The URL can be used to link to this page

Home My WebLink About5. General Fund Budget #5 CITY OF SHAKOPEE Memorandum TO: Mayor and Council Mark McNeill FROM: Gregg Voxland, Finance Director SUBJ: 2007 Budget - General Fund Budget Status DATE: August 24, 2006 Introduction The status of the General Fund 2007 budget and tax levy is summarized for Council to give direction to staff on the proposed maximum tax levy. Background The next official step in the budget process is the September 15th certification of the maximum tax levy to be collected in 2007. After that date the tax levy can be reduced but not increased. General Fund revenues: Building activity in Shakopee has slowed considerably. Forecast permit revenue is $1,330,000 less than for 2006. To replace this revenue decrease, the tax rate would need to go up 12% or 3.69 points. A point in the tax rate equals $360,000. The pay 2006 rate is 30.974 and to replace the decrease in permit revenue it would need to go to 34.668. City of Shakopee tax rate history: 2002 33.976 2003 33.939 2004 32.433 2005 31.115 2006 30.974 Comparative rates in Scott County for pay 2006 are: Shakopee 30.974 Prior Lake 31. 305 Savage 46.489 Jordan 50.786 Belle Plaine 54.983 Per Council direction, Market Value Credit in the amount of $531,860 is not included in the revenue estimates. General Fund expenditures: Council has reviewed the budget requests for 2007. They total an increase from $14,783,600 to $16,786,520 which is 13.5%. Items on the improvement list not included in the draft budget are: City Hall Parking Lot 75,000 City monuments 50,000 Huber Park Performances 14,000 Rec/Park Planning Initiatives 25,000 CC Security Cameras 10,000 Aquatic Park Improvements 58,000 Attached is a schedule of the budget status for the General Fund. In all scenarios, health insurance expenditures are decreased $80,000 due to more current rate information, and fund balance is used to pay for the 800 MHZ radios, the Accessibility Coordinator duties assumed by the new Recreation Superintendent, the Home Town Messenger cost revised downward and VOIP cut for the Fire Department. Column #1 has the current tax rate, budget requests less the $820,690 in listed cuts and none of the items listed in the table above. Column #2 has the tax rate increased to replace the decrease in permit revenues, budget requests and the items listed above included. The bottom line is a surplus of $381,340. Column #3 has the tax rate increased one point ($360,000), budget requests, budget cuts as listed on the attached spreadsheet and $25,000 for Recreation/park planning initiatives. Column #4 has the tax rate increased two points ($720,000) , budget requests, budget cuts as listed on the attached spreadsheet, $14,000 for Huber Park performers and $25,000 for Recreation/park planning initiatives. The average value of a home in Shakopee for taxes payable next year is an estimated market value of $237,362 and a limited market value of $234,053. For that house; Tax Rate City Tax Daily Amount Increase 30.974 (2006) 642.56 1. 76 30.974 (2007) 690.56 1. 89 7.5%" 31. 974 (2007) 713 .96 1.96 11.1% 32.774 (2007) 732.68 2.01 14.0% Alternatives 1. Reduce expenditures. 2. Increase tax levy. 3. Include Market Value Credit from state. 4. Combination of 1 - 3. Recommendation Alternative 1 - because the city continues to add new residents, roads, parks and infrastructure, this would effectively result in a reduction in service levels because it would not add new employees to handle the additional workload. Some maintenance would be deferred. Alternative 2 would still leave the city with a low tax rate compared . to the pay 2006 tax rates of other cities in Scott County. Alternative 3 improves the budget position but includes some exposure to cuts by the state. Staff's recommendation is for Council to consider alternative number 4 as shown on the attached column #4 in order to maintain service levels. This increases the tax rate by 2 points, delay hiring of two of the requested four police officers until July 1, no not hire the Fire Department secretary, and use fund balance for the parking lot, Community Center and Aquatic Park items. A two point increase in the tax rate would show the city with the second lowest tax rate in the county compared to pay 2006 tax rates. It is a six percent increase in taxes on top of the 6 percent increase in value of the average home, but addresses the reduction in permit revenue of $1,330,000. Again, this is the maximum proposed levy, it is based on preliminary data and Council has until December to refine the budget and levy. Action Requested Discuss and give staff direction. G~OXland Finance Director 1 2 3 4 5 Tax Rate Tax Rate Tax Rate Fund Balance Use SUMMARY GENERAL FUND - 2007 GF Total Revenue per print 14.519.620 14.519.620 14.519.620 14.519.620 Tax Rate Increase N/C 1.330.000 360.000 648.000 Market Value Credit Transfer In 1.603.130 1.603.130 1.603.130 ' 1.603.130 Total Revenue & Transfers 16.122.750 17 .452. 750 16.482.750 16.770.750 GF Expend per'print 16.794.520 16.794.520 16.794.520 16.794.520 Options to cut (820,690) (80,000) (489,123) (215,800) Options to add 207.000 193.000 207.000 EDA Transfer out 31.000 31.000 31.000 31.000 Recreation Transfer Qut 1.246.670 1.246.670 1.246.670 1.246.670 Total Expenditures and Transfers 17.251.500 18.199.190 17.776.068 18.063;390 Net surplus (deficit) (1.128.750) {746.4401 {1.293.3181 (1.292.6401 FundinQ From Fund Balance 168.000 168.000 800MHZ Radios 456.000 456.000 456.000 456.000 Underspend/overbudoet factor 4% 671.780 671.780 671.780 671.780 Net surplus (deficit) 1970\ 381.340 2.463 3.140 Included in draft budoet Request Cuts Cuts Cuts ~ 2 Police officers 3/1/07 99,315 (99,320) (39,730) (39,730) 2 Police officers 119,178 (l19,180) (119,180) Records Supervisor 65,100 (65,lOO) (32,550) ,park Maintenance 47,960 (47,960) (11,990) Street Maintenance 47,960 (47,960) (11,990) Secretary - Fire Dept. 57,430 (57,430) (57,430) (57,430) GIS position (3/4 - 1/2 utility) 60,300 (60(300) (22,613) Communications Coordinator .5FT 32,000 (32,OOO) Recreation Superintendant position 87,800 (87,800) Accessibility part time coord. 16,640 (16(640) (16,640) (16,640; Home Town Messenger 17,000 (17,000) (7,OOO) (7,000) Up date pay plan 50;000 (25,000) (25,000) Congregate Dining 29,730 Health Insurance (80,000) (SO/OOO) (80,000) (80,000) Sesquicentennial 10,000 Seal'Coat 50,000 (50,000 (50,000) VOIP = Fire station 15,000 (15,000 (15,000) (15,000) 805,413 (820,690 (80,000) (489,123) (215,800) Not in the draft budaet Huber Park Performances 14,000 Rec/Park Planning Initiatives 25,000 City Hall Parking Lot 75,000 75,000 City monuments 25,000 25,000 >>--,- CC Security Cameras - 10,000 10,000 Aquatic Park Improvements 58,000 58,000 207,000 168,000 8/25/2006 8:54 AM CITY OF SHAKOPEE Memorandum TO: Mayor and Council Mark McNeill, City Administrator FROM: Gregg Voxland, Finance Director SUBJ: 2006 Budget Status DATE: August 16, 2006 Council is sent financial statements showing budget comparisons monthly. This memo is to bring the current status of the 2006 General Fund budget to the forefront of your attention. Revenues for building activity are down substantially. Activity year to date indicates a budget shortfall of about $1,143,000 for 2006. Expenditures seem to running at a rate comparable to 2005 which ended with about a million dollar balance left for expenditures. Fund Balance: Beginning 2006 $9,679,000 Reservation of fund balance -1,480,000 Permit revenue reduction -1,143,000 7,056,000 Fund balance target range is 40 to 45% of 2006 expenditures and transfers out. The range is $6,653,000 to $7,384,000. CITY OF SHAKOPEE Memorandum TO: Mayor and Council Mark McNeill, City Administrator FROM: Gregg Voxland, Finance Director SUBJ: Budget Statement Formatting DATE: August 16, 2006 This memo is to explain the formatting of some of the pages in the budget documents. The financial pages in the budget are either Excel produced or worksheets printed from the financial system. The worksheet pages printed from the financial system have numbers marked as negative (credits) or unmarked (debits) . Transfers in are credits (like revenues) and transfers out are debits (I ike expenditures) . The fund level financial statements from Excel are the opposite for transfers. Attached is a page from "Governmental Accounting, Auditing, and Financial Reporting" which is the "Blue Book" for governmental accounting. It shows transfers in as a positive or unmarked number. Transfers out are a negative number. This shows the number's impact on the excess (or deficiency) of revenues over expenditures which is the total of revenues less expenditures. A transfer in adds to this excess (or reduces a deficiency) number and the resultant change in fund balance. A transfer out reduces the excess (or increases a deficiency) number and the resultant change in fund balance. Name of Government General Fund Statement of Revenues, Expenditures, and Changes In Fund Balances - Budget and Actual For the Year Ended December 31, 2010 (amounts expressed In thousands) "!. Variance with } Budgeted Amounts Final Budget- < Positive r. Original Final Actual Amounts (Negative) I; REVENUES ~; Taxes: $ 14,007 $ 14,007 $ 14,133 $ ~. Property 126 ;c Sales 5,900 5,900 6,642 742 ~~ Franchise 4,312 4,312 4,293 (19) l Ucenses and permits 1,827 1,827 2,041 214 '{ Intergovemmental 5,661 5,661 5,770 109 ~ Charges for services 2,101 2,158 2,300 142 i~:: Fines 810 810 808 (2) , , ;. Investment eamings 555 555 773 218 r Contributions and donations - - 145 145 1., Payments in lieu of taxes 345 345 365 20 . Drug forfeitures - - ' 75 75 Total revenues 35.518 35.575 37.345 1.770 EXPENDITURES Current: General government: Council 110 110 92 18 Commissions 86 86 64 22 Manager 490 490 505 (15) Attorney 380 380 387 (7) Clerk 275 275 250 25 Personnel 356 356 304 52 Finance and administration 904 904 868 36 Other -unclassified 2.389 2.256 1.787 469 'i:' Total general government 4.990 4.857 4.257 600 fLPublic safety: Y'~ Police 6,488 6,513 6,354 159 Fire 6,025 6,040 6,031 9 , Inspection 1.092 1.092 1.053 39 Total public safety 13.605 13.645 13.438 207 Highways and streets: Engineering 814 814 796 18 Maintenance 3.Q12 3.052 2.939 113 Total highways and streets 3.826 3.866 3.735 131 Sanitation 3.848 3.848 3.726 122 Culture and recreation 5.950 5.950 5.899 51 . '.' Debt service: .~. Principal - - 15 (15) ; Bond issuance costs - 150 150 Total debt service 150 165 (15) T 1-exp-eT11 32.219 32.316 C~~ 1.096 Excess of revenues over expenditures 3.299 3.259 2,866 i :OTHER FINANCING SOURCES (USES) 1,576 IC 'Transfers in ~ 1,576 1,576 - Jransfers out < (4,760) (4,760) (4,645) 4;:- 115 'Capital leases - - 140 140 ,Sale of capital assets 34 34 5 (29) '~ Total other financing sources and uses (3.150) (3.150) (2.924) 226 Net change in fund balances 149 109 3,201 3,092 Jund balances - beginning 1.807 1.807 1.807 - . Fund balances - ending $ 1.956 $ 1.916 $ 5.008 $ 3.092 1)1e notes to the financial statements are an integral part of this statement. oJ:, 35 . . . CITY OF SHAKOPEE BUdget Report 2003 2004 2005 07/31/2006 2006 2007 Actual Actual Actual YTD Actual Budget Requested 01000 GENERAL FUND 11 MAYOR & COUNCIL 71,310 79,234 70,251 45,798 113,320 172,090 51.9% 12 CITY ADMINISTRATOR 467,769 536,518 379,656 201,298 532,410 503,760 -5.4% 13 CITY CLERK 232,777 266,616 323,594 180,082 305,210 317,420 4.0% 15 FINANCE 582,421 634,221 662,711 417,128 723,020 751,180 3.9% 16 LEGAL COUNSEL 276,668 298,616 285,754 229,504 485,100 486,300 0.2% 17 COMMUNITY DEVELOPMENT 326,330 402,102 398,185 245,631 419,660 489,880 16.7% 18 GENERAL GOVERNMENT BUILDINGS 300,793 549,968 532,314 307,610 581 ,420 661,030 13.7% 20 INFORMATION TECHNOLOGY 155,535 187,193 207,854 141,327 268,540 298,210 11.0% 31 POLICE DEPARTMENT 3,115,830 3,682,219 4,107,360 2,575,190 4,809,020 5,920,260 23.1% 32 FIRE 975,656 1,078,778 1,194,610 690,201 1,561,570 1,983,970 27.0% 33 INSPECTION-BLDG-PLMBG-HTG 645,030 740,747 855,864 455,076 912,090 864,050 -5.3% 41 ENGINEERING 604,032 685,660 773;574 513,452 930,580 995,460 7.0% 42 STREET MAINTENANCE 889,381 992,742 1 ,152:924 762,665 1,452,940 1,789,290 23.1% 44 SHOP 197,627 291,826 402,364 227,162 357,190 66,180 -81.5% 46 PARK MAINTENANCE 674,958 793,082 912,955 542,016 1,171,530 1,325,430 13.1% 91 UNALLOCA TED 317,167 - (254,457) 160,000 170,000 6.3% 9,833,284 11,219,519 12,259,971 .7,279,682 14,783,600 16,794,510 13.6% *Notes Police and Fire include each include $228,000 for 800 MHZ radios Shop is decreased and other departments increased for maintenance charged out Mayor & Council includes SCALE Transportation $34,000, Derby Days $4,000 and Sesquicentennial $10,000 Community Development inclueds planning updates $75,000 II TRUTH IN TAXATION SUPPLEMENTAL POLICY II A 2005 amendment to M.S. 275.065, Subd.3, allows Counties, Cities and School Districts, with the consent of the County Board, to include supplemental information with the Proposed Tax Notice. At the County Board meeting on October 25, 2005, the Scott County Board of Commissioners consented to allow local cities and schools to prepare an insert for mailing with the Pay 2006 and future Proposed Tax Notices. The Scott County Board of Commissioners has directed the Scott County Department of Taxation to set annual standards, rules and schedules by which the supplements are to be created and submitted. All entities, wishing to submit such supplements, must follow these requirements in order for the County to comply with their request. / Statutorily, the information can include data for the current, future or consecutive future years pertaining only to: . Impact ofinflation . Growth in population. . State or Federal Government actions . Other financial factors affecting the level of property taxation and local services by the County, City or School . , Scott County Dept of Taxation will send notifications to qualifying entities annually along with the requests for TNT dates, times, locations and proposed levy forms. Any Entity wishing to take advantage of the opportunity to submit information with the TNT Notices, .must indicate so at the time of the Certification of dates, times and locations for the TNT hearing. If no hearing is held, Scott County will notify the Entity and require them to submit a formal request by September 1. ItSTANDARDS, RULES & SCHEDULE - Pay 200711 Standards for the insert: · 60# paper · 8-1/2" x4" · Text, Graphs or Tables · Printed on one or both sides,of the paper . White or colored paper All costs will be 100% reimbursed by the jurisdiction: · $200.00 per request plus $50.00 per 1000 notices (minimum of $50.00) '. 2006 Schedule: · All Entities must indicate on their Certification of date, time and location for TNT Hearings of their intent to have supplemental information included with the proposed tax notice or submit a 'separate formal. request no later than September 1 · A proof of the supplementmust be delivered and approved by the Scott County Auditor on qr before 1 0/13/06 ."' -". . · All inserts must be printed and delivered to Scott County Taxation Department on or before 10/20/06 · By Statute, Proposed Tax Notices must be mailed to property owners after November 10 but no later than I November 24 Last Year's Insert Dear City of Shakopee Taxpayer: The City of Shako pee's levy (amount of budget paid by property taxes) went up from $9.7 million in 2005 to $11.1 million proposed for 2006. After factoring in other sources of income to the budget, the overall increase in the tax rate is estimated to be 3.2%. The major reasons for the increase in the tax rate are: . The loss of $560,000 in market value homestead credit aid that was "cut" by the State of Minnesota. . Afull year of the equivalent of five additional police officer positions and 5.5 positions in other departments. Each of these positions is needed to address additional growth in the community. . Delivery in 2006 of three new fire trucks. A budgeted depreciation on these three trucks adds $174,000 to the budget. . Operating costs of new Public Works building, scheduled to be occupied in early 2006. . Budgeted 30% increase for natural gas and gasoline. . Cost of living adjustments for employees; and general inflation. The City Council realizes that all property owners are under a "squeeze", with fuel increases and other factors beyond your control. For that reason, great efforts were made to keep the tax increase to a minimum. While the 3.2% tax rate increase impacts the taxes paid, so too will be any increase in market value. City-wide, properties will see an average value increase of 3 .2% - some properties may be lower, others higher. However, for the average value property, when combined with the tax levy increase, and the market value credit reduction, it should be an average of7.7% increase in the tax amount. Visit www.ci.sbalmpee.mn.us, and click on budget information for more information. Below is a graph of tax rates for the City. The increase in 2003 is due to a cut in state aids. Tax Rate Trend : 40 l~V,I-T~R~ ~ 30 a:: 20 >< ~ 10 0 PJ~ ~ PJQ) d' ~":l ~ ,,"5 ,,"5 ,,"5 '1,o<:::l '1,o<:::l ~ Sincerely, 11ayorJohnJ.Schnlltt Councilor Matt Lehman Councilor Terry Joos Councilor Steve Menden Councilor Joseph Helkamp