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Item Nos. 16 & 17 <br />memorandum <br />TO: Mayor & City Council <br />FROM: John Godwin, City Manager <br />SUBJECT: BUDGET <br />DATE: August 17, 2015 <br />BACKGROUND: We have discussed the 2015 -16 in multiple meetings over the last few <br />months, and I presented a draft budget on August 10 to the city council. The budget I presented <br />includes some new equipment, one -half of a new employee, some increases in compensation, <br />and some progress on safety and communications equipment in Fire. At this point it still <br />includes tax funding (within the existing $0.50195 rate) to pay debt on $2.5 million in <br />certificates of obligation. It does not include some of the raises for public safety we have <br />discussed, and I still think these raises are important enough to increase the tax rate by at least a <br />penny. A total tax rate of $0.51195 would generate approximately $150,000, at a cost of about <br />$7.47 per year for the average property owner. A recently as 2013 the total tax rate was <br />$0.51107, and it was $0.52000 in 2012. <br />STATUS OF ISSUE: We do need a decision very quickly on the CO issuance and on the total <br />tax rate. As you recall, although cities usually talk about a single tax rate, legally we adopt two <br />rates each year, one for debt service (I &S) and one for operations and maintenance (O &M). We <br />need to know what rate(s) the council intends to consider in formal hearings in September to be <br />able to advertise consistently with state law. For example, right now the I &S rate (proposed at <br />$.08854) is based on selling the COs; if the council decides not to do that, the money cannot <br />simply be moved over to O &M (proposed at $0.41341). If it is collected for debt, it must be <br />used for debt. <br />The council will have a special meeting on Mondayy August 31 to make any changes and discuss <br />the budget as needed. As always I encourage the council to provide general direction and policy <br />guidelines as much as possible in lieu of an unproductive line by line review. The budget is <br />schedule to be adopted on September 21. <br />BUDGET: NA at this time. <br />