HomeMy WebLinkAbout07 17 2023 1A Budget Work Session Report - 2024 Preliminary Budget and Tax Levy2024 Preliminary Tax Levy and Budget
July 17, 2023
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Agenda
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2023 Projection
2024:
Tax Levy Considerations
Budget and Proposed Tax Levy Assumption
Proposed Tax Levy Change and Tax Rate
Residential Impact
General Fund Reserves
CIP projects
Proposed utility rate changes
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2023 General Fund Preliminary Yearend Estimates
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The growth of wages surpassed that of inflation for the first time since March 2021 in February of 2023.
Used May YTD wage growth of 6% instead of inflation rate of 4% as 71% of city budget is personnel costs.
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2024 Base Tax Levy Considerations
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U.S. inflation rate versus wage growth 2020-2023
May 2023:
Wages 6%
Inflation 4%
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2023 Budget and Property Tax Assumptions
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Growth in tax capacity and market value assumptions from 2023 to 2024
Estimated market value has increased 3.6% and estimated tax capacity has increased 4.9%.
Revenue Assumptions:
Building permits of 80/year
SMSC aid for Policing – no proposed increase for 2024 budget
Fire service contract/City of Credit River and Spring Lake Township – incorporates financial impact of Full-time Fire staffing model.
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2024 Budget and Property Tax Assumptions
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Staffing Changes per Personnel Plan
2024:
Transition to full-time firefighter staffing model -additional six months of expenditures as compared to 2023 budget
Police Officer add (1 FTE) Budget neutral in 2024/Funded with one-time Public Safety State Aid/tax levy impact 2025 forward)
Recreation Programmer (1 FTE)
Funding to support wage inflation and rising costs of goods and service
Commitments to long-term plans (CIP)
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2024 Initial Budget Adjustments/Net Levy Reductions
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Property Tax Projection Summary
Total CITY tax levy of $18,782,644 which is an 12.85% increase from the prior year levy based on the preliminary budgets.
City tax rate of 30.44% (8.3% increase).
Total EDA tax levy of $364,000 which is a 1.62% decrease from the prior year levy based on the preliminary budgets.
EDA tax rate of .58% (1.62% decrease) due to budget of $26,000 for fiscal disparities in 2024.
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The 2024 proposed tax levy increase is $2,167,000
The proposed tax levy increase is 12.85%
Base levy considerations total 10.9% levy increase
2% increase above guideline due to non-tax revenue shortfall of $333k
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2024 Proposed Budget & Tax Levy Change
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Estimated market value has increased 3.6% for pay 2024.
The estimated increase in city tax is $145 for a median valued home.
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Residential Impact of the Proposed City Tax Levy Change
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Resident Impact of City Tax Levy
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General Fund Reserve *
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CFMP specifies a range between 40% and 50%
2023 Year-End Estimated Reserve Balance - $10.1M (48%)
2024 Year-End Estimated Reserve $10.1M (45%)
* 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
2024 Prior Lake City Tax Rate based on preliminary 2024 budget is 30.44%
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Scott County Tax Capacity Rate by City
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Capital Project Funds
Equipment Replacement Plan (F410)
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Capital Project Funds
Park Equipment Replacement Plan (F430)
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Capital Project Funds
Facilities Management Plan (F440)
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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 and $260k adds in 2024 for regional water quality pond project and PL outlet channel lining project
Increase in water and sewer rates to plan for upcoming pavement management plan projects and utility needs
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Enterprise Funds
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Combined Utility Bill Impact
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2024 Tax Levy and Budget Schedule
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Next Steps
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Council Discussion
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Council direction on proposed tax levies
Any questions on 2024 proposed CIP projects and proposed utility rates?
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