Truth-in-Taxation Meeting December 2, 2019 1 Truth-in-taxation - PowerPoint PPT Presentation

City of Shorewood 2020 Budget Truth-in-Taxation Meeting December 2, 2019 1

Truth-in-taxation requirements • Present the 2020 General Fund budget and 2020 property tax levy • Discuss the budget and property tax levy • Invite public comment • Adopt a property tax levy and budget 2

City Services in General Fund • Administration, Finance, Planning & Zoning, Elections, and other services • Police & Fire Protection • Building Inspections • Street & Park Maintenance • Recreation Programs • Transfers to Shorewood Community & Event Center & Capital Funds 3

Budget Assumptions 2020 • Property Tax Levy increase of 5.9% included for 2020 • New staffing for full-time Street Inspector budgeted ❑ 30% in Public Works; 20% Water; 30% Sewer; 20% Storm • Planning Technician increased from 0.8 FTE to 1.0 FTE • Other staffing levels remain the same from 2019 • 3.0% employee cost of living increase for 2020 budgeted • Employer contribution toward insurance premiums to increase from $1,130 to $1,180 per month 4

General Fund Budget Summary 2020 • Total revenues and transfers in of $6,566,196 • Total revenues and transfers in budgeted to increase $292,664, or 4.7% (the majority of the increase is from property taxes) • Property taxes budgeted to increase from $5,530,322 in 2019 to $5,856,611 in 2020, or 5.9% 5

General Fund Budget Summary 2020 • Total expenditures and transfers out of $6,622,581 • Expenditures budgeted to increase $266,523, or 5.2% • Total transfers out (Shorewood Community & Event Center, City Hall debt service, capital) budgeted to increase $36,110, or 3.0% ❑ Street improvements transfer budgeted to increase $25,000 ❑ $50,000 shift from capital equipment to park improvements • Total expenditures and transfers out budgeted to increase $302,633, or 4.8% 6

General Fund Budget Summary 2020 • Reserves of $56,385 used to balance the 2020 budget, compared to $46,416 budgeted use of reserves for 2019 ❑ Increase in budgeted use of reserves of $9,969 7

Budgeted Expenditures & Transfers Out 2016-2020 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2016 2017 2018 2019 2020 8

2020 Expenditures & Transfers Out By Program 9

2020 Expenditures & Transfers Out By Type 10

Budgeted Revenues & Transfers In 2016-2020 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2016 2017 2018 2019 2020 11

2020 Revenues & Transfers In 12

Tax Assessment & Levy Timeline Dec, 2019 Jan 2, 2019 Apr-May, 2019 Sep 30, 2019 Nov, 2019 Dec 28, 2019 2020 Certify TNT TNT Certify Board of Market Prelim Notices Meeting Final Levy Review Value Levy 13

2020 Property Tax Distribution (Preliminary) 14

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Total Tax $ Change - 2020 Tax Change # of Parcels % of Parcels Decrease 886 38.9% $0-300 1,069 47.0% $301-600 223 9.8% $601-900 46 2.0% $901+ 52 2.3% Full property tax bill – includes city, county, school district and other taxing jurisdictions 19

Property Tax Impact 2019 CITY PROPERTY TAXES City Local City Market Tax Tax Capacity Property Value Capacity Rate Taxes 2019 2019 Pay 2019 2019 $200,000 $1,808 28.539% $516 $400,000 $3,988 28.539% $1,138 $600,000 $6,250 28.539% $1,784 $800,000 $8,750 28.539% $2,497 $1,000,000 $11,250 28.539% $3,211 20

Property Tax Impact 2020 CITY PROPERTY TAXES (WITH NO MARKET VALUE CHANGE) Market City Local City Property Percentage Value Tax Tax Capacity Property Taxes Tax 2020 Capacity Rate Taxes Increase Increase NO CHANGE 2020 Pay 2020 2020 (Decrease) (Decrease) $200,000 $1,808 28.973% $524 $8 1.5% $400,000 $3,988 28.973% $1,155 $17 1.5% $600,000 $6,250 28.973% $1,811 $27 1.5% $800,000 $8,750 28.973% $2,535 $38 1.5% $1,000,000 $11,250 28.973% $3,259 $49 1.5% 21

Property Tax Impact 2020 CITY PROPERTY TAXES (WITH MARKET VALUE INCREASE) Market Value City Local City Property Percentage 2020 Tax Tax Capacity Property Taxes Tax INCREASE OF Capacity Rate Taxes Increase Increase 1.2% 2020 Pay 2020 2020 (Decrease) (Decrease) $202,400 $1,834 28.973% $531 $15 3.0% $404,800 $4,040 28.973% $1,171 $32 2.8% $607,200 $6,340 28.973% $1,837 $53 3.0% $809,600 $8,870 28.973% $2,570 $73 2.9% $1,012,000 $11,400 28.973% $3,303 $92 2.9% 22

What is Fund Balance? Fund balance is accumulated reserves that are created when revenues exceed expenditures in a given year. Each governmental fund created by the city has a fund balance. Fund balance can be used in future years for purposes determined by the City Council. The Shorewood City Council adopted a revised General Fund Balance Policy on 1/14/19. 23

Shorewood’s Fund Balance Policy The goal of the General Fund Balance Policy is to provide sufficient funds for cash flow, to accumulate savings for projects, and to have reserves for unexpected shortfalls or emergencies. The plan calls for a balance of 60% of the next year’s budgeted expenditures and transfers out to be kept in the General Fund. Any amount over the 60% target can be used for capital purchases or one-time projects as authorized by the City Council. 24

General Fund Balance 11/8/2019 11/8/2019 2016 2017 2018 2019 Est. 2020 Est. Jan 1 Total Fund Balance 4,502,167 4,604,583 4,162,049 4,419,414 4,333,879 Surplus or (Deficit) for the year 102,416 (442,534) 257,365 (85,535) (56,385) Dec 31 Total Fund Balance 4,604,583 4,162,049 4,419,414 4,333,879 4,277,494 Nonspendable Fund Balance (Prepaid Items) (6,687) (132,477) (157,914) (150,000) (150,000) Dec 31 Unassigned Fund Balance 4,597,896 4,029,572 4,261,500 4,183,879 4,127,494 Fund Balance Goal (60% of the next Year's Budgeted Expenditures and Transfers Out) 3,624,787 3,740,179 3,791,969 3,973,549 Available Surplus 973,109 289,393 469,531 210,330 Percent of Unassigned Fund Balance to Budget 76.1% 63.8% 64.3% 63.2% 2016 2017 2018 2019 2020 Est. Budgeted Expenditures & Transfers Out 5,857,087 6,041,312 6,233,632 6,319,948 6,622,581 Fund Balance % Goal 60% 60% 60% 60% 60% Fund Balance $ Goal 3,514,252 3,624,787 3,740,179 3,791,969 3,973,549 25

Other Funds • Special Revenue Fund: – Shorewood Community & Event Center • Capital Project Funds: – Park Improvement, Equipment Replacement, Street Reconstruction, MSA, Trail Construction, Community Infrastructure • Enterprise Funds: – Water, Sewer, Stormwater, Recycling 26

Capital Improvement Plan • Capital Improvement Plan 2020-2029 • Updated annually • Includes parks, equipment, streets, utilities • Financing sources may include property taxes, assessments, bonding, grants, user charges, use of reserves 27

Capital Improvement Plan • Park Improvements – Increase in transfer from General Fund: $42,000 to $95,000 per year (including shift of $50,000 per year from the Equipment Replacement Fund) – Park Improvements priority list developed • Equipment Replacement – Decrease in transfer from General Fund: $145,000 to $95,000 per year (shift of $50,000 per year to the Park Improvements Fund) 28

Capital Improvement Plan • Street Improvements – Increase in transfer from General Fund: $810,000 in 2019 to $835,000 in 2020 – 2020 proposed projects: • Enchanted and Shady Island Roads • Woodside Road/Lane – Water, Sewer, and Stormwater funds are projected to fund applicable utility project costs 29

Next Steps • December 9, 2019 City Council meeting – Approve the 2020 property tax levy and 2020 General Fund budget – Approve the 2020 budgets for the Shorewood Community & Event Center and Enterprise funds • January 2020 – Approve the 2020 budgets for the Capital Project funds – Approve the 2020-2029 Capital Improvement Plan 30