HomeMy WebLinkAboutItem 07September 8, 2020 Item No.________
RESOLUTION APPROVING THE PRELIMINARY 2021 PROPERTY TAX LEVY
AND PRELIMINARY 2021 BUDGET
Proposed Action
Staff recommends adoption of the following motion: Move to approve the resolution approving
the Preliminary 2021 Property Tax Levy and Preliminary 2021 Budget and setting the Budget
Public Hearing to be held on Monday, December 7, 2020 at 6:30 pm in the Council Chambers.
Overview
Passage of this resolution will result in the approval of the 2021 preliminary tax levy of $34,114,570
and preliminary 2021 General Fund budget as discussed at the August 24 Council work session
and will set the date for the budget public hearing.
The City Council has reviewed primary drivers of revenue and expenditure changes for the
preliminary 2021 General Fund budget and proposed Capital Improvement Program (CIP).
Budgets for other Funds will be discussed at upcoming scheduled City Council work sessions.
The proposed 2021 budget includes the following significant changes:
Personnel:
o Cost of Living Adjustment (COLA), step increases, adjustments from the
Compensation and Classification Study, additional Fire Dept duty crew
o Transition to full year for 2021 for new positions added in 2020
o Benefit changes
Commodities:
o Reductions in motor fuels
o Reductions in commodities funded by donations
Contractual:
o Police & Fire Dept – Building maintenance
o Police Dept – Tuition reimbursements
o Police Dept – Reduction in DCC member fees
o Fire Dept – Comprehensive fire operations study
o Increase in LOGIS expense
o Increase in legal fees
o Vonage telephone annual contract
The overall change in the General Fund expenditures is a 3.6% increase from 2020.
The proposed 2021 levy shown below is a $2.1 million increase over the 2020 levy.
Proposed Change
2021 From 2020
Levy ($)
General Fund 23,489,532$ 953,897$
Pavement Management Fund 1,100,000 -
Equipment Fund 675,000 -
Park Improvement Fund 600,000 250,000
Trail Improvement Fund 80,000 50,000
Debt Service Funds 8,170,038 829,673
TOTAL TAX LEVY 34,114,570$ 2,083,570$
Fund
Even though the tax levy is proposed to increase, the City tax capacity rate is anticipated to decrease
from 34.615% to 34.427%. The City has been fortunate to keep its tax rate relatively low. Since
2013, the tax rate has declined primarily due to significant new construction growth.
Over the past ten years, new construction has added $1.4 billion to the taxable market value of
which $973 million or 67% of the growth has occurred in the past five years.
Some of the impacts of new construction (as reported in the 2019 Comprehensive Annual
Financial Report):
Population – increased from 55,954 in 2010 (U.S. Federal Census) to approximately 66,000
or 18%;
Street Miles – increased from 259 in 2010 to 303 or 16.8%;
Acres of parks, conservations areas and greenways – increased from 1,579 in 2010 to 1,677
or 6.2%;
Trails and sidewalks (paved miles) – increased from 97 in 2010 to 118 or 21.6%.
0.33973
0.41234
0.34427
0.00000
0.05000
0.10000
0.15000
0.20000
0.25000
0.30000
0.35000
0.40000
0.45000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Est
City of Lakeville Tax Capacity Rates
The growth of the community and expectations for services puts pressure on the City’s resources
to provide the necessary personnel, equipment, technology, etc. Property taxes are a primary
funding source for many of the services (excluding utilities such as water and sewer) provided to
residents and businesses as follows:
provide about 73% of the funding needed in the General Fund to provide general services
such as police, fire, parks, administration, etc.
debt repayment for the city’s portion of street reconstruction projects and city facilities;
ongoing pavement management;
vehicle/equipment replacement and new (due to growth);
park and trail replacement;
The preliminary 2021 budget includes the use of reserves for one-time or long-term purchases, as
allowed by the Fund Balance policy. Also, included in the preliminary budget is a use of reserves
to fund some ongoing inspection expenses (from prior year inspection revenue surplus) and to
moderate the tax levy increase (to address potential financial stresses caused by the pandemic).
The following chart details the use of reserves:
Use of Funds
Equipment Fund $350,000
Technology Fund 200,000
Inspections Dept Expenses 100,000
Moderate Tax levy Increase (due to
pandemic)
1,000,000
TOTAL $1,650,000
It should be noted that the use of reserves for operational expenses will significantly impact the
subsequent year’s tax levy when the funding source for those expenses is replaced with tax levy.
Another important funding source has been the Liquor Fund. Without the contributions from the
Liquor Fund, additional funding would be required from the property tax levy or another source.
The 2021 budgets reflect approximately $1.092 million in transfers from the Liquor Fund:
Debt Service – police station bonds - $400,000
Equipment Fund – capital equipment - $500,000
Technology Fund – capital equipment - $22,000
General Fund – administration, technology, etc. - $165,000
Environmental Resources – household hazardous waste drop-off day - $5,000
The preliminary General Fund budget does NOT reflect the impact of CARES Act funding.
The proposed 2021 City tax levy will result in an estimated $42 increase on the median value home
($339,100) due to both a levy increase as well as a market value increase as determined by the
Dakota County Assessor.
Existing commercial properties, in the aggregate, increased in market value by 5.8%. The proposed
2021 City tax levy will result in an estimated $363 increase on a commercial property valued at $1
million with a 5.8% increase in value. Individual circumstances will determine the tax burden for
each commercial property.
City councils are required, prior to September 30, to certify to the County Treasurer/Auditor the
date for the budget hearing. The purpose of the hearing is to present the budget and proposed tax
levy as well as provide property owners the opportunity to ask questions and make comments.
The budget hearing is proposed to be held on Monday, December 7, 2020 at 6:30 PM in the Council
Chambers. The final approval of the budget and tax levy is scheduled for Monday, December 7,
2020, as well.
Primary Issues to Consider
The City Council can adopt a final tax levy in December that is equal to or less than the
preliminary tax levy approved on September 8, 2020. The City Council may not, however,
adopt a final tax levy that is greater than the preliminary tax levy.
Supporting Information
Resolution establishing the preliminary 2021 property tax levy and preliminary 2021
budget and setting the public budget meeting;
General Fund Summary.
Financial Impact: $ Budgeted: Y☒ N☐ Source:
Related Documents: (CIP, ERP, etc.):
Envision Lakeville Community Values: Good Value for Public Services
Report Completed by: Jerilyn Erickson, Finance Director
34,114,570 Various
N/A
CITY OF LAKEVILLE
RESOLUTION No. ________
RESOLUTION APPROVING THE PRELIMINARY 2021 PROPERTY TAX LEVY
AND PRELIMINARY 2021 BUDGET
BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota that the
Preliminary 2021 tax levy in the amount of $34,114,570 is hereby approved as shown on
Exhibits A and B attached hereto.
BE IT FURTHER RESOLVED by the City Council of the City of Lakeville, Minnesota
that the reductions in the original debt service levies are the result of excess funds in the
debt service account due to changes in funding sources such as interest on investments,
special assessments and contributions from Liquor Fund, ISD#194 and other entities.
BE IT FURTHER RESOLVED by the City Council of the City of Lakeville, Minnesota
that the Preliminary 2021 Budget is hereby approved and adopted as follows:
General Fund $32,029,331
BE IT FURTHER RESOLVED by the City Council of the City of Lakeville, Minnesota
that the Public Budget Hearing will be held on Monday, December 7, 2020 at 6:30 pm in
the Council Chambers.
ADOPTED by the Lakeville City Council this 8th day of September 2020.
CITY OF LAKEVILLE
By: _____________________________
Douglas P. Anderson, Mayor
ATTEST:
________________________________
Charlene Friedges, City Clerk
EXHIBIT A
PRELIMINARY 2021 PROPERTY TAX LEVY
Total
Non-Debt Service Funds 25,944,532$
Debt Service:
HRA Lease Rev Ref Bonds 2016A 298,275$
Capital Improvement Ice Arena Facility 270,443
Capital Improvement Ref Bonds 2014 550,038
G. O. Improvement Bonds 2012 452,565
G. O. Improvement Bonds 2013 307,324
G. O. Improvement Bonds 2014 434,430
G. O. Improvement Bonds 2015 275,000
G. O. Improvement Bonds 2016 774,537
G. O. Improvement Bonds 2017 451,494
G. O. Improvement Bonds 2018 550,000
G. O. Improvement Bonds 2019 459,951
G. O. Improvement Bonds 2020 557,854
G. O. Refunding Bonds 2012B 2,048,360
Street Reconstruction Bonds 2014B 194,606
Street Reconstruction Bonds 2017A 200,288
Street Reconstruction Bonds 2018B 344,873
Subtotal Debt 8,170,038$
Total 34,114,570$
EXHIBIT B
PROPERTY TAX LEVY FOR DEBT
2021
2021 CERTIFIED
BOND DESCRIPTION SERIES DEBT LEVY DEBT LEVY
STREET RECONSTRUCTION 2009A 411,600$ ‐$
IMPROVEMENT 2012A 484,814$ 452,565$
IMPROVEMENT 2012B 2,129,715$ 2,048,360$
IMPROVEMENT 2013A 323,324$ 307,324$
IMPROVEMENT 2014A 956,261$ 434,430$
REFUNDING 2014B 1,229,643$ 744,644$
IMPROVEMENT 2015A 674,729$ 275,000$
GENERAL OBLIGATION 2016A 298,275$ 298,275$
GENERAL OBLIGATION 2016B 813,264$ 774,537$
GENERAL OBLIGATION 2017A 674,356$ 651,782$
GENERAL OBLIGATION 2018A 627,007$ 550,000$
GENERAL OBLIGATION 2018B 344,873$ 344,873$
IMPROVEMENT 2019A 459,951$ 459,951$
IMPROVEMENT 2020A 557,854$ 557,854$
ABATEMENT 2020A 33,475$ ‐$
GENERAL OBLIGATION 2021A ‐$ 270,443$
10,019,141$ 8,170,038$
The following is a schedule of all debt which, at the time of issuance, included a certification
of future property tax levies. The 2021 Debt Levy column represents the levy in the original
bond documents. The 2021 Certified Debt Levy column represents the actual levy. The
reductions in the original debt service levies are the result of excess funds in the debt
service account due to changes in funding sources such as interest on investments, special
assessments and contributions from Liquor Fund, ISD#194 and other entities.
2020 2020 2021
2019 Adopted Amended 2020 Preliminary
Actual Budget Budget Estimate Budget
Revenues (Amount) (Percent) (Amount) (Percent)
General property taxes 21,493,906$ 22,509,080$ 22,509,080$ 22,529,038$ 23,457,728$ 948,648$ 4.2% 928,690$ 4.1%
Licenses and permits 3,808,132 2,657,099 2,657,099 3,167,832 2,496,070 (161,029) -6.1% (671,762) -21.2%
Intergovernmental 1,219,200 1,053,453 1,053,453 1,102,207 1,031,562 (21,891) -2.1% (70,645) -6.4%
Charges for services 3,448,777 2,976,026 2,976,026 2,880,312 2,679,812 (296,214) -10.0% (200,500) -7.0%
Court fines 354,292 360,000 360,000 206,137 156,000 (204,000) -56.7% (50,137) -24.3%
Investment income 478,317 128,000 128,000 250,000 174,000 46,000 35.9% (76,000) -30.4%
Miscellaneous 143,406 42,893 68,782 95,827 57,729 (11,053) -16.1%(38,098) -39.8%
Total revenues 30,946,030 29,726,551 29,752,440 30,231,353 30,052,901 300,461 1.0%(178,452) -0.6%
Expenditures
General government
Mayor and council 119,026 121,006 121,006 120,292 130,039 9,033 7.5% 9,747 8.1%
Committees and commissions 107,962 91,616 91,616 33,999 107,012 15,396 16.8% 73,013 214.8%
City administration 469,912 498,062 498,062 482,633 508,241 10,179 2.0% 25,608 5.3%
City clerk 136,800 265,446 265,446 283,281 163,244 (102,202) -38.5% (120,037) -42.4%
Legal counsel 92,545 83,500 83,500 96,876 99,783 16,283 19.5% 2,907 3.0%
Planning 562,831 597,315 597,315 592,071 604,321 7,006 1.2% 12,250 2.1%
Community and econ. development 374,624 382,316 382,316 375,181 403,329 21,013 5.5% 28,148 7.5%
Inspections 1,315,910 1,439,695 1,439,695 1,451,398 1,519,824 80,129 5.6% 68,426 4.7%
General government facilities 626,334 637,091 637,091 636,645 693,841 56,750 8.9% 57,196 9.0%
Finance 793,060 859,493 879,693 859,040 884,684 4,991 0.6% 25,644 3.0%
Information technology 808,810 818,247 850,247 845,332 877,707 27,460 3.2% 32,375 3.8%
Human resources 496,660 557,705 557,705 538,073 588,400 30,695 5.5% 50,327 9.4%
Insurance 435,727 285,000 285,000 285,000 285,000 - 0.0% - 0.0%
Public safety - 0%
Police 11,456,238 12,428,732 12,506,121 12,168,802 13,036,451 530,330 4.2% 867,649 7.1%
Fire 2,040,480 2,103,412 2,119,412 2,096,775 2,236,820 117,408 5.5% 140,045 6.7%
Public works - 0%
Engineering 876,416 1,024,200 1,024,200 934,805 1,061,442 37,242 3.6% 126,637 13.5%
Construction services 508,240 620,977 620,977 529,123 615,777 (5,200) -0.8% 86,654 16.4%
Streets 3,433,821 3,547,487 3,547,487 3,233,523 3,675,739 128,252 3.6% 442,216 13.7%
Parks and recreation - 0%
Parks 2,661,384 2,869,618 2,869,618 2,710,188 2,984,776 115,158 4.0% 274,588 10.1%
Recreation 745,489 786,925 786,925 643,142 777,248 (9,677) -1.2% 134,106 20.9%
Heritage center 117,981 151,221 151,221 135,447 139,264 (11,957) -7.9% 3,817 2.8%
Arts center 673,801 633,472 633,472 574,527 636,389 2,917 0.5% 61,862 10.8%
Other - (45,939) (45,939) 150,000 - 45,939 -100.0%(150,000) -100.0%
Total expenditures 28,854,051 30,756,597 30,902,186 29,776,153 32,029,331 1,127,145 3.6%2,253,178 7.6%
Excess (deficiency) of revenues
over expenditures 2,091,979 (1,030,046) (1,149,746) 455,200 (1,976,430) (826,684) 71.9%(2,431,630) -534.2%
Other financing sources (uses)
Transfer from other funds 772,784 830,371 830,371 830,371 876,430 46,059 5.5% 46,059 5.5%
Transfer to other funds (1,225,000) (550,000) (550,000) (550,000) (550,000) - 0.0%- 0.0%
Total other financing sources (uses) (452,216) 280,371 280,371 280,371 326,430 46,059 16.4%46,059 16.4%
Net change in fund balance 1,639,763 (749,675) (869,375) 735,571 (1,650,000) (780,625) 89.8% (2,385,571) -324.3%
Fund balance, January 1 15,696,442 16,012,291 17,203,248 17,203,248 17,938,819 735,571 4.3%735,571 4.3%
Inventory Adjustment (132,957) - - - -
Fund balance, December 31 17,203,248$ 15,262,616$ 16,333,873$ 17,938,819$ 16,288,819$ (45,054)$ -0.3%(1,650,000) -9.2%
Adj Fund Balance, Dec 31 (net of restricted)16,279,427$ 14,283,241$ 15,410,052$ 17,014,998$ 15,364,998$
Ratio: Fund balance to CY expenditures 54.1%45.6%49.0%56.1%47.2%
Ratio: Fund balance to NY expenditures 52.0%44.8%48.1%53.1%46.3%
2020 2020 2021
2019 Adopted Amended 2020 Preliminary
Actual Budget Budget Estimate Budget
Function (Amount) (Percent) (Amount) (Percent)
General government 6,340,201 6,636,492 6,688,692 6,599,821 6,865,425 176,733 2.6% 265,604 4.0%
Public safety 13,496,718 14,532,144 14,625,533 14,265,577 15,273,271 647,738 4.4% 1,007,694 7.1%
Public works 4,818,477 5,192,664 5,192,664 4,697,451 5,352,958 160,294 3.1% 655,507 14.0%
Parks and recreation 4,198,655 4,441,236 4,441,236 4,063,304 4,537,677 96,441 2.2% 474,373 11.7%
Contingency - (45,939) (45,939) 150,000 - 45,939 -100.0%(150,000) -100.0%
28,854,051 30,756,597 30,902,186 29,776,153 32,029,331 1,127,145 3.6%2,253,178 7.6%
Classification
Personnel services 21,062,234 23,061,164 23,061,164 22,370,549 24,263,073 1,201,909 5.2% 1,892,524 8.5%
Commodities 1,972,089 1,826,720 1,920,109 1,717,946 1,801,256 (118,853) -6.2% 83,310 4.8%
Other charges and services 5,496,725 5,852,908 5,905,108 5,646,900 5,938,312 33,204 0.6% 291,412 5.2%
Capital outlay 323,003 15,805 15,805 40,758 26,690 10,885 68.9%(14,068) -34.5%
28,854,051 30,756,597 30,902,186 29,776,153 32,029,331 1,127,145 3.6%2,253,178 7.6%
2020 Amended
Budget
2020
Estimate
CITY OF LAKEVILLE, MINNESOTA
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
For the Year Ending December 31, 2021
Change from Change from
2020 Amended
Budget
Change from Change from
2020
Estimate