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<br /> . PAGE TIIlO <br /> J:lU1JW:1.r IMP1lC1' MEH> <br /> '!his Certified 12vy percentage in=ease is within the Council guideline <br /> to keep such in=ease less than 4%. <br /> DELINOUENCY ASSUMPI'IONS <br /> It appears that the two most =itical assurrptions i.:rrpacting the 1993 <br /> General Fund budget are the degree to which =rent ad val=em taxes and <br /> HACA will be collected. <br /> To dOClllllel1t the assumptions used a "Deli.nquency Analysis" schedule is <br /> attached for your review. As you will note, the planned deli.nquencies <br /> of $124,770 (7.86% of the Certified 12vy) appear aggressive with respect <br /> to pri= years budgets and actual experience. However, the 50% reserve <br /> for HACA ($40,000) appears prudent given the collection history of this <br /> state aid. <br /> 'Iherefore, the aggressiveness = optllnism in the delin::[uency assurrption <br /> arises from the 4.89% rate used f= =rent property tax collections. <br /> Historically, this would be a conservative rate f= the City. But in <br /> the last two years, the rates have been 9.26% (1991) and 7.00% (1992 <br /> est). If the 1993 collection experience parallels the 1992 estimate, <br /> e the revenue shortfall may be approximately $20,000. <br /> 'Ihe alternatives to offset this risk include: <br /> - Reducing expenditures $20,000 to =eate a plarmed <br /> 1993 surplus of $20,000. <br /> - Not being as conservative in reserving HACA. Moving <br /> $20,000 from plarmed HACA into property tax reserve <br /> would result in anticipating to collect 75% of HACA <br /> instead of the =rent 50%. <br /> - Evaluating if 1991 & 1992 collection experience <br /> was an aberration from historical trends or the <br /> beginning of a new benchmark level. <br /> - Increasing the Certified 12vy by $20,000 (a 5.25% increase) <br /> to =eate a planned surplus of $20,000. <br /> - Finding additional revenue sources (i.e., increasing <br /> various permit = license fees). Exploratory work in <br /> this area is =rently being researched by a SUbcommittee <br /> of the Finance Committee. <br /> staff recommendation is to be less conservative on HACA receipts while <br /> also anticipating a higher level of pennit/license revenue based upon <br /> price increases. 'lhe i.:rrpact of these two revenue sources should <br /> mitigate any further reduction of expenditures or increase in the <br /> Certified 12vy. <br /> MARKEl' VALUATION FOOINOI'E <br /> e During the b..1dget worksession process, there was same anticipation on <br />