2.0. SR 09-06-2000kern #2
City of
River
MEMORANDUM
TO:
FROM:
DATE:
Mayor & City Council
Pat Klaers, City Administrator
September 6, 2000
SUBJECT: 2001 Budget
Attachments
· General Fund Revenues - changes from 8/7
· General Fund Expenditures - changes from 8/7
· Personal Services - changes from 8/7
· Capital Outlay and Transfers Out - changes from 8/7
· 2001 Budget - changes from 8/7
· 2001 Budget Worksheet
· 2001 General Fund Budget
· Levy Samples
The Net Tax Capacity (NTC) information was received from the county on
Wednesday afternoon and the news is good. The city NTC grew by 10.46
percent for year payable 2001...more on that later.
At the scheduled 8/28/00 budget meeting, staff was prepared to distribute a
number of handouts on some suggested budget adjustments in order to close
the budget gap. However, the worksession was delayed until Wednesday,
September 6, so this material was never distributed. This information is
attached to this memo and should be self-explanatory.
In a nutshell, staff is suggesting raising General Fund revenues by $141,300
and cutting expenses by $90,450 for a total budget adjustment of $231,750.
This reduces the August 7 budget gap of $468,900 to a gap of $237,150. The
proposed adjustments are open for discussion and the council should feel free
to make additional changes or to not make some of the suggested changes.
Most everything is pretty easy to follow, however the capital outlay
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone (763) 441-7420 · Fax (763) 441-7425
adjustments may need some additional discussion and explanation on
Wednesday evening.
In addition to the changes noted above and in the attachments, the finance
director has advised me that the state has finally provided us with our PERA
information and the estimate in the August 7 draft budget is low. The city is
going to receive an additional $6,850 in PERA aid so this has to be added to
our 2001 revenues. This additional PERA aid further reduces the budget gap
to a new total of $230,300.
The newest preliminary levy sample (dated 8/30/00) shows a city tax levy
increase of 10.453 percent. This levy sample is based on the NTC growth of
10.46 percent and no change in the city tax rate. It must be emphasized that
this is simply a NTC estimate and it will be nearly impossible to make a
decision that will result in the exact same tax rate in 2001 as compared to
2000. Nonetheless, using the estimate from the county and keeping the tax
rate the same, results in an additional $218,100 in tax revenues being
available. If all of this amount is levied and used for the General Fund, then
the city has a budget gap of $12,200. This amount can easily be dealt with
and, in fact, may be able to be dealt with by the police department. (The chief
included a memo in the 8/28 packet on funding help for the sergeants'
vehicle.., if the council believes this to be an appropriate addition to the
police department fleet.)
As you can tell, the budget gap can be solved and a balanced budget approved
with no tax rate change, but the council may want to look at some budget
issues and programs before finalizing the 2001 proposal. For example, the
council may want to increase the amount transferred for the ice arena deficit,
or increase the amount of money being put away for city hall maintenance
and repair, or the council may question the revenue increases being
suggested. These type of changes would require some offsetting adjustments.
While there are no levy limits on municipalities for 2001, there is always a
concern that limits could come back in 2002 or a future year. That being said,
the council could still consider some budget cuts that would result in a tax
rate decrease. Such a decision would require further budget amendments, but
this certainly could be looked at and evaluated.
Little has been discussed by the council as it relates to priorities for programs
and whether an increase or decrease in certain levels of service is desired.
Programs to be looked at by the council could include Cable TV, fire
inspection, police department D.A.R.E. program, youth initiatives, the
employee appreciation proposal, the pavement replacement program, etc.
If the City Council were to approve the budget without any more cuts in
expenditures, the total General Fund Budget would then be $6,477,200. This
is a $614, 700 or 10.485 percent increase, which is nearly identical to the
percentage increases in the NTC and the total tax levy. This General Fund
Budget increase can be broken down into the following categories:
Personal services
Supplies
Other services and charges
Capital outlay
+$291,350 6.87%
+$85,200 20.5%
+$90,750 8.5%
+$147,400 107.5%
As discussed on August 7, the capital outlay is up on purpose and it is
appropriate to get more of the annual capital expenses into the annual
budget. The personal services increase is smaller than typical as fewer
employees are being added in 2001. The supplies, and to a certain extent the
other services and charges, categories are up due to low estimates in the past.
In reducing the budget gap, staff is suggesting spending $111,150 in 2000 on
requested items for 2001. We can do this based on the growth related
revenues in 2000 being higher than the budgeted amount. These high growth
revenues are based on commercial and industrial construction. Even with
these expenditures being shifted to the 2000 budget, there still may be a
surplus available at the end of the year. If so, the council should consider
designating all available year-end funds to a community center/YMCA project
reserve rather than increasing the city fund balance. In fact, the council may
want to make a public statement to that effect now in order to send a positive
message to our citizens and to the YMCA regarding our commitment to a
future project.
Please bring to this 9/6/00 meeting the material from the 8/7/00 and the
8/28/00 worksessions. This material will be the starting point for our
discussion on September 6, 2000.
General Fund Revenues
8/28/00 Proposal for 2001 (Changes from the 8/7100 Proposal)
· +$ 5,650-
· +$12,200-
· +$ 7,200-
· +$ 7,850-
· +$ 7,500-
· +$ 9,600-
· +$ 3,050-
· +$13,250-
Gravel tax (based on 1999 actual)
Building Permits (identical to the 2000 budget)
Plumbing and heating permits (identical to the 2000
budget)
2% police aid (based on 1999 actual)
state grants (Safe & Sober) **
plan check fees (identical to the 2000 budget)
development fund transfer (based on LGA reductions)
housing aid (a funding program from the state for which
Elk River just became eligible)
Total: $66,300 increase in General Fund Revenues
+ $75,000 in tax levy increases due to the elimination of equipment
certificates (see capital outlay/equipment narrative page).
$141,300 total increase in General Fund Revenues.
** The city recently received information that a grant was approved for the period of October
2000 through September 2001. The $7,500 revenue in 2001 will be offset by identical
overtime expenditures.
General Fund Expenditures
8/28/00 Proposal for 2001 (Changes from the 8/7/00 Proposal)
* - $ 7,000 - Mayor/CC - remove the logo/design proposal and do this
work in 2000
· -$ 7,500 - AdministrationfFinance - purchase computers and printers
in 2000 versus including in the 2001 budget.
· -$10,000 - Street overlay/seal coat line item. Reduce the budget to
$90,000, which is still an $11~000 increase over the
adopted 2000 budget.
· - $ 5,000 - Equipment maintenance and repair budget - reduce
supplies line item
· -$ 1,500 - Snow removal - reduce.supplies line item
· -$ 3,000 - Parks - reduce the other rental line item
· -$ 2,000 - Recreation - reduce the youth initiatives contracted services
line item.
$36,000 subtotal of reductions
+$ 7,500 - Expenditure increases in police: Safe & Sober program for
overtime
+$ 1,500 - Elections - Equipment maintenance agreement for the new
precinct counters.
$27,000 reduction in General Fund Expenditures
Personal Services
8[7/00
Requests for 2001
· Cable TV - ½ time employee at $9.50/hour = $11,150
· Finance - ½ time employee at $10.50/hour = $12,350
· Government Buildings - extra 650 hours to change part time employee
status to full time plus benefits = $13,550
· Street/Park Maintenance I employee- $11.73 and $12.96 per hour
plus benefits = $34,350
· Street/Park department - ½ time clerical employee at $10.36/hour =
$12,15o
Total Requested: $83,550
8/28/00 Changes · Finance - Start employee April 1...save $3,000
· Street/Park Maintenance I - start employee in mid May...save $13,800
· Street/Park Clerical - start employee in May...save $4,000
Total Savings of $20,800
Capital Outlay (CO) & Transfers Out
Attachments · 8/20/00 CO Proposal for 2001
· 8/7/00 CO Proposal for 2001
· Adopted 2000 CO Plan
Please note that in order to compare "apples to apples" between 2000 and
2001, the $66,600 City Hall debt transfer out should have been added to the
2001 CO page that was distributed on 8/7/00. This dollar amount was in the
budget, but was omitted from the summary page.
The one increase to the CO page and to the budget is the $27,500 transfer out
for the ice arena operating deficit. This amount is not based on the 2001
budget, but is based on the actual deficit (excluding capital outlay) in 1999.
The changes from the 8/7/00 proposal to the current proposal are related to
revenues beyond what was budgeted being available in 2000. These extra
funds are mainly due to city growth activities. The idea is to spend this
additional revenue on requested 2001 purchases and to obtain these capital
outlay items this year. The changes are highlighted in the "Purchase in 2000"
column in the current capital out]ay proposal. Most of the items are coming
out of the General Fund proposal, however the roadside mower is coming out
of the equipment certificate proposal.
In addition to the above noted changes, it is also staffs intent to fund the fire
truck pumper (the replacement for Engine 3) by way of using equipment
reserves. Technically this is an equipment certificate item as it would be a
five-year loan, but the tax levy will be canceled each year and reserves will be
used to fund this expenditure. Revenues are added to the equipment reserves
on an annual basis by way of the Utilities contribution. The purchase of the
fire truck will cost about $70,000 per year over five years. It should also be
noted that the $43,000 expenditure from equipment reserves for pumper #1
ends in year 2002, and this was funded on a five-year purchase plan. The
other approach to funding the replacement for Engine #3 is to save reserves
money for four years and then purchase the truck.
By making the adjustments noted on this current CO page, the city is
eliminating a net amount of $42,650 in proposed capital outlay expenditures
from the General Fund. Additionally, because no equipment certificates are
being proposed for 2001, the city is freeing up $75,000 that was identified in
the preliminary tax levy sample for capital equipment, which now can be
shifted into the General Fund. This $75,000 amount was noted on the
"revenues addition" page.
2001 CAPITAL OUTLAY
Fundin~ Source
General Equipment Equipment Department Purchase
Department Item Fund Certificate Reserve Total in 2000
Mayor & Council -
Cable TV Digital Camera - 4,000
Administration Copy Machine Lease 12,450 12,450
Finance
Elections Precinct Counters (2) 7,500 7,500
Planning
Building & Envior. Truck 22,000
Cop)' Machine Lease 2,800 2,600
Govt. Building Capital Improvements/Maintenance 15,000 15,000
Police Copy Machine Lease 7,200
Squad Video Cameras (2) 7,200
Mobil Digital Computer Replacements (3) 13,500
4 x 4 Utili[y Vehicle 38,000
CSO Vehicle 31,000 96,900
Police Reserve
Fire Pumper I 13,000 43,000
Pumper 2 275,000
Overhead Building Heaters 5,000
Remodel Mezzanine into Office 331,000 20,000
Emergency Prep. Siren 13,000 13,000
Streets Roadside Mower 41,000
Pickups - Used (2) 25,000
Radio Repeater 25,000 10,850
Equipment Services Hoist 10,000 10,000
Parks Front Mount Mower 48,000
Zero Turn Mower 48,000 8,500
Recreation
Transfers Out To City Hall Debt Fund 66,600
To Ice Arena Operating 27,500
To Ice Arena Reserve 8,000 102,100
TOTAL $284,550 $275,000 $104,000 $863,550 $111,150
See Notes
Note: The Ice Arena budget includes $29,000 from the Equipment Reserve.
Equipment Reserve capital outlay expenditures for 2001 total $133,000.
The 2001 Equipment Certificate will be paid with Equipment Reserve funds
on an annual basis and the Equipment Certificate tax levy will be cancelled.
8/21/00
Aug2800:01 Cap Ouday
2001 CAPITAL OUTLAY
Fundin~l Source
General Equipment Equipment Department
De' }artment Item Fund Ce~ficate Reserve Total
Mayor & Council
Cable TV Digital Camera 4,000 4,000
Administration Copy Machine Lease 12,450 12,450
Finance
Elections Precinct Counters (2) 7.500 7,500
Planning
Building & Enviar. Truck 22,000
Copy Machine Lease 2,600 24,600
Govt. Building Capital Improvements/Maintenance 15,000 15,000
Police Copy Machine Lease 7,200
Squad Video Cameras (2) 7,200
Mobil Digital Computer Replacements (3) 13,500
4 x 4 Utility Vehicle 38,000
CSO Vehicle 31,000 96,900
Police Reserve
Fire Pumper 1 13,000 43,000
Pumper 2 275,000
Overhead Building Heaters 5,000
Remodel Mezzanine into Office 20,000 356,000
Emergency Prep. Siren 13,000 13,000
Streets Roadside Mower 41,000
Puckups - Used (2) 25,000
Radio Repeater 10,650 76,650
Equipment Services Hoist 10,000 10,000
Parks Front Mount Mower 48,000
Zero Turn Mower 8,500 56,500
Recreation -
Transfers Out To Ice Arena Fund 8,000 8,000
TOTAL $260,600 $316,000 $104,000 $680,600
Note: The Ice Arena budget includes $29,000 from the Equipment Reserve.
Equipment Reserve capital outlay expenditures for 2001 total $133,000.
Capitalo:01 Cap Outlay
2000 CAPITAL OUTLAY
Fundinc~ Source
General Equipment Equipment Department
Department Item · Fund Certificate Reserve Tob~l
Mayor & Council 0
Administration Copy Machine 10,650 10,550
Finance Check Si~ner 3,500 3,500
Elections 0
Planning 0
Building & Envior. Copy Machine 2,600
Truck 20,000
Remodel Office 5,000 27,600
Govt. Building City Hall Buildin~l Debt 66,600 66,600
Police Squad Cars (5) & Setup/Striping 136,200
Copy Machine 8,400!
Cameras 4,2501 148,850
=olice Reserve Portable Radios 4,500 '~ 4,500
Fire *Pumper pa~/ment 13,000 43,000
SCBAs 20,000 76,000
Emergency Prep. Siren 13,000 13,000
Streets Mower 8,000
Tractor 26,6001
Planer 2,650
*Dump Truck 136,200 173,450
Parks 0
Recreation Ice Arena Reserve (Transfer to Reserve) 8,000 8,000
Ice Arena Equipment 3,500 3,500
$137,150 $215,800 $182,700 $535,650
*ERMU Reserve
9/3/99
2001 Budget
August 28, 2000 Adjustments from the August 7, 2000 Proposal
8/7/00 General Fund Deficit or Budget Gap - $468,900
· $66,300 - revenue increases
· $75,000 - tax levy shift due to no equipment certificates being
proposed
· $27,000 - general cuts in expenditures (net)
· $20,800 - personal services reductions
· $42,650 - capital outlay (net) reductions in the General Fund
Net change - $231,750
8/28/00 General Fund Deficit or Budget Gap - $237,150
Revenues + $141,300
Expenditures - $ 90~450
$231,750
2001 BUDGET WORKSHEET
REVENUE PROJECTION
MAYOR & COUNCIL
CABLE TV
ADMINISTRATION
ELECTIONS
FINANCE
LEGAL
PLANNING
PLANNING COMMISSION
GOVERNMENT BUILDINGS
CONTINGENCY
POLICE
POLICE RESERVE
FIRE
EMERGENCY PREPAREDNESS
BUILDING & ZONING
STREETS
EQUIPMENT SERVICES
SNOW REMOVAL
ENGINEERING
SHADE TREE
PARKS
RECREATION
SR. CITIZEN PROGRAMS
ECONOMIC DEVELOPMENT
ENERGY CITY
TRANSFERS
TOTAL EXPENDITURES
BALANCE
2001 Budget
2000 Adopted July Augu~ 28, 2000
Budget Adjustments Adjustments
$ 5,862,500 $ 6,098,750 $ 6,240,050
81,900 157,400 150,400
24,000 57,950 53,950
312,000 314,750 314,750
29,700 7,500 9,000
298,950 341,450 330,950
72,600 75,000 75,000
230,500 248,600 248,600
7,400 7,400 7,400
88,750 137,300 137,300
130,000 130,000 130,000
2,150,600 2,359,700 2,367,200
29,150 38,550 38,550
327,650 378,800 353,800
15,850 17,800 17,800
447,550 496,300 474,300
577,600 635,650 597,200
156,450 213,650 208,650
160,750 177,350 175,850
42,000 45,000 45,000
7,950 9,250 9,250
230,150 265,900 254,400
224,500 241,500 239,500
62,250 65,300 65,300
46,350 25,800 25,800
20,300 32,150 32,150
87,600 87,600 115,100
$ 5,862,500 $' 6,567,650 $ 6,477,200
(468,900) (237,150)
Transfers:
Ice Arena - 8,000
Ice Arena - 27,500
Bldg Debt - 66,600
Pumper- 13,000
8/22/00
Aug2800:Blank Appmp
2000 GENERAL FUND BUDGET
SOURCE OF FUNDS
1998 1999 2000 2001
ACTUAL ACTUAL ADOPTED PROPOSED
TAXES
INTERGOVERNMENTAL REVENUES
CHARGES FOR SERVICES
FINES AND FORFEITS
LICENSES & PERMITS
OTHER REVENUES
TRANSFERS
TOTAL
$2,681,221 $3,114,711 $3,356,100 $3,674,400
1,118,506 1,047,623 1,016,100 1,061,850
516,794 491,198 482,400 482,800
115,753 117,614 115,700 119,500
540,826 511,307 478,100 486,750
123,010 76,184 92,700 102,700
295,000 309,800 321,400 312,050
$5,391,110 $5,668,437 $5,862,500 $6,240,050
8/22/00
2001 GENERAL FUND BUDGET
SOURCE OF FUNDS
TAXES
INTERGOVERNMENTAL REVENUES
CHARGES FOR SERVICES
FINES AND FORFEITS
LICENSES & PERMITS
OTHER REVENUES
TRANSFERS
TOTAL
1998 1999 2000 2001
ACTUAL ACTUAL ADOPTED PROPOSED
$2,681,221 $3,114,711 $3,356,100 $3,674,400
1,118,506 1,047,623 1,016,100 1,061,850
516,794 491,198 482,400 482,800
115,753 117,614 115,700 119,500
540,826 511,307 478,100 486,750
123,010 76,184 92,700 102,700
295,000 309,800 321,400 312,050
$5,391,110 $5,668,437 $5,862,500 $6,240,050
8/31/00
PREMILIMARY LEVY SAMPLE
FOR TAXES PAYABLE 2001
General Fund*
Street Replacement
Lake Orono
Library*
Dam Loan
Development Fund
Surface Water Mgmt.
City Special Assessments
1994 Storm Sewer Bonds
1997 Certificate of Indebtedness
1998 Certificate of Indebtedness
1999 Certificate of Indebtedness
2000 Certificate of Indebtedness
2001 Certificate of Indebtedness
Gross 601,225
Levy HACA
$ 4,340,783 $ 520,465 $
82,369 9,876
17,631 2,114
68,000 8,153
32,572 3,905
137,383 16,472
60,000 7,194
27,717 3,323
112,387 13,475
21,038 2,522
22,010 2,639
38,450 4,610
54,000 6,475
$ 5,014,340 $ 601,225 $
Net
Levy
3,820,318
72,493"~
15,517]
59,847/
28,667/
120,911{
52'806 k, ~.J~5-~lqq q
24,394
98,912
18,516
19,371
33,840
47,525
4,413,115
* Levy subject to change based on approved budget.
NTC Net Levy Tax Rate
Payable 2000 13,208,236 3,995,469 30.248%
Payable 2001
Prelim. Sherburne Cty.- Aug. 30
Percent Increase
14,589,776
10.46%
4,413,115
30.248%
8/30/00
Taxlevy
PREMILIMARY LEVY SAMPLE
FOR TAXES PAYABLE 2001
General Fund*
Capital Equip./2001 Equip. Cert.'
Street Replacement
Lake Orono
Library*
Dam Loan
Development Fund
Surface Water Mgmt.
City Special Assessments
1994 Storm Sewer Bonds
1997 Certificate of Indebtedness
1998 Certificate of Indebtedness
1999 Certificate of Indebtedness
2000 Certificate of Indebtedness
2001 Certificate of Indebtedness
Gross 601,225 Net
Levy HACA Levy
3,923,636 $ 504,900 $ 3,542,757
75,000 9,651 65,349
82,369 10,599 71,770
17,631 2,269 15,362
68,000 8,750 59,250
32,572 4,191 28,381
137,383 17,679 119,704
60,000 7,721 52,279
27,717 3,567 24,150
112,387 14,462 97,925
21,038 2,707 18,331
22,010 2,832 19,178
38,450 4,948 33,502
54,000 6,949 47,051
$ 4,672,193 $ 601,225 $ 4,194,989
Levy subject to change based on approved budget.
Payable 2000
Payable 2001
5% NTC Increase
7% NTC Increase
8% NTC Increase
9% NTC Increase
NTC Net Levy Tax Rate
13,208,236 3,995,469 30.248%
13,868,648 4,194,989 30.248%
13,868,648 4,394,989 31.690%
13,868,648 4,194,989 30.248%[
13,868,648 4,320,777 31.155%
14,132,813 4,194,989 29.683%
14,132,813 4,394,989 31.098%
14,132,813 4,274,893 30.248%
14,132,813 4,403,078 31.155%
14,264,895 4,194,989 29.408%
14,264,895 4,394,989 30.810%
14,264,895 4,314,845 30.248%
14,264,895 4,444,228 31.155%
14,396,977 4,194,989 29.138%
14,396,977 4,394,989 30.527%
14,396,977 4,354,798 30.248%
14,396,977 4,485,378 31.155%
8/4/O0
Taxlevy
RESOLUTION 99 -
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION AUTHORIZING THE 1999 PROPERTY TAX LEVY
-FOR COLLECTION IN 2000
WHEREAS, the Elk River City Council has review the City's anticipated
expenditures for all funds in 2000; and,
WHEREAS, revenues from sources other than property taxes are not sufficient
to meet anticipated expenditures of all funds.
WHEREAS, the Elk River City Council has received publci input and comment
on the Tax Levy and Budget.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River that
the following amounts are to be levied as property taxes payable in 2000:
HACA
Gross Levy Reduction Nit Levy
General Fund $ 3,809,355 $ 498,244
Lake Orono 100,000 13,080
Library 66,650 8,717
Dam Loan 32,572 4,260
Development Fund 145,000 18,965
Surface Water Management 57,500 7,521
City Special Assessments 28,926. 3,783
1989 Fire Equipment 72,891 9,534
1994 Storm Sewer Bonds 116,073 15,182
2000 Certificate of Indebtedness 57,500 7,521
1999 Certificate of Indebtedness. 40,000 2,851
1998 Certificate of Indebtedness 23,150 3,307
1997 Certificate of Indebtedness 25,283 3,028
1996 Certificate of Indebtedness 21,794 5,232
TOTAL $ 4,596,694 $ 601,225 $3,995,469
$3,311,111
86,920-'"'~
57,933~
28,312}
126,035/
49,979!
25,143 ~k.
63,357
100,891
49,979
37,149
19,843
22,255
16,562 J
Passed and adopted by the City Council of the City of Elk River this 13th
day of December, 1999.
ATTEST:
Stephanie Klinzing, Mayor
Sandra A. Peine, City Clerk