HomeMy WebLinkAbout08 21 2023 1A Budget Work Session Report - 2024 Preliminary Budget and Tax Levy2024 Preliminary Tax Levy and Budget
August 21, 2023
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Agenda
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2024:
Tax Levy Considerations
Budget Talking Points
Summary of Budget Adjustments
Proposed Tax Levy Change and Tax Rate
Residential Impact
General Fund Reserves
Future Budget Challenges
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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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Budget Talking Points
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The proposed budgets reflect additional resources needed for the following areas:
First full year of Fire department full-time staffing (includes six months of added expenditures due to midyear 2023 implementation)
Proposed personnel add for a Police Officer and Recreation Programmer
Unfunded mandates (elections, joint county prosecution, PD additional holiday worked)
Reduction in the rate of residential development (Prior Lake is still experiencing community growth, but at a slower rate than the previous several years is anticipated.)
Inflationary/Contract increases for wages and commodities
Funding capital plans for PayGo strategy for annual capital replacement needs for equipment/park equipment/facilities.
The city has had one month of fulltime fire. Key Fire department metrics have shown substantial improvement with the fulltime fire staffing model.
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Budget Talking Points
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Fire Department key metrics for duty engine– July 2023 (first month with fulltime fire staffing model)
July 2023
Average en route time- 01:04
Average on scene time- 05:41
Average total call time: 06:45
July 2022
Average en route time- 05:21
Average on scene time- 06:28
Average total call time: 11:49
Public education events 2023- 14
Preliminary site inspections 2023- 5
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2024 Additional Budget Adjustments/Net Levy Reductions
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2024 Additional Budget Adjustments (continued)
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Updated budget information:
SMSC aid for Policing – Proposed increase of $100k for 2024 budget (annual budget total of $1.1M).
The budget also reflects a planned add to fund balance of $100k.
The net impact on the tax levy for these two items is zero.
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The 2024 proposed tax levy increase is $1,994,000
The proposed tax levy increase is 11.81%
Base levy considerations total 10.9% levy increase
.9% increase above guideline driven by incremental increase in CIP funding to work toward PayGo funding for annual needs.
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2024 Proposed Budget & Tax Levy Change
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Property Tax Projection Summary
Total CITY tax levy of $18,857,710 which is an 11.81% increase from the prior year levy. City tax rate estimate of 30.29% (7.7% increase).
Total EDA tax levy of $390,000 which is a 5.41% increase from the prior year levy. EDA tax rate estimate of .63% (1.25% increase)
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Property Tax Rate History
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Resident Impact of Proposed City Tax Levy Change
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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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Future Challenges
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General Fund:
Funding for additional staff to maintain city services
Unfunded mandates
Reduction in the rate of residential development
Inflationary/Contract increases for wages, commodities, health care costs, etc.
Capital Project Funding:
Updated Pavement Management Plan with additional needs identified. In addition to tax levy needed for street replacement, there is funding pressure on the utility funds for the PMP
projects with water/sewer replacement.
Unfunded Projects of the Park Master Plan
Funding for future facility improvements, including Maintenance Center expansion in 2032
* Estimated
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Identify and monitor the proposed uses of the 2023 One-time Public Safety State Aid Funding
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Future Challenges (continued)
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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
Does the city council have any further questions on the proposed maximum tax levy of 11.81% that will be presented at the September 18 meeting? (Reminder: The levy can be reduced, but
not increased, when we submit the final tax levy on December 4th)
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