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Home My WebLink About2016.08.22 CC PowerPoint Mid-Year BudgetCITY OF HUGO 2016 Mid -Year Budget Review � CITY C)F �'==NW" EST. 1906 Looking Back • Pay 2016 * Tax Capacity Declined 2.12% * Tax Levy Reduced $82,950 * Maintain Flat Tax Rate * Postponed Equip Levy $105,535 * Transferred General Fund Surplus to Equipment Fund Budgeting Techniques • Conservatively estimate revenues • On-going practice of "contingency budgeting" for expenditures • Expenditures may or may not occur • Usually leads to annual budget surpluses that can be added to our reserves or carried over to the following year • Favorably looked upon by bond rating agencies Comparative 2016 Tax Rates Cities in Washington County Oak Park Heights ......... 57.7253% Stillwater .................... 57.4251 % LGA = $645,603 Forest Lake ................ 43.3850% LGA = $ 73,162 Cottage Grove ............. 43.1397% LGA = $ 75,362 Oakdale ..................... 39.4915% LGA = $140,448 Scandia ..................... 36.7221 % LGA = $ 241 Hugo ........................ 36.3229% Woodbury .................. 35.2869% Mahtomedi .................. 34.6575% LGA = $ 212 Lake Elmo ..................23.1209% Local Government Aid • $519,398,012 Total Distribution in 2016 • $ 77,805,255 Minneapolis • $ 62,337,589 St. Paul • $ 29,264,120 Duluth • 84 Cities/Towns Do Not Receive LGA • Town of Funkley = $36 2016 Budget Status • Additional Revenues: • $228,646 Permit & Plan Check Fees ($ 20,556) Tax Refunds • Unanticipated Expenses: - None • Estimated General Fund surplus: $223,721 Transfer to Equipment Fund — eliminates need for 2017 equipment levy Tax Refunds • 16 Closed Tax Petitions Refunds Given = $13,835 • 4 Open Tax Petitions Potential Refunds = $ 6,721 $201556 Refunds are charged to each taxing jurisdiction's tax collections 0 Ll Market Value Changes — Pay 2017 ($ 1,417,575) Agricultural 5,228,900 Apartments (includes sr. rental) 805,800 Commercial/Industrial 54,113,675 Residential $ 58,730,800 Market Value Increase 1.9% Existing Properties 2.0% New Construction 3.9% Increase in Market Value Estimated Tax Capacity • Increase of 4.21 • Tax Levy Increase of $214,172 • Maintains a Flat Tax Rate • 1 % increase in tax rate = $53)000 Fiscal Disparities Distribution Pay 2009 = $490,589 Pay 2010 = $556,78 9 Pay 2011 = $602,566 Pay 2012 = $576,529 Pay 2013 = Pay 2014 = Pay 2015 = Pay 2016 = Pay 2017 = $535,259 $531,665 $518,463 $547,656 $547,656 + 13.4 9 % + 8.22% - 4.32% - 7.16% - 0.67% - 2.48% + 5.63% No Change (est.) Budget Factors Factor: 1) No increase in urban tax rate 2) Provide for balanced budget with no structural deficit Caveats • Total tax capacity and fiscal disparities have been estimated by staff • Levy may need to be adjusted when firm numbers are released by the county • The legislature pushed back the levy certification date from Sept. 15t" toSept. 30tH • Levy cannot be increased in December 2017 Proposed Tax Levy • 606,793 Debt Service & Abate Levy • 539,657 CIP Levy • 94,923 Park Improvement Levy • 64,909 Sealcoat Levy • 13,742 Firefighter's Relief Levy • $4,528,220 General Operating Levy $5,848,244 Total 2017 Proposed Levy City Bonded Debt (Gross) • $ 485,000 Improvement Bonds of 2007 (4.0 - 4.15) • $ 390,000 Imp Bonds of 2009 (3.25 - 3.875) • $ 425,000 Tax Abatement Bonds of 2009 (3.0) • $ 265,000 Capital Imp Bonds of 2010 (2.25 — 2.5) • $ 885,000 Improvement Bonds of 2011 (2.0 — 3.0) • $ 4,775,000 Crossover Bonds of 2013 (0.65 — 1.15) $ 7,225,000 Gross Bonded Debt at 08/01/16 $ 8,795,000 Gross Bonded Debt at 08/01/15 $ 835,000 Capital Improvement Bonds 3,940,000 Tax Abatement Bonds City Bonded Debt (Per Capita) 2016: $7,225,000/14,352 = $ 503 2014 State Average = $1,678 (State Auditor's Online Report) S&P Long Term Bond Rating: AA+ Bonded Debt Subject to Debt Limit 265,000 Cap Imp Bonds of 2010 835,000 Crossover Refunding Bonds of "13* 1, 100,000 Bonds Subject to Debt Limit 465,500) Funds on Hand $ 634,500 Net Debt Subject to Debt Limit *Capital Imp Bonds Portion of Issue Statutory Debt Limit • $1,416,731,700 Taxable Market Value x 3% • $ 42,501,951 Statutory Debt Limit • $ 634,500 City Debt Subject to Limit • 98% Unused Debt Limit Bond Principal & Interest Due by Year Due in 2017 = $1,625,000 $106,242 Due in 2018 = $1,680,000 $ 83,058 Due in 2019 = $1,615,000 $ 58,402 Due in 2020 = $1,675,000 $ 32,636 2021— 2027 = $ 630,000 $ 44,725 Principal Interest Totals $ 7,225,000 $325,063 Debt Service & Abatement Levy • $ 83,390 Improvement Bonds of 2009 • $104,288 Tax Abatement Bonds of 2009 • $ 89,509 Cl P Bonds of 2010 • $ 63,311 Improvement Bonds of 2011 • $ 66,500 CIP Portion of Crossover Bonds • $199,795 Abate Portion of Cross Bonds $606,793 Debt Service Levy for 2017 Debt Service Levy By Year Payable P & • 2017 1,731,242 • 2018 1,763,058 • 2019 1,673,402 • 2020 1,707,636 • 2021 201,341 • 2022 190,912 Tax Levy 606,793 624,706 621,245 63,235 68,228 13,235 2017 Proposed Tax Levy • 606,793 Debt Service & Abate Levy • 539,657 CIP Levy • 94,923 Park Improvement Levy • 64,909 Sealcoat Levy • 13,742 Firefighter's Relief Levy • $4,528,220 General Operating Levy $5,848,244 Total 2017 Proposed Levy CIP Levy History • $235,931 Pay 2006 thru Pay 2009 • $256, 735 Pay 2010 th ru Pay 2011 • $131,093 Pay 2012 • $ 50,587 Pay 2013 • $ 50,587 Pay 2014 • $539,657 Pay 2015 • $539,657 Pay 2016 • $539,657 Pay 2017 (Proposed) Project Priority 1 City of Hugo - 2016 Street CIP Funding Source N Total State Aid Assessments Homestead Ave N, 132nd St N, Homestead Dr, 126th St N $ 2,627,675 $ 912,176 $ 307,700 b 159th St N, Finley Ave, Finley Bay N, 159th Cir N, Priority 2 159th Ct N, Foxhill Ave N, 157th St N, 157th Way N, Oneka Lake Blvd, Harrow Ave$ 1,853,232 $ 992,136 ° $ I03,700 $ Priority 5 Priority 3 1,539,086 $- $ 593,800 $ 945,2$6 Geneva Ave N, Freeland Ave N, Freeland. Ct N, 125th St N, Upper Heather Ave N, Heather Ave N $ 2,178,634 1 $ 843,943 $ 169,400 $ Priority 6 Priority 4 147th St N, Flay Ave N, Fitzgerald Ave N, Finale Ave N, 129th St N, 128th St N, 128th St Ct N, Fiona Rd N, $ 1,638,612 1 $ 2.04,726 1 S 597,450 $ Other 1,407,798 767,396 1,165,291 836,436 Ferrara Ave N, Ferrara Dr N, Flay Rd N, Fondant Trail N, Foxhill Ave N, 128th Alcove N, 128th Bay N 159th St N, Finley Ave, Finley Bay N, 159th Cir N, 159th Ct N, Foxhill Ave N, 157th St N, 157th Way N, 157th Way Ct N, Fenway Ave N, Fenway Cir Priority 5 Fountain Ave N, Foxhill Ave N, 138th St N, $ 1,539,086 $- $ 593,800 $ 945,2$6 Geneva Ave N, Freeland Ave N, Freeland. Ct N, 135th St N, 135th Ct N Priority 6 147th St N, Flay Ave N, Fitzgerald Ave N, Finale Ave N, S 2,447,{116 $ 335,999 $ 449,800 $ 1,661,217 Lipper 146th St N, 146th St N, Finley Ave N, 145th St N Priority 7 Fenway Ave N, 140th St N, Fenway Blvd N, $ 1,221,990 $ 655,079 $ 421,000 S 145,911 Fenway Blvd Ct N, 130th 5t N, Farnham Ave N, Falcon Ave N Priority 8 Oneka Pkwy N, Heritage Pkwy $ 1,641,165 , $ 1,166,765 $ 474,400 ; $ (0) STREET CONSTRUCTION FUNDS 2016 2017 2018 2019 2020 2021 2022 2023 2024 2024 Beginning Fund Balance 2,476,591 2,313,916 871,770 227,970 1,447,813 1,041,647 1,138,232 1,454,837 936,624 1,698,858 REVENUES: Property Tax Levy - CIP 539,657 539,657 539,657 539,657 539,657 539,657 539,657 539,657 539,657 539,657 Property Tax Levy - Extra Levy Capacity 558,010 553,017 608,010 602,647 602,676 602,846 Special Assessments 137,533 128,489 162,392 162,803 157,418 125,140 190,641 269,116 324,508 309,443 State Aid 548,135 517,383 517,383 517,383 517,383 517,383 517,383 517,383 517,383 517,383 EXPENDITURES: Current Project: 147th Street/Oneka Lake Blvd (1,388,000) Priority 1: Homestead Ave, 132nd St (2,627,675) Priority 2: Oneka Lake Blvd, Harrow (1,863,232) Priority 3: 125th, Heather, Upper Heather (2,178,634) Priority 4: 128th & 159th Neighborhoods (1,638,612) Priority 5: Fountain, Foxhill (1,539,086) Priority 6: 147th, Fitzgerald, Finale, 145th, 146th (2,447,016) Priority 7: Fenway Ave, Fenway Blvd (1,221,990) Priority 8: Oneka Pkwy, Heritage Pkwy (1,641,165) Ending Fund Balance 2,313,916 871,770 227,970 1,447,813 1,041,647 1,138,232 1,454,837 936,624 1,698,858 2,027,022 Park Improvement Levy • $296,000 Original Park Levy • (104,288) Tax Abatement Bond Levy • ( 96,789) Park Planning & Programming $ 94,923 Net Park Levy for 2017 Sealcoat Program Levy $ 64,909 Diverted from CIP in 2012 to enhance sealcoating program Firefighter Relief Levy • Fire Relief Pension Fiscal Policy • Levy taxes in an amount equal to the PERA employer percentage as applied to total fire department wages & salaries • $183,225 x 7.50% _ $13,742 • Place in separate special revenue fund • No mandatory contribution required in 2017 Equipment Replacement $ 185,000 Replace Snow Plow in 2017 (#202-07) 50,000 Replace Jeep Brush Rig #11 35,000 Replace PW Pickup in 2017 (#102-07) 35,000 Replace PW Pickup in 2017 (#114-07) 18,000 Skid Steer Trade -Up &Attachments 17,000 Replace SCBA Tanks (3 -year plan) 1,095,500 Equipment Needs 2018 thru 2021 $ 1,435,500 Total Equipment Purchases Equipment Replacement $1,022,536 Funds on Hand 01/01/17 0 2017 Tax Levy 105,535 2018 Tax Levy 105,535 2019 Tax Levy 105,535 2020 Tax Levy 105,535 2021 Tax Levy $ 1,444,676 Funds Thru 12/31/21 $ 1,435,500 Equipment Needs 2017 Proposed Tax Levy • $4,528,220 General Operating Levy 215,181 Increase or 4.99% Budget Factors: Personnel • 22 Regular Full -Time • 2.0% Cost of Living Adjustment to Matrix • Step Increases • 14 Employees Already at Maximum • 8 Employees Progressing thru Steps • General Fund Cost: 49,007 Wages 7,425 Payroll Taxes '56,432 Total Cost Salary Market Data • LMC On -Line Salary Survey • 13 Metro Cities (pop: 10,000 — 20,000) • Hugo Average Minimum Range: -2% • Hugo Average Maximum Range: 3% • Hugo Actual: 4% Chief's Retention Program • $0.50 per hour increase per year starting in 6thyear and capping at 1 0t" year • 1St step implemented in 2014 2nd step implemented in 2015 • 3rdstep implemented in 2016 • 4thstep budgeted in 2017 Health Insurance $186,534 192,818 $ 6,284 2016 Actual Premium 2017 Estimated Premium 3.4% Increase Renewal Premiums Not Available Until October Health Care Coverage • $1,750 deductible for single contract • $3,500 deductible for family contract • Cumulative deductible (all employees on the group) _ $50,750 HealthPartners increased total out-of-pocket maximums $500 per contract (above the deductible) * Cumulatively, employees are responsible for an additional $8,500 in costs Law Enforcement • $ 26,007 3% Contract Increase • $121,376 Add Investigator to Law Enforcement Contract 2017 Proposed Tax Levy • $4,528,220 General Operating Levy 215,181 Increase or 4.99% • $ 121,376 Add Investigator Position 26,007 3% Police Contract Increase 56,432 2% Cola and Payroll Taxes 14,895 Card Reader System* *Placeholder • $154,137 • $104,658 • $ 12,210 • $151,367 • $ 83,769 • $ 40,965 • $ 17,400 • $ 5,990 Other Revenues Franchise Fees License & Permit Fees Mobile Home Taxes & Penalties Intergovernmental Revenue Charges for Services Fines and Forfeits Investment Earnings Rentals & Miscellaneous $570,496 Non -Tax Levy Revenues 0 0 0 0 0 2017 Proposed Tax Levy 606,793 Debt Service & Abate Levy 539,657 CIP Levy 94,923 Park Improvement Levy 64,909 Sealcoat Levy 13,742 Firefighter's Relief Levy $4,528,220 General Operating Levy $5,848,244 Total 2017 Proposed Levy $5,634,071 Total 2016 Adopted Levy $ 214,173 Levy Increase 3.8% Tax Impact Pay 2016 Pay 2017 Final Proposed Total Urban Tax Rate 36.323% 36.323% City Tax on Median Value Homestead: Median Value Homestead $ 2767600 $ 2877900 Tax Capacity Net Tax Dollar Change $ 2,766 $ 2,879 $ 17004.69 $ 17045.75 $ 41.06 Conclusions • Budget is balanced with no transfers in • The proposed tax levy keeps the urban tax rate the same • Buy down bonded debt while fully funding CIP What's Missing • $ 41,362 Apprentice in PW Department • $150,000 2 Monument Signs • $200,000 Fire Hall Roof Replacement Recommendations • Direct staff to prepare a preliminary tax levy resolution for consideration at the September 1 9t" Council meeting that keeps the tax rate the same.