09-14-2020 CC - Laserfiche WebLink

Home Browse Search

The Mounds View Vision A Thriving Desirable Community Item No: 8.A. Meeting Date: September 14, 2020 Type of Business: Council Business City Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 9309 Authorizing Certification of the Preliminary General Fund Budget and Preliminary Property Tax Levy for Fiscal Year 2021 State law requires that the City certify a preliminary General Fund Budget and preliminary property tax levy to Ramsey County by September 30. The City Council reviewed the General Fund budget at the May Special work session and will review the budget again before final approval in December. The Charter limits the levy increase to inflation plus 2% or 5% whichever is less unless otherwise excluded (referendums and debt service/capital levies are excluded from the charter limit). (Inflation is 1.3%) Each 1% levy increase is an additional $56,789. The state has certified Local Government Aid (LGA) for 2021 at $844,418 but it is highly unlikely that we will get the entire amount. Tax collections will be at a lower rate than historical collections thus impacting cashflows/revenues. The Strategic Plan adopted by the City Council calls for less dependence on LGA. LGA is included in the General Fund budget at 50% of the certified amount. This reflects the likelihood that it will be reduced as a result of the State deficit. The Strategic Plan also calls for reducing dependence on the Levy Reduction Assigned Fund balance by 3-5% per year. Prior budgets have used $250,000, we used $246,000 for 2020 to balance the budget. For 2021, $242,000 is proposed and $238,000 for 2022 is proposed to meet the goal of the Strategic Plan. Unassigned fund balance was $4,127,062 at December 31, 2019 and represents 52.6% of draft 2021 budgeted expenditures and transfers in. The Assigned Levy Reduction fund balance was $5,217,724 at 12-31-19 and will be approximately $4,967,724 at December 31, 2020. Staff is recommending that the preliminary levy be set at the maximum allowed by charter to provide flexibility for the Council in case there are additional unforeseen challenges between now and final adoption. The goal is to have a zero percent levy increase. The base General Fund levy would be $4,666,859 and special levies for Fire Debt Service of $166,291, 2004 police personnel referendum of $220,000, 2017 police personnel referendum of $110,000, PERA rate increase special levy of $39,145 for a total General Fund levy of $5,202,295. A debt service levy for the 2017A PW Facility Debt Service is $413,984 a decrease of $2,310 over 2020. A base levy for the Street Improvement fund of $150,000 will be continued for 2021. The EDA levy of $100,000 is no increase over 2020. The total of all base and special levies proposed is $5,866,279, 3.3% increase over 2020. Once this amount is set, the levy cannot be increased but can be lowered. The final levy will be adopted on or about December 14, 2020 along with the General Fund budget and all other City funds budgets. The draft General Fund budget for preliminary approval is $7,854,992. This amount is subject to change as the Council gets additional information and provides additional direction to staff before final approval in December. Respectfully submitted, ___________________________ Mark Beer, Finance Director