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4.a) Staff Report-Max Tax Levy Staff Report Date of Meeting: September 3, 2014 To: City Council From: Kristina Handt, Administrator Re: Certify Maximum Tax Levy Background: The preliminary levy for taxes payable in 2015 must be certified to Washington County and the date of the public hearing must be set no later than September 30 for the general fund and September 15th for the EDA. The recommended property tax levy would be preliminary, to be used for the property tax notices that will be sent in November. The Council may make additional changes to the budget prior to its adoption in December, but the tax levy may not be increased. The Council has held budget work sessions in August and began the review of Capital Improvement needs. Issue: What amount should the Council certify for the preliminary levy for taxes payable in 2015? Proposal Details: The resolution in your packet provides the tax levy breakdown by fund. The total levy would be $2,227,509 or a 2.6% increase over taxes payable in 2014. These levy amounts are reflective of the changes directed by the Council at the August 20th meeting:  No Council salary adjustments  No audio improvements for the Council chambers  EDA levy of $5,000  Capital Improvement Fund levy reduced to $50,000  Equipment Replacement Fund levy transfers reduced to $20,000  Additional $130,000 shifted to Local Road Improvement Fund levy Updated budget drafts are also included in your packet. The utility truck with crane has been removed from the Capital Improvement Program (CIP). Fiscal Impact: The charts below show the impact of a 2.6% levy increase for a number of different home values. The first chart shows the 2014 values and taxes. The second chart assumes a 19.8% increase in market value and shows the tax impact of a 2.6% levy increase. Market Homestead Taxing Value Market Taxable District Before Value Market Tax Portion of Exclusion Exclusion Value Capacity Tax Actual Pay 2014 Pay 2014 76,000 @40% 500,000@1.0% (A7 x G) + MV - rem @ 9% (D) - (E) rem @ 1.25% (A12 X D) 224,500 17,000 207,500 2,075 $850.25 83,500 29,700 53,800 538 $220.45 125,200 26,000 99,200 992 $406.48 208,700 18,500 190,200 1,902 $779.36 333,900 7,200 326,700 3,267 $1,338.69 Proposed Pay 2015 Pay 2015 MV 76,000 @40% 500,000@1.0% (B7 x G) + X 1.198 - rem @ 9% (D) - (E) rem @ 1.25% (B12 x D) 268,900 13,000 255,900 2,559 $889.46 100,000 28,200 71,800 718 $249.56 150,000 23,700 126,300 1,263 $438.99 250,000 14,700 235,300 2,353 $817.86 400,000 1,200 398,800 3,988 $1,386.15 Options: 1) Approve Resolution 9-3-14-01 to certify the preliminary levy at $2,272,509 2) Amend and then Approve Resolution 9-3-14-01 to certify the preliminary levy at a different amount. Recommendation: Option 1. The Council can continue to work on the budget between now and final adoption in December. The levy could still decrease from the proposed preliminary amount; however, it could not increase.