HomeMy WebLinkAbout2.a. Preliminary Budget Review
EXECUTIVE SUMMARY
City Council Work Session: July 5, 2022
AGENDA ITEM: Preliminary Update on Draft 2023 Budget AGENDA SECTION:
Discussion
PREPARED BY: Logan Martin, City Administrator
Teah Malecha, Finance Director AGENDA NO. 2.a.
ATTACHMENTS: 2023 Budget Summary Sheets APPROVED BY: LJM
RECOMMENDED ACTION: Receive update on status of draft 2023 Budget and provide
staff direction on needed modifications.
BACKGROUND
City Staff has been working to prepare the draft 2023 Budget over the last few months. All departments
have submitted initial proposals, and staff has reviewed each proposal with departmental leadership. This
was our first budget cycle with fully digital budget submittals as well as a reformatted budget spreadsheet,
so it has been a detailed process.
The major headline surrounding this budget season is the significant increase all property owners have seen
in their assessed values. The City’s 2023 Tax Capacity Value is preliminarily increasing by 19.71%, and our
median valued home is increasing by 18.88%. The City’s median valued home rose from $323,700 to
$384,800. These are historically high increases to both data points, and they reflect the lag in which the
County’s assessors review properties. Essentially, to establish property value for payable 2023 the property
is reviewed in 2021, notice is sent in 2022, and taxes go into effect in 2023. This means that the sharp
increases in housing values we’ve seen in recent years are starting to be reflected in the County’s system.
Nearly $100 million ($98,261,500) in value was added via new construction, which is a number we expect to
continue based on the City’s growth patterns.
The current draft of the Budget reflects a 5.96% levy increase, which equates to a $65 increase on a median
valued home that sees an 18.88% value increase from 2022. A few key factors remain as additional drafts
of the Budget are completed, and staff will continue to review and refine both revenues and expenditures in
the weeks to come.
Below is a list of the major factors affecting the 2023 Budget:
• 2nd year implementation of the Compensation Study
• Jan. 1 hire of a FT Police Officer
• June 1 hire of a FT Building Inspector (off-set by revenues)
• Anticipated Health Insurance rate increases
At the July 5 work session, staff will provide a brief verbal overview of current status of the 2023 Budget.
A full presentation of departmental information and response from the Council will occur at the August
work session.
RECOMMENDATION
Staff requests the City Council receive an update on the 2023 Budget and provide direction on any needed
modifications.
FUNDING REQUIREMENTS - SOURCES
2022 2023
Adopted Proposed +/-
Types Budget Budget Difference Percentage
--------------------------------------------------------------------------------------------------------------------------------------
Internal Revenue Generated:
Licenses and Permits 987,100 1,118,000 130,900 13.26%
Intergovernmental 1,195,500 1,301,500 106,000 8.87%
Charges for Services 1,157,300 1,362,800 205,500 17.76%
Fines & Forfeits 95,000 96,000 1,000 1.05%
Recreational Fees 296,400 313,800 17,400 5.87%
Miscellaneous Revenues 232,500 231,500 (1,000) -0.43%
Transfers In 3,500 3,500 0 0.00%
Enterprise Revenues 6,594,930 7,154,065 559,135 8.48%
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Total Internal Revenues 10,562,230 11,581,165 1,018,935 9.65%
Levy Sources:
Special Levies 183,172 183,803 631 0.34%
General Levy 13,843,173 14,678,401 835,228 6.03%
---------------------------------------------------------------------------
Total Levy $14,026,345 $14,862,204 $835,859 5.96%
---------------------------------------------------------------------------
Total Revenue Sources $24,588,575 $26,443,369 $1,854,794 7.54%
========================================
FUNDING REQUIREMENTS - USES
2022 2023
Adopted Proposed +/-
Departments Budget Budget Difference Percentage
-------------------------------------------------------------------------------------------------------------------------------------
Council Budget 347,100 350,645 3,545 1.02%
Administration Budget 867,600 979,000 111,400 12.84%
Elections Budget 45,000 2,000 (43,000) -95.56%
Finance Budget 749,400 798,705 49,305 6.58%
General Government Budget 361,200 364,270 3,070 0.85%
Community Development Budget 1,235,900 1,307,500 71,600 5.79%
Police Budget 5,393,300 5,854,454 461,154 8.55%
Fire Budget 531,300 625,200 93,900 17.67%
Public Works Operating Budgets:
Government Buildings Budget 619,400 665,280 45,880 7.41%
Fleet Maintenance Budget 778,200 817,400 39,200 5.04%
Street Maintenance Budget 1,534,000 1,696,740 162,740 10.61%
Parks Maintenance Budget 983,400 1,057,955 74,555 7.58%
Park & Rec Budget - General Operating 1,628,900 1,743,150 114,250 7.01%
Park & Rec Budget - Steeple Ctr. Operations 158,200 147,400 (10,800) -6.83%
Park & Rec Budget - Special Programs 85,600 85,600 0 0.00%
Transfers - Arena Assistance 130,000 130,000 0 0.00%
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Total Operating Budgets - General Fund $15,448,500 $16,625,299 $1,176,799 7.62%
Building CIP Requirements 0 0 0 0.00%
Street CIP Requirements 931,361 959,302 27,941 3.00%
Equipment CIP Requirements 809,712 900,000 90,288 11.15%
Insurance Budget Requirements 450,000 450,000 0 0.00%
Port Authority Operating Levy 170,900 170,900 0 0.00%
Bonded Indebtedness 183,172 183,803 631 0.34%
Water Enterprise Fund 1,702,400 1,706,260 3,860 0.23%
Sewer Enterprise Fund 2,666,665 2,999,140 332,475 12.47%
Storm Water Enterprise Fund 1,474,265 1,682,515 208,250 14.13%
Street Light Utility Fund 220,000 220,000 0 0.00%
Arena Enterprise Fund 531,600 546,150 14,550 2.74%
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Total Funding Requirements $24,588,575 $26,443,369 $1,854,794 7.54%
=========================================
2022 GENERAL PROPERTY TAX LEVY PAYABLE 2023
GENERAL LEVY
GENERAL FUND $12,198,199
BUILDING CIP FUND $0
STREET CIP FUND $959,302
EQUIPMENT CIP FUND $900,000
INSURANCE FUND $450,000
PORT AUTHORITY OPERATING LEVY $170,900
-------------------------
TOTAL GENERAL LEVY $14,678,401
BONDED INDEBTEDNESS
G.O. IMPROVEMENT BONDS 2014A $0
G.O. CAPITAL IMPROVEMENT PLAN (CIP) REFUNDING BONDS 2015B $183,803
G.O. IMPROVEMENT BONDS 2017A - 2023 Final Pay Year $0
G.O. IMPROVEMENT BONDS 2018A $0
G.O. PORT AUTHORITY 2022A $0
-------------------------
TOTAL BONDED INDEBTEDNESS $183,803
-------------------------
GRAND TOTAL 2022 PROPERTY TAX LEVY $14,862,204
==============
SPREAD LEVY COMPUTATIONAL WORKSHEET
(INCLUDING FIRE STATION LEVY)
(Proposed)
2020 2021 2022 2023
--------------------------------------------------------------------
Total Funding Requirements 23,047,538 23,658,638 24,588,575 26,443,369
Less: Internal Revenues 10,080,000 10,233,800 10,562,230 11,581,165
--------------------------------------------------------------------
Equals: Revenues Needed 12,967,538 13,424,838 14,026,345 14,862,204
County Auditor Adjustments (All Subtractions):
Fiscal Disparities Distribution Levy (Metro Area)1,361,991 1,461,128 1,494,616 1,494,616
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Spread Levy Used to Compute Local Tax Rate 11,605,547 (1)11,963,710 (1)12,531,729 (1)13,367,588 (1)
Increase/(Decrease) from Previous Year in Spread Levy 3.09%4.75%6.67%
(1) Actual Spread Levy Based on Numbers from Dakota County
CITY OF ROSEMOUNT
WORKSHEET FOR ESTIMATING RESIDENTIAL PROPERTY TAXES (ISD #196 FIGURES)
(Rates Based on Proposed Preliminary Levy Numbers)
302,840 (Value After M/V Exclusion) 315,593 (Value After M/V Exclusion) 382,192 (Value After M/V Exclusion) 344,260 (Value After M/V Exclusion)
Market Value 312,000 (Payable 2021 Median) 323,700 (Payable 2022 Median) 384,800 (Est. Payable 2023 Median)(+18.88%)350,000
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Year 2021 2022 2023 Est. 2021 2022 2023 Est. 2021 2022 2023 Est. 2021 2022 2023 Est.
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Tax Capacity 3,028 3,028 3,028 3,156 3,156 3,156 3,822 3,822 3,822 3,443 3,443 3,443
Tax Capacity Rates:
City 0.36954 0.36949 0.32210 0.36954 0.36949 0.32210 0.36954 0.36949 0.32210 0.36954 0.36949 0.32210
County 0.22716 0.21630 0.21630 0.22716 0.21630 0.21630 0.22716 0.21630 0.21630 0.22716 0.21630 0.21630
School District 0.20046 0.19971 0.19971 0.20046 0.19971 0.19971 0.20046 0.19971 0.19971 0.20046 0.19971 0.19971
Miscellaneous 0.03802 0.03729 0.03729 0.03802 0.03729 0.03729 0.03802 0.03729 0.03729 0.03802 0.03729 0.03729
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Totals 0.83518 0.82279 0.77540 0.83518 0.82279 0.77540 0.83518 0.82279 0.77540 0.83518 0.82279 0.77540
========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
City Market Referendum 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000
ISD #196 Market Ref 0.0032712 0.0031336 0.0031336 0.0032712 0.0031336 0.0031336 0.0032712 0.0031336 0.0031336 0.0032712 0.0031336 0.0031336
Dakota County Ref 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000
2022 2023
Property Taxes:
City 1,119 1,119 975 1,166 1,166 1,017 1,412 1,412 1,231 1,272 1,272 1,109 City Taxes $1,166 $1,231
County 688 655 655 717 683 683 868 827 827 782 745 745 City Market Ref.$0 $0
School District 607 605 605 633 630 630 766 763 763 690 688 688 ----------------------------
Miscellaneous 115 113 113 120 118 118 145 143 143 131 128 128 Total Taxes - Median $1,166 $1,231
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total Property Taxes 2,529 2,492 2,348 2,636 2,597 2,447 3,192 3,145 2,964 2,875 2,833 2,669 Increase / (Decrease)$65
City Market Referendum 0 0 0 0 0 0 0 0 0 0 0 0
ISD #196 Market Ref 1,021 978 978 1,059 1,014 1,014 1,259 1,206 1,206 1,145 1,097 1,097
Dakota County Ref 0 0 0 0 0 0 0 0 0 0 0 0
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Grand Total All Taxes $3,550 $3,469 $3,326 $3,695 $3,611 $3,461 $4,451 $4,350 $4,169 $4,020 $3,929 $3,766
========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
371,510 (Value After M/V Exclusion) 414,000 (Value After M/V Exclusion)
Market Value 375,000 414,000 History of Actual Tax Capacity Rates (Using ISD #196 Rates)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Year 2021 2022 2023 Est. 2021 2022 2023 Est. 2018 2019 2020 2021 2022 2023 Est.
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Tax Capacity 3,715 3,715 3,715 4,140 4,140 4,140
Tax Capacity Rates:
City 0.36954 0.36949 0.32210 0.36954 0.36949 0.32210 0.40961 0.39355 0.38580 0.36954 0.36949 0.32210 (1), (2)
County 0.22716 0.21630 0.21630 0.22716 0.21630 0.21630 0.26580 0.25386 0.24133 0.22716 0.21630 0.21630 (2)
School District 0.20046 0.19971 0.19971 0.20046 0.19971 0.19971 0.21352 0.20613 0.19860 0.20046 0.19971 0.19971 (2)
Miscellaneous 0.03802 0.03729 0.03729 0.03802 0.03729 0.03729 0.04307 0.04227 0.04030 0.03802 0.03729 0.03729 (2)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Totals 0.83518 0.82279 0.77540 0.83518 0.82279 0.77540 0.93200 0.89581 0.86603 0.83518 0.82279 0.77540
========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
City Market Referendum 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 (2)
ISD #196 Market Ref 0.0032712 0.0031336 0.0031336 0.0032712 0.0031336 0.0031336 0.0026715 0.0026162 0.0034367 0.0032712 0.0031336 0.0031336 (2)
Dakota County Ref 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 0.0000000 (2)
Property Taxes:
City 1,373 1,373 1,197 1,530 1,530 1,334 Net Tax Capacity Percentages
County 844 804 804 940 895 895 For Residential Homesteads:
School District 745 742 742 830 827 827
Miscellaneous 141 139 139 157 154 154 Equal to or Less Than $500,000 1.00% 1.00% 1.00%
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ Over $500,000 1.25% 1.25% 1.25%
Total Property Taxes 3,103 3,057 2,881 3,458 3,406 3,210
City Market Referendum 0 0 0 0 0 0
ISD #196 Market Ref 1,227 1,175 1,175 1,354 1,297 1,297 (For 2002 Through 2011 Credit Applied to All Organizations Proportionately)
Dakota County Ref 0 0 0 0 0 0 (For 2012 and On Credit Eliminated-Replaced with Market Value Adjustment)
------------------ ------------------ ------------------ ========== ========== ==========
Grand Total All Taxes $4,329 $4,232 $4,056 $4,812 $4,704 $4,507
========== ========== ========== ========== ========== ==========
(1) This Figure Derived Using Figures Provided by Dakota County:
(a) 2022 Projected Levy Less Fiscal Disparities as of 6/29/22 13,367,588 / 41,501,006 = 32.21%
(b) Preliminary Net Tax Capacity Figure as of 2/22/22 (With M/V Exclusion) 46,073,628 19.71% Increase (Decrease) from Final Pay 2022
(c) Captured Tax Increment Tax Capacity as of 6/29/22 (1,392,302) 0.00% Increase (Decrease) from Final Pay 2022
(d) Contribution to Fiscal Disparities as of 4/1/22 (3,180,320) 0.00% Increase (Decrease) from Final Pay 2022
------------------
Last Updated - 6/29/2022 (2) These Figures Provided by Dakota County as of 4/1/2022 41,501,006
(For 2013 and on the City of Rosemount does not have a Referendum Levy)