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<br />Gem Lake News Page 3 of 6
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<br />2015 Budget Approved: You Can Exhale….
<br />Reporting Requirements, and a 14% increase in
<br />the law enforcement budget. On the plus side,
<br />the council was able to remove the $20,000
<br />contingency fund from 2015, and also, building
<br />inspection revenue is projected to increase by
<br />$5,000 due to increased building activity.
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<br />The Good News/Bad News
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<br />Ramsey County determines market values and
<br />then property class rates are established by the
<br />State of Minnesota. Class rates are applied to
<br />market value of property in a city to establish
<br />what is called “tax capacity.” The city then
<br />establishes a tax levy based on their budget and
<br />the tax levy is divided by tax capacity value to
<br />determine the tax rate. The tax rate is multiplied
<br />by individual tax capacity to determine what
<br />each property owner will have to pay. The good
<br />news is that residential values increased an
<br />average of 6.6%. The median value of a home
<br />increased in the county from $200,800 to
<br />$214,000. The bad news is that commercial
<br />property values remain flat or are still
<br />decreasing. This creates a shift in property tax
<br />load from commercial to residential.
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<br />Gem Lake will have a total 2015 budget from all
<br />funds of $596,734. The General Fund Budget of
<br />$331,932, makes up 55.62% of the budget. The
<br />other budget categories are the Capital
<br />Improvement Fund, which makes up 11.81% of
<br />the total, the Debt Service Fund, which makes
<br />up 11.76% of the total, the Enterprise Fund,
<br />which makes up 9.97% of the total; and a
<br />Special Revenue Fund, which makes up 10.83%
<br />of the total.
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<br />The Capital Improvement Budget is $70,500 and
<br />covers road repairs. The Debt Service Budget is
<br />$70,171 and covers debt payments for Heritage
<br />Hall and passed improvements. The Enterprise
<br />Budget is $59,481 and covers the operations of
<br />the sewer system. It is substantially covered by
<br />sewer fees. The Special Revenue Fund is
<br />$64,650 covers expenditures related to an
<br />improvement grant and is offset by grant
<br />revenue and interest earnings. No tax dollars are
<br />involved.
<br />The property tax levy is broken into a general
<br />fund levy and a debt levy.
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<br />The General Fund Operating Property Tax
<br />Levy is $204,655. This is a 13.6 increase over
<br />2014, but it is lower than the 2011 and 2013
<br />levies.
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<br />The Debt Levy for Heritage Hall is $49,500,
<br />which is a $600 decrease from 2014.
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<br />It is not unusual in Minnesota for a city’s
<br />preliminary and final budgets to differ greatly.
<br />According to state law, the final budget can
<br />never be higher than the final budget, so cities
<br />estimate high, especially regarding spending
<br />categories where they don’t have final
<br />numbers. The preliminary budget has to be
<br />submitted to the county by September, so
<br />very often figures are not yet certain for things
<br />like contract services.
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<br />That was the case for Gem Lake. The
<br />significant decrease in the final budget came
<br />as a result of both refinements in revenue
<br />estimates based on actual 2014 activity and
<br />more accurate information on 2015 costs.
<br />This led to budget decreases in for next year
<br />when it comes to things like recycling
<br />services, administration, financial and legal
<br />services, fire protection and the newsletter.
<br />The City Council also decided to use reserves
<br />to buy down the potential levy by $80,000 for
<br />2015.
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<br />The General Fund Budget, which again will be
<br />$332,932 for 2015 is made up of Public
<br />Works, which will account for $41,350; Public
<br />Safety, which accounts for $128,783; and
<br />General Government, which accounts for
<br />$161,799.
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<br />The General Fund Budget accounts for the
<br />operations of the city. The General Fund
<br />budget is increasing 5% over the 2014
<br />budget. The major source of revenue for this
<br />budget is property taxes. This budget
<br />increased $99,916 over the previous year due
<br />to a decrease of $14,000 in facility rental
<br />revenue that was based on an arrangement
<br />with the Sheriff’s Department, $36,927 for
<br />adding a staff person to the Heritage Hall site,
<br />$13,000 for Ms-4 (state storm water)
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