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CR 90-173 Approve Proposed Set Budget HearingsAugust 16, 1990 EmeacagLagtioL • gyerview. APPROVE PROPOSE,^. 1990 Lt SEAT BUDGET BEARINGS Council Report 090 -173 Staff recommends adoption of the following motion: 9'cve_ that Q,1utj _i. i . " s l9C Tax L evv �l�tb?�aAoPcha l�rr.`S.Y e ial Public_..,, a.K near be adapted. Adoption of this resolution will enable compliance with the "Truth and Taxation" law enacted by the Minnesota legislature for levy year 1990. The legislation set many deadlines for specific action by the Council. The City Council must adopt a proposed 1990 levy and set hearing Pates by September 1, 1990. Budget hearings must be held between November 17 and Dr 20, 1}90, and a final levy (which cannot exceed the proposed levy, but may be Lower) muet be adopted by December 28, 1990. The state government Baas frozen local aids for cities at the 1990 reduced levels. Due to this action, the city must raise local taxes in order to maintain current service levele. Staff is recommending that the Council adopt the maximum levy 'unount at this time. During the budget process, ptaaff will identify alternative areas in which to lower the tax levy. °e .s. o What is the necessity for levying to the limit amount? o What are the components of levy - General Fund and Debt Service? ca How will current actions relate to future financing? sncmxetno a fo .t+eal. o Background R%esoletion 90 -92. c Staff analysis cif budget. o Department of Revenue Truth in Taxation calendar. • County Auditor budget hearing* calendar. o Preliminary 1991 General Fund Budget. B. Itched er, Finance Director • • Approve Proposed 1990 Levy Set Budget Hearings Report 90 -173 Page 2 esc gXauaq The advent of "Truth and Taxation" legislation has drastically changed the time table for the budgeting process. The timing of deadlines has altered not only the when, but also the process of preparing a city budget. With the increasing limitations on the City's ability to levy taxes and the freezing of state aids, the taxes and state government aids become the driving factors in the financial limitations on operating services. Gengra1 Fund The preliminary General. Fund budget process keyed on the cost of personnel, which accounts for 72% of General Fund. costs. These costs were determined prior to August 1 when the levy limits and LGA first become known. From the revenue available then is subtracted the personnel costs and the remainder of the budget is shaped to funding available, The 1991 Preliminary Budget thus is being reported to the Council with departmental totals only, developed with actua.l personal service projections and percentage increases for other costs. The departments then will develop their regular line item budgets within the parameters established. 5.21Arce Amount % Cten g Levy* (at levy limit) $3,456,000 9.9 Local Government Aid (frozen at 1990 amount) 984,900 O. Other Revenue ._? ,2L7 800 18,.2 1991 Total +General. Fund Revenue *Levy Limit Calculation General Fund Revenue Summary This is a total increase of $310,402 (9.3 %) 'from the maximum 1989. levy. There are two factors influencing the increase w- inflation and popUlr tion growth. The normal. 3% inflation factor g:nerates $ 126,005 Growth factor - 1/2 of 8.5% population increase 1989 vs. 198& or a net 4.3% increase 1,86. E12 312,030 Levy base adjustment for 100% of 1990 final LGA reduction of base Adjust for freeze of LGA for 1991 Net Levy Limit Increase $5,728,700 (71,263) $ 310,402 0 Approve Proposed 1990 Levy Set Budget Hearings Report 90-173 Page 3 Expenditure Summary Personal. Services $4,167,000 8.3% Other Charges and Supplies 1,331,100 3.0 Ice Arena (charges & supplies) 76,500 Customer Service/Wellness 6,100 Non - departmental 163,000 (8.4) Capital, Outlay 80,000 3.0 1991 Total $5,823,700 Revenue 5 728 700 Difference $ 95,000 $95,000 proposed from fund balance to cover 65% of 27th payroll. On a bi- weekly pay system every eleven years an extra payroll is required. Increases to expenditure budget include: 27th payroll $145,O00 One-half of refunding a dropped intern 27,000 Staffing ax d operating expense Ice Arena 150,600 (offset by revenue of $135,600) p1oyee - Cost of living increase, step increases and some comparable worth adjustments. Approve Proposed 1990 Levy Set Budget Hearings Report 90 -173 Page 4 GENERAL FOUND 1991 PRELIMINARY DEPARTMENT EXPENDITURES 40410 Mayor-Council $ 85,600 40415 Health & Welfare 44,500 40420 City Manager 227,300 40440 Elections 22,500 40510 City Clerk 76,900 40520 Finance 190,300 40600 Legal Services 83,800 40940 Municipal Building 129,000 40950 Activity Center - Maint. 47,600 40960 Activity Center -- Operating 90,300 41100 Police 1,821,500 41200 Fire 366,400 41300 Civil Defense 21,200 41400 C. Dev. - Administration 93.300 41500 C. Dev. - Flan & Econ Day. 80,400 41600 C. Dev'. - Assessing 142,500 41800 C. Dev. - Inspection 230,400 42100 P.W. - Buildings 32,000 42110 P.W. - Equipment Services 52,500 42120 P.W. - Administration 113,200 42125 P.W. - Engineering 114,700 42130 P.W. - Streets & Alleys 389,800 42140 I.W. - Snow & Ice Removal 100,200 42160 P.W. - Traffic Signs & Signals 122,600 42170 P.W. -- Street Lighting 112,500 42240 P.W. -- Street Cleaning 53,200 42250 P.W. Parks 347,000 42260 P.W. - Tree Service 113,700 42270 P.W. - Pavilion /Ice Arena 150,600 43510 Recreation 124,000 43930 insurance 50,000 43931 Unallocated 100,000 43932 Transfers Out 1._1,(2' , Capital Outlay Use of Fund Balance 5,743,700. $5,823,700 0 Approve Proposed 1990 Levy Set Budget Hearings Report 90-173 Page 5 • iellf.Yallgr..e D ebt 3 The last levy for bonds was $22,313 in 1976 (Parks Bonds) . The requirements for debt service is $639,600, Park Bonds $525,700 and improvement Bonds $113,900, The 1990 levy covers interest and principal for 1990, 1991 and February, 1992. Since the City cannot levy until the bonds are actually sold, the first levy has some catchup in it. Funds deed to be collected in 1991 for availability on due dates. The first levy on most bond issues normally does occur after an actual payment of interest in the year of issue. This loads the first levy in the life on an issue, and the levy will reduce to a normal flow in subsequent years and continue to reduce as principal is repaid. The levies for these two issues will be $414,300 in 1991 and $405,500 in 1992, etc. On averaging the tax for the park issue over the first two years on a home with a market value of $80,000, the taxes for the first two years of this issue are $3.00 per year lower than the projected taxes of $26.49 as estimated in the Hopkins Highlights October, 1989, issue The first two years average tax for Improvement Bonds is $5.10. The levy for Capital Notes results in a slight reduction from the prior levy. Total j In terms of total levy, the tax increase is $942,420 or 26,08% of which 17.70% is due to bonds issued by referendum and prior actions. The taxes to support the General Fund increased 8.44% and while the expenditures proposed increases 7,41 the loss of LGA (2.6 %) and the reduction of fund balance of $294,220 for 1989 awakes the increased taxes insufficient to cover the 1991 budget (mainly due to the extra payroll). Also to consider is that part of the tax increaee was a. one time bump (4.3 %) to the base for a population increase and this adjustment will grow at the inflation rate of only 3.01 in the future. Landfill costs in 1990 are anticipated to exceed the landfill fund balance reserves in excess of $500,000, thu. s reducing the target of $2,500,000 for cash flow. In order to regain the target of cash flow and the uncertainties of future actions by other governmental units, I strongly suggest the levy be made at the maximum allowable. • CITY OF HOPKTNS Hennepin County, Minnesota RESOLUTION' NO. 90-92 A RESOLUTION APPROVING PROPOSED 1990 TAX LEVY COLLECTIBLE IN 1991, ADOPTING THE PRELIMINARY 1991 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 1991 upon the taxable property in aid City of Hopkins, for the following purposes. General. Fund Capital Equipment Notes General Obligation Bonds This levy Le made based on current law $5,823 Provision has been made for the payment of the P'eblic Employees Retirement Association. Spacial Assessment Bonds 7 -1-72 Redevelopment Bonds 5-1-B8 G.G. Sewer Revenue Bonds 12 -1-89 Redevelopment Bonds 12-1 -89 Capita/ Equipment Notes 3 -1 -90* Jas A. Genellie, Ci.t Clerk By $3,473,191 442,800 639,600 and the 1991 General Fund Budget of City's contributory share to the Provision has also been made for the payment of principal and interest on the following bond issues: Park Bonds 3 -1 -90* Special Assessment Bonds 3- 1-90* Redevelopment Bonds 3-1-90 Refunding Bond 3 -1 -90 Public hearing date for the 1991 budget is November 20, 1990, with a reconvening date of December 11 1990, if necessary. BE IT FURTHER RESOLVED, that the City Clerk transmit si°t a - certified copy of this resolution County, Minnesota, is hereby. ordered and directed to to the County Auditor of Hennepin Adopted by the City Council of the City of Hopkins at a regular meeting of the Council held this 21st day of .August, 1990. Nelson W Beg, Meyer MUTE IN TAXATION CALENDAR FOR LEVY YEAR 1990 PAYABLE 1991 ON QR BEFORE AUGUST 1, 1990 ON OR BEFORE AUGUST 15, 1990 €4 OR BEFCRE ALUJST 20, 1990 ON OR MORE SEPTEMBER' 1, 1990 ON OR BEFORE SEPTEMBER 1, 1990 County auditor notifies the clerk of each school district within the county of the dates that the count; board has selected for its Truth in Taxation hearing and for the continuation of its hearing, if necessary. (M.S. 275.065) 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 Truth in Taxation hearing and for the continuation of its hearing, if necessary. If not certifiers by this date, the county auditor will assign the hearing date. (M.S. 275.065) County , auditor notifies the clerk of each city within the county of the dates on which the county and school districts will be holding their Truth in Taxation. hearings or continuations of their hearings. (M.S. 275.065) Each city certifies to the county auditor the dates that it has selected for its Truth in Taxation 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 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 school districts in which. the .°ity is lotted. All cities, regaLdless of their population, mu et hold Truth in Taxation hearings. (M.S. 275.065) Each ''taxing authority" certifies its proposed property tax levy for payable 1991 to the county auditor. "TTaxiang authority" includes all counties, all school districts, all cities regardless of their population, all towns and all special taxing districts. No loccal, units of government are exempted from this requirement. (M.S. 275.065) 41 1 ON OR BEFORE NOVEMBER 10, 1990 County auditor prepares and county treasurer delivers a generic notice of proposed property taxes by first class mail to each taxpayer at the address listed on the county's current year assessment roll. The date, tine and place for the scheduled public hearings for the county,. school district and city must also be shown. The Department of Revenue is to prescribe the form of generic notice used by all 87 counties. (M.S. 275.065 ) NOT LESS THAN TWO CALENDAR DAYS A county, school district or city advertises NOR MORE THAN SIX CALENDAR DAYS its Truth in Taxation hearing in an official PRIOR TO THE - TF,WATICN newspaper of general circulation within the BEARING taxing authority, subject to specific requirements as to content, presentation and newspaper selection. The advertisement must give notice of the taxing authority's intent to adopt its property tax levy (and in the case of a county or city its gadget) at the public hearing. Torts and special taxing districts are exempt from this publication re c .r° nt, (M.S. 275.0653 VCNEMBER 15 THROUGU DECEMBER 20, Counties, school districts and cities hold 1990 their scheduled Truth in Taxation leasinns and adopt their final levies (end, in the case of counties and cities, their final budgets) at the hearing. ( . S . 275.055) OW OR MORE DECEMBER 28, 1990 Counties, school districts, cities and • special taxing districts certify their final adopted, levies to the county auditor. The final levy certified by a county, school district or city cannot exceed its proposed levy except for several exemptions authorized for events occu ring after the proposed Xevy vas certified. If a town board modifies the tows r i final levy at a special town meeting after September 1, the town boarJ musst recertify its modified levy at this time, If a county, :school district, city, town or special taxing district has not certified its final levy by this time, its levy shall be the amount levied b it in the preceduly year. (M.S. 275,07) • Cmesroads To Service July 31, 1990 James A. Gene11ie, Clerk City of Hopkins 1010 First Street South Hopkins, Minnesota 55343 Dear Mr, Gene1l.ae: 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 within your city to adopt the levy for taxes payable in 1991. Taxing District Hennepin County School District #270 School District #273 School District #283 j We are now requesting that you set your city's dates and times for the original budget hearing and for a reconvened hearing. The hearings may re held anytime from NOvember 17, 1990, through December 20, 1990. We ask that upon setting the dates, times, end places, you fill out the enclosed form and return it to us in the envelope provided. As you can tell from the enclosed abbreviated calendar, the turn around time for the public hearing notifications is vety short. You need to return the enclosed form by September 1, 1990. You may include it when certifying your proposed levy which is also die on September 1, 1990, If you have any questions, please contact Marie Kun ,° at 348-5100., Sincerely, Dale G, Foisted, Director Property Tax and Public Records Marie . Kunze Tax Receivables Division Manager DGF :ZW(;kfs Enclosures DEPA ENT OF PROPEL TAX AND PUBLIC RECORDS A607 Government Center Minneapolis, Minnesota 55487-0067 flri final Hear,ang Eecorf:!ntd Hearing November 15, 1990 December 6, 1990 November 26, 1990 November 26, 1990 November r 16 ,1990 December 20, 1990 November 27, 1990 December 10, 1990 Jt' erg ,:t d 1 fe c" ��{�„�[�2�Y / ( `rte' HEN EP N COUNTY on 'aqua! o,porfun ty enpk i '