HomeMy WebLinkAbout1996 12-05 City Council PacketP�
AGENDA
MAPLEWOOD CITY COUNCIL
6:30 P.M., Thursday, December 5, 1996
Council Chambers, Municipal Building
Meeting No. 96-24
:a a 19, all e : _ A
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G. PUBLIC HEARINGS
1. 6 :30 P.M.: Proposed 1997 Budget and Taxes
a. Manager Comments
b. Video Presentation of Proposed 1997 Budget
c. Citizen Comments -
d Council Di scussion
e. Determination of Need for Continuation Hearing Scheduled
for 6:30 P.M. on Thursday, December 12..
f. Announcement of Hearing to Adopt the 1997 Budget and
Taxes Payable i 1997
NONE
NOME
NEEI�I-
NONE
1LI�_I
1._
2.
M. ADMINISTRATIVE
I -ITAT I C S
1.
2.
AGENDA NO. &owl
AGENDA REPORT
T0: City Manager
FROM:
RE:
DATE:
Finance Director AM1tr11A--
Act I on by Council
Endorse
Modified.
Rejected
Date
PUBLIC HEARING ON PROPOSED 1997 BUDGET AND TAXES
November 27, 1996
A public hearing on- the proposed property taxes and budget for 1997 has been scheduled for
December 5 at 6:30 p.m. in the Council Chambers. Attached is a copy of the handout that will
be distributed to citizens that attend the hearing.
At the beginning of the hearing a video presentation of the proposed budget will be shown. Then
citizen comments will be received. If additional time is needed for citizen comments, the hearing
has been scheduled to reconvene at 6:30 p.m. on December 12. The date, time and place for the
continuation hearing must be announced prior to adjournment of the public hearing on December
5. If additional time is not needed for citizen comments, a motion should be passed to cancel the
scheduled continuation hearing.
State law requires that cities must adopt their 1997 budget and final property tax levy for taxes
payable in 1997 at a subsequent public hearing. Therefore, another public hearing has been
scheduled for December 9 at 7:00 p.m. in the Council Chambers. The date, time and place for
the December 9 hearing must also be announced prior to adjournment of the public hearing on
December 5.
If additional time is needed for citizen comments, then the continuation hearing should be held
at 6:30 p.m. on December 12. In this case the budget adoption hearing would have to be held at
7:00 p.m. on December 16.
P: \FINANCE \WP \AGN \97PR0P.TAX
CITY OF MAPLEWOOD
1997 PROPOSED PROPERTY TAXES
AND
1997 PROPOSED BUDGET
PUBLIC HEARING
DECEMBER 5, 1996
HOW YOUR PROPERTY TAXES ARE DETERMINED
Box 1
Total
Proposed Local
Budget
-minus
Box 2
All Non - Property
Tax Revenue, eg:
* State Aid
* Fees, Etc.
= equals
Box 3
Property Tax
Revenue Needed
(Levy)
divided by
Box 4
Assessor's
Market Value
x times
Box 5
State
Mandated
Class Rates
= equals
Box 6
Total
"Tax Capacity"
(Formerly Assessed Value)
Box 7
Property
Tax
Rate
( "Tax Capacity" Rate)
= equals
YOUR PROPERTY TAX =
Your Property's Market Value X Class Rates) X " Tax Capacity " R=
Source: "Understanding Your Property Taxes. 1994 Edition." Minnesota Taxpayers Association, p. 6
FORMULA FOR 1996 PROPERTY TAXES
Steer 1 - Calculate Tax Qpac a v
MARKET X STATE HOMESTEAD = TAX
VALUE FORMULA CAPACITY
$100,000 $ 72,000 X .01 = $ 720 $ 720
28 X .02 = $ 560 560
$100,000 $1,280
S te 2 - Calculate Tax Based
TAX g
on Tax Cam;
TAX
= PROPERTY
CAPACITY
RATE
TAX
$1,280
136.594%
$1,747.83
(Note: Tax rate is for home in /SD 622 and Battle Creek portion of the
Metro Watershed.)
SteD3 - Calculwe Tax. Based
MARKET X
on Market Value
TAX
= TAX
VALUE
RATE.
CAPACITY
$100,000
0.07379%
$73.79
Stgp 4 - Ca /cu /ate Total Tax--
TAXES BASED + TAXES BASED = TOTAL
ON TAX CAPACITY ON MARKET VALUE TAX
$1,747.83 $73.79 $1,821.62
PARNANCEMMBUDDOCIBDGTHEAR. NOT
ESTIMATED 1997 CITY PROPERTY. TAX CHANGES
TAX RATE CHANGES
Tax rate on tax capacity
Tax rate on market value for open
space bonds
Payable 1996
Local Tax Rate
20.946%
0.027%
Estimated
Payable 1997
Local Tax Rate
21.035%
0.027%
Percent
Change
+0.4%
0.0%
PROPERTY TAX CHANGES ON HOMES
Estimated
Market
Value *
Tax
Capacity
Tax
Increase
Percent
Decrease
$70
$ 700
$ 166
$ 8
5.1%
92,300 **
1,126
262
19
7.8%
100,000
1
296
21
7.6%
120,000
1,680
385
25
6.9%
140,000
2 11 080
476
30
6.7%
160,000
2,480
565
34
6.4%
*The values listed for 1997 are 4.6% more than 1996 which was the average change according to the
Ramsey County Assessor's Office.
**Average value home in Maplewood
PARNANCEMPOUDDOMBDGTHEAR. NOT
TAX APPEALS AVAILABLE
The only way at this time that property owners can appeal their property values is by filing a
petition for review with tax court by March 31, 1997. The Tax Court has two divisions - the
regular division, whose decisions may be appealed, and the small claims division, whose
decisions are final. If the property is homestead, the appeal can be made to either division.
Property owners were previously given the opportunity to appeal their values when value
notices were mailed in March or at the County Board of Equalization in June.
The only other way that 1997 taxes can still be changed is by reducing the property tax levy
itself. By attending the TNT hearing, taxpayers can recommend reductions in each taxing
authority's tax levy for 1997.
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 at post offices, libraries and
most banks or by calling 296 -3781 (24 hours /day) or by writing to:
Minnesota Tax Forms
Mail Station 7131
St. Paul, MN 55146 -7131
PAR NANCEIW RBUDDOCIBDGTHEAR. NOT
! �i
CITY OF,
%
1'I. F 0 D
MAPLEW 0
1830 E. COUNIY ROAD B MAPLEWOOD, MINNESOTA 55109
FINANCE DEPARTMENT 612 -770 -4510
August 9, 1996
Honorable Mayor and Counc Members:
I am pleased to transmit the 1997 Proposed Budget for the City of
BUDGET Maplewood for your review and approval. The budget document includes
AWARD workload indicators for each department for the first time. The remaining
parts of the document are in a format similar to the 1996 Budget which
received the Award for Distinguished Budget Presentation from the
Government Finance Officers Association of the United States and Canada.
It is hoped that the format of this document and the information contained
within it will .clearly communicate the City's 1997 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 1997 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 1997. The
Debt Service section focus is on the scheduled bond issue principal and
interest payments due in 1997.
The mission statement of the City of Maplewood is "to provide high - quality
OBJECTIVES and cost effective public services ". The major objectives of the 1997
Budget are designed to help the City accomplish this mission. These budget
objectives include the following: keep . the property tax increase under 5
begin the operation of a municipal fire department, decrease the net loss at
the Community Center to $150,000 or less and maintain the level of
services provided by all other departments. Other major objectives are
listed on page 2 -1 and objectives for'each department are listed in Section 3.
1 -5
Equal Opportunity Employer
The City's tax for 1997 is $ 800 which is 4.8 % more than 1996.
TAX LEVY Approximately 79% of the total levy is for operations financed by the
INCREASE General Fund. Most of the remaining levy (17%) is for debt service costs
FOR 1997 on bond issues. The remaining 4 % of the tax levy is for capital
IS 4.8 % improvements.
CITY
RECEIVES
16.6° OF
TAXES
In 1996 the City received 16.6 % of the property taxes on property within
the City. It is anticipated that this rate will not change significantly in _
1997. The following indicates the allocation of property tax dollars by
government type:
X Ps
THE tit iVIT �� W n�. ww R+��rtw
,, 1 11115 M OTL If LEGALT[Mp[R �"'�'�"
1 FOR AU 09 VS. /Y011t AND 'NAIL � �
61729445 A. ! 1
wA,4TvvcGTo'..D.G.
E 10
7 10 a
s* E0
J6172' 9445A � --
10 t
r
r
5.3% 16.6% 31.3%
Other City County
46.8%
Schools
It should be noted that the above data is for property in Maplewood that is
located within School District 622.
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1997
EXPENDITURES
BUDGET
$29.7 MILLION
Revenues for the 1997 Budget are higher and expenditures are lower than
the 1996 Budget.
REVENUES AND EXPENDITURES. BY SECTION
Comparison of 1996 and 1997 Budget
REVENUES
EXPENDITURES
Amount
Change
Amount
Change
[" Operations
$21,1051,070
+3.4%
$21,233,140
+2.3%
Capital Improvements
3,475,330
+5.4
4
-18.3
Debt Service
2
-10.3
3,864,090
-53.6
Totals
$26,702,480
+2.4%
$29,653,110
-14.4%
The difference between total revenues and expenditures will be financed by
the use of surplus fund balances and bond issues.
OPERATING BUDGET
This portion of the budget covers basic City services such as police,
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firefi htin street maintenance, recreation programs, park maintenance,
firefighting,
planning, building inspections and utility maintenance. The expenditures
for the funds within this portion of the budget are grouped by department
and subdivided into divisions for each department. Budget performance is
measured based on the accomplishment of the objectives for 1997 listed for
each department and by the percentage of budgeted expenditures that are
spent,
Operating budget revenues for 1997 are 3.4% more than 1996. The
OPERATING revenue category with the largest increase is property taxes which are up
BUDGET $531,020 due to the .increase in the tax levy for the operating budget.
REVENUES Licenses and permit revenues for 1997 are projected to increase by
UP 3.4% $107,340 and most of this increase is for building permits. Revenues in
the charges for service category include a planned increase in ambulance
rates effective Janu ary 1, 1997 as indicated in the following table.
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AMBULANCE
RATES
UP 5.9%
UTILITY RATES
UP 3.4%
The 1997 ambulance rates are based upon the average 1996 ambulance
rates charged b other providers. The increase in rates will produce
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additional revenues of approximately $52,500. The large increase in rates
will decrease the property tax subsidy for paramedic services to 1 % .
Operating bud et revenues for 1997 produced by utility service charges
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will total $3, 644 780 which represents 17.3 % of the total revenues. Utility
service charges consist of hydrant charges, sewer service charges and
recyc ling charges. Current hydrant charges. and recycling charge rates will
be sufficient to finance the 1997 Budget. However, sewer rates will need
to be increased by per r quarter to finance the 1997 Budget. The last
sewer rate increase was January 1, 1996. Most of the revenues from the
sewer rates finance the Metropolitan Council sewage treatment charges to
Maplewood which will be 74.6% of the operating expenses for the
Sanitary Sewer Fund in 1997.
1 -s
AMBULANCE RATE INCREASES
Increase
1996
1997
Amount
Percent
Basic life
support:
Resident
$ 255
$ 270
$ 15
5.9%
Non - resident
280
295
15
5.4
Advanced life
support:
Resident:
495
525
30
6.1
Non- resident
545
580
35
6.4
Char a er mile
7.20
7.65
0.45
6.3%
The 1997 ambulance rates are based upon the average 1996 ambulance
rates charged b other providers. The increase in rates will produce
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additional revenues of approximately $52,500. The large increase in rates
will decrease the property tax subsidy for paramedic services to 1 % .
Operating bud et revenues for 1997 produced by utility service charges
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will total $3, 644 780 which represents 17.3 % of the total revenues. Utility
service charges consist of hydrant charges, sewer service charges and
recyc ling charges. Current hydrant charges. and recycling charge rates will
be sufficient to finance the 1997 Budget. However, sewer rates will need
to be increased by per r quarter to finance the 1997 Budget. The last
sewer rate increase was January 1, 1996. Most of the revenues from the
sewer rates finance the Metropolitan Council sewage treatment charges to
Maplewood which will be 74.6% of the operating expenses for the
Sanitary Sewer Fund in 1997.
1 -s
The following table summarizes the proposed utility rate increases for an
average home.
J
Operating budget expenditures for 1997 are $21.2 million and 2.3
OPERATING higher than 1996. The largest increase is for the Fire Department which
BUDGET is up 19.4 %. This increase is partly due to one -time costs associated with
EXPENDITURES the formation of a municipal department to replace contracts with the three
UP independent corporations that previously provided fire suppression and
2.3% emergency medical services, The Parks and Recreation Department
budget also has a large increase. It is up 12.7 %primarily due to increased
operating expenses of the community center. The Public Works
Department budget is down 5.0% due to decreases in the Water Fund
expenses. These expenses are lower as Maplewood will not be assuming
responsibilities from St. Paul for the operation of the Maplewood water
system as anticipated in the 1996 Budget. Instead a new water agreement
has been negotiated that will continue the present retail arrangement but
under more favorable terms.
Our annual population increases in 1993, 1994 and 1995 were 1.5%,
1.6 % , and 1.9 % respectively. The 1996 population estimate which will
be released next year will probably be a 1.9 % increase because building
permits issued in 1995 for new housing units totaled 279 which was nearly
the same as 1994.
The City's 1995 population estimate was 33,533 which makes Maplewood
the second largest suburb in Ramsey County. Population growth requires
budget increases in excess of the inflation rate in order to maintain the
present level of City services.
1 -9
PROPOSED UTILITY RATE INCREASES
IMPACT ON AN AVERAGE HOME
Quarterly
Charge Increase
1996
1997 Amount
Percent
Water (hydrant
$3.70
$3.70 $0
0.0%
charge)
Sewer service
36.60
38.10 1.50
4.1
Recycling charge
3.60
3.60 0
0.0
Total
$43.90
$45.40 $1.50
3.4%
J
Operating budget expenditures for 1997 are $21.2 million and 2.3
OPERATING higher than 1996. The largest increase is for the Fire Department which
BUDGET is up 19.4 %. This increase is partly due to one -time costs associated with
EXPENDITURES the formation of a municipal department to replace contracts with the three
UP independent corporations that previously provided fire suppression and
2.3% emergency medical services, The Parks and Recreation Department
budget also has a large increase. It is up 12.7 %primarily due to increased
operating expenses of the community center. The Public Works
Department budget is down 5.0% due to decreases in the Water Fund
expenses. These expenses are lower as Maplewood will not be assuming
responsibilities from St. Paul for the operation of the Maplewood water
system as anticipated in the 1996 Budget. Instead a new water agreement
has been negotiated that will continue the present retail arrangement but
under more favorable terms.
Our annual population increases in 1993, 1994 and 1995 were 1.5%,
1.6 % , and 1.9 % respectively. The 1996 population estimate which will
be released next year will probably be a 1.9 % increase because building
permits issued in 1995 for new housing units totaled 279 which was nearly
the same as 1994.
The City's 1995 population estimate was 33,533 which makes Maplewood
the second largest suburb in Ramsey County. Population growth requires
budget increases in excess of the inflation rate in order to maintain the
present level of City services.
1 -9
The number of full-time employees included in the 1997 Budget is 141.
-5 FULL-TIME This is a decrease of 5 po sitions. The breakdown by department is as
EMPLOYEES follows:
+1.00 Fire. A full -time secretary has been added in conjunction with
the creation of a municipal Fire Department.
1.00 General Government -- One full -time building custodian
po sition which is shared with Parks and Recreation) has
been eliminated.
- 2.00 Parks and Recreation — The Community Center . secretary
and ro ram coordinator positions have been eliminated.
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Also, a full -time building custodian position shared with
General Government has been eliminated. These changes
were made to decrease the net operating loss at the
Community Center.
-3-00 Public Works —Two utility maintenance positions . for the
water system have been eliminated. Also, the utility
billing clerk position has been eliminated. These changes
have been made due to a new water agreement with the
City of St. Paul.
56 o o A roxmatel 56 % of the rating Budget is accounted for in the City's
�
OPERATING
General Fund. Revenues projected for 1997 will be 9.5 % higher than the
1996 Budget. Expenditures will be 3.3 % higher BUDGET IN
M. 1997 than the 1996
GENERAL FUND
Budget. The 1997 Budget for the General Fund is a deficit budget as 1997
expenditures exceed revenues by $108,800. Transfers to other funds will
increase this deficit to $551, 260. The deficit will be financed by using part
of the surplus fund balance.
The 9.5 % increase in General Fund revenues amounts to $791,490. The
GENERAL FUND largest increases are in property taxes (up $457,170) and charges for
REVENUES service (up $337,220). In 1997 property taxes will be 46% of total
UP 9.5% revenues for the General Fund. This is a small decrease from 1996 when
property taxes were 47 % of the revenues.
1 -10
Department expenditure requests for the General Fund were 5.7 % higher
GENERAL FUND than the original 1996 Budget. The. 1997 Budget includes recommended
PER CAPITA expenditures that are 3.3% higher than the 1996 Budget. This 3.3%
EXPENDITURES increase in expenditures is reasonable compared to a combined projected
UP 1,8% inflation rate of 2.8 % and growth rate of 1.5 %. On a per capita basis,
General Fund expenditures will increase b y 1.8% as indicated in the
following table:
GENERAL FUND EXPENDITURES
1996 1997 Percent
Budge change.
Expenditures $11,490,230 $11,872,170 3.3%
Population 34,170 34,682 1.5%
Per capita
expenditures
for General Fund $336 $342 1.8%
An analysis of the feral Fund cash flow for 1994 and 1995 indicated that
GENERAL FUND the 12 -31 -97 fund balance should be 27.6% of the expenditures to finance
BALANCE cash flow needs. The fund balance also needs to be large enough to finance
WILL
unexpected expenditures that are in excess of the General Fund contingency
.INCREASE account. Therefore, the budgeted 12 -31 -97 fund balance has been set at
34.2 % of -the 1997 pe
budgeted expenditures. This should provide a sufficient
g
balance to cover cash flow needs and unexpected expenditures. Also, it is
reasonabl y close to the 36.1 % level that it was at in October, 1989 when the
ci ty y 's bond rating b Moody's Investors Services was increased to Aa. The
budgeted 12 -31 -96 fund balance was 31.8 % of the 1996 budgeted
expenditures.
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 use to acquire and
construct only major facilities. All other capital outlay is financed within the
Operating Budget. The 1997 Budget implements the first year of the 1997-
2001 Capital Improvement Plan adopted by the City Council on July 8,
1996.
1 -11
Revenues for 1997 in the Capital Improvements Budget are $177,210 and
CAPITAL 5.4 % more than 1996. This increase is caused primarily by an increase in
IMPROVEMENTS state street construction aid to finance improvement projects. Major revenue
REVENUES sources for the 1997 Capital Improvement Budget are tax increment revenue
UP 5.4% ($910,010) and street construction state aid ($1,975,000).
Capital Improvement Budget expenditures planned for 1997 include public
CAPITAL improvement projects ($2,940,000), park development ($1,160,000),
IMPROVEMENTS refurbish two fire trucks ($150,000) and the continuance of the street
EXPENDITURES. overlay and sealcoating program ($100,000). The impact of these items on
DOWN operating costs will not be significant. Total 1997 expenditures are
14.6% $4,555,880 and 14.6% less than 1996.
This portion of the budget covers the payment of principal and interest on
DEBT the City's bonded indebtedness. Each bond issue has a separate debt service
SERVICE sinking fund.
REVENUES
DOWN 10.3% Revenues for 1997 are 10.3% less than 1996 primarily due to a decrease in
property taxes. Major revenue sources, as in past years, are property taxes
($1,509,660), special assessments ($351,710), and interest on investments
($260,710).
Expenditures for 1997 are 53.6 % less than 1996. The large decrease is
DEBT caused by $4,335,000 of prepayments in 1996 on bonds being refinanced at
SERVICE
a lower .interest rate. If these large prepayments were not included in the
EXPENDITURES 1996 Budget, debt service expenditures would be 3.3 % less in 1997. The
DOWN 53 . 6°�0 ant tied new debt issues for 1997 consists of (a) a $1,300,000 bond issue
.
for replacement of the Gladstone Fire Station which is being considered for
a 1997 referendum and b a $1,185,000 bond issue for public works
improvements. At the end of 1997, general long -term net debt payable will
be $27,705,000 which is $285,000 more than projected for the end of 1996.
1 -12
Operating Budget increases in the future will continue to exceed the inflation
FUTURE rate because of .population growth and increases in commercial development.
GROWTH The City has experienced slow steady population growth . since 1980.
WILL IMPACT Average annual population increases between 1980 and 1990 were 1.5 %.
OPERATING The City's latest population estimate is 33,533 for 1995 according to the
BUDGET Metropolitan Council. This represents a 1.9% increase over 1994. It is
anticipated that population growth will continue at the same rate for the next
several years. In 1995 the City issued building permits with a total
valuation of $94.6 million. In 1994 the City issued building permits with a
total valuation of $50.6 million. Permit values were significantly higher in
1995 because of large commercial, buildings.
Based on projections in the 1997 -2001 Capital Improvement Plan, the
CAPITAL Capital Budget will range from $1.6 million to $3.4 million in 1998 -2001.
IMPROVEMENT Major factors affecting the capital budgets will be (a) the referendum for
EXPENDITURES replacement of the Gladstone Fire Station in 1997, (b). the number of public
WILL improvement projects that are approved for construction and (c) the
DEPEND ON referendum in 1999 for park improvements. Bond issues to finance the
REFERENDUMS 1997 -2001 Capital Improvement Plan total $6,840,000.
Conserving the financial resources of the City continues to be important.
C Q N C LU S I o N The budgeting function is the prime tool you have to make sure the City's
limited resources are wisely utilized and to establish department objectives
for the coming year. We continue with the objectives of making
Maplewood an affordable place to live while pro viding the services that
make it a good place to live.
The Council's cooperative effort in the review and adoption of the 1997
Budget will be greatly appreciated. I would also like to express my
appreciation to all City personnel who assisted in the preparation of the 1997
Budget.
Michael A. McGuire
City Manager
1 -13