ITEM 1 Budget Meeting #5I
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HINNO50TA
TO: Mayor and City Council
FROM: Adam Flaherty, City Administrator & Finance Director
DATE: August 10, 2020
SUBJECT: Budget Meeting #5
On Monday, Council and staff will resume the review of the draft 2020 General Fund budget. This
meeting is the second of three special meetings scheduled for budget and tax levy review. Please
note that staff is seeking Council input during these budget review meetings in order to effectively
and efficiently move the budgeting process forward.
These review meetings lead into September, where the Council will need to adopt the preliminary
property tax levy, which is the maximum amount the City can levy for taxes payable 2021. This
action will take place at a regular Council meeting, either on the 14' or the 28t' of September,
depending upon Council direction.
I have developed an outline of discussion topics below.
Property Tag Levy
Attached with the packet for this meeting, is an updated summary. Staff will review and explain any
changes that have occurred since the last budget meeting. Staff would be seeking Council consensus
at each meeting regarding the direction of the preliminary property tax levy amount.
Budget Review
Council and staff will be reviewing General Fund department budgets as outlined in the attached
review schedule.
Next Meetings
August 24 — At this meeting, staff and Council will be reviewing the detailed line -item budgets for
General fund revenues and department expenditures.
Materials Attached for Discussion
1) Property Tax Levy Summary
2) Department Expenditure Review Schedule
City of Otsego 113400 901h Street NE, Otsego, MN 55330 1 Tel. (763) 441-4414 Fax (763) 441-9163
July 27
Department Page Completed
Revenues
City Council
Administration
Elections
City Administrator
Assessing
Finance
Information Technology
Human Resources
City Hall & Public Works Building
2
Yes
5
Yes
9
Yes
11
Yes
7
Yes
12
Yes
13
Yes
15
Yes
18
Yes
21
Yes
August 10
Department Page Completed
Streets
Street Lights
Fleet Management
Old Township Site
Police Services
Public Safety Commission
Fire Protection
Building Safety
Emergency Management
Animal Control
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X:\Budget\2021\2021 Budget Calendar
City of Otsego
Property Tax Levy Calculations
Payable 2021
Revised: August 5, 2020
Preliminary Tax Levy (8-10)
Preliminary Tax Levy (7-27)
Levy Description
2016
2017
2018
2019
2020
2021
Change Change
2021
Change Change Comment
General Revenues
3,529,352
3,766,000
3,986,000
4,210,000
4,518,000
4,688,000
170,000 3.76%
4,688,000
170,000 3.76%
Tax Abatements
88,814
81,385
65,546
60,816
56,491
45,874
(10,617)-18.79%
45,874
(10,617)
Debt Service
Series 2010D & Series 2011A
225,000
225,000
215,000
205,000
195,000
195,000
-
195,000
- Evaluating Refunding Issue - Might Change
Series 2010B
415,OOD
430,000
440,000
450,000
460,000
460,000
-
460,000
-
Series 2018A
-
-
-
79,293
91,758
94,551
2,793
94,551
2,793
Sub -total
640,000
6o
55,OO
655,000
734,293
746,758
749,551
2,793 0.37%
749,551
2,793 0.37%
Capital Reserves
Pavement Management
339,200
475,960
600,000
800,000
950,000
1,050,000
100,000
1,050,000
100,000
Trails Management
25,250
26,000
30,000
32,000
33,000
34,000
1,000
34,000
1,000
Parks Equipment
54,590
55,000
56,000
58,000
60,000
62,000
2,000
62,000
2,000
Capital Equipment Revolving
168,000
235,200
242,256
260,000
280,000
300,000
20,000
300,000
20,000
Fire Reserve
150,000
150,000
160,000
170,000
180,000
190,000
10,000
190,000
10,000
Storm Water
25,000
25,000
26,000
30,000
32,000
34,000
2,000
34,000
2,000
Capital Improvements
-
160,200
282,500
355,000
318,000
441,900
123,900
441,900
123,900
City Buildings & Property
-
-
-
-
20,000
25,000
5,000
25,000
5,000
Sub -total
762,040
1,127,360
1,396,756
1,705,000
1,873,000
2,136,900
263,900 14.09%1
2,136,900
263,9001 14.09%
Grand Total
5,020,206
5,629,745
6,103,302
6,710,109
7,194,249
7,620,325
426,076 5.92%
7,620,325
426,076 i 5.92%
Tax Capacity
Growth (%)
Net Tax Capacity
Growth(%)
Tax Rate
Population
Tax Levy Per Capita
13,238,424 14,873,116 16,783,003 18,695,511 20,742,285 22,048,692
16.55% 12.35% 12.84% 11.40% 10.95% 6.30%
13,238,424 14,872,821 16,696,008 18,608,540 20,497,278 21,717,962
16.55% 12.35% 12.26% 11.46% 10.15% 5.96%
37.921 37.852 36.556 36.060 35.099 35.088
14,968 15,472 16,019 16,605 17,323 18,130
335 364 381 404 415 420
22,048,692
6.30%
21,717,962
5.96%
35.088
18,130
420
Taxing
2016
2017
2018
2019
2020
2021
2021
Authority
Final Tax Rate Final Tax Rate
Final Tax Rate
Final Tax Rate Final Tax Rate
Estimate
Change
Estimate
Change
City of Otsego
37.921
37.852
36.556
36.060
35.099
35.088
-0.03%
35.088
-0.03%
Wright County
39.970
39.599
39.946
44.273
44.421
44.421
0.00%
44.421
0.00%
School District
39.266
36.659
36.137
32.865
34.371
34.371
0.00%
34.371
0.00%
School District - RMV
19.441
19.373
19.422
19.430
29.961
29.961
0.00%
29.961
0.00%
Description
2017
2018
2019
2020
2021
Change
2021
Change
Median Appraised Value
198,300
217,206
220,572
247,859
258,455
4.28%
258,455
4.28%
Less: MV Exclusion
(19,393)
(17,691)
(17,389)
(14,933)
(13,979)
(13,979)
Taxable Market Value
178,907
199,515
203,183
232,926
244,476
4.96%
244,476
4.96%
Tax Capacity
1,789
1,995
2,032
2,329
2,445
2,445
2017
2018
2019
2020
2021
2021
Taxing
Estimated
Estimated
Estimated
Estimated
Estimated
Estimated
Authority
Tax
Tax
Tax
Tax
Tax
Change
Tax
Change
City of Otsego
677
729
733
818
858
4.89%
858
4.89%
Wright County
708
797
900
1,035
1,086
4.93%
1,086
4.93%
School District
656
721
668
801
840
4.87%
840
4.87%
School District -RMV
384
422
429
743
774
4.17%
774
4.17%
Total
2,425
2,669
2,730
3,397
3,558
4.74%
3,558
4.74%
Annual Increase
161
161
Estimated at 1% of County Provided Value
Estimated at 98.500A 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
ale at the time of presentation. These
I only be considered as estimates, and
I NOT be considered final.
X:\Budget\2021\Property Taxes\Tax Levy Calculations
8-10
City of Otsego
Property Tax Levy Calculations
Future Tax Levies
Revised: August 5, 2020
Levy Description 2020
General Revenues 4,518,000
Tax Abatements
Gateway North 56,491
Parkview Retail -
Preliminary Projections
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
4,688,000 4,922,400 5,168,520 5,426,946 5,698,293 5,983,208 6,282,368 6,596,497 6,926,311 7,272,627
Comments
Annual Increase of 5%
45,874 - - - - - - - Current Abatements (Gateway North)
- 34,196 57,770 57,770 57,770 57,770 57,770 57,770 57,770 57,770 Projected Abatements(Parkview Retail)
Debt Service
Series 2010D & Series 2011A
195,000
195,000
450,000
425,000
400,000
300,000
300,000
280,000
-
280,000
-
-
-
_
-
Debt Expires = 202
Debt Expires = 2021
Series 2010E
460,000
91,758
460,000
94,551
-
97,187
-
94,415
-
102,144
-
104,308
-
106,313
113,412
114,946
9,232
12,592
Debt Expires = 2034
Series 2018A
-
299,777
299,777
299,777
299,777
299,777
299,777
299,777
299,777
299,777
$4.OM Bond -15 Years at 1,50% Interest (2022)
NEW - PW Expansion
-
-
488,847
488,847
488,947
488,847
489,847
$SM Bond -15 Years at 4.50% Interest(2026)
NEW - Fire Station
Sub -total
-
746,758
-
749,551
-
846,964
819,192
801,921
704,085
1,194,937
1,182,036
1,183,570
797,856
801,216
Capital Reserves
950,000
1,050,000
1,150,000
1,250,000
1,325,000
1,400,000
1,475,000
1,550,000
1,625,000
1,700,000
1,775,000
See Cash Flow Spreadsheets
Pavement Management
33,000
34,000
35,000
36,000
37,000
38,000
39,000
40,000
41,000
42,000
43,000
Increase $1,000 Annually
Trails Management
60,000
62,000
64,000
66,000
68,000
70,000
72,000
74,000
76,000
78,000
80,000
Increase $2,000 Annually
Parks Equipment
Revolving
280,000
300,000
320,000
340,000
360,000
380,000
400,000
420,000
440,000
460,000
480,000
Increase $20,000 Annually
Capital Equipment
Fire Reserve
180,000
190,000
200,000
210,000
220,000
230,000
42,000
-
44,000
-
46,000
-
48,000
-
50,000
-
52,000
Increase $10,000 Annually Until Debt Issued
Increase$2,000 Annually
Storm Water
32,000
34,000
36,000
38,000
40,000
-
-
-
-
Evaluate Annually
Capital Improvements
318,000
441,900
-
-
35,000
-
40,000
45,000
50,000
55,000
60,000
65,000
70,000
Increase $5,000 Annually
City Buildings & Property
20,000
25,000
2,136,900
30,000
1,835,000
1,975,000
2,090,000
2,205,000
2,080,000
2,185,000
2,290,000
2,395,000
2,500,000
Sub -total
1,873,000
Grand Total
7,638,560
8,020,482
8,376,637
8,665,148
9,315,915
9
10,631,613
20,497,278
24429753
25406943
26423221
27,480,150
28,579,356
29,722,530
30,911,431
Annual Capacity Increase of4%
NetTax Capacity
Growth (%)
10.15%
5.96%
4.00%
4.00%
4.00%
4.00%
4.00%
4.00%
4.00%
4.00%
4.00%
Tax Rate
35.099
35.088
33.819
34.144
34.289
34.105
35.257
35.324
35.438
34.240
34.394
Increase/(Decrease) to Maintain Tax Rate
2,366
506,264
450,135
432,805
496,672
212,377
2OZ250
177,974
541,096
515,141
FUTURE LEVIES
X:\Budget\2021\Property Taxes\Tax Levy Calculations