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MOUND�VIEW Item No: 7 S Meeting Date: September 7, 2021 Type of Business: Work Session City Administrator Review: City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Preliminary Property Tax Levy and General Fund Budget for Fiscal Year 2022 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 3.3%) Each 1 % levy increase is an additional $58,663. The state has certified Local Government Aid (LGA) for 2022 at $850,373. The Strategic Plan adopted by the City Council calls for less dependence on LGA. LGA is included in the General Fund budget at 90% of the certified amount. 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 $242,000 for 2021 to balance the budget. For 2022, $238,000 is proposed and $234,000 for 2023 is proposed to meet the goal of the Strategic Plan. Unassigned fund balance was $4,662,432 at December 31, 2020 and represents 56.4% of draft 2022 budgeted expenditures and transfers in. The Assigned Levy Reduction fund balance was $5,033,580 at December 31, 2020 and will be approximately $4,816,748 at December 31, 2021. 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 unforeseen challenges between now and final adoption. The goal is to have the smallest levy increase needed. The base General Fund levy would be $4,960,174 and special levies for Fire Debt Service of $165,916, 2004 police personnel referendum of $255,000, 2017 police personnel referendum of $130,000, PERA rate increase special levy of $39,145 for a total General Fund levy of $5,550,235. A debt service levy for the 2017A PW Facility Debt Service is $416,766, an increase of $2,782 over 2021. A base levy for the Street Improvement fund of $150,000 will be continued for 2022. The EDA levy of $100,000 is no increase over 2021. The total of all base and special levies proposed is $6,217,001, 5.98% increase over 2021. Once this amount is set, the levy cannot be increased but can be lowered. The final levy will be adopted on or about December 13, 2021 along with the General Fund budget and all other City funds budgets. The draft General Fund expenditure budget for preliminary approval is $8,261,424. This amount is subject to change as the Council gets additional information and provides additional direction. Respectfully submitted, L- Mark Beer, Finance Director The Mounds View Vision A Thriving Desirable Community