The URL can be used to link to this page

Home My WebLink About2017.12.04CITY OF HUGO2018 Budget and Tax Levy Presentation 1 Presentation Topics Local Government Aid 2017 Tax Rate Comparisons Proposed Tax Levy for 2018 Tax Levy Items General Fund Budget Proposed Urban Tax Rate for 2018 Tax on Median Value Homestead Recommendations 2 Local Government Aid (LGA) $519,398,012 Total Distribution in 2017 $ 77,981,491 Minneapolis $ 62,561,686 St. Paul $ 29,299,670 Duluth Average LGA = $455,743 (767 Cities) Range: $12 million (St. Cloud) 3 Funkley (pop. 5) $14 4 Local Government Aid (LGA) 89 Cities/Towns Do Not Receive LGA Most are located in 7-County Metro Area 5 Local Government Aid (LGA) Statewide Average Tax Rate : 44.695% Hugo’s Urban Tax Rate: 36.360% The biggest factor why we do not receive LGA is because we have a tax rate that is considerably lower than the statewide average. 6 Median Residential Homestead Market Value – Pay 2017 $229,500 Median Value Homestead Pay 2017 One-half of the residential homesteads have a market value less than $229,500 One-half of the residential homesteads have a market value more than $229,500 7 Comparative 2017 Tax Rates Average City Tax Rate (all 853 cities in Minnesota) ………………………44.695% Tax on $229,500 Homestead = $ 951.01 City of Hugo’s Urban Tax Rate ..36.360% Tax on $229,500 Homestead = $ 774.16 Tax Difference of $176.85 Tax Difference of 18.6% 8 Comparative 2017 Tax Rates Cities in Washington County Stillwater ……………….. 57.322% LGA = $650,846 Oak Park Heights ………56.143% Forest Lake ……………. 43.473% LGA = $ 73,715 Cottage Grove ………….43.012% LGA = $ 64,741 Oakdale …………………39.721% LGA = $144,155 Mahtomedi ……………...37.580% LGA = $ 721 Scandia ………………… 36.594% Hugo …………………… 36.360% Woodbury ……………… 35.122% Lake Elmo ………………20.018% 9 Market Value Changes – Pay 2018 $ 2,691,494 Agricultural 3,682,900 Apartments (includes sr. rental) 8,460,300 Commercial/Industrial 143,398,806 Residential ========== $ 158,233,500 Market Value Increase Total Market Value = $1,731,500,700 10 Market Value Changes – Pay 2018 $ 143,398,806 Residential Value Increase 8.3% Existing Properties 2.5% New Construction ------- 10.8% Increase in Market Value 11 Median Residential Homestead $255,100 Median Market Value Pay 2018 $229,500 Median Market Value Pay 2017 25,700 Increase of 11.2% 12 Flat Tax Rate City tax collections increase when property values increase City tax collections decrease when property values decrease 13 Tax Levy (flat tax rate) $6,589,302 Pay 2018 Levy (proposed) 14 City Bonded Debt $ 410,000 Improvement Bonds of 2007 (4.0 - 4.15) $ 295,000 Imp Bonds of 2009 (3.5 - 3.875) $ 325,000 Tax Abatement Bonds of 2009 (3.0) $ 135,000 Capital Imp Bonds of 2010 (2.5) $ 775,000 Improvement Bonds of 2011 (2.0 – 3.0) $ 3,660,000 Crossover Bonds of 2013 (0.85 – 1.15) ------------------ $ 5,600,000 Bonded Debt at 12/01/17 $ 7,225,000 Bonded Debt at 12/01/16 ----------------- $ 1,625,000 Paid off in 2017 15 Debt Service & Abatement Levy $ 67,883 Improvement Bonds of 2009 $106,230 Tax Abatement Bonds of 2009 $ 63,286 Improvement Bonds of 2011 $ 56,502 CIP Portion of Crossover Bonds $331,035 Abate Portion of Cross Bonds ======== $624,936 Debt Service Levy for 2018 16 Debt Service Levy By Year Payable P & I Tax Levy 2018 1,763,058 624,936 2019 1,673,402 621,475 2020 1,707,636 63,235 2021 201,341 68,228 2022 190,912 13,235 2023 91,739 18,598 17 CIP Levy History $ 235,931 Pay 2006 thru Pay 2009 $ 256,735 Pay 2010 thru Pay 2011 $ 131,093 Pay 2012 $ 50,587 Pay 2013 and Pay 2014 $ 539,657 Pay 2015 thru Pay 2019 $1,097,667 Pay 2020 $1,092,674 Pay 2021 $1,147,667 Pay 2022 18 2018 Capital Imp Projects $2,931,361 Fund Balance 01/01/18 $ 539,657 Tax Levy $ 515,126 State Construction Aid $ 104,461 Special Assessments ========= $4,090,605 - 1,863,232 Oneka Lake Blvd/Harrow Ave ========= $2,227,373 Fund Balance 12/31/18 19 Sealcoat* Program Levy $ 64,909 Diverted from CIP in 2012 to enhance sealcoating* program * Reallocate to mill and overlay projects if sealcoating program is discontinued 20 Park Improvement Levy $296,000 Original Park Levy ( 106,230) Tax Abatement Bond Levy ( 99,216) Park Planning & Programming ========= $ 90,554 Net Park Levy for 2018 21 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 $203,075 x 7.50% = $15,231 Tax Levy Place in separate special revenue fund No mandatory contribution required in 2018 22 Storm Water Levy Tax Levy Discontinued Pay 2010 Water Reuse Projects 1) $203,837 Design Engineering 2) $172,982 Beaver Ponds Project 3) $347,900 Waters Edge Bid Award ======= $724,719 Proposed Tax Levy of $271,111 23 Equipment Replacement $ 200,000 Replace Snow Plow in 2018 (#206-06) 80,000 Masonry Monument Sign 70,000 Fire Command Vehicle 02 28,000 Replace Fire Portable Radios (4-year plan) 17,000 Replace SCBA Tanks (3-year plan) 8,000 Skid Steer Trade-Up & Attachments 420,500 Equipment Needs 2019 thru 2022 750,000 Replace Fire Engine in 2021 ========= $ 1,573,500 Total Equipment Purchases 24 Equipment Replacement $ 839,961 Funds on Hand 01/01/18 559,395 Tax Levy ($111,879/year) ========= $ 1,399,356 Funds Thru 12/31/22 $ 1,573,500 Equipment Needs Thru 2022 ========= $ (229,035) Shortfall 25 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 26 2018 General Operating Levy $4,871,025 General Operating Levy 27 Budget Factors: Personnel 23 Regular Full-Time 2.0% Cost of Living Adjustment to Matrix Step Increases 18 Employees Already at Maximum 5 Employees Progressing thru Steps General Fund Cost: 41,623 Wages 6,306 Payroll Taxes 47,929 Total Cost 28 Salary Market Data LMC On-Line Salary Survey 15 Metro Cities (pop: 10,000 – 20,000) Hugo Average Minimum Range: -6% Hugo Average Maximum Range: 0% Hugo Actual: 1% 29 Chief’s Retention Program $0.50 per hour increase per year starting in 6th year and capping at 10th year 1st step implemented in 2014 2nd step implemented in 2015 3rd step implemented in 2016 4th step implemented in 2017 5th step budgeted in 2018 30 No Changes in Deductibles $2,000 deductible for single contract $2,250 total out-of-pocket maximum $4,000 deductible for family contract $4,500 total out-of-pocket maximum 4 single contracts 14 family contracts 5 waived coverage 31 Health Insurance $257,358 2018 Actual Premium 242,825 2017 Actual Premium ========= $ 14,533 6.0% Increase 2.0% Due to age 4.0% Cost of health care $ 46,674 Add for 3 new enrollees ========= $ 61,207 Total Increase in Budget 32 Law Enforcement Added Investigator to Contract Mid-Year $ 60,688 Full-year Investigator 33 2018 General Fund Budget $ 211,664 Increase of 4.06% $ 61,207 Health Insurance Premiums 60,688 Full-Year Investigator Position 47,929 2% Cola and Payroll Taxes 17,820 Bldg. Permit Software User Fees 15,522 Elections 10,000 Street Materials ====== $213,166 34 General Fund Budget $ 5,417,834 2018 Budget $ 4,871,025 From Property Taxes (90%) 546,809 From Other Sources (10%) 35 Other Revenues $161,987 Franchise Fees $105,833 License & Permit Fees $ 12,490 Mobile Home Taxes & Penalties $119,874 Intergovernmental Revenue $ 84,035 Charges for Services $ 36,615 Fines and Forfeits $ 17,400 Investment Earnings $ 8,575 Rentals & Miscellaneous -------------- $546,809 Non-Tax Levy Revenues 36 2018 Proposed Tax Levy 624,936 Debt Service & Abate Levy 539,657 CIP Levy 271,111 Storm Water Levy 111,879 Equipment Levy 90,554 Park Improvement Levy 64,909 Sealcoat (Mill & Overlay)Levy 15,231 Firefighter’s Relief Levy $4,871,025 General Operating Levy ---------------- $6,589,302 Total 2018 Proposed Levy 37 Fiscal Disparities Property tax base sharing program unique to the 7-county metro area Portion of growth in commercial, industrial, and public utility property value goes into a tax base sharing pool Distributed to each taxing jurisdiction based on market value per capita Cities with relatively less market value per capita receive a larger distribution than cities with greater market value wealth per capita 38 Fiscal Disparities Distribution Pay 2010 = $556,789 Pay 2011 = $602,566 + 8.22% Pay 2012 = $576,529 - 4.32% Pay 2013 = $535,259 - 7.16% Pay 2014 = $531,665 - 0.67% Pay 2015 = $518,463 - 2.48% Pay 2016 = $547,656 + 5.63% Pay 2017 = $603,076 + 10.12% Pay 2018 = $643,288 + 6.67% 39 After Fiscal Disparities $6,589,302 Proposed 2018 Tax Levy $ 643,288 From Fiscal Disparities $5,946,014 Paid by Local Taxpayers Urban Tax Rate Will Decline 0.18% Rural Tax Rate Will Decline 0.42% 40 Comparative 2018 Tax Rates Cities in Washington County Oak Park Heights ………54.451% Stillwater ……………….. 53.750% Forest Lake ……………. 42.034% Cottage Grove ………….40.562% Oakdale …………………38.470% Scandia ………………… 36.601% Hugo ……………………. 36.294% Mahtomedi ……………...33.977% Woodbury ……………… 33.684% Lake Elmo ……………… 22.597% 41 Tax Impact 42 City Taxes by Parcel Count Residential Homesteads 150 Parcels – Tax Decrease 78 Parcels – Increase .01% - 2.5% 268 Parcels – Increase 2.6% - 5.0% 912 Parcels – Increase 5.1% - 7.5% 991 Parcels – Increase 7.5% - 10.0% 1,168 Parcels – Increase 10.1% - 15.0% 465 Parcels – Increase 15.1% - 20.0% 311 Parcels – Greater Than 20% 43 13 Tax Rates City – Urban Tax Rate City – Rural Tax Rate 4 School Districts 3 Watershed Districts County Met Council Metro Mosquito Control County HRA & RRA 44 Urban Tax Rate in ISD 624 5% 38% 25% 32% Other City Schools County 45 State Property Tax Programs Homestead Credit Refund: Must own and occupy home on January 2, 2018 Based on household income and property taxes paid. Forms available at www.revenue.state.mn.us 46 State Property Tax Programs Special Property Tax Refund: Must own and occupy home on January 2, 2017 and January 2, 2018 Net property tax on homestead must have increased by more than 12% and the increase must be $100 or more. Forms available at www.revenue.state.mn.us 47 State Property Tax Programs Senior Citizen Property Tax Deferral: Allows people 65 years of age or older, whose household incomes are $60,000 or less, to defer a portion of their property tax on their home. This is not a tax forgiveness program – it is a low interest loan from the state. Interest will be charged and a lien will attach to the property. Forms available at www.revenue.state.mn.us 48 Conclusions Budget satisfies the funding priorities established by City Council 1) Funds our capital improvement program 2) Buys down our bonded debt 3) Budget is balanced with no transfers in 4) Urban tax rate remains the same 49 Recommendations Open up public hearing Take comment Close public hearing Council discussion Consider adoption of final budget and tax levy resolutions 50