HomeMy WebLinkAbout10A - 2006 Budgets & Tax Levy
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
SEPTEMBER 6, 2005
10A
Ralph Teschner, Finance Director
CONSIDER APPROVAL OF A RESOLUTION ADOPTING PROPOSED 2006
CITY BUDGETS AND CERTIFYING PRELIMINARY 2006 CITY OF PRIOR
LAKE PROPERTY TAX LEVY TO SCOTT COUNTY DEPARTMENT OF
TAXATION
Introduction
Truth in Taxation statutes require that each "taxing authority" adopt a proposed
budget and certify a preliminary tax levy for payable 2006 property taxes to the
Scott County Department of Taxation on or before September 15, 2005. The
attached resolution would fulfill this statutory requirement. The purpose of this
statutory requirement is to allow the County adequate time to prepare,
calculate and mail "Truth in Taxation" notices of proposed property taxes for
the county, school district, city and special taxing districts to taxpayers.
History
The Council conducted its first 2006 budget workshop on June 6, 2005. The
discussion that took place was fairly general. The objectives of the proposed
2006 general operating budget were reviewed along with possible program
additions. Also, the City Council was approached as to any specific service
priorities that should be incorporated into the budget for 2006. At the
conclusion of the first budget study session, Council direction was for Staff to
prepare an operating budget for 2006 that would accomplish these primary
objectives while minimizing the property tax impact.
Following this session the Council conducted its initial review of the proposed
2006 budget requests, including the general, water and sewer and transit
enterprise fund budgets, at its second workshop on August 15, 2005. An
explanation of the proposed property tax levy was reviewed along with an
explanation of new proposed budget expenditures. The Council acknowledged
the budget to be responsive to community needs recognizing the fact that
program growth, including capital expenditures associated with the Capital
Improvement Program, is for the most part funded either by enhanced revenue
sources or taxes generated by new valuation growth experienced by the city.
Current Circumstances
The draft 2006 budget and the property tax levy it requires have the following
characteristics:
· The property tax impact on a $275,000 market value home is estimated
to be 4.77% or less than $42 per year.
· The total property tax levy (not taxes) proposed for all funds represent
an increase of 10.6%. This levy reflects the additional investment
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Phone 952.447.4230 / Fax 952.447.4245
ISSUES:
FINANCIAL
IMPACT:
associated with the general obligation bonds that were issued to finance the
new police station and city hall. If the police station/city hall bond debt were
excluded, the General Fund budget increase would be 3%.
· The budgets as proposed provide for a continuation of services at
existing levels and for improvements in certain areas including the addition
of one maintenance position within the street department.
· The proposed 2006 budgets continue the focus of the Prior Lake 2030
Vision and Strategic Plan.
Following the workshop discussion, Staff increased the fuel allocation within
both the General and Enterprise funds. The result was that the total fuel
budget increased by nearly 70% or $80,000 above this year. Hopefully fuel
demand nationwide will diminish somewhat to curb this rapid escalation in fuel
prices. If the present trend continues it will be important to maintain the
Contingency Reserve at the proposed levels to offset any further rise in energy
costs.
The attached resolution incorporates a proposed 2006 General Fund
Operating Budget of $10,840,734 representing an 8.78% increase above the
current year. If the police station/city hall building bond debt service were
excluded, the budget increase would be 3%. A "Budget Summary" showing
the increases/decreases of each respective department is attached. The initial
property tax levy certification for 2006 as approved this evening may only be
adjusted downward.
Overall, the proposed "preliminary" tax levy of $8,086,236 is comprised of the
following elements:
i Pur.ose
.........................................
.....................................+
....................................................
Amount
............................................. .................................
.mm~m:m......mL..~~~_~:f.~I)~~im.......:::::::::::.:::::::::::::::::::::::......m.m.....[ $5,6'41';201":'00-
..m.m.?:.......Jm.'.3~feE~.~9..~_~m9...~b!....I.~vies ..mmmm:..___$75.1~.3b'Ojj'O
3. i Building bonds levy...mmm....m.-r--.._.ls-3S;735.
I Revolvi n_~~i~i plf.i~6'f.f~.6~)~y'~~]-----$280, 06'0:''0'0-'
5. i Existing Special Debt levies '$7
6. I 2005 capitai.m.Proj'ectmfevm......... $17
.....::.....:.:.....:...:...:....:....=~........:.:........I~~~L~~e..~~y.~E~~.!::~yy.L_~~,9~_?!.?~.?:g.9.__
Attached to this agenda report is an updated "Property Tax Impact Analysis"
that incorporates the estimated tax capacity valuation prepared by the Scott
County Department of Taxation for payable 2006. The new analysis includes
the finalized fiscal disparities distribution and budget adjustments referred to
above. This valuation assumes market value increase due to appreciation,
new housing construction and all value relating to improvements such as
additions, etc. The "Property Tax Impact Analysis" compares a residential
home in 2005 adjusted by an average market value rise of 10% for payable
2006 property taxes.
As shown on the "Property Tax Impact Analysis" the projected annual city
._'-r--~-----'-
property tax based upon the estimated 2006 tax capacity value, would be
$917.28 on a $275,000 market value home, which approximates the average
market value house in Prior Lake. This represents a 4.77% increase or
$41.78 for the year in city property taxes from 2005 to 2006. Individual
property tax amounts will be subject to slight variations from these estimates
depending upon inflationary market value adjustment increases as determined
by the county assessor. This percentage is a reduction from the original
number that was given to the Council at the August workshop. The reason is
that the County now has now finalized its taxable estimated market value
number for payable 2006 and the average home increase is 9.8% versus the
projected 11 % number that was given to us earlier. This decrease means more
of the market value increase resides in new valuation, which results in a lower
property tax impact for existing homes.
City councilmembers are aware that the City tax increase in 2005 was 1.25%
and in 2004 an actual reduction of .25%. When viewed over a multiyear period,
the City's tax levy increase is actually well below the rate of inflation. As a
growing city, it is not unreasonable to expect that service delivery and capital
investment costs will increase.
Resolution os-xx identifies the various city budgets and delineates the
preliminary 2006 property tax levy breakdown. The City will hold a formal Truth
in Taxation public hearing this year on Monday December S, 200S at 7:00 p.m.
to receive public comment.
AL TERNA TIVES:
The following alternatives are available to the City Council:
1. Approve Resolution Adopting Proposed 2006 City Budgets and
Certifying Preliminary 2006 City of Prior Lake Property Tax Levy to
Scott County Department of Taxation as submitted.
2. Amend resolution to an amount determined by the City Council.
RECOMMENDED
MOTION:
Staff would recommend Alternative #1. The Council may make alternative
adjustments between now and its final levy determination that must be certified
in late December.
Reviewed by:
Frank Boyle ,
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
RESOLUTION OS-xx
Motion By:
Second By:
WHEREAS, Truth in taxation provisions as specified by state statute requires the Prior Lake City
Council to certify a proposed property tax levy to the Scott County Department of
Taxation.
WHEREAS, The City Council of the City of Prior Lake anticipates a 2006 General Fund Operating
Budget increase of approximately 8.8%, which would amount to $10,840,734.00, and
subject to approval by the City Council at its budget adoption proceeding scheduled for
December 19, 2005.
WHEREAS, The City of Prior Lake's proposed 2006 Enterprise Fund budgets total an aggregate
$3,904,298.00 which includes the Water & Sewer Utility, Water Quality Utility and
Transit Services.
WHEREAS, The total proposed property tax levy approved has been determined to be
$8,086,236.00.
WHEREAS, The City of Prior Lake hereby certifies that the levy certification rate will increase for
payable 2006 property taxes.
WHEREAS, The proposed City of Prior Lake property tax levy for the year payable 2006 represents
an increase of 10.6%.
WHEREAS, The City Council will consider the 2006 General Operating Budget, Enterprise Fund
Budgets and the Final 2006 Property Tax Levy during its regularly scheduled council
meeting at 7:00 p.m. on Monday December 5, 2005 at 16776 Fish Point Road, Prior
Lake with a continuation (if necessary) at 7:00 p.m. on December 12, 2005.
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 proposed tax levy be distributed upon the taxable property in said City for the following
purposes in payable 2006:
Purpose
Amount
*
For General City Purposes
Revolving Equipment Fund
G.O. Improvement Bonds '96 (Northwood)
$5,641,201.00
$280,000.00
$55,000.00
*
*
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Phone 952.447.4230 / Fax 952.447.4245
* G.O. Improvement Bonds '97 (Pike Lake) $56,000.00
* G.O. Improvement Bonds '98 (Duluth) $58,000.00
* G.O. Improvement Bonds '99 (Candy Cove) $55,000.00
* G.O. Improvement Bonds '00 (Oak Ridge) $71,000.00
* G.O. Improvement Bonds '01 (Frog Town) $59,000.00
* G.O. Improvement Bonds '02 (Pixie Point) $59,000.00
* G.O. Improvement Bonds '03 (150th Street) $106,000.00
* G.O. Improvement Bonds '04 (Breezy Point) $185,000.00
* G.O. Improvement Bonds '05 (Fish Point) $171,000.00
* G.O. Building Bonds '05 (EDA) $538,735.00
** Fire Hall Referendum Bonds '93 $175,540.00
** Park Referendum Bonds '97 $575,760.00
Total... $8,086,236.00
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 6TH DAY OF SEPTEMBER, 2005.
YES
NO
Haugen Haugen
Fleming Fleming
leMair leMair
Petersen Petersen
Zieska Zieska
Frank Boyles, City Manager
H:\BUDGET\06budprelimres.doc
"BUDGET SUMMARY"
DETAILED DIFFERENCE BETWEEN ACTUAL
2005 AND PROPOSED 2006 GENERAL FUND BUDGET
Deoartment '05 Budeet '06 Prooosed % Chanee 5 Chanee
41110 Mayor & Council $52,066 $61,487 18.09% $9,421
41130 Ordinance $14,000 $12,000 -14.29% -$2,000
41320 City Manager $323,213 $347,407 7.49% $24,194
41330 Boards & Commissions $9,074 $13,337 46.98% $4,263
41410 Elections $5,320 $15,356 188.65% $10,036
41520 Director of Finance $120,649 $125,666 4.16% $5,017
41530 Accounting $139,388 $162,658 16.69% $23,270
41540 hrtemalAudrting $14,750 $17,100 15.93% $2,350
41550 Assessing $82,800 $92,100 11.23% $9,300
41610 Law $264,000 $283,000 7.20% $19,000
41820 Personnel $67,000 $98,478 46.98% $31,478
41830 Communications $119,146 $129,131 8.38% $9,985
41910 Planning & Zoning $317,939 $333,259 4.82% $15,320
41920 Data Processing $145,020 $160,735 10.84% $15,715
41940 Buildings & Plant $299,983 $293,395 -2.20% -$6,588
42100 Police $2,435,588 $2,603,682 6.90% $168,094
42200 Fire & Rescue $569,980 $611,261 7.24% $41,281
42400 Building Inspection $476,529 $499,989 4.92% $23,460
42500 Civil Defense $27,750 $27,300 -1.62% -$450
42700 Animal Control $17,210 $31,200 81.29% $13,990
43050 Engineering $565,817 $556,403 -1.66% -$9,414
43100 Street $649,391 $775,672 19.45% $126,281
43400 C~rnlGarage $248,556 $271,839 9.37% $23,283
45100 Recreation $374,831 $380,113 1.41% $5,282
45200 Parks $1,079,251 $1,185,130 9.81% S105,879
45500 Libraries $78,310 S89,795 14.67% $11,485
46500 Economic Developm~ $178,292 $173,206 -2.85% -$5,086
47000 Debt Service $790,180 $1,290,035 63.26% $499,855
49303 Building Fund Reserve $250,000 $0 -100.00% -$250,000
49999 Contingency Reserve $250,000 $200,000 -20.00% -$50,000
General Fund 59,966,033 510,840,734 8.78% $874,701
BUDSUM,XlS
Page 1
8122105
BUDGET SUMMARY RECAP:
'OS Bud2et '06 Proposed 0/0
41000 GENERAL GOVERNMENT $1,974,348 $2,145,109 8.65%
42000 PUBLIC SAFETY $3,527,057 $3,773,432 6.99%
43000 PUBLIC WORKS $1,463,764 $1,603,914 9.57%
45000 CULTURE-RECREATION $1,532,392 $1,655,038 8.00%
46000 ECONOMIC DEVELOP. $178,292 $173,206 -2.85%
47000 DEBT SERVICE $790,180 $1,290,035 63.26%
49000 BUILDING FUND $250,000 $0 -100.00%
49999 CONTINGENCY RESERVE $250.000 $200.000 -20.00%
General Fund $9,966,033 $10,840,734 8.78%
BUDGET BREAKDOWN:
'05 Proposed '06 Proposed % of Total % Chan,e
Personal Services $5,912,702 $6,296,886 58.09% 6.50%
Current Expenses $2,553,056 $2,824,068 26.05% 10.62%
Capital Outlay $210,095 $229,745 2.12% 9.35%
Debt Service $790,180 $1,290,035 11. 90% 63.26%
Building Reserve $250,000 $0 0.00% -100.00%
Contingency Reserve $250.000 $200.000 1.84% -20.00%
Total $9,966,033 $10,840,734 100.00% 8.78%
DETAILED DIFFERENCE BElWEEN ACTUAL
2005 AND PROPOSED 2006 ENTERPRISE FUND BUDGETS
Department '05 Proposed '06 Proposed % Chan2e $ Chan2e
p. 35 49400 Water Utility $986,623 $1,001,802 1.54% $15,179
p. 37 49450 Sewer Utility $2,151,683 $1,954,502 -9.16% -$197,181
p. 39 49420 Water Quality Utility $287,939 $355,926 23.61 % $67,987
p. 40 49804 Transit Services $540.038 $592.068 9.63% $52.030
Enterprise Funds $3,966,283 $3,904,298 -1.56% -$61,985
BUDSUM.XLS
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8129105
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