10-29-2008 Budget Workshop CITY OF SCANDIA
CITY COUNCIL AGENDA
SPECIAL MEETING
Wednesday, October 29, 2008
6:00 p.m.
1. Call to Order
2. Discussion of Draft 2009 Budget
3. Adjournment
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SCANDIA
Menlo minnesota
To: Mayor and City Council
From: Anne Hurlburt, City Administrator
Date: October 27, 2008
Re: 2009 Budget, "201" Community Sewage Treatment System
Attached for the Council's review are draft 2009 revenue and expenditure budgets for the"201"
community sewage treatment system. The draft assumes that there would be NO increase to the user
charges in the coming year,with revenues exceeding projected expenses by approximate$800.00.
New ordinances governing operation of the sewer system were adopted in February,which included a
new billing and cost allocation system. All users are billed equally,in four installments. The 2008
rate is$548.94 per year. A goal was set to stabilize the billings so they did not fluctuate significantly
from year to year. We also identified the need to set aside reserves for variable operation costs and to
increase reserves for long-term replacements.
A few highlights of the draft budget:
• The maintenance and operations contract with the county would decrease, as 2009 will be a year
during which significant amounts of pumping should not be required.
• The annual contribution to long-term reserves (#120,Depreciation)has been increased by 10%,
from $5,000 to$5,500.
• A new line item(#438)has been added to indicate that a sum($5,000)would be allocated to a
new operating reserve for future pumping costs.
• The operating transfer to the general fund would increase to reflect our most recent estimate of
staff time needed for administration and grounds care, as well as the cost of supplies and postage
used for billings. This transfer is made so that taxpayers do not subsidize the sewer system.
• The line item for utilities has been increased by 20% for 2009, the same assumption as for other
city budgets.
• Page 1
One reason no rate increase is necessary is that the 2008 user fee was calculated with the assumption
that there were 94 customers,based on Washington County data. After that, a concerted effort was
made to eliminate errors in the database and to collect from all the users. One new connection was
added. The 2009 draft budget assumes 100 system users. No additional connections or users were
assumed in the budget calculations.
The addition to long-term reserves is fairly modest. If the Council wished to increase this
contribution,a rate increase would be necessary. A 1%increase in user rates would produce revenue
of about$549.00.
Attachments:
• Expenses,201 Sewer Project(602)
• Revenues,201 Sewer Project Fund 602
• Page 2 2
EXPENSES
201 SEWER PROJECT(602)
2006 2007 2008 9/30/2008 2008 2009 Change
Actual Actual Adopted Year-to-Date Estimated Proposed '08-'09
Account Description Expenses Expenses Budget Expdtrs Expdtrs Budget Budget Notes:
Materials&Supplies
203 Printed Forms&Papers 514 20 -100.00% 1
Total Materials&Supplies 514 20 -100.00%
Contractual Services
311 Permit Fees 505 885 505 900 1.69%
321 Telephone 888 900 666 1,056 1,162 29.07%
322 Postage 62 -100.00%
360 Insurance 2,948 1,075 1,075 1,123 #DIV/0!
381 Utilities 1,238 2,210 1,500 1,117 1,500 1,800 20.00%
386 201 Operation&Maintenance 24,648 34,408 39,888 27,232 42,232 36,000 -9.75%
406 Grounds Care 300 #DIV/0!
420 Depreciation Expense 30,000 30,000 5,000 5,000 5,500 10.00% 3
438 Misc Contractual 5,000 #DIV/O! 3
Total Contractual Services 57,579 70,080 48,255 30,594 50,863 51,485 6.69%
Transfers
720 Operating Transfers 3,339 3,339 3,339 3,600 7.82% 2
Total Transfers 3,339 3,339 3,339 3,600 7.82%
Total 201 Sewer Project(602) 57,579 70,594 51,614 33,933 54,202 55,085 6.72%
1.Stationery&envelopes
2.Transfer to General Fund for staff time&grounds care,postage&supplies
3.Add to depreciation for long term reserves($5,500),add an operating reserve for pumping in future years($5,000)
1 of 1 201 SEWER 3:04 PM 10/26/2008
REVENUES
201 PROJECT SEWER FUND 602
2009
2006 2007 2008 09/30/08 2008 Total
Actual Actual Adopted Year-to-Date Estimated Proposed
Account Description Revenue Revenue Budget Revenue Revenue Revenue Notes:
36100 Special Assessments 5,920 13,903 2,585 1,663 1,663 1,500
Other Income
36210 Interest Income 4,315 4,948 4,246 0 3,880 2,250
Total Other Income 4,315 4,948 4,246 0 3,880 2,250
Proprietary Fund Revenues
34401 Sewer Charges 27,932 22,024 49,009 40,172 42,074 52,149 1
Total Proprietary Fund 27,932 22,024 49,009 40,172 42,074 52,149
Total 201 Project Sewer Fund 602 38,167 40,874 55,840 41,835 47,617 55,899
1 Assumes 95%collection of billings totalling$54,894--no rate increase to users
1 of 1 201 SEWER REV 2:37 PM 10/27/2008
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CANDIA
Memo m i n nes o to
To: Mayor and City Council
From: Anne Hurlburt, City Administrator
Date: October 27, 2008
Re: 2009 Draft Budget—Information for October 29 Work Session
Attached for the Council's review are two summary worksheets showing the current status of the
2009 revenue and expenditure budgets. Also attached is a worksheet recapping the 2009 proposed tax
levies.
There have been only a few minor changes to the individual department expense budgets since the
draft prepared for the August 26, 2008 work session. The net result was a reduction of less than$200
in expenditures. Therefore, we have not printed new worksheets,but request that you bring the
August 26 budget information for discussion at the upcoming meeting. If you no longer have this
information,please let me know as soon as possible and we'll make additional copies.
The revenue budget worksheet is new information. For 2008, we prepared a single revenue budget for
the entire general fund. Our auditors have requested that we distribute revenues to individual
departments, which we have done for 2009 except for the general purpose tax levy. That would be
distributed to balance each department budget after the expense budgets are set.
Currently, the draft budget shows total revenues to be$24,036 less than expenses. At least this
amount would need to be cut from expense budgets to balance the budget. It may also be possible to
shift some expenses to reserve funds.
The projections for the three capital funds for 2009 (from the August budget memo) are:
2008
Fund Balance 2009 Expense 2009 Revenue Net
401 Capital Improvements $200,346 $23,000 $0 $177,346
404 Parks Capital Improvements $35,338 $40,000 $0 -$4,662
406 Equipment Replacement $49,732 $25,000 $40,000 $64,732
Total $285,416 $88,000 $40,000 $237,416
• Page I
I recommend that the Council review each department budget and give your direction for changes to
bring the budget into balance. In making the budget changes, the Council may wish to consider the
following issues which were identified in the August budget memo:
• The funding for road maintenance falls significantly short of the needs identified by the
Pavement Management Study.
• Contributions to the equipment replacement fund fall far short of the need identified by the
Capital Improvement Program,significantly increasing the need to borrow in future years.
• Little or nothing would be added to fund balances needed for cash flow or future
contingencies.
• Balances in the Capital Improvements Fund and Park Capital Improvement Funds would
decrease, as projects would be funded but no revenues would accrue.
• Even though some funds for planning consulting($75,000)has been included in the draft
budget it may not be sufficient to complete the ordinance updates and other work
anticipated by the Comprehensive Plan.
Since the last budget meeting, the Fire Department has also indicated that they may wish to increase
their request for the municipal contribution to the Fire Relief Association. Investment earnings in the
fund are down,as are contributions from the State of Minnesota. The current draft shows a
contribution of$75,000 of city funds in 2009(compared to$50,000 in 2008.)
The Council has scheduled another work session for Thursday, November 20(6:00 p.m.)to continue
discussions on the budget. A draft budget should be available for discussion with the public at the
Truth in Taxation Hearing on December 8. The final budget would tentatively be adopted at the
December 16, 2008 regular City Council meeting.
• Page 2 2
2009 Tax Levy Calculation
2008 2009
Special Levies
Bonded Debt
2004 Blacktop Fund 304 $150,000.00 $100,000.00
2007 Blacktop Fund 307 $42,000.00 $174,000.00
Fire Hall/Public Works Fund 310 $126,000.00 $106,000.00
Subtotal, Debt Levy $318,000.00 $380,000.00
Police Personnel Costs $93,248.94 100,804.77
Fire Personnel Costs $71,798.00 $81,915.23
PERA Increase Since 2001 $4,216.00 $4,451.00
Total, Special Levies $487,262.94 $567,171.00
2009 Levy Limit Calculation
Pay 2008 Final Total Levy $1,703,589
Deduct Special Levies -$487,263
Add LGA Lost $25,134
Levy Base= $1,241,460
Multiply by:
Inflation Adjustment(3.9%) 1.039000
Household Adjustment Factor 1.002699
New CI Adjustment Factor 1.000280
Pay 2009 Levy Limit Base $1,293,721
Add 2009 Special Levies:
Police Personnel Costs $100,805
Fire Personnel Costs $81,915
PERA Increase Since 2001 $4,451
Debt Service $380,000
Total 2009 levy $1,860,892
Maximum 2009 Levy Certified to Washington County 9/15/08
General Revenue $1,480,892
Debt Service $380,000
Total $1,860,892
General Fund Revenues vs Expenditures (draft budget as of 10/27/08)
Draft Revenues $1,757,588.00
- Draft Expenditures $1,781,624.95
=(Shortfall) or Surplus ($24,036.95)
1 of 1 2009 Revenue Budget Special Levies & limit 12:19 PM 10/27/2008
DRAFT FOR DISCUSSION AT OCTOBER 29, 2008 WORK SESSION
2009 Proposed Expenditure Budget
Summary by Fund and Department
Personal Materials & Contractual Capital
Fund Dept. Description Services Supplies Services Outlays Debt Service Transfers Total
101 41000 Administration & Finance $166,590 $9,500 $172,072 $348.162
41110 City Council $16,156 $2,000 $18.156
41410 Elections $495 $495
41910 Planning & Building $83,323 $3,280 $137,894 $400 $450 $225,347
42000 Police $117,366 $117,366
42200 Fire $81,915 $46,875 $179,603 $15,000 $21,220 $23,571 $368,184
43000 Public Works $169,398 $79,202 $311,823 $10,000 $14,780 $585,203
43210 Uptown Water & Sewer $5,880 $5.880
45000 Parks $25,176 $3,650 $21,081 $5,000 $1,199 $56,106
45180 Community Center $5,038 $6,500 $45,189 $56,727
General Fund Total $547,595 $149,007 $993,403 $30,400 $21,220 $40,000 $1,781,625
304 2004 Blacktop $247,920 $247,920
307 2007 Blacktop $181,038 $181,038
310 Fire Hall/ Public Works $111,140 $111,140
Debt Service Funds Total $540,098 $540,098
401 Capital Improvements $23,000 $23,000
404 Parks Capital Improvements $15,000 $25,000 $40,000
406 Equipment Replacement $25,000 $25,000
Capital Funds Total $15,000 $73,000 $88,000
602 201 Sewer $51,485 $3,600 $55,085
Enterprise Funds Total $51,485 $3,600 $55,085
All Funds, Total Expenditures $547,595 $149,007 $1,059,887 $103,400 $561,318 $43,600 $2,464,808
1 of 1 EXPENSE SUMMARY 12:05 PM 10/27/2008
DRAFT FOR DISCUSSION AT OCTOBER 29, 2008 WORK SESSION
2009 Proposed Revenue Budget
Summary by Fund and Department
Intergovern-
Licenses & mental Charges for Fines & Special Other
Fund Dept. Description Taxes Permits Revenues Services Forfeitures Assessments Revenues Total
101 General Fund
41000 Administration & Finance"' $1,480,892 $5,775 $7,362 $1.575 $15,000 $0 $18,789 $1,529,393
41110 City Council $0 $0 $0 $0 $0 $0 $0 $0
41910 Planning & Building $0 $35,000 $0 $75,000 $0 $0 $0 $110,000
41410 Elections $0 $0 $0 $0 $0 $0 $0 $0
42000 Police $0 $0 $0 $0 $0 $0 $0 $0
42200 Fire & Rescue $0 $0 $25,000 $30,000 $0 $0 $0 $55,000
43000 Public Works $20,000 $500 $0 $16,500 $0 $0 $1,100 $38,100
43210 Uptown Sewer& Water $0 $0 $0 $3,520 $0 $0 $0 $3,520
45000 Parks & Recreation $0 $5,550 $0 $0 $0 $5,550
45180 Community Center $0 $0 $16,025 $0 $0 $0 $16,025
General Fund Total $1,500,892 $41,275 $32,362 $148,170 $15,000 $0 $19,889 $1,757,588
302 2002 Blacktop $0 $0 $0 $0
304 2004 Blacktop $100,000 $44,360 $3,893 $148,253
307 2007 Blacktop $174,000 $45,306 $0 $219,306
310 Fire Hall/Public Works $106,000 $6,707 $112,707
Debt Service Funds Total $380,000 $0 $0 $0 $0 $89,666 $10,600 $480,266
401 Capital Improvements $0 $0 $3,724 $3,724
404 Parks Capital Improvements $0 $0 $688 $688
406 Equipment Replacement $40,179 $40,179
Capital Funds Total $0 $0 $0 $0 $0 $0 $44,591 $44,591
602 201 Sewer $1,500 $54,399 $55,899
Enterprise Funds Total $0 $0 $0 $0 $0 $1,500 $54,399 $55,899
All Funds, Total Revenues $1,880,892 $41,275 $32,362 $148,170 $15,000 $91,166 $129,479 $2,338,344
*** General Fund property tax revenues will be distributed among departmental budgets per Auditor's recommendation
1 OF 1 REV SUMMARY 2:23 PM 10/27/2008