December 3, 2019 Presentation Outline Budget Basics Proposed 2020 - PowerPoint PPT Presentation

December 3, 2019

Presentation Outline  Budget Basics  Proposed 2020 General Fund Budget  Expenditures  Revenues  Proposed 2020 Tax Levy  Basics of Property Taxes  City of Delano Tax Levy  Calculation of Property Taxes  Comparisons  Summary

Budget Basics  The Budget is a tool utilized by the City to allocate resources towards goals and priorities of the City for the upcoming year.  The Budget is a reflection of the plans, policies, and objectives regarding the services the City plans to provide.  The Budget is a tool to reach an end – providing the quality services and while maintaining resource management.

Budget Basics  Needs and priorities determined  Strategies established  Capital improvement plan updated  Detail budgets prepared  Preliminary budget and tax levy approved  Revisions to the preliminary budget and tax levy  Final budget and tax levy presented and approved

Proposed 2020 General Fund Budget - Expenditures  Total General Fund Expenditures - $3,929,650 General Fund Expenditures Other, 5% General Capital Outlay, 13% Government, 22% Public Safety, 19% Community Services, 29% Public Works, 12%

Proposed 2020 General Fund Budget - Expenditures  2018 - $3,560,800 2019 - $3,725,000 2020 - $3,929,650 1,500,000 1,000,000 500,000 - 2018 2019 2020 General Government Public Safety Public Works Community Services Capital Outlay Other

Proposed 2020 General Fund Budget - Expenditures  Items Impacting Expenditures  5.0% increase in medical insurance  2.25% cost of living adjustment  Capital needs  Splashpad

Proposed 2020 General Fund Budget - Revenues  Total General Fund Revenues - $3,929,650 General Fund Revenues Intergovernmental Licenses and Aids, 10% Franchise Fees, 10% Permits, 3% Transfers In, 6% Charges for Services, 4% Other, <1% Property Taxes, 67%

Proposed 2020 General Fund Budget - Revenues  2018 - $3,560,800 2019 - $3,725,000 2020 - $3,929,650 3,000,000 2,000,000 1,000,000 - 2018 2019 2020 Property Taxes Franchise Fees Intergovernmental Aids Licenses and Permits Transfers In Charges for Services & Other

Proposed 2020 General Fund Budget - Revenues  Items Impacting Revenues  Property Taxes  Franchise Fees  Intergovernmental Aids  Splashpad

Proposed 2020 General Fund Budget  Summary  Balanced General Fund Budget  Total General Fund Budget increase of $204,650.  Splashpad revenue and expenditures of $54,450.  Conservative estimate of Licenses and Permits.

Proposed 2020 Tax Levy – Basics of Property Taxes  How are property taxes calculated?  Property taxes support three levels of government – City, County, and School District  State establishes a formula for how taxes are divided amongst properties

Proposed 2020 Tax Levy – Basics of Property Taxes  Factors that influence the Tax Levy  Market Value  Tax Capacity  Class Rates  State Aids  City Budget and Debt Levies  County Budget  School District Operating and Debt Levies  State Changes to Market Value Program

Proposed 2020 Tax Levy – City of Delano Tax Levy  Preliminary 2020 Tax Rate – 52.885%  Actual 2019 Tax Rate – 53.399%  The City establishes a levy amount based on three factors:  General Fund (general operations of the City)  Debt Service  Tax Abatement

Proposed 2020 Tax Levy – City of Delano Tax Levy  The general operations levy is $2,683,607  An increase of $106,411, or 4.13%, over last year’s levy.  This compares to a levy increase of $112,056, or 4.55% for 2019.

Proposed 2020 Tax Levy – City of Delano Tax Levy  The debt levy is $944,000  Fire station 2011 debt service - $77,500  Rockford Ave. and Tiger Dr. (‘16 debt service) - $142,000  Bridge Avenue 2009 debt service - $70,000  2013 streets debt service - $237,000  2016 streets debt service - $321,500  2018 improvements - $96,000  Tax abatement levy is $100,000  2015 downtown public safety improvements.

Proposed 2020 Tax Levy – City of Delano Tax Levy  Total levy for 2020 is $3,727,607  An increase of 5.22% from 2019; down from 7.92% last year.  Decision not to specially assess benefiting property owners for street improvements.  Tax rate decrease of 0.514 (0.96%) percentage points from 2019. Why?  $415,000 increase in Taxable Market Value ($269,750 inflationary and $145,250 new growth).

Proposed 2020 Tax Levy – Calculation of Property Taxes  Each property has an assessed market value  Homesteaded properties valued at less than $413,800 are allowed an exclusion of a portion of their market value  Classification rate is applied to the taxable market value to determine the net tax capacity of the property  Each type of property has a different classification rate (homestead - 1.0%, commercial - 1.5%, etc.)  Example: $200,000 x 1.0% = $2,000  The net tax capacity of the property is then applied to the tax rate to determine the taxes due  Each taxing entity (City, County, School) establishes a rate, and the sum equals the total tax rate

Proposed 2020 Tax Levy – Calculation of Property Taxes  Preliminary tax rates for 2020  City 52.885% (53.399% in 2019)  County 44.393% (44.273% in 2019)  School 36.766% (39.826% in 2019)  Total preliminary tax rate 134.044% (137.498% in 2019)  An example for a $275,000 homesteaded property is shown on the next slide.

Proposed 2020 Tax Levy – Calculation of Property Taxes 2019 2020 2020* Assessed Market Value $ 275,000 $ 275,000 $ 286,000 Less: Exclusion 12,490 12,490 11,500 Taxable Market Value 262,510 262,510 274,500 Multiplied by Class Rate of 1% 2,625 2,625 2,745 Multiplied by Tax Rates: City of Delano 1,402 1,388 1,452 Delano School District 1,045 965 1,009 Wright County 1,162 1,165 1,219 Net Tax $ 3,609 $ 3,518 $ 3,680 Increase from 2019 to 2020 -2.52% 1.97% * - Assumes a 4% increase in the property's market value.

Proposed 2020 Tax Levy – Comparisons  Of the 17 Cities in Wright County, Delano has the eighth lowest proposed City tax rate 110.000 90.000 70.000 50.000 30.000

Proposed 2020 Tax Levy – Comparisons  Of the 17 Cities in Wright County, Delano has the eleventh lowest proposed total tax rate 200.000 180.000 160.000 140.000 120.000 100.000 80.000

Where Do Your Taxes Go?  Total Property Tax Allocation Wright County 33% City of Delano 40% Delano Public Schools 27%

Where Do Your City Taxes Go?  City of Delano Property Tax Allocation Police 7% 13% Fire Emergency Services and Other Safety 6% 18% Snow Removal & Street Maintenance 3% Parks and Trails Senior Center, Library, and Other 14% 10% Housing & Economic Development Capital Outlay 2% 9% Debt - Street Reconstruction 18% Debt - Buildings & Infrastructure

Where Do Your City Taxes Go?  What do you pay for City Services monthly? Snow Parks and Capital Debt – Debt - Value of Police Fire Buildings & Removal & Street Recon- Trails Outlay Home Infrastructure Street Mntce struction $150,000 $7.37 $3.47 $7.61 $10.14 $5.80 $10.10 $3.93 $260,000 $14.37 $6.77 $14.83 $19.77 $11.31 $19.69 $7.67 $400,000 $23.29 $10.97 $24.02 $32.02 $18.33 $31.90 $12.42  Compare the cost of a service provided by the City to other services provided or products consumed (i.e. cell phone, cable, fuel, groceries, sporting event, etc.)

Summary  Balanced General Fund Budget  Items property tax payers should consider when paying their property taxes:  The City’s total levy is increasing by 5.22%. Of that increase 56% is for operations and 44% is for street improvements.  Cost per month of City services provided decreased for most services.  The City’s overarching goal is to provide the highest quality services in a fiscally responsible manner