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SH"L+E w REQUEST FOR COUNCIL ACTION Date: 12/05/11 Item No.: 12 .b Department Approval City Manager Approval ■ Item Description: Adopt the Final 2012 Tax Levy and 2012-2013 Budget BACKGROUND State Statute requires all cities in excess of 2,500 in population, to adopt a final tax levy and budget by 3 December 30th for the upcoming fiscal year. The final levy amount must not exceed the preliminary levy 4 that was established in September. However, the Council has discretion in modifying the budget at any 5 time. 6 7 At the September 12,2011 City Council meeting,the Council adopted a 2012 preliminary non-to-exceed tax levy and preliminary budget. The preliminary levy was$15,291,245,an increase of$588,201 or 4.0%. 9 By prior Council action,the City Council had dedicated$500,000 of this increase for vehicles,equipment, '10 and general facilities replacements. The remaining $88,201 has not been formally designated. 1 d? It was noted at the September 12th meeting that the City would no longer have its tax levy artificially '1 3 reduced to pay for the State's Market Value Homestead Credit Program. As a result,the$475,000 levy that '14 was in place to make up for the reduction could now be counted on to fund operations. '1 5 '1 6 In adopting the preliminary Budget,the Council designated one-half, or$237,500, of the MVHC Levy to 17 forgo some of the cuts to the operating budget that had been previously recommended. The remaining '18 $237,500 has not been formally designated. In addition,the City's healthcare coverage for employees came '19 in at a lower cost than expected. This will allow for $100,000 in projected savings for 2012. 10 1�11 By virtue of these actions, the City has $425,701 in available funds for the tax-supported pro rg ams that remain undesignated for 2012. The Council could choose to capture these monies and allow for the adoption of a lower tax levy. This would reduce the tax levy increase to only 1.8%or less. However, it is 24 suggested that the Council take this opportunity to review its priorities to determine whether other needs 5 should be met. `26 7 The following is a list of potential budget priorities that could be met with the available funds for 2012: 8 d"'?`,P •'* $145,000 to re-establish funding for the Park Improvement Program to current levels 30 ❖ $220,000 to provide for cost-of-living-adjustments (COLA) for all employees 31 •:* $30,000 to conduct an employee compensation and comparison study 3d`,,,' ❖ $30,000 for General Fund's portion of Asset Management Software 33 •:* $15,000 to accommodate higher than expected fuel prices Page 1 of 9