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3. TNT 2020 Budget PresentationTRUTH IN TAXATION PUBLIC HEARING 2020 BUDGET D E C E M B E R 4 , 2 0 1 9 PURPOSE OF MEETING: ❖Purpose: To gather public comment on the City’s budget, and the property taxes needed to pay for the expenditures that are budgeted for 2020 ❖Meeting held in each taxing jurisdiction (county, city, school district, etc.) ❖Mandated by State Legislature HOW PROPERTY TAX SYSTEM WORKS ❖Assessor sets proposed property values as of January 1 for the following year taxes. Values are based on comparable sales. ❖These values are sent to the County Auditor. Auditor then sends property specific notices to property owners notifying of the value change. Included in the notice is the information about the Board of Review meeting. ❖City Council conducts Board of Review meeting in April of each year; this is when residents can question their proposed values. ❖Values are then finalized and set for calculating the taxes. ❖In September the City sets the maximum levy amount which is used to calculate taxes in notices mailed in November ❖City and other jurisdictions adopt levy and budgets in December. Tax rates are calculated by County based on the levies adopted by each jurisdiction. FORMULA FOR CALCULATING PROPERTY TAX RATES Property Tax Revenue Needed (Levy) Net Tax Capacity (NTC) City Tax Rate Total Taxable Market Value (TMV) within the City Limits State of MN mandated class rates for types of property SHARE OF TAXES City 34% School 27% County 32% Watershed 4% all other 3% Percentage of Total Property Tax Rate on Property in Forest Lake Area School District (ISD 831)/Carnelian-Marine-St Croix Watershed District (based on 2020 Preliminary Levies) YOUR PROPOSED PROPERTY TAX BILL ➢Will also be affected by: ✓Valuation changes different than median ✓Classification changes ✓Homestead Market Value Exclusion ✓School district differences, levy referenda ✓Watershed district differences ✓Other taxing districts (Metro Council, Mosquito Control, County HRA, Transit) CITY BUDGET PROCESS: ❖June/July-staff and committees draft operating budgets ❖August/September –City Council Work Session budget overview ❖September –City Council adopts resolution certifying maximum tax levy of $2,429,946 (7.08% increase for 2019) for a city tax rate of 31.094% (a city tax rate decrease of 1.3% from 2019) ❖November-County mails proposed property tax statements based on maximum levy amounts ❖December 4th -Public hearing on 2020 budget ❖December 17th -Council adopts 2020 budget SCANDIA’S BUDGET: ❖General Fund ▪Operating Budgets by Department ❖Special Revenue Funds ▪Cable Television Fund, Economic Development Authority ❖Debt Service Funds ▪Streets and Equipment ❖Capital Funds ▪General Capital Improvement, Park Improvement, Equipment Replacement, Road Improvement ❖Enterprise Funds ▪Anderson/Erickson and Bliss Wastewater Systems, Uptown Wastewater System GENERAL FUND REVENUE SUMMARY TYPE 2019 BUDGET 2020 PROPOSED %Change Property Taxes $ 1,342,592 $ 1,484,700 9.57% Other Taxes $ 15,000 $ 18,000 16.67% Licenses and permits $ 132,600 $ 133,900 0.97% Intergovernmental Services $ 70,200 $ 74,500 5.77% Charges for Service $ 63,200 $ 73,100 13.54% Fines & Forfeitures $ 10,000 $ 9,000 -11.11% Other Income and Transfers in $ 8,000 $ 8,500 5.88% TOTAL $ 2,138,562 $ 1,794,114 -19.2% GENERAL FUND EXPENDATURE SUMMARY TYPE 2019 Budget 2020 Proposed Dif. Administration & Finance $285,592 $407,100 29.85% City Council $31,000 $21,000 -47.62% Elections $2,200 $6,400 65.63% Planning & Building $125,000 $133,700 6.51% Police $136,000 $139,100 2.23% Fire $262,400 $277,800 5.54% Public works $666,900 $689,500 3.28% Parks & Recreation $82,700 $77,600 -6.57% Community Center $49,800 $49,500 -0.61% TOTAL $1,641,592 $1,801,700 8.89% BUDGET EXPENSE HIGHLIGHTS •Salaries and Wages in Preliminary Budget –Does not include implementation of the City’s classification and compensation study completed by Springsted –Budget Included 2.0% Cost of Living Adj. (COLA) for non-union staff –2.75% COLA for Union Staff –Includes no increases for the City Administrator and wage study adjustments were not included for the public works director or fire chief. –0% Wage Adjustments for the City Council and Mayor •Employee Benefits –Health Insurance increase for non-union health plan –a 0% increase was included for the SW/WC Service Cooperative Plan through IUOE Local 49 –Health Insurance Increase for union health plan –HealthPartners up 18.7% –Public Employee Retirement Association (PERA) –remains at 7.5% employer & 6.5% employee as in 2019 –Worker’s Compensation Insurance –up 5% •Property Insurance up as high as 4%, auto as high as 5%, and liability could increase as high as 6%. EXPENSE HIGHLIGHTS CONT. •Increase in police services contract by 2.2% from $135,700 to 138,800 •Largest single increase in the fire department budgeted expenses are due to the need for EMT training for new members and for the purchase of technology up grades ($4,500). The overall department increase was $14, 800 or a difference of 13.2% •$8,000 increase in ditching, road repair, and tree maintenance accounted for the largest item increase in public works budget, followed by increase expense of employee health insurance ($6,000), and salary & wages ($5,100) •Park and Recreation expenses actually went down by $7,500 due to the removal of expense for one time project accounting for the 9.7% reduction in its budget. •Community Center Expenses remain relatively unchanged from 2019 •Planning Expenses remain relatively the same, except for an additional $10,000 for updates to the city’s development code which must be completed following adoption of the new Comprehensive Plan. EXPENSE HIGHLIGHTS CONT. •Budget includes and an additional $4,200 for the 2020 elections. •The City Council budget went down after the removal of a one time cost of $10,000 for the recodification of City Ordinances. •The largest increase in administration dept. expenses came from wages ($15,000), followed by utility cost related to the solar farm subscription ($14,400), and a health insurance increase from HealthPartners ($6,800). GENERAL CAPITAL FUND REVENUE/EXPENSE SUMMARY Revenue Type 2019 BUDGET 2020 PROPOSED %Change Property Taxes $0 $0 0% Intergovernmental $111,000 $0 -100% Other Income $559,962 $2,000 -27898.1% Transfers In $0 $3,000 - TOTAL $670,962 $5,000 -13319.2% Expense Type 2019 BUDGET 2020 PROPOSED %Change Personnel Services $2,000 $0 -100% Professional Services $127,000 $0 -100% Contractual Services $0 $0 0% Capital Outlay $97,200 $430,000 77.4% Transfers Out $0 $0 0% TOTAL $226,200 $430,000 47.4% PARK CAPITAL FUND REVENUE/EXPENSE SUMMARY Revenue Type 2019 BUDGET 2020 PROPOSED %Change Property Taxes $0 $30,000 100% Intergovernmental $38,720 $32,180 -20.3% Charges for Service $7,600 $7,600 0% Other Income $140,500 $0 - Transfers $0 $0 0% TOTAL $186,820 $69,780 -167.7% Expense Type 2019 BUDGET 2020 PROPOSED %Change Personnel Services $1,400 $1,440 2.8% Professional Services $800 $820 2.4% Contractual Services $1,320 $1,360 2.9% Capital Outlay $112,370 $78,000 -440.6% Transfers Out $0 $0 0% TOTAL $215,890 $81,620 -164.5% EQUIPMENT CAPITAL FUND REVENUE/EXPENSE SUMMARY Revenue Type 2019 BUDGET 2020 PROPOSED %Change Property Taxes $30,000 $30,000 0% Intergovernmental $0 $0 0% Other Income $11,000 $11,000 0% Transfers $0 $0 0% TOTAL $41,000 $41,000 0% Expense Type 2019 BUDGET 2020 PROPOSED %Change Capital Outlay $73,000 $256,000 71.5% Transfers Out $0 $0 0% TOTAL $73,000 $256,000 71.5% ROAD CAPITAL FUND REVENUE/EXPENSE SUMMARY Revenue Type 2019 BUDGET 2020 PROPOSED %Change Property Taxes $378,930 $381,516 0.68% Intergovernmental $0 $0 0% Other Income $1,000 $10,000 90.0% Transfers $0 $0 0% TOTAL $379930 $391,516 2.96% Expense Type 2019 BUDGET 2020 PROPOSED %Change Professional Services $50,000 $50,000 0% Capital Outlay $318,290 $587,000 45.8% Transfers Out $0 $0 0% TOTAL $368,290 $637,000 42.2% SPECIAL REVENUE FUND REVENUE/EXPENSE SUMMARY (CABLE TV) Revenue Type 2019 BUDGET 2020 PROPOSED %Change Cable Franchise Fees/ PEG Fees $ 18,000 $ 18,000 0.0% TOTAL $18,000 $ $18,000 0.0% Expense Type 2019 BUDGET 2020 PROPOSED %Change Professional Services $2,000 $2,000 0.0% Contractual Services $6,920 $6,920 0.0% TOTAL $8,920 $8,920 0.0% * PEG Public, Educational, and Government (PEG) Access programming charged to cable tv subscribers ENTERPRISE 201 SYSTEMS SEWER FUND (ANDERSON/ERICKSON AND BLISS SYSTEMS) (602 ) Revenue Type 2019 BUDGET 2020 PROPOSED %Change Property Taxes $0 $0 0.0% Special Assessments $600 $600 0.0% Intergovernmental $0 $0 0.0% Other Income $200 $200 0.0% Charges for Service $86,300 $90,615 4.76% Transfers In $0 $0 0.0% TOTAL $90,900 $91,415 0.56% ENTERPRISE 201 SYSTEMS SEWER FUND (ANDERSON/ERICKSON AND BLISS SYSTEMS) (602 ) Expense Type 2019 BUDGET 2020 PROPOSED %Change Personnel $20,600 $26,900 23.4% Materials and Supplies $1,300 $1,550 16.1% Professional Services $21,725 $8,000 -63.2% Contractual Services $6,900 $10,200 32.4% Operational Expenses $37,300 $39,025 4.8% Depreciation $49,700 $49,700 0.0% Transfers Out $0 $0 0.0% TOTAL $137,525 $135,375 -1.6% ENTERPRISE UPTOWN SEWER FUND (612) Revenue Type 2019 BUDGET 2020 PROPOSED %Change Property Taxes $0 $0 0.0% Special Assessments $0 $0 0.0% Intergovernmental $0 $0 0.0% Other Income $0 $0 0.0% Charges for Service $20,800 $21,800 4. 6% Transfers In $0 $0 0.0% TOTAL $20,800 $21,800 4. 6% ENTERPRISE UPTOWN SEWER FUND (612) Expense Type 2019 BUDGET 2020 PROPOSED %Change Personnel $8,400 $9,250 9.2% Materials and Supplies $225 $275 18.2% Professional Services $0 $350 - Contractual Services $1,325 $1,300 -1.9% Operational Expenses $5,970 $6,395 6.6% Depreciation $4,877 $4,877 0.0% Transfers Out $0 $0 0.0% TOTAL $21,397 $22,447 -4.7% NEXT STEPS ❖Open hearing for comments and questions ❖Adoption of 2020 budget and tax levy at the Council meeting on Tuesday, December 17, 2019 (7:00 p.m.)