HomeMy WebLinkAbout08 01 2022 1A Budget Work Session Report - 2023 Preliminary Budget and Tax Levy2023 Preliminary Tax Levy and Budget
August 1, 2022
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2023 Tax Levy and Budget Schedule
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Tax Levy and Budget Schedule
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2023 Base Tax Levy Considerations
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*The debt service % change is estimated based on the 2023 planned debt issuance.
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2023 Budget and Property Tax Assumptions
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Growth in tax capacity and market value assumptions from 2022 to 2023
Estimated market value has increased 18.4% and estimated tax capacity has increased 22.5%.
Revenue Assumptions:
Building permits of 150/year
SMSC aid for Policing – no proposed increase for 2023 budget
Full-time Fire staffing model July 1, 2023 start – Preliminary tax levy assumes no SAFER grant award as the status of the SAFER grant may not be known as of September 19 Council meeting
to approve the preliminary tax levy.
The preliminary tax levy establishes the maximum that the City can levy against properties in 2023. The Council will consider the final tax levy in December at which time the levy can
either be maintained or reduced at the amount established in September. The Council will not be able to increase the tax levy.
Fire service contract/City of Credit River and Spring Lake Township – incorporates financial impact of Full-time Fire staffing model July 1, 2023 start date.
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2023 Budget and Property Tax Assumptions
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Staffing Changes per Personnel Plan
2023:
Transition to full-time firefighter staffing model (12 FTE)
Police Property Room Manager converted from open CSO role (FTE & budget neutral with retirement savings and conversion of CSO rolls )
Financial Analyst – midyear hire
Mechanic converting from part-time to full-time (.3 FTE)
Funding to support rising costs of goods and service
Commitments to long-term plans (CIP)
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2023 Budget and Property Tax Assumptions
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Full-time Fire staffing model July 1, 2023 start
Recruitment and retention
Current response times meet the standard only 9% of the time.
Not meeting standards for life safety inspections, pre-planning and public education.
Fire call volume has grown by 55% in five years from 440 in 2016 to 682 in 2021.
Need to plan for continued increase due to rapid growth.
Paid-On-Call (POC) firefighters respond to calls for service via pager/phone-challenging deployment model
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The 2023 proposed tax levy increase is $2,037,000
The proposed tax levy increase is 13.35% (assumes NO SAFER grant award)
5.62% of the levy increase is for transition to FT Fire staffing model
7.73% is remaining levy need which is below the base tax levy consideration of 10.4% that considers growth, inflation and debt service
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2023 Proposed Budget & Tax Levy Change
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Property Tax Projection Summary
Total tax levy with SAFER grant award (FT Fire January 1 start) of $16,765,000 which is an 9.92% increase from the prior year levy based on the preliminary budgets.
Total tax levy with NO SAFER grant award (FT Fire July 1 start) of $17,290,000 which is a 13.35% increase from the prior year levy based on the preliminary budgets.
Planned reduction in City tax rate with both scenarios.
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Estimated market value has increased 18.4% for pay 2023.
This is the property market valuation change that was used when estimating the residential impact of the City tax levy.
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Residential Impact of the Proposed City Tax Levy Change
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General Fund Reserve *
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CFMP specifies a range between 40% and 50%
2022 Year-End Estimated Reserve Balance - $10.1M (52%)
2023 Year-End Estimated Reserve $10.1M (48-50%)
* Estimated
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Seven County Metro Area Average Tax Capacity Rate
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City Levy/Tax Capacity = Tax Rate
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City Levy/Tax Capacity = Tax Rate
2023 Prior Lake City Tax Rate based on preliminary 2023 budget is 28.21%
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Scott County Tax Capacity Rate by City
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Increase in stormwater % due to:
Decision in 2021 to add storm sewer replacement costs on reconstruction projects to the stormwater utility fund, previously were part of the general levy and assessment cost
Funding for $950k add in 2024 for regional water quality pond project
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Enterprise Funds
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Combined Utility Bill Impact
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2023 Tax Levy and Budget Schedule
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Next Steps
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Council Discussion
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Does the Council have any questions on the proposed maximum tax levy of 13.35% that will be presented at the September 19 meeting recognizing that it can be reduced, but not increased,
when we submit the final tax levy on December 5th?
If the City receives confirmation of the SAFER Grant prior to September 19 the proposed maximum tax levy presented will be 9.9%.
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