ITEM 5.1 Resolution 14-650
ots11.17 o
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Administration
Lori Johnson, City Administrator
September 22, 2014
PRESENTER(s):
REVIEWED BY:
ITEM #:
Lori Johnson, City Administrator
Dan Jordet, Administrative
5.1
Services Director
AGENDA ITEM DETAILS
RECOMMENDATION:
It is recommended that the City Council consider the attached resolution establishing a preliminary
property tax levy of $4,680,000 for taxes payable in 2015; approve a preliminary General Fund
expenditure budget of $4,450,667, and set the public input meeting on the 2015 budget and property
tax levy for Monday, December 8, 2014, at 7:00 PM at Prairie Center.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No I No
BACKGROUND/JUSTIFICATION:
In preparation for setting the maximum property tax levy for 2015, the City Council and staff met in
work session seven times resulting in a proposed tax levy of $4,680,000 and a preliminary General Fund
expenditure budget of $4,450,667. The City is required to adopt a proposed budget and preliminary
property tax levy and certify the levy to the County Auditor prior to September 30. The final levy is
adopted following the public input meeting; that levy may be less, but not more, than the preliminary
levy. The preliminary levy is used to calculate the estimated tax amounts in the parcel specific notices
the County prepares and mails to all property owners in November.
The proposed levy of $4,680,000 is an $180,000, four percent increase above last year's levy. Of that
$180,000 increase, 74.84 percent is due to a levy increase of $134,715 for bonded debt payments. The
General Fund tax levy increase is $45,285, an increase of 1.38 percent above last year's General Fund tax
levy. The reserve fund levies are unchanged from last year.
Based on a preliminary estimate from Wright County, Otsego's tax capacity is projected to increase
12.69 percent, significantly higher than originally estimated. Based on this preliminary information, a
$200,000 homesteaded, residential property with no value increase will have a tax decrease of $68.71
or 7.71 percent. That same property with a five percent value increase will still have a tax decrease of
approximately $28.95 or 3.09 percent.
The General Fund budget expenditures are proposed to increase $167,791 or 3.92 percent. Public
safety accounts for the majority, 84 percent, of the total increase. The City contracts for service with
Wright County for police services and three surrounding communities for fire service. Those contracts
are increasing a total of $107,918 in 2015. The only other significant increase is the addition of part time
administrative and parks staff with cost of approximately $50,800. The remainder of the General Fund
expenditure budget increase is due to increased service demand and cost increases.
Between now and adoption of the final levy and budgets on December 8, the Capital Improvement Plan
(CIP), Utility budgets, compensation, fees, and reserve funds will be reviewed. The following work
session dates are proposed to coordinate with Council schedules as previously discussed:
• October 13 following the regular meeting— Utility Budgets
• October 27 following the regular meeting— Reserve fund analysis, fees, compensation, other
general items.
• November 19 at 5:30 — CIP
• November 24 following regular meeting — CIP
• Week of December 1— Optional as needed for outstanding items prior to December 8 public
input and levy adoption meeting.
SUPPORTING DOCUMENTS: X ATTACHED ❑ NONE
• Resolution 2014-65 Setting a Preliminary Property Tax Levy for Taxes Payable in 2015.
• General Fund Budget Summary
• Property Tax Levy Calculation Spreadsheet
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to adopt Resolution 2014-65 Setting a Preliminary Property Tax Levy for $ 4,680,000 for
Property Taxes Payable in 2015.
Motion to set the public meeting on the property tax levy for taxes payable in 2015 and operating
budgets for 2015 for Monday, December 8, 2014 at 7:00 PM at Prairie Center.
Motion to set special meetings ----insert desired meeting dates.
BUDGET INFORMATION
FUNDING: BUDGETED: ❑ YES
❑ NO
X NOT APPLICABLE
ACTION TAKEN
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
rd•7!iIJ,ICIkqI GO
RESOLUTION NO. 2014-65
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
A RESOLUTION SETTING A PRELIMINARY PROPERTY TAX LEVY FOR
TAXES PAYABLE IN 2015
WHEREAS, the Otsego City Council is required by State law to establish a preliminary tax
levy for taxes payable in 2015 by September 30, 2014 and certify the preliminary tax levy to
the Wright County Auditor; and
WHEREAS, the Otsego City Council has reviewed the City's anticipated expenditures for
funds using property tax proceeds in 2015; and
WHEREAS, the Otsego City Council has considered projected revenues for funds using
property tax proceeds in 2015; and
WHEREAS, revenues from sources other than property taxes are not sufficient to meet the
anticipated expenditures of said funds; and
WHEREAS, the debt levies have been adjusted or cancelled based on revenue collections
and projections.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF OTSEGO, MINNESOTA:
1. That the following amounts are the maximum to be levied as property taxes payable in 2015
for the following purposes:
General Government $4,047,000
Tax Abatement 23,000
GO Improvement Bonds 2010D 36,032
GO Improvement Bonds 2011A 163,968
Public Works Building Bond 2010B 410,000
Total Tax Levy 4 680 000
2. That said levy is a preliminary levy as required by State Law and establishes a maximum
levy amount for property taxes payable in 2015.
3. That a copy of this resolution be transmitted to the Wright County Auditor.
4. That a preliminary General Fund budget of $ 4,648,869 in revenues supporting $ 4,450,667
in expenditures be adopted subject to change at the final adoption of 2015 operating and
capital budgets.
G-161-1M►1 4
SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 22nd day of September 2014.
ATTEST:
Tauri Loff, City Clerk
2
CITY OF OTSEGO
Jessica Stockamp, Mayor
City of Otsego
General Fund Budget
for the year ending 31 December 2015
Revenues:
Taxes
Licenses and Permits
Intergovernmental Revenue
Charges for Service
Interest Revenue
Cable Franchise Fees
Other Revenues
TOTAL Revenues:
Expenditures:
General Government:
City Council
Administration
Elections
Assessor
Finance
Legal
Information Technology
City Hall
Planning
Building Inspection
Subtotal: General Government:
Public Safety:
Police
Police Commission
Fire
Emergency Management
Animal Control
Subtotal: Public Safety.,
Public Works:
Streets
Engineering
Street Lights
Fleet Maintenance
Subtotal PublicWorks
Culture & Recreation
Park Maintenance
Recreation
Prairie Center
Subtotal: Culture & Recreation:
Economic Development
Transfers Outl(In)
TOTAL Expenditures:
NET GENERAL FUND:
2011 2012
Actual Actual
2013 2014
Actual Budget
July Preliminary
2015 2015
Proposed Proposed
Increase or
Decrease
3,343,665
3,139,130
3,366,010
3,273,715
3,334,000
3,334,000
304,084
563,077
830,076
557,300
592,000
592,000
199,053
208,822
217,630
316,611
323,122
323,122
96,204
62,163
38,321
65,650
47,200
50,700
3,500
118,186
92,134
(4,766)
100,000
95,000
95,000
100,176
106,547
83,681
105,000
105,000
105,000
282,796
66,553
72,924
143,736
149,047
149,047
4,444,164
4,238,426
4,603,876
4,562,012
4,645,369
4,648,869
3,500
49,950
51,273
44,216
74,547
82,317
82,317
295,869
376,582
339,696
391,860
373,980
415,273
41,293
390
24,334
1,486
26,200
745
745
67,935
67,904
67,463
70,300
74,700
74,700
176,950
239,680
242,381
321,187
345,123
342,703
(2,420)
95,239
71,305
78,996
75,000
82,000
82,000
-
35,108
22,760
47,628
66,300
66,300
721
716
71,270
81,255
82,063
82,063
91,753
86,356
70,016
73,400
66,500
67,250
750
454,415
204,926
181,882
231,692
229,951
229,723
228
1,233,222
1,158,184
1,120,166
1,393,069
1,403,679
1,443,074
39,395
861,410
875,045
882,601
912,500
941,700
941,700
1,191
1,372
1,399
1,350
1,350
1,350
-
347,922
365,873
375,850
450,432
454,560
4,128
-
728
2,950
8,550
7,450
7,450
15,274
10,915
11,058
11,000
11,300
11,300
877,875
1,235,982
1,263,881
1,309,250
1,412,232
1,416,360
4,128
1,285,891
760,656
678,991
630,610
685,860
681,123
(4,737)
147,421
128,714
160,825
85,000
85,000
85,000
97,046
108,775
109,667
110,000
114,100
114,100
-
-
148,131
191,630
184,880
187,260
2,380
1,530,358
998,145
1,097,614
1,017,240
1,069,840
1,067,483
(2,357)
346,350
193,455
166,490
294,880
336,914
343,851
6,937
41,736
86,162
115,471
156,089
129,945
130,177
232
58,888
39,134
20,220
32,647
35,622
35,622
446,974
318,751
302,181
483,616
502,481
509,650
7,169
12,353
2,649
3,286
13,790
14,100
14,100
-
556,941
115,000
-
65,911
-
-
-
4,657,723
3,828,711
3,787,128
4,282,876
4,402,332
4,450,667
48,335
213,559
409,715
816,748
279,136
243,037
198,202
(44,835
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CityOtsego
Calculation of Property Tax Levy Options
for taxes payable 2015
1 lGeneral Fund Levy
2 Fire Reserve Levy
3 Storm Sewer Levy
4 Pavement Management Levy
5 Park Trail Management Levy
6 Capital Equipment Revolving Fund Levy
7 Parks Capital Equipment
8 Subtotal: Other Limited Levies
9 1 Subtotal: Limited Levy
10 2007B GO Improvement Bonds
11 2010A GO Equipment Certificate
12 2010B GO Building Bonds
13 2010D & 2011A GO Improvement Bonds
14 2003A Improvement Bonds
15 2004A Improvement Bonds
16 2006B Improvement Bonds
17 Subtotal: Bonded Debt Levies
18 Tax Abatement
19 TOTAL: Certified Levy
20 Dollar Increase
21 Percentage Increase
22
23
24
25
26
27
28
TC
ER
Tax Capacity Growth
Pay 2012
Pay 2013
2,831,000
3,213,145
480,000
140,000
-
57,765
300,000
300,000
25,000
25,000
150,000
175,000
50,000
25,000
1,005,000
722,765
3,836,000
3,935,910
150,000
150,000
100,000
100,000
75,000
75,000
100,000
100,000
425,000
425,000
-
17,000
4,261,000 4,377,910
116,910
2.74°/a
Tax for $ 200,000 homestead with stable value
Percentage change in City Property Tax Levy
Tax for $ 200,000 homestead with 5% growth in value
Percentage change in City Property Tax Levy
9,470,288
46.23%
Adopted
Beginning
Pay 2014
Pay 2015
3,273,715
3,319,000
145,000
145,000
25,000
25,000
320,000
320,000
25,000
25,000
160,000
160,000
53,000
53,000
728,000
728,000
4,001,715
4,047,000
200,285
410,000
-
200,000
100,000
-
75,000
(100.00%)
100,000
-
475,285
610,000
23,000
23,000
4,500,000
4,680,000
122,090
180,000
2.79%
4.00%
$ 924.56 $
10, 095, 765 11,376,427
44.57% 41.14%
6.60% 12.69%
891.46 $ 822.75
(3.58%) (7.71%)
936.04 $ 907.09
1.24% (3.09%)
Dollar Percentage
Change Change_
45,285
1.38%
-
0.00%
-
0.00%
-
0.00%
-
0.00%
-
0.00%
-
0.00%
-
0.00%
45,285
1.13%
-
0.00%
-
0.00%
209,715
104.71%
200,000
0.00%
(100,000)
(100.00%)
(75,000)
(100.00%)
(100,000)
(100.00%)
134,715 28.34%
- 0.00%
180,000 4.00%
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