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Home My WebLink About2.a. Preliminary Review of Draft 2018 Budget EXECUTIVE SUMMARY City Council Work Session: August 7, 2017 AGENDA ITEM: Preliminary Review of Draft 2018 Budget AGENDA SECTION: Discussion PREPARED BY: Logan Martin, City Administrator Jeff May, Finance Director AGENDA NO. 2.a. ATTACHMENTS: Summary Sheets of Draft 2018 Budget APPROVED BY: LJM RECOMMENDED ACTION: Discuss draft 2018 Budget and provide staff direction on needed modifications. BACKGROUND Since receiving direction from the City Council at its July work session, staff has made modifications to the draft 2018 Budget. Staff has also discussed the details of the 2018 Budget with Councilmembers individually to answer questions and receive feedback. Attached to this memo are updated Budget Summary pages to convey the current proposal, and the detailed departmental budgets will be updated to reflect further changes after the work session (the complete Budget provided in July can still be used for reference and discussion). Based upon the proposed changes to expenditures and revenues discussed below, the draft 2018 Budget reflects a 3.91% increase to the total Tax Levy. As you will recall, the first draft provided in July reflected a 6.9% increase to the total Tax Levy. The City’s Operating Budgets are proposed to increase 6.49%, as compared to 6.82% in July. In this scenario, the City’s tax rate for 2018 is proposed to decrease by 2.07%, from 0.41832 in ’17 to 0.40967. The impact of the proposed tax levy on the median valued home results in a $36 increase for 2018. Revenues Below is a summary of revenue modifications since the July work session. Budget Line Item Change Charges for Services $90,000 added • Add’l revenues anticipated in ’18 due to reassessed timing of development projects $160,000 added (SKB Funds) General Levy $11,874,782 • Reduced from $12,215,682 2 Expenditures Below is a summary of expenditure modifications since the July work session (shown in red strikethrough), along with items still pending additional discussion. City Council Finance Community Development / Port Authority Police Fire Initiative Changed or Pending Discussion Community-wide survey (last done in ’14) $22,000 $16,000 (Updated quotes) Initiative Changed or Pending Discussion Add 1 FTE (Accountant) on 7/1/18 $34,300 (Position removed) Increase hours of part-time IT Specialist • 10 add’l hours per week to assist with increasing demands placed on our current IT Coordinator. $20,500 Initiative Changed or Pending Discussion Add 1 FTE (Econ. Dev. Specialist) on 7/1/18 • Creates increased staff capacity to engage in marketing, outreach, business retention and attraction efforts. $42,900 Marketing partnership with Retail Strategies • Supplement staff efforts to develop data, market, and recruit retail users for vacant parcels / buildings. $50,000 (Removed, pending further discussion on FTE.) Initiative Changed or Pending Discussion Add 1 FTE (Patrol Officer) on 3/1/18 • Position added after the Detective promotion occurs; would increase ability to provide adequate staff size to meet service minimums, while reducing overtime due to staff shortages. (Position partially funded via $15,000 grant from Commerce Dept.) $83,700 Promote Officer to Detective (stipend pay) $3,000 Initiative Changed or Pending Discussion Increase Chief stipend $8,000 Increase Assistant Chief stipend $4,000 Increase firefighter rate from $10/hr. to $12/hr. $33,500 3 Public Works Parks and Recreation RECOMMENDATION Staff requests the City Council provide direction on any needed modifications to the draft 2018 Budget. Initiative Changed or Pending Discussion Increased project needs on long-term Building Maintenance program $18,000 Increased project needs on long-term Parking Lot Maintenance program $20,000 Additional crack sealing / sealcoat (moved from CIP) $30,000 Add’l hours for PT Horticulturalist $5,200 Topdressing, sod, wood chips, and mulch needs $15,000 Increased project needs on long-term Parks Maintenance program $25,000 Initiative Changed or Pending Discussion Increase Steeple Ctr. / Rec. Coord. to 32 hrs. + benefits • Add 6 hours per week to market and book more events; manage ever-increasing programming schedule at Steeple Center. $22,800 Increase programming for Seniors $3,000 FUNDING REQUIREMENTS - USES August 7, 2017 2017 2018 Adopted Proposed +/- Departments Budget Budget Difference Percentage --------------------------------------------------------------------------------------------------------------------------------------- Council Budget $272,500 $292,000 $19,500 7.16% Administration Budget 671,200 676,700 5,500 0.82% Elections Budget 20,000 45,300 25,300 126.50% Finance Budget 528,100 576,500 48,400 9.16% General Government Budget 323,600 334,600 11,000 3.40% Community Development Budget 1,052,500 1,124,900 72,400 6.88% Police Budget 3,930,300 4,218,500 288,200 7.33% Fire Budget 384,000 438,700 54,700 14.24% Public Works Operating Budgets: Government Buildings Budget 574,300 615,400 41,100 7.16% Fleet Maintenance Budget 653,500 676,500 23,000 3.52% Street Maintenance Budget 1,423,500 1,533,100 109,600 7.70% Parks Maintenance Budget 940,000 1,000,800 60,800 6.47% Park & Rec Budget - General Operating 1,286,000 1,329,300 43,300 3.37% Park & Rec Budget - Steeple Ctr. Operations 111,400 119,400 8,000 7.18% Park & Rec Budget - Special Programs 91,800 85,400 (6,400) -6.97% Transfers - Arena Assistance 130,000 130,000 0 0.00% -------------------------------------------------------------------------- Total Operating Budgets - General Fund $12,392,700 $13,197,100 $804,400 6.49% Building CIP Requirements 24,000 24,000 0 0.00% Street CIP Requirements 811,400 783,900 (27,500) -3.39% Equipment CIP Requirements 580,000 600,000 20,000 3.45% Insurance Budget Requirements 260,000 280,000 20,000 7.69% Port Authority Operating Levy 58,000 60,000 2,000 3.45% Bonded Indebtedness 346,056 344,682 (1,374) -0.40% Water Enterprise Fund 1,653,400 2,361,300 707,900 42.81% Sewer Enterprise Fund 2,202,000 2,526,700 324,700 14.75% Storm Water Enterprise Fund 1,285,400 1,182,200 (103,200) -8.03% Arena Enterprise Fund 610,100 533,500 (76,600) -12.56% -------------------------------------------------------------------------- Total Funding Requirements $20,223,056 $21,893,382 $1,670,326 8.26% ========== ========== ========== ========= - $6,000 (Survey Total) - $34,300 (Removed Accoutant) - $50,000 (Retail Strategies) - $2,200 (Removed Accoutant) - $2,200 (Removed Accoutant) - $2,200 (Removed Accoutant) - $2,200 (Removed Accoutant) FUNDING REQUIREMENTS - SOURCES August 7, 2017 2017 2018 Adopted Proposed +/- Types Budget Budget Difference Percentage ----------------------------------------------------------- ------------------- ------------------- ------------------- --------------- Internal Revenue Generated: Licenses and Permits 695,900 729,200 33,300 4.79% Intergovernmental 710,600 747,800 37,200 5.24% Charges for Services 1,123,800 1,419,100 295,300 26.28% Fines & Forfeits 120,000 115,000 (5,000) -4.17% Recreational Fees 242,100 236,500 (5,600) -2.31% Miscellaneous Revenues 148,800 163,800 15,000 10.08% Transfers In 3,500 3,500 0 0.00% Enterprise Revenues 5,750,900 6,603,700 852,800 14.83% ------------------- ------------------- ------------------- --------------- Total Internal Revenues 8,795,600 10,018,600 1,223,000 13.90% Levy Sources: Special Levies 346,056 344,682 (1,374) -0.40% General Levy 11,081,400 11,530,100 448,700 4.05% ------------------- ------------------- ------------------- --------------- Total Levy $11,427,456 $11,874,782 $447,326 3.91% ------------------- ------------------- ------------------- --------------- Total Revenue Sources $20,223,056 $21,893,382 $1,670,326 8.26% ========== ========== ========== ======== ->Added $90,000 Admin Fees $160,000 SKB Fees 2017 GENERAL PROPERTY TAX LEVY PAYABLE 2018 GENERAL LEVY GENERAL FUND $9,782,200 ** BUILDING CIP FUND $24,000 STREET CIP FUND $783,900 EQUIPMENT CIP FUND $600,000 INSURANCE FUND $280,000 PORT AUTHORITY OPERATING LEVY $60,000 ** ------------------------- TOTAL GENERAL LEVY $11,530,100 BONDED INDEBTEDNESS G.O. PUBLIC FACILITY REFUNDING BONDS 2010B (Old 2001C) (Port Authority) (Authorized - $167,625 $167,625 G.O. IMPROVEMENT BONDS 2013A (Authorized - $8,701) $0 G.O. IMPROVEMENT BONDS 2014A (Authorized - $3,448) $0 G.O. CAPITAL IMPROVEMENT PLAN (CIP) REFUNDING BONDS 2015B (Authorized - $177,057) $177,057 ------------------------- TOTAL BONDED INDEBTEDNESS $344,682 ------------------------- GRAND TOTAL 2017 PROPERTY TAX LEVY $11,874,782 ============== Last Updated 8/3/17 ** CHANGES: Added $90,000 Generall Fund Admin Fees $160,000 General Fund SKB Revenues Removed $6,000 General Fund (Council) Survey $34,300 General Fund (Finance) Accountant $50,600 Port Authority Retail Strategies SPREAD LEVY COMPUTATIONAL WORKSHEET (INCLUDING FIRE STATION LEVY) (Proposed) 2015 2016 2017 2018 ----------------- ----------------- ----------------- ----------------- Total Funding Requirements 18,237,547 18,828,402 20,223,056 21,893,382 Less: Internal Revenues 7,409,800 7,789,100 8,795,600 10,018,600 ----------------- ----------------- ----------------- ----------------- Equals: Revenues Needed 10,827,747 11,039,302 11,427,456 11,874,782 County Auditor Adjustments (All Subtractions): Fiscal Disparities Distribution Levy (Metro Area)1,172,199 1,121,469 1,175,131 1,175,131 (2) ----------------- ----------------- ----------------- ----------------- Spread Levy Used to Compute Local Tax Rate 9,655,548 (1) 9,917,833 (1) 10,252,325 (1) 10,699,651 Increase/(Decrease) from Previous Year in Spread Levy 2.72% 3.37% 4.36% (1) Actual Spread Levy Based on Numbers from Dakota County (2) 2018 Number Provided by Dakota County as of 8/x/18 Last Updated - 8/3/17 ** CHANGES: Added $90,000 Generall Fund Admin Fees $160,000 General Fund SKB Revenues Removed $6,000 General Fund (Council) Survey $34,300 General Fund (Finance) Accountant $50,600 Port Authority Retail Strategies CITY OF ROSEMOUNTWORKSHEET FOR ESTIMATING RESIDENTIAL PROPERTY TAXES (ISD #196 FIGURES)(Rates Based on Proposed Preliminary Levy Numbers)220,981 (Value After M/V Exclusion)234,061 (Value After M/V Exclusion)247,850 (Value After M/V Exclusion)(+5.89%) 289,760 (Value After M/V Exclusion)Market Value236,900 (Payable 2016 Median)248,900 (Payable 2017 Median)261,550 (Est. Payable 2018 Median)(+5.08%) 300,000------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Year2016 2017 2018 Est.2016 2017 2018 Est.2016 2017 2018 Est.2016 2017 2018 Est.------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Tax Capacity2,210 2,210 2,2102,341 2,341 2,3412,478 2,478 2,4782,898 2,898 2,898Tax Capacity Rates: City0.43149 0.41832 0.409670.43149 0.41832 0.409670.43149 0.41832 0.409670.43149 0.41832 0.40967 County0.28570 0.28004 0.280040.28570 0.28004 0.280040.28570 0.28004 0.280040.28570 0.28004 0.28004 School District0.24317 0.23336 0.233360.24317 0.23336 0.233360.24317 0.23336 0.233360.24317 0.23336 0.23336 Miscellaneous0.05063 0.04907 0.049070.05063 0.04907 0.049070.05063 0.04907 0.049070.05063 0.04907 0.04907------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Totals1.01099 0.98079 0.972141.01099 0.98079 0.972141.01099 0.98079 0.972141.01099 0.98079 0.97214========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========City Market Referendum 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.00000000.0000000 0.0000000 0.0000000ISD #196 Market Ref 0.0026999 0.0027380 0.0027380 0.0026999 0.0027380 0.0027380 0.0026999 0.0027380 0.00273800.0026999 0.0027380 0.0027380Dakota County Ref 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.00000000.0000000 0.0000000 0.000000020162017Property Taxes: City 954 924 905 1,010 979 959 1,069 1,037 1,0151,250 1,212 1,187 City Taxes$979 $1,015 County631 619 619669 655 655708 694 694828 811 811 City Market Ref.$0 $0 School District537 516 516569 546 546603 578 578705 676 676-------------- -------------- Miscellaneous112 108 108119 115 115125 122 122147 142 142 Total Taxes - Median $979 $1,015------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Total Property Taxes2,234 2,167 2,1482,366 2,296 2,2752,506 2,431 2,4092,929 2,842 2,817 Increase / (Decrease)$36City Market Referendum000000000000ISD #196 Market Ref640 649 649672 681 681706 716 716810 821 821Dakota County Ref000000000000------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Grand Total All Taxes $2,874 $2,816 $2,797$3,038 $2,977 $2,957$3,212 $3,147 $3,126$3,739 $3,663 $3,638========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========344,260 (Value After M/V Exclusion)414,000 (Value After M/V Exclusion)Market Value350,000414,000History of Actual Tax Capacity Rates (Using ISD #196 Rates)------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Year 2016 2017 2018 Est.2016 2017 2018 Est.2013 2014 20152016 2017 2018 Est.------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Tax Capacity3,443 3,443 3,4434,140 4,140 4,140(2.07% Decrease)Tax Capacity Rates: City0.43149 0.41832 0.409670.43149 0.41832 0.409670.48862 0.47676 0.451520.43149 0.41832 0.40967 (1), (2) County0.28570 0.28004 0.280040.28570 0.28004 0.280040.33421 0.31827 0.296330.28570 0.28004 0.28004 (2) School District0.24317 0.23336 0.233360.24317 0.23336 0.233360.27956 0.27606 0.232710.24317 0.23336 0.23336 (2) Miscellaneous0.05063 0.04907 0.049070.05063 0.04907 0.049070.05884 0.05538 0.050330.05063 0.04907 0.04907 (2)------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------Totals1.01099 0.98079 0.972141.01099 0.98079 0.972141.16123 1.12647 1.030891.01099 0.98079 0.97214========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========City Market Referendum 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.00000000.0000000 0.0000000 0.0000000 (2)ISD #196 Market Ref 0.0026999 0.0027380 0.0027380 0.0026999 0.0027380 0.0027380 0.0023542 0.0025809 0.00254840.0026999 0.0027380 0.0027380 (2)Dakota County Ref 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.00000000.0000000 0.0000000 0.0000000 (2)Property Taxes: City1,485 1,440 1,4101,786 1,732 1,696 Net Tax Capacity Percentages County984 964 9641,183 1,159 1,159 For Residential Homesteads: School District837 803 8031,007 966 966 Miscellaneous174 169 169210 203 203Equal to or Less Than $500,0001.00% 1.00% 1.00%------------------ ------------------ ------------------ ------------------ ------------------ ------------------Over $500,0001.25% 1.25% 1.25%Total Property Taxes3,480 3,376 3,3474,185 4,060 4,025City Market Referendum000000ISD #196 Market Ref945 958 9581,118 1,134 1,134(For 2002 Through 2011 Credit Applied to All Organizations Proportionately)Dakota County Ref000000(For 2012 and On Credit Eliminated-Replaced with Market Value Adjustment)------------------ ------------------ ------------------ ========== ========== ==========Grand Total All Taxes $4,425 $4,335 $4,305$5,303 $5,194 $5,158========== ========== ========== ========== ========== ==========(1) This Figure Derived Using Figures Provided by Dakota County: (a) 2017 Projected Levy Less Fiscal Disparities as of 8/3/1710,699,651 / 26,117,652 =0.40967 (b) Net Tax Capacity Figure as of 2/24/17 (With M/V Exclusion)29,624,097 (6.27% Increase from Final Pay 2017) (c) Captured Tax Increment Tax Capacity as of 10/14/16(852,062) (x.xx% Increase from Final Pay 2017) (d) Contribution to Fiscal Disparities as of 7/31/17(2,654,383) (5.52% Increase from Final Pay 2017)------------------Last Updated - 8/3/17(2) These Figures Provided by Dakota County as of 10/14/1626,117,652 (For 2012 and on the City of Rosemount does not have a Referendum Levy)See Changes on "Spread Levy Worksheet".