HomeMy WebLinkAbout1(B) Work Session Long-Range Financial Planning PresentationMay 20, 2019
1
General Fund 2018 Year-End
Capturing increase in preliminary 2020 tax
capacity
Tax Levy Impacts
Five-Year Property Tax Projection
Debt and Debt Levy Impacts
Agenda
2
2018 Beginning Balance -$6.7M
2018 Ending Balance -$7.2M*
2018 Ending Reserve Calculation –53%*
CFMP specifies a range between 40% and 50%
Looking forward:
2019 Planned Use of Reserves ($216,800)
2019 Budget Amendments ($65,000)
2019 Planned Ending Balance -$6.9M
Reserve Calculation as a % of 2020 Proposed
Expenditures –48%*
General Fund Reserve*
3
General Fund Reserve*
4
* Reserve as a % of next year’s projected expenditures
For taxes payable in 2020 there is a
preliminary increase in Gross Tax Capacity of
9.1%
The city’s general tax levy is spread across city
properties based on property tax capacity
As the tax base or Gross Tax Capacity increases,
the taxes are spread across a larger base.
Tax Base and Tax Rate
5
Gross Tax Capacity is reduced to arrive at a Net
Tax Capacity. The reductions are for:
•Fiscal Disparities Tax Capacity Contribution
•TIF Tax Capacity going back to developer to
assist in development costs
Tax Base and Tax Rate
6
Tax Base and Tax Rate
7
Fiscal Disparities Impact on the City Tax Rate:
2019
2019 without fiscal
disparities impact
TAX LEVY:
Total Levy 12,543,617 12,543,617
Fiscal Disparities Distribution 920,449
Net Tax Levy 11,623,168 12,543,617
TAX CAPACITY:
Total TC with Projected New Construction 37,003,207 37,003,207
Fiscal Disparities TC Contribution 1,074,047
TIF TC 728,894 728,894
Net Tax Capacity (NTC)35,200,266 36,274,313
Annual % Change in NTC 33.02%34.58%
TIF Tax Capacity Impact on City Tax Rate:
2019
2019 without TIF
Tax Capacity Impact
TAX LEVY:
Total Levy 12,543,617 12,543,617
Fiscal Disparities Distribution 920,449 920,449
Net Tax Levy 11,623,168 11,623,168
TAX CAPACITY:
Total TC with Projected New Construction 37,003,207 37,003,207
Fiscal Disparities TC Contribution 1,074,047 1,074,047
TIF TC 728,894
Net Tax Capacity (NTC)35,200,266 35,929,160
Annual % Change in NTC 33.02%32.35%
Tax Levy Impact and Tax Rate
8
The tax levy and net tax capacity affect the city tax
rate
The Council could increase the tax levy to “capture”
the growth in net tax capacity and still maintain the
same tax rate of 33%
City of Prior Lake City Tax Rate Calc:
2019:2020:
$11,623,000 Tax Levy $12,743,000 Tax Levy
$35,2000,000 Net Tax Capacity $38,593,000 Net Tax Capacityequals33% City
Tax Rate equals 33% City
Tax Rate
Tax Levy Impact and Tax Rate
9
The Council could decide not to increase the
tax levy to “capture” the growth in net tax
capacity. This decision would result in
reducing the tax rate.
The long range plan assumptions indicate that
we cannot fund our service level needs and
maintain the tax rate at 33% (This will be discussed
further on slides 16 and18)
Tax Levy Impacts and Tax Rate
10
The city’s Market Value Tax Rate is based on
property market value.
The MV tax levy and city market value affect the MV
tax rate.
Preliminary 2020 MV Tax Rate is decreasing 4.4%
City of Prior Lake City MV Tax Rate Calc:
2019:2020:
$234,418 MV Tax Levy $242,057 MV Tax Levy
$3,463,715,300 Ref MV $3,740,536,700 Ref MV0.006768%equals 0.006471%equals
Tax Levy Impacts and Tax Rate
11
Annual Change in 2020 Total Taxes assuming a 5% increase in Market Value:
$%
Residential $338,100 60 5.3%
Residential $400,000 69 5.1%
Residential $500,000 101 4.8%
Residential $1,000,000 203 4.8%
Commercial $1,000,000 325 4.9%
Projected
2019 2020
City Net Tax Levy - Tax Capacity 11,623,068 12,743,483
MV Tax Levy 234,418 242,057
Total Tax Levy 11,857,486 12,985,540
Market Value 3,463,715,300 3,740,536,700
Adjusted Net Tax Capacity 35,200,266 38,593,092
City Tax Rate 33.02%33.02%
MV Tax Rate 0.006768%0.006471%
Percent Change:
City Net Tax Levy - Tax Capacity 6.05%9.64%
Adjusted Net Tax Capacity 6.11%9.64%
City Tax Rate -0.06%0.00%
MV Tax Levy 3.02%3.26%
MV Tax Rate -2.24%-4.38%
Actual
Include
One new FTE for each year
Commitments to long-term plans (CIP)
Debt obligations (existing and proposed)
Estimates for revenues/expenditures to maintain
General Fund balance at 46%
Projection Assumptions
12
Include growth in tax capacity and market
value assumptions
Projection Assumptions
13
Preliminary
2020 2021 2022 2023 2024
Change in Gross Tax Capacity before
new Construction 9%5%4%3%3%
(Constructed 2 yrs prior to tax year):
New Residential Housing Units 135 135 125 125
New Apartment Housing Units 50 50 50 50
New Commercial Square Footage 50,000 50,000 50,000 50,000
5-Year Projection
14
CITY OF PRIOR LAKE
PROPERTY TAX LEVY, TAX CAPACITY, AND TAX RATE
2019 BUDGET 2020 2021 2022 2023 2024
TAX LEVY
General Fund 8,146,555 8,904,454 9,530,204 10,007,553 10,570,374 11,022,304
Debt Service Fund 3,262,770 3,353,593 3,736,998 4,104,776 4,155,836 4,231,201
Equip Revolv Fund 600,000 600,000 600,000 600,000 600,000 625,000
Revolv Park Equip Fund 289,292 450,885 375,149 417,832 449,294 589,072
EDA Fund 150,000 150,000 175,000 176,800 178,600 180,400
PIR Fund 95,000 175,000 195,000 205,000 205,000 205,000
Facilities Mgmt Fund - 30,000 80,000 80,000 105,000 130,000
Total Levy 12,543,617 13,663,932 14,692,351 15,591,961 16,264,104 16,982,978
Annual % Change 5.85%8.93%7.53%6.12%4.31%4.42%
Fiscal Disparities Distribution 920,449 920,449 920,449 920,449 920,449 920,449
Net Tax Levy 11,623,168 12,743,483 13,771,902 14,671,512 15,343,655 16,062,529
Annual % Change 6.05%9.64%8.07%6.53%4.58%4.69%
TAX CAPACITY
Total Tax Capacity (TC) Before New Construction 37,003,207 39,509,919 41,485,415 43,144,831 44,439,176 45,772,351
TC from Projected New Construction - 886,112 720,826 737,729 711,875 607,500
Total TC with Projected New Construction 37,003,207 40,396,031 42,206,241 43,882,560 45,151,051 46,379,851
Fiscal Disparities TC Contribution 1,074,047 1,074,045 1,074,045 1,074,045 1,074,045 1,074,045
TIF TC 728,894 728,894 728,894 728,894 715,796 715,796
Net Tax Capacity (NTC)35,200,266 38,593,092 40,403,302 42,079,621 43,361,210 44,590,011
Annual % Change 6.11%9.64%4.69%4.15%3.05%2.83%
TAX CAPACITY TAX RATE 33.020%33.020%34.086%34.866%35.386%36.023%
Annual % Change -0.06%0.00%3.23%2.29%1.49%1.80%
TAX LEVY (REFERENDUM)234,418 242,057 253,488 254,638 265,408 280,533
Annual % Change 3.02%3.26%4.72%0.45%4.23%5.70%
MARKET VALUE (REFERENDUM)3,463,715,300 3,740,536,700 3,927,563,535 4,084,666,076 4,207,206,059 4,333,422,240
MARKET VALUE TAX RATE 0.006768%0.006471%0.006454%0.006234%0.006308%0.006474%
Annual % Change -2.24%-4.38%-0.26%-3.41%1.19%2.62%
Total Tax Levy % Change 5.80%8.83%6.33%6.23%4.32%4.45%
5-Year Projection
15
The long range plan assumptions indicate
that we cannot fund our service level needs
and maintain the tax rate at 33%
5-Year Projection
16
5-Year Projection
17
Scott County Tax
Capacity Rate by City
18
City 2019
Belle Plaine 78.62%
Elko New Market 46.07%
Jordan 72.77%
New Prague 57.57%
Prior Lake 33.02%
Savage 44.47%
Shakopee 34.94%
City Tax Capacity Rate*
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25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Prior Lake 7-County Metro Average
Metro Pop. 10,000 - 24,999 Metro Pop. 25,000 - 49,999
*City Levy/Tax Capacity = Tax
Rate
Maintain Fund Balance at 46%
20
Impact of Use of Fund Balance
21
Annual use of $100k of fund balance
Fund balance is rebuilt through 1) tax levy and/or 2) actual
results favorable to budget.
2020 Proposed Tax Levy Considerations
22
2020 Tax Levy Impact and Tax Rate
23
Annual Change in 2020 Total Taxes assuming a 5% increase in Market Value:
$%
Residential $338,100 60 5.3%
Residential $400,000 69 5.1%
Residential $500,000 101 4.8%
Residential $1,000,000 203 4.8%
Commercial $1,000,000 325 4.9%
Projected
2019 2020
City Net Tax Levy - Tax Capacity 11,623,068 12,743,483
MV Tax Levy 234,418 242,057
Total Tax Levy 11,857,486 12,985,540
Market Value 3,463,715,300 3,740,536,700
Adjusted Net Tax Capacity 35,200,266 38,593,092
City Tax Rate 33.02%33.02%
MV Tax Rate 0.006768%0.006471%
Percent Change:
City Net Tax Levy - Tax Capacity 6.05%9.64%
Adjusted Net Tax Capacity 6.11%9.64%
City Tax Rate -0.06%0.00%
MV Tax Levy 3.02%3.26%
MV Tax Rate -2.24%-4.38%
Actual
Debt Projection
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Debt Projection
25
Debt Projection
26
Debt Projection
27
Debt Projection-Comparison to Other Cities
28
Rosemount $521
White Bear Lake $577
Farmington $699
Oakdale $895
Lino Lakes $971
Ramsey $1,106
Austin $1,171
Chanhassen $1,528
Prior Lake $1,822
Shoreview $1,953
Savage $2,096
Chaska $2,328
Debt Projection-Comparison to Other Cities
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Shorewood $151
Little Canada $511
Rosemount $521
White Bear Lake $577
Shakopee $944
Lino Lakes $971
Forest Lake $1,033
Cottage Grove $1,096
Ramsey $1,106
Inver Grove Heights $1,140
Mendota Heights $1,352
Maplewood $1,533
Prior Lake $1,822
Shoreview $1,953
Lakeville $2,017
Chaska $2,328
Lake Elmo $4,402
Debt Projection-Comparison to Other Cities
30
Does the Council support the following planning
assumptions:
•Maintain the 2020 tax rate equal to 2019 tax rate
•Maintain the General Fund balance at 46%
•Add one FTE per year based on the preliminary
personnel plan
•Include technology expenditures, debt service, and
CIP funding as identified in the five year capital
improvement program
Questions
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