B. 2005 BudgetCITYOF
CHANItASSEN
7700 Marke! Boulevard
PO Box 147
O~aohassen Mil 55317
Phone: 9522271100
Fax: 952 2271110
Building Inspeclions
Phone 9522271180
Fax; 9522271190
Engineering
Phone: 9522271160
Fax: 952227 1170
Finance
Phone: 9522271140
Fax: 952227 1110
Park & Recreation
Phone; 952 2271120
Fax: 9522271110
Recrea!ion Center
2310 Coulter Boulevard
Phone~ 9522271400
Fax~ 952 2271404
Planning &
Natural Resources
Pho~qe: 9522271130
Fax: 9522271110
Public Works
1591 Park Road
Phone: 9522271300
Fax: 9522271310
Senior Center
Phone; 952.22? 1125
Fe:x: 9522271110
Web Site
www ci.chanhassen mn.us
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Mayor
City Council Members
Bruce M. DeJong, Finance Directo(~L..
August 17, 2004
2005 Budget and Tax Levy Discussion
The City of Chanhassen faces budget pressures due to increasing population and
the accompanying demand for service, opening new areas to development, and
fluctuating and uncertain state aid revenues. This discussion will focus on broad
areas where the budget pressure is greatest, with detailed discussions regarding
individual departments to be held later this fall.
Background
Expenditures
The preliminary budget contains inflationary increases in the salary and benefit
area at the rate of 3.3%. This is consistent with the Bureau of Labor Statistics
calculation of inflation.
There are also four requests for additional personnel time. The Planning
Department (1420) has requested that their intern position be replaced with a full-
time Planner I. This position is mainly involved in code enforcement, and it has
been difficult to maintain continuity and the skill set as interns rotate through the
program and leave. This was a full-time position up until the 2003 state budget
cuts, so this merely reinstates the staff that existed until then. The Engineering
Department (1310) is requesting that the GIS Technician be increased from 16
hours weekly to 30 hours. This position was used more prior to the state cuts, so
once again this just restores the department staffing to where it once was. Street
Maintenance (1320) anticipates filling their vacant position next year and keeping
the seasonal salaries that they spent this year for additional summer help.
The fourth personnel addition is in the Sheriff's Contract (1210). In that budget,
two additional employees are included. The proposed budget anticipates adding
another patrol deputy and a corporal who will act as the night field supervisor.
The City of Chanhassen A growing commundy with dean lakes qu,~,tysc,,.,,Is /charr]i': ~,,,, ,
2005 Budget
August 17, 2004
Page 2 of 4
The Legal (1140) budget was increased to cover the cost of having Campbell,
Knutson perform the prosecution services. This increased cost is partially offset
by increased fine revenues.
In order to smooth year to year levy fluctuations, staff is recommending that
election costs be budgeted on a half cost basis each year. This takes our estimated
costs and splits it in half. One year will be under budget and the next over, but the
levy will be more consistent.
Planning (1420) also needs to increase its consulting budget in order to contract
with facilitators for neighborhood meetings. They anticipate substantially more
meetings as the 2005 MUSA area develops. The Senior Commission (1430)
budget was increased to cover the cost of the congregate dining (CAP).
Self-Supporting programs in the Park and Recreation budget are increasing
expenditures, but they are offset by additional revenues.
Staff is recommending that we fund our pavement maintenance out of the MSA
Fund (415). We are taking $50,000 from that fund for crack sealing this year and
still have a balance of about $265,000 after that. If we transfer a portion of our
tax levy to that program and move the trail maintenance there, then it will be
easier to see exactly how much we are spending on those activities. This will
remove $35,000 from the Park Maintenance budget. Staff also recommends
moving the MSA maintenance revenue from the general fund to 415.
Revenues
The governor has resolved the Local Governmental Aid (LGA) problem by
directing the Department of Finance to follow "legislative intent" which helps
Minneapolis and St. Paul to the detriment of suburbs like Chanhassen. We have
officially lost the $20,000 that we would have received under a strict
interpretation of the poorly drafted law last year.
We will also be wrestling with the issue of how the legislature deals with its
budget deficit for the 2006-2007 biennium when they convene next January. The
stated budget deficit at this time is over $400 million, but that doesn't include any
inflationary increase in state spending which is projected at $670 million over
those two years. That total deficit of over $1 billion doesn't include any increase
in spending on either K-12 or higher education.
In discussions with League of Minnesota Cities (LMC) officials, they believe the
legislature could come back and take away the Market Value Homestead Credit
that we are scheduled to receive. This is the $300,000 annual amount that we had
2005 Budget
August 17, 2004
Page 3 of 4
taken away for 2003 and 2004. It is included in the budget for now, but any loss
of this aid will come mid-year 2005.
The major changes revenues are reflected in the $697,485 decrease of property tax
required. This is caused for two reasons. Staff anticipates receiving the MVHC
this year which decreases the allowance for uncollectible taxes (3002). The other
change is that we do not show any transfer to debt service funds for 2005. That
reduction of $821,915 is offset against the increase of $436,890 for new personnel
costs and inflationary increases.
Other revenue changes in pet licenses (3205), traffic fines (3401), vehicle lockouts
(3402), development contract charge (3614), self-supporting recreation fees
(3636), and interest earnings (3801) are based on actual experience over the past
several years.
The $33,600 MSA maintenance funds will be deposited into the MSA fund (415)
rather than the general fund. We will add the $27,000 pothole repair funds and
the $35,000 trail maintenance that was in the Park Maintenance budget along with
new tax levy funds to cover maintenance for all streets, sidewalks and trails.
Tax Levy
Our tax levy for 2005 will increase by $553,499. Part of this is due to the
$258,894 debt service increases which include the new tax levy on the 2004A
bond issue that was just sold. The remainder is a combination of the shift of
pavement maintenance funds to MSA fund (415), the $800,000 levy for
equipment and the $697,485 in general fund tax levy.
Staff believes that we should convert our $821,915 transfer to debt service for
2004 into a levy for equipment purchases starting in 2005. This will eliminate the
need for bonding equipment purchases and should cover the anticipated
equipment purchases in the CIP, which average about $800,000 per year over the
life of the 2004-2008 C1P.
The Downtown TIF district will be back on the tax roles for 2005. This currently
generates about $4,000,000 of increment annually. That translates into tax
generation power of about $625,000 back to the city levy. Staff also intends to
decertify the Eden Trace TIF district this year. That district currently generates
about $400,000 of increment annually. That translates into tax generation power
of about $65,000 back to the city levy. These additions to the general tax rolls
will more than offset the increase in tax levies.
2005 Budget
August 17, 2004
Page 4 of 4
Development also adds to the amount of property that will be taxed. I have
estimated about 2% in new construction additions that will generate about
$173,000 in tax.
With the total additions to the tax capacity of the city, we will be able to fully
fund all of the staff proposals and still provide a decrease for an individual
property owner. Staff is estimating this reduction at 3.57% on a preliminary basis.
Recommendation
Staff requests feedback from the City Council regarding the proposed general
fund expenditures, pavement management recommendations and tax levy so that
we can prepare an appropriate preliminary budget and tax levy for the September
13th meeting.
Enclosures:
General Fund Revenues
General Fund Expenditures
Tax Levy Comparison
2004-2025 Debt Levies
Pavement Maintenance Proposal
CITY OF CHANHASSEN
2004 BUDGET
REVENUE
101 General Fund
IACCOUNT
DESCRIPTION
2003
BUDGET
GENERAL PROPERTY TAX
3010
3002
3011
3041
3090
3500
Current Properly Tax
Allowance for Delinquent Taxes
Delinquent Property Tax
Homestead & Ag Credit
Other Property Taxes
Local Government Aid
TOTAL GENERAL PROPERTY TAX
6,465,535
(60,000)
50,000
20,400
6,475,935
LICENSES
3203 Dog Kennel
3205 Dog or Cat
3213 Solicitor
3223 3.2 Off and On Sale
3226 Liquor On and Off Sale
3227 Club and Sunday
3230 Rental Housing Licenses
3284 Rubbish
* TOTAL LICENSES
2004
BUDGET
PERMITS
3301 Building
3302 Plan Check
3305 Heating & A/C
3306 Plumbing
3307 Trenching
3308 Gun
3309 Sprinkler
3310 Gas Piping
3311 Sign
3316 Septic Tank
3320 Stable
3328 Wetland Alteration
3329 Demolition
3390 Misc. Permits
* TOTAL PERMITS
2005
BUDGET
6,657,060
(388,734)
50,000
5,959,575
(90,000)
50,000
6,318,326 5,919,575
600 450 450
2,300 2,000 2,500
550 550 550
800 850 850
55,000 81,000 81,000
1,700
40,000 20,000 20,000
500 500 500
101,450 105,350 105,850
616,000 616,000 616,000
365,000 365,000 365,000
110,000 110,000 110,000
88,000 88,000 88,000
10,000 10,000 10,000
1,000 1,000 1,000
16,000 5,000 5,000
30,000
3,000 3,000 3,000
2,000 2,000 2,000
300 300 300
600 600 600
100 100 100
1,500 1,500 1,500
1,243,500 1,202,500 1,202,500
(697,485)
298,734
5OO
FINES & PENALTIES
3401 Traffic & Ordinance Violation
3402 Vehicle Lockouts
3404 Dog/Cat Impound
* TOTAL FINES & PENALTIES
35,000 35,000 60,000
1,500
4,000 4,000 4,000
39,000 39,000 65,500
25,000
1,500
CITY OF CHANHASSEN
2004 BUDGET
REVENUE
101
IACCOUNT
General Fund
DESCRIPTION
2003 2004 2005
BUDGET BUDGET BUDGET
INTERGOVERNMENTAL REVENUE
3502 M.S.A. Maint. & Constr.
3509 Other Shared Taxes
3510 Grants-State
* TOTAL INTERGOVERNMENTAL REV
33,600 33,600
108,000 108,000 108,000
40,000 40,000 40,000
181,600 181,600 148,000
CHARGES FOR CURRENT SERVICES
3601
3602
3603
3604
3605
3613
3614
3617
3619
3629
3631
3633
3634
3635
3636
3637
3638
3639
3649
Sale of Documents
Use & Variance Permits
Rezoning Fees
Assessment Searches
Plat Recording Fees
Misc.-General Government
Admin. Charge-2% Constr.
Engineering General
Investment Management Fee
Misc.-Public Safety
Recreation Center
Park Equipment Rental
Park Facility Usage Fee
Watercraft Rental
Self-Supporting Programs
Senior Programs
Food Concessions
Misc.-Park & Rec.
Misc.-Public Works
TOTAL CURRENT SERVICES
4,000 4,000 4,000
23,000 23,000 23,000
1,000 1,000 1,000
700 700 700
6,000 6,000 6,000
59,000 59,000 59,000
40,000 40,000 80,000
11,600 11,600 11,600
65,000 65,000 65,000
5,000 5,000 5,000
207,500 207,500 207,500
150 150 150
15,500 15,500 15,500
4,000 4,000 4,000
147,000 147,000 157,000
30,000 30,000 30,000
16,000 16,000 16,000
800 800 800
2,000 2,000 2,000
638,250 638,250 688,250
OTHER REVENUE
3801
3802
3803
3807
3808
3812
3816
3818
3820
3829
3903
Interest Earnings 170,000 130,000 100,000
Equipment Rental & Sale 30,000 30,000 30,000
Building Rental -
Donations 15,000 15,000 15,000
Ins. Recoveries & Reimburse 5,000 5,000 5,000
Contractor Verification 2,500
SAC Retainer 5,000 5,000 5,000
Sur-Tax Retainer 1,500 1,500 1,500
Misc. Other Revenue 5,000 5,000 5,000
Interest/Penalties-Other 500 500 500
Refunds/Reimbursements 6,000 6,000 6,000
TOTAL OTHER REVENUE 240,500 198,000 168,000
** TOTAL GENERAL FUND REVENUE 8,920,235 8,683,026 8,297,675
TOTAL GENERAL FUND EXPENDITURES
8,297,675
NET LEVY REMAINING
(33,600)
40,000
10,000
(30,000)
(385,351)
Expenditure by Year
GENERAL GOVERNMENT
1110 Legislative
1120 Administration
1130 Finance
1140 Legal
1150 Assessing
1160 MIS
1170 City Hall
1180 Elections
1190 Library Building
TOTAL
LAW ENFORCEMENT
1210 Law Enforcement
1220 Fire
1250 Building Inspection
1260 CSO
TOTAL
PUBLIC WORKS 1310 Engineering
1320 Street Maintenance
1350 Street Lighting
1370 Vehicle Maintenance
TOTAL
COMMUNITY DEVELOPMENT
2001 2002 2003 2004 2005
139,330 172,470 154,370 119,200 124,600
388,700 406,000 388,900 393,300 405,900
284,875 262,100 253,750 292,720 299,550
93,000 100,000 110,000 110,000 145,000
70,300 70,100 50,100 70,100 83,600
337,155 329,230 377,280 258,050 259,800
297,800 293,200 380,400 415,900 396,050
7,800 36,950 31,750 18,500
34,000 61,500 71,500
1,618,960 1,670,050 1,748,800 1,752,520 1,804,500
858,500 1,010,800 1,134,800 1,081,800 1,257,600
537,225 592,390 645,200 615,350 633,550
664,250 710,200 795,900 700,400 727,200
52,000 50,500 61,000 58,450 57,750
2,111,975 2,363,890 2,636,900 2,456,000 2,676,100
708,760 702,950 998,410 454,660 500,800
746,530 779,170 846,070 710,670 724,950
281,960 259,100 261,300 233,300 233,300
274,320 371,510 374,500 358,700 375,400
2,011,570 2,112,730 2,480,280 1,757,330 1,834,450
1410 Planning Commission 3,300 3,200
1420 Planning Administration 281,664 319,314
1430 Senior Commission 22,420 18,100
* TOTAL 307,384 340,614
PARKS & RECREATION
1510 Park & Rec. Commission 3,625 3,625
1520 Park Administration 99,000 121,900
1530 Recreation Center 243,550 248,450
1540 Lake Ann 62,770 57,690
1550 Park Maintenance 783,850 817,750
1560 Senior Center 41,915 44,035
1600 Recreation Programs 248,845 242,170
1700 Self-Supporting Programs 103,699 88,820
TOTAL 1,587,254 1,624,440
3,700
320,825
18,450
342,975
2,225
117,700
253,850
69,440
854,200
53,025
242,505
123,155
1,716,100
3,100
315,475
18,620
04-05 Change
337,195
1,225
104,500
230,250
63,140
767,950
43,925
231,400
115,350
1,557,740
3,100
357,750
28,300
389,150
1,225
111,600
235,100
65,200
771,050
38,350
245,100
125,850
1,593,475
General Fund Total 7,637,143 8,111,724 8,925,055 7,860,785 8,297,675
Population 18,760 20,371 21,561 22,376 23,524
398.20
351.30
413.94
Per Capita General Fund Budget Exp 407.10
352.73
Dollars
5,400
12,600
6,830
35,000
13,500
1,750
(19,850)
(13,250)
10,000
51,980
175,800
18,200
26,800
(7OO)
220,100
46,140
14,280
16,700
77,120
42,275
9,680
51,955
7,100
4,850
2,060
3,100
(5,575)
13,700
10,500
35,735
436,89O
1,148
1
4.5%
3.2%
2.3%
31.8%
19.3%
0.7%
-4.8%
-41.7%
16.3%
3.0%
16.3%
3.0%
3.8%
-1.2%
9.0%
10.1%
2.0%
0.0%
4.7%
4.4%
13.4%
52.0%
15.4%
0.0%
6.8%
2.1%
3.3%
0.4%
-12.7%
5.9%
9.1o/~
2.3%
5.6%
5.1%
0.4%
CITY OF CHANHASSEN
TAX LEVY
2005 Budget
TAX CAPACITY BASED TAX LEVY
General Fund
Capital Replacement Fund (for equipment)
MSA Fund (for street & trail pavement maint.)
Special Assessment Debt
General Obligation Debt
Debt of Other Agencies (EDA)
TOTAL TAX CAPACITY BASED TAX LEVIES
2004 2005 Percent
Levy Levy Increase
$6,657,060 $ 5,959,575 -10.48%
$ 800,000
0 162,000
218,485 96,940 -55.63%
284,532 658,604 131.47%
153,693 121,213
$7,313,770 7,798,332 6.63%
MARKET VALUE TAX LEVY
Park Referendum
Library Referendum
TOTAL MARKET VALUE TAX LEVY
TOTAL TAX LEVY
Dollar Increase
Taxes applied to:
General Fund
Capital Replacement
MSA Fund
Total Levy subject to levy limits
Bond Funds
Total
Tax Generation Capacity
Prior Year
New Construction
TIF Dist 1
Eden Trace TIF
Total Capacity
841,397 881,234 4.73%
484,000 483,100 -0.19%
$1,325,397 $1,364,334 2.94%
$8,639,167 $9,162,666 6.06%
$523,499
$5,959,575
800,000
162,000
$6,921,575
2,241,091
$9,162,666
3.97% Increase
$8,639,167
$172,783
$625,000
$65,00O
$9,501,950
Net Effect on existing property owners -3.57%
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