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Home My WebLink About2012-12-05 PACKET 08.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 12/5/12 . A PREPARED BY Fin ance Robin Roland ORIGINATING DEPARTMENT DEPARTMENT HEAD COUNCIL ACTION REQUEST Adoption of Property Tax Levy for Taxes payable 2013 and Adoption of 2013 Budget STAFF RECOMMENDATION Adopt Resolution certifying the Tax Levy for taxes payable 2013. Adopt Resolution: 2013 Budget BUDGET IMPLICATION N/A N/A BUDGETED AMOUNT ACTUAL AMOUNT ADVISORY COMMISSION ACTION DATE REVIEWED APPROVED DENIED ❑ 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: ADMINISTRATORS COMMENTS Date COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER H: \Council items \City Council Action Form.doc City of Cottage Grove Finance Department TO: Honorable Mayor and City Council Ryan Schroeder, City Administrator FROM: Robin Roland, Finance Director DATE: November 30, 2012 RE: Adoption of Property Tax Levy for Taxes Payable in 2013 Adoption of 2013 Budget Introduction Memo A preliminary tax levy for 2013 and the proposed 2013 budget were adopted at the September 5, 2012 City Council meeting. The preliminary levy may not be increased but can be reduced prior to December 28 when the final levy is required to be adopted. There have been no changes to the levy since the preliminary adoption in September. 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. There will be a presentation of the levy and budget at the Council meeting. This is not a public hearing, but rather a time for Council to receive public comment on the levy and budget. Property Tax Levy Summary The proposed tax levy for 2013 is the same as the 20 12 tax levy. Adopted Adopted Adopted Proposed Preliminary 'General Levies 2010 2011 2012 2013 2014 General Fund $ 10, 213, 300 $ 10, 345,100 $ 10, 929,100 ; $ 10, 867, 000 $ 11, 561, 860 MVHC unallotment 584,000 584,000 Park shelter replacement / Landscape initiative 30,000 30,000 Future Municipal buildings J 30,000 30,000 Economic development 106,000 = 106,000 106,000 108,100 108,100 Total levy subject to limitl 10,903,300 ; 11,035 100 1 11,035,100 11,035,100 11,729,960 Debt Levies ' Ice Arena expansion bonds i 240,000 _ 240,000 240,000 ; - 240,000 240,000 Debt seance mitigatio 346,400 346,400 Public Safety /City Hall building bonds { 0 550,000 550,000 All Pavement Mgmt debt 1,011,700 % 619,750 ; 619,750 416,150 341,000 Total debt levy l 1,251,700 1,206,150 1,206,150 1 1,206,150 1,131, 000 Total Gross levy 12,155,000 1 12,241,250 12,241,250 12,241,250 12,860,960 Change in Gross levy - 2.34 %1 0.71 %1 0.00 %1 0.00 %1 5.06% The chart below reflects the proposed levies (over $1 million) for other Washington County cities as adopted in September. Note that the average change is an increase of 1.7% where Cottage Grove's increase is 0.0 %. The 2010 -2013 average change for all cities is an increase of 4.86% where Cottage Grove has increased by 0.71 % over the same period. Preliminary Tax Rates Based on estimated taxable property tax values and the levy amounts presented the tax extension rate for 2013 will be 44.9 %. Proposed % increase. ` Pay 2010 Pay 2011 Pay 2012 Pay 2013 (decrease) ' City Levy Levy Levy Levy i n rate Newport $ 1,972,300 ; $ 2,291,0001 $ 2 311,0001 $ 2,361,620: 219 % =_ St. Paul Park 1,495,333 11,655,427 1,779,467 1,872,926, 5.25 %! Bayport 1,041,975 1,113 798; ; 1,135,560 1,159,981 2.15% Oak Park Heights ; 3,754,704 3,964,704 4,228,062 4,538,193: 7.34 % Scandia 1,918,647 2,013,651, 2,055,174 2,175,171 5.84 %° Mahtomedi { 3,262,288i 3,386,9991 ; 3,309,583 3,231,393 - 2.36 % Woodbury 27,142,990. 27,915,979, ; 27,915,979 28,823,861 3.25 % Afton 1,516,258 1,560,836; 1,573,323 1,617,375, 2.80 % ` Oakdale 9,787,5981 9,980,088' 9,880,974 9,879,444 - 0.02 %°' Lake Elmo 2,743,346; 2,789,559` . 3,113,017 3,233,359 3.87 %r Cottage Grove 12,155,000 12,241,250' 12,241,250 12,241,250 0.00 %°' Stillwater 10,110,190 10,158,367, 10,246,597 10,406,507 1.56%°; Forest Lake 7,030,723 6,895,556; 7,166,528 7,188,901 0.31 %° , Hugo 5,217,322 4,838,7781 4,959,583 4,749,083 - 4.24 %! Average Change 1.70% Preliminary Tax Rates Based on estimated taxable property tax values and the levy amounts presented the tax extension rate for 2013 will be 44.9 %. The following table is from Washington County and reflects the City tax on the "average" property for the last ten years. The "CAMA Market Value" 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 the gross city tax generated, prior to the effect of any MVHC in years prior to 2012. 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 flat levy coupled with our expected decline in market value would increase our tax rate, it was our belief that other cities would 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 the majority of cities and has discovered (so far) that our assumptions hold true. Cities 2013 prelim rate Cities 2013 prelim rate White Bear Lake 21.47 Inver Grove Heights 46.40 Chanhassen 28.78 St. Louis Park 48.05 Minnetonka 36.89 Rosemount 48.80 Shoreview 36.95 Maplewood 49.01 Roseville 38.96 Apple Valley 50.42 Woodbury 39.76 Golden Valley 58.13 Maple Grove 42.27 New Hope 58.82 Lakeville 42.60 South St. Paul 63.18 Oakdale 44.02 Richfield 65.61 New Brighton 44.70 Hastings 68.46 Cottage Grove 44.88 Brooklyn Center 71.92 Average 47.73 2013 Operating Budgets General 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 $0 for 2013 and $15,720 for 2014. • Cost of Living Increases — T he cost of living increase is 2% for 2013 and 2% for 2014. • Admin Charge to Enterprise Funds — The admin charge to the enterprise funds (water, sewer, storm water and street light utilities) remains constant for 2013 and 2014; it respectively totals $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 2013 and 2014. • 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 Coordinated 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 is 10 %. 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 10% allocation represents an approximation of the officer time spent on EMS calls according to the department. • Fuel Allocation- The 2013 budget includes an assumption of $3.40 per gallon for gasoline and diesel. This represents an increase from $3.25 in the 2012 budget amounts. Special Revenue Funds Equipment Replacement Fund The budget includes a five year equipment replacement plan totaling $3.5 Million, along with the funding source. A summary list of purchases by year is included totaling $1,219,300 for 2013 and $613,100 for 2014. The 2013 equipment purchases include: Unmarked Investigations sedan (Police) Grass /brush firefighting vehicle (Fire) Two (2) Single Axle Dump trucks (streets) One ton dump body (streets) Street sweeper (Streets) Spray injection patcher (Streets) Crash Attenuator (Streets) Snow blower Loader (Snow) 4WD pickup truck (Parks) 11 foot mower (Parks) Trash Truck (Parks) One ton truck (Stormwater) Seal Coating Fund After the Franchise fee increase in 2010 and the switch to a seven year program, expenditures in this fund increase by 15.9% in 2013 and by an additional 4.2% in 2014. Ice Arena Expenses include the purchase of a new Point of Sale hardware /software system and water heaters for each of the North and South rinks. 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 increases slightly over the 2012 levy to $108,100. Utility and Enterprise Funds Storm Water Utility Fund The rates remain at the level of $48 per residential customer for 2013 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 2013 capital outlay includes replacement of a 4WD pickup truck, purchase of a trailer mounted pressure washer and portable air compressor and expenses for the 2013 Pavement Management project. Furthermore, fund expenses also include the beginning of a water meter replacement program. The fund is projected to have a net loss of $30,420 in 2013. Sewer Fund Staff is proposing no increase of the Sewer rate, despite continued growth in Met Council sewer services charges. The 2013 and 2014 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. 2013 rates are not proposed to increase. However, there are net losses projected in 2013 and 2014. Golf Course Fund Assumptions have been made that revenues will increase by 1 % each in both 2013 and 2014. Although expenses will decrease in 2013, deficits are still predicted in both years due to a combination of capital outlay items and other financing charges. Staff will continue to monitor this operation very closely and provide strategic options to the Council and EDA. Ambulance Fund The budgeted revenue includes an increase of 6.25% in the rates. The fund is projected to have a loss of $59,220 in 2013 and $38,070 in 2014. Rates would have to increase by 25% for the fund's budget to show a break even. Population and call trends indicate more than 70% Medicaid and Medicare. Recap of fees and taxes. Based on a $188,600 average (2013) 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 $104 in property taxes, franchise fees and utility charges per month. Action Requested Adopt the attached resolutions Resolution adopting the final 2012 tax levy collectible in 2013 Resolution adopting the 2013 budget for the City of Cottage Grove. 2013 Property Taxes (city Portion only) $ 62.98 Franchise Fees 3.30 Water Charge 13.20 Sewer Charge 16.90 Streetlight Fee w /maintenance 3.30 Stormwater Fee 4.00 $ 103.68 Action Requested Adopt the attached resolutions Resolution adopting the final 2012 tax levy collectible in 2013 Resolution adopting the 2013 budget for the City of Cottage Grove. RESOLUTION NO. 12- RESOLUTION ADOPTING THE 2012 TAX LEVY COLLECTIBLE IN 2013 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 2013, upon the taxable property in the City of Cottage Grove for the following purposes: General Lev General Fund $ 10,867,000 Park shelter replacement 30,000 Future municipal buildings 30,000 Economic Development 108,100 Subtotal General Levy 11,035,100 Debt Levies Ice Arena Expansion 240,000 Pavement Management - 2008 175,000 PS /CH building bonds 550,000 Pavement Management — 2000 159,550 Pavement Management - 2011 81,600 Subtotal Debt Levy 1,206,150 Total Property Tax Levy $ 12,241,250 Passed this 5th day of December, 2012. Myron Bailey, Mayor Attest: Caron Stransky, City Clerk RESOLUTION NO. 12- RESOLUTION ADOPTING A 2013 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 budget to the County Auditor by December 28, 2012. NOW THEREFORE BE IT RESOLVED, the City Council of the City of Cottage Grove, County of Washington, State of Minnesota, hereby certifies the proposed 2013 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, 2012, Revenues and Transfers In General Fund Recycling Storm Water Utility Forfeiture Ice Arena Charitable Gambling Economic Development Authority Equipment Replacement Sealcoating EDA Trust Fund Water Operating Sewer Operating Street Lighting River Oaks Golf $ 13, 367, 080 53,150 643,400 56,000 1,147, 500 1,500 167,600 255,970 553,100 25,000 2,490,650 2,318,700 611,100 1,569,800 Expenditure or Expense and Transfers Out $ 13,462,730 71,620 746,300 24,900 1,221,610 265,445 1,219,300 714,250 430,000 3,109, 870 2,895,540 1,585,620 1,772,260 Revenues and Transfers In Ambulance Self Insurance Fleet Service Information Services Expenditure or Expense and Transfers Out 1,375,600 1,468,770 1,347,700 1,455,835 1,080,000 1,063,460 378,010 368,860 $ 27,441,860 $ 31,876,370 Passed this 5th day of December 2012. Myron Bailey, Mayor Attest: Caron Stransky, City Clerk