Truth in Taxation Presentation (12-11-2023)Truth in Taxation2024 Budgets & Property Tax LevyPRESENTATION & PUBLIC INPUTDECEMBER 11, 2023
Before We Start•PROPERTY VALUATION •That is not the focus of this meeting.•No changes can be made at this meeting.•LOCAL BOARD APPEAL & EQUALIZATION MEETING•Annual Meeting between April 1 – May 31•Payable 2024 Valuation Meetings were Held:•April 24, 2023•May 8, 2023 (continued from April 24, 2023)
•MINNESOTA DEPARTMENT OF REVENUE•Requirement for cities with a population over 500•NOTIFICATION•County sends a parcel specific notice between November 11-24•PURPOSE OF THIS MEETING•Discussion of 2024 Budgets•Discussion of Levy for Taxes Payable 2024•Discussion of Capital Improvement Plan•Public InputTruth in Taxation
Otsego’s Strategic Vision
Budget Process•CITY COUNCIL OUTLINES 2024 BUDGET GOALS AND OBJECTIVES•STAFF PREPARE PROPOSED BUDGETS•PROPOSED BUDGETS REVIEWED•City Council Meetings from May to November (open to public)•7 Meetings Prior to Tonight•PRELIMINARY TAX LEVY•Certified September 25, 2023•FINAL BUDGET ADOPTION•Truth in Taxation Public Input
General Fund
General Fund SummaryBudgetBudget% Change$ Change20242023DescriptionRevenues18.12%$ 970,243 $ 6,324,793 $ 5,354,550 Taxes-0.75%(1,000)132,000 133,000 Cable Franchise Fees-2.27%(38,483)1,657,040 1,695,523 Licenses & Permits400.52%369,684 461,984 92,300 Intergovernmental-3.82%(10,261)258,515 268,776 Charges for Services-13.64%(600)3,800 4,400 Special Assessments28.75%6,900 30,900 24,000 Fines & Forfeitures40.68%30,920 106,920 76,000 Investment Interest133.33%10,000 17,500 7,500 Miscellaneous33.19%106,400 427,000 320,600 Interfund Transfers18.10%1,443,803 9,420,452 7,976,649 SubtotalExpenditures18.87%336,620 2,120,045 1,783,425 General Government18.31%623,612 4,029,903 3,406,291 Public Safety17.15%298,010 2,035,838 1,737,828 Public Works20.73%193,961 1,129,706 935,745 Culture & Recreation-7.41%(8,400)104,960 113,360 Economic Developmentn/a---Interfund Transfers18.10%1,443,803 9,420,452 7,976,649 Subtotal
RevenuesTaxes, 67%Cable Franchise FeeLicenses & PermitsIntergovernmentalCharges for ServicesMiscellaneousTransfers In2023Taxes, 67%Cable Franchise FeeLicenses & PermitsIntergovernmentalCharges for ServicesMiscellaneousTransfers In2024
•PROPERTY TAXES•Total Expenditures and Subtract Other Revenue Sources•LICENSES & PERMITS•Forecasting Fewer New Residential Construction Permits•INTERGOVERNMENTAL•Public Safety Aid - $285,686•TRANSFERS IN•Administrative Services Reimbursement - $427,000Revenues – Changes from 2023
ExpendituresGeneral GovernmentPublic SafetyPublic WorksParks & RecreationEconomic Development2023General GovernmentPublic SafetyPublic WorksParks & RecreationEconomic Development2024
•CITY COUNCIL; ADMINISTRATION; ELECTIONS; ASSESSING; FINANCE; INFORMATION TECHNOLOGY; LEGAL; HUMAN RESOURCES; AND CITY BUILDINGS.•Contingency Reduced - To Reflect Historical Actuals•Elections – There were no Elections in 2023•Communications•Website Update and Part-Time Staff Position•Information Technology•Consultant Retirement and Full-Time Staff Position•Wages and Benefits – Competitive Labor MarketGeneral Government – Changes from 2023
•POLICE PROTECTION; PUBLIC SAFETY COMMISSION; FIRE PROTECTION; BUILDING SAFETY; EMERGENCY MANAGEMENT; AND ANIMAL CONTROL.•Law Enforcement Contract - $443,890•Hourly Rate Increase - $105 per hour, 21% Increase•One-Time Assessment - $105,577•Fire Protection Contracts - $116,185 (11% Increase)•Emergency Services Director•Only Partial Year Budget in 2023Public Safety – Changes from 2023
Public Works – Changes from 2023•STREETS MAINTENANCE; ENGINEERING; STREET LIGHTS AND FLEET MANAGEMENT.•Snow Removal – Salt, Sand, and Pretreatment Chemicals•Compost Site – Cost sharing with the City of Albertville•Mechanic•Only Partial Year Budget in 2023•Fleet Services – Fuel, Vehicle & Equipment Maintenance, and Repairs•Wages and Benefits – Competitive Labor Market
•PARK MAINTENANCE; RECREATION; PARKS AND RECREATION COMMISSION; AND HERITAGE PRESERVATION COMMISSION.•Parks – Property Insurance•Recreation Programmer•Expand Recreation Offerings to Public and Full-Time Staff Position•Wages and Benefits – Competitive Labor MarketCulture and Recreation – Changes from 2023
Additional Budgets
16Public Utility FundsBudgetBudget20242023DescriptionUtility Revenues$ 7,679,101 $ 6,092,230 Operating3,721,630 315,433 Non-Operating3,733,574 3,855,100 Availability + Connection Charges382,206 433,411 Special Assessments19,600,000 10,245,000 Bond Proceeds35,116,511 20,941,174 SubtotalExpenditures1,175,404 879,286 Personal Services1,026,307 944,190 Supplies1,413,746 1,261,422 Services & Other Charges23,055,807 28,312,777 Capital Outlay4,274,943 3,629,859 Depreciation4,781,299 4,738,949 Debt Service427,000 469,657 Interfund Transfers36,154,506 40,236,140 SubtotalExcess (Deficiency) of Revenues$ (1,037,995)$ (19,294,966)Over (Under) Expenditures
17Debt Service FundsBudgetBudget20242023DescriptionRevenues$ 299,144 $ 544,416 Taxes176,239 186,238 Special Assessments--Bond Proceeds475,383 730,654 SubtotalExpenditures460,000 685,000 Principal98,406 119,406 Interest1,000 1,000 Fiscal Agent Fee's559,406 805,406 SubtotalExcess (Deficiency) of Revenues$ (84,023)$ (74,752)Over (Under) Expenditures
Special Revenue FundsBudgetBudget20242023DescriptionRevenues532,815 489,198 Tax Increments532,815 489,198 SubtotalExpenditures3,200 1,500 Personal Services4,500 7,500 Services & Other Charges471,410 450,226 Development Incentives479,110 459,226 SubtotalExcess (Deficiency) of Revenues$ 53,705 $ 29,972 Over (Under) Expenditures
Property Tax Levy
20•MARKET VALUE•Wright County Assessor sets valuations•Board of Appeal and Equalization (4-24-2023 & 5-8-2023)•CURRENT ENVIRONMENT HAS AN INCREASING TREND•2023 ASSESSMENT – PAYABLE 2024•Residential: 15.59%•Median Value (2022): $328,710•Median Value (2023): $403,700 or 22.81% Increase•Multi-Family: 10.32%•Commercial & Industrial: 21.67%•Agricultural: 17.09%2024 Tax Capacity - Factors
MarketValueClass RateTax CapacityTax Capacity
ADD THEM ALL UP = TAX BASETax Capacity - Continued $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000Residential Commercial &IndustrialAgricultural PersonalProperty2020202120222023202482%14%2%2%2024ResidentialCommercial & IndustrialAgriculturalPersonal Property
Tax RateTax Levy• $9,772,629Tax Capacity• $38,962,235Tax Rate• 25.0822024RMVTotalSchoolCityCountySchool District25.726 82.748 23.882 25.082 33.784 Elk River Area - 72813.643 91.175 32.309 25.082 33.784 STMA - 88517.737 72.500 13.634 25.082 33.784 Monticello - 882
2024 Tax Rates - Preliminary49.50542.12341.90841.31339.07136.32435.82135.55834.71428.50228.47627.13826.20825.08224.75920.912
2024 Tax Levy Summary2020 2021 2022 2023 2024General Operations$4,518,000 $4,671,000 $5,009,000 $5,366,000 $6,336,000Capital Projects1,873,000 2,362,000 2,988,590 3,344,939 2,265,393Debt Service746,758 749,551 547,187 544,416 1,083,012Tax Abatements56,491 45,874 40,228 74,668 88,224 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000Per Capita$ 430 $ 438 $ 430 $ 432 $ 415 City of Otsego
262024 Taxes - Calculation(%)PayablePayableCommentsChange20242023ResidentialSource - Wright County 22.81%$ 403,700 $ 328,710 Median Appraised ValueMax Benefit = $30,400 / Phase Out = $413,778 (907)(7,656)Less: Market Value ExclusionSubtract MV Exclusion from Estimated MV402,793 321,054 Taxable Market ValueSet by Legislature (Over $500k is 1.25%)1.00%1.00%Class RateTaxable MV Multiplied by Class Rate4,028 3,211 Tax CapacityTax Levy Divided by Tax Capacity * 100-15.18%25.082 29.572 City of Otsego - Tax RateTax Capacity Multiplied by Tax Rate6.41%$ 1,010 $ 949 City of Otsego - Estimated TaxesMonthly Equivalents$ 12 Law Enforcement$ 10 Fire Protection$ 20 Streets - Plowing & Maintenance$ 11 Parks and Trails
Capital Improvement Plan
28•10-YEAR PLAN (2024 – 2033)•THE CIP DOES NOT PROVIDE FINAL AUTHORITY•City Council approves each item specifically before expenditures incurred.•SNAPSHOT OF SOME 2024 PROJECTS•Pavement Management: $3.230M•Parks and Trails: $2.557M•Vehicles and Equipment: $600k•Water Utility: $6.911M•Sanitary Sewer Utility: $15.787MCapital Improvement Plan (CIP)
Public InputCITY COUNCIL ACTION-ADOPT 2024 OPERATING BUDGETS-SET FINAL TAX LEVY FOR PAYABLE 2024-ADOPT THE 2024-2033 CIP
Questions:CITY ADMINISTRATOR/FINANCE DIRECTOR – ADAM FLAHERTYAFLAHERTY@CI.OTSEGO.MN.US(763) 441-4414