2012-11-27_PWETC_AgendaPacket - Laserfiche WebLink

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Page 2 of 10 36 The 2011 Recommendations — A Reminder of What Has Been Done 37 38 Tax - Supported Capital Needs. 39 40 Background. The tax - supported capital areas (other than Fire Station or Parks and Pathways 41 needs) are Vehicles, Equipment, and Facilities. Vehicles represent City `rolling stock," from 42 police squad cars to fire trucks to snow plows to utility pick -up trucks. Equipment represents 43 such things as firefighter turn -out gear, police firearms, office furnishings, and the like. 44 Facilities capital needs generally do not include whole buildings, but rather major building 45 systems, such as roof replacements or heating and air conditioning systems. These capital items 46 are the "nuts and bolts" of doing City business on the tax- supported side of the ledger. 47 48 Over $16 million (57 %) of the $28 million in general Vehicle, Equipment, and Facility needs 49 was un -funded as of 2011, using then - current funding levels and projected costs over the next 20 50 years. 51 52 Recommendation. The subcommittee recommended, and the City Council implemented, a long - 53 term solution for Vehicles, Equipment, and Facilities that is a combination of shifting funding 54 from operational costs to capital costs, re- purposing existing levy funding, and adding revenues. 55 This recommended solution addressed 100% of the $16 million identified shortfall over the next 56 20 years, and left the associated fund balances and annual fixnding at sustainable levels beyond 57 that time. 58 59 The first part of the implemented recommendation was to shift approximately $300,000 (about 60 2.0% of the then- current $14.7 million levy) from current operating budget funding to capital 61 funding in 2012, and to maintain that shift permanently going forward. Approximately $115,000 62 of that amount goes annually be dedicated to Vehicle funding, approximately $115,000 to 63 Equipment funding, and the remaining approximately $70,000 goes to Facility funding. 64 65 The second part of the implemented recommendation was to re- purpose for capital needs half of 66 the $475,000 ongoing property tax levy that was "over- levy" to account for the loss of Market 67 Value Homestead Credit reimbursement from the State, and to maintain that re- purposing 68 permanently going forward. Approximately $95,000 of that amount would annually be 69 dedicated to Vehicle funding, approximately $95,000 to Equipment funding, and the remaining 70 approximately $47,000 would be dedicated to Facility funding. 71 72 The third part of the implemented recommendation was to increase the annual property tax levy 73 by $256,000 (1.8% of the current $14.7 million levy) in 2012, and to maintain that increase 74 permanently going forward. Approximately $103,000 of that amount would annually be 75 dedicated to Vehicle funding, approximately $103,000 to Equipment funding, and the remaining 76 approximately $50,000 would be dedicated to Facility funding. 77