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I I I City Council Minutes September 9, 1996 Page 4 Council Business Finance Director Margaret Egan presented actions required for compliance of Truth in Taxation. The City annually adopts an operating budget which identifies services to be provided and financing method. The following requirements are recommended: public hearing for the annual budget (December 5); Council consideration for adoption of the annual budget (December 18); certifying of maximum tax levy (September 9); and adoption of the proposed 1997 annual budget (September 9). Proposed property tax statements will be mailed to property owners sometime in October. A 3 % increase in the base has been included for personnel services while all other costs are the expected amounts. For 1998 and 1999, a 2 % price adjustment across the board has been planned. The proposed 1997 budget is estimated at $12,070,900; or an increase of 5.74% over the 1996 budget. Services changes in the 1997 General Fund include: addition of 3.5 police positions; increased debt/capital expenses - $79,600; growth in Family Service Center base; general price changes; MPRS settlement fees; addition of streetscape maintenance position; teen curfew program; and elimination of boat launch staff. For the Enterprise Services, most of the cost increase is for sewage treatment by the Metropolitan Council Waste Water Services. The 1997 sewage charge is expected to increase from $717,000 to $900,000. Municipal accounting provides for three kinds of expenditures: 60% - personnel services; 10% - materials and supplies; and 29% - contractual services. The City fully finances its annual cost to services. Primary revenue categories are: taxes, customer charges, State aid, interest, transfers, and decreases of the reserves. The General Fund contains the City's repayment installments for bonds and other long- term capital improvements. For the Enterprise Services, it is normally expected that all costs will be financed by customer charges. The Water Utility received a significant special fee for operating the Treatment Plants. The 1997 fee is budgeted at $225,000 which provides 20% of this utility's revenues. The strategy for the changes in property taxes result in increases in operation costs, and decreases in other revenues. The 1996 property tax levy was $2,760,300. The 1997 proposed amount would be $3,015,900 which represents a change of $255,600 or 9.6% from 1996. The annual impact on a home valued at $72,000 would be $11; a home valued at $200,000 would see a dollar change of $53. Benke confirmed that the 9.6% proposed levy increase is the maximum allowable. Based on Council and staff work sessions, it appears that amount will be decreased. Hoffman noted a decrease in the HazMat budget. Motion by Williams, seconded by Samuelson, to WAIVE THE READING AND ADOPT THE RESOLUTION COMPLYING WITH THE TERMS OF THE TRUTH IN TAXATION PROGRAM. 4 Ayes - 0 Nayes, Motion Carried. Council Business Truth in Taxation Report 96-211 Resolution 96-073