10.3. SR 07-05-2016 clty
Elk Request for Action
R.iVer
To Item Number
Mayor and City Council 10.3
Agenda Section Meeting Date Prepared by
Worksession July 5, 2016 Lori Ziemer,Interim Finance Director
Item Description Reviewed by
2017 Budget Cal Portner, City Administrator
Reviewed by
Action Requested
Discuss 2017 budget process and provide feedback.
Background/Discussion
City staff has begun developing the preliminary 2017 budget. Budget meetings are currently being held
with department directors and/or division managers and the preliminary requested budgets are being
compiled. At this work session we will begin discussing the 2017 tax levy and budget parameters. All of
this leads up to the Council adopting a maximum tax levy prior to September 30, 2016. The deadline for
adoption of the EDA& HRA levy remains September 15. The final budget will not be adopted until
December. The majority of the budgets will be discussed at meetings in July and August.
Proposed Budget Timeline (summary)
■ July 5 Council work session—General 2017 budget discussion and process.
■ July&August work sessions —Presentation of proposed budget&goals to Council with
department directors and division managers in attendance.
■ August 15 regular meeting—Presentation of proposed Enterprise Fund budgets.
■ September 19 regular meeting—Approve maximum tax levy.
■ October& November—Continue budget, Capital Improvement Plan and tax levy discussion.
■ December 5 regular meeting—Present final proposed budget; take additional public input; adopt
final budget and tax levy.
Consumer Price Index (CPI)
The CPI for the Midwest region went up approximately 0.8% from April 2015 to April 2016.
Change in Net Tax Capacity
Last year, the city's Net Tax Capacity (NTC) increased 3.8% after several years of decreasing. The
County Assessor is currently working on updating the preliminary estimates of the NTC for payable 2017
and should be available soon. Early spring estimates indicated residential values increasing about 4%,
commercial/industrial increased slightly over 1%, and apartments increased about 3%. Until we get
updates from the county,we will use a 3.5-4%increase in NTC to begin the budget process.
POWERED 6T
Template Updoted 4/14 INAWRE1
Pay and Benefits
Pay and benefits general increases will follow Council direction and honor labor agreements.
State Aid
The estimated 2017 Local Government Aid (LGA) is approximately$271,000. We propose to continue
budgeting the LGA in the Equipment Replacement Fund with the offsetting amount from Elk River
Municipal Utilities (ERMU) (transfer-in) in the General Fund. The transfer from ERMU is allocated to
the General Fund and Equipment Replacement Fund. If LGA is eliminated or reduced, as in the past,it
will be easier to adjust our equipment needs and reprioritize the replacements versus immediate General
Fund operational changes.
Transfer In
Transfers are made each year to the General Fund from the Waste Water,Liquor, Storm Water, Garbage,
EDA and HRA funds to cover costs associated with providing services to those funds. We will review
the transfers to ensure they cover services used. The exception is the Liquor Fund transfer,which is
significantly higher to offset other operating expenditures.
Levels of Service
The preliminary budget will be drafted based on continuing the same level of service as in 2016.
Estimated General Fund Revenue
Most revenue line items are stable and consistent with last year. We continue to monitor building activity
and revenue and will make adjustments as we get updates on newly planned 2017 building activities.
Tax Lew
The city administrator will propose a balanced budget. At this point we should just have some general
discussions about the tax levy expectations as other revenues are relatively consistent and programmed
conservatively.
Other Items
■ Fuel price per gallon will start at$2.50—we fully intend to use state contract pricing again.
■ The tax abatement levy will increase approximately$38,000 due to the addition of 3 tax
abatement properties added for 2017.
Financial Impact
N/A
Attachments
■ 2016 Budget Schedule
City of Elk River
2017 Budget Schedule
May 9, 2016 Budget forms and instructions to department directors
June 6, 2016 Department Director proposed budgets due to finance department
June 2016 Staff budget meetings with City Administrator and Finance Director
July 5, 2016 General budget discussion on tax levy,goals, staffing and other
Policy items.
July 18, 2016 Presentation of Community Development and Operations (Planning,
COD, Environmental, Energy City, Landfill), Finance,Information
Technology, and Building Maintenance budgets to Council
August 1, 2016 Presentation of Administration, Cable TV,Mayor& Council,
Elections,Legal, Human Resources, Streets, Snow Removal,
Equipment Maintenance,Engineering, Parks and Recreation and
Library budgets to Council
August 8, 2016 Presentation of Police, Fire, Building Safety and Equipment
Replacement Fund (fleet committee to attend) budgets to Council
August 15, 2016 Presentation of Liquor, Garbage, Storm Water and Wastewater
budgets to Council
September 6, 2016 Council adopts EDA/HRA levies
September 12, 2016 Budget review and any remaining budget presentations
September 19, 2016 Council adopts maximum property tax levy
September 30, 2016 Certify city maximum property tax levy to Sherburne County
October/November 2016 Final adjustments/budget revisions and review Capital Improvement
Plan (CIP) funds/projects
December 5, 2016 City Council adopts the final 2017 budget and property tax levy
December 19, 2016 City Council adopts the 2017-2021 CIP