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
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