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REQUEST FOR COUNCIL ACTION <br /> Date: 07/22/13 <br />Item No.: 12.a <br />Department Approval City Manager Approval <br />Item Description: 2014 Budget Discussion – City Council Budget Guidance <br />B <br />ACKGROUND <br />1 <br />thth <br />At the July 15 and 18 City Council meetings, the Council received an overview of departmental <br />2 <br />priorities, challenges, and opportunities. These overviews were followed by a general discussion on <br />3 <br />various departmental-related topics that could potentially impact the 2014 Budget. The purpose of <br />4 <br />these initial forums was to provide the Council with a broad perspective on the short-term operational <br />5 <br />needs in 2014 as well as the longer-term, strategic initiatives that had been identified earlier this year. <br />6 <br />7 <br />The next step in the budget process is to receive guidance and/or directives from the City Council <br />8 <br />regarding the 2014 Budget. Staff will use this guidance to prepare a City Manager Recommended <br />9 <br />Budget to be presented at the August 19, 2013 Council meeting. More specifically, the Council is <br />10 <br />asked to identify the following: <br />11 <br />12 <br />Maximum, not-to-exceed tax levy increase (statutory cap of 3% for 2014) <br />13 <br />The extent that cash reserves might be utilized <br />14 <br />High-priority budget items <br />15 <br />The extent that programs or services could receive reduced emphasis <br />16 <br />17 <br />To ensure that the 2014 City Manager Recommended Budget reflects the Council’s goals and <br />18 <br />objectives, it is crucial that the Council reach consensus on the items listed above. Each of the items <br />19 <br />listed above are discussed in greater detail below. <br />20 <br />21 <br />Maximum, not-to-exceed tax levy increase (statutory cap of 3% for 2014) <br />22 <br />th <br />As noted at the June 10 City Council meeting, levy limits were reinstated by the State Legislature for <br />23 <br />2014, capping the increase to 3% of the current levy less any LGA the City receives. The levy for debt <br />24 <br />service was excluded from this calculation. <br />25 <br />26 <br />Based on the 3% cap the levy limit increase is $423,000. However, this is reduced by $225,000 in <br />27 <br />newly-awarded LGA leaving us with a maximum net levy increase of $198,000. Therefore, between <br />28 <br />the LGA and additional levy authority the City has up to $423,000 in available new revenues. <br />29 <br />30 <br />If we levy the maximum of $198,000, the property tax impact for a median-valued home that <br />31 <br />experiences an expected 3.5% valuation increase will be $2.15 per month. In addition, the debt service <br />32 <br />levy is increasing by $560,000 in 2014 which will bring the overall impact to $4.47 per month. <br />33 <br />34 <br />Page 1 of 3 <br /> <br />