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AR-DEN HILLS CITY COUNCIL—December 14, 2009 19 7C. Approve the 2010 Capital Improvement Plan; Motion to Adopt Resolution 2009-040 Adopting the Proposed 2010 Budget; Motion to Adopt Resolution 2009- 041 Setting the Final Levy for Taxes Payable in 2010 (continued) Homestead Credit of about $66,000. Besides the Public Safety and Market Value Homestead Credit, the City's portion of the Levy was only 0.5% increase. Councilmember McClung clarified that the City had made up for the fact that the Market Value Homestead Credit was cut. 1.1% of the increase is the market value so the City is increasing the levy to make up for the fact that the State is unallotting the City. Finance Director Iverson clarified that what happens is the tax levy that is certified is what is sent to the County and to the State. What happens then is when you get a property tax statement you get a market value homestead credit and the City does not get that money back unless the State sends that money to the City, so the City will not get the whole levy back. The City did increase the levy to make up for the unallotment. Councilmember Holden stated that Staff raises were cut this year as well. Councilmember McClung stated that other cities are finding a way to not increase their levy for the unallotment of the Market Value Homestead Credit and making cuts. Other cities are making more drastic cut and doing more to decrease their budget than Arden Hills seems to be. Finance Director Iverson stated that several of these cities are using what is called fund balance to offset this cost. Councilmember Holden clarified that according to the charts, Arden Hills' tax rate increase was less than most of the surrounding communities by a significant amount. Councilmember McClung stated that the only concern is what Arden Hills is doing for its residents. He clarified that he was not referencing just surrounding communities making cuts to lower their budgets but also other cities in the State as well. Councilmember Grant clarified that Arden Hills does not receive HACA or LGA funds. If these funds are unallotted it would not impact Arden Hills. Of the budget for 2009 he asked for a projection of how under budget the City would be.