ITEM 6.1 Resolutions 18-58, 18- 59OtCI�ezoF
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT REQUESTOR:
MEETING DATE:
Administration City Administrator/Finance Director Flaherty
September 10, 2018
PRESENTER(s) REVIEWED BY:
ITEM #:
Administration
6.1
STRATEGIC VISION
MEETS:
I THE CITY OF OTSEGO:
X
Is a strong organization that is committed to leading the community through innovative
communication.
It is also recommended by staff that the City Council set a public meeting at which the 2019 Budget and
Has proactively expanded infrastructure to responsibly provide core services.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
No
Is a social community with diverse housing, service options, and employment opportunities.
BACKGROUND/JUSTIFICATION:
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
It is recommended by staff that the City Council approve the attached resolutions:
1) Reducing the 2019 Debt Service Property Tax Levy Certified in the Original Bond Resolution
2) Adopting a Preliminary Property Tax Levy for Taxes Payable in 2019
It is also recommended by staff that the City Council set a public meeting at which the 2019 Budget and
Property Tax Levy will be discussed and for the public to ask questions and provide input.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
No
BACKGROUND/JUSTIFICATION:
The City Council and staff have met in five work session settings in preparation and review of the
preliminary property tax levy and General fund budget. Each item is discussed below:
1) When the City issues debt, a property tax levy certification resolution is sent to Wright County. The
levy amounts in that resolution are projections at the time of issuance. Each year, City staff
analyzes the debt service funds to determine if a property tax levy is needed and what the levy
amount should be. Given the most recent analysis performed, the property tax levies for payable
2019 are different than those originally projected. In order to change the 2019 debt levies from the
amounts in the original certification resolution, Wright County requires the City Council to pass a
resolution. The form that will be filed with Wright County is attached.
2) Minnesota State statutes require the City to certify a preliminary property tax levy on or before
September 30th to the County auditor. The preliminary property tax levy amount will be used to
formulate the truth in taxation notices that will be sent out by Wright County later this fall. It is
important to note that the City's final levy can be less, but not more than this preliminary levy
amount. The form that will be filed with Wright County is attached.
3) The Minnesota Department of Revenue requires that Cities with a population over 500 to hold a
meeting at which the budget and property tax levy will be discussed and the public allowed to
speak. The form that will be filed with Wright County is attached.
I SUPPORTING DOCUMENTS ATTACHED: I
• General Fund Budget Summary (DRAFT)
• General Fund Budget Changes — Requested vs. Preliminary
• Tax Levy Calculation Summary
• Resolution 2018-58: Reducing the 2019 Debt Service Property Tax Levy
• Wright County Form — Bond/Register / Debt Levy Supplement
• Resolution 2018-59: Adopting a Preliminary Property Tax Levy for Taxes Payable in 2019
• Wright County Form: Proposed Levy Certification
• Wright County Form: Truth in Taxation Public Hearing Information
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES:
3 Separate Motions Needed
-Motion to approve Resolution 2018-58, reducing the 2019 debt service property tax levy certified in the
original bond resolution.
-Motion to approve Resolution 2018-59, adopting a preliminary property tax levy for taxes payable in 2019.
-Motion to set the Truth in Taxation public hearing for taxes payable 2018 for 7:00 p.m., on Monday,
December 10th, 2018. The meeting will be held in the Council Chambers at 8899 Nashua Avenue NE,
Otsego, MN 55330.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
City of Otsego
General Fund Budget - 2019
Requested Budget
Revenue & Expenditure Summary
Description
Revenues
Taxes
Cable Franchise Fees
Licenses & Permits
Intergovernmental
Charges for Services
Special Assessments
Fines & Forfeitures
Investment Interest
Miscellaneous
Interfund Transfers
Subtotal
Expenditures
General Government
Public Safety
Public Works
Culture & Recreation
Economic Development
Interfund Transfers
Subtotal
Net Change in Fund Balance
Requested Preliminary
Actual Actual Year -to -Date Budget Budget Budget Revision
2016 2017 2018 2018 2019 2019 Amounts
$ 3,494,664 $
3,756,375 $
2,219,634 $
3,981,581 $
4,200,749 $
4,220,821 $
20,072
131,229
135,652
104,085
136,000
139,000
139,000
-
1,661,565
1,363,384
1,217,475
876,238
1,002,026
1,002,026
(0)
69,567
74,081
936
58,800
60,800
60,800
-
286,577
275,565
241,805
111,575
162,820
162,820
-
4,179
8,495
3,610
-
-
-
-
16,223
21,092
15,755
12,000
24,000
24,000
-
20,221
29,501
104,929
42,000
62,000
62,000
-
43,508
219,296
14,246
-
-
-
-
136,755
155,042
159,840
159,840
171,950
171,762
(188)
5,864,487
6,038,483
4,082,314
5,378,034
5,823,345
5,843,229
19,884
1,240,002
1,079,575
809,032
1,310,816
1,321,605
1,319,122
(2,483)
1,829,288
1,895,465
1,435,247
2,132,164
2,375,135
2,404,931
29,796
1,010,623
1,055,964
817,570
1,204,155
1,307,006
1,299,797
(7,209)
534,123
587,737
425,822
615,039
705,339
705,119
(220)
98,326
113,579
64,776
115,860
114,260
114,260
-
460,212
1,074,567
948,076
-
-
-
-
5,172,573
5,806,887
4,500,523
5,378,034
5,823,345
5,843,229
19,884
$ 691,914 $ 231,596 $ (418,209) $ - $ - $ (0) $ (0)
City of Otsego
General Fund Budget - 2019
Budget Changes Tracking
Total Expenditures - Draft Budget Binder (July 23rd)
$ 5,823,345
Revised Health/Life/Disability Insurance Rates
City Administrator
(165)
Administration
(281)
Finance
(187)
Building Safety
(204)
Streets
(737)
Fleet Maintenance
(6,472)
Park Maintenance
(301)
Recreation
81
Email Account Licenses Increased
Information Technology 400
MyCivic Application Replaces WebCA Software
Administration (1,250)
Downpayment on Financial Software Upgrade
Finance (1,000)
Contingency for Service Area Boundary Changes
Fire Protection 30,000
Total Expenditures - Preliminary Budget (September 10th) 5,843,229
X:\Budget\2019\General Fund\2.0 - 2019 PRELIMINARY BUDGETS INPUT
City of Otsego
Property Tax Levy Calculations
Payable 2019
�1
Revised: September 4, 2018
13,238,424
14,873,116
16,783,003
Preliminary (9-10-2018)
Preliminary (8-27-2018)
Growth (%)
16.55%
Pavement Management
339,200
475,960
600,000
800,000
200,000
Levy Description
2016
2017
2018
2019
Change Change
2019
Change Change
General Revenues
3,529,352
3,766,000
3,986,000
4,241,000
255,000 6.40%
4,221,000
235,000
Tax Abatements
88,814
81,385
65,546
60,816
(4,730) 7.22%
60,816
(4,730)
Debt Service
17,744
Fire Reserve
150,000
150,000
160,000
170,000
10,000
Series 2010D & Series 2011A
225,000
225,000
215,000
205,000
(10,000)
205,000
(10,000)
Series 2010B
415,000
430,000
440,000
450,000
10,000
450,000
10,000
Series 2018A, Mississippi Shores
-
-
-
69,116
69,116 j
69,116
69,116
Series 2018A, Kadler Avenue
-
-
-
10,177
10,177
10,177
10,177
Sub -total
640,000
655,000
655,000
734,293
79,293 12.11%f
734,293
79,293 12.11%
ent
NEW - See Summary of Budget Changes
Capital Reserves
13,238,424
14,873,116
16,783,003
18,643,608
18,004,252
Growth (%)
16.55%
Pavement Management
339,200
475,960
600,000
800,000
200,000
800,000
200,000
Trails Management
25,250
26,000
30,000
32,000
2,000
32,000
2,000
Parks Equipment
54,590
55,000
56,000
58,000
2,000
58,000
2,000
Capital Equipment Revolving
168,000
235,200
242,256
260,000
17,744
260,000
17,744
Fire Reserve
150,000
150,000
160,000
170,000
10,000
170,000
10,000
Storm Water
25,000
25,000
26,000
30,000
4,000
30,000
4,000
Capital Improvements
-
160,200
282,500
355,000
72,500
125,000
(157,500) NEW - CSAH 38/19 Local Share
Sub -total
762,040
1,127,360
1,396,756
1,705,000
308,2441 22.07%
1,475,000
78,2441 5.60%
721
734
11.89%
734
Grand Total
5,020,206
5,629,745
6,103,302
6,741,109
637,807 10.455,.
6,491,109
387,807 6.35%
Tax Capacity
13,238,424
14,873,116
16,783,003
18,643,608
18,004,252
Growth (%)
16.55%
12.35%
12.84%
11.09%
7.28%
Net Tax Capacity
13,238,424
14,872,821
16,696,008
18,550,390
17,914,231
Growth (%)
16.55%
12.35%
12.26%
11.11%
7.30%
Tax Rate
37.921
37.852
36.556
36.339
36.234
Taxing
2016
2017
2018
2019
2019
2019
Median Appraised Value
Authority
FinalTax Rate
Fina lTax Rate
FinalTax Rate
Estimate
Change
Estimate
Change
ity of Otsego
37.921
37.852
36.556
36.339
-3.99%
36.234
-4.27%
Nright County
39.970
39.599
39.946
39.946
0.88%
39.946
0.88%
ichool District
39.266
36.659
36.137
36.137
-1.42%
36.137
-1.42%
>choolDistrict - RMV
19.441
19.373
19.422
19.422
0.25%
19.422
0.25%
Description
2017
2018
2019
Change
2019
Change
Median Appraised Value
198,300
217,206
220,572
11.23%
220,572
11.23%
Less: MV Exclusion
(19,393)
(17,691)
(17,389)
(17,389)
Taxable Market Value
178,907
199,515
203,183
13.57%
203,183
13.57%
Tax Capacity
1,789
1,995
2,032
2,032
2017
2018
2019
2019
Taxing
Estimated
Estimated
Estimated
Estimated
Authority
Tax
Tax
Tax
Change
Tax
Change
City of Otsego
677
729
738
9.01%
736
8.71%
Wright County
708
797
812
14.69%
812
14.69%
School District
656
721
734
11.89%
734
11.89%
School District - RMV
384
422
428
11.46%
428
11.46%
Total
2,425
2,669
2,712
11.84%
2,710
11.75%
Annual Increase
43
41
X:\Budget\2019\Property Taxes\Tax Levy Calculations
NEW - County Provided 8/30/2018
Estimated at 99.50% of Tax Capacity
The City rate is calculated by the Finance
Director. County and School District tax rates
were obtained from Wright County, and
represent the tax rate from their respective
preliminary levies and are NOT FINAL.
Source = Wright County Assessor
These are best estimates calculated bythe
Finance Director based upon information
available at the time of presentation. These
should only be considered as estimates, and
should NOT be considered final.
9-10
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF AIINNESOTA
REDUCING THE 2019 DEBT SERVICE PROPERTY TAX LEVY
CERTIFIED IN THE ORIGINAL BOND RESOLUTION
WHEREAS, the Wright County Auditor's records show the original debt levies pledged by the City Council
at the time of sale as follows:
GO Improvement Bonds, 2018A
GO Improvement Bonds, 2012A
GO Improvement Bonds, 2011A
GO Improvement Bonds, 201 OD
GO Improvement Bonds, 2010B
GO Improvement Bonds, 2010A
TOTAL RECORDED LEVY
$79,293
55,511
306,009
106,147
519,110
42,683
1 108 753 ;and
WHEREAS, the City of Otsego has, in its most recent audited fmancial statement, recorded cash in excess of
reserve requirements in the Debt Sinking Funds maintained for these bonds; and
WHEREAS, the Otsego City Council has considered restructuring of the Pay 2019 property tax levy such
that the above amounts may be reduced by use of a portion of the excess funds available, in turn reducing the
property tax levy for Pay 2019; and
WHEREAS, the debt levies have been adjusted or cancelled based on revenue collections, cash balances
reported and projections.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO,
MINNESOTA:
1. That the following amounts are approved adjusted property tax levies to be levied as property taxes
payable in 2019 for debt service purposes:
GO Improvement Bonds, 2018A
$79,293
GO Improvement Bonds, 2012A
0
GO Improvement Bonds, 201 IA
98,853
GO Improvement Bonds, 201 OD
106,147
GO Improvement Bonds, 2010B
450,000
GO Improvement Bonds, 2010A
0
TOTAL LEVY FOR DEBT SERVICE 734 293
2. That these debt service property tax levy adjustments are applicable to taxes payable for 2019 only
and that any future changes in levy will be adopted at such time as is proper and prudent.
ADOPTED by the Otsego City Council this 10th day of September, 2018.
ATTEST:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
MOTION made by Council Member and SECONDED by Council Member
I la WWI] IR
OPPOSED:
0)
August 3, 2018
CITY OF OTSEGO
RE: Bond Register/Debt Levy Supplement
(A) (B) (C)
A -B=C
BOND
ISSUED
ORIGINAL DATE DEBT LEVY PER
PRINCIPAL ISSUED BONDRESOLUTION
FOR PAY 2019
ADDITIONS OR
REDUCTIONS TO
LEVIED AMOUNT
CERTIFIED
DEBT LEVY
2019
G.O. IMPROVEMENT BONDS, SERIES 2018A
79,293
79,293
G.O. IMPROVEMENT CROSSOVER REFUNDING BONDS, SERIES 2012A
$55,511
(55,511)
G.O. IMPROVEMENT CROSSEVER REFUNDING BONDS, SERIES 2011A
$306,009
(207,156)
98,853
G.O. IMPROVEMENT REFUNDING BONDS, SERIES 2010D
$106,147
106,147
G.O. WATER & SEWER REVENUE REFUNDING BONDS, SERIES 2010C
G.O. CAPITAL IMPROVEMENT PLAN REFUNDING BONDS, SERIES 20108
$519,110
(69,110)
450,000
G.O. EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2010A
$42,683
(42,683)
G.O. WATER & SEWER REVENUE REFUNDING BONDS, SERIES 2009A
TOTAL 1,108,753
-374,460
734,293
I hereby certify that the above schedule of bond levies to be spread on payable 2019 tax rolls agrees with
your records and is true and correct. Copies of any resolutions which increase or reduce these levies
are attached.
Please sign and date, then return to the Wright County Auditor/Treasurer's Office with your Levy Certification.
Date
Sincerely,
Rd""e %, qC&.&
Robert J. Hiivala
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF AMSNESOTA
RESOLUTION NO: 2018-59
ADOPTING A PRELIlVIINARY PROPERTY TAX LEVY
FOR TAXES PAYABLE IN 2019
WHEREAS, the Otsego City Council is required by State Statute to establish a preliminary tax levy for taxes
payable in 2019 by September 30, 2018 and certify the preliminary tax levy to the Wright County Auditor;
and
WHEREAS, the Otsego City Council has reviewed the City's anticipated expenditures for funds using
property tax proceeds in 2019; and
WHEREAS, the Otsego City Council has considered projected revenues for funds using property tax
proceeds in 2019; and
WHEREAS, revenues from sources other than property taxes are not sufficient to meet the anticipated
expenditures of said funds; and
WHEREAS, the debt levies have been adjusted or cancelled based on revenue collections and projections.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO,
MINNESOTA:
That the following amounts are the maximum to be levied as property taxes payable in 2019 for the
following purposes:
General Revenue
$5,946,000
Tax Abatement
60,816
GO Improvement Bonds, 2010B
450,000
GO Improvement Bonds, 201 OD
106,147
GO Improvement Bonds, 2011A
98,853
GO Improvement Bonds, 2018A
79,293
Total Tax Levy 6 41 109
1
ADOPTED by the Otsego City Council this 10th day of September, 2018.
MOTION made by Council Member
IN FAVOR:
OPPOSED:
2
ATTEST:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
and SECONDED by Council Member
Proposed Levy Certification
STATE of MINNESOTA
160,0001
Return by: October 1, 2018
170,0001
COUNTY of WRIGHT
170,000
56,000:
City Taxes Voted
56,000'1
CITY of OTSEGO
58,000;
58,000
1,345,375;
To the AUDITOR of Wright County: I hereby
certify that the Council for the City of
Otsego, County of Wright, Minnesota, did at a meeting on
1,418,218;
levy the following amount to be raised by taxation for the City of Otsego for the payable year 2019.
683,9251 734,293
743,430:
143,4301
2018 Final
20 Blacktopping
2019 Proposed
62,870:
A B
C
D
A B C
D
355,0001
(A -B -C=D)
65,546;
(A -B -C=D)
2018 2018
2018
2018
2019 2019 2019
2019
Budget
Other
Tax
Budget Other
Certified
Requirement LGA
Resources
Levy # Fund
Requirement i LGA Resources 1.
Levy
5,378,0341
1,392,034;
3,986,OOOi 5 Revenue
5,843,229; 1,602,2291
4241000
160,0001
160,0001
7 Fire Protection
170,0001
170,000
56,000:
56,000'1
11 Parks
58,000;
58,000
1,345,375;
690,375:
655,000'1
19 Debt Service
1,418,218;
683,9251 734,293
743,430:
143,4301
600,000;
20 Blacktopping
862,870:
62,870:
800,000
282,5001
282,5001
26 Capital Imp
355,0001
355,000
65,546;
65,5461
37 Tax Abatement
60,8161
60,816
26,000;
26,000;
41 Water
30,000;
30,000
242,256;
242,256:
73 Public Facilities i
260,000;
260,000
30,000;
30,000:
76 Park Projects
32,000:
32.000
8,329,141:i 143,4301 2,082,4091 6,103,3021 Total
* Do not include any Disparity Reduction Aid or Fiscal Disparity taxes.
9,090,133; 62,870
Dated this day of 2018.
Adam Flaherty, Finance Director
,154; 6,741,109
City Name
Truth in Taxation Public Meeting Dates
Otsego
Contact Person: Adam Flaherty, Finance Director Phone: (763) 441-4414
Public Meeting
Date: Monday, December 10, 2018
Time: 7:00 PM
Listed below is prior year data for (1) the location of the public meeting, (2) the phone number
to be published and (3) the mailing address for written responses. Please review these
and either confirm that they are still accurate or make the necessary changes.
OK OR New Information
1. Location: Otsego Prairie Center
8899 Nashua Ave NE
Otsego, MN 55330 I
OK OR I New Information
2. Phone Number: (763) 441-4414
OK OR New Information
3. Mailing Address: City of Otsego
13400 90th St NE
MN 55330
Please return this completed form no later than October 1, 2018.
Email: lindsay.salo@co.wright.mn.us
Fax: (763) 682-7873 Attention: Lindsay Salo
Mail: Wright County Auditor/Treasurer
10 2nd St NW Room 230
Buffalo, MN 55313