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CR 92-176 Set Budget Hearing '\ · . i Y \ 0 ~ -S- - '" I a 0 ~ I .. August 25, 1992 P K \ I Council Report #92-176 APPROVE PROPOSED 1992 LEVY SE~ BUDGE~ HEARINGS Proposed Action. Staff recommends adoption of the following motion: Move that Resolution # 92-72 "Approvinq Proposed 1992 Tax Levv Collectible in 1993, Adoptinq the Preliminarv 1993 Budqet, and Settinq Public Hearinq Dates", be adopted. Adoption of this resolution will enable compliance with the "Truth and Taxation" law enacted by the Minnesota legislature. Overview. The legislation set many deadlines for specific action by the Council. The City Council must adopt a proposed 1992 levy and set hearing dates by September 15, 1992. Budget hearings must be held between November 30 and December 21, 1992, and a final levy (which cannot exceed the proposed levy, but may be lower) must be adopted by December 21, 1992. The state government has cut local aids for cities in 1990 and 1991 and is forecasting a cut in 1992. Due to this action, the City should consider raising 4It local taxes in order to maintain current service levels. staff is recommending that the Council adopt the proposed levy amount at this time. During the budget process, staff will identify alternative areas the Council may consider in which to lower the tax levy. Primary Issues To Consider. o Wnat is the necessity for levying to the proposed amount? o What are the components of levy - General Fund, Debt Service, and Equipment Replacement Fund? o How will current actions relate to future financing? Supportinq Information. o Background. o Staff analysis of budget. o Preliminary 1993 General Fund Budget. o 1992 Budget overview. o 1992 Revenue and Expenditures - General Fund. o Tax capacity comparisons 1991 and 1992. o Department of Revenue Truth in Taxation calendar. o County Auditor budget hearings calendar. lIIJ 0 Resolution 92-72. Schedler, Finance Director -J . ) . Approve Proposed 1992 Levy Set Budget Hearings Report 92-176 Page 2 Baokground The advent of "Truth and Taxation" legislation which drastically changed the time table for the budgeting process continues on the same schedule as last year. The elimination of levy limits allows the Council options which have not been available for some time. The Minnesota Revenue Department has informed the City of the authorized LGA and HACA amounts. These amounts are subject to change on a formula basis dependent on state tax receipts. General Fund The preliminary General Fund budget process is keyed on the cost of personnel, which accounts for 70% of General Fund costs. Personal services, which includes base salaries, special type wages and fringe benefits, has been increased 3.3% over 1992. The 1993 preliminary Budget is being reported to the Council with departmental totals only, developed with actual personal service projections and percentage increases for other,costs. The departments then will develop their regular line item budgets within the . parameters established~ General Fund Revenue Summary Source Amount % Change Levy (includes HACA estimate) $4,015,000 5.8% Local Government Aid 785,200 3.0 Other Revenue 1, 338,800 6.3 1993 Total General Fund Revenue $6,139,000 5.5% This is a total tax increase of $219,200 from the actual 1991 General Fund levy. The only remaining growth factor left in the LGA formula is a 3% inflation factor. However, making cities liable for sales tax results in a net decrease ,in aid of 3.6%. . " " . Approve Proposed 1992 Levy Set Budget Hearings Report 92-176 Page 3 General Fund Expenditure Summary 1992 1993 % Chanqe Personal services $4,077,000 $4,212,000 3.3% Other Charges and Supplies 1,393',200 1,538,000 10.4 Landfill '- cleanup & monitoring 175,000 175,000 - Non-departmental 133,000 132,000 -(0.7) Capital outlay 38.800 82.000 111.3 Totals $5,817,000 $6,139,000 5.5% Landfill service charges are proposed to cover past and future monitoring costs and to recover some of the City's share of cleanup costs. The non-departmental area includes contingency, insurance and Hop-A- Ride support. Capital outlay, after three years of drastic cuts, is restored to ~he . previously established level. .- , l , . . Approve Proposed 1992 Levy Set Budget Hearings Report 92-176 Page 4 GENERAL FUND 1993 PRELIMINARY DEPARTMENT EXPENDITURES 40410 Mayor-Council $ 69,200 40415 Health & Welfare 45,200 40420 City Manager 206,200 40440 Elections 23,100 40510 City Clerk 91,600 40520 Finance 201,400 40600 Legal Services 98,500 40940 Municipal Building 179,600 40950 Activity Center - Maint. 73,000 40960 Activity Center - operating 100,400 41100 Police 1,963,000 41200 Fire 349,700 41300 civil Defense 6,900 41400 C. Dev. - Administration 100,400 41500 C. Dev. - Plan & Econ Dev. 82,900 41600 C. Dev. - Assessing 145,600 41800 C. Dev. - Inspection 248,300 . 42XXX Public Works 1,656,000 43510 Recreation 110,000 Landfill - cleanup & monitoring 175,000 43930 Insurance 21,000 43931 Unallocated 100,000 43932 Transfers Out 10,000 capital outlay 82,000 Total $6,139,000 . .i -~ . Approve Proposed 1992 Levy Set Budget Hearings Report 92-176 Page 5 Levv Increase Debt Service The 1992 levy for debt is $452,800, an increase of $38,500 (9.3%) from last year's levy of $414,300. The requirements for'1993 debt service are $324,100 for Park Bonds and $128,700 for Improvement Bonds. While the Park Bonds levy decreased $8,800, Improvement Bonds increased $47,300 due to the 1992 issu~. Equipment Replacement Levy The removal of levy limits allows a direct levy ,of $400,000 for the Equipment Replacement Fund. In the past the City had to issue capital notes or certificates of indebtedness to allow for a special levy beyond the levy limit. The City will save approximately $50,000 (11.0%) per year in interest and issuance costs. Total Levy 'The 1992 Proposed Levy would 'increase taxes $208,308 or 4.5% over last year. Taxes to support the General Fund increase -5.8%. Debt service ." levies, increase 9.3% and taxes to support the Equipment Replacement Fund decrease 11.0%. The tax levy after credits for HACA and Fiscal Disparties results in a 2.9% increase on the net levy. I The amount adopted as the proposed levy cannot be exceeded by the final levy adopted at the December, 1992 budget hearings. The final levy maybe less than the proposed levy. In order to regain the target of cash flow and the uncertainties of future actions by other governmental units, staff recommends adoption of the proposed levy which will be further refined in the budget process. ,. WI J' ~ Approve Proposed 1992 Levy ~ Set Budget Hearings Report 92-176 Page 6 Budget Hearinq Dates The County has preempted December 15, 1992, for their reconvened hearing. The City's budget calendar had selected this date for its reconvened hearing. options: 1. If city stays with public hearing on Monday, December 7, then only two dates are available for a reconvened hearing - December 16th (Wednesday) or December 18th (Friday). Even though a reconvening date must be reported to the county, the levy and budget can be adopted at the original hearing and no further actual meeting would be required. 2. If city moves original hearing to December 3rd, (Thursday and the day after NLC conference ends) THEN a reconvened hearing could be held December 10 (Thursday), December 11 (Friday), December 16 (Wednesday) or December 18 (Friday). 3. Move original hearing to December 4th (Friday) THEN recon- ~ vened hearings could be December 11th, 16th or 18th. -. .. " 1992-1993 . GENERAL FUND COMPARISON 1992 1993 ADOPTED PROPOSED REVENUES G.F. Levy $3,795,800 $4,015,000 + 5. 7% Other Revenue 2.021.200 2.124.000 ' Subtotal $5,817,000 $6,139,000 +6.3% EXPENDITURES . Personnel $4,077,000 $4,212,000 +3.3% Capital 39,000 82,000 +110% CIP Projects 95,000. Other'" 1,701.000 1.750.000 +2.9% TOTAL $5,817,000 $6,139,000 +6.3% . ", Contingency, landfill, supplies, services, etc. .' . TAX LEVY 1992 1993 ADOPTED PROPOSED General Fund $3,795,800 $4,015,000 +5.7% . Debt Service 414,300 452,800 Equip. Rep. 449.400 400.000 Total Levy $4,659,500 $4,867,800 +4.5% Credits* (1.315.186} (1.425.565) . Total Mter Credits $3,344,314 $3,442,235 + 2.9% * Fiscal Disparities and HACA . MAjOR IMPACTS . ON 1993 BUDGET INFLATION 2-3% $115,000 - $175,000 SALES TAX 6.5% $50,000 (est.) CAPITAL EXPENDITURES 1. Sidewalks $40,000 2. Salt dome $35,000 (1/3 of the total cost) . 3. Activity Center Roof $20,000 4. Other $43,000 . GENERAL FUND 1992 BUDGET OVERVIEW Fund Balance 1-1-91 $3,435,292 REVISED 1991 BUDGET 1991 PROJECTED Expenditures $ 5,617,300 $ 5,548,300 Revenues $ 5,383,800 $ 5,233,000 Net Change $ (233,500) $ (315,300) $ (315,300) Projected Fund Balance 12-31-91 $ 3,119,992 PROPOSED ADOPTED 1992 BUDGET 1992 BUDGET Expenditures $ 5,817,000 $ 5,817,000 Revenues $ 5,817,000 $ 5,817,000 Use of Fund Balance $ - Fund Balance 12-31-92 $ 3,119,992 General Fund' Total City Levy/ Tax Tax Payable Tax ' Capacity Tax Debt Tax Capacity Years Capacity Rate" Levy Levy Levy, Rate" .1991192 17,585,486 19.26 3,795.792 8~3. 700 4,659,492 23.64 1990/91 18,672,204 17.27 3,426.000 1 ,082,400 4,509,000 22.73 1989/90 16,476,846 19.23 3,168,171 445,000 3,613,171 21.93 1988/89 18,910,000 13.98 ' 2,643,745 294,945 2,938,690 15.68 1987/88 17,690,000 15.95 2,821.000 1986/87 17,194,415 15.45 2,657,300 1985/86 16,307,510 14.75 2,406,000 1984/85 15,964,540 13.75 2,194,470 1983/84 14,372,560 15.15 2,177,425 1982/83 13,952,670 14.96 2,087,095 "Tax Capacity Rate Computation: Tax capacity reduced by Fiscal Disparities contribution and Tax Increment Financing Districts. Levy reduced by Fiscal Disparities distribution and HACA (Homestead & Ag Credit). 5 ,. REVENUES - GENERAL FUND COMPARATIVE ANALYSIS BY SOURCE 1992 BUDGET 1990 1991 BUDGET MANAGERS SOURCE ACTUAL REVISED PROPOSED ADOPTED Current Revenues Current Property Tax $ 2,500,642 $ 2,893,300 $ 3,117,800 $ 3,117,800 Intergovernmental Revenue 1,695,483 1,499,700 1,632,000 1 ,632,000 License, Permits, & Fines 343,322 362,000 356,500 356,500 Use of Money & Property 554,581 329,400 366,200 366,200 Charges for Current Services 39,364 34,000 36,500 36,500 Other Revenue 255,662 259,500 275,000 275,000 Non Revenue Receipts 97,282 5,900 33,000 33,000 TOTAL CURRENT REVENUES $ 5,486,336 $ 5,383,800 $ 5,817,000 $ 5,817,000 Other Financing Sources 150,078 - - - TOTAL $ 5,636,414 $ 5,383,800 $ 5,817,000 $ 5,817,000 EXPENDITURES - GENERAL FUND COMPARATIVE ANALYSIS BY OBJECTIVE 1992 BUDGET 1990 1991 BUDGET MANAGERS OBJECTIVE ACTUAL REVISED PROPOSED ADOPTED Current Expenses Personal Services $ 3,731,844 $ 4,012,300 $ 4,073,900 $ 4,073,900 Other Services and Charges 1 ,150,618 1 ,211 ,100 1,307,000 1,307,000 Supplies 327,571 332,900 368,400 368,400 Capital Outlays 47,783 52,500 56,900 56,900 TOTAL CURRENT EXPENSES $ 5,257i816 $ 5,608,800 $ 5,806,200 $ 5,806,200 Other Financing Uses 429,638 8,500 10,800 10,800 TOTAL $ 5,687,454 $ 5,617,300 $ 5,817,000 $ 5,817,000 . - 6 " CITY .OF HOPK.INS . TAX CAPACITY COMPARISON ,FOR 1991 AND 1992 . 1991 Estimated Market Value 1991 Tax Capacity Commercial $ 77,130,300 $ 3,414,225 Industrial 107,748,000 5,028,204 Residential 232,055,000 3,320,708 Apartment 110,978,600 3,749,288 *Other 81.379.600 1.832.443 TOTAL $609,291,500 $17,344,868 *Includes: Condos, Townhouses, Vacant Land, Railroads, Mobile Home Park j 1992 Estimated Market Value % Change 1992 Tax Capacity % Change Commercial $ 73,476,700 -4.7 $ 3,201,208 -6.2 Industrial 98,280,000 -8.8 4,526,595 -10 Residential 233,807,100 0.8 ' 3,193,273 -3.8 Apartment 110,089,500 -0.8 3,623,093 ' -3.4 Other 79.143.600 -2.7 1.656.648 -9.6 TOTAL $594,796,900 -2.4 $16,200,817 -6.6 , Improvement Amounts 1991 to .1992 Commercial $2,033,700 Industrial 100,000 Residential 1,283,700 Apartment 0 .' Other 271.000 TOTAL - $3,688,400 Pavable 1992 ClassRates Payable 1993 Class Rates Commercial 4.75% 4.70% Industrial 4.75% '4.70% Residential 1st 72,000 @ 1%, next 43,000 @ 1st 72,000 @ 1 ~ balance @ 2% 2%, balance ~ 2 5% non-homestead 2.'5% non-homestea ~ 2.8% Apartment 3:50% 3.40% SUBURBAN HENNEPIN COUNTY CHANGES IN ESTIMATED MARKET FROM ~99~ TO ~992 Commercial -6.8% Industrial -4.9% Residential +1.3% Apartment -5.8% Total 1991 Estimated Market Value $ 31,619,000,000 Total 1992 Estimated Market Value $ 32,044,000,000 , . Imnovement Amount 191-1 to 1992* $690,000,000 (* 17,678,300 in Mall 0 America) Overall Growth in Suburban Hennepin County .. +.8% ,CAlIf;NDAR FOR PROPOSED PROPERTYTAXES~ PUBLIC HEAFUNGS AND f~NAl PROPERTY TAXES FOR PAYABLE 1993 fu.-...~~~~~ .~.- ~J=~ - .ON OR BEfORE AUGUST 1111992 Each school board certifies to the county auditors of the counties in which the school district is located the dates that it has selected for its public hearing and for the continuation of its hearing, if necessary. If not certified by this date, the county auditor will assign the hearing date. The dates for the school district hearings must not conflict with the county hearing. ON OR BEfORE AUGUST 20j 1992 The county auditor notifies the clerk of each city within the county of the dates on which the school districts will be holding their public hearings or continuations of their hearings. --- ON OR BEfORE SEPTEMBER 1 1992 Each city certifies to the county auditor the dates that it has selected for its public hearing and for the continuation of its hearing, if necessary. if not cer- tified by this date, the county auditor will assign the hearing date. The date for the city's hearing or for the continuation of its hearing must not conflict with . the hearing dates of the county or of the schoo! districts in which the city is located. All cities, regard- less of their population, must hold public hearings on their proposed property taxes. ON OR BEfORE SEPTEMBER 15j 1992 Each OOtaxing authorityii other than a school district adopts a proposed budget for 1993. Each IItaxing authority II including a school district certifies its proposed (or, in the case of a town, its final) property tax levy for payable 1993 to the county auditor. "Taxing authorityll includes all counties, all school districts, all cities regardless of their population, all towns and all special taxing districts. No local units of government are exempted from this requirement. AFTER NOVEMBER '10, 1992 The county auditor prepares and the county AND ON OR BEfORE NOVEMBER treasurer delivers a parcel specific notice of 24! d8992, proposed property taxes by first class mail to each property owner at the address listed on the county's current year assessment roll. The date, time and place for the scheduled public hearings for the . county, school district and city (if the property is located within a city) will be shown along with other information" The Department of Revenue is to prescribe the form of parcel specific notice to be (Over) used. .. . ," ,- , School districts and cities over 1,000 in population NOT LESS THAN lWO BUSINESS DAYS NOR MORE THAN SIX BUSINESS DAYS advertise their public hearing in an official newspaper PRIOR TO THE PUBLIC HEARING of general circulation within' the taxing authority. . Cities of1 ,000 population or less must post their notice in the three most public places within the taxing authority. Both the publishing and the posting procedures are subject to specific requirements as to content, presentation and newspaper selection (or posting place). The advertisement must give' notice of the taxing authority's intent to adopt its payable 1993 property tax (and, in the case of a county or city, its payable 1993 budget) at the public hearing. Towns and special taxing districts are exempt from , this publication or posting requirement. NOVEMBER 30 THROUGH DECEMBER 21 Counties, school districts and cities hold their public 1992 ~/~~~~~~':(fl1 hearings and adopt their final payable 1993 property taxes (and, in the case of counties and cities, their ~~ final budgets) at the hearing. All counties are re- quired to hold their public hearings on December 8th in 1992. . AT LEAST FIVE BUSINESS DAYS BUT If the public hearing is not completed ,on its . NO MORE THAN 14 BUSINESS DAYS scheduled date, the taxing authority must announce, AFTER THE PUBLIC HEARING prior to adjournment of the public hearing, the date, time and plabe for the continuation of the hearing. ON OR BEFORE 5 BUSINESS DAYS Counties, school districts, cities and special taxing AFTER DECEMBER 20, 1992 ~ districts certify their final adopted property taxes to ~~ the county auditor. (Towns certify their final property taxes by September 15, 1992.) The final property tax certified by a county, school district or city cannot . exceed its proposed property tax except for several exemptions authorized for events occurring after the proposed property tax was certified. If a town board modifies the town's final property tax at a special town meeting after September 15, the town board must recertify its modified property tax at this time. If a county, school district, city, town or special taxing district has not certified its final property tax by this time, its, property tax shall be the amount levied by it in the preceding year. . ~ . . '. ,. '" . , DEPARTMENT OF PROPERTY TAX AND PUBLIC RECORDS A607 Government Center . HENNEPIN Minneapolis, Minnesota 55487-0067 Crossroads To Service August 21, 1992 John E. Schedler Hopkins City Hall 1010 1 st Street South , Hopkins, Minnesota 55343 Dear Mr. Schedler: As required by the Truth in Taxation legislation, we are notifying you of the public hearing dates set by the Hennepin County Board of Commissioners and the school districts to adopt the levy for taxes payable in 1993. Taxing District Original Hearing Reconvened Hearing . Hennepin County December 8, 1992 December 15, 1992 School District No. 270 December 3, 1992 December 17, 1992 School District No. 273 December 14; 1992 December 21, 1992 School District No. 283 December 14, 1992 December 21, 1992 We are now asking that you set your city's dates and times for the original budget hearing and for a reconvened hearing. Although, we will only be printing the original hearing date on the notice, the reconvened date needs to also be set at this time. The hearings may be held anytime between November 30, 1992 and December 21, 1992, as long as they do not fall on the dates shown above. We ask that upon determining the dates, times, places and phone number for taxpayers to call, that you fill out the enclosed form 'and return it to us in the. envelope proyided. Minnesota Statutes 275.065 requires it be returned no later than . September 15, 1992. HENNEPIN COUNTY an ~qual opportunity employer .-. ."~"'" "'...>>"...._,.. .~...~ ~.~ .,"... --'"'''''''+"~,,,,, .. ,n_".. "..",.,,,...',,.,,. ~..,.... ---_._..~_.._._---- " ,~, CITY OF HOPKINS .' Hennepin County, Minnesota RESOLUTION NO. 92-72 A RESOLUTION APPROVING PROPOSED 1992 TAX LEVY COLLECTIBLE IN 1993, ADOPTING THE PRELIMINARY 1993 BUDGET, AND SETTING PUBLIC HEARING DATES BE IT RESOLVED BY THE COUNCIL OF THE CITY OF HOPKINS, MINNESOTA, that the following sums of money be levied for the current year collectible ,in 1993 upon the taxable property in said City of Hopkins, for the following purposes. General Fund, $4,086,000 Equipment Replacement Fund 400,000 General Obligation Bonds 324,100 Improvement Bonds ,128,700 This levy is made based on current law and the 1993 General Fund Budget of $6,210,000. provision has been' made for the payment of the City 's contributory share to the Publ~c Employees Retirement Association. provision has also been made for the payment of principal and interest on the .. following bond issues: Redevelopment Bonds 5-1-88 G.O. Sewer Revenue Bonds 12-1-89 Redevelopment Bonds 12-1-89 Park Bonds 3-1-90* Refunding Bonds 3-1-90 Improvement (PIR) Bonds 3-1-90* Refunding Bonds 2-1-92 Improvement (PIR) Bonds 8-1-92* *Levy Public hearing date for the 1993 budget is December 7, 1992, with a reconvening date of December 16, 1992, if necessary. BE IT FURTHER RESOLVED, that the City Clerk is hereby ordered and directed to transmit a certified copy of this resolution to the County Auditor of Hennepin County, Minnesota. Adopted by the city Council of the City of Hopkins at a regular meeting of the - Council held this 1st day of September, 1992. By Nelson W.Berg, Mayor ATTEST: . James A. Genellie, City Clerk .