Overview of the 2016 Proposed Budget

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1 Overview of the 2016 Proposed Budget City of Burnsville November 24, 2015

2 2016 Budget Process Meeting Dates June 9 July 14 August 11 September 8 October 20 October 27 Discussion Topics Financial Management Plan Review Budget Pressures Council Worksession on Revenue and Fees Council Gives Direction to Staff to Prepare Maximum Tax Levy Council Adopts Maximum Tax Levy Virtual Open House Video Release Department Budget Presentations at Worksession November 10 November 24 December 8 Council Worksessions on the Budget: General Fund & Other Property Tax Supported Funds Capital Projects, CIP, & Enterprise Funds Council Adopts Tax Levies and Budget

3 Summary of Budget Process to Date June estimated 3.7% for current service level & adopted plans + facilities plan September - approved 4.9% max tax 3.5% for current service level & adopted plans 1.4% facilities plan debt service Proposed lowered to 4.5% 3.1% for current service level & adopted plans 1.4% facilities plan capital levy

4 Meeting Agendas November 10 Overview of budget General Fund Special Revenue Funds Tax Increment Finance (TIF) Funds November 24 Capital Improvement Program Debt Service Funds Enterprise Funds Follow up Information on Fee Proposals 4

5 Capital Improvement Program (CIP) A Long-term Plan for the City s Capital Assets Page

6 Public Works Capital Improvement Program (CIP) Street Projects Collector / Thoroughfare Intersection Improvements Street Lights Water System Sanitary Sewer System Storm Water Management 6

7 Capital Improvement Program Other Capital Plans Parks Vehicles and Equipment Facilities Information Technology (IT) Ice Center Golf Ames Center 7

8 Public Works Streets & Utilities CIP $75.2 million Over 5 Years $25.2 in

9 Public Works CIP $75.2 million Over 5 Years 2020 Streets Utilities 2019 Streets Utilities 2018 Streets Utilities 2017 Streets Utilities 2016 Streets Utilities $0 $5 $10 $15 $20 $25 $30 Street Project Intersection Impr Collector/Thoroughfare Exp Water & Sanitary Sewer Storm Water 9

10 Streets

Street Projects $41.5 million Over 5 Years 2020 Recon/Rehab $7.6 2019 Recon/Rehab $7.1 2018 Recon/Rehab $8.6 2017 Recon/Rehab $4.

11 Street Projects $41.5 million Over 5 Years 2020 Recon/Rehab $ Recon/Rehab $ Recon/Rehab $ Recon/Rehab $ Recon/Rehab $8.1 $0 $2 $4 $6 $8 $10 $12 $14 $16 Millions Recon/Rehab Overlays Intersection/Lights Collector/Thoroughfare 11

12 Street Projects Funding Sources 2020 S/A ITF & MSAS Utilities 2019 S/A ITF & MSAS Utilities 2018 S/A ITF & MSAS Utilities 2017 S/A ITF & MSAS Utilities 2016 S/A ITF & MSAS Utilities Other $0 $2 $4 $6 $8 $10 $12 Millions S/A ITF & MSAS Utilities Other 12

13 2016 Street Projects Annual Street Rehabilitation - $930,000 $160,000 from utility funds Annual Street Reconstruction - $7.2 million $2.5 million from utility funds 13

14 Collector/Thoroughfare $1.3 million in 2016 Dupont Ave/126 th St/Cliff Road Improvements $885,000 Trail Extension on County Roads $400,000 14

15 Intersection Improvement City and County Traffic Signal Replacement $430,000 (2016) $1.2 million

16 Street Un-programmed Projects Burnsville Parkway / 35W Bridge Element Rehab TH 13 / 35W Bridge Element Removal Cliff Road Trail (East of TH 13) 16

17 Utilities CIP Water & Sanitary Sewer Storm Water

18 Water System $12.8 million in 2016 Meter/AMI Replacement Project $8.7 million (2016) System Rehabilitation $1.5 million (2016) Storz Hydrant Nozzle $200,000 (2016) $475,000 ( ) Ground Water Plant Rehab $6.3 million ( ) Street Recon & Rehab - Water $1,800,000 (2016) $5,570,000 ( ) 18

19 Sanitary Sewer System Management $1.9 million in 2016 Lift station rehabilitation $1.7 million (2016) $520,000 ( ) Sanitary sewer rehabilitation $165,000 (2016) $880,000 ( ) Street Recon & Rehab Sanitary Sewer $340,000 (2016) $1,180,000 ( ) 19

20 Storm Water Management Annual Capital Programs Lateral Drainage Modifications (LDM) $80,000 (2016) $350,000 ( ) Pond Cleanout/Outfall Improvement $315,000 (2016) $1.3 million ( ) Street Recon & Rehab Storm Water $550,000 (2016) $2,150,000 ( ) 20

21 Storm Water Management Lift Station Rehab $100,000 (2016) $750,000 ( ) Black Dog Outfall Replace - $660,000 (2017) Crystal Beach Park & Keller Lake Water Quality Improvements $850,000 (2016) 21

22 Storm Water Management Other Future Project Highlights Ravine Restoration $1,000,000 ( ) 27 th /Hayes Storm Water Basin $445,000 ( ) Future Water Quality Pond Improvements $1,000,000 (2019) 22

23 5-Year Financial Plans Capital Project Funds

24 Improvement Construction Fund Purpose is accounting for the portion of capital costs related to revenues from sources other than MSAS & ITF Other funding sources Intergovernmental Special Assessments Bonding Transfers Zero Balance Fund

25 Improvement Construction Fund Sources & Uses Millions $2.5 $2.0 $1.5 $1.0 $0.5 $ Sources Uses Ending Fund Balance

26 Infrastructure Trust Fund Purpose is maintenance of infrastructure Two funding sources ITF levy & MSAS $50,000 additional tax levy in 2016 MSAS revenue varies with the state-aid streets in the recon & rehab areas Fund Balance sufficient to provide cash flow and project contingency at a target goal of approximately $2 million

27 Infrastructure Trust Fund Sources and Uses of Funds Millions $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Ending Fund Balance ITF Levy MSAS Streets, Parks & Debt ITF Levy MSAS Streets, Parks & Debt ITF Levy MSAS Streets, Parks & Debt ITF Levy MSAS Streets, Parks & Debt ITF Levy MSAS Streets, Parks & Debt

28 Street Maintenance Fund Street maintenance projects that extend the life of the existing street system and smaller roadway improvements and traffic control issues Roadway Preventative Maintenance Pavement marking Right of Way Maintenance Monuments

29 Street Maintenance Fund Sources & Uses Millions $0.9 $0.8 $0.7 $0.6 $0.5 $0.4 $0.3 $0.2 $0.1 $ Sources Uses Ending Fund Balance

30 Parks Capital Fund Capital Improvement Projects in the City s Park & Trail System

31 Parks Capital Fund General Fund support assumes annual increases $825,000 ($100,000 increase) in 2016 Transfers of $925,000 - $1,000,000 ( ) Infrastructure Trust Fund 10% of the ITF levy Development fees estimated at $100,000 annually (Fees updated based on recently completed appraisal) 31

32 Parks Capital Source of Funds $6.4 million over 5 years (page 73) 2020 General Fund, $1,000,000 ITF Levy $340,000 Dev Fee $100, General Fund, $975,000 ITF Levy $335,000 Dev Fee $100, General Fund, $950,000 ITF Levy $330,000 Dev Fee $100, General Fund, $925,000 ITF Levy $325,000 Dev Fee $100, General Fund, $825,000 ITF Levy $320,000 Dev Fee $150,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 General Fund ITF Levy Dev Fee 32

Parks Capital Expenditures Projects in the next 5 years are mainly renovations 2016 Highlights Lac Lavon Building Skate Park Phase II Bicentennial

33 Parks Capital Expenditures Projects in the next 5 years are mainly renovations 2016 Highlights Lac Lavon Building Skate Park Phase II Bicentennial Gardens Black Dog Regional Trail Park System Master Plan Park Entrance Signs $1.7 million in projects waiting for funding (see page 71 for list of projects) 33

34 Parks CIP Use of Funds $6.9 million over 5 years Renovations Renovations 2018 Renovations Renovations Renovations $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 Millions Renovations New - Improvements New - Trails (net of grant funding) 34

35 Parks Capital Fund Sources & Uses Millions $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $ Sources Uses Ending Fund Balance

36 Equipment, Vehicle & Facilities Capital Funds Funds Split into two separate funds Equipment & Vehicle Fleet Facilities capital repairs & renovations Provides flexibility for timing of major replacements

37 Equipment & Vehicle Highlights 2015 Fleet Software Upgrade Will allow for more efficient use of vehicles, fleet rightsizing and proactive preventative maintenance Facility Improvement Plan Identified facility needs and options to meet long-term needs of aging facilities Plan shows a negative fund balance in the future years Future plans will need to address Reprioritize uses with results of facilities study Additional funding / one-time funds / LGA balance

38 Equipment & Vehicle Fund Sources & Uses Millions $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 -$ Sources Uses Ending Fund Balance

39 Equipment & Vehicle Fund Source of Funds $9.7 million over 5 Years 2020 General Fund Transfer $ General Fund Transfer $ General Fund Transfer $ General Fund Transfer $ General Fund Transfer $1.3 $0.0 $0.5 $1.0 $1.5 $2.0 Millions General Fund Transfer LGA Dedicated to Capital Utility Fund Transfers Sale of property & interest 39

40 Equipment & Vehicle Fund $9.7 million over 5 years 2019 Vehicles and equipment $ Vehicles and equipment $ Vehicles and equipment $ Vehicles and equipment $1.0 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 millions 40

41 Facility Fund Sources & Uses Millions $9.5 $9.0 $8.5 $8.0 $7.5 $7.0 $6.5 $6.0 $5.5 $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $ Sources Uses Ending Fund Balance

42 I.T. Capital Fund Information Technology Capital Equipment Hardware & Software

43 I.T. Capital Plan Highlights Hosted Services Moved to operating in General Fund 43

44 I.T. Capital Equipment Plan $2.8 million over 5 years 2019 Computers and Infrastructure Software Dev. Public Safety $179,250 $9,000 $117,300 Other $52, Computers and InfrastructureSoftware Dev. Public Safety $218,750 $9,000 $94,700 Other $70, Computers and Infrastructure $225,750 Software Dev. $14,040 Public Safety $168,800 Other $127, Computers and Infrastructure $354,000 Software Dev. $14,000 Public Safety $136,345 Other $236,300 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 44

45 I.T. Capital Fund Sources & Uses Millions $0.8 $0.6 $0.4 $0.2 $ Sources Uses Ending Fund Balance

46 Enterprise Funds Business-Type Activities Revenues are User Fees & Charges

47 Enterprise Funds $35.9 million Water and Sewer 74.3% Storm Sewer 14.5% Ice Center 2.6% Golf Course 0.7% Street Lighting 1.4% Ames Center 6.4% Sidewalk Snow Plowing 0.2% 47

48 Water & Sewer Fund $30.1 million Ground & Surface Water Treatment Plants Water Distribution Wells Waste Water Collection & Conveyance

49 Water & Sanitary Sewer Fund Proposed 2016 Water Rates Three tiered rate to comply with State Statute to encourage water conservation $2.77 per 1,000 gallons 4.5% increase $3.46 per 1,000 gallons 4.5% increase No change to base rate 49

50 Water & Sanitary Sewer Fund Proposed 2016 Sanitary Sewer Rates Net increase of 4.5% annually in the five year plan 8.6% increase in Met Council environmental services charge absorbed. City sewer rate was decreased to offset. Future Met Council environmental services rate increases will not be able to be offset by City sewer decreases. 50

51 Water & Sewer Fund Proposed Capital Projects Aging water production and revenue collection infrastructure Improvements needed at 30+ year old plant Meter replacements critical for revenue collection Capital Improvement Funding Proposed a combination of bonding and use of fund balance in each year of the 5-year plan Future rate increases are proposed to remain steady at 4.5% annually 51

52 Water Meter Replacement Meter replacement charge is based on meter size Funding dedicated to repayment of project cost for replacement of meters and radio units. Funding plan includes future revenues recaptured by new meters.

53 Storm Water Fund $5.9 million Fund system maintenance Preserve water quality Support improvements in the Water Resource Management Plan 53

54 Storm Water Fund Rate Overview Based on property s land use and size Amount of storm water run-off a property generates (residential equivalent units) Commercial/industrial properties are generally larger and have more impervious surface 1% increase is proposed for 2016 Future rate increases projected to be 1% annually Fund replacement of aging system Fund City s adopted Water Resources Management Plan 54

55 Street Lighting Fund $557,000 Provide continuous and major roadway lighting Fund replacement of existing lights Provide funding mechanism for lighting improvements 55

56 Street Lighting Fund Fee Overview No increases proposed for 2016 Future increases projected at 3% Fee structure Continuous Major Roadway (flat rate) Street Light Replacement $170,000 in 2016 $680,000 ( ) 56

57 Street Lighting Fund Sources & Uses Millions $0.8 $0.7 $0.6 $0.5 $0.4 $0.3 $0.2 $0.1 $ Sources Uses Ending Fund Balance

58 Sidewalk Snow Plowing Fund $91,000 Snow Plowing of City Sidewalks & Trails 58

59 Sidewalk Snow Plowing Fund Rate Overview Rates increase proposed for 2016 Rates increased to reflect new three-year agreement rebid for Increases of $0.028/month for residential and $0.0031/foot for all others in 2016 Rates to remain flat for three years and a 5% increase for 2019 in the five-year plan Rates for residential are flat charge Rates for commercial are per lineal foot Contract service will be rebid for 2019

60 Sidewalk Snow Plowing Fund Sources & Uses $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $ Sources Uses Ending Fund Balance

61 Ice Center Fund $1.0 million No General Fund support for operations projected Significant capital expenditures anticipated in 5-year plan Roof Replacement $900,000 (2018) City will likely need to bond for the roof replacement 61

62 Ice Center Sources & Uses (including capital replacement) Millions $2.5 $2.0 Roof Replacement $1.5 $1.0 $0.5 $ Sources Uses Cash Balance

capital improvements Parking lot replacement in 2020 2015 good year due

63 Golf Course Fund $270,000 Fees are at the top of the market no changes are proposed for 2016 Fund stable next 5 years / sufficient cash for capital improvements Parking lot replacement in good year due to favorable weather conditions Projections are based on average weather 63

64 Golf Course Sources & Uses (including capital replacement) Millions $0.4 Parking Lot Replacement $0.2 $ Sources Uses Cash Balance

65 Ames Center $2.4 million Naming rights projected $100,000 annually Annual capital to maintain facility is included in the 5-year plan Projected to annually reduce the operating loss and the advance from the General Fund 65

66 Ames Center Operations $2,000,000 $1,500,000 $1,000,000 $500,000 $0 -$500,000 -$253,000 -$179,000 -$79,000 -$112,000 -$98,000 -$97,000 -$96,000 -$95,000 -$95, Actual 2013 Actual 2014 Actual 2015 est Operating Revenue Operating Expense Net Operating Loss

67 Millions Ames Center All Sources & Uses Includes: Transfers in/out & Host Fee Revenue $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 $ Actual $ Actual $ Actual $0.11 $0.09 $0.08 $0.09 $0.13 $ est Operating Revenue Operating Expense Total Income (loss)

68 Debt

69 Outstanding Debt $54.7 million Year ended 2015 Special Assmt Impr Projects 24.5% Tax Increment 9.0% Utility Funds 30.9% Ice Center Renovation 8.2% Maint Facility 0.7% Ames Center 26.7%

70 Debt Balances Historical and Projected $80 $70 $60 $50 $40 $30 $20 $10 $ Proj 2017 Proj 2018 Proj 2019 Proj 2020 Proj millions Spec Assmt Improvements Tax Increment Utility Funds Other Facilities & Equip Ames Ctr

71 2016 Debt Service $1,200,000 $1,169,350 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Debt Service Fund Levy ITF Fund Levy Use of General Fund Balance Ice Center $274,334 $140,000 Ames Center $68,000 Maintenance Facility $111,930 Street Improvements $672,410 $363,491

72 Debt Ratio Comparisons Outstanding Debt to Tax Capacity Annual Debt Service to Tax Capacity

73 Proposed Plans for Issuance of Debt Debt to be issued to fund special assessment portion of projects annually Property Tax Supported Proposed 2017 bonding for Facilities Study Improvements No plans for any other issuance of property tax supported debt based upon the proposed CIP in 2016 Revenue (Utility) Supported Water and sanitary sewer utility, $13.6 million in 2016 $8.7 million for meter replacement Future years plan for bonding a portion of utility capital projects $1.8 $4.7 million annually 73

74 Proposed Bonding Millions $16 $14 $12 $10 $8 $6 $4 Facilities Improvements Bonds Water & Sewer Utility Bonds New Assessment Debt $2 $

75 Debt Analysis 5 Year Projection 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Facilities Improvements Bonds Water & Sewer Utility Bonds New Assmt Debt New Debt from prior years Existing Debt

76 Financial Management Plan Continuing disclosure addition

77 Fees & Charges Page

78 Criteria for Adjusting Fees Financial Management Plan Market comparison Fees set at upper quartile of the market Maximum set by external source Fees set by legislation or International Building Code Entrepreneurial approach Fees set at the top of the market Recover the cost of service Fees for the programs will be self-supporting where possible Utility fees Fees based on annual rate study 78

79 Proposed Utility Fee Adjustments for % increase for Water and Sanitary Sewer projected to increase 4.5% annually in the five-year plan 1% increase for Storm Water projected to increase 1% in 2016 and 1.0% annually in all other years in the five-year plan No increase for Street Light Utility projected to increase 0% in 2015 and 3.0% annually in all other years in the five-year plan Increase for Sidewalk snowplowing in 2016, projected to increase approximately $3.32 per year for residential customers and approximately $.02 per foot each year for commercial customers projected to increase 5.0% in 2019 and 0% in all other years in the five-year plan Utility fee schedule can be found on pages in the proposed budget materials 79

80 New Revenue Considerations Discussed Nov 10 How would Council like to proceed with the following new revenue sources? Franchise Fees - Council consensus was to proceed Lawful Gambling Fees - No More info needed on the following: Massage License Fee Increases Resellers Fees Liquor on-sale comparable cities

81 Fees & Charges Information Requests Massage Fees Liquor License Comparable Cities Reseller Reporting

82 Massage Fee Structure Alternative Annual License: Enterprise Annual License $200 (includes 1 person) Individual Annual License $75 Initial Application: Enterprise Investigation Fee $300 (includes 1 person) Individual Investigation Fee $200 Reduce investigation fee by $100 if applicant can provide a current background report from approved 3 rd party

83 Investigation Procedures Reviewed the suggested 3 rd party information Staff recommends accepting approved 3 rd party background check to partially reduce work involved

84 Liquor License $12, On-Sale Liquor License $10,000 $8,000 $6,000 $5,250 $6,300 $7,000 $7,300 $7,500 $7,700 $8,000 $8,240 $8,600 $8,750 $8,775 $9,350 $9,600 $10,000 $4,000 $2,000 $0 Proposed 2016 Fee $7,875

85 Reseller APS Reporting Current Categories as determined in 2010 Electronic audio or video equipment Firearms Power tools Computers & related equipment Jewelry, coins, precious metals 62 Agencies report to APS Categories are consistent Upon review found no Goodwill, Salvation Army, consignment clothing that were reporting

86 2016 Budget Revenue Change Results Massage License $200 enterprise/$75 individual $25,000 Reseller Fees Delay implementation to April 2016 $15,000 Liquor License No change Total property tax increase $40,000

87 Summary of Budget Process to Date September - approved 4.9% max tax 3.5% for current service level & adopted plans 1.4% facilities plan debt service Proposed lowered to 4.5% 3.1% for current service level & adopted plans 1.4% facilities plan capital levy Revised Proposal - 4.7% 3.3% for current service level & adopted plans 1.4% facilities plan capital levy

88 Council Discussion Items Items to Consider Proposed for Discussion at the Nov. 10 Meeting Does the Council have any direction to give staff regarding the magnitude of the future General Fund tax levies as detailed in the five-year plan or reductions to pursue at this time? Council consensus was to proceed as proposed. Does the Council support uses of Fund Balance as proposed? Council consensus was to use fund balance as proposed. 88

89 Council Discussion Items Items to Consider Proposed for Discussion at the Nov. 24 Meeting Does the Council support the proposed Capital Improvements Plan as presented? The Five Year Plan for the Parks Capital Fund includes an increase of $100,000 in the tax levy support from the General Fund, for planning purposes, to maintain the present size of the park system. Does the Council support this increase? 89

90 Council Discussion Items Items to Consider Proposed for Discussion at the Nov. 24 Meeting The budget recommends committing Local Government Aid received over $50,000 be dedicated to Equipment & Facilities fund. Does the Council agree with this use? Does the Council agree with the planned increase in fees in 2016? Utility fees Revised New fees presented this evening Other fees as per fee schedule Other Discussion Items? 90

91 2016 Budget Process Meeting Dates June 9 July 14 August 11 September 8 October 20 October 27 Discussion Topics Financial Management Plan Review Budget Pressures Council Worksession on Revenue and Fees Council Gives Direction to Staff to Prepare Maximum Tax Levy Council Adopts Maximum Tax Levy Virtual Open House Video Release Department Budget Presentations at Worksession November 10 November 24 December 8 Council Worksessions on the Budget: General Fund & Other Property Tax Supported Funds Capital Projects, CIP, & Enterprise Funds Council Adopts Tax Levies and Budget

92 Remaining Key 2016 Budget Process Dates December 8 - Budget Adoption at 6:30 p.m. Virtual budget open house video can be viewed at /budget For more information on the City s budget, including these dates and other frequently asked questions, as well as staff contact information, citizens may go to the City s website 92

CITY OF INVER GROVE HEIGHTS A G E N D A CITY COUNCIL WORK SESSION September 3, :00 PM INVER GROVE HEIGHTS CITY HALL LOWER LEVEL TRAINING ROOM

CITY OF INVER GROVE HEIGHTS A G E N D A CITY COUNCIL WORK SESSION September 3, 2013 7:00 PM INVER GROVE HEIGHTS CITY HALL LOWER LEVEL TRAINING ROOM 1. CALL TO ORDER Mayor Tourville 2. CAPITAL IMPROVEMENT