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Letter of Transmit�al The Honorable Mayor and City Council: Submitted, herewith, is the adopted 1989 Annual Budget. Introduction The intent of this letter is to provide an overview o£ the 1989 � Budget, noting significant changes from the 1988 Budget. The ' letter addresses four major areas: Assessed Valuation, Levy and Mill Rate, Revenues, and Expenditures. 1989 Budget Overview Estimated Assessed Valuation The 1988 Legislature did pass and put into effect several significant changes related to property taxes, one of which was a change on assessed valuation. The term "Assessed Valuation" has been changed to Tax Capacity. Each property within the City will have a tax capacity, which is 12.0034 percent of the old assessed value. For comparison purposes, Roseville's 1988 assessed valuation is $343,324,012.00. The County has estimated that the 1989 comparable assessed valuation would be $358,509.13. Using the 12.0034 percent, Roseville's estimated 1989 tax capacity will be $40,224,858.00. - One other legal change has been the elimination of the millage rate. It has been replaced by the term "Tax Capacity Rate". It appears the new Tax Capacity Rate is used in the same manner as the old millage rate. (See the following page for an illustration and comparison.) Based on the County's estimates, Roseville does show a significant increase in valuation for 1989 over 1988, of $16,676,000. This increase of 4.8 percent does reflect a combination of valuation changes and new taxable property. This increase is outside of the Tax Increment Districts. Levies, and Tax Capacity Rates The total 1989 adopted budget is $16,544,214. This is an increase of $1,500,453, or a 9.97 percent increase over 1988. Tax levy requirements to finance this budget are $5,154,451 for an increase of $154,451, or a 3.09 percent increase. Based on the estimated Tax Capacity and levy requirement, the Tax Capacity Rate for 1989 will be 12.00 percent. This tax capacity rate is equivalent to 14.377 mills under the old law. The mills in 1988, 1987, 1956 were 14.563, 14.192 and 13.564 respectively. i