7.1 SR 12-04-2023
Request for Action
To Item Number
Mayor and City Council 7.1
Agenda Section Meeting Date Prepared by
Public Hearing December 4, 2023 Lori Stich, Finance Manager
Item Description Reviewed by
2024 Budget and Tax Levy Joe Stremcha, Assistant City Administrator
Reviewed by
Cal Portner, City Administrator
Action Requested
Approve, by motion, the 2024 General, Special Revenue, and Enterprise Fund budgets.
Adopt, by motion, the resolution authorizing the property tax levy for collection in 2024.
Background/Discussion
In May, staff began the budgeting process by developing their 2024 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 2024 General Fund budget is $21,570,600 compared to $20,490,000 in 2023. 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. Because city government is
primarily a service industry, 76% of the operating budget is for personal service expenditures.
Tax Levy
On September 5, the City Council adopted the preliminary tax levy of $16,641,082. Since then, additional
reductions of $503,750 have been made for a proposed tax levy of $16,137,332 for 2024.
Sherburne County estimates the city’s Net Tax Capacity (NTC) value increasing about 11.8%, attributable to
new growth and market value increases. The final NTC may change slightly as the county continues to update
property values before calculating property taxes in early 2024. Based on the current NTC values, the proposed
tax rate is 37.895%, a decrease from last year’s rate of 39.618%.
The city accounts for about 38% of a homeowner’s total property tax bill. The remainder is attributed to the
county (36%), the school district (24%), and other jurisdictions (2%). For businesses, the city’s share is about
28% of the total.
Most of the property tax levy (93%) funds city services such as police, fire, street maintenance, parks and
recreation, and general government. The remaining 7% pays for debt service, tax abatement, and library
operations.
RevenuesExpendituresNet Effect
General Fund$ 21,570,600$ 21,570,600$ -
Special Revenue Funds:
Library$ 112,000$ 125,000$ (13,000)
FTCenter$ 1,896,000$ 1,842,150$ 53,850
Enterprise Funds:RevenuesExpendituresDepreciationCapitalNet Effect
Sewer$ 3,936,000$ 2,938,310$ 1,705,000$ 173,000$ (880,310)
Liquor$ 8,295,000$ 8,732,550$ 100,000$ 91,000$ (628,550)
Garbage$ 2,017,800$ 1,900,200$ -$ -$ 117,600
Storm Water$ 655,000$ 629,600$ 495,000$ -$ (469,600)
Financial Impact
Summary of 2024 Budgets
Below is a summary of the proposed budgets Council has reviewed and to be approved:
Mission/Policy/Goal
Grow responsibly and be good stewards for every dollar to develop a sustainable and prosperous community.
Attachments
Tax levy resolution
Resolution 23-____
A Resolution of the City of Elk River Authorizing the Proposed Property Tax
Levy for Collection in 2024
WHEREAS, the Elk River City Council has reviewed the City’s anticipated expenditures
for all funds in 2024; and,
WHEREAS, the Elk River City Council has considered projected revenues for all funds in
2024; 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 2024:
Levy__
General Fund $ 14,917,700
Library 79,000
2020A GO CIP Bond 608,709
2021A GO CIP/Equipment Bond 392,023
Economic Development Tax Abatement 139,900
TOTAL $ 16,137,332
th
Passed and adopted this 4 day of December 2023.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
City Council 2024 Budget–Truth in Taxation
Purpose of Meeting Truth in Taxation Public Hearing Adopt City Tax LevyApprove 2024 BudgetsReceive Public CommentProperty Tax Levy OverviewEnterprise FundsSpecial Revenue FundsGeneral
FundReview 2024 Budgets:
2024 General Fund Budget Summary
20232024%$
BUDGETPROPOSEDCHANGECHANGE
Revenues:
Property Taxes$13,893,000$14,917,7007.4%$1,024,700
Other Taxes225,000225,0000.0%0
Licenses & Permits1,004,3001,008,2000.4%3,900
Intergovernmental634,000659,0003.9%25,000
Charges for Services1,127,2001,148,2001.9%21,000
Fines130,000150,00015.4% 20,000
Other Revenues275,000330,00020.0%55,000
Transfers In3,201,5003,132,500-2.2%(69,000)
Total Revenues$20,490,000$21,570,6005.3%$1,080,600
Expenditures:
General Government$4,913,100$5,349,4008.9%$436,300
Public Safety10,061,80010,429,6003.7%367,800
Public Works2,771,5003,039,7509.7%268,250
Parks & Recreation2,743,6002,751,8500.3%8,250
Total Expenditures$20,490,000$21,570,6005.3%$1,080,600
24%by Function–General Fund Expenditures General GovernmentPublic SafetyPublic WorksParks & Recreation $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $-13%13%14%14%48%49%25%
20232024
EXPENDITURES:BUDGETPROPOSED
General Government$ 4,913,100 $ 5,349,400
Public Safety10,061,80010,429,600
Public Works2,771,5003,039,750
Parks & Recreation2,743,6002,751,850
TOTAL$20,490,000$21,570,600
76%1%by Category–General Fund Expenditures Debt ServiceService ChargesSuppliesPersonal Services$25,000,000$20,000,000$15,000,000$10,000,000$5,000,000$0 16%17%7%7%76%
20232024
EXPENDITURES:BUDGETPROPOSEDCHANGE
Personal Services$15,662,350$16,448,200$785,850
Supplies1,426,1001,482,30056,200
Service Charges3,401,5503,524,150122,600
Debt Service - 115,950115,950
TOTAL$20,490,000$21,570,600$1,080,600
$0 by Source–General Fund Revenues 2024 PROPOSED2023 BUDGETProperty TaxesOther TaxesLicenses & PermitsIntergovernmentalCharges for ServicesFinesOther RevenuesTransfers In$16,000,000$12,000,000$8,000
,000$4,000,000
20232024
REVENUES:BUDGET PROPOSED
Property Taxes$13,893,000$14,917,700
Other Taxes225,000225,000
Licenses & Permits1,004,3001,008,200
Intergovernmental634,000659,000
Charges for Services1,127,2001,148,200
Fines130,000150,000
Other Revenues275,000330,000
Transfers In3,201,5003,132,500
TOTAL$20,490,000$21,570,600
$0 General Fund Budget History 6%-Avg. Personal ServicesSuppliesService ChargesCapitalTransfer out$24,000,000$20,000,000$16,000,000$12,000,000$8,000,000$4,000,000
Other Budgets Special Revenue Funds–
LIBRARYFTCENTER
REVENUES:
Property Tax$ 79,000 $ -
User Fees - 1,894,000
Other 5,000 2,000
Transfers In 28,000 -
Fund Balance Reserves 13,000 -
TOTAL REVENUES 125,000 1,896,000
EXPENDITURES:
Personal Services - 900,650
Supplies 8,000 159,800
Service Charges 104,000 661,300
Capital 13,000 120,400
TOTAL EXPENDITURES 125,000 1,842,150
NET CHANGE$ -$ 53,850
STORM
Other Budgets –
WATER
SEWERLIQUORGARBAGE
REVENUES:
Sales$ -$ 8,161,000 $ -$ -
Cost of Sales - (6,028,000) - -
Gross Profit - 2,133,000 - -
User Charges 2,630,000 - 2,009,800 630,000
Other Revenue 1,306,000 134,000 8,000 25,000
TOTAL REVENUES 3,936,000 2,267,000 2,017,800 655,000
EXPENDITURES:
Operating Expenditures 2,160,510 1,454,550 1,842,200 454,600
Depreciation 1,705,000 100,000 - 495,000
Capital 173,000 91,000 - -
Transfers Out 175,000 1,250,000 58,000 175,000
Debt Service 602,800 - - -
TOTAL EXPENDITURES 4,816,310 2,895,550 1,900,200 1,124,600
NET CHANGE$ (880,310)$ (628,550)$ 117,600 $ (469,600)
Your Property Tax: Who Determines It?property taxes)portion to be raised through (Overall budget amount and the Determines levy amount Taxing Jurisdictions assigns property classDetermines
market value and County Assessor tax, and sets levy limitsstate aid, levies state business rates, determines the levels of Establishes property classes/class State Legislature
PROPOSED TAXES 2024 Increased by 34%Taxable Market Value Rate Reduced by 51%Homestead Exclusion Increased by 30%Estimated Market Value Property Tax Valuation Example(Spring 2024)Attend
Local Board of Review Public Hearing Contact Sherburne County AssessorMarket Value Questions?Taxes Payable Year Property Classification:Taxable Market Value:Other Exclusion/Deferrals:Homestead
Exclusion:Estimated Market Value:RES HMSTD$249,430N/A$13,570$263,000RES HMSTD$333,360N/A$6,640$340,000 20242023
Property Tax Dollar Distribution$.02Other$0.24School$0.36County$0.38City
Municipal Liquor Reduces Our Tax Levy Impact The 2022 Minnesota Municipal Liquor Store Report will be published December 2023. In 2021, Elk River was ranked #8 out of 177 municipal liquor
operations gross sales. In 2024, our liquor operations will provide $1,250,000 in governmental fund transfers. 100% of all proceeds are reinvested into our community and this reduces
our tax levy.
City Tax Levy
202320242024Change from 2023
Levy Component Levy PreliminaryProposedAmountPercent
General Fund$13,893,000$15,421,450$14,917,700$1,024,7007.4%
Library75,00079,00079,0004,0005.3%
Debt Service995,4811,000,7321,000,7325,2510.5%
Tax Abatement131,475139,900139,9008,4256.4%
Total$15,094,956$16,641,082$16,137,332$1,042,3766.9%
NTC Valuation$38,101,440$42,584,195$42,584,195$4,482,75511.8%
Tax Rate - City39.618%39.078%37.895%-1.723%
General Govt.Tax Levy by Use 1%Econ. Develop.6%Debt Service0%Library12%RecreationParks & 13%Public Works45%Public Safety23%
Tax Capacity Rates city, county & school comparison (estimates only)
202320242024Change
ENTITYACTUAL PRELIMINARYPROPOSED from 2023
City39.70039.07937.895
-1.805
EDA1.0410.9770.977
-0.064
HRA1.0581.0331.033
-0.025
County38.63036.62236.622
-2.008
School26.60523.88223.882
-2.723
Total Tax Rate107.034101.593100.409
-6.625
47.190%Tax Rate History-Tax Levy Tax LevyTax Rate Tax RateTax Levy2024202320222021202020192018201720162015$18,000,000$16,000,000$14,000,000$12,000,000$10,000,000$055.000%50.000%45.000%40.000%35.000%3
0.000%37.895%39.618%43.967%44.556%46.241%45.907%46.011%46.193%46.170%
Estimated City Tax Impact
Residential (Homestead): With Valuation Change Impact
Estimated City Tax
Estimated Market ValueTax CapacityTax Capacity Rate
Property ValueValue ExclusionValue39.700%37.895%DollarPercent
20232024Change202320242023202420232024changechange
$281,500$298,8006.1%$11,905 $10,348 $2,696$2,885$1,070$1,093$232.1%
$345,500$360,2004.3%$6,145 $4,822 $3,394$3,554$1,347$1,347$00.0%
$490,700$565,80015.3%$0 $0 $4,907$5,658$1,948$2,144$19610.1%
$243,800$260,9007.0%$2,285$2,471$907$937$303.3%
$15,298 $13,759
$546,800$602,80010.2%$0 $0 $5,468$6,028$2,171$2,284$1135.2%
$448,400$459,9002.6%$0 $0 $4,484$4,599$1,780$1,743($37)-2.1%
$340,000$364,9007.3%$6,640 $4,399 $3,334$3,605$1,323$1,366$433.3%
$340,000$340,0000.0%$6,640 $6,640 $3,334$3,334$1,323$1,263($60)-4.5%
** Median Value Home
* As property value increases, the market value exclusion is phased out at $413,800 & over.
Tax Rate Impact on Taxes Payable Year Property Classification:Taxable Market Value:Other Exclusion/Deferrals:Homestead Exclusion:Estimated Market Value:RES HMSTD$249,430N/A$13,570$263,000RES
HMSTD$333,360N/A$6,640$340,000 20242023 PROPOSED TAXES 2024 Taxable Market Value
What If…. No 2024 Tax Levy Increase?IMPACT FACTORS 30%, Levy70%, Market Value
$0.00 Distribution of 2024 City Tax $.03 - Econ. Develop.$.23 - Debt Service$1.14 - Other Govt Svcs$.35 - Street Maint.$.46 - Parks & Rec.$.32 - Fire$1.22 - Police$3.75/DAYCITY TAX $364,900MEDIAN
VALUE HOME $4.00$3.50$3.00$2.50$2.00$1.50$1.00$0.50
City Council Next StepsQuestions?budget/levycomment regarding Receive public Enterprise Fund budgetsSpecial Revenue, and Approve 2024 General, Property Tax LevyAdopt 2024 City