2020-12-09 CC Packet - Laserfiche WebLink

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Memorandum Date: December 9, 2020 To: Honorable Mayor and City Council Members Through: Mark R. Statz, City Administrator/City Engineer From: Bruce DeJong, Finance Director Item: 2021 General Fund Budget and Property Tax Levy Discussion City staff are presenting the final budget for 2021. This budget incorporates many months of discussions including a review of all debt service, capital, and enterprise funds of the city. We have gone through the individual department budgets in detail. We have incorporated prior year spending adjustments and made additional estimates of budget adjustments for each line item based on actual or expected price changes. This levy change of $23,697 represents an increase of 0.87% over the 2020 tax levy. This levy may be reduced, but not increased, after the public hearing and discussion by the City Council when the final levy is adopted. With the $2,900,000 in new property value that is coming online from Ruffridge Johnson and other new construction, this will result in a city tax increase of less than 1% for the majority of residential properties in the community. This budget is responsible in both the long and short term. We have built in a contingency of $50,000 for our capital projects. If not needed for our capital projects, those funds can cover short-term drops in property tax payments if residents are unable to make their payments on time. $50,000 would cover a more than 2% delinquency rate. Staff has not seen property tax collections drop below 97% for a city in 30 years of boom and bust cycles. We have healthy reserves in our General Fund, Water Fund, and Sewer Fund. These reserves can be used wherever necessary as determined by the City Council. Our cash flow forecast is designed to ensure money is in our bank account when needed. We have reviewed investment maturities and the timing of expenditures and receipts to make sure need to sell investments at a loss to cover our cash flow needs.