ITEM 5.1 Truth in Taxation PresentationCITY OF
sera
Truth in Taxation
2019 Budget & Property Tax Levy
Presentation & Public Input
December 10, 2018
Before We Start
o Property Valuation Questions
• That is not the focus of this meeting.
16 The Board of Equalization meeting for those
questions is held between April 1— May 31.
For Payable 2019, was held 4-23-2018.
Truth in Taxation
o Required by Statute 275.065, subd. 7
n* Purpose
Discussion of 2019 Budgets
Discussion of Levy for Taxes Payable in 2019
Discussion of Capital Improvement Plan
Public Input
Otsego Strategic Vision
Is a strong organization committed to leading the
community through innovative communication.
o Has proactively expanded infrastructure to
responsibly provide core services.
O Is committed to delivery of quality emergency
service responsive to community needs and
expectations in a cost effective manner.
Is a social community with diverse housing, service
options and employment opportunities.
o Is a distinctive, connected community known for
its beauty and natural resources.
Budget Process — General Fund
Staff prepare Proposed Budgets
Proposed Budgets Reviewed
City Council & Staff
Occurs During Special City Council Meetings (open to public)
Q,Preliminary Tax Levy & Budget
Certified September 10, 2018
o Additional Budget Review
0 Final Budget Adoption
t. Truth in Taxation Public Input
X19 General Fund - F
2018
2019
($)
Budget
Budget
Change
Revenue Source
Taxes
$
3,981,581
$
4,190,235
$ 208,654
Cable Franchise Fee
136,000
140,000
4,000
Licenses & Permits
876,238
982,401
106,163
Intergovernmental
58,800
70,800
12,000
Charges for Services
111,575
162,820
51,245
Investment Interest
42,000
65,000
23,000
Miscellaneous
171,840
201,200
29,360
Tota 1
$
5,378,034
$
5,812,456
$ 434,422
Per Capita
$
336
$
350
2019 General Fund - Expenditures
Economic
Parks & Development
Recreation 2%
12%
Public Works
22%
General
Government
24%
Public Safety
40%
Public Works
22% 0
2019
Economic
Parks & Development
Recreation 2%
12%
General
Government
23%
Public Safety
41%
2018 2019 ($)
Budget Budget Change Why?W
General Government
City Council
$ 141,487 $
140,689
$ (798)
City Administrator
159,963
167,519
7,556
Wages & Benefits
Administration
323,142
329,532
6,390
Wages & Benefits
Elections
24,000
1,650
(22,350)
No election in 2019
Assessing
94,111
112,680
18,569
Contractual Increase/ New Construction Fees
Finance
202,390
226,386
23,996
Wages & Benefits / Software Upgrade
Information Technology
97,080
91,600
(5,480)
Legal
111,600
91,000
(20,600)
Adjustment to Reflect 2016-2018 Actuals
Pra i ri e Center
38,241
42,319
4,078
City Hall & PW Building
115,202
112,286
(2,916)
Old Town Hall
3,600
3,300
(300)
Total
$ 1,310,816 $ 1,318,961 $ 8,145
Per Capita $ 82 $ 79
Public Safety
Pol ice Services
Public Safety Commission
Fire Protection
Building Inspection
Emergency Management
Animal Control
Tota I
2018 2019 ($)
Bud.Ret Budget Change
$ 1,168,320 $ 1,329,240
3,060
3,060
573,917
633,893
369,367
390,333
3,100
2,600
14,400
15,300
W
$ 160,920 Increased Contracted Hours from Sheriff's Office
59,976 Contract Basis Increase (Parcels +Tax Capacity)
20,966 Convert Office Assistant from 32 HRS to Full Time
(500)
900
$ 2,132,164 $ 2,374,426 $ 242,262
Per Capita $ 133 $ 143
Public Works
Streets
Engineering
Street Li ghti ng
FI eet Ma i ntena nce
Tota I
Per Capita
2018 2019 ($)
Budget Budget Chan
Wh
$ 751,586 $ 845,709 $ 94,123 FT Maintenance Addition / Existing Wages & Benefits
91,350 81,400 (9,950)
142,400 145,660 3,260
218,819 225,120 6,301
$ 1,204,155 $ 1,297,889 $ 93,734
$ 75 $ 78
_J
2018
2019
($) -1
T—
Budget
Budget
Change Why?
Culture & Recreation
Pa rk Ma i ntena nce
$ 408,608
$ 481,687
$ 73,079 FT Ma i ntena nce Add iti on / Exi sti ng Wages & Benefits
Recreation
203,951
222,753
18,802 Wages & Benefits
Heritage Preservation Commission
2,480
2,480
-
Tota 1
$ 615,039
$ 706,920
$ 91,881
Per Capita
$ 38
$ 43
Economic Development
Planning Commission
Planning
Economic Development
Tota I
Per Capita
2018 2019 ($)
Budget BUdRet Chan
Whv?
$ 4,000 $ 4,000 $ -
97,200 96,000 (1,200) Adjustmentto Reflect 2016-2018 Actuals
14,660 14,260 (400)
$ 115,860 $ 114,260 $ (1,600)
$ 7 $ 7
2019 Tax Levy - Factors
o Market Value
• Wright County Assessor sets valuations
o Board of Appeal &Equalization (4-23-2018)
Current environment has an increasing trend
o 2018 Assessment / 2019 Payable
Residential: 8.09% Increase
Commercial / Industrial: 0.07% Decrease
Agricultural: 12.04% Increase
X19 Tax Levv - Factc
11
2018
ISD
County
City
School
Total
Elk River Area - 728
39.946
36.556
36.137
112.639
STMA - 885
39.946
36.556
47.950
124.452
Monti cel to - 882
39.946
36.556
15.621
92.123
2019
ISD
County
City
School
Total
Elk River Area - 728
44.171
36.224
32.716
113.111
A - 885
44.171
36.224
47.137
127.532
4OLMOnti cel I o - 882
44.171
36.224
16.966
97.361
2019 Tax Levy - Factors
o Tax Capacity
• No legislative changes in class rate system
Change dependent upon market value
• New Construction
o Residential -429 New Permits (2016+2017)
o Commercial & Industrial — P&F Machining,
Nystrom & Associates
2018
2019 ($)
Levy
_�--
Levy
Change
Components of Tax Levy
General Revenue
$
3,986,000 $
4,210,000
$ 224,000
Capital Reserves
1,396,756
1,705,000
308,244
Debt Service
655,000
734,293
79,293
Tax Abatements
65,546
60,816
(4,730)
Total
$
6,103,302 $
6,710,109
$ 606,807
Per Capita Comparisons
City of Otsego
$
381 $
404
6.06%
Statewide
$
463
n/a
Source = LMC (2016)
Tax Rate Comparisons
City of Otsego
36.556
36.224
-0.91%
Statewide
46.520
n/a
Source = LMC (2016)
Region 7W
47.165
n/a
Source = LMC (2016)
Metro Cities (10-25k)
46.960
n/a
Source = LMC (2016)
Greater MN Cities (10-25k)
52.448
n/a
Source = LMC (2016)
City of Rogers
36.810
37.630
Source = County
City of Elk River
48.779
47.939
Source = City
City of St. Michael
37.963
37.025
Source = County
City of Al bertvi I I e
49.158
49.125
Source = County
2019 Tax Levy — Tax Capac
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Residential Commercial & Agricultural Personal
Industrial Property
2016
2017
2018
2019
18%
ity
2018
4% 3%
75%
Residential _ Commercial & Industrial
Agricultural -d Personal Property
2019
3% 3%
17%
77%
Residential
Median Appraised Value
Less: Market Value Exclusion
Taxable Market Value
Class Rate
Tax Capacity
City of Otsego - Tax Rate
City of Otsego - Estimated Taxes
Commercial
Arbitrary Example
Tax Capacity
City of Otsego - Tax Rate
City of Otsego - Estimated Taxes
2018
2019
$ 217,206 $ 220,572
(17,691) (17,389)
199,515 203,183
1.00% 1.00%
1,995 2,032
36.556 36.224
S 729 $ 736
$ 700,000 $ 695,100
13,250 13,152
36.556 36.224
(%)
Change
1.55% Source - Wright County
Max Benefit = $30,400 / Phase Out = $413,778
Subtract MV Exclusion from Estimated MV
Set by Legislature (Over $500k is 1.25%)
Taxable MV Multiplied by Class Rate
-0.91% Tax Levy Divided by Tax Capacity * 100
0.91% Tax Capacity Multiplied by Tax Rate
Comments
-0.70% County Indicated C/I Growth
Class Rates are 1.50%- 2.00%
$ 4,844 $ 4,764 -1.64% Tax Capacity Multiplied by Tax Rate
2019 Tax Levy — Uses (Median Value)
Tax Abatements
Fire
Parks & Recreation
Debt Service
Street Maintenance & Street Lights
Police
Governmental Services
Capital Reserves
20 40 60 80 100 120 140 160
2019
2018
Capital Improvement Plan (CIP)
O 10 Year Plan (2019-2028)
n* The CIP does not provide final authority
City Council approves each item specifically
before expenditures incurred
O Estimated 2019 Investment = $6,035,645
Proposed items have feasible funding sources
Capital Improvement Plan (CIP)
Significant 2019 Items
Public Utility Systems
Addition of Municipal Well #9 - $1.1M
Design Phase — East WWTF Solids Processing - $1.1M
Construction of Permanent Lift Station #7 - $235k
Streets
Maintenance - $445k
Reconstruction - $873k
851h & Maciver Street Construction - $2.1M
CSAH 19, 37 & 38 Local Share - $501k
Vehicle Fleet - $518k
opcial Revenue Funt
Revenues
Taxes
Description
Subtotal
Expenditures
Services & Other Charges
Subtotal
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Budget Budget
2018 2019
161,105 $ 157,754
161.105 157.754
108,548 150,311
108,548 150,311
$ 52,557 $ 7,443
Remaining Steps
o City Council to take Public Input
0* Consideration of Resolutions
Adopting the 2019 Annual Operating Budgets
Setting the Final Tax Levy for Payable 2019
Adopting the 2019-2028 CIP
Questions
Adam Flaherty
City Administrator / Finance Director
aflaherty@ci.otsego.mn.us
(763) 441-4414