12-12-2022 Council Packet - Laserfiche WebLink

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Prepared By: RJO Reviewed By: A. Carlson Approved By: 1. Purpose. The purpose of this action item is to approve the 2023 General Fund Budget, 2023 Tax Levy, the 2023 Special Revenue Fund Budgets, the 2023 Enterprise Budgets, the 2023 Fee Schedule, and the 2023 Capital Improvement Plan. 2. Background. Prior to the adoption of the 2023 budgets and tax levy, the City is required to hold a public hearing to allow public input. By law, this hearing must occur between November 25th and December 28th. When the preliminary tax levy and budget was approved in September, the public hearing was set for December 12, 2022 at 6:00 pm. This public hearing is the final step prior to adoption of the budget and tax levy. Staff has been working on the 2023 General Fund budget since May. As part of the budget process, there have been three meetings with the Budget Committee and the draft budget was presented to the entire Council at a work session on September 12th for their review. In addition to the work on the actual budget, staff has been working on updating th e Capital Improvement Plan (CIP). The CIP identifies the long-term infrastructure needs and is a valuable tool in the budgeting process. As part of the budget adoption process, Staff has updated the City’s the fee schedule. 3. Tax Levy. The property tax levy has six components. The first is the operating levy which is adopted to fund the General Fund Operating Budget and is increasing by $648,900 (13%). The second part is the Facilities Levy which is dedicated to be used for construction and capital maintenance of city buildings which is remaining at the 2022 amount. The third is for the Pavement Management Levy that is needed to fund the City’s pavement maintenance plan and is increasing by $100,000 (11.1%). The levy for parks is being increased by $50,000 (50%). The Community Investment levy is being established at $219,000 to pay for projects of citywide value. The final levy component is for the debt service of the City’s outstanding bonds. The breakdown of the tax Levy is as follows. General Fund - Operating $5,641,000 Facilities $375,000 Pavement Management $1,000,000 Parks $150,000 Community Investment 219,000 Debt Service $1,002,000 Total $8,387,000 When compared to the 2022 tax levy, the levy is increasing by $1,442,220 or 20.7%. 4. Tax Capacity Rate and the Impact of the Tax Levy on Property Owners . Based on information provided by Hennepin County, adoption of the levy will result in a decrease in the City’s tax rate from 16.820% to 16.567%. This continues to have one of the lowest tax rates in Hennepin County (ranking 40 of 45 cities). Using the new tax rate and assuming no change in a property’s value, the City’s share of the property tax bill will be: a decrease of $-28.52 (-7.21%) on a home previously valued at $250,000; a decrease in tax of $54.07 (-6.43%) on a $500,000 home; a $1,000,000 home will see a decrease of $-132.01 Item No.: 1 Date: December 12, 2022 Item Description: 2023 Budget Hearing Presenter: Ronald Olson Finance Director Agenda Section: Truth In Taxation Public Hearing