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Home My WebLink About2015-09-02 PACKET 08.B. REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # � _ DATE 9/2/15 . • PREPARED BY: Finance Robin Roland ORIGINATING DEPARTMENT DEPARTMENT HEAD * * * * * * * * * * * * * * * * * * * * * * * � * * * * * * * * * * * * * * * * * * * * � * * * COUNCIL ACTION REQUEST: Consider approval of the preliminary Property Tax Levy payable in 2016. STAFF RECOMMENDATION: Adopt the resolution approving the preliminary Property Tax Levy payable in 2016. 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: r�" � � /�: �� C' Admini o �_� �ate * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * H:\Council items\council-action template.docx Cottage � Grove �here Pride and P�osperity Meet To: Mayor and City Council Members Craig Woolery, Interim City Administrator From: Robin Roland, Finance Director � Date: August 27, 2015 Subject: Consider adoption: 2016 Preliminary Tax Levy INTRODUCTION The City is required to adopt a preliminary tax levy each year by September 30th. The preliminary levy is 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�h when the final levy is required to be adopted. PROPERTY TAX LEVY For 2016,the preliminary proposed tax levy is$14,070,800 or 4.99%more than the 20151evy. There is no levy limit for 2016. - ---�--- __._______.._------ ---- - � Ado ted Ado ted Ado ted Preliminar Preliminar ;----------_----_--_____.._�_�---____________.._ _...__-..rP---...__ __..... ____._P�___._...._..�..----__--P---------�--.----,__y_�__�.__---____.__._y_ `General Levies 2013 2014 2015 2016 2017 , _ _.._ .___ __. _-- _. . (General Fund ' $ 10,867,000 ` $ 11,265,030 F $ 11,915,100 ' $ 12,569,300 E $ 12,981,400 : , _- - - -- ----- __- --_.� -- __ ___._. - --- ---- -----��.._.. - IPark shelter replacement/Landscape initi�` i --- ;_ � 30,000 _ � � I ; -- — _- ,._ ,_ _ __ __ ;Future Municipal buildmgs ( 30 000 ; � ,. . _.... __ _.�_ , _.... � _ ,. ..._ � __..........._ ' '.._..._._.... ... ' _...I._ .. ; .._. � -- _.{ �Economic development , 108,100 � 108 100 � lll 500 � 111 500 111 500 I _- - ; -- _ _ _._. _ . . _ _ .. - - •-_ ;Public Safety/City Hall interfund loan ; 550,000 ; 500,000 � 500,000 = 500,000 s 500,000 ; ; _ , _ - 3 s 11 585 100 . 11,873,130 � 12,526,600 � 13,180,800_E_ 13,592,900 i ? - __ _ -- � - - ! -'-- ' ; , _ ---- [ - �Debt Levies i � , � . • ; � _ ._ •:- -__ __ � - - - - - _ _.. - -= _-,-_ - `;Ice Arena e ansion bonds � 240 000 ; 240 000 ' 290 000 ; 290 000 � S � _ _ _ __ __ _ _ _ . _ � - - ' - .__ _ � � � _._ ' - !_. _ _ 90,00 � 2 0 , _ _. ___ .._ . ;All Pavement Mgmt debt ! 416,150 � 586,000 `r 585,500 ; 600,000 ; 890,000 ' ,_ _ __ _ ._ _ _ . ;_ Total debt levy; 656,150 :' 826,000 ; 875,500 ; 890,000 E 1,180,000 ;'• ; - - --. .. .- - -- - - ;Total Gross levy a 12,241 250 : 12,699,130 � 13,402,100 j 14,070,800 j 14,772,900 I - -- - -_ . __._ s - -- -- __. _.__ --- ,_ - -- !Change in Gross levy __ ! 0 00%; 3 74%� 5.54%, 4 99%oi 4 99%, ,_ _ .,..._ , _- _._ _ _ �� - - - - �___ - - _ .. ; { _ € ; � I : � ; _ . _ , .. __ ____.. __ __ __ ,.. ... . .. ...__._ _ _,- -- __. _ . ...____..___.-- _,_ __ ___ . .. _._._ .__ ,_. . ___ _ . ...__ � Required levies for the repayment of debt were adjusted due to available fimding in the respective Debt Seivice funds. CITY OF COTT'AGE GROVE • 12800 Ravine Parkway • Cottage Grove, Minnesota 55016 www.cottage-grove.org • 651-458-2800 • Fax 651-458-2897 • Equal Opportunity Employer PRELIR�VARY TAX RATE The City's estimated tax capacity value will increase by 3%in 2015;fi•om$29,842,872(2015)to$30,731,110(2016). The 4.99% increase in the levy, combined with the valuation increase will result in an increase in the taa extension i•ate fi•om 41.42% in 2015 to 42.94% in 2016. Tax Extension Rates 46.00 44.80 43.73 42.9 44.00 41.42 42.00 40.00 38'90 41.42 38.00 36.00 34.00 32.00 35.81 35.19 34.64 � 30.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tax Payable Year The combination of increased property vahiations and the tax rate increase will result in an increase in the propei-ty taaes on an average home(inarlcet value $227,000) of about$3 8 per year. 2015 OPERATING BUDGETS GeirerrJ Fund Genei•al Fund i•evenues are proposed to increase by 4.1%; and expenditui•es are proposed to increase by 7.6% foi• 2016 over 2015. The eapendihlre increase is primarily due to capital equipinent e�penses resulting fi•oin delayed replacement of several large, eapensive pieces of equipment. Currently the general fiuld budget reflects a use of$516,300 in fiind balance reseives for 2016. These reserves were set aside beginning in 2009 foi• use in offsetting the loss of Marlcet Value Homestead Credit at that time. These "assigned"reserves have been reviewed in the cotu�se of each year end. The one time use of fimds will"btry down" the property tax levy for 2016. Although the 2017 budget reflects eapendihues exceeding revenues by over$984,000, no similar offsetting revenue source has been identified at this time and the expected deficit must be resolved during the 2017 budget process. The following items are of note: • Charges for services—both 2016 and 2017 i•eflect static administration and financing fees for developments due to the anticipated level of developinent activity. • Inter�ovei•nmental—in 2014, the City received Local Government Aid (LGA) for the fii•st tiine since 2003. The 2016 allocation of$75,000 is an inci•ease of$2,500 over 2015. • Investment earnin�s— Investment earnings have beei� calculated at 0.75% for 2015 and 2016 to reflect continuing low interest rates. • Cost of Livin�;Increases—The budgeted cost of living increase for salaries is 2.75% for 2016 and 2017. • Other Personnel Cost Changes—Budget amounts for health insurance reflect a 10% increase over 2015 and 15% inci•ease for worlcers comp insurance. Statutorily detei•mined PERA r•ates for 2016 for the both the Coorclinated plan and the Police and Fire plan remain at 2015 levels.Current mandated employer contribirtion rates ar•e 7.5% for those employees in the Co-ordinated plan and 16.20% in the Police and Fire plan; employees contribute 7.25% and 10.8%to the respective plans. • Fuel Allocation- The 2016 budget includes an assuinption of$3.25 pei• gallon for gasoline and dieseL This is a decrease fi�om the 2015 budget assumption of$3.60. • Staffin�—Inci•eases in fiill time staffing include an eighth full time Firefighter/Parainedic as identified in the EMS h•ansitional plan. • Transfer to the Equipment Replacement Fund —the General fimd t�•ansfer for capital equipment in 2016 is $672,375 to assist in pui•chasing$855,890 of vehicles and equipment. Special Revenue Funds Seal Coatin F�und An agreement reached with Xcel Energy decreased Franchise Fee revenues for the 15 month period October 2014 to December 2015. Franchise fees will return to pre-October 2014 levels for 2016 and sealcoating eapenditures will return to historical norms. Ice Arena Revenues are expected to remain constant thi•ough the 2016 budget. In Octobei•2014,the City Colmcil approved a five yeai•maintenance plan to addi•ess the ininimum improvements to flie eaisting system to maintain the refi•igeration plant. The plan called for$109,000 in expenses for 2015, $26,450 in 2016. The goal of this plan is to extend the life of the R22 coolant system tmtil after 2020. Recvcling The revemie is the recycling grant amount eapected to be received fi•om Washington County. EDA and Economic Development Ti•ust Funds The EDA pi•operty levy continues at $111,500 foi• 2016. The EDA budget includes a fiill year of revenue and eapenditut•e impacts of the operation of the Business Enteiprise Center(BEC). Utilit��turd Efaterp�•ise Fentds Stoi7n Watel•Utility Fund The rates are proposed to increase fi•om $52.80 annually to $55.20 (or$0.20 per month) per residential customer for 2016 and to$57.60 for 2017. These increases are necessaiy to maintain the viability ofthe fund so the next five yeaj•s of the storm water utility plan can be financed. Water Fund The 2016 eapenses include a new public seivice worlcer position to be shared with the Sewer fiind. 2016 will be the foui�th year of the wate7�meter i•eplacement program and the Watei•Fund budget also includes expenses for the 2016 Pavement Management project. Sewer Fund Met Council sewer services char•ges are increasing by 3% for 2016 and a similat•increase is budgeted for 2017. The 2016 and 2017 budgets include the shared public sei�vice worlcer position inentioned above and capital outlay items fi•om the respective pavement management projects for those years. i Street Lig;ht Fund , Street Light fees increased by 5 % annually beginning in 2015 to assure financial resources are available for the ', replaceinent of streetlights as part of firture pavement management projects. City owned Residential streetlight � charges will increase fi•om 2015 rates of$2.57 plus $0.89 to the 2016 rate of$2.70 plus$0.94 per month. Ambulance Fund The budgeted 2016 revenue inchides an increase of 3% in the rates. � A change in staffing strategy which was adopted by the City Council in 2013 is in the final stage of implementation. This sh•ategy provides for primaiy response by the Fire Division providing an ALS ambulance and Paramedic seivices � to the community; Police OffcerlParamedics respond for critical and multiple EMS calls. Through 2015, the Fire/EMS division has hired seven (7) fiill-time Firefighter/Paramedics, reducing the need for Police ; Officer/Paramedics. The eighth Firefighter/Paramedic position is included in the 2016 Budget. I Crrpital Project Fun�'s ', Equipment Replacement Fuild , The budget docmnent includes a five year equipment replacement plan totaling $3.5 Million, sorted by funding source. A summaiy list of purchases by year is included totaling$855,890 for 2016 and $927,790 for 2017. The 2016 equipment purchases include: I Forfeiture vehicle for Investigative Aid $ 100 ' Investigation Van 33,000 Squad for Captain 30,000 Squad coming out of service: Police Investigations 100 ' Pickup-Inspections 25,190 � Tandem dump- Streets 255,000 '' 4WD utility vehicle with attachments 180,000 ! Replace equipment(loader,blower,h•actor)- Parks 185,000 � Aerial truck-Forestiy 50,000 One ton pick-up -Parks 32,500 '' 4WD pick-up 3/4 ton-Parks 32,500 4WD picic-up 3/4 ton- Streets 32,500 4WD pick-up 3/4 ton-Parks 32,500 ; Pass down Forester pick-up (32,500) $855,890 i ACTION REQUESTED ' Adopt the attached resolution adopting the proposed preliminaiy 2015 tax levy collectible in 2016. � I Once the prelimi�iary levy is adopted, City staff will certify the amounts to Washuigton County. The County will include the City's levy along with the County, School Dish•ict and Special Dish•ict levies in the prepared notices sent to individual property owners in November. The notices will identify the proposed taxes paid by each property owner based on the properry's classification. In addition,the notice will identify the meeting date(December 2nd) when public comment on the levy and the budget will be taken. � � � ( i � RESOLUTION NO. 15- RESOLUTION ADOPTING THE PROPOSED 2015 TAX LEVY COLLECTIBLE IN 2016 . i 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 2016, ; upon the taxable property in the City of Cottage Grove for the following purposes: i General Levv ' General Fund $ 12,569,300 PS/CH interfund loan 500,000 , Economic Development 111,500 j Subtotal General Levy 13,180,800 Debt Levies Ice Arena Expansion 290,000 Pavement Management - 08 150,000 ', Pavement Management - 2011 50,000 ! Pavement Management - 2013 300,000 � Pavement Management - 2015 100,000 ' Subtotal Debt Levy 890,000 ! Total Property Tax Levy $ 14,070,800 , � Passed this 2nd day of September 2015. Myron Bailey, Mayor Attest: ' � Joe Fischbach, City Clerk i �