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8.0. SR 09-09-1996ITEM 8. 'ity of iver MEMORANDUM TO: FROM: DATE: SUBJECT: Mayor and City Council Pat Klaers, City Admi~or September 4, 1996 1997 Budget The next City Council worksessions on the 1997 budget are scheduled for September 9 and 11. At the end of the first worksession on August 26, 1996, all of the general fund revenues and expenditures were presented and reviewed. As discussed on 8/26/96, the current "budget gap" is $75,400. This budget gap amount of $75,400 assumed that the city will increase its property tax revenue in the 1997 general fund by $337,400. This is the same amount that the general fund tax revenue increased last year and required an approximately 15 percent growth in the city's net tax capacity (NTC) in order for there to be no change in the city's tax rate. On Friday, August 30, 1996, city staff was advised by county officials that the city NTC is estimated to increase by 12.09 percent. This means that a city tax rate increase will be necessary in order for the city to obtain the amount of general fund tax revenues that was discussed at the budget worksession. To generate this amount of tax revenue would require a 3 percent increase in the city tax rate. The city tax rate would go from 24.033 percent to 24.765 percent. In spite of the city having a low total tax rate when compared to similar communities, any type of tax rate increase must be looked at carefully. If the city is to experience no city tax rate change for 1997, an additional $87,700 will have to be cut from the tax revenues and proposed expenditures. While tax revenues received a fair amount of discussion at the 8/26/96 worksession, the other important element of the 1997 budget, personnel additions, did not receive much discussion. Personnel additions and wage increases are in the City Council contingency fund. The city tends to make the funding of personnel from the contingency fund "work out" because new employees are usually hired throughout the year and not all at the beginning of the year. The 1996 adopted and 1997 proposed Council contingency funds are both $193,500. 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 Mayor and City Council Budget Memo September 4, 1996 2 The proposed personnel for 1997 that needs to be discussed by the City Council includes the following: Mechanic- $38,000 · Seasonal PT Park Ranger- $2,500 · Seasonal PT Park Maintenance - $4,500 · Additional PT Fire Inspection Hours - $5,000 · Changing Police Office Service Worker (OSW) from PT to FT- $12,000 · Police Services- $56,500 · PT Administrative OSW- $10,000 These positions, and two other full time positions, are noted in my 8/26/96 budget memo to the Council. As the Council knows, just because new personnel are funded through the contingency fund and these positions are being considered, all new positions need further review and approval by the Council at a future date. Nonetheless, if the aforementioned positions are approved by the City Council, this equals $128,500 in annual (1997) expenses. Combined with the contingency expense of wage increases for the non-union general fund employees, which is estimated at $46,000, the Council is left with a very small amount of money for true contingency expenditures. However, the Council can obtain more flexibility in contingency expenses if, for example, the mechanic is hired during the summer and the change in status of the Police OSW does not take place until the summer. Even with using this delayed hiring approach to provide more flexibility for the City Council, it would be very desirable if the Council contingency fund could be increased in the 1997 budget. We currently have a budget gap of $75,400 between the proposed expenditures and the available revenues. This is based on a NTC growth of approximately 12 percent and a 3 percent increase in the city tax rate. The following list of possible budget adjustments is offered for your review. This list is fairly short because staff already made a number of adjustments in the revenues and expenditures in order to achieve the $75,400 gap that we are now evaluating. · Add $25,000 in revenues for school liaison services and requests continued school participation in this program for the third officer which serves as the secondary DARE officer. · Add $5,000 in street reserve transfers. · Add $5,000 in liquor store transfers. · Cut $11,500 from the Planning budget by delaying the hiring of the Planning intern that is scheduled for 1996; but which has not been approved by the Council. The entire 1997 salary for this position is in the Planning budget and we could save $11,500 in this budget by delaying the hiring of this employee until June, 1997. · Cut $2,300 from the City Council budget by changing the City Newsletter from 6 times a year to 4 times a year. Mayor and City Council Budget Memo September 4, 1996 3 · Cut $5,500 from the City Council budget by deleting the purchase of the City Council Chambers computer software and presentation package...or move this expense to the equipment reserve or certificate budget. · Cut 0-$8,000 from the Administration budget by putting less funds into the reserves for the copy machine that is anticipated to be needed in 1998. · Cut 0-$4,000 from the Government Buildings budget by moving the window coverings expense to either equipment reserves or certificates. · Cut 0-$2,000 from the street painting (striping) program. · Cut 0-$2,000 from the snow plowing contract. · Cut 0-$3,000 from the youth initiative proposal. · Cut 0-$2,000 by reducing the Ice Arena Reserve allocation. · Cut 0-$1,000 from the Recreation budget in the Cultural Activities line item (the proposed budget included the contribution for the Community Theater increasing from $1,000 to $2,000). · Direct staff to identify $15,000 in smaller miscellaneous cuts and revenue additions throughout the general fund budgets. If the City Council desires that the budget be further reduced by up to $87,700 in order for the city tax rate change to be somewhere between 0 and 3 percent, then more dramatic budget adjustment steps will need to be taken. One possibility would be to not hire the mechanic and other positions and to reduce the City Council Contingency fund. Another possibility is to move even more of the general fund capital outlay items to the equipment reserves or the three (or five) year equipment certificate payment plan. Additionally, the Council could look at keeping the surface water management (SWM) levy at the same level as last year and moving the proposed additional tax revenues into the general fund budget. However, more SWM projects are anticipated in the next few years for helping to improve parts of the county ditch system that the city would take over (especially ditch 28) and to help address pending surface water needs for development on the east side of Highway 169. The main purpose of these September worksessions is to close the budget gap and to discuss the tax revenue issue. It should be noted that what the City Council needs to certify to the County by September 16, 1996, is the proposed maximum levy and that this amount can be decreased, but can not be increased, in December when we have our public hearing on the 1997 budget and levy. At the September budget worksession, the City Council should consider: A motion approving the EDA tax levy resolution A motion approving the HRA tax levy resolution A motion to adjust the debt levies per the recommendation of the Assistant City Administrator (Lori will have a handout and make a presentation on these adjustments at the worksession) Mayor and City Council Budget Memo September 4, 1996 4 · A motion approving the general city tax levy resolution (this resolution also approves the proposed maximum budget) · A motion calling for the city truth in taxation public hearing on the tax levy and budget for December 2, 1996, with a continuation date of December 9, 1996. During the budget process, the council always reviews a number of non-general fund budgets and programs. The revenues for a number of these budgets are incorporated into the tax levy resolution. The revenues for the library budget, special assessments, equipment certificates and the surface water management (SWM) program are part of the tax levy resolution. The library budget and special assessment budget were distributed at the last worksession. The equipment certificate amount is identified in the capital outlay page that was distributed with the 8/26/96 budget memo. The SWM levy is established at 2.25% of the NTC. The currently proposed levy amount that is in the levy resolution is consistent with this past City Council direction. The city will need to discuss status of the SWM program, but this can be done at a future meeting. The other non-general fund programs include the EDA and HRA budgets (distributed on 8/26/96), the equipment reserve budget (also outlined on the capital outlay page), the landfill budget and the ice arena budget. The ice arena information was distributed at the 8/26/96 meeting and this information came directly from the adjusted Marquette study as previously accepted by the City Council. The landfill budget is very straight forward, contains about 13% of the Building/Zoning Administrator's time and is decreasing for 1997. The equipment reserve, landfill and ice arena programs do not have any impact on the city tax levy. At the end of the budget review, and as time allows, I would like to review with the City Council the status of some additional capital improvement program items that have been moving forward this summer. Many of these items were discussed in my 8/5/96 memo that was previously distributed. My current concerns include the funding of the recreation fields project and the city contribution to the ice arena project. Attachments: · Source of Funds (note the LGA decrease for TIF loss and the corresponding transfer in for municipal services) · Appropriations Summary (same document as reviewed on 8/26/96) · Capital Outlay Page (same document as reviewed on 8/26/96) · 1997 Tax Levy Resolution (same general fund amount as discussed on 8/26/96) · Sanitary Landfill Project s:Xcouncilkbudmm829.doc SOURCE OF FUNDS GENERAL PROPERTY TAX INTERGOVERNMENTAL REVENUES CHARGES FOR SERVICES FINES & FORFEITS LICENSES & PERMITS OTHER REVENUES TRANSFERS TOTAL 1994 1995 1996 1997 ACTUAL ACTUAL ADOPTED PROPOSED $1,520,021 $1,801,547 $2,128,500 $2,465,900 924,685 941,211 909,750 1,015,700 375,878 392,941 396,050 350,200 76,370 73,058 75,000 77,000 244,018 287,446 232,750 265,000 148,799 157,605 125,700 138,900 258,650 297,600 227,000 184,050 $3,548,421 $3,951,408 $4,094,750 $4,496,750 GENERAL PROPERTY TAX Ad Valorem Tax INTERGOVERNMENTAL REVENUES Local Government Aid HACA Local Performance Aid Police Relief Gravel Tax Urban Street Maintenance Cops Fast Grant Police Training Reimbursement CHARGES FOR SERVICES GENERAL GOVERNMENT Administrative Project Fees Plan Check Fees Planning & Zoning Fees Sewer Inspection Fees Miscellaneous Sales Assessment Searches PUBLIC SAFETY School Liaison Police Contract Police Contribution (NSP & Landfill) Impound Fees Fire Calls & Contracts PUBLIC WORKS Street Services RECREATION Recreation Fees $2,465,900 $2,465,900 227,6O0 499,4OO 14,950 99,000 39,500 28,00O 101,750 5,500 20,000 90,000 13,500 5OO 1,500 5,500 50,000 5,000 39,500 8OO 64,O0O 2,000 '48,90O 1,015,700 SOURCE OF FUNDS Softball League Fees FINES & FORFEITS Court Fines LICENSES & PERMITS PERMITS Building Permits Building Permit Surcharge Plumbing & Heating Permits Contractor License Surcharge LICENSES Dog Cigarette Liquor Amusement Gas Fitters Garbage Haulers Mineral Extraction Apartment Licenses Other Business OTHER REVENUE Interest Landfill Surcharge Contribution-Municipal Utilities Contribution-Guardian Angels Refunds & Reimbursements TRANSFERS Liquor ......................................... Equip & Program Rsrv (Municipal Serv.) ......................................... Street Reserve Sewer Economic Development Authority ......................................... Housing & Redevelopment Authority ......................................... TOTAL 9,000 350,200 77,000 77,000 170,000 800 35,000 3,700 1,000 5O0 24,500 1,850 1,500 550 9,800 12,700 3,100 265,000 45,000 11,200 78,000 3,700 1,000 138,900 118,450 28,100 30,000 6,000 1,000 500 184,050 $4,496,750 APPROPRIATIONS SUMMARY 1994 1995 1996 1997 Actual Actual Adopted Proposed MAYOR & COUNCIL ADMINISTRATION & FINANCE ECONOMIC DEVELOPMENT ELECTIONS LEGAL ENGINEERING BUILDING & ZONING SUSTAINABLE CITY PLANNING' PLANNING COMMISSION DATA PROCESSING GOVERNMENT BUILDINGS POLICE POLICE RESERVE FIRE EMERGENCY PREPAREDNESS STREETS = EQUIPMENT REPAIR & MAINT. SNOW REMOVAL STREET LIGHTING SHADE TREE PARKS RECREATION SR. CITIZEN PROGRAMS CONTINGENCY TOTAL 62,983 69,227 75,500 83,800 382,008 431,966 464,450 502,050 38,371 35,512 34,800 31,550 11,287 7,500 23,300 19,500 42,404 52,414 47,500 55,000 26,131 33,440 30,000 35,000 237,233 257,139 273,200 314,350 30,200 114,709 129,082 144,200 177,900 3,139 6,211 6,450 6,800 19,889 21,724 21,300 38,050 95,962 99,551 101,150 108,000 1,299,970 1,378,641 1,449,600 1,628,600 16,696 26,570 21,750 24,600 301,624 253,318 245,950 280,550 10,731 8,383 8,400 13,550 438,570 404,153 422,600 464,850 78,957 94,898 96,400 100,100 60,445 66,962 82,550 100,050 890 11085 '1,500' 1,500 5,585 6,188 11,600 11,600 104,625 122,663 139,200 140,750 118,050 134,068 162,850 171,000 31,387 35,494 37,000 39,300 7,442 14,555 193,500 193,500 3,509,088 3,690,744 4,094,750 4,572,150 ..Department Item 1997 CAPITAL OUTLAY General Fund Fundin~l Source Equipment Equipment Department Certificate Reserve Total Mayor & Council Elections Administration Building & Zoning Planning Data Processing Government Bldg. Police Fire Emergency Prep. Streets Parks Recreation Council Chambers Computer Presentation Package Reserve for Optical Scanner Reserve for Copy Machine Car Microfiche Reader, Pdnter & Cabinet Computer Copy Machine Engineering Copier Reserve for Hardware and Software Building Debt · Window Film/Coverings Fax Files 3 Squads & 1 Investigator Car Squad Setups Stdpe & Stripping Squads 2 Mobile Digital Computers 1 Mobile Radio 2 Portable Radios Van Payment Deck Guns Reserve for Pumper Building Debt 2 Sirens, Poles & Setup Sign Maker Overhead Hoist Dump Box, Hydraulics, Plow & Wing Dump Box, Hydraulics, Plow & Wing Turf Sprayer Leaf Blower Reserve for Future Ice Arena Reserve Oak Knoll Bleachers $ 5,500 12,500 8,000 2,500 2,500 14,000 37,200 4,000" 1,000 1,500 13,000 28,400 3,750 3,700 3,000 10,000 $150,550 79,000 5,500 2,000 2,000 2,500 20,000 $111,000 12,500 4,000 4,400 20,000 4,000 24,000 26,800 18,000 2,700 3,700 3,~00 $123,500 $ 5,500 12,500 24,500 5,000 4,400 14,000 41,200 113,500 69,400 26,800 45,450 9,400 13,400 $385,050 8/21/96 10:09 PM RESOLUTION 96- A RESOLUTION FOR THE CITY OF ELK RIVER a RESOLUTION AUTHORIZING THE PROPOSED MAXIMUM TAX LEVY FOR CALENDAR YEAR 1997 WHEREAS, the Elk River City Council has review the City's anticipated expenditures for all funds in 1997; and, WHEREAS, The Elk River City Council has considered projected revenues for all funds in 1997; and, WHEREAS, revenues from sources other than property taxes are not sufficient to meet anticipated expenditures of all funds. NOW, THEREFO~RE, BE IT RESOLVED by the City Council of the City of Elk River that the proposed General fund Budget in the amount of is hereby adopted. BE IT FURTHER RESOLVED by the City Council of the City of Elk River that the following amounts are the maximum to be levied as property taxes payable in 1997. HACA Gross Lev)/ Reduction Net Levy General Fund $ 2,965,300 $ 499,397 Library 54,950 9,254 Dam Loan 32,572 5,486 SWM/Development Fund 294,100 49,530 City Special Assessments 33,577 5,655 1989 Fire Equipment 68,586 11,551 1993 Certificate of Indebtedness 13,000 2,189 1994 Certificate of Indebtedness 24,393 4,108 1995 Certificate of Indebtedness 26,327 4,434 1996 Certificate of Indebtedness 26,250 4,421 1997 Certificate of Indebtedness 31,000 5,221 $2,465,903 45.696 27.086 244 570 27 922 57 035 10 811 20 285 21 893 21 829 25 779 TOTAL $ 3,570,055 $ 601,246 Passed and adopted by the City Council of the City of Elk River this day of September, 1996. $2,968,809 ATTEST: Henry A. Duitsman, Mayor Sandra A. Thackeray, City Clerk SAN/TAR Y LANDFILL 1994 1995 1996 1997 ACTUAL ACTUAL ADOPTED PROPOSED PERSONAL SERVICES SUPPLIES OTHER SERVICES & CHARGES CAPITAL OUTLAY TRANSFERS OUT TOTAL $5,491 $13,063 $8,350 $8,450 31 8,8O5 - 30,924 33,380 51,500 35,750 19,461 1,736 20,950 20,950 19,750 19,750 $76,857 $77,934 $79,600 $63,950 PERSONAL SERVICES Regular Salaries Employee Pensions Employee Insurance SUPPLIES Operating Supplies OTHER SERVICES & CHARGES Legal Services Other Professional Services Postage Printing & Publishing CAPITAL OUTLAY TRANSFERS OUT General Fund Police Services EXPENDITURE ANALYSIS ..................................... $7,400 ..................................... 800 ..................................... 250 ..................................... 15,000 ..................................... 20,000 ..................................... 250 500 $8,450 0 0 35,750 19,750 19,750 $63,950 RESOLUTION 96- A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE HOUSING AND REDEVELOPMENT AUTHORITY 1997 TAX LEVY WHEREAS, the Housing and Redevelopment Authority in and for the City of Elk River has passed Resolution 96-1 authorizing a levy of .0131% of the taxable market value of the City for various redevelopment activities; and, WHEREAS, the City Council of the City of Elk river has consented to this levy. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River that the Housing and Redevelopment Authority in and for the City of Elk River certify a levy of .0131% of the taxable market less Homestead and Agricultural Aids of $5,608.00 to the County Auditor. Passed and adopted by the City Council of the City of Elk River, Minnesota this __ day of ,1996. Henry A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Clerk RESOLUTION 96 - A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE 1997 TAX LEVY FOR ECONOMIC DEVELOPMENT PURPOSES FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY WHEREAS, the City Council of the City of Elk River has received a request from the Economic Development Authority to levy a tax for the benefit of the Authority in the amount of .01813% of taxable market value of taxable property in the City for the year of 1997; and, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River as follows: The City Council of the City of Elk River proposes that a tax in the amount of .01813% of the taxable market value in the City less Homestead and Agricaltural Credit Aids of $12,065.00 be levied in the year 1997 for the benefit of the City of Elk River Economic Development Authority to be used for Economic Development Authority purposes as provided under Minnesota Statute 469.090 et.seq. Passed and adopted by the City Council of the City of Elk River, Minnesota this __ day of , 1996. Henry A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Clerk PAYABEE 1997 DEBT SERVICE LEVY ADJUSTMENTS Scheduled Adjusted Bond Fund G.O. Improvement Bonds Sedes 1992A 1993 Certificate of Indebtedness Levy Levy 266,937 $ 20,396 13,000 Reason for Adjustment Sufficient cash available from Special Assessments. Sufficient cash due to required overlevies.