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Home My WebLink AboutAugust 16, 2005 Budget Work Session 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TOO (763) 706-3692 Visit Our Website at: www.ci.colu/llbia-heights./Illl.us Mavor Gmy L. Peterson Councilmembers Robert A. Williams Bruce Nawrocki Tammera Ericson Die/un Bruce Ke/zenberg City Manaqer Walt Fehst CITY OF COLUMBIA HEIGHTS ADMINISTRA TION NOTICE OF CITY COUNCIL MEETING ************ to be held in the CITY OF COLUMBIA HEIGHTS as follows: Meeting of: Date of Meeting: Time of Meeting: Location of Meeting: Purpose of Meeting: COLUMBIA HEIGHTS CITY COUNCIL TUESDAY - AUGUST 16, 2005 7:00 P.M. CONFERENCE ROOM 1 WORK SESSION AGENDA 1. 2006 Budget - Levy review The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individmis with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handcapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Counal Secretary at 706-3611, to make an"angements. (TDDI706-3692 for deaf or hearing impaired only) THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER CITY OF COLUMBIA HEIGHTS DATE: AUGUST 11,2005 TO: THE HONORABLE MAYOR GARY PETERSON FROM: CITY COUNCIL MEMBERS TAMI ERICSON DIEHM BRUCE KELZENBERG BRUCE NAWROCKI BOBBY WILLIAMS WALT FEHST, CITY MANAGER If/r- WILLIAM ELRITE{;J~ FINANCE DIRECTOR RE: PROPOSED LEVY AND BUDGET FOR 2006 Attached is a series of documents that summarize the budget and levy recommendations for 2006. It is important to recognize that we began the 2006 budget process anticipating that we would be losing $338,000 in LGA. The course of action was to only make up this loss through a propeliy tax levy and to "hold the line" for all expenses at the 2004 level, the same level that we held expenses for in 2005. In processing the budgets under this premise, there were several significant cuts made in departments. An example of this is that in 2005 all maintenance on the library building was eliminated along with several other reductions. In the proposed 2006 budget maintenance is still eliminated in addition to reducing the book budget by $4,000, videocassette budget by $1,000. Periodicals, electronic databases and audiocassettes were also reduced by a total of $1,100 along with several other reductions. These types of reductions in the Library, such as reducing the materials we carry for patrons along with significantly reducing library infrastructure and maintenance has a serious effect on the quality of library services we provide to our residents. In the Fire Department a fulltime firefighter position was eliminated. This will once again mean that one shift will run with one paid firefighter and the other two shifts will run with two paid firefighters. The effect of this on residents is that they stand a one in three chance of receiving lesser service if they have an emergency call. Another area of great impact on our residents is that the Finance Department budget reduces the receptionist position to three-quarter time for 2006. In the 2004 budget we eliminated one fulltime accountant position. With this additional reduction in the receptionist position we would not open the switchboard until 10:00 a.m. Between 8:00 a.m. and 10:00 a.m. all incoming calls would be answered by automated attendant services whereby the caller would be given a list of selections to choose from to reach other departments by pressing the keys on their phone. Also, residents wanting to pay their utility bills and other items between 8:00 a.m. and 10:00 p.m. would be directed to the drop box for their payments. These are but a few of the examples of the drastic steps that were taken to maintain a "hold the line" budget for the third year at a level that is significantly below the 2003 adopted budget. ' However, as of August 1, we received confinnation from the Department of Revenue that we would not be receiving a $338,000 reduction in LGA for 2006. The actual reduction will be $29,990. Therefore, if we maintain the levy at the proposed level, this will give us $284,137 to add back in the budget to make up for some of the severe cuts that were made. This add-back equates to approximately 3% inflation to the budget. However, it should be noted that even with this inflationary increase, the total budget for 2006 would still be less than the adopted budget for 2003. WE:sms 0508111COUNCIL Explanation of Attachments for the August 16th Work Session (Page 1 of 2) The following section of this memo lists the attachments and highlights some of the major items in each attachment. Comparison of Tax Supported Funds This document shows the actual expenditures for each department for 2003 and 2004 along with the adopted 2005 budget, and the Department/City Manager proposed budget for 2006. The final column shows the increase or decrease in each departmental budget for 2006 compared to 2005. As you can see, some departments, such as the Police Department, achieved a "hold the line" budget in relationship to dollar amounts. On the other hand, the Police Department took the approach of "holding the line" on services that resulted in a $105,000 increase to the 2006 budget. There are several other reasons for the increase, including the City Council's decision to add back the 23rd and 24th officers, the state enacted PERA increase, employee movement through the pay plan, and potential pay increases. The other major change from 2005 was the Election Department budget. As we did not have any elections in 2005 there was an increase of $89,204 to conduct the 2006 elections. 2006 Revenue by Source This document shows the major categories of revenue for the General Fund, Library, EDA and total for tax supported functions. Revenue is totaled for each fund followed by the "hold the line" budget expenses. The last two lines on this form show the effect of what amounts will be available for add-backs in various budgets with a 7.6% property tax increase and a 5.5% Increase. History of Local Government Aid This form shows the City's certified LGA in 2003 at $2,651,999. The certified LGA for 2006 is $1,028,487. This is an annual decrease in LGA from 2003 to 2006 of$1,623,512. An amount of even greater value on the form is in the lower right hand comer. This shows the total dollar amount that we have lost in LGA over the last four years. The total loss of LGA revenue to the City of Columbia Heights is $4,962,530. Comparison of Lost LGA to Levy Increase This form is comparable to the previous form and shows the amount that the City has increased the levy from 2002 to 2006. As you can see, the total dollar amount of revenue gained from levy increases over this four-year period of time is $3,561,346. This, compared to the lost LGA of $4,962,530, results in a net revenue loss to the City of $1,401,184. This is the true net loss to the City of Columbia Heights in operating revenue. The primary purpose of this fornl is to show that although we have had significant property tax levy increases in the past two years, these increases are far from making up for the total amount we have lost in LGA. The bottom line of the increased levies over lost LGA is a net loss to the City of $1,401,184. This is the true figure of how much less we have to work with to provide services to residents. Page Two Proposed Property Taxes 5.5% Increase This chart is one that we have used for the past few years. It shows the calculation of the levy and levy increases for 2004 through 2007. As you can see, the chart reflects significant property tax increases for 2004 and 2005 with significantly lower property tax increases for 2006 and 2007. This chart is based on a property tax levy with a net effect of a 5-1/2% increase to property owners for 2006. Proposed Property Taxes 7.6% Increase This chart shows the same basic comparison but is based on increasing property taxes by 7.6%. Levy and LGA Comparison 2005 to 2006 This chart simply reflects the total levy and total LGA by fund for 2005 and 2006 with the percentage increases and decreases shown at the bottom. As you can see from the lower right hand corner, the additional revenue the City would receive from the tax levy is 5.54% while at the same time LGA is being reduced by 2.83%. This chart is based on a 7.61% increase in property taxes for an average resident. City of Columbia Heights, Minnesota Comparison of Tax Supported Funds 2003 - 2006 Adopted Department Inc/Dec Actual Actual Budget Proposed from 2003 2004 2005 2006 2005 General Fund 41110 Mayor-Council 199,444 166,991 187,281 182,507 (4,774) 41320 City Manager 359,692 397,741 405,943 409,570 3,627 41410 Elections 8,377 31,418 185 89,389 89,204 41510 Finance 603,367 572,074 615,758 632,504 16,746 41550 Assessing 92,113 0 105,913 106,945 1,032 41610 Legal Services 168,003 176,417 186,500 186,500 0 41940 General Government Bldg 102,697 121,001 150,676 144,730 (5,946) 42100 Police 2,427,115 2,400,828 2,600,324 2,706,145 105,821 42200 Fire 1,024,854 1,018,836 963,106 1,025,427 62,321 42500 Civil Defense 30,191 27,364 34,565 33,833 (732) 42700 Animal Control 11 ,839 14,404 15,4 70 15,470 0 43000 Public Works 0 0 0 0 0 43100 Engineering 388,460 305,362 309,999 311,095 1,096 43121 Streets 599,265 652,607 658,950 679,228 20,278 43160 Street Lighting 119,850 116,068 120,860 126,136 5,276 43170 Traffic Signs & Signals 65,952 74,397 70,605 68, 1 33 (2,472) 43260 Weed Control 9,392 16,061 13,957 16,569 2,612 45000 Recreation Administration 162,136 128,894 149,878 153,644 3,766 45001 Youth Athletics 14,050 24,926 38, 136 31,397 (6,739) 45003 Adult Athletics 17,207 28,377 43,787 38,200 (5,587) 45004 Youth Enrichment 17,531 28,128 37,376 47,788 10,412 45005 Travel Athletics 8,806 21,201 37,093 31,557 (5,536) 45030 Trips & Outings 32,072 43,889 48,347 52,411 4,064 45040 Senior Citizens 72,904 81 ,1 03 76,623 74,163 (2,460) 45050 Recognition/Special Events 40,118 43,555 35,595 33,700 (1,895) 45129 Murzyn Hall 223,471 191,830 193,900 197,536 3,636 45200 Parks 614,916 695,733 713,967 712,972 (995) 46102 Tree Maintenance 99,627 105,790 96,249 105,709 9,460 46103 Dutch Elm Sanitation 225 600 0 0 0 49200 Contingencies 4,160 100,000 28,870 20,000 (8,870) 49300 Transfers 480,000 338,725 378,630 85,000 (293,630) Total General Fund 7,997,B'34 .'7',924,320 a.,31a,s:43 .... 8,$la;2s:8 (~aq) Economic Development Authority 46314 Econ Development Authority 127,017 222,648 246,332 246,331 ( 1 ) Total EDA 1:27.,01.7 222.,p4a 249,$$2... 44(3,$31 (1). library 45500 Library 636,773 606,311 636,521 636,521 0 Total library 9$p,77$ EWp,$11 9$6;S::21 ...P9P,5~1 0 G/NextfTax Supported Funds Comparison/Expense City of Columbia Heights, Minnesota 2006 Revenue by Source General Fund Library EDA Total Taxes (7.6% Levy) 5,892,866 463,086 84,965 6,440,917 HRA Levy 0 0 161,366 161,366 Licenses & Permits 119,500 0 0 119,500 Intergovernmental Revenue 1,325,862 145,811 0 1,471,673 Charges for Services 480,498 8,500 0 488,998 Fines & Forfeits 120,000 15,000 0 135,000 Miscellaneous 1 01 ,126 4,700 0 105,826 Sales & Related Charges 0 0 0 0 Allocations 0 0 0 0 Transfers In & Non Revenue Receipts 483,883 50 0 483,933 Total revenue 8,523,735 637,147 246,331 9,407,213 Hold the line budget expense 8,318,258 636,521 246,331 9,201,110 Funds available for add backs I With a 7.6% levy increase 205,4 77 626 0 206,103 With a 5.5% levy increase 112,723 0 0 112,723 G/NextlTax Supported Funds Comparison/Revenue City of Columbia Heights Proposed 2006 Budget History of Local Government Aid Prepared 08/10/2005 Increase In Cumulative (~ertified Amount of (T otal) Aid Year LGA Lost Aid Lost Original Aid Certified for Columbia Heights 2003 2,1651,999 N/A N/A Aid After 2003 Legislative Reductions 2003 1,955,299 696,700 696,700 2004 1,1603,203 352,096 1,048,796 2005 1,058,477 544,726 1,593,522 2006 1,028,487 29,990 1,623,512 Total LGA lost in 4 years 4,962,530 City of Columbia Heights Comparison of Lost LGA to Levy Increase Prepared 08/10/2005 Levies Certified for Columbia Heights Year 2003 2004 2005 2006 Total Levy increase in 4 years Certified Levy 4,817,984 5,447,260 6,102,537 6,440,917 Increase In Amount of Levy 6,146 629,276 655,277 338,380 Lost LGA during the same 4 year period of time -, .". --, ..' .' . -'.," :-':'. .....: .:';--'.: . . -..' .:. --:: Net Revenue LO$s to the City Cumulative revenue from Levy Increases 6, 146 635,422 '1 ,290,699 '1,629,079 :3,561,346 4,962,530 ('1,401,184 ) City of Columbia Heights Proposed Property Taxes 2003-2007 IBased on a 5.50/0 Property Tax Increase I Prepared 08/10/2005 2003 2004 2005 2006 2007 Actual Adopted % of Adopted % of Proposed I % of Pro ert Taxes Lev Lev Increase Lev Increase Lev Increase Library 433,585 433,585 438,835 462,971 EDA 140,569 84,965 84,965 84,965 General Fund 4,243,830 4,928,710 5,578,737 5,799,601 Total Levy 4,817,984 5,447,260 6,102,537 6,347,537 Increase from Prior Year N/A 629,276 655,277 245,000 Proposed I % of Levv Increase 6,620,133 272,596 Total.leVY<J;l3rtifjeq. .to..Q6L1nty Area Wide (Fiscal Disparities) l....oc... pl.l..eVY . ,- ..',.';: --,., Projected Market Value Homest 4,817,984 1,037,040 3,780,944 (646,380) 3,134,564 5,447,260 1,010,487 4,436,773 (646,380) 3,790,393 6,102,537 1,010,487 5,092,050 (646,380) 4,445,670 1.2.0$%1 6,347,537 1,010,487 14:7.7%1 5,337,050 (646,380) 4,690,670 4.01%1 6,620,133 1,010,487 4;81%1 5,609,646 (646,380) 4,963,266 4.29% 5.11% 5.81% Amount of Levy Increase 629,276 655,277 245,000 27:2,596 City of Columbia Heights Proposed Property Taxes 2003-2007 Prepared 08/10/2005 IBased on a 7.60/0 Property Tax Increase I 2003 2004 2005 2006 Actual Adopted % of Adopted % of Proposed Pro ert Taxes Lev Lev Increase Lev Increase Lev Library 433,585 433,585 438,835 462,971 EDA 140,569 84,965 84,965 84,965 General Fund 4,243,830 4,928,710 5,578,737 5,892,981 Total Levy 4,817,984 5,447,260 6,102,537 6,440,917 Increase from Prior Year N/A 629,276 655,277 338,380 -rrptcll. Levy GE?ttifie.q fq QOLlnty Area Wide (Fiscal Disparities) l..;oQ;:ilkl?vY Projected Market Value Homest 2007 % of I Proposed I % of Increase Levv Increase 4,817,984 1,037,040 3,780,944 (646,380) 3,134,564 13~()6%,1 6,102,537 . 12.03% 1,010,487 17'.A35~1 5,092,05014,'77% (646,380) 4,445,670 5,447,260 1,010,487 4,436,773 (646,380) 3,790,393 6,440,917 1,010,487 5,430,430 (646,380) 4,784,050 5.54% 6;65% 6,713,513 272,596 6,713,513 1,010,487 5,703,026 (646,380) 5,056,646 4.23% 5.02% IAmount of Levy Increase I 629,276 I 655,277 --' 338,380 I 272,596 I City of Columbia Heights Proposed 2006 Budget Levy and LGA Comparison 2005 to 2006 Prepared 08/10/05 2005 General Library EDA Fund Fund Fund Total Levy 5,578,737 438,835 84,965 6,102,537 LGA 908,411 150,062 0 1,058,473 Total 6,487,148 588,897 84,965 7,161,010 2006 r-e....~..al Library Cr\A \,;J Ilt::l I LLlM 2006 Fund Fund Fund Total Levy 5,892,866 463,086 84,965 6,440,917 LGA 882,676 145,811 0 1,028,487 Total 6,775,542 608,897 84,965 7,469,404 Change from 2005 to 2006 General Library EDA Fund Fund Fund Total 2006 lost LGA (25,735) (4,251 ) (29,986) 2006 lost LGA -2.830/0 -2.830/0 -2.830/0 2006 Levy Increase 314,129 24,251 0 338,380 2006 Levy Increase 5.630/0 5.530/0 0.000/0 5.540/0 Note: The above chart reflects the increase in revenue to the City. This levy will generate an increase of 5.54% in property tax revenue. This will result in an average increase in property taxes of 7.61 %