2015 Truth in Taxation Hearing. December 1, 2014

Transcription

1 2015 Truth in Taxation Hearing December 1, 2014

2 Overall Budget Goal To effectively generate revenue through diverse sources that will allow the community to strengthen its mission of being The Best Small Town in Minnesota and always working towards improving Chaska s high quality of life for all community members.

3 Changes to Consider for 2015 Continued implementation of CIP Program Implementation of new Tax Levy Policy focusing on new growth and inflation as opposed to a constant tax rate Reincorporation of TIF District #4 Tax Capacity into the General Tax Levy after the 25-year District closes New Tax Capacity to support Street Reconstruction Program-no impact on taxes Incorporation of tax levy support for new Community Building Fund

4 Budget Objectives Support budgeting programs that help Chaska strengthen its mission of being The Best Small Town in Minnesota Maintain and improve existing high-quality service levels Limit tax levy growth to capture only new growth and inflation Fully fund maintenance and replacement of equipment/property Increase levy additionally only if new service levels or assets are being added Budget utilizing a plan that avoids draw-down of City s General Fund Reserves Fully fund levy needs of Street Reconstruction Program

5 2015 Budget Environment

6 Budget Environmental Factors Existing Property Values Increasing Starting to see the increase from New Growth Local Government Aid Increasing Continued Stability in Building Permits Steady increase in population occurring Electric usage up significantly Were seeing a shift over the last decade to more residential properties being developed instead of a mix with C/I Starting to see this re-shift with addition of new industrial parks and additions onto existing buildings

7 Market Values for Taxes Payable 2015 Chaska 2014 Assessment Residential Commercial/Industrial Apartment Other Total 2014 EMV $1,782,140,200 $386,861,600 $112,688,900 $88,593,400 $2,370,284, EMV $1,559,449,600 $368,957,400 $101,653,100 $81,675,400 $2,111,735,500 Total Value Change $222,690,600 $17,904,200 $11,035,800 $6,918,000 $258,548,600 New Construction $40,936,500 $2,182,300 $942,900 $0 $44,061,700 Market Change $181,754,100 $15,721,900 $10,092,900 $6,918,000 $214,486,900 % New Construction 2.30% 0.56% 0.84% 0.00% 1.86% % Market Change 10.20% 4.06% 8.96% 7.81% 9.05% 2014 Total % Increase 14.28% 4.85% 10.86% 8.47% 12.24%

8 Projected Market Values Projecting 3.5% market value growth through 5-years, although we are seeing a 12.24% increase in 2014

9 New Construction Market Value Growth: Chaska experienced new construction growth in each of the last several years, even in the years where we saw no tax levy growth. This new growth adds to our service level needs

10 Local Government Aid Increasing LGA numbers have continued to increase as the financial condition of the State has stabilized

11 Building Permit Revenue Stabilizing We are currently running at our projected Building Permit Revenues for came in 33% ahead of budget

12 Population Rising Again Year # of Housholds # of New Est. Pop , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,295 Population one of the important factors to consider when looking at Staffing levels in areas like Public Safety and Public Works

13 Electric Franchise Fee Continues to Rise -Seen robust growth in Franchise Fee due to significant increase in C/I development -Seen a 55% increase in this revenue since 2008

14 Focus Items for 2015 Budget

15 Major Discussion Items from 2014 Started CIP Implementation First of 4 phases implemented in 2014, with $200,000 coming from Gas Franchise Fee and $50,000 increase to tax levy New Tax Levy Policy Focus on increasing levy for new growth/inflation-the two items that have the most impact on the cost of services provided Elimination of Sales Tax on General Government Purchases Savings of $100,000 in General Fund and $400,000 in Enterprises TIF District #4 Expiration at end of 2014 Plan to take new tax capacity coming back on the books to fund the Street Reconstruction Program-been planning since 2010

16 Major Discussion Items for 2015 Establishment of operational tax levybased on new Policy 2 nd Year of implementation for CIP Re-allocation of TIF #4 District Tax Capacity to Fund major costs of Street Reconstruction Program Addition of EDA tax levy to support Community Building Fund

17 New Tax Levy Policy Old policy established tax levy based on keeping a constant tax rate The tax levy would go up by the amount that the market value/tax capacity increased-for 2015 the increase would have been over 12% to keep a constant tax rate New Policy focusses on establishing levy increase based on factors that impact our cost of providing service Inflation & new growth directly impact cost of services For 2015, the new growth is 2%, with inflation running 2% The New Policy would have our operational levy increasing by 4% With an increase of over 12% in market values, this means that we will see a decrease in tax rate

18 Capital Improvement Program Determined through study that we were underfunding our replacement/ maintenance of existing assets in our General Fund by $1 million Decided during the 2014 Budget Process to implement this over a 4-year period For 2014, we implemented half a year of Gas Franchise Fee ($200,000), along with $50,000 tax levy increase With a full year of Gas Franchise Fee in 2015 ($400,000) and carrying over the $50,000 increase from last year, this would require a $50,000 increase in tax levy for 2015 to support the CIP Program This represents about a 1% increase in the levy In combination with the operation tax levy, this would represent a 5% total increase in tax levy Again, with over a 12% increase in market values, the tax rate will go down even with the CIP increase entered in (would go down over 7%)

19 TIF District #4 Decertification TIF District #4 expires on December 31st With this expiring, all tax capacity in district will go back into general tax rolls For City, this will mean ~$1.1 million that was being collected before through our TIF District to support the debt service we had in this TIF District (i.e. Flood Control, Industrial Parks, CCC, CTC, ect ) will now be able to be re-allocated to support our Street Reconstruction program debt without having any impact on the property taxes an individual pays It will now show that we collect it through our General Tax Levy, therefore increasing the General Fund tax levy, but will be offset by the removal of the collection of this levy through the TIF District This means it is a net-neutral change to our overall tax levy collection As we have discussed for the past 5 years, this recapturing of TIF District #4 values is the major funding source of the Street Reconstruction Program, and what allowed us to move forward with the overall program in 2015 The County and the School District will also now get to incorporate these new values into their tax base and generate new resources without having any impact on tax payers

20 EDA Tax Levy: Community Building Fund Developed as part of the Firemen s Park Redevelopment Project, and future funding of City Square West Objective to create a mechanism to both complete the current community building projects we are now discussing, in addition to creating a financial mechanism to support larger community building projects every 10 years Also addresses depreciation costs of the projects it supports To meet this objective would require a $300,000 tax levy in our EDA to support debt service on these projects This would be carried forward permanently with the ~$79,000 EDA levy we currently have for operations Levying these dollars annually would meet the tax levy needs of the Firemen s Park project, along with our other Community Building Projects going into the future Would have ~$30 annual impact on the average homeowner

21 Assumptions of 2015 Budget- Revenue Utilize new tax levy policy-capture only new growth and inflation Represents 4% total in 2015 Implement second year of CIP Program, increasing the tax levy by $50,000 Would bring total CIP revenue to $500,000 out of $1 million needed over 4 years Would add addition 1% onto General Fund Tax levy increase, bringing total tax levy increase to 5% Major project in 2015 would be overlay of Clover Ridge Drive Re-allocation of the City s share of value created over the past 25 years in the expiring TIF District #4 Would shift the collection of ~$1.1 we currently have in our TIF District #4 to support debt service to our General Fund to pay for the debt service of our Street Program No impact on the taxes residents or businesses pay-just reallocates taxes already being collected to our General Tax levy Utilize the EDA Fund to implement Community Building Projects This is what would help support the Park Improvements in Fireman s and Schimelpfenig Park, as well as future Community Building projects

22 Assumptions of 2015 Budget- Expenditures Operating Costs up 1% in 2015 Personnel Costs up 3% in 2015, with 6.3% increase in Employer Contribution to benefits (overall cost of medical insurance up 10.5% in 2015) Fund half of remaining 50% of Cable Coordinator position in 2015: $22,400 Are exploring how to best integrate this position into overall City communication strategy Fund 50% of Administrative Support Function in 2015: $25,000 This would be to provide needed support to our City Hall functions, including Administration, Community Development and Finance Addition of new Project Engineer Position for $65,000 Unable to keep up in this department with new growth-utilizing contracted engineer too much Will allow for more time for mentorship between City Engineer and Assistant City Engineer (succession planning) Would have 75% charged to projects and 25% charged to Storm Water Utility-no net impact on General Fund Budget Addition of New Police Officer #25 in mid-2015: $40,000 Would match with our policy of 1 officer per 1,000 residents, although average staffing level of departments our size is closer to 1.3 officers per 1,000 residents More importantly, provides appropriate Staff as strategy to help reduce overtime hours

23 Assumptions of 2015 Budget- Expenditures Would finance scheduled equipment replacement in with an equipment certificate We set sale for this debt at our December 15 th meeting Continued debt levy for Street Reconstruction Program Shift of dollars from TIF District #4 to General Fund to support debt service for Street Reconstruction Program Addition of $12,000 for Part-time Public Works employment in 2015 to address addition of downtown Chaska projects Full Funding of Street Overlay/ Sealcoating Program Addition of 25% Public Works Maintenance Worker for $20,000 in 2015 (100% in 2016) Needed for growth in Chaska Township Area

24 2015 Tax Levy Recommendation: Impact to Average Home Impact to average home in Chaska for 5% increase in General Fund Tax Levy Median Sales Value of Home in 2014: $239,828 Median Sales Value in 2015 (assuming 10.2% increase in residential values): $264,290 Actual City Taxes on Example Home: 2014 Taxes on Example Home: $ Taxes on Example Home: $651 Average increase of $13 for 2015 for taxes supporting General Fund Operations Tax rate drops from 2014 to 2015 by 7.8%: 2014: 26.59% 2015: 24.66% Including the EDA Levy to Support the Community Building Fund (Fireman s Park), the average impact would be ~$43 for everything in 2015 As always, this is dependent on the actual increase/decrease in tax capacity in the City, of which we are still waiting for final data from the County

25 2015 General Fund Revenues

26 2015 General Fund Expenditures

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28 Comparisons to Other Cities-2014 Ranking City Taxes Population Tax Levy Per Capita 1 Wayzata $4,302, ,217 $1, Oak Park Heights $4,784, ,788 $ Golden Valley $17,435, ,862 $ Newport $2,420, ,461 $ Minneapolis $278,404, ,070 $ Tonka Bay $1,048, ,523 $ Medina $3,428, ,221 $ Shorewood $4,906, ,533 $ St. Anthony Village $5,479, ,583 $ Dayton $3,064, ,882 $ Monticello $8,150, ,029 $ Minnetonka $31,878, ,368 $ Chanhassen $10,424, ,432 $ Mounds View $4,306, ,525 $ St. Paul $101,207, ,873 $ Arden Hills $3,289, ,704 $ Anoka $5,712, ,268 $ Blaine $19,752, ,407 $ New Brighton $6,870, ,073 $ North St. Paul $3,435, ,830 $ Vadnais Heights $3,686, ,983 $ North Oaks $1,291, ,691 $ Lauderdale $616, ,456 $ Chaska $5,145, ,444 $ Falcon Heights $1,083, ,491 $ White Bear Lake $4,755, ,555 $193.65

29 Metro Cities Comparisons We are currently the 3 rd lowest of 86 Metro Area Cities (84 out of 86) For 2015, even while adding the 5% for new growth and inflation, plus just over $1.1 million from the decertification of our TIF District to get reallocated towards our Street Program, we only move #84 to #83 We are lowest tax levy per capita in Carver County (Chan is #50 out of #86)

30 Comparisons After Change to Levy Ranking City Taxes Population Tax Levy Per Capita 1 Wayzata $4,302, ,217 $1, Oak Park Heights $4,784, ,788 $ Golden Valley $17,435, ,862 $ Newport $2,420, ,461 $ Minneapolis $278,404, ,070 $ Tonka Bay $1,048, ,523 $ Medina $3,428, ,221 $ Shorewood $4,906, ,533 $ St. Anthony Village $5,479, ,583 $ Dayton $3,064, ,882 $ Monticello $8,150, ,029 $ Minnetonka $31,878, ,368 $ Chanhassen $10,424, ,432 $ Mounds View $4,306, ,525 $ St. Paul $101,207, ,873 $ Arden Hills $3,289, ,704 $ Anoka $5,712, ,268 $ Blaine $19,752, ,407 $ New Brighton $6,870, ,073 $ North St. Paul $3,435, ,830 $ Vadnais Heights $3,686, ,983 $ North Oaks $1,291, ,691 $ Chaska $6,543, ,444 $ Lauderdale $616, ,456 $ Falcon Heights $1,083, ,491 $ White Bear Lake $4,755, ,555 $193.65

31 Carver County Comparisons This shows Chaska s proposed 2015 compared to the other City s 2014 tax levies

32 Schedule for 2015 Budget December 15 th : Adopt final 2015 budgets and establish final tax levy

33 Questions???