ITEM 4.1 Tax LevyE I'
ots T
Y P O
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT REQUESTOR:
MEETING DATE:
Administration City Administrator/Finance Director Flaherty
September 9, 2019
PRESENTER(s) REVIEWED BY:
ITEM #:
Administration
4.1
STRATEGIC VISION
MEETS:
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 2020 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 2020 Debt Service Property Tax Levy Certified in the Original Bond Resolution
2) Adopting a Preliminary Property Tax Levy for Taxes Payable in 2020
It is also recommended by staff that the City Council set a public meeting at which the 2020 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 six 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
2020 are different than those originally projected. In order to change the 2020 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 2019-47: Reducing the 2020 Debt Service Property Tax Levy
• Wright County Form — Bond Register / Debt Levy Supplement
• Resolution 2019-48: Adopting a Preliminary Property Tax Levy for Taxes Payable in 2020
• 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 2019-47, reducing the 2020 debt service property tax levy certified in the
original bond resolution.
-Motion to approve Resolution 2019-48, adopting a preliminary property tax levy for taxes payable in 2020.
-Motion to set the Truth in Taxation public hearing for taxes payable 2020 for 7:00 p.m., on Monday,
December 9th, 2019. 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
1,079,575
1,188,216
835,693
1,318,961
1,464,127
1,464,603
General Fund Budget - 2020
1,895,465
2,168,187
1,569,236
2,374,426
2,597,827
2,597,842
Requested Budget
1,055,964
1,170,466
845,869
1,297,889
1,376,185
1,351,255
Revenue & Expenditure Summary
587,737
644,462
444,714
706,920
763,743
763,784
Economic Development
113,579
113,311
72,208
114,260
Requested
Preliminary
Interfund Transfers
Actual
Actual
Year -to -Date
Budget
Budget
Budget
Description
2017
2018
2019
2019
2020
2020
Revenues
$ 231,596 $
222,829 $
300,297 $
- $
- $
-
Taxes
$ 3,756,375 $
3,992,749
$ 2,274,158 $
4,190,235
$ 4,552,957
$ 4,496,809
Cable Franchise Fees
135,652
139,161
70,194
140,000
141,000
141,000
Licenses & Permits
1,363,384
1,672,906
1,227,582
982,401
1,086,220
1,086,220
Intergovernmental
74,081
78,437
936
70,800
75,000
75,000
Charges for Services
275,565
313,583
222,583
162,820
174,365
202,615
Special Assessments
8,495
6,403
2,808
5,300
4,600
4,600
Fines & Forfeitures
21,092
25,616
16,725
24,000
24,000
24,000
Investment Interest
29,501
45,682
1,015,146
65,000
71,000
71,000
Miscellaneous
219,296
21,169
37,712
-
-
-
Interfund Transfers
155,042
159,840
171,900
171,900
201,700
201,700
Subtotal
6,038,483
6,455,546
5,039,744
5,812,456
6,330,842
6,302,944
Expenditures
General Government
1,079,575
1,188,216
835,693
1,318,961
1,464,127
1,464,603
Public Safety
1,895,465
2,168,187
1,569,236
2,374,426
2,597,827
2,597,842
Public Works
1,055,964
1,170,466
845,869
1,297,889
1,376,185
1,351,255
Culture & Recreation
587,737
644,462
444,714
706,920
763,743
763,784
Economic Development
113,579
113,311
72,208
114,260
128,960
125,460
Interfund Transfers
1,074,567
948,076
971,726
-
-
-
Subtotal
5,806,887
6,232,717
4,739,447
5,812,456
6,330,842
6,302,944
Net Change in Fund Balance
$ 231,596 $
222,829 $
300,297 $
- $
- $
-
City of Otsego
General Fund Budget - 2020
Budget Changes Tracking
Total Expenditures - Draft Budget Binder (July 22nd)
$ 6,330,842
Economic Development
City Development Brochure - 250 Copies of 6 Page Trifold Brochure
(3,500)
Streets Maintenance
Front Mount Snowblower for 6000 Tractor
(15,500)
Hydraulic Shouldering Machine
(9,300)
Health Insurance Rates Finalized
City Administrator
120
Administration
120
Finance
120
Human Resources
116
Building Safety
15
Streets Maintenance
(43)
Fleet Management
(87)
Parks Maintenance
(128)
Recreation
169
Total Expenditures - Preliminary Budget (September 9th) 6,302,944
X:\Budget\2020\General Fund\2.0 - 2020 PRELIMINARY BUDGETS INPUT
City of Otsego
Property Tax Levy Calculations
Payable 2019
Y,
Revised: September 4, 2019 Preliminary (9-9-2019) Preliminary (8-26-2019)
Levy Description 2016 2017 2018 2019 2020 Change Change 2020 Change Change Comment
General Revenues 3,529,352 3,766,000 3,986,000 4,210,000 4,520,000 310,000 7.36% 4,520,000 310,000 r 7.36%
Tax Abatements 88,814 81,385 65,546 60,816 56,491 (4,325) -7.17/6 56,491 (4,325)
Debt Service
13,238,424
14,873,116
16,783,003
18,695,511
20,158,430
20,158,430
Growth (%)
16.55%
Series 2010D & Series 2011A
225,000
225,000
215,000
205,000
195,000
(10,000)
195,000
(10,000)
Series 2010B
415,000
430,000
440,000
450,000
460,000
10,000
460,000
10,000
Series 2018A
-
-
-
79,293
91,758
12,465
91,758
12,465
Sub -total
640,000
655,000
655,000
734,293
746,758
12,465 1.70%
746,758
12,465 1 1.70%
Capital Reserves
404
415
415
19.430
0.00%
Estimated
Estimated
Pavement Management
339,200
475,960
600,000
800,000
950,000
150,000
950,000
150,000
Trails Management
25,250
26,000
30,000
32,000
33,000
1,000
33,000
1,000
Parks Equipment
54,590
55,000
56,000
58,000
60,000
2,000
60,000
2,000
Capital Equipment Revolving
168,000
235,200
242,256
260,000
280,000
20,000
280,000
20,000
Fire Reserve
150,000
150,000
160,000
170,000
180,000
10,000
180,000
10,000
Storm Water
25,000
25,000
26,000
30,000
32,000
2,000
32,000
2,000
Capital Improvements
-
160,200
282,500
355,000
316,000
(39,000)
316,000
(39,000)
City Buildings & Property
-
-
-
-
20,000
20,000
20,000
20,000
Sub -total
762,040
1,127,360
1,396,756
1,705,000
1,871,000
166,000 9.74%
1,871,000
166,0001 9.747
Grand Total
5,020,206
5,629,745
6,103,302
6,710,109
7,194,249
484,140 7.22%
7,194,249
484,140 7.22%
Tax Capacity
13,238,424
14,873,116
16,783,003
18,695,511
20,158,430
20,158,430
Growth (%)
16.55%
12.35%
12.84%
11.40%
7.82%
7.82%
Net Tax Capacity
13,238,424
14,872,821
16,696,008
18,608,540
19,956,846
19,956,846
Growth (%)
16.55%
12.35%
12.26%
11.46%
7.25%
7.25%
Tax Rate
37.921
37.852
36.556
36.060
36.049
36.049
Population
14,968
15,472
16,019
16,605
17,323
17,323
Tax Levy Per Capita
335
364
381
404
415
415
Taxing
2016
2017
2018
2019
2020
2020
2020
Median Appraised Value
Authority
Final Tax Rate Final Tax Rate Final Tax Rate Final Tax Rate
Estimate
Change
Estimate
Change
:ity of Otsego
37.921
37.852
36.556
36.060
36.049
-0.03%
36.049
-0.03%
Nright County
39.970
39.599
39.946
44.273
44.273
0.00%
44.273
0.00%
ichool District
39.266
36.659
36.137
32.865
32.865
0.00%
32.865
0.00%
ichool District- RMV
19.441
19.373
19.422
19.430
19.430
0.00%
19.430
0.00%
Description
2017
2018
2019
2020
Change
2020
Change
Median Appraised Value
198,300
217,206
220,572
247,859
12.37%
247,859
12.37%
Less: MV Exclusion
(19,393)
(17,691)
(17,389)
(14,933)
(14,933)
Taxable Market Value
178,907
199,515
203,183
232,926
14.64%
232,926
14.64%
Tax Capacity
1,789
1,995
2,032
2,329
2,329
2017
2018
2019
2020
2020
Taxing
Estimated
Estimated
Estimated
Estimated
Estimated
Authority
Tax
Tax
Tax
Tax
Change
Tax
Change
City of Otsego
677
729
733
840
14.60%
840
14.60%
Wright County
708
797
900
1,031
14.56%
1,031
14.56%
School District
656
721
668
766
14.67%
766
14.67%
School District - RMV
384
422
429
482
12.35%
482
12.35%
Total
2,425
2,669
2,730
3,119
14.25%
3,119
14.25%
Annual Increase
450
450
X:\Budget\2020\Property Taxes\Tax Levy Calculations
NO CHANGE FROM 8-26-2019
Estimated at 1% of County Provided Value
Estimated at 99% of Tax Capacity
Source = MN State Demographer
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
are best estimates calculated by the
:e Director based upon information
)le at the time of presentation. These
I only be considered as estimates, and
I NOT be considered final.
9-9
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2019-47
REDUCING THE 2020 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
TOTAL RECORDED LEVY
$91,758
53,465
361,778
122,147
522,438
1 151 586 ;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 2020 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 2020; 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 2020 for debt service purposes:
GO Improvement Bonds, 2018A $91,758
GO Improvement Bonds, 2012A 0
GO Improvement Bonds, 2011A 72,853
GO Improvement Bonds, 201 OD 122,147
GO Improvement Bonds, 2010B 460,000
TOTAL LEVY FOR DEBT SERVICE 746 58
2. That these debt service property tax levy adjustments are applicable to taxes payable for 2020 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 9th day of September, 2019.
ATTEST:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
MOTION made by Council Member and SECONDED by Council Member
IN FAVOR:
OPPOSED:
2
August 3, 2019
CITY OF OTSEGO
RE: Bond Register/Debt Levy Supplement
(A) (B) (C)
A -B=C
BOND
ISSUED
ORIGINAL DATE DEBT LEVY PER ADDITIONS OR
PRINCIPAL ISSUED BOND RESOLUTION REDUCTIONSTO
FOR PAY 2020 LEVIED AMOUNT
CERTIFIED
DEBT LEVY
2020
G.O. IMPROVEMENT BONDS, SERIES 2018A
91,758
91,758
G.O. IMPROVEMENT CROSSOVER REFUNDING BONDS, SERIES 2012A
$53,465
(53,465)
G.O. IMPROVEMENT CROSSEVER REFUNDING BONDS, SERIES 2011A
$361,778
(288,925)
72,853
G.O. IMPROVEMENT REFUNDING BONDS, SERIES 2010D
$122,147
122,147
G.O. WATER & SEWER REVENUE REFUNDING BONDS, SERIES 2010C
G.O. CAPITAL IMPROVEMENT PLAN REFUNDING BONDS, SERIES 20108
$522,438
(62,438)
460,000
G.O. WATER & SEWER REVENUE REFUNDING BONDS, SERIES 2009A
TOTAL 1,151,586
-404,828 1
746,758
I hereby certify that the above schedule of bond levies to be spread on payable 2020 tax rolls agrees wit]
your records and is true and correct. Copies of any resolutions which increase or reduce these levie
are attached.
Please sign and date, then return to the Wright County Auditor/Treasurer's Office with your Levy Certification
Sincerely,
,--d.t P. q4k,.&
Robert J. Hiivala
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF NIINNESOTA
RESOLUTION NO: 2019-48
ADOPTING A PRELDIINARY PROPERTY TAX LEVY
FOR TAXES PAYABLE IN 2020
WHEREAS, the Otsego City Council is required by State Statute to establish a preliminary tax levy for taxes
payable in 2020 by September 30, 2019 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 2020; and
WHEREAS, the Otsego City Council has considered projected revenues for funds using property tax
proceeds in 2020; 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:
1. That the following amounts are the maximum to be levied as property taxes payable in 2020 for the
following purposes:
General Revenue
$6,391,000
Tax Abatement
56,491
GO Improvement Bonds, 2010B
460,000
GO Improvement Bonds, 201 OD
122,147
GO Improvement Bonds, 2011A
72,853
GO Improvement Bonds, 2018A
91,758
Total Tax Levy 7 194 249
1
ADOPTED by the Otsego City Council this 9th day of September, 2019.
MOTION made by Council Member
IN FAVOR:
OPPOSED:
PA
ATTEST:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
and SECONDED by Council Member
Proposed Levy Certification
STATE of MINNESOTA
COUNTY of WRIGHT
CITY of OTSEGO
Return by: September 30, 2019
City Taxes Voted
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
September 9, 2019, levy the following amount to be raised by taxation for the City of Otsego for the payable year 2020.
5,812,456;
2019 Final
1,602,456;
4,210,0001
2020 Proposed
6,302,944;
A
B C
D
A
B C
D
170,0001
7 Fire Protection
(A -B -C=D)
(A -B -C=D)
2019
2019 2019
2019
2020
2020 2020
2020
Budget
Other
Tax
Budget
Other
Certified
Requirement i
LGA Resources
Levy i #
Fund Requirement
LGA Resources
Levy
5,812,456;
1,602,456;
4,210,0001
5 Revenue
6,302,944;
1,782,944;
4,520,000
170,0001
170,0001
7 Fire Protection
180,000
180,000
58,000;
58,000;
11 Parks
60,000;
60,000
1,418,218;
683,9251
734,2931
19 Debt Service i
1,528,700;
i
781,9421
746,758
862,870;
62,870;
800,000;
20 Blacktopping 1
1,231,7271
62,870!
218,8571
950,000
355,0001
355,000;
26 Capital Imp
316,0001
316,000
60,816;
60,816
37 Tax Abatement
56,4911
56,491
30,000;
30,000;
41 Water
32,000;
32,000
260,000;
260,000!
73 Public Facilities 1280,000:
280,000
32,000;
32,0001
76 Park Projects
33,000!
33,000
Building Maintenance
20,000;
20,000
9,059,3601 62,870; 2,286,381! 6,710,109; Total
* Do not include any Disparity Reduction Aid or Fiscal Disparity taxes.
Dated this 10th day of September, 2019.
10,040,862; 62,870; 2,783,743; 7,194,249
Adam Flaherty, Finance Director
Truth in Taxation Public Meeting Dates
City Name: Otse
Contact Person: Adam Flaherty, City Administrator Phone: (763) 441-4414
Public Meeting
Date: December 9, 2019
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 check the
appropriate box for each item. Fill in any new information as needed.
Q Information is correct ❑ New Information
1. Location: Otsego Prairie Cetner
2. Phone Number:
8899 Nashua Ave NE
Otsego, MN 55330 I
Q Information is correct
(763) 441-4414 I
Q Information is correct
3. Mailing Address: City of Otsego
13400 90th St NE
Otsego, MN 55330
❑ New Information
❑ New Information
Please return this completed form no later than September 30, 2019.
email: lindsay.salo@co.wright.mn.us
fax: (763) 682-7873 Attn: Lindsay Salo
mail: Wright County Auditor/Treasurer
Attn: Lindsay Salo
10 2nd St NW Room 230
Buffalo, MN 55313