HomeMy WebLinkAbout09 19 2022 9A - 2023 Preliminary Budget and Tax Levy PPT 13.3.5% levy change2023 Preliminary Tax Levy and Budget
September 19, 2022
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2023 Preliminary Tax Levy and Budget
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By September 30, the City Council must:
Adopt a preliminary budget and certify a preliminary property tax levy for pay 2023
Announce the time and place of the meeting, when the budget and levy will be discussed, and public input allowed
The public budget meeting will be held December 5 at 7:00 p.m. in the Council Chambers
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2023 Tax Levy and Budget Schedule
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Tax Levy and Budget Schedule
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Overview – 2023 Preliminary Budgets
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Full-time Fire staffing model
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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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Full-time Firefighter Staffing Model – July 1, 2023 start date
Budget Assumptions
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Revenue Assumptions:
The city applied for a federal SAFER grant to transition to a full-time fire department. The grant would pay for three years of salary/benefits for newly hired full-time firefighters.
The preliminary tax levy presented tonight assumes no SAFER grant award as the status of the SAFER grant is not known as of tonight’s Council meeting.
The 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.
Expenditure Assumptions:
The budget includes expenditures for 12 fulltime firefighters starting mid-2023.
The budget also includes an incremental tax levy increase to prepare for full-year FT Fire costs in 2024.
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General Fund Revenues $18,803,459
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General Fund Expenditures $18,853,459
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2023 Base Tax Levy Considerations
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$857,000 (5.62%) of the tax levy increase is funding to support the transition to a full-time firefighter staffing model.
$1,180,000 (7.73%) is the levy needed to provide city services, capital improvement funding, and address cost increases during this inflationary period.
Full-time Fire Staffing Model:
The city applied for a federal SAFER grant to transition to a full-time fire department. The grant would pay for three years of salary/benefits for newly hired full-time firefighters.
The preliminary tax levy presented tonight assumes no SAFER grant award as the status of the SAFER grant is not known as of tonight’s Council meeting.
The preliminary tax levy establishes the maximum that the City can levy against properties in 2023. If the SAFER grant is received, the levy can be maintained or reduced from the amount
established at tonight’s meeting. The Council will not be able to increase the tax levy beyond what is approved tonight.
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2023 Proposed Tax Levy Change
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The 2023 proposed tax levy increase is $2,037,035
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 Tax Levy Change
based on Preliminary Budgets
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City tax capacity tax rate: The tax base for the city has grown 22% over the past year, resulting in an estimated reduction in the city tax rate of 7.4%. We have been able to reduce
the tax rate while making an investment in public safety with funding for a full-time firefighter staffing model.
City market value tax rate for financing the construction of Fire Station #2 is estimated to decrease almost 14%.
EDA tax rate is estimated to decrease almost 16%
2023 Tax Levy Impact and Tax Rate
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Bond Rating – Maintain/improve current rating (AA+)
2022 – S&P Rating AA+
General Fund Reserves – 40% to 50%
2022 Year End Projection – 52%
2023 Year End Projection – 50%
Property Tax Rank – Maintain/improve
Property Taxes/HH – Growth plus inflation
General Fund Expenditures/HH – Growth plus inflation
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Budget Objectives/ Metrics
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Budget Metric: Maintain or improve property tax rank when compared to a broader list of metro area cities.
Prior Lake’s Tax Rate has been consistently lower than average tax rate for Seven-County Metro area cities.
2022 Prior Lake City Tax Rate of 30.47%
2023 Prior Lake City Tax Rate based on preliminary 2023 budget is 28.21%
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Metro Area Cities Tax Capacity Rates
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Budget Metric: Maintain or improve property tax rank when compared to a broader list of metro area cities.
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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Budget metric: “maintain a level of property taxes on a per household basis which takes into account the cost of inflation and community growth.”
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Proposed Tax Levy per Household
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Budget metric: “maintain a level of General Fund operational expenditures on a per household basis which takes into account the cost of inflation and community growth.”
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General Fund Operating Expenditures per Household
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Resident Impact of City Tax Levy
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2023 Tax Levy and Budget Schedule
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Next Steps
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Council Discussion
Council Action Requested
Resolution 1- Consider Approval of a Resolution Approving Preliminary 2023 City Budgets and Certifying Preliminary 2023 City of Prior Lake Property Tax Levy to Scott County Department
of Taxation
Resolution 2 - Consider Approval of a Resolution Approving Preliminary 2023 Economic Development Authority Budget and Certifying Preliminary 2023 Economic Development Authority Property
Tax Levy to Scott County Department of Taxation
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Resident Impact of City Tax Levy
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