3)a Draft Proposed 2023 Budget Summary 9-7-20222023 Budget/Levy Discussion
September 7, 2022 – City Council Budget Workshop
Tonight’s Discussion will focus on:
•Brief Introduction to the proposed 2023 General Fund Budget
•Review of Rough 2023 Draft Proposed Capital Improvement Plan.
•Review the General Fund and Capital Improvement Plan’s Projected Costs
and Impacts
You are encouraged to share comments questions and changes to the proposal
at anytime!
9/7/2022Draft 2023 Budget Proposal Summary Presentation 2
General Fund 101 Highlights
•An 11precent increase in tax levy amount over last year for $1,759,213, and this accounts for most of the 10.3% increase in revenue.
•Wages have been increased 5.77% based on the 2019 Wage Study Salary Tables.
•Non-union health insurance has estimated to increase by 10% but actual estimates will not be available to the last week in September. Costs could be much lower or
higher.
•Union health insurance is estimated to change by 5%.
•Workers Compensation insurance and Property, Casualty, and Liability has 10%
increase
•Administration
•$3,800 increase for Insurances, $3,300 increase in software licensing, $4,000
increase for financial advising, $15,000 increase in legal services, $3,500 increase
for audit, and $8,700 for health insurance
•Decreases to training costs, operating supplies, share of disability costs due to
reallocations, equipment rental, general legal notice publications.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 3
General Fund 101 Highlights
•Mayor/Legislative
•Decrease in travel budget
•Elections
•Decreased due to no elections in 2023 just equipment maintenance costs.
•Planning and Building
•$22,000 increase for planning services
•$600 increase to publication costs
•$3,200 increase for insurance
•Police
•Sheriff Contract Cost up $18,100.
•Fire and EMS – See Chief Hinz’s Wage Increase Proposal
•Increases to fuel Workers Comp Insurance, Utilities, and Dues
9/7/2022Draft 2023 Budget Proposal Summary Presentation 4
General Fund 101 Highlights
•Animal Control up $1,000
•Public Works
•Wages up 4.3% based on department distribution
•$25,500 increase to health insurance costs (estimate available later this month).
•Workers Comp up $9,500
•General increases to equipment repair, parts, tires, and maintenance.
•$3,000 increase for tool budget.
•$7,500 increase to road repair
•Parks and Recreation
•Only 1 summer seasonal budgeted. Decrease by $7,400
•Small increases to structure repair and WC Insurance
•Community Center
•Large unexpected 2022 expense was community well failure $13,675.
•Transfers
•Further estimates and refinement of costs will be used to transfers to Capital, unless otherwise instructed
9/7/2022Draft 2023 Budget Proposal Summary Presentation 5
Capital Fund Highlights – General Capital Fund 401
•No items removed from outlay.
•The City Council has earmarked $432,000 to support 2023 Broadband In
Buildout, this is $125,000 higher than the $307,000 originally planned for
this year.
•Deficit Spending in this fund over the last few years has caused decline in
the City’s cash position. Ending cash position is anticipated to be around
$300k to $500k over the next 3 years. (This takes into account payables for
uncompleted internet buildouts.)
•Restoring a stronger cash position will require a “rest period”. In this
proposal iteration the planned internet funding expenditure for 2024 was
left unchanged for that year and the remaining projects for that year (Lines
44 through 48 were adjusted to 2025) and projects on
lines 39-64 were pushed out to accommodate a 4 year spending
break in 2026 and 2030 to rebuild fund balance.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 6
Cont. - Highlights – General Capital Fund 401
•$50,000 was added to the Capital Improvement plan for 2023 (Line 38) as
part of a $200,000 grant planning process for long-range pedestrian and
bicycle improvements in the Village Center. The project would also include
MnDOT’s participation and financial support.
•The City’s Gateway Trail request through LCCMR was approved last week
for a $2.6 Million allocation to buildout a pedestrian tunnel, re-align a small
segment of County Hwy 52 (Oakhill Road) to make room for trail, and to
build a trail from it to a trailhead parking lot behind Meister's.
•Although this project has no match requirement, it was only provided 88% of the
original amount requested; approx. $3.07 Million. The remaining 12% of this cost,
$368,400 will need to be closed or the scope of this project will need to be amended to
be within the grant allocation.
•There remains $100,000 in DNR Park and trail funding that can be utilized
to cover some of this gap.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 7
Cont. - Highlights – General Capital Fund 401
•Washington County has agreed to serve as fiscal agent for this project so
we will not need to process this project through this fund. However, given
the project will receive funding for build and completion in the summer
and fall of 2023, the City may want to consider making improvements to
the Annex Property where the trailhead parking lot will be located (behind
the building where the dirt lot is).
•Possible improvements could include landscaping and replacement of existing asphalt
surfacing to given asphalt work will be done on the new lot.
•Considerations
•What are the City’s overall fund balance goals?
•Are the projects or equipment purchases that could be deferred to meet
these goals? This consideration can be considered across all 4 funds.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 8
Highlights – Park Fund 404
•The Park Capital Fund has available funds to fund improvements through
next year, but has very little contingency for project overages. It is
estimated to have around a $6,000 balance by 2023 Year End.
•Considerations may want to be made regarding making additional
improvements to the Community Center Playground Site post 2023
construction.
•The Park and Recreation Committee will be reviewing this budget this
month to provide a recommendation based on projections.
•The Council and CIC are requested to offer recommendations and
any direction.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 9
Highlights – Equipment Replacement Fund 406
•It is anticipated that the equipment replacement fund will be able to
maintain its capacity of expenses with the utilization of 10 year bank
certificates. Which have typically been offered with competitive interest
rates.
•42,600 can be covered through levy but approximately $800,000 will require
debt in 2023 based on the proposed plan.
•There are not anticipated funding issues with this fund but a break period
may also be needed in a few years.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 10
Highlights – Road Improvement Fund 408
•This fund’s proposed budget proposes that bonding for roads take place
every 4 years, but scaling back in 5 years and imposing a break period at
some point will be important to allow for the reduction in debt service levy.
•Deferring Road Projects can help improve debt capacity and fund balance,
but can also delay critical improvements.
9/7/2022Draft 2023 Budget Proposal Summary Presentation 11
Complications to consider for this year’s levy and tax rate
•Recent changes in property values have increased the tax capacity by 31%,
which is unprecedented.
•This proposal has been estimated to match the existing tax rate per City
Council direction at 30.945%.
•Property owners with increased property value will see an increase in tax
payments.
•It is difficult to predict the changes in future property value due to current
market conditions. Future years were estimated to have modest changes
that are no more than
9/7/2022Draft 2023 Budget Proposal Summary Presentation 12