HomeMy WebLinkAbout2.b. Preliminary Review of Draft 2020 Budget
EXECUTIVE SUMMARY
City Council Work Session: August 5, 2019
AGENDA ITEM: Preliminary Review of Draft 2020 Budget AGENDA SECTION:
Discussion
PREPARED BY: Logan Martin, City Administrator
Jeff May, Finance Director AGENDA NO. 2.b.
ATTACHMENTS: None (refer to July packet for full Budget) APPROVED BY:
RECOMMENDED ACTION: Discuss draft 2020 Budget and provide staff direction on needed
modifications.
BACKGROUND
The Council met in July to begin preliminary discussions surrounding the draft 2020 Budget. Based on
direction received that evening, staff intends to continue the discussion at the August work session. The
memo sections that follow are identical to what was shown in July, as no formal changes were requested.
Two items are pending discussion in staff’s opinion; the addition of 1 FTE in the Parks Maintenance
Department (highlighted in yellow), along with a consideration of adding levy dollars to allocate for future
municipal building projects.
The preliminary 2020 Budget shows an increase of 4.86% to the operating budget, which results in a 4.5%
increase ($555,004) in the property tax levy. The impact of this levy increase on a median valued home is
projected to be $39 per year. The City’s tax rate (the percentage used to calculate the City’s portion of the
property tax) is projected to be reduced to 37.9%, as compared to 39.3% in 2017. This rate continues to
be lower than it was in 2016 (43%), which is a reflection of the growth of the City in recent years and the
effect of added taxable value. In 2020, the median value home is estimated to be $295,900, which reflects a
6.71% value growth over last year’s median valued home. This is the 4th highest value per median-valued
home in Dakota County.
Revenues
The City’s tax base (tax capacity value) is preliminarily increasing by 7.91% for 2020, or a total increase of
$2,510,001 to the City’s taxable value. In 2019, the City’s tax base increased by 7.32%. Historically, from
2008-2020, the City’s tax capacity value has grown by 27.48% ($7,582,306), which is the 2nd largest value
growth in Dakota County.
Non-tax levy revenues generated by the City are projected to decrease by 2.65% in 2020 due to a large
reduction in a one-time transfer of Enterprise funds in 2019 for the water tower reconditioning project.
Beyond that irregularity, revenues are projected to increase. Licenses and Permits, the fees generated by
growth and construction activities, are conservatively projected to grow 4.07% next year. As discussed in
previous years, staff takes a conservative approach to projecting these revenues so as to not rely too
heavily on uncontrollable factors. However, as large residential or commercial projects are completed,
revenues received would outpace these estimates. This revenue forecast is based on a target goal of 250
new units of housing in 2020. Staff continues to project increased rental fees associated with our various
facilities, which is also reflected in a revenue increase.
Expenditures
Below is a description of notable changes to each department’s budget. Some discussion is provided
below, however a detailed presentation and discussion surrounding these initiatives will occur during the
work session.
City Council
Administration
This category includes Elections, Administration, and the General Government budgets.
Finance
Community Development
Police
Fire
Initiative Increase over ’19 Budget
Increased civic engagement efforts
• OpenGov dashboard, Alliance for Innovation
$5,700
Initiative Increase over ’19 Budget
No major initiatives or changes. N/A
Election budget was modified to account for ’20 election
Initiative Increase over ’19 Budget
Annual subscriptions to Microsoft 365 included
• No longer able to acquire Microsoft licenses, so
this annual fee is required. Allows for offsite
data storage, reducing server requirements.
$21,000
Initiative Increase over ’19 Budget
Salaries & Benefits reflect the full-year cost of ED
Coordinator position
$45,000
Initiative Increase over ’19 Budget
Reduction in Dakota Comms. Center annual fee ($10,500)
Add’l training funds, including funds for 1 member of
command staff to attend the MN Chief’s Conference
$1,800
Initiative Increase over ’19 Budget
Staff training management / tracking software
• Software tracks training hours and serves as a
source for recorded / online training resources
$5,000
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Public Works
This category includes Gov’t Buildings, Fleet Maintenance, Street Maintenance, and Parks Maintenance
budgets.
Parks and Recreation
Port Authority
RECOMMENDATION
Staff requests the City Council provide direction on any needed modifications to the draft 2020 Budget.
Initiative Increase over ’19 Budget
Decreased funding for long-term Building Maintenance
program (to account for future new PW facility
($35,000)
Add’l costs associated with high volume received at City
clean-up events(City pays to dispose of items)
$6,000
Decreased funding for contracted services/ maintenance
due to leased fleet maintenance program
($10,000)
Decreased funding for preventative maintenance needs ($5,000)
Add’l road salt needs based on historical averages $5,000
Removal of costs associated with Street Lights to account
for proposed implementation of Street Light Utility fund
($177,000)
Increased funding for Parking Lot Maintenance long-term
plan
$105,000
Add 1 FTE in Parks Maintenance to reflect increased
development and demand for services
$90,000
Decreased funding for long-term Parks Maintenance Plan ($80,000)
Initiative Increase over ’19 Budget
Increased costs of maintenance and repair at Steeple Center $7,000
Initiative Increase over ’19 Budget
Funding for add’l marketing opportunities $18,000
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