Agenda - Council - 12/08/1992 - Laserfiche WebLink

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The following information is pertinent to this case: 1993 Local Government Aid (LGA) to the City of Ramsey will be $230,799 less than the $446,122 payment received in 1989. In addition to previous cuts, cities risk losing additional LGA in the December payment for 1992 and for the year of 1993. For the City of Ramsey, the remaining LGA of $215,323 is partially, perhaps fully, at risk. With the change in law which makes city purchases now subject to Minnesota sales tax, the City will incur a 1993 sales tax cost in the range of $30,000 to $60,000. This, when combined with the LGA decrease, results a bottom line loss in revenue or increase in expenditures that has a $276,000 impact for the year of 1993. The proposed 1993 property tax levy will increase the City's revenue by $91,510, provided the State does not reduce transfer payments for HACA during 1993. After recognition of this revenue, the City of Ramsey's financial status still is impacted in excess of $180,000. If the City had increased the property tax levy by this amount, the levy to be collected as property taxes would have increased by 30% over 1992 instead of the proposed 5.61%. Based on 1991 statistics provided by the utility companies, a 3% franchise fee will generate approximately $145,000 in new revenue to the City of Ramsey. It is not expected this new revenue will fully replace the loss of LGA already experienced, or future cuts, but this fee is not subject to cuts by the State of Minnesota. Therefore, it represents a stable revenue source that State transfer payments do not. What we have not included in the change in revenue/expenditure numbers above is the loss of the landfill revenue. The tipping fee and trust fund revenue represent approximately $300,000 per year. These funds have provided for the City's curb- side recycling program (approximately $50,000 per year), park improvements and start-up costs of the Fire Department. This revenue stream will end in 1993. While the City has experienced significant revenue changes since 1989, miles of City roads have increased 10%, land dedicated for parks has grown by 26% and the City's households and population have increased 13%. These increases have directly impacted the City services demanded. A franchise fee on the utility system results in revenues received upon occupancy of the home. Property taxes generally result in up to a two year lag in revenues from when we begin delivering services to the property. We wilt have in excess of 250 new homes built in 1992 for which we will not receive tax revenues until 1994. Projected taxes from the 242 homes built through October 1992 to be received in 1994 are $65,582. Projected electric and gas company revenues received in 1993 (in addition to 1992 revenues) from these homes are $323,070. Proposed revenues from a franchise fee at 3% if implemented January 1, 1993 are $9,692. The City has a general fund budget of approximately $2.5 million. Original requested operating expenditures above the projected 1993 budget were $669,308. These requests remain unfunded and earlier the Council passed its maximum levy pursuant to State law. I I I I I I I I I I I I I I I I