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Item 6.1 2021 Annual Budget. Tax Levy, CIP40 06TY F O MINNESOTA g DEPARTMENT INFORMATION Request for City Council Action ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Administration City Administrator/Finance Director Flaherty December 14, 2020 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. Has proactively expanded infrastructure to responsibly provide core services. 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. 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) Adopting the 2021 Annual Operating Budgets 2) Setting a Final Property Tax Levy for Taxes Payable 2021 3) Adopting the 2021-2030 Capital Improvement Plan ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? No Yes — Held on December 14, 2020 BACKGROUND/J U STI FI CATION: The City Council and staff began the budgeting process back in May, and have met in ten special city council meetings, which are work session settings in preparation and review of the operating budgets, property tax levy, and capital improvement plan. The proposed General fund budget is a balanced budget, with expenditures totaling $6,611,457. When compared with 2020, this is an increase of 4.73%. These expenditures are funded with property taxes being the primary source of revenue, which accounts for 70% of all revenues. The Public Utility budgets include the Water, Sanitary Sewer and Storm Water funds. The primary sources of revenues for these funds are from charges for services to customers of the public utilities. The expenses are comprehensive, and include operating expenses, depreciation, capital outlay, debt service and interfund transfers. The utility funds have cash flow projections which are monitored and updated multiple times per year. The rates for the charges for services to customers have been analyzed, and current recommendations for increases have been included in the budgets. The respective rates will be analyzed further when the end of the year financial information is available. Staff will make a final recommendation to the Council for the 2021 rates sometime in February, with any rate changes becoming effective with the March billing. The Debt Service Funds budget includes revenues and expenditures for each of the City's seven outstanding bond issues. The primary sources of revenues include property taxes, special assessments and utility availability/connection charges. These revenues along with fund balance will repay the principal and interest on the respective bond issues. The Special Revenue Funds budget includes activity for the City's Economic Development Revolving and Tax Increment Districts Funds. The expenditures within these funds are for tax abatement agreements and TIF pay -as -you go note agreements, respectively. These expenditures are funded through a property tax levy and tax increments, respectively. The proposed property tax levy accounts for General fund revenues, Capital fund reserves, Debt Service repayments and Tax Abatements. The total proposed levy is $7,828,425. The most recent information available from Wright County shows the City's net tax capacity increased to a total of $22,620,843 (10.36% from 2020). All of this calculates to an estimated City tax rate of 34.607, which is down (1.40%) from the prior year rate of 35.099. In the end, this means that any increase in the City's portion of property taxes is driven by that respective properties increase in market value. The proposed Capital Improvement Plan (CIP) covers the years of 2021-2030. A summary of the CIP is included and is organized by funding source. Inclusion of an item within the CIP does not commit final approval by the City Council, rather it directs staff to plan towards and gather necessary information for an educated final approval on each respective item. Each individual item is planned, researched and brought back to City Council for final approval when the respective item is ready to move forward. I SUPPORTING DOCUMENTS ATTACHED: I • Resolution 2020-80: Adopting the 2021 Annual Operating Budgets o Budget Summaries: General, Public Utility, Debt Service & Special Revenue Funds • Resolution 2020-81: Setting a Final Property Tax Levy for Taxes Payable 2021 o Tax Levy Calculations • Resolution 2020-82: Adopting the 2021-2030 Capital Improvement Plan o Projects by Funding Source Summary POSSIBLE MOTION PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES: Motion to approve Resolution 2020-80, Adopting the 2021 Annual Operating Budgets; Motion to approve Resolution 2020-81, Setting a Final Property Tax Levy for Taxes Payable 2021; and Motion to approve Resolution 2020-82, Adopting the 2021-2030 Capital Improvement Plan BUDGET INFORMATION FUNDING: BUDGETED: N/A CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO: 2020-80 ADOPTING THE 2021 ANNUAL OPERATING BUDGETS WHEREAS, the Otsego City Council has on December 14, 2020, held a public meeting to allow for public comment before adopting a final budget and certifying a final property tax levy; and WHEREAS, the Otsego City Council has reviewed the proposed General, Public Utility, Debt Service and Special Revenue fund budgets and has determined the budget is adequate to fund the respective fund operations for the year 2021. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA: 1. That the following revenues and expenditures (summarized) be authorized as the final budget for the operation of the General fund for 2021 as follows: Revenues Property Taxes $4,646,632 Cable Franchise Fees 135,000 Licenses and Permits 1,200810 Intergovernmental 87,500 Charges for Services 198,915 Miscellaneous 342,600 Total Revenues 6 611457 Expenditures General Government $1,540,869 Public Safety 2,714,553 Public Works 1,429,909 Parks and Recreation 796,416 Economic Development 129,710 Total Expenditures $6,611,457 2 3 0 That the following revenues and expenses (summarized) be authorized as the final budget for the operation of the Public Utility funds for 2021 as follows: Revenues Operating $4,648,511 Non -Operating 12,848,023 Total Revenues $17,496,534 Expenses Operating $5,873,919 Capital Outlay 13,668,510 Depreciation 2,469,535 Transfers to Other Funds 384,100 Total Expenses $22,396,064 That the following revenues and expenditures (summarized) be authorized as the final budget forthe operation of the Debt Service funds for 2021 as follows: Revenues Property Taxes $749,551 Special Assessments 551,531 Utility Availability & Connection Charges 2,292,698 Transfers from Other Funds 141,000 Total Revenues 3 734 780 Expenditures Principal $3,770,000 Interest, Fiscal Agent Fee's & Amortizations 525,251 Total Expenditures S4,295,251 That the following revenues and expenditures (summarized) be authorized as the final budget for the operation of the Special Revenue funds for 2021 as follows: Revenues Property Taxes $45,874 Tax Increments 415,676 Total Revenues S461,550 Expenditures Economic Development $436,033 Total Expenditures 436 033 ADOPTED by the Otsego City Council this 14th day of December, 2020. MOTION BY: SECONDED BY: IN FAVOR: OPPOSED: 3 CITY OF OTSEGO Jessica L. Stockamp, Mayor ATTEST: Bethany Benting, Deputy City Clerk �j j M 00 0 PO PO m m 00 0 0) LO w 0 w w W w o o m 00 m 0 0) m 00 w N r. owmWw j-, N " p. J W m A ,4 Ln N m m 0 0 r 0 0 Ul W Ul 0 0 v m �, �, i- p. -j U, LO m (D -P, 0 rl ID V 00 r 0 V m 0 m ID w ID 0 '.4 m W 00 tOJt 0 w ww W w A14 N w w w r 3 0 A 0 � " J r l 3 l Owwowwow I w N w w r -11 O D� M� 41 W M, w 00 A -4 -P, 0 m ko MA 0 Do ON "1 w w 000)moNow 0 w 000w000-i VT T WO w J, W 0 0 0 Ul w 0 0 0 :) 000�0�0-rl D , 000u1000m WNW co CD w S" .90 IV p 1V1 D 0 0 W n W 0 kO D 0 0 0 � 0 r 0 14 D , 00OW00014 MA w 00 0 w OOWLDWMOM 000w000N 0 0 0 0 0- 00 (D 0 0 D 0 mm 3 m M M x r 'a Q. co 0 M :3 (D C UQ CL uq m r N City of Otsego Public Utility Fund Budget - 2021 Revenue & Expenditure Summary Revenues Operating Non -Operating Description Subtotal Expenditures Personal Services Supplies Services & Other Charges Capital Outlay Depreciation Debt Service Interfund Transfers Subtotal Excess (Deficiency) of Revenues Over (Under) Expenditures Requested Actual Actual Year -to -Date Budget Budget 2018 2019 2020 2020 2021 $ 3,434,316 $ 3,746,337 $ 4,057,238 $ 3,941,130 $ 4,648,511 3,425,958 2,766,208 6,794,714 15,239,157 12,848,023 6,860,273 6,512,545 10,851,952 19,180,287 17,496,534 442,800 501,257 475,365 580,300 616,500 424,908 485,690 359,641 510,596 636,794 861,227 2,124,774 1,856,648 2,215,520 4,620,625 (3,071) (1,083,090) 8,247,107 16,026,901 13,668,510 1,553,712 1,639,244 - 1,665,000 2,469,535 - - 17,500 - - 583,105 473,479 335,746 287,167 384,100 3,862,680 4,141,354 11,292,007 21,285,484 22,396,064 $ 2,997,593 $ 2,371,190 $ (440,056) $ (2,105,197) $ (4,899,530) City of Otsego Debt Service Fund Budget - 2021 Revenue & Expenditure Summary Description Revenues Taxes Special Assessments Utility Availability + Connection Charges Investment Interest (net) Interfund Transfers Bond Proceeds Subtotal Expenditures Capital Outlay Principal Interest Fiscal Agent Fee's Debt Service Amortizations Transfers Out Subtotal Excess (Deficiency) of Revenues Over (Under) Expenditures Actual Actual Year -to -Date Budget Budget 2018 2019 2020 2020 2021 $ 655,000 $ 734,293 $ 373,379 $ 746,757 $ 749,551 659,067 517,085 266,668 423,349 551,531 3,939,956 4,880,689 6,161,541 1,881,750 2,292,698 181,310 498,018 - - - 308,610 301,579 133,950 133,950 141,000 110,984 - 3,262,200 - - 5,854,927 6,931,664 10,197,737 3,185,806 3,734,780 20,955 - - - - 1,160,000 1,185,000 6,835,000 3,665,000 3,770,000 1,060,485 1,024,203 806,300 780,250 674,112 75,843 73,433 40,820 4,750 4,750 (78,881) (78,883) - (78,882) (153,611) - - 12,485 - - 2,238,403 2,203,752 7,694,606 4,371,118 4,295,251 $ 3,616,524 $ 4,727,912 $ 2,503,132 $ (1,185,312) $ (560,471) City of Otsego Special Revenue Fund Budget - 2021 Revenue & Expenditure Summary Description Revenues Property Taxes Tax Increments Charges for Services Investment Earnings Miscellaneous Subtotal Expenditures Personal Services Services & Other Charges Transfer Out Subtotal Excess (Deficiency) of Revenues Over (Under) Expenditures Actual Actual Year -to -Date Budget Budget 2018 2019 2020 2020 2021 $ 65,546 $ 60,816 $ 28,246 $ 56,491 $ 45,874 96,938 97,419 137,723 261,020 415,676 - 4,181 55,650 - - 6,593 16,819 - 169,077 179,235 221,618 317,511 461,550 476 1,133 - 1,000 1,500 144,388 182,024 220,110 222,788 362,885 - - - - 71,648 144,865 183,157 220,110 223,788 436,033 $ 24,213 $ (3,922) $ 1,509 $ 93,723 $ 25,517 CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO: 2020-81 SETTING A FINAL PROPERTY TAX LEVY FOR TAXES PAYABLE IN 2021 WHEREAS, the Otsego City Council has on December 14, 2020, held a public meeting to allow for public comment before adopting a final budget and certifying a final property tax levy; and WHEREAS, the Otsego City Council is required by State Statute to establish a final property tax levy for taxes payable in 2021 and certify the final property tax levy to the Wright County Auditor; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA: 1. That a tax is hereby levied for collection in 2021 upon all taxable properties in the City of Otsego for the purpose and sums as follows: General Revenue $7,033,000 Tax Abatement 45,874 GO Improvement Bonds, 2010B 460,000 GO Improvement Bonds, 2010D 124,703 GO Improvement Bonds, 2011A 70,297 GO Improvement Bonds, 2018A 94,551 Total Tax Levy 7 828 425 ADOPTED by the Otsego City Council this 14th day of December, 2020. MOTION BY: SECONDED BY: IN FAVOR: OPPOSED: CITY OF OTSEGO Jessica L. Stockamp, Mayor ATTEST: Bethany Benting, Deputy City Clerk City of Otsego Property Tax Levy Calculations Payable 2021 4�t Revised: December 9, 2020 General Revenues Tax Abatements Debt Service Series 2010D & Series 2011A Series 2010E Series 2018A Sub -total Capital Reserves Pavement Management Trails Management Parks Equipment Capital Equipment Revolving Fire Reserve Storm Water Capital Improvements City Buildings & Property Sub -total Grand Total Tax Capacity Growth(%) Net Tax Capacity Growth (%) Tax Rate Population Tax Levy Per Capita 4,518,000 56,491 195,000 460,000 91,758 746,758 Final Tax Levy (12-14) 2021 Change Change Comment 4,671,000 153,000 3.39% UPDATED - MAINTAIN BALANCED BUDGET 45,874 (10,617)-18.79% 195,000 460,000 - 94,551 2,793 749,551 2,793 0.37% 950,000 1�Q50t00 //r �� /S00 000 /ir //� / ��/ a 1,050,000 100,000 33,000 rri/ � j� ji347jQO�O�j/�/i��ji��1j000 i�///��//� r/ 40,000 7,000 60,000 %� /i� 6�0�0�%// �%L Op0 /i/rrr jrr� �// 62,000 2,000 280000 r%//�BOO�OOr//i�/r�z6r000r/�i �r/rriii/i%/ 300,000 20,000 180,000 � r��9Q00p rr/ /�r'�0 60O/ // � r rir 190,000 50,000 32000 34,000 2,000 318,000 /��650�000�� r 332i000 / �/ 661,000 343,000 25,000 5,000 20,000 '//%2;345,000///%ir/% 472,000 i/; ,R25;20% �! �/M/� /%E/i/mgr �i/%/ 2,362,000 489, 0001 26.11% 1,873,000 7,194,249 /�/,,,,7,828,425,,,,�,/b3p;175 !; /C!/r$:82% 7,828,425 634,1761 8.82% 20,742285 r//�j .i i 22,965,323 1095/ i/22,67��806 ir/�i�932/0 /i/%/i//i r r �rii 10.72% 20,497 278 22,334 684r j l/ r�/ r / 22,620,843 1015/ 10.36% 35.099 34.607 17,323 �` r18,130 r r r r 18,130 415 432 Authority Final Tax Rate r�i/Es�Jn'laEe /i Chapge /r r ' rr / Estimate Change City of Otsego 35.099 %/�//l �/ 851051rri/�j/�/�r014/or / 34.607 -1.40% Wright County 44421 School District 34.371 iir �i34371 �� r 0 QO/ rid 31.664 -7.88% School District- RMV 29.961�r/��9¢�.. Description 2020 Change r/ r/ r 2021 Change Median Appraised Value 247,859 258�55 j 4 28i6 / 258,455 4.28% Less: MV Exclusion (14,933) ;r/ r (13 979) j r / (13,979) Taxable Market Value 232,926 , `?„ 244,475 `496% 244,476 4.96% Tax Capacity 2,329 rr/�4�5 �/r r� % r 2,445 r r 2020 2021 Taxing Estimated �r6s�mate�j/ r rri rir / o rr/ / j Estimated Authority Tax r ��irf�fa��///r�i � Change i � Sri r/ � � Tax Change City of Otsego 818 %�/�/j %/85J %/rrr /r 4i7/7�6/ r /� / 846 3.42% i r� i/i /ri r/ii r r r Wright 1035 '/r/6/r1,086 / 493� / 1,069 3.29% g Y ; r 774 -3.37% School District School District -RMV /r r 7�14/ rJ/ rr/4 �7/a r r / j 790 6.33% 743 //a Total 3 397 r/r� !/557 /r /�71r6 / r 3,479 2.41% Annual increase UPDATED - PER TRAIL RENEWAL CIP UPDATED -TO MAINTAIN PRELIM LEVY UPDATED - ESTIMATED FROM NTC BELOW UPDATED - USED FOR TNT MAILED NOTICES 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 These are best estimates calculated by the Finance Director based upon information available at the time of presentation. These should only be considered as estimates, and should NOT be considered final. X:\Budget\2021\Property Taxes\Tax Levy Calculations 12-14 CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO: 2020-82 ADOPTING THE 2021-2030 CAPITAL IMPROVEMENT PLAN WHEREAS, the Otsego City Council has determined it is fiscally responsible and necessary to develop a capital improvement plan that identifies items that may require significant capital investment; and WHEREAS, the Otsego City Council has reviewed the details and estimated cost of each item included within the capital improvement plan; and WHEREAS, the Otsego City Council has identified probable funding sources for each item included within the capital improvement plan; and WHEREAS, the inclusion of an item within the capital improvement plan does not commit final approval for each respective item, rather each item will be presented to the Otsego City Council with final expenditure amounts and a detailed funding plan to gain final approval. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA: 1. That the 2021-2030 Capital Improvement Plan, as set forth in summary, attached as Exhibit A to this Resolution is adopted. ADOPTED by the Otsego City Council this 14th day of December, 2020. MOTION BY: SECONDED BY: IN FAVOR: OPPOSED: CITY OF OTSEGO Jessica L. Stockamp, Mayor ATTEST: Bethany Benting, Deputy City Clerk lz CA O 0i 0 cn O t4 cn 4� en cl N ti O ci Ci R, rli Q, Q> Q� <Z� 1* Q, 0 �q Q, 1=1 C:l �� C� — C� C5 cIF Ld cd t-,7 c> cr (=i Ci I=i a) -me zz 2L, O CL 4s cq it Q 3.1 O O O O O O N N � O N 0 0 0 N 0 0 0 0 0 0 0 � N ~ O Cl M O O O ! N m 6 N O O V 06 O' Oi to O" M M c�- c+i ' 0 0 0 N' 0 rn M v rn rn N O M O 0 0 fOD ti 11J O O M V' m N 0 O_ C n M O '7 M V LO 0 0 0 N S 0 N rn m v 0i rn N c0 M 0 0 0 a? ' n 0 000 Io W M N O> 10 V coo 0 C-4 N 0 O 0 a O 'OW O N N 0 O 0 O aM0 am o_ IO• cc O O o O � oo c3 N 0) L Y O N O M N N C •? 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