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Item 4MCITY OF SOUTHLAKI MEMORANDUM July 29, 2014 To: Shana Yelverton, City Manager From: Sharen Jackson, Chief Financial Officer Subject: Consider proposal to adopt a tax increase and set public hearing on the tax rate for the August 19, 2014 and September 2, 2014 Regular City Council meetings Action Requested: Place proposal to adopt a tax increase and set public hearing on the tax rate for the August 19, 2014 and September 2, 2014 City Council meeting. Background Information: The proposed tax rate of $.462 will exceed the effective tax rate ($.447209) and increase tax revenues. Even though the tax rate is held at $.462, the tax rate exceeds the effective tax rate ($.447209) by 2.16%. Because the tax rate exceeds the effective tax rate, state law requires that two public hearings be held by the governing body before adopting the proposed tax rate. The city council must vote to place a proposal to adopt the rate on the agenda of a future meeting as an action item and hold two public hearings on the proposal. Financial Considerations: The effective tax rate would result in a property tax revenue reduction of $932,650 Strategic Link: F1 Adhere to financial management principles and budget Citizen Input/ Board Review: Public hearings would be scheduled for August 19t" and September 2nd Legal Review: None required Alternatives: None Supporting Documents: None Staff Recommendation: Place a proposal to adopt a tax rate increase and set public hearings for the August 19t" and September 2nd Regular City Council meeting.