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HomeMy WebLinkAbout12 05 2022 7A - 2023 Final Budget and Tax Levy - 12.98% levy change2023 Final Tax Levy and Budget Public Meeting December 5, 2022 1 Tonight’s Agenda 2 2 2023 Tax Levy and Budget Schedule 3 Tax Levy and Budget Schedule 3 Rounded to the nearest 1000 4 – 2023 Proposed City Budgets3 Expenditures - $39,848,000 4 General Fund Expenditures $18,810,000 5 5 Full-time Fire staffing model 6 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. 6 Full-time Firefighter Staffing Model – July 1, 2023 start date Budget Assumptions 7 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 proposed 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. 7 $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 (7.36%) 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 proposed 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. 8 2023 Proposed Tax Levy Change 8 2023 Base Tax Levy Considerations 9 9 The 2023 proposed tax levy increase is $1,981,195 The proposed tax levy increase is 12.98% (assumes NO SAFER grant award) 5.62% of the levy increase is for transition to FT Fire staffing model 7.36% is remaining levy need which is below the base tax levy consideration of 10.4% that considers growth, inflation and debt service 10 2023 Proposed Tax Levy Change based on Proposed Budgets 10 11 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 almost 8%. With the increase in the tax base, 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 14%. EDA tax rate is estimated to decrease 16% 2023 Tax Levy Impact and Tax Rate 11 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 – 47-48% Property Tax Rank – Maintain/improve Property Taxes/HH – Growth plus inflation General Fund Expenditures/HH – Growth plus inflation 12 Budget Objectives/ Metrics 12 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 28.08% 13 Metro Area Cities Tax Capacity Rate 13 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 28.08% 14 Scott County Tax Capacity Rate by City 14 Budget metric: “maintain a level of property taxes on a per household basis which takes into account the cost of inflation and community growth.” 15 Proposed Tax Levy per Household 15 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.” 16 General Fund Operating Expenditures per Household 16 17 Resident Impact of City Tax Levy 17 Resident impact – 2022 tax dollar for a median valued home 18 * Other includes Scott County CDA, City EDAs ( Jordan, Prior Lake & Shakopee), Water Districts, Sewer District, & Region Nine Development Commission 18 Next Steps 19 Hold Public Hearing Requested Council Action Resolution 1- Consider Approval of a Resolution Approving Final 2023 City Budgets and Certifying Final 2023 City of Prior Lake Property Tax Levy to Scott County Department of Taxation Resolution 2 - Consider Approval of a Resolution Approving Final 2023 Economic Development Authority Budget and Certifying Final 2023 Economic Development Authority Property Tax Levy to Scott County Department of Taxation 19