Minutes - Council Work Session - 08/27/2013

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Finance Director Lund explained how the levy limit is calculated and impact of whether or not the special levies are included. She referenced the newly prepared 2014 preliminary budget report and reviewed the adjustments of $156,000 made to gain a balanced budget of $7,482,513. Finance Director Lund stated the City Council needs to approve the maximum levy limit by September 10, 2013, so tonight is the last opportunity to make that determination without holding a Special Meeting. Finance Director Lund reviewed the budget impact with the $931,285 increase that would result in an estimated tax capacity of $48.165 %. Councilmember Riley asked if the State meant something different by "levy limit" or had there been a miscommunication. Finance Director Lund stated the calculation indicated the City was to exclude special levies; however, the new information indicates the special levies do not need to be excluded. She stated she confirmed the new interpretation was correct with the League. Councilmember Riley asked if the State could go back should this be a mistake. Finance Director Lund stated they could not because the State threw out the special exemption this year. She explained that if the State removes levy limits, then it would be up to the City what to levy. City Administrator Ulrich stated you could presume some intent of the Legislature to limit levies since the cities received LGA. Mayor Strommen stated the tax bill was considered very quickly at the end of the Session. Councilmember Riley asked what will be done next year. Mayor Strommen stated she does not know if there will be a Tax Bill next year. Finance Director Lund explained the levy limit sunsets in one year. She stated she contacted a neighboring community who had the same questions and asked for an interpretation from the League. Mayor Strommen stated the City Council had a proposal for 2013 and asked whether they were comfortable with the budget at the $7,482,513 level, noting the City Council cannot increase the amount once the levy is approved. She also asked if there were concerns with any of the line items. Councilmember LeTourneau stated he is comfortable with that level. Councilmember Kuzma stated he was excited to see that the majority of the Strategic Plan was implanted within that amount. He stated he is not excited about increasing the levy to the maximum level even though that is an option but would consider an increase of $156,000 to completely implement the Strategic Plan. City Council Work Session / August 27, 2013 Page 2 of 6