Agenda - Council - 11/10/1992 - Laserfiche WebLink

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excess of $180,000. If thc City had increased the property tax levy by this amount, the tevv 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 $1-t5,000 in new revenue to the City of Ramsev. It is not expected this new revenue will fully replace the toss of LGA 'already experienced, or future cuts, but this fee is not subject to cut 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 · e loss of the landfill revenue. The tipping fee and nmst fund revenue represent approximately $300,000 per year. These funds have provided for the City's curb- side reeycling program (approximately $50,000 per year), park improvements and start-up costs of He F~re department. This revenue stream will end ha 1993. While the City has exr~erienced 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 will 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 is $6_5r,5.82. Projected electric and gas company revenues received in 1993 -(ih addition to I992 revenues) from these homes is $323,070. Proposed revenues from a franchise fee at 3% if implemented January 1, 1993 is $9,692. The City has a general fund budget of approximately $2.5 million. Ori~nal requested operating expenditures above the projected 1993 budget was $669,308. These requests remain unfunded and earlier the Council passed its maximum levy pursuant to state law. Recommendation: Staff recommends introducing the ordinance establishing franchise f~s at the rate of' ~ 7c, Orl residennal revenues. CounciI Action: Motion to introduced Ordinance .~*~92-XX establishing franchise fees at the rate of 3% on residential revenues. Reviewed by: CiD, Administrator Copies also distributed to: Finance Officer CC: t 1/! I I I I I I I I I I I I I I I I I I