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

• bjectives 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 Government, 22% Public Safety, 19% Public Works, 12% Community Services, 29% Capital Outlay, 13% Other, 5%

General Fund Expenditures

Proposed 2020 General Fund Budget - Expenditures

 2018 - $3,560,800

2019 - $3,725,000 2020 - $3,929,650

• 500,000

1,000,000 1,500,000 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

Property Taxes, 67% Franchise Fees, 10% Intergovernmental Aids, 10% Licenses and Permits, 3% Transfers In, 6% Charges for Services, 4% Other, <1%

General Fund Revenues

Proposed 2020 General Fund Budget - Revenues

 2018 - $3,560,800

2019 - $3,725,000 2020 - $3,929,650

• 1,000,000

2,000,000 3,000,000 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

• wners 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

30.000 50.000 70.000 90.000 110.000

Proposed 2020 Tax Levy – Comparisons

 Of the 17 Cities in Wright County, Delano has the

eleventh lowest proposed total tax rate

80.000 100.000 120.000 140.000 160.000 180.000 200.000

Where Do Your Taxes Go?

 Total Property Tax Allocation

City of Delano 40% Delano Public Schools 27% Wright County 33%

Where Do Your City Taxes Go?

 City of Delano Property Tax Allocation

13% 6% 3% 14% 18% 9% 2% 10% 18% 7% Police Fire Emergency Services and Other Safety Snow Removal & Street Maintenance Parks and Trails Senior Center, Library, and Other Housing & Economic Development Capital Outlay Debt - Street Reconstruction Debt - Buildings & Infrastructure

Where Do Your City Taxes Go?

 What do you pay for City Services monthly?

 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.)

Value of Home Police Fire

Snow Removal & Street Mntce

Parks and Trails Capital Outlay

Debt – Street Recon- struction

Debt - Buildings & Infrastructure

$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

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