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Item 2. Budget 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 29, 2022    SUBJECT:   Budget Meeting #6      On Monday, Council and staff will resume review of the draft 2023 General Fund budget. This  meeting is the third and final the 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.    I have developed an outline of discussion topics below.     Budget Review  Council and staff will be reviewing General Fund department budgets as outlined in the attached  review schedule.    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.    Council Roundtable  This is an opportunity for the Council to express their current view on the budgets as presented  thus far and to discuss any recommended changes to the preliminary budgets and tax levies.    Next Steps  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.    It should be noted that the preliminary property tax levy is the amount used for truth‐in‐taxation  notices that are sent to the taxpayers by Wright County.      City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441‐4414 Fax (763) 441‐9163      The final budget and property tax levy will not be adopted by the City Council until December.  Changes to the budget can still be made between now and then but increases to expenditures  become difficult because the primary revenue source to pay for those increases is property taxes.  The property tax levy can be decreased between now and then, but the levy cannot be increased.    Staff is seeking direction from the City Council on how they would like to proceed.    Materials Attached for Discussion  1) Department Expenditure Review Schedule  2) Budget Narrative for City Administrator/Finance Director Flaherty  3) Budget Narrative for Assistant City Administrator/Human Resources Hille  4) Budget Narrative for Interim Parks and Recreation Director Jacobs  5) Budget Changes Tracking Summary  6) Property Tax Levy Summary  Department Page Completed Department Page Completed Department Page CompletedStreets 32YesPolice Services 25YesCity Administrator 7Street Lights 37YesFire Protection 27YesFinance 13Fleet Management 38YesEmergency Management 30YesInformation Technology 15Revenues 2YesAnimal Control 31YesLegal 17City Council 5YesAdministration 9YesHuman Resources 18Assessing 12YesElections 11YesPark Maintenance 40Public Safety Commission 26YesPlanning 47YesRecreation 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 8/25/2022 1 2023 Budget Narrative Adam Flaherty, City Administrator/Finance Director August 29, 2022 Current Staffing City Administrator/Finance Director: Adam Flaherty Accountant: Julie Weiers Finance Clerk: Mary Olson Utility Billing: Tammi Vaith Department Staff 1 2 8/25/2022 2 Current Staffing Building Permit Technician: Barb Williams Administrative Assistant: Kelly Thelen Administrative Assistant: Sandy Lindenfelser Department Staff •Building Permit Technician; 2024 •Finance Clerk (PT); 2026 •Payroll Clerk; 2027 •Emergency Management; TBD •Communications; TBD •Information Technology; TBD Department Current & Future: 3 4 8/25/2022 3 Strategic Plan Alignment •Positioning for Growth •Maintain strong financial position to support bond rating •Continued progression of the Emergency Services Study •Maintain high quality customer service •Engaging Stakeholders •Active participation in community partnerships •Increase collaboration with Local/State/Federal representation •Empowering the Organization •Communication •Employee Engagement •Training Opportunities Department Responsibilities: City Administrator •Conduit for City Council and City Staff •Meeting Agenda/Packets Review and Preparation •Implementation of Ordinances and Policies •Public Relations •Leadership for Management Team •Economic Development •Contract Administration 5 6 8/25/2022 4 •Budgets and Property Taxes •Financial Reporting and Audits •Investments •Cash Receipting: ~$4.1M per month •Vendor Payments: ~$2.8M per month •Debt Management •Risk Management •Builder and Developer Escrows •Customer Service •Assessment Searches: ~60 per month Department Responsibilities: Finance •Customer Service •Phone Calls: ~26 per day •User Accounts: 4,987 •Monthly Billing •3,406 Mailed Bills (67%) •$5.5M Total in 2021 •Payment Processing •Checks/Cash: ~836 per month (25%) •Online/Phone: ~3,374 per month (75%) •Work Orders •Meter Replacements: ~600 for 2022 YTD •Turn On/Off •Final Billings Departmental Responsibilities: Utility Billing 7 8 8/25/2022 5 •Customer Service •Phone Calls: ~68 per day •Cash Receipting •Licenses and Permits •Fences •Rental Housing •Peddler/Solicitors •Right-of-Way •Building Safety •New Construction, Additions, Decks, Roofs, Etc. •Inspections Scheduling •Other •MyCivic – Code Enforcement •Builder Escrows Departmental Responsibilities: Administration 616 571 666 700 693 893 968 722 1147 1227 1791 1856 0 500 1000 1500 2000 Total Permits Issued •Increase engagement with County/State/Federal Elected Officials •Encourage Utility customers to sign up for e-bills •Continued conversion of paper files to electronic retention •Expand and refine electronic workflows •Revised truth-in-taxation reporting requirements •Enhanced capital project tracking and reporting •Continue to expand forward looking financial forecasts •Explore feasibility of electronic vendor payments Goals: 9 10 8/25/2022 6 Thank you. 11 8/25/2022 1 2023  BUDGET  PRESENTATION General Fun(d) –Human Resources 101‐41800‐### OVERVIEW 1 2 8/25/2022 2 Department Responsibilities Department Responsibilities •Employee Benefits •Personnel Records •Payroll Processing •Employee Engagement/Recognition •On‐boarding •Recruitment/Hiring •Workers’ Compensation •Communications •Personnel Policy •DOT Drug & Alcohol Compliance Department Goals •Utilize Focus Group & Sunshine Committee  Employee Engagement and Communication •Classification and Compensation Study •Review Benefit Package and Broker for alternate  structure •Laserfiche past payroll information •Improve Onboard Process and Timeline •Create Partnership with ISD 728 & postsecondary  Schools –Shadow and Internship Programs •Grow and Further Development Internship  Program Strategic Plan Alignment •Empowering the Organization ‐Employee Engagement:City Staff will improve our strategic groups,  with the intention to increase cross department communication,  and engaged emerging leaders. The goal of these groups would be  to increase staff involvement in organizational culture, value and  behaviors; and ultimately outline these. Employees would use these  groups to participate in the strategic plan process. ‐Performance Review Structure Review: City Staff has expressed  interest in redesigning our Performance Review Process. Staff will  be implementing a new review process to better meet the needs  and expectations of city staff. ‐Improve Onboarding Experience: In late 2021 the City implemented  a new Human Resource Information System (HRIS), which has  improved the onboarding experience for new employees. Though  research and discussions, the city plans to further the timeline of  “on‐boarding” to engage new employees ‐Internal Communications: Internal communications is an area that  needs to be continuously monitored and improved on. Each  department functions differently, and so a communication  plan/road map would be helpful. 3 4 8/25/2022 3 Strategic Plan Alignment ‐continued •Engaging Stakeholders •Communication Initiatives:Begin with engaging staff on city projects and  initiatives, this will translate into their interaction with residents. Ideally utilizing  peer to peer influence to share and strengthen communication with the public. •Engagement with Elected Officials: Create communication with the new County  Commissioner after elections, work with school districts to keep up with on‐ going projects and concerns. •Increase Engagement in Advisory Commissions: Start informational Flyers for  residents to learn more about the commissions and their roles with the city.  •Positioning for Growth •Future Staffing Plan:In 2022 City Staff presented City Council with a future  projected staffing plan. City Staff will continue to improve and review the plan,  and work to implement the growth with council approval. •Recruitments/On‐Boarding: Assist various departments on the growth of staff by  aiding in recruitments, hiring, and on‐board of the additional staff added to the  City of Otsego. HIGHLIGHTS 5 6 8/25/2022 4 2022  Items  Completed •Employee Engagement  Survey •Employee Benefit Survey •MCMA Administrative Intern  Grant •Bamboo HR Implementation  &Payroll •DOT Clearinghouse •COBRA Administration  Implementation0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 1234567891011121314151617 Otsego ‐Employee Engagement Survey 2022 Aggregate Dept. Head Lead Staff Bamboo HR •HRIS system •Very  positive feedback from staff •Time cards on cell phones •Benefit information available to staff 24/7 •New features consistently being released •Online Employment Applications 7 8 8/25/2022 5 Dues & Memberships •Minnesota Employee Recreation & Services Council (MERSC) •Minnesota City Managers Association (MCMA) •Association of Public Management Professionals (APMP) •International City Managers Association (ICMA) •Random Drug Screen Membership Education & training •MCMA Annual Conference •MCMA Winter Workshop •Leadership ICMA •Employee Recognition •Wright County Admin Lunches •HR Area Group Lunches 9 10 8/25/2022 6 Contracted Services •Insights Discovery Profiles –New Hires •Sunshine Committee Training Sessions •Alerus COBRA Administration •Bamboo HR/TRAXPayroll Payroll Services •FSA Administration •Compensation Study 2023 Sunshine Committee & Focus Groups •Meet Monthly •Past Topics •Time Management •Happiness •Employee Survey 11 12 8/25/2022 7 Employer Paid Benefits •Health Insurance •One High Deductible Plan •Dental Insurance •Two  dental plan options •Short Term/Long  Term  Disability •60% of wages for Sickness and  Injury(Max. of $750) •AD&D Life Insurance ‐$25,000 •Health Savings Account (HSA) •Employer Contribution •*Proposed* Minnesota State  Retirement System (MSRS) •Contribution to Health Care Savings  Plan (HCSP) –match HSA amount 95.83% 4.17% Understanding of Benefits Offered Yes No 13 8/25/2022 1 2023 Budget Narrative Parks and Recreation Department AUGUST 29, 2022 INTERIM PARKS AND RECREATION DIRECTOR JACOBS Alignment With Strategic Plan: 1 2 8/25/2022 2 BUILD AND STRENGTHEN INTERGOVERNMENTAL COOPERATION AND COLLABORATION •CONTINUE TO WORK WITH THE DNR AND WRIGHT COUNTY TO IMPROVE ACCESS TO PARKS AND TRAILS THROUGHOUT THE CITY •WORK WITH ISD 728 FOR ADDITIONAL PROGRAMMING USING SCHOOL FACILITIES Engaging Stakeholders: PROVIDE QUALITY SERVICES AS WE GROW •STAFF WILL BE WORKING ON IMPROVEMENTS FOR: SCHOOL KNOLL, PRAIRIE PARK BALLFIELDS, CARRICK'S LANDING, WAYFINDING PROJECT •STAFF WILL ALSO BE EXPANDING RECREATIONAL PROGRAMMING BY SEARCHING FOR COMMUNITY PARTNERS TO OFFER DIVERSE PROGRAMMING. (RC, FISHING, PICKLEBALL, ETC.) Positioning for Growth: 3 4 8/25/2022 3 DEVELOP SKILLS AND BUILD OUR TEAM •ATTENDING TRAININGS TO KEEP UP ON ALL CERTIFICATIONS (TREE INSPECTOR, HERBICIDE, PLAYGROUND) •ATTENDING STATEWIDE CONFERENCES FOR STATE ACCREDITED ASSOCIATIONS •WEEKLY TEAM MEETINGS TO DISCUSS TEAM GOALS AND OBJECTIVES •CLEAR OBJECTIVES AND EXPECTATIONS TO ACHIEVE PROMOTION FROM MAINTENANCE I TO II Empowering the Organization STAFFING: 5 6 8/25/2022 4 Current Staff Parks and Recreation Staff (Left to Right) Pat Launderville Lead Parks Maintenance Connie Schwecke Recreation Coordinator Nick Jacobs Interim Parks and Recreation Director CJ Huettl Park Maintenance I Staff Model 7 8 8/25/2022 5 PARKS MAINTENANCE I SINCE THE LAST STAFF ADDITION, THE PARKS AND RECREATION DEPARTMENT HAS ADDED: •TWO PARKS (APPROX 65 ACRES) •8 ROUNDABOUTS •10+ MILES OF TRAIL •NEED ADDITIONAL HELP FOR PROACTIVE MAINTENANCE VS. REACTIVE •AGING INFRASTRUCTURE AND PLAY EQUIPMENT = INCREASING MAINTENANCE •ADDITION WOULDN’T START UNTIL APRIL OF 2023 Staff Addition 2023 •POTENTIAL NEED FOR FULL TIME RECREATION PROGRAMMER IN 2024/2025 -SEEING A NEED FOR ADDITIONAL PROGRAMMING FOR YOUTH AND SENIORS •POTENTIAL PARK MAINTENANCE I IN 2027 -NEED BASED ON ADDITIONAL PARKS, ROUNDABOUTS, TRAILS, NATURAL AREAS Future Growth Forecast 9 10 8/25/2022 6 Parks Maintenance Athletic Fields and Park Irrigation 11 12 8/25/2022 7 Playgrounds Inspection and Maintenance Seasonal Amenities 13 14 8/25/2022 8 Roundabouts Trails Summer and Winter Maintenance 42+miles 15 16 8/25/2022 9                          Department Statistics Recreation Events and Programs 2021-2022 17 18 8/25/2022 10 425 FAMILIES 1,100-1,250 PARTICIPANTS Egg Hunt Touch-A-Truck • 1,500+ Attendees 19 20 8/25/2022 11 MORE OFFERINGS IN 2022 WITH MORNING AND EVENING EVENTS 12 TOTAL Splash and Play Summer Entertainment 430 KIDS! Color Run (Morning and Evening Offering) 21 22 8/25/2022 12 Farmers Market Programs and Leagues 23 24 8/25/2022 13 7,000+ ATTENDEES IN 2021 Prairie Festival 380 FAMILIES 1,000-1,250 PARTICIPANTS Pumpkin Patch 25 26 8/25/2022 14 393 FAMILIES 1,250-1,400 PARTICIPANTS Santa Day Thank you! 27 28 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)                 Increase Contracted Hours from 48 to 50 Police Services 63,328                Total Expenditures ‐ Preliminary Budget (September 12 or 26) 7,909,767           Y:\Budget\2023\General Fund\2.0 - 2023 PRELIMINARY BUDGETS INPUT City of Otsego Property Tax Levy Calculations Payable 2023 Revised: August 25, 2022 $% $% 2021 2022 2023 Change Change 2023 Change Change General Revenues 4,671,000        5,009,000        5,245,000      236,000          4.71% 5,309,000        300,000          5.99% 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) 2,494,821      2,430,821        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% Annual Increase 145                 145                   Same Tax Rate Illustration (8‐22‐2022)Same Tax Rate Illustration (8‐29‐2022) Levy Description Y:\Budget\2023\Property Taxes\Tax Levy Calculations (2023)8‐29