Memo_2014 operating budgetsI
CITY 0F 0
ot e
MINNESOTA
DATE: 9 January 2014
TO: Lori Johnson, city Administrator
FROM: Dan Jordet, Administrative Services Director
RE: 2014 operating Budgets
Streets and Fleet Mana ement
At the 9 December 2013 city council meeting the council requested additional information on the
Streets budget for 2014 and the Fleet Management budget for 2014. Brad Belair has prepared detailed
review of these divisions which are attached to this memorandum. They may be reviewed with the City
council on Monday, 13 January 2014 prior to proposing a final 2014 operating budget for adoption.
2014 operating_ Budget for General Fund
At the 9 December 2013 city council meeting, the council adopted a property tax levy for all purposes
totaling $ 4,500,000. This levy included $ 23,000 of tax abatement, $ 475,285 of debt service levies,
special fund reserve levies of $ 728,000 and a General Fund operating levy of $ 3,273,715. This final
levy as adopted was $ 39,285 less than the preliminary levy adopted in September 2013. All of the
reduction came from the General Fund levy.
In order to rebalance revenues and expenditures in the General Fund staff followed a multi --step
process to find expenditure reductions. First, budget administrators were requested to find reductions
in line items that did not involve compensation or dedicated contractual services (such as engineering,.
assessing and legal) equal to 5.0% of that amount. This would be the equivalent of about $ 55,000.
The rationale of asking for 5.0% in recommendations was to allow choice among several alternatives to
arrive at a net budget reduction that would meet financial goals but also provide for the best mix of
services. Not all recommended or offered reductions were used in arriving at the final proposals.
Next, the city Administrator and Administrative Services Director reviewed the lists and attempted to
determine the reductions that would produce two different outcomes. The first outcome was simply to
balance General Fund revenues to General Fund expenditures with no surplus budgeted. The second
outcome was to reduce expenditures by an amount equal to the reduction in the property tax levy,
$ 39,285. The steps taken to reach each of those outcomes are included on the sheet with the colored
rectangles around sections of the spreadsheet.
The pink rectangle at the top shows the originally presented revenue and expense scenario as was
considered on 9 December 2013. It produced a surplus of $ 34,917 which was to be transferred to the
debt service fund for the 2003A improvement Bonds.
The red rectangle, second down, shows the result of the reduced levy adopted by the council. It
reduces revenues to $ 4,044,812 with no change in expenditures. The result is a deficit of $ 4,308.
This amount is, at a minimum, what would have to be reduced to reach a balanced budget.
The yellow rectangle, third down on the page, indicates that the next step in the budget process was to
take the $ 25,088 of expected sales tax exemption savings and spread it back across the expenditure
budget against all of the individual accounts. An additional spreadsheet is attached showing how that
$ 25,085 was distributed among the benefitting General Fund accounts.
The blue rectangle addresses the first of two objectives. It reduces expenditures enough to bring the
General Fund expenditures to the same level as General Fund revenues and balances the budget. In
this scenario, it is implied that the surplus from the original proposal is applied to the property tax
reduction. Any money transferred to debt service funds would have to be authorized at a later time and
be taken from fund balance reserves. The consequences of the blue box reductions are less economic
development marketing, postponement of some street sign replacements and a reduction in training for
Administration.
The green box, last box on the sheet, shows additional cuts suggested to arrive at an expense
reduction equal to the property tax reduction made on the revenue side of the budget. The first $ 41308
is added to $ 34,917 in other cuts to reach the $ 39,285 in reduced property tax revenue. The
consequences of these reductions are listed in the right hand column.
Finally, I have attached two possible resolutions for adoption of the 2014 operating budgets. The first
resolution uses the "blue box" method of balancing the budget and allowing general fund operations to
proceed at an expenditure level of $ 4,044,812, equal to revenues expected.
The second resolution uses the "green box" appropriation method producing the same surplus as the
original budget of $ 34,917. This will require additional cuts in services and postponement of activities
but will produce the surplus for the debt service fund that was originally considered.
If there are additional questions, concerns or scenarios to be developed, please let me know.
attachments
Budget Status After Tax Reduction:
6 Revenues
7 Gross Expenditures
8 Iess: expected sales tax exemption
9 Net Expenditures
10 Net Operations
Modification:
41044,812 cut tax levy by $ 39,285
4,075,265
410491180 beginning botom line
(4,368) deficit, implies no transfer to Debt Service
11 Spread sales tax exemption savings among accounts on attached schedule
Expenditure Reductions:
12 Economic Development - Marketing
13 Finance: - Audit Costs
14 Streets -Sign Materials
15 Administration - Training
16 Total Reductions from Line 7
17 Net General Fund Operations (Line 10 + Line 16)
1,000 less ED marketing, leaves $ 3,000
2,000 have actual RFP cost
500 postpone sign upgrades to 2015
868 eliminate a training meeting or conference
implies no transfer to Debt Service
from Operations
Further Reductions to Equal Property Tax Reduction: ($ 39,285 cut in Line 6)
8 Cuts from Balancing Actions (Line 16) 4,368
F9,Parks - Contact Services 4,000 staff will spread fertilizer, reduced maintenance
20
Budget Originally Proposed:
100
Notes:
1
Revenues
4,084,097
12/9/2013 Resolution
2
Gross Expenditures
4,075,265
12/9/2013 Resolution
3
less: expected sales tax exemption
26,085
original estimate
4
Net Expenditures
4,049,180
take as comp time
i
5
Net Operations
34,917
to be transferred to Debt Service
Budget Status After Tax Reduction:
6 Revenues
7 Gross Expenditures
8 Iess: expected sales tax exemption
9 Net Expenditures
10 Net Operations
Modification:
41044,812 cut tax levy by $ 39,285
4,075,265
410491180 beginning botom line
(4,368) deficit, implies no transfer to Debt Service
11 Spread sales tax exemption savings among accounts on attached schedule
Expenditure Reductions:
12 Economic Development - Marketing
13 Finance: - Audit Costs
14 Streets -Sign Materials
15 Administration - Training
16 Total Reductions from Line 7
17 Net General Fund Operations (Line 10 + Line 16)
1,000 less ED marketing, leaves $ 3,000
2,000 have actual RFP cost
500 postpone sign upgrades to 2015
868 eliminate a training meeting or conference
implies no transfer to Debt Service
from Operations
Further Reductions to Equal Property Tax Reduction: ($ 39,285 cut in Line 6)
8 Cuts from Balancing Actions (Line 16) 4,368
F9,Parks - Contact Services 4,000 staff will spread fertilizer, reduced maintenance
20
Police Commission - Supplies
100
leaves $ 500 for activity
21
Recreation - Publishing
1,000
newsletter
22
Finance - Office Supplies
200
make do with less
23
Finance - Training
500
limit data processing training
24
Streets - Overtime
21,000
take as comp time
25
Streets - Sand and Gravel
3,000
forego gravel storage area behind salt shed
26
Emergency Managerment - Training
11000
reduce to $ 4,000
27
Economic Development - Marketing
2,000
additional reduction, leaves $ 1,000
28
Streets - Sign Materials
2,000
postpone a portion of sign upgrades to 2015
29
Economic Development - Consultant Services
40000
leaves $ 1,000 for studies & planning
30
Administration - PT Intern
6,000
postpones Laserfiche implementation
31
Recration - Programming
11000
raise fees or reduce programs
32
Streets - Operating Supplies
11-000
mow roadside weeds rather than spray chemicals
33
Fleet - Fuel
2,700
average cost to $ 3.70/gallon
34
Prairie Center - Supplies
2,717
reduce growth in supplies use
35
IT - Suppies
300
reduce backup parts supplies
36
City Council -Training
400
reduce conference attendance
37
Recreation - Community Events
1,000
smaller increase in budget
38
Additional Reductions
34,917
(lines 19 through 37)
39 Total Reductions (matches Property Tax Reduction) 39,285 (Line 18 + Line 38)
City of Otsego
493950
511273
62,950
74,547
74,147
General Fund Budget
295,869
367,582
3551290
391,002
3851002
for the year ending 31 december 2014
390
241334
585
26,200
261200
Actual
Actual
Budget
Cuts to
Cuts to
701300
2011
2012
2013
Balance
Sur lus
Revenues:
Information Technology
-
35,108
46,850
461628
Ad Valorem Property Tax
313431665
331391131
31213,145
31273,715
3,273,715
Licenses and Permits
23,450
33,915
281040
40,100
401100
Intergovernmental Revenue
1991053
2081822
202,875
316,611
3161611
Charges for Service
967204
60,253
57,000
651650
651650
Interest Revenue
118,186
923134
100,000
100,000
1001000
Cable Franchise Fees
100,176
1061547
100,000
1053000
1051000
Other Revenues
2321613
35,164
500
143,736
1431736
TOTAL Revenues:
40113,347
31675,966
31701,520
4,044,812
4,044,812
Expenditures:
General Government
City Council
493950
511273
62,950
74,547
74,147
Administration
295,869
367,582
3551290
391,002
3851002
Elections
390
241334
585
26,200
261200
Assessor
671935
67,904
681250
701300
701300
Finance
1761950
2391680
2431945
321,187
3201487
Information Technology
-
35,108
46,850
461628
461328
Legal
951239
71,305
70,000
751000
751000
City Hall
--
-
78,685
81,255
811255
Old Town Site
721
715
-
-
-
Planning
91,213
851126
80,000
739400
731400
Planning Commission
540
11230
11680
-
-
Subtotal. General Government:
7781807
944,258
130081235
111591519
11152,119
Public Safety:
Police
8611410
875,045
883,300
912,500
9121500
Police Commission
1,191
1,372
1,370
11350
1,250
Fire
-
347,922
355,000
375,850
3751850
Emergency Management
-
728
6,500
81550
71550
Animal Control
151274
101,915
171500
111000
11,000
Subtotal: Public Safety:
8771875
1,235,982
1,263,670
1$09,250
113081150
Public Works:
Streets
1,285,891
7601656
5103240
6291110
6217110
Engineering
1471421
128,713
1171000
851000
851000
Street Lights
971046
1081775
1053000
110,000
1101000
Fleet Maintenance
-
-
209,460
191,630
1881930
Subtotal. Public Works
115301358
9981144
9411700
1,015,740
110053040
Culture & Recreation
Park Maintenance
346,410
195,456
291,655
294,880
290,880
Recreation
37,325
83, 016
1371110
154,075
151,075
Prairie Center
58,888
39,134
43,500
331647
301930
Heritage Preservation Comm.
21400
1,134
1,250
-
-
Subtotal: Culture & Recreation:
445,023
3181740
4731515
4821602
4721885
Economic Development
121353
21649
141400
113790
5,790
Transfers Out/(In)
5561941
1151000
-
65,911
65,911
TOTAL Expenditures: 4,201 }357 316141773 31701,520 41044,812. 410091895
Sales Tax Exemption Savings - -
NET GENERAL FUND: (88,010) 611193 - I - 11 341917
V.
_E
'BA-LANC' -D
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2014 -
RESOLUTION ADOPTING 2014 OPERATING BUDGETS
WHEREAS, on December 9, 2013 the Otsego City Council held a public meeting at which
citizens were invited to comment on the proposed property tax levy and resulting operating
budgets for the 2014 fiscal year.
NOW, T-BEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
OTSEGO, WRIGHT COUNTY, MINNESOTA THAT:
the following sums of money be allotted for the operation of City business in the various funds
of the City during the 2014 fiscal year as follows:
GENERAL FUND:
General Fund Revenues
Property Taxes
$ 3.1273,715
Licenses and Permits
40,100
Intergovernmental Revenue
3165611
Charges for Service
65, 65
Interest Revenue
1001000
Cable Franchise Fee
105,000
Other Revenues
143 73 6
Revenues
$450445 812
General Fund Expenditures:
General Government $ L15%519
Public Safety 153 0%250
Public Works 13015.5740
Culture & Recreation 482)602
Economic Development 11,790
Transfers 65,911
Expenditures $4.044)812
SPECIAL REVENUE FUNDS:
Storm Water In -District Fund Revenues $ 735800
Storm Water In -District Fund Expenditures $ 63,000
Storm Water Out -of -District Fund Revenues $ 25,000
Storm Water Out -of -District Fund Expenditures $ 21,240
Street Light District Fund Revenues
Street Light District Fund Expenditures
Building Safety Fund Revenues
Building Safety Fund Expenditures
DEBT SERVICE FUND
Debt Service Fund Revenues
Debt Service Fund Expenditures
ENTERPRISE FUNDS
Water Fund Revenues
Water Fund Expenditures
Sewer Fund Revenues
Sewer Fund Expenditures
$ 26)700
$ 13,880
$ 517,200
$ 252,796
$ 23705,019
$ 2,705,019
$ 131K875
$ L328)202
112.33,900
2,3935599
ADOPTED by the Otsego City Council this 13t" day of January, 2014.
ATTEST:
Tarry. Loff, City Clerk
MOTION made by Council Member
a
I_IV
OPPOSED:
CITY OF OTSEGO
Jessica Stockamp, Mayor
and SECONDED by Council Member
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2014 -
RESOLUTION ADOPTING 2014 OPERATING BUDGETS
WHEREAS, on December 9, 2013 the Otsego City Council held a public meeting at which
citizens were invited to comment on the proposed property tax levy and resulting operating
budgets for the 2014 fiscal year.
NOW, TBEREFORE9 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
OTSEGO, WRIGHT COUNTY, MINNESOTA THAT:
the following sums of money be allotted for the operation of City business in the various funds
of the City during the 2014 fiscal year as follows.. -
GENERAL FLJND:
General Fund Revenues:
Property Taxes
$ 35273.1715
Licenses and Permits
40,100
Intergovernmental Revenue
3165611
Charges for Service
655650
Interest Revenue
10 0- 0 0 0
Cable Franchise Fee
105,000
Other Revenues
143,73
Revenues
$ 4,0445812
General Fund Expenditures:
General Government $ 1,152JI9
Public Safety 1,308,150
Public Works IP005)040
Culture & Recreation 472,885
Economic Development 5,790
Transfers 65,3911
Expenditures $4.009,895
Surplus $ 34,917
SPECIAL REVENUE FUNDS:
Storm Water In -District Fund Revenues
Storm Water In -District Fund Expenditures
Storm Water Out -of -District Fund Revenues
Storm Water Out -of -District Fund Expenditures
Street Light District Fund Revenues
Street Light District Fund Expenditures
Building Safety Fund Revenues
Building Safety Fund Expenditures
DEBT SERVICE FUND
Debt Service Fund Revenues
Debt Service Fund Expenditures
ENTERPRISE FUNDS
S P
U, L U
735800
63,000
25.5000
21,240
26,700
$ 13,880
$ 517,200
$ 252,796
$ 25705P0I9
$ 2,7055019
Water Fund Revenues $ 151K875
Water Fund Expenditures $ L328,202
Sewer Fund Revenues $ 1,233,900
Sewer Fund Expenditures $233931599
ADOPTED by the Otsego City Council this 13t` day of January, 2014.
ATTEST:
Tami Loff, City Clerk
MOTION made. by Council Member
OPPOSED:
CITY OF OTSEGO
Jessica Stockamp, Mayor
and SECONDED by Council Member