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Financial Statements 5.17.2016MIT- wove' S. 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 53.5 40.0 37.0 35.5 40.0 30.5 25.5 62.5 77.0 41.0 35.5 33.0 511.0 42.6 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 52.0 43.5 38.5 39.0 37.5 58.5 43.5 62.0 41.5 33.5 64.0 42.0 555.5 46.3 2012 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 63.5 48.5 52.0 81.0 31.5 27.5 96.0 69.0 39.0 41.5 39.0 24.0 612.5 51.0 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 77.0 59.0 37.0 35.5 67.0 61.0 54.0 53.0 59.0 67.0 47.5 68.5 685.5 57.1 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 63.5 59.5 67.5 69.0 70.0 70.5 62.5 45.5 69.0 65.5 47.5 79.5 769.5 64.1 2015 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 64.0 53.0 53.0 41.5 56.0 83.5 77.0 75.0 78.5 65.5 80.5 77.5 805.0 67.1 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tot Month Total 78.0 68.5 69.0 77.0 71.5 82.5 0.0 0.0 0.0 0.0 0.0 0.0 446.5 74.4 _ bergaa I ov May 17, 2016 The Honorable Mayer and City Council Attn: Adam Flaherty City of Otsego 13400 90' Street NE Otsego, MN 55330 Dear Honorable Mayer and City Council: Thank you for the opportunity to provide auditing services to the City for the next one to three years. Our quotes based on the different options are as follows: Three year contract: For the year ended December 31, 2016 Audit of the City's Basic Financial Statements $26,950 For the year ended December 31, 2017 Audit of the City's Basic Financial Statements $27,600 For the year ended December 31, 2018 Audit of the City's Basic Financial Statements $28,300 One year contract: For the year ended December 31, 2016 Audit of the City's Basic Financial Statements $27,900 We appreciate the relationship we've had with the City over the last several years, and look forward to serving you in the future. If one of the above quotes meets the City's needs, please let us know. We will.then follow up with an engagement letter for the 2016 fiscal year.. Sincerely, Nancy M. Schulzetenberg, CPA City of Otsego Property Tax Levy Calculations Payable 2017 Revised: August 29, 2016 Levy Description 2015 2016 2017 Change Change 2017 Change Change Comment General Revenues 3,319,000 3,529,352 3,773,850 244,498 6.93% 3,773,850 244,498 6.93% Located on Page #2 of General Fund Binder Tax Abatements 23,000 88,814 81,385 (7,429) 8.36% 81,385 (7,429) 8.36% Consensus Amount - Reviewed May 9th Debt Service Series 2010D & Series 2011A 200,000 225,000 225,000 - 225,000 - Consensus Amount - Reviewed May 9th Series 2010B 410,000 415,000 430,000 15,000 430,000 15,000 Consensus Amount - Reviewed May 9th Sub -total 610,000 640,000 655,000 15,000 2.34% 655,000 15,000 Capital Reserves Pavement Management 320,000 339,200 356,160 16,960 356,160 16,960 Scenario #3(LGA+Debt + Annual s%) Trails Management 25,000 25,250 26,000 750 26,000 750 Capital Equipment 160,000 168,000 235,200 67,200 235,200 67,200 Scenario#3 (2017 Adjustment + Annual 3%) Parks Equipment 53,000 54,590 55,000 410 55,000 410 Fire Department 145,000 150,000 150,000 - 150,000 - Storm Water 25,000 25,000 25,000 25,000 - Unallocated - - - - 154,807 154,807 Counci's Discretion to Allocate or Eliminate Sub -total 728,000 762,040 847,360 85,320 11.20%1 1,002,167 240,127 31.51% Grand Total 4,680,000 5,020,206 5,357,595 337,389 6.72% 5,512,402 492,196 Tax Capacity 11,358,615 13,238,424 14,536,358 14,536,358 1% Calculation of EMV from County (4-25-16) Growth (%) 16.55% 9.80% 9.80% Tax Rate 41.202 37.921 36.857 37.921 Taxing 2016 2017 2017 Authority Tax Rate Tax Rate Change Tax Rate Change 1ty of Otsego 37.921 36.857 -2.81% 37.921 0.00% Vright County #DIV/0! #DIV/O! chool District #DIV/O! #DIV/O! Description 2016 2017 Change 2017 Change 4edian Residential Sale Price 298,210 313,120 5.00% 313,120 5.00% ess: MV Exclusion (10,401) (9,059) (9,059) 'axable Market Value 287,809 304,061 5.65% 304,061 5.65% -ax Capacity 2,878 3,041 3,041 2016 2017 2017 Taxing Estimated Estimated Estimated Authority Tax Tax Change Tax Change City of Otsego 1,091 1,121 2.68% 1,153 5.65% Wright County - - #DIV/O! - #DIV/01 School District - #DIV/O! - #DIV/01 Total 1,091 1,121 2.68% 1,153 5.65% Annual increase 29 62 In theory, if there are no changes to a properties respective market value, this would be the change in that properties City tax amount. According to Edina Realty, the Median Sale Price for a residential home in Otsego currently is $313,120.Obtained on August 22, 2016. U:\Budget\2017\Property Taxes\Tax Levy Calculations 8-29-2016 City of Otsego Property Tax Levy Calculations Future Tax Levies Revised: August 29, 2016 Requested Levy Description 2016 2017 2018 2019 2020 2021 2022 General Revenues 3,529,352 3,773,850 3,924,804 4,081,796 4,326,704 4,499,772 4,679,763 Tax Abatements 88,814 81,385 67,782 67,502 65,511 23,283 - Debt Service 2023 2024 2025 2026 2027 2028 4,960,549 5,158,971 5,365,330 5,687,249 5,914,739 6,151,329 Series 2010D & Series 2011A 225,000 225,000 215,000 205,000 195,000 195,000 400,000 400,000 350,000 350,000 325,000 325,000 325,000 Series 2010E 415,000 430,000 440,000 450,000 460,000 460,000 - - - - - - - NEW - 2018 Street Project - - - 124,991 124,991 124,991 124,991 124,991 124,991 124,991 124,991 124,991 124,991 NEW - Fire Station - 455,831 455,831 455,831 455,831 455,831 455,831 455,831 455,831 455,831 NEW - PWExpansion - - - - - - - NEW -City Hall NEW - Police Station - - - - - - - - - - Sub -total 640,000 655,000 655,000 779,991 1,235,822 1,235,822 980,822 980,822 930,822 930,822 905,822 905,822 905,822 Capital Reserves Comments Alternating Increases - 2 Years at 4%, 1 at 6% Current Abatements Only Debt Expires = 2028 Debt Expires = 2021 Debt Expires = 2028 ($1.98M Issue -10 Years) Debt Expires = 2034 ($5M Issue -15 Years) Potential item when looking out this far. Potential item when looking out this far. Potential item when looking out this far. Pavement Management 339,200 356,160 373,968 392,666 412,300 432,915 454,560 477,288 501,153 526,211 552,521 580,147 609,154 Scenario #3 (LGA + Debt + Annual 5%) Trails Management 25,250 26,000 26,500 27,000 27,500 28,000 28,500 29,000 29,500 30,000 30,500 31,000 31,500 $500 Annual Increase Capital Equipment 168,000 235,200 242,256 249,524 257,009 264,720 272,661 280,841 289,266 297,944 306,883 316,089 325,572 Scenario #3 (2017 Adjustment+Annual 3%) Parks Equipment 54,590 55,000 55,500 56,000 56,500 57,000 57,500 58,000 58,500 59,000 59,500 60,000 60,500 $500 Annual Increase Fire Department 150,000 150,000 160,000 170,000 - - - - - - - - - $10,000 Annual Increase Until Debt Issued Storm Water 25,000 25,000 25,500 26,000 26,500 27,000 27,500 28,000 28,500 29,000 29,500 30,000 30,500 $500 Annual Increase Sub -total 762,040 947,360 883,724 921,190 779,809 809,634 840,722 873,130 906,919 942,155 978,904 1,017,236 1,057,226 Grand Total 5,020,206 5,357,595 5,531,310 5,850,479 6,407,846 6,568,511 6,501,307 6,814,500 6,996,712 7,238,306 7,571,975 7,837,798 8,114,377 Tax Capacity 13,238,424 14,536,358 15,263,176 16,026,335 16,827,652 17,669,034 18,552,486 19,480,110 20,454,116 21,476,822 22,550,663 23,678,196 24,862,106 5%Annual Growth Growth (%) 9.80% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Tax Rate 37.921 36.857 36.240 36.505 38.079 37.175 35.043 34.982 34.207 33.703 33.578 33.101 32.638 Increase/(Decrease) for Same Tax Rate 154,807 256,712 226,944 (26,552) 131,848 534,070 572,646 759,791 906,022 979,570 1,141,324 1,313,701 Notes: Series 2010D & Series 2011A - Could levy for 3 fewer years by continuing the 2017 debt levy of $655k through 2025 instead of reducing in 2022 as shown above. U:\Budget\2017\Property Taxes\Tax Levy Calculations FUTURE