5.2. & 5.3. SR 12-09-2002Item 5.2 & 5.3.
I IEMORANDUM
TO:
FROM:
DATE:
Mayor and City Council
Pat Klaers, City Administ~/~r
December 9, 2002
SUBJECT: Approve Resolution Setting Final Tax Levy for Taxes Payable
2003 and Consider Motion Adopting 2003 Budget
At this December 9, 2002 meeting, this City Council is requested to approve the proposed
2003 tax levy resolution, and the proposed 2003 General Fund budget, and the Special
Revenue funds.
The City Council reviewed the proposed 2003 budget at a number of City Council meetings
in August and September. On September 9, 2002, the City Council approved a resolution
that called for the 2003 proposed maximum levy of $5,980,161. This is an $861,873 increase
over the adopted 2002 tax levy amount. Included within this increase is $634,000 for the
public safety facility.
On December 2, 2002, the City Council held its truth in taxation public hearing. This public
hearing is required by state law to receive public input on the proposed city tax levy and
budget. The county sent out notice of this public hearing to all property owners in the city.
A notice was also published in the November 27, 2002, Elk River StarNews.
At this December 2 public hearing the proposed 2003 tax levy and the proposed 2003
budget of $7,687,900 was reviewed and discussed. The proposed budget is 6.55 percent
more than the adopted 2002 budget. At this public hearing one property owner addressed
the City Council with a question about city reserves and expenses related to employee health
insurance.
The 2002 city tax rate is 43.6. Based on the proposed tax levy the 2003 tax rate is estimated
at 44.513. This is a 2.1 percent increase in the city tax rate. This is the increase a property
owner will see in the city taxes i_f their property value did not increase; however, this is not
likely to be the case for most property owners in 2003. According to Sherburne County
information that was provided to the city in September, the city net tax capacity (NTC)
increased by 14.44 percent for 2003. This citywide increase in the NTC is the reason why the
S/Council/Pat/Budget/ApproveBudget&FinalTaxLevy
city tax levy can increase substantially and yet the city tax rate only increased moderately. It is
safe to assume that most property owners saw an increase in their valuation, and accordingly,
most property owners saw more than a 2.1 percent increase in their city taxes.
Additionally, Sherburne County has recently advised the city about the estimated 2003 tax
rates. The total tax rate for 2003 is projected at 136.37. This is a decrease from the 2002 tax
rate of 139.799.
Finally, this budget memo would not be complete unless a comment or two is made
regarding the state budget problems. According to the most recent information available, the
state is facing a $4.5 billion deficit over the next two and a half years. This deficit includes
over $300 million that must be addressed before the end of June 2003. The balance of the
deficit is for the 2003-05 budget. The governor-elect indicated that he believes the deficit can
be addressed with spending reductions. Elk River receives $937,150 from the state as local
government aid (LGA). It is very, very, likely that this program will be reduced for 2004 and
beyond. At this time the concern is whether or not cuts will be made in promised 2003
LGA. If cuts are made to the 2003 LGA program, then the city will either have to reduce
expenditures and/or use fund balance reserves to balance the budget.
Attachments · 2003 General Fund Revenue Pages
· 2003 General Fund Expenditure Page
· Special Revenue Funds Summary Page
· 2003 Tax Levy Resolution.
Recommendation
It is recommended that the City Council approve Resolution 02-__ authorizing the 2002
proposed tax levy for collection in 2003.
It is recommended that the City Council approve a motion adopting the 2003 municipal
general fund budget and the Special Revenue funds.
S/Council/Pat/Budget/ApproveBudget&FinalTaxLcvy
SOURCE OF FUNDS
2000 2001 2002 2003
ACTUAL ACTUAL ADOPTED PROPOSED
GENERAL PROPERTY TAX
INTERGOVERNMENTAL REVENUES
CHARGES FOR SERVICES
FINES & FORFEITS
LICENSES & PERMITS
OTHER REVENUES
TRANSFERS
TOTAL
3,288,976 $ 3,784,590 $ 4,163,150 $ 4,588,800
1,109,078 1,284,155 1,190,400 1,188,250
596,203 693,374 599,750 644,700
119,421 89,221 237,500 156,000
749,888 989,052 566,600 621,950
180,155 127,420 111,100 107,200
276,400 273,274 347,000 381,000
$ 6,320,121 $ 7,241,086 $ 7,215,500 $ 7,687,900
GENERAL PROPERTY TAX
Ad Valorem Tax
INTERGOVERNMENTAL REVENUES
Local Government Aid
PERA Aid
Low Income Housing Aid
Police Relief
Gravel Tax
Urban Street Maintenance
Police Training Reimbursement
Other Grants (Safe & Sober)
CHARGES FOR SERVICES
GENERAL GOVERNMENT
Administrative Project Fees
Planning & Zoning Fees
Plan Check Fees
Contractor License Surcharge
Sewer Inspection Fees
Miscellaneous Sales
Assessment Searches
PUBLIC SAFETY
School Liaison
Police Contract
Lockout Fees
Impound Fees
Fire Calls & Contracts
PUBLIC WORKS
Street Services
RECREATION
Recreation Fees
Concessions
Bulilding Rent
Park\Facility Fees
$ 4,588,800 $ 4,588,800
................................................937,150
................................................11,500
................................................132,000
................................................54,000
................................................33,350
................................................10,500
................................................9,750
................................................25,000
................................................20,000
................................................252,300
................................................2,000
................................................7,000
................................................4,500
................................................1,800
................................................ 21,500
................................................ 4,000
................................................ 20,000
................................................ 2,500
................................................ 86,000
30,000
................................................ 95,000
................................................ 52,000
................................................ 3,600
................................................ 17,500
1,188,250
644,700
SOURCE OF FUNDS
FINES & FORFEITS
Court Fines
Parking Fines
150,000
6,000
156,000
LICENSES & PERMITS
PERMITS
Building Permits
Building Permit Surcharge
Plumbing & Heating Permits
Other Non-Business
LICENSES
Animal
Cigarette
Liquor
Amusement
Gas Fitters
Garbage Haulers
Mineral Extraction
Apartment Licenses
Other Business
OTHER REVENUE
Interest
Landfill Surcharge
Contribution-Guardian Angels
Refunds & Reimbursements
TRANSFERS
Liquor
Landfill
Street Reserve
NSP/RDF Reserve
Sewer
Utilities
Development
Drug Forfeiture Reserve
Economic Development Authority
Housing & Redevelopment Authority
419,550
1,200
90,000
6,000
1,500
3,000
53,45O
1,400
3,000
85O
13,500
13,500
15,000
90,000
9,000
3,700
4,500
145,000
30,000
45,000
39,500
10,000
105,000
5,000
1,500
621,950
107,200
381,000
TOTAL SOURCE OF FUNDS $ 7,687,900
APPROPRIATIONS SUMMARY
2000 2001 2002 2003
A~ual A~ual Adored Proposed
122,067 $ 153,458 $ 162,100 $ 172,300
32,777 53,916 63,750 97,900
314,061 322,966 325,450 350,900
23,375 10,680 49,150 -
309,899 325,016 364,950 345,550
97,500
76,752 54,695 220,000 213,750
230,800 241,991 271,300 290,550
103,684 146,130 141,300 138,300
47,082 140,882 95,000 75,000
2,241,084 2,441,444 2,501,950 2,665,950
345,208 361,092 378,950 418,500
14,848 19,183 20,200 23,450
476,293 515,174 591,700 567,900
566,775 776,801 697,600 763,500
94,435 113,055 174,000 167,050
163,011 205,239 236,100 265,450
44,206 177,816 53,000 75,000
298,337 273,596 300,600 300,300
15,746 8,659 13,050 2,000
182,233 236,303 306,700 440,800
63,105 68,297 81,200 82,200
33,850 19,183 26,700 -
5,131 11,386 20,650 20,850
132,637 197,570 120,100 113,200
MAYOR & COUNCIL
CABLE TV
ADMINISTRATION
ELECTIONS
FINANCE
INFORMATION TECHNOLOGY
LEGAL
PLANNING (Includes Plan.Comm.)
GOVERNMENT BUILDINGS
CONTINGENCY
POLICE (Includes Police Reserve)
FIRE
EMERGENCY PREPAREDNESS
BUILDING & ENVIRONMENTAL
STREETS
SNOW REMOVAL
EQUIPMENT SERVICES
ENGINEERING
PARKS
SHADE TREE
RECREATION
SR. CITIZEN PROGRAMS
ECONOMIC DEVELOPMENT
ENERGY CITY
TRANSFERS
TOTAL EXPENDITURES
$ 5,937,396 $ 6,874,532 $ 7,215,500 $ 7,687,900
Special Revenue Funds
2003
Proposed
$ 63,750
688,400
357,100
107,500
48,500
16,900
290,250
Library
Ice Arena
Equipment Certificates
Equipment Reserve
Sanitary Landfill
Safety
Storm Sewer
RESOLUTION 02 -
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION AUTHORIZING THE PROPERTY TAX LEVY
FOR COLLECTION IN 2003
WHEREAS, the Elk River City Council has reviewed the City's anticipated
expenditures for all funds in 2003; and,
WHEREAS, the Elk River City Council has considered projected revenues for
all funds in 2003; and,
WHEREAS, revenues from sources other than property taxes are not sufficient
to meet anticipated expenditures of all funds.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River that
the following amounts are to be levied as property taxes payable in 2003:
General Fund
Street Replacement
Library
Surface Water Management
City Special Assessments
1994 Storm Sewer Bonds
2003 Certificate of Indebtedness
2000 Certificate of Indebtedness
1999 Certificate of Indebtedness
PERA Employer Rate Increase
Public Safety Lease Revenue Bonds
Economic Development Tax Abatement
TOTAL
Levy
$4,580,083
150,000
69,000
175,000
25,298
115,233
140,000
41,088
35,032
9,713
634,000
5,714
$5,980,161
Passed and adopted by the City Council of the City of Elk River this 9th
day of December, 2002.
ATTEST:
Stephanie Klinzing, Mayor
Sandra A. Peine, City Clerk