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Home My WebLink About2017-08-07 City Council Workshop Packet PLEASENOTESTARTTIME PLEASENOTESTARTTIME AGENDA MAPLEWOOD CITY COUNCIL MANAGER WORKSHOP 5:30 P.M. Monday,August 7, 2017 City Hall, Council Chambers CALL TO ORDER ROLL CALL APPROVAL OF AGENDA UNFINISHED BUSINESSNone NEW BUSINESS 2018Budget Workshop #1 ADJOURNMENT RULES OF CIVILITY FOR THE CITY COUNCIL, BOARDS, COMMISSIONS AND OUR COMMUNITY Following are 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: Speak only for yourself, not for other council members or citizens - unless specifically tasked by your colleagues to speak for the group or for citizens in the form of a petition. Show respect during comments and/or discussions, listen actively and do not interrupt or talk amongst each other. Be respectful of the process, keeping order and decorum. Do not be critical of council members, staff or others in public. Be respectful of each other’s time keeping remarks brief, to the point and non-repetitive. THIS PAGE IS INTENTIONALLY LEFT BLANK E1 MEMORANDUM TO:Melinda Coleman, City Manager FROM: Ellen Paulseth, Finance Director DATE: August 7, 2017 SUBJECT: 2018 Proposed Budget Workshop #1 Introduction The City is required to file a proposed property tax levy for fiscal year 2018 with Ramsey County in September of 2017.The final 2018 tax levy must be adopted in December of 2017. The City Council may decrease the proposed tax levy prior to final adoption, but may not increasethe proposed levy after it is filed with the County. Background The city manager, finance staff, and department heads have been actively engaged in planning and developing the 2018 operating and capital budgets over the past two months. City Manager operational initiatives throughout the have year resulted in a more streamlined staffing structure, which ultimately has a positive impact on the budget. Specific challenges for the 2018 budget include funding: 2.5% general wage adjustments; Remedies for Emerald Ash Borer infestation; The elimination of PEG fee revenue in the General Fund; The continued reduction of internal charges in the General Fund. The senior management team continues to work on the development of sustainable solutions to structural budget challenges, including the elimination of funds with deficit balances and not borrowing for internal operations. The City’s Budget The primary operating fund of the City is the General Fund. Activities of the General Fund include services such as police, fire, public works, parks maintenance, community development, and administration. The General Fund budget is financed by the property tax levy and revenues from other sources, such as fees, licenses, permits, fines, charges for services and interest earnings. The attached Budget Proposal document describes the City Manager’s 2018 proposed budget and tax levy, as presented by the City Manager. Attachments 1.CityManager’s2018BudgetProposal Workshop Packet Page Number 1 of 28 E1,Attachment CityManager’s2018BudgetProposal August7,2017 5:30PM Workshop Packet Page Number 2 of 28 E1,Attachment Contents HowDoestheProposedBudgetgetEstablished?Page1 HowDoestheBudgetImpacttheTaxLevy?Page2 WhatwillChangefromLastYear?Page3 WhatwilltheProposedGeneralFundBudgetDo?Page4 WhereDoestheMoneyGo?Page5 WhereDoestheMoneyComeFrom?Page6 WhatdidnotgetFundedintheProposedBudget?Page7 GeneralFundSummaryPage8 PeerGroupComparisonsPage9 Workshop Packet Page Number 3 of 28 E1,Attachment HowDoestheProposedBudgetGetEstablished? CalculatingDepartmentalOperatingBudgets Eachyear,departmentheadsbuildaproposedbudgetfromthegroundupusingazerobaseapproach. Staffinglevelsareanalyzedwiththecitymanagerandthefinancedepartmentprovidespersonnelcost estimates,basedonlaborcontractsinplace.Conservativeestimatesaregeneratedforpositionswith opencontracts.Thefinancedepartmentalsogeneratesdepartmentalestimatesforlarge,routine expendituressuchasinsuranceandutilities.Internaltechnologyandfleetchargesarecalculatedbythe appropriatedepartmentheadandthefinancedepartment.Allotherlineitemsarecalculatedby individualdepartmentheads.Asummaryofthebudget,includinganarrativeexplainingchangesover theprioryear,isprovidedtothecitymanagerandfinancedirector. CapitalExpenditureBudgets TheCapitalImprovementPlan(CIP)formsthebasisforthecapitaloutlaybudgetinthebudgetyear. CapitalImprovementPlanexpendituresareappropriatedeachyearthroughthebudgetprocess. Therefore,2018CIPprojectswillbeincludedinthe2018citybudget.However,eachprojectwillstill requireCouncilapprovalatthetimetheprojectcommences.CIPprojectsareevaluatedinthecontext ofthecurrentbudgetprocesstoprovideforthebestpossiblealignmentofthesetwoprocesses. AdministrativeReviewProcess Thecitymanagerandassistantcitymanagerreviewalldepartmentalbudgetstoensurethat departmentalobjectivesalignwiththecity’sstrategicgoals,andthatexpenditurelevelsare appropriatelylinkedtodesiredoutcomes.Staffinglevelsofalldepartmentsareanalyzedonanannual basis,toensuretheadequateallocationofresourcestomeetstrategicobjectives.Thecitymanager, assistantcitymanagerandfinancedirectormeettoreviewdepartmentalbudgetsintheaggregateand discussoverallgoalsforthebudgetandtaxlevy.Apreliminarytaxlevytargetisestablished. AnalyticalReview Thefinancedepartmentanalyzeseverylineitemofthecitybudgettoensureaccuracyand reasonableness.Thisreviewisconductedbyboththefinancedirectorandassistantfinancedirector. Personnelcostsarecomparedagainsttheoriginalestimates.Afiveyeartrendanalysisisconductedon lineitemsforthelargescalepurchaseofcommodities,suchasroadsaltandmotorfuel,aspricesand quantitiescanbevolatile.Thebudgetamountisbasedontheaverageyearlyexpenditureforthese items,ratherthantheworstcaseorbestcasescenario.Lineitemexpendituresforuniformallowances andotheremploymentnecessitiesarebudgetedbasedonhowmuchthecityexpectstospend,rather thanthefullcontractualallotment.Thesebudgetsareestablishedthroughtrendanalysisandemployee counts.Budgetsforcontractedprofessionalservicesarecalculatedusingazerobaseapproach,based ontheamountofservicesrequiredinthebudgetyeartomeetstrategicobjectives.Thefinancedirector recommendslineitemadjustmentstothecitymanagerinanamountsufficienttomeettargetgoals,if possible.Itemsthatrequirepolicyreviewareidentifiedbythecitymanagerandfinancedirectorand arepresentedtothecitycouncilfordiscussion. Workshop Packet Page Number 4 of 28 E1,Attachment HowDoestheProposedBudgetImpacttheTaxLevy? CityManager’sBudgetProposal Thecitymanager’s2018budgetproposalincludesa3%increase,or$621,764,inthetotalcitytaxlevy. TheGeneralFundincreaseof5.8%ispartiallyoffsetbyreductionsinotherfunds.Thedetailsofthe majorchangesandchallengesareincludedonthenextpage.Thecitymanagesbetween$50and$60 millioninoperatingandcapitalexpendituresinnearly150fundsonanannualbasis.Notallofthese fundsrequirepropertytaxrevenues,butarefundedthroughothercomponentsofthecity’srevenue stream.Ayearoveryearcomparisonofallfundsrequiringapropertytaxlevyareshownbe low: Final 2017 Proposed$ Increase% Increase Levy:2018 Levy(Decrease)(Decrease)Levy General Fund14,418,07915,251,527 833,4485.8% Debt Service Funds4,891,484 4,894,070 2,5860.1% Recreation Fund 205,000 1 95,000(10,000)-4.9% Capital Equipment Funds 3 35,000 420,000 85,00025.4% Ambulance Fund 3 00,000 300,000 -0.0% Community Center Fund 500,000 200,000(300,000)-60.0% EDA Fund 89,270 100,000 10,73012.0% Total City Levy20,738,83321,360,597 621,7643.0% GeneralFund Approximately70%ofthetotalcitytaxlevyonanannualbasisisreflectedintheGeneralFund.Levies fordebtservicefundsarelegallyobligatedandthecapitalequipmentfundsreflectitemsintheCIP. Thus,mostofourattentionisdevotedtotheGeneralFundforthepurposeofestablishingthetaxlevy. Final2017Levy Proposed2018Levy 5.7% 6.9% 22.9% 23.6% 71.4% 69.5% GeneralFundDebtServiceFundsOtherFunds GeneralFundDebtServiceFundsOtherFunds Workshop Packet Page Number 5 of 28 E1,Attachment WhatwillChangefromLastYear? 2017FinalPropertyTaxLevy$20,738,833 GeneralFundChangesinExpenditures Personnelcostchangesand2.5%wageadjustments485,000 Increasesinsupplies35,000 TechnologyforBuildingInspections41,000 IceArenacostofoperationseliminated(33,000) MaplewoodLivingexpenseseliminated(Communications)(127,000) TotalGeneralFundChangesinExpenditures401,000 GeneralFundChangesinRevenues Increaseinbuildingpermitcharges(72,000) Increaseinotherrevenues(17,000) EliminationofinterestchargesSt.John’sloanpaid90,000 Reductionininternalchargestoreducebondeddebt98,000 Reductioninfines33,000 EliminationofCablePEGfeerevenue300,000 TotalGeneralFundChangesinRevenues432,000 AdditionalChangestoTaxLevy EmeraldAshBorerCIPFund100,000 EDAFundincrease11,000 DebtServiceincrease2,600 MCCFundlevyreduction(300,000) RecreationFundlevydecrease(10,000) CIPequipmentlevydecrease(15,000) Rounding164 TotalAdditionalChangestoTaxLevy(211,236) TotalIncreasetoPropertyTaxLevyfrom2017to2018621,764 2018ProposedPropertyTaxLevy$21,360,597 Notes Themajorcomponentsoftheproposedlevyincreasearecontractualwageadjustments,eliminationof thePEGfeefromtheGeneralFund,andanewexpenditureitemfortheemeraldashborerinfestation. AdditionalexpenseswerepartiallyoffsetbyreductionsintheMCClevy. Workshop Packet Page Number 6 of 28 E1,Attachment WhatwilltheProposedGeneralFundBudgetdo? The2018ProposedBudgetwillaccomplishthefollowing: Personnel–EstimatedImpact$485,000 Provideacostoflivingincreaseforallemployees2.5%; ReallocatePark&RecreationDirectorto100%GeneralFund(prioryearincluded50%toMCC) Services–EstimatedImpact($120,000) uildinginspections; Newpermitsprogramandlaptopsforb DevelopacomprehensiveplanasrequiredbyMetCouncil; Eliminationoficearenaoperations; MaplewoodLivingexpensestransferredtoCommunicationsFund; EquipmentandSupplies–EstimatedImpact$35,000 Smallincreasesinpublicworkssupplies,mostlyinflationary; Smallincreaseinpolicesuppliesandbodyarmorvests; Revenues–EstimatedImpact$432,000 Restructuringofinternalchargestoreduceoveralldebtburdenandeliminatefunddeficits TransferPEGfeestoCommunicationsFund; Increasedbuildingpermitactivity; ReductionofMCClevy. Personnel BudgetedFTE’sreflecttheeliminationofseveralpositionscomparedtotheprioryear,includingaparks manager,firemarshal,GISplanner,andallMCCemployees.Thechartreflecttotalemployeesacrossall funds. Workshop Packet Page Number 7 of 28 E1,Attachment WheredoestheMoneyGo? Nearly76%oftheGeneralFundbudgetisspentonpersonnelcosts.Another20%representscontracted services,includingattorneys,auditors,planners,andcontractors.Only4%isspentoncommodities. Thismakesitdifficulttofindsavingsinthebudgetwithoutimpactingservices.Theallocationdoesnot changesignificantlyfromyeartoyear,asshowninthecomparisonbelow. GeneralFund2018ExpendituresbyCategory 4,059,826 28,000 19.98% 0.14% 836,730 4.12% 15,398,270 75.77% Wages&BenefitsCommoditiesContractedServicesTransfersOut GeneralFund2017ExpendituresbyCategory 4,179,800 28,000 20.98% 0.14% 801,260 4.02% 14,912,969 74.86% Wages&BenefitsCommoditiesContractedServicesTransfersOut Workshop Packet Page Number 8 of 28 E1,Attachment WheredoestheMoneyComeFrom? Approximately75%oftheGeneralFundrevenuestreamconsistsofpropertytaxrevenues.Licensing andpermitrevenueaccountsforthenextlargestcategoryat6.3%.Chargesforservicesprovide5.3%of GeneralFundrevenues,whileintergovernmentalrevenuesprovide4.6%.Transfersinfromotherfunds includeinternalchargessuchasengineeringandadministrativecharges.Therevenuestreamremains fairlyconstantovertime,asshownbelow. GeneralFund2018Revenues 0.2% 0.6% 6.6% 0.9% 5.3% 4.6% 6.3% 0.4% 75.0% PropertyTaxesSpecialAsmts&OtherTaxesLicenses&Permits IntergovernmentalChargesforServicesFines InterestMiscTransfersIn GeneralFund2017Revenues 0.6% 0.7% 8.7% 1.1% 5.2% 4.8% 6.2% 0.3% 72.4% PropertyTaxesSpecialAsmts&OtherTaxesLicenses&Permits IntergovernmentalChargesforServicesFines InterestMiscellaneousTransfersIn Workshop Packet Page Number 9 of 28 E1,Attachment WhatdidnotgetFundedintheProposedBudget? SeveraldepartmentalrequestswereidentifiedbytheCityManagerandFinanceDirectoras enhancementstocurrentservicelevels,requiringapolicydecision.ThesewerenotincludedintheCity Manager’sBudgetProposal. OnenewSchoolResourceOfficerposition$90,000 OnenewCommunityEngagementOfficer$83,000 MoveCommunicationsexpensestoGeneralFund$150,000 ImproveUnrestrictedFundBalanceinGeneralFund$200,000 ImproveUnrestrictedFundBalanceinEDAFund$100,000 RestoreCityManagerCuts$143,000 Every$200,000increaseinexpenditureswillresultinapproximately1%increaseinthetaxlevy. Workshop Packet Page Number 10 of 28 E1,Attachment Workshop Packet Page Number 11 of 28 E1,Attachment HowDoWeCompare? ThefollowingchartcomparesMaplewood’s2015spendingandeconomicdatawithsimilarmetropolitancities. ThedatawasprovidedbytheOfficeoftheStateAuditor,with2015spendingdatabeingthelatestavailable. 20152015Taxable2015Net2015Current2015Capital2015Debt2015TotalDebt&DebtServiceOutstanding PopulationTaxCapacityTaxLevyExpendituresOutlayServiceExpendituresCapital/Total/TotalExpBondedDebt Andover 31,70424,496,0249,113,62911,396,6942,228,7612,437,41516,062,87029.05%15.17%23,135,000 AppleValley 50,16142,630,19519,300,39525,249,8346,515,1844,475,64936,240,66730.33%12.35%45,695,000 BrooklynCenter 30,86413,869,3319,712,13823,620,70610,475,7703,978,27138,074,74737.96%10.45%32,960,000 CottageGrove 35,59627,179,35811,255,16420,664,7216,677,0403,051,63530,393,39632.01%10.04%25,185,000 InverGroveHeights 35,07129,945,24114,549,69821,487,3694,939,2604,495,05930,921,68830.51%14.54%47,411,870 504,94712,725, Maplewood 39,74234,824,69416,142,37119,90426,948,27559,179,12667.04%45.54%70,269,630 Richfield 36,55724,594,69414,789,52729,390,62812,900,3993,836,64346,127,67036.28%8.32%53,840,000 Roseville 35,24441,499,94116,147,29823,923,69810,551,7323,472,41737,947,84736.96%9.15%30,300,000 Shakopee 40,25438,705,00214,654,39223,354,5235,461,6075,980,89834,797,02832.88%17.19%16,640,000 St.LouisPark 48,35451,886,84424,778,04351,674,2073,486,8642,826,43857,987,50910.89%4.87%40,130,000 Average38,35532,963,13215,044,26625,026,7337,596,2526,150,27038,773,25534.39%14.76%38,556,650 Maplewood %ofAverage 103.6%105.6%107.3%77.9%167.5%438.2%152.6%194.9%308.5%182.3% Maplewood’spopulationandeconomictaxcapacityareslightlylargerthanthesamplegroup.The2015tax levywasslightlymorethanthegroupaverage;however,current(operating)expendituresweresignificantly less.Capitalexpendituresweresignificantlyhigher,primarilyduetotheEnglishStreet/TH#36project.Debt servicewassignificantlyhigher;however,$15,895,000ofMaplewood’sdebtservicetotalwasduetothe retirementofprincipalrelatedtotheissuanceofrefundingbonds.Maplewood’soutstandingbondeddebtis significantlyhigherthanthatofthepeergroup. Workshop Packet Page Number 12 of 28 E1, Attachment 2 August 7, 2017 Budget Workshop #1 Workshop Packet Page Number 13 of 28 E1, Attachment 2 Workshop Packet Page Number 14 of 28 E1, Attachment 2 •••••• Workshop Packet Page Number 15 of 28 E1, Attachment 2 0.1% 4.9% 3.0% 25.4%37.5%12.0% Change % 195,000420,000500,000100,000 4,894,070 2018 $621,764 of 89,270 205,000335,000800,000 4,891,484 $20,738,833$21,360,597 Increase 2017 Funds Funds Funds Fund$14,418,079$15,251,5275.8% ProjectFunds Levy Service Fund Fund GeneralDebtSpecialRevenueCapitalEnterpriseEDA Total Workshop Packet Page Number 16 of 28 E1, Attachment 2 Workshop Packet Page Number 17 of 28 E1, Attachment 2 Workshop Packet Page Number 18 of 28 E1, Attachment 2 76,00090,00098,00021,764 300,000100,000 (33,000)(89,000) (127,000)(300,000) $21,360,597 Fund Communications Fund485,000 to Loan) Communications –General (Hospital to Transferred Eliminated Charges Revenue Increases Funding Expenses Transferred Levy Technology InterestInternal Borer Revenue Levy$20,738,833 inin Reduction Personnel Operations and Revenue and FinalProposed Levy Arena 2017 COLASuppliesIceMaplewoodLivingIncreasesinReductionReductionPEGFeeEmeraldAshMCCOther 2018 Workshop Packet Page Number 19 of 28 E1, Attachment 2 Workshop Packet Page Number 20 of 28 E1, Attachment 2 Out Transfers Services 75.77% 15,398,270 Contracted 0.14% 28,000 Commodities 19.98% 4,059,826 Benefits & 4.12% Wages 836,730 Out Transfers Services 74.86% 14,912,969 Contracted 0.14% 28,000 Commodities 20.98% Benefits 4,179,800 & Wages 4.02% 801,260 Workshop Packet Page Number 21 of 28 E1, Attachment 2 Workshop Packet Page Number 22 of 28 E1, Attachment 2 2018 167 2017PROPOSED 176 Employees 2016 173 Equivalent Time 170 2015 Full 173 Budgeted 2014 171 2013 176174172170168166164162 Workshop Packet Page Number 23 of 28 E1, Attachment 2 21,360,597 3.0% 20,738,833 5.0% 19,751,270 4.0% HISTORY LEVY TAX 18,991,610 2.5% 18,528,400 0.0% 201320142015201620172018 18,528,400 2.0% Workshop Packet Page Number 24 of 28 E1, Attachment 2 Workshop Packet Page Number 25 of 28 E1, Attachment 2 ••••••• Workshop Packet Page Number 26 of 28 E1, Attachment 2 ••• Workshop Packet Page Number 27 of 28 E1, Attachment 2 Workshop Packet Page Number 28 of 28