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Department Approval: � a�'; �-� REQUEST F4R COUNC�L ACTTON Manager Item Descrip#ion: Adopt the Final 2007 Tax Levy azzd Budget Date: 12/18/2d06 Ite�n Na: �4.a Agenda Section: Staff Reports Introduction �ta#e Siatu�e requires ail cities to adopt a final tax levy and budget by December 3fl��' for t�e following fiscal year. The final levy ainaunt must not exceed the p;relirz�ina�ry levy that was established in 5eptember. The prapased 2007 Budget and Tax levy was initially submitted for eonsideration in Juiy and was �ol�owed by a series of Council budget meetings. On Septernber 11, 2006, the Council adoptied a Preiirninary Budget, and an Deeember 4, 2006 the City's annual Truth-in-Taxation Hearing was held. Preliminary Budget and Tax Levy The 2007 Pr�liminary Citywide Budget is $32,�4Q,799, a decrease of $484,391. The Budget for the property tax-s�pported pragrams is $15,264,294, an increase �f $352,1I9 or 2.4%. By comparison, local inflation during t�e �ast year is approximaiely 2.5 -� 3.0% depending on which rrieas�are yau use. Th� proposed Budget calls for a prop�rty tax levy af $11,728,360, an increase of 558,�-95 ar 5%. The proposed le�y has increased above in#7ation due to th�ree reasons. They include: 1) The desz�e to eliz�inate the use of cash rese�-ves (i.e. savings) to pay far on-gaing ot�e�rat�onal costs. This arnounts to $128,000 or a levy increase of appraxin�ately 1°/a. 2} The desire to strengthen ihe City's asset replacement funding mechanisms to ensure that the City's assets are replaced at the end of their useful lives. This az�naunts to $111,000 or a levy increase of approximately 1%. 3) The desire ia set aside additional monies for items that were not included in the original Ci�y Manager Recnmmended Budget, but have been ic�entified as a core need. This amounts ta $58,000 or a Ievy increase af approximately 0.5%. Tax �mpact o� Proper#y Qwners �'or an average �alued home in Roseville of $200,OOa, the 2007 Recom.z�ae�ded Budget and Tax Levy increase will result in an increase of appraxzznately $bl per year or $5.08 per month. This increase factors in the adc�itional tax levy described above and assumes that the home exp�riences a valuation increase o� 15%. Most horr�es in Roseville have �xperienced a Iesser valuation increase, and ther�fore will see a smaller overall increase in their City taxes.