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HomeMy WebLinkAbout2008-06-23 08-236 ORDERItem No, 08 236 Date: 6-23-M Item/Subject ORDER, Authommg the Fiscal Year 2009 Tax Levy to Increase Above the Property Tax Levy Limit, as Calculated Under 30-A MRSA Section 5721-A, Due to an Unprecedented Increase in Fuel Paas Responsible Department City Council Canmentary: The City operates under a state mandated property tax levy limit that restricts the annual growth in the property taxes the City may levy. That limit is based on the ten year average rate of growth of real personal income plus the percentage our tax base grows based on new real and personal property. As this year's budget process progressed, It became dear that unprecedented increases in the cost of fuels would have significant budget implications. For the coming year, we are anticipating an 80%, or $700,000, Increase In these cross, an increase representing aver 55% of the allowable Increase In our tax levy. While a portion of this cost increase an be covered wfthin the levy limit, covering the entire amount would require significant reductions in the service levels provided by the City and expected by our citizens. We currently use nearly 100,000 gallons of heating all; 164,000 gallons of diesel fuel with 40% used by the BAT public transportation system and 52% by public works, pdmadly during winter operations; and 84,000 gallons of gasoline, over half of which Is used by our Police Department. The City is aggressively pursing a range of energy conservation efforts including Implementing the results of a City-wide energy audit undertaken by Honeywell. These efforts will take some time to implement and will primarily result In avoiding costs associated with projected future energy price increases. The property tax levy hint can be increased by a separate major vote of the City Coundl. The attached order would Increase the limit by $484,791 to partially offset the energy price increases we are facing. Department Head Manager's Comments: Recommendapproval. City Manager Associated Information: Budget Approval: ak Finandif Director Introduced for X Passage _ First Reading Page _ of _ Referral 08 236 Pty Assigned to councilor atone June 23. 2008 CITY OF BANGOR e (TME.) ORDER, Authorizing the Fiscal Year 2009 Tax Levy to Increase Above the Property Tax Levy Limit, as Calculated Under 30-A MRSA Section 5721-A, Due to an Unprecedented Increase In Fuel Prices WHEREAS, the State Legislature has enacted a system designed to limit the growth of municipal tax levies to the rate of growth of real personal income and the growth In new real and personal property; and WHEREAS, the City, in providing services to our citizens, consumes nearly 100,000 gallons of oil to heat its buildings, 84,000 gallons of unleaded gasoline, over half of which is used in Police vehicles, and 164,000 gallons of diesel fuel, of which 40% is used in the operation of the BAT Community Connector public transit service and 52% by Public Works; and WHEREAS, fuel prices have increased 80% or $700,000 aver FY2008 levels; and WHEREAS, an increase of this magnitude cannot be funded within the tax levy limits imposed by the State without significant reductions in the services and service levels provided by the City; and WHEREAS, while the City has entered into an agreement with Honeywell to undertake energy audits of all significant City facilities and is exploring alternatives to reduce its energy use, such efforts will take time to implement and will primarily result in avoiding casts associated with projected future energy price increases; and WHEREAS, the legislature has authorized municipalities to increase their property tax levy limit by majority vote of the City Council; NOW, THEREFORE, BE IT ORDERED BY THE CIT' COUNCIL OF THE CITY OF BANGOR THAT In accordance with 30-A MRSA Sections 5721-A. 6. and 7. A, R is the Intent of the City Council to Increase, and we hereby do Increase, the property tax levy limit for Fiscal Year 2009 by the amount of $484,791. This represents the amount of Increase in fuel prices that could not be absorbed within the allowable levy. M CITY MUNCIL lace 23. 2008 Notice, Made and seconded for Passage eta/s^fw LR TY CLeA t g 08-236 vanes (1'PPLvae. re..a a eb. g Tac Levy to Iacreace Above the Property 30-AIIDSASection 5721-A'Due ato an ppprecedeated Anigegl b couoegor_�tlY/gtl ��