HomeMy WebLinkAbout2014-12-03 PACKET 08.A. REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 12/3/15
o e
PREPARED BY Finance Robin Roland
ORIGINATING DEPARTMENT DEPARTMENT HEAD
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COUNCIL ACTION REQUEST
Consider resolutions approving the Property Tax levy payable in 2015 and the 2015 City
Budget
STAFF RECOMMENDATION
Adopt Resolution approving the 2014 Property Tax levy payable in 2015.
Adopt Resolution approving the 2015 City Budget.
BUDGET IMPLICATION
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
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City Administrator Date
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H:\Council items\council-action template.docx
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To: Mayor and City Council Members
Ryan Schroeder, City Administrator
From: Robin Roland, Finance Director
Date: November 24, 2014
Subject: Adoption of Property Tax Levy for Taxes Payable in 2015
Adoption of 2015 Budget
Introduction
A preliminary tax levy for 2015 was adopted at the September 3, 2014 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. A public hearing is not required, but Council has chosen to hear a presentation of the levy
and budget at this meeting and will receive any public comment on the levy and budget.
Property Tax Levy
The City's tax levy of $12.2 million had remained flat from 2009 through 2013. During this time, debt
service was retired on several bond issues and tax levy dollars were redirected to operations and an inter-
fund loan which financed the construction of the new Public Safety/City Hall project. The City Council's
desire was to `stay the course' during times of declining property valuation while keeping the City's tax
rate among the average of peer communities.
Although the levy was limited by state statute, the property tax levy increased by 3.74% for 2014 due to
increased debt service obligations and an increase in operational support. The increase began to recover
expense increases which had averaged 2.5% annually while revenue support remained flat over the previous
five year period.
For 2015, the proposed tax levy is $13,402,100 or 5.5% more than the 20141evy. Levy limits imposed for
2014 have expired and there is no levy limit for 2015. Both General Fund revenues and operating
expenditures are proposed to increase by 4.35% for 2015.
CITY OF COTTAGE GROVE • 12800 Ravine Parkway • Gottage Grove, Minnesota 55016
www.cottage-grove.org • 651-458-2800 • Fax 651-458-2897 • Equal Opportunity Employer
� ' � --- � ..V � _- � _ ��� Adopted Adopted Adopted Proposed Preliminary
�General Le�ies ��� 2012 � 2013 2014 � 2015 2016
.�..,
3 General Fund �. �� �� $ 10,929,100 �$ 10,867 000 �$ 11,265,030 �$ 11,915 100 $ 12,842,500
�,�r,.,�.,.W�,.�..�,.�,��. - - � .��,.,�.,h,�_,.m�.� ,�._.ax.�.=�,._,..Y.,.,m v.s.��: °
��..�.a�......�.:�.,v...�.�.. .....m..�,��.,�.w�..�.. ,._ .. _ �,
� Park shelter replacement/Landscape initiative � 30,000 �
�Future Municipal buildings � � 30,000 � �
Economic development � �� 106 000 � 108,100 108,100 � 111,500 u 111,500
�.�.��..�.._.�__..__.�.._�._.�.�.._�.._�� � ..�_._;�.��.,��_m�...�.. �
�Public Safety/Cit Hall interFund loan ! � 550,000 500,000�� 500,000 � 500,000 �
� 11 035 100 ' 11� 585 100 11,873,130 � � 12,526,600 13,454,000
�.�.,.�,�ew � � °��,_.me_�.._>> , � ��.� �
�....�.__.�..._.__�.____.�`_a__� �.�...�..�..�._�..�� ___w._ :
�Debt Levies � � � � € �
_..�
Ice Arena e�pansion bonds � 240,000 240,000 240,000 290,000 290,000
a.���,�. ,�m�.�..�..�..,�...,v,� .�._.�r .�..._.� ��,.. ���__...�.. �,,.�......._....._�._ ......,..,_,�.u..._,�..d.�,�.._... ...��_..�.�_..._�,..
Debt service mitigation �;� 648,205 � N � p �� ym. �� m.i M
All P avement Mgm debt �� � � 317,945� � 416,15�� � 586,000 � 585,500 � 655,500 �
� �� Total debt le vy 1,206,150 � 656,150 � 826,000 � 875,500 � 945,500'
.�_,.__...�,...�.�.��_.�..�.,.� �,.._._,,,�.��....M�,.__�.._,__
Total Gross levy 12,241,250 � 12,241,250 � 12,699,130 13,402,100 14,399,500
____. �--.-
Change m Gross levy 0 00%� 0 00%�� 3 74% 5.54% 7.44%
The chart below reflects the proposed levies (over $ lmillion) for other Washington County cities as adopted
in September. Note that the average change is an increase of 5.2%; Cottage Grove's increase is 5.5%. The
2011-2015 average change for all cities is an increase of 11.7% where Cottage Grove has increased by.9.5%,
over the same period.
Proposed � % increase.
Pay 2012 Pay 2013 Pay 2014 Pay 2015 ,(decrease)
City Levy Levy Levy � Levy � in rate �
Hugo 4,959,583 4,749,083�� 4,940,809 5,717,021 15.71%
Forest Lake 7,166,528 7,163,901� � 8,039,421 8,943,358 11.24%
_______� �_
Mahtomedi �, �3,309,583 3�231�,393 3,399,916 3,768,385 10.84%
Stillwater 10,246,597 10,406,507 10,624,986 . 11,371,253 7.02%
�,.......�.,�.��..�,.,.�..�_.�,,.�, .,.�.rm,._....... _ ,w._,,a.�..�,,.dµ..�.._..._.....�. .��.�,.�..,�__.a..��,. ..a�,�.�.,..��..,a_...,_..��, .n.._,s_.�,,�...��.�.,
Oak Park He ights 4,2 4,538,193 4,784,896 5,0 82,731 6.22%
Cotta Grove y 12,241,250 12, 241,250 12,699,130 13,40 2,100 5.54%
Afton � R 1,573,323 1,602,769 1,634,824 � 1,704,183 4.24%
Wo 27,915,979 28,603,229 29,399,293 30,238,368 2.85%
St. Paul Park 1,779,467 1,872,241 1,942,659 1,991,284 2.50%
Newport 2,311,000 2,351,000 2,415,691 2,467,476 2.14%
Scandia ��� 2,055,174� 2,171,074 � 2,171,074 � 2,217,509 ���2.14%0
Bayport n ,T 1 135 560 �� � 1�159�981 1_ �
Oakdale 9,880,974 9,879,444 10,088,705 10,270,522 � 1.80%
Lake EI m o � µ� 3,113, 017 � 3,163, 359 � 3,163, 359 3,137, 663 -0.81 %
WW ��� .µ � m Average Change � � 5.22%
_a_..�.._._..�_..N.�._...�__. _�.. N � _N_�____,.�..._'_ � �.�.....�....��__.w...m._..� �_________.�._
Preliminary Tax Rates
The City's estimated tax capacity value will increase by 13.2% in 2015; from $23,990,630 (2014) to
$27,165,777 (2015). The 5.5% increase in the levy, combined with the valuation increase will result in a
decrease in the tax extension rate from 43.812% in 2014 to 41.603% in 2015.
Tax Extension Rates
46.00
44.00 43.81
41.42
42.00
40.00 38.90
38.00
36.00
34.00 37.93
35.81 35.19 34.64
32.00
30.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tax Payable Year
The following table is from Washington County and reflects the City tax on the "average" property for the
last ten years. The "CAMA Marlcet 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.
._._. ___._. __-_. __ ..,___ ______ �---.__._-_.
� ' CAMA � � - -.___ £ .-_.. �
Market � � Tax � Urban Tax �
� Year � Value �%Change � Capacity � Rate � City Tax °/a Change
' 2004 187,700 9.38% ! 1,877 0.4366 819.44 � 3.49%
� 2005 � 211,800� 12.84%� 2,118� 0.3917� 829.62� 1.24%I
2006 222,000 4.82% 2,220 0.3793 841.94 1.48%
� 2007 � 239,900j 8.06%� 2,399� 0.3581 � 859.15� 2.05%)
k t ;
' 2008 244,300 1.83% ' 2,443 0.3519 859.67 ' 0.06%
� 2009 � 243,900 � -0.16%� 2,439 � 0.3463 � 844.67 � -1.74% �
' 2010 228,000 -6.52% ' 2,280 0.3542 807.47 -4.40%
� 2011 � 207,400� -9.04%� 2,074� 0.3810� 790.09� -2.15%I
! �
2012 204,000 -1.64% 1,851 0.4142 766.68 2.96%'
� 2013 � 187,800€ -7.94°/a� 1,675; 0.4503� 754.25� -1.62%)
�
2014 196,100 4.42% 1,765 0.4381 773.25 ` 2.52%
1_ 2015 � 219,800� 12.09%�_ 2,069� 04160� 860.70) 11.31%)
2015 OPERATING BUDGETS
General Funcl
Currently the general fund budget is in a"balanced state" - revenues equal expenses for 2015 and 2016.
The following items are of note:
• Charges for services - both 2015 and 2016 reflect static administration and financing fees for
developments due to the anticipated level of development activity.
• Intergovernmental - in 2014, the City received Local Government Aid (LGA) for the first time since
2003. The 2015 allocation of $72,500 is an increase of $12,900 over 2014.
• Investment earnin s�— Investment earnings have been calculated at 0.75% for 2015 and 2016 to
reflect continuing low interest rates.
• Cost of Living Increases — The budgeted cost of living increase for salaries is 2.5% for 2015 and
2016.
• PERA Changes - budget amounts include increases in the PERA rates for 2015 for the both the
Coordinated plan and the Police and Fire plan. PERA rates are statutorily determined. Current
mandated employer contribution rates of 7.25% for those employees in the Co-ordinated plan will
increase to 7.50% in 2015. Adjustments to the Police and Fire plan rates will be as follows:
Employee Employer
contribution contribution
2014 10.2% 15.30%
2015 10.8% 16.20%
This change increases the General fund budget by $41,600 for 2015.
• Police Officer / Paramedic Allocation- The allocation of the Police Officer/Paramedic time to the
ambulance fund was adjusted to 5% in 2013 and 2014. In 2015 however, police officers are
budgeted 100% in the General Fund, with the exception of contractual pay differential, completing
the transition to a Firefighter/Paramedic model.
• Fuel Allocation- The 2015 budget includes an assumption of $3.60 per gallon for gasoline and
diesel. This is an increase from the 2014 budget assumption of $3.50.
• Staffin� — No new full time staff is proposed for 2015. Increases in part time staffing include a
facilities coordinator, increased CSO hours in police patrol and animal control and increased clerical
hours in public safety. 2016 will include an additional full time Firefighter/Paramedic as included
in the EMS transitional plan.
• Transfers from Enterprise Funds - The charges to Enterprise funds (water, sewer, storm water and
street light utilities) for administrative services were previously reflected in the Charges for Services
revenue category. Although categorization has changed, the amount of this revenue source remains
constant at $520,710 for 2015.
Specicrl Revenue Funds
Seal Coating Fund
An agreement reached with Xcel Energy will cause a decrease in Franchise Fee revenues for the 15 month
period October 2014 to December 2015. As a result of this decrease, sealcoating expenditures will need to
be curtailed by an estimated 50% in 2015 to assure adequate cash reserves in the fund. Franchise fees will
return to pre-October 2014 levels for 2016.
Ice Arena
Revenues are budgeted to increase by 5% in 2015. Expenses include replacement of the furnace and
$115,000 for installation of indoor turf in the West rink. Rink space with turf would be used to
accommodate various groups who might otherwise never utilize the Ice Arena. Cost recovery through
increased revenue from these groups is anticipated.
Discussions continue regarding funding the replacement of the chiller and over $1.2 million in capital outlay
items over the next five years.
Rec c�g
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 from the 20141evy at $108,100 by 3% to $111,500 for 2015. The EDA
budget includes a full year of revenue and expenditure impacts of the operation of the Business Enterprise
Center (BEC).
Golf Course Fund
The Golf Course fund became a Special Revenue fund in 2013 in recognition of its on-going need of support
from sources other than existing or expected revenues. A detailed business plan for 2015-2019 was adopted
which included increases to greens fees for 2014 and 2015 and a plan to update facilities to insure continued
ability to compete with similar venues.
Canit�rl Proiect Funds
Equi�ment Replacement Fund
The budget document 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 $291,100 for 2015 and
$645,000 for 2016.
The 2015 equipment purchases include:
Squad for canine officer (police)
SUV (Fire)
Car/Truck/SUV (engineering)
Self-Propelled Asphalt paver (streets)
Trailer (streets)
Mower 11 ft. rotary (Parks)
Historically, squad cars and associated equipment budgeted in the General Fund were considered approved
for purchase when the budget resolution was adopted, as the replacements were considered essential. Staff
proposes that adoption of the 2015 budget will authorize purchase of the budgeted squad cars (General and
Equipment Replacement Funds), Fire and Engineering vehicles, Streets trailer and Parks mower according
to City Purchasing Policy. Other vehicles and equipment which are included in the budget but which are
additions (not replacements) would be brought back to Council for separate approval during 2015.
Utilitv anrl Enterprise Funds
Storm Water Utilitv Fund
The rates are proposed to increase from $50.40 annually to $52.80 (or $0.20 per month) per residential customer
for 2015 and to $55.20 for 2016. These increases are necessary to maintain the viability of the fund so the next
five years of the storm water utility plan can be financed.
Water Fund
The 2015 expenses include the third year of the water meter replacement program, the painting of the Innsdale
3M gallon water tower and expenses for the 2014 Pavement Management project.
Staff is not proposing a rate increase for the Water utility in 2015. However, we are proposing a shift in the tier
structure for billing usage as follows:
Current Proposed
0 to 15,000 gallons 0 to 10,000 gallons
15,001 to 30,000 gallons 10,001 to 20,000 gallons
Over 30,000 gallons Over 20,000 gallons
This structure would not have an impact the City's average monthly user, but would encourage conservation of
water by increasing the financial impact of water usage at levels greater than average usage.
Sewer Fund
Staff is proposing an increase of the Sewer rate as follows:
Current Proposed
Base $1.65 per month $1.75 per month
0 to 30,000 gallons $3.00 per 1,000 gal $3.15 per 1,000 gal
Over 30,000 gallons $3.60 per 1,000 gal $3.70 per 1,000 gal
Met Council sewer services charges are increasing by 3% for 2015 and a similar increase is budgeted for 2016.
The 2015 and 2016 budgets include capital outlay items from the respective pavement management projects for
those years.
Street Light Fund
Staff is proposing to increase Street Light fees by 5% annually beginning in 2015 to assure financial resources
are available for the replacement of streetlights as part of future pavement management projects. City owned
Residential streetlight charges will increase from 2014 rates of $2.45 plus $0.85 per month to the 2015 rate of
$2.57 plus $0.89. The 2016 rate will be $2.70 plus $0.94 per month.
Ambulance Fund
The budgeted 2015 revenue includes an increase of 3% in the rates; the 2016 rates would increase by an additional
3%. A change in the staffmg strategy which was adopted by the City Council in 2013 will move away from a
police/paramedic model and towards a firefighter/paramedic model. Three full time firefighter/paramedics were
added in 2013 to begin this implementation and two more were added in 2014. Full transition will be completed
with an additional firefighter/paramedic in each 2016 and 2017.
Reccrp of fees ancl tcrxes.
Based on a$219,800 average (2015) value home charged for 9,000 gallons of water and 5,000 units of sanitary
sewer in a month would pay approximately $113.59 in property taxes, franchise fees and utility charges per
month. This is a monthly increase over 2014 of $8.64.
2015
Property Taxes (city Portion oniy) $ 71.73
Franchise Fees 3.30
Water Charge 13.20
Sewer Charge 17.50
Streetlight Fee w/maintenance 3.46
Stormwater Fee 4.40
$ 113.59
ACTION REQUESTEI) I
• Adopt the attached resolution adopting the fina12014 tax levy collectible in 2015.
• Adopt the attached resolution adopting the 2015 budget for the City of Cottage Grove. Adoption of the
2015 budget will authorize purchase of the budgeted squad cars (General and Equipment Replacement
Funds), Fire and Engineering vehicles, Streets trailer and Parks mower according to City Purchasing
Policy.
RESOLUTION NO. 14-
RESOLUTION ADOPTING THE 2014 TAX LEVY
COLLECTIBLE IN 2015
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 to be levied for the current year, collectible in 2015, upon the taxable
property in the City of Cottage Grove for the following purposes:
General �ew
General Fund $ 11,915,100
PS/CH interfund loan 500,000
Economic Development 111,500
Subtotal General Levy 12,526,600
Debt Levies
Ice Arena Expansion 290,000
Pavement Management - 2008 175,000
Pavement Management - 2011 80,500
Pavement Management - 2013 330,000
Subtotal Debt Levy 875,500
Total Property Tax Levy $ 13,402,100
Passed this 3rd day of December, 2014.
Myron Bailey, Mayor
Attest:
Caron Stransky, City Clerk
i
RESOLUTION NO. 14-
RESOLUTION ADOPTING A 2015 BUDGET
FOR THE CITY OF COTTAGE GROVE
WHEREAS, the City Code of the City of Cottage Grove requires that a
recommended budget be provided annually to the City Council including projected
revenues and sources and all proposed expenditures to be made and obligations to be
incurred by the City in the forthcoming fiscal year; and
WHEREAS, the recommended 2015 budget has been reviewed by the City
Council at various public workshops and City Council meetings; and
WHEREAS, existing law requires certification of the budget to the County Auditor
by December 28, 2014.
NOW THEREFORE BE IT RESOLVED, the City Council of the City of Cottage
Grove, County of Washington, State of Minnesota, hereby certifies the proposed 2015
budget as follows:
Expenditure or
Revenues and Expense and
Transfers In Transfers Out
General Fund $ 14,751,680 $ 14,751,680
Recycling 53,150 74,300
Storm Water Utility 712,650 731,815
Forfeiture 29,500 42,300
Ice Arena 1,325,500 1,440,050
Charitable Gambling - 5,000
Economic Development Authority 271,000 421,325
River Oaks Golf 1,563,000 1,614,900
Equipment Replacement 291,100 291,100
Sealcoating 388,100 360,000
EDA Trust Fund 25,000 430,000
Parks Capital Projects 370,000 515,000
Water Operating 2,267,950 3,444,205
Sewer Operating 2,377,400 2,911,840
Street Lighting 766,100 1,302,445
Ambulance 1,392,660 1,437,530
Self Insurance 1,635,860 1,808,635
Fleet Service 1,142,200 1,218,545
Information Services 425,000 405,535
$ 29,787,850 $ 33,206,205
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, 2014,
Passed this 3rd day of December 2014.
Myron Bailey, Mayor
Attest:
Caron Stransky, City Clerk