Agenda - 06-21-1999 - 9a - Laserfiche WebLink

Browse Search

2) from operating revenues (the major source being the County appropriations supported by the taxes levied each year by the Board of Commissioners)that exceed personnel/operating/capital expenses of the department each year. I told Cliff yesterday that my observations and recommendation to the County Manager and Board of Commissioners would follow this line: Can New Hope provide its current level of service next year while maintaining the current tax rate of 5.15 cents? Absolutely. Is there a case to be made for a tax rate of 6.0 cents, or something in between? Sure. However, even if we were to accept the view that fund balance is needed for truck repairs and that every single dollar in the requested budget for personnel and operating is necessary, and that the requested increases in those lines cannot be mitigated,there are two relatively simple adjustments that would maintain the current tax rate and would have no impact on the department's ability to provide service in 1999-2000. First, do not set aside $15,000 for capital reserve this year. With two new trucks and an enhanced station,the argument for big capital reserves is less compelling to me. Second, finance the new debt over twelve years instead of ten, and reduce debt service from the requested$50,000 to about$43,000 (Cliffs June 16 letter cites the excellent deal they have been offered at 4.89% for 10 years—the leasing company has also offered 5.04% financing for 12 years). These two modifications bridge the $22,000 difference between the Manager's recommended appropriation and that requested from County funding by the department. My recommendation to maintain the tax rate at its current rate as provided by the Manager's recommended budget is admittedly based on a bias towards avoiding any tax increase if possible. There are certainly reasonable arguments to be made calling for paying off the debt in 10 rather than 12 years and thereby reducing total debt costs, and continuing to make programmed capital reserve set asides,rather than relying on operating surpluses to accomplish those increases in cash reserves. This year,I personally find the no tax increase approach more persuasive.