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HomeMy WebLinkAboutCCWkspAgen_08Sep3City of Falcon Heights 2077 W Larpenteur Avenue Falcon Heights MN 55113 CITY COUNCIL 6:30 p.m. WORKSHOP AGENDA 1. Proposed 2009 Capital, Debt, and Special Revenue Budgets; General Fund Levy Discussion ???????????????????????????? WKSP 1 9/3/08 TO: Mayor Lindstrom, Council members Harris, Kuettel, Long, and Mercer-Taylor FROM: Justin Miller, City Administrator Re: Proposed 2009 Capital, Debt, and Special Revenue Budgets General Fund Levy Discussion Explanation: Attached to this report are the proposed 2009 capital, debt, and special revenue budgets. Key points to consider include: Capital Funds Each year the council adopts a five-year Capital Improvements Plan (CIP). Individual funds are outlined below: Infrastructure Our largest capital fund is also one that is under serious pressure. You will note that under current projections, the fund will face a negative balance in 2012, mostly due to transfers out for debt service, TIF obligations, and future projects. Key items in next year’s budget include $250,000 for a rehabilitation of the city hall parking lot. Staff has already been in discussions with the Capital Region Watershed District about a potential grant for this project, and $75,000 is denoted in the capital sources section. General Capital The largest item in this budget is $10,000 for council chamber audio/visual improvements. Currently, residents watching meetings on television generally have no way of viewing maps, charts, etc. when the council or planning commission is discussing it. Providing a built-in projector would allow documents to be brought up for viewing much easier, and would be visible to all who are watching the meetings. Public Safety This fund is also facing pressure, due mostly to a large expenditure in future years for refurbishing a fire truck. Chief Kurhajetz is also requesting a utility vehicle so that it is easier for them to respond to smaller calls without having to take out a larger fire engine. This year’s conduit debt fees ($50,000) have tentatively been deposited to this account. Parks/Recreation/Public Facilities Of all the capital funds, this one will be the first to face a deficit situation. Besides ongoing maintenance, several public works vehicles and pieces of equipment will need to be replaced in coming years. Special Revenue Funds Park Programs This fund is responsible for the park and recreation programs offered in the city. No major changes are being proposed at this time. Community Garden Due to the success of the garden, there have been discussions about expanding the size and adding new plots. To do so would require some new fencing and equipment, so $1000 has been proposed. Final decision to expand the size of the garden would be made by the city council. Water Currently a 4% surcharge is added to each water customer’s bill to pay for improvements to the water system that is the responsibility of the city. In the past, money from this fund has also been used to pay for fire department capital expenses since they depend on a reliable water source from the hydrants. Staff is proposing to increase the fee to 5%, which will generate an estimated $3,000 in additional revenue to help offset future expenses in the public safety capital funds. On a residential water bill (typical house during summer months), the current water charge is $1.02 per quarter. Implementing the new 5% rate would mean this would increase to $1.28 per quarter. Recycling Each year, the city receives a grant from Ramsey County that we use to subsidize the cost of recycling in Falcon Heights. At this time, we have not been notified of the 2009 grant amount. However, staff is proposing no changes to the 2009 recycling budget. Citizen Corps Grant (207) The grant for our 2008 CERT program was extended to March 2009, so this budget simply moves the 2008 money into 2009. Community Development In the past, this budget has been used to fund consultants who work on projects such as the comprehensive plan update. No major projects are planned for this account in 2009. Citizen Corps Grant (212) This year the city was yet again awarded money to fund ongoing CERT training. This money must be used by the middle of 2010, and the CERT leaders are currently planning a 2009 timeline for training activities. Debt Service The city has two outstanding debt issues that require payments in 2009. The 1996 TIF Larpenteur Bonds are paid for with tax increment proceeds from the Bullseye and 1666 Coffman TIF districts. Historically, the 1999 G.O. NE Quadrant Improvement Bonds have been paid for with reserves designated in the Infrastructure fund. The last payment for this bond will take place in 2010. General Fund and Tax Levy At our last workshop, the city council discussed the draft 2009 general fund budget. At the time, several items were unknown, such as the amount of our fiscal disparities allocation and the effect of any special levies on future budgets. Since this time, we have learned more information on both topics. Our 2009 fiscal disparities allocation will increase by $20,656 to $197,502. The result is a decrease in the ad valorem tax that will be spread across all taxpayers in the city by an equal amount. Staff has also learned that using a special levy for our existing debt obligations will not negatively impact future year’s budgets. As a result, staff is proposing the following for our preliminary levy: 2008 Budget 2009 Proposed % Change A Ad Valorem Taxes $774,230 $680,601 -12.09% B Fiscal Disparities $176,846 $197,502 11.7% C Delinquent Taxes $2,500 $0 D Special Levy for Debt $0 $96,129 Total Property Tax Levy Certified to Ramsey County (A+B+C+D) $953,576 $974,232 2.16% Actual Levy Applied to Falcon Heights Taxpayers (A+C+D) $776,730 $776,730 0.0% This proposal keeps us within the 3.9% levy limit applied by the state legislature, yet also allows us to begin levying for debt that traditionally has been paid for out of reserves. As was discussed earlier in this report, the infrastructure fund (where the debt payments have historically been paid from) is facing pressure and will have a negative balance in the coming years unless the rate of expenditures slows or new revenue streams are identified. Even with this new levy to pay for general obligation debt, the impact to our taxpayers will be a net zero increase in the tax levy.