CC - Agendas - City Council - REGULAR - 7/23/2013

Home

Prescott City council Regular Voting Meeting —June 25, 2013 Page 11 • House Bill 2111 will reduce the General Fund and Streets Fund revenue beginning January 1, 2015, in the range of $350,000.00 - $500,000.00 less revenue in each of the two funds in the first year. • Recommendation on pay adjustments to be brought to Council by August 2013 to analyze anticipated effects of HG 2111. Councilman Blair asked how much money the City will lose when the .25 of one percent goes away from the Streets and Open Space Fund. Mr. Woodfill said the City received $13 million for the 1 percent. Councilman Blair said that the City should ask for an extension of the tax to get the entire amount back. He advised that maintenance for Open Space be included. Mr. McConnell said we will be looking at a reduction in the Streets Fund if the money goes away. He said it is the duty of staff and the community to create a package that will be included in the .25 percent tax. He noted that in the current year budget, the retirement systems increase is $500,000.00. Councilman Lamerson said the budget adjustments are made for the City and are not done by Council or staff. The ability to deliver the services the citizens have become accustomed to are significantly impacted. Mr. McConnell said municipal funding in the state is tenuous. There are two major sources of money to the general fund — sales tax and intergovernmental revenues that come back from the state. The cities seem to be taking the brunt of the fallout from the legislative session, which stretches the budget. The reality is that the services the City provides our residents and tourists are being subsidized by our visitors. This emphasizes the importance of the link to tourism development. Mayor Kuykendall said the playing field is not level. Our sales tax is 2 percent now. Our neighbors have a sales tax of 2.33 percent and 4 percent. He said we get beat up on the tax base, but we are the lowest in the area. If we have another.33 percent it would be near $4 million a year. Mr. Woodfill continued with a discussion concerning property tax. • There are significant state limitations on the amount of property tax the city is allowed to assess. • There are two types of property tax: • Primary for general governmental operations • Secondary pays of debt service • Property owners surrounding Prescott do not pay any City property tax but kkine are subject to Central Yavapai Fire District (CYFD) tax.