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Home My WebLink About2015-06-03 PACKET 00 6:30 WORKSHOP REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # � DA�E 6/3/15 �•� PREPARED BY: Finance Robin Roland � ORIGINATING DEPARTMENT DEPARTMENT HEAD * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * COUNCIL ACTION REQUEST: Workshop - 2016 Budget direction. STAFF RECOMMENDATION: 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: , , ' �L� �� City Administrator Date * * * * * * * * * * * * * * * * * * * * * * * * � * * * * * * * * * * * * * * * * * * * * * * * H:\Council items\council-action template.docx Cottage J Grove �here Pride and P�OSPerity Meet To: Mayor and City Council Members Craig Woolery, Interim City Administrator From: Robin Roland, Finance Director � Date: May 27, 2015 Subject: Workshop — 2016 & 2017 Budget Goals Staff is seeking to confirm City Council direction regarding the 2016 (and 2017) Property Tax Levy and Budget. Given the current circumstances, budget preparation documents were distributed to departments on May 21St with the direction to "stay the course"; That is, to use the 2016 Budget and Levy assumptions identified in the 2015/2016 budget process from last year as a baseline without significant additions to programs or personnel. At the workshop, we would like to discuss the following: • General Fund Levy ■ Proposed increase for 2016 from the 2015/2016 budget was 7.44%. • Special Levies: ■ EDA Funding ■ Ice Arena funding ■ Golf Course funding • Debt Levies ■ Required levies on existing debt ■ Future Pavement Management ■ Future funding of Fire Station As part of the discussion, staff will address growth in the tax base for 2016 and expected impacts for 2017 and beyond of commercial and retail development projects currently underway. Levy The following chart reflects amounts identified in the 2015 Budget process for 2016. New debt issued in 2015 is highlighted in yellow. Adopted Adopted Adopted Proposed Proposed 2013 2014 2015 2016 2017 General Levies General Fund $ 10,867,000 , $ 11,265,030 ' $ 11,915,100 I $ 12,842,500 ' $ 13,227,775 Public Safety/City Hall interFund loan ' 500,000 500,000 500,000 500,000 Park shelter replacement/Landscape 30,000 ' Future Municipal buildings 30,000 - Economic development 108,100 108,100 111,500 111,500 111,500 `: Total levy subject to limit 11,035,100 11,873,130 12,526,600 ' 13,454,000 13,839,275 ' Debt Levies Jce Arena expansion bonds 240,000 240,000 290,000 290,000 290,000 Public Safety/City Hall interfund loan ; 550,000 '; ' Pa�ment Mgmt 2008 175,000 : 175,000 175,000 ' 175,000 175,000 Pavement Mgmt 2000 159,550 Pavement Mgmt 2010/2011 � 81,600 81,000 80,500 80,500 , 80,500 '' Pa�ement Mgmt 2013 � 330,000 330,000 400,000 400,000 Pa�ment Mgmt 2014/2015 300,000 300,000 Total debt levy 1,206,150 826,000 ' 875,500 1,245,500 1,245,500 ' Total Gross levy 12,241,250 12,699,130 13,402,100 ' 14,699,500 15,084,775 Change in Gross levy 0.00%; 3.74%' 5.54% 9.68%' 2.62%i (__ Debt levy as%oftotal levy I 9.85% 6.50% 6.53% 8.47% 8.26%' Congruence with established financial policies is a key factor when rating agencies consider the appropriate rating for the City's overall debt. The City's Debt levy is limited by policy to less than 10% of the total levy. At the end of 2014, the City's debt per capita was $604; approximately half of the average of our peer communities. i i � �; � Taxable Value , The chart below reflects Washington County's "first glance" estimate for Pay 2016 tax capacity value. Estimated i Property Value for; Property Value for Property Value for Property Value for ' Taxes Collectable Taxes Collectable Taxes Collectable Taxes Collectable 2013 2014 _. 2015 2016 � I ; � _ i Ma rket va l ue $ 2,277,900,700 ; $ 2,396,493,700 $ 2,705,847,900 $ 2,789,362,100 F � _ ; j ; � � __ ! a, : _ .. ._ _ ._ _ .__ ._. _ __. _ _. _- s . Taxable property value � j Real estate = 24,938,753 i � 26,084,196�� 29,209,085 � � 30,097,323 ( ;Personal Property 612,076 622,578 633,787 633,787 � Total property value 25,550,829 � 26,706,774 � 29,842,872 = 30,731,110 j less: Tax Increment project ; _ _ � , ;val uations � (789,029)� (675,25'I)� (646,581) (646,581); ; S ubtotal - City 24,761,800 ; 26,031,523 , 29,196,291 30,084,529 � , less: Fiscal Dispanty: contribution value: (2,076,999); (2,040,893) (2,016,925) (2,016,925)� ; Net Tax Capacity val ue 22,684,801 ; 23,990,630 . 27,179,366 28,067,604 E j add: Fiscal Disparity ; � � distribution' 5,000,859 ; 4,981,123 j 4,915,251 �� 4,915,251 � � ;,_ , i ; _ _ , � � Total Tax Capacity; 27,685,660 � 28,971,753 ; 32,094,617 � 32,982,855 ; � a ; ; � _ � i � ; � jChange in Tax Capacity Value� -7 2%; 5.8% 13.3% 3.3%! I _ ; _ , _ _ I � We will discuss the potential tax rate approaches at the workshop with an eye towards the taxable value i per capita and its relation to the amount of tax revenue we are able to collect in comparison to other communities. The following chart reflects the final adopted 2015 Property tax rates of our 35 peer communities. The average tax rate for 2015 is 42.64; Cottage Grove's rate was 41.59. Our strategy in the recent past has been for our tax rate to be at or below the market mean. For 2015, we were 2.5% below the mean for our peer cities. This equates to an additional $285,383 if � we were at the mean tax rate; revenue that we could use to improve our reserves and address ongoing � budgetary needs. ; ; � � � ' i i 2015 Tax Rates so.00 �o.00 60.00 50.00 40.00 — 30.00 20.00 — 10.00 w = N �o z G� � n — cn y � D � -" v � o Z � � p � D W � n � a � � 3 rt � C p � v � C p �'-r, rt T 2� Q n�i � N r � '�O O O p O- � N rt � � � � � n� Q �� • O 0 (D p �' a� � � � � � � = m °° v � ° � co 3 � � m m � a°'o v� <. m �• n°_i o ° � r'o � Q ' r. °' � �- o � ao cn o � r� G� C v '< ,� � � -� _ _ � � r+ 5. s � m °1 v � `^ '+ Q- -o < o `� o �' ° � �' oo' �o � ro � m -� o m � n, �- �, c°�o (l � lD n� < p'�j O � rt �^ � rt O � � � � �� v � C � � x- � � �G � fD � � � I_' i ; i i 2016 Budget Calendar Target Date Responsible party Action January 24, 2015 Council Establish Strategic Plan �' May 21, 2015 Finance Distribute forms to departments , June 3, 2015 Council Budget guidelines workshop June Finance Tax Revenue forecasts June 17, 2015 Departments Return forms to finance i June 22, 2015 Budget team Preliminary review July 8-10, 2015 Budget team and Review meetings ; Departments ', July 27, 2015 Finance Proposed Budget Document to Council July 29, 2015 Council Budget workshops - Council ' August 5, 2015 review & comment August 19, 2015 All Commissions All Commissions—Town Hall ' meeting on Budget August 26, 2015 Council Final budget workshop — if ; necessary September 2, 2015 or Council Adopt preliminary levy and September 16, 2015 budget , By September 30, 2015 Finance Certify preliminary levy and ' comment hearing date November 2015 County Notices of proposed property taxes for 2016 taxes payable ' December 2, 2015 Council Conduct budget comment � meeting � December 2 or 16, 2015 Council Adopt final budget and levy , By,December 30, 2015 Finance Certify final levy ' ; i �