FY2020 Budget

Six original MSD neighborhoods approved an assessment of a special tax rate annually, beginning in Fiscal Year 2014. The tax rate will continue to be levied for all six neighborhoods until the cost of all improvements for all projects is complete. The MSD tax increment is anticipated to generate approximately $100,700 at an estimated 99% collection rate in Fiscal Year 2020. The General Fund provides for an annual transfer to the MSD Fund of $110,000 to accelerate funding for these projects and will be repaid by the MSD tax increment over time, even after all projects are complete. The repayment timeline is approximately 25 years and is dependent upon both the revenues collected from the tax increment and the cost of the MSD projects themselves. Individual neighborhoods are not relieved of their responsibility for payment of the MSD tax increment until all street improvements within the district are complete and funds advanced by the General Fund are repaid.

Other non-operating budgets for Fiscal Year 2019 include two annually adopted retirement funds:

Retirement Health Care Fund (OPEB)

$355,460

Retirement LEO Separation Allowance Fund

$ 96,610

Capital Projects Funds with approved Capital Budget Ordinance are on multi-year budget schedules and are not related to the annual operating budget ordinance unless through a planned interfund transfer(s) or debt obligation(s).

GENERAL FUND OVERVIEW

Ad Valorem Taxes (Property Tax/Auto Decal Fee)

The Fiscal Year 2020 property tax rate is recommended to remain at $0.39 per $100 of property valuation. Revenues are reflective collectively of the increased assessed property value from the natural growth in tax base and from stable revenues in other categories. Real revenue growth (from sources other than transfers and carryover items) approximates 2% as compared to the prior year. Two additional balanced budget tax rate scenarios, illustrating additional levels of program and operational support are provided for Town Council discussion. Town Council has also begun discussing a future bond referendum to solicit citizen support for tax increases associated with major capital projects that may impact tax rates for future years.

The General Fund Ad Valorem revenue for Fiscal Year 2020 is estimated at $19,240,000 and represents 55% of the total budget. This estimate is based on a 99.8% collection rate.

The vehicle tax fee of $30 per vehicle approved in FY 2019 is the maximum levy authorized and remains at that level for FY 2020. Of the $30, $5 may be used for any lawful purpose, and $5 may be used to fund public transportation system costs. The remaining $20 must be used to maintain, repair, construct, reconstruct, widen or improve public streets in the municipality that are not part of the State highway system.

Sales and Use Tax

Sales Tax revenues continue to show stable growth, reflective of historic trends and strong consumer confidence indices. Sales Tax revenues are projected to increase by 6% to $6,080,000 for Fiscal Year 2020. Sales tax revenues are 17% of the General Fund revenues and the second largest revenue source for the Town.

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