CITY OF LE SUEUR REQUEST FOR COUNCIL ACTION TO: Mayor and City Council FROM: Jasper Kruggel, City Administrator Zach Doud, Finance Director SUBJECT: 2020 Budget Review DATE: For the City Council meeting of November 12, 2019 PURPOSE/ACTION REQUESTED Provide an update for the 2020 Budget including the Tax Levy, Enterprise Budgets including rates, and Capital Improvement/Capital Equipment (CIP/CEP) for 2020-2024. SUMMARY Tax Levy No major changes have occurred to the Preliminary Tax Levy as City Staff has not gotten final information from all insurance providers (health, dental, auto, liability, etc.) for the 2020 fiscal year. City Staff has worked on the tax levy budget for the information that has been received and is working to make sure that all of the changes that have been received are able to get to the goal of City Staff of a 6.0% tax levy increase. As a reminder that the Preliminary Tax Levy was approved at 9.47% which results in a tax impact decrease of 2.48%. Some major points were the hiring of a Streets and Parks employee, change in allocation of the Community Development Director, reduction of revenues to be more accurate based on current projection of revenues, and finally the increase in number of pools hours which results in an increase in pool staff time. Enterprise Budgets Overall the Enterprise Budgets, with the exception of the Sewer Fund, are performing at a level that is sustainable if the City Council was not focused on planning for the future. Due to the City Council being focused on planning for the future of the City, Enterprise Budgets will all need to be increased slightly with this in mind. The Enterprise Budgets are all being adjusted to plan for the future and to cover the increased costs due to inflation increases. Water Fund: Additional planning for CIP/CEP, one additional W/WW Supervisor (50% funded by the Water Fund), reduction of bond costs due to a bond being paid off in 2019. These are the major changes for the Water Fund. Sewer Fund: First off, the budgets were designed without MRVPUC in mind and full operations of the Sewer Treatment Plants under the control of the City. With this being said, there are additional costs and additional revenues for this change. Again additional planning for CIP/CEP, and the additional W/WW supervisor (50% funded by the Sewer Fund). These are the major changes for the Sewer Fund. Electric Fund: Additional planning for CIP/CEP is the only major change for the Electric Fund.
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CITY OF LE SUEUR
REQUEST FOR COUNCIL ACTION
TO: Mayor and City Council FROM: Jasper Kruggel, City Administrator
Zach Doud, Finance Director SUBJECT: 2020 Budget Review
DATE: For the City Council meeting of November 12, 2019 PURPOSE/ACTION REQUESTED Provide an update for the 2020 Budget including the Tax Levy, Enterprise Budgets including rates, and Capital Improvement/Capital Equipment (CIP/CEP) for 2020-2024. SUMMARY Tax Levy No major changes have occurred to the Preliminary Tax Levy as City Staff has not gotten final information from all insurance providers (health, dental, auto, liability, etc.) for the 2020 fiscal year. City Staff has worked on the tax levy budget for the information that has been received and is working to make sure that all of the changes that have been received are able to get to the goal of City Staff of a 6.0% tax levy increase. As a reminder that the Preliminary Tax Levy was approved at 9.47% which results in a tax impact decrease of 2.48%. Some major points were the hiring of a Streets and Parks employee, change in allocation of the Community Development Director, reduction of revenues to be more accurate based on current projection of revenues, and finally the increase in number of pools hours which results in an increase in pool staff time. Enterprise Budgets Overall the Enterprise Budgets, with the exception of the Sewer Fund, are performing at a level that is sustainable if the City Council was not focused on planning for the future. Due to the City Council being focused on planning for the future of the City, Enterprise Budgets will all need to be increased slightly with this in mind. The Enterprise Budgets are all being adjusted to plan for the future and to cover the increased costs due to inflation increases. Water Fund: Additional planning for CIP/CEP, one additional W/WW Supervisor (50% funded by the Water Fund), reduction of bond costs due to a bond being paid off in 2019. These are the major changes for the Water Fund. Sewer Fund: First off, the budgets were designed without MRVPUC in mind and full operations of the Sewer Treatment Plants under the control of the City. With this being said, there are additional costs and additional revenues for this change. Again additional planning for CIP/CEP, and the additional W/WW supervisor (50% funded by the Sewer Fund). These are the major changes for the Sewer Fund. Electric Fund: Additional planning for CIP/CEP is the only major change for the Electric Fund.
Storm Water Fund: No major changes noted in the 2020. Refuse Fund: No major changes noted in 2020. Overall, Enterprise Budgets are all needing small changes to rates based on the CIP/CEP planning that City Staff and City Council has focused on over the past couple of years. The proposed utility rates for 2020 are in the tables below: Water Rates – Note that all rates per 1,000 gallons was $4.00 in 2019.
2019 Actual 2020 Proposed Meter Size Accessibility Fee (Monthly) Accessibility Fee (Monthly) Factor 5/8” meter $15.00 $20.00 1” meter $35.25 $47.00 135% 1.5” meter $70.50 $94.00 100% 2” meter $112.80 $150.40 60% 3” meter $225.60 $300.80 100% 4” meter $351.94 $469.25 56% 6” meter $703.87 $938.50 100% All accounts Absorbed in rates $0.81/month ($9.72/year) MDH testing fee
Tiered Rates
• 0-10,000 Gallons - $3.25 per 1,000 gallons • 10,001-20,000 Gallons - $3.75 per 1,000 gallons • 20,001 and up - $4.25 per 1,000 gallons
Non-Essential (Irrigation) Water
2019 Actual 2020 Proposed Meter Size Accessibility Fee (Monthly) Accessibility Fee (Monthly) Factor 5/8” meter $15.00 $5.00 1” meter $35.25 $11.75 135% 1.5” meter $70.50 $23.50 100% 2” meter $112.80 $37.60 60% 3” meter $225.60 $75.20 100% 4” meter $351.94 $117.31 56%
Tiered Rates
• 0-20,000 Gallons - $5.00 per 1,000 gallons • 20,001-40,000 - $6.00 per 1,000 gallons • 40,001 and up - $7.00 per 1,000 gallons
Electric Rates
2019 Actual 2020 Proposed Service Type Accessibility Fee (Monthly) Service Charge
Overall We will look at the Overall Utility Bill along with the Property Taxes to show the entire picture of how Utility Rates and Taxes will affect the City of Le Sueur Residents as they are proposed today. Average Home is valued at $189,100 in 2019 that uses 6,000 gallons on a ¾” meter, 450 kWh of electricity, 96 gallon refuse bin, and a .5 acre parcel. I have provided both the home with no increase in value from 2019 to 2020 and a home that increases 12% to $211,200 which is the tax capacity increase from 2019 to 2020.
Average Utility Bill discussed previously w/no Sprinkler Home Value of $189,100 in 2019 Monthly Yearly 2019 2020 2019 2020 Average Utility Bill 228.20 $233.77 2,738.38 2,805.23 City Taxes 114.27 111.01 1,371.18 1,332.13 County Taxes 75.30 78.52 903.58 942.29 School Taxes (assuming no ref) 56.26 54.89 675.12 658.71 Total $474.02 $478.20 $5,688.26 $5,738.36 Total Change $4.18 Total Change $50.10 Total Percent 0.88% Total Change w/ No Utility Increases Monthly ($1.40) Yearly ($16.75)
Home Value Increase and 1/2 Dep Average Utility Bill discussed previously w/no Sprinkler Home Value of $189,100 in 2019 and Increased based on Tax Capacity Increase (12%) to $211,792 Monthly Yearly 2019 2020 2019 2020 Average Utility Bill 228.20 $233.77 2,738.38 2,805.23 City Taxes 114.27 124.33 1,371.18 1,491.98 County Taxes 75.30 87.95 903.58 1,055.37 School Taxes (assuming no ref) 56.26 61.48 675.12 737.76 Total $474.02 $507.53 $5,688.26 $6,090.34 Total Change $33.51 Total Change $402.08 Total Percent 7.07% Total Change w/ No Utility Increases Monthly $27.94 Total Change $335.23 5.89%
CIP/CEP Please see the attached CIP/CEP listing which shows all of the planned projects/equipment needs for the City from 2020-2024. RECOMMENDATION Provide feedback/ask questions about the 2020 budget overall to City Staff.
City of Le Sueur, MinnesotaCIP and CEP Plan 2020 - 2024
Department Project # 2020 2021 2022 2023 2024
Capital Lease Payment 30,200 16,000 16,000 16,000 16,000
Administration Total 30,200$ 16,000$ 16,000$ 16,000$ 16,000$
Taxiway Extension w/ Utilities 795,464
Pull Behind Finish Mower 14,000
2004 New Holland TV145 Tractor 225,000 Airport Hanger Construction Project 450,000
Airport Total 809,464$ 225,000$ 450,000$ -$ -$
Council Chamber AV Upgrades 25,000
City Council Total 25,000$ -$ -$ -$ -$
Capital Lease Payment 94,942 94,942 94,942 94,942 94,942