2004-97 MAKING THE ANNUAL TAX LEVY

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SUBJECT: Annual Taa�Levy SUMMARY RECOMMENDATION: StaffRecommends approval of the proposed Tax Levy BACKGROUND: Each year the City is required to pass a tax levy, an issue made more difficult based on the fact that the levy must be passed in December even though we won't know the city's Equalized Assessed Valuation(the amount of value to which our tax is applied) until March at the earliest. In the past,this time gap has created situations whereby the property tax amounts paid to the City by residents would vary greatly from year to year in cases where the City's estimate of the EAV did not mirror the actual amount. Additionally, the City itself has never collected an adequate amount of the annual increase in value of the community to cover costs required to be paid by the t� levy. This has been the case even though the city has taken on considerable debt to build that value and other costs such as police and fire pension, IMRF and employee healthcare —among other things—have greatly increased. The proposed resolution would correct problems with the timing of the levy and work to stabilize our tax rate. Under this proposal, The City would levy a dollar amount with an assumption of equalized assessed value, as we do currently. In the event that the county's assessment does not match City estimate, however, we would shift a portion of the costs currentiv covered b,y the tax levy to other sources (abatements)thereby insuring that the amount paid by taxpayers to the city would not change, unless their property was reassessed. POTENTIAL OBJECTORS: There have been several inquiries from residents regarding this year's proposed levy amount. INPUT FROM OTHER SOURCES: Finance Director Ron Neufeld did consult with Macon County about EAV estimates for the coming year and with other communities who currently levy in the manner that is being proposed. STAFF REFERENCE: Staff will be available to answer any questions. Attached you will find several charts detailing our current levy situation as well as a memo addressing many of the questions raised in recent weeks regarding the levy.