ITEM 5.1_Truth in Taxation PresentationCITY OF
sera
ition
Levy
nput
0 December 12, 2016
Before We Start
O Property Valuation Questions
9 That is not the focus of this meeting.
The Board of Equalization meeting for those
questions is held annually between April 1— May
31.
Truth in Taxation
o Required by Statute 275.065, subd. 7
O Purpose
Discussion of 2017 Budgets
Discussion of Levy for Taxes Payable in 2017
Public Input
Budget Process — General Fund
Staff prepare Proposed Budgets
Proposed Budgets Reviewed
• City Council & Staff
• Occurs During Special City Council Meetings (open to public)
Preliminary Tax Levy& Budget
Certified September 26, 2016
Additional Budget Review
Final Budget Adoption
Truth in Taxation Public Input
1
Revenue Source
Taxes
Cable Franchise Fee
Licenses & Permits
Intergovernmental
Charges for Services
Investment Interest
Miscellaneous
Total
Per Capita
Pq �ZH ��Z
2016 2017 ($)
1 Budget Budget Chan
$ 3,544,352
$ 3,763,273
$ 218,921
107,000
132,000
25,000
641,565
788,900
147,335
343,590
56,800
(286,790)
57,000
105,550
48,550
50,000
33,000
(17,000)
136,755
161,042
24,287
$ 4,880,262
$ 5,040,565
$ 160,303
$ 326
$ 326
2017 General Fund - Expenditures
Parks &
Recreation
11%
Public Works
22%
Other F'arKS & Other
5% General Recreation 2%
12%
Government
26%
Public Safety
36%
Public Works
23%
General
Government
26%
Public Safety
37%
General Government
City Council
Administration
Elections
Assessing
Finance
Information Technology
Legal
Prairie Center
City Hall & PW Building
Old Town Hall
Total
2016 2017 ($)
Budget Budget Change Why?
$ 116,276 $
122,293
$ 6,017
469,467
457,164
(12,303)
291825
1,924
(27,901)
No election in 2017
761941
81,623
4,682
2881531
318,400
29,869
Personnel (Step Increases +Insurance)
72,000
94,500
22,500
Increased Contract Hours +Computers
86,000
114,000
28,000
To reflect trends in prior year a ctua I s
33,877
32,149
(1,728)
82,351
109,656
27,305
Insurance+Copier Rental Reclassifications
500
2,640
2,140
$ 1,255,768 $ 1,334,349 $ 78,581
Per Capita $ 84 $ 86
11
Public Safety
Pol ice Services
Public Safety Commission
Fire Protection
Building Inspection
Emergency Management
Animal Control
Total
Per Capita
2016
2017
($)
Budget
Budget
Change
Why?
$ 978,200
$ 1,020,700
$ 42,500
Wright County Hourly Contract Rate (3.7% Increase)
2,850
2,850
-
497,462
539,094
41,632
Contract Basis Increase (Parcels +Tax Capacity)
250,588
287,174
36,586
Personnel (Steps) + Increase Metro West Hours
14,400
10,920
(3,480)
13,500
14,400
900
$ 1,757,000
$ 1,875,138
$ 118,138
$ 117
$ 121
11
2016 2017 ($)
Budget Budget Change Why?
Public Works
Streets
$ 689,681 $
720,326
$ 30,645 Personnel (Step Increases +Workers Comp)
Engi neeri ng
85,000
86,400
1,400
Street Lighting
115,968
117,000
1,032
FI eet Ma i ntena nce
208,303
213,002
4,699
Tota 1
$
1,098,952
$
1,136,728 $ 37,776
Per Capita
$
73
$
73
11
Culture & Recreation
Park Maintenance
Recreation
Heritage Preservation Commission
Total
2016
Budget
2017
Budget
$ 381,806 $
390,811
151,396
191,229
2,450
2,450
($)
Chan
W hv?
$ 9,005 Personnel (Step Increases +Workers Comp)
39,833 Personnel (Pay Classification) + Prairie Festival
$ 535,652 $ 584,490 $ 48,838
Per Capita $ 36 $ 38
11
Economic Development
PlanningCommission
Planning
Economic Development
Transfers
Interfund Transfers
Total
2016 2017
Wdget BudgE
$ 3,000 $ 4,000
88,000 91,200
14,300 14,660
($)
Chan
W hv?
$ 1,000 Expect additional meetings
3,200 To reflect trends in prior year actuals
360
127,590 - (127,590) LGA Revenues -Allocated to Pavement Fund
$ 232,890 $ 109,860 $ (123,030)
Per Capita $ 16 $ 7
2017 Tax Levy - Factors
Market Value
Wright County is responsible for valuations
Current environment has an increasing trend
2016 Assessment / 2017 Payable 11% Increase
O Tax Capacity
• No legislative changes in class rate system
• Change dependent upon market value
• New Construction
Residential — 395 New Permits (2014 + 2015)
Commercial & Industrial — Gateway North
2017 Tax Levy - Factors
Tax Levy
City Increase of $609,539
Growing City = Growing Needs (General Revenues)
Planning for the Future (Capital Reserves)
Debt Service
Economic Development (Tax Abatements)
o Other Districts
• Wright County
• School Districts
o Elk River (#728), STMA (#885) & Monticello (#882)
2016 EM
2017 EMM
($)
Levy
Levy
Change
Components of Tax Levy
General Revenue
$
3,529,352 $
3,766,000
$
236,648
Capital Reserves
762,040
1,127,360
365,320
Debt Service
640,000
655,000
15,000
Tax Abatements
88,814
81,385
(7,429)
Tota 1
$
5,020,206 $
5,629,745
$
609,539
Per Capita Comparisons
City of Otsego
$
335 $
364
8.49%
Statewide
$
463
n/a
Source =
LMC
Tax Rate Comparisons
City of Otsego
37.921
37.879
-0.11%
Statewide
46.520
n/a
Source =
LMC
Region 7W
47.165
n/a
Source =
LMC
Metro Cities (10-25k)
46.960
n/a
Source =
LMC
Greater MN Cities (10-25k)
52.448
n/a
Source =
LMC
City of Rogers
37.879
38.687
Source =
County
City of Elk River
46.170
46.070
Source =
City
City of St. Michael
37.772
37.484
Source =
County
City of Al bertvi I I e
52.370
51.566
Source =
County
2017 Tax Levy — Tax Capac
16%
■ Residential
■ Commercial &
Industrial
■ Agricultural
Personal Property
18%
Residential
Commercial &
Industrial
Agricultural
ity
2016
5% 2%
2017
4% 3%
77 %
75%
Residential Commercial & Agricultural Personal
Industrial Property
Personal Property
2016 2017 N
Levy Levy Change Comments
Residential
Median Sale Price
$ 295,238 $
310,000
Less: Market Value Exclusion
(10,669)
(9,340)
Taxable Market Value
284,569
300,660
Class Rate
1.00%
1.00%
Tax Capacity
2,846
3,007
City of Otsego - Tax Rate
37.921
37.879
City of Otsego - Estimated Taxes
$ 1,079 $
1,139
Commercial
Arbitrary Example
$ 700,000 $
700,000
Tax Capacity
13,250
13,250
City of Otsego - Tax Rate
37.921
37.879
5.00% Source- Edina Realty (Value) / Increase % (County)
Max Benefit = $30,400 / Phase Out = $413,778
Subtract MV Exclusion from Estimated MV
Set by Legislature (Over $500k is 1.25%)
Taxable MV Multiplied by Class Rate
-0.11% Tax Levy Divided by Tax Capacity * 100
5.53% Tax Capacity Multiplied by Tax Rate
0.00% No change so that tax rate changes are evident
Class Rates are 1.50% - 2.00%
City of Otsego - Estimated Taxes $ 5,025 $ 5,019 -0.11% Tax Capacity Multiplied by Tax Rate
D17 Tax Lpvv - D-I-qtr-IhHt-Ir
Tax Rates
City of Otsego
Wright County
School District
School District- RMV
Tota I Tax Rate
Estimated Taxes of Median Sale Price
City of Otsego
Wright County
School District
School District- RMV
Total Estimated Property Taxes
2016
Levy
1 2017 1
Levy
M
Change
37.921
37.879
-0.11%
39.970
39.604
-0.92%
39.266
37.197
-5.27%
19.441
19.367
-0.38%
136.598
134.047
-1.87%
$ 1,079 $
1,139
5.53%
1,137
1,191
4.69%
1,117
1,118
0.09%
574
600
4.53%
$ 3,908 $
4,048
3.58%
Capital Improvement Plan (CIP)
O 10 Year Plan (2017-2026)
o The CIP does not provide final authority
on City Council approves each item specifically
before expenditures incurred
(40 Estimated 2017 Investment = $513741250
9 Proposed items have feasible funding sources
Capital Improvement Plan (CIP)
O Significant 2017 Items
Public Utility Systems
Rehabilitation of Water Tower #1 - $446k
Water Main Extension to Well #7 - $1.525M
Streets
Maintenance & Reconstruction - $1M
o 85t" & Maciver Street Construction - $850k
Parks - $760k
o Norin Landing & Lefebvre Creek Greenway
Vehicle Fleet - $399k
uni
L-J
Sanitary
Storm
Water
Sewer
Water
Public Utility Funds
Operating
$ 1,153,850
$ 1,598,576
$ 100,000
Non -Operating
168,588
-
-
Total Revenues
1,322,438
1,598,576
100,000
Personal Services
91,516
274,545
12,000
Supplies
212,486
164,703
22,500
Services & Other Charges
467,657
549,382
29,800
Capital Outlay
1,764,380
228,635
-
Depreciation
510,000
925,000
23,000
Debt Servi ce
100,000
100,000
-
Interfund Transfers
48,561
155,481
5,000
Total Expenses
3,194,600
2,397,746
92,300
Net Income / (Loss)
$ (1,872,162) $ (799,170) $ 7,700
[)Pht Sprvicc-
Des cri Pti on
Revenues
Taxes
Special Assessments
Utility Availability + Connection Charges
Investment Earnings
I nterfund Transfers
Subtotal
Expenditures
Principal
Interest
Fiscal Agent Fee's
Debt Service Amortizations
Subtotal
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Actual
Actual
Year -to -Date Budget
Budget
2014
2015
2016 2016
2017
$ 303,035
$ 610,000
$ 320,000 $
$ 655,000
682,089
539,160
568,177
438,681
2,402,922
1,760,425
3,226,881
1,726,000
145,095
47,219
-
-
-
154,000
50,000
49,000
3,533,142
3,110,804
4,165,058
2,868,681
6,575,000
1,130,000
3,210,000
3,160,000
1,368,571
1,263,180
1,239,608
1,172,859
2,866
4,630
2,475
4,750
-
(78,882)
-
(78,882)
7,946,437
2,318,928
4,452,083
- 4,258,727
$ (4,413,295)
$ 791,877
$ (287,025) $
$ (1,390,046)
Alk
-0
Description
Alk
Actual
2014
NFre
Actual
2015
,
Year -to -Date Budget
2016 2016
Budget
2017
Revenues
_
Taxes
$ 22,911
$ 23,000
$ 44,407 $
$ 81,385
Charges for Services
117,476
27,006
12,007
10,000
Investment Earnings
'
4,953
2,333
-
-
Miscellaneous
-
26,371
-
-
Subtotal
145,339
78,710
56,414
91,385
Expenditures
Services & Other Charges
50,612
59,060
48,426
91,385
Subtotal
50,612
59,060
48,426
91,385
Excess (Deficiency) of Revenues
Over (Under) Expenditures
$ 94,727
$ 19,651
$ 7,988 $
$ -
Remaining Steps
o City Council to take Public Input
o Consideration of Resolutions
Adopting the 2017 Annual Operating Budgets
Setting the Final Tax Levy for Payable 2017
Adopting the 2017-2026 CI P
Questions
Adam Flaherty, Finance Director
aflaherty@ci.otsego.mn.us
(763) 441-4414