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Item 1. 2023 Budget, Tax Levy and Capital Improvement Plan Review City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441‐4414 Fax (763) 441‐9163        TO:     Mayor and City Council    FROM:    Adam Flaherty, City Administrator & Finance Director    DATE:     August 22, 2022    SUBJECT:   Budget Meeting #5      On Monday, Council and staff will resume review of the draft 2023 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 to move the budgeting process forward  effectively and efficiently.    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 2023. This action  will take place at a regular Council meeting, either on the 12th or the 26th of September, depending  upon Council direction.    I have developed an outline of discussion topics below.     Property Tax 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 29 – 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) Department Expenditure Review Schedule  2) Budget Narrative for City Clerk Etzel  3) Budget Changes Tracking Summary  4) Property Tax Levy Summary  Department Page Completed Department Page Completed Department Page CompletedStreets 32YesPolice Services 25 City Administrator 7Street Lights 37YesFire Protection 27 Finance 13Fleet Management 38YesEmergency Management 30 Information Technology 15Revenues 2YesAnimal Control 31 Legal 17City Council 5YesAdministration 9 Human Resources 18Assessing 12YesElections 11 Park Maintenance 40Public Safety Commission 26YesPlanning 47 Recreation 42Heritage Preservation Commission 44YesPrairie Center 20Parks and Recreation Commission 45YesCity Hall & Public Works Building 22Planning Commission 46YesOld Township Site 24Building Safety 28Engineering 36Economic Development 48Interfund Transfers 50August 8 August 22 August 29Y:\Budget\2023\2023 Budget Calendar 8/18/2022 1 2023 Budget Narrative Audra Etzel, City Clerk August 22, 2022 Current Staffing City Clerk Audra Etzel Deputy Clerk Bethany Benting Department Staff 1 2 8/18/2022 2 •Agenda Packets •Official Notices •Minutes/Resolutions/Ordinances •Administer Elections •Licensing: Liquor, Gambling and Mobile Food Units •Data Requests •Records Retention Departmental Responsibilities Trends for the department: •Legal Documents E-Recorded: 2019 (49), 2020 (14), 2021 (35), 2022 (46*) •Public Hearings: 2019 (46), 2020 (30), 2021 (40), 2022 (22*) •Ordinance: 2019 (25), 2020 (18), 2021 (27), 2022 (15*) •Resolutions: 2019 (85), 2020 (84), 2021 (103), 2022 (66*) •Election Ballots Processed: Primary: 2018 (1,494), 2020 (735), 2022 (1,194) General: 2018 (6,228), 2020 (4,905), 2022 TBD •Absentee/Direct Ballots Processed: Primary: 2018 (98), 2020 (635), 2022 (107) General: 2018 (983), 2020 (6,484), 2022 TBD •Liquor Licenses: On-Sale and Sunday Licenses (7), Off-Sale Licenses (5), Off-Sale 3.2 (2), 3.2 On-Sale (1), and 3.2 and Wine Combination (1), for a total of 16 Liquor Licenses. •Lawful Gambling Premise Permits: 6 Premises Permits (2 Organizations) *Activity as of 8/18/2022 3 4 8/18/2022 3 •Deputy Clerk to complete year three of the Minnesota Municipal Clerks Institute •Laserfiche additional documents in storage area and former City Attorney files •Look into website contract •Research e-Subscription options Internal department goals: Strategic Plan Alignment Goals and Initiatives Positioning for Growth: -Work with community partners on polling locations and continued in-person voting options. -Engaging Stakeholders: -City website update/photos/formatting. -Utilize effective technology to easily maintain & locate data for public. -Explore possible software for e-subscribe. Empowering the Organization: -Continue cross training within the department. -Department staff training, development and advancement. -Records management. 5 6 8/18/2022 4 Thank you. 7 City of Otsego General Fund Budget ‐ 2023 Budget Changes Tracking Total Expenditures ‐ Draft Budget Binder (August 5) 7,871,939$        Remove Community Survey City Council (20,000)               Remove/Modify Advisory Commissioner Training Public Safety Commission (1,500)                 Heritage Preservation Commission (1,000)                 Parks and Recreation Commission (1,500)                 Planning Commission (1,500)                 Total Expenditures ‐ Preliminary Budget (September 12 or 26) 7,846,439           Y:\Budget\2023\General Fund\2.0 - 2023 PRELIMINARY BUDGETS INPUT City of Otsego Property Tax Levy Calculations Payable 2023 Revised: August 19, 2022 $% $% 2021 2022 2023 Change Change 2023 Change Change General Revenues 4,671,000        5,009,000        5,271,000      262,000          5.23% 5,245,000        236,000          4.71% Tax Abatements 45,874              40,228              87,744            47,516            118.12% 87,744              47,516            118.12% Debt Service Series 2010B 460,000            ‐                        ‐                       ‐                       ‐                         ‐                       Series 2018A 94,551              97,187              94,415            (2,772)             94,415              (2,772)             Series 2020A 195,000            450,000            450,000          ‐                       450,000            ‐                       **NEW** ‐                         ‐                        ‐                       ‐                       ‐                         ‐                       Sub‐total 749,551            547,187            544,415          (2,772)             ‐0.51% 544,415            (2,772)             ‐0.51% Capital Reserves Pavement Management 1,050,000        1,100,000        1,100,000      ‐                       1,100,000        ‐                       Trails Management 40,000              63,000              65,000            2,000              65,000              2,000              Parks Equipment 62,000              64,000              70,000            6,000              70,000              6,000              Capital Equipment Revolving 300,000            320,000            480,346          160,346          480,346            160,346          Fire Reserve 190,000            200,000            210,000          10,000            210,000            10,000            Storm Water 34,000              36,000              38,000            2,000              38,000              2,000              Capital Improvements 661,000            1,175,590        ‐                       (1,175,590)     ‐                         (1,175,590)     City Buildings & Property 25,000              30,000              35,000            5,000              35,000              5,000              Sub‐total 2,362,000        2,988,590        1,998,346      (990,244)        ‐33.13% 1,998,346        (990,244)        ‐33.13% Tax Rate Management (Flexibility) 2,468,821      2,494,821        Grand Total 7,828,425        8,585,005        10,370,326    1,785,321      20.80% 10,370,326      1,785,321      20.80% Growth (%) 8.82% 9.66% Tax Capacity 22,876,221      25,254,743      30,504,905    30,504,905      Growth (%) 10.29% 10.40% 20.79% 20.79% Net Tax Capacity 22,591,258      24,852,871      30,019,489    30,019,489      Growth (%) 10.22% 10.01% 20.79% 20.79% Tax Rate 34.653              34.545              34.545            34.545              Population 18,130              19,966              21,289            21,289              Tax Levy Per Capita 432                   430                   487                 487                   Taxing 2021 2022 2023 2023 Authority Final Tax Rate Final Tax Rate Estimate Change Estimate Change City of Otsego 34.653              34.545              34.545            0.00% 34.545              0.00% Wright County 43.719              43.751              43.751            0.00% 43.751              0.00% School District 31.717              30.889              30.889            0.00% 30.889              0.00% School District ‐ RMV 30.598              28.698              28.698            0.00% 28.698              0.00% Description 2021 2022 2023 Change 2023 Change Median Appraised Value 258,455            290,081            328,710          13.32% 328,710            13.32% Less: MV Exclusion (13,979)            (11,133)            (7,656)             (7,656)               Taxable Market Value 244,476            278,948            321,054          15.09% 321,054            15.09% Tax Capacity 2,445                2,789                3,211              3,211                2021 2022 2023 2023 Taxing Estimated Estimated Estimated Estimated Authority Tax Tax Tax Change Tax Change City of Otsego 847                   964                   1,109              15.04% 1,109                15.04% Wright County 1,069                1,220                1,405              15.16% 1,405                15.16% School District 775                   862                   992                 15.08% 992                   15.08% School District ‐ RMV 791                   832                   943                 13.34% 943                   13.34% Total 3,482                3,878                4,449              14.72% 4,449                14.72% Annual Increase 571                 571                   Illustration (8‐8‐2022) Illustration (8‐22‐2022) Levy Description Y:\Budget\2023\Property Taxes\Tax Levy Calculations (2023)8‐22