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De artment Approval: � � �� REQUEST FOR COUNCIL ACTION Manager Approved: Date: 12/27/04 It�n: 2. 2�S Budget and Tax Levy Date: l �� Item No: 10. Agenda Section: ��'�� Item Description: Adopting the 2005 Final Tax Levy and Budget Introduction State Statute requires all cities to adopt a final tax levy and budget by December 30" for the following fiscal year. The final levy amount must not exceed the preliminary levy that was established in September. 2005 Budget The proposed 2005 Budget and Tax levy was initially submitted for consideration in July and was followed by a series of Council budget meetings. On September 13, 2004, the Council adopted a Preliminary Budget in the amount of $32,923,530(a), a decrease of $2,068,880 or 5.9%. The decrease is largely attributable to the completion of the City Hall renovation and other capital improvements for which one-time monies were used, and are no longer needed. The combined Preliminary Budget for the tax-su�orted funds is $14,435,365, an increase of $232,105 or 1.6%. (a) The resolution adopting the 2005 Proposed Budget included an amount of $33,323,530. The correct amount should ha�e been $32,923,530 ($400,000 less) and will be reflected in the final Budget resolurion. The resolurion adopring the Proposed 7�c Levy vuas not affected. The budgeted increase in the tax-su�ported funds is affected by a variety of factors which include, but are not limited to: a) $200,OOOincrease for inflationary impacts b) $125,000 increase for added vehicle replacement charges c) $25,000 increase for the City's share of gym rental and operating costs at the Gymnastics Center These added costs were partially offset by the elimination of funding for a custodial position, one maintenance position, and one FTE civilian position within the Police Department. The elimination of these positions was incorporated into the Preliminary Budget.