6.1. SR 12-05-2011~~ REQUEST FOR ACTION
R~.ver
TO ITEM NUMBER
Ma or and Ci Council 6.1.
AGENDA SECTION MEETING DATE PREPARED BY
Administration December 5, 2011 Tim Simon, Finance Director
ITEM DESCRIPTION REVIEWED By
2012 Budget and Tax Levy Presentation; Public Comment; Cal Portner, Ci Administrator
Consider Resolution Adopting Final Tax Levy for Taxes Payable REVIEWED BY
in 2012; and Consider Adoption of 2012 Budget
ACTION REQUESTED
• Adopt the resolution authorizing the property tax levy for collection in 2012
• Adopt the 2012 General, Special Revenue, and Enterprise fund budgets
BACKGROUND/DISCUSSION
In May, city departments began working on the 2012 department goals and the requested budget.
Starting in June, staff met with Council to discuss in detail those 2012 goals and the expenditure detail.
Based on Council review and discussion with staff, the budgets were adjusted and amended. In
September, the Council approved the proposed tax levy that was used to calculate the city tax for the
proposed property tax notice that was mailed to each property owner on November 21. As the Council
is aware, the final levy may be less than, but may not be more than, the levy approved in September. In
October and November, budget adjustments were discussed to reduce the levy from the proposed levy
adopted in September. At the November 21 Council meeting, the Council discussed adjustments
resulting in a proposed $12,678,050 General Fund budget.
Tax Lew
The maximum tax levy proposed for 2012 was $11,112,391. On November 21, the Council considered
options to reduce the levy to $10,275,815 which is $836,5761ess than the 2011 tax levy. The preliminary
estimated Net Tax Capacity (NTC) decreased by 11.07 percent to 21,612,212 for taxes payable in 2012.
Last year the NTC decreased 2.91 percent. The main reason for the large decrease relates to 1) market
value decreases and 2) market value exclusion. The final NTC will change slightly as the county makes
final corrections and adjustments before calculating taxes in early 2012. The tax rate based on the
maximum tax levy is 51.4 percent. Based on the revised levy that the Council will consider, the rate will
be approximately 47.5 percent.
There are three main entities: the county, school district, and city, that each receives part of the property
taxes paid by property owners. The city receives approximately 33 percent of the total property tax the
property owner will pay. The balance, approximately 67 percent, goes to Sherburne County, Independent
School District 728, Regional Rail Authority, Economic Development Authority, and Housing
Redevelopment Authority. Additionally, the State of Minnesota also receives part of the property taxes
on commercial and industrial property, the city's share percentage decreases below 30 percent for those
properties that pay state tax.
rl~wEaE~ ~r
N:\Public Bodies\City Council\Finance\Tim\2011\2012budget12052011.docx ~~„°
The city uses its property tax revenue fox several purposes: the majority, 89 percent, is used to fund
General Fund expenditures such as police, fire, street maintenance, general government, parks and
recreation programs. The remaining 11 percent pays for debt service, tax abatement, library, and storm
water management expenditures.
General Fund Budget
The 2012 General Fund budget is proposed to increase slightly to $12,678,050. The majority of the
$178,000 increase relates to cost of living adjustment, fuel prices, and increased Council Contingency.
Council Contingenry is broken out as follows ($50,000 -operations and $191,550 -position
reallocation). The $191,550 includes the engineering tech salary being reallocated out of the engineering
budget to Council Contingency.
Public safety expenditures (police, fire, emergency management, building safety, environmental) account
for 45 percent of the General Fund budget. General government, public works, and culture and
recreation make up the majority of the balance. Personal service expenditures are the largest type of
expenditure due to the fact that the city's core objective is to provide service to its residents. Personal
service expenditures are 71 percent of the operating budget. The budget does include a 2 percent cost of
living pay adjustment fox all employees in 2012.
On November 21 the Council discussed lowering the tax levy to the $10,275,815. Staff was directed to
work with departments to offset the $28,000 that would have been saved by splitting the cost of living
pay adjustment with half on January 1 and July 1. Staff has worked with the city departments on ideas
and has implemented the $28,000 based on department recommendations and suggestions.
Summary of all 2012 Budgets
All of the proposed budgets are listed below. The Council has reviewed all of these budgets.
Below is a summary of the proposed budgets to be approved:
General Fund
Special Revenue Funds:
Library
Ice Arena
Pinewood Golf Course
Landfill
Storm Sewer
Safety
Enterprise Funds:
$12,678,050
$ 97,000
$ 644,450 (deleted 2012 bond payment)
$ 236,500
$ 128,200
$ 160,350
$ 25,000
Revenues Expenditures Net Effect
Sewer ~ $2,004,400 $3,468,550 $(1,464,150)*
Garbage $1,376,600 $1,348,500 $ 28,100
Liquor $6,280,250 $6,685,450 $ (405,200)**
*Includes depreciation ($993,600) capital projects ($1,041,500) and debt service ($201,050)
**Includes calling in the remaining bonds on 07/01 /2012 ($730,000 principal)
N:\Public Bodies\Ciry Council\Finance\Tim\2011\2012budget12052011.docx
Adoption of Tax Levy and Budget
A levy resolution has been prepared based on Council direction of $10,275,815. This levy and the budget
may be adopted following public comment at this meeting.
ATTACHMENTS
^ Budget and Tax Levy Presentation
^ Resolution Authorizing the Property Tax Levy for Collection in 2012
^ General Fund Budget Summary Information
o Source of Funds
o Appropriations Summary
Action Motion by Second by Vote
Follow Up
N:\Public Bodies\Ciry Council\Finance\Tim\2011\2012budget12052011.docx
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RESOLUTION 11 -
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION AUTHORIZING THE PROPOSED PROPERTY TAX LEVY
FOR COLLECTION IN 2012
WHEREAS, the Elk River City Council has reviewed the City's anticipated
expenditures for all funds in 2012; and,
WHEREAS, the Elk River City Council has considered projected revenues for
all funds in 2012; and,
WHEREAS, revenues from sources other than property taxes are not sufficient
to meet anticipated expenditures of all funds; and,
WHEREAS, debt levies have been adjusted or cancelled based on revenue
collections and projections.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River that
the following amounts are the maximum to be levied as property taxes
payable in 2012:
Levy
General Fund $ 9,142,170
Library 63,100
Surface Water Management 50,000
City Special Assessments 17,090
2005 Improvement Bonds 88,600
2007 Improvement Bonds 118,400
G.O. Capital Improvement Plan Bonds 367,951
Economic Development Tax Abatement 428,504
TOTAL $10,275,815
Passed and adopted by the City Council of the City of Elk River this 5th
day of December, 2011.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
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APPROPRIATIONS SUMMARY (General Fund)
2009 2010 2011 2011 2012 % of % $$ 2011
ACTUAL ACTUAL ADOPTED AMENDED Preliminary Total Change Increase % of Total
General Government
MAYOR&COUNCIL $ 154,894 $ 152,891 $ 177,800 $ 177,800 $ 172,250 1.36% -3.12% $ (5,550) 1.42%
CABLE TV 68,737 71,027 77,800 77,800 86,600 0.68% 11.31 % 8,800 0.62
ADMINISTRATION 449,684 464,493 473,650 473,650 482.950 3.81% 1.96% 9.300 3.79%
HUMAN RESOURCES 142.744 148,826 150,750 150,750 164,500 1.30% 9.12% 13,750 1.21
ELECTIONS - 30,283 - - 38,050 0.30% #DIV/0! 38,050 0.00%
FINANCE 437,571 445,122 454,700 454,700 464,450 3.66% 2.14% 9,750 3.64%
INFORMATION TECHNOLOGY 248,260 285,211 266,600 266,600 242,000 1.91 % -9.23% (24,600) 2.13%
LEGAL 213,210 222,952 240,000 240,000 228,000 1.80% -5.00% (12,000) 1.92%
COMMUNITY DEVELOPMENT 102,487 66,643 67,100 67,100 69,250 0.55% 3.20% 2,150 0.54%
PLANNING 294,984 299,609 303,550. 303,550 304,700 2.40% 0.38% 1,150 2.43%
BUILDING MAINTENANCE 260,953 281,614 300,850 300,850 304,150 2.40% 1.10% 3,300 2.41
CONTINGENCY 6,434 10,766 75,000 75,000 241,550 1.91 % 222.07 % 166,550 0.60
ENERGY CITY 41729 72194 51650 51650 50850 0.40% -1.55% (600) 0.41%
General Government 2,421,687 2,551,631 2,639,450 2,639,450 2,849,300 22.47% 7.95% 209,850 21.12
Public Safety
POLICE 3,999,708 4,192,403 4,288,650 4,288,650 4,412,850 34.81 % 2.90% $ 124,200 34.31
FIRE 622,588 623,834 774,450 774,450 743,500 5.86% -4.00% (30,950) 6.20%
EMERGENCY MANAGEMENT 26,852 29,064 107,400 107,400 103,900 0.82% -3.26% (3,500) 0.86%
BUILDING SAFETY 560,986 453,741 465,200 465.200 473.350 3.73% 1.75% 8,150 3.72%
ENVIRONMENTAL 70 897 52 762 56 950 56 950 48 650 0.39% -14.22 % (8,100) 0.46%
Public Safety 5,281,031 5.351,804 5,692.650 5,692,650 5,782,450 45.61% 1.58% 89,800 45.54%
Public Works
STREETS 1,276.703 1,286,247 1,524,450 1,524,450 1,505,300 11.87% -1.26% $ (19,150) 12.20%
SNOW REMOVAL 205,707 285.975 262,850 262,850 288,400 2.27% 9.72% 25,550 2.10%
EQUIPMENT SERVICES 238,461 223,592 245,950 245,950 247,900 1.96% 0.79% 1,950 1.97%
ENGINEERING 107 137 91 387 177 800 177 800 133 550 1.05 % -24.89% (44 250) 1.42
Public Works 1,628,008 1,887,201 2,211,050 2,211,050 2,175,150 17.16% .
- ,
( .
Culture & Recreation
PARK MAINTENANCE 728,358 791,996 790,350 790,350 813,800 6.42% 2.97% $ 23450 6.32%
RECREATION 722,825 674.228 756,900 756,900 790,350 6.23% 4.42% 33,450 - 6.06%
SR. CITIZEN PROGRAMS 187,583 190,491 204450 204,450 226,500 1.79% 10.79% 22,050 1.64%
Culture 8 Recreation 1,638,766 1 656,715 1 751 700 1,751,700 1,830,650 14.44% 4.51% 78,950 14.01
TRANSFERS 233 104 130 337 205 200 205 200 40 500 0.32 % -80.26 % (164 700) 1.64
TOTAL $
11 402 596 $
11 577 688 $
12 500,050 $
_ 12,500,050 $
12,678,050
100.00%
1.42 % $
178,000 69%
900) 17
35
1
62%
100.00
Personal Other Services Capital
Services Supplies & Charges Outlay/Transfers Total
2012 Percent of Total General Fund 71.09 % 8.53% 19.10% 1.28% 100.00
GENERAL FUND EXPENDITURES 2009 - 2012
57,000,000 -
$6,000,000 ~:-------
$5,000,000 ', ----~
11 /30/2011
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