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11 /01 /2010 MEMORANDUM Date: November 1, 2010 To: City Council From: Jessie Hart, Treasurer Re: 2011 Proposed General Fund Budget and Property Tax Levy The Gem Lake City Council approved a preliminary tax levy of $413,245 at their August 17, 2010 meeting. This levy included $361,245 for General Fund operations and $52,000 for the City Hall bonds. Mayor Uzpen and I have met and refined the 2011 Preliminary General Fund budget. These refinements included adjustments for services that we now have a better basis for costs as well as the elimination of some anticipated costs for development that if they do occur, will be offset by revenues paid by the developer. Those refinements and adjustments resulted in a reduction of the 2011 preliminary levy to $320,234, a reduction of $93,011 and decreased the preliminary tax capacity rate from 36.943% to a projected 28.483%. The new proposed tax capacity rate is approximately 14.93% less than the actual 2010 rate of 33.483%. Tax Levy summary information: 2009 2010 2011 2011 Actual Actual Preliminary Proposed Tax Levy $ 443,289 $ 395,828 $ 413,245 $ 320,234 Tax Capacity * $ 1,208,871 $ 1,151,703 $ 1,099,491 $ 1,099,491 Tax Capacity Rate 35.58% 33.483% 36.943% 28.483% * 2010 tax capacity is the August 23, 2010 estimate provided by Ramsey County. The estimate is approximately 4.53% lower than 2010. This results in a decline in the tax base of the City of slightly over 9.0% since 2008. General Fund Budget: The projected 2010 General Fund looks like it will have excess revenues over expenditures of approximately $75,738, an increase to the fund balance. At the end of 2010 the General Fund fund balance is projected to be $369,803 which is 90.92% of the 2011 Proposed General Fund Budget or 114.45% of the projected 2010 expenditures. Page 1