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HomeMy WebLinkAbout2003 12-01 City Council Special Meeting PacketAGENDA SPECIAL MEETING MAPLEWOOD CITY COUNCIL 7:00 P.M. Monday, December 1, 2003 Council Chambers, Municipal Building Meeting No. 03-29 A. CALL TO ORDER B. PLEDGE OF ALLEGIANCE C. ROLL CALL D. APPROVAL OF AGENDA E. PUBLIC HEARINGS 1. Proposed 2004 Budget and Tax Levy G. VISITOR PRESENTATIONS H. COUNCIL PRESENTATIONS I. ADMINISTRATIVE PRESENTATIONS J. ADJOURNMENT Sign language interpreters for hearing impaired persons are available for public hearings upon request. The request for this service must be made at least 96 hours in advance. Please call the City Clerk's Office at (651) 249-2001 to make arrangements. Assisted Listening Devices are also available. Please check with the City Clerk for availability. RULES OF CIVILITYFOR OUR COMMUNITY Following are some rules of'civility the City of'Maplewood expects of'everyone appearing at Council Meetings -elected officials, staff' and citizens. It is hoped that by following these simple rules, everyone s opinions can be heard and understood in a reasonable manner. We appreciate the fact that when appearing at Council meetings, it is understood that everyone will follow these principles: Show respect for each other actively listen to one another keep emotions in check and use respectful language. AGENDA NO. AGENDA REPORT TO: City Manager FROM: Finance Director RE: PUBLIC HEARING ON PROPOSED 2004 BUDGET AND TAX LEVY DATE: November 25, 2003 A public hearing on the proposed property taxes and budget for 2004 has been scheduled for December 1 at 7:00 p.m. in the Council Chambers. At the beginning of the hearing a video presentation of the proposed budget will be shown. Then citizen comments will be received. The public hearing can be continued on December 8 if additional time is needed. On September 4 the City Council increased the General Fund tax levy by $4,970 in the proposed budget: to provide a larger reserve for unexpected events. The tax levy included in the proposed budget was $4,970 under the state imposed levy limit. On November 24 the City Council discussed the following additional changes to the proposed General Fund budget: 1. Decreased expenditures by $37,210 due to a lower required contribution to the firefighters pension plan. 2. Increased expenditures by $14,000 for employee safety training. 3. Increased expenditures by $93,000 for repair of fire station roofs. Attached is a copy of the public hearing notice that was published. Also attached is a handout that will be distributed to citizens who attend the hearing. Page A-4 is a listing of property tax changes on homes with market values from $70,000 to $200,000. If a person thinks their property is incorrectly assessed, the phone number for the Ramsey County Assessor's office is 651-266-2000. State law requires that cities adopt their 2004 budget and property tax levy at a subsequent public hearing. Therefore, another public hearing has been scheduled for December 8 at 7:00 p.m. in the Council Chambers. The date, time and place for this hearing must be announced prior to adjournment of the public hearing on December 1. P\agn\2004budgethearing 1 Notice of Proposed Total Budget and Property Taxes The Maplewood city council will hold a public hearing on its budget and on the amount of property taxes it is proposing to collect to pay for the costs of services the city will provide in 2004. SPENDING: The total budget amounts below compare the city's 2003 total actual budget with the amount the city proposes to spend in 2004. 2003 Total Actual Budget X38,829,190 Proposed 2004 Budget X31,483,340 Change From 2003 - 2004 -18.9% TAXES: The property tax amounts below compare that portion of the current budget levied in property taxes in the city of Maplewood for 2003 with the property taxes the city proposes to collect in 2004. 2003 Property Taxes X11,927,880 Proposed 2004 Property Taxes X12,831,520 Change from 2003 - 2004 +7.6% LOCAL TAX RATE COMPARISON: The following compares the city's current local tax rate, the city's tax rate for 2004 if no tax levy increase is adopted, and the city's proposed tax rate for 2004. 2003 2004 Tax Rate if 2004 Proposed Tax Rate NO Lew Increase Tax Rate 36.319% 32.492% 35.755% Attend the Public Hearing All Maplewood residents are invited to attend the public hearing of the city council to express their opinions on the budget and the proposed amount of 2004 property taxes. The hearing will be held on: Monday, December 1, at 7:00 p.m. City Council Chambers Maplewood City Hall 1830 East County Road B Maplewood If the discussion of the budget cannot be completed, a time and place for continuing the discussion will be announced at the hearing. You are also invited to send your written comments to: Finance Director, City of Maplewood, 1830 East County Road B Maplewood, MN 55109 P\word\mi sc\H earingNotic e CITY OF MAPLEWOOD 2004 PROPOSED PROPERTY TAXES AND 2004 PROPOSED BUDGET PUBLIC HEARING DECEMBER 1, 2003 P:AFINANCE\WORD~BUDDOC~BDGTFiEAR.DOC HOW YOUR PROPERTY TAXES ARE DETERMINED BOX L BOX 4 Total Proposed Local Assessor's Budget Market Value -minus x times BOX Z BOX S All Non-Property State Tax Revenue, eg: Mandated * State Aid Class Rates * Fees, Etc. = equals =equals BOX 3 BOX () Property Tax divided by Total Revenue Needed "Tax Capacity" (Levy) (Formerly Assessed Value) = equals BOX 7 Property Tax Rate ("Tax Capacity" Rate) YOUR PROPERTY TAX = Your Property's Market Value X Class Rate(s) X "Tax Capacity "Rate Source: "Understanding Your Property Taxes. 1994 Edition." Minnesota Taxpayers Association, p. 6 P:AFINANCE\WORD~BUDDOC~BDGTFiEAR.DOC ~_r~ FORMULA FOR 2004 PROPERTY TAXES Example of tax calculation for a home using the proposed 2004 tax rate. Tax rate is for a home in ISD 622 and the Metro Watershed. Step 1 -Calculate Tax Capacity: MARKET STATE HOMESTEAD TAX VALUE X FORMULA = CAPACITY $156,000 $156,000 X .01 = $1,560 Step 2 -Calculate Tax based on Tax Capacity: TAX TAX PROPERTY CAPACITY X RATE = TAX $1,560 1 17.045 $1,825.90 Step 3 -Calculate Tax based on Market Value: MARKET TAX TAX VALUE X RATE = CAPACITY $156,000 0.19197 $299.47 Step 4 -Calculate Total Tax: NET TAX BASED TAXES BASED TOTAL ON TAX CAPACITY + ON MARKET VALUE = TAX $1,825.90 $299.47 $2,125.37 Step 5 -Calculate Homestead Credit: MARKET HOMESTEAD VALUE X FORMULA = CREDIT $156,000 $76,000 X .004 $304.00 $80,000 X .009 -72.00 $232.00 Step 6 -Deduct Homestead Credit: TOTAL HOMESTEAD NET TAX o CREDIT = TAXES $2,125.37 $232.00 $1,893.37 P:\FINANCE\WORD\BUDDOC\BDGTHEAR.DOC ~-~ ESTIMATED 2004 CITY PROPERTY TAX CHANGES TAX RATE CHANGES Payable 2003 Local Tax Rate Estimated Payable 2003 Local Tax Rate Percent Chi Tax rate on tax capacity Tax rate on market value for open space and fire safety bonds 36.319% 0.02946% 35.755% 0.02283% -1.6% -22.5% PROPERTY TAX CHANGES ON HOMES Estimated Market Value * Tax Capacity Tax Before Homestead Credit Increase Amount Increase (Decrease) Percent $ 70,000 $ 700 $266 $ 21 8.6% 100,000 1,000 381 31 8.9% 156,000** 1,560 594 47 8.6% 200,000 2,000 761 59 8.4% *The values listed for 2004 are 12% more than for 2003, which was the average change according to the Ramsey County Assessor's Office. **Median value home in Maplewood P:\FINANCE\W O RD\BU DDOC\B DGTH EAR. DOC A-4 MAPLEWOOD HOMEOWNER COSTS FOR SERVICES - 2004 Service Monthly Bill Rubbish removal $20.03 Phone service $24.00 Cable television $44.00 City property taxes $49.50* *Breakdown of city taxes on median value home: Police protection $15.23 Debt service on bond issues $10.10 Parks and recreation $5.24 Public works $5.11 Executive $4.66 Fire protection $4.00 Community development $2.63 All other services $2.53 P:\FINANCE\W O RD\BU DDOC\B DGTH EAR. DOC ~- c PROPERTY TAX RELIEF The legislature provides several different types of property tax relief. The homeowner's and renter's rebates are given to taxpayers whose property taxes are disproportionate to their income. More importantly, a targeting refund is available for homeowners whose taxes increase by more than 12% from the prior year. No income limits apply to this refund. Property owners file for the refunds using state form M1-PR which is sent out with state income tax instructions. The M1-PR form can also be obtained several ways as follows: ;.~ at post offices, libraries, and most banks; ;.~ by calling the Minnesota Department of Revenue at 651-296-3781; ~ on the Internet at http://www.taxes.state.mn.us; or ~ by writing to: Minnesota Tax Forms Mail Station 5510 St. Paul, MN 55146-5510 P:\FINANCE\W O RD\BU DDOC\B DGTH EAR. DOC ~- G TAX LEVY FOR 2004 U P 7.5% P:\FINANCE\WORD\BUDDOC\BDGTHEAR.DOC ~- / PROPOSED 2004 TAX LEVY APPROVED ON 9-4-03 2003 2004 Change Levv Levv Amount Percent General Fund: Gross levy $8,942,250 $9,903,320 $961,070 10.7% Debt Service Fund: Gross levy $2,191,930 $2,499,200 $307,270 14.0% C.I.P. Fund: Gross levy $373,700 $0 ($373,700) -100.0% Community Center Operations Fund: Gross levy $75,000 $181,000 $106,000 141.3% F.T.R. Fund: Gross levy $90,000 $0 ($90,000) -100.0% Housing Replacement Fund: Gross levy $50,000 $0 ($50,000) N/A Park Development Fund: Gross levy $205,000 $0 ($205,000) -100.0% Recreation Programs Fund: Gross levy $0 $248,000 $248,000 N/A Totals-All Funds: Gross levy $11,927,880 $12,831,520 $903,640 7.6% Levv Limit: Gross levy 11,927,880 12,831,520 $903,640 7.6% Less debt service levy (2,191,930) (2,499,200) ($307,270) 14.0% Less PERA levy (23,105) (24,722) ($1,617) 7.0% Net levy subject to limit 9,712,845 10,307,598 $594,753 6.1 Levy limit 9,712,847 10,307,598 $594,751 6.1 Amount over (under) limit (2) 0 $2 -100.0% P:\FINANCE\W O RD\BU DDOC\B DGTH EAR. DOC ~- THE FOLLOWING PAGES ARE AN EXCERPT FROM THE PROPOSED 2004 BUDGET P:\FINANCE\W O RD\BU DDOC\B DGTH EAR. DOC August 2003 Honorable Mayor and Council Members: In compliance with State Statutes, I am pleased to transmit the proposed 2004 Budget for the City of Maplewood. The major objectives of the 2004 Budget are designed to help the Council accomplish the goals and objectives established in June 2002 and February 2003. Much of the budget is concentrated on maintaining the "high quality and cost effective public services" provided to the residents of Maplewood. Changes in the budget reflect the attention and emphasis desired by the Council to meet the changing needs of the community. The most noteworthy objectives include limiting the General Fund expenditure increase to the inflation rate with an adjustment for city growth, converting the format of the operating budget from aline-item budget to a program and performance budget with a mission statement and performance effectiveness indicators for each program and expanding storm water management activities with financing by an environmental utility charge. The aforementioned objectives and many others (which are listed on the following pages) are part of a larger all encompassing goal of working effectively and efficiently. The Finance Director and his staff using input from the department heads prepared this document. It is in a format similar to the 2003 Budget, which received the Award for Distinguished Budget Presentation from the Government Finance Officers Association of the United States and Canada. It is intended that the format of this document and the information contained within it will clearly communicate the City's 2004 financial plans and provide an operations guide for all City departments. The budget is divided into three main sections: Operations, Capital Improvements, and Debt Service. Within the Operations section, the basic focus is on 2004 performance objectives for each department and the planned expenditures to accomplish the objectives. The focus of the Capital Improvements section is the construction projects planned for 2004. The Debt Service section focus is on the scheduled bond issue principal and interest payments due in 2004. Conserving the financial resources of the City is more important than ever. The budgeting function is the primary tool the Council has to make sure the City's limited resources are wisely utilized and to establish department objectives for the coming year. We continue with the combined objectives of ensuring Maplewood is an affordable place to live while providing the services that make it a good place to live. The Council's cooperative effort in the review and adoption of the 2004 Budget will be appreciated. I would also like to express my appreciation to all City personnel who assisted in the preparation of the 2004 Budget. Sincerely, Richard Fursman City Manager OFFICE OF THE CITY MANAGER 651-770-4524 CITY OF MAPLEWOOD 1 H3O EAST COUNTY ROAD B MAPLEWOOD, MN 55109 1-5 BUDGET OVERVIEW During preparation of the 2004 Budget, city staff focused on the long- MAJOR range goals established by the City Council and management staff at INITIATIVES retreats in June 2002 and February 2003. The goals were established after issues and opportunities were identified and prioritized. There are two new major initiatives included in the 2004 Budget based on these long-range goals. The major initiatives are as follows: 1. Converted the format of the operating budget from aline-item budget to a program and performance budget with a mission statement and performance effectiveness indicators for each program. 2. Planned expansion of storm water management activities with financing by an environmental utility charge One of the City's long-range goals is to develop a strong public works LONG-RANGE infrastructure (streets, storm sewers, etc.). The proposed new GOALS environmental utility charge will produce annual revenues of $1.1 million that will finance improvements for and maintenance of the storm sewer system. Approximately $844,000 of these new revenues will be used to finance storm water management activities that were previously financed by the General Fund. Another long-range goal is to improve the city's parks and trail system. In order to accomplish this the budget for the Park Development Fund is $454,070. The two projects that are included in the five-year Capital Improvement Plan for 2004 will be financed by the budget. These projects are the Sterling Oaks Park and Priory Preserve improvements. To address the goal to redevelop residential and commercial properties, the Housing Replacement Fund has been renamed the Redevelopment Fund and the budget includes planned expenditures of $200,640 for undesignated projects. Financing for the 2004 Budget is from revenue from the sale of the Larpenteur and Van Dyke properties. The City's tax levy for 2004 is $12,826,500 which is 7.5% higher than TAX LEVY 2003. This is despite a budget preparation process that involves close FOR 2004 scrutiny of proposed expenditures and a constant search for non-tax 7.5% revenues. HIGHER The tax levy increase is $898,670. About two-thirds of the increase ($591,400) represents the tax levy to recoup 60% of the state aid cuts that the Legislature enacted for 2004. (Cities were allowed to levy only 60% of the aid cuts.) The remainder of the increase is for debt service and is due to higher principal and interest payments on bond issues. Approximately 81 % of the 2004 tax levy is for operations and the remaining levy (19%) is for debt service costs on bond issues. 1-6 The tax bill adopted by the legislature in 2003 extended property tax levy STATE limits for one year. The limit for 2004 is based on the tax levy for 2003 TAX LEVY with an adjustment for 60% of the state aid cuts. There is no adjustment LIMIT LAW for growth and inflation. The 2004 Budget includes a property tax levy that is equal to the levy limit. CITY RECEIVES 26.2% OF TAXES a ~; 2004 EXPENDITURES BUDGET $31.5 MILLION In 2003 the City received 26.2% of the property taxes on property within the City. The following illustration indicates the allocation of property tax dollars by government type. 5.5% 26.2% 32.4% 35.9% Other City Schools County It should be noted that the above data is for property in Maplewood that is located within School District 622. Expenditures in the 2004 Budget are 18.9% less than 2003. The breakdown by section is listed in the following table: REVENUES AND EXPENDITURES BY SECTION Comparison of 2003 and 2004 Budget REVENUES EXPENDITURES Amount Change Amount Change Operations $25,241,850 -6.3% $25,680,600 -9.6% Capitallmprovements 1,172,470 -65.2% 2,347,120 -67.4% Debt Service 3,152,440 18.3% 3,455,620 7.7% Totals $29,566,760 -10.3% $31,483,340 -18.9% The difference between total revenues and expenditures will be financed by the use of surplus fund balances and bond issues. 1-7 OPERATING BUDGET This portion of the budget covers basic City services such as police, firefighting, street maintenance, recreation programs, park maintenance, planning, building inspections and utility maintenance. The expenditures for the funds within this portion of the budget are grouped by department and subdivided into programs for each department. Budget performance is measured based on the accomplishment of the objectives for 2004 listed for each department and by the performance effectiveness indicators listed for each program. Operating budget revenues for 2004 are 6.3% less than 2003. The OPERATING primary reason for this is due to elimination of the Employee Benefits BUDGET Fund from the budget. It has been eliminated from the budget because REVENUES the fund duplicates the benefit costs that are included in the Personal DOWN 6.3% Services category in each program budget. It has also been eliminated because the Employee Benefits Fund does not account for a program. Operating budget revenues for 2004 are 9% higher when the Employee Benefits Fund is excluded from 2003. AMBULANCE RATE INCREASE The revenue categories with the largest increase are licenses/permits and the charges for service category. Most of the increase in licenses/permits is due to a higher volume of building permits that is anticipated as a result of the 80-acre Legacy Village development. Charges for service is higher due to the new environmental utility charge and increases in the recycling and sanitary sewer utility rates. Revenues in the charges for service category include a planned increase in ambulance rates effective January 1, 2004 as indicated in the following table. AMBULANCE RATE INCREASES Increase 2003 2004 Amount Percent Non-transport Resident $225.00 $270.00 $45.00 20.0% Non-resident 225.00 290.00 65.00 28.9 Basic Life Support: Resident 635.00 710.00 75.00 11.8 Non-resident 665.00 740.00 75.00 11.3 Advanced Life Support 1: Resident 870.00 975.00 105.00 12.1 Non-resident 910.00 1,020.00 110.00 12.1 Advanced Life Support 2: Resident 975.00 1,100.00 125.00 12.8 Non-resident 1,025.00 1,155.00 130.00 12.7 Charge per mile 11.30 12.46 1.16 10.3 1-8 The 2004 ambulance rates are based upon the average 2003 ambulance rates charged by other providers as in past years. However, there is an additional 3% increase to adjust the average to an approximate rate that other providers will be charging in 2004. Ambulance service revenues for 2004 are projected to be $1,355,260 which is $217,250 and 19.1 % higher than the 2003 budget. Operating budget revenues for 2004 produced by utility service charges UTILITY RATES will total $5,012,680, which represents 19.9% of the total operating UP 5.3% budget revenues. Utility service charges consist of sewer service charges ($3,618,040), environmental utility charges ($1,093,290) and recycling charges ($301,350). Sewer rates need to be increased by 4.8% to finance the 2004 Budget for the Sanitary Sewer Fund and increase the fund working capital. Most of the revenues from the sewer rates finance the Metropolitan Council sewage treatment charges to Maplewood which will be 61.4% of the operating expenses for the Sanitary Sewer Fund in 2004. The sewage treatment charges for 2004 are anticipated to be $2,156,740 which is $78,050 more than the 2003 budget. The Metropolitan Council sewage treatment rates will increase by approximately 3.1 % but this will be offset by variations in annual sewage flow from Maplewood. The new environmental utility charge will finance current and expanded storm water management activities. Recycling charges will increase due to (a) an allocation of administrative costs totaling $34,000 to the recycling program, (b) an allocation of wages and benefits for the environmental health officer to the recycling program, and (c) an increase in recycling costs. The following table summarizes the proposed utility rate changes for an average home. UTILITY RATES IMPACT ON AN AVERAGE HOME Quarterly Charge Increase (Decrease) 2003 2004 Amount Percent Sewer service* $50.10 $52.50 $2.40 4.8% Environmental charge 0.00 5.25 5.25 N/A Recycling charge 4.65 5.40 0.75 16.1 Total $54.75 $63.15 $8.45 15.3% *Rate per 1,000 gals $2.50 $2.62 $0.12 4.8% 1-9 Operating budget expenditures for 2004 are $25.7 million, which is 9.6% OPERATING lower than 2003. The primary reason for this is due to elimination of the BUDGET Employee Benefits Fund from the budget. It has been eliminated from EXPENDITURES the budget because the fund duplicates the benefit costs that are DOWN included in the Personal Services category in each program budget. It 9.6% has also been eliminated because the Employee Benefits Fund does not account for a program. Another major change in the 2004 Budget is elimination of estimated expenditures for contingencies. These expenditures totaled $504,820 in six funds in the 2003 Budget. In the 2004 Budget the fund balances have been increased to provide a reserve for contingencies. Operating budget expenditures for 2004 are 7.1 % higher when the Employee Benefits Fund and contingency expenditures are excluded from 2003. Most of the increase is for wages and benefits as the 2003 budget amounts were based on the 2002 pay rates. This was because the union contracts had not been settled when the 2003 Budget was prepared. Population growth and commercial development requires budget increases in excess of the inflation rate in order to maintain the present level of City services. The size of population increases is directly related to the number of new housing units built. Commercial development can be monitored based on the valuation of non-residential building permits. For the past three years the amounts have been as follows: DEMAND FOR CITY SERVICES BASED ON GROWTH NON- RESIDENTIAL GROWTH RESIDENTIAL GROWTH Valuation of New Housing Percent Non-residential YEAR Units Population Chan a Buildin Permits 2000 129 34,947 -2.3% $35,661,840 2001 293 35,080 0.4% $40,205,519 2002 191 35,600 1.5% $61,908,694 The population for 2000 is from the U.S. Census Bureau. The population for 2001 and 2002 are estimates prepared by the Metropolitan Council. The average annual population increase between 1990 and 2000 was 1.3%. If this rate of increase continues, the city's population in 2003 will be 36,063 and in 2004 will be 36,531. 1-10 The number of full-time employees included in the 2004 Budget is 168. -1 This is a decrease of one position. The changes in budgeted full-time FULL-TIME positions are as follows: EMPLOYEES +1.00 Community Development Department - a building inspector apprentice position has been added with financing by permit revenues. This position was approved by the City Council on November 13, 2002. -1.00 Executive Department - a clerk-typist position has been eliminated in the Deputy Registrar office. This position will be replaced by two part-time positions. -1.00 Police Department - aclerk-typist position has been eliminated through attrition. -1.00 Parks and Recreation Department - a building custodian position has been eliminated at the community center to reduce operating expenses. +1.00 Public Works Department - a maintenance worker has been added with financing by the Environmental Utility Fund. Approximately 65% of the Operating Budget is accounted for in the 65% OF City's General Fund. Revenues projected for 2004 will be 4.5% higher OPERATING than the 2003 Budget. Expenditures will be 2.9% higher in 2004 than the BUDGET IN 2003 Budget. The 2004 Budget for the General Fund is a deficit budget GENERAL as 2004 expenditures exceed revenues by $559,090. The deficit will be FUND financed by using part of the surplus fund balance. 1-11 The following shows sources and uses of funds for the 2004 Budget compared to the 2003 Budget: Sources of funds: Current property taxes Other revenues Fund balance Tota I Use of funds: Expenditures CHANGE 2003 2004 INCREASE OVER 2003 BUDGET BUDGET (DECREASE) BUDGET $8,857,820 $9,370,480 $512,660 6,499,590 6,680,530 1,059,480 559,090 $16,416,890 $16,610,100 $16,145,220 $16,610,100 Net interiund transfers 271,670 0 Tota I $16,416,890 $16,610,100 180,940 (500,390) $193,210 $464,880 (271,670) $193,210 5.8% 2.8% (47.2%) 1.2% 2.9% (100.0%) 1.2% It has been common for the past several years to have a General Fund deficit budget. Despite this practice the fund balance in the General Fund has increased and has been maintained at an appropriate level. This is because it is city budget policy to make conservative revenue estimates and liberal expenditure estimates. Consequently, the General Fund ending balance is usually much higher than budgeted and provides a resource for financing the deficit in the annual budget. The 4.5% increase in General Fund revenues amounts to $693,600. The GENERAL FUND largest increases are in the current taxes and charges for service REVENUES categories. The increase in current taxes is $512,660 and this partially UP 4.5% offsets the $564,420 decrease in intergovernmental revenues. In 2004 current property taxes will be 58.4% of total revenues for the General Fund compared to 57.7% of the revenues in 2003. The increase in charges for service is $510,610 and almost half of this is for ambulance fees. Other charges with large increases are administrative charges on improvement projects which is up $166,580 and administrative charges for utility funds which is up $98,410. 1-12 GENERAL FUND The 2004 Budget includes recommended expenditures that are 2.9% EXPENDITURES higher than the 2003 Budget. The breakdown by department is as UP 2.9% follows: GENERAL FUND EXPENDITURES BY DEPARTMENT INCREASE % CHANGE 2004 OVER 2003 OVER 2003 BUDGET BUDGET BUDGET Community Development $1,157,750 $129,480 12.6% Executive 2,049,500 2,049,500 N/A Finance 671,670 91,250 15.7% Fire 1,758,880 177,400 11.2% General Government 0 -2,579,720 -100.0% Human Resource 312,240 24,450 8.5% Legislative 125,590 125,590 N/A Parks and Recreation 1,584,730 120,820 8.3% Police 6,702,810 721,090 12.1% Public Works 2,246,930 -394,980 -15.0% Total expenditures $16,610,100 $464,880 2.9% The largest increase is $2,049,500 in the Executive Department. This is due to the elimination of the General Government Department and the allocation of its budget to other departments but primarily to the Executive Department. The Legislative Department is also new in 2004 and its budget previously was included in the General Government Department. On a per capita basis, General Fund expenditures will increase in 2004 by 1.6% as indicated in the following table: GENERAL FUND EXPENDITURES PER CAPITA 2001 2002 2003 2004 ACTUAL ACTUAL BUDGET BUDGET Expenditures Population Per capita expenditures for General Fund PERCENT CHANGES: Percent change in expenditures Percent change in population Per capita expenditures percent change $13,995,173 $14,824,262 $16,145,220 $16,610,100 35,080 35,600 36,063 36,531 $399 $416 $448 $4551 5.4% 5.9% 8.9% 2.9% 0.4% 1.5% 1.3% 1.3% 5.0% 4.4% 7.6% 1.6% 1-13 Actual per capita expenditures for 2003 and 2004 may be significantly different than the budget amounts as population changes are difFicult to estimate and expenditures are usually less than the budget. An analysis of the General Fund cash flow for 2001 and 2002 indicated GENERAL FUND that the fund balance should be 21.4% of the revenues to finance cash BALANCE flow needs. The fund balance also needs to be large enough to finance WILL BE unexpected expenditures as the contingency account has been 36.6% eliminated from the 2004 budget. Therefore, the budgeted 12-31-04 fund OF BUDGET balance has been set at 36.6% of the 2004 budgeted revenues. This should provide a sufficient balance to cover cash flow needs and unexpected expenditures. Also, it is near the level that it was at in October 1989 when the city's bond rating by Moody's Investors Services was increased to its current level. The budgeted 12-31-03 fund balance was 35.6% of the 2003 budgeted revenues. CAPITAL IMPROVEMENTS BUDGET This portion of the budget covers the acquisition and construction of major facilities other than those financed by the Operating Budget. The revenues and expenditures within the Capital Improvements Budget are grouped by fund. The money within each fund is restricted for major equipment purchases and construction projects costing in excess of $50,000. All other capital outlay is financed within the Operating Budget. The 2004 Budget implements the first year of the 2004-2008 Capital Improvement Plan adopted by the City Council on June 9, 2003. This five-year plan is updated annually through a comprehensive capital needs planning process. Revenues for 2004 in the Capital Improvements Budget are $1,172,470 CAPITAL and 65.2% less than 2003. This decrease is caused primarily by a IMPROVEMENTS decrease in state street construction aid to finance improvement REVENUES projects. Major revenue sources for the 2003 Capital Improvement DOWN 65.2% Budget are tax increment revenues ($488,210) and miscellaneous revenues ($684,260) which includes investment interest and park availability charges. The Capital Improvement Budget expenditures are down significantly CAPITAL due to a change in the budget policy for public improvement projects. In IMPROVEMENTS the past the budget included planned expenditures for public EXPENDITURES improvement projects even though public hearings had not been held DOWN 67.4% and the projects had not been approved by the City Council. Beginning with the 2004 budget, planned expenditures for public improvement projects will no longer be included unless the public hearings have been held and the project has been approved by the City Council. The largest projects planned for 2004 include construction of an addition to the Public Works Building ($1,250,000), replacement of a fire truck ($371,350), development of the Sterling Oaks Park ($250,000) and 1-14 improvements to the Priory Preserve ($200,000). The impact of these items on operating costs will not be significant. Total 2004 expenditures are $2,347,120 and 67.4% less than 2003. DEBT SERVICE BUDGET This portion of the budget covers the payment of principal and interest on the City's bonded indebtedness. Each bond issue has a separate debt service sinking fund. Revenues for 2004 are 18.3% more than 2003 primarily due to an DEBT increase in property taxes. Major revenue sources, as in past years, are SERVICE property taxes ($2,474,200), special assessments ($596,630), and REVENUES interest on investments ($81,610). UP 18.3% Expenditures for 2004 are 7.7% more than 2003. The increase is due to DEBT SERVICE higher scheduled principal and interest payments. EXPENDITURES UP 7.7% The anticipated new debt issues for 2003 total $10,647,000 to finance public works improvements. At the end of 2004, general long-term net debt payable will be $44,469,297 which is 20% more than projected for the end of 2003. Operating Budget increases in the future will continue to exceed the FUTURE inflation rate because of population growth and increases in commercial GROWTH development. The City has experienced slow steady population growth WILL IMPACT since 1990. Average annual population increases between 1990 and OPERATING 2000 were 1.3%. It is anticipated that population growth will accelerate in BUDGET 2004 due to the 80-acre Legacy Village development. In 2002 the City issued building permits with a total valuation of $96.6 million. In 2001 the City issued building permits with a total valuation of $71.9 million. The Legacy Village development will have an estimated value of $162 million. Based on projections in the 2004-2008 Capital Improvement Plan, the CAPITAL Capital Budget will range from $8.5 million to $15.3 million in 2005-2008. IMPROVEMENT Major factors affecting the capital budgets will be (a) residential and EXPENDITURES commercial growth and (b) the number of public improvement projects IN that are approved for construction. Bond issues and capital notes to 2005-2008 finance the 2004-2008 Capital Improvement Plan total $36,294,500. 1-15 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET MAJOR OBJECTIVES ;.~ Establish department objectives and allocate financial resources to accomplish goals in the city's strategic plans. ;.~ Convert the format of the operating budget from aline-item budget to a program and performance budget with a mission statement and performance effectiveness indicators for each program. ;.~ Limit the General Fund expenditure increase to the inflation rate with an adjustment for city growth. ;.~ Levy property taxes for the Community Center Operations Fund to eliminate the working capital deficit and to replace the transfer from the General Fund to more clearly indicate the property tax subsidy for the center. ;.~ Levy property taxes for the Recreation Programs Fund to replace the transfer from the General Fund to more clearly indicate the property tax subsidy for these programs. ;.~ Provide a General Fund budgeted ending fund balance equal to 36.6% of the budgeted revenues to provide working capital to finance expenditures between the semi-annual receipt of property tax and state aid revenue and to provide a reserve for emergencies. ;.~ Expand storm water management activities with financing by an environmental utility charge. ;.~ Provide property tax revenue for the Debt Service budget to (a) pay principal and interest on bond issues and (b) amortize projected debt service fund deficits. a-i 2003 and 2004 BUDGET -ALL BUDGETARY FUNDS Financing Sources and Expenditures Bond Issue Proceeds and Surplus Balances 15.1% Financing Sources 2003 Budget - $38,8 Million Capital Improvements Debt Service 18.5% 8.3% ,~ Operations 73.2% Expenditures by Category 2003 Budget - $38.8 Million Bond Issue Proceeds and Surplus Balances 6.1 Financing Sources 2004 Budget - $31.5 Million Capital Improvements Debt Service 7.4% 11.0% Expenditures by Category 2004 Budget - $31.5 Million 2-2 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET REVENUE ASSUMPTIONS Tax revenues consist of property taxes (current, delinquent, forfeited tax sales, tax increment, and mobile home), charitable gambling taxes, and cable television franchise taxes. Current property tax revenues account for most of the revenues in this category. Tax revenues included in the budget are as follows: 2003 2004 Percent Budget Budget Change Operating Budget $9,215,130 $10,037,360 8.9% Capital Improvement Budget 1,069,450 488,210 -54.3% Debt Service Budget 2,170,020 2,474,200 14.0% Totals $12,454,600 $12,999,770 4.4% Property tax collections for 2004 are anticipated to be 99.8% of the amount levied. Special assessments are charges against property (a) for capital improvements such as street reconstruction and (b) for the collection of delinquent utility bills. Special assessment revenues consist of the following amounts: 2003 2004 Percent Budget Budget Change Operating Budget $48,800 $47,140 -3.4% Debt Service Budget 451,600 596,630 32.1% Totals $500,400 $643,770 28.7% Special assessment collections for 2004 will be 28.7% more than the 2003 Budget based on an analysis of new rolls, scheduled installments and historical collection rates. Business license fees are required to be paid annually in order to operate a business within the City. Liquor license fees and general business licenses account for most of the revenue in this category. Non-business license and permit fees are levied to finance the cost of inspecting and regulating new construction. All license and permit revenues are in the Operating Budget. In 2003 they total $1,068,910 and in 2004 they will total $1,320,650. Building permit fees generate most (49.5%) of the revenue in this category. Revenue estimates assume that rates for business licenses and permits will be increased by an average of 1.6% to keep pace with the 2-3 projected inflation rate for 2004. Non-business license and permit fee revenue estimates are based on the assumption that they will equal the average for 2000-2002. Intergovernmental revenues are monies from other governments in the form of grants, entitlements and shared revenues. Intergovernmental revenues consist of the following amounts: 2003 2004 Percent Budget Budget Change Operating Budget $1,335,410 $719,840 -40.7% Capital Improvement Budget 1,950,000 0 -100.0% Totals $3,285,410 $719,840 -78.1 Two items account for most of these revenues: state local government aid (LGA) and street construction state aid. For the year 2003, it originally was anticipated that LGA would be $400,030. However, none will be received in 2003 and none are anticipated for 2004 due to state fiscal problems. All LGA revenues are in the Operating Budget. Street construction state aid is a portion of state gasoline and motor vehicle registration fees that are allocated based on population and fiscal need. These revenues are in the Capital Improvement Budget. None is anticipated in 2004 as the City will have used its allotment prior to 2004. Charges for service consist of Community Center fees, recreation program fees, utility charges, miscellaneous department fees, and ambulance charges. In 2003 they total $9,288,700 and in 2004 they will total $11,043,440. Revenues from service charges will be 18.9% more than the 2003 Budget due to (a) an increase in sewer and recycling billing rates, (b) an increase in passport fees, (c) higher engineering fees, and (d) implementation of an environmental utility charge. Fines and penalties consist of (1) the City's share of fines collected by the County for court actions, (2) false alarm fees and (3) revenue from drug forfeiture proceedings. All of these revenues are in the Operating Budget. In 2003 they total $179,830 and in 2004 they will total $180,260. Revenues from fines and penalties will be 0.2% more than budgeted for 2003 based upon average actual collections for 2000-2002. 2-4 Miscellaneous revenues include interest on investments, internal service charges, park availability charges, and water availability charges. Miscellaneous revenues consist of the following amounts: 2003 2004 Percent Budget Budget Change Operating Budget $5,792,470 $1,893,160 -67.3% Capital Improvement Budget 346,950 684,260 97.2% Debt Service Budget 43,540 81,610 87.4% Totals $6,182,960 $2,659,030 -56.9% Internal service charges for employee benefits account for 58.6% of the miscellaneous revenues budget for 2003 and 0% for 2004. This decrease is due to elimination of the Employee Benefits Fund from the 2004 Budget for the reasons indicated in the Budget Overview section. a-s ALL BUDGETARY FUNDS REVENUE SUMMARY w 35 c 0 30 25 20 15 10 ^ Taxes ^ Special Assessments ^ Licenses/Permits ^ Intergovernmental Charges for Services ^ Fines/Penalties ^ Miscellaneous 2-6 03 BUDGET 04 BUDGET CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET REVENUE SUMMARY -ALL BUDGETARY FUNDS Total By Source Taxes Special Assessments Licenses and Permits Intergovernmental Revenue Charges for Services Fines and Penalties Miscellaneous PERCENT AMOUNT 2003 2004 OVER(UNDER) OVER(UNDER) BUDGET BUDGET 2003 BUDGET 2003 BUDGET $12,454,600 $12,999,770 4.4% 500,400 643,770 28.7% 1,068,910 1,320,650 23.6% 3,285,410 719,840 -78.1 9,288,700 11,043,440 18.9% 179,830 180,260 0.2% 6,182,960 2,659,030 -57.0% $545,170 $143,370 $251,740 ($2,565,570) $1,754,740 $430 ($3,523,930) Totals Total By Fund Operating Budget: Charitable Gambling Tax Community Center COPS More Grant Dental Self-Insurance East County Line Fire Employee Benefits Enhanced 911 Service Environmental Utility Fleet Management General Gladstone Fire District Hazardous Materials Information Technology Law Enforcement Block Grant Police Services Fund Recreation Programs Recycling Program Redevelopment Sanitary Sewer Total Operating Budget Capital Improvements Budget: Capital Improvement Projects Fire Safety Projects Fire Truck Replacement Historic Bruentrup Farm Open Space Park Development Public Improvement Projects Public Safety Dispatching Center Public Works Building Addition Sewer Lift Station No. 9 Street Construction State Aid Tax Increment Economic Development District #1-4 Tax Increment Economic Development District #1-5 Tax Increment Housing District #1-1 Tax Increment Housing District #1-2 Tax Increment Housing District #1-3 Tax Increment Housing District #1-4 Tax Increment Housing District #1-5 Tax Increment Housing District #1-6 Water Availability Charge - No. St. Paul Water Availability Charge - St. Paul Total Capital Budget Debt Service Budget: Debt Service Funds Grand Total 32,960,810 29,566,760 -10.3% 57,880 62,020 7.2% 2,146,600 2,072,040 -3.5% 0 0 N/A 0 0 N/A 0 0 N/A 3,761,310 0 -100.0% 26,330 24,710 -6.2% 0 1,106,960 N/A 947,230 748,720 -21.0% 15,357,410 16,051,010 4.5% 0 0 N/A 0 0 N/A 273,890 333,000 21.6% 16,770 0 -100.0% 0 4,980 N/A 546,320 785,330 43.7% 317,830 375,420 18.1 49,500 0 -100.0% 3,428,180 3,677,660 7.3% 26,929,250 25,241,850 -6.3% 370,340 5,490 -98.5% 0 0 N/A 113,280 25,060 -77.9% 0 0 N/A 0 9,560 N/A 460,860 568,650 23.4% 1,950,000 21,090 -98.9% 0 0 N/A 0 0 N/A 0 0 N/A 9,000 470 -94.8% 0 0 N/A 0 5,240 N/A 100,120 96,440 -3.7% 138,350 172,100 24.4% 35,710 43,480 21.8% 27,070 37,140 37.2% 22,470 33,480 49.0% 89,400 107,000 19.7% 1,980 2,700 36.4% 47,820 44,570 -6.8% 3,366,400 1,172,470 -65.2% 2,665,160 3,152,440 18.3% $32,960,810 $29,566,760 -10.3% ($3,394,050) 2-7 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET REVENUE SOURCES AS PERCENT OF TOTAL SOURCE 2003 PERCENT 2004 PERCENT BUDGET OF TOTAL BUDGET OF TOTAL Taxes $12,454,600 37.8% $12,999,770 44.0% Special Assessments 500,400 1.5% 643,770 2.2% Licenses and Permits 1,068,910 3.2% 1,320,650 4.5% Intergovernmental Revenue 3,285,410 10.0% 719,840 2.4% Charges for Services 9,288,700 28.2% 11,043,440 37.4% Fines and Penalties 179,830 0.5% 180,260 0.6% Miscellaneous 6,182,960 18.8% 2,659,030 9.0% Totals $32,960,810 100.0% $29,566,760 100.0% 2-8 CITY OF MAPLEWOOD, MINNESOTA 2003 BUDGET EXPENDITURE ASSUMPTIONS Personnel costs will decrease by 14.8% over the 2003 Budget due to a budgeting change for benefits. After adjusting for this change the actual costs will increase by 9.9% due to cost-of-living salary adjustments, step increases within pay ranges, benefits cost increases and changes in the number of employees. It is important to note that the 2003 budget for personnel costs was based on 2002 pay rates because union contracts were not settled when the 2003 Budget was prepared. Expenditures for materials and supplies will be 12.8% greater in 2004 primarily due to inflation and equipment purchases necessary for the year. Contractual services costs for 2004 will be 2.3% more than 2003 primarily due to inflation. Capital outlay and depreciation expenditures are anticipated to be 56.0% less than 2003 primarily due to lower expenditures in the Capital Improvements Budget. This is due to a budget policy change for public improvement projects. Prior to the 2004 Budget the anticipated expenditures for improvement projects were included in the budget before the public hearing on the project was held. Beginning with the 2004 Budget, the anticipated expenditures on public improvement projects will be added to the budget after the public hearing is held. Expenditures for debt service will be 9.1 % more in 2004 due to higher principal and interest payments on bond issues. The other charges category will be 40.5% less than 2003 primarily due to elimination of estimated expenditures for contingencies. In the 2004 Budget the reserves for contingencies are included in fund balances. 2-9 ALL BUDGETARY FUNDS EXPENDITURE SUMMARY w 45 c 0 40 35 30 25 20 15 10 5 0 Legislative Executive Debt Service ^Community Development ®General Government Human Resource Finance Fire Police Public Works Parks and Recreation 2-10 03 BUDGET 04 BUDGET CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET EXPENDITURE SUMMARY -ALL BUDGETARY FUNDS PERCENT 2003 2004 OVER(UNDER) Total By Department BUDGET BUDGET 2003 BUDGET Community Development $1,674,690 $1,733,810 3.5% Debt Service 3,333,170 3,617,310 8.5% Executive 1,808,260 2,049,500 13.3% Finance and Information Technology 971,170 1,144,550 17.9% Fire 1,703,280 2,176,860 27.8% General Government 4,700,330 0 -100.0 Human Resource 287,790 312,240 8.5% Legislative 130,330 194,330 49.1 Parks and Recreation 5,085,780 4,910,880 -3.4 Police 6,035,810 6,736,830 11.6 Public Works 13,098,580 8,607,030 -34.3% Totals 38,829,190 31,483,340 -18.9% Total By Type Personal Services 17,525,750 14,934,230 -14.8% Commodities 1,279, 530 1,443,150 12.8 Contractual Services 6,835,640 6,992,450 2.3% Capital Outlay and Depreciation 8,761,300 3,856,960 -56.0 Debt Service 3,270,260 3,568,340 9.1 Other Charges 1,156,710 688,210 -40.5% Totals 38,829,190 31,483,340 -18.9% Total By Fund Operating Budget: Charitable Gambling Tax 52,910 68,740 29.9% Community Center 2,271,980 2,101,530 -7.5% COPS More Grant 0 0 N/A Dental Self-Insurance 0 0 N/A East County Line Fire 0 0 N/A Employee Benefits 3,936,290 0 -100.0 Enhanced 911 Service 37,000 24,720 -33.2% Environmental Utility 0 925,590 N/A Fleet Management 690,880 612,810 -11.3% General 16,145,220 16,610,100 2.9% Gladstone Fire District 0 0 N/A Hazardous Materials 0 0 N/A Information Technology 389,070 470,660 21.0% Law Enforcement Block Grant 16,710 0 -100.0 Police Services Fund 380 300 -21.1 Recreation Programs 798,850 769,930 -3.6 Recycling Program 303,140 375,420 23.8% Redevelopment 343,280 200,640 -41.6% Sanitary Sewer 3,428,180 3,520,160 2.7% Total Operating Budget 28,413,890 25,680,600 -9.6 Capital Improvements Budget: CapitallmprovementProjects 290,160 104,520 -64.0% Fire Safety Projects 0 0 N/A Fire Truck Replacement 1,800 372,980 20621.1 Historic Bruentrup Farm 0 0 N/A Open Space 0 620 N/A Park Development 551,040 454,070 -17.6% Public Improvement Projects 6,036,670 1,370 -100.0 Public Safety Dispatching Center 0 0 N/A Public Works Building Addition 200,000 1,250,000 525.0 Sewer Lift Station No. 9 0 0 N/A Street Construction State Aid 590 30 -94.9 Tax Increment Economic Development District #1-4 0 0 N/A Tax Increment Economic Development District #1-5 80 170 112.5 Tax Increment Housing District #1-1 180 180 0.0 Tax Increment Housing District #1-2 180 190 5.6 Tax Increment Housing District #1-3 170 170 0.0 Tax Increment Housing District #1-4 26,960 37,030 37.4 Tax Increment Housing District #1-5 22,340 33,350 49.3 Tax Increment Housing District #1-6 77,060 92,300 19.8 Water Availability Charge - No. St. Paul 80 90 12.5 Water Availability Charge - St. Paul 270 50 -81.5 Total Capital Budget 7,207,580 2,347,120 -67.4% Debt Service Budget: Debt Service Funds 3,207,720 3,455,620 7.7% GrandTotal $38,829,190 $31,483,340 -18.9% 2-11 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET EXPENDITURE TYPES BY DEPARTMENT AS PERCENT OF TOTAL 2003 PERCENT 2004 PERCENT TYPE BUDGET OF TOTAL BUDGET OF TOTAL Personal Services $17,525,750 45.1% $14,934,230 47.4% Commodities 1,279,530 3.3% 1,443,150 4.6% Contractual Services 6,835,640 17.6% 6,992,450 22.2% Capital Outlay and Depreciation 8,761,300 22.6% 3,856,960 12.3% Debt Service 3,270,260 8.4% 3,568,340 11.3% Other Charges 1,156,710 3.0% 688,210 2.2% Totals $38,829,190 100.0% $31,483,340 100.0% DEPARTMENT Community Development $1,674,690 4.3% $1,733,810 5.5% Debt Service 3,333,170 8.6% 3,617,310 11.5% Executive 1,808,260 4.7% 2,049,500 6.5% Finance and Information Tech. 971,170 2.5% 1,144,550 3.6% Fire 1,703,280 4.4% 2,176,860 6.9% General Government 4,700,330 12.1 % 0 0.0% Human Resource 287,790 0.7% 312,240 1.0% Legislative 130,330 0.3% 194,330 0.6% Parks and Recreation 5,085,780 13.1 % 4,910,880 15.6% Police 6,035,810 15.5% 6,736,830 21.4% Public Works 13,098,580 33.7% 8,607,030 27.3% Totals $38,829,190 100.0% $31,483,340 100.0% 2-12 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET POLICIES ON FUND BALANCES AND RETAINED EARNINGS OPERATING BUDGET: General Fund -the projected 12-31-04 fund balance is equal to 36.6% of the budgeted revenues to provide working capital to finance operations between the semi-annual receipt of property tax and State aid revenues and to provide a reserve for emergencies. The fund balance was at 36.1 % of the budgeted revenues in October, 1989 when the city's bond rating was increased to Aa by Moody's Investors Services. Special Revenue Funds Charitable Gambling Tax Fund -this fund is used to hold charitable gambling taxes until they are allocated by the City Council based upon requests received. Consequently, the balance in this fund will fluctuate greatly. Cops More Grant Fund -accounts for federal grant money received in 2003 which was used to purchase crime-mapping software. This fund was closed in 2003. East County Line Fire District Fund -this fund was closed in 2003. Enhanced 911 Service Fund -this fund accounts for state aid for the 911 emergency phone dispatching costs. The fund balance will fluctuate depending on the timing of state aid eligible expenditures. Gladstone Fire District Fund -this fund will be closed in 2002. Hazardous Materials Fund -this fund is designed to finance the one-time costs that will be incurred in developing a hazardous materials response team. Consequently, the size of the fund balance is completely dependent on the timing of the expenditures. It is anticipated the final costs will be incurred in 2003 and the fund will be closed at that time. Law Enforcement Block Grant Fund -this fund accounts for grant money received from the U.S. Department of Justice. The fund was closed in 2003. 2-13 POLICIES ON FUND BALANCES AND RETAINED EARNINGS (cont.) Police Services Fund -this fund was established to account for money that is legally restricted for police services. Most of the revenues for this fund are from confiscated money that is split between the city, county and state based on a statutory formula. The city's share is 70%. The balance in this fund will fluctuate greatly. Recreation Programs Fund -the projected 12-31-03 fund balance is 7.0% of the 2004 budgeted expenditures. It is current policy to maintain the fund balance at approximately 5-10% of the budgeted expenditures. Redevelopment Fund -this fund accounts for the Previously it was titled the Housing Replacement Fund depending on program activities. Enterprise Funds City's redevelopment activities. . The fund balance will fluctuate Community Center Operations Fund -the projected 12-31-04 cash balance is $12,684 and this approximates the working capital balance. It is planned that the working capital will be gradually increased to 5% of the budgeted operating expenses. Environmental Utility Fund -this fund accounts for the City's storm water management program and projects. The balance in the fund will fluctuate depending on projects and program activities. Recycling Program Fund -the projected 12-31-04 cash balance is $39,814 and this approximates the working capital balance. It is current policy to maintain the working capital at 10% of the budgeted operating expenses. Sanitary Sewer Fund -the projected 12-31-04 cash balance is $636,285 and this approximates the working capital balance. Utility rates are set to provide working capital equal to at least 33% of the annual budgeted expenses. Internal Service Funds Dental Self-Insurance Fund -this fund was closed in 2001. Fleet Management Fund -internal service charges provide most revenues for this fund. Annual increases in the internal service charges are set to produce a small net income. This process is designed to produce a cash reserve equal to the amount of accumulated depreciation for replacement of vehicles and equipment as many fixed assets in this fund are in excess of five years old. Information Technology Fund -the projected 12-31-04 cash balance is $704,213 and this approximates the working capital balance. Internal service charges are set to provide working capital equal to at least 33% of the annual budgeted expenses. 2-14 POLICIES ON FUND BALANCES AND RETAINED EARNINGS (cont.) CAPITAL IMPROVEMENT BUDGET: The fund balances in the funds within the Capital Improvement Budget vary annually based upon the timing of construction projects. Normally the year-end fund balance is positive except for the Public Improvement Projects Funds which may have a temporary deficit pending the issuance of public improvement bonds. DEBT SERVICE BUDGET: Debt service fund balances fluctuate annually in large part due to prepayment of deferred special assessments which can not be forecasted. Annual tax levies for the debt service funds are adjusted based upon the amortization of the projected surplus or deficit for each bond issue. a-is THIS PAGE INTENTIONALLY LEFT BLANK 2-16 CITY OF MAPLEWOOD, MINNESOTA ALL BUDGETARY FUNDS BUDGETED CHANGES IN FUND BALANCES/RETAINED EARNINGS Total By Fund Operating Budget: Charitable Gambling Tax Community Center COPS More Grant Dental Self-Insurance East County Line Fire Enhanced 911 Service Environmental Utility Fleet Management General Gladstone Fire District Hazardous Materials Information Technology Law Enforcement Block Grant Police Services Fund Recreation Programs Recycling Program Redevelopment Sanitary Sewer Total Operating Budget Capital Improvements Budget: Capital Improvement Projects Fire Safety Projects Fire Truck Replacement Historic Bruentrup Farm Open Space Park Development Public Improvement Projects Public Safety Dispatching Center Public Works Building Addition Sewer Lift Station No. 9 Street Construction State Aid Tax Increment Economic Development District #1-4 Tax Increment Economic Development District #1-5 Tax Increment Housing District #1-1 Tax Increment Housing District #1-2 Tax Increment Housing District #1-3 Tax Increment Housing District #1-4 Tax Increment Housing District #1-5 Tax Increment Housing District #1-6 Water Availability Charge - No. St. Paul Water Availability Charge - St. Paul Total Capital Budget Debt Service Budget: Debt Service Funds Grand Total NET OTHER BALANCE INCREASES BALANCE 01-01-04 REVENUES (DECREASES) EXPENDITURES 12-31-04 $18,936 $62,020 $0 $68,740 $12,216 9,561,817 2,072,040 0 2,101,530 9,532,327 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 13 24,710 0 24,720 3 273,320 1,106,960 0 925,590 454,690 2,716,715 748,720 (1,250,000) 612,810 1,602,625 6,430,845 16,051,010 0 16,610,100 5,871,755 0 0 0 0 0 0 0 0 0 0 1,233,803 333,000 0 470,660 1,096,143 0 0 0 0 0 99,646 4,980 0 300 104,326 38,820 785,330 0 769,930 54,220 141,373 375,420 0 375,420 141,373 206,446 0 0 200,640 5,806 10,832,909 3,677,660 (80,500) 3,520,160 10,909,909 31,554,643 25,241,850 (1,330,500) 25,680,600 29,785,393 109,855 5,490 0 104,520 10,825 0 0 0 0 0 501,268 25,060 0 372,980 153,348 0 0 0 0 0 191,281 9,560 0 620 200,221 913,925 568,650 0 454,070 1,028,505 421,853 21,090 239,000 1,370 680,573 0 0 0 0 0 0 0 1,250,000 1,250,000 0 0 0 0 0 0 9,432 470 0 30 9,872 0 0 0 0 0 3,026 5,240 0 170 8,096 4,811 96,440 (96,260) 180 4,811 8,579 172,100 (171,910) 190 8,579 2,165 43,480 (43,310) 170 2,165 6,326 37,140 0 37,030 6,436 6,854 33,480 0 33,350 6,984 101,689 107,000 0 92,300 116,389 27,751 2,700 0 90 30,361 15,748 44,570 (33,460) 50 26,808 2,324,563 1,172,470 1,144,060 2,347,120 2,293,973 2,590,593 3,152,440 344,940 3,455,620 2,632,353 $36,469,799 $29,566,760 $158,500 $31,483,340 $34,711,719 Note: The amounts listed in the column labeled NET OTHER INCREASES (DECREASES) consist of the following: transfers between funds, bond issue proceeds and credits arising from the transfer of depreciation expense to contributed capital. 2-17 SUMMARY OF PERSONNEL BY DEPARTMENT BUDGETED FULL-TIME REGULAR EMPLOYEES Community Development Executive Finance and Information Tech. Fire Human Resource Parks and Recreation Police Public Works 2-18 City of Maplewood, Minnesota SUMMARY OF PERSONNEL BY DEPARTMENT NUMBER OF BUDGETED REGULAR EMPLOYEES 2003 2004 PROGRAM Full Time Part Time* Full Time Part Time* Communit Develo ment 11 2 12 2 Executive 13 2 12 3 Finance and Information Tech. 8 1 9 1 Fire 10 0 10 0 Human Resource 3 0 3 0 Parks and Recreation 24 18 23 16 Police 68 0 67 0 Public Works 32 1 32 1 TOTALS* 169 24 168 23 The number of regular part-time employees listed is after conversion to full-time equivalents. Employee totals do not include volunteer firefighters or reserve police officers. A listing of budgeted positions by job title in each department is located on pages 6-2 through 6-8. 2-19 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET TAX LEVY 2001 - 2004 The city's tax levy has increased from $8,471,410 in 2001 to $12,826,550 in 2004. The average annual increase has been 17.4% for these four years. 13 12 11 10 9 ~ g O 7 = 6 5 4 3 2 1 0 $8,471,410 $10,348,230 $11,927,880 $12,826,550 2001 2002 2003 2004 Operations Capital Improvements ^ Debt Service The 2004 tax levy is 7.5% more than 2003. The following is a breakdown of increases and decreases in the tax levy payable in 2004: Tax Levy Increase/(Decrease) Amount Amount Percent Operations Capital Improvements Debt Service Total $10,327,350 0 2,499,200 $12,826,550 $1,385,100 15.5% (793,700) (100.0%) 307,270 14.0% $898,670 7.5% The impact of the payable 2004 tax levy on a median value home in Maplewood cannot be determined until Ramsey County finalizes the tax base values for 2004. 2-20 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET CHANGES IN TAX BASE 2001 - 2004 The assessor's estimated market values for 2001-2004 have been as follows: 2001 $2,119,540,200 +10.6% 2002 $2,246,631,200 +6.0% 2003 $2,508,311,400 +11.7% 2004 Data not available In Minnesota the assessor's estimated market values are reduced by different percentages depending on the property type to calculate a taxable value called tax capacity. For taxes payable in 2004 on asingle-family home occupied by the owner with an assessor's estimated market value of $600,000, the tax capacity is calculated as follows: 1 % of the first $500,000 in value = $5,000 1.25% of the value above $500,000 = $1,250 Total tax capacity = $6,250 For commercial and industrial property the tax capacity is calculated at 1.5% of the first $150,000 of market value and 2.0% of the market value above $150,000. The table on the next page lists the property class rates for taxes in 2000 through 2004. 2-21 PROPERTY CLASS RATES SET BY STATE LEGISLATURE Percentage of Market Value Rate for 2000 & Rate for Rate for Rate for Property Type 2001 Taxes 2002 Taxes 2003 Taxes 2004 Taxes Homestead 0 to $76,000 1.00% 1.00% 1.00% 1.00% $76,000-$500,000 1.65% 1.00% 1.00% 1.00% Over $500,000 1.65% 1.25% 1.25% 1.25% Non-Homestead (Single Family) 0 to $76,000 1.20% 1.00% 1.00% 1.00% $76,000-$500,000 1.65% 1.00% 1.00% 1.00% Over $500,000 1.65% 1.25% 1.25% 1.25% Apartments 2.40% 1.80% 1.50% 1.50% Commercial/Industrial 0 to $150,000 2.40% 1.50% 1.50% 1.50% Over $150,000 3.40% 2.00% 2.00% 2.00% 2-22 When the City of Maplewood levies property taxes, most of the amount levied is allocated to property owners based on the tax capacity of their property. (The open space and fire safety bond issue referendums approved levies are on the market value of their property.) The total tax capacity of all property in Maplewood for 2001-2004 has been as follows: 2001 $39,024,950 +13.2% 2002 $27,324,987 -30.0% 2003 $30,874,105 +13.0% 2004 Data not available The amounts listed include real estate and personal property such as electric substations. Also, the amounts are after adjustments for tax increment districts and fiscal disparities. The adjustment for tax increment districts reduces the tax base for the value of new development in a specified area. This allows the city to use the additional property taxes generated by the development to pay for certain expenses. The adjustment in tax base for fiscal disparities provides for sharing throughout the Twin Cities metropolitan area 40% of the growth in commercial and industrial tax base values. The 40% growth is contributed to an area-wide tax base pool. A distribution index, based on the factors of population and property market value per capita, is used to allocate the area-wide tax base pool back to each taxing district. The following table provides a breakdown of Maplewood's tax base values: TAX CAPACITY: 2001 2002 2003 2004 est. Real Estate $41,658,320 $29,496,053 $32,431,708 Data Not Available Personal Property 646,646 383,819 408,077 Tax Increment Districts 423 775 347 400 39( 3,723) Sub-Total 41,881,191 29,532,472 32,446,062 Fiscal Disparities: Contribution (7,005,645) (4,720,041) (4,266,341) Distribution 4,149,404 2,512,556 2,694,384 Total Tax Capacity 39,024,950 27,324,987 30,874,105 2-23 CITY OF MAPLEWOOD, MINNESOTA 2004 BUDGET CHANGES IN TAX RATES 2001 - 2004 When the City of Maplewood levies property taxes, most of the amount levied is allocated to property owners based on the tax capacity of their property. (The open space bond issue referendum approved levy is on the market value of their property.) In order to allocate the tax levy, a percentage is calculated by dividing the tax levy amount by the tax capacity of the city's tax base. This rate is then applied to the tax capacity of property to determine the amount of taxes due. The 2001-2004 tax capacity tax rate for the city property tax levy has been as follows: 2001 - 19.971 2002 - 35.436% 2003 - 36.319% 2004 -Data not available Part of the city's tax levy each year is for principal and interest payments on a 1994 bond issue that financed the purchase of vacant undeveloped land that will be preserved for "open space". Since this bond issue was approved in a referendum, the tax levy is allocated to property owners based on the market value of their property. In order to allocate the tax levy, a percentage is calculated by dividing the tax levy amount by the market value of the city's tax base. This rate is then applied to the market value of property to determine the amount of taxes due. The 2001-2004 market value tax rate for the city property tax levy has been as follows: 2001 - .03066% 2002 - .03133% 2003 - .23506% 2004 -Data not available City property taxes are a small proportion of total tax bill for property owners. In Minnesota property taxes are also levied by school districts, counties and miscellaneous special taxing districts such as watersheds, regional transit commissions and the Metropolitan Council. The property tax bill for each property owner is equal to each taxing district's tax rate multiplied by the property value and then added together. The pie graphs on the next page indicate what portion city taxes have been of the total for 2002 and 2003. 2-24 CITY PORTION OF PROPERTY TAXES County 46.2% Miscellaneous 5.0% Sc 1e.i%o 2002 Schools 32.4% 2003 City 32.7% City 26.2% 2-25 Miscellaneous County 5.5% 35.9%