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$1 <br />82 <br />83 <br />8� <br />SS <br />86 <br />87 <br />8'8 <br />83 <br />90 <br />91 <br />92 <br />Relatiorns�ip between Reserves & Prape�°ty Ta�es <br />In add'ztiQn ta tl�e roles depicted above, eash reser�res also play a�roie in determining w�at t�e <br />City's propez�ty tax levy needs to be. Tk�e Ci�� earns approxz�aaaiely $�.7 millinn in intearest <br />earnings fram the cash reserves that are inves�ed. These interest earni�gs are used tn provid� <br />fivading far �he cunrent �scal year. This is depicied below. <br />As noted abave, �e City overall earns abaut $1.7 rnillion in annual interest earnings from zts <br />cash reserves. Assuming �he City did nat have t�ese reserves, we vvouid lase out on. ihe ability io <br />capture the $1.7 millian. Holding a11 other factors canstant, we �ould then have ta increase �he <br />levy by the sarne $1.7 z�:illia� io preserve funding �evels. The table belovv dez�aonstra�es the <br />impaot. <br />93 <br />9� As tl�e table above indicates, wi�k�aut a�y cash resezves, a typical home�wner would pay <br />95 approxirnately I`�% more in property t�es to �e�p current funding levels cons�ant. <br />96 <br />97 Fi�a� Comraien�s <br />98 �n June, 2006, t�e Czty hired Springsted �'i�aancial Advisors to provid� a credit rating �rofile. <br />99 Wit�in this �rofile was a generai discussion on apera�ing budget reser�ve guid�Zanes anc� �ior�r t�ey <br />100 innpact �he Ci�y's credit rati�z�;. An axcerpt of this report is included in Attachment A at the bac� <br />� 01 of this repart. <br />3 <br />