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Home My WebLink About8A - Truth-in-Taxation Hearing 2008 Budgets MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: ALTERNATIVES: RECOMMENDED MOTION: CITY COUNCIL AGENDA REPORT DECEMBER 3, 2007 SA Ralph Teschner, Finance Director TRUTH IN TAXATION PUBLIC HEARING FOR PROPOSED 2008 CITY BUDGETS Introduction The purpose for the public hearing tonight is to provide information to the public regarding the city's proposed 2008 Operating Budgets and the amount of property taxes that the City proposes to collect in 2008. Also, it is important to give the residents the opportunity to express their opinions on the budget and those services that are important to the taxpayers. A Powerpoint presentation (attached) will be provided, the Council will have an opportunity to ask questions and then the Truth-in-Taxation hearing should be opened. Any written comments submitted previous to the hearing are to be entered into the official record. Staff will provide a short presentation with respect to the proposed 2008 general fund budget and enterprise fund budgets that were preliminarily adopted by the City Council in September. Under Truth-in- Taxation guidelines the City Council adopted the preliminary budgets and tax levies on September 4,2007. The City Council CANNOT TAKE ANY ACTION with respect to adopting the 2008 budgets this evening. If all public concerns cannot be addressed tonight, the Truth-in-Taxation hearing could be continued until 6:00 P.M. Monday, December 10, 2007. This meeting would be a special council meeting to conclude the public comment period. The final budgets and property tax levy would then be considered for approval by the City Council at its last regularly scheduled meeting of the year on Monday, December 17,2007. By Minnesota Statute the final property tax levy amount must be certified to the Scott County Auditor's Office no later than 5 working days after December 20th (December 28, 2007). The following alternatives are available to the City Council: 1. If all questions have been answered, close the public hearing and direct the Staff to place this item on the December 17,2007 City Council agenda for final action. 2. Continue the public hearing until December 10,2007 at 6:00 P.M. if there are questions that cannot be answered on December 3rd. Motion to either close the public hearing or continue the hearing to 6:00 P.M., Monday December 10, 2007. If the hearing is adjourned the the date, time and place for the levy adoption meeting (~ndaYJ:OO p.m. 'December 1th) must be announced. '~~ www.cityofpriorlake.com Phone 952.447.9800 / Fax 952.447.4245 As a taxpayer, at what time of the year do I do what? DECEMBER 3, 2007 8UM~,\"'_ ' .Tho............. -..- ,dillriCt1lrid ,DIner -- dectdton bUdgiItli ....-JXXtion muitc:om.frOriI'.' lhepop.rty:tax ..... Truth in Taxation Public Information Hearing BUDGET PROCESS TO DATE BUDGET PROCESS TO DATE ...~;;:.=~ '" City Council and staff have conducted two work sessions on the proposed budget for 2008. City Council makes additional cuts. City Council adopted a preliminary budget and levy in September. Truth-in-Taxation notices were mailed to all city property owners last month. Truth-in-Taxation Hearinq Purpose Discuss budget - in percentages & dollars ;,l Discuss tax levy - in percentages & dollars ,;l Explain the increases BUDGET PROCESS TO DATE A REMINDER ":,~'""": -.---. I:;:; TONIGHT: Truth-in-Taxation hearing SpecI.ITuCilrlric:t SO.OS Prior Lake $0.29 "" MONDAY, DEC. 10: Continuation of Truth-in-Taxation hearing (if necessary) ~ MONDAY, DEC. 17: Budget and levy must be adopted by City Council Scott county SO.33 Tonight we discuss the city's share of your total 2008 tax bill. For 2008, it's 29 cents of each tax dollar. 1 OUR OBJECTIVE What our 2030 Vision says about fiscal management.. . 'Prior Lake maintains a sound financial position while providing high-value and top-quality services to residents.' WE INVEST IN OUR COMMUNITY! METRO PICTURE c,;Q;:!:2iK,"'~""1 In the Citizen's League of Minnesota's rankings of 117 metro city tax rates, Prior Lake has declined. In 2004, Prior Lake ranked ... 37th In 2005, Prior Lake ranked ... 45th ..;.;....; In 2006, Prior Lake ranked ... 45th In 2007, Prior Lake ranked ... 54th AND THE TREND SHOULD CONTINUE IN 2008 WHERE WE STAND i'ii1 The lower the tax rate the lower the property tax! Conclusion.. . ;'1,1 Our tax picture is improving. FINANCIAL POSITION ~ Established Performance Gold Standards ~~ Shared with community as a report card of our results ~ We strive to do better each year ,",'/, WHERE WE STAND . ;;;~~d~~ff~ Comparison to all other cities In county... r@ Prior Lake's 2007 tax capacity rate ranked LOWEST of the seven cities in Scott Countyl 1. Belle Plaine 54.929 2. New Prague 50.934 3. Savage 50.165 4. Jordan 47.287 5. ElkolNew Market 35.687 6. Shakopee 31.939 7. PRIOR LAKE 28.435 /"G~"'YRt.~", ;~ .c', ,.!:: ~\ U rrsJ / Proposed General Fund Budget & Tax Levy Truth-in-Taxation Hearing DECEMBER 3, 2007 2 u~. CONTRIBUTING FACTORS IN 2008 BUDGET-TAX LEVY EXTERNAL (beyond our control) III Increasing energy costs !ill State mandates (pension) !II Insurance costs INTERNAL (within our control) l!JI New and existing multi-year labor agreements already in place !ill 2030 Vision & Strategic Plan III SCALE/SMSC cooperative ventures !!l Two additional employees NEW SPENDING PROPOSED IN 2008 G.F. BUDGET Joint public Safety training facility}....$21 ,000 Contingency................. ........ ............$25,000 Fiber technology plan........ ................$25,000 Fuel increase.......................... .........$26,000 Debt service.............. ...... .......... .......$29,000 Property/liability insurance.......... .....$36,000 Building/senior personnel additions..$75,OOO Legal {general/prosecution)....... .......$78,000 2008 BY THE NUMBERS :::::'-::::'~-;:i~::;;:J I~..' Prior lake'.s 2008 property tax levy would increese by , $848,680 from 2007, and , would represent a 7.42% increase. ... TAX REDUCTION EFFORTS . Taken from the new 2030 Vision: ;;;!.;;:1l;3!:;oJin;;:::~ I-- Financial Resource Elements: . Identify appropriate balance between residential and commercial tax base (comprehensive plan) . Identify additional revenue sources (franchise fees) . Enhance development fee system (comprehensive plan) . Establish more partnerships (SCALE/SMSC) . Developed detailed list of economizing efforts in every city department. NEW SPENDING PROPOSED IN 2008 G.F. BUDGET New building utilities increase........$93,OOO Labor contractlPERA mandate..... $311.000 TOTAL.............,...... ................. $719,000 These ten items account for over 97% of the $740,624 budget increase. 2008 BUDGET BY ACTIVITY Pubic VIklrks 14.5% .._. ... ".. __.. ::::'l Fire & Rescue 8.2% Other* General 7.9% Government 20.3% 3 BUDGET CHANGES FOR 2008 $.....1 12.92% $8,0D4 $U,ooo 0.00" $0 53"',418 ....95" -$19.020 $13,337 $13,337 0.00" $0 $5,5'" $1.6,297 192.85" $1.0,732 $1.26,1148 $130,_ 3.17" "',017 $168,240 $174,226 3.5&" $5,986 $11,200 $22,200 21.98" $4,000 $102,200 $UO,BOO 8.41" $8.BOO $298,000 S376,ooo 26.17" $78,000 Personnel $75,799 $78,343 3.36" $2,544 CommunklMlons $131,974 $126,198 -3.92% ..$5,116 PlanninC .. Zordn. $350,713 $434.716 23.95" $804,003 : BUDGET CHANGES FOR 2008 ..' i De""rtment '07 Budget '08 Pr_d "~~~J11~~~ $167,141 $131,672 -21.10" -$35,2" Eoonomlo DwakIpment ;::-'i;>"" -::: .{':',':-'/'-;;",:,\-'/ '-,;--,:--~,' GElf_f.liND, ' $1.1,685,807 $12,42S,4U. .' 6.34%, $74o,lia4: TAXPAYER IMPACT OTHER HOME VALUES & IMPACTS $210,000 Property 4.49% or $27 $262,500 Property 4.16% or $32 $367,500 Property 3.81% or $43 $420,000 Property 3.58% or $46 Payable 2008 Median Value Home: $254,800 Payable 2008 Average Value Home: $323,500 BUDGET CHANGES FOR 2008 . ,.. De""rtment , _ DatI. Pro....n. .: Bul"",,." Plont '07 Budget '08 Pro_d "~!,~~~e $142,550 $175,595 23.1n $33,045 $329.737 $410,056 24036" '1ll,.11J1 TAXPAYER IMPACT Assumina averaae 50/0 market value increase Owner of a $315,000 home in Prior Lake would see a 3.95% increase in the city's share of total tax bill. In dollars, that's $37.31 for year. Proposed Enterprise Fund Budgets Truth-in-Taxation Hearing DECEMBER 3, 2007 4 ENTERPRISE FUND BUDGET What are they? Enterprise funds... , Provide a product or service . Supported primarily by user fees , Are run like a business There are four enterprise funds in Prior Lake... , Water Utility , Sewer Utility , Water Quality Utility , Transit Services ENTERPRISE FUND BUDGET HIGHLIGHTS FOR 2008 Water Utilitv , Rates have been crafted to allow completion of water treatment plant by year-end 2008. , Maintenance building security fence. " Srooksville Hills water main replacement. - Sewer Utilitv Inflow/infiltration improvements. , Lift station controls standardization upgrade. Rebuild (2) additional lift stations. CONCLUSION Truth-in-Taxation Hearing DECEMBER 3, 2007 :; BUDGET CHANGES FOR 2008 Department '07 Budeet '08 Proposed " CIlIIn.lle~$.C""nge_ (Fund Transfer. $506,987 $1,003,414 97.92% $496,427 Watar Utility $1,107,693 $1,768,821 59,69% $661,128 '.Sowor Utility $2,571,031 $2,327,006 -9.49% -$244,025 Watar Quality Utility $330,454 $315,537 -4.51% -$14,917 ENTERPRISE FUND BUDGEt CHANGES FOR 2008 Water Qualitv Utilitv " Pondweed removal program. Stormwater pond dredging. , Outlet box and channel improvements. Transit Services > Intergovernmental transfer funds from Met Council are earmarked for Park & Ride, new bus shelter and additional services. THINGS TO CONSIDER Cautiouslv movina forward? The proposed budget and tax levy for 2008 will enable the city to take yet another step toward its 2030 Vision while respecting the realities of our economy. Developing communities require investment... and Prior Lake is no exceptionl 5 ,. _. _..._~_~~.~_~__~~'-""-"',_L..-__~""'~ __"'_"_'~'_'_'_____'~__"" __......._....,..___...._ -~.-~-_... --......--------- --......-..............-- ..~._.__.._--_._.__._-~, ._.... _.._._.....~ .,.... - ~.- THINGS TO CONSIDER What is the city's fiscal health? Ask Moody's Investor Service, which in 2005 upgraded the city's bond rating to Aa3 - good for the 97th percentile. Only 24 of 856 cities in the state had better ratings. ProDertv tax stabilitv The annual increase in the city portion of the property tax (2.48%) has paralleled the average rise of 2.79% in the consumer price index over the past 7 years. Truth in Taxation Thank you for your attention! Public Information Hearing DECEMBER 3, 2007 NEXT STEPS !!i TONIGHT: Questions from council members Open public hearing and recewe input Close public hearing or continue ., FUTURE: MONDA y, DEC. 10: Continuation of Truth-in- Taxation hearing (if necessary) MONDA Y, DEC. 17: Budget and levy must be adopted by City Council 6