HomeMy WebLinkAbout09-09-2019 Council Packet (Budget)SPECIAL WORK SESSION AGENDA
CITY OF LINO LAKES
Monday, September 9, 2019
CITY COUNCIL WORK SESSION
Community Room (not televised)
Following adjournment of the regular City Council meeting
1. 2020 Budget
2. Adjourn
WS – Item 1
WORK SESSION STAFF REPORT
Special Work Session Item No. 1
Date: September 9, 2019
To: Mayor and City Council
From: Sarah Cotton, Finance Director
Re: 2020 Budget Recap
Background
Preliminary 2020 Taxable Market Values received from the County detailed an increase of
8.37% in values. Including new construction, preliminary 2020 Taxable Market Values
have increased 10.49%. The increase in property values is estimated to increase the City’s
Net Tax Capacity Value by $2,034,150 or approximately $923,318 at the 2019 City Tax
Capacity Rate of 41.817%.
The initial draft of the 2020 Budget presented to the City Council on July 29, 2019 resulted
in a 13.08% levy increase given the needs and requests included in the draft budget. Two
drivers of the significant proposed levy increase were the use of $594,573 in general fund
reserves in 2019 and the additional debt service levy of $281,799 required for the 2018
Street Reconstruction Project (West Shadow Lake Dr and LaMotte Areas).
At the August 12, 2019 Budget Work Session, the Council expressed a desire to reduce the
proposed levy increase to 8%. Based on this direction, staff proposed budget cuts totaling
$231,067 and a transfer of $100,000 from the Closed Bond Fund to soften the impact of
the additional debt service requirements in 2020 associated with street reconstruction. In
addition, $180,000 of General Fund Reserves were identified as available to reduce the
levy impact in 2020, due to favorability in the 2019 expenditure budget.
Council expressed concern with reducing the transfer of funds for street maintenance
proposed by staff, which was included in the $231, 067 of budget cuts. Staff added back
$31,500 to the draft 2020 Budget to continue funding the city’s pavement management
efforts at a 5% increase over 2019 levels, bringing the total funding of the city’s pavement
management plan to $661,500 in 2020.
At the September 3rd Work Session, the Council expressed a desire to further reduce the
increase in the preliminary levy by $300,000. Staff has prepared an updated Gap Analysis
detailing a transfer of an additional $280,000 from the Closed Bond Fund and Use of
Reserves in the amount of $20,000 to meet the City Council’s request. The resulting year-
over-year increase to the preliminary levy is $535,102, or 5.32% and a reduction to the
city’s tax rate from 41.817% in 2019 to 40.115% in 2020.
In summary, the 2020 draft budget includes the following sources and uses:
Council action is requested by the September 23rd meeting in order to set the preliminary
tax levy and to schedule a public hearing date in December on the budget and tax levy.
The preliminary levy set at the September meeting may not be increased thereafter, but
may be lowered before approving the final budget and levy in December.
Attachments
2020 General Fund Gap Analysis
Proposed Adopted $ %
2020 2019 Inc/(Dec) Inc/(Dec)
General Fund Operating Expenditures 11,294,433$ 10,974,316$ 320,117$ 2.92%
Debt Service 2,122,762$ 1,862,292$ 260,470$ 13.99%
Total Uses 13,417,195$ 12,836,608$ 580,587$ 4.52%
Proposed Adopted $ %
2020 2019 Inc/(Dec) Inc/(Dec)
Revenues (Licenses/Permits, Charges, Fines, Etc.) 2,246,677$ 2,186,419$ 60,258$ 2.76%
Operating Levy 8,467,756$ 8,193,124$ 274,632$ 3.35%
Debt Service Levy 2,122,762$ 1,862,292$ 260,470$ 13.99%
Total Levy 10,590,518$ 10,055,416$ 535,102$ 5.32%
Use of Reserves(Surplus)/Transfer of Funds 580,000$ 594,773$ (14,773)$ -2.48%
Total Sources 13,417,195$ 12,836,608$ 580,587$ 4.52%
7/29/2019 8/12/2019 8/26/2019 9/3/2019 9/9/2019
Adopted Proposed Proposed Proposed Proposed Proposed %
2019 2020 2020 2020 2020 2020 Change Change
Tax Levies
Operating Levy 8,193,124 9,248,018 9,247,299 8,736,256 8,767,756 8,467,756 274,632 3.35%
Debt Levy 1,862,292 2,122,762 2,122,762 2,122,762 2,122,762 2,122,762 260,470 13.99%
Total Tax Levy 10,055,416 11,370,780 11,370,061 10,859,018 10,890,518 10,590,518 535,102 5.32%
Year-over-Year Change Levy $1,315,364 1,314,645 803,602 835,102 535,102 5.32%
Drill-Down on Year-Over-Year Levy Changes 7/29/2019 8/12/2019 8/26/2019 9/3/2019 9/9/2019
Adopted Proposed Proposed Proposed Proposed Proposed %
2019 2020 2020 2020 2020 2020 Change Change
Revenues
Property Taxes (Delinquent, Penalties/Interest)39,000 39,000 39,000 39,000 39,000 39,000 - 0.00%
Intergovt Revenue 577,105 616,722 616,722 616,722 616,722 616,722 39,617 6.86%
Business Licenses/Permits 137,600 144,233 144,233 144,233 144,233 144,233 6,633 4.82%
Non-Business Licenses/Permits 764,860 788,113 788,113 788,113 788,113 788,113 23,253 3.04%
Charges for Services 25,477 27,538 27,538 27,538 27,538 27,538 2,061 8.09%
Public Safety Service Charges 200,800 190,800 190,800 190,800 190,800 190,800 (10,000) -4.98%
Municipal Fines 119,132 116,100 116,100 116,100 116,100 116,100 (3,032) -2.55%
Miscellaneous 322,445 324,171 324,171 324,171 324,171 324,171 1,726 0.54%
Trf from Closed Bond Fund - - - 100,000 100,000 380,000 380,000 ***
Use of Reserves 594,773 - - 180,000 180,000 200,000 (394,773) -66.37%-
Total Revenues/Funding Sources 2,781,192 2,246,677 2,246,677 2,526,677 2,526,677 2,826,677 45,485 1.64%
Expenditures
Personal Services 7,398,006 7,783,412 7,782,693 7,692,000 7,692,000 7,692,000 293,994 3.97%
Supplies 472,775 477,825 477,825 477,825 477,825 477,825 5,050 1.07%
Other Services and Charnges 1,295,289 1,377,557 1,377,557 1,344,407 1,344,407 1,344,407 49,118 3.79%
Contracted Services 743,794 742,084 742,084 725,084 725,084 725,084 (18,710) -2.52%
Capital Outlay 94,452 60,317 60,317 42,117 42,117 42,117 (52,335) -55.41%
Others 970,000 1,053,500 1,053,500 981,500 1,013,000 1,013,000 43,000 4.43%
Total Expenditures 10,974,316 11,494,695 11,493,976 11,262,933 11,294,433 11,294,433 320,117 2.92%
Debt Service
Bonds 1,255,008 1,549,975 1,549,975 1,549,975 1,549,975 1,549,975 294,967 23.50%
Certificates of Indebtedness 607,284 572,788 572,788 572,788 572,788 572,788 (34,497) -5.68%
Total Debt Service 1,862,292 2,122,762 2,122,762 2,122,762 2,122,762 2,122,762 260,470 13.99%
0
Year-over-Year Change Levy $1,315,364 1,314,645 803,602 835,102 535,102
Total Levy Supported by Valuation Increase ($10,978,734)738,640 923,318 923,318 923,318 923,318
Gap to Maintain Flat Tax Capacity Rate 576,724 391,327 (119,716) (88,216) (388,216)
Tax Capacity Rate 41.817%44.389%43.535%41.293%41.431%40.115%
GENERAL FUND FORECAST GAP ANALYSIS
2019-2020