HomeMy WebLinkAbout7.a. 2019 Budget
EXECUTIVE SUMMARY
City Council Regular Meeting December 4, 2018
AGENDA ITEM: 2019 Budget AGENDA SECTION:
Public Hearing
PREPARED BY: Logan Martin, City Administrator
Jeff May, Finance Director AGENDA NO. 7.a.
ATTACHMENTS: Resolution, 2019 Budget APPROVED BY: LJM
RECOMMENDED ACTION: Adopt a Resolution Approving the 2019 General Fund
Operating Budget, the 2019 C.I.P. Budgets, the 2019 Insurance Budget, the 2019 Port
Authority Operating Levy and the 2019 Levy required by the City of Rosemount.
SUMMARY
In response to direction received from the City Council at four work sessions over the past number of
months, staff is prepared to present the City’s Final Operating Budget and Levy for 2019. These
documents are the result of many hours of work from both the Council and Staff, and we are pleased with
the results.
The recommended 2019 Budget proposes an increase in the City’s property tax levy of 3.75%. This levy
increase results in an estimated annual increase of $44 in the City taxes assessed to a median valued home.
The estimated City tax on a median valued home ($279,300) would be $1,051 in 2019. The median valued
home saw an increase in assessed value of 7.51% thanks to a strong local housing market. Even with the
increases proposed for 2019, an owner of a median valued home is still paying $7 less in City taxes in 2019
than they paid in 2008.
A summary of key characteristics of the proposed 2019 Budget is shown in the following table:
A summary of the main expenditures leading to the budget increase is discussed later in this memo. The
budget shows some increased personnel costs reflecting new full time employees, increased funding for
the City’s long-range maintenance plans, and overall increased wages and benefits for 2019 based on
assumptions from current labor contracts.
Partially offsetting these increased costs are increased development related fees for building permits, plan
checks, and administrative charges for development of new streets and utilities. The public hearing on the
budget will be held at this meeting (December 4th at 7:00 p.m. in the Council Chambers).
Budget Facts at a Glance
Growth of Property Tax Base from ‘18 + 7.27%
Avg. value increase on Median-Valued Home + 7.51%
Change in General Fund Budgets + $616,300 or 4.71% (reduced $90K from Sep.)
City Tax Increase on Median Valued Home + $44
% Tax Change on Medan Valued Home + 4.37%
Change in Estimated City Tax Rate - 3.96% (from 0.40961 to 0.39338)
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BUDGET PROCESS
The drafting of the 2019 Budget ultimately began with and was inspired by the City Council’s goal setting
retreat in March. The goals and five year strategic initiatives discussed during that process were
instrumental in the creating of each department’s budget request.
After each department submitted their 2019 request, Finance Director May and I met individually with
each Department Head to discuss all requests and receive further explanation as to their necessity. A
number of items were removed via those discussions and 3 drafts were completed internally prior to
Council review.
In addition, as a part of the budget review we have looked at 10-year needs projections for street
improvements, equipment replacement, buildings and the Ice Arena. We have also reviewed our long term
needs for major maintenance for parking lots, playgrounds, etc.
Finally, as has been the direction in year’s past, staff looked at the overall budget strategically for its overall
balance and consistency, effect on taxpayers, and long term impacts on finances for 2019 and beyond.
Our intent was to develop the most conservative budget possible that:
(1) is consistent with Council goals
(2) is consistent with previous Council direction on levels of service
(3) does not weaken the City’s long range financial outlook
(4) is balanced not only between revenues and expenditures, but also is well balanced internally
between personnel, equipment, technology, operating needs and capital expenditures
According to state law, the preliminary budget and levy must be adopted by September 30th and the final
budget must be adopted by December 28th after a public hearing.
GENERAL FACTORS AFFECTING THE BUDGET
Tax Base
For the sixth consecutive year, the overall tax base in the community has increased. The overall tax
capacity value within the City is estimated to be 7.27% higher in 2019 than it was in 2018. The increase in
market value of the median home in Rosemount is 7.51%.
State Budget and Legislative Impacts
There were no significant changes in State legislation in 2019 impacting the Budget, and there are no levy
limits in place for 2019.
REVENUES
Property taxes fund 73.56% of the General Fund budget. However, there are several other categories of
General Fund revenues that are also important to the City. The chart below compares budgeted revenue
for several key categories.
2018 Budget 2019 Estimated Change
Licenses & Permits $729,200 $749,800 + $20,600
Intergovernmental $747,800 $1,066,500 + $318,700
Chargers for Services (no SKB) $634,100 $583,100 - $51,000
SKB Revenue $675,000 $675,000 + $0
Fines & Forfeits $115,000 $115,000 + $0
Recreational Revenues $236,500 $256,500 + $20,000
Miscellaneous Revenue $163,800 $172,700 + $9,600
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Because staff anticipates another strong housing pattern in 2019, building permit revenues are projected to
increase to $525,000. This is the highest revenue projection the City has seen since 2006. The charges for
services category includes $200,000 in plan check fees, which are related to building permits. Staff
continues its practice of being conservative on these projections, as these revenues are exposed to many
factors in the local economy.
EXPENDITURES
Salaries
Rosemount currently has 85 full time employees (FTE), which compares with 81 FTE at the beginning of
2008. Two new FTE (patrol officers) are included in the 2019 Budget. Funding for these positions is
calculated based on a June hiring, which would coincide with the Department’s internal training and
development plan. The 2019 Budget also includes the reclassification of the current part-time IT Specialist
to a full-time position. Information technology continues to be an area in need of additional support,
especially as the City continues to more strategically utilize technology in all facets of its operation. All
four labor bargaining units are currently under contract, so salary and benefit budgets reflect those
agreements.
Health Insurance
Staff was able to negotiate next year’s health insurance rates with our provider, which resulted in no
increase in rates from 2018 to 2019. This successful negotiation resulted in a significant cost savings in the
budget (approximately $90,000), and is the main factor leading to the reduction in the preliminary levy
amount.
Capital Budgets
The City currently has three capital improvement program (CIP) funds: Equipment, Streets, and
Buildings. The Council adopted the CIP in November, which showed a levy for the Equipment CIP of
$620,000, an increase of $20,000 due to future forecasted needs.
The Street CIP is proposed to have a levy of $852,327, an increase of 8.73% to account for upcoming
street/county road projects.
Enterprise Fund Budgets
Proposed water, sewer and storm water utility rates and budgets were reviewed by the Utility Commission
and will be presented to the Council at the December 11th meeting as part of the annual fee resolution
update.
CONCLUSION
The 2019 Budget and Levy reflect modest adjustments to account for the growth that the community has
experienced in recent years and anticipates continuing to see into the future, while maintaining high quality
services that residents expect. The levy increase of 3.75% would mean that Rosemount would have the 3rd
lowest municipal levy increase in the County in 2019 while still maintaining the City’s service levels and
long-range equipment and facilities replacement schedules. A taxpayer owning a median-valued home will
pay $7 less in City taxes in 2019 than they would have paid in 2008, which is a testament to the City’s
commitment to financial management and respect of tax dollars.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2018 -
A RESOLUTION APPROVING THE 2019 GENERAL FUND OPERATING BUDGET,
THE 2019 CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGETS,
THE 2019 INSURANCE BUDGET, THE 2019 PORT AUTHORITY OPERATING LEVY
AND THE 2019 LEVY REQUIRED BY THE CITY OF ROSEMOUNT
WHEREAS, the City Council of the City of Rosemount has determined that budgets and
special needs for the year 2019 will be in the amount of $22,377,127 for the General
Operating Fund, the three CIP funds, the Insurance Fund levy, the Port Authority
operating levy and the Enterprise funds; and
WHEREAS, the City Council has determined that special levies for Bonded
Indebtedness total $344,681 for 2 City issues (G.O. Public Facility Refunding Bonds
2010B and G.O. Capital Improvement Plan Refunding Bonds 2015B) and no levy
necessary for any other City issues (utilizing other revenue sources); and
WHEREAS, the City Council has determined that actual incomes, fund transfers and
anticipated aids will total $10,339,200; and
WHEREAS, the City Council has determined that budgeted expenditures for all Debt
Service Funds total $1,933,000; and
WHEREAS, the City Council has determined the budget for the Arena Fund to be
$610,400; and
WHEREAS, the City Council has received the Port Authority and the Utility Fund
budgets approved by the Rosemount Port Authority and the Utility Commission.
NOW, THEREFORE BE IT RESOLVED, that the total levy certified to the Dakota
County Auditor shall be $12,320,434; and
BE IT FURTHER RESOLVED, that the City Council approves the 2019 General Fund
operating budget as presented to them at the Public Hearing held this evening; and
BE IT FURTHER RESOLVED, that the City Council approves the three 2019 CIP Fund
budgets, the 2019 Insurance Fund budget, the 2019 Port Authority operating levy and
the 2019 Arena Fund budget as presented to them at the Public Hearing held this
evening.
RESOLUTION 2018 -
ADOPTED this 4th day of December, 2018.
_____________________________________
William H. Droste, Mayor
ATTEST:
____________________________________
Erin Fasbender, City Clerk
CERTIFICATION
I hereby certify that the foregoing is a true and correct copy of a resolution presented to
and adopted by the City Council of Rosemount at a duly authorized meeting thereof,
held on the 4th day of December, 2018, as disclosed by the records of said City in my
possession.
(SEAL)
____________________________________
Erin Fasbender, Rosemount City Clerk
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