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2019 preliminary budget

2019 preliminary budget. City of New Hope Council Presentation • Sept 10, 2018. Presentation Outline. Budget process review Review past levies, loss of aid, reduced funding for central garage equipment replacement Present preliminary general tax levy Review specific tax levy detail

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2019 preliminary budget

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  1. 2019 preliminary budget City of New Hope Council Presentation • Sept 10, 2018

  2. Presentation Outline • Budget process review • Review past levies, loss of aid, reduced funding for central garage equipment replacement • Present preliminary general tax levy • Review specific tax levy detail • Property tax levy limits • Local Government Aid (LGA) review

  3. Budget Process Review • September 10, 2018 • Present 2019 preliminary tax supported budgets • Present 2019 preliminary tax levy (maximum amount) • September – November, 2018 • Review general fund budget detail • Review enterprise fund budget detail • December 3, 2018 • Public input meeting

  4. Budget Process Review • December 2018 • Present approved budgets and tax levy – Final meeting December 10, 2018 • Certify final levy to Hennepin County Auditor and Department of Revenue

  5. Past Levies, LGA Loss & Impact on Equipment Replacement Funding • 2016 Budget • 7.04% levy increase over 2015 • $616,161 LGA received • Full LGA used to help cover general fund equipment replacement costs (75%)

  6. Past Levies, LGA Loss & Impact on Equipment Replacement Funding • 2017 Budget • 10.68% levy increase over 2016 (added bonds for City Center and Northwood South street projects) • $621,879 LGA received • Full LGA used to help cover general fund equipment replacement costs (100%) plus $304,000 from General Fund tax levy

  7. Past Levies, LGA Loss & Impact on Equipment Replacement Funding • 2018 Budget • 7.9% levy increase over 2017 (added bonds for Northwood North street project and Park Infrastructure levy increase for ice arena debt) • $693,114 LGA received • Full LGAto be used to help cover general fund equipment replacement costs (100%) plus $160,000 from General Fund tax levy

  8. Past Levies, LGA Loss & Impact on Equipment Replacement Funding • 2019 Budget • 18.99% levy increase over 2018 (13.24% is for addition of bonds for new police station/city hall facility). The levy increase would be 5.75% without the facility bonds. • Scheduled to receive $697,684 in LGA. • Full LGAto be used to help cover general fund equipment replacement costs (100%) plus $250,000 from General Fund tax levy

  9. Central Garage Fund Equipment/ Vehicle Replacement • In past years funds have been budgeted for both: • Operations (gas, oil, tires, maintenance) • Replacement (savings for future replacement) • Includes variety of city vehicles/equipment (snowplows, police vehicles, trucks, etc.) • Equipment replaced only when necessary – often delayed • Past budgets – replacement charges reduced in general fund due to reduction in LGA and to keep tax levy low • Goal achieved in 2017 to incrementally increase general fund replacement cost to 100%. Also saving $300,000 annually for future improvements to garage facility.

  10. General Fund Budget Major increases include: • $365,857 to fund 3% increase in wages/benefits; increase in Council salaries • $69,027 increase for 100% equipment replacement costs and future building improvements at public works • $62,743 for potential new part-time communications position • $28,995 increase in West Metro Fire-Rescue District JPA • $27,000 increase in street department for 19% increase in cost of salt for snowplowing • $21,000 increase in Hennepin County assessment services contract due to new development

  11. Street & Park Infrastructure • Key points: • New Hope does not assess taxable properties for street improvement. • Street and Park infrastructure improvements are paid through the general property tax levy (commenced with 2001 tax levy). • Levies for street and park infrastructure funds were increased by 3% in 2015 (first increase since 2009). • A 5% increase for street infrastructure is proposed in the 2019 budget (increase of $66,545). • A 5% increase for park infrastructure is proposed in the 2019 budget (increase of $16,646, plus $300,000 to assist with ice arena debt service and capital improvements). • Overall tax rate may appear high when compared to other cities due to New Hope including infrastructure improvements in general property tax levy rather then assessing to benefiting property owner (street levy isapproximately 15% of local tax levy).

  12. 2019 Budget Initiatives • Key points: • Continue to provide existing services/programs with current resources. • Utilize $697,864 of LGA in the general fund to help fund equipment replacement savings at 100% level (not utilized for general operations). • Police and Fire operations are a high priority; continue CERT emergency preparedness program and joint city/fire emergency operations center. • Redevelopment of city center area is a high priority as well as completion of Ironwood luxury apartment project adjacent to golf course and initiating redevelopment on city-owned railroad property. • Total tax levy includes new levy ($1,709,452) for the new police station/city hall facility scheduled for completion in June of 2019

  13. 2019 Budget Initiatives • Key points (continued): • Continue aggressive scattered site housing program to remove deteriorated homes and increase property values with new construction. • Continue aggressive street improvements program (Winpark Drive reconstruction, 42nd Avenue street light replacement, and Boone and 42nd Avenue turn signal replacement), and annual seal coat and sewer lining improvements. • Complete Jaycee Park playground improvements, coordinate Civic Center Park and pool improvements, complete Ice Arena CIP items (dehumidification improvements, security door system), improvements at golf course (new golf cart lease, potential bocce ball court), and continue Movies in the Park program. • Continue Emerald Ash Borer removal/replace- mentprogramon public property.

  14. 2018 Budget Initiatives • Key points (continued): • Move in to new police station/city hall facility and coordinate demolition of existing building. • 2019 is not an election year. • Continue contractual arrangement with Solution Builders for IT services. • Continue financial services contract with AEM, update five-year financial plan and continue to improve financial reporting. • Continue local performance measures program, performance measurement report/SMART goals, solicit resident feedback on services, and continue to promote Nextdoor.com program. • Cost of living increase (3%) and shared increase for insurance contributions included for employees; Council salary adjustments. • Continue MN Green Step Cities program.

  15. THE PROPOSED TAX LEVY

  16. Tax Levy Effect on a Home

  17. 2018 Legislative Session Impacts • No levy limits; • The competitive bidding threshold has been raised from $100,000 to $175,000; • LGA allotment increased to $697,684 (was $693,114 in 2018); • Effective Jan. 1 2019, Minnesota’s minimum wage will increase to $9.86 per hour for large employers (up from $9.65 per hour). The youth minimum wage will increase to $8.04 per hour and a “training wage” of $8.04 also goes into effect. Some city positions are exempt from these requirements.

  18. 2019 LGA Compared With Last 10 Years

  19. City Tax Rate For Past 10 Years

  20. Tax Capacity Information • 2019 Tax levy impact will vary by property type • Commercial/Industrial properties have higher tax rates than Residential/Apartment properties • Tax impact is based on estimated market value • Parcel specific tax estimates prepared by county

  21. Summary of Tax Capacities

  22. Local Tax Rate Preliminary tax capacity values obtained from Hennepin County on August24, 2018 Amounts are estimated for county, school and other tax rates for 2019.

  23. General Fund Revenues 2017 & 2018 Adopted Budgets & 2019 Preliminary Budget

  24. General Fund Expenditures2017 & 2018 Adopted Budgets & 2019 PreliminaryBudget

  25. 2019 Current Budget Summary • Fund balance maintains close to 45% of expenditures if this budget is maintained • Overall levy increase is 18.99%. Prior year increase was 7.9% • LGA to be used for equipment replacement savings – not general operations

  26. 2019 Preliminary Budget Data • Council and staff will continue to review budgets and programs • Tax supported and rate supported budgets will be reviewed and finalized • Final document will be submitted to Council in December 2018 for adoption • Budget document also available at city hall • 763-531-5117 • cityhall@ci.new-hope.mn.us

  27. Property Tax Relief Programs • State provides direct property tax relief to taxpayers • Homestead credit refund • Renter’s refund • Special property tax refund (referred to as the targeting program) • Senior Citizen Property Tax Deferral Program. • Contact MN Dept of Revenue 651-296-4444 or www.revenue.state.mn.us

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