E. Discuss 2013 Budget Expectations0
CITY OF
CHANAASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.2271180
Fax: 952.227.1190
Engineering
Phone: 952.2271160
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
7901 Park Place
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
www.ci.chanhassen.mn.us
MEMORANDUM
TO: Mayor and City Council
FROM: Greg Sticha, Finance Director �
DATE: June 25, 2012 O*,�k
SUBJ: Preliminary 2013 Budget Discussion
BACKGROUND
It is that time of year again when we begin preliminary discussion of the 2013
budget. At this work session, the council will receive information on some of the
factors that will influence the 2013 budget. Staff would like council feedback on
any items of concern and direction for department heads as they prepare their
budgets. It should be noted that staff will be reviewing operational efficiencies
and effectiveness, and identifying key drivers affecting cost and service
performance levels, with the goal of achieving the right balance for each
department.
We have included a calendar for the remainder of the year reflecting meeting
dates and significant deadlines for completion of the 2013 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
Carver County has informed us that new construction growth for 2012 was
1.82 %. This new construction value has a direct impact on the budgeting process
and will result in an approximate $184,800 increase in new tax growth available
for 2013. The total market value for the city decreased -1.15% for 2012, which is
used for 2013 property taxes. Residential values decreased by -2.70% in 2012 for
taxes payable in 2013.
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. In the simplest terms, the tax rate is a product of the total
taxable market value and the total tax levy dollars requested. Attached is an
illustration that staff will review with council to help understand the decreased
value and the impact it will have on the city's tax rate and property tax bills.
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
Preliminary 2013 Budget Discussion
June 25, 2012
Page 2 of 2
Cost of Living
The Consumer Price Index (CPI) for 2012 has increased slightly (around .5% or
less) on a monthly comparison from the previous year.
RECOMMENDATION
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. This feedback will give
clear direction to department directors as they prepare their 2013 budget requests.
ATTACHMENTS
1. 2013 Budget Calendar
2. 2012 Assessment Worksheet Summary from Carver County
3. Property Value vs. Tax Illustration
F: \GregS \Budget\2013 Budget \6 -25 prelim bud discussion.docx
2013 Budget Calendar
Date
Task
Forum
June 25, 2012 Discuss 2013 Budget expectations with City Council & Work Session
review budget efficiency ideas /suggestions
July 1, 2012 Distribute 2012 General Ledger Detail,
2013 Operating Budget Preparation Worksheets,
2013 -2017 CIP worksheets
July 10, 2012
2013 Payroll and Revenue Projections Distributed
July 20, 2012
Completed Operating Budget Forms Returned to Finance
July 23, 2012
Review 2 nd quarter revenue activity to date
Work Session
August 1, 2012
Powerpoint for detailed budget discussion distributed
August 13, 2012
Preliminary Budget and Levy Discussion
Work Session
August 13, 2012
Department heads return their departments powerpoint
information
August 27, 2012
Work Session dedicated to detailed department review of
Work Session
Budgets (powerpoint presentation, cancel regular session)
September 10, 2012
Final review of preliminary 2013 Budget before
Work Session
Preliminary budget set at City Council Meeting
September 10, 2012
Approval/Certification of Maximum Proposed
City Council Meeting
Preliminary Levy to Carver County Auditor
September 15, 2012
All 2013 -2017 CIP Requests Returned to Finance
October 22, 2012
Review 3` quarter revenue activity, 2013 -2017 CIP, and
Work Session
rate study with Ehlers and Associates.
November 13, 2012
Rate Study, Budget or CIP discussion
Work Session
November 26, 2012
Rate Study, Budget or CIP discussion if needed
Work Session
December 3, 2012
Truth in Taxation Hearing
City Council Meeting
December 10, 2012
Adopt Final Levy & 2013 Budget and 2013 -2017 CIP
City Council Meeting
City of Chanhassen 2012 Assessment Summary
Chanhassen Value Distribution 2012
0 Apartment 0 Other
1% 1% ■ Residential
■ Commercial/
Industrial
12%
■ Commercial /In
dustrial
❑ Apartment
El Other
■ Residential
85%
Apartment
Other
Total
2012 EMV
$2,669,817,200
$393,975,000
$43,922,300
$41,593,400
$3,149,307,900
2011 EMV
$2,686,243,400
$408,298,400
$45,314,000
$46,126,300
$3,185,982,100
Total Value Change
($16,426,200)
($14,323,400)
($1,391,700)
($4,532,900)
($36,674,200)
New Construction
$56,189,600
$1,037,500
$0
$0
$57,227,100
Market Change
($72,615,800)
($15,360,900)
($1,391,700)
($4,532,900)
($93,901,300)
• New Construction
2.10%
0.26%
0.00%
0.00%
1.82%
• Market Change
- 2.70%
- 3.76%
- 3.07%
- 9.83%
- 2.95%
-T 2012 Total % Increase
-0.61%
-3.51%
- 3.07%
- 9.83%
Chanhassen Value Distribution 2012
0 Apartment 0 Other
1% 1% ■ Residential
■ Commercial/
Industrial
12%
■ Commercial /In
dustrial
❑ Apartment
El Other
■ Residential
85%
Example of Effect on Tax Rate
With Market Value Decrease
YEAR 1
$10,000,000
Total Levy
YEAR 2
$10,000,000
Total Levy
$2,000,000 Taxable Market Value
X 25.00 Tax Race
$10,000,000
Average Value Home: $350,000
City Property Tax Bill $1,500
$1,800,000 Taxable Market Value
X 25.25 Tax Rate
1 111 111
Average Value Home: $315,000
City Property Tax Bill $1,500
$1.8 Billion
Taxable Market
$2.0 Billion
Taxable Market
Value