D. Preliminary 2010 Budget & Budget Efficiency Discussion
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
PllOne 952.227.1100
Fax 952.227.111 0
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
Prone 952.227.1300
Fax 952.227.1310
Senior Center
Phone 952.227.1125
Fax 952.227.1110
Web Site
www.ci.chanhassen.mn.us
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MEMORANDUM
TO: Mayor and City Council
FROM:
0'1'&
Greg Sticha, Finance Director
DATE:
June 22, 2009
SUBJ:
Preliminary 2010 Budget & Budget Efficiency Discussion
BACKGROUND
It is that time of year again when we begin preliminary discussion of the 2010
budget. At this work session, the council will receive information on some of the
factors that will influence the 2010 budget, and staff would like council feedback
on any items of concern and direction for the department heads as they prepare
their budgets.
We have included a calendar for the rest of the year reflecting meeting dates and
significant deadlines for completion of the 2010 budget. If any of the dates
appear to conflict with other known city deadlines or budget requirements, please
let me know as soon as possible.
Market Value & New Construction Value
We have been informed by the county that new construction for 2009 was 1.40%.
This new construction value for the city has a direct impact on the budgeting
process for 2010. The total market value for the city did decrease (-.82%) for
2009, which is used for 2010 property taxes.
It is extremely important to note that a decrease in total market value does not
mean property taxes will increase, assuming no change in the amount levied from
the previous year. The tax rate in the simplest terms is a product of the total
taxable market value and the total tax levy dollars requested. We have attached an
illustration that we will be reviewing with you to help understand the decreased
value and what impact that will have on the city's tax rate and to the tax bill of
property owners.
Cost of Living
The Consumer Price Index (CPI) for 2009 has remained relatively flat from the
previous year. In past years' budget discussions, we have seen fairly significant
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
Preliminary 2010 Budget Discussion
June 22, 2009
Page 2012
increases in the cost of living and related CPl, but this far into 2009 we have not
seen that same trend.
Budget Efficiency
As part of our Key Financial Strategies Goals for 2009, we included a discussion
on ways to improve the efficiency of the budget process. As you look at the 2010
budget calendar for the rest of this year, you will see that a large percentage of our
remaining meetings contain budget discussions.
One suggestion that could be considered would be to shift the individual
department reviews of their budgets from the work sessions in October and
November to one work session in later October. This could be accommodated in
a few different ways. If a second city council meeting in October isn't needed, it
could be replaced with a work session just for reviewing the 2010 individual
department budgets. If the second city council meeting in October is needed,
another option would be to select an alternative date in later October to be
dedicated to just departmental budget reviews.
Shifting these reviews to one dedicated work session would allow for a number of
efficiencies. The discussion would not be carried out over two months of
individual work sessions, thus allowing for the momentum and concentration of
the budget discussion to continue with more continuity. It would also free-up
work session time available for other topics or allow for the cancellation of work
session meetings.
RECOMMENDA TION
Staff requests feedback from the city council regarding the level of the initial tax
levy and how many alternative budget scenarios the city council would like to see.
Staff would also like feedback on the budget calendar and suggested shifting of
budget discussions to one meeting to become more efficient. This feedback will
give clear direction to department directors as they prepare their 2010 budget
requests.
A TT ACHMENTS
1. 2010 Budget Calendar
2. 2009 Assessment Worksheet Summary from Carver County
3. Illustration of effect of market value decrease on tax rate
F:\GregS\Budget\2010 Budget\6-22 prelim bud discussion.docx
Date
June 22, 2009
July 13, 2009
July 13, 2009
July 27,2009
August 10, 2009
August 24,2009
August 31, 2009
September 14,2009
September 28, 2009
October 12,2009
October 26, 2009
November 9,2009
November 23, 2009
December 7, 2009
December 14,2009
December 24, 2009
2010 Bud2:et Calendar
Task
Preliminary Review with City Council on 2010
Budget Calendar and Budget Forecasts
Distribute 2009 General Ledger Detail,
2010 Operating Budget Preparation Worksheets,
2010-2014 CIP worksheets
2010 Payroll and Revenue Projections Distributed
Completed Operating Budget Forms Returned to Finance
Preliminary Budget and Levy Discussion
Continued Preliminary Budget and Levy Discussion
All 2010-2014 CIP Requests Returned to Finance
Approval/Certification of Maximum Proposed
Preliminary Levy to Carver County Auditor
CIP Proofs Returned to Departments
Review Department Budgets: Community Development
Review Department Budgets: Public Works and
Park & Recreation
Review Department Budgets: Administration, Fire,
Finance, and Capital Improvement Program
Review Department Budgets: Rate Study &
Remaining Departments
Truth in Taxation Hearing
Continuation Hearing, if needed, and Budget and
CIP Adoption
Final Date for 2010 Budget & Levy Certification to
Carver County Auditor
Forum
Work Session
Work Session
Work Session
City Council Meeting
Work Session
Work Session
Work Session
Work Session
City Council Meeting
City Council Meeting
Example of Effect on Tax Rate
With Market Value Decrease
YEAR 1
YEAR 2
;/
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I
I.
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$2.0 Billion
Taxable Market
Value
$1.8 Billion
Taxable Market
Value
$2,000,000 Taxable Market Value
X 25.00 Tax Rate
$10,000,000
$1,800,000 Taxable Market Value
X 25.25 Tax Rate
$10,000,000
Average Value Home: $350,000
City Property Tax Bill $1,500
Average Value Home: $315,000
City Property Tax Bill $1,500