HomeMy WebLinkAbout10 04 10 City Council work session~~ PRI~~\
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U x Prior Lake, MN 55372-1714
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CITY COUNCIL WORKSHOP AGENDA REPORT
~`M~NNESO~P~.;-
MEETING DATE: OCTOBER 4, 2010
PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR
PRESENTER: JERILYN ERICKSON, FINANCE DIRECTOR
TOPIC: 2011 BUDGET 8~ TAX LEVY
DISCUSSION: Introduction
Since the City Council adopted the preliminary budget and property tax levy
on September 7, 2010, the city Staff has continued to refine numbers in
order to prepare a budget document for the Truth in Taxation hearing.
The purpose of today's workshop is to:
1) Provide staff with the opportunity to apprise the council of our efforts
to refine the preliminary budget;
2) Afford the City Council with an opportunity to discuss the salient
aspects of the document;
3) Receive council direction with respect to the timing and preparation of a
document for use at the 2011 Truth in Taxation hearing.
History
The City Council has established the preliminary property tax levy in
accordance with State Statute. This amount has been reported to Scott
County.
Current Circumstances
REFINING THE BUDGET
Expenditures
Staff has continued their efforts to refine the 2011 budget. You may recall
that at the end of 2009, the City realized significant savings in costs for fuel,
electric and gas. Staff has analyzed these costs and determined that
reductions can be made to the 2011 budget for the General Fund and the
Enterprise Funds.
Staff is also reevaluating a vacant position in the Enterprise Funds that was
responsible for GIS and Cartegraph to determine if a consultant could better
provide this expertise. This would result in a reduction in one position in the
Enterprise Funds.
Health insurance premiums are coming in with almost twice the increase
that was originally anticipated. This is an additional cost of approximately
$43,000 for all funds.
www. cityofpriorlake. com
R:ICounci112010 Agentla ReportslWorkshop Report - ~~~ge~~9~~~Q~f~0 /Fax 952.447.4245 p~g~ ~
Revenues
The preliminary budget reflected a $12,000 increase in revenues from the
townships based on the contract formula. Depending on the outcome of
upcoming discussions regarding "actual costs," this number may decrease.
Staff continues to recommend budgeting at a conservative 50 single family
permits for 2011.
CITY COUNCIL DISCUSSION
New Budget Initiatives
The preliminary budget reflects an additional $156,000 in expenditures per
council directives for economic development and water quality initiatives.
Economic Development. The preliminary budget reflects an additional
$110,000 in funding for economic development resources.
As the Council is aware, twelve objectives have been added to the 2030
Vision and Strategic Plan regarding economic development. The Economic
Development Authority is in the process of being restructured. The
Economic Development Advisory Committee is being staffed by the
Community Development and Natural Resources Director and the City
Manager. If the Council desires to reduce budget expenditures and the
amount funds drawn from General Fund reserves, this $110,000 could be
eliminated and the EDA and EDAC could be staffed as they presently are.
In the future, the EDA can determine the appropriate type and level of
resources that should be dedicated to support this initiative in coming years.
Water Quality. The preliminary Water Quality Fund budget includes
$87,000 in grant revenues that would pay for the additional personnel (.65
FTE engineering position - $46,000) and operating costs associated with
these initiatives.
Personnel Services
The City is primarily in the service industry. Therefore, personnel costs are
going to comprise a large percentage of the costs, especially in the General
Fund. Personnel services comprise fifty-six percent (56%) of the General
Fund budget, nineteen percent (19%) of the Enterprise Fund budgets and
thirty-three percent (33%) of the total budget including Debt Service Funds
and the Revolving Equipment Fund.
The City has four groups of employees, three of which are represented by
bargaining units. Currently, two of the bargaining units (Police Sergeants
and Patrol Officers) have contracts in place for 2011 which call for 2.5%
increases. The third bargaining unit (AFSCME) has a contract that expires
at the end of 2010. The fourth group which is comprised of managers and
supervisors is not represented by a bargaining unit.
Historically, the City has sought to compensate each of the groups
equitably compared to the other groups as well as other governmental
units.
Personnel services also reflect mandated increases for PERA, FICA and
Medicare. Health insurance premiums are expected to increase 19%. The
preliminary 2011 budget reflected a 10% increase so an additional $43,000
R:ICounci112010Rgenda ReportslWorkshap Report - 2011 Budget - 2010.10.04,doc Page 2
of expense must be taken into consideration with other expenditure
fluctuations.
Fund Balance Reserves
The preliminary budget reflects the use of General Fund reserves in the
amount of $350,000. It maintains a level of reserves at slightly less than
45%. Basically, $100,000 was for the Economic Development resources
and the remaining $250,000 was for mitigating the property tax pressures
associated with general operating expenditures.
The utilization of $350,000 of fund balance reserves (conservatively
assuming no increase in the fund balance reserve from 2010 activity) is
consistent with current council-adopted guidance to maintain a 45% fund
balance reserve. Staff presented five-year property tax and fund balance
reserve projections to show the impact of growing expenditures for
operations and debt service on the property tax levies and the longer term
impact of using fund balance reserves. In addition, Staff emphasized that
the use of fund balance reserves for general operating expenditures is a
one-time use and is not sustainable. Ultimately, future property tax levies
will need to be adjusted to support the level of expenditures.
Issues
The Council adopted a property tax increase of 0.35% or $35,000 for 2011.
The Council may adopt a final tax levy that is at the same level or an
amount lower than the preliminary tax levy adopted on September 7, 2010.
The Council adopted a preliminary 2011 budget for the General Fund which
reflected a 2.77% or $336,000 increase. If the Council chooses to eliminate
the Economic Development resources from the final budget, the increase
would be reduced to 1.9% or $226,000. General Fund reserve usage
would similarly be reduced from $350,000 to $240,000 leaving a balance of
approximately 45.5%.
If the Council directs a reduction in the 2011 budget or levy amount in areas
other than the new economic development appropriation, Staff should be
directed to identify the areas to be cut for Council consideration. The Staff
would return to the Council in the next thirty days with a document reflecting
the Council's direction together with any new information that is identified as
part of our ongoing effort to refine the proposed 2011 budget.
Conclusion
The following meetings/workshops are currently scheduled to discuss service
priorities, labor strategies, funding options and adopt 2011 property tax levies
and budgets. The workshops could change if the Council determines that
additional meetings are needed.
11/01/2010 CC Executive Session -Discuss AFSCME labor negotiation
strategies
12/06/2010 CC Meeting -Truth in Taxation Hearing
12/20/2010 CC Meeting -Truth in Taxation Hearing Continuation (if needed)
Adopt Final 2011 Budget & Property Tax Levy
Copies of the budget documents that were presented at the September 7,
2010 council meeting are included with this report.
R:ICounci112010Rgenda ReportslWorkshop Report - 2011 Budget - 2010.10.04.doc Page 3
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04 PRIp~ City of Prior Lake
~ ~ 2011 Preliminary Budget
0 ~ Revenue Summary
M~NNES°~*
2010
Council Meeting 09.07.2010
2010 2011
2011 $ Change % Change % of % of
Venera~FUnd aaoptea rtequestea ~u-~~ ~u-~~ iotai iotai
Taxes 8,482,856 8,428,405 (54,451) -0.64% 69.99% 69.62%
Licenses and permits 269,975 269,975 0 0.00% 2.23% 2.23%
Intergovernmental 1,327,667 1,310,678 (16,989) -1.28% 10.95% 10.83%,
Charges for services 1,382,131 1,467,332 85,201 6.16% 11.40% 12.12%'
Fines and forfeitures 182,000 150,000 (32,000) -17.58% 1.50% 1.24%
Interest on investments 90,000 90,000 0 0.00% 0.74% 0.74%
Other 60,917 55,000 (5,917) -9.71% 0.50% 0.45%
Transfers from other funds 325,000 335,000 10,000 3.08% 2.68% 2.77%
Total General Fund 12,120,546 12,106,390 (14,156) -0.12% 100.00% 100.00%
Service Funds
Taxes - 1,157,195 1,157,195 0.00% 0.00% 32.83%
Transfers from other funds - 2,367,398 2,367,398 0.00% 0.00% 67.17%
Total Debt Service Funds - 3,524,593 3,524,593 0.00% 0.00% 100.00%
Revolving Equipment Fund
Taxes - 270,000 270,000 0.00% 0.00% 72.97%
Transfers from other funds - 100,000 100,000 0.00% 0.00% 27.03%
Total Revolvin E ui ment Fund - 370,000 370,000 0.00% 0.00% 100.00%
Water Fund
Charges for services -water 2,702,938 2,702,938 0 0.00% 98.18% 98.18%
Interest on investments 50,000 50,000 0 0.00% 1.82% 1.82%
Total Water Fund 2,752,938 2,752,938 0 0.00% 100.00% 100.00%
r Fund
Charges for services -sewer 1,916,250 1,916,250 0 0.00% 97.46% 97.46%
Interest on investments 50,000 50,000 0 0.00% 2.54% 2.54%
Total Sewer Fund 1,966,250 1,966,250 0 0.00% 100.00% 100.00%
Water Quality Fund
Charges for services -storm water 425,000 425,000 0 0.00% 100.00% 83.01
Intergovernmental revenues - 87,000 87,000 0.00% 0.00% 16.99%
Total Water Qualit Fund 425,000 512,000 87,000 20.47% 100.00% 100.00%
it Fund
Charges for services -transit revenue 534,661 660,886 126,225 23.61 % 100.00% 100.00%
Total Transit Fund 534,661 660,886 126,225 23.61% 100.00% 100.00%
GRAND TOTAL 17,799,395 21,893,057 4,093,662 23.00%
Page 1 of 1
of POOR City of Prior Lake
~ ~ 2011 Preliminary E udget
D m FundlDepartment'r_xpenseSummary
M~NNi.SURP
2010
Council Meeting 09.07.2010
2010 2011
2011 $ Change % Change % of % of
General Fund Adopted Nroposed ~u - ~~ ~u - ~~ suototai suototai
41110 Mayor & Council 65,453 67,365 1,912 2.92% 0.54% 0.54%
41130 Ordinance 7,000 7,000 0 0.00% 0.06% 0.06%
41320 Administration 351,576 400,463 48,887 13.91% 2.90% 3.21%
41330 Boards & Commissions 12,474 13,449 976 7.82% 0.10% 0.11%
41410 Elections 7,167 - (7,167) -100.00% 0.06% 0.00%
41520 Finance 300,327 309,379 9,052 3.01% 2.48% 2.48%
41540 Internal Auditing 28,200 28,200 0 0.00% 0.23% 0.23%
41500 Assessing 108,200 118,800 10,600 9.80% 0.89% 0.95%
41610 Legal 385,000 385,000 0 0.00% 3.18% 3.09%
41820 Personnel 131,540 145,674 14,134 10.75% 1.09% 1.17%
41830 Communications 107,382 113,076 5,695 5.30% 0.89% 0.91%
41910 Community Dev/Natural Resources 252,563 276,166 23,603 9.35% 2.08% 2.22%
41920 Technology 146,597 155,340 8,743 5.96% 1.21% 1.25%
41940 Buildings & Plant 439,126 436,206 (2,920) -0.66% 3.62% 3.50%
42100 Police 3,072,315 3,139,642 67,327 2.19% 25.35% 25.21%
42200 Fire 862,159 864,725 2,566 0.30% 7.11% 6.94%
42400 Building Inspection 363,796 390,345 26,549 7.30% 3.00% 3.13%
42500 Emergency Management 7,500 7,500 0 0.00% 0.06% 0.06%
42700 Animal Control 35,844 25,650 (10,194) -28.44% 0.30% 0.21%
43050 Engineering 375,022 418,928 43,906 11.71% 3.09% 3.36%
43100 Street 1,032,659 1,060,003 27,344 2.65% 8.52% 8.51%
43400 Central Garage 329,994 348,030 18,037 5.47% 2.72% 2.79%
45100 Recreation 403,502 402,792 (709) -0.18% 3.33% 3.23%
45200 Parks 1,310,084 1,337,029 26,945 2.06% 10.81% 10.73%
45500 Libraries 91,067 91,067 0 0.00% 0.75% 0.73%
46500 Economic Development 44,401 150,996 106,595 240.07% 0.37% 1.21%
47000 Debt Service 1,680,600 1,713,565 32,965 1.96% 13.87% 13.76%
49999 Contingency 69,000 - (69,000) -100.00% 0.57% 0.00%
49303 Transfers 100,000 50,000 50,000 -50.00% 0.83% 0.40%
Total General Fund 12,120,546 12,456,390 335,844 2.77% 100.00% 100.00%
Debt Service Funds
47000 Debt - 4,278,001 4,278,001 0.00% 0.00% 100.00%
Total Debt Service Funds - 4,278,001 4,278,001 0.00% 0.00% 100.00%
Revolving Equipment Fund
Police - 90,000 90,000 0.00% 0.00% 12.97%
Fire - 73,500 73,500 0.00% 0.00% 10.59%
Public Works 530,256 530,256 0.00% 0.00% 76.43%
Total Revolvin E ui ment Fund - 693,756 693,756 0.00% 0.00% 100.00%
Water Fund
41520 Finance 123,870 132,186 8,316 6.71% 4.28% 3.46%
49400 Water 2,013,522 2,913,229 899,708 44.68% 69.58% 76,18%
49303 Transfers 756,393 778,511 22,118 2.92% 26.14% 20.36%
Total Water Fund 2,893,785 3,823,926 930,142 32.14% 100.00% 100.00%
Sewer Fund
41520 Finance - - 0 0.00% 0.00% 0.00%
49003 Lift Station Upgrade - - 0 0.00% 0.00% 0.00%
49005 CIPP Pipe Slip Lining 150,000 - (150,000) -100.00% 5.59% 0.00%
49450 Sewer 2,234,546 2,618,269 383,722 17.17% 83.29% 89.40%
49303 Transfers 298,404 310,322 11,918 0.00% 11.12% 10.60%
Total Sewer Fund 2,682,950 2,928,591 245,640 9.16% 100.00% 100.00%
Water Quality Fund
49420 Water Quality 443,367 906,906 463,539 104.55% 100.00% 100.00°
Total Water Qualit Fund 443,367 906,906 463,539 104.55% 100.00% 100.00°
Transit Fund
49804 Transit Services 1,144,473 851,893 (292,581) -25.56% 100.00% 100.00%
Total Transit Fund 1,144,473 851,893 292,581 -25.56% 100.00% 100.00%
GRAND TOTAL 19,285,120 25,939,463 6,654,342 34.51%
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