2004-05-10 Budget Study - Laserfiche WebLink

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Session 1919 May 10, 2004 SW asked if the City Council has the authority to levy more tax than is currently levied, and the City Manager responded that they do. He cited an example of where sales tax was used to pay off bonds, instead of raising property taxes. Since the bonds are paid off, the property tax cannot be collected. He mentioned a second authority, not utilized, which is a voted levy for police and firemen pension funds of about fifteen cents, and there is authorization to collect a property tax of up to fifteen cents. Over the past decade the pension funds have been well-funded, so this has not been necessary. If necessary, the City could invoke a property tax voted in twenty years ago. The City currently has reached the maximum allowed by voters for the General Fund and for the Library. Mr. Wagner took exception to the City Manager's description of how the City must spend its money, listed on the Revenue page, and the assertion that it is mandatory to give cost-of-living raises. His "rule" is that budget expenditures should not increase over the amount of revenue raised for the preceding year. To do otherwise, he asserted, is irresponsible government. Ms. Welsch asked about the difference between the delinquent property tax, in terms of real property and personal property, and why there is a difference in amounts from revised figures from this year and what is expected next year. Mr. Ollendorff said the City was unusually successful at budgeting a more typical level of collection of delinquent taxes. Extra work by the Finance Department enabled more taxes to be collected, but the City Manager does not expect that to continue into the next year, so he showed it in the budget more closely to the traditional number. Next, Ms. Welsch asked about increased figures for electricity and natural gas, and if these increases resulted for extreme rises in prices. Mr. Ollendorff returned to the subject of property taxes and said many people assume it is a government's main source of revenue, but it is only about twelve percent of the total budget. The School District is highly dependent upon property tax, its only source of revenue. Licenses The City Manager explained that this section is basically sales taxes and taxes on businesses and sales of one kind or another. The largest of these are the two big utility taxes, electric and natural gas. These are subject to two big variables, the weather and the rates. Rates were increased this year and are expected to increase next year, too. Last year there was a cool summer, so electrical revenue was lower than estimated; the opposite was true with natural gas. There was a cold winter, so natural gas costs were high. It is expected that rates will continue to rise next year. In respect of line item 630.25, fiber optics and cell phones, the City currently has a court Page 2