HomeMy WebLinkAbout2010-09-01 PACKET 08.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 9/1/10 oQ
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COUNCIL ACTION REQUEST
Consider the 2011 preliminary tax levy and proposed budget.
STAFF RECOMMENDATION
1) Adopt a resolution setting the Preliminary 2010 Tax Levy collectible in 2011.
and
2) Adopt a resolution setting the Proposed 2011 City Budget
Yl1919TZ AINWOTTWOW
BUDGETED AMOUNT
ACTUAL AMOUNT
ADVISORY COMMISSION ACTION
DATE
REVIEWED
APPROVED
DENIED
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PLANNING
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PUBLIC SAFETY
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PUBLIC WORKS
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PARKS AND RECREATION
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HUMAN SERVICES /RIGHTS
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ECONOMIC DEV. AUTHORITY
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SUPPORTING DOCUMENTS
® MEMO /LETTER: Roland 8/26/10
® RESOLUTION: (2)
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
ADMINISTRATORS COMMENTS
City Administrator Date
COUNCIL ACTION TAKEN: APPROVED ❑ DENIED ❑ OTHER
HACouncil items \City Council Action Form.doc
City of • .•- Grove
Finance Department
TO:
FROM:
DATE:
RE:
Honorable Mayor and City Council
Ryan Schroeder, City Administrator
Robin Roland, Finance Director
August 26, 2010
Adoption of Preliminary Budget and Property Tax Levy for Taxes Payable in 2011
Introduction
The City is required to adopt a preliminary levy each year by September 15 the original budget
calendar included plans to adopt the preliminary levy at the regular council meeting on
September V This preliminary levy will be used by Washington County to prepare the notices
of estimated property taxes that are mailed to property owners in November. The preliminary
levy may not be increased but can be reduced prior to December 28 when the final levy is
required to be adopted.
This is the third budget cycle we have used a two year budget format. It will serve as a plan for
2012 and next year 2012 can be fine tuned and 2013 added. This two year format proved of
significant benefit in the compilation of the proposed budget at hand since the majority of the
work for 2011 was done last year in preparation of the 2010 -2011 budgets.
Staff believes the preliminary 2011 tax levy will result in the two goals stated by the City Council
at their Budget goals workshop on May 5, 2010: that the City taxes paid by the owner of an
"average" property would be no more in 2011 than in 2010 and that the City's tax extension rate
would continue to be at the "mean" tax extension rate of the 36 cities to whom we compare
ourselves.
Over the past month the City Council and staff have been meeting to discuss the 2011 and 2012
budgets. Although there remain outstanding issues to be resolved with the 2012 budget, the
proposed 2011 budget is balanced and addresses the necessary tax levy required for
operations.
Property Tax Levy Summary
The preliminary levy proposed includes a total increase of 0.71 %, or approximately $86,250.
General Levies
General Fund
Adopted
Amended
Adopted
1
Proposed
1
Proposed
1
2008
2009
2010
2011
2012
$ 9,620,000 $ 10,338,000 $ 10,213,300 $ 10,345,100 $ 10,358,800
MVHC unallotment
584,000
584,000
584,000
Park shelter replacement /Landscape initiative
100,000
20,000
Future Public Safety /City Hall
450,000
20,000
Economic development
106,000
119,000
106,000
106,000
106,000
Grey Cloud Bridge
7,300
Debt reduction
20,400
20,400
Future Pavement Mgmt
80,000
80,000
Ice Arena
230,000
Total levy subject to limit
10,513,700
10,657,400
10,903,300
11,035,100
11,088,800
Debt Levies
EDA public project
275,800
140,000
Ice Arena expansion bonds
240,000
240,000
240,000
240,000
Debt service mitigation
407,000
127,500
346,400
Public Safety /City Hall building bonds
670,400
Pavement Mgmt 2008
290,000
180,000
175,050
175,660
Pavement Mgmt 1998
225,100
215,300
Pavement Mgmt 2000
18,300
19,200
29,306
41,000
43,200
Pavement Mgmt 2002c
202,400
274,200
334,894
403,700
Pavement Mgmt 2003b
236,500
234,500
232,300
Pavement Mgmt 2002b
305,200
248,400
235,200
Total debt levy
1,670,300
1,789,100
1,251,700
1,206,150
1,129,260
Total Gross levy
12,184,000
12,446,500
12,155,000
12,241,250
12,218,060
Change in Gross levy
3.06%
2.15%
-2.34%
0.71%
-0.19%
Preliminary Tax Rates
Based on estimated taxable property tax values and the levy amounts presented the tax
extension rate will increase approximately 10.3% to 38.9 %. We have not received updated tax
capacity numbers from the County. This tax rate is based on conservative estimates of tax
capacity numbers from the County and the resulting tax rate may vary. Staff hopes to have
updated tax capacity values just prior to the Council meeting September 1 St and will incorporate
those values into the preliminary levy /budget presentation at the meeting.
Tax Extension Rates
50.00
45.00
47.52
43. 37.93 _
40.00 - 42.08 9
35.19
35.00 - - -- 39.17 34. a40-
I
30.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Tax Payable Year
The 38.9% tax rate will result in tax dollars paid (exclusive of MVHC) of $721 to the City of
Cottage Grove for a home valued at $205,600 for 2010 that experiences a 10% decline in 2011
taxable market value.
Pay 2009
Pay 2010
Pay 2011
2011 Operating Budgets
TMV Gross City Tax paid
$221,600 $768
205,600 727
184,834 721
General Fund
Currently the attached general fund budget is in a "balanced state" - revenues equal expenses.
Items of note included in the General Fund Budget.
• Council Contingency -the preliminary budget includes an expenditure line item for council
contingency of $55,000 for 2011 and 2012.
• State Aids (Local Government Aid) — The levy and the preliminary budget reflects no
Local Government Aid or Market Value Homestead Credit (MVHC). As in 2010, the City
had to levy for the MVHC aid so that it could be unallotted (retained by the state).
• Cost of Living Increases — T he cost of living increase is 2% for 2011 and 2012.
• Admin Charge to Enterprise Funds — The admin charge to the enterprise funds (water,
sewer, storm water and street light utilities) was not increased for 2011 or 2012; it totals
$495,600 in the general fund.
• Charges for services — both 2011 and 2012 reflect a $100,000 reduction in engineering,
administration and financing fees collected on developments due to the lack of
anticipated development activity.
• Investment earnings— Investment earnings have been calculated at 1.5% for 2011 and
2012.
• PERA Changes budget amounts include an addition for the increase in the PERA rates
for 2011. Based on adopted legislation the PERA rate went from 7.0% to 7.25% for
Coordinated members and the rate for Police & Fire went from 14.1% to 14.4 %. The
history of these mandated increases are detailed below:
Table of PERA Employer Contribution Rates
effective date
Coordinated Plan
Police & Fire
1/1/2006
6.00%
10.50%
1/1/2007
6.25%
11.70%
1/1/2008
6.50%
12.90%
1/1/2009
6.75%
14.10%
1/112010
7.00%
14.10%
1/1/2011
7.25%
14.40%
• Police Officer / Paramedic Allocation- The allocation of the Police Officer /Paramedic time
to the ambulance fund remains at 12 %. A shift started in 2006 to more accurately reflect
actual time spent on EMS calls over a straight allocation method used in years prior. The
12% allocation represents an approximation of the officer time spent on EMS calls
according to the department.
• Fuel Allocation- The 2011 budget includes an assumption of $3.05 per gallon for gasoline
and diesel. This represents an increase from $2.80 in the 2010 budget amounts.
Special Revenue Funds
Equipment Replacement Fund
The budget includes a five year equipment replacement plan totaling $4.1 Million, along with the
funding source. A summary list of purchases by year is included totaling $551,100 for 2011 and
$635,500 for 2012.
The 2011 equipment purchases include:
Four (4) marked squads (Police)
Specialty vehicle (CSO) (Police)
Hybrid sedan (Inspections)
Pumper Truck: first half — balance in 2012 (Fire)
16 foot rotary mower (Parks)
Bucket Truck (Street Light Utility)
Seal Coating Fund
After the Franchise fee increase in 2010 and the switch to a seven year program, expenditures
in this fund increase by 4% in 2011 and an additional 8.7% in 2012.
Ice Arena
Staff is requesting that a portion of current year income be designated for future equipment
replacement. $10,000 is being designated in 2011 and 2012 for this purpose.
Charitable Gambling Fund
The budget includes budget appropriations of $5,000 to the Fireworks display.
Celebration Fund
No activity is included in this fund for either 2011 or 2012
Forfeiture Fund
The expenditures include purchase of new POSS scheduling software for the police
department and a $25,000 payment for the squad camera loan repayment to the Equipment
Replacement Fund.
Recycling
The revenue is the recycling grant amount expected to be received from Washington County.
Expenditures include purchase of shelving and promotional display in 2011.
EDA and Economic Development Trust Funds
The EDA property levy remains at the 2010 levy amount of $106,000.
Utility and Enterprise Funds
No rate increases are currently proposed for any of the utility funds in 2011 and 2012.
Storm Water Utility Fund
The rates remain at the level of $48 per residential customer for 2011 and are consistent with
the storm water utility plan presented in 2008 which included scaled back storm water utility
projects to match the revenue source.
Water Fund
The 2011 capital outlay includes design development for Well #12 and painting the 1 MG tank.
The fund is projected to have a net income of $359,485 in 2011.
Sewer Fund
The largest expenditure increase anticipated is the Met Council sewer services charge (6.7 %).
The 2011 capital outlay includes sewer access trails of $25,500. The fund is projected to have
a net loss of $289,145.
Street Light Fund
The rates decreased in 2010 to help mitigate the increases in the franchise fee. There is a
small projected net loss in the fund of $38,520 in 2011.
Other Enterprise Funds
Golf Course Fund
Despite fund revenues in both 2011 and 2012 reflecting a preliminary assumption of $65,000
"additional revenue ", this fund breaks even in 2011 and loses $28,150 in 2012. Discussions
should continue about goals for and strategies to handle this operation.
Ambulance Fund
The budgeted revenue includes an increase of 8% in the rates. The fund is projected to have
a loss of close to $100,000 each year in 2011 and 2012. Rates would have to increase by
25% for the fund to break even. Population and call trends indicate more than 68% Medicaid
and Medicare.
Recap of fees and taxes.
Based on a $184,834 average (2011) value home charged for 9,000 gallons of water and
5,000 units of sanitary sewer in a month would pay on a monthly basis approximately $100 in
property taxes, franchise fees and utility charges per month.
Property Taxes (city Portion only)
Franchise Fees
Water Charge
Sewer Charge
Streetlight Fee w /maintenance
Stormwater Fee
Per Month
2010
2011
% increase
$ 60.58 $
60.08
-0.8%
3.30
3.30
0.0%
13.20
13.20
0.0%
16.65
16.65
0.0%
3.30
3.30
0.0%
4.00
4.00
0.0%
$ 101.03 $
100.53
-0.5%
Remaining Schedule
After the preliminary levy and budget is adopted City staff will certify these amounts to the
County and the County will prepare the notices to be sent to individual property owners in
November. The notices will identify the proposed taxes paid by each property owner based on
the property's classification. In addition, the notice will identify the meeting date in December
when public comment on the levy and the budget will be taken.
Action Requested
Adopt the attached resolutions
• Resolution adopting the proposed 2010 tax levy collectible in 2011
• Resolution adopting a proposed 2011 budget for the City of Cottage Grove.
RESOLUTION NO. 10-
ADOPT RESOLUTION ADOPTING THE PROPOSED 2010 TAX LEVY
COLLECTIBLE IN 2011
NOW THEREFORE BE IT RESOLVED, the City Council of the City of
Cottage Grove, County of Washington, State of Minnesota, that the following
amounts are the proposed to be levied for the current year, collectible in 2011,
upon the taxable property in the City of Cottage Grove for the following
purposes:
General Levy
General Fund $ 10,345,100
MVHC unallotment 584,000
Economic Development 106,000
Subtotal General Levy 11,035,100
Debt Levies
Ice Arena Expansion
240,000
Pavement Management - 08
175,050
Pavement Mgmt — 02 Refunding ( 95/96)
403,700
Pavement Management — 00
41,000
Pavement Management — 02
173,200
Pavement Management — 03
173,200
Subtotal Debt Levy
1,206,150
Total Property Tax Levy $ 12,241,250
Passed this 1st day of September 2010.
Myron Bailey, Mayor
Attest:
Caron Stransky, City Clerk
a r
ADOPT RESOLUTION ADOPTING A PROPOSED 2011 BUDGET
FOR THE CITY OF COTTAGE GROVE
WHEREAS, The City of Cottage Grove provides a variety of services to
the residents of Cottage Grove; and
WHEREAS, the funds to provide services are reviewed and appropriated
by the City Council at public hearings, and
WHEREAS, it is necessary to generate sufficient revenues to meet the
financial obligations, and
WHEREAS, existing law requires certification of the proposed budget to
the County Auditor by September 15, 2010.
NOW THEREFORE BE IT RESOLVED, the City Council of the City of
Cottage Grove, County of Washington, State of Minnesota, hereby certifies the
proposed 2011 budget, and,
BE IT FURTHER RESOLVED, the Finance Director is hereby instructed to
transmit a certified copy of this resolution to the County Auditor of Washington
County, Minnesota by September 15, 2010,
Community Celebration Fund
Expenditure or
Expense and
Transfers Out
$ 13,177,301
50,000
634,000
361,100
5,000
59,400
56,500
1,099,900
130,700
430,000
Revenues and
Transfers In
General Fund
$ 13,177,301
Park shelter /playground equipment
-
Sealcoating
533,100
Equipment Replacement
346,715
Charitable Gambling
5,000
Recycling
52,400
Forfeiture
51,000
Ice Arena
1,114, 500
Economic Development Authority
205,800
EDA Trust Fund
77,000
Community Celebration Fund
Expenditure or
Expense and
Transfers Out
$ 13,177,301
50,000
634,000
361,100
5,000
59,400
56,500
1,099,900
130,700
430,000
Attest:
Caron Stransky, City Clerk
Expenditure or
Revenues and
Expense and
Transfers In
Transfers Out
Water Operating
2,561,500
2,202,015
Sewer Operating
2,321,600
2,622,545
Ambulance
1,121,900
1,211,155
Storm Water Utility
631,200
660,445
Street Lighting
607,975
646,495
River Oaks Golf
1,653,300
1,646,350
Self Insurance
1,577,800
1,697,585
Fleet Service
1,000,300
965,150
$ 26,821,170
$ 27,384,040
Passed this 1 st day of September 2010.
Myron Bailey,
Mayor
Attest:
Caron Stransky, City Clerk