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HomeMy WebLinkAbout2013 Budget BookM , / 1' 1 CITY OF SAINT ANTHONY VILLAGE 2013 CITY BUDGET md, TABLE OF CONTENTS Principal City Officials .................... ..............................1 Organizational Chart ..................... ............................... 2 Management Letter ........................ ............................... 3 Introduction.................................... ............................... 7 Tax Rate Calculation & Impact ..... ............................... 9 What do I Get for My Taxes .......... .............................11 22 Budget Calendar ............................. .............................12 25 -34 Salaries............................................. .............................13 25 GENERALFUND Revenues Summary .................. .............................16 Revenues Graph ........................ .............................17 Expenditures Summary ........... .............................18 36 Expenditures Graph ................. .............................19 38 Overview of Departments ..... ............................... 20 Revenues Detail ..................... ............................... 22 Expenditures Detail .......... ............................... 25 -34 Mayor /Council ....................... ............................... 25 General Management ............. ............................... 25 Planning................................... ............................... 26 Elections................................... ............................... 26 Financial Services .................... ............................... 26 Legal......................................... ............................... 27 Assessing.................................. ............................... 27 CityBuildings .......................... ............................... 28 Cable Franchise ....................... ............................... 28 Police Protection ...................... ............................... 28 Police Reimburseable ............. ............................... 29 Fire Protection ......................... ............................... 30 Protective Inspections ............. ............................... 30 Emergency Management ....... ............................... 31 Animal Control ........................ ............................... 32 Public Works ............................ ............................... 33 Parks......................................... ............................... 33 Other Grants & Expenditures ............................... 34 ENTERPRISE FUNDS Liquor Operations Marketplace............................ ............................... 36 Silver Lake Village ................ ............................... 38 AllStores ................................ ............................... 40 Utility Fund Summary................................ ............................... 42 Water....................................... ............................... 43 Sewer....................................... ............................... 45 SPECIAL REVENUE FUNDS Housing & Redevelopment ......... .............................48 Recycl ing...................................... ............................... 49 Forfeiture..................................... ............................... 50 Fire................................................ ............................... 51 Community Center ..................... ............................... 52 CAPITAL FUNDS Capital Improvement Plan Overview................................ ............................... 54 Detail....................................... ............................... 55 Building Improvement ............... ............................... 58 Park Improvement ...................... ............................... 60 DEBT SERVICE FUNDS Street Improvement Debt .......... ............................... 62 Tax Abatement & Lease Revenue Debt .................. 63 BUDGET INFORMATION City Fund Balances ....................... .............................66 Financial Management Plan CITY OF ST. ANTHONY 3301 Silver Lake Road St. Anthony, MN 55418 Phone: (612) 782 -3301 Fax: (612) 782 -3302 website: www.ci.saint- anthony.mn.us e -mail: city@ci.saint- anthony.mn.us Principal City Officials Mayor Jerome O. Faust Council Member's Hal Gray Jan Jenson Jim Roth Randy Stille City Staff Mark Casey, City Manager Barb Suciu, City Clerk John Ohl, Police Chief John Malenick, Fire Chief Shelly Rueckert, Finance Director Jay Hartman, Public Works Director Michael Larson, Liquor Operations Manager St. Anthony Organizational Chart 0M... Employees 1 1 7 Full time Employees Consultants Engineer - WSB & Associates Human Resources - City of New Brighton Financial - Ehlers & Associates Legal - Dorsey & Whitney Planner - WSB & Associates 4 Full time 24 Part time City Clerk 30 26 Full time Employe( 1 Part time Employee 2013 14 Full time 10 Seasonal Full-Time Positions = 58 Put -Time Positions = 73 Police Reserves (Unpaid) =12 1111 1 ;11 f�. 11 December 11, 2012 Honorable Mayor and City Council, City of St. Anthony, Minnesota Dear Mayor and Councilmembers: RE. Management Letter I am submitting for City Council consideration the 2013 General Operating Budget. Included in this document are the 2013 budgets for the General Fund, Enterprise Funds, Special Revenue Funds, the 5 -Year Capital Equipment Plan, Debt Service Funds, and Budget Information. Staff's goal is to provide our community with strong, quality services in the most cost effective and efficient way possible. In preparing the 2013 budget, Staff continued its mission to maintain the existing level of City services and programs with the use of financially conservative budgeting. Overall, the proposed 2013 General Operating Budget represents an increase of $20,650 over last year's budgeted amount. General Operating Fund For year 2013, Staff is proposing a General Fund Levy in the amount of $3,123,343, compared to prior year's levy of $3,045,166, reflecting a 2.56% increase from 2012. Overall, the personal services portion of the Budget continues to be the largest segment comprising 73.85% of the General Fund Operating Budget. The increase in the 2013 Operating Budget reflects a 2% increase in salaries for Fire, Police, Public Works, Liquor and Non -Union employees. In addition, the employer health insurance premium contribution for family coverage will remain at 2012 levels for the City's co -pay plan and increase by $50 for certain HSA High Deductible plans. Infrastructure Improvements During the past there has been significant reconstruction of City streets, sidewalks, the storm water system, Silver Lake Village and our park infrastructures. The 2012 street project included street reconstruction and utility improvements to: ♦ Belden Drive — 34th Avenue NE to 36th Avenue NE; ♦ Coolidge Street — 34`n Avenue NE to 36th Avenue NE; and ♦ 35th Avenue — Harding Street to Belden Drive; ♦ and a pipe bursting project from Macalaster Drive NE to Chandler Drive NE. The total budget for the 2012 project totaled $1,940,000. Funding came from the issuance of a street improvement bond and special assessments. For 2013, the City Engineer is proposing street reconstruction and utility improvements to: ♦ Edwards Street — 35°i Avenue NE to 36a' Avenue NE; ♦ 36th Avenue NE — Roosevelt Street to Silver Lake Road. The total budget of the proposed street project is estimated at $1,803,197. Funding for the project will come from road improvement bonds and special assessments. The City continues to assess 35% of the costs to the adjacent property owners and through the issuance of road improvement bonds, 65% of the costs is levied over the entire community for their use of City streets. Lev St. Anthony's General Operating Fund levy for 2013 totals $3,123,343 which supports the cost of providing City services. The total for all levies is $5,426,789. This represents an increase of $203,700 or 3.9% percent. A summary of the total levies are as follows: General Operating Levy CIP Levy Street Improvement Levy Lease Revenue Bonds/Public Facilities HRA Levy Tax Abatement (Central /Emerald Park) Total 2013 $3,123,343 (General Fund) $ 50,000 $1,577,184 $ 379,197 $ 150,585 $ 146,480 $5,426,789 Changes to the levy include: a $78,177 increase in the General Operating levy; a $76,429 increase to the Road Improvement Levy; a $30,576 decrease to the Lease Revenue Bonds/ Public Facilities Levy and a $2,915 decrease in the Tax Abatement Levy for Central & Emerald Parks. The addition of a $50,000 Capital Improvement Levy and the elimination of the $7,500 PERA Levy. In 2013, the median property valuation of the City equals $207,000 (the median taxable valuation is the number in the middle: 50% lower, 50% higher). The average homeowner in the Village will pay $1,380.21 in "City Property Taxes ". A breakdown of the costs includes: $810.50 for Police, Fire, Public Works and Park maintenance; $419.12 for Streets; $99.19 for the Fire and Public Works buildings; $38.32 for the Central and Emerald park improvements; and $13.08 for the Capital Improvement Fund. 9 Capital Equipment Purchases - Appropriation = $299,100 The proposed 2013 Capital Equipment Budget totals $299,100. Traditionally, revenue for funding capital equipment has come from various sources including: transfers from the General Fund, profits from Liquor Operations, Liquor Reserve Funds, MSA Revolving Funds, interest earnings, trade /sale of existing equipment, and water /sewer revenue. A review of the 2013 revenue and expenditures is as follows: Revenues: Capital Improvement Levy Liquor Operating Transfers NSA/Revolving Funds Water Filtration Transfer Trade /Sale of Equipment Total Available $ Expenditures: Police Department Squad Cars Teardown /Building of Squad Cars Equipment Replacement /Squad Cars Opticoms Tasers Firearms Radar Defibrillator's Portable Radio's CrimNet /State Computer Upgrades Total Police $ 50,000 Fire Department 108,200 Turnout Gear $ 4,000 90,000 Office /Training Room Furniture 3,000 SQ000 Replace Rescue Oil (2006 - Fire Truck) 80,000 5,400 Pagers 3,000 303,600 Total Fire $ 90,000 Public Works Snow Blower Attachment /Bobcat Replacement $ 6,500 54,600 1 -Ton Truck 40,000 10,500 Total Public Works r$ 46,500 7,000 Finance/Administration 4,000 Financial Software (Civic) 30,000 3,000 Elections Machines & Equipment 27,500 51000 Total Finance/Administration $ 57,500 5,000 6,000 Total Expenditures $ 299,100 5,000 5,000 105,100 Grants To help offset the cost of operations and capital equipment, Staff continues to participate in Federal and State grants, seeking donations from private sources and partners with local organizations. In 2012, funding from these sources totaled $172,746. Combining this effort with previous years since 1999, the City has received $15,982,099, which, based on a population of 8,226, represents $1,942.88 per resident. Some recent on -going grants and applications include: to promote public safety and alcohol awareness the Police Department continues to secure Safe and Sober Grant funding; Metropolitan Council I & I Shared Services Grant; and a Metropolitan Environmental Services Grant; Liquor Operations The profitability of St. Anthony's Liquor Operations continues to be a focus for City Council and Staff. Profits from the operation of our two stores have a significant impact on our City's ability purchase capital equipment without issuing debt. They also provide a source of funding for reducing the general fund tax levy. The profits for year 2011 from Liquor Operations totaled $462,312. For 2012, the projected profits from Liquor Operations are estimated to be $524,304. In 2013, the allocation of liquor operating profits includes $305,800 being transferred to the General Fund and $108,200 is designated to fund the purchases of Capital Equipment for all City Departments and the retirement of a $73,000 Inter -Fund Loan from the Water Filtration Fund. Conclusion "Our mission is to be a progressive, livable, walkable Village which is sustainable, safe and secure ". The Mayor, City Council and Staff will continue to closely monitor the needs of the community and set goals to meet the level of services that the community desires at the most affordable cost. St. Anthony is a thriving and stable community. A key factor in improving our community is intergovernmental cooperation between the City, the School District, Hennepin/Ramsey Counties, the Mississippi Watershed Management Organization, the Rice Creek Watershed as well as the Police Contracts with Lauderdale and Falcon Heights. The quarterly meetings held between the School Board and the City Council along with our on -going dialog and partnering with our local businesses, Hennepin/Ramsey Counties and the Watershed Districts help us in developing a better understanding of the overall needs of the community. The City continues to be very active in the League of Minnesota Cities, the Association of Metropolitan Municipalities and our local Chamber of Commerce and Kiwanis. Undoubtedly, the responsible management of our financial resources in a weakened economy, while providing strong services and infrastructure improvements to our Community, will remain an exciting challenge for the City Council and Staff. Yours truly, WarkCasey Mark Casey City Manager 0 INTRODUCTION The City of St. Anthony is primarily a residential community, which neighbors the communities of Minneapolis, Roseville, New Brighton and Columbia Heights. The City is at or near full development, with the economy consisting of light industrial, commercial and retail- related businesses. Form of Government The City of St. Anthony operates under the Statutory Plan B form of government. Under this form of government, the City Council appoints the City Manager who then governs the Administration, Finance, Police, Fire, Public Works and Liquor Departments. Budget Process Based on discussions with the City Council and the direction they provide Staff, Department Heads begin the preparation of their proposed operating and capital equipment budgets for the next calendar year, 2013 (St. Anthony's fiscal year is a calendar year). At the annual goal setting retreat Qanuary 12th & 13th) the City Council and Staff discussed financial management planning, resources and prioritized the budgeting process. On March 12, 2012, April 16, 2012, May 7, 2012 and August 6, 2012 work sessions were held with the City Council and Staff to review the 2013 General Operating and Capital Equipment Budgets. On April 24, 2012, and August 28, 2012, the City Council held public meetings to obtain public input on the budget process. Council adopted the proposed 2013 Operating Budget and Preliminary Tax Levy at its September 11, 2012, regular meeting and announced December 11, 2012, as the date for the presentation/ discussion and approval of the 2013 Operating Budget and Tax Levy. On September 12, 2012, City Staff certified a proposed budget and tax levy to Hennepin and Ramsey Counties. Once the proposed levy has been certified, the levy cannot be increased, but it can be reduced during the final certification process in December. The City's five -year capital equipment plan and corresponding upgrades to city buildings are prepared in a similar manner, however are expanded to include long -term goals, needs and projections. In late October, staff calculates the proposed tax rate and tax capacity numbers to determine the impact on residential and commercial properties. In Mid - November, the impact of the proposed budget and tax levy is published and "Proposed Property Tax Statements" are mailed to all property owners. Staff presented the 2013 General Operating Budget and Tax Levy at the December 11, 2012, City Council meeting. After gathering, discussing and reviewing the necessary information to determine the 2013 Tax Levy, the City Council adopted the 2013 General Operating Budget and Property Tax Levy. The City's final property tax levy was certified to Hennepin and Ramsey Counties who collect the property taxes on behalf of the City, County, School District voter - approved levies and other Taxing Districts. Respectfully submitted, Sheffy R,ueckert Shelly Rueckert Finance Director MEMORANDUM DATE: December 11, 2012 TO: Mark Casey, City Manager FROM: Shelly Rueckert, Finance Director ITEM: TAX RATE CALCULATION AND IMPACT For collectible 2013 taxes, the proposed general fund levy totals $3,123,343. The road improvement levy totals $1,577,184; the lease revenue bonds levy for the Public Works and Fire buildings is $379,179; the tax abatement levy is $146,480 (Central /Emerald Park Improvements); and the Capital Improvement levy of $50,000 for a Local Levy of $5,276,204. The 2013 HRA Levy proposed is $150,585 resulting in a combined increase of 3.9% over prior years' levies. The 2013 tax rate of 73.3% is based on the amount of St. Anthony's Total Local Levy $5,276,204, less the City's distribution from the Fiscal Disparities pool ($689,453) and then dividing the total local levy by current valuation estimates from Hennepin and Ramsey Counties ($6,258,544). Combining the factors that contribute to the amount of property taxes paid (the general operating fund levy; the road improvement levy; the public facilities levy; the tax abatement levy; and the PERA levy) with a decline in the tax base the 2013 tax rate increased. The increases in the 2013 levies totaling $203,700 include: the general operating levy increase of $78,177; the road improvement levy increase of $76,429; the public facilities levy decrease of $30,576; the tax abatement levy decrease of $2,915; the elimination of the PERA levy $7,500; the establishment of the CIP levy for $50,000 and the HRA Levy increase of $40,085. In early November, Property Tax Statements were mailed to St. Anthony residents. A percentage breakdown of the "decrease or increase" in 2013 property taxes for St. Anthony residential properties is as follows: 1) 5.38% will experience a 4.9% decrease to a 20% decrease. 2) 55.8% will experience a 0% increase to 4.9% decrease.. 3) 34.5% will experience an increase of 0% to 4.9 %. 4) 4.2% will experience an increase between 5% and 9.9 %. 5) .12% will experience an increase greater than 10.0 %. 0 To reflect housing sales and the real estate market, the County Assessor indicates that overall residential property values have declined. The median valuation in 2013 totals $207,000 compared to $223,000 in 2012. The 2013 property taxes on an average residential property are as follows: Median Taxable Valuation: $ 207,000 City portion of property taxes: $1,380.21 A breakdown of the operating budgets is as follows: General Fund $ 810.50 Roads $ 419.12 Public Works /Fire Buildings $ 99.19 Tax Abatement $ 38.32 CIP 13.02 Total $1,380.21 To provide an understanding of what St. Anthony residents receive for their property tax dollars, the following page has a breakdown by Department of the costs for basic services relating to the proposed 2013 operating budget and property tax levy for a property valued at $207,000. 10 WHAT DO I GET FOR MY TAXES? - 2013 AVERAGE HOME VALUATION = $207,000 ANNUAL BUDGET TAXES= $810.50 ROAD LEVY TAXES = $419.12 PUBLIC FACILITIES - P/ W & FIRE $99.19 TAX ABATEMENT $38.32 CAPITAL IMPROVEMENTS 13.08 TOTAL CITY PROPERTY TAXES = $1,380.21 Mayor / Council Cable Franchise General Management Elections Finance, Insurance / Accounting Finance, Assessing Legal Engineering, Planning / Zoning City Buildings Emergency Management Police Protection Lauderdale /Falcon Heights Contracts Dare Education Fire Protection Inspections, Building /Plumbing /Heating /Health Animal Control Public Works Parks Other Expenditures (Grants, Donations & Misc.) GENERAL FUND TOTAL ROAD LEVY PUBLIC FACILITIES - P/ W & FIRE TAX ABATEMENT CIP LEVY 2013 TAX LEVY °% OF TAXES BUDGET EXPENDITURES BUDGET PAID $76,426.00 $66,054.03 2.11% $17.14 $37,969.00 $0.00 0.00% $0.00 $87,443.00 $75,575.89 2.42% $19.61 $23,760.00 $20,535.47 0.66% $5.33 $228,665.00 $117,868.28 3.77% $30.60 $49,482.00 $42,766.67 1.37% $11.10 $103,750.00 $58,750.00 1.88% $15.25 $31,775.00 $27,462.73 0.88% $7.13 $151,030.00 $130,533.33 4.18 °% $33.87 $62,601.00 $54,105.26 1.73% $14.04 $1,694,212.00 $1,025,744.67 32.84% $266.18 $1,204,060.00 $0.00 0.00% $0.00 $14,500.00 $0.00 0.00% $0.00 $919,482.00 $740,432.43 23.71% $192.15 $94,975.00 $0.00 0.00% $0.00 $3,600.00 $3,111.43 0.10% $0.81 $773,194.00 $512,711.85 16.42% $133.05 $286,584.00 $247,690.95 7.93% $64.28 $40,000.00 $0.00 0.00% $0_00 $5,883,508.00 $3,123,343.00 100.00% $810.50 $1,577,184.00 $419.12 $379,197.00 $99.19 $146,480.00 $38.32 $50,000.00 13.08 TOTAL LEVY $5,276,204.00 $1,380.21 11 IMPORTANT DATES St. Anthony Budget Schedule for 2013 Budget 12RLi y 12 &13,2012 Goal Setting, Financial Management and Planning. March 12,2012: Financial Planning work session. April 16, 2012: Financial Planning work session. April 24,2012: Public Hearing /Provide Residents with an Opportunity to have input in the budget process. May 7,2012: Work Session with Department Heads - Discussion on 2013 Operating Budget and evaluate 5 -Year Capital Equipment needs. May - Tune: City Manager & Staff Meetings to discuss/ draft 2013 Budget. August 6, 2012: Work Session with Department Heads - Council & Staff to review Key Financial Plan and the Proposed 2012 General Operating Budget; Discussion on Capital Equipment Budgets. August 28, 2012: Presentation of the Proposed 2013 Operating Budget & Property Tax Levy to the City Council. September 11, 2012: Resolution passed: 1) Setting the proposed 2013 Operating Budget and Property Tax Levy. 2) Announce the date and time at which the final Budget and Tax Levy will be discussed. December 11, 2012: Presentation of 2013 Operating Budget and Levy with Public Input. 1) Adoption of the 2013 Operating Budget and Property Tax Levy. 12 SALARIES Administration City Manager 2012 2013 Council $57,388 $58,531 Mayor $7,500 $7,500 Mayor Pro Tern $6,756 $6,756 Council member $6,000 $6,000 Administration City Manager $105,000 $115,000 City Clerk $57,388 $58,531 Finance $64,345 $66,275 Finance Director $91,000 $93,725 Accountant $56,000 $57,117 License /Permit Specialist $49,612 $50,606 Utility Billing Clerk $46,318 $47,258 Office Support Specialist $41,496 $42,328 Fire Fire Chief $85,118 $87,672 Asst. Fire Chief $74,242 $76,469 Captain $64,345 $66,275 Firefighter Top - $61,564 $62,795 Police Start - $55,524 $56,635 Firefighter - PT $11.10 - $12.95/hr. $11.36 - $13.26/hr. Code Enforcement - PT $16.50 - $17.25/hr. $16.75 - $17.50 /hr. Li quo Liquor Operations Manager $85,118 $87,872 Asst. Liquor Operations Manager $62,339 $63,586 Liquor Store Manager $58,178 $59,342 Full-Time Liquor Clerk $45,261 $46,176 Police $51,709 $52,749 Police Chief $99,159 $102,128 Captain $85,055 $86,757 Lieutenant $75,754 $77,272 Sergeant $73,362 $76,295 Investigator $66,602 $67,933 Police Officer Top - $66,604 $67,933 Start - $49,953 $50,952 CSO Officer $29,764 $30,368 Office Manager $57,368 $58,510 Office Support Specialist $44,044 $44,907 Data Entry Clerk P/T $13.87 /hr. $14.14/hr. Public Works Public Works Director $85,118 $87,672 Public Works Superintendent $71,594 $73,029 Mechanic $54,595 $56,098 Crew Leader $53,893 $54,974 Maintenance 111 $51,709 $52,749 Water /Sewer Operator $50,648 $51,667 Maintenance I Top- $49,670 $50,669 Start - $37,232 $37,981 13 This page left intentionally blank bA w 0 7� v u O O 4 N N +� cu a) O � ct H 7� to � w � u bA oQ) U C7 a a 4 cu a) O � ct H 7� � w � u bA a 4 O � � ct H 7� u O a v v v w Cd cz W WI^ N N W m � C M If cn o0 O� ti N � e n II WI^ N N W m � C M If a0 lln N bp (n to df o O t� N W w W Q F 0.l N rn in � 6 a z � .� 4 rd d e~-� N H � N � NM H ems-, S d' 06 y�� N O z W d N clt a o N M N N � N d f» Fn S w N M H m orn d a N N d V3 � 7 y N a v W C v v � z N N z 5 F 4 wl z w A z w wl z w c� v as v v w 0 M r-i O bA ER i m v u RE N ° o 00 X Lrj m Lr) F-+ � v o D o � � bA ;. v 00 cV r p �o 0 N Lq 0 M r-i O bA ER i m v u RE N ° o 00 X Lrj m Lr) F-+ � v o D o � � bA ;. v 00 cV r p W m 0 N a °u y NN N V3 W H Vi t» O 00 t\ c» O� H FA W N Y3 u N Q N 4 U) 16��� u N W N n N 6 06 W {r�� (y O M N M N CD n e N S VOI N 16 n N M W M (7� 4 NN N V3 W H Vi t» O 00 t\ c» O� H FA W N Y3 u N Q N 4 U) 16��� W 06 n O T � C4 CD N S VOI N 16 n N M W M (7� 4 N (n lD O ri app [![te�n m di fA fA rl p o y� pQ�� eon U N.pp S oD N M m pNp�� . 4 yW� M O n W S N N O T �D a0 h h N tM�f t\ t\ N r-I N N H tq N N N F V] fA Vi M W m N N VI ll [A Vi fA Qm N W N n M !\ dk ' t\ h to C'~ N n ttV� F N aa00 U N N Le to fA Vf d3 O d' 16 if � D W O 6 N 6 11 W C N N N ul N d fR fA Vi oyp� O L� T N M h ttp Om� td�� N h h r+ h h N M n H 'r H q g M N W N N N M N tri N EA Hi YS � y rL .7 m w G1N w c4 v C C v U 't3 v F Q C o v u v G @ W W z Y a m G U w O � rn p G m u a NN N V3 W H Vi t» O 00 t\ c» O� H FA W N Y3 u N Q N 4 U) W M�1 Q W W Q z w w z W c� CU Q o ri 0 u ON vx re,W m v o0 � N V Lfi w Ln o U LO 0 N o .�, if w � Ru Tt � N ch U M r N I .b ) G N �� bO V. ti L eao Q o v b2vg 1- -0 °b> IL A ° $0'E wv d d° •p 3 d • G .°. a+ m 5 o N .ra G. 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K \ § !m§ }® (� \ ( ) )\ § § 7 \ \ \ k a y r ) § §(k ( §( } C', ) §km & < § ! 2§§; /§ ƒ2■'[ 7 /; §§ ! K \ § !m§ }® (� \ ( ) )\ § § 7 \ \ \ k a y r ) § §(k ( §( } C', ) §km & < § ! This page left intentionally blank BUDGET INFORMATION �i • City Fund Balances • Financial Management Policy CITY FUND BALANCES The audited Fund Balances for City operations at the end of 2011 totaled $17,568,234. A review of those funds and a description of their intended use for budget years 2012 and 2013 are listed below. General Fund (101) - $1,624,700 The General Fund provides resources for financing general services and daily operations of the City including Administration, Finance /hisurance, Police, Fire, Public Works and Parks Maintenance. The fund balance provides the City's Working Capital, Insurance Reserves, Contract Insurance Reserves/ Deductibles, Unemployment Reserves, and funds Pre -Paid Insurance requirements. MSA Road Project Fund (2051- $35,938 This fund was established for improvements to Streets that are designated as Minnesota State Aid Roads. The improvements are completed therefore the fund was closed in 2012. The remaining fund balance was used to retire the deficit fund balance in the 2009 Street Improvement Fund and a contribution to the 2013 Street Improvement Fund. MSA Bond Fund (207) - $74,747 This is the Debt Service associated with the State -Aid Street Improvement Bonds issued in 2000. The debt will be retired by 2015. Recycling Fund (225) - ($11,817) This Special Revenue fund's was established to manage recycling services and programs within the City limits. Grants from Hennepin and Ramsey Counties provide the primary funding for recycling. The fund revenues are committed sources for the City's annual Clean -up Day costs. The deficit fund balance will be retired by the share Hennepin County Grant proceeds not paid out as rebates and General Fund Transfer. Forfeiture Fund (230) - $23,622 This Special Revenue Fund's revenues are derived from the sale of vehicles and other seized assets confiscated for driving under the influence and drug- related offenses. State statute restricts the use of these funds to supplement the Police Department's operating fund for use in DUI /Drug- related enforcement, education and training. Fire Training Fund (240) - $3,422 The Fire Training Fund provides additional Police and Fire training outside of the General Fund Levy. Funding of this training is generated by the City's Certified Fire Instructors providing training services to other jurisdictions. HRA General Fund (301) - ($167,651) The HRA oversees all commercial and residential redevelopment activities in the community. The HRA General Fund allows for the payment of administrative costs which are associated M stimulating development within the City. The deficit fund balance will be retired over time due to the 2013 increase in the HRA Levy and the elimination of the annual transfer to the General Fund. Capital Equipment Fund (401) - $41,065 The Capital Equipment Fund is used for major capital equipment purchases (refer to the 5 -Year Capital Equipment Plan). Current funding is derived from transfers of Liquor profits, Road State aid, Water Infiltration interest earnings and proceeds from the sale of existing equipment. Additional Funding has been established in 2013 with a Capital Improvement Levy of $50,000. Park Improvement Fund (501) - $36,006 The Park Improvement Fund provides for the renovation and refurbishing of the City's park system. Current revenue sources are donations from private sources and park land user fees. The fund revenues are designated for park improvements. Tax Abatement Bond Fund (502) - $132,245 This fund provides funds to support the bond payments for the Tax Abatement Bonds issued in 2001 & 2009 for Park Improvements. The 2001 bonds will be retired in 2016, reducing annual debt service requirements by approximately $55,000. The 2009 bonds will be retired in 2025, eliminating the remaining annual debt service requirements of approximately $175,000. Street Improvement Bond Fund (345/503) - $3,442,836 The Street Improvement Bond Fund revenues include special assessments and a portion of Road improvement Levy. These proceeds are used to retire debt associated with road improvement bonds issued prior to 2009.The Fund balance above includes $2,164,079 of restricted funds related to the advance refunding of certain bond issues. The remaining Fund balance will be used to service the annual debt service requirements. Debt obligations serviced by this fund will be fully retired by 2023. Road Improvement Construction Fund (504) - $194,459 This represents the remaining project funds for Street Improvements prior to 2009. The disposition of this fund will be determined in connection with a debt service study performed during 2013. The fund's assets (cash) will be transferred in accordance with the study's findings and will result in the closure of this fund. Revolving Fund (509) - ($48,597) The Revolving Fund has served as general improvement fund for discretionary projects. City Council has designated the use of this fund to projects such as park improvements, capital equipment purchases, computer technology, street improvements and contingencies for emergency expenditures. 2012 MSA proceeds have eliminated the deficit fund balance. Building Improvement Fund (502) - $1,822 The fund was established to provide funding for infrastructure and non - recurring maintenance costs for City owned buildings and structures throughout the Village. Funding of these projects has been established in the 2013 Budget by transferring form the Community Center Fund and Liquor proceeds beginning in 2014. 67 2009 Street Improvement Construction Fund (511) - ($28,339) This fund accounted for the costs associated with the reconstruction of Chandler Drive and Foss Road. The reconstruction costs were funded by the 2009A - $2,630,000 improvement bond and special assessments. The 2011 deficit fund balance was retired by transfer from the Revolving Fund and the fund was closed as of 12/31/2012. 2009 Street Improvement Bond Fund (512) - $462,660 The 2009 Street Improvement Bond Fund was established to provide debt financing for the 2009 street improvements. The $2,630,000 debt issuance will be repaid with funds derived from the Road Improvement Levy and special assessment collections. The debt will be fully retired by 2025. 2010 Street Improvement Construction Fund (513) - $21,737 This fund accounted for the costs associated with the reconstruction of Silver Lane the mill and overlay of Old Highway 88. The reconstruction costs were funded by the 2010A - $1,375,000 improvement bond and special assessments. The projects were fully completed by 2012 therefore the remaining fund balance was transferred to the associated debt service fund and the capital fund was closed as of 12/31/2012. 2010 Road Improvement Bond Fund (514) - $73,494 The 2010 Street Improvement Bond Fund was established to provide debt financing for the 2010 street improvements. The $1,375,000 debt issuance will be repaid with funds derived from the Road Improvement Levy and special assessment collections. The debt will be fully retired by 2026. 2011 Street Improvement Construction Fund (515) - $189,591 This fund accounted for the costs associated with the reconstruction of Beldon Drive, Coolidge Street, Harding Street and Edward Street from 37th Avenue NE to 36th Avenue NE. The reconstruction costs were funded by the 2011A - $1,940,000 improvement bond. The fund balance will be used to pay any final project expenses and retire the retainage held; the remaining funds will then be transferred to the associated debt service fund. 2011 Road Improvement Bond Fund (516) - $211,695 The 2011 Street Improvement Bond Fund was established to provide debt financing for the 2011 street improvements. The $1,940,000 debt issuance will be repaid with funds derived from the Road Improvement Levy, special assessment collections and fund balance. The debt will be fully retired by 2027. Community Services/City Hall Fund (601) - $124,956 The Community Services /City Hall Fund is used to fund the operation and maintenance of the City Hall building. Funding is comprised of annual rent charges of $125,000 from I.S.D. #282 for the Community Services portion of the building and a rent transfer from the General Fund for the segment of the building used for City Hall. Budgeted rent transfer for 2013 is $70,150. Fund balance transfers will prospectively provide for City Hall capital improvements via the Building Improvement Fund. Water & Sewer Fund (701) - $3,680,397 The Water & Sewer Fund is an enterprise fund used to provide water and sewer services to the community. Funding for operation and maintenance of the system is provided on a user -fee basis, which is based on consumption of water. 68 Storm Water Fund (702) - ($7,730) The Primary source of revenues for this fund is the storm water charges. These collections are currently being used to retire bonds issued in 2000 for a major storm sewer improvement. Once Bonds are retired in 2015 these collections will be available to support storm water reconstruction costs incurred in the annual street projects. Storm Water Bond Fund (703) - $138,933 The Storm Water Bond Fund was established to provide debt financing for storm sewer improvements along 29th Avenue. The $1,610,000 debt issuance will be repaid with funds derived from stone water charges. The debt will be fully retired in 2015. Water Filtration & Purification Fund (704) - $5,059,865 The Water Filtration & Purification Fund was established and is dedicated to provide safe drinking water to the residents. The monies in this fund were derived from a cash settlement that the City received from the United States Army and Honeywell as damages for contaminating the City's water supply. The original ten -year agreement which provided 90°% funding for operation and maintenance of the carbon filtration plant has expired. The City is now 100% responsible for the operation and maintenance of the plant. Historically, the annual interest earnings have funded yearly operation and maintenance costs. Since, the Minnesota Pollution Control Agency has indicated that contaminates in the water could be in the system for as much as 100 years a significant fund balance is maintained to address any future needs. Liquor Fund (705) - $2,168,070 The Liquor Fund is an enterprise fund used to account for operations from the City's municipal liquor stores. Profits from operations are directed to capital equipment purchases and reducing the general fund levy. The fund balance is substantially comprised of cash, inventory, buildings, and fixtures. Severance Fund (900) - $74,265 The Severance Fund is a restricted use fund that provides funding for employee personal leave and comp -time severance pay upon their termination of employment with the City. The City's General Fund liability for 2011 totaled $703,122, the Water /Sewer's liability totaled $92,564 and the year -end liability for Liquor Operations totaled $50,858. Since it is unlikely that all employees would leave the City at the same time, the fund balance is deemed adequate to fund short term payments. 6S] This page left intentionally blank CITY OF ST. ANTHONY FINANCIAL MANAGEMENT POLICY 12/31/2012 I. SUMMARY ..................................................................................... ..............................1 II. REVENUE MANAGEMENT ....................................................... ..............................2 III. CASH AND INVESTMENTS ...................................................... ..............................3 IV. RESERVES ...................................................................................... ..............................5 V. OPERATING BUDGET ................................................................ ..............................5 VI. CAPITAL IMPROVEMENTS PLAN ......................................... ..............................6 VII. DEBT MANAGEMENT ................................................................ ..............................7 VII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING ......................8 IX. RISK MANAGEMENT ................................................................. ..............................8 I. SUMMARY Scope: A Financial Management Plan serves two main purposes. It draws together in a single document the City's financial policies and establishes clear principles that should help both Staff and Council members make consistent and informed financial decisions in an increasingly challenging fiscal environment. Purpose• The City of St. Anthony has an important responsibility to its citizens to plan the adequate funding of services desired by the public, including the provision and maintenance of public facilities; to manage and plan municipal finances wisely, and to carefully account for public funds. The City strives to ensure that it is capable of funding and providing local government services needed by the community. The City will maintain or improve its infrastructure on a systematic basis to provide the community with quality neighborhoods and enhanced property values. Prudent planners must develop adaptive policies that provide citizens with the best possible service value within the prevailing financial context. In order to achieve this purpose, this plan establishes City policy in the following areas: • Revenue Management • Reserve Operating • Capital Improvement Plan • Accounting, Auditing, Financial • Cash and Investments • Budget • Debt Management • Risk Management Objectives: • To provide both short term and long term future financial sustainability by ensuring adequate funding for providing services needed by the community. To protect the City Council's policy- making ability by ensuring that important policy decisions are not controlled by financial problems or emergencies and to prevent financial difficulties in the future. • To provide sound principles to guide the decisions of the City Council and management by providing accurate and timely information concerning various financial matters. To employ revenue policies, which prevent undue or unbalanced reliance on certain revenues; distribute the cost of municipal services fairly; and provide adequate funding to operate desired programs. • To provide essential public facilities and prevent deterioration of the City's public facilities and infrastructure. • To protect and enhance the City's credit rating and prevent default on any municipal debt. • To ensure the protection of all City funds through a good system of financial planning and accounting controls. • To create a document for staff and Council members can refer to during financial planning, budget preparation, and other financial management issues. II. REVENUE MANAGEMENT It is essential to responsibly manage the City's revenue sources to provide maximum service value to the community. Some revenue sources, such as intergovernmental transfers (LGA and MVHC) are outside of direct City control and are consequently unaddressed by this policy. This policy establishes guidance for the two major sources of City revenue: property taxes and fees /charges. Property Taxes: The property tax rate will not be increased without exploring all other alternatives. Basic City services, as annually defined and approved by the City Council, will be funded to the maximum extent possible by increases in market valuation, (i.e., new tax base growth and valuation increase). Priorities for increasing the property tax rate include: • Long -term protection of the City's infrastructure. • Meeting legal mandates imposed by outside agencies. • Maintaining adequate fund balance and reserve funds sufficient to maintain or improve the City's bond rating. Property tax rate increases to meet other purposes will be based on the following criteria: • A clear expression of community need. • The existence of community partnerships willing to share resources. • Establishment of clearly defined objectives and measurements of success. • Maintain current level of City Services. Service Fees and Charges: The City will establish service fees and charges wherever appropriate for the purpose of keeping the property tax rate at a minimum and to fairly allocate the full cost of services to the users of those services. Specifically, the City will: 2 • Establish utility rates sufficient to fund both the operating costs and the replacement of capital equipment items, plus maintain an adequate level of working capital. • As part of the City's enterprise effort, evaluate City services and pursue actions to accomplish the following: • The City will charge non - resident fees, which reflect the total cost of the activity or programs. • Make services financially self - supporting or, whenever possible, strive to develop and maintain them as possible. • Establish user charges and fees at or near a level related to the direct, indirect, and overhead cost of providing the services for the enterprise operations. • Annually review City services and identify those for which charging user fees are appropriate. These services will be identified as enterprise services and fees will be set for each. Included, as part of this process, will be a market analysis that compares our fees to that charged by other cities. • Identify some enterprise services as entrepreneurial in nature. The intent of entrepreneurial services will be to maximize revenues to the extent the market allows. • Waive or offer reduced fees to youth, seniors, community service groups, and other special population groups identified by the Council as requiring funding support to maintain program offerings. Selected criteria: To determine the specific rate to charge a fee for services rendered, the rate criteria can be one of five approaches: 1. Market Comparison ➢ Attempt to set fees equal to the market rate. 2. Maximum set by External Source ➢ Fees set by legislation, Uniform Building Code, etc. 3. Entrepreneurial Approach ➢ Fees will be at the top of the market. 4. Recover the Cost of Service ➢ Program will be self - supporting. 5. Utility Fees ➢ An analysis will be completed each year to determine the rate necessary to balance the operating budget. III. CASH AND INVESTMENTS Effective cash management is essential to good fiscal management. Investment returns on funds not immediately required can provide a significant source of revenue for the City. Investment policies must be well founded and uncompromisingly applied in their legal and administrative aspects in order to protect the City funds being invested. Legal Aspects: Minnesota Statutes authorize and define an investment program for municipal governments. A. Investment Instruments Authorization The City of St Anthony shall invest in the following instruments as allowed by Minnesota Statutes: a. United States Treasury obligations b. Federal Agency issues c. Repurchase agreements (repo's) d. Certificates of deposit e. Commercial paper - prime f. Bankers acceptances - prime g. Money Market funds investing exclusively in U. S. government agency issues B. Supplemental Depositories Administrative Process: Investing the City funds shall be undertaken in a manner, which seeks to insure the preservation of capital in the overall portfolio. Safety of principal is the foremost objective; additionally, liquidity and yield are also important considerations. It is essential that money is always available when needed; therefore, the investment goal is to maximize yield while providing cash flow to meet expenditure needs. The City shall seek to conduct its investment transactions with several reputable investment security dealers and qualifying banks. The qualifying bank or dealer must have demonstrated, over a significant period of time, a successful, profitable, and reliable operation. Special care should be exercised when considering new services. The City will analyze market conditions and investment securities to determine what yield can be obtained and attempt to secure the best possible return on all investments consistent with security and liquidity requirements. Portfolio diversification must also be considered so that investments are not concentrated in one institution, in one type of investment, or purchased from one dealer. The investment portfolio of the City shall be designed to attain an average rate of return regularly exceeding the average return on three month U.S. Treasury bills, while seeking to augment returns above this threshold consistent with budgetary cycles, economic conditions, risk limitations, and prudent investment principles. Investment officials participating in the investment process shall seek to act responsibly as custodians of the public trust and shall avoid any transaction that might impair public confidence in the City of St. Anthony s ability to govern effectively. IV. RESERVES It is important for the financial stability of the City to maintain reserve funds for unantic expenditures or unforeseen emergencies, as well as to provide adequate working capital current operating needs so as to avoid short -term borrowing. Policy Statement: 1. The City will assign annual general fund surpluses to a Contingency Reserve Fund from the prior year's General Fund budget. These funds are available for appropriation by the Council for unanticipated expenditures and unforeseen emergencies. Council will review the request for funding on a scheduled basis and authorize funding as necessary. In an emergency, the City Manager has the authority to commit funds from the Contingency Reserve Fund. 2. The City will maintain fund balances in the General and Special Revenue Funds at a level which will avoid issuing short -term debt to meet the cash flow needs of the current operating budget. Generally, the goal of the City is to maintain a minimum balance of 30% - 35% of the operating budget. Within the general operating fund is the accounting of the Police contractual services provided to Lauderdale and Falcon Heights. Since each City makes payment on a monthly basis, there are no reserves deemed necessary for these expenditures. This need could fluctuate with each years budget objectives and appropriations such as large capital expenditures and variations in the collection of revenues. V. OPERATING BUDGET The Operating Budget is the annual financial plan for funding the costs of City services and programs. The General Operating Budget includes the General Fund, the Special Revenue Funds, the Street Reconstruction Fund, the Community Center Fund and the Capital Equipment Fund. Enterprise operations are budgeted in separate Enterprise Funds. 1. The City Manager shall submit a balanced budget in which appropriations shall not exceed the total of the estimated revenues and available fund balance. 2. The City will provide for all current expenditures with current revenues. The City will avoid budgetary procedures that balance current expenditures at the expense of meeting future years budgets. 3. The City will coordinate the development of the 5 -Year Capital Equipment Budget with the development of the operating budget. Operating costs associated with capital improvements will be projected, approved by Council and budgeted on a project basis. 4. The budget will provide for adequate operation, maintenance, replacement of City equipment and for their orderly replacement. 5. The impact on the operating budget from any new programs or activities being proposed should be minim zed by providing funding with newly created revenues whenever possible. 6. The City will maintain a budgetary control system to help it adhere to the budget. 7. The City administration will prepare monthly reports comparing actual revenues and expenditures to the budgeted amounts. 8. The operating budget will describe the major goals to be achieved and the services and programs to be delivered for the level of funding provided. 9. When establishing operating expenses, Enterprise fund budgets shall be balanced with operating revenues. Reserves from operations can be appropriated to provide replacement costs of property, buildings, equipment, or if appropriate, used when establishing rates and charges for services. 10. Each year, the City Council will approve an operating budget to establish a maximum level of total expenditures. The City Manager will be allowed to reallocate budgeted funds between departments and programs as needed during the year, provided that total maximum expenditures are not exceeded. VI. CAPITAL IMPROVEMENTS The demand for services and the cost of building and maintaining the City's infrastructure continues to increase. No City can afford to accomplish every project or meet every service demand. Therefore, a methodology must be employed that provides a realistic projection of community needs, the meeting of those needs, and a framework to support City Council prioritization of those needs. Capital improvements include the scheduling of public improvements for the community over a five -year to ten -year period and take into account the community's financial capabilities as well as its goals and priorities. A "capital improvement" is defined as any major nonrecurring expenditure for physical facilities of government. Typical expenditures are the cost of land acquisition, construction of roads, utilities, parks, vehicles and capital equipment. Capital improvements are directly linked to goals and policies, land use, community needs and sections of the Comprehensive Plan. Development Process: • Staff will comprise, prioritize, consolidate and recommend Capital Improvement Projects. Devise proposed funding sources for proposed projects. Recommended funding sources will be clearly stated for each project. • Analyze debt service related to new projects. Each project, when applicable, will include its separate impact on the tax levy and /or utility charges as well as its total dollar cost. 0 • Project and analyze total debt service related to the total debt of the City. • A debt study will be provided summarizing the impact of the project, review of the revenues and proposed debt. The City Council will evaluate all proposed Capital Improvements and decide on the following: • Project Prioritization • Funding Source Acceptability • Acceptable Financial Impact on Tax Levy, Total Debt, or Utility Rate Levels. VII. DEBT MANAGEMENT The use of borrowing and debt is an important and flexible revenue source available to the City. Debt is a mechanism, which allows capital improvements to proceed when needed, in advance of when it would otherwise be possible. It can reduce long -term costs due to inflation, prevent lost opportunities, and equalize the costs of improvements to present and future constituencies. Debt management is an integral part of the financial management of the City. Adequate resources must be provided for the repayment of debt, and the level of debt incurred by the City must be effectively controlled to amounts that are manageable and within levels that will maintain or enhance the City's credit rating. A goal of debt management is to stabilize the overall debt burden and future tax levy requirements to ensure that issued debt can be repaid and prevents default on any municipal debt. Policy Statement. Wise and prudent use of debt provides fiscal and service advantages. Overuse of debt places a burden on the fiscal resources of the City and its taxpayers. The following guidelines provide a framework and limit on debt utilization: 1. The City will confine long -term borrowing to planned capital improvements. 2. The City will not use long -term debt for current operations. 3. The City will pay back debt within a period not to exceed the expected useful life of the projects, with at least 50% of the principal retired within two- thirds of the term of the bond issue. 4. Total general obligation debt shall not exceed 2% of the total market valuation of taxable property in the City. 5. Direct net debt (gross debt less available debt service funds) shall not exceed 3% of the total market valuation of taxable property in the City. 6. The City will maintain good communications with bond rating agencies regarding its financial condition. The City will follow a policy of full disclosure in every financial report and bond prospectus. 7 7. The City will use refunding mechanisms to reduce interest cost when economically feasible. VIII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING The key to effective financial management is to provide accurate, current, and meaningful information about the City's operations to guide decision making and enhance and protect the City's financial position. Policy Statement: 1. The City's accounting system will maintain records on a basis consistent with generally accepted accounting standards and principles for local government accounting as set forth by the Government Accounting Standards Board (GASB) and in conformance with the State Auditor's requirements per State Statutes. 2. The City will establish and maintain a high standard of accounting practices. 3. The City will follow a policy of full disclosure written in clear and understandable language in all reports on its financial condition. 4. A primary goal of the Finance Department is to provide timely monthly, quarterly and annual financial reports to users. 5. An independent public accounting firm will perform an annual audit and issue an opinion on the City's financial statements. 6. The City Council will review the audit report, approve its findings and meet with the Auditor to discuss any questions they might have in regard to the audit. IX. RISK MANAGEMENT A comprehensive risk management plan seeks to manage the risks of loss encountered in the everyday operations of an organization. Risk management involves such key components as risk avoidance, risk reduction, risk assumption, and risk transfers through the purchase of insurance. The purpose of establishing a Risk Management Policy is to help maintain the integrity and financial stability of the City, protect its employees from injury, and reduce overall costs of operations. Policy Statement: 1. The City will maintain a Risk Management Program that will minimize the impact of legal liabilities, natural disasters or other emergencies through the following activities: a. Loss prevention - prevent losses where possible b. Loss control - reduces or mitigates losses c. Loss financing - provide a means to finance losses d. Loss information management - collects and analyzes data to make prudent prevention, control and financing decisions 2. The City will review and analyze all areas of risk in order to, whenever possible, avoid and reduce risks or transfer risks to other entities. Of the risks that must be retained, it 13 shall be the policy to fund the risks which the City can afford and transfer all other risks to insurers. 3. The City will maintain an active safety committee comprised of City employees. 4. The City will periodically conduct educational safety and risk avoidance programs within its various divisions. 5. The City will, on an ongoing basis, analyze the feasibility of self - funding and other cooperative funding options in lieu of purchasing outside insurance in order to provide the best coverage at the most economical cost. 0