HomeMy WebLinkAbout2011-09-07 PACKET 08.B.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA.
MEETING ITEM #
DATE 917111 be
PREPARED BY Finance Robin Roland
ORIGINATING DEPARTMENT DEPARTMENT HEAD
COUNCIL ACTION REQUEST
Consider 2012 Preliminary Tax Levy and Budget
STAFF RECOMMENDATION
Adopt resolution certifying 2012 Preliminary Tax Levy.
Adopt resolution preliminary 2012 City Budget.
BUDGET IMPLICATION
BUDGETED AMOUNT
ADVISORY COMMISSION ACTION
DATE REVIEWED
❑ PLANNING ❑
❑ PUBLIC SAFETY ❑
❑ PUBLIC WORKS ❑
❑ PARKS AND RECREATION ❑
❑ HUMAN SERVICES /RIGHTS ❑
❑ ECONOMIC DEV. AUTHORITY ❑
❑ ❑
SUPPORTING DOCUMENTS
® MEMO /LETTER:
® RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
ACTUAL AMOUNT
APPROVED
DENIED
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ADMINISTRATORS COMMENTS
ity Administrator Date
COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
H: \Council items \City Council Action Form.doc
( M
TO:
FROM:
DATE:
RE:
City of Cottage Grove
Finance Department Memo
Honorable Mayor and City Council
Ryan Schroeder, City Administrator
Robin Roland, Finance Director VJ
September 2, 2011
Adoption of Preliminary Property Tax Levy for Taxes Payable in 2012
Introduction
The City is required to adopt a preliminary levy each year by September 15 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.
Property Tax Levy Summary
Staff believes the preliminary 2012 tax levy meets the two goals stated by the City Council at the
Budget goals workshop on May 4, 2011: that the levy remain unchanged from the amount
levied for 2011 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.
The 2012 preliminary levy proposed inc ludes an increase of 0.33 %, or approximately $40,000
General Levies
Amended
2009
I Adopted
2010
I Adopted
2011
I Proposed
2012
I Preliminary
2013
General Fund
$ 10,338,000
$ 10,213,300
$ 10,345,100
$ 10,345,100
$ 10,703,900
MVHC unallotment
127,500
584,000
584,000
584,000
584,000
Park shelter replacement/Landscape ini
100,000
20,000
30,000
Future Municipal buildings
1,281,600
1,011,700
619,750
20,000
30,000
Economic development
119,000
106,000
106,000
106,000
108,100
Debt reduction
20,400
12,155,000
12,241,250
12,281,250
12,917,417
Future Pavement Mgmt
80,000
-134%
0.71%
0.33%
5.18%
Total levy subject to limit
10,657,400
10,903,300
11,035,100
11,075,100
11,456,000
Debt Levies
EDA public project
140,000
Ice Arena expansion bonds
240,000
240,000
240,000
240,000
240,000
Debt service mitigation
127,500
346,400
Public Safety /City Hall building bonds
500,400
700,000
All Pavement Mgmt debt
1,281,600
1,011,700
619,750
465,750
521,417
Total debt levy
1,789,100
1,251,700
1,206,150
1,206,150
1,461,417
Total Gross levy
12,446,500
12,155,000
12,241,250
12,281,250
12,917,417
Change in Gross levy
2.15%
-134%
0.71%
0.33%
5.18%
Preliminary Tax Rates
Owing to the elimination of the MVHC program for 2012 and its replacement with the MVHC
exclusion program, the City's estimated tax capacity value will decline by roughly 8% in 2012;
from $29,770,125 (2011) to $27,426,810 (2012). Therefore, despite no increase in the tax levy,
the tax extension rate can be expected to increase from 38.25% in 2011 to 41.59% in 2012.
Staff believes that this tax extension rate increase will be consistent with that which other cities
experience due to the across the board MVHC exclusion program. However, due to uncertainty
among our peer cities, getting actual comparison rates to verify this theory has been
problematic.
Tax Extension Rates
46.00
44.00
42.00
43.6
40.00 - _
38.00 42.08 35 , E 35.-19_ 3890__,
39.17
36.00 34.64 .40
-- -- - - -
34.00 - -
32.00 -- —
30.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tax Payable Year
2012 Operating Budgets
Genera/ Fund
Currently the attached general fund budget is in a "balanced state' - revenues equal expenses.
The following items are of note:
• Council Contingency -the preliminary budget includes an expenditure line item for council
contingency of $10,000 for 2012 and $13,799 for 2013.
• Cost of Living Increases — T he cost of living increase is I% for 2012 and 2% for 2013.
• Admin Charge to Enterprise Funds — The admin charge to the enterprise funds (water,
sewer, storm water and street light utilities) was increased for 2012 and 2013; it
respectively totals $510,500 and $520,710 in the general fund.
• Charges for services — both 2012 and 2013 continue to reflect reductions 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 2012 and
2013.
• PERA Changes budget amounts include no additional increases in the PERA rates for
2012 or 2013. PERA rates are statutorily determined. Current mandated employer
contribution rates are 7.25% for those employees in the Co- ordinated plan and 14.40%
for employees in the Police and Fire plan.
• 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 2012 budget includes an assumption of $3.25 per gallon for gasoline
and diesel. This represents an increase from $3.05 in the 2011 budget amounts.
Special Revenue Funds
Equipment Replacement Fund
The budget includes a five year equipment replacement plan totaling $3.2 Million, along with the
funding source. A summary list of purchases by year is included totaling $381,000 for 2012 and
$969,200 for 2013.
The 2012 equipment purchases include:
Unmarked Investigations sedan (Police)
Pumper Truck: second half (Fire)
Chassis for patcher (streets)
6 foot mower (Streets)
Two 5 foot mowers (Parks)
Van (Recreation)
Seal Coating Fund
After the Franchise fee increase in 2010 and the switch to a seven year program, expenditures
in this fund decrease by 2.7% in 2012 and by an additional 18.7% in 2013.
Ice Arena
Expenses include the purchase of a new ice Resurfacer in 2012 at a cost of $100,000.
Charitable Gambling Fund
In a break from previous year budget appropriations, the $5,000 contribution to the 4 of JUly
Fireworks display is no longer expended from this fund.
Forfeiture Fund
The expenditures include the final $19,440 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.
EDA and Economic Development Trust Funds
The EDA property levy remains at the 2011 levy amount of $106,000.
Utility and Enterprise Funds
Storm Water Utility Fund
The rates remain at the level of $48 per residential customer for 2012 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 2012 capital outlay includes an in -line booster pump for Well #10 and expenses for the
2012 Pavement Management project. Furthermore, fund expenses also include the beginning
of a water meter replacement program. The fund is projected to have a net income of
$105,295 in 2012.
Sewer Fund
Staff is proposing an increase of the Sewer rate from $3.00 to $3.05 per 1000 gallons for up to
30,000 gallons and from $3.60 to $3.75 per 1000 gallons over 30,000 gallons used. This rate
increase will help offset the continued growth in Met Council sewer services charges. The
2012 and 2013 budgets include capital outlay items from the respective pavement
management projects for those years.
Street Light Fund
These rates decreased in 2010 to help mitigate the increases in the franchise fee and other
utility rates. 2012 rates are not proposed to increase. However, there are net losses projected
in 2012 and 2013.
Golf Course Fund
Assumptions have been made that revenues and expenditures will increase by 3% each in
both 2012 and 2013 with deficits predicted in both years.due to a combination of capital outlay
items and other financing charges. 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 $18,960 in 2012 and $23,830 in 2013. Rates would have to increase by 25% for the
fund's budget to show a break even. Population and call trends indicate more than 68%
Medicaid and Medicare.
-Once the preliminary levy is adopted, City staff will certify the amounts to Washington 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 (December 7th)
when public comment on the levy and the budget will be taken.
Staff is further proposing this year a workshop in October to evaluate the effect of the change
in MVHC on the tax extension rates of Cottage Grove and our peer communities, with our goal
being no net change to the 2012 levy.
Action Requested
Adopt the attached resolutions:
• Resolution adopting the proposed 2011 tax levy collectible in 2012.
• Resolution adopting a proposed 2012 budget for the City of Cottage Grove.
RESOLUTION NO. 11-
ADOPT RESOLUTION ADOPTING THE PROPOSED 2011 TAX LEVY
COLLECTIBLE IN 2012
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 2012,
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
Park shelter replacement
20,000
Future municipal buildings
20,000
Economic Development
106,000
Subtotal General Levy
11,075,100
Debt Levies
Ice Arena Expansion
240,000
Pavement Management - 08
175,700
PS /CH building bonds
500,400
Pavement Management — 2000
142,245
Pavement Management - 2011
147,805
Subtotal Debt Levy
1,206,150
Total Property Tax Levy $ 12,281,250
Passed this 7th day of September 2011.
Myron Bailey, Mayor
Attest:
Caron Stransky, City Clerk
RESOLUTION NO. 11-
ADOPT RESOLUTION ADOPTING A PROPOSED 2012 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, 2011.
NOW THEREFORE BE IT RESOLVED, the City Council of the City of
Cottage Grove, County of Washington, State of Minnesota, hereby certifies the
proposed 2012 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, 2011,
Expenditure or
Expense and
Transfers Out
$ 13,051,105
616,800
381,000
71,300
57,980
1,246,260
173,900
430,000
Revenues and
Transfers In
General Fund
$ 13,051,105
Sealcoating
553,100
Equipment Replacement
427,900
Charitable Gambling
-
Recycling
52,400
Forfeiture
52,000
Ice Arena
1,122,000
Economic Development Authority
195,500
EDA Trust Fund
25,000
Expenditure or
Expense and
Transfers Out
$ 13,051,105
616,800
381,000
71,300
57,980
1,246,260
173,900
430,000
Revenues and
Transfers In
Water Operating
Sewer Operating
Ambulance
Storm Water Utility
Street Lighting
River Oaks Golf
Self Insurance
Fleet Service
IT
2,565,700
2,363,700
1,256,800
634,900
611,100
1,555,800
1,345,750
1,029,100
325,205
$ 27,033,650
Passed this 7th day of September 2011.
Expenditure or
Expense and
Transfers Out
2,762,105
3,003,580
1,280,560
679,730
849,800
2,004,580
1,465,135
974,560
351,805
$ 29,104,155
Myron Bailey, Mayor
Attest:
Caron Stransky, City Clerk