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7.1. SR 12-05-2016City of Elk — River Request for Action To Item Number Mayor and City Council 7.1 Agenda Section Meeting Date Prepared by Public Hearin December 5, 2016 Lori Ziemer, Finance Director Item Description Reviewed by 2017 Budget and Tax Levy Cal Portner, City Administrator Reviewed by Action Requested Adopt, by motion, the resolution authorizing the property tax levy for collection in 2017. Approve, by motion, the 2017 General, Special Revenue, and Enterprise Fund budgets. Background/Discussion City staff began the budgeting process in May developing their 2017 department goals and requested budgets. The City Council and staff have since met in numerous work sessions reviewing in detail department operating budgets and the property tax levy. In September, Council approved the preliminary (maximum) tax levy that was used to calculate the proposed property tax notice that was mailed to each property owner in November. The final 2017 levy may be less than the preliminary levy, but cannot be more. Tax Levv On September 19, the City Council adopted the preliminary tax levy of $10,657,808, which is an increase of 4.78% over 2016. Since then, staff has made reductions to the budget and is recommending a proposed final levy of $10,563,770, which is an increase of 3.85% and down from the preliminary levy increase of 4.78%. The most recent property values reported by the county estimate Net Tax Capacity (NTC) increasing by 4%, attributable to new growth and market value increases. The final NTC may change slightly as the county continues to update property values before calculating taxes in early 2017. The tax capacity rate based on the preliminary levy is 46.483%, which is a slight increase from last year's rate of 46.17%. With the approval of the revised levy, the tax capacity rate will be adjusted downward to approximately 46.07%. With the adopted final levy, city property taxes for a median value home ($196,500 in 2016) will basically remain unchanged. The city accounts for about one-third of a homeowners total property tax bill. The remainder is attributed to the school district (27%), the county (37%), and other jurisdictions (3%). For businesses, the city's share is about 25% of the total. The majority of the property tax levy (94%) is used to fund city services such as police, fire, street maintenance, parks and recreation, and general government. The remaining 6% pays for debt service, tax abatement and library operations. P a w E R E U 6 Y NaA f RE] General Fund Budget The 2017 General Fund budget is at $14,378,400, which is a 3.55% increase over 2016. The greatest portion of the city's General Fund operating budget is dedicated to public safety programs and services. General government, public works, and culture and recreation make up the balance of the General Fund budget. Due to the fact that city government is primarily a service industry, 76% of the operating budget is personal service expenditures. The budget does include a cost of living pay adjustment for employees in 2017. Financial Impact Summary of all 2017 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 $14,378,400 Special Revenue Funds: Library $ 97,500 Ice Arena $ 827,550 Landfill $ 134,550 Safety $ 31,600 Enterprise Funds: Attachments ■ Tax levy resolution ■ Tax levy breakout ■ General Fund summary Revenues Expenditures Depreciation Capital Net Effect Sewer $2,499,000 $2,106,700 $1,425,000 $100,500 $(1,133,200) Garbage $1,431,600 $1,549,100 - - $ (117,500) Liquor $7,040,850 $6,694,500 $ 125,000 - $ 221,350 Storm Sewer $ 502,000 $ 560,900 $ 448,000 $150,000 $ (656,900) Attachments ■ Tax levy resolution ■ Tax levy breakout ■ General Fund summary City of Elk River Resolution 16- A Resolution of the City of Elk River Authorizing the Proposed Property Tax Levy for Collection in 2017 WHEREAS, the Elk River City Council has reviewed the City's anticipated expenditures for all funds in 2017; and WHEREAS, the Elk River City Council has considered projected revenues for all funds in 2017; and WHEREAS, revenues from sources other than property taxes are not sufficient to meet anticipated expenditures of all funds; and WHEREAS, the 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, Minnesota, as follows: The following amounts are to be levied as property taxes payable in 2017: Levy General Fund $ 9,969,250 Library 53,650 2010A G.O. Capital Improvement Plan Bonds 368,030 Economic Development Tax Abatement 172,840 TOTAL $ 10.563.770 Passed and adopted this 5 h day of December, 2016. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk row€R10 8 NATUREI City of Elk River Levied Preliminary Revised Tax Levy Breakout Pay 2016 Pay 2017 Pay 2017 General Fund $9,596,850 $10,052,950 $9,969,250 Library 59,400 53,6501 53,650 9,656,250 10,106,600 10,022,900 General Property Tax Levy Special Levies City Special Assessments 4,221 - - 2010 G.O. Capital Improvement Plan Bonds 366,405 368,030 368,030 Economic Development Tax Abatement 144,857 183,1781 172,840 10,171,733 11.0,657,8081 10,563,770 Total Levy General Fund Change from 2016 456,100 372,400 Percentage Change from 2016 4.75% 3.88% Total Dollar Change from 2016 486,075 392,037 Change 4.78% 3.85% General Fund Revenues: Property taxes Othertaxes Licenses & Permits Intergovernmental Revenues Charges for Services Fines Other Revenues Transfers In Total General Revenues General Fund Expenditures General Government: Mayor & Council Cable TV Administrative Services Human Resources Elections Finance Information Technology Legal Community Development Planning Building Maintenance Energy City Contingency Total General Government Public Safety: Police Fire Code Enforcement Building Safety Environmental Total Public Safety Public Works: Street Maintenance Snow Removal Equipment Services Engineering Total Public Works Culture & Recreation: Parks Maintenance Recreation Sr. Citizen Programs Total Culture & Recreation Total General Fund Expenditures CITY OF ELK RIVER General Fund Budget 2016 2017 % of % Adopted Proposed budget change $9,596,850 $9,969,250 69.35/6 3.9% 127,000 140,000 1.0% 10.2% 646,550 714,950 5.0% 10.6% 288,350 293,500 2.0% 1.8% 891,050 891,400 6.2% 0.0% 127,000 155,000 1.1% 22.0% 213,500 217,500 1.5% 1.9% 1,994,500 1,996,800 13.9% 0.1% 13,884,800 14,378,400 100.00% 3.55% 145,850 148,800 1.03% 2.02% 109,700 111,300 0.77% 1.46% 605,500 594,450 4.13% -1.82% 178,400 234,450 1.63% 31.42% 20,500 6,600 0.05% -67.80% 583,550 572,200 3.98% -1.94% 346,350 385,100 2.68% 11.19% 214,600 220,000 1.53% 2.52% 213,750 223,400 1.55% 4.51% 297,400 297,450 2.07% 0.02% 623,650 638,850 4.44% 2.44% 16,300 33,800 0.24% 107.36% (95,000) 0 0.00% - 3,260,550 3,466,400 24.1% 6.3% 4,975,700 5,142,250 35.76% 3.35% 881,850 908,550 6.32% 3.03% 91,600 93,650 0.65% 2.24% 647,750 665,300 4.63% 2.71% 39,100 47,000 0.33% 20.20% 6,636,000 6,856,750 47.69% 3.33% 1,310,000 1,304,800 9.07% -0.40% 281,550 305,950 2.13% 8.67% 186,250 196,050 1.36% 5.26% 217,950 218,500 1.52% 0.25% 1,995,750 2,025,300 14.09% 1.48% 1,038,100 1,047,950 7.29% 0.95% 711,450 732,400 5.09% 2.94% 242,950 249,600 1.74% 2.74% 1,992,500 2,029,950 14.12% 1.88% 13,884,800 1 14,378,400 100.00% 3.55% Budget and Tax Levy City Council Meeting 5, 2016 December 2017 Budget General Fund Budget Levy & Revenue Proposed Tax Levy Comment Other Budgets Enterprise Approve Tax Special Overview Public Budget Process General Fund Budget General Taxes 70% Revenues Transfer In 14% - General Fund Other Charges for Services 2% Fines and Forfeits Intergovernmental License & Permits Revenue 6% 1% 5% 2% Government General 24% Expenditures by Function Public Safety 48% Culture & Recreation 14% Public Works 14% Personal Services 76.3% Other Services Expenditures by Type & Charges 16.4% Supplies 7.3% Estimated Tax Impact Taxable Market Value Levy Components Tax Distribution City Tax Levy History Tax Levy Apartments Residential Comm/Ind Other 4% Increase Ag. - 2017 18%73% Taxable Market Value 2016 2015 2014 2013 Source: Sherburne County Assessor 2012 2011 - 2017 Tax Levy 2010 2009 $2,500,000,000$2,000,000,000$1,500,000,000$1,000,000,000$500,000,000$0 $10,563,770 2017 $10,171,733 2016 $10,017,357 2015 $9,853,835 2014 $10,175,765 2013 $10,275,815 2012 History $11,112,391 2011 $11,112,391 2010 - 2017 Tax Levy $11,190,753 2009 $10,761,311 2008 $- $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 % Chg. - From 2016 3.88%9.68%%19.32%%% .44 3.854.78 - - $486,075 $392,037 53,650 $9,969,250368,030172,840 10,563,770$10,657,808 2017 Proposed $ 2016 Levy $9,596,85059,4004,221366,405144,857 10,171,733 $ 2017 Tax Levy Assessment Preliminary Levy Tax Abatement Dollar Change Dollar Change General Fund Components Debt Service Total Library Spec. Levy Development Economic 2% General Fund 94% Debt Service 3% Tax Levy by Use Library 1% Proposed 46.07 2017 Preliminary 139.020 .219050 46.48350.84237.197 .02647.19258 1.5731.2721.653 omparison (estimates only) 2017 Distribution 140.694 Actual 50.47839.268 .21545 .02104.19441 46.17 1.5641.3051.909 2016 - 2017 Tax Levy c school , & Total Tax Rate YMCA Ref. Total MV Rate county School Ref. School County Rail HRA EDA , - City City ity c Other 2% Property Sherburne County City of Elk 27% Commercial/Industrial River 25% State of MN 26% ISD 728 20% Distribution Other Sherburne 3% County Residential Property 37% - 2017 Tax Levy City of Elk River 33% ISD 728 27% Clear Lake 84.9 2017 Proposed Tax Rates Princeton 74.4 Big Lake 58.1 East St. Cloud 47.7 56.83% Zimmerman 47.4 County Average Sherburne County Elk River 46.5 2017 Sherburne Becker 38.9 0.0 90.080.070.060.050.040.030.020.010.0 Estimated City Tax Impact $97,500$31,600 $827,550$134,550 Special Revenue Funds Other Budgets: Ice Arena Landfill Library Safety & 3,632,2001,549,1001,158,900 Capital Outlay$6,819,500 Total Exp. 100,500150,000 Capital Outlay - - $ 3,531,7001,549,1001,008,900 $6,819,500 Expenditures $7,040,8502,499,0001,431,600502,000 Enterprise Funds Revenues Other Budgets: Storm Water Garbage Fund Enterprise Liquor Fund Sewer Fund Funds Adopt Tax Levy Resolution Approve Budgets Public Comment Next Steps