A. 2008 Budget and Tax Levy Discussion
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
WINI.ci .chanhassen.mn. us
A
MEMORANDUM
TO:
Mayor
City Council Members
Greg Sticha, Finance Director &. 'I.
FROM:
DA TE:
o~~
December 3,2007
SUBJ:
2008 Budget and Tax Levy Discussion
BACKGROUND
Tonight we will be holding our annual Truth-in-Taxation hearing to take
comment from the public on our preliminary proposed property tax levy. At the
work session before the hearing, we will be discussing some of the changes that
have occurred since we set our preliminary levy in September, and the current
proposal being presented at the truth-in-taxation hearing later this evening.
In addition, we will be discussing the change in the healthcare costs and the
effect it will have on our 2008 budget and future budgets. Staff will also be
updating the council on the status of the city's Market Value Homestead Credit
(MVHC) for 2007 and 2008, and other available cash balances in 2008.
A TT ACHMENTS
1. Tax Levy Impact September and Current
2. Cash Balances Spreadsheet
3. Property Tax Examples
The City 01 Chanhassen · A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
CITY OF CHANHASSEN (SEPTEMBER)
TAX LEVY
2008 Budget
TAX CAPACITY BASED TAX LEVY
2007 2008 Percent
Levy Levy Increase
$6,558,100 $6,853,900 4.51% 295,800
824,000 824,000 0.00%
250,750 267,875 6.83%
129,500 -100.00%
488,280 484,873 -0.70%
80,000 285,000 256.25%
100,000 100.00%
122,548 122,703 0.13%
$8,453,178 8,938,351 5.74%
General Fund
Capital Replacement Fund (for equipment)
Pavement Mgmt Fund (Seal coating)
Special Assessment Debt
General Obligation Debt
General Obligation Debt (212 Bonds)
Local Street Improvements
Debt of Other Agencies (EDA)
TOTAL TAX CAPACITY BASED TAX LEVIES
MARKET VALUE TAX LEVY
Park Referendum
Library Referendum
TOTAL MARKET VALUE TAX LEVY
TOTAL TAX LEVY
696,500 559,652
489,100 490,700
$1,185,600 $1,050,352
($63,000) ($133,738)
$9,575,778 $9,854,965
$279,187
-19.65%
0.33%
-11.41%
Use of cash reserves
2.92%
Dollar Increase
.- ,,' .".~, 'T,;C' "~";'>T;t:.'r,:.-"'~t',,~~'1!l~~
Taxes applied to: General Fund
Capital Replacement
Pavement Mgmt
Total Levy subject to levy limits
Bond Funds
Reduction in OS Levy
Total
Scenario 1 Scenario 2 Scenario 3
$ 6,853,900 $6,782,900 $6,747,100
824,000 824,000 824,000
267,875 267,875 267,875
$7,945,775 $7,874,775 $7,838,975
2,042,928 2,042,928 2,042,928
(133,738) (133,738) (133,738)
$9,854,965 $9,783,965 $9,748,165
Tax Generation Capacity
Prior Year
New Construction
Exsiting MV Inc
TIF Oist 1
Eden Trace TIF
Gateway TIF
$9,575,616 $9,575,616 $9,575,616
$172,361 $172,361 $172,361
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$9,747,977 $9,747,977 $9,747,977
1.10% 0.37% 0.00%
Total Capacity
Net Effect on existing property owners
Scenario 1 - Includes the Building Inspector Position (71,000) and the Debt Levy not needed (100,000)
Scenario 2 - Includes the Debt levy Not Needed (100,000) but does not inlclude the Building Inspector position
Scenario 3 - Does not include the Builiding Inespctor Position or the Debt Levy not needed (100,000)
All 3 Scenarios include 532,200 in healthcare savings costs and a reduction in salaries in the finance
department due to a retirement.
Staff recommends using Scenario 1 with potentially re-allocating the $171,000 for other needs such as
the future Public Works Building, Improvements to Iyman Boulevard, or to fund the city's share of local
street improvements.
CITY OF CHANHASSEN (NOVEMBER)
TAX LEVY
2008 Budget
2007 2008 Percent
TAX CAPACITY BASED TAX LEVY Levy Levy Increase
General Fund $6,558,100 $6,821,700 4.02% 263,600
Capital Replacement Fund (for equipment) 824,000 824,000 0.00%
Pavement Mgmt Fund (Sealcoating) 250,750 267,875 6.83%
Special Assessment Debt 129,500 -100.00%
General Obligation Debt 488,280 484,873 -0.70%
General Obligation Debt (212 Bonds) 80,000 285,000 256.25%
Local Street Improvements 100,000 100.00%
Debt of Other Agencies (EDA) 122,548 122,703 0.13%
TOTAL TAX CAPACITY BASED TAX LEVIES $8,453,178 8,906,151 5.36%
MARKETVALUETAXLEVY
Park Referendum 696,500 695,900 -0.09%
Library Referendum 489,100 490,700 0.33%
TOTAL MARKET VALUE TAX LEVY $1,185,600 $1,186,600 0.08%
Use of cash reserves ($63,000) ($269,986)
TOTAL TAX LEVY $9,575,778 $9,822,765 2.58%
Dollar Increase $246,987
Taxes applied to: General Fund
Capital Replacement
Pavement Mgmt
Total Levy subject to levy limits
Bond Funds
Local Street Improvements
Reduction In OS Levy
Total
Scenario 1 Scenario 2 Scenario 3 Scenario 4
$ 6,821,700 $6,750,700 $6,750,700 $6,751,700
824,000 824,000 824,000 824,000
267,875 267,875 267,875 267,875
$7,913,575 $7,842,575 $7,842,575 $7,843,575
2,079,176 2,079,176 1,979,176 2,079,176
100,000 100,000 100,000 170,000
(269,986) (269,986) (269,986) (269,986)
$9,822,765 $9,751,765 $9,651,765 $9,822,765
Tax Generation Capacity
Prior Year
New Construction
Exsiting MV Inc
TIF Oist 1
Eden Trace TIF
Gateway TIF
$9,575,616 $9,575,616 $9,575,616 $9,575,616
$172,361 $172,361 $172,361 $172,361
$0 $0 $0 $0
$0 $0 $0 $0
$0 $0 $0 $0
$0 $0 $0 $0
$9,747,977 $9,747,977 $9,747,977 $9,747,977
0.77% 0.04% -0.99% 0.77%
Total Capacity
Net Effect on existing property owners
Scenario 1 - Includes the Building Inspector Position (71,000) and a Levy for (100,000) for local street improvements
Scenario 2 - Includes a levy for local streets (100,000) but does not inlclude the Building Inspector position
Scenario 3 - Does not include the Builiding Inespctor Position or a levy for local streets (100,000)
Scenario 4 - Is the same as scenario #1 with the cost savings from switching Health care providers & Retirement (70,000)
eliminated from the general fund and used for local street improvements
City of Chanhassen
Analysis of Cash Balances
Estimated 2007 Estimated 2008 Cash Balances
Fund Excess cash Excess cash Desianated
MVHC $ 160,000 $ 120,000
1999A Bond Closing 550,000
2001 B Bond Closing 50,000
Permanent Revolving Debt Fund 150,000
Capital Replacement Fund** 900,000
Contigency Fund 1,300,000
Gateway West TIF District 200,000
TOTALS $ 160,000 $ 920,000 $ 2,350,000
Notes:
The excess cash in the general fund for 2007 & 2008 is from the MVHC, the amount for 2008 should not
be counted on. The 2008 legislature could eliminate this provision. It is staffs recommendation to take any
MVHC in 2007 and beyond and transfer it to the Revolving Assessment Construction Fund (Pavement Mgmt)
Potential Land Sale Proceeds
Park Place Land Site
Sinclair Site
Water Treatment Site
Total Land Sale Proceeds
$ 1,500,000
$ 450,000
$ 670,000
$ 2,620,000
Unfunded Projects
Audubon Rd
Lyman Blvd (Currently Revolve Assess Fund)
PW Facility
101 Corridor
Hwy 5 (41 to NWY)
Total
$2,500,000
$400,000
?
?
?
2,900,000
ffect on Homeowner
Below are some examples of how the 2008 levy will
impact some property owners:
2007 2008 Percent 2007 City 2008 City Percent
Parcel Value Value Change Property Tax Property Tax Change
1 $330,600 $330,600 00/0 $885.12 $853.60 - 3.60/0
2 $380,200 $390,200 2.60/0 $1,033.18 $1,026.10 - .60/0
3 $472,500 $489,800 3.70/0 $1,292.71 $1,294.15 + .10/0
4 $587,900 $594,000 1.00/0 $1,660.77 $1,625.18 -2.1010
5 665,300 $688,200 3.40/0 $1,918.44 $1,930.03 + .60/0
6 $793,200 $912,200 150/0 $2,344.48 $2,654.65 + 13.20/0
12