budget. <br /> The proposed 2022 budget is $5,308,750, an increase of$95,770 or 2.0%. For the purpose of this <br /> discussion, there is a 3% ($178,400) tax levy increase reflected in the budget, $78,400 for the <br /> General Fund and $50,000 for the Public Safety Capital Fund. As presented, the General Fund <br /> Budget is underfunded by $346,990, which is more than the budget shortfall projected in the 2021 <br /> budget of$90,720. This practice is not sustainable in the long term. A tax levy increase of 11.1% <br /> would be needed to balance the budget in 2022. The table below shows the amount the General <br /> Fund Budget is underfunded at different tax levy increase amounts. <br /> Tax Levy Increase Underfunded Amount <br /> 3% $346,990 <br /> 4% $304,190 <br /> 5% $261,390 <br /> 11.1% $0 <br /> The preliminary 2022 property value data as of 08/04/21 shows the value for our local rate is <br /> decreasing slightly over 2021. Depending on where the fiscal disparity distribution numbers come <br /> in,the City could potentially see an increase in their local tax rate even without a tax levy increase. <br /> More information on this won't be available from Ramsey County until late August or early <br /> September. <br /> Page 1 of 4 <br />