Jim Swenson Mayor Kelly Neider Councilmember/Acting Mayor Kathy Blomquist Councilmember Amanda Darwin Councilmember Patrick Meacham Councilmember NORTH BRANCH Minnesota CITY COUNCIL WORK SESSION AGENDA TUESDAY, AUGUST 17, 2021 – 6:40 PM CITY HALL, 6408 ELM STREET, NORTH BRANCH, MN 55056 Topic Presenter Time Allocation 1. Call to Order 2. Pledge of Allegiance 3. Roll Call 4. Work Session Items 1. Assessment Charges Fry 15 Min. 2. Finance Update Starks 15 Min. 3. 2022-2031 Capital Improvement Plan (CIP) Discussion Starks 15 Min. 4. 2022 Budget Discussion Starks 60 Min. 5. Adjourn
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Jim Swenson Mayor
Kelly Neider
Councilmember/Acting Mayor
Kathy Blomquist Councilmember
Amanda Darwin
Councilmember
Patrick Meacham
Councilmember
NORTH BRANCH
Minnesota
CITY COUNCIL
WORK SESSION AGENDA
TUESDAY, AUGUST 17, 2021 – 6:40 PM
CITY HALL, 6408 ELM STREET, NORTH BRANCH, MN 55056
Topic Presenter Time Allocation
1. Call to Order
2. Pledge of Allegiance
3. Roll Call
4. Work Session Items
1. Assessment Charges Fry 15 Min.
2. Finance Update Starks 15 Min.
3. 2022-2031 Capital Improvement Plan (CIP) Discussion Starks 15 Min.
4. 2022 Budget Discussion Starks 60 Min.
5. Adjourn
City of North Branch
Staff Report
Prepared By: Renae Fry, City Administrator
Joseph Starks, Finance Director
Date: August 17, 2021
Subject: Assessment Charges
Whenever an unpaid/deliquent utility bill is certified to the property taxes on the parcel, interest
at a rate of 8% per year is charged. The interest is charged in advance and not in arrears, so 8%
interest for a full year is added right away to the amount that is determined to be delinquent. It
appears that this practice has been in effect for many years and only just recently did the staff
learn of this practice. It has been a line item on a spread sheet for years, but no one knew why it
was there. According to the county Auditor, the practice to charge interest or any type of
administrative fee is a city decision.
At this time, no other Chisago County cities charge interest on delinquent utility bills. At least
one city charges a 10% one time penalty fee/administrative fee but no additional interest is
charged. In anticipation of certifying delinquent rural storm water fees to many parcels in North
Branch this coming fall, staff is looking for direction from the council - do you want to continue
the practice of charging interest? If so, at what annual rate? And/or do you want to charge a one
time fee? If so, at what rate? With some consensus from the council as to their preferences in
this regard, staff will bring a resolution back to the council for formal action adopting the
preferred practices.
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City of North Branch
Staff Report
Prepared By: Joseph Starks, Finance Director
Date: August 17, 2021
Subject: Finance Update
Year-to-date Finance update provided for Council information.
Attachments:
July 2021 YTD Finance Update
July 2021 Bank Balances
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City of North Branch July 2021 YTD Revenue & Expenditure Summary % of Year Remaining: 41.67%
Revenues 2021 Current Budget 2021 YTD Actual 2021 Balance % Remaining 2020 YTD Actual 21 vs. 20 YTD
General Fund 5,528,156$ 2,968,564$ 2,559,592$ 46% 2,922,606$ 45,958$
EDA Fund 129,225$ 47,255$ 81,970$ 63% 47,407$ (152)$
Wastewater Fund 1,814,833$ 1,280,010$ 534,823$ 29% 868,493$ 411,517$
Stormwater Fund 735,994$ 279,594$ 456,400$ 62% 168,626$ 110,968$
Municipal Liquor Fund 4,216,504$ 2,338,646$ 1,877,858$ 45% 2,400,066$ (61,420)$
TOTAL REVENUES 12,424,712$ 6,914,069$ 5,510,643$ 44% 6,407,198$ 506,871$
Expenditures 2021 Current Budget 2021 YTD Actual 2021 Balance % Remaining 2020 YTD Actual 21 vs. 20 YTD
General Fund 5,573,122$ 2,710,469$ 2,862,653$ 51% 2,766,674$ (56,205)$
EDA Fund 121,582$ 83,668$ 37,914$ 31% 76,539$ 7,129$
Wastewater Fund 1,998,039$ 561,552$ 1,436,487$ 72% 715,701$ (154,149)$
Stormwater Fund 618,704$ 186,110$ 432,594$ 70% 169,623$ 16,487$
Municipal Liquor Fund 4,181,542$ 2,315,500$ 1,866,042$ 45% 2,295,478$ 20,022$
TOTAL EXPENDITURES 12,492,989$ 5,857,300$ 6,635,689$ 53% 6,024,015$ (166,715)$
Revenues 2021 Current Budget 2021 YTD Actual 2021 Balance % Remaining 2020 YTD Actual 21 vs. 20 YTD
Note: Cash balances fluctuate during the year and are usually at their highest levels in December and July when property tax payments
are received and balances generally decline in months between. Cash balances also fluctuate due to the timing of expenditures paid.
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City of North Branch
Staff Report
Prepared By: Joseph Starks, Finance Director
Date: August 17, 2021
Subject: 2022-2031 Capital Improvement Plan (CIP) Discussion
We'll be discussing revisions made to the City's Draft 10-Year (2022-2031) CIP based on input
from the 5/18 Work Session.
Attachments:
CIP Revisions 8.17.2021
CIP Projects by Department 8.17.2021
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City of North Branch
Staff Report
Prepared By: Joseph Starks, Finance Director
Date: August 17, 2021
Subject: 2022 Budget Discussion
We will be having another 2022 Preliminary Budget discussion.
Attachments:
Preliminary 2022 Budget Proposal
Revenue Summary
Expenditure Summary
2022 General Fund Revenue Budget
2022 General Fund Expenditure Budget
2022 Proposed EDA Operating Budget
2022 Proposed Liquor Store Fund Budget
2022 Proposed Special Revenue_Debt Service Fund Budgets
Levy Comparison
EDA_HRA Preliminary Levy
Taxable Refunding Lease Land Release Map
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PRELIMINARY BUDGET PROPOSAL
2022 BUDGET
TUESDAY, AUGUST 17TH
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For Tonight, We Intend To:• Remind you that we are working towards setting the Preliminary Levy for 2022. This sets the
ceiling for the Final Levy. (i.e. the final levy can come down but it cannot be increased)
• Provide more detail on the preliminary 2022 budget proposal for the City and the subsequent ESTIMATED City property tax impact
• Provide context on what went into the City’s budget development process
• Answer any questions you may have regarding the City’s proposed 2022 budget
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Factors Influencing the 2022 Budget• COVID-19 pandemic and ongoing impact on the community, residents and businesses
• Uncertain economic impact
• Increasing consumer price index (CPI)
• Uncertain future of governmental aid
• Increases in personnel costs
• Increases in costs related to worker’s compensation and property/casualty insurance
• 2022 Elections
• Debt payments
• Projected tax base growth ($30 mil. in new improvements)
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Financial/Budget Objectivesü Continue to pay down debt.
ü Continue to maintain adequate reserves.
ü Maintain fiscal responsibility so that the City can provide the highest level of service at the lowest possible cost to residents.
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What This Budget Proposal Does Include•Part-Time Fire Chief
•Police Officer (approved by Council on 7/27)
•Body Cameras
•2022 Elections (none in 2021)
•“Lights On” Budget
•Factored in anticipated CPI inflationary increases to services/goods (street maintenance, etc.)
•Conservative revenue projections
•Local Government Aid (LGA) at 2020 levels (increase should be treated as one-time revenue according to our one-time revenue policy)
•Review of Salary Splits according to anticipated, actual activity
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What This Budget Proposal Does Not Include
•Public Works Maintenance Position (mentioned in Strategic Staffing Plan)
•Capital Items (Snow Plow, Fire Truck, Grader, Roof, Etc.)
•Potential usage of ARPA funds to offset operating costs
•Possibility of advance purchasing 2022 budget items in 2021
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2022 Proposed City Budget & Levy• Proposed City Operating/Debt Service levy increase of 3.56%
• City tax rate projected to decrease from 45.07% to 44.39%
• City taxes on median value home ($240,000) would increase approximately $35 annually or less than $3 per month
• Had the same $240,000 median value home not increased in value from the $225,000 prior year median home value, City taxes on would actually decrease approximately $43 annually or more than $3 monthly
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City Tax Rate Trend
55.0752.98
49.4747.41
45.07 44.39
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20.00
30.00
40.00
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60.00
2017 2018 2019 2020 2021 2022Projected
North Branch City Tax Rate Trend
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City Tax Rate Comparison
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
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70.00%
80.00%
Cambridge Pine City Shafer Isanti Lindstrom North Branch2021
North Branch2022 Proposed
Wyoming Harris Forest Lake
2021 City Tax Rates
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City Impact on Property TaxesHow Property Taxes Work
Property Value * Tax Rate = Tax $$$
City's Portion of Property Tax Bill
Median Value Home ($240,000)
GF/Debt Levy $59
EDA/HRA Levy $5
Fire Hall Levy -$29
Annual Increase $35
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2022 Property Taxes• Reminder, City is less than 1/3 of total property
tax bill.
• County and School District make up remaining 2/3 of total property tax bill.
CITY, 32%
County, 40%
School District,
27%
Other, 1%
Where Does Each $1 of Your Property Taxes Go?
City County School District Other
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2022 Revenue – General Fund
Taxes, 69%
Grants/Aids, 20%
2022 GF Revenue Budget
Taxes Licenses/Permits Grants/Aids Other Gen Govt Charges Fines/Fees Interest/Reimbursements Transfers
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2022 General Fund Budget
Police, 38%Fire Dept, 8%
Public Works, 21%
2022 GF Expenditure Budget
Council City Administrator City Clerk Elections Financial Admin
City Attorney City Engineer Planning & Zoning Govt Bldgs/Plant Police
Fire Dept Bldg Inspection Civil Defense Animal Control Other Protect-St Lgts
Public Works Culture & Rec Libraries Other Exp-General
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Summaryü Levy increase of 3.56% results in approximately $35 more annually in City taxes for median
value home ($240,000)
ü Helps to ensure we’re able to offer the highest level of service at the lowest possible cost to residents
ü Staff is continuing to look for budgetary savings and efficiencies
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Questions?
Thank you!
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City of North Branch - Revenue Executive Summary
Revenues
2021 2022 $ %
General Fund Actual 2019 Actual 2020 Budget Budget Change Change Primary Impact(s) of Causing Change for 2022
TOTAL GENERAL 5,711,485 5,730,136 5,521,595 6,098,120 576,525 10.4%
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City of North Branch - Department Expense Executive Summary
Expenses
2021 2022 $ %
Department Actual 2019 Actual 2020 Budget Budget Change Change Primary Drivers for Change in 2022
Police 1,938,423 1,924,690 2,009,578 2,326,982 317,404 15.8% New Police Officer and Body Cameras / WC & Property Casualty Insurance Increases
Public Works 1,326,468 1,059,542 1,135,471 1,284,340 148,869 13.1% Salary splits revised due to anticipated, actual activity / Inflationary Increases for Street Materials
Fire 407,224 977,884 485,923 483,227 (2,696) -0.6% -
322-47000-50325 Bond Issuance Costs -$ 7,000$ -$ -$
322-47000-50601 Debt Srv Bond Principal 30,000$ 30,000$ 30,000$ 40,000$
322-47000-50611 Bond Interest 18,655$ 17,380$ 16,030$ 5,828$
322-47000-50620 Fiscal Agent s Fees 2,183$ 1,300$ 2,000$ 2,000$
Expenditures 50,838$ 55,680$ 48,030$ 47,828$
323 2017C (2009D) TIF Debt Svc
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General Ledger
Budget Analysis
User: JosephStarks
Printed: 8/16/2021 7:38:05 PM
Period 01 - 12
Fiscal Year 2021
Account Number Description 2019 Actual 2020 Actual 2021 Adopted 2022 Proposed323-00000-31010 Current Ad Valorem Taxes (41,178)$ (53,435)$ (60,000)$ (90,000)$
323-00000-31020 Delinquent Ad Valorem Taxes -$ -$ -$ -$
486-00000-36230 Contributions and Donations (513)$ -$ -$ -$
Revenues (41,370)$ (48,807)$ (20,000)$ (40,000)$
486-46500-50506 Park Improvements 1,091$ 80,712$ -$ -$
Expenditures 1,091$ 80,712$ -$ -$
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2021 2022
Adopted Proposed
Operating Budget Levies 3,724,480 4,255,843
Debt Service Levies
2010B Fire Hall(+ 1998 Bld Bond) 156,851 -
Bridge Project 45,873 48,120
2009D GO TIF Bond 85,000 90,000
Assessment Debt 510,000 240,000
City Debt Repay-Capital Project Funds(ESSBY/Bridge Projects) 240,000 265,000
ESSBY Cnty Debt (7/2016) 180,000 225,000
4,947,604 5,123,963
3.56% Operating Budget/Debt Service Levy % Change
EDA/HRA Levy
*Debt service obligations for Taxable Refunding Lease Bonds 359,312 357,870
-0.40% EDA/HRA Levy % Change
3.30% Total City Levies % Change
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City of North Branch
Staff Report
Prepared By: Carla Vita, Community Development Director Joseph Starks, Finance Director
Date: August 3, 2021
Subject: A Resolution Adopting the Preliminary 2022 EDA and HRA Property Tax Levy
Background Information: Yearly the EDA must pass a resolution for a levy. The levy covers the yearly obligation for the Taxable Refunding Lease Revenue Bonds on the property within the Interstate Industrial Park owned by the EDA. The EDA must act by the end of September 2021 with the preliminary levy. Staff is bringing this forward to ensure compliance to the Bond requirements. Requested EDA Action: Finance Director Starks is requesting that the EDA pass the resolution in order to set the preliminary levy for the Taxable Refunding Lease Revenue Bonds, Series 2017. Voting Requirements:
>Simple Majority
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STATE OF MINNESOTA COUNTY OF CHISAGO CITY OF NORTH BRANCH ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 002-21-EDA A RESOLUTION ADOPTING THE PRELIMINARY 2022 EDA AND HRA PROPERTY TAX LEVY BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE NORTH BRANCH ECONOMIC DEVELOPMENT AUTHORITY AS FOLLOWS:
1. The North Branch Economic Development Authority (the Authority), a public body corporate and a political subdivision organized under Minnesota Statutes, Sections 469.001 to 469.047 and 469.090 to 469.1082, pursuant to the authority granted in Minnesota Statutes, Section 469.033, Subdivision 6, hereby levies a special benefit tax in the amount of $180,742.66 (the Tax) for the HRA Levy and $177,127.81 (the Tax) for
resolution of the City of North Branch (the City).
2. The levy does not exceed 0.0185 percent for the HRA Levy and 0.01813 percent for the EDA Levy of taxable market value in the City.
3. The levy, when received by the Authority, shall be expended only for the purposes of paying the debt of the Taxable Refunding Lease Revenue Bonds, Series 2017.
4. After affirmation and approval by the City Council, the City Administrator is hereby directed to transmit a copy of the Resolutions to the Chisago County Auditor.
RESULT: ADOPTED [UNANIMOUS] MOVER: Bob Streater, Commissioner SECONDER: Kathy Blomquist, Councilmember AYES: Moeller, Blomquist, Larson, Streater, Swenson ABSENT: Dennis Johnson, Chuck Sinn Passed and adopted this 3rd day of August 2021
CITY OF NORTH BRANCH ECONOMIC DEVELOPMENT AUTHORITY BY: ____________________________ Lorraine Moeller, Chairman
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ATTEST:____________________________ Carla Vita, Community Development Director
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EXHIBIT BLand to be Released
Fletch
er Av
e
IScale: 1":700'
Outlot F62.09 ac
Inters
tate 3
51
2
3
4
5
6
Outlot A10.6 ac
Outlot A45.71 ac
2.74 ac
2.1 ac2.75 ac
CSAH 3
0/Fore
st Blvd
400th St
410th St
Exhibit B
7
89
5 ac
5 ac
4.98 ac
Site PID Acres Lot Block Subdivision1 11.01072.13 62.09 Outlot F ESSBY BUSINESS PARK2 11.01072.25 10.6 Outlot A ESSBY BUSINESS PARK 3RD ADDITION3 11.01072.33 45.71 Outlot A ESSBY BUSINESS PARK 4TH ADDITION4 11.01072.28 5 1 2 ESSBY BUSINESS PARK 4TH ADDITION5 11.01072.29 5 2 2 ESSBY BUSINESS PARK 4TH ADDITION6 11.01072.30 4.98 3 2 ESSBY BUSINESS PARK 4TH ADDITION7 11.01072.05 2.74 2 1 ESSBY BUSINESS PARK8 11.01072.06 2.09 3 1 ESSBY BUSINESS PARK9 11.01072.07 2.75 4 1 ESSBY BUSINESS PARK