HomeMy WebLinkAbout11 06 2017 2018 Budget Report
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL WORKSHOP AGENDA REPORT
MEETING
DATE:
NOVEMBER 06, 2017
AGENDA
ITEM:
# 1
PRE-
PARED
BY:
CATHY ERICKSON, FINANCE DIRECTOR
JASON ETTER, ACCOUNTING MANAGER
TOPIC: 2018 BUDGET/TAX LEVY DISCUSSION
DISCUS-
SION:
Introduction
The purpose of this workshop is to discuss the proposed 2018 budget with the Council
which will be the subject of the December 4 truth in taxation hearing. The purpose of
tonight’s work session is to refamiliarize you with the budget and apprise you of steps
we have taken since September when the Council adopted the maximum tax levy and
preliminary 2018 budgets.
History
Earlier in 2017, the City Council approved the annual budget schedule/calendar. Pur-
suant to that calendar, on August 21, 2017, the Council held a workshop to discuss the
preliminary 2018 budget and tax levy. A preliminary 2018 budget and property tax
levy were prepared and presented at the September 18, 2017 council meeting, and
adopted. The budget schedule calls for the City Council to review the proposed 2018
budget this evening. A public hearing and the final budget adoption are scheduled for
December 4, 2017.
A copy of the September 18 agenda report (w/o attachments) is included for your ref-
erence.
The Council adopted preliminary 2018 budgets in the amount of $33,585,534 and a
preliminary 2018 tax levy of $12,111,574 as shown in the table below:
2
Current Circumstances
Since September, Staff has reviewed the approved preliminary budget and funding
sources and has refined them as follows (detail shown on Exhibit “A”):
Revenue:
• State Aid - $16,000 add. The city will not be notified of the 2018 state aid
amount until October 2018. Based on 2017 Police and Fire state aid re-
ceived in October, staff increased the 2018 state aid estimate equal to the
2017 state aid amount received.
• SW Drug Taskforce operating grant - $36,000 add. The governing Board of
Directors for the SW Metro Drug Taskforce has approved reimbursement of
$3,000/month for members that have a drug taskforce officer. Since Prior
Lake now provides an officer, annual revenue of $36,000 has been added to
the 2018 budget for this reimbursement.
Expenditures:
Fuel Budget
Unleaded gas and diesel prices have seen variations in prices. Based on 2017 YTD
costs, current fuel prices and planned fuel use (gallons), staff is recommending a re-
duction in the 2018 fuel budget of ~$53,000. (No adjustment is proposed to the
2017 budget for potential fuel savings to ensure we have funds for any extreme
weather conditions which we may experience.)
Health and Dental Insurance
Health and Dental Insurance -The approved preliminary budget planned for a 20%
increase in health insurance premiums. The final increase came in at 12%.
The dental plan premium increase is modest and within the preliminary budget
planned for 2018.
Staffing
Each year the Personnel Plan is presented to the council for consideration. The ap-
proved preliminary budget included 1) a drug taskforce officer, 2) a police officer,
starting 1/1 and a maintenance working starting 7/1.
Change 17 - 18
Property Taxes 2017 2018 Amount Percent
Levy - Tax Capacity
General Fund - Operating 7,192,793$ 7,863,218$ 670,425$ 9.32%
Debt Service Funds 2,628,937 3,142,620 513,683 19.54%
Revolving Equipment Fund 375,000 500,000 125,000 33.33%
Revolving Park Equipment Fund 213,406 238,184 24,778 11.61%
Facilities Management Fund - - - n/a
10,410,136$ 11,744,022$ 1,333,886$ 12.81%
Levy - Market Value - General Fund 1,018,019 227,552 (790,467) -77.65%
Levy - Economic Dev Authority 140,000 140,000 - 0.00%
Total Levy 11,568,155$ 12,111,574$ 543,419$ 4.70%
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Based on the additional revenue sources of $52,000 noted above, staff has included
the following staff changes in the budget for the council’s consideration:
Maintenance worker January 1 start
The city’s long-range personnel plan included a Public Works maintenance worker
to maintain existing streets and parks. All Maintenance V workers participate in win-
ter snow removal for streets and parks. A 1/1 start date (instead of 7/1) would pro-
vide an additional worker to assist with the city snow removal on trails and sidewalks
and other winter maintenance activities.
Police PT CSO add
• With the addition of $36,000 in revenue from the SW Drug Taskforce, the city
would like to add a PT CSO. The CSO position is a much-needed position,
and one that was cut from the budget several years ago. The property and
evidence room management is a primary responsibility of this posi-
tion. Proper handling of evidence and recovered property is vital to running a
police department, and an area that was neglected due to staffing constraints
in the past.
This position also will support community outreach and engagement initia-
tives from an organizing, scheduling, and information sharing perspective.
Revolving Equipment Fund - Reestablish the 2018 tax levy in accordance with
the CIP long range plan
The long range revolving equipment plan (CIP) included a 2018 tax levy increase of
$175,000. To reduce the preliminary 2018 tax levy increase, $50,000 was cut from
the 2018 preliminary budget. Each year these funds are reduced as a tax levy strat-
egy.
The budget presented tonight has added back the $50,000 for the equipment levy.
Revolving Park Fund – Utilize one-time revenue as funding source
The long range revolving park plan (CIP) included a 2018 tax levy increase of
$124,778. To reduce the preliminary 2018 tax levy increase, $130,000 was cut from
the 2018 preliminary budgets. The 2017 budget for Parks was also reduced by
$100,000. Each year these
Staff has identified a “one-time” source of funds that could be used to replace the
funding for the revolving parks fund
With the development of the Shepard/Bolger property, the city received payment of
special assessments that were deferred until the sale of the property. This has re-
sulted in a surplus in the debt service fund of $381,000, since the debt associated
with the project has been paid.
Minnesota State Statute 475.61, subd (4a) provides that any surplus remaining in
a debt service fund when the obl igations and interest thereon are paid may be
appropriated to any other general purpose by the municipality .
4
Staff recommends that one -time revenue be used for one -time expenditures
such as equipment, trail replacement, or street projects. Staff does n ot recom-
mend artificially lowering the levy with one -time revenue, as there is no ongo-
ing revenue source to offset the levy reduction.
Council approved a portion of the funds received to lower the cost of the Roll-
ing Oaks project ($185,000). Staff reco mmends that the remaining $195,000
be used for park trail replacement.
The cost to replace trails is approximately $20/foot. A mile of trail is 5,280 ft.
so replacement would cost $105,600. The trail that needs to be replaced
along Wilds Parkway is ap proximately one mile in length. We also have a trail
in Fairway Heights that is just as bad as Wilds Parkway and is approximately
½ mile in length. We have approximately 80 miles of trails so at a rate of re-
placing 1 mile per year it will take us 80 year s to replace all our existing trails
which is insufficient .
The funds would help the city work toward funding their trail replacement plan.
In addition to trail replacement, funding is needed for 1) annual trail sealcoating to
extend useful life ($120k) and 2) the construction of new trails to fill our trail gaps as
defined in the recent trail gap study. Staff will work to address the funding for these
items in our long-range planning.
The revenue and expenditure changes noted above have been incorporated into Ex-
hibit “B” which is the overview of all budgeted funds (governmental and enterprise).
The second page of Exhibit “B” includes the following:
• Property tax comparisons;
• Expenditure comparisons;
• All funds expenditure comparison with the 2017 original and amended budg-
ets;
• General Fund expenditure comparison with the 2017 original and amended
budgets;
Exhibit “C” provides a summary of the 2018 proposed revenues and expenditures
from the 2016 actual, the 2017 original, and the 2017 amended budgets.
The tax levy provides services to our growing community while properly retiring debt
and continuing our infrastructure improvement efforts. The Staff proposed tax levy
is 4.40% greater than 2017. This is lower than the preliminary levy amount the
Council approved at the September 18, 2017 council meeting.
The proposed staff and equipment additions are in-line with the recent community
survey results. 96% of respondents said the quality of life in Prior Lake is excellent
or good, with public safety identified as the most important aspect for this measure.
60% of respondents support a tax increase to hire more police officers. As for city
services other than public safety, 96% of respondents said street repair and mainte-
nance and 97% said snow removal are essential or very important city services.
5
One of the key metrics the City Council considers during the budget process is to
“Maintain a level of property taxes on a per household basis which considers the cost
of inflation and community growth.” Earlier in the 2018 budget process, staff antici-
pated that community growth plus the cost of inflation for 2018 at 4.3%. With the
planned addition of the Lake Ridge apartments in 2017, the average combined house-
hold growth and inflation is estimated at 5.4% for 2018. Staff wants to remind the
council that our levy request is below this metric, and raises the concern that service
delivery may be impacted due to ongoing equipment and staffing constraints.
IMPACT ON GENERAL FUND RESERVES
2017 Planned Use of Reserves
Staff has looked at preliminary financial projections for year-end 2017. Currently,
the Council has approved the planned use of general fund reserves of $449,000.
There are two “one-time” technology expenditures that staff has proposed to fund
from general fund reserves to minimize the tax levy increase. They are the La-
serfiche and Cartegraph (Public Works asset management) software upgrades. The
Laserfiche upgrade would be funded from 2017 GF reserves. The approved 2018
preliminary budget includes $18,990 for the Cartegraph upgrade to be funded from
GF reserves.
Since these are one-time expenditure, staff is comfortable utilizing general fund re-
serves. However, our long-range plan will need to include ongoing funding for soft-
ware upgrades and replacements.
If there are currently no additional planned uses of reserves for the remainder of the
year, fund balance as a percent of the proposed 2018 budget would equal about
48%.
LONG-TERM PLANS
The City Council and Staff have been proponents of long-term strategic planning
and funding for the maintenance and replacement of assets including infrastructure,
facilities, vehicles, equipment, etc. Separate funds have been established for vehi-
cles/equipment, facilities, and parks due to the fluctuations in the associated ex-
penditures. The City Council and Staff have incrementally increased the funding in
each of these funds to try to get it to a level that is consistent with the long-term
needs. As it relates to the 2018 budget year, it is time to execute the long-range
plan. The 2018 budget includes the following large purchases that have been identi-
fied in the long-range CIP plans. Information regarding 1) any vehicle adds and 2)
replacement purchases greater than $100,000 are detailed below.
Vehicles/Equipment:
• Police- New Squad car: An additional squad car is needed for the proposed
police officer add in 2018.
• Fire – Engine 9220: This vehicle will be 25 years old in 2018. It appears that
it was not spec’d correctly 26 years ago, as the body is too heavy for the
chassis that it’s built on. It is overweight for its rating. It has needed new
6
brakes, new rear-end, pumps, seals, etc. The pump hours are well over the
hours recommended. It has 50,000 miles on it, but they are hard miles that
are typically driven at 70 miles/hour. The truck is serviceable, but expen-
sive to fix. Cumulative report costs are $68,000. The older the truck gets,
the more expensive it is to repair as parts are hard to come by which also
causes significant delays in repair.
• Parks: 5 Ton Dump Truck: The current truck is 16 years old, and the ex-
pected life span was 12 years. Life to date repair costs are $62,000. The
maker of this trunk is Sterling which no longer makes these types of trucks
so parts are very difficult to locate. This truck is a critical part of our snow re-
moval operations during the winter.
Facilities:
• Fire Station #1 SCBA Packs & Fill Station: The current SCBA units were pur-
chased in 2003. 45 air bottles will reach their 15-year lifecycle and need re-
placement in 2018 (DOT Regulation). The Air Pack systems will not meet
new NFPA guidelines in 2018. All existing air packs in need of repair will
have to be retrofitted to remain compliant as repair companies will be man-
dated to bring them up to standard. The cost of a retro-fit is more expensive
then replacement.
• Fire Station #1 Parking Lot & Sidewalk: When Fire Station #1 was built they
did not correct the existing soils to the level needed before installing the
parking lot and sidewalks. As a result, the pavement is experiencing signifi-
cant rutting from the fire trucks entering and exiting the facility. In addition,
most of the sidewalks around the building have settled 2”-5” causing tripping
hazards and safety concerns to the employees and public that use the build-
ing.
To correct these items is very expensive due to the cost associated with
completely removing the existing pavement and sidewalks, removing the un-
stable soils beneath, hauling in several feet of sand, and then pouring new
sidewalks and repaving the entire parking lot. When we get into the design
we will have soil borings completed and we will do a thorough analysis to try
to reduce costs where feasible.
ENTERPRISE FUNDS
Included on Exhibit B are budget summaries of the three enterprise funds that the
City operates. Enterprise funds are used to account for “business-type activities”
which include those primarily funded through user charges. Like most cities, these
funds are Water, Sewer, and Water Quality.
Water Rates, City Portion of Sewer Rate, and Storm Water Charge increases are
based on Staff recommendations made in conjunction with the approval of the Capi-
tal Improvement Program (2017-2021). These rates are charged each billing cycle
and intended to reimburse the City for operating costs for each utility and a portion
of the capital costs. At the workshop on August 21 and September 5, Staff pre-
sented rate increases and debt issuance necessary to fund operations as well as
capital projects identified in the Capital Improvements Plan. For example, in the ap-
proved Transportation Plan, there are $4.1 million of water projects, $2.4 million of
sewer projects, and $1.4 million of water quality projects planned over the next five
7
years. These projects are currently proposed to be funded out of fund balance. To
do this, annual rate increases and/or the issuance of debt is necessary.
Staff is proposing to issue debt for the utility work for the 2018 Franklin Area im-
provement projects and fund the remainder of the capital utility improvements out of
fund balance. To continue operations and maintenance of the systems, fund utili-
ties associated with street projects, and maintain the appropriate fund balance level,
fees increases are recommended on an annual basis.
Met Council Portion of Sewer Rate (MCES)
The Metropolitan Council adopted a Metropolitan Wastewater Charge for 2018 of
$219.7 million. This is an increase of 3.7% from the 2017 budget of $211.9 million.
Prior Lake’s portion of the 2018 Metropolitan Wastewater Charge is $1,440,332. It is
the City’s intent that the charges incurred from the MCES be considered a pass-
through cost and that the residents pay the actual cost of receiving the service. For
2018 the recommended rate is $2.70, an increase of $0.13.
Staff’s recommendation for each fund follows:
Fee Description 2017 Amount Proposed 2018
Amount
Utility Billing:
Water Rate – First 25,000
gallons
$4.53/1,000 gallons $4.67/1,000 gallons
Water Rate – Over 25,000
gallons
$6.25/1,000 gallons $6.44/1,000 gallons
Storm Water Charge $13.93 (residential)
$41.79/acre
$14.34 (residential)
$43.02/acre
Met Council Sewer Rate
(MCES)
$2.57/1,000 gallons $2.70/1,000 gallons
Sewer Rate – City $2.69/1,000 gallons $2.94/1,000 gallons
Conclusion
Bottom line, the following general points can be made about the 2018 proposed
budget and tax levy:
➢ Proposed total tax levy increase is $509,383 or 4.4%
• This is less than the levy proposed in September;
➢ Proposed 2018 total budget is $33,533,514
• 6.57% increase from the 2017 originally adopted budget;
➢ Proposed 2018 General Fund budget is $12,767,768.
• -2.32% decrease from 2017 original adopted budget;
➢ Total planned add to reserves is $94,941;
➢ General Fund planned use of reserves totals $18,990.
➢ Despite the tax levy increase of 4.40%, the majority of property owners will
see a REDUCTION in the market value tax portion of the city property tax
since the 2005 Parks & Library Referendum was fully paid in 2017.
8
To prepare the final 2018 budgets and property tax levies, Staff is seeking direction
from the Council on:
1. Is there additional information you need to consider the 2018 budgets on De-
cember 4?
The Public Budget Meeting and adoption of the final 2018 budgets and property tax
levies is scheduled for Monday, December 4 at 7:00 pm. Also, scheduled for De-
cember 4 is the public hearing to discuss the amendment of the Official Fee Sched-
ule ordinance.
FINANCIAL
IMPACT:
The impact on the tax levies and reserve balances were previously mentioned in this
report.
Fee Schedule Revisions
Staff is proposing several changes to the fees listed in the Fee Schedule. A new
fee is a daily admission fee for parking at Sand Point Beach. The daily admission
fee is projected to generate about $20,000 and would be used to help offset the cost
of our seasonal park patrol ($10,000). Fee increases of $5.00/fee are proposed for
building permits and other permits/fees to help offset the technology costs we incur
for annual service contracts and new technology. The fee increases would result in
about $12,000 of new revenue. About $8,000 would be new building permit revenue
and about $4,000 would be for all other permits/fees combined. If approved, the to-
tal increased revenues would amount to about $32,000
Other fee revisions of 10% (as outlined in the 2017-2021 CIP) are included for trunk
and connection charges for a third year to make up for increased inflationary costs
which have not been reflected in our development fees. These fees are commonly
adjusted on an annual basis.
As noted above, modest rate increases are also proposed for the Water, Sewer and
Storm Water.
The city has received police funding assistance each year from the SMSC. The cur-
rent agreement is in its last year. We are hopeful for an increase for the next two
years. We should know the amount soon. In the meantime, the preliminary 2018
budget reflects the present $440,000 gift
ATTACH-
MENTS:
1) September 18 Council Agenda Report – 2018 Preliminary Budget and Tax
Levy;
2) Exhibit “A” – Summary of Budget Changes
3) Exhibit “B” – Budget Overview
4) Exhibit “C” – Revenue and Expenditure Summaries
Council Workshop 11.06.207
Summary of General Fund Budget Changes
DESCRIPTION
2018 PRELIMINARY
BUDGET
2018 PROPOSED
BUDGET
F101 CHANGE
INCREASE/(DECREASE)
Fund 101 - GENERAL FUND
REVENUES:
Taxes 8,090,770 8,006,734 (84,036) 1) Reduction in proposed tax levy
Charges for Services 1,702,315 1,702,315 -
Intergovernmental 1,623,986 1,675,986 52,000 1) $36k from SW Drug Taskforce, 2) $16k for Police & Fire State Aid
Miscellaneous Revenues 312,945 312,945 -
Transfers in 443,000 443,000 -
Licenses and Permits 607,798 607,798 -
TOTAL REVENUES 12,780,814 12,748,778 (32,036)
DEPARTMENT DESCRIPTION
2018 PRELIMINARY
BUDGET
2018
PROPOSED
BUDGET CHANGE
Fund 101 - GENERAL FUND
EXPENDITURES:
41110.00 MAYOR & COUNCIL 58,196 58,196 -
41130.00 ORDINANCE 7,500 7,500 -
41320.00 ADMINISTRATION 427,088 428,305 1,217
41330.00 BOARDS & COMMISSIONS 10,689 10,689 -
41410.00 ELECTIONS 23,984 23,984
41520.00 FINANCE 464,403 464,052 (351)
41540.00 INTERNAL AUDITING 30,700 30,700 -
41550.00 ASSESSING 194,700 194,700 -
41610.00 LEGAL 212,000 212,000 -
41820.00 HUMAN RESOURCES 185,462 184,443 (1,019)
41830.00 COMMUNICATIONS 125,736 124,717 (1,019)
41910.00 COMMUNITY DEVELOPMENT 330,144 326,475 (3,669)
41920.00 INFORMATION TECHNOLOGY 318,146 317,145 (1,001)
41940.00 FACILITIES - CITY HALL 462,107 461,287 (820)
42100.00 POLICE 4,179,824 4,172,825 (6,999) 1) PT CSO add - $32k , 2) benefit budget reduction - $28k, 3) fuel reduction - $10k
42200.00 FIRE 933,051 929,460 (3,591) 1) Fuel reduction
42400.00 BUILDING INSPECTION 602,412 593,926 (8,486) 1) benefit budget reduction
42500.00 EMERGENCY MANAGEMENT 10,830 10,830 -
42700.00 ANIMAL CONTROL 26,448 26,448 -
43050.00 ENGINEERING 466,854 466,739 (115)
43100.00 STREET 1,194,115 1,175,385 (18,730) 1) Fuel reduction
43400.00 CENTRAL GARAGE 421,534 421,679 145
45100.00 RECREATION 429,329 427,696 (1,633)
45200.00 PARKS 1,393,446 1,407,937 14,491 1) Start new maint worker at 1/1 instead of 7/1 add 39k, 2) Fuel reduction - $20k
45500.00 LIBRARIES 63,554 63,098 (456)
80000.00 Transfers to other Funds 227,552 227,552 -
12,799,804 12,767,768 (32,036)
F101 Revenue Increases 52,000
F101 Expenditure Increase/(Decrease)(32,036)
F101 Reduction in Proposed Tax Levy 84,036
Fund 101
City of Prior Lake
Council Workshop 11..06.2017
Exhibit A
BUDGET REPORT FOR CITY OF PRIOR LAKE
Summary of Budget Changes
City of Prior Lake Council Workshop 11.6.2017
2018 Preliminary Budget Exhibit B
Budgeted Funds
Debt Capital Revolving Revolving Park Permanent Facilities Total Total
General Service Cable Park Equipment Equipment Improvement Management EDA Governmental Water Sewer Water Quality Enterprise Budgeted
Fund Funds Fund Fund Fund Fund Revolving Fund Fund Funds Fund Fund Fund Funds Funds
Revenues / Sources
Property Taxes
Levy - Tax Capacity 7,779,182$ 3,142,620$ -$ -$ 550,000$ 238,184$ -$ 140,000$ 11,849,986$ -$ -$ -$ -$ 11,849,986$
Levy - Market Value 227,552 - - - - - - 227,552 - - - - 227,552
Special Assessments - 586,355 - - - 83,314 - - 669,669 - - - - 669,669
Licenses & Permits 607,798 - - - - - - 607,798 - - - - 607,798
Fines & Forfeits - - - - - - - - - - - - -
Intergovernmental 1,675,986 - - - 30,000 - - 1,705,986 - - - - 1,705,986
Charges for Services 1,702,315 - 32,000 429,000 - - 7,820 2,171,135 4,075,174 3,453,940 916,326 8,445,440 10,616,575
Other Revenues 312,945 30,491 - 17,000 18,000 4,700 1,538 5,400 2,700 392,774 35,900 18,500 12,000 66,400 459,174
Bond Proceeds - - - - 665,000 600,000 620,000 - 1,885,000 1,180,000 1,400,000 .2,580,000 4,465,000
Lease Proceeds - - - - - - - - - -
Transfers From Other Funds
General Fund - 227,552 - - - - - 227,552 - - - - 227,552
Water Fund 190,500 537,304 - - 70,000 47,741 - 845,545 - - - - 845,545
Sewer Fund 190,500 - - - 70,000 10,609 - 271,109 - - - - 271,109
Water Quality Fund 62,000 - - - 15,000 - - 77,000 - - - - 77,000
Trunk Reserve Fund - 1,500,000 1,500,000 1,500,000
TIF Fund - 30,135 - - - - - 30,135 - - - - 30,135
PIR Fund 75,374 75,374 75,374
Facilities Management Fund - - - - - - - - - - - - -
Capital Park Fund - -
Total Revenues / Sources 12,748,778$ 4,629,831$ 32,000$ 446,000$ 1,418,000$ 242,884$ 684,852$ 683,750$ 150,520$ 21,036,615$ 6,791,074$ 4,872,440$ 928,326$ 12,591,840$ 33,628,455$
Expenditures / Uses
Employee Services 8,911,150$ -$ -$ -$ -$ -$ -$ 117,453$ 9,028,603$ 733,601$ 708,902$ 285,965$ 1,728,468$ 10,757,071$
Current Expenditures 3,584,616 - - 3,700 - - 650,000 - 36,144 4,274,460 1,320,898 1,851,659 246,099 3,418,656 7,693,116
Capital Outlay 44,450 - 80,000 - 1,394,027 238,184 - 1,756,661 106,090 81,297 110,000 297,387 2,054,048
Capital Improvements - - - - - - 873,704 - 873,704 3,653,390 1,830,000 279,605 5,762,995 6,636,699
Subtotal 12,540,216$ -$ 80,000$ 3,700$ 1,394,027$ 238,184$ 650,000$ 873,704$ 153,597$ 15,933,428$ 5,813,979$ 4,471,858$ 921,669$ 11,207,506$ 27,140,934$
Transfers To Other Funds
General Fund -$ -$ -$ -$ -$ -$ -$ -$ 190,500$ 190,500$ 62,000$ 443,000$ 443,000$
Treatment Plant (Debt)- - - - - - - - 537,304 - - 537,304 537,304
Equipment Fund - - - - - - - - 70,000 70,000 15,000 155,000 155,000
Park Equipment Fund - - - - - - - - - - - - -
Debt Service Funds 227,552 - - - - 75,374 - - 302,926 - - - - 302,926
PIR Fund - -
Facilities Management Fund - - - - - - - - 47,741 10,609 - 58,350 58,350
EDA Fund - - - - - - - - - - - - -
Contingency - - - - - - - - - - - - -
Debt Service 4,896,000 - - - - - 4,896,000 - - - - 4,896,000
Subtotal 227,552$ 4,896,000$ -$ -$ -$ -$ 75,374$ -$ -$ 5,198,926$ 845,545$ 271,109$ 77,000$ 1,193,654$ 6,392,580$
Total Expenditures / Uses 12,767,768$ 4,896,000$ 80,000$ 3,700$ 1,394,027$ 238,184$ 725,374$ 873,704$ 153,597$ 21,132,354$ 6,659,524$ 4,742,967$ 998,669$ 12,401,160$ 33,533,514$
Change in Fund Balance (18,990)$ (266,169)$ (48,000)$ 442,300$ 23,973$ 4,700$ (40,522)$ (189,954)$ (3,077)$ (95,739)$ 131,550$ 129,473$ (70,343)$ 190,680$ 94,941$
1 of 2
2018 Property Tax Levy Comparison Council Workshop 11.6.2017
Exhibit B
Change 17 - 18
Property Taxes 2017 2018 Amount Percent
Levy - Tax Capacity
General Fund - Operating 7,192,793$ 7,779,182$ 586,389$ 8.15%
Debt Service Funds 2,628,937 3,142,620 513,683 19.54%
Revolving Equipment Fund 375,000 550,000 175,000 46.67%
Revolving Park Equipment Fund 213,406 238,184 24,778 11.61%
Facilities Management Fund - - - n/a
10,410,136$ 11,709,986$ 1,299,850$ 12.49%
Levy - Market Value - General Fund 1,018,019 227,552 (790,467) -77.65%
Levy - Economic Dev Authority 140,000 140,000 - 0.00%
Total Levy 11,568,155$ 12,077,538$ 509,383$ 4.40%
2018 Budget Expenditure Comparisons (2017 Original Budgets)
Capital Revolving Revolving Park Permanent Facilities Total Total
General Debt Service Cable Park Equipment Equipment Improvement Management EDA Governmental Water Sewer Water Quality Enterprise Budgeted
Fund Funds Fund Fund Fund Fund Revolving Fund Fund Funds Fund Fund Fund Funds Funds
2018 Total Expenditures / Uses 12,767,768$ 4,896,000$ 80,000$ 3,700$ 1,394,027$ 238,184$ 725,374$ 873,704$ 153,597$ 21,132,354$ 6,659,524$ 4,742,967$ 998,669$ 12,401,160$ 33,533,514$
2017 Total Expenditures / Uses 13,070,878$ 5,019,318$ 11,250$ -$ 872,704$ 223,406$ -$ 232,140$ 160,825$ 19,590,521$ 6,025,897$ 4,461,398$ 1,388,206$ 11,875,501$ 31,466,022$
Change 2017 to 2018 ($)(303,110)$ (123,318)$ 68,750$ 3,700$ 521,323$ 14,778$ 725,374$ 641,564$ (7,228)$ 1,541,833$ 633,627$ 281,569$ (389,537)$ 525,659$ 2,067,492$
Change 2017 to 2018 (%)-2.32%-2.46%611.11%n/a 59.74%6.61%n/a 276.37%-4.49%7.87%10.52%6.31%-28.06%4.43%6.57%
2018 Budget Expenditure Comparisons (2017 Amended Budgets)
Capital Revolving Revolving Park Permanent Facilities Total Total
General Debt Service Cable Park Equipment Equipment Improvement Management EDA Governmental Water Sewer Water Quality Enterprise Budgeted
Fund Funds Fund Fund Fund Fund Revolving Fund Fund Funds Fund Fund Fund Funds Funds
2018 Total Expenditures / Uses 12,767,768$ 4,896,000$ 80,000$ 3,700$ 1,394,027$ 238,184$ 725,374$ 873,704$ 153,597$ 21,132,354$ 6,659,524$ 4,742,967$ 998,669$ 12,401,160$ 33,533,514$
2017 Total Expenditures / Uses 12,869,668$ 5,019,494$ 11,250$ -$ 872,704$ 308,736$ -$ 852,140$ 160,825$ 20,094,817$ 6,043,932$ 4,479,433$ 1,388,206$ 11,911,571$ 32,006,388$
Change 2017 to 2018 ($)(101,900)$ (123,494)$ 68,750$ 3,700$ 521,323$ (70,552)$ 725,374$ 21,564$ (7,228)$ 1,037,537$ 615,592$ 263,534$ (389,537)$ 489,589$ 1,527,126$
Change 2017 to 2018 (%)-0.79%-2.46%611.11%n/a 59.74%n/a n/a 2.53%-4.49%5.16%10.19%5.88%-28.06%4.11%4.77%
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4
7
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1
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1
9
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7
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1
7
4
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1
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2
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(1.00)
In
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13
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3
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45
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3
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40
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35
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9
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(4
,
1
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(10.25)
Tr
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f
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n
24
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8
7
1
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5
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2
5
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500.00
De
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85
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33
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38.82
TO
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29.20
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Ch
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98
2
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87
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1
91
6
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3
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6
39
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4
0
5
4.49
In
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34
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7
9
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34
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7
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(3
4
,
7
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(100.00)
Mi
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11
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8
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12
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9
2
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48.51
TO
T
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U
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-
F
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6
0
2
99
3
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9
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7
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1
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6
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Fu
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4
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Ch
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4
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7
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5
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4
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34
4
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4
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11.08
In
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57
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18
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5
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Tr
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92
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3
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De
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4
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TO
T
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-
F
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D
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0
4
4,
6
6
2
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9
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0
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1
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TO
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L
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S
33
,
8
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30
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1
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1
9
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29
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8
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33
,
6
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8
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4
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5
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7
5
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2
6
1
12.57
20
1
8
2018
PR
O
P
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S
E
D
PROPOSED
AM
T
C
H
A
N
G
E
% CHANGE
3,
4
5
5
,
2
6
1
11.45
Fr
o
m
O
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B
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11
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6
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2
0
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x
h
i
b
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C
20
1
6
20
1
7
20
1
7
20
1
8
20
1
8
2018
AC
T
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V
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T
Y
OR
I
G
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AM
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PR
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PR
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PROPOSED
DE
P
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BU
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T
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% CHANGE
Fu
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1
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41
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57
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8
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58
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D
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E
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41
6
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3
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A
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10
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3
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16
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100.00
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FI
N
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42
8
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31
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15
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30
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BU
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58
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41
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TO
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DE
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47
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4
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0
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2
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4
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TO
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Fr
o
m
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Ex
p
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s
11
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0
1
7
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x
h
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C
20
1
6
20
1
7
20
1
7
20
1
8
20
1
8
2018
AC
T
I
V
I
T
Y
OR
I
G
I
N
A
L
AM
E
N
D
E
D
PR
O
P
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PR
O
P
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S
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D
PROPOSED
DE
P
T
DE
S
C
R
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P
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N
BU
D
G
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T
BU
D
G
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BU
D
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T
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% CHANGE
Fr
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m
A
m
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d
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B
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t
BU
D
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Ex
p
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s
Fu
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2
1
0
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D
41
3
4
0
.
0
0
PU
B
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4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: SEPTEMBER 18, 2018
AGENDA # 9A
PREPARED BY: FRANK BOYLES, CITY MANAGER
CATHY ERICKSON, FINANCE DIRECTOR
JASON ETTER, ACCOUNTING MANAGER
PRESENTED BY: CATHY ERICKSON
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION APPROVING PRELIMINARY
2018 CITY BUDGETS AND CERTIFYING PRELIMINARY 2018 CITY OF
PRIOR LAKE PROPERTY TAX LEVY TO SCOTT COUNTY DEPARTMENT
OF TAXATION
DISCUSSION: Introduction
State statutes require that each taxing authority adopt a preliminary budget
and certify a preliminary tax levy for payable 2018 to the County on or before
September 30, 2017. The preliminary tax levy establishes the maximum that
the City can levy against properties in 2018.
The City’s tax levy is used (together with the preliminary levies of other taxing
entities) to assemble the parcel-specific truth in taxation notices for mailed
distribution in November prior to the public budget meetings in December.
At the meeting at which the City Council adopts a preliminary budget and
preliminary tax levy (September 18), the Council must announce the date,
time and place of the council meeting at which the 2018 budget and levy will
be discussed and which allows for citizen input.
That meeting is scheduled for Monday, December 4 at 7 p.m. in the Prior
Lake City Council Chambers. This information must also be included in the
meeting minutes.
History
This year, the development of the 2018 budget began in April when Staff
presented to the Council a summary of the 2016 financial results and an
update on what to expect for 2017. Staff also presented the Personnel Plan
a five-year projection of staffing needs) and Compensation Study (a study of
city jobs to see if they are in the correct pay ranges and comparable to like
cities) in July.
A follow-up meeting was held in August when staff presented an overview of
the preliminary 2018 budget and projected tax impacts. The overall tax levy
including the general fund) increase also included the CIP impacts on the
levy which has been part of the CIP discussions that started in July.
The budgets have been prepared taking into consideration Council
comments as well as the City Manager’s direction. A budget workshop was
Page 2
held on August 21 to review the proposed 2018 budgets. Council feedback
indicated receptivity to new revenue sources such as daily parking fees at
Sandpoint Park, a fee adjustment to address the City’s technology costs for
processing permits, licenses, etc. The Council also indicated that they could
support a levy increase that was less than 5%.
To work toward a levy increase of less than 5%, several revisions have
occurred since the August 21 presentation which have resulted in a reduction
of the preliminary tax levy increase from 5.31%, which we originally provided
you, to 4.7% which is reflected in the preliminary budget recommendation.
The revisions made are as follows:
A final budget workshop will be held on November 6 in anticipation of the
December 4 hearing.
Current Circumstances
Overview
A preliminary budget overview has been attached to this agenda report. It
reflects preliminary figures for the 2018 budget for the following funds:
General Fund
Debt Service Funds
Cable Fund
Capital Park Fund
Revolving Equipment Fund
Revolving Park Equipment Fund
Permanent Improvement Revolving Fund
Facilities Management Fund
General Fund:
Increase in revenues (58,034)
Park Admission Fees-Sandpoint weekday parking
Police state aid
Police bulletproof vests grant
Building permit fees
Fire-Township Fire & Resc Aid Increase
Other permit/misc. licenses
Net Increase in Expenditures 142,266
Parks Seasonal Staff correction/Park attendant weekdays at Sandpoint Park
Parks Maintenance Workers -delay start until 7/1
Streets Mainenance reduction for seal coat/spot fill
Tax abatement for Versatile Vehicles
Other expense adjustments
Use of General Fund Reserves for Cartegraph Upgrade (18,990)
General Fund Levy Increase 65,242
Other Funds:
Debt Service Levy Decrease-Close Funds/Balance Transfer (56,849)
Revolving Parks Fund Levy Decrease (80,000)
Net Decrease in Tax Levy (71,607)
Page 3
Economic Development Authority
Water Fund
Sewer Fund
Water Quality Fund
The second page shows tax levy and budgetary comparisons from the 2017
adopted budget to the preliminary 2018 figures. Summaries for revenues and
expenditures are also included with this report. The summaries reflect two
years of actuals, current year original and amended budgets, and the
preliminary 2018 budget.
Estimated Tax Levy
The following table shows the total tax levy for the period 2012 to preliminary
2018:
Since 2012, the levy has increased on average 2.7% annually while the rate
of inflation and community growth has, on average, increased 3.7%. (Annual
average inflation of 1.6% plus household growth of 2.1%.)
The 2018 preliminary budget presents some funding constraints due in part to
our prior actions to keep property tax adjustments low (despite inflationary
pressures and growth of the community). In some years the levy was
supplemented by an allocation from the general fund reserve until it became
apparent that such a contribution would be needed every year, reducing the
reserve below policy minimums.
With the recent addition of the Grainwood Senior apartments, Summit single
family and townhome development, and Lake Ridge apartments, community
growth in 2017 and 2018 alone is anticipated to be 3.6% and 3.1%
respectively.
One of the key metrics the City Council considers during the budget process
is to “Maintain a level of property taxes on a per household basis which takes
into account the cost of inflation and community growth.” Earlier in the 2018
budget process, staff anticipated that community growth plus the cost of
inflation for 2018 at 4.3%. With the addition of the Lake Ridge apartments in
2017, the average combined household growth and inflation is estimated at
5.4% for 2018. If the city council were to support the 5.4% target, an additional
81,000 would be available to fund programs which the staff has already cut
to reach the 4.7% target. This funding of $81,000 would be used to maintain
existing programs and infrastructure.
The following chart shows the detailed change in the property tax levy for
2018 based on the preliminary budgets presented to the Council tonight.
2012 *2013 2014 2015 2016 2017 Prelim 2018
Total Tax Levy 9,414,124$ 9,414,124$ 9,448,918$ 10,394,086$ 11,078,361$ 11,568,155$ 12,111,574$
Change from prior year ($)(700,000) - 34,794 945,168 684,275 489,794 543,419
Change from prior year (%)-6.92%0.00%0.37%10.00%6.58%4.42%4.70%
CPI - U (MSP)2.3%1.9%1.4%-0.6%1.6%2.3% est 2.3% est
Approximately 2.5% of the 6.92% reduction in 2012 was due to the legislative change from a market value homestead credit aid program
to a market value exclusion program. The net change from 2011 to 2012 was (4.42%).
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One of the key metrics the City Council targets during the budget process is
to “Maintain a level of property taxes on a per household basis which takes
into account the cost of inflation and community growth.”
The following chart illustrates the total property tax levy on a per household
basis.
As reflected in the chart, the preliminary 2018 total tax levy/household is
slightly lower than the level which reflects the combined annual cost of
inflation and growth.
General Fund
The proposed 2018 budget is about 1% (.54%) lower than the amended
2017 budget and (2.07%) lower than the original 2017 budget. Significant
items discussed at the August work sessions are noted below.
Service Delivery Challenges
Staff has expressed its concerns about ongoing service delivery challenges.
These challenges are triggered by:
Funding limitations to provide services to existing infrastructure,
population and property.
City growth (i.e. increased street miles, parks, utility customers, etc.),
Property Taxes 2017 2018 Amount Percent
Levy - Tax Capacity
General Fund - Operating 7,192,793$ 7,863,218$ 670,425$ 9.32%
Debt Service Funds 2,628,937 3,142,620 513,683 19.54%
Revolving Equipment Fund 375,000 500,000 125,000 33.33%
Revolving Park Equipment Fund 213,406 238,184 24,778 11.61%
Facilities Management Fund - - - n/a
10,410,136$ 11,744,022$ 1,333,886$ 12.81%
Levy - Market Value - General Fund 1,018,019 227,552 (790,467) -77.65%
Levy - Economic Dev Authority 140,000 140,000 - 0.00%
Total Levy 11,568,155$ 12,111,574$ 543,419$ 4.70%
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Level of activity (i.e. building permits, plats, projects, etc.); or
Other factors such as vacancies from employee illness, accidents, or
turnover.
Personnel: Staff prepared a Personnel Plan that was presented to the
Council at a work shop in July. The intent of the plan is to address these
triggering events mentioned above as well as succession planning. Based
on Council input, the 2018 proposed budget includes the following new
positions:
1. Two additional full-time staff (maintenance worker and police officer).
To minimize the 2018 levy impact, the maintenance worker planned
start date is mid-year (7/1) and the police officer start date is 1/1.
2. One Police drug task force officer. While we anticipate filling this
position in October 2017, the first time this position will be reflected in
the full year budget is 2018. The SMSC is making an annual
contribution of $70,000 for 2017-2019 to help fund this position.
The city’s long-range personnel plan will continue to include a request for
additional staff primarily to meet the following needs:
1) Public Works maintenance worker staffing to maintain existing streets
and parks
2) A full-time City Clerk is needed to fulfill the statutory obligations of the
City Council, including attending meetings, posting meeting notices,
maintaining official city record and public documents (Laserfiche), etc.
3) Patrol officer staffing to meet the service call increase, response time,
and rising crime rates.
Contract Building Inspector
The preliminary budget includes $50,000 for a temporary contract building
official to help with inspections in 2018 due to the number of projects being
constructed. This expenditure is budgeted in professional services and
funding for this position is proposed to come from additional building permits.
If they do not materialize, we will not fund this position. We have also been
informed that our long time chief building official will be retiring at the end of
February, 2018.
Engineering
The 2017-2021 CIP reflects several transportation projects. With the
resignation of the Assistant Public Works Director/City’s Engineer in August,
some concern has been raised about staff’s capacity to oversee public
improvement projects. As discussed with the previous Council, the staff
finds itself taking additional customer service steps on each project. In many
cases, three neighborhood meetings are required and public hearings are
becoming multi-meeting efforts. Additionally, the Engineering department
does development review “on demand” as the need arises. Because of
these two things, we expect that a combination of staff and consultants will
be needed for the rest of 2017 and 2018. We believe this format will work,
but we will continue to evaluate it.
Employee Retention & Training: Over the past two years, 12 employees
have resigned for other opportunities. Coupled with the seven employee
retirements, the city lost 21% of its workforce in two years. In 2017 alone,
four department heads resigned or retired. Not only has the city lost
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important institutional knowledge, but the time and cost of recruiting and
replacing employees is significant. A common theme relayed during staff ‘exit
interviews’ is the lack of resources to handle the volume of work, which is
professionally frustrating and personally stressful. This exodus of staff has
caused Administration and the leadership team to reflect on the city as an
employer and research methods to retain employees.
One retention strategy we undertook in 2017 was the compensation program
review to ensure that job classifications are accurate and appropriately
graded and that our salaries reflect the current market. The
recommendations from this analysis were approved by the City Council in
July which sent a strong message of support to city staff.
Over the past few years, to keep budgets low, training and professional
development line items were cut. These funds should be restored over time
to ensure strong supervisors, continuing education and engaged employees.
Given the short tenure of half our staff, providing training and professional
development will be an important tool to retain our young staff. In 2018,
Administration will continue to assess the current benefits package, work
culture and other important retention tools to preserve our workforce.
The following table shows the detailed change in the General Fund 2018
preliminary budget as compared to the 2017 amended budget:
The following chart illustrates General Fund operating expenditures on a per
household basis from 2005 to the preliminary 2018 budget:
Expenditures Totals
Personnel:559,897
Assumptions: 1) Police drug task force officer
10/1/17 ($70k annual funding from SMSC through
2019); Police Officer 1/1/18 and Maintenance Worker
7/1/18, 2) COLA increase and health care premiums,
3) No change in PERA, FICA, Medicare rates 4)
Election Judges
Current:227,647
Operating Supplies 33,990
1) Repairs at the old/original PW builidng, 2) tech
small equipment replacement per CIP, 3) Quarterly
town meetings
Professional Services 38,657
1) Engineering consulting for Interim PW Director
and development reviews, and 2) legal fees
Maintenance Agreements 91,528
1) Park trails/sidewalks, 2) City cleaning contract,
3)Building HVAC
Utilities 27,279 Cost increase plus additional park lighting/Ponds
Training and Employee Development 18,090
1) Supervisor training and 2) additional Police
training (legislative mandate) ~3k of Police training
will be reimbursed
Tax abatement 11,576 Versatile Vehicles
Other 6,527
Capital Outlay
Varies based on CIP. Prior year included building
financial system module (66,941)
Debt Transfer
Final payment of Park Referendum in 2017/Debt
service reduction (790,467)
Net Decrease in 2018 Expenditure Budget (69,864)
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Includes 2016 Amended Budget and 2017 Preliminary Budget
Another key metric the City Council targets is to “Maintain a level of General
Fund operational expenditures on a per household basis which considers the
cost of inflation and community growth.”
As reflected in the chart above, the preliminary 2018 operating expenditures
per household continues to be less than the level which reflects the cost of
inflation and growth.
Debt Service Fund
The City Council acknowledges that the most responsible course of action
with infrastructure repair, replacement and new construction is to financially
plan for development and incorporate it into the Capital Improvement
Program (CIP).
Transportation Plan: During this year’s CIP review, no new projects have
been added to the Transportation Plan. However, the timing of projects in
the 2017-2021 CIP plan have been adjusted as follows:
1. Rolling Oaks Improvement Project - The Council approved resolution
17-120 which moves this project forward to 2017 in order to take
advantage of the Trillium Cove Development underway on adjacent
property.
2. Street Reconstruction Projects - At the CIP public presentation on
August 7, Staff recommended shifting the Duluth Avenue/TH 13
signal project from 2019 to 2018 and consider keeping the project in
that year only if the state could provide $500,000 in funding
assistance. The Council suggested that if we move the Duluth/TH13
project up, we should shift a different project to a future year to help
balance the levy change. Based on this direction from Council, Staff
has shifted the Pershing Area Improvement project from 2018 to
2019.
Retirement of Market Value Debt: In 2017, the City will make the final
payment on the 2005 Park Referendum debt.
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Closure of Debt Service Funds: Because there are two debt service fund that
can be closed (the debt has all been paid), about $40,000 can be used to
reduce the debt service levy on another existing bond issue. Therefore, the
2018 debt service levy can be reduced. This reduction has been reflected in
the tax levy numbers provided above.
Staff will be presenting a resolution to authorize the closure of Debt Service
Funds 550 and 553 at September 18 Council meeting.
Maintaining the City’s existing infrastructure is expensive as evidenced by
the City’s approved Transportation Plan which has over $31.9 million in
projects planned over the next 5 years. Approximately half of the funding will
come from a property tax levy. As a result of the City’s commitment to
maintain infrastructure, annual debt service costs have increased. For 2017,
the overall debt service to pay our existing debt (including debt issued in
2017) increased by approximately $514,000. The debt service levy is the
total for debt issued in previous years as well as 2017. However, this
increase is offset by a $790,000 reduction in our General Fund Market Value
Referendum levy. This has resulted in a total debt service levy decrease
debt service + market value levy) of approximately ($277,000) or (7.6%).
Revolving Equipment Fund
Per the 2017-2021 CIP, the Revolving Equipment Fund is scheduled to
receive a $175,000 increase from $375,000 to $550,000 in 2018. Additional
increases are planned 2019 at which point the City plans to levy annually
600,000. This amount is necessary based upon staff’s projections for the
replacement and/or refurbishment of existing equipment and the purchase of
new equipment. Even with this increased level of contribution, issuing
equipment certificates will be necessary to finance large equipment
purchases (i.e. fire trucks). To minimize the levy increase, staff has reduced
the revolving equipment fund levy by $50,000 to $500,000 rather than
550,000. This will result in a delay in scheduled replacement or
refurbishment of equipment, and may result in an increase in equipment
repair& maintenance costs.
Revolving Park Equipment Fund
Existing park capital improvements are planned and budgeted for in the
Revolving Park Equipment Fund. Per the 2017-2021 CIP, the Revolving
Park Equipment Fund is scheduled to receive a tax levy of approximately
368,000. To minimize the levy increase, staff has reduced the revolving
park equipment fund levy by $130,000. For the past several years, the
budget for trail maintenance has been cut by $100,000-$130,000 per year.
The following four trails are in desperate need for repair; 1) Wilds Parkway,
2) Five Hawks, 3) Fairway Heights and 4) Lakefront Park. The reduction in
funding will result in a delay in completing necessary sidewalk/trail repairs,
and may result in temporary closure of trails due to safety concerns.
Permanent Improvement Revolving Fund
The preliminary budget reflects the mill and overlay project for nineteen
streets in the Willows Area. Beginning in 2018, mill and overlay projects will
be accounted for in the PIR fund, not the General Fund. It is anticipated that,
over time, the fund will be self-sustaining. Until we develop special
assessment prepayment history, we anticipate that the City will bond or levy
for a portion of the costs, and fund the remainder with prepayments of
special assessments collected from prior year(s) improvements. The
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preliminary budget for 2018 reflects bonding for the Willows Area mill and
overlay.
EDA
The Prior Lake Economic Development Authority (EDA) proposed a tax levy
of $155,000. The Council has recommended that the proposed levy for the
EDA should be maintained at the current levy of $140,000. To achieve this,
the EDA will use fund balance of approximately $5,400 to help offset
proposed 2018 expenditures. At the August budget workshop, the Council
indicated they would consider an update to the Comprehensive Financial
Management Plan to provide additional annual funding to the EDA if the
General Fund reserve amount was above an established percentage (say
47%). The funding would not be automatic, but would be reviewed by the
Council based on the EDA submission of a development spending plan for
council approval and direction in the expenditure of those resources.
Enterprise Funds
Included on Exhibit B are budget summaries of the three enterprise funds
that the City operates. At the workshop on August 21 and September 5,
Staff presented rate increases and debt issuance necessary to fund
operations as well as capital projects identified in the Capital Improvements
Plan. For example, in the approved Transportation Plan, there are $4.1
million of water projects, $2.4 million of sewer projects, and $1.4 million of
water quality projects planned over the next five years. These projects are
currently proposed to be funded out of fund balance. To do this, annually
rate increases and/or the issuance of debt is necessary.
Use of General Fund Reserves:
Staff is proposing to minimize the levy impact by paying for two needed
software upgrades from General Fund Reserves. The two software
upgrades needed are the Laserfiche upgrade in 2017 and the Cartegraph
upgrade in 2018. The City is often forced to delay system upgrades or
planned technology improvements due to the inability to fund these
purchases.
FINANCIAL
IMPACT: Fee Schedule Revisions
Staff is proposing several changes to the fees listed in the Fee Schedule. A
new fee is a daily admission fee for parking at Sand Point Beach. The daily
admission fee is projected to generate about $20,000 and would be used to
help offset the cost of our seasonal park patrol ($10,000). Fee increases of
5.00/fee are proposed for building permits and other permits/fees to help
offset the technology costs we incur for annual service contracts and new
technology. The fee increases would result in about $12,000 of new
revenue. About $8,000 would be new building permit revenue and about
4,000 would be for all other permits/fees combined. If approved, the total
increased revenues would amount to about $32,000
Other fee revisions of 10% (as outlined in the 2017-2021 CIP) are included
for trunk and connection charges for a third year to make up for increased
inflationary costs which have not been reflected in our development fees.
These fees are commonly adjusted on an annual basis.
As noted above, modest rate increases are also proposed for the Water,
Sewer and Storm Water.
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The city has received police funding assistance each year from the SMSC.
The current agreement is in its last year. We are hopeful for an increase for
the next two years. We should know the amount soon. In the meantime, the
preliminary 2018 budget reflects the present $440,000 gift.
Detailed staff recommendation will be presented to the Council at the budget
workshop on November 6.
ISSUES: Service Delivery Challenges: The implications of the city’s service delivery
challenges are noted above. Staff strives to maintain the city’s existing
streets, parks, building and other resources in the face of our funding
constraints.
Union contract negotiations and health plan premium rates for 2018 are still
pending. We anticipate negotiations will begin in October.
ALTERNATIVES: 1. Approve resolution adopting preliminary budgets and setting maximum
levies as set forth in the resolution.
2. Approve the resolution modified to adjust certain expenditures and the
programs they support.
3. Take no action and establish last year’s levy as this year’s maximum.
RECOMMENDED
MOTION:
ATTACHMENTS:
Alternative #1
1) September 18, 2017 Council Resolution – 2018 Preliminary Budget
and Tax Levy;
2) Exhibit “A” – Budget Overview
3) Exhibit “B” – Revenue and Expenditure Summaries