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Home My WebLink About9A Adopting 2012 Budgets and Certifying Property Tax LevyPRIO U 4646 Dakota Street SE ' �Mvsso� Prior Lake. MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 19, 2011 AGENDA #: 9A PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR PRESENTED BY: JERILYN ERICKSON AGENDA ITEM: CONSIDER APPROVAL OF RESOLUTIONS ADOPTING 2012 PRIOR LAKE BUDGETS AND CERTIFYING FINAL 2012 CITY OF PRIOR LAKE PROPERTY TAX LEVY TO SCOTT COUNTY DEPARTMENT OF TAXATION. DISCUSSION: Introdu The purpose of this agenda item is to consider approval of the 2012 budgets for the City of Prior Lake's General Fund, Debt Service Funds, Revolving Equipment Fund, Economic Development Authority, Water Fund, Sewer Fund, Water Quality Fund and Transit Fund and to determine the City's final 2012 property tax levy for certification to the Scott County Department of Taxation office. Histo The Council has held workshops on August 15 and November 7 this year to discuss the challenges, priorities and options for developing the 2012 budget. On September 6, 2011 the City Council considered the preliminary budgets for the General Fund, Debt Service Funds, Revolving Equipment Fund, Economic Development Authority and Enterprise Funds and a preliminary tax levy of $10,114,124. It was announced at the September 6, 2011 meeting and included in the meeting minutes that a public hearing would be held on December 5, 2011 at which time the 2012 budget and levy would be discussed and would allow for citizen input. Following individual parcel mailings, the truth -in- taxation (TNT) hearing was then conducted on December 5, 2011. Seven residents spoke at the TNT hearing. The minutes from the TNT hearing are part of this agenda packet if the City Council wishes to refer to them. Following the TNT hearing, the Council further discussed some of the questions raised during the public hearing such as revenue assumptions, expenditure trends, history of fund balance changes, etc. Current Circumstances The 2012 budgets presented for final consideration are the same as those presented at the TNT public hearing on December 5, 2011. Conclusion The Council should determine if it concurs with the budgets as they have been presented. FINANCIAL Property Tax Levies IMPACT: The 2012 proposed property tax levy is as follows: Levy - Tax Capacity Cllttge /� 1l ` General Fund - Operating $ 6,961,567 $ 6,548,514 $ (413,053) -5.93% General Fund - Debt 620,000 634,748 14,748 2.38% Debt Service Funds 1,157,195 1,072,340 (84,855) -7.33% Revolving Equipment Fund 270,000 280 10,000 3.70% 3,432,016 $ 9,008,762 $ 8,535,602 $ (473,160) - 5.25% Lew - Market Value - General Fund 1.105.362 1.128,522 23,160 2.10% A $450,000 or 4.45% reduction in the total property tax levy is proposed before considering the impact of the MVHC Aid program. The following table shows the impact of the 2012 proposed property tax levy from the perspective of what is to be collected from local taxpayers: Total Levy $ 10,114,124 $ 9,664,124 $ (450,000) -4.45 Less MVHC Aid (258,524) - 258,524 - 100.00 otal Lew Collectible from Residents $ 9,855,600 $ 9,664 $ (191,476) -1.94° After adjusting for the MVHC Aid, a $191,476 or 1.94% reduction in the property tax levy is proposed. Expenditures The 2012 proposed expenditure budgets are as follows: I' Cllttge /� 1l ` General $ 12,729,968 $542k 4.44% Debt Service 4,558,609 281k 6.56% Rev. Equipment 504,864 189k 27.23% EDA 137,923 83k 150.77% Water 3,432,016 138k 3.88% Sewer 3,069,460 232k 8.17% Water Quality 703,582 205k 22.55% Transit 851,204 74k 9.63% Total $ 25,987,626 $680k 2.69% Fund Balance Reserves The proposed budget includes a planned use of reserves for all funds. Capital improvement projects and capital purchases are cause for the greatest variability in expenditure levels and, therefore, fluctuation in the amount of reserves used from year to year in the Water Fund, Sewer Fund, Water Quality Fund and Revolving Equipment Fund. The level of special assessment and property tax collections impact the amount of reserves used to pay debt service obligations in the Debt Service Funds. 6 The EDA Special Revenue Fund does not have an ongoing revenue source. The City Council authorized the closure and transfer of residual balances of several economic development - related funds to the EDA Fund earlier this year for the specific purpose of providing short-term funding for economic development activities. In 2012, the EDA and City Council will be considering other long -term funding strategies. The Transit Fund is funded by the Motor Vehicle Sales Tax (MVST) and distributed by the Met Council through a formula established by Minnesota State Statutes. Additional funding is provided by bus fares paid by the riders. It is the Met Council's intent to reduce the level of reserves held by Transit providers by reducing the amount of MVST allocated to each provider. It should be noted that none of the City of Prior Lake's property tax levy is allocated to the Transit Fund The General Fund budget reflects a use of reserves in the amount of $485,595. The impact of this use of reserves is shown in the following table: The CFMP also identifies the expenditure criteria when the City Council may consider the judicious use of reserve balances. Specifically for the 2012 budget, Staff has recommended the use of reserves as follows: 1) To provide catch -up funding for long -term obligations not previously recognized. • The Facilities Management Fund was established in 2011 to support the Facilities Management Plan. This Plan is a long -term planning document which accounts for major repairs to City facilities. A $150k transfer from the General Fund is providing seed money for these repairs. 2) To fund policy shifts by other governmental entities having a negative impact on the City. 3 The Comprehensive Financial Management Policy (CFMP) targets a 45% General Fund reserve. As stated in the Policy, this percentage could fluctuate with each year's budget objectives and appropriations such as large capital expenditures and variations in the collections of revenues. • The State of MN eliminated the Market Value Homestead Credit Aid Program and implemented the Market Value Exclusion Program. This change reduced the City's taxable market value base by approximately $45M for purposes of calculating the tax rates. Change in Market Value The overall taxable market value of all properties in the City declined approximately $95M. This includes a reduction of $45M due to the implementation of the Market Value Exclusion program. New construction added about $32.6 million to the tax base for 2012. This equates to approximately $114k of property taxes to either support the cost of additional services or offset the cost of current services. Impact on Averaae Valued Home Historically, we have used the average valued home as a basis for communicating the impact of any tax levy decision. Based on current tax valuations provided by Scott County, the average valued home of $284,800 in 2011 decreased approximately 2.35% to $278,100 for 2012. The impact of a 4.45% or $450,000 decrease in property tax levy would be an approximate $20.00 reduction in taxes imposed by the City of Prior Lake. This does not include the impact of taxes imposed by the county, school district and other taxing authorities. For your reference, the materials from the December 5, 2011 Truth in Taxation meeting are included with this agenda report. ALTERNATIVES: The following alternatives are available to the City Council: 1. Approve a Resolution Adopting 2012 Prior Lake Budgets and Certifying Final 2012 City of Prior Lake Property Tax Levy to Scott County Department of Taxation. 2. Amend Resolution according to specific Council changes. RECOMMENDED Alternatives 1. Staff would recommend that the City Council approve the MOTION: resolution as submitted. The final property tax levy amount must be certified to the Scott County Department of Taxation Office no later than 5 working days after December 20th (December 28, 2011) as prescribed by Minnesota statute. 4 PRIG,, ti U trl \INIYESp�/ 4646 Dakota Street SE Prior Lake, NIN 55372 RESOLUTION 11 -xxx RESOLUTION ADOPTING 2012 PRIOR LAKE BUDGETS AND CERTIFYING FINAL 2012 CITY OF PRIOR LAKE PROPERTY TAX LEVY TO SCOTT COUNTY DEPARTMENT OF TAXATION Motion By: Second By: WHEREAS, The City Council of the City of Prior Lake conducted a Truth in Taxation public hearing on December 5, 2011 pursuant to state requirements; and WHEREAS, The City Council hereby adopts the following 2012 budgets; and General Fund $12,729,968 Debt Service Funds 4,558,609 Revolving Equipment Fund 504,864 Economic Development Authority 137,923 Water Fund 3,432,016 Sewer Fund 3,069,460 Water Quality Fund 703,582 Transit Fund 851,204 Total $25,987,626 WHEREAS, The property tax levy by tax base approved for payable year 2012 is as follows; and Tax Capacity Based Levy $ 8,535,602 Market Value Based Referenda Levy 1,128,522 Total $ 9,664,124 WHEREAS, The property tax levy approved for payable year 2012 is for the following purposes: General Purposes $ 6,548,514 Revolving Equipment Fund 280,000 Debt Service 2,835,610 Total $ 9,664,124 WHEREAS, The City of Prior Lake's General Fund operating budget tax levy is hereby equivalent to $8,311,784; and WHEREAS, The Revolving Equipment Fund levy amount is $280,000; and WHEREAS, The Special debt levies account for an additional tax levy of $1,072,340 of which the Scott County cooperative agreement appropriation of $148,340 for CSAH 82 is included. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. That the tax levy be distributed upon the taxable property in said City for the following purposes in payable 2012: Purpose General City Purposes Revolving Equipment Fund Debt Service: G.O. Improvement Bonds'05 (Fish Point) CSAH 82 Improvement Appropriation '06 G.O. Street Reconstruction Bonds '07 G.O. Improvement Bonds'08 (Brooksville Hills 1) G.O. Improvement Bonds'09 (Brooksville Hills 11) G.O. Imp Refunding Bonds 2009B G.O. Improvement Bonds'10 (CR12) G.O. Improvement Bonds'11 (Boudins I & Arcadia ROW) G.O. Improvement Bonds ('04)'11 Refunding G.O. Building Bonds '05 (EDA) ** Park Refunding Bonds '05 ** Fire Station #2 Referendum Bonds'06 ** Fire Station #1 Refunding Bonds'08 Total Debt Service Total Amount $ 0 148,340 162,000 91,000 115,000 118,000 109,000 172,000 157,000 634,748 727,244 216,280 184,998 Amount $ 6,548,514 280,000 2,835,610 $ 9,664,124 Note: Single starred funds shall be spread over the entire consolidated City of Prior Lake. Note: Double starred funds represent market value based referendum taxes and shall be spread over the entire consolidated City of Prior Lake. Note: All other bond issues have sufficient fund balances to cover debt requirements. PASSED AND ADOPTED THIS 19th DAY OF DECEMBER, 2011. 197 NO ser Myser Erickson Erickson Hedber — Hedberg Keeney Keene Soukup Souku Frank Boyles, City Manager 2 p-d IV? City of Prior Lake 2012 Proposed Budget Budgeted Funds 4 TNT Public Hearing 12.05.2011 1 10 Page 102 Debt Revolving Total Total General Service Equipment EDA Governmental Water Sewer Water Quality Transit Enterprise Budgeted Fund Funds Fund Funds Fund Fund Fund Fund Funds Funds Revenues / Sources Property Taxes Levy - Tax Capacity $ 7,183,262 $ 1,072,340 $ 280,000 $ - $ 8,535,602 $ - $ - $ - $ - $ - $ 8,535,602 Levy - Market Value 1,128,522 - - - 1,128,522 - - - - - 1,128,522 Special Assessments - 415,000 - - 415,000 - - - - - 415,000 Licenses & Permits 350,265 - - - 350,265 - - - - - 350,265 Fines & Forfeits 155,000 - - - 155,000 - - - - - 155,000 Intergovernmental 1,329,469 - - - 1,329,469 - - 140,000 485,000 625,000 1,954,469 Charges for Services 1,514,463 - - - 1,514,463 2,732,437 2,587,735 540,000 200,000 6,060,172 7,574,635 Other Revenues 248,392 55,000 36,917 6,000 346,309 75,000 75,000 18,000 37,000 205,000 551,309 Transfers From Other Funds General Fund - 1,768,370 - - 1,768,370 - - - - 1,768,370 Water Fund 167,500 575,720 50,000 - 793,220 - - - - - 793,220 Sewer Fund 167,500 96,932 50,000 - 314,432 - - - - - 314,432 Total Revenues / Sources $ 12,244,373 $ 3,983,362 $ 416,917 $ 6,000 $ 16,650,652 $ 2,807,437 $ 2 662 735 $ 698,000 $ 722,000 $ 6,890,172 $ 23 540 824 Expenditures / Uses Employee Services $ 7,162,452 $ - $ - $ 69,923 $ 7,232,375 $ 527,812 $ 675,595 $ 282,072 $ 94,174 $ 1,579,653 $ 8,812,028 Current Expenditures 3,329,827 - - 68,000 3,397,827 1,061,234 1,610,683 195,810 757,030 3,624,757 7,022,584 Capital Outlay 269_,319 - 504,864 - 774,183 4,750 8,750 - - 13,500 787,683 Capital Improvements - - - - - 1,020,000 450,000 225,700 - 1,695,700 1,695,700 Subtotal $ 10,761,598 $ - $ 504,864 $ 137,923 $ 11,404,385 $ 2,613,796 $2,745,028 $ 703,582 $ 851,204 $ 6,913,610 $18,317,995 Transfers To Other Funds General Fund $ - $ - $ - $ - $ - $ 167,500 $ 167,500 $ - $ - $ 335,000 $ 335,000 Maintenance Building (Debt) - - - - - 96,931 96,932 - - 193,863 - 193,863 Treatment Plant (Debt) - - - - - 478,789 - - - 478,789 478,789 Equipment Fund - - - - - 50,000 50,000 - - 100,000 10000 Park Equipment Fund 50,000 - - - 50,000 - - - - - 50,000 Debt Service Funds 1,768,370 - - - 1,768,370 - - - - - 1,768,370 Facilities Management Fund 150,000 - - - 150,000 25,000 10,000 - - 35,000 185,000 Debt Service - 4,558,609 - - 4,558,609 - - - - - 1 4,558,609 Subtotal $ 1,968,370 $ 4,558,609 $ - $ - $ 6,526,979 $ 818,220 $ 324,4 32 $ - $ - $ 1,142,652 $ 7,669,631 Total Expenditures / Uses $ 12,729,968 $ 4,558,609 $ 504,864 $ 137 $ 17,931,364 $ 3,432,016 $3,069,460 $ 703,582 $ 851,204 8,056 $ 25 987 626 Change in Fund Balance 1 485,595 $ 575,24 $ 87,947 $ 131,923 $ 1,280,712 $ 624,579 $ 406,725 $ 5,582 $ 129,204 $ (1,166,090)1 $ 2,446,802 1 10 Page 102 2012 Preliminary Property Tax Levy 2012 Proposed Budget Expenditure Comparisons TNT Public Hearing 1205.201 L� Change 11 -12 Property Taxes 2011 2012 Amount Percent Levy - Tax Capacity Total General General Fund - Operating $ 6,961,567 $ 6,548,514 $ (413,053) -5.93% General Fund - Debt 620,000 634,748 14,748 2.38% Debt Service Funds 1,157,195 1,072,340 (84,855) -7.33% Revolving Equipment Fund 270,000 280,000 10000 3.70% Funds $ 9,008,762 $ 8,535,602 $ (473,160) -5.25% Le - Market Value - General Fund 1,105,362 1 128 522 23 2.10% Total L $ 10 $ 9,664,124 $ (450 -4.45% 2012 Proposed Budget Expenditure Comparisons TNT Public Hearing 1205.201 L� "2011 EDA Budget was adopted on 041252011 Revolving Total Total General Debt Service Equipment EDA' Governmental Water Sewer Water Quality Transit Enterprise Budgeted Fund Funds Fund Funds Fun d Fund Fund Fund Funds Funds 2012 Total Expenditures / Uses 12,729,968 4,558,609 504,864 137,923 17,931,364 3,432,016 3,069,460 703,582 851,204 8,056,262 25,987,626 2011 Total Expenditures I Uses 12188 313 4,278,001 693 756 55 17,215 070 3 570 445 2,837,596 908 404 776,458 8.092,903 25,307,973 Change 2011 to 2012 ($) 541,655 280,608 (188,892) 82,923 716,294 (138,429) 231,864 (204,822) 74,746 (36,641) 679,653 Change 2011 to 2012 % 4.44% 6.56% - 27.23% 150.77%1 4.16% - 3.88° 8.17% - 22.55% 9.63% -0.45% 2.69% "2011 EDA Budget was adopted on 041252011 0 p � 4 4 City Of Prior Lake ` 2012 Proposed Budget c7 Revenue Summary Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest on investments Other Transfers from other funds Debt Service Funds TNT Public Hearing 12.05.2011 Taxes Special assessments Interest on investments Transfers from other funds 1,157,195 374,184 31,945 2,367,398 1,072,340 415,000 55,000 2,441,022 (84,855) 40,816 23,055 73,624 2011 2012 2011 2012 $ Change % Change % of % of dopted Proposed 11-12 11-12 Total Total 8,428,405 8,311,784 (116,621) - 1.38% 69.53% 67.88% 292,815 350,265 57,450 19.62% 2.42% 2.86% 1,310,678 1,329,469 18,791 1.43% 10.81% 10.86% 1,480,432 1,514,463 34,031 2.30% 12.21% 12.37% 130,000 155,000 25,000 19.23% 1.07% 1.27% 90,000 190,000 100,000 111.11% 0.74% 1.55% 55,000 58,392 3,392 6.17% 0.45% 0.48% 335,000 335,000 - 0.00% 2.76% 2.74% Taxes Special assessments Interest on investments Transfers from other funds 1,157,195 374,184 31,945 2,367,398 1,072,340 415,000 55,000 2,441,022 (84,855) 40,816 23,055 73,624 -7.33% 10.91% 72.17% 3.11% 29.44% 9.52% 0.81% 60.23% 26.92% 10.42% 1.38% 61.28% Total Debt Service Funds 3,930,722 3 983 362 52,640 1.34% 100.00% 100.00% Revolving Equipment Fund Taxes Interest on investments Transfers from other funds 270,000 26,348 100,000 280,000 36,917 100,000 10,000 10,569 0 3.70% 40.11% 0.00% 68.12% 6.65% 25.23% 67.16% 8.85% 23.99% Total Revolving E ui ment Fund 396,348 416,917 20,569 5.19% 100.00% 100.00% EDA Special Revenue Fund Intergovernmental revenues Interest on investments 15,000 2,000 - 6,000 (15,000) 4,000 - 100.00% 200.00% 88.24% 11.76% 0.00% 100.00% Total EDA Fund 17,000 6,000 (11,000) -64.71% 100.00% 100.00% Water Fund Charges for services - water Interest on investments 2,702,938 50,000 2,732,437 75,000 29,499 25,000 1.09% 50.00% 98.18% 1.82% 97.33% 2.67% Total Water Fund 2,752,938 2 807 437 54,499 1.98% 100.00% 100.00% Sewer Fund Charges for services - sewer Interest on investments 1,916,250 50,000 2,587,735 75,000 671,485 25,000 35.04% 50.00% 97.46% 2.54% 97.18% 2.82% Total Sewer Fund 1,966,250 2 662 735 696,485 35.42% 100.00% 100.00% Water Quality Fund Charges for services - storm water Intergovernmental revenues Interest on investments 425,000 87,000 10,000 540,000 140,000 18,000 115,000 53,000 8,000 27.06% 60.92% 80.00% 81.42% 16.67% 1.92% 77.36% 20.06% 2.58% Total Water Quality Fund 522 000 698,000 176,000 33.72% 100.00% 100.00% Transit Fund Charges for services - transit revenue Intergovernmental revenues Interest on investments 100,000 560,886 10,000 200,000 485,000 37,000 100,000 (75,886) 27,000 100.00% - 13.53% 270.00% 14.91% 83.60% 1.49% 27.70% 67.17% 5.12% GRAND TOTAL 22,378,474 23,640,824 1,162,350 6.19% Page 1 of 1 0 p � O +P City of Prior Lake 2012 Proposed Budget P roposed Fund /Department Expense Summary 11-12 Subtotal TNT Public Hearing 12.05 2011 2011 2012 2011 2012 $ Change % Change % of % of General Fund Ad opted P roposed 11-12 11-12 Subtotal Subtotal 41110 Mayor & Council 67,365 68,067 702 1.04% 0.55% 0.53% 41130 Ordinance 7,000 7,000 - 0.00% 0.06% 0.05% 41320 Administration 371,884 394,528 22,644 6.09% 3.05% 3.10% 41330 Boards & Commissions 13,575 10,189 (3,386) - 24.94% 0.11% 0.08% 41410 Elections - 17,349 17,349 n/a 0.00% 0.14% 41520 Finance 312,967 403,626 90,659 28.97% 2.57% 3.17% 41540 Internal Auditing 28,200 28,200 - 0.00% 0.23% 0.22% 41500 Assessing 118,800 118,300 (500) -0.42% 0.97% 0.93% 41610 Legal 309,000 361,920 52,920 17.13% 2.54% 2.84% 41820 Personnel 140,248 141,331 1,083 0.77% 1.151/0 1.11% 41830 Communications 113,956 113,682 (274) - 0.24% 0.93% 0.89% 41910 Community Dev/Natural Resources 276,354 325,733 49,379 17.87% 2.27% 2.56% 41920 Technology 135,340 183,975 48,635 35.94% 1.11% 1.45% 41940 Buildings & Plant 410,206 431,293 21,087 5.14% 3.37% 3.39% 42100 Police 3,122,509 3,186,812 64,303 2.06% 25.62% 25.03% 42200 Fire 851,139 807,684 (43,455) -5.11% 6.98% 6.34% 42400 Building Inspection 398,004 435,572 37,568 9.44% 3.27% 3.42% 42500 Emergency Management 7,500 33,900 26,400 352.00% 0.06% 0.27% 42700 Animal Control 25,650 25,650 - 0.00% 0.21% 0.20% 43050 Engineering 416,046 327,994 (88,052) - 21.16% 3.41% 2.58% 43100 Street 1,054,352 1,060,929 6,577 0.62% 8.65% 8.33% 43400 Central Garage 346,903 367,883 20,980 6.05% 2.85% 2.89% 45100 Recreation 390,860 387,152 (3,708) -0.95% 3.21% 3.04% 45200 Parks 1,326,359 1,280,226 (46,133) -3.48% 10.88% 10.06 45500 Libraries 85,067 80,642 (4,425) -5.20% 0.70% 0.63% 46100 Natural Resources (NEW) - 121,958 121,958 n/a 0.00% 0.96% 46500 Economic Development 95,464 40,004 (55,460) - 58.10% 0.78% 0.31% 47000 Debt Service 1,713,565 1,768,370 54,805 3.20% 14.06% 13.89% 49303 Transfers 50,000 200,000 150,000 300.00% 0.41% 1.57% Total General Fund 12,188,313 12,729,968 541,655 4.44% 100.00% 100.00% -Debt Revolvina Equipment Fund Fire 90,000 65,300 (24,700) - 27.44% 12.97% 12.93% Police 73,500 28,840 (44,660) - 60.76% 10.59% 5.71% Public Works 530,256 410,724 (119,532) - 22.54% 76.43% 81.35% Total Revolving Equipment Fund 693,756 504.864 (188,892) - 27.23% 100.00% 100.00% EDA Water Fund 41520 Finance 65,690 82,418 16,728 25.47% 1.84% 2.40% 49400 Water 2,726,244 2,531,378 (194,866) -7.15% 76.36% 73.76% 49303 Transfers 778,511 818,220 39,709 5.10% 21.80% 23.84% Total Water Fund 3,570.445 3 432 016 (138.429) - 3.88% 100.00% 100.00% Sewer Fund 41520 Finance 65,690 81,591 15,901 24.21% 2.31% 2.66% 49450 Sewer 2,461,584 2,663,437 201,853 8.20% 86.75% 86.77% 49303 Transfers 310,322 324,432 14,110 4.55% 10.94% 10.57% Total Sewer Fund 2.837,596 3 231 864 8.17% 100.00% 100.00% Water GRAND TOTAL 25 307,973 25,987,626 679,653 2.69% Page f of 1