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down in FY08 when the youth levy expires and the library levy is reduced by half. The rate is expected to <br />go down again in FY11 when the urban renewal special levy to pay for the library bonds is eliminated. <br />There appears to be sufficient room under the cap to accommodate a capital local option levy with an <br />average tax rate of $0.75 per $1000 of real market value, leaving some room for property value <br />fluctuations during the levy term. This tax rate would generate capital spending of about $10 million per <br />year. Any room under the cap is shared between the City, County and Urban Renewal Agency, so there <br />would be less room for the City’s governmental partners or for the City to contemplate other local option <br />levy funding during the term of the pavement preservation capital local option levy. <br /> <br />Should council decide to include a property tax component in a pavement preservation funding package, <br />staff would recommend a capital local option levy over a GO bond as the preferred property tax funding <br />mechanism because a) the local option levy could provide sufficient funding under the Measure 5 tax rate <br />cap without incurring debt or using limited GO bonding capacity, and b) the local option levy is a less <br />expensive method than GO bonds for providing funding for pavement preservation projects. <br /> <br /> <br /> <br /> <br /> <br />2 <br />