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<br />, <br /> <br />., <br /> <br />P1lGE TWO <br />BtlDGEl' IMP1lCT MDI) <br /> <br />'!his Certified Levy percentage increase is within the Council guideline <br />to keep such increase less than 4%. <br /> <br />DELINQUENCY ASSUMPI'IONS <br /> <br />It appears that the two most =itical assumptions impacting the 1993 <br />General Fun:i Wdget are the degree to which current ad valorem taxes and <br />HACA will be collected. <br /> <br />To document the assumptions used a "Del:in::{uency Analysis" schedule is <br />attache:l for your review. As you will note, the planned del:in::{uencies <br />of $124,770 (7.86% of the Certified Levy) appear aggressive with respect <br />to prior years b.ldgets and actual experience. However, the 50% reserve <br />for HACA ($40,000) appears prudent given the collection history of this <br />state aid. <br /> <br />. <br /> <br />'Iherefore, the aggressiveness or optmsm in the del:in::{uency assumption <br />arises from the 4.89% rate used for current property tax collections. <br />Historically, this would be a conservative rate for 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 />the revenue shortfall may be approximately $20,000. <br /> <br />The alternatives to offset this risk include: <br />- Reducing expenditures $20,000 to =eate a planned <br />1993 surplus of $20,000. <br />Not being as conservative in reserving HAC/\.. Moving <br />$20,000 from planned HACA into property tax reserve <br />would result in anticipating to collect 75% of HACA <br />instead of the current 50%. <br />Evaluating if 1991 & 1992 collection experience <br />was an aberration from historical trends or the <br />beginning of a new benchnark level. <br />In=easing the Certified Levy by $20,000 (a 5.25% increase) <br />to =eate a planned surplus of $20,000. <br />Fin::ling additional revenue sources (i.e., increasing <br />various pennit or license fees). Exploratory work in <br />this area is currently being researched by a SUbcommittee <br />of the Finance Canmittee. <br /> <br />staff reconunendation is to be less conservative on HAC/\. receipts \Yhile <br />also anticipating a higher level of pennit/license revenue based upon <br />price increases. 'Ihe impact of these two revenue sources should <br />mitigate any further reduction of expenditures or increase in the <br />Certified Levy. <br /> <br />. <br /> <br />MARKEr VAllJATION FWINarE <br /> <br />During the wdget worksession process, there was some anticipation on <br />