HomeMy WebLinkAbout01(B) - Financial Planning Updated ReportJuly 20, 2020 1
2020 Projection
2021 Tax Levy Impact based on Preliminary
Budgets
Five-Year Property Tax Projection
Debt and Debt Levy Impacts
Agenda
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2020 Beginning Balance - $7.9M
2020 Planned Use of Reserves ($201,250)
2020 Budget Amendments ($123,462)
2020 Year-End Estimated Reserve Balance - $7.6M (50%)
(Pre-Pandemic Estimated Reserve)
2020 Year-End Estimated Reserve Balance - $7.5M (49%)
(with COVID19 budget impact assumptions)
General Fund Reserve
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This is an improvement from our 1st quarter
estimate of additional use of reserves of $480,000.
2020 General Fund - Projection
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Variance from
2020 2020 2020 Amended Budget - % BDGT
Budget Amended Projection Positive (Negative) USED
Total Revenues 14,455,498 14,455,498 13,574,995 (880,000) 94%
Total Expenditures 14,656,748 14,780,212 13,991,972 790,000 95%
Use of Reserves (201,250) (324,714) (416,977) (90,000)
2020 General Fund - Projection
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Variance from
Revenues Amended Budget - Assumptions
Positive (Negative)
Taxes (270,000)$ 1) 3% delinquency rate
Licenses and Permits (100,000)
1) Liquor licenses – The City Council deferred payment until January 1 (half
of the license year).
2) Reduction in building/mechanincal/plumbing permit revenue
3) Reduction in burning permits/rental fees
Intergovernmental (130,000)
1) SMSC local government aid for Policing – may not receive revenue for
two months Mystic Lake was closed
Charges for Services (290,000)
1) Police & Park contracted services – Mystic Lake/Musicfest/Lakefront Days;
2) Lakefront Pavillion & Park Shelter Rental;
3)Spring/Summer Recreation Programs;
4)Facility rental abatement during lockdown
5) Project Admin/Engineering Fees
6) Building Plan Check Fees
Fines and Forfeitures -
Interest (losses) on investments (20,000) 1) Estimated reduction in interest earnings
Other (70,000)
1) Anticipate that planned new development may not come in (Meadows
and Parkhaven planned phased development);
2) Reduction in solicitor permit revenue
Transfers in -
Total Revenues (880,000)$
With the end of the Stay at Home order,
about $75,000 of net expenditures were
added back to the budget for the following:
Limited Parks seasonal staff
Building department staffing
Recreation is adding some Summer youth camps
and adult sports. (Rec program revenue offsets
this cost.)
Communications for the upcoming 2021
proposed utility billing rate changes.
2020 General Fund - Projection
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2020 General Fund - Projection
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2020 General Fund - Projection
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The city received CARES Act funding of $1.9M
to cover “eligible” expenditures
Staff is reviewing federal guidance for
eligible use of funds
Receipt of federal funds >$750k triggers a
“single audit”
This is an audit of expenditure
reimbursement and related internal controls.
2020 General Fund - Projection
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Capital Project Funds update:
For budgeted expenditures not yet presented to Council
for approval – To manage cash flow, we will:
•Extend the replacement cycle for emergency
sirens/delay 2020 replacement -$50k
•Delay trail/sidewalk replacement - $396k
2020 Other Funds- Projection
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Enterprise Funds Update:
Utility receivables (Water, Sewer and Water Quality) at
June 30th are approximately 9% of the YTD revenues, as
compared to 11% in 2019.
Utility bills that are older than one billing cycle are 40% of
our receivable in 2020 as compared to 43.5% of the
receivable in 2019.
Delinquent utility accounts will begin to be notified in
August that their outstanding balances could be certified to
the parcel’s property taxes if they remain unpaid.
2020 Utility Funds- Projection
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2021 Base Property Tax Levy Considerations
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Growth (New Construction) 2.0%
CPI-U (MSP) 2.7%
Debt Service 0.0%
Base Property Tax Levy
Considerations 4.7%
Estimated market value has increased
$338M from 2020 to 2021, of which
approximately $19 million or 5% is from
new construction.
Preliminary 2021 info – 10% increase in
tax capacity
*The debt service % change is already determined as
there is no 2020 bond issue, so no planned change in
2021 debt service.
2021 Proposed Tax Levy Considerations
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2021 Proposed Tax Levy Considerations
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2020 Planned Ending Balance before CARES funding - $7.5M
Reserve– 49%
2021 Reserve – 48%
CARES funding is not incorporated into our reserve analysis
until we have further guidance on expenditures eligible for
reimbursement.
2021 Proposed Tax Levy Considerations
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RESIDENTIAL IMPACTS
% Net Net Net Net Net Net
of Inc/Dec Difference Inc/Dec Difference Inc/Dec Difference
Inc/Dec Total 20 vs 21 % Change 20 vs 21 % Change 20 vs 21 % Change
+15.01+% 596 6% 152$ 12.9% 295$ 14.5% 435$ 13.4%
+10.01-15.00% 967 10% 122$ 10.4% 235$ 11.6% 346$ 10.6%
+5.01-10.00% 3,814 41% 58$ 4.9% 115$ 5.6% 166$ 5.1%
+0.01-5.00% 3,412 37% (6)$ -0.5% (5)$ -0.3% (14)$ -0.4%
No Change 3 0% (38)$ -3.2% (65)$ -3.2% (104)$ -3.2%
-0.01-5.00% 452 5% (70)$ -5.9% (125)$ -6.2% (194)$ -6.0%
-5.01 - 10.00% 36 0% (134)$ -11.4% (245)$ -12.1% (374)$ -11.5%
-10.00 - 15.00% 12 0% (198)$ -16.8% (365)$ -18.0% (554)$ -17.0%
-15.01% + 9 0% (230)$ -19.5% (425)$ -20.9% (644)$ -19.8%
9,301 100%
AVG MV- $366,300 $600,000 HOME $900,000 HOME
% EMV Value Range
# of
affected
Properties
Include
One new FTE for each year starting in 2022 (No
net FTE add in 2021)
Commitments to long-term plans (CIP)
Debt obligations (existing and proposed)
SMSC aid for Policing – incremental annual
increase which will be adjusted, as needed, based
on the agreement approved by the SMSC Business
Council and the City Council.
Estimates for revenues/expenditures to maintain
General Fund balance at 46-48%
5- Year Projection Assumptions
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Include growth in tax capacity and market
value assumptions
5- Year Projection Assumptions
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Preliminary
2021 2022 2023 2024 2025
Change in Gross Tax Capacity before
new Construction 10%4% 3% 3% 2%
(Constructed 2 yrs prior to tax year):
New Residential Housing Units 115 125 135 125
New Apartment Housing Units 50 50 50
New Commercial Square Footage 50,000 50,000 50,000 50,000
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CITY OF PRIOR LAKE
PROPERTY TAX PROJECTION SUMMARY
2020 2021 2022 2023 2024 2025
SUMMARY OF CHANGE IN TAX LEVIES
GENERAL FUND 564,544 526,119 640,933 660,876 571,927 494,217
DEBT SERVICE FUNDS 64,100 (1,480) 209,225 (1,237) (26,556) 153,858
OTHER FUNDS
Equip Revolv Fund 25,000 25,000 50,000 50,000 50,000 50,000
Revolv Park Equip Fund 29,708 56,000 30,000 35,000 45,000 50,000
EDA Fund 124,750 75,000 205 - 360 10,510
PIR Fund (15,000) 40,000 35,000 35,000 35,000 15,000
Facilities Mgmt Fund 30,000 50,000 25,000 35,000 25,000 25,000
OTHER FUNDS 194,458 246,000 140,205 155,000 155,360 150,510
TOTAL CHANGE IN TAX LEVIES 823,102 770,639 990,364 814,639 700,731 798,586
CURRENT YEAR TAX LEVIES
General Fund 8,711,099 9,237,218 9,878,151 10,539,027 11,110,955 11,605,172
Debt Service Fund 3,561,288 3,559,808 3,769,033 3,767,796 3,741,240 3,895,099
Equip Revolv Fund 625,000 650,000 700,000 750,000 800,000 850,000
Revolv Park Equip Fund 319,000 375,000 405,000 440,000 485,000 535,000
EDA Fund 274,750 349,750 349,955 349,955 350,315 360,825
PIR Fund 80,000 120,000 155,000 190,000 225,000 240,000
Facilities Mgmt Fund 30,000 80,000 105,000 140,000 165,000 190,000
Grand Total 13,601,137 14,371,776 15,362,139 16,176,778 16,877,510 17,676,096
CURRENT YEAR TAX LEVIES ANNUAL % CHANGE
General Fund 6.9% 6.04% 6.94% 6.69% 5.43% 4.45%
Debt Service Fund 1.8% -0.04% 5.88% -0.03% -0.70% 4.11%
Equip Revolv Fund 4.2% 4.00% 7.69% 7.14% 6.67% 6.25%
Revolv Park Equip Fund 10.3% 17.55% 8.00% 8.64% 10.23% 10.31%
EDA Fund 83.2% 27.30% 0.06% 0.00% 0.10% 3.00%
PIR Fund -15.8% 50.00% 29.17% 22.58% 18.42% 6.67%
Facilities Mgmt Fund 166.67% 31.25% 33.33% 17.86% 15.15%
Grand Total 6.44% 5.67% 6.89% 5.30% 4.33% 4.73%
5-Year Projection
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5-Year Debt Projection
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5-Year Debt Projection
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5-Year Debt Projection
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5-Year Debt Projection
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What is Council direction on proposed 2021 tax levy %
change to move forward on the budget process?
Does the Council support the following planning
assumptions?
1)Maintain the General Fund balance (46-48%)
2)Treat the CARES Act Funding separately from the annual
budget process until eligible expenditures are confirmed via
audit
3)Include debt service, and CIP funding as identified in the five-
year capital improvement program
4)A tax levy that results in a reduction of the tax rate from 32.5%
in 2020 to 31.5% in 2021. (The tax rate returns to the 2020
level in 2022.)
Questions/Discussion
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