7.1 SR 12-05-2022City of
Qk*l
River
Request for Action
To
Item Number
Mayor and City Council
7.1
Agenda Section
I
Meeting Date
Prepared by
Public Hearing
December 5, 2022
Lori Ziemer, Finance Director
Item Description
Reviewed by
2023 Budget and Tax Levy
Cal Portner, City Administrator
Reviewed by
Action Requested
Approve, by motion, the 2023 General, Special Revenue, and Enterprise Fund budgets.
Adopt, by motion, the resolution authorizing the property tax levy for collection in 2023.
Background/Discussion
In May, staff began the budgeting process by developing their 2023 department goals and budget requests. Over
numerous work sessions, the City Council and staff reviewed in detail each department's operating budget and
the property tax levy. In September, the Council approved the preliminary tax levy that was used to calculate the
proposed property tax notice that was mailed to each property owner.
General Fund Budget
The 2023 General Fund budget is $20,490,000 compared to $18,913,650 in 2022. The greatest portion of the city's
General Fund operating budget is dedicated to public safety programs and services, with general government,
public works, and parks and recreation making up the balance. Due to the fact that city government is primarily a
service industry, 76% of the operating budget is for personal service expenditures.
Tax Lew
On September 6, the City Council adopted the preliminary tax levy of $15,202,106. Since then, additional
reductions of $107,150 have been made for a proposed tax levy of $15,094,956 for 2023.
The county estimates the city's Net Tax Capacity (NTC) value increasing about 20.6%, attributable to new
growth and market value increases. The final NTC may change slightly as the county continues to update
property values before calculating property taxes in early 2023. Based on the current NTC values, the proposed
tax rate is 39.618%, a decrease from last year's rate of 43.967%.
The city accounts for about 37% of a homeowner's total property tax bill. The remainder is attributed to the
county (36%), the school district (25%), and other jurisdictions (2%). For businesses, the city's share is about
28% of the total.
The majority of the property tax levy (92%) funds city services such as police, fire, street maintenance, parks and
recreation, and general government. The remaining 8% pays for debt service, tax abatement, and library
operations.
AR
Financial Impact
Summary of 2023 Budgets
Below is a summary of the proposed budgets Council has reviewed and to be
approved:
Revenues
Expenditures
Net Effect
General Fund
$ 20,490,000
$ 20,490,000
$ -
Special Revenue Funds:
Library
$ 118,000
$ 118,000
$ -
FTCenter
$ 1,680,350
$ 1,680,350
$ -
Enterprise Funds:
Revenues
Expenditures
Depreciation
Capital
Net Effect
Sewer
$ 3,791,000
$ 2,815,550
$1,645,000
$ 266,000
$ (935,550)
Liquor
$ 6,925,250
$ 7,610,300
$ 99,000
$ 80,000
$ (864,050)
Garbage
$ 1,932,500
$ 1,830,800
$ -
$ -
$ 101,700
Storm Water
$ 640,000
$ 282,550
$ 475,000
$ 500,000
$ (617,550)
Mission/Policy/Goal
Grow responsibly and be good
stewards for
every dollar to develop
a sustainable and prosperous
community.
Attachments
■ Tax levy resolution
■ 2023 Budget and Tax Levy Presentation
City of
Elk -�.-1
River
Resolution 22-
A Resolution of the City of Elk River Authorizing the Proposed Property Tax
Levy for Collection in 2023
WHEREAS, the Elk River City Council has reviewed the City's anticipated expenditures
for all funds in 2023; and,
WHEREAS, the Elk River City Council has considered projected revenues for all funds in
2023; 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 2023:
Levy —
General Fund $ 13,893,000
Library 75,000
2020A GO CIP Bond 606,346
2021A GO CIP/Equipment Bond 389,135
Economic Development Tax Abatement 131,475
TOTAL $ 15.094956
Passed and adopted this 51h day of December 2022.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
2023 Budget and Tax Levy Hearing
December 5, 2022
Purpose of Meeting
rca, �(,�
T- y �'o"r
■ 2023 Budgets:
42�6Jj
➢ General Fund �.f° G E r
➢ Special Revenue Funds' .
➢ Enterprise Funds
■ 2023 City Property Tax Levy
■ Public Comment
■ Approve Budgets
■ Adopt City Tax Levy
2023 General Fund Budget Summary
Revenues:
Property Taxes
Other Taxes
Licenses & Permits
Intergovernmental
Charges for Services
Fines
Other Revenues
Transfers In
Total Revenues
Expenditures:
General Government
Public Safety
Public Works
Parks & Recreation
Total Expenditures
2022
2023
%
$
BUDGET
PROPOSED
CHANGE
CHANGE
$13,109, 300
$13, 893, 000
6.0%
$ 783, 700
180,000
225,000
25.0%
45,000
865,700
1,004,300
16.0%
138,600
623,000
634,000
1.8%
11,000
1,018,000
1,127, 200
10.7%
109,200
120,000
130,000
8.3%
10,000
260,000
275,000
5.8%
15,000
2,737,650
3,201,500
16.9%
463,850
$18,913,650
$20,490,000
8.3%
$1,576,350
$4, 701, 050
$4, 913,100
4.5%
$212, 050
9,105,150
10, 061, 800
10.5%
956,650
2,623,750
2,771,500
5.6%
147,750
2,483,700
2,743,600
10.5%
259,900
$18,913,650
$20,490,000
8.3%
$1,576,350
General Fund Expenditures - by Function
EXPENDITURES:
2022
BUDGET
2023
PROPOSED
General Government
$ 4,701,050
$ 4,913,100
P u b l i c Saf ety
9,105,150
10,061,800
Public Works
2,623,750
2,771,500
Parks & Recreation
2,483,700
2,743,600
TOTAL
$18,913,650
$20,490,000
$25,000,000
$20,000,000
1
13% 3%
14%
$15,000,000 14%
$10,000,000 480/ 49%
$5,000,000
25% 24%
2022 2023
General Government Public Safety
Public Works Parks & Recreation
General Fund Expenditures - by Category
EXPENDITURES:
2022
BUDGET
2023
PROPOSED
CHANGE
Personal Services
$14,595,450
$15,662,350
$1,066,900
Supplies
1,224,950
1,426,100
201,150
Service Charges
3,093,250
3,401,550
308,300
TOTAL
1$18,913,650
1$20,490,000
1 $1,576,350
$25,000,000
$20,000,000
17%
16%
7/ $15,000,000 7%
$10,000,000
N77% 76%
$5,000,000
$0
2022 2023
Personal Services Supplies Service Charges
General Fund Revenues - by Source
REVENUES:
2022
BUDGET
2023
PROPOSED
Property Taxes
$13,109,300
$13,893,000
Other Taxes
180,000
225,000
Licenses & Permits
865,700
1,004,300
Intergovernmental
623,000
634,000
Charges for Services
1,018,000
1,127,200
Fines
120,000
130,000
Other Revenues
260,000
275,000
Transfers In
2,737,650
3,201,500
TOTAL
$18,913,650
$20,490,000
Property Taxes
Other Taxes
Licenses & Permits
Intergovernmental
Charges for Services
Fines
Other Revenues
Transfers In
$0 $4,000,000 $8,000,000 $12,000,000 $16,000,000
2022 BUDGET 2023 PROPOSED
General Fund Budget History
$24,000,000
$20,000,000
$16,000,000
MTransfer out
$12,000,000 Capital
Service Charges
Supplies
$8,000,000 Personal Services
$4,000,000
$0 Avg. - 5%
Other Budgets
■ Special Revenue
REVENUES:
Property Tax
User Fees
Other
Transfers In
Fund Balance Reserves
TOTAL REVENUES
EXPENDITURES:
Personal Services
Supplies
Service Charges
Capital
TOTAL EXPENDITURES
NET CHANGE
LIBRARY
$ 75,000
5,000
28,000
10,000
118,000
6,000
102,000
10,000
118,000
FTCENTER
1,576,000
4,000
100,350
1,680,350
917,800
102,850
457,700
202,000
1,680,350
Other Budgets
■ Enterprise
Funds:
STORM
SEWER
LIQUOR
GARBAGE
WATER
REVENUES:
Sales
$ -
$ 6,816,250
$ -
$ -
Cost of Sales
-
(4,937,100)
-
-
Gross Profit
-
1,879,150
-
-
User Charges
2,520,000
-
1,925,000
620,000
Other Revenue
1,271,000
109,000
7,500
20,000
TOTAL REVENUES
3,791,000
1,988,150
1,932,500
640,000
EXPENDITURES:
Operating Expenditures
2,037,500
1,423,200
1,774,300
147,550
Depreciation
1,645,000
99,000
-
475,000
Capital
266,000
80,000
-
500,000
Transfers Out
170,000
1,250,000
56,500
135,000
Debt Service
608,050
-
-
-
TOTAL EXPENDITURES
4,726,550
2,852,200
1,830,800
1,257,550
NET CHANGE
$ (935,550)
$ (864,050)
$ 101,700
$ (617,550)
Your Property Tex: Who Determines It?
State Legislature
* LskKj Ui isiie--!;. p r (i petty classes
class rates,
• Determines Ievels of state zIdl
• Levies state business tax
• Sets levyr IlimIts,
Taxing Jurisdictions
Determines levy amount
(Over.all budg t & the portion to be
raised through proverty t axes.
�r pert'y
County A s s eSSO r
F 1-j LerMi CS a r,.L-Vrket value
si-nprop I s
2022 Value Trends: Residential Taxpayer Impact
A-vera9c 21022 Reiidentiar Mue Increase
c.dr ; ir•r
b# c
s d°�
g 615iins ISirYG
Oit
G - Anoka
y, G �a-n
Maw
w 1r%
'ems - 5tDWk#
� ilk � •
Yoe,. �r
HKo1kq 'rLi WUd akip
Orown
Lhve
Wah
By MN law, assessors
must study actual sales
f property on the open
market in each
community for a 1 -
month period.
The current market has
d riven sig n ificant value
increases in 2022
Property Tax Valuation
THIS IS NOT A FALL, DO NOT PAY.
ALINES AND CLASSIF
#p Tees Payable Year
Estimated Market Value:
Homestead Exd ion:
Other Exdu§ionlDeferrals;
Taxable Market Value:
Property Classification:
2022 2023
$ 63,000 $,000
13, 570 $6, 6 40
NIA NIA
24 ,430 $333,360
Market Value Questions?
• Contact Sherburne County Assessor
i
Proposed Property Taxes and Meetings by Jurisdiction for Your Property
Contactlnfonnation
Actual2022 Proed2023 Meeting Information
Sherburne County
$r1,09 -36 $1.292,53 6:DD PM DEC I Ti HLIR
SHERBURNE CO BOARD
8MD ROOM
13880 Busines s Center Dr
GOVERNMENT CENTER
ELK RIVER. FYIN 55330
ELK FUVER MN 55 330
763-765-3D01
ELK RIVER CITY
$1,096.54 $1,320M 6:30 PM DEC 5 MON
CAL POR TN ER
CITY HAIL
CITY HALL.13065 ORONO PKW
130665ORONO PARKWAY
ELK RIVER, MN 55330
ELKRIVERMNM30
7n635-1000
whwelkrivermn.gov
State C7eneral Tax $0.00
ELK RIVER - ISD 0728 VoterAp ved Levy $872V
JO€ PRIMU . Dir of Fin Other Local Levies $770.37
1 1500 1943RD AVE irW
ELK RIVER, MN SM30
763-241-3437
v.rj-isd728_orq
Lake I mprovern ant District $0.00
Special Taxing Districts $5.49
$0-00 NO MEETING R EGUI RED
$946A1 6:00 PM DEC 12 MON
I*B8Z94 SCHO(7L DIST OFFICE
tI WO 100 AVE i
ELK RIVER MN 55330
$tl_00
$6.98
NewTruth-in-Taxation Notice
Levy Information
2022 2023 Percent
Taxing Authority Current Year Prupused Change
Sherburne County $54, 68'9, 085 $58. 726, 360 7 .
Elk River City $13.1385.700 $15, 202,106 9.5%
Elk River $62,424.579 $68,584,34a 9.92 '
City Summary Budget Information
2022
2a23
Percent
Category
Current Year
Proposed
Change
Revenues
Property Taxes
$13.185,250
$14.075.150
6.7%
Special Assessments
.0%
State General Purpose Aid
$6,000
$6,000
.0%
State Categorical Aid
$617.000
$608,000
-1.5%
All Other Revenues
$6 , 764 , 550
$7 , 379 , 900
9.1%
Expenditures
General Government
$4,701,050
$4,910,309
4.51
Public Safety
$9,105,150
$10,060.000
10.5%
Streets and Highways
$2,623,750
$2.832,950
8.Dz
Sanitation
.0%
Human Servioes
.0%
health
. D%
Culture and Recreation
$4 , 046 , 750
$4,483, 550
10 .
Conservation of Nat'l Res
.09
Economic Dev & Housing
0%
All ❑ her Current Exp
.0%
City Tax Levy
2022
2023
2023
Change from 2022
Levy Component
Levy
Preliminary
Proposed
Amount
Percent
General Fund
$13,109,300
$14,000,150
$13,893,000
$783,700
6.0%
Library
75,950
75,000
75,000
(950)
-1.3%
Debt Service
602,650
995,481
995,481
392,831
65.2%
Tax Abatement
97,800
131,475
131,475
33,675
34.4%
$13,885,700
$15,202,106
$15,094,956
$1,20%256
8.7%
Total
NTC Valuation
$31,581,676
$38,101,440
$38,101,440
$6,51%764
20.6%
Tax Rate - City
43.967%
39.899%
39.618%
-4.349%
Tax Levy by Use
Librar,
Parks & 1%
Recreation
12%
Public Works
12%
nohr cor.,iro
Econ. Develop.
1%
General Govt.
22%
Public Safety
45%
Tax Levy -Tax Rate History
Tax Levy
Tax Rate
$16,000,000
55.000%
$14,000,000
48.544 %
50.000%
$12, 000, 000
7,190%
46.170% 46.193% 46.011% 45.907% 46.241%
$10,000,000
__ °
43.967% 45.000%
��
Tax Levy
$8,000,000
flax Rate
9.618 .
$6,000,000
40.000%
$4,000,000
35.000%
$2,000,000
$0
30.000%
2014 2015 2016 2017 2018 2019 2020 2021
2022 2023
Tax Capacity Rates
city, county & school comparison (estimates only)
ENTITY
2022
ACTUAL
2023
PRELIMINARY
2023
PROPOSED
Change
from 2022
City
43.967
39.898
39.618
-4.349
E DA
1.150
1.039
1.039
-0.111
H RA
1.050
1.056
1.056
0.006
County
44.080
38.768
38.768
-5.312
School
30.889
26.483
26.483
-4.406
Total Tax Rate
121.136
107.244
106.964
-14.172
PropertyTax Dollar Distribution
Other
$.02
School
District ' �
$ City
.25
AtIk $.37
County
$.36
Estimated CityTax Impact
Residential (Homestead): With Valuation Change Impact
Estimated City Tax
Estimated
Market Value
Tax Capacity
Tax Capacity Rate
43.967%
39.618%
Property Value
Value
Change
Exclusion
Value
Dollar
change
Percent
change
2022
2023
2022
2023
2022
2023
2022
2023
$227,800
$281,500
23.6%
$16,738
$11,905
$2,111
$2,696
$928
$1,068
$140
15.1 %
$300,800
$345,500
14.9%
$10,168
$6,145
$2,906
$3,394
$1,278
$1,344
$66
5.2%
$364,200
$440,500
21.0%
$4,462
$0
$3,597
$4,405
$1,582
$1,745
$163
10.3%
$416,300
$490,700
17.9%
$0
$0
$4,163
$4,907
$1,830
$1,944
$114
6.2%
$263,000
$340,000
29.3%
$13,570
$6,640
$2,494
$3,334
$1,097
$1,321
$224
20.4%
$263,000
$263,000
0.0%
$13,570
$13,570
$2,494
$2,494
$1,097
$988
($109)
-9.9%
** Median Value Home
As property value increases, the market value exclusion is phased out at $413,800 & over.
Distribution of 2023 CityTax
Median Value Home - $340,000
City Tax - $3.62/day
B 03542754 F ,
WASHTVGTON,D.C.
. F 2 I
$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00
■ $1.21- Police
w $.30 - Fire
■ $.46 - Parks & Rec.
■ $.31- Street Maint.
■ $1.07 - Other Govt Svcs
= $.24 - Debt Service
■ $.03 - Econ. Develop.
Next:
■ Receive public comment regarding budget/levy
■ Approve 2023 General, Special Revenue, and
Enterprise Fund budgets
• Adopt 2023 City PropertyTax Levy