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CC Packet 2006 12 04AGENDA CHANHASSEN CITY COUNCIL MONDAY, DECEMBER 4, 2006 CHANHASSEN MUNICIPAL BUILDING, 7700 MARKET BOULEVARD 5:30 P.M. - CITY COUNCIL WORK SESSION, FOUNTAIN CONFERENCE ROOM 1. Continuation of Budget & CIP Review. 6:30 P.M. – EXECUTIVE SESSION, FOUNTAIN CONFERENCE ROOM 2. Discussion of City Manager’s Performance Evaluation. 7:00 P.M. – PUBLIC HEARING 3. Truth-in-Taxation Hearing. Members of the City Council and some staff members may gather at Houlihan’s Restaurant & Bar, 530 Pond Promenade in Chanhassen immediately after the meeting for a purely social event. All members of the public are welcome. MEMORANDUM TO: Mayor City Council FROM: Greg Sticha, Finance Director DATE: December 4, 2006 SUBJ: Truth in Taxation Hearing The city budget for 2007 represents little change from the 2006 budget. HIGHLIGHTS Total budgeted expenditures in the general fund increase from $8,900,100 to $9,062,400. In 2006, we transferred excess reserves from the general fund to our revolving assessment fund. We will now use the reserves in the revolving assessment fund to maintain a flat debt levy and zero percent increase in the average property owner’s city portion of their property tax bill ($63,000). As discussed in our individual department budget presentations, the increase in the general fund expenditures are almost entirely made up of wage increases and additional energy costs estimated for 2007. There are no new employees in the 2007 budget. The total levy for the City, including the general fund, the capital replacement fund, sealcoating, and debt service, went from $9,354,890 in 2006 to $9,575,778 in 2007, which is a $220,888 or 2.4% increase in total levies from the prior year. RECOMMENDATION Staff recommends that the City Council hold the public hearing for Truth-in- Taxation on December 4, receive public input regarding the tax levy and budget, and close the public hearing. Final adoption the proposed tax levy is scheduled for December 11, 2006. ATTACHMENTS 1. 2006 Truth-in-Taxation Hearing PowerPoint Presentation 2. Tax Levy Comparison 3. General Fund Revenues 4. General Fund Expenditures 5. Bond Debt Levy Schedule 6. Revolving Assessment Fund 7. City of Chanhassen Tax Rate and Levy History De c e m b e r 4 , 2 0 0 6 1 Ci t y o f C h a n h a s s e n 20 0 6 Tr u t h i n T a x a t i o n He a r i n g 2 Re q u i r e d E l e m e n t s f o r Tr u t h i n T a x a t i o n Pr e s e n t t h e p r o p o s e d 2 0 0 7 b u d g e t . Pr e s e n t t h e p r o p o s e d 2 0 0 7 t a x l e v y . Di s c u s s m a j o r c h a n g e s t o t h e b u d g e t an d l e v y . Ho l d t h e p u b l i c h e a r i n g f o r c i t i z e n i n p u t an d c o m m e n t s ( D e c e m b e r 4 ) . Ad o p t l e v y a n d b u d g e t o n D e c e m b e r 1 1 . 3 Bu d g e t P r o c e s s Pr e l i m i n a r y b u d g e t s s u b m i t t e d b y D e p a r t m e n t Di r e c t o r s i n J u l y . Bu d g e t r e v i e w e d b y F i n a n c e D i r e c t o r a n d Ci t y M a n a g e r i n A u g u s t . Pr e l i m i n a r y T a x L e v y A d o p t e d f o r T r u t h - i n - T a x a t i o n pu r p o s e s o n S e p t e m b e r 1 5 . De t a i l b u d g e t m e e t i n g s h e l d i n O c t o b e r a n d No v e m b e r . Tr u t h - i n - T a x a t i o n h e a r i n g h e l d o n D e c e m b e r 4 . Bu d g e t a d o p t i o n o n D e c e m b e r 1 1 . 4 Ex p e n d i t u r e s 20 0 6 Bu d g e t 20 0 7 Bu d g e t % Change from 2006 Ge n e r a l G o v e r n m e n t $1 , 8 9 5 , 1 0 0 $1 , 9 7 9 , 2 0 0 4.4% La w E n f o r c e m e n t $2 , 7 4 7 , 7 0 0 $2 , 8 3 7 , 6 0 0 3.3% Pu b l i c W o rk s $1 , 9 0 0 , 4 0 0 $2 , 0 8 9 , 4 0 0 9.9% Co m m u n i t y D e v e l o p m e n t $3 9 2 , 8 0 0 $4 1 1 , 9 0 0 4.8% Pa r k s & R e c r e a t i o n $1 , 6 7 9 , 1 0 0 $1 , 7 4 4 , 3 0 0 3.9% Tr a n s f e r t o D e b t S e r v i c e $2 8 5 , 0 0 0 (100%) To t a l $8 , 9 0 0 , 1 0 0 $9 , 0 6 2 , 4 0 0 1.8% 5 Re v e n u e s 20 0 6 Bu d g e t 2007 Budget% Change from 2006 Pr o p e r t y T a x $6 , 1 7 9 , 6 0 0 $6 , 2 8 8 , 1 0 0 1.8% Li c e n s e s & P e r m i t s $1 , 2 7 1 , 5 0 0 $1 , 5 2 5 , 3 0 0 20.0% In t e r g o v e r n m e n t a l R e v . $2 0 5 , 0 0 0 $205,0000.0% Ch a r g e s f o r S e r v i c e s $6 5 9 , 5 0 0 $660,5000.2% Fi n e s & P e n a l t i e s $7 6 , 5 0 0 $136,50078.4% Ot h e r R e v e n u e $2 2 3 , 0 0 0 $247,00010.8% To t a l R e v e n u e $8 , 6 1 5 , 1 0 0 $9 , 0 6 2 , 4 0 0 5.2% 6 Ge n e r a l F u n d E x p e n d i t u r e H i s t o r y $ 8 , 1 1 1 , 7 2 4 $ 0 $ 7 , 8 6 0 , 7 8 5 $ 8 1 5 , 0 0 0 $ 7 , 8 6 0 , 7 8 5 $ 8 2 1 , 8 8 5 $ 8 , 3 0 7 , 920 $0$8,615,100 $285,000$9,062,400 $0 0 2 , 0 0 0 , 0 0 0 4 , 0 0 0 , 0 0 0 6 , 0 0 0 , 0 0 0 8 , 0 0 0 , 0 0 0 1 0 , 0 0 0 , 0 0 0 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 20062007 O p e r a tin g E x p e n d i tu r e s T r a n s f ers to Debt Service 7 Wh a t f a c t o r s c h a n g e th e b u d g e t f o r 2 0 0 7 ? Op e r a t i n g e x p e n d i t u r e s w i l l r i s e f o r i n c r e a s e d pe r s o n n e l c o s t s a n d h e a t i n g a n d f u e l c o s t s . To t a l G e n e r a l F u n d e x p e n d i t u r e s i n c r e a s e 1. 8 2 % . No t r a n s f e r w i l l b e m a d e o u t o f t h e g e n e r a l fu n d f o r d e b t s e r v i c e i n 2 0 0 7 . 8 Ta x C a p a c i t y L e v y C h a n g e s Ta x C a p a c i t y L e v i e s 20 0 6 2007% Chg Ge n e r a l F u n d $6 , 3 9 9 , 6 0 0 $6 , 5 5 8 , 1 0 0 +2.5 Ca p i t a l R e p l a c e m e n t $80 0 , 0 0 0 $824,000+1.8 MS A ( P a v e m e n t M g m t ) $21 6 , 5 0 0 $250,750+15.9 Sp e c i a l A s s e s s m e n t D e b t $1 2 9 , 3 0 0 $129,500+0.2 Ge n e r a l O b l i g a t i o n D e b t $5 6 4 , 6 1 4 $568,280+0.6 ED A D e b t $1 2 2 , 0 4 8 $122,548+0.7 TO T A L T A X CA P A C I T Y L E V I E S $8 , 2 3 2 , 0 6 2 $8 , 4 5 3 , 1 7 8 +2.7 9 Ma r k e t V a l u e L e v y C h a n g e s Ma r k e t V a l u e L e v i e s 20 0 6 2007% Chg Pa r k R e f e r e n d u m $6 3 6 , 1 2 8 $633,500-0.4 Li b r a r y R e f e r e n d u m $48 6 , 7 0 0 $489,100+0.5 TO T A L M A R K E T VA L U E L E V I E S $1 , 1 2 2 , 8 2 8 $1 , 1 2 2 , 6 0 0 -0.1 10 De b t S e r v i c e 20 0 7 d e b t l e v y w i l l i n c r e a s e b y $ 4 , 1 3 8 t o a t o t a l of $ 1 , 9 4 2 , 9 2 8 . T h i s i n c r e a s e i s l e s s t h a n o n e te n t h o f o n e p e r c e n t i n a c o n t i n u i n g e f f o r t t o k e e p ou r d e b t l e v i e s f l a t . It i s o u r i n t e n t t o u s e r e s e r v e s t o k e e p t h e d e b t le v y f l a t u n t i l 2 0 0 9 , a t w h i c h p o i n t e x c e s s l e v y be c o m e s a v a i l a b l e t o h e l p f u n d o u r s t r e e t s (r e v o l v i n g a s s e s s m e n t f u n d ) . 11 Ne t T a x L e v y E f f e c t s Ge n e r a l F u n d l e v y s l i g h t i n c r e a s e o f 2 . 5 % . De b t S e r v i c e l e v y r e m a i n s f l a t a t 0 . 1 % in c r e a s e . To t a l t a x l e v y i n c r e a s e o f $ 2 2 0 , 8 8 8 o r 2 . 4 % . 12 Ef f e c t o n H o m e o w n e r s Th e a v e r a g e p r o p e r t y o w n e r w i l l s e e a z e r o pe r c e n t i n c r e a s e i n t h e C i t y ’ s p o r t i o n o f t h e i r pr o p e r t y t a x b i l l a s s u m i n g t h e i r m a r k e t v a l u e di d n o t i n c r e a s e m o r e t h a n t h e a v e r a g e i n t h e ci t y , w i t h o u t i m p r o v e m e n t s o r d u e t o o t h e r as s e s s e d a d j u s t m e n t s . 13 Re c o m m e n d a t i o n Ho l d c o n t i n u a t i o n h e a r i n g , i f n e e d e d , o n Mo n d a y , D e c e m b e r 1 1 , 2 0 0 6 . Ad o p t t h e t a x l e v y a n d b u d g e t a s s h o w n on M o n d a y , D e c e m b e r 1 1 , 2 0 0 6 .