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.14 MOUNDS ' VIEw City of Mounds View Staff Report Item No: 8.B. Meeting Date: September 12, 2022 Type of Business: Council Business City Administrator Review: To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 9629 Authorizing Certification of the Preliminary General Fund Budget and Preliminary Property Tax Levy for Fiscal Year 2023 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 6.5% with a simple majority or up to 9% with a 4/5ths super majority unless otherwise excluded (referendums and debt service/capital levies are excluded from the charter limit). (Inflation is 8.5% for the 12 months ending in July) Each 1% levy increase is an additional $61,789. The state has certified Local Government Aid (LGA) for 2023 at $856,860. 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 5-8% per year. Prior budgets have used $250,000, we used $238,000 for 2022 to balance the budget. For 2023, $232,000 is proposed and $226,000 for 2024 is proposed to meet the goal of the Strategic Plan. Unassigned fund balance was $5,037,325 at December 31, 2021 and represents 49.4% of draft 2023 budgeted expenditures and transfers out. The Assigned Levy Reduction fund balance was $4,835,391 at December 31, 2021 and will be approximately $4,627,101 at December 31, 2022. Staff is recommending that the preliminary levy be set at 6.5% to provide flexibility for the Council in case there are additional unforeseen challenges between now and final adoption. The goal is to have the smallest levy increase needed. The base General Fund levy would be $5,365,207 and special levies for Fire Debt Service of $127,164, 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 $5,916,516. A debt service levy for the 2017A PW Facility Debt Service is $413,983, a decrease of $2,783 over 2022. A base levy for the Street Improvement fund of $150,000 will be continued for 2023. The EDA levy of $100,000 is no increase over 2022. The total of all base and special levies proposed is $6,580,499, 6.50% increase over 2022. Once this amount is set, the levy cannot be increased but can be lowered. The final levy will be adopted on or about December 12, 2022 along with the General Fund budget and all other City budgets. The EDA levy will be set in a separate resolution. The draft General Fund budget for preliminary approval is $10,193,540. 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 The Mounds View Vision A Thriving Desirable Community