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Gem Lake News Page 2 of 6 Gem Lake Anticipated to Meet 2010 Budget (continued from page 1) "We are relying on volunteer time whenever possible, but controlling the variable expenses is really the key." Expenditure for year-to-date as of the third quarter were budgeted to be $302,824 and have come in at $190,797. Although expenditures appear to be significantly below budget, the issue is mainly the timing of when these expenses come in. "If expenditures were spent evenly throughout the year, the City should have spent about 75% of its budget," says Hart. "Most activities, such as general government and public works appear to be under budget, but it is due in part to the cyclical nature of some of the city projects." Budget for 2011 Approved: City Tax Rate Going DOWN!!! As a result of careful financial planning, the Gem Lake City Council was able to significantly reduced its final 2011 budget numbers from the preliminary figures turned in to Ramsey County in September. The council approved a preliminary tax levy of $413,245 at their August 17 City Council Meeting. A series of budget refinements and adjustments for services led to good news for the final 2011 budget. At the November 16 City Council meeting, a final tax levy of $320,234 was approved, down $93,011 from the preliminary numbers. This is also a 19.09% decrease from the 2010 tax levy. This number includes a general fund operating property tax levy of $268,234 and a debt levy for Heritage Hall of $52,000. The Gem Lake tax capacity rate will go down from 36.943% in the preliminary budget to a much more palatable 28.483%. The new proposed tax capacity rate is almost 15% less than the actual 2010 rate of 33.483%. This means the city portion of each resident's property tax bill has a good chance of going down next year. One of the primary strategies used to reduce the amount of the tax levy is simply to draw down the anticipated general fund balance to cover some of next year's expenses. The Minnesota Office of the State Auditor has indicated recently that it is acceptable for a city to maintain a general fund balance level of 40-60% of the next year's operating budget. The projected 2010 general fund looks like it will have excess revenues over expenditures of $75,738, which would bring the general fund balance at the end of the year to about $389,800. This is almost 91% of the 2011 Proposed General Fund Budget. The 2011 General Fund Operating Budget for the City will be $411,755, which is an increase of 2.66% over the 2010 budget. However, because the city is drawing down its general fund balance, less will have to be collected from citizens to cover 2011 expenses. "It's important to note that we are doing this with no anticipated decreases in any services," said Gem Lake Mayor Bob Uzpen. (continued on page 3)