HomeMy WebLinkAboutAgenda Packets - 2024/09/03
CITY OF MOUNDS VIEW
CITY COUNCIL WORK SESSION AGENDA
MOUNDS VIEW CITY HALL
Tuesday, September 3, 2024
6:00 p.m.
ROLL CALL: Lindstrom, Cermak, Gunn, Meehlhause, Clark
Council Work Sessions are informal gatherings of the council at which no final
decisions are made, rather consensus discussion to direct staff on council
decision items.
AGENDA ITEMS DISCUSSED BY CONSENSUS
1. Cannabis Discussion – Mayor Lindstrom
2. 2025 Budget Discussion – Continued Discussion
3. Local Aid Housing Assistance – Continued Discussion
PUBLIC COMMENT
Citizens may speak to issues not on tonight’s agenda. Before speaking, please give
your name and address for the minutes. Also, please limit your comments to three
minutes. As a reminder, public comment is for addressing the Council only.
Comments or concerns regarding Staff must be submitted in writing to the Mayor or
City Administrator. Failure to respect these guidelines will result in me asking you to
cease commenting and asking you to return to your seat. That said, is there anyone
here for public comment?
NEXT COUNCIL WORK SESSION: Monday, October 7, 2024 at 6:00 pm
NEXT COUNCIL MEETING: Monday, September 9, 2024 at 6:00 pm
THIS PAGE LEFT BLANK INTENTIONALLY
Item No. 2
Meeting Date: September 3, 2024
Type of Business: Council Work Session
City Administrator Review: ______
City of Mounds View Staff Report
To: Honorable Mayor and City Council
From: Gayle Bauman, Finance Director
Item Title/Subject: Review Levy Scenarios and Utility Rates for 2025
COUNCIL CONSIDERATION
Staff is requesting City Council to review and provide feedback on the levy scenarios included in this memo and
the proposed utility rates for 2025.
TAX LEVY
City staff has received preliminary value information from the County and are now able to put together some
projections on different tax levy increase amounts.
Council has indicated they would like to look at what the impact would be if the City were to eliminate the General
Fund budget deficit and balance the budget. This request has been factored into the scenarios below.
All scenarios include an increase to the debt service levy of $1,995 to cover the 2025 debt payments. All scenarios
also include an increase to the police referendum levies in total amount of $35,000 to cover the increased costs
for three officers.
Scenario #1
General Fund – not a balanced budget. Utilize $220,000 from levy reduction fund.
EDA Fund – no increase to levy. Remains at $150,000 ($100,000 levy and $50,000 transfer).
Street Improvement Fund – no increase to levy. Remains at $150,000.
2024 2025 % Change
General levy capped at 6.5%5,833,475 6,045,936 3.64%
Referendum levy 385,000 420,000 9.09%
EDA levy 100,000 150,000 50.00%
Debt/Capital (Streets) levy 566,293 568,288 0.35%
TOTAL 6,884,768 7,184,224 4.35%
Scenario #2
General Fund – not a balanced budget. Utilize $220,000 from levy reduction fund.
EDA Fund – increase the EDA levy by $10,000 to $160,000.
Street Improvement Fund – increase the Street Capital levy by $150,000 to $300,000.
2024 2025 % Change
General levy capped at 6.5%5,833,475 6,045,936 3.64%
Referendum levy 385,000 420,000 9.09%
EDA levy 100,000 160,000 60.00%
Debt/Capital (Streets) levy 566,293 718,288 26.84%
TOTAL 6,884,768 7,344,224 6.67%
Scenario #3
General Fund – balance the General Fund budget.
EDA Fund – no increase to levy. Remains at $150,000 ($100,000 levy and $50,000 transfer).
Street Improvement Fund – no increase to levy. Remains at $150,000.
2024 2025 % Change
General levy capped at 6.5%5,833,475 6,265,936 7.41%
Referendum levy 385,000 420,000 9.09%
EDA levy 100,000 150,000 50.00%
Debt/Capital (Streets) levy 566,293 568,288 0.35%
TOTAL 6,884,768 7,404,224 7.55%
Scenario #4
General Fund – balance the General Fund budget.
EDA Fund – increase the EDA levy by $10,000 to $160,000.
Street Improvement Fund – increase the Street Capital levy by $150,000 to $300,000.
2024 2025 % Change
General levy capped at 6.5%5,833,475 6,265,936 7.41%
Referendum levy 385,000 420,000 9.09%
EDA levy 100,000 160,000 60.00%
Debt/Capital (Streets) levy 566,293 718,288 26.84%
TOTAL 6,884,768 7,564,224 9.87%
Scenario #5
General Fund – balance the General Fund budget.
EDA Fund – increase the EDA levy by $10,000 to $160,000.
Street Improvement Fund – increase the Street Capital levy by $90,173 to $240,173.
Keeps the total levy at 9.0%.
2024 2025 % Change
General levy capped at 6.5%5,833,475 6,265,936 7.41%
Referendum levy 385,000 420,000 9.09%
EDA levy 100,000 160,000 60.00%
Debt/Capital (Streets) levy 566,293 658,461 16.28%
TOTAL 6,884,768 7,504,397 9.00%
The tables below show the potential annual impacts to different valued properties. The lines highlighted in green
represent a median valued home in Mounds View.
% levy increase Total levy amt $ levy increase General Fund (220,000) Use levy reduction fund
EDA - No increase in levy
4.35%7,184,224$ 299,456$ Street Improvement - No increase in levy
Value of Value of Taxable
Property for Property for Value for $ %
Pay 2024 Pay 2025 Pay 2025 Pay 2024 Pay 2025 CHANGE CHANGE
90,000$ 91,800$ 55,080$ 234$ 221$ (13)$ -5.4%SCENARIO #1
160,000$ 163,300$ 131,400$ 517$ 515$ (2)$ -0.4%
240,000$ 244,900$ 220,400$ 840$ 857$ 17$ 2.0%
317,600$ 324,100$ 306,700$ 1,154$ 1,188$ 35$ 3.0%
400,000$ 408,200$ 398,400$ 1,487$ 1,541$ 54$ 3.6%
500,000$ 510,200$ 509,600$ 1,864$ 1,976$ 113$ 6.0%
600,000$ 612,300$ 612,300$ 2,324$ 2,466$ 142$ 6.1%
General Fund (220,000) Use levy reduction fund
EDA 10,000 Increase levy
6.67%7,344,224$ 459,456$ Street Improvement 150,000 Increase levy
Value of Value of Taxable
Property for Property for Value for $ %
Pay 2024 Pay 2025 Pay 2025 Pay 2024 Pay 2025 CHANGE CHANGE
90,000$ 91,800$ 55,080$ 234$ 227$ (7)$ -3.0%SCENARIO #2
160,000$ 163,300$ 131,400$ 517$ 528$ 11$ 2.2%
240,000$ 244,900$ 220,400$ 840$ 879$ 39$ 4.7%
317,600$ 324,100$ 306,700$ 1,154$ 1,220$ 66$ 5.7%
400,000$ 408,200$ 398,400$ 1,487$ 1,581$ 95$ 6.4%
500,000$ 510,200$ 509,600$ 1,864$ 2,029$ 165$ 8.9%
600,000$ 612,300$ 612,300$ 2,324$ 2,532$ 208$ 8.9%
General Fund - Balanced budget
EDA - No increase in levy
7.55%7,404,224$ 519,456$ Street Improvement - No increase in levy
Value of Value of Taxable
Property for Property for Value for $ %
Pay 2024 Pay 2025 Pay 2025 Pay 2024 Pay 2025 CHANGE CHANGE
90,000$ 91,800$ 55,080$ 234$ 229$ (5)$ -2.1%SCENARIO #3
160,000$ 163,300$ 131,400$ 517$ 533$ 17$ 3.2%
240,000$ 244,900$ 220,400$ 840$ 888$ 48$ 5.7%
317,600$ 324,100$ 306,700$ 1,154$ 1,232$ 78$ 6.8%
400,000$ 408,200$ 398,400$ 1,487$ 1,597$ 110$ 7.4%
500,000$ 510,200$ 509,600$ 1,864$ 2,049$ 185$ 9.9%
600,000$ 612,300$ 612,300$ 2,324$ 2,556$ 233$ 10.0%
CITY TAX
CITY TAX
CITY TAX
A summary of the impact on a median valued home and the city tax rate based on the preliminary value
information is as follows:
UTILITY RATES
Sewer Fund
Staff is proposing a 4% increase in rates. The impact on a household that uses an average of 16,000 gallons of
water per quarter would be $4.23 per quarter or $16.92 per year. Because the plan is to complete $500,000 of
sewer lining in 2025, the fund will still realize a cash loss in 2025, but the 4% rate increase will assist in maintaining
a sufficient cash balance for the long term.
Street Lighting Fund
Staff is proposing a 5% increase in rates. The impact on a household would be $0.25 per quarter or $1.00 per
year. This fund had no rate increases from 2019 to 2023.
% levy increase Total levy amt $ levy increase General Fund - Balanced budget
EDA 10,000 Increase levy
9.87%7,564,224$ 679,456$ Street Improvement 150,000 Increase levy
Value of Value of Taxable
Property for Property for Value for $ %
Pay 2024 Pay 2025 Pay 2025 Pay 2024 Pay 2025 CHANGE CHANGE
90,000$ 91,800$ 55,080$ 234$ 235$ 1$ 0.4%SCENARIO #4
160,000$ 163,300$ 131,400$ 517$ 547$ 30$ 5.8%
240,000$ 244,900$ 220,400$ 840$ 910$ 70$ 8.4%
317,600$ 324,100$ 306,700$ 1,154$ 1,263$ 110$ 9.5%
400,000$ 408,200$ 398,400$ 1,487$ 1,638$ 151$ 10.1%
500,000$ 510,200$ 509,600$ 1,864$ 2,101$ 238$ 12.7%
600,000$ 612,300$ 612,300$ 2,324$ 2,622$ 298$ 12.8%
9.00%7,504,397$ 619,629$ Reduce above amount by $59,827
Value of Value of Taxable
Property for Property for Value for $ %
Pay 2024 Pay 2025 Pay 2025 Pay 2024 Pay 2025 CHANGE CHANGE
90,000$ 91,800$ 55,080$ 234$ 233$ (1)$ -0.6%SCENARIO #5
160,000$ 163,300$ 131,400$ 517$ 542$ 25$ 4.8%
240,000$ 244,900$ 220,400$ 840$ 902$ 62$ 7.4%
317,600$ 324,100$ 306,700$ 1,154$ 1,251$ 98$ 8.5%
400,000$ 408,200$ 398,400$ 1,487$ 1,622$ 136$ 9.1%
500,000$ 510,200$ 509,600$ 1,864$ 2,082$ 218$ 11.7%
600,000$ 612,300$ 612,300$ 2,324$ 2,598$ 274$ 11.8%
CITY TAX
CITY TAX
% CHANGE $ CHANGE 2024 2025 2024 2025 $ CHANGE % CHANGE 2024 2025
4.35% 299,456$ 317,600$ 324,100$ 1,154$ 1,188$ 35$ 3.0% 34.935% 36.285%
6.67% 459,456$ 1,220$ 66$ 5.7%37.312%
7.55% 519,456$ 1,232$ 78$ 6.8%37.698%
9.87% 679,456$ 1,263$ 110$ 9.5%38.725%
9.00% 619,629$ 1,251$ 98$ 8.5%38.341%
CITY LEVY MEDIAN VALUE ANNUAL CITY TAX CITY TAX CITY TAX RATE
Surface Water Management Fund
Staff is proposing an 8.8% increase. The impact on a household would be $1.50 per quarter or $6.00 per year.
This fund will require increases in excess of 5% per year for the foreseeable future. The mandates related to storm
water ponds is putting a strain on the fund. Staff will need to prioritize projects and seek grant funding in order
to proceed with work.
Water Fund
As council is aware, this fund is facing some challenges. There is a cash deficit projected in the Water Fund in
excess of $750,000 at the end of 2024. Even with the rate increase being proposed for 2025, the budget shows
the fund will still lose money. The goal is to try to spread rate increases out over a period of years to bring this
fund back into the black.
The City assesses two types of water rates – a fixed, flat fee and a rate applied to gallons used. The flat fee is
meant to cover fixed costs in the fund. Fixed costs are those that do not change based on water use. These would
include wages, debt service, insurance, memberships, training, and some supplies and professional services.
These costs remain the same no matter how many gallons of water are used per year. Our fixed costs are currently
in excess of $900,000 per year. The revenue being collected from the flat fee is approximately $350,000 per year.
The City also has a rate for Service Line Repair Insurance. The cost for service line repairs has more than doubled
over the past few years from $90,000 in 2021 to $194,000 in 2023. It is not anticipated that these costs will go
down any time soon.
Staff is proposing an increase in the flat fee for 2025, from $23.00 per quarter to $38.00 per quarter. Staff is also
proposing an increase in the Service Line Repair Insurance fee from $9.00 per quarter to $13.00 per quarter. No
increase to the usage rates is being proposed except to bring the two higher tiers of the commercial rates more
in line with where they should be. These only affect commercial usage over 700,000 gallons per quarter.
The impact of the two flat fee increases on a household would be $19.00 per quarter or $76.00 per year.
A summary of all of the proposed utility rate increases is as follows:
Average qtrly usage 16,000 gallons
2024 2025 % change
Water Base 23.00 38.00 23%
Service Line 9.00 13.00
Consumption 46.76 46.76
MN Test Fee 2.43 2.43
Sewer Base 45.69 47.52 4%
Consumption 58.24 60.64
Street Light 5.00 5.25 5%
Surface Water 17.00 18.50 9%
TOTAL 207.12 232.10 12%
24.98$ Quarterly increase
99.92$ Annual increase