HomeMy WebLinkAbout2010-12-01 PACKET 06.C.C OUNCIL A GENDA
MEETING ITEM # oO'
DATE 1 - 6.C
PR
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COUNCIL ACTION REQUEST
Hold public informational hearing for the 2010 tax levy collectible in 2011 and the 2011 budget.
Consider adoption of the tax levy collectible and the 2011 budget.
STAFF RECOMMENDATION
1. Adopt resolution 2010 tax levy collectible in 2011 for the City of Cottage Grove.
2. Adopt resolution approving the 2011 budget for the City of Cottage Grove.
BUDGET IMPLICATION:
BUDGETED AMOUNT
ACTUAL AMOUNT
ADVISORY COMMISSION ACTION
DATE
REVIEWED
APPROVED
DENIED
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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
ADMINISTRATORS COMMENTS
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City Adiistrator
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Z A D DR OVED El DENIED
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City of Cottage Grove
Finance Department
TO: Honorable Mayor and City Council
Ryan Schroeder, City Administrator
FROM: Robin Roland, Finance Director
DATE: November 23, 2010
RE: Adoption of Property Tax Levy for Taxes Payable in 201
Adoption of 2011 Budget
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The City is required to adopt a property tax levy each year by the end of December. The
preliminary tax levy for 201 and the proposed 201 budget were adopted at the regular council
meeting on September 1, 2010. The preliminary levy may not be increased but can be reduced
prior to December 28 th when the final levy is required to be adopted.
The proposed levy was used by Washington County to prepare the notices of estimated
property taxes that were mailed to property tax owners in November. Those notices included
the date of this tax levy and budget meeting to be held. There will be a presentation of the levy
and budget at the Council meeting. Since the changes to the "Truth in Taxation" statute, this is
not a public hearing, but rather a time for Council to receive public comment on the levy and
budget.
As was discussed in September, 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.
11P �I
The proposed tax levy includes a total increase of 0.71 %, or approximately $86,250.
Adopted
Amended
Adopted
Proposed
Proposed
00;
009
2010
2011
2012
General Levies
General Fund $ 9,620,000 $ 10,338,000 $ 10,213,300 $ 10,345,100 $ 10,358,800
MVHC unallotment
Park shelter replacement/Landscape initiative 100,000
Future Public Safety /City Hall 450,000
Economic development 106,000 119,000
Grey Cloud Bridge 7,300
Debt reduction 20,400 20,400
Future Pavement Mgmt 80,000 80,000
Ice Arena 230,000
584,000 584,000 584,000
20,000
20,000
106,000 106,000 106,000
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%
The chart below reflects the proposed levies (over $1 million) for other Washington County cities
as adopted in September. Note that the 8Ve[8gO Ch8Dg8 i3 an iOC[e@Se Of3.61% VYhe[8
Cottage GPDV8'S iDCF888e i00.71%. The two year (2009-2011) average change is an iDCFe88e
Of5.71% where Cottage Grove has decreased by1.65% over the same period.
city
Newport
St. Paul Park
Bayport
Oak Park Heights
Soandia
K8uhtomedi
Woodbury
Afton
Oakdale
Lake Elmo
Cottage Grove
Stillwater
Forest Lake
Hugo
0,895.550 -1.92%
4.838.778 -7.20%
].6l0
Based On e9tnD8f8d taxable DnJnerh/ tax V@!Ues and the l8VV 8DlOUDtG presented the f8X
extension [8t8 for 2011 will be 38.24% /dOVVD slightly from the September estimate of 38.90%\.
After discussions with COUDt« Staff, we believe the final rate will be closer to 38.10% due to the
expiration of 8 T|F district which is included in the CU[[eOt COOODUt8fiOn but which will not be
included in the final tax rate formula.
Pay 2010
Pay 2009 Levy
Levy
$ 1
$ 1.072.300
1.470.584
1.405.333
1.022.533
1.041.975
3.057.865
3.754.704
1.860.892
1.828.647
3.174.854
3.262.288
28.304.482
27.142.990
1.457.080
1.516.258
9.727.488
9.787.508
2.788.203
2.743.346
12.446.500
12.155.000
10.090.769
10.110.190
7.114.054
7.030.723
5.329.096
5.217.322
Average
Change
0,895.550 -1.92%
4.838.778 -7.20%
].6l0
Based On e9tnD8f8d taxable DnJnerh/ tax V@!Ues and the l8VV 8DlOUDtG presented the f8X
extension [8t8 for 2011 will be 38.24% /dOVVD slightly from the September estimate of 38.90%\.
After discussions with COUDt« Staff, we believe the final rate will be closer to 38.10% due to the
expiration of 8 T|F district which is included in the CU[[eOt COOODUt8fiOn but which will not be
included in the final tax rate formula.
% increase.
Proposed Pay
(decrease) in
2011 Levy
rate
$ 2.317.342
17.40%
1.855.427
1071%
1.113.798
0.8996
3.964.704
5.5096
2.013.051
4.41%
3.386.000
3.82%
27.958.800
3.00%
1.580.838
2.94%
9.980.088
1.97%
2.789.550
1.68%
12.241.250
0J1%
10.158.367
0.4896
0,895.550 -1.92%
4.838.778 -7.20%
].6l0
Based On e9tnD8f8d taxable DnJnerh/ tax V@!Ues and the l8VV 8DlOUDtG presented the f8X
extension [8t8 for 2011 will be 38.24% /dOVVD slightly from the September estimate of 38.90%\.
After discussions with COUDt« Staff, we believe the final rate will be closer to 38.10% due to the
expiration of 8 T|F district which is included in the CU[[eOt COOODUt8fiOn but which will not be
included in the final tax rate formula.
The following table is from Washington County and reflects the City tax on the "average"
property for the last ten years. Although the "CAMA Market Value" is different than valuations
presented in September, it still reflects the affect of valuation and tax rate changes on Cottage
Grove properties. (CAMA Market Value is Average Residential Market Value based on
Computer Assisted Mass Appraisal)
This chart reflects that an 'average' valued home in Cottage Grove would see effectively no
increase in actual dollars paid in City taxes in 2011, meeting Council's first "goal".
Council's second goal was that the City tax extension rate remains at the "mean" of the tax rates
of all 36 cities to whom Cottage Grove compares itself. Early this year staff had asserted that
although our slight increase in levy coupled with our expected decline in market value would
increase our tax rate, it was our belief that other cities would increase their levies and have the
same market value declines, resulting in Cottage Grove's tax rate remaining "in the middle of
the pack." At this time, staff has compared proposed tax rates of those cities in Washington,
Ramsey and Dakota Counties and has discovered (so far) that our assumptions hold true.
Cities 2011 rate
Apple Valley
Hastings
Inver Grove Heights
Lakeville
Maplewood
New Brighton
Oakdale
Rosemount
Roseville
Shoreview
So St Paul
White Bear Lake
Woodbury
Average
Cottage Grove
42.39%
55.19%
43.16%
38.27%
38.87%
37.69%
35.79%
44,64%
30,24%
30.93%
48,66%
18.11%
34.98%
38.38%
38.24%
CAMA
Market
Tax
Urban Tax
Year
Value
% Change
Capacity
Rate
City Tax
% Change
2002
145,900
13.72%
1,459
0.4752
693.27
55.27%
2004
187,700
9.38%
1,877
0.4366
819.44
13.49%
2006
222,000
4.82%
2,220
0.3793
841.94
1.48%
2008
244,300
1.83%
2,443
0.3519
859.67
0.06%
2010
228,000
-6.52%
2,280
0.3542
807.47
-4.40%
This chart reflects that an 'average' valued home in Cottage Grove would see effectively no
increase in actual dollars paid in City taxes in 2011, meeting Council's first "goal".
Council's second goal was that the City tax extension rate remains at the "mean" of the tax rates
of all 36 cities to whom Cottage Grove compares itself. Early this year staff had asserted that
although our slight increase in levy coupled with our expected decline in market value would
increase our tax rate, it was our belief that other cities would increase their levies and have the
same market value declines, resulting in Cottage Grove's tax rate remaining "in the middle of
the pack." At this time, staff has compared proposed tax rates of those cities in Washington,
Ramsey and Dakota Counties and has discovered (so far) that our assumptions hold true.
Cities 2011 rate
Apple Valley
Hastings
Inver Grove Heights
Lakeville
Maplewood
New Brighton
Oakdale
Rosemount
Roseville
Shoreview
So St Paul
White Bear Lake
Woodbury
Average
Cottage Grove
42.39%
55.19%
43.16%
38.27%
38.87%
37.69%
35.79%
44,64%
30,24%
30.93%
48,66%
18.11%
34.98%
38.38%
38.24%
General Fund
As presented in September the general fund budget is in a "balanced state" - revenues equal
expenses. AdJustments have been made to the employee benefits expense to reflect the health
insurance changes which will take effect in 2011. This reduced the total general fund
expenditures for 2011 from $13,177,301 to $13,047,501 or by $129,800. All other revenue and
expenditure highlights from September remain the same:
• 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 un-allotted (retained by the state).
• Cost of Living Increases — The 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 is 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%
1/1/2010
7.00%
14.10%
1/1/2011
7.25%
14.40%
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 201 and
$635,500 for 2012.
The 201 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 201 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 201 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 201 or 2012
Forfeiture Fund
The expenditures include purchase of new FOSS 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 201
EDA and Economic Development Trust Funds
T'itg, EQ& *rol;ert\
,� IevX rptu2jis 9t tiie 201 IevX 2nowit of 1106,000,
Utility and Enterprise Funds
No rate increases are currently proposed for any of the utility funds in 201 and 201
for Water Utility Fund
The rates remain at the level of $48 per residential customer for 201 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
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.
Action Requested
Adopt the attached resolutions
• Resolution adopting the final 2010 tax levy collectible in 2011
• Resolution adopting the 2011 budget for the City of Cottage Grove.
Per Month
2010
2011
% increase
Property Taxes (City Portion only)
$ 60.58 $
60.08
-0.8%
Franchise Fees
3.30
3.30
0.0%
Water Charge
13.20
13.20
0.0%
Sewer Charge
16.65
16.65
0.0%
Streetlight Fee w/maintenance
330
3.30
0.0%
Stormwater Fee
4.00
4.00
0.0%
$ 101.03
100.53
-0.5%
Action Requested
Adopt the attached resolutions
• Resolution adopting the final 2010 tax levy collectible in 2011
• Resolution adopting the 2011 budget for the City of Cottage Grove.
ADOPT •' • • ADOPTING 1 1 i'w LETT
COLLECTIBLE 1
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
MVHC unallotment
Economic Development
Subtotal General Levy
Debt Levies
Ice Arena Expansion
Pavement Management - 08
Pavement Mgmt — 02 Refunding ( 95/96)
Pavement Management — 00
Pavement Management — 02
Pavement Management — 03
Subtotal Debt Levy
Total Property Tax Levy
Passed this 1 st day of December, 2010.
$ 10,345,100
584,000
106,000
11,035,100
240,000
175,050
403,700
41,000
173,200
173,200
1,206,150
$ 12,241,250
al 8
04*4101061mil • Till
I M MS] I W&SI &OL61 a fATCJ:&Ci' .401VI
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 budget to the County
Auditor by December 28, 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 December 28, 2010,
Revenues and
Transfers In
$ 13,047,501
553,100
371,715
5,000
52,400
51,000
1,114,500
205,800
77,000
Expenditure or
Expense and
Transfers Out
T37,1 7#
50,000
634,000
361,100
5,000
58,500
56,500
1,094,900
130,100
430,000
Revenues and
Transfers In
Water Operating
Sewer Operating
Ambulance
Storm Water Utility
Street Lighting
River Oaks Golf
Self Insurance
Fleet Service
2,630,700
2,321,600
1,121,900
631,200
607,975
1,653,300
1,404,400
1,000,300
$ 26,716,970
Passed this 1 st day of December, 2010.
Expenditure or
Expense and
Transfers Out
3,069,515
2,662,245
1,208,955
657,845
755,195
2,015,600
1,502,585
973,250
$ 28,577,490
Myron Bailey, Mayor
Attest:
Caron Stransky, City Clerk