HomeMy WebLinkAboutCC AGENDA 09302003 Meeting Sheet
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Box: 34
Folder: CC MINUTES AND AGENDAS 2003
Document: CC AGENDA 09302003
St. Anthony-New Brighton School Board/ St. Anthony Village City Council
Joint Meeting
• Tuesday, September 30, 2003 @ 7 p.m.
SAV City Council Chambers-3301 Silver Lake Road, St. Anthony
AGENDA
1. Call to Order
2. Agenda Review -Rick Dunn
Comments: This is a time when the agenda can be amended.
3. School District Update- Rick Dunn
A. Blueprint for a Bright Future Update (attachment)
B. November 4, 2003,Levy Referendum (attachment)
• Capital Levy for Technology
• Capital Levy for Curriculum
• Operating Levy
C. Financial Plan(attached)
D. Other
4. City Council Updates-Randy Hodson
• A. Firehall/Maintenance Building
B. St. Anthony Village Shopping Center AMCON Redevelopment Project
C. Autumn Woods Project
D. Apache Project
E. Other
5. A. Central Park Change Process-Rick Dunn
Comments: Agreement on a process to deal with future changes to Central Park
B. Grandfather Levy/Levy for Lease Process
6. Other -
A.
B.
7. Next Meeting-Rick Dunn: Tuesday, December 30`h -6:30 p.m. or
Monday, January 5h- 6:30 p.m.
September 30,2003
School Board Agenda
Blueprint for a Bright Future
Blueprint for a Bright Future is a community--.based three-phase planning process that began in November of 2001, for the
purpose of helping the district determine priorities. It will also help us focus our time, energy, and limited resources on
those identified priorities for the future.
Phase I "Where Are We Today?"
(Data Gathering Summary Reports)
Phase II "What Should We Be Doing?"
(Best Practice Identification and Design)
Phase III "How Do We Get It Done?"
(Action Plan Design, Implementation, Monitoring and Evaluation)
Completion Timeline
Area Phase I Phase II Phase III
Buildings & Grounds Spring, 2002 Spring, 2003 Begin Summer, 2003
Communications Spring, 2002 Spring, 2003 Begin Summer, 2003
Community Services Spring, 2002 Spring, 2003 Begin Summer, 2003
Computer Technology Spring, 2002 Spring, 2003 Begin Summer, 2003
Curriculum Spring, 2002 Spring, 2003 Begin 2003-04
Finance Spring, 2002 Complete Summer, 2004 Begin Summer, 2003
Evaluation Spring, 2002 Begin 2003-04
Food Services Spring, 2002 Begin 2003-04
Staff Development Spring, 2002 Begin 2003-04
Student Activities Spring, 2002 Begin 2003-04
Student Services Spring, 2002 Begin 2003-04
Transportation Spring, 2002 Begin 2003-04
R
Blueprint for a Bright Future
Buildings and Grounds - Phase II completed with a comprehensive plan for improvement. Phase III work has
begun with additional engineering work to lay out plans to deal with health and safety areas identified in plan.
Finance Committee recommended not putting a Bond Referendum (money to be used for building
construction/repair/updates) before the voters until the Blueprint Phase process is complete.
Communications - Phase II completed with a communication plan to develop specific action plans. Emphasis will
be on public engagement through consistent messages in the newspaper, newsletters, and a special emphasis on the
use of our web site. Also, district logo developed and emphasis on helping constituents see Community Services
as part of the St. Anthony-New Brighton School District.
Community Services - Phase II completed and Phase III action plans are being developed/implemented. A
setback has been a hard financial hit to Community Services due to the 2003-Legislative budget reduction.
Particularly hard hit was the city recreation/senior citizen program which Community Services administers for the
city. Ongoing planning is underway to deal with the financial issues and services provided.
Computer Technology - Phase II completed with a 7-year plan. Phase III action plan implementation will be
driven by the outcome of the 7-year $180,000 Technology Levy on the ballot for the November 4th election.
Failure of the levy will mean a limited ability to implement the Technology Plan.
Curriculum - Phase II completed with a two-part outcome identifying:
1) what the school district will do in order to
2) meet the community's expectations of what our graduates should know.
I
Finances - On July 8, 2003, the school board approved Citizens Ad Hoc Finance Advisory Committee made the
following background summary points, observations, and recornmendations:
Surnmarypoints relative to why ISD 282 faces financial challenges:
1. From the 1991-92 school year to the 2002-03 school year, public school districts have received, on average, a
2.5% annual increase in basic foundation aid.
2. There will be no increase in basic foundation aid for the 2003-04 and 2004-05 school years.
3. Historically, ISD 282's average annual increase in expenditures is 6-7%.
4. The gap between revenue and expenditures is the primary cause of ISD 282's financial difficulty.
5. There has been an increasing number of un-funded or under-funded state and federal mandates, particularly
over the past ten years. In fact, the 2003 legislative session ended with additional un-funded mandates thrown
at ISD 282.
6. ISD 282 is hugely under-funded relative to the maintenance and retrofit demands of its facilities and there is no
legal way to build up a reserve over time for facilities.
Observations regarding financial management of ISD 282:
1. The school board has been a prudent manager of the budget.
2. There have been ongoing annual budget reductions.
3. Revenue has been increased through accepting open-enrollment students and the revenue received has exceeded
any additional expenses the district may have incurred because of additional students. However, the student
capacity-limit has nearly been reached so this will not be a part of the solution for future budgets.
4. Additional revenue has been received through a court-ordered desegregation program. However, this is a year-
by-year situation and is not revenue that should automatically be counted on.
Recommended Action:
With respect to short-term budget issues, the ad hoc committee recommends that:
1. The board and administration review existing operations and develop a plan for reduction of expenditures for
the 2004-05 school year.
2. The board propose and place on ballot at the earliest possible election an additional operating levy to the fullest
extent permitted by law, such levy to be for a short term (3-4 years).
3. The board propose and place on the ballot at the earliest possible time capital expenditure levies for $140,000
and $180,000, respectively, to upgrade curriculum materials and technology.
4. The board levy as soon as possible for health and safety issues to the fullest extent permitted by law without
referendum to remediate health and safety issues.
5. The board and administration promptly commence a study and develop a plan for alternative educational
delivery strategies to maintain and promote quality educational programs at reduced costs.
6. The board defer placing a bond levy referendum on the ballot until a strategy for educational program delivery
and long-term operational funding has been formulated.
School Board Action Regarding Revenue
1. To place a 7-year $180,000 per year technology levy on the November 4, 2003 ballot.
2. To place a 7-year $140,000 per year curriculum levy on the November 4, 2003, ballot.
3. To place a 4-year operating levy with inflation factor for up to $400/resident student on the November 4, 2003,
ballot. This maximizes our operating levy under present legislation.
4. Conduct a study of long term viability of ISD 282.
5. Continue to work with legislators to capture operating levy revenue for open enrollment students.
I
D� A
•
Summary Resort of School District Finance Advisory Committee
A. Committee:
The ad hoc Finance Committee was composed of members of the School Board,
School Administrators,and designated representatives of various Blueprint task
forces. The committee was chaired by the undersigned. The ad hoc Committee
met during May—June, 2003. This report summarizes the conclusions and
recommendations of the ad hoc Finance Advisory Committee.
B. Background:
Summary points relative to why ISD#282 faces financial challenges:
1. From 1991-1992 school year to the 2002-2003 school year,public school districts
have received, on average, a 2.5%annual increase in basic foundation aid.
2. There will be no increase in basic foundation aid for the 2003-2004 and 2004-
2005 school years.
3. Historically, ISD#282's average annual increase in expenditures is 6-7%.
4. The gap between revenue and expenditures is the primary cause of ISD#282's
financial difficulty.
5. There has been an increasing number of un-funded or under funded state and
federal mandates particularly over the past ten years. In fact the 2003 legislative
session ended with additional un-funded mandates thrown at ISD#282.
6. ISD#282 is hugely under-funded relative to the maintenance and retrofit demands
• of its facilities and there is no legal way to build up a reserve over time for
facilities.
Observations concerning Financial Management of ISD#282:
1. The school board has been prudent managers of the budget.
2. There have been ongoing annual budget reductions.
3. Revenue has been increased through accepting open-enrollment students and the
revenue received has exceeded any additional expenses the district may have
incurred because of additional students. However,the student capacity-limit has
nearly been reached so this will not be a part of the solution for future budgets.
4. Some additional revenue has been received through a court ordered desegregation
program. However,this is a year-by-year situation and is not revenue that should
automatically be counted on.
C. Process:
The ad hoc committee reviewed materials and data concerning school district
demographic trends, developments in educational processes, history and
developments in ISD 282 finances,historical budgets and future budget
projections,property tax levy history and projections, school district funding
limits, and potential funding options including the various operating,capital
project,and bond levy possibilities. The resources reviewed included,inter alia,
the results of various studies by school administrators and independent
consultants, and the participation of a representative of Springsted, a group
specializing in techniques of funding local government.
•
D. Issues Presented:
1. Projected declining resident enrollment trends coupled with inequities in funding
open enrollment students result in a revenue shortfall over the near and long term.
Budget deficits are anticipated to occur in 2003-2004 and to continue in
subsequent years.
2. Legal limits on the District's ability to fund revenue shortfalls render problematic
the long-term funding of the District by further operating levies. Present law
limits additional operating fund levies to approximately $150,000 per year.
3. Approximately 80%of the District's expenditures budget consists of staff-related
costs. Mandated,unfunded programs and collective bargaining agreements limit
the flexibility of the District to reduce such expenditures substantially in the
present educational delivery system.
4. The District has carefully utilized its resources to maintain programs and facility
operations,but has insufficient funding resources to refurbish aging curriculum
materials,equipment and physical plant.
E. Evaluation of Potential Funding Solutions:
a. Additional school operating levy
i. limited to approximately$150,000 annually •
ii. District resident vote required to levy
b. Capital projects levy
i. $140,000 annual levy for curriculum materials and$180,000 technology
annual levy possible
ii. District resident vote required to levy.
c. Health and safety levy
i. $500,000 one-time levy available without District resident vote.
d. Bond levy
i. possibility of funding physical plan improvements by bonds of amounts limited
only by the District's ability and willingness to vote affirmatively for levy.
ii. District resident vote required.
e. Restructuring or reconfiguring District operations.
i. possibility of reducing staff and administrative costs through sharing resources or
revising the educational delivery mechanism.
ii. Board and administrative action required. Resident vote not required.
•
F. Recommended Action:
With respect to short-term budget issues, the ad hoc committee recommends that:
i. The Board and administration review existing operations and develop a plan for
reduction of expenditures for the 2003-2004 school year.
ii. The Board propose and place on ballot at the earliest possible election an
additional operating levy to the fullest extent permitted by law, such levy to be
for a short term(3-4 years).
iii. The Board propose and place on the ballot at the earliest possible time capital
expenchtures levies for$140,000 and$180,000,respectively,to upgrade
curriculum materials and technology.
iv. The Board levy as soon as possible for health and safety issues to the fullest
extent permitted by law without referendum to remediate health and safety
issues.
v. The Board and administration promptly commence a study and develop a plan
for alternative educational delivery strategies to maintain and promote quality
educational programs at reduced costs so as to match.
vi. The Board defer placing a bond levy referendum on the ballot until a strategy for
educational programs delivery and long-term operational funding has been
formulated.
rG. Conclusion:
The ad hoc committee concluded nearly unanimously that short-term funding sources,
including additional operational and capital projects levies ought to be promptly
placed on the ballot. The committee unanimously recommended that the health and
safety levy be implemented to the fullest extent permissible without resort to a
referendum vote. A majority of the committee recommended that the issue of a bond
levy referendum for facility improvements be deferred pending formulation of a long-
term strategy for school operational funding.
Respectfully submitted,
Thomas E. Brever
Ad Hoc Finance Committee Chair
a ,
• HOW WILL BALLOT QUESTION #1 BE STATED?
SCHOOL DISTRICT QUESTION BALLOT
INDEPENDENT SCHOOL DISTRICT NO.282
(ST.ANTHONY—NEW BRIGHTON)
SPECIAL ELECTION
November 4,2003
To vote for a question,put an(X)in the square next to the word"YES"for that question.
To vote against a question,put an(X)in the square next to the word"NO"for that question.
SCHOOL DISTRICT BALLOT QUESTION 1
APPROVAL OF CAPITAL PROJECT LEVY
The school board of Independent School District No. 282 (St. Anthony-
New Brighton) has proposed to make a capital project levy for school
technology improvements with an estimated total cost of $1,260,000.
The project has received a positive review and comment from the
Commissioner of the Department of Education. To provide funds for
project costs,the school board has proposed a capital project levy in the
amount of.02713 times the net tax capacity of the school district. The
proposed capital project levy will raise approximately$180,000 for taxes
• payable in 2004,the first year it is to be levied,and would be authorized
for seven years.
YES
Shall the capital project levy proposed by the board of Independent School
District No.282 be approved?
NO
** BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING FOR A
PROPERTY TAX INCREASE.
WHAT DOES BALLOT QUESTION#1 MEAN?
The complete wording of this ballot question(and all ballot questions)is required,word for word,by law.
In simpler English,here's what the ballot means: The district is proposing a levy of$180,000 per year for
seven years,for a total of$1,260,000. The tax impact would be.02713 times the net tax capacity of your
property. For a $100,000 home, for example, the net tax capacity is $1,000 (M), so the annual tax
impact would be$1,000 x.02713,or$27.13. Another example,for a$175,000 home the net tax capacity
is$1,750(1%),so the annual tax impact would be$1,750 x .02713,or$47.47.
HOW WILL BALLOT QUESTION#2 BE STATED? •
SCHOOL DISTRICT QUESTION BALLOT
INDEPENDENT SCHOOL DISTRICT NO.282
(ST.ANTHONY—NEW BRIGHTON)
SPECIAL ELECTION
November 4,2003
To vote for a question,put an(X)in the square next to the word"YES"for that question.
To vote against a question,put an(X)in the square next to the word"NO"for that question.
SCHOOL DISTRICT BALLOT QUESTION 2
APPROVAL OF CAPITAL PROJECT LEVY
The school board of Independent School District No. 282 (St. Anthony-
New Brighton) has proposed to make a capital project levy for the
acquisition of curriculum materials with an estimated total cost of
$980,000. The project has received a positive review and comment from
the Commissioner of the Department of Education. To provide funds for
project costs,the school board has proposed a capital project levy in the
amount of.0211 times the net tax capacity of the school district. The
proposed capital project levy will raise approximately$140,000 for taxes
payable in 2004, the first year it is to be levied,and would be authorized •
for seven years.
YES
Shall the capita] project levy proposed by the board of Independent School
District No.282 be approved?
NO
** BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING FOR A
PROPERTY TAX INCREASE.
WHAT DOES BALLOT QUESTION #2 MEAN?
The complete wording of this ballot question(and all ballot questions)is required,word for word,by law.
In simpler English,here's what the ballot means: The district is proposing a levy of$140,000 per year for
seven years, for a total of$980,000. The tax impact would be .0211 times the net tax capacity of your
property. For a $100,000 home, for example, the net tax capacity is $1,000 (1%), so the annual tax
impact would be$1,000 x .0211, or$21.10. Another example, for a$175,000 home the net tax capacity
is$1,750(1%),so the annual tax impact would be$1,750 x.0211,or$36.92.
•
• HOW WILL BALLOT QUESTION#3 BE STATED?
SCHOOL DISTRICT QUESTION BALLOT
INDEPENDENT SCHOOL DISTRICT NO.282
(ST.ANTHONY—NEW BRIGHTON)
SPECIAL ELECTION
November 4,2003
To vote for a question,put an(X)in the square next to the word"YES"for that question.
To vote against a question,put an(X)in the square next to the word"NO"for that question.
SCHOOL DISTRICT BALLOT QUESTION 3
APPROVAL OF SCHOOL DISTRICT
REFERENDUM REVENUE AUTHORIZATION
The board of Independent School District No. 282(St. Anthony—New Brighton),has proposed
to increase its general education revenue by $400.00 per resident marginal cost pupil unit. The
additional revenue will be used to finance school operations and the property tax portion thereof
will require an estimated referendum tax rate of approximately .00039403 of the referendum
market value of all taxable property in the district for taxes payable in 2004,the first year it is to
be levied, and an estimated referendum tax rate of approximately .00055470 of the referendum
market value of all taxable property in the district for the first year the increase is at the
maximum of$400.00. The proposed referendum revenue authorization would be applicable for
• four(4)years unless otherwise revoked or reduced as provided by law.
YES
Shall the capital project levy proposed by the board of Independent School
District No.282 be approved?
NO
** BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING_ FOR A PROPERTY TAX
INCREASE.
WHAT DOES BALLOT QUESTION#3 MEAN?
Let's start with what it doesn't mean. It does not mean that your tax increase will be$400 per year. $400
per resident marginal cost pupil unit is legal language that means an operating levy that provides$400 per pupil
unit that resides in the district ("Pupil unit" is a weighted student count that allocates funding based on a
student's grade level.) $400 is not your tax increase. It's the other figures in the ballot language—.00039403
and .00055470—that determine the possible range of your annual tax increase. Your tax increase will be
.00039403 times the estimated market value of your property as listed on your property tax statement. For
example, a home with an estimated market value of$100,000 would see an annual tax increase of.00039403 x
$100,000,or$39.40. To find out the maximum it could possibly increase over the four years would be to utilize
the.00055470 multiplier,netting a maximum increase by the fourth year of$55.47 on a home with an estimated
market value of$100,000.
M
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Independent School District 282, Saint Anthony-New Brighton, MN
Estimated Tax Impact
Request New$400 Request New$400 Request New$400 Request New$400
per RMCPU per RMCPU per RMCPU per RMCPU
Base Authority 1,136.62 1,136.62 1,13662 1,136.62
Est Maximum per year 1,362.18 1,418.01 1,476.12 1,536.62
4.0984% Est CPI Growth Difference 225.56 281.39 339.50 400.00
8!0000% Est Tax Base Growth Pupil Units 1,150 1,150 1,150 1,150
RMV Levy 259,394 323,596 390,429 460,001
Referendum Market Value 658,305,468 710,969,905 767,847,49B 829,275,298
Pay 2004 Pay 2005 Pay 2006 Pay 2007
Estimated Referendum 2003/2004 Estimated Estimated Estimated Estimated
Market Market Net Tax RMV %I c) 0.039403% 0045515% 0-050847% 0055470%
Value a Valu Capacity NTC %(b)
U Homestead Residential
A $125,000 $125,000 $1,250 $49.25 $56.89 $6356 $6934
W 150,000 150,000 1,500 59.10 68.27 76.27 83.21
fn 175,000 175,000 1,750 6896 79.65 88.98 97.07
200,000 200,000 2,000 7881 91.03 101.69 110.94
z
x 225,000 225,000 2,250 88.66 102.41 11441 124.81
p- 250,000 250,000 2,500 9851 113.79 127.12 136.68
N 275,000 275,000 2,750 10836 125.17 139.83 152.54
300,000 300,000 3,000 11821 136.54 15254 166.41
Commerciallindustrial
$250,000 $250,000 $4,250 $98.51 $113.79 $127.12 $138.68
500,000 500,000 9,250 197.02 227.57 25424 277.35
N 750,000 750,000 14,250 295.52 341.36 381.35 416.03
0 1,000,000 1,000,000 19,250 394.03 455.15 508.47 554.70
M
M
N
N
N (a) Estimated market value is the basis from which the net tax capacity is calculated
This value is not necessarily the price the property would bring if sold.
(b) The Net Taff Canar itv(NTC')rate inr:rwaxp l.t rtPrivorl by rhvlrlinn the AntirinAtarl 10OW by IMP tarahiA nPt PAY
Gtr. capacity The dollar increase in taxes payable is derived by multiplying the net tax capacity
o, by the tax capacity rate increase.
Tr (c) The Referendum Market Value(RMV)tax rate increase is derived by dividing the anticipated levy by the
Referendum Market Value(Excludes Agricultural Land and Seasonal Recreational Properties) The dollar
M increase in taxes payable is derived by multiplying the Referendum Market Value by the RMV rate increase.
o
0
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00 Prepared by.Springsted Incorporated-8/21/2003 BM Legal-ISD 282-0812031.xis-Question 3-New
0
Independent School District 282, Saint Anthony-New Brighton, MN
Estimated Tax Impact - Capital Projects Levy
Question 1 Question 2
` Use Technology Curriculum
Amount 180,000 140,000
Net Tax Capacity 6,635,478 6,635,478
Pay 2004 Pay 2004
Estimated Referendum 2003/2004 Estimated Estimated
Market Market Net Tax RMV % ( c ) 0.00000% 0.00000%
Value Value Capacity NTC % ( b ) 2.713% 2.110%
Homestead Residential
$125,000 $125,000 $1,250 $33.91 $26.37
150,000 150,000 1,500 40.69 31.65
175,000 175,000 1,750 47.47 36.92
200,000 200,000 2,000 54.25 42.20
225,000 225,000 2,250 61.04 47.47
250,000 250,000 2,500 67.82 52.75
275,000 275,000 2,750 74.60 58.02
300,000 300,000 3,000 81.38 63.30
CommerciaUlndustrial
$250,000 $250,000 $4,250 $115.29 $89.67
500,000 500,000 9,250 250.92 195.16
750,000 750,000 14,250 386.56 300.66
1,000,000 1,000,000 19,250 522.19 406.15
(a) Estimated market value is the basis from which the net tax capacity is calculated.
This value is not necessarily the price the property would bring if sold.
(b) The Net Tax Capacity(NTC) rate increase is derived by dividing the anticipated levy by the taxable net tax
capacity. The dollar increase in taxes payable is derived by multiplying the net tax capacity
by the tax capacity rate increase.
(c) The Referendum Market Value (RMV) tax rate increase is derived by dividing the anticipated levy by the
Referendum Market Value (Excludes Agricultural Land and Seasonal Recreational Properties). The dollar
increase in taxes payable is derived by multiplying the Referendum Market Value by the RMV rate increase.
Prepared by: Springsted Incorporated-8/21/03 • BM Legal-ISD 282-081203.xls-Capital Projects Q 1 Q2 -
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• DRAFT #2
St. Anthony-New Brighton Schools
Plan for Fiscal Viability
September 30, 2003
Although it is impossible to predict the future, based on what we know at this time, the
following will collectively do much to secure long term financial stability.
1. Continued prudent management of school district budget
2. Identify and capitalize on opportunities for alternate, cost -effective educational
delivery systems.
3. Continued maintenance of present (2003-04) student enrollment (1,633) which is at
capacity from a facility and program standpoint.
4. Approval on November 4, 2003, of the following levies
• Seven-year capital levy for technology
• Seven year capital levy for curriculum
• Four-year operating levy with inflation factor
• 5. Renewal of operating levy on or before 2007
6. Legislation to capture operating levy revenue for open enrollment students
7. Adequate funding from the state which is more in line with the cost of living index
and/or aligned with the actual cost of providing education under present
resident/parental/state and federal expectations.
8. Approval of a bond referendum to upgrade our high school, middle school, and
elementary school facilities.
It will take continued careful planning, communication, and collaboration for these things
to happen
Proposed Process for Reviewing and Approving
5�
• Capital Project Improvements To Central Park
1. The St. Anthony-New Brighton School District and the City of St.
Anthony Village will agree to appoint a joint-body advisory committee,
consisting of two City Council members, two School Board members, the
City Manager and the Superintendent. This committee will meet from
time to time to review capital projects having an impact on the use or
asthetics of Central Park.
2. The committee will hold meetings to promote cooperation between the
city and the school district on specific projects, and to obtain broader
community input on the impact of specific projects to the park and the
community
3. As projects are identified, but prior to completion of planning for the
project, the joint-body advisory committee will meet with a
representative member of the St. Anthony Parks Commission (normally
the Commission chair) to solicit comments, concerns, and feedback on
the project.
4. The projects will then be reviewed, modified, approved, or rejected by
• the City Council or the School Board, depending on which body has
jurisdiction over the property and the funding.
5. All capital projects must follow applicable city ordinances and
regulations.
6. All capital projects will managed by the city or school district
- (determined by which body has jurisdiction over the project), and will
follow the capital project procedures used by the respective body for all
aspects of the project including procurement, project management,
accounting for funds, insurance, and ongoing maintenance.
Notes
1. This process will not be used for routine repairs, maintenance, and
improvements that do not have a significant impact to existing capital
structures.
• 2. In some situations, the City or School District may have a compelling
mission-related or programmatic interest in a capital project, which may
outweigh the consideration given to other input on the project.
• MEMORANDUM
DATE: September 3, 2003
TO: Mike Mornson, City Manager
FROM: Roger Larson, Finance Director
ITEM: COMMUNITY SERVICES DEFECIT
Per your direction, I completed an analysis to determine the cost of the City supporting
the $54,000 Community Services levy versus the present cost of the School District's
levy.
It is my understanding that effective July 1, 2004, the School can no longer levy the cost
of Community Services and the School Board has asked the City to absorb the levy. The
question was asked, "if the School reduced its levy by $54,000 and the City increased
theirs by $54,000, would the cost be the same to the residents?"
To determine the answer, I worked with Hennepin County. The result is as follows (the
• analysis is based on 2003 collectible taxes):
$200,000 St. Anthony Home
$2,000—Tax Capacity
Annual School Tax for Community Services $16.12
Annual City Tax for Community Services $21.32
Amount of Annual Increase $ 5.20
The increase is because the City has a lower tax capacity ($5,067,038) compared to the
School's $6,143,961 (their base includes part of New Brighton).
In addition, because of strict levy limits in 2004, the City could not absorb this into its
budget until January 2005. This equates to a funding gap of$27,000 for one-half of the
year 2004.
The options for funding the gap could be as follows:
1) School funds the deficit for 2004. City absorbs the levy in 2005.
2) City funds gap/absorbs the levy in 2005:
a. Dedicates budget reserves from 2003 budget.
b. Transfer 2003 —Liquor Profits.
• c. Appropriate funds from Tires Plus Building Fund (remaining balance
at 6/30/04 will be approximately $316,108.00.
Recommendation: •
If Council opts to the fund the gap, the Tires Plus money is the most prudent financial
alternative of the three options.
With all the changes to our budgeting process, we do not know if there will be any 2003
budget reserves to appropriate. In addition, the redevelopment of the Stonehouse/SAV I
will reduce our 2003 operating profit numbers, which means funds may or may not be
available.
•