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4.1 Truth in Taxation Presentation (12-13-21)Truth in Taxation2022 Budgets & Property Tax LevyPRESENTATION & PUBLIC INPUTDECEMBER 13, 2021 Before We Start•PROPERTY VALUATION QUESTIONS•That is not the focus of this meeting.•LOCAL BOARD APPEAL & EQUALIZATION MEETING•Annual Meeting between April 1 – May 31•Payable 2022 Meetings•April 26, 2021•May 12, 2021 (continued from April 26, 2021) •REQUIRED BY STATUTE 275.065, SUBD. 7•PURPOSE•Discussion of 2022 Budgets•Discussion of Levy for Taxes Payable 2022•Discussion of Capital Improvement Plan•Public InputTruth in Taxation •IS A STRONG ORGANIZATION 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 RESPONSIVETO 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 RESOURCES.Otsego’s Strategic Vision Budget Process•CITY COUNCIL OUTLINES 2022 BUDGET GOALS AND OBJECTIVES•STAFF PREPARE PROPOSED BUDGETS•PROPOSED BUDGETS REVIEWED•Occurs during Special City Council Meetings (open to public)•PRELIMINARY TAX LEVY•Certified September 27, 2021•ADDITIONAL BUDGET REVIEW•11 Meetings Prior to Tonight•FINAL BUDGET ADOPTION•Truth in Taxation Public Input General Fund Revenues2021 2022 ($) (%)Budget Budget Change ChangeRevenue SourceTaxes $     4,646,632  $     5,000,506  $    353,874  7.62%Cable Franchise Fee 135,000  129,000  (6,000) ‐4.44%Licenses & Permits 1,200,810  1,510,639  309,829  25.80%Intergovernmental 87,500  87,500  ‐ 0.00%Charges for Services 198,915  238,871  39,956  20.09%Investment Interest 72,000  60,000  (12,000) ‐16.67%Miscellaneous 270,600  320,900  50,300  18.59%Total $     6,611,457  $     7,347,416  $    735,959  11.13%Per Capita $                365 $                368  $                3  0.91% - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000Charges for ServicesTaxesFranchise FeeLicenses & PermitsInvestment InterestIntergovernmentalMiscellaneous20222021 2021 2022 ($) (%)Budget Budget Change ChangeExpenditure FunctionGeneral Government $     1,540,869  $     1,763,193  $    222,324 14.43%Public Safety 2,714,553  3,015,037  300,484  11.07%Public Works 1,429,909  1,551,450  121,541  8.50%Parks & Recreation 796,416  855,826  59,410  7.46%Economic Development 129,710  161,910  32,200  24.82%Total $     6,611,457  $     7,347,416  $    735,959  11.13%Per Capita $                365 $                368  $                3  0.91%ExpendituresGeneral Government23%Public Safety41%Public Works22%Parks & Recreation12%Economic Development2%2021General Government24%Public Safety41%Public Works21%Parks & Recreation12%Economic Development2%2022 General Government•CITY COUNCIL; ADMINISTRATION; ELECTIONS; ASSESSING; FINANCE; INFORMATION TECHNOLOGY; LEGAL; HUMAN RESOURCES; AND CITY BUILDINGS.General Government2021 Budget $     1,540,869 Notable Changes:Administrative Internship 8,784  4%Election Year 68,176  31%Assessor Contract 12,628  6%Finance Staff Addition 29,735  13%Information Security Risk Analysis 15,000  7%HR/Assistant City Administrator 34,009  15%Other Operational Increases 53,992  24%2022 Budget $     1,763,193 Total Increase $        222,324 Per Capita (Annually)2022 Budget $                   88 2021 Budget $                   85  •POLICE PROTECTION; PUBLIC SAFETY COMMISSION; FIRE PROTECTION; BUILDING SAFETY; EMERGENCY MANAGEMENT; AND ANIMAL CONTROL.Public SafetyPublic Safety2021 Budget $     2,714,553 Notable Changes:Law Enforcement Contract 42,924  14%Fire & Emergency Response Contracts 172,274  57%Building Official & Inspections Contract 58,500  19%Other Operational Increases 26,786  9%2022 Budget $     3,015,037 Total Increase $        300,484 Per Capita (Annually)2022 Budget $                151 2021 Budget $                150  •STREETS MAINTENANCE; ENGINEERING; STREET LIGHTS AND FLEET MANAGEMENT.Public WorksPublic Works2021 Budget $     1,429,909 Notable Changes:Street Maintenance Staff Addition 40,633  33%Clean Up Day Event 8,500  7%Compost Site Maintenance Equipment 12,075  10%Street Light Electricity 8,160  7%Vehicle & Equipment Maintenance Supplies 18,351  15%Other Operational Increases 33,822  28%2022 Budget $     1,551,450 Total Increase $        121,541 Per Capita (Annually)2022 Budget $                   78 2021 Budget $                   79  Culture and Recreation•PARK MAINTENANCE; RECREATION; PARKS AND RECREATION COMMISSION; AND HERITAGE PRESERVATION COMMISSION.Culture and Recreation2021 Budget $        796,416 Notable Changes:Park Maintenance Supplies 8,680  15%Park Utilities (Irrigation, Electricity) 4,000  7%Liability and Property Insurance 4,289  7%Prairie Festival & Community Events 9,456  16%Other Operational Increases 32,985  56%2022 Budget $        855,826 Total Increase $           59,410 Per Capita (Annually)2022 Budget $                   43 2021 Budget $                   44  •PLANNING; PLANNING COMMISSION AND ECONOMIC DEVELOPMENT.Economic DevelopmentEconomic Development2021 Budget $        129,710 Notable Changes:Comprehensive Plan Update 37,950  118%Other Operational Increases (5,750) ‐18%2022 Budget $        161,910 Total Increase $           32,200 Per Capita (Annually)2022 Budget $                     8 2021 Budget $                     7  Property Tax Levy 2022 Tax Levy Summary2018 2019 2020 2021 2022General Revenue$3,986,000 $4,210,000 $4,518,000 $4,671,000 $5,009,000Capital Reserves1,396,756 1,705,000 1,873,000 2,362,000 2,988,590Debt Service655,000 734,293 746,758 749,551 547,187Tax Abatements65,546 60,816 56,491 45,874 40,228 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,0002018 2019 2020 2021 2022Per CapitaLevy Levy Levy Levy LevyCity of Otsego $                       381  $                       404  $                       415  $                       432 $                       430  2022 Tax Levy – By Purpose79 108 94 27 78 36 8 79 114 97 41 56 37 8 80 111 98 43 38 37 8 GENERAL GOVERNMENTSTREETS & LIGHTS POLICE & FIRE DEBT SERVICE CAPITAL IMPROVEMENT PLANPARKS & RECREATIONECONOMIC DEVELOPMENT202220212020 Tax Capacity 18•MARKET VALUE•Wright County Assessor sets valuations•Board of Appeal and Equalization (4-26-2021)•CURRENT ENVIRONMENT HAS AN INCREASING TREND•2021 ASSESSMENT – PAYABLE 2022•Residential: 4.42%•Median Value (2020): $258,455•Median Value (2021): $290,081 or 12.24% Increase•Commercial & Industrial: 3.78%•Agricultural: 8.30%2022 Tax Capacity - Factors 192021 2022 ($)Levy Levy ChangeProperty TypeResidential $   18,154,360  $   19,975,455  $     1,821,095 Commercial & Industrial 3,406,114  3,671,121  265,007 Agricultural 665,277  657,859  (7,418)Personal Property 650,470  589,792  (60,678)Total $   22,876,221  $   24,894,227  $     2,018,006 2022 Tax Capacity $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000Residential Commercial &IndustrialAgricultural PersonalProperty2018201920202021202280%15%3%2%2022ResidentialCommercial & IndustrialAgriculturalPersonal Property 2022 Tax Rates - Preliminary31.220 34.486 34.535 35.107 37.894 39.054 43.313 46.516 49.057 49.091 56.975 MAPLE GROVE OTSEGO ST. MICHAEL ROGERS MONTICELLO CHAMPLIN CORCORAN ALBERTVILLE DAYTON DELANO BUFFALO2022School District County City School Total RMVElk River Area ‐ 728 43.564  34.486  30.822  108.872  29.379 STMA ‐ 885 43.564  34.486  42.784  120.834  14.345 Monticello ‐ 882 43.564  34.486  15.488  93.538  17.879  21Payable Payable (%)2021 2022 Change CommentsResidentialMedian Appraised Value $        258,455  $        290,081  12.24% Reliable ‐ Provided by Wright County Less: Market Value Exclusion (13,979) (11,133) Max Benefit = $30,400 / Phase Out = $413,778 Taxable Market Value 244,476  278,948  Subtract MV Exclusion from Estimated MVClass Rate 1.00% 1.00% Set by Legislature (Over $500k is 1.25%)Tax Capacity 2,445  2,789  Taxable MV Multiplied by Class RateTax RatesCity of Otsego 34.653  34.486  ‐0.48%Wright County 43.719  43.564  ‐0.35%School District 31.717  30.822  ‐2.82%School District ‐ RMV 30.598  29.379  ‐3.98%Total Tax Rate 140.687  138.251  ‐1.73%Estimated Taxes of Median Appraised HomeCity of Otsego $                847  $                962  13.55% Tax Rate Multiplied by Tax CapacityWright County 1,069  1,215  13.70% Tax Rate Multiplied by Tax CapacitySchool District 775  860  10.88% Tax Rate Multiplied by Tax CapacitySchool District ‐ RMV 791  852  7.71% Market Value Multiplied by RMV Tax RateTotal Estimated Property Taxes $             3,482  $             3,889  11.67%2022 Taxes - CalculationCity of Otsego25%Wright County31%School District44% Capital Improvement Plan 23•10 YEAR PLAN (2022 – 2031)•THE CIP DOES NOT PROVIDE FINAL AUTHORITY•City Council approves each item specifically before expenditures incurred.•ESTIMATED 2022 INVESTMENT•$23,763,424•Proposed CIP items have feasible funding sources.Capital Improvement Plan (CIP) Capital Improvement Plan (CIP)•SIGNIFICANT 2022 ITEMS•Public Utility Systems•West WWTF Expansion ~ $15 million•Water Tower #4 ~ $2 million•Pavement Management•Street Maintenance ~ $984 thousand•Walesch Estates Renewal Project ~ $895 thousand Additional Budgets 26RequestedActual Actual Year‐to‐Date Budget BudgetDescription 2019 2020 2021 2021 2022Utility RevenuesOperating $     3,746,337  $     4,313,040  $     5,418,809  $     4,648,511  $     5,083,097 Non‐Operating 3,524,651  3,442,648  377,808  389,023  264,933 Availability + Connection Charges 4,880,689  6,363,246  6,022,926 2,292,698  3,274,509 Special Assessments 49,999  1,064,931  132,070  262,140  256,251 Bond Proceeds ‐ (0) 19,567,652  12,600,000  15,500,000 Subtotal12,201,676  15,183,864  31,519,264  20,192,372  24,378,790 ExpendituresPersonal Services 501,257  566,816  559,587  616,500  777,497 Supplies 485,690  425,475  737,417  636,794  840,362 Services & Other Charges 2,124,774  2,192,069  2,883,772  4,620,625  1,101,365 Capital Outlay (1,083,090) (1,091,397) 9,064,615  13,668,510  19,590,375 Depreciation 1,639,244  1,750,387  ‐ 2,469,535  2,873,134 Debt Service 785,662  478,668  11,502,319  2,779,689  3,823,167 Interfund Transfers 473,479  396,320  ‐ 384,100  293,500 Subtotal4,927,016  4,718,337  24,747,711  25,175,753  29,299,400 Excess (Deficiency) of RevenuesOver (Under) Expenditures$     7,274,660  $   10,465,528  $     6,771,553  $   (4,983,381) $   (4,920,610)Public Utility Funds 27RequestedActual Actual Year‐to‐Date Budget BudgetDescription 2019 2020 2021 2021 2022RevenuesTaxes $        734,293  $        746,758  $        374,775  $        749,551  $        547,187 Special Assessments 442,600  363,481  692,921  289,391  240,960 Investment Interest (net) 185 ‐‐‐‐Bond Proceeds ‐ 3,262,200  ‐ ‐ ‐Subtotal1,177,078  4,372,439  1,067,696  1,038,942  788,147 ExpendituresCapital OutlayPrincipal 1,145,000  4,500,000  1,360,000  1,360,000  660,000 Interest 228,917  222,250  153,062  153,062  144,431 Fiscal Agent Fee's 2,873  65,484  495  2,500  1,500 Subtotal1,376,790  4,787,734  1,513,557  1,515,562  805,931 Excess (Deficiency) of RevenuesOver (Under) Expenditures$       (199,712) $       (415,295) $       (445,861) $       (476,620) $         (17,784)Debt Service Funds Special Revenue FundsRequestedActual Actual Year‐to‐Date Budget BudgetDescription 2019 2020 2021 2021 2022RevenuesProperty Taxes $           60,816  $           56,491  $           22,937  $           45,874  $                      ‐Tax Increments 97,419  275,445  155,994  415,676  421,996 Investment Earnings 13,669  12,426  ‐ ‐ ‐Subtotal171,904  344,362  178,931  461,550  421,996 ExpendituresPersonal Services 1,133  1,875  ‐ 1,500  1,500 Services & Other Charges 2,725  2,950  2,535  7,500  7,500 Development Incentives 147,500  218,550  389,679  355,385  387,365 Transfer Out ‐ ‐ ‐ 71,648  ‐Subtotal151,357  223,375  392,214  436,033  396,365 Excess (Deficiency) of RevenuesOver (Under) Expenditures$           20,547  $        120,987  $       (213,283) $           25,517  $           25,631  Public InputCITY COUNCIL ACTION-ADOPT 2022 OPERATING BUDGETS-SET FINAL TAX LEVY FOR PAYABLE 2022-ADOPT THE 2022-2031 CIP Questions:CITY ADMINISTRATOR/FINANCE DIRECTOR – ADAM FLAHERTYAFLAHERTY@CI.OTSEGO.MN.US(763) 441-4414