7.1. SR 12-03-2018
Request for Action
To Item Number
Mayor and City Council 7.1
Agenda Section Meeting Date Prepared by
Public Hearing December 3, 2018 Lori Ziemer, Finance Director
Item Description Reviewed by
2019 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 2019.
Approve, by motion, the 2019 General, Special Revenue, and Enterprise Fund budgets.
Background/Discussion
Staff began the budgeting process in May developing their 2019 department goals and requested budgets.
The City Council and staff have since met in numerous work sessions reviewing in detail departmental
operating budgets and the property tax levy. In September, the Council approved the preliminary tax levy
used to calculate the proposed property tax notice that was mailed to each property owner in November.
Tax Levy
On September 17, the Council adopted the preliminary tax levy of $11,938,765. Since then, reductions
have been made to the General Fund Budget; however, staff recommends maintaining the preliminary
levy as the proposed final levy. The proposed levy reflects the initiatives of the new compensation plan as
well as Council’s goal of establishing capital reserves for future financial sustainability.
The county estimates Net Tax Capacity (NTC) values increasing over 9%, 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 2019. The tax capacity rate, as determined by the county, based on
the preliminary and final levy is 45.467%, a reduction from last year’s rate of 46.01%.
City tax accounts for about 35% of a homeowners total property tax bill. The remainder is attributed to
the school district (26%), the county (37%), and other jurisdictions (2%). For businesses, the city’s share
is about 27% 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, library operations, and capital reserve.
General Fund Budget
The 2019 General Fund budget is $16,221,200, a 4.9% increase over 2018. The greatest portion of the
General Fund operating budget is public safety programs and services, with general government, public
works, and culture and recreation making up the balance. Because city government is primarily a service
industry, 77% of the operating budget is personal service expenditures and reflects the implementation of
the updated compensation plan goal.
Financial Impact
Summary of 2019 Budgets
Below is a summary of the proposed budgets Council has reviewed and to be approved:
General Fund $16,221,200
Special Revenue Funds:
Library $ 116,000
Ice Arena $ 783,950
Enterprise Funds:
Revenues Expenditures Depreciation Capital Net Effect
Sewer $2,825,500 $2,407,600 $1,575,000 $ 58,000 $(1,215,100)
Liquor $7,277,450 $6,894,850 $ 121,000 $100,000 $ 161,600
Garbage $1,653,500 $1,646,750 $ - $ - $ 6,750
Storm Sewer $ 537,000 $ 715,350 $ 455,000 $170,000 $ (803,350)
Attachments
Tax levy resolution
Tax levy breakout
General Fund summary
Resolution 18-____
A Resolution of the City of Elk River Authorizing the Proposed Property Tax
Levy for Collection in 2019
WHEREAS, the Elk River City Council has reviewed the City’s anticipated expenditures
for all funds in 2019; and,
WHEREAS, the Elk River City Council has considered projected revenues for all funds in
2019 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, Minnesota, as follows: The following amounts are to be levied as property taxes
payable in 2019:
Levy__
General Fund $ 11,187,400
Library 66,000
2010A G.O. Capital Improvement Plan Bonds 470,130
Economic Development Tax Abatement 160,235
Government Building Reserve 55,000
TOTAL $ 11,938,765
rd
Passed and adopted this 3 day of December 2018.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
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General Fund$10,497,800$11,242,400$11,187,400
Library54,00066,00066,000
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Special Levies:
2010 GO CIP Bonds369,500470,130470,130
Economic Development Tax Abatement142,530160,235160,235
Government Building Reserve55,000
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General Fund Change from Previous Year744,600689,600
Percentage Change from Previous Year7.1%6.6%
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CITY OF ELK RIVER
GENERAL FUND BUDGET
20182019% of %
BudgetFinal BudgetBudget Change
General Fund Revenues:
Property taxes$10,497,800$11,187,40069.0%6.6%
Other taxes150,000150,0000.9%0.0%
Licenses & Permits877,900857,0005.3%-2.4%
Intergovernmental Revenues551,500571,5003.5%3.6%
Charges for Services937,900969,2006.0%3.3%
Fines151,000154,5001.0%2.3%
Other Revenues226,500259,5001.6%14.6%
Transfers In2,063,9502,072,10012.8%0.4%
Total General Fund Revenues15,456,55016,221,200100.0%4.9%
General Fund Expenditures
General Government:
Mayor & Council155,300149,0500.9%-4.0%
Communications306,900326,3502.0%6.3%
Administrative Services511,900531,8503.3%3.9%
Human Resources250,550280,5001.7%12.0%
Elections 42,2506,8000.0%-83.9%
Finance586,250644,5504.0%9.9%
Information Technology431,300440,0002.7%2.0%
Legal230,000230,0001.4%0.0%
Community Development150,050162,7501.0%8.5%
Planning405,800352,5502.2%-13.1%
Building Maintenance 679,750714,4004.4%5.1%
Energy City33,00031,1500.2%-5.6%
Contingency -153,1000.9%-
Total General Government3,783,0504,023,05024.8%6.3%
Public Safety:
Police5,510,0505,754,70035.5%4.4%
Fire1,142,0001,145,5007.1%0.3%
Building Safety678,450721,9004.5%6.4%
Code Enforcement98,750115,7000.7%17.2%
Environmental48,40032,4500.2%-33.0%
Total Public Safety7,477,6507,770,25047.9%3.9%
Public Works:
Street Maintenance1,355,4501,396,7508.6%3.0%
Snow Removal298,700279,6001.7%-6.4%
Equipment Services 210,400216,3001.3%2.8%
Engineering234,200357,7502.2%52.8%
Total Public Works2,098,7502,250,40013.9%7.2%
Culture & Recreation:
Parks Maintenance 1,118,8001,135,1007.0%1.5%
Recreation726,800792,0004.9%9.0%
Sr. Citizen Programs251,500250,4001.5%-0.4%
Total Culture & Recreation2,097,1002,177,50013.4%3.8%
Total General Fund Expenditures$15,456,550$16,221,200100.0%4.9%