HomeMy WebLinkAbout9.b. 2020 BudgetEXECUTIVE SUMMARY
City Council Regular Meeting September 17, 2019
AGENDA ITEM: 2020 Budget AGENDA SECTION:
New Business
PREPARED BY: Logan Martin, City Administrator
Jeff May, Finance Director AGENDA NO. 9.b.
ATTACHMENTS: Resolution, 2020 Preliminary Budget
Summary APPROVED BY: LJM
RECOMMENDED ACTION: Adopt a Resolution Setting the Preliminary 2020 General
Fund Operating Budget, the Preliminary 2020 C.I.P. Budgets, the Preliminary 2020
Insurance Budget, the Preliminary 2020 Port Authority Operating Levy and the Preliminary
2019 Levy and a Budget Hearing Date of December 3, 2019 at 7:00 p.m. at City Hall.
BACKGROUND
In response to direction received from the City Council at work sessions in June, July, and August, staff is
prepared to present the City’s Preliminary Operating Budget and Preliminary Levy for 2020. The City is
required to establish a “ceiling” for the tax levy by the end of September, which allows the City the
opportunity to reduce the levy after the ceiling is set until final certification in December. A final work
session in November is planned to discuss any final changes to the budget prior to final certification.
The preliminary 2020 Budget shows an increase of 4.99% to the operating budget, which results in a 5.89%
increase ($725,804) in the property tax levy. The impact of this levy increase on a median valued home is
projected to be $56 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 38.5%, as compared to 39.3% in 2019. 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.
It is important to note that the City’s tax rate is going down while the amount of City taxes paid by a
homeowner is going up. This is due to market value increases in property values as assessed by Dakota
County (7.91% citywide). If a homeowner were to see no value growth on their property, their taxes would
actually decrease by $24 (on a $300,000 home).
A summary of key characteristics of the proposed 2019 Budget is shown in the following table:
Budget Facts at a Glance
Growth of Property Tax Base from ‘19 + 7.91%
Avg. value increase on Median-Valued Home + 6.71%
Change in General Fund Budgets + $683,600 or 4.99%
City Tax Increase on Median Valued Home + $56
% Tax Change on Median Valued Home + 5.36%
Change in Estimated City Tax Rate - 2.12% (from 0.39355 to 0.38521)
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 2020 based on the fact
that the City’s four labor bargaining units have yet to settle on 2020-2021 contracts.
A public hearing on the budget will be scheduled for December 3rd at 7:00 p.m. in the Council Chambers.
BUDGET PROCESS
The drafting of the 2020 Budget ultimately began with and was inspired by the City Council’s goal setting
retreat in January. 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 2020 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. Staff also compiled long-range growth
projections in housing, population, and service requirements to generate future budget & levy projections
that the Council reviewed during the preparation of this Budget.
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 2020 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 seventh consecutive year, the overall tax base in the community has increased. The overall tax
capacity value within the City is estimated to be 7.91% higher in 2020 than it was in 2019. The increase in
market value of the median home in Rosemount is 6.71%.
State Budget and Legislative Impacts
There were no significant changes in State legislation in 2020 impacting the Budget, and there are no levy
limits in place for 2020.
REVENUES
Property taxes fund 73.5% 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.
2019 Budget 2020 Estimated Change
Licenses & Permits $749,800 $800,300 + $50,500
Intergovernmental $1,066,500 $1,104,800 + $38,300
Chargers for Services (no SKB) $583,100 $683,800 + $100,700
SKB Revenue $675,000 $375,000 - $300,000
Fines & Forfeits $115,000 $95,000 - $20,000
Recreational Revenues $256,500 $298,400 + $41,900
Miscellaneous Revenue $172,700 $215,000 + $42,300
Because staff anticipates another strong housing pattern in 2020, building permit revenues are projected to
increase to $570,000. Staff continues its practice of being conservative on these projections, as these
revenues are exposed to many factors in the local economy. A significant change in revenues is the reduction
of $300,000 in SKB fees within the General Fund. Rather than accounting for these revenues within the
General Fund, these funds will be placed into the Building CIP Fund to allow for future construction of
municipal facilities (Indoor Rec Center, PD / Public Works Facility, etc.).
EXPENDITURES
Salaries
Rosemount currently has 90 full time employees (FTE), which compares with 81 FTE at the beginning of
2008. One FTE (Parks Maintenance) is shown in the 2020 Budget, along with a Utility Maintenance position
in the Enterprise Funds (which Council will consider later this fall after the Utility Commission completes
its review). The contracts for all four labor bargaining units expire at the end of the year, and staff has begun
negotiations with those groups on wages and benefits for 2020-2021.
Health Insurance
Staff anticipates receiving complete information about health insurance renewals in late September.
Preliminary estimates from our insurance broker indicate a moderate increase to our insurance costs. As
such, additional funds were added to the budget during reviews this summer to prepare for this reality. Any
additional funds needed beyond what is included in this budget will be acquired via the assigned health
insurance balance.
Capital Budgets
The City currently has three capital improvement program (CIP) funds: Equipment, Streets, and Buildings.
The Council will review the CIP Budgets at a work session this fall. The levy for the Equipment CIP is
proposed to be $640,000, an increase of $20,000 due to future forecasted needs.
The Street CIP is proposed to have a levy of $877,977, an increase of $25,000 to account for upcoming
street / County road projects.
Enterprise Fund Budgets
Proposed water, sewer and storm water utility rates and budgets were recently reviewed by the Utility
Commission and will be reviewed in further detail with the Council later this fall.
Departmental Review
A summary of each Department’s budgetary changes for next year is shown below.
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
Public Works
This category includes Gov’t Buildings, Fleet Maintenance, Street Maintenance, and Parks Maintenance
budgets.
Parks and Recreation
Port Authority
RECOMMENDATION
The proposed 2020 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. The proposed
levy of increase of 5.89% would mean that Rosemount would once again have one of the lowest municipal
levy increases in the County in 2020, while still maintaining the City’s service levels and long-range equipment
and facility improvement schedules.
Further discussions with the City Council will occur this fall to finalize a few remaining points of discussion
and to establish the final 2020 Budget and Levy. Staff recommends that the City Council establish the
Preliminary 2020 Budget and Levy.
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
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2019 -
A RESOLUTION SETTING THE PRELIMINARY 2020 GENERAL FUND OPERATING
BUDGET, THE PRELIMINARY 2020 C.I.P. BUDGETS,
THE PRELIMINARY 2020 INSURANCE BUDGET, THE PRELIMINARY 2020 PORT
AUTHORITY OPERATING LEVY AND THE PRELIMINARY 2019 LEVY AND BUDGET
HEARING DATE 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 2020 will be in the amount of $22,978,697 for the General
Operating Fund, the three CIP Funds, the Insurance Fund, the Port Authority Fund and the
Enterprise Funds; and
WHEREAS, the City Council has determined that special levies for Bonded Indebtedness
total $180,941 for 1 City issue (G.O. Capital Improvement Plan Refunding Bonds 2015B)
and no levy is 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 $10,113,400.
NOW, THEREFORE BE IT RESOLVED, that the total Preliminary Levy certified to the
Dakota County Auditor shall be $13,046,238; and
BE IT FURTHER RESOLVED, that the City Council of the City of Rosemount will conduct a
Public Hearing for the purpose of presenting the proposed budget and levy to the general
public and to comply with Truth in Taxation laws as set by the Minnesota State Legislature,
and that the hearing shall take place on Tuesday, December 3, 2019, at 7:00 P.M., in the
Council Chambers at the City Hall.
ADOPTED this 17th day of September, 2019.
_____________________________
William H. Droste, Mayor
ATTEST:
__________________________
Erin Fasbender, City Clerk
RESOLUTION 2019 -
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
17th day of September, 2019, as disclosed by the records of said City in my possession.
(SEAL)
_______________________________
Erin Fasbender, Rosemount City Clerk