6. Discussion on 2019 Operating and Capital budgetsSC DILA
Staff Report
Date of Meeting: August 1, 2018
To: City Council
From: Neil Soltis, Administrator
Re: 2019 Operating and Capital budgets
Background: The proposed 2019 budget information provided is based on a series of assumptions
that reflect known or anticipated changes to the levels of services provided for in the 2018 budget
and information submitted by the Departments. These changes are based on projected inflation,
historical spending patterns, and information provided by outside sources regarding charge or rate
increases. A listing of those assumptions and other changes that are reflected in the financial
information follow the financial information.
Based on these inflationary increases and minor adjustments to departmental expenditures, the
2019 General Fund expenditures (net of any transfers) would be $1,667,200 which is $95,900 less
than the 2018 budget. The tax levy needed to support these levels of service provided by the
General Fund would be $1,375,800 which is $29,480 greater than the amount levied for 2018. The
levy for all funds, which includes debt service and the Local Road Improvement Fund, would be
$2,291,080 which is $36,708 (1.63%) greater than the 2018 levy.
This is a starting point for the budget discussions.
The goals in order to move forward with the budget are the following:
1. Discuss any changes that should be made to the assumptions
2. Discuss any changes that should be made to the changes proposed by staff
3. Discuss any changes that should be made to the current levels of service provided
4. Discuss other changes to the programs, activities, or services provided
5. Discuss changes to expenditures from the Capital Funds proposed by staff or Committees.
Based on this discussion and information that is not currently available, the budgetary information
will be recast for further discussion at the September work session.
At the September City Council meeting, action will need to be taken by the Council to set the
maximum levy amount for taxes to be collected in 2019.
BUDGET DISCUSSION
COUNCIL WORK SESSION - 08/01/2018
Total by Department
$ 1,818,391 $ 2,210,975 $ 2,163,100 $ 1,667,200
GENERAL FUND REVENUE SUMMARY
Account
2016 Actual
Account
2017 Actual
2016 Actual
2018 Budget
2017 Actual
2019 Budget
2018 Budget
Personal Service
2019 Budget
Property Taxes
$
1,484,612
$
1,531,749
$
1,346,320
$
1,375,800
Other Taxes
$
16,661
$
18,431
$
13,200
$
13,200
Licenses and permits
$
160,513
$
366,902
$
132,600
$
132,600
Intergovernmental Services
$
63,890
$
115,107
$
63,800
$
70,200
Charges for Service
$
65,252
$
63,915
$
60,900
$
63,200
Fines & Forfeitures
$
11,792
$
8,415
$
12,000
$
10,000
Other Income and Transfers in
$
41,358
$
49,637
$
15,800
$
8,000
Total by Object
$
1,844,078
$
2,154,157
$
1,644,620
$
1,673,000
Total by Department
$ 1,818,391 $ 2,210,975 $ 2,163,100 $ 1,667,200
GENERAL FUND EXPENDITURE SUMMARY BY OBJECT
Account
2016 Actual
2016 Actual
2017 Actual
2017 Actual
2018 Budget
2018 Budget
2019 Budget
2019 Budget
Personal Service
$
552,483
$
605,052
$
690,300
$
709,500
Materials & Supplies
$
107,476
$
116,452
$
184,900
$
173,900
Contractual Services
$
805,510
$
938,605
$
857,900
$
777,400
Capital Outlay
$
5,197
$
27,666
$
6,500
$
3,400
Transfers
$
347,724
$
523,200
$
423,500
$
3,000
Total by Object
$
1,818,391
$
2,210,975
$
2,163,100
$
1,667,200
Total by Department
$ 1,818,391 $ 2,210,975 $ 2,163,100 $ 1,667,200
GENERAL FUND EXPENDITURE SUMMARY BY DEPARTMENT
Account
2016 Actual
2017 Actual
2018 Budget
2019 Budget
Administration & Finance
$
320,225
$
331,274
$
344,000
$
324,300
City Council
$
17,645
$
19,291
$
19,500
$
20,400
Elections
$
5,428
$
1,765
$
6,200
$
2,200
Planning & Building
$
112,602
$
213,887
$
126,300
$
119,200
Police
$
120,696
$
128,656
$
127,200
$
134,300
Fire
$
200,280
$
213,208
$
271,500
$
259,200
Public Works
$
603,020
$
679,904
$
730,500
$
685,400
Parks & Recreation
$
53,008
$
63,411
$
69,300
$
74,200
Community Center
$
37,763
$
36,380
$
45,100
$
45,000
Transfer
$
347,724
$
523,200
$
423,500
$
3,000
Total by Department
$ 1,818,391 $ 2,210,975 $ 2,163,100 $ 1,667,200
BUDGET DISCUSSION
COUNCIL WORK SESSION - 08/01/2018
TAX LEVY
Fund 2016 Actual 2017 Actual 2018 Budget 2019
General Fund
$
1,484,612
$
1,531,749
$
1,346,320
$
1,375,800
Debt Service Fund
$
148,582
$
116,739
$
152,202
$
564,100
Capital Improvement Fund
$
30,000
$
30,000
$
-
$
-
Equipment Replacement
$
-
$
-
$
30,000
$
30,000
Local Road Improvement
$
581,142
$
560,533
$
725,050
$
316,180
Economic Development Authority
$
-
$
5,000
$
800
$
5,000
Total Levy
$
2,244,336
$
2,244,021
$
2,254,372
$
2,291,080
$ 3.80
$
3.80
$
3.71
$
Levy Calculation 2016 Actual 2017 Actual 2018 Budget 2019 Budget
Estimated Market Value
Taxable Market Value
Levy Capacity
Taxable value
Levy Amount
Fiscal disparity
Localtaxlevy
% of capacity levied
tax rate
Levy / $1,000 of taxable market valuation
$ 622,802,500
$
622,612,400
$
642,439,900
$
687,795,100
$ 589,914,400
$
590,055,800
$
607,952,500
$
655,195,300
$ 6,029,832
$
6,023,919
$
6,226,982
$
6,735,177
$ 5,873,543
$
5,864,023
$
6,091,001
$
6,599,196
$ 2,244,336
$
2,257,872
$
2,254,372
$
2,291,080
$ (155,098)
$
(159,896)
$
(135,981)
$
(135,981)
$ 2,089,238
$
2,097,976
$
2,118,391
$
2,155,099
37.22%
37.48%
36.20%
34.02%
35.57%
35.78%
34.78%
32.66%
$ 3.80
$
3.80
$
3.71
$
3.50
BUDGET DISCUSSION
COUNCIL WORK SESSION 08/01/18
BUDGET ASSUMPTIONS
PERSONAL SERVICE
Pay structure - merit step increases for non -bargaining unit employees - 2.00%
Pay structure - bargaining unit employees - 2.75%
Mayor & Council wages increase based on Ordinance 156 - 5.2%
Health insurance - bargaining unit - estimated - 10.0%
Health insurance - non -bargaining unit - per renewal information from insurer - 21.0%
PERA contribution rates - no change in rate - 0.0%
Social security & medicare - no change in rate - 0.0%
Workers Compensation - League range 3-6% increase - 6.0%
Wage allocations
Administrator - 20% to Planning 20.00%
Public Works Director - 201 Sewer Systems 12.50%
Public Works Director - 5% Uptown Sewer System 4.00%
Wage allocation estimates
Public Works staff - Parks Maintenance
Public Works staff - Community Building Maintnenance
Public Works staff - Uptown Sewer System
PT Parks - 20% to Park Improvement fund for lighted ballfield maintenance
Public Works staff - 201 Sewer Systems
CONTRACTUAL SERVICES
League of Minnesota Cities dues increase
Property insurance - League range 2 - 3% increase
Liability Insurance - League 2-6% increase
Auto damage & liability - League range 3 - 5% increase
Xcel - electricity -
Contract with Sheriff Department - estimated increase
Building Permit fees - 45% of Building permit revenues
REVENUES
Building permits - $130,000 less than 2018 projected, $254,000 less than 2017 actual
7.50%
3.00%
3.00%
20.00%
5.50%
0.0%
4.0%
2.0%
6.0%
- 0.0%
BUDGET DISCUSSION
COUNCIL WORK SESSION - 08/01/18
2018 2019 CHANGE
GENERAL FUND CHANGES FOR DISCUSSION
CHANGES FROM STAFF REFLECTED IN THE BUDGET AS PRESENTED
REVENUE
No cable franchise fees to General Fund
Lakes Area Television accounting services
Fines and Forfeitures
EXPENDITURES
ADMINISTRATION
Lakes Area Television - withdraw from joint powers agreement 6/30/2018
No transfer of fund balance to EDA
ELECTIONS
Off year election cycle
PLANNING - COMPREHENSIVE PLAN UPDATE
Planner - Code changes based on Comprehensive Plan
Remainder on comprehensive planning agreement ($43,000 in 2017)
FIRE
PUBLIC WORKS
Allowance for fuel cost increase (2016/2017 actual $10,809 / $13,833)
Decreased salt usage (2016/2017 actual $20,368 / $22,784)
Road Maintenance supplies (2016/2017 actual $16,561 / $15,930)
Contractual Road Maintnenance & Repair
PARKS
Additional PW & Seasonal wages
COMMUNITY BUILDING
Added wages for Public Works maintenance
GROUP HOSPITALIZATION INSURANCE
- $
6,000
$
- $
(6,000)
- $
1,800
$
3,600 $
1,800
- $
12,000
$
10,000 $
(2,000)
- $
5,300
$
- $
(5,300)
- $
20,000
$
- $
(20,000)
-
6200
$
2,200 $
(4,000)
- $
25,000
$
30,000 $
5,000
- $
15,000
$
2,000 $
(13,000)
- $
20,000
$
26,000
$
6,000
- $
40,000
$
32,000
$
(8,000)
- $
30,000
$
25,000
$
(5,000)
- $
215,000
$
140,000
$
(75,000)
- $
11,500
$
14,000
$
2,500
- $
2,400
$
4,800
$
2,400
- $
84,100
$
93,200
$
9,100
BUDGET DISCUSSION
COUNCIL WORK SESSION - 08/01/18
2018 2019 CHANGE
CHANGES THAT ARE NOT REFLECTED IN THE BUDGET AS PRESENTED
COUNCIL
Codify City Ordinances - $ - $ 10,000 $ 10,000
Replace meeting tablets as needed $ - $ 600 $ 600
PUBLIC WORKS
Computer replacement
PARKS
Additional Senior and Youth programming
Path & culvert to T -ball field
Buckthorn control @ Lilleskogen
Aquatic Invasive species boat inspections ($3,500 in 2018)
$ - $ 2,000 $ 2,000
- $ - $ 3,500 $ 3,500
$ - $ 5,000 $ 5,000
- $ 3,500 $ 3,500 $ -
BUDGET DISCUSSION
COUNCIL WORK SESSION - 08/01/18
2018
2019
CHANGE
CAPITAL FUNDS CHANGES FROM 2018 - 2022 CAPITAL IMPROVEMENT PLAN
CAPITAL IMPROVEMENT FUND
Bliss Addition Stormwater Plan - 100% of cost to be partially offset by
Watershed District
- $ -
$
30,000
$ 30,000
Fire Department - LED lighting - would be offset by savings in the General Fund
- $ -
$
30,000
$ 30,000
PARK CAPITAL IMPROVEMENT FUND
Lilleskogen - wetland restoration -
$ -
$
10,000
$ 10,000
Concrete slabs under bleachers -
$ -
$
10,000
$ 10,000
Path from t -ball field to community building / pleasure rink expansion -
$ -
$
10,000
$ 10,000
Clearing and trails at nature parks (Bone Lake, Big Marine School site, Orwell
Court)
- $ -
$
10,000
$ 10,000
Settlers monument improvements -
$ -
$
5,000
$ 5,000
Doors for pavilion and water source at Lions Park -
$ -
$
15,000
$ 15,000
LOCAL ROAD IM[PROVEMENT FUND
Engineering for 2020 Road Improvement projects -
$ -
$
50,000
$ 50,000
CAPITAL IMPROVEMENTS (FUND 401)
2016 2017 2018 2018 2019
Actual Actual Projected Budget Proposed
FUND BALANCE
Revenue
$
31,144
$
32,412
$
443,500
$
456,000
$
26,500
6,000
Advance from (to) 201 Sewer Fund
$
2,639
$
2,639
$
2,639
$
2,639
Expenditures
$
2,370
$
13,642
$
193,635
$
253,650
$
127,000
Information Technology
Net Revenues (Expenditures)
$
28,774
$
18,770
$
249,865
$
202,350
$
(100,500)
$
476,339
800
Server
$
5,300
Balance January 1
$
356,058
$
384,832
$
403,602
$
403,602
$
605,952
Community Building
Balance December 31
$
384,832
$
403,602
$
653,467
$
605,952
$
505,452
Interfund Loan from (to) Park Capital Fund
EXPENDITURES BY DEPARTMENT
$
6,000
$
9,000
$
9,000
$
6,000
$
6,000
Advance from (to) 201 Sewer Fund
$
2,639
$
2,639
$
2,639
$
2,639
$
2,639
$
30,000
Information Technology
CASH BALANCE 12/31
$
326,802
$
357,211
$
618,715
$
568,200
$
476,339
EXPENDITURES BY DEPARTMENT
General
Hoiday decorations
$ 6,000
$
6,000
Bliss Additional Stormwater plan
$
30,000
Information Technology
Firewall appliance
$
1,300
Gigabit ethernet switch
$
800
Server
$
5,300
Broadband Feasibility Study
$ 9,350
$
9,350
Community Building
Building lighting conversion to LED
$ 33,285
$
33,300
Skateboard ramps
$
12,000
Tennis court resurfacing
$ 45,000
$
45,000
Fire
Emergency Generator
$ -
$
66,000
Roof replacement
$
100,000
HVAC replacement
$
15,000
LED lighting improvements
$
30,000
Parks
South Ballfield backstop
$
6,335
Log House Landing
Boat ramp
$ 2,370 $
-
$ -
205th Street - bound aggregate
improvement
$ 2,370 $
13,735
$ 93,635
$
153,650
$
157,000
PARK CAPITAL IMPROVEMENTS (FUND 404)
2016 2017 2018 2018 2019
Account Description Actual Actual Projected Budget Proposed
FUND BALANCE
Revenue
$
8,253
$
5,582
$
248,919
$ 315,700
$
8,200
Designated - Lilliskogen
$
(24,907)
$
(21,407)
$
(14,688)
$ (22,907)
$
(18,688)
Expenditures
$
-
$
3,768
$
102,450
$ 118,220
$
63,240
Designated - Skating Rink
$
-
$
-
$
-
$ -
Net Revenues (Expenditures)
$
8,253
$
1,814
$
146,469
$ 197,480
$
(55,040)
Balance January 1
$
(19,812)
$
(11,559)
$
(9,745)
$ (9,745)
$
136,724
Balance December 31
$
(11,559)
$
(9,745)
$
136,724
$ 187,735
$
81,684
Advance from (to) Capital Improvement fund 1 $ (6,000) $ (3,000)T$ (6,000) $ (6,000) $
CASH BALANCE 12/31 $ 17,4411 $ 16,255 1 $ 156,724 1 $ 207,735 1 $ 95,684
Balance by sub -fund
Undesignated
$
(1,777)
$
(1,645)
$
138,355
$ 198,356
$
98,356
Designated - Lilliskogen
$
(24,907)
$
(21,407)
$
(14,688)
$ (22,907)
$
(18,688)
Designated - Wayne Erickson
$
15,125
$
13,307
$
13,057
$ 12,287
$
3,057
Designated - Skating Rink
$
-
$
-
$
-
$ -
$
(11,559)
$
(9,745)1
$
136,724 1
$ 187,735 1
$
82,724
Balance due to Capital Improvement Fund $ 29,000 $ 26,000 $ 20,000 $ 20,000 $ 14,000
IMPROVEMENTS BY LOCATION
Lilleskogen - to be 100% funded through grants & donations
Parking lot
Picnic shelter $ - $ - $ - $ 15,000
Lilleskogen - wetland restoration $ 10,000
$ - $ - $ - $ 15,000 $ 10,000
Wayne Erickson - to be funded through advertising revenues
Bleacher/ Concession improvements
Concrete slabs under bleachers
Undesignated
Path from t -ball field to community bi
Clearing and trails at nature parks
(Bone Lake, Big Marine School site,
Orwell Court)
Settlers monument improvements
Doors for pavilion and water source a
$ -
$ 3,169 $ - $ -
$ 10,000
$ -
$ 3,169 $ - $ - $ 10,000
ilding / pleasure rink expansion
$ 10,000
$ 10,000
$ 5,000
Lions Park
$ 15,000
$ - $ -
$ -
$ 40,000
Account Description
Revenue
EQUIPMENT REPLACEMENT (FUND 406)
2016 2017 2018 2018 2019
Actual Actual Projected Budget Proposed
FUND BALANCE SUMMARY
30.454 1 S 171.834 1 S 40.540
Expenditures
$
- 1 $
195,093 1 $
155,961 1 $
145,500 1 $
43,000 1
Net Revenues (Expenditures)
$
30,454 1 $
(23,259) $
(115,421) $
(84,960)1 $
18,000
Balance January 1
$
470,608 $
501,061 $
477,802 $
477,802 $
392,842
Balance December 31
$
501,061 $
477,802 $
362,382 $
392,842 $
410,842
EXPENDITURES BY DEPARTMENT
Public Works
Replace 2002 Sterling dump
truck & plow $ 155,961
Replace 2009 John Deere 1445
mower w broom & blower $ 32,500
Purchased used roller ; $ 6,633 ; ;
Replace 2008 Ford F350 +plow ; ; ; ; ; $ 43,000 ;
Tailgate sander - Ford F550 $ 6,100 , $ 7,000 ,
Replace 2008 Ford Ranger i i i i$ 36,500
Fire
SCBA & Masks $ $ 106,918 ; $ 107,540
SCBA Air Compressor $ $ - $ 17,000
Replace 1995 Ford - Grass Rig
#5175 $ $ 90,470 $ 85,000
Radio replacement I ; $ 75,000
Replace 2003 Peterbuilt Tanker - I I I I I
#5178 '
Replace engine on 2000 Pumper
truck - #5176 '
Thermal Imaging Camera $ $
Community Center
Zamboni replacement I I I I I
$ - $ 195,093 $ 203,488 $ 253,040 $ 118,000
LOCAL ROAD IMPROVEMENT (FUND 408)
2016 2017 2018 2018 2019
Description Actual Actual Projected Budget Proposed
FUND BALANCE SUMMARY
317,180
$ 965,806 ; $ 88,753 ; $ 5,117,965 ; $ 6,500,000 ; $ 50,000 ;
$ (28,936)1 $ 1,081,016 j $ (522,994) $ (1,360,250)1 $ 267,180 1
$ 402,956 I $ 374,020 I $ 11455,036 I $ 1,477,853 I $ 932,042
1 $ 374,020 1 $ 1,455,036 1 $ 932,042 1 $ 117,603 1 $ 1,199,222 1
EXPENDITURES
Engineering Services , $ , $ 88,753 , $ 350,000 , $ 50,000 , $ 50,000 ,
Debt issuance costs $ $ - $ 42,965 i $ - i $ i
$ $ 88,753 $ 392,965 $ 50,000 $ 50,000
Capital Improvements other than Bldgs 1 $ 965,806 1 $ $ 4,725,000 1 $ 6,450,000 1 $
$ 965,806 ; $ ; $ 4,725,000 ; $ 6,450,000 ; $ ;
$ 965,806 : $ 88,753 : $ 5,117,965 $ 6,500,000 : $ 50,000
Description 2016 Actual 2017 Actual 2018 Proj.
2018 Budget 2019 Budget
Base $
581,142 i $
560,533 i $ 725,050 i $
581,000 i $
610,050
Increase in base $
- $
- $ -
$
29,050 $
-
Sealcoat funds from General Fund I $
$
$
$
115,000 $
115,000
Debt Service on bonds ' $
- ; $
- ; $ -
; $
- ; $
(408,870) ;
$
581,142 $
560,533 $ 725,050
$
725,050 $
316,180