CITY OF VICTORIA Budget Book. City of Victoria, Minnesota 1670 Stieger Lake Lane, PO Box 36. Phone: (952) Fax (952)

Transcription

1 CITY OF VICTORIA 2018 Book City of Victoria, Minnesota 1670 Stieger Lake Lane, PO Box 36 Victoria, Kelly Grinnell MN Phone: (952) Fax (952)

2 CONTENTS Introductory section... 4 Message... 4 Directory of City Officials... 5 Organizational Chart... 6 Community, Demographic, & Statistical Information... 7 Planning Processes... 8 Considerations for Comparison 2017 to Process Amendments Fund Structure Property Taxes Property Tax Basics Levy & Tax Capacity History Long-Term Financial Plan Legal Debt Limit & Bond Ratings Revenue & Expenditure Summary All Funds Fiscal Year Revenue & Expenditure Summary Special Revenue Funds Fiscal Year Revenue & Expenditure Summary Enterprise Funds Fiscal Year Revenue & Expenditure Summary - Debt Service Funds Fiscal Year Revenue & Expenditure Summary Capital Project Funds Fiscal Year General Fund General Fund Revenues (Detail) Building Inspections Civil Defense Animal Control Public Works - Streets Public Works Snow Removal Public Works Street Lights Public Works Signal Lights Public Works - Composting Page

3 Recreation Programs Parks & Recreation Park Maintenance Transfers to Other Funds Special Revenue Funds Special Revenue Funds Summary Victoria Recreation Center Fund Economic Development Authority Fund PEG Fees Fund Gifts to the Parks Fund Debt Service Funds Debt Service Funds Summary /2008A Lease Revenue Refunding Bonds Debt Service Fund /2006A/2016B Refunding Bonds Debt Service Fund G.O. TIF Bonds/2012A Crossover Refunding Bonds Debt Service Fund A Crossover Refunding Bonds Debt Service Fund G.O. Street/Utility and 2011B Crossover Refunding Bonds Debt Service Fund G.O. Street/Utility and 2012A Crossover Refunding Bonds Debt Service Fund G.O. Street/Utility and 2012A Crossover Refunding Bonds Debt Service Fund G.O. Street/Utility and 2016B G.O. Improvement Bonds Debt Service Fund G.O. Street/Utility Improvement and 2016B G.O. Bonds Debt Service Fund G.O. Street/Utility Improvement Bonds Debt Service Fund EDA Lease Revenue and Limited Tax Bonds Debt Service Fund A GO Street/Utility Improvement Bonds Debt Service Fund A GO Tax Increment Bonds Debt Service Fund C GO Tax Abatement Franchise Bonds Debt Service Fund A GO Street/Utility Improvement Bonds Debt Service Fund Capital Project Funds Capital Project Funds Summary Public Works Capital Equipment Fund Fire Truck and Equipment Fund Capital Facilities Fund Long-Term Street Maintenance Fund Page

4 2017 Street Improvement Project Fund Street Improvement Project Fund Tax Increment Financing District # Tax Increment Financing District # Tax Increment Financing District # Tax Increment Financing District # Undergrounding Fund Park Dedication Fees Fund Park Improvement Fees Fund Trail Fund Tree Replacement Fund Charitable Gambling Donations Fund Affordable Housing Program Fund Enterprise Funds Enterprise Funds Summary Water Fund Sewer Fund Storm Water Management Fund Utility Rates Capital Equipment & Improvement Plan Projects by Funding Source Capital Improvement Plan Project Detail Glossary of Terms Acronyms Financial Policies Capital Improvement Fiscal Policy Capital Assets Policy Debt Management Policy Fund Balance Policy Purchasing Policy Investment Policy Revenue Stabilization Policy Page

5 INTRODUCTORY SECTION BUDGET MESSAGE INTRODUCTION I am pleased to present the 2018 City of Victoria. This budget book is intended to serve as a guide for elected officials, City staff, and others interested in the budget of the City of Victoria. This document is a comprehensive financial plan that identifies the City s priorities and the resources needed to achieve them. This year s budget continues to maintain Victoria s high quality of services while exercising the City s continuing practice of fiscal responsibility. One of the key messages this year is the City s total levy and tax rate. The total levy increased by 11%; however, due to growth from new homes and growth in the market value of existing properties, the City s tax rate is decreasing. The City s taxable market value increased 10.6%, to $1,376,353,100. About 30% of the growth came from new construction as the City added 117 new homes in About 70% of the growth in market value came from increases in the market values of existing properties. The median valued home increased to $396,700, up 6.8%. The City anticipates overall property market values to will continue to increase. The City budgeted for two new FTEs in The City added a Building Inspector last summer due to the growth in building permits, so 2018 is the first year budgeted for that position. The City processed 198 new home permits in 2017, compared to 117 in 2016 and 81 in The City is also adding a new position, a Communications and Human Resources Manager. This manager will provide a needed proactive strategy for overall City communications and a dedicated human resources contact. This will bring the City s total number of FTEs to 26. Overall, General Fund expenditures increased in 2018 by 7.3%, or $281,772. Key reasons for the increase include the two new FTE positions, a 17% increase in health insurance premiums, and the first full year of budgeting for an additional sheriff s deputy. The deputy was budgeted for half a year in Another reason for the increase is the addition of the Southwest Prime Ride Share Program to the City. This program allows residents to access shared transportation to participating communities, along with access to mass transit. The overall budget is balanced and results in a year-end fund balance reserve equal to 30% of operating expenditures, which is aligned with the City s policy. The General Fund budget also includes a $197,000 increase in budgeted transfers. The City sets aside funds each year for Public Works and Fire Department capital expenditures so that funds are on hand when equipment is needed and it is not necessary to borrow. The City set up a new transfer for 2018 for a new parks and trails fund. The City will transfer $100,000 in 2018, with a goal to increase the transfer by $50,000 each year. This new fund will be used for matching grant opportunities, trail gap construction, and other park projects. The Victoria Recreation Center, Water, Sewer, and Storm Water Fund budgets are also balanced. revenues will cover budgeted expenditures and transfers. The Victoria Recreation Center became self-sustaining (i.e. no property tax levy is required to support its operations) in As far as utility rates are concerned, no rate increase is needed for the Water Fund; however, rate increases are needed for operation of the Sewer and Storm Water Funds. Sewer rates will increase 2% and storm water rates will increase from $19 to $23 per quarter. The City will need to accumulate resources in the Storm Water Fund for the dredging of the City s 84 storm water ponds. The City Council formally adopts budgets for the General Fund, Victoria Recreation Center Fund, Water Fund, Sewer Fund, and Storm Water Fund. s for these funds are included in the book. Staff has also prepared projections for the other funds of the City, including debt service and capital project funds, which are included in this book. Sincerely, Kelly Grinnell, Finance Director 4 Page

6 DIRECTORY OF CITY OFFICIALS MAYOR AND CITY COUNCIL Position Term Expires Mayor ~ Tom Funk 12/31/2020 Council Member ~ Jim Crowley 12/31/2018 Council Member ~ Tom Strigel 12/31/2018 Council Member ~ Tom Vogt 12/31/2020 Council Member ~ Tom Gregory 12/31/2020 CITY STAFF Interim City Manager ~ Douglas Reeder Parks & Public Works Director ~ Ann Mahnke Community Development Director ~ Open position Finance Director ~ Kelly Grinnell City Clerk ~ Cindy Patnode Fire Chief ~ Andrew Heger Building Official ~ Scott McCarty Deputy Director of Public Works ~ Chuck Almhjeld 5 Page

7 ORGANIZATIONAL CHART Victoria Residents City Council City Attorney City Manager Boards and Commissions Finance Director City Engineer P&R-PW-VRC Director Police Services Contract Community Development Director Fire Chief Accounting Technician City Clerk Deputy PW Director VRC PT Employees Recreation Supervisor Senior Planner Building Official Planning/PW Technician Volunteer Fire Fighters PW Workers PW Seasonal Workers P&R Seasonal Employees Building Inspector Permit Technician 6 Page

8 COMMUNITY, DEMOGRAPHIC, & STATISTICAL INFORMATION The City of Victoria was founded in the 1850s and incorporated in It is located about 25 miles southwest of the Minneapolis/St. Paul metropolitan area and serves an estimated population of 9,812. Because of its proximity to the Minneapolis/St. Paul metropolitan area, the City benefits from the employment opportunities offered in the regional economy and the relatively low unemployment rate. The City operates under the Council-Manager form of government. The five-member City Council is elected on a nonpartisan basis. The mayor is elected to serve a four-year term. Council members serve four-year staggered terms, with two council members elected every two years. Policy-making and legislative authority are vested in the council. The Council is responsible, among other things, for passing ordinances, adopting the budget, and appointing committees. The City Manager is responsible for carrying out the policies and ordinances of the Council, overseeing the day-to-day operations of the government, and hiring employees and professional staff. The City s population continues to grow. The City has approved several new plats for single family housing in the last three years. The City s Long-Term Financial Plan assumes 111 new homes will be built each year. The chart below shows historical and projected population for the City: Year Population Increase 1990 Census 2, Census 4,025 71% 2010 Census 7,345 82% 2017 Estimate 9,812 34% 2020 Estimate 10,730 9% Victoria residents typically earn more than the average state or national citizen. For 2016, median household income was estimated at $132,400 and per capita income at $49,500. It is estimated that only 2% of Victoria residents live below the federal poverty level. Most residents also have a post-secondary degree. 18% Graduate Degree 46% Bachelor s Degree 11% Associate Degree The City occupies 10.7 square miles. The City is empowered by state statutes to extend its corporate limits by annexation, which it has done from time-to-time through an orderly annexation agreement with Laketown Township. The ultimate growth boundary is 32 square miles. The City acquired 13.5 acres from the Three Rivers Park District for expansion of the City s central business district. This land will provide opportunity for a mixed-use development of commercial/retail and high-density residential. 7 Page

9 PLANNING PROCESSES CITY OF VICTORIA PLANNING PROCESSES Process Description Purpose Impact Annual Annual operations plan Sets expenditure limits for the Provides financial stability, funding incorporating all other City planning budget year. for the CIP, and reserve level targets. processes. Capital Improvement Plan (CIP) Parks & Trails Master Plan Comprehensive Plan Pavement Management Plan Storm Water Pollution Prevention Plan Five-year plan that includes proposed capital projects and equipment purchases by department, plan year, and funding source. Twenty-year master plan for parks, recreation, and open space development. Long range plan designed to manage growth and development and serve as a guideline for future related decision making. Long range plan to maintain and improve the City s street and road system. Long range comprehensive planning document required for regulatory control of storm water. Strategic Plan One to two-year operations plan identifying financial and nonfinancial goals and objectives, based on the City s overall vision and mission statement. Water System Plan Sewer System Plan Wellhead Management Plan Equipment Replacement Plan Long-Term Financial Plan Long range plan designed to assist in management and operations of the City s drinking water system. Long range plan defining the City s wastewater needs. Long range plan to protect drinking water. Long range plan providing for the orderly replacement of public works and fire equipment. Ten-year operating and capital model used for planning purposes. Submitted annually with the budget along with appropriation requests for the budget year. Establish service levels for park facilities and open spaces. Guides the location, timing, and intensity of the various types of development in the City. To maximize the City s investment in its infrastructure. Guides the City in conserving, protecting, and managing its surface water resources. Establishes the basis for departmental works plans and provides direction for City staff. Describes how the system meets current and future water demands and ensures high quality drinking water. Supports development in accordance with the Comprehensive Plan. Provides guidance for managing the potential sources of contamination in areas that supply water to public wells. Establishes life cycles for all City equipment. Projects revenues and expenditures to facilitate financial planning Allows planning for funding, debt service, and operating costs related to the improvements and acquisitions. Allows planning for funding of capital projects and operating expenses to maintain the projects. Provides the basis for review of all land development applications. Allows planning for funding of improvement and maintenance projects. Establishes reasonable, achievable, and affordable goals followed by an implementation plan. Provides for definition of decisions on allocation of resources necessary to achieve goals. Provides guidance for the City to invest in and maintain its water system at the lowest life cycle cost. Allows for planning of capital expenses and maintenance to meet the City s wastewater needs. Expense of treating polluted water or drilling new wells is avoided through wellhead protection. Allows planning for funding of equipment purchases on a pay-asyou-go basis. Provides for budget stability, forecasting, and adequate reserves. 8 Page

10 BUDGET CONSIDERATIONS FOR 2018 The 2018 budget was focused on continuing to provide excellent municipal services and amenities to Victoria residents, businesses, and property owners. The City of Victoria provides a range of services to the community, including police and fire protection, street and park maintenance, snow and ice removal, recreation programs, administrative and planning services, elections, and water, sewer, and storm water management services. The City also owns and operates the Victoria Recreation Center. PERSONNEL SERVICES The City s 2018 budget does include two new positions: a full-time Human Resources/Communications Manager position to begin in April 2018 and a full-time Building Inspector (this position was added in 2017 due to the growth in building permits). As development continues and the populations grows, the City will continue to evaluate staffing levels. The City plans to add a Public Works position every odd year to maintain streets, parks, and utilities. The chart below shows Full-Time Equivalent (FTE) positions proposed for 2018 compared to the last three years: Department/Division Administration Finance Community Development Planning Building Inspections Fire Public Works Streets Utilities Parks and Recreation Total Wages for existing employees will generally increase about 3%; however, employees below the mid-point of their pay range and other employees with merit may receive higher increases depending on where they are at on the adjusted pay scale. Health insurance premiums are projected to increase 17% over The City is considered a small market employer for health insurance purposes. Rates for all Minnesota small market employers increased significantly for The City does compare rates from carriers each year to obtain the best pricing possible. The City typically projects a 7% increase in annual health insurance premiums. The City does have $25,000 in assigned fund balance available to offset large health insurance premiums in future years. The City will continue to offer an opt-out option for those that have coverage through a spouse or Medicare. The contribution rates to the Public Employees Retirement Association (PERA) for 2018 remain at 7.50% for the employer and 6.50% for most employees. The fire chief belongs to the Police & Fire Plan at PERA, which has a 16.2% employer rate and a 10.8% employee rate. The budget also estimates Social Security and Medicare taxes at 6.20% and 1.45% respectively for 2018 and beyond. 9 Page

11 ADDED SERVICES The City s 2018 budget includes the provision of a new service: participation in the Southwest Prime Ride Share Program. This program allows residents to arrange for shared transportation to destinations in participating communities, such as Chaska, Chanhassen, and Eden Prairie or bus service to an ultimate destination. This new program is expected to cost $40,000. This is also the first full year of budgeting for the sheriff s deputy added in September The City is conducting a citizen survey in 2018 to gauge resident interest and opinion on a variety of services. CAPITAL PROJECTS The City is planning several capital projects and purchases in The Capital Improvement Plan begins on page 104. Highlights include construction of Goodman Park, the purchase of additional skate park equipment, replacement of the fire department portable radios, the purchase of a mini-excavator, and the 2018 street reclaim project. 10 Page

12 BUDGET COMPARISON 2017 TO 2018 The following compares the adopted 2017 and 2018 budgets: Fund Revenues Expenditures & Transfers 2017 Total 2018 Total 2017 Total 2018 Total General Fund $4,282,681 $4,779,794 $4,248,995 $4,727,743 Victoria Recreation Center Fund $951,063 $959,136 $948,063 $949,096 Water Fund $1,820,058 $1,973,699 $1,704,349 $1,898,974 Sewer Fund $1,220,517 $1,357,495 $1,435,662 $1,108,443 Stormwater Fund $231,851 $295,151 $225,611 $390,388 Total $8,506,170 $9,365,275 $8,562,680 $9,074,644 GENERAL FUND REVENUES Overall budgeted revenues are up $497,113, or 11.6% over 2017, largely due to the increase in the General Fund portion of the tax levy. ed revenue for building permits is up $95,650, or 18.2% as the City expects 111 new home permits in 2018, compared to 90 in The revenues and other sources to support General Fund expenditures and other uses are classified as follows: 2018 General Fund Revenues and Other Sources Classification % Change Property & Franchise Taxes $3,339,600 $3,802, % Licenses & Permits $378,000 $450, % Intergovernmental Revenues $116,161 $38, % Charges for Services $419,920 $453, % Miscellaneous $29,000 $34, % Total $4,282,681 $4,779, % General Fund Revenues Licenses & Permits 9.4% Property & Franchise Taxes 79.5% Intergovt Revenues 0.8% Charges for Services 9.5% Misc 0.7% 11 Page

13 EXPENDITURES & TRANSFERS 2018 budgeted expenditures and transfers are 11.3% higher than the 2017 budget. Primary reasons for the increase include: New Communication/Human Resources position for $67,301; addition of Southwest Prim Ride Share Program $40,000; first full year of budgeting for additional sheriff s deputy $68,939; and first year of budgeting for building inspector added in 2017/benefits elections for this department $144,485. The following schedule displays 2018 budgeted General Fund expenditures by function compared with 2017: 2018 General Fund Expenditures and Other Uses Function % Change General Government $1,333,150 $1,514, % Public Safety $1,105,101 $1,252, % Public Works $956,895 $885, % Parks & Recreation $478,849 $503, % Transfers $375,000 $572, % Total $4,248,995 $4,727, % General Fund Expenditures Gen Govt 32% Transfers 12% Public Safety 26% Parks & Rec 11% The following table and graph provide perspective on expenditures and other uses for the various General Fund classifications in the 2018 budget: Public Works 19% 2018 General Fund Expenditures and Other Uses Classification % Change Wages & Benefits $1,764,494 $2,073, % Supplies, Repairs & Maint $537,612 $453, % Contractual Services $1,118,467 $1,238, % Utilities $171,609 $178, % Miscellaneous $158,863 $152, % Capital Outlay $122,950 $59, % Operating Transfers $375,000 $572, % Total $4,248,995 $4,727, % 12 Page

14 General Fund Expenditures Wages/Benefits 44% Capital Outlay 1% Transfers 12% Supplies/ Repairs/Maint 10% Misc 3% Utilities 4% Contracted Serv 26% VICTORIA RECREATION CENTER FUND The following tables display the changes in revenues and other sources and the change in expenditures and other uses for the Victoria Recreation Center Fund in Overall revenues are increasing by $8,073, or 0.8%, largely due to an increase in the operating lease with School District 112 and membership revenue Victoria Recreation Center Fund Revenues & Other Sources Classification % Change Property Taxes $2,000 $ % Charges for Services $643,063 $670, % Miscellaneous $295,000 $275, % Investment Income $11,000 $14, % Total $951,063 $959, % Overall expenses and transfers are increasing by $1,033 or 0.2%, largely due to an increase in contractual services for building maintenance Victoria Recreation Center Fund Expenditures & Other Uses Classification % Change Wages & Benefits $178,382 $176, % Supplies, Repairs, & Maint $116,350 $119, % Contractual Services $62,310 $84, % Utilities $221,900 $223, % Miscellaneous $4,400 $6, % Capital Outlay $7,950 $ % Debt Service Leased Fitness Equipment $16,771 $ % Transfer for Debt Service $340,000 $340, % Total $948,063 $949, % 13 Page

15 UTILITY FUNDS The City operates three utilities: water, sewer, and storm water. The City uses the modified accrual basis for budgeting for these funds. Charges for service and connection fees are set to cover expenses for each fund. Revenues are classified as either operating or non-operating. The table below shows 2018 budget information for each fund Utility Fund Revenues and Expenses Water Sewer Stormwater Operating Revenue $1,360,637 $959,817 $291,604 Non-Operating Revenue $613,062 $397,678 $3,547 Total Revenue $1,973,699 $1,357,495 $295,151 Total Expenses $1,898,974 $1,108,443 $390,388 Available Cash at Year End $3,147,514 $858,174 $259, Page

16 BUDGET PROCESS The budget process begins by analyzing and evaluating requests from the various departments and incorporating goals from the strategic planning process. Service levels are reviewed to determine whether they should be maintained at current levels. Revenue estimates are conservative, realistic, and based on historical and current trends. Fees are reviewed for adequacy. The City s policy is to maintain a General Fund unassigned fund balance equal to 30% of the next year s expenditures (transfers not included). The General Fund budget must be balanced to meet this funding percentage. The Finance Committee reviews the budgets several times and the City Council participates in two budget workshops annually. Public input is welcome at any time during the process. Final budgets and levies are adopted in December. To ensure budgetary control, the budget is entered into the City s accounting system and updates are provided to the City Council on a quarterly basis. The 2018 budget calendar is provided below: Date June 2018 June 2018 July 2018 August 2018 August 2018 September 2018 September 2018 October 2018 November 2018 November 2018 December 2018 Step Department heads submit General Fund budget requests Finance Department prepares first draft General Fund budget for Finance Committee Finance Committee reviews second draft of General Fund budget Workshop with City Council to review draft General Fund budget Department heads submit Victoria Recreation Center, Water, Sewer, and Storm Water Management funds budget requests and items for Capital Improvement Plan Finance Committee reviews second draft of General Fund budget City Council reviews and approves preliminary General Fund budget and tax levy Finance Department prepares draft Victoria Recreation Center, Water, Sewer, and Storm Water Management funds budgets and draft Capital Improvement Plan for Finance Committee Finance Committee reviews second drafts of Victoria Recreation Center, Water, Sewer, and Storm Water Management funds budgets and Capital Improvement Plan Workshop with City Council to review General, Victoria Recreation Center, Water, Sewer, and Storm Water Management funds budgets and Capital Improvement Plan City Council adopts final General, Victoria Recreation Center, Water, Sewer, and Storm Water Management funds budgets and Capital Improvement Plan BUDGET AMENDMENTS The legal level of budgetary control is at the function (General Government, Public Safety, Public Works, Culture and Recreation) level. The appropriated budget is prepared by fund, function, and department. Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require approval of the City Manager. Transfers of appropriations between functions require City Council approval if over $10,000. The budget is not amended for these transfers of appropriations. The City has not historically amended adopted budgets. However, should a budget amendment be necessary formal City Council approval is required. Since the City is a Minnesota Plan B city, a four-fifths vote of all members of the City Council is required to reduce amounts in the budget or authorize transfers from unencumbered balances. 15 Page

17 FUND STRUCTURE The accounting system maintains a standard fund structure for a typical Minnesota city government. Governmental funds are used to account for services primarily financed by tax revenues, special assessments, or issued debt. The Governmental Funds include the General, Special Revenue, Debt Service, Capital Projects Funds. Proprietary funds are set up to account for a government s business-type activity (i.e. the activities are supported, primarily, by fees or charges). The City s Proprietary funds are set up as Enterprise funds. City of Victoria Governmental Funds Proprietary Funds General Fund Special Revenue Funds Capital Project Funds Debt Service Funds Enterprise Funds - Water, Sewer & Storm Water Management The City uses several Governmental Funds; however only two of these funds are formally budgeted and receive City Council approval: General Fund and Victoria Recreation Center Fund (this fund is a Special Revenue Fund). The City prepares annual projections for all the other Governmental Funds. The City prepares a formal budget and the City Council approves an annual budget for all three Enterprise Funds: Water Fund, Sewer Fund, and Storm Water Management Fund. All the City s funds are listed below. Certain large funds and all the enterprise funds are considered major funds and they are identified below with bold and underlined font. These funds are reported as a separate column in the City s CAFR and are subject to a separate opinion in the independent auditor s report. GENERAL FUND The General Fund accounts for all financial transactions not properly accounted for in any other fund, including most of the basic government services. The expenditures from the General Fund account for the majority of primary services provided by the City in the areas of public safety, parks, public works, recreation, planning, engineering, and general government. SPECIAL REVENUE FUNDS Special Revenue Funds account for services and expenditures where revenue is restricted for a designated purpose. The City maintains four Special Revenue Funds, but budgets for only one, the Victoria Recreation Center Fund. Victoria Recreation Center Fund Accounts for the revenues and expenditures associated with the Victoria Recreation Center. Economic Development Authority Fund Administers the resources associated with the Victoria Economic Development Authority revolving loan program. PEG Fees Fund Accounts for the resources associated with PEG fees collected from the Mediacom cable franchise. 16 Page

18 Gifts to the Parks Fund Administers donations received for parks. DEBT SERVICE FUNDS Debt Service Funds account for the accumulation of resources for the payment of general long-term debt principal, interest, and related costs. The City maintains fifteen individual debt service funds for its various bond issues. The City has established annual financial plans for each of the individual debt service funds. All the Debt Service Funds are consolidated into one major fund and reported in a single column in the CAFR Basic Financial Statements. The CAFR also includes Combining Schedules that detail individual fund activity for the consolidated Debt Service Fund. CAPITAL PROJECTS FUNDS Capital Project Funds account for the acquisition and construction of major capital facilities and equipment (except those financed by enterprise funds). This includes expenditures relating to capital projects and large capital outlay purchases. Project budgets and/or annual financial plans are established for each fund. Public Works Capital Equipment Fund Accounts for Public Works capital equipment expenditures for vehicles and heavy equipment. It receives appropriations from the General Fund. Fire Truck and Equipment Fund Accounts for Fire Department capital equipment expenditures for vehicles and heavy equipment. It receives appropriations from the General Fund. Capital Facilities Fund Accounts for the accumulation of resources for the construction of and acquisition of City facilities and land. Long-Term Street Maintenance Fund Accounts for the expenditures associated with long-term maintenance of City streets Street Improvement Project Fund Accounts for the expenditures associated with the 2017 street reclaim project Street Improvement Project Fund Accounts for the expenditures associated with the 2018 street reclaim project. Tax Increment District #3 Accounts for tax increment revenues received from those properties within TIF District #3, which decertifies in December Tax Increment District #4 Accounts for tax increment revenues received from those properties within TIF District #4 that are pledged for a pay-as-you-go note. The district decertifies in December Tax Increment District #5 Accounts for tax increment revenues received from those properties within TIF District #5, which decertifies in December 2043 Tax Increment District #6 Accounts for tax increment revenues received from the Victoria Flats development that are pledged for a pay-as-you-go note and for municipal improvements Undergrounding Fund Accounts for the construction proceeds and expenditures associated with the undergrounding of electrical power lines within the City. Park Dedication Fund Accounts for the cash contributions made from developers that shall be used to purchase park land and/or funding of park facilities, in accordance with Minnesota Statutes. Park Improvement Fee Fund Accounts for the park improvement fees collected when a new home building permit is issued for the express purpose of park capital improvements. Trail Fund Accounts for the cash contributions in lieu of land from developers for the purpose of trail improvements. Tree Replacement Fund Accounts for the cash contributions received from developers for tree replacement. Charitable Gambling Donations Fund Accounts for the resources for the contributions from permitted lawful gambling within the City and for expenditures of lawful purpose in accordance with Minnesota Statutes, , Subd. 25. Affordable Housing Program Fund Accounts for the funds received from the sale of the land trust lots and will be used for affordable housing. 17 Page

19 ENTERPRISE FUNDS Enterprise Funds account for the City s business-type activities. These activities provide services where most of the costs are recovered through user fees and charges. The City has three Enterprise Funds. Water Utility Fund Accounts for the revenues and expenses associated with providing water and maintaining the water system infrastructure. Sewer Utility Fund Accounts for the revenues and expenses associated conveying sewage and maintaining the sewer system infrastructure. Storm Water Management Fund Accounts for the revenues and expenses associated with maintaining the storm water infrastructure. 18 Page

20 PROPERTY TAXES The State of Minnesota has granted local municipalities the authority to levy taxes to fund operations and debt payments. For 2018, the City s property tax levy will increase from $4,367,000 to $4,847,500. There are two components to the property tax levy: General Fund $3,715,000 and Debt Service $1,132,500. About 78% of revenues in the General Fund come from the property tax levy. The debt service levy is $17,500, or 1.6%, higher than it was In 2016 and in prior years, the City levied a property tax for the Victoria Recreation Center. Due to a refunding of the bonds for the Victoria Recreation Center facility and other cost savings, a property tax levy is no longer needed for that fund. Under contract, the Carver County Assessor values all properties located within the City s corporate limits. This market value is applied to the class rates assigned by the state to determine a property s tax capacity. The County estimates the City s adjusted net tax capacity for taxes payable in 2018 at $14,119,015, which is an 11.6% increase from The City s property tax levy is divided by the net tax capacity to determine the City s tax capacity rate. The tax capacity rate is applied to each property s tax capacity to determine the tax the City will collect before any credits are applied. The City s tax rate is expected to decrease from 32.84% in 2017 to 32.75% in The following table provides a historical and projected view of the tax capacity value, tax capacity rate, and tax levy: Year Net Tax Capacity Value Net Tax Capacity % Change Tax Levy Levy % Change Tax Capacity Rate Rate % Change 2011 $10,483, % $4,106, % 37.42% 0.1% 2012 $9,713, % $4,050, % 39.55% 5.7% 2013 $9,508, % $3,947, % 39.57% 0.1% 2014 $9,967, % $3,961, % 37.89% -4.3% 2015 $11,727, % $4,100, % 33.33% -12.0% 2016 $12,724, % $4,367, % 32.94% -1.2% 2017 $12,648, % $4,367, % 32.84% -0.3% 2018 $14,119, % $4,847, % 32.75% -0.3% The City currently does not have the authority to levy or collect local sales taxes or other types of taxes under the state s tax system. 19 Page

21 PROPERTY TAX BASICS ASSESSMENT AND CLASSIFICATION The property tax system is a continuous cycle, but it effectively begins with the estimation of property market values by local assessors. The City of Victoria contracts with the Carver County Assessor for this task. Assessors attempt to determine the approximate selling price of each parcel of property based on the current market conditions. Along with the market value determination, a property class is ascribed to each parcel of property based on the use of the property. For example, property that is owner-occupied as a personal residence is classified as a residential homestead. The use class is important because the Minnesota system, in effect, assigns a weight to each class of property. Generally, properties associated with income production (e.g. commercial and industrial properties) have a higher classification weight than other properties. The property classification system defines the tax capacity of each parcel as a percentage of each parcel s market value. For example, a $75,000 home which is classified as a residential homestead has a class rate of 1.0 percent and therefore has a tax capacity of $75,000 x.01 or $750. Current class rates in Minnesota are listed below: Property Classification Market Value Class Rate Residential Homestead First $500,000 Over $500, % 1.25% Residential Non-Homestead (with building) First $500,000 Over $500, % 1.25% Residential Non-Homestead (no buildings vacant land) All 1.25% Residential Rental (Apartments) All 1.25% Agricultural Homestead House/Garage & 1 Acre First $500,000 Over $500, % 1.25% Agricultural Land & Outbuildings First $2,050,000 Over $2,050,000.50% 1.00% Agricultural Non-Homestead Land All 1.00% Seasonal Cabins (Non-Commercial) First $500,000 Over $500, % 1.25% Commercial/Industrial First $150,000 Over $150, % 2.00% [Parcel Market Value] * [Class Rate] = [Parcel Tax Capacity] The next step in calculating the tax burden for a parcel involves the determination of each local unit of government s property tax levy. The city, county, school district, and any special property taxing authorities must establish their levy by December 28 of the year preceding the year in which the levy will be paid by taxpayers. The property tax levy is set after the consideration of all other revenues including state aids such as LGA. [City ] [All Non-Property Tax Revenues] = [City Levy] LOCAL TAX RATES Local governments do not directly set a tax rate. Instead, the tax rate is a function of the levy and the total tax base. To compute the local tax rate, a county must determine the total tax capacity to be used for spreading the levies. The total tax capacity is computed by first aggregating the tax capacities of all parcels within the city. Several adjustments to this 20 Page

22 total must be made because not all tax capacity is available for general tax purposes. The result of this calculation produces taxable tax capacity. Taxable tax capacity is used to determine the local tax rates. PARCEL TAX CALCULATIONS [City Levy] / [Taxable Tax Capacity] = [City Tax Rate] The property tax bill for each parcel of property is determined by multiplying the parcel s tax capacity by the total local tax rate. The tax statement for each individual parcels itemizes the taxes for the county, city, school district, and any special taxing authorities. [Parcel Tax Capacity] * [Total Local Tax Rate] = [Tax Capacity Tax Bill] SAMPLE PROPERTY TAX CALCULATION Estimated Market Value $396,700 Homestead Exclusion $ -1,537 Taxable Market Value $395,163 $395,163 Taxable Market Value X 1% Residential Tax Class Rate = $3,952 Tax Capacity X $1, % City of Victoria Taxes = City of Victoria Tax Rate TERMS DEFINED Class Rates The percent of market value set by state law that establishes the property s tax capacity subject to the property tax. Local Tax Rate The rate used to compute taxes for each parcel of property. Local tax rate is computed by dividing the certified levy (after reduction for fiscal disparities distribution levy and disparity reduction) by the taxable tax capacity. Market Value An assessor s estimate of what property would be worth on the open market if sold. The market value is set on January 2 of the year before taxes are payable. Homestead Market Value Exclusion (HMVE) Starting with taxes payable in 2012, eligible homesteads will pay property taxes on only a portion of their homes. The maximum exclusion, 40% of value, occurs at home value of $76,000 and phases out as home value grows. The HMVE phases out completely at $413,800. Property Class The classification assigned to each parcel of property based on the use of the property. For example, owner-occupied residential property is classified as homestead. 21 Page

23 Property Tax Levy The tax imposed by a local unit of government. The tax is established on or around December 28 of the year preceding the year the levy will be paid by taxpayers. Tax Capacity The valuation of property based on market value and statutory class rates. The property tax for each parcel is based on its tax capacity. Total Tax Capacity The amount computed by first totaling the tax capacities of all parcels of property within a city. Adjustments for fiscal disparities and tax increment are made to this total since not all tax capacity is available for general tax purposes. Truth-in-Taxation The taxation and notification law which requires local governments to set estimated levies, inform taxpayers about the impacts, and announce which of their regularly scheduled council meetings will include a discussion of the budget and levy. Taxpayer input is taken at that meeting. Date On or Before Sept. 30 On or Before Sept. 30 Nov. 11 to Nov. 23 Nov. 25 to Dec. 30 On or Before Dec. 30 TNT SUMMARY CHART FOR TAXES PAYABLE 2018 Action At one meeting, the City Council adopts the proposed property tax levy and announces the time and place of a future city council meeting at which the budget and levy will be discussed and public input allowed, prior to final budget and levy determination. This public input meeting must occur after November 24 and must start at or after 6:00 p.m. Cities must provide the County Auditor with the following information: The time and place of the meeting at which the budget and levy will be discussed and public input allowed. A phone number that city taxpayers may call if they have questions related to the auditor s property tax notice. An address where comments will be received by mail. County auditor prepares and sends parcel-specific notices. City council holds a meeting to discuss the budget and property tax levy and, before a final determination, allows public input. Cities must certify a final property tax levy to the county auditor. FISCAL DISPARITIES The City participates in the Metropolitan Fiscal Disparities Program (MFDP). The MFDP is a property tax base sharing program that was enacted in 1971 and began in Since 1971, each participating entity has contributed 40% of its growth in commercial and industrial value to a fiscal disparities pool. The measure of growth includes new construction and inflationary increases in existing property values. The contribution value is not available for local tax purposes and is subtracted from tax capacity before a local tax rate is computed. Each entity is assigned a distribution value from the pool based on the City s total market value per capita compared to the average market value per capita. The actual distribution is received in the form of property taxes and is called a distribution levy. The distribution levy is computed by multiplying the assigned distribution value by the prior year tax capacity rate. The distribution levy is subtracted from the certified levy before a local tax rate is computed. The City receives a net gain from the MFDP. For taxes payable in 2018, the City is projected to contribute $221,015 in tax capacity to the pool. However, the City is projected to receive $794,331 in tax capacity from the pool, resulting in a fiscal disparities tax levy of $259,426. This tax levy is subtracted from the City tax levy for purposes of calculating the local tax rate. 22 Page

24 LEVY & TAX CAPACITY HISTORY TAX LEVY AND TAX CAPACITY HISTORY TAX LEVY HISTORY General Fund $2,887,000 $2,856,000 $3,181,000 $3,252,000 $3,715,000 Percent Change 1.13% -1.07% 11.38% 2.23% 14.20% Special Revenue Fund Victoria Recreation Center $225,000 $160,000 $150,000 $0 $0 Percent Change % % -6.25% % 0.00% Debt Service Funds 2008A EDA Refunding Bonds (1998) $87,800 $87,800 $80,000 $80,000 $79, A GO Refunding Bonds (2004B) $93,000 $93,000 $93,000 $96,000 $94, B GO Refunding Bonds (2006B) $134,000 $134,000 $105,000 $105,000 $98, A GO Improvement Bonds $125,200 $115,000 $114,000 $112,000 $112, B GO Improvement Bonds $122,000 $122,000 $123,000 $123,000 $120, A GO Taxable Improvement Bonds $194,000 $194,000 $195,000 $191,000 $190, B GO Improvement Bonds $93,000 $83,000 $77,000 $74,000 $73, A GO Improvement Bonds - $68,000 $61,000 $63,000 $63, A EDA Limited Tax Lease Rev Bonds - $188,000 $188,000 $188,000 $188, A GO Improvement Bonds $43,000 $75, A GO Parking Improvement Bonds $40,000 $40,000 Total Special Revenue Funds $849,000 $1,084,800 $1,036,000 $1,115,000 $1,132,500 Percent Change 0.71% 27.77% -4.50% 7.60% 1.60% Total All Funds $3,961,000 $4,100,800 $4,367,000 $4,367,000 $4,847,500 Percent Change 0.34% 3.53% 6.49% 0.00% 11.00% TAX CAPACITY HISTORY Net Tax Capacity $9,967,534 $11,727,425 $12,724,544 $12,648,047 $14,119,015 Percent Change 4.83% 17.66% 8.50% -0.6% 11.6% Urban Tax Capacity Rate 37.89% 33.33% 32.94% 32.84% 32.75% Percent Change -4.25% % -1.17% -0.3% -0.3% 23 Page

25 LONG-TERM FINANCIAL PLAN The City has a long-term financial plan (LTFP) and updates it frequently. The LTFP incorporates council goals, such as General Fund balance and tax rates, projections for household and market value growth, and estimates for tax levies and capital replacement and projects to ensure long-term financial sustainability. The City uses the LTFP to project the impacts of capital projects, debt service, and budgets on taxpayers. The current LTFP projects conservative growth, with 111 new homes added each year and 2.5% growth in the value of existing properties. The LTFP projects operating expenses to grow at 3.0%, includes the addition of staff and equipment, and factors in debt service for street and utility reconstruction projects. Given these factors, the LTFP shows the tax rate remaining stable, between 31.0% and 33.0%. The table below shows levy and tax projections through 2022: Projection 2020 Projection 2021 Projection 2022 Projection General Fund General Fund Levy $3,252,000 $3,715,000 $3,935,000 $4,150,000 $4,400,000 $4,575,000 Other Revenues $1,030,681 $1,064,794 $1,089,191 $1,113,753 $1,138,362 $1,163,520 Total Revenues $4,282,681 $4,779,794 $5,024,191 $5,263,753 $5,538,362 $5,738,520 Total Expenditures $3,873,995 $4,155,743 $4,347,307 $4,420,206 $4,646,942 $4,784,581 Total Transfers $375,000 $572,000 $642,000 $780,000 $850,000 $910,000 Debt Service Total Debt* $27,240,000 $25,795,000 $24,210,000 $20,980,000 $19,260,000 $20,045,000 Net Tax Supported $10,363,111 $10,128,773 $10,098,132 $9,151,100 $8,712,900 $9,524,050 Debt (NTSD) NTSD % of EMV 0.81% 0.72% 0.67% 0.57% 0.52% 0.54% Debt Service Levy $1,115,000 $1,132,500 $1,153,500 $1,138,000 $1,248,000 $1,288,000 Debt Levy % of Total Levy 25.53% 23.36% 22.67% 21.07% 21.54% 21.43% Total Levy $4,367,000 $4,847,500 $5,088,500 $5,258,000 $5,608,000 $5,823,000 Taxable Market $1,243,985,400 $1,376,353,100 $1,471,255,685 $1,552,043,256 $1,635,950,671 $1,723,083,430 Value Net Tax Capacity $12,648,047 $14,119,015 $15,136,690 $16,014,416 $17,147,275 $17,882,642 Tax Capacity Rate 32.84% 32.75% 32.15% 31.46% 31.44% 31.36% Median Valued $371,500 $396,700 $406,618 $416,783 $427,203 $437,883 Home (MVH) Tax on MVH $1,208 $1,294 $1,305 $1,312 $1,343 $1,373 Households 3,176 3,287 3,398 3,509 3,620 3,731 Population 9,734 10,066 10,398 10,730 11,062 11,394 *Total debt excludes advance refunded debt for which money is held in escrow awaiting the call date. 24 Page

26 LEGAL DEBT LIMIT & BOND RATINGS LEGAL DEBT LIMIT Minnesota cities may not incur debt in excess of 3 percent of the market value of taxable property in the City (the limit is 2 percent in First Class cities unless a charter provides a higher rate, but even so this higher rate is capped by law at 3.67 percent). But excepted from this overall 3 percent limit are almost all debt obligations for which some other source of revenue is pledged as security. Thus, improvement assessment bonds, tax increment bonds, utility revenue bonds, pure revenue bonds, capital improvement bonds under an approved capital improvement plan, judgment bonds, and similar bonds may be issued without regard to the statutory debt limit. (There may be other requirements for bonds that are exempt from the debt limit; for example, capital improvement bonds must be approved by an affirmative vote of threefifths of the members of a five-member governing body.) The result is that, with only a few exceptions, the only obligations subject to the debt limit are general obligation bonds payable solely from ad valorem property taxes. The legal debt limit has nothing to do with the practical debt limit of a city, which is the debt burden beyond which the creditworthiness of the city is put into question. (See Minnesota Statutes ) Legal Debt Margin Calculation for Fiscal Year 2018 Taxable Market Value (payable 2018) $1,376,353,100 Debt Limit (3% of market value) $41,290,593 Debt Applicable to Limit GO Tax Abatement & Refunding Bonds $6,360,000 Lease Purchase Jetter Vactor Trailer $88,718 Total Net Debt Applicable to Limit $6,448,718 Legal Debt Margin $34,841,875 ANTICIPATED BORROWING THIS FISCAL YEAR For 2018, the City expects to issue General Obligation Permanent Improvement Revolving Fund Bonds for street reclaim projects in several neighborhoods. The total estimated project cost is $1,206,000, with approximately one half of the cost to be assessed to benefiting property owners. This project will be funded from bond proceeds. Also in 2018, the City may issue General Obligation Tax Increment Financing Bonds to reconstruct Stieger Lake Lane, from City Hall east to Highway 5. The total estimated project cost is $2,400,000. The bonds will be repaid from tax increment financing, a property tax levy, and special assessments. BOND RATINGS In August 2017, Standards & Poor s Ratings Services affirmed the City s AA+ long-term rating on the City s existing General Obligation (GO) debt. They assigned its AA long-term rating to Victoria Economic Development Authority s series 2014A Lease Revenue and Limited Tax Bonds. The rating on the 2014A bonds is rated one notch below the GO rating to reflect annual appropriation risk. The outlook is stable. The rating reflects Standard & Poor s assessment of the following factors for the City: Very strong economy, with access to a broad and diverse metropolitan statistical area (MSA); Very strong management with strong financial policies and practices under their Financial Management Assessment methodology; Adequate budgetary performance, with an operating surplus in the general fund but an operating deficit at the total governmental fund level in fiscal 2016; 25 Page

27 Very strong budgetary flexibility, with an available fund balance in fiscal 2016 of 44% of operating expenditures; Very strong liquidity, with total government available cash at 121.8% of total governmental fund expenditures and 4.6x governmental debt service, and access to external liquidity that we consider strong; Weak debt and contingent liability position, with debt service carrying charges at 26.48% of expenditures and net direct debt that is 313.4% of total governmental fund revenue, but rapid amortization, with 69.7% of debt scheduled to be retired in 10 years; and Strong institutional framework score. BOND RATING SCALES Standards & Poor s City of Victoria ratings: G.O. Debt - AA+; Limited Tax Lease Revenue AA Standard & Poor s Moody s Fitch Description AAA Aaa AAA Prime AA+ Aa1 AA+ AA Aa2 AA High Grade AA- Aa3 AA- A+ A1 A+ A A2 A Upper Medium Grade A- A3 A- BBB+ Baa1 BBB+ BBB Baa2 BBB Lower Medium Grade BBB- Baa3 BBB- BB+ Ba1 BB+ Non-Investment Grade BB Ba2 BB Speculative BB- Ba3 BB- B+ B1 B+ B B2 B Highly Speculative B- B3 B- CCC+ Caa1 Substantial Risks CCC Caa2 Extremely Speculative CCC- Caa3 CCC Default Imminent With CC Ca Little Prospect for C C DDD Recovery D / DD In Default / D Of the Minnesota municipalities rated by Standard & Poor s in 2017, only 7% received the highest AAA rating and only 10% received the second highest AA+ rating. 26 Page

28 REVENUE & EXPENDITURE BUDGET SUMMARY ALL FUNDS FISCAL YEAR 2018 General Fund Special Revenue Funds Capital Project Funds Debt Service Funds Enterprise Funds Beginning Fund Balance $1,260,583 $1,146,395 $4,951,104 $4,351,688 $4,870,872 $16,580,642 Revenues Property Taxes $3,733,200 $0 $0 $1,132,500 $0 $4,865,700 Franchise Fees $69,000 $16,000 $274,468 $0 $0 $359,468 Tax Increment $0 $0 $277,278 $0 $0 $277,278 Special Assessments $0 $0 $851 $405,455 $0 $406,306 Licenses & Permits $450,810 $0 $0 $0 $0 $450,810 Intergovernmental Revenue $38,861 $0 $91,820 $0 $0 $130,681 Charges for Services $453,923 $670,136 $277,500 $7,000 $0 $1,408,559 Fines & Forfeits $9,900 $0 $0 $0 $0 $9,900 Miscellaneous $4,100 $277,000 $52,500 $0 $0 $333,600 Investment Income $20,000 $14,478 $56,628 $58,800 $0 $149,906 Operating Income $0 $0 $0 $0 $2,612,058 $2,612,058 Non-Operating Income $0 $0 $0 $0 $1,014,287 $1,014,287 Total Revenue $4,779,794 $977,614 $1,031,045 $1,603,755 $3,626,345 $12,018,553 Total Expenditures General Government $1,514,415 $0 $0 $0 $0 $1,514,415 Public Safety $1,252,782 $0 $0 $0 $0 $1,252,782 Public Works $885,498 $0 $0 $0 $0 $885,498 Parks & Recreation $503,048 $619,096 $0 $0 $0 $1,122,144 Debt Service-Principal $0 $0 $0 $1,925,000 $675,000 $2,600,000 Debt Service-Interest & Other Charges $0 $0 $0 $502,842 $148,475 $651,317 Capital Outlay-Public Safety $0 $0 $87,500 $0 $0 $87,500 Capital Outlay-Public Works $0 $0 $3,244,472 $0 $0 $3,244,472 Capital Outlay-Parks $0 $0 $1,591,000 $0 $0 $1,591,000 Capital Outlay-Economic Development $0 $0 $119,285 $0 $0 $119,285 Bond Issuance Costs $0 $0 $100,605 $0 $0 $100,605 Enterprise Fund Expenses $0 $0 $0 $0 $2,574,330 $2,574,330 Total Expenditures $4,155,743 $619,096 $5,142,862 $2,427,842 $3,397,805 $15,743,348 Other Financing Sources (Uses) Bond Proceeds $0 $0 $2,840,000 $0 $0 $2,840,000 Premium on Bonds Sold $0 $0 $19,937 $0 $0 $19,937 Transfer In $0 $10,000 $1,022,000 $646,000 $0 $1,678,000 Transfer Out $-572,000 $-340,000 $-497,782 $-106 $0 $-1,409,888 Total Other Financing Sources (Uses) $-572,000 $-330,000 $3,384,245 $645,894 $0 $3,128,139 Ending Fund Balance $1,312,634 $1,174,913 $4,223,532 $4,173,495 $5,099,412 $15,983, Page

29 REVENUE & EXPENDITURE BUDGET SUMMARY SPECIAL REVENUE FUNDS FISCAL YEAR 2018 Fund 227 Victoria Recreation Center Fund 103 Economic Development Authority Fund 224 PEG Fees Fund 811 Gifts to the Parks Beginning Fund Balance $1,093,971 $5,256 $7,397 $39,771 $1,146,395 Revenues Property Taxes $0 $0 $0 $0 $0 Franchise Taxes $0 $0 $16,000 $0 $16,000 Charges for Services $670,136 $0 $0 $0 $670,136 Miscellaneous $275,000 $0 $0 $2,000 $277,000 Investment Income $14,000 $6 $74 $398 $14,478 Total Revenue $959,136 $6 $16,074 $2,398 $977,614 Total Expenditures General Government Parks & Recreation $609,096 $0 $0 $10,000 $619,096 Total Expenditures $609,096 $0 $0 $10,000 $619,096 Other Financing Sources (Uses) Transfer In $0 $0 $0 $10,000 $10,000 Transfer Out $-340,000 $0 $0 $0 $-340,000 Total Other Financing Sources (Uses) $-340,000 $0 $0 $10,000 $-330,000 Ending Fund Balance $1,104,011 $5,262 $23,471 $42,169 $1,174,913 REVENUE & EXPENDITURE BUDGET SUMMARY ENTERPRISE FUNDS FISCAL YEAR 2018 Fund 601 Water Fund 602 Sewer Fund 603 Storm Water Management Total Revenues Operating Revenues $1,360,637 $959,817 $291,604 $2,612,058 Non-Operating Revenues $613,062 $397,678 $3,547 $1,014,287 Total Revenue $1,973,699 $1,357,495 $295,151 $3,626,345 Expenditures Operating Expenses $1,075,499 $1,108,443 $390,388 $2,574,330 Debt Service-Principal $675,000 $0 $0 $675,000 Debt Service-Interest & Other Charges $148,475 $0 $0 $148,475 Total Expenditures $1,898,974 $1,108,443 $390,388 $3,397, Page

30 REVENUE & EXPENDITURE BUDGET SUMMARY - DEBT SERVICE FUNDS FISCAL YEAR 2018 Fund 308 Diethelm Park Bonds Fund 311 Rec Center Bonds Fund 377 TIF Dist 3 Bonds Fund St Imp Bonds Fund St Imp Bonds Fund St Imp Bonds Fund St Imp Bonds Fund St Imp Bonds Beginning Fund Balance $18,504 $144,654 $189,090 $61,207 $194,336 $166,452 $247,698 $212,418 Revenues Property Taxes $79,000 $0 $0 $94,500 $98,000 $112,000 $120,000 $190,000 Franchise Fees $0 $0 $0 $0 $0 $0 $0 $0 Special Assessments $0 $0 $20,520 $33,184 $52,695 $19,739 $33,712 $46,620 Lease Revenue $0 $0 $0 $0 $0 $0 $0 $0 Investment Income $0 $24,123 $150 $500 $1,028 $814 $1,155 $1,981 Total Revenue $79,000 $24,123 $20,670 $128,184 $151,723 $132,553 $154,867 $238,601 Expenditures Debt Service-Principal $95,000 $200,000 $195,000 $150,000 $160,000 $145,000 $175,000 $230,000 Debt Service-Interest & Other Charges $2,398 $91,275 $8,600 $7,750 $20,913 $16,195 $22,662 $36,500 Total Expenditures $97,398 $291,275 $203,600 $157,750 $180,913 $161,195 $197,662 $266,500 Other Financing Sources (Uses) Transfer In $0 $340,000 $171,000 $0 $0 $0 $0 $0 Transfer Out $-106 $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $-106 $340,000 $171,000 $0 $0 $0 $0 $0 Ending Fund Balance $0 $217,502 $177,160 $31,641 $165,146 $137,810 $204,903 $184,519 Fund St Imp Bonds Fund St Imp Bonds Fund 526 City Hall Bonds Fund St Imp Bonds Fund 528 TIF #5 Bonds Fund 529 Tax Abatement Undergrounding Bonds Fund St Imp Bonds Total Debt Service Funds Beginning Fund Balance $1,000,258 $612,964 $135,831 $1,165,482 $26,830 $99,471 $76,493 $4,351,688 Revenues Property Taxes $73,000 $63,000 $188,000 $75,000 $40,000 $0 $0 $1,132,500 Special Assessments $10,505 $21,697 $0 $40,963 $0 $0 $125,820 $405,455 Lease Revenue $0 $0 $7,000 $0 $0 $0 $0 $7,000 Investment Income $9,881 $5,484 $1,374 $9,513 $273 $1,006 $1,518 $58,800 Total Revenue $93,386 $90,181 $196,374 $125,476 $40,273 $1,006 $127,338 $1,603,755 Expenditures Debt Service-Principal $85,000 $100,000 $120,000 $145,000 $35,000 $90,000 $0 $1,925,000 Debt Service-Interest & Other Charges $51,500 $41,500 $75,913 $58,070 $12,850 $33,835 $22,821 $502,842 Total Expenditures $136,500 $141,500 $195,913 $203,070 $47,850 $123,835 $22,821 $2,427,842 Other Financing Sources (Uses) Transfer In $0 $0 $0 $0 $0 $135,000 $0 $646,000 Transfer Out $0 $0 $0 $0 $0 $0 $0 $-106 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 $135,000 $0 $645,894 Ending Fund Balance $957,144 $561,645 $136,292 $1,087,889 $19,253 $111,643 $180,950 $4,173, Page

31 REVENUE & EXPENDITURE BUDGET SUMMARY CAPITAL PROJECT FUNDS FISCAL YEAR 2018 Fund 102 PW Capital Equip Fund 809 Fire Truck & Equip Fund 104 Capital Facilities Fund 808 Long-Term Street Maint Fund Street Imp Project Fund Street Imp Project Fund 490 TIF #3 Fund 495 TIF #4 Fund 400 TIF #5 Beginning Fund Balance $81,684 $439,462 $365,377 $1,421,472 $262,915 $-7,358 $163,659 $128,803 $-253,034 Revenues Franchise Fees $0 $0 $0 $0 $0 $0 $0 $0 $0 Tax Increment $0 $0 $0 $0 $0 $0 $222,154 $42,000 $13,124 Special Assessments $0 $0 $0 $851 $0 $0 $0 $0 $0 Intergovernmental Revenue $0 $0 $0 $91,820 $0 $0 $0 $0 $0 Charges for Services $0 $0 $0 $0 $0 $0 $0 $0 $0 Miscellaneous $0 $2,500 $0 $0 $0 $0 $0 $0 $0 Investment Income $817 $4,395 $365 $14,215 $2,000 $2,000 $409 $435 $820 Total Revenue $817 $6,895 $365 $106,886 $2,000 $2,000 $222,563 $42,435 $13,944 Expenditures Capital Outlay-Public Safety $0 $87,500 $0 $0 $0 $0 $0 $0 $0 Capital Outlay-Public Works $15,000 $0 $0 $343,098 $294,197 $1,193,000 $0 $0 $0 Capital Outlay-Parks $0 $0 $0 $0 $0 $0 $0 $0 $0 Capital Outlay-Economic Development $0 $0 $0 $0 $0 $0 $3,086 $38,661 $76,262 Bond Issuance Costs $0 $0 $0 $0 $0 $50,605 $0 $0 $0 Total Expenditures $15,000 $87,500 $0 $343,098 $294,197 $1,243,605 $3,086 $38,661 $76,262 Other Financing Sources (Uses) Bond Proceeds $0 $0 $0 $0 $0 $1,165,000 $0 $0 $0 Premium on Bonds Sold $0 $0 $0 $0 $0 $19,937 $0 $0 $0 Transfer In $180,000 $90,000 $0 $42,000 $63,200 $71,890 $0 $0 $0 Transfer Out $0 $0 $0 $0 $-33,918 $-7,864 $-171,000 $0 $0 Total Other Financing Sources (Uses) $180,000 $90,000 $0 $42,000 $29,282 $1,248,963 $-171,000 $0 $0 Ending Fund Balance $247,501 $448,857 $365,742 $1,227,260 $0 $0 $212,136 $132,577 $-315,352 Fund 499 Undergrounding Fund 801 Park Dedication Fees Fund 806 Park Imp Fees Fund 805 Tree Replacement Fund 810 Charitable Gambling Donations Fund 802 Affordable Housing Total Capital Projects Funds Fund 407 TIF #6 Fund 807 Trail Fund Beginning Fund Balance $-87,056 $1,046,543 $507,318 $317,687 $34,948 $260,525 $78,892 $189,267 $4,951,104 Revenues Franchise Fees $0 $274,468 $0 $0 $0 $0 $0 $0 $274,468 Tax Increment $0 $0 $0 $0 $0 $0 $0 $0 $277,278 Special Assessments $0 $0 $0 $0 $0 $0 $0 $0 $851 Intergovernmental Revenue $0 $0 $0 $0 $0 $0 $0 $0 $91,820 Charges for Services $0 $0 $0 $277,500 $0 $0 $0 $0 $277,500 Miscellaneous $0 $0 $0 $40,000 $0 $0 $10,000 $0 $52,500 Investment Income $0 $15,698 $5,073 $4,765 $349 $2,605 $789 $1,893 $56,628 Total Revenue $0 $290,166 $5,073 $322,265 $349 $2,605 $10,789 $1,893 $1,031,045 Expenditures Capital Outlay-Public Safety $0 $0 $0 $0 $0 $0 $0 $0 $87,500 Capital Outlay-Public Works $1,112,944 $286,233 $0 $0 $0 $15,000 $0 $0 $3,244,472 Capital Outlay-Parks $0 $0 $0 $1,576,000 $0 $0 $0 $0 $1,591,000 Capital Outlay-Economic Development $0 $0 $0 $0 $0 $0 $0 $1,276 $119,285 Bond Issuance Costs $50,000 $0 $0 $0 $0 $0 $0 $0 $100,605 Total Expenditures $1,162,944 $286,233 $0 $1,576,000 $0 $15,000 $0 $1,276 $5,142,862 Other Financing Sources (Uses) Bond Proceeds $1,250,000 $0 $0 $425,000 $0 $0 $0 $0 $2,840,000 Premium on Bonds Sold $0 $0 $0 $0 $0 $0 $0 $0 $19,937 Transfer In $0 $0 $0 $575,000 $0 $0 $0 $0 $1,022,090 Transfer Out $0 $-135,000 $-150,000 $0 $0 $0 $0 $0 $-497,782 Total Other Financing Sources (Uses) $1,250,000 $-135,000 $-150,000 $1,000,000 $0 $0 $0 $0 $3,384,245 Ending Fund Balance $0 $915,476 $362,391 $63,952 $35,297 $248,130 $89,681 $189,884 $4,223, Page

32 GENERAL FUND GENERAL FUND SUMMARY FUND DESCRIPTION One of the five governmental fund types, the General Fund serves as the chief operating fund of the City. The General Fund is used to account for all financial resources not accounted for in some other fund. The fund uses the modified accrual basis of accounting for budgeting and financial reporting purposes. This means expenditures are recorded when the liability is incurred and revenues are recorded when they become measurable and available. The adopted General Fund budget is a balanced-budget current revenues and other sources equal expenditures and other uses. BUDGET HIGHLIGHTS AND FUTURE TRENDS Overall revenues are projected to increase by 11.6%. The General Fund s largest revenue source is property taxes. The General Fund portion of the property tax levy is $3,715,000, up $463,000 or 14.2% from Licenses & Permits revenues are up 19.3%, or $72,810, because the City is budgeting for 111 new home permits in 2017 versus 90 in Intergovernmental Revenues are $77,300 lower because Municipal State Aid for street maintenance is now accounted for in the Long-Term Street Maintenance Fund, along with seal coating expenditures. General Fund expenditures are expected to increase by 7.3%. Detail for each department follows, but some of the significant items include: the addition of a full-time building inspector (the inspector began in 2017, but 2018 is the first year for budgeting for the position); the addition of a full-time Communications/Human Resources Manager position is budgeted to start in April 2018; the first full year of budgeting for an additional sheriff s deputy; and the addition of Southwest Prime, a shared ride service. The budget also includes a $197,000 increase in transfers. The City is setting up a new Parks and Trails fund that will receive $100,000 transfer in 2018 and the City will transfer $42,000 to the Long-Term Street Maintenance fund for sealcoating BUDGET General Fund $ Chg 2017 to 2018 % Chg 2017 to 2018 Revenues Property & Franchise Taxes $2,920,387 $3,252,468 $3,339,600 $3,802,200 $462, % Licenses & Permits $349,244 $513,922 $378,000 $450,810 $72, % Intergovernmental Revenues $148,970 $125,613 $116,161 $38,861 $-77, % Charges for Services $378,666 $470,514 $419,920 $453,923 $34, % Fines & Forfeits $10,698 $9,934 $9,900 $9,900 $0 0.0% Investment Income $17,055 $18,778 $15,000 $20,000 $5, % Miscellaneous $78,604 $56,231 $4,100 $4,100 $0 0.0% Total Revenues $3,903,624 $4,447,460 $4,282,681 $4,779,794 $497, % Expenditures by Department General Government Mayor and Council $20,457 $16,276 $35,878 $33,280 $-2, % Administration $539,697 $500,112 $501,703 $612,949 $111, % Finance $136,238 $228,206 $150,841 $157,416 $6, % Elections $0 $17,237 $1,800 $20,650 $18, % Professional Services $278,572 $310,036 $272,150 $301,230 $29, % Planning and Zoning $159,649 $227,013 $296,425 $317,917 $21, % City Hall Building $51,363 $61,628 $74,353 $70,973 $-3, % Total General Government $1,185,976 $1,360,508 $1,333,150 $1,514,415 $181, % 31 Page

33 General Fund $ Chg 2017 to 2018 % Chg 2017 to 2018 Public Safety Police Protection $327,589 $342,233 $404,921 $473,860 $68, % Fire Protection $220,925 $305,254 $450,437 $422,449 $-27, % Building Inspections $217,441 $206,142 $205,743 $354,173 $148, % Civil Defense $3,140 $800 $43,500 $1,800 $-41, % Animal Control $0 $380 $500 $500 $0 0.0% Total Public Safety $769,095 $854,809 $1,105,101 $1,252,782 $147, % Public Works PW Streets $783,661 $635,532 $780,039 $699,045 $-80, % PW Snow Removal $39,039 $55,633 $67,500 $57,500 $-10, % PW Street Lighting $86,089 $95,183 $93,000 $112,536 $19, % PW Signal Lights $11,799 $1,821 $4,256 $4,317 $61 1.4% PW Composting $25,312 $22,874 $12,100 $12,100 $0 0.0% Total Public Works $945,900 $811,043 $956,895 $885,498 $-71, % Parks and Recreation Recreation Programs $54,553 $59,311 $60,912 $67,792 $6, % Parks and Recreation $138,031 $141,123 $160,166 $159,216 $ % Park Maintenance $201,613 $248,246 $257,771 $276,040 $18, % Total Parks and Recreation $394,197 $448,680 $478,849 $503,048 $24, % Total Expenditures $3,295,168 $3,475,040 $3,873,995 $4,155,743 $281, % Other Financing Sources (Uses) Transfers to Other Funds $481,135 $856,961 $375,000 $572,000 $197, % Total Other Financing Sources (Uses) $481,135 $856,961 $375,000 $572,000 $197, % Excess of Revenues over Expenditures and Other Financing Sources (Uses) $127,321 $115,459 $33,686 $52,051 Unassigned Fund Balance $1,103,908 $1,162,197 $1,237,883 $1,312,634 December 31* *Per City Policy Unassigned Fund Balance shall equal 30% of the next year s projected expenditures (excluding transfers). 32 Page

34 The preceding table summarized expenditures by function and department. The table below summarizes expenditures by classifications. General Fund $ Chg 2017 to 2018 % Chg 2017 to 2018 Expenditures by Classification Wages and Benefits $1,429,982 $1,546,274 $1,764,494 $2,073,883 $309, % Supplies, Repairs, & Maint $512,400 $537,036 $537,612 $453,050 $-84, % Contractual Services $992,849 $984,321 $1,118,467 $1,238,205 $119, % Utilities $168,792 $170,076 $171,609 $178,840 $7, % Miscellaneous Charges $123,301 $129,776 $158,863 $152,765 $-6, % Capital Outlay $67,844 $107,557 $122,950 $59,000 $-63, % Total Expenditures $3,295,168 $3,475,040 $3,873,995 $4,155,743 $281, % 33 Page

35 GENERAL FUND REVENUES (DETAIL) General Fund $ Chg 2017 to 2018 % Chg 2017 to 2018 Revenues Current Taxes $2,838,266 $3,169,274 $3,252,000 $3,715,000 $463, % Delinquent Taxes $15,257 15,355 $19,600 $18,000 $-1, % Excess TIF $984 $0 $0 $0 $0 0.0% Cable Franchise Fees $65,387 $67,679 $67,000 $69,000 $2, % Tax Penalties & Interest $493 $160 $1,000 $200 $ % Total Taxes & Franchise Fees $2,920,387 $3,252,468 $3,339,600 $3,802,200 $462, % Business Licenses $3,915 $3,425 $3,800 $3,500 $ % Liquor Licenses $22,010 $22,110 $22,000 $26,000 $4, % Utility Permit Fees $25,293 $31,799 $20,000 $28,000 $8, % Non-Business Licenses $60 $75 $0 $0 $0 0.0% Building Permit Fees $42,439 $68,455 $42,000 $42,840 $ % Commercial Bldg Permit Fees $0 $19,228 $0 $0 $0 0.0% New Home Permit Fees $222,551 $318,544 $256,000 $308,298 $52, % Surcharge Admin Fee $765 $1,055 $700 $1,000 $ % Plumbing Permit Fees $11,506 $15,320 $11,500 $13,650 $2, % Mechanical Permit Fees $15,270 $22,136 $14,000 $16,200 $2, % Golf Cart Permits $200 $250 $0 $0 $0 0.0% Hunting Permits $10 $30 $0 $0 $0 0.0% Water Permit Fees $3,200 $5,730 $4,000 $5,661 $1, % Sewer Permit Fees $2,025 $5,765 $4,000 $5,661 $1, % Total Licenses & Permits $349,244 $513,922 $378,000 $450,810 $72, % PERA Aid $1,613 $1,613 $1,613 $1,613 $0 0.0% MV Homestead Credit $301 $294 $0 $0 $0 0.0% Police Aid $28,843 $29,901 $28,500 $31,000 $2, % MSA Street Maintenance $71,040 $75,838 $79,800 $0 $-79, % State Fire Aid $31,742 $0 $0 $0 $0 0.0% Fire Department Grants $9,140 $11,657 $0 $0 $0 0.0% Composting Grant $6,248 $6,248 $6,248 $6,248 $0 0.0% Other Grants/Aids $43 $62 $0 $0 $0 0.0% Total Intergovernmental Revenues $148,970 $125,613 $116,161 $38,861 $-77, % Rentals $1,115 $935 $1,000 $1,000 $0 0.0% Cellular Antenna Rent $94,785 $99,524 $104,500 $109,725 $5, % Planning/Zoning Fees $17,070 $10,755 $26,483 $11,000 $-15, % Plan Check Fees $165,961 $245,996 $193,700 $228,240 $34, % Sales of Maps/Copies $177 $0 $0 $0 $0 0.0% ROW Registration Fes $1,600 $1,000 $1,000 $1,200 $ % Assessment Searches $80 $20 $0 $0 $0 0.0% SAC 1% Admin Fee $2,112 $3,380 $2,237 $2,758 $ % Refund Fees $34 $6 $0 $0 $0 0.0% Fire Contract Fees $13,137 $13,221 $17,000 $14,500 $-2, % Warning Siren Fees $2,950 $12,650 $0 $0 $0 0.0% Bldg Insp Contract Fees $3,120 $5,445 $0 $0 $0 0.0% 34 Page

36 General Fund $ Chg 2017 to 2018 % Chg 2017 to 2018 Snow Plowing Services $5,182 $917 $5,000 $2,000 $-3, % Park Facility Fees $4,616 $3,102 $2,000 $3,500 $1, % Rec Program Fees $66,727 $73,563 $67,000 $80,000 $13, % Charges for Services $378,666 $470,514 $419,920 $453,923 $34, % Fines & Forfeits $10,698 $9,934 $9,900 $9,900 $0 0.0% Dog Impound Fines $30 $0 $0 $0 $0 0.0% Reimbursements/Refunds $7,086 $8,738 $1,500 $1,500 $0 0.0% Interest on Investments $17,055 $18,778 $15,000 $20,000 $5, % Unrealized MV Gain(Loss) $-1,238 $172 $0 $0 $0 0.0% Donations/Contributions $4,000 $1,575 $600 $600 $0 0.0% Park Donations $2,025 $2,440 $2,000 $2,000 $0 0.0% Insurance Dividends & Proceeds $21,922 $42,563 $0 $0 $0 0.0% Miscellaneous $4,124 $743 $0 $0 $0 0.0% Interfund Transfers $40,655 $0 $0 $0 $0 0.0% Total Miscellaneous Revenues $106,357 $84,943 $29,000 $34,000 $5, % Total Revenues $3,903,624 $4,447,460 $4,282,681 $4,779,794 $497, % 35 Page

37 MAYOR AND CITY COUNCIL REPORTS TO Residents, businesses, property owners, and voters of the City of Victoria. DESCRIPTION/SERVICES PROVIDED The Mayor and City Council comprise the legislative body of the City. The City operates under a statutory form of government consisting of a four-member City Council and the Mayor, who is a voting member. Council members serve staggered four-year terms with two Council members elected every four years. The Mayor also serves a four-year term. The Council appoints members to City commissions and committees. SERVICES PROVIDED The City Council establishes public policy, enacts legislation, annually adopts a balanced budget, and provides direction to the City Manager. BUDGET HIGHLIGHTS AND FUTURE TRENDS Wages and benefits increased in 2017 due to the Ordinance to raise City Council salaries effective January 1, Contractual services are higher in odd years because strategic planning sessions are held after election years, when there may be new council members due to elections BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $13,041 $13,226 $27,178 $27,130 $ % Materials & Supplies $252 $ 441 $200 $150 $ % Contractual Services $6,191 $2,359 $8,000 $5,500 $-2, % Miscellaneous $973 $ 250 $500 $500 $0 0.0% Total Mayor & Council $20,457 $16,276 $35,878 $33,280 $-2, % 36 Page

38 ADMINISTRATION REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED The City Manager is appointed by the City Council and heads the administrative branch of city government. The position is responsible for staffing and coordinating and directing all city operations, projects, and programs. The City Manager assists the Mayor and City Council in formulating goals the city will pursue and developing a plan of action. Once a plan of action is defined, the City Manager implements policies and directions through professional leadership and management practices to ensure that operations are performed in a timely and respectful manner that is fiscally responsible. The Administration Department is responsible for overseeing and coordinating all aspects of the City of Victoria. The City Manager is the Chief Administrative Officer of the City and directs the administration of City affairs. The City Manager is responsible for enforcing the City Code and resolutions adopted by the City Council. The City Clerk is responsible for records retention, the City website, technology, communications, and issuing permits and licenses (building permits excluded). STAFF City Manager and City Clerk BUDGET HIGHLIGHTS AND FUTURE TRENDS Wages and benefits are higher in 2018 because the city plans to hire an HR/Special Projects Manager to start April Contractual Services is higher because the city is offering a new ride share program by partnering with South West Transit at a cost of $40,000. The city is also planning to conduct a citizen survey that will cost about $15, BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $305,288 $290,562 $286,406 $343,425 $51, % Materials & Supplies $34,193 $42,288 $25,305 $24,350 $4, % Contractual Services $124,071 $113,777 $130,692 $186,474 $55, % Miscellaneous $54,076 $53,485 $59,300 $58,700 $ % Capital Outlay $22,069 $0 $0 $0 $0 0.0% Total Administration $539,697 $500,112 $501,703 $612,949 $111, % 37 Page

39 FINANCE REPORTS TO Finance Director DESCRIPTION/SERVICES PROVIDED The Finance Department is responsible for maintaining the City s overall financial stability through sound financial planning and management. The department provides payroll services, manages City s investments, coordinates the annual audit and preparation of the annual financial statement, prepares the annual budget and Capital Improvement Plan, manages the utility billing process, processes accounts payable, coordinates risk management, and manages special assessments. STAFF Finance Director, Accounting Technician BUDGET HIGHLIGHTS AND FUTURE TRENDS The overall budget is up 4.4%, due to an increase in wages and benefits BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $124,841 $119,220 $135,946 $142,201 $6, % Materials & Supplies $810 $1,136 $1,200 $1,200 $0 0.0% Contractual Services $8,339 $6,277 $11,120 $11,440 $ % Miscellaneous $2,248 $2,491 $2,575 $2,575 $0 0.0% Capital Outlay $0 $99,082 $0 $0 $0 0.0% Total $136,238 $228,206 $150,841 $157,416 $6, % 38 Page

40 ELECTIONS REPORTS TO City Clerk DESCRIPTION/SERVICES PROVIDED The Elections Department is responsible for conducting all local, state, and federal elections. The City Clerk is the Election Administrator for the City of Victoria and is responsible for providing election services. Services include: voter registration, election judge recruitment and training, conducting elections in compliance with federal and state laws, redistricting, and precinct management. BUDGET HIGHLIGHTS AND FUTURE TRENDS Primary and General Elections are conducted in even years, so the budget is increased in those years. Typically, the only expense in odd years is for election equipment maintenance BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $0 $10,493 $0 $12,000 $12,000 n/a Materials & Supplies $0 $4,134 $1,800 $5,300 $3, % Contractual Services $0 $2,610 $0 $3,350 $3,350 n/a Total $0 $17,237 $1,800 $20,650 $18, % 39 Page

41 PROFESSIONAL SERVICES REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED The City contracts with certain professional services providers due to the City s limited size, staffing, legal requirements, and needed expertise. The City contracts out for the following: Accounting/Auditing Engineering Legal Human Resources Information Technology County Contracted Services, such as assessing, truth in taxation, prosecution STAFF Not applicable. BUDGET HIGHLIGHTS AND FUTURE TRENDS Engineering fees are increasing $20,000 due to the number of projects and growth in the City. Information technology services is increasing $15,120 due to a move to a more comprehensive service plan and the expenses for Microsoft Office 360. Human resources services are decreasing $7,300 due to the planned hire of a Communications/HR manager BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Contractual Services $278,572 $310,036 $272,150 $301,230 $29, % Total $278,572 $310,036 $272,150 $301,230 $29, % 40 Page

42 PLANNING AND ZONING REPORTS TO Community Development Director DESCRIPTION/SERVICES PROVIDED The Community Development Department is responsible for ensuring that all development meets applicable codes so that the City of Victoria remains safe, healthy, and attractive to current and future residents and businesses. The Community Development Director processes all development applications and serves as the staff liaison for the Planning Commission. The Director supervises the Building Inspections Department. The Director also maintains the City s demographic and statistical information on population, households, land inventory, and building activity. The Director also prepares and manages the administration of the Comprehensive Plan and Zoning Ordinances. STAFF Community Development Director, Senior Planner, Planning/PW Technician BUDGET HIGHLIGHTS AND FUTURE TRENDS Wages and benefits are higher due to an increase in salaries and more employees electing medical insurance. Contractual services is lower due to less services needed for the Comprehensive Plan update. Contractual Services also includes the services of a shared County GIS Specialist. The GIS Specialist provides about 350 hours of services annually to various City departments BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $128,689 $200,841 $221,850 $248,222 $26, % Materials & Supplies $514 $231 $450 $450 $0 0.0% Contractual Services $29,420 $23,755 $70,400 $64,040 $-6, % Miscellaneous $1,026 $2,186 $3,725 $5,205 $1, % Total $159,649 $227,013 $296,425 $317,917 $21, % 41 Page

43 CITY HALL BUILDING REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED This department accounts for the operation of the City Hall building to ensure the building is safe, accessible, and functional. Expenditures include preventative maintenance, repair and replacement as needed, and utilities. This department ensures the City Hall facility is safe, accessible, and functional for the daily work of employees, library patrons, participants in various city and civic meetings, and for service as a precinct in local, state, and federal elections. STAFF Not applicable. BUDGET HIGHLIGHTS AND FUTURE TRENDS The City moved into a new combined City Hall/Library in January Contractual Services are lower in 2018 due to a decrease in the amount for cleaning services. The City continues to budget for $7,000 for the lease payment to the City s Economic Development Authority for debt service on the new building BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Materials & Supplies $4,048 $9,184 $8,100 $10,100 $2, % Contractual Services $24,904 $30,843 $39,000 $33,152 $-5, % Utilities $18,119 $17,932 $18,700 $19,221 $ % Miscellaneous $4,292 $3,669 $8,553 $8,500 $ % Total $51,363 $61,628 $74,353 $70,973 $-3, % 42 Page

44 POLICE PROTECTION REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED This department accounts for the provision of police services through a contract with the Carver County Sheriff s Office. They are committed to enhancing the security, safety, and the quality of life for the citizens, businesses, and visitors of Victoria. BUDGET HIGHLIGHTS AND FUTURE TRENDS The City contracted with the Sheriff s office to add one FTE deputy to coverage in September The budget is higher in 2018 since the deputy will be in coverage for the entire year BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Contractual Services $327,589 $342,233 $404,921 $473,860 $68, % Total $327,589 $342,233 $404,921 $473,860 $68, % 43 Page

45 FIRE PROTECTION REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED The City operates as a paid on-call Fire Department. The department consists of one full-time Fire Chief and 33 paid-oncall firefighters. The Fire Department relies on paid-on-call firefighters to manage operations and deliver emergency response. The department manages ongoing readiness to ensure effective and safe operations while complying with national, state, and local regulations and standards. The department responds to and manages all types of emergencies, including fires, medical emergencies, car accidents, technical rescue, hazardous materials, and automated alarms. The department also coordinates and provides fire and safety education programs. STAFF Full-Time Fire Chief and 34 paid-on-call firefighters BUDGET HIGHLIGHTS AND FUTURE TRENDS 2017 reflected the first full year of full-time wages and benefits for the Fire Chief position hired in No Fire Relief Pension Payment is required in 2018; however, the City is making a voluntary contribution of $15,000. No capital outlay is planned for BUDGET SUMMARY Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $101,224 $145,413 $249,052 $246,890 $-2, % Materials & Supplies $53,612 $76,448 $85,577 $87,550 $1, % Contractual Services $23,039 $28,829 $28,334 $33,883 $5, % Utilities $10,928 $11,652 $12,914 $13,366 $ % Miscellaneous $32,122 $42,912 $49,560 $40,760 $-8, % Capital Outlay $0 $0 $25,000 $0 $-25, % Total $220,925 $305,254 $450,437 $422,449 $-27, % 44 Page

46 BUILDING INSPECTIONS REPORTS TO Community Development Director DESCRIPTION/SERVICES PROVIDED The primary task of the Building Inspections Department is to ensure new construction within the City meets minimum standards as regulated by the International Building Code and International Residential Code, the International Mechanical Code, the International Fuel Gas Code and the Minnesota Plumbing Code. These codes promote safe building practices and limits future risk to the public. The department is responsible for building plan review, permit issuance, and inspections of buildings, plumbing, and mechanical systems, fire sprinklers, and alarm systems. The Building Inspector also serves as Fire Inspector. STAFF Building Official and 2 Building Inspectors BUDGET HIGHLIGHTS AND FUTURE TRENDS The overall budget is higher due to the hiring of an additional inspector. The inspector was hired in 2017 due to the growth in the number of permits. Benefits are higher due to the additional inspector and more employees opting for medical insurance BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $185,116 $193,899 $194,563 $339,048 $144, % Materials & Supplies $2,023 $5,335 $6,180 $6,300 $ % Contractual Services $1,316 $3,637 $1,850 $3,300 $1, % Miscellaneous $2,754 $3,271 $3,150 $5,525 $2, % Capital Outlay $26,232 $0 $0 $0 $0 0.0% Total $217,441 $206,142 $205,743 $354,173 $148, % 45 Page

47 CIVIL DEFENSE REPORTS TO Fire Chief DESCRIPTION/SERVICES PROVIDED This department accounts for the expenses associated with the City s warning sirens. The City has several civil defense sirens located throughout the City. The sirens are used to provide emergency population warning of approaching danger, such as a tornado. BUDGET HIGHLIGHTS AND FUTURE TRENDS The City purchased a new siren in No capital outlay is planned for BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Materials & Supplies $3,140 $800 $1,500 $1,800 $ % Capital Outlay $0 $0 $42,000 $0 $-42, % Total $3,140 $800 $43,500 $1,800 $-41, % 46 Page

48 ANIMAL CONTROL REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED This department accounts for the expenses associated with animal control services within the City. The City s contract with the Carver County Sheriff provides for animal control services. Most of these services are provided by Community Service Officers (CSOs). CSOs are responsible for lost animals, taking bite complaints, and removing dead animals from City streets. Impounded animals are taken to Countryside Veterinary Clinic. BUDGET HIGHLIGHTS AND FUTURE TRENDS Expenses for this department include dog impound fees. Owners that retrieve impounded animals are required to pay all impound fees and a fine BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Contractual Services $0 $380 $500 $500 $0 0.0% Total Animal Control $0 $380 $500 $500 $0 0.0% 47 Page

49 PUBLIC WORKS - STREETS REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED The Public Works Department strives to maintain and improve the quality of life by planning for future needs, promoting environmental quality, building and maintaining municipal infrastructure, and protecting health and safety. The department provides many services, including: street maintenance, boulevard tree trimming, mowing ditches and boulevards, street signs maintenance, and pavement marking. STAFF Parks and Public Works Director, Deputy Public Works Director, and One Lead PW Worker, and Eight PW Workers BUDGET HIGHLIGHTS AND FUTURE TRENDS Wages and benefits are higher in 2018 due to wage increases and an increase in the number of employees electing medical insurance. Materials and supplies are lower due to the planned transfer of seal coating expenses to the Long-Term Street Maintenance Fund. Contractual services are lower because tree-related expense will be paid from the Tree Replacement Fund. Capital Outlay for 2018 includes the trade-in and purchase of two Bobcats BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $364,710 $341,946 $416,279 $467,119 $50, % Materials & Supplies $314,259 $230,371 $235,000 $165,750 $-69, % Contractual Services $58,880 $29,461 $42,760 $19,076 $-23, % Utilities $17,506 $15,858 $19,200 $19,800 $ % Miscellaneous $10,930 $10,816 $18,800 $18,300 $ % Capital Outlay $17,376 $7,080 $48,000 $9,000 $-39, % Total PW Streets $783,661 $635,532 $780,039 $699,045 $-80, % 48 Page

50 PUBLIC WORKS SNOW REMOVAL REPORTS TO Public Works Director DESCRIPTION/SERVICES PROVIDED The Public Works Department strives to provide street, trail, and sidewalk users with safe facilities that are in good condition in the winter months. The Public Works Department is responsible for maintenance of the City s streets, trails, and sidewalks in the winter. The department plows and hauls snow and applies salt and sand mixture to streets. BUDGET HIGHLIGHTS AND FUTURE TRENDS Expenses for this department are trending lower due to the purchase of a new dump truck with better salt and sand spreading equipment which should reduce waste BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Materials & Supplies $23,560 $52,475 $47,500 $45,500 $-2, % Contractual Services $11,479 $3,158 $20,000 $12,000 $-8, % Miscellaneous $4,000 $0 $0 $0 $0 0.0% Total PW Snow Removal $39,039 $55,633 $67,500 $57,500 $-10, % 49 Page

51 PUBLIC WORKS STREET LIGHTS REPORTS TO Public Works Director DESCRIPTION/SERVICES PROVIDED The Public Works Department is responsible for the repair of City-maintained street lights. BUDGET HIGHLIGHTS AND FUTURE TRENDS Materials and supplies is higher in 2018 because the City plans to purchase two new lights for the Rose Street Parking lot BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Materials & Supplies $5,850 $10,552 $13,000 $21,000 $8, % Utilities $80,239 $84,631 $80,000 $91,536 $11, % Total PW Street Lights $86,089 $95,183 $93,000 $112,536 $19, % 50 Page

52 PUBLIC WORKS SIGNAL LIGHTS REPORTS TO Public Works Director DESCRIPTION/SERVICES PROVIDED The Public Works Department maintains signal lights within the City that enhance safety and traffic flow throughout the City. The Public Works Department is responsible for the repair and operation of signal lights at the intersections of Highway 5 and County Road 11, Highway 5 and Rolling Acres Road, and Highway 7 and Rolling Acres Road/Smithtown Road. BUDGET HIGHLIGHTS AND FUTURE TRENDS The budget for this department is increasing due to inflation BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Materials & Supplies $10,328 $140 $2,500 $2,500 $0 0.0% Utilities $1,471 $1,681 $1,756 $1,817 $61 3.5% Total PW Street Lights $11,799 $1,821 $4,256 $4,317 $61 1.4% 51 Page

53 PUBLIC WORKS - COMPOSTING REPORTS TO Public Works Director DESCRIPTION/SERVICES PROVIDED The Public Works Department provides a compost site to residents during the year. Public Works staff also brings compost materials in from other parts of the City. An independent contractor picks up the compost as needed. BUDGET HIGHLIGHTS AND FUTURE TRENDS The compost site is no longer monitored by a City employee. Carver County provides an annual grant of $6,248 to the City for this service BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $3,441 $5,285 $0 $0 $0 0.0% Contractual Services $21,871 $17,589 $12,100 $12,100 $0 0.0% Total PW - Composting $25,312 $22,874 $12,100 $12,100 $0 0.0% 52 Page

54 RECREATION PROGRAMS REPORTS TO Recreation Supervisor DESCRIPTION/SERVICES PROVIDED The Recreation Programs Department strives to provide high quality programs, lessons, and leagues that meet the needs of the community. The department also provides a high-quality preschool for the community. STAFF Seasonal employees and contracted instructors are supervised by the Recreation Supervisor. BUDGET HIGHLIGHTS AND FUTURE TRENDS The budget is higher because the City plans to increase the level of recreation program offerings and offer new programs BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $5,610 $9,710 $8,612 $11,842 $3, % Materials & Supplies $5,878 $3,622 $9,000 $7,000 $-2, % Contractual Services $43,065 $45,979 $43,300 $48,950 $5, % Total $54,553 $59,311 $60,912 $67,792 $6, % 53 Page

55 PARKS & RECREATION REPORTS TO Park and Recreation Director DESCRIPTION/SERVICES PROVIDED The Parks & Recreation Department s primary purpose is to provide a comprehensive parks program, including park planning and development, maintenance of the trail system and park and recreation facilities with the goal of enhancing the quality of life in the City and promoting a stronger sense of community. The revenues and expenditures of the Victoria Recreation Center are accounted for in a separate fund. STAFF Parks and Public Works Director and Recreation Supervisor BUDGET HIGHLIGHTS AND FUTURE TRENDS Wages and benefits are higher due to the planned hiring of an intern in Utilities are lower because the city is using less water to irrigate parks. There is no planned capital outlay in BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $87,865 $100,767 $104,537 $117,166 $12, % Materials & Supplies $5,071 $3,292 $4,300 $3,400 $ % Contractual Services $14,208 $6,285 $5,340 $6,350 $1, % Utilities $18,703 $20,733 $27,039 $21,100 $-5, % Miscellaneous $10,017 $9,703 $11,000 $11,200 $ % Capital Outlay $2,167 $343 $7,950 $0 $-7, % Total $138,031 $141,123 $160,166 $159,216 $ % 54 Page

56 PARK MAINTENANCE REPORTS TO Park and Recreation Director DESCRIPTION/SERVICES PROVIDED The Public Works Department maintains the City s park and trail systems. Services include mowing, shelter and trail maintenance, ball field preparation, fertilization and weed control, and tree care and replacement. STAFF Public Works Department staff and seasonal employees BUDGET HIGHLIGHTS AND FUTURE TRENDS Materials and supplies is lower because playground replacement has been moved to the capital outlay category. Capital outlay for 2018 includes the replacement of the playground at Woodlands Park BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Wages & Benefits $110,157 $114,912 $120,071 $123,340 $3, % Materials & Supplies $48,862 $96,587 $96,000 $66,200 $-29, % Contractual Services $41,731 $34,702 $40,000 $35,000 $-5, % Miscellaneous $863 $ 993 $1,700 $1,500 $ % Capital Outlay $0 $1,052 $0 $50,000 $50,000 n/a Total $201,613 $248,246 $257,771 $276,040 $18, % 55 Page

57 TRANSFERS TO OTHER FUNDS REPORTS TO City Manager DESCRIPTION/SERVICES PROVIDED The City plans for transfers out to several other funds to accumulate funds for future capital needs and for other purposes. BUDGET HIGHLIGHTS AND FUTURE TRENDS The City plans to increase the transfer to the PW Capital Fund each year to meet future capital needs. The City plans to transfer the average amount needed for seal coating projects (seal coating costs less Municipal State Aid for street maintenance) to the Long-Term Street Maintenance Fund for the next five years. The City is creating a new fund for parks and trails that will increase $50,000 annually, based on an initial transfer of $100,000 in The City is increasing the amount to repay the Water Fund. The loan will be repaid by The transfer to the Gifts to the Parks Fund began in The City pays for Concerts in the Park expenditures through that fund BUDGET Account $ Chg 2017 to 2018 % Chg 2017 to 2018 Transfer-Fire Dept Capital Fund $64,135 $89,135 $70,000 $90,000 $20, % Transfer-PW Capital Fund $110,000 $120,000 $170,000 $180,000 $10, % Transfer-Long-Term Street $157,000 $397,742 $0 $42,000 $42,000 n/a Maintenance Fund Transfer New Parks & Trails $0 $0 $0 $100,000 $100,000 n/a Fund Transfer-Repay Water Fund $150,000 $58,319 $125,000 $150,000 $25, % Transfer-Rev Stabilization $0 $181,765 $0 $0 $0 0.0% Transfer-Gifts to the Parks Fund $0 $10,000 $10,000 $10,000 $0 0.0% Total Transfers $481,135 $856,961 $375,000 $572,000 $197, % Total Other Transfers $481,135 $856,961 $375,000 $572,000 $197, % 56 Page

58 SPECIAL REVENUE FUNDS SPECIAL REVENUE FUNDS SUMMARY DESCRIPTION The City currently has four active special revenue funds. The largest special revenue fund is the Victoria Recreation Center Fund. Special revenue funds are used to account for the proceeds of specific revenue sources that are committed to expenditures for specific purposes other than debt service or capital projects. Unlike the General Fund, the budgets of special revenue funds do not always balance, i.e., revenues equal expenditures. Special revenue funds use the modified accrual basis of accounting for both financial reporting and budgeting purposes. BUDGET ISSUES Each special revenue fund has specific challenges that will be addressed in the narrative for each fund. 57 Page

59 VICTORIA RECREATION CENTER FUND SERVICES PROVIDED The revenues and expenditures for the Victoria Recreation Center are accounted for in a special revenue fund. The Center provides recreation opportunities for the City s residents. The Center is operated in partnership with Eastern Carver County Schools (District 112). ISD 112 uses the two ice arenas for school functions. ISD 112 pays an annual operations and lease payment for this use and reimburses the City for operating expenses. BUDGET HIGHLIGHTS AND FUTURE TRENDS Overall revenues have decreased the last two years due to the elimination of the property tax levy for this fund. Membership revenue and reimbursements are projected to increase. The levy elimination is possible due to the refunding of the bonds for the recreation center, which is shown in the decrease in the transfer out for debt service. Contractual services are higher due to the hiring of a cleaning service for the fitness center. There is no planned capital outlay for A portion of the ending fund balance is set aside for items identified in the Facility Needs Analysis BUDGET $ Chg 2017 to 2018 % Chg 2017 to 2018 Revenues Property Taxes $160,205 $150,312 $2,000 $0 $-2, % Charges for Services $620,854 $643,559 $643,063 $670,136 $27, % Miscellaneous $275,020 $276,951 $295,000 $275,000 $-20, % Investment Income $7,722 $12,045 $11,000 $14,000 $3, % Total Revenues $1,063,801 $1,082,867 $951,063 $959,136 $8, % Expenditures by Classification Wages and Benefits $148,766 $168,640 $178,382 $176,630 $-1, % Supplies, Repairs, & Maint $103,578 $79,298 $116,350 $119,300 $2, % Contractual Services $58,166 $61,839 $62,310 $84,116 $21, % Utilities $204,263 $202,394 $221,900 $223,000 $1, % Miscellaneous Charges $7,062 $4,701 $4,400 $6,050 $1, % Capital Outlay $0 $21,469 $7,950 $0 $-7, % Debt Service $16,771 $16,770 $16,771 $0 $16, % Total Expenditures $538,606 $555,111 $608,063 $609,096 $1, % Other Financing Sources (Uses) Transfers Out Debt Service $-440,000 $-440,000 $-340,000 $-340,000 $0 0.0% Total Other Financing Sources (Uses) $-440,000 $-440,000 $-440,000 $-340,000 $0 0.0% Excess of Revenues over Expenditures and Other Financing Sources (Uses) $85,195 $87,756 $3,000 $10,040 Fund Balance December 31 $1,004,430 $1,090,971 $1,093,971 $1,104, Page

60 ECONOMIC DEVELOPMENT AUTHORITY FUND SERVICES PROVIDED The Economic Development Authority Fund accounts for the resources associated with the Victoria EDA and its revolving loan program. In 2015, the City commissioned a study for downtown planning and development services. The remaining work was completed in A master plan was created for the 13.5-acre parcel owned by the City PROJECTIONS Revenues Interest on Investments $263 $131 $46 $6 $6 $6 $6 Miscellaneous $0 $0 $0 $0 $0 $0 $0 Total Revenues $263 $131 $46 $6 $6 $6 $6 Expenditures by Classification Contractual Services $49,417 $7,617 $0 $0 $0 $0 $0 Total Expenditures $49,417 $7,617 $0 $0 $0 $0 $0 Other Financing Sources (Uses) Transfer In $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 $-49,154 $-7,486 $46 $6 $6 $6 $6 $12,696 $5,210 $5,256 $5,262 $5,268 $5,274 $5, Page

61 PEG FEES FUND SERVICES PROVIDED The PEG Fees Fund accounts for the resources associated with PEG fees collected from the Mediacom cable franchise. The City received $60,000 in advance PEG fees to use toward technology improvements in the new City Hall. This is reflected in the transfer out in PROJECTIONS Revenues PEG Fees $15,916 $18,841 $16,000 $16,000 $16,000 $16,000 $16,000 Interest on Investments $569 $-201 $7 $74 $235 $397 $561 Total Revenues $16,485 $18,640 $16,007 $16,074 $16,235 $16,397 16,561 Expenditures by Classification Contractual Services $0 $0 $0 $0 $0 $0 $0 Total Expenditures $0 $0 $0 $0 $0 $0 $0 Other Financing Sources (Uses) Transfer Out $-60,000 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $-60,000 $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 $-43,515 $18,640 $16,007 $16,074 $16,235 $16,397 $16,561 $-27,250 $-8,610 $7,397 $23,471 $39,706 $56,103 $72, Page

62 GIFTS TO THE PARKS FUND SERVICES PROVIDED The Gifts to the Parks Fund accounts for donations received for parks, including the Concert-in-the-Parks series. In 2016, the City began to transfer $10,000 to the fund each year to cover concert expenditures. These expenditures were previously budgeted in the General Fund. This fund also received donations for the Community Sculpture that was constructed in Expenditures for that project were also paid from this fund PROJECTIONS Revenues Interest on Investments $186 $457 $316 $398 $422 $446 $470 Miscellaneous $8,890 $17,228 $6,517 $2,000 $2,000 $2,000 $2,000 Total Revenues $9,076 $17,685 $6,833 $2,398 $2,422 $2,446 $2,470 Expenditures by Classification Contractual Services $6,246 $22,102 $8,933 $10,000 $10,000 $10,000 $10,000 Total Expenditures $6,246 $22,102 $8,933 $10,000 $10,000 $10,000 $10,000 Other Financing Sources (Uses) Transfer In $0 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Total Other Financing Sources (Uses) $0 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Net Change in Fund Balance Fund Balance December 31 $2,830 $5,583 $7,900 $2,398 $2,422 $2,446 $2,470 $26,288 $31,871 $39,771 $42,169 $44,590 $47,036 $449, Page

63 DEBT SERVICE FUNDS DEBT SERVICE FUNDS SUMMARY DESCRIPTION Debt Service Funds account for the accumulation of resources for the payment of general long-term debt principal, interest, and related costs. The City maintains fifteen individual debt service funds for its various bond issues. The City has established annual financial plans for each of the individual debt service funds. Debt service funds use the modified accrual basis of accounting for both financial reporting and forecasting purposes. The following pages show for each debt service fund activity from 2015 through 2016 and projections from 2017 to Page

64 1998/2008A LEASE REVENUE REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City s Economic Development Authority (EDA) issued $1,330,000 in Lease Revenue Bonds, Series 1998 in 1998 to finance construction of Diethelm Park. The City refunded these bonds in The bonds will be repaid from a tax levy. The final bond payment is scheduled for February The true interest cost (TIC) of the refunded bonds over the life of the bonds is 4.24% PROJECTIONS Revenues Property Taxes $87,717 $80,177 $79,537 $79,000 Interest on Investments $5 $-5 $11 $0 Total Revenues $87,722 $80,172 $79,548 $79,000 Expenditures Debt Service Principal $85,000 $85,000 $90,000 $95,000 Debt Service Interest & $13,154 $9,693 $6,190 $2,398 Other Total Expenditures $98,154 $94,693 $96,190 $97,398 Other Financing Sources (Uses) Transfers Out (Fund 520) $0 $0 $0 $-106 Total Other Financing Sources (Uses) $0 $0 $0 $-106 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $-10,432 $-14,520 $-16,642 $-18,504 $49,666 $35,146 $18,504 $0 $270,000 $185,000 $95,000 $0 63 Page

65 2002/2006A/2016B REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $6,570,000 in Gross Revenue Recreation Facility Bonds, Series 2002 in 2002 to finance construction of the Victoria Recreation Center. The City advance refunded these bonds in 2006, with the crossover occurring in The City refunded the bonds again in 2016 due to low interest rates. The net present value benefit from the 2016 current refunding is $1,475,637. The bonds will be repaid with Victoria Recreation Center revenues, including lease revenue from Independent School District 112. The final bond payment is scheduled for February 2032, with a first available call date of February 1, The true interest cost (TIC) of the refunded bonds over the life of the bonds is 1.82% PROJECTIONS Revenues Interest on Investments $1,652 $24,611 $45,274 $24,123 $24,123 $24,123 $24,123 Total Revenues $1,652 $24,611 $45,274 $24,123 $24,123 $24,123 $24,123 Expenditures Debt Service Principal $185,000 $195,000 $5,245,000 $200,000 $280,000 $285,000 $290,000 Debt Service Interest & Other $279,056 $270,506 $201,808 $91,275 $86,475 $80,825 $75,075 Total Expenditures $464,056 $465,506 $5,446,808 $291,275 $366,475 $365,825 $365,075 Other Financing Sources (Uses) Transfers In (Fund 227) $440,000 $440,000 $340,000 $340,000 $340,000 $340,000 $340,000 Bond Proceeds $4,630,000 Bond Premium $121,173 Bond Discount $-50,930 Bond Issuance Costs $-18,364 Total Other Financing Sources (Uses) $440,000 $5,121,880 $340,000 $340,000 $340,000 $340,000 $340,000 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $-22,404 $4,680,985 $-5,061,534 $72,848 $-2,352 $-1,702 $-952 $525,204 $5,206,187 $144,654 $217,502 $215,150 $213,448 $212,496 $5,440,000 $5,245,000 $4,630,000 $4,430,000 $4,150,000 $3,865,000 $3,575, Page

66 2003 G.O. TIF BONDS/2012A CROSSOVER REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $2,720,000 in General Obligation Tax Increment, Series 2003 in 2003 to finance downtown street improvements in connection with TIF District 1-3. The City advance refunded these bonds in 2012, with the crossover occurring in The bonds will be repaid from a tax increment and special assessments on benefiting properties. The final bond payment is scheduled for January 2020, with no call date available. The true interest cost (TIC) of the refunded bonds over the life of the bonds is 1.26% PROJECTIONS Revenues Special Assessments $26,541 $32,149 $20,683 $20,520 $20,520 $0 Interest on Investments $514 $97 $149 $150 $100 $0 Total Revenues $27,055 $32,246 $20,832 $20,670 $20,620 $0 Expenditures Debt Service Principal $180,000 $185,000 $195,000 $195,000 $205,000 $115,000 Debt Service Interest & Other $19,942 $16,285 $12,425 $8,600 $4,600 $1,400 Total Expenditures $201,776 $201,285 $207,425 $203,600 $209,600 $116,400 Other Financing Sources (Uses) Payment on Refunded Debt $0 $0 $0 $0 $0 $0 Transfers In (Fund 490) $179,950 $291,000 $171,000 $171,000 $128,220 $0 Total Other Financing Sources (Uses) $179,950 $291,000 $171,000 $171,000 $128,220 $0 Net Change in Fund Balance Fund Balance December A Refunded Bonds Outstanding December 31 $5,229 $121,960 $-15,594 $-11,930 $-60,760 $-116,400 $82,720 $204,683 $189,090 $177,160 $116,400 $0 $895,000 $710,000 $515,000 $320,000 $115,000 $0 65 Page

67 2011A CROSSOVER REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $1,740,000 in General Obligation Improvement Bonds, Series 2004B in 2004 to finance street and utility reconstruction in the Virginia Shores, Smithtown Road, and Parkside neighborhoods. The City advance refunded these bonds in 2011, with the crossover occurring in The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for December 2019 and the refunded bonds are not callable. The true interest cost (TIC) of the refunded bonds over the life of the bonds is 2.12% PROJECTIONS Revenues Property Taxes $92,918 $93,358 $95,429 $94,500 $90,000 $0 Special Assessments $49,690 $39,621 $38,352 $33,184 $33,184 $33,184 Interest on Investments $1,086 $1,286 $1,142 $500 $400 $200 Total Revenues $143,694 $134,265 $134,923 $128,184 $123,584 $33,384 Expenditures Property Taxes $597 $0 $0 $0 $0 $0 Debt Service Principal $140,000 $140,000 $150,000 $150,000 $150,000 $0 Debt Service Interest & Other $14,478 $12,406 $10,125 $7,750 $4,225 $0 Total Expenditures $155,075 $152,406 $160,125 $157,750 $154,225 $0 Other Financing Sources (Uses) Transfers Out (Fund 520) $0 $0 $0 $0 $0 $-34,384 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 $-34,384 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $-11,381 $-18,141 $-25,202 $-29,566 $-30,641 $-1,000 $104,549 $86,409 $61,207 $31,641 $1,000 $0 $590,000 $450,000 $300,000 $150,000 $0 $0 66 Page

68 2006 G.O. STREET/UTILITY AND 2011B CROSSOVER REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $3,010,000 in General Obligation Improvement Bonds, Series 2006B in 2006 to finance street and utility reconstruction in the Lilac Circle, Hyacinth, Wintergreen, Kirke Lachen, Bayview, and 77 th Street neighborhoods. The City advance refunded these bonds in 2011, with the crossover occurring in The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for February 2023; however, the bonds may be called after February 1, The true interest cost (TIC) of the refunded bonds over the life of the bonds is 2.18% PROJECTIONS Revenues Property Taxes $133,891 $105,559 $104,340 $98,000 $99,000 $99,000 $99,000 Special Assessments $83,054 $64,826 $62,851 $52,695 $52,695 $52,695 $52,695 Interest on Investments $1,054 $1,420 $945 $1,028 $825 $675 $712 Total Revenues $217,999 $171,805 $168,136 $151,723 $152,520 $152,370 $152,407 Expenditures Debt Service Principal $155,000 $155,000 $160,000 $160,000 $165,000 $165,000 $170,000 Debt Service Interest & Other $28,306 $26,659 $24,103 $20,913 $17,663 $14,363 $10,885 Total Expenditures $183,306 $181,659 $184,103 $180,913 $182,663 $179,363 $180,885 Other Financing Sources (Uses) Payment on Refunded Debt Transfers In (Funds 308 & 519) Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance December B Refunded Bonds Outstanding December 31 $0 $0 $0 $0 $0 $0 $0 $0 $106 $106 $0 $0 $34,384 $0 $0 $106 $106 $0 $0 $34,384 $0 $34,693 $-9,854 $-15,861 $-29,190 $-30,143 $7,391 $-28,478 $220,053 $210,197 $194,336 $165,146 $135,004 $142,395 $113,917 $1,330,000 $1,175,000 $1,015,000 $855,000 $690,000 $525,000 $355, Page

69 2007 G.O. STREET/UTILITY AND 2012A CROSSOVER REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $1,900,000 in General Obligation Improvement Bonds, Series 2007A in 2007 to finance street and utility reconstruction in the Woodstone and Smithtown Road neighborhoods. The City advance refunded these bonds in 2012, with the crossover occurring in The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for January 2023; however, the bonds may be called after January 1, The true interest cost (TIC) of the refunded bonds over the life of the bonds is 1.61% PROJECTIONS Revenues Property Taxes $114,953 $114,445 $111,335 $112,000 $112,000 $112,000 $112,000 Special Assessments $26,229 $29,756 $25,168 $19,739 $19,739 $19,739 $19,739 Interest on Investments $3,455 $1,450 $702 $814 $689 $510 $346 Total Revenues $144,637 $145,651 $137,205 $132,553 $132,428 $132,249 $132,085 Expenditures Debt Service Principal $115,000 $145,000 $145,000 $145,000 $155,000 $155,000 $160,000 Debt Service Interest & Other $51,236 $21,985 $19,025 $16,195 $13,200 $10,105 $6,960 Total Expenditures $166,236 $166,985 $164,025 $161,195 $168,200 $165,105 $166,960 Other Financing Sources (Uses) Refunding Debt Issued $0 $0 $0 $0 $0 $0 $0 Premium on Refunding $0 $0 $0 $0 $0 $0 $0 Debt Payment on Refunded $-1,260,000 $0 $0 $0 $0 $0 $0 Debt Total Other Financing Sources (Uses) $-1,260,000 $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December A Bonds Outstanding December A Refunded Bonds Outstanding December 31 $-1,281,599 $-21,334 $-26,820 $-28,642 $-35,772 $-32,856 $-34,875 $214,607 $193,272 $166,452 $137,810 $102,038 $69,182 $34,307 $0 $0 $0 $0 $0 $0 $0 $1,160,000 $1,015,000 $870,000 $725,000 $570,000 $415,000 $255, Page

70 2008 G.O. STREET/UTILITY AND 2012A CROSSOVER REFUNDING BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $2,160,000 in General Obligation Permanent Improvement Revolving Fund Bonds, Series 2008B in 2008 to finance street and utility reconstruction in the Baycliffe, 80 th Street, and Victoria Circle neighborhoods. The City advance refunded these bonds in 2012, with the crossover occurring in The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for January 2024; however, the bonds may be called after January 1, The true interest cost (TIC) of the refunded bonds over the life of the bonds is 1.73% PROJECTIONS Revenues Property Taxes $121,892 $123,468 $122,270 $120,000 $120,000 $120,000 $120,000 Special Assessments $73,788 $36,604 $53,800 $33,712 $33,712 $33,712 $33,712 Interest on Investments $8,804 $6,163 $1,204 $1,155 $1,025 $803 $622 Total Revenues $204,484 $166,235 $177,274 $154,867 $154,737 $154,515 $154,334 Expenditures Debt Service - Principal $125,000 $135,000 $170,000 $175,000 $180,000 $175,000 $185,000 Debt Service Interest & Other $97,199 $60,501 $25,675 $22,662 $19,124 $15,586 $11,999 Total Expenditures $222,199 $195,501 $195,675 $197,662 $199,124 $190,586 $196,999 Other Financing Sources (Uses) Refunding Debt Issued $0 $0 $0 $0 $0 $0 $0 Premium on Refunding Debt $0 $0 $0 $0 $0 $0 $0 Payment on Refunded Debt $0 $-1,400,000 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $-1,400,000 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December B Bonds Outstanding December A Refunded Bonds Outstanding December 31 $-17,715 $-1,429,266 $-18,401 $-42,795 $-44,387 $-36,071 $-42,665 $1,695,365 $266,099 $247,698 $204,903 $160,516 $124,445 $81,780 $1,535,000 $0 $0 $0 $0 $0 $0 $1,360,000 $1,360,000 $1,190,000 $1,015,000 $835,000 $660,000 $475, Page

71 2009 G.O. STREET/UTILITY AND 2016B G.O. IMPROVEMENT BONDS DEBT SERVICE FUND 523 SERVICES PROVIDED The City issued $3,435,000 in General Obligation Taxable Permanent Improvement Revolving Fund Bonds, Series 2009A in 2009 to finance street and utility reconstruction in the downtown and the Hartwood and Lions Park neighborhoods. The City current refunded these bonds in 2016, with a refund date to occur on February 1, The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for February 2025; however, the bonds may be called after February 1, The true interest cost (TIC) of the refunded bonds over the life of the bonds is 1.36% PROJECTIONS Revenues Property Taxes $193,827 $195,745 $189,869 $190,000 $190,000 $190,000 $190,000 Special Assessments $67,659 $71,385 $59,553 $46,620 $46,620 $46,620 $46,620 Intergovernmental $42,746 $40,586 $19,637 $0 $0 $0 $0 Revenues Interest on Investments $2,767 $5,663 $6,084 $1,981 $1,845 $1,561 $1,272 Total Revenues $306,999 $313,379 $275,143 $238,601 $238,465 $238,181 $237,892 Expenditures Debt Service Principal $205,000 $205,000 $2,425,000 $230,000 $235,000 $240,000 $240,000 Debt Service Interest & Other $132,857 $125,526 $97,088 $36,500 $31,850 $27,100 $22,300 Total Expenditures $337,857 $330,526 $2,522,088 $266,500 $266,850 $267,100 $262,300 Other Financing Sources (Uses) Bond Proceeds $0 $1,955,000 $0 $0 $0 $0 $0 Bond Premium $0 $67,225 $0 $0 $0 $0 $0 Bond Discount $0 $-17,309 $0 $0 $0 $0 $0 Bond Issuance Costs $0 $-23,132 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $1,981,784 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $-30,858 $1,964,636 $-2,246,945 $-27,899 $-28,385 $-28,919 $-24,408 $494,726 $2,459,363 $212,418 $184,519 $156,134 $127,215 $102,807 $2,630,000 $4,380,000 $1,955,000 $1,725,000 $1,490,000 $1,250,000 $1,010, Page

72 2010 G.O. STREET/UTILITY IMPROVEMENT AND 2016B G.O. BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $1,415,000 in General Obligation Permanent Improvement Revolving Fund Bonds, Series 2010B in 2010 to finance street and utility reconstruction in the Lake Auburn neighborhood. The City advance refunded these bonds in 2016, with the crossover to occur in The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for February 2027; however, the bonds may be called after February 1, The true interest cost (TIC) of the bonds over the life of the bonds is 1.57% PROJECTIONS Revenues Property Taxes $82,963 $77,330 $73,554 $73,000 $73,000 $73,000 $73,000 Special Assessments $47,180 $27,995 $28,162 $10,505 $10,505 $10,505 $10,505 Interest on Investments $2,346 $4,843 $7,042 $9,881 $9,571 $9,118 $1,346 Total Revenues $132,489 $110,168 $108,758 $93,386 $93,076 $92,623 $84,851 Expenditures Debt Service Principal $80,000 $80,000 $85,000 $85,000 $90,000 $840,000 $90,000 Debt Service Interest & Other $46,683 $44,306 $53,246 $51,500 $48,425 $29,825 $12,125 Total Expenditures $126,683 $124,306 $138,246 $136,500 $138,425 $869,825 $102,125 Other Financing Sources (Uses) Bond Proceeds $0 $665,000 $0 $0 $0 $0 $0 Bond Premium $0 $17,605 $0 $0 $0 $0 $0 Bond Discount $0 $-5,888 $0 $0 $0 $0 $0 Bond Issuance Costs $0 $-7,868 $0 $0 $0 $0 $0 Transfers In $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $668,848 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $5,806 $654,712 $-29,488 $-43,114 $-45,349 $-777,202 $-17,274 $375,034 $1,029,746 $1,000,258 $957,144 $911,796 $134,594 $117,320 $1,180,000 $1,765,000 $1,680,000 $1,595,000 $1,505,000 $665,000 $575, Page

73 2013 G.O. STREET/UTILITY IMPROVEMENT BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $1,655,000 in General Obligation Permanent Improvement Revolving Fund Bonds, Series 2013A in 2013 to finance street and utility reconstruction in the Aster Trail neighborhood. The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for February 2030; however, the bonds may be called after February 1, The true interest cost (TIC) of the bonds over the life of the bonds is 2.87% PROJECTIONS Revenues Property Taxes $67,587 $61,267 $62,617 $63,000 $65,000 $65,000 $65,000 Special Assessments $77,606 $55,487 $95,292 $21,697 $21,697 $21,697 $21,697 Interest on Investments $4,372 $7,977 $4,860 $5,484 $5,616 $5,145 $4,639 Total Revenues $149,565 $124,731 $162,769 $90,181 $92,313 $91,842 $91,336 Expenditures Debt Service Principal $0 $95,000 $100,000 $100,000 $100,000 $105,000 $105,000 Debt Service Interest & Other $46,583 $59,033 $43,250 $41,500 $39,500 $37,450 $35,350 Total Expenditures $46,583 $154,033 $143,250 $141,500 $139,500 $142,450 $140,350 Other Financing Sources (Uses) Bonds Issued $0 $0 $0 $0 $0 $0 $0 Transfers In $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $102,982 $-29,302 $-19,519 $-51,319 $-47,187 $-50,608 $-49,014 $622,747 $593,445 $612,964 $561,645 $514,458 $463,850 $414,836 $1,655,000 $1,560,000 $1,460,000 $1,360,000 $1,260,000 $1,155,000 $1,050, Page

74 2014 EDA LEASE REVENUE AND LIMITED TAX BONDS DEBT SERVICE FUND SERVICES PROVIDED The City s Economic Development Authority (EDA) issued $2,850,000 in Lease Revenue and Limited Tax Bonds, Series 2014A in 2014 to finance construction of the new City Hall/Library. The bonds will be repaid from an EDA HRA levy and an annual lease revenue payment from the City s General Fund. The final bond payment is scheduled for April 2035; however, the bonds may be called after October 1, The true interest cost (TIC) of the bonds over the life of the bonds is 3.14% PROJECTIONS Revenues Property Taxes $186,836 $188,737 $186,983 $188,000 $188,000 $188,000 $188,000 Lease Revenue $0 $0 $7,000 $7,000 $7,000 $7,000 $7,000 Interest on Investments $308 $546 $540 $1,374 $1,363 $1,382 $1,371 Total Revenues $187,144 $189,283 $194,523 $196,374 $196,363 $196,382 $196,371 Expenditures Debt Service Principal $0 $80,000 $120,000 $120,000 $120,000 $125,000 $125,000 Debt Service Interest $84,285 $77,614 $76,746 $75,913 $74,413 $72,510 $70,260 Total Expenditures $84,285 $157,614 $196,746 $195,913 $194,413 $197,510 $195,260 Net Change in Fund Balance $102,859 $31,670 $-2,223 $461 $1,950 $-1,128 $1,111 Fund Balance December 31 $106,383 $138,053 $135,830 $136,292 $138,242 $137,115 $138,226 Bonds Outstanding December 31 $2,850,000 $2,770,000 $2,650,000 $2,530,000 $2,410,000 $2,285,000 $2,160, Page

75 2016A GO STREET/UTILITY IMPROVEMENT BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $2,950,000 in General Obligation Permanent Improvement Revolving Fund Bonds, Series 2016A in 2016 to finance street reclaim and drain tile improvements in the Deer Run neighborhood and a street and utility reconstruction of 78 th Street and Kochia Lane. The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for February 2032; however, the bonds may be called after February 1, The true interest cost (TIC) of the bonds over the life of the bonds is 1.81% PROJECTIONS Revenues Property Taxes $0 $42,727 $75,000 $108,000 $108,000 $108,000 Special Assessments $329,102 $341,729 $40,963 $40,963 $40,963 $40,963 Interest on Investments $-264 $2,434 $9,513 $10,879 $10,178 $9,456 Total Revenues $328,838 $386,890 $125,476 $159,842 $159,141 $158,419 Expenditures Debt Service Principal $0 $0 $145,000 $175,000 $180,000 $185,000 Debt Service Interest $0 $57,644 $58,070 $54,896 $51,373 $47,752 Total Expenditures $0 $57,644 $203,070 $229,896 $231,373 $232,752 Other Financing Sources (Uses) Transfers In (Fund 497) $0 $511,000 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $511,000 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $328,838 $840,246 $-77,594 $-70,054 $-72,232 $-74,333 $328,838 $1,165,482 $1,087,889 $1,017,834 $945,602 $871,269 $2,950,000 $2,950,000 $2,805,000 $2,630,000 $2,450,000 $2,265, Page

76 2016A GO TAX INCREMENT BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $660,000 in General Obligation Tax Increment Bonds, Series 2016A in 2016 to finance improvements to the Rose Street parking lot and parking improvements on Rose Street and Victoria Drive. The bonds will be repaid from tax increment financing revenues generated from the Main Street Building. The final bond payment is scheduled for February 2032; however, the bonds may be called on or after February 1, The true interest cost (TIC) of the bonds over the life of the bonds is 1.81% PROJECTIONS Revenues Property Taxes $39,747 $40,000 $40,000 $18,000 $18,000 Interest on Investments $18 $273 $193 $73 $71 Total Revenues $39,765 $40,273 $40,193 $18,073 $18,071 Expenditures Debt Service Principal $0 $35,000 $40,000 $40,000 $40,000 Debt Service Interest $12,935 $12,850 $12,100 $11,300 $10,500 Total Expenditures $12,935 $47,850 $52,100 $51,300 $50,500 Other Financing Sources (Uses) Transfers In (Fund 498) $0 $0 $0 $33,000 $33,000 Total Other Financing Sources (Uses) $0 $0 $0 $33,000 $33,000 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $26,830 $-7,577 $-11,907 $-227 $571 $26,830 $19,253 $7,345 $7,119 $7,690 $660,000 $625,000 $585,000 $545,000 $505, Page

77 2016C GO TAX ABATEMENT FRANCHISE BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $1,730,000 in General Obligation Tax Abatement Bonds, Series 2016C in 2016 to finance undergrounding of Xcel s new distribution lines in the City. The bonds will be repaid from a new franchise fee on electric and natural gas customers of Xcel Energy, MVEC, and Centerpoint within City limits. The final bond payment is scheduled for February 2032; however, the bonds may be called on or after February 1, The true interest cost (TIC) of the bonds over the life of the bonds is 1.82% PROJECTIONS Revenues Interest on Investments $699 $71 $1,006 $1,116 $1,158 $1,171 Total Revenues $699 $71 $1,006 $1,116 $1,158 $1,171 Expenditures Debt Service Principal $0 $0 $90,000 $100,000 $105,000 $105,000 Debt Service Interest $0 $26,299 $33,835 $31,935 $29,885 $27,785 Total Expenditures $0 $26,299 $123,835 $131,935 $134,885 $132,785 Other Financing Sources (Uses) Transfers In (Fund 499) $0 $125,000 $135,000 $135,000 $135,000 $135,000 Total Other Financing $0 $125,000 $135,000 $135,000 $135,000 $135,000 Sources (Uses) Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $699 $98,772 $12,171 $4,181 $1,273 $3,386 $699 $99,471 $111,643 $115,824 $117,098 $120,484 $1,730,000 $1,730,000 $1,640,000 $1,540,000 $1,435,000 $1,330, Page

78 2017A GO STREET/UTILITY IMPROVEMENT BONDS DEBT SERVICE FUND SERVICES PROVIDED The City issued $1,205,000 in General Obligation Permanent Improvement Revolving Fund Bonds, Series 2017A in 2017 to finance street reclaim and drain tile improvements in several City neighborhoods. The bonds will be repaid from a property tax levy and special assessments on benefiting properties. The final bond payment is scheduled for February 2033; however, the bonds may be called after February 1, The true interest cost (TIC) of the bonds over the life of the bonds is 2.36% PROJECTIONS Revenues Property Taxes $0 $0 $50,000 $50,000 $50,000 Special Assessments $76,491 $125,820 $34,844 $34,844 $34,844 Interest on Investments $2 $1,518 $1,810 $1,822 $1,691 Total Revenues $76,493 $127,338 $86,654 $86,666 $86,535 Expenditures Debt Service Principal $0 $0 $60,000 $75,000 $75,000 Debt Service Interest $0 $22,881 $25,453 $24,736 $23,939 Total Expenditures $0 $22,881 $85,453 $99,736 $98,939 Other Financing Sources (Uses) Transfers In (Fund 401) $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 Bonds Outstanding December 31 $76,493 $104,457 $1,201 $-13,071 $-12,404 $76,493 $180,950 $182,151 $169,080 $156,676 $1,205,000 $1,205,000 $1,145,000 $1,070,000 $995, Page

79 CAPITAL PROJECT FUNDS CAPITAL PROJECT FUNDS SUMMARY DESCRIPTION Capital Project Funds account for the acquisition and construction of major capital facilities and equipment (except those financed by enterprise funds). This includes expenditures relating to capital projects and large capital outlay purchases. Project budgets and/or annual financial plans are established for each fund. The City currently has seventeen active construction project funds. Capital project funds use the modified accrual basis of accounting for both financial reporting and budgeting purposes. The following pages show for each construction project fund with activity from 2015 through 2016 and projections from 2017 to Detail on individual projects can be found in the Capital Improvement Plan section of this document. 78 Page

80 PUBLIC WORKS CAPITAL EQUIPMENT FUND SERVICES PROVIDED The Public Works Capital Equipment Fund accounts for capital equipment expenditures exceeding $5,000. This fund was set up to accumulate funds for the purchase and replacement of Public Works vehicles and heavy equipment. All the items planned for purchase are included in the City s CIP. This fund receives annual appropriations from the General Fund. BUDGET HIGHLIGHTS & FUTURE TRENDS Only one purchase is planned for 2018, adding a bobcat toolcat utility vehicle for $15,000. There are two planned purchases for 2019: pickup with plow replacement for $54,000 and adding a truck to the fleet for $39,000. In 2020, the city plans to replace the loader and a dump truck. The long-term outlook for this fund is stable annual appropriations from the General Fund are sufficient to cover planned purchases and replacements through PROJECTIONS Revenues Miscellaneous $1,236 $273 $166 $0 $0 $0 $0 Interest on Investments $585 $1,377 $479 $817 $2,475 $3,515 $1,300 Total Revenues $1,821 $1,650 $ 645 $ 817 $2,475 $3,515 $1,300 Expenditures by Classification Capital Outlay $232,996 $228,821 $95,988 $15,000 $93,500 $505,000 $202,500 Total Expenditures $232,996 $228,821 $95,988 $15,000 $93,500 $505,000 $202,500 Other Financing Sources (Uses) Proceeds Sale of Capital Assets $0 $8,385 $13,050 $0 $5,000 $80,000 $15,000 Transfers In $110,000 $120,000 $170,000 $180,000 $190,000 $200,000 $200,000 Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance December 31 $-121,175 $-98,786 $87,707 $165,817 $103,975 $-221,485 $13,800 $92,763 $-6,023 $81,684 $247,501 $351,476 $129,991 $143, Page

81 FIRE TRUCK AND EQUIPMENT FUND SERVICES PROVIDED The Fire Truck and Equipment Fund accounts for the Fire Department s capital equipment purchases. Revenues include grant proceeds, donations, and appropriations from the General Fund. BUDGET HIGHLIGHTS & FUTURE TRENDS The City entered into a 7-year lease purchase agreement for a new fire engine in Annual appropriations from the General Fund covered the lease payments until they ended in In 2018, the radio inventory will be replaced at a cost of $85,000. In 2019, the SCBA equipment must be replaced at a cost of about $215,000. The City plans to replace two trucks with a mini pumper in The long-term outlook for this fund is stable annual appropriations from the General Fund are sufficient to cover planned purchases and replacements through PROJECTIONS Revenues Donations $4,650 $3,975 $4,740 $2,500 $2,500 $2,500 $2,500 Interest on Investments $3,365 $7,105 $3,992 $4,395 $4,489 $2,883 $1,212 Total Revenues $8,015 $11,080 $8,732 $6,895 $6,989 $5,383 $3,712 Expenditures by Classification Capital Outlay $6,348 $92,855 $6,321 $87,500 $267,500 $302,500 $85,000 Debt Service $64,135 $64,135 $64,135 $0 $0 $0 $0 Total Expenditures $70,483 $156,990 $70,456 $87,500 $267,500 $302,500 $85,000 Other Financing Sources (Uses) Proceeds-Sale of Capital Assets $114,000 $3,990 $0 $0 $0 $20,000 $0 Transfers In $64,135 $64,135 $70,000 $90,000 $100,000 $110,000 $120,000 Total Other Financing Sources (Uses) $178,135 $68,125 $70,000 $90,000 $100,000 $130,000 $120,000 Net Change in Fund Balance Fund Balance December 31 $115,105 $-52,784 $8,276 $9,395 $-160,511 $-167,117 $36,212 $483,970 $431,186 $439,462 $448,857 $288,345 $121,229 $157, Page

82 CAPITAL FACILITIES FUND SERVICES PROVIDED The Capital Facilities Fund accounts for the accumulation of resources for the construction and acquisition of City facilities and land. Most recently the City used this fund for the new Public Works facility and the purchase of the small lot just east of the new City Hall. BUDGET HIGHLIGHTS & FUTURE TRENDS No budgeted transfers are planned through PROJECTIONS Revenues Interest on Investments $7,322 $1,938 $145 $365 $366 $366 $367 Total Revenues $7,322 $1,938 $145 $365 $366 $366 $367 Expenditures by Classification Capital Outlay $598 $83,596 $0 $0 $0 $0 $0 Total Expenditures $598 $83,596 $0 $0 $0 $0 $0 Other Financing Sources (Uses) Transfers In $327,545 $1,035 $0 $0 $0 $0 $0 Transfers Out $-235,000 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $92,545 $1,035 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 $99,269 $-80,623 $145 $365 $366 $366 $367 $445,855 $365,233 $365,377 $365,742 $366,108 $366,474 $367, Page

83 LONG-TERM STREET MAINTENANCE FUND SERVICES PROVIDED The Long-Term Street Maintenance Fund accounts for resources accumulated for the long-term maintenance of City streets. The City typically cannot issue bonds for projects paid for out of this fund, e.g., street overlays. Revenues include appropriations from the General Fund and interest earnings. BUDGET HIGHLIGHTS & FUTURE TRENDS The City Engineer has prepared a street overlay schedule. Overlays were completed in 2016 and Another overlay project is planned for 2018 for $200,000. The City Engineer is evaluating overlay projects for 2019 and beyond. In 2016, the City began work with the County on preliminary design work for Marsh Lake Road and this work continued in Street improvement feasibility studies are also paid from this fund. The City also completed with West 77 th street project out of this fund. Special assessments will repay a portion of the cost. Beginning in 2018, the City will pay for sealcoating and crack sealing from this fund. To offset these costs, Municipal State Aid for Streets maintenance funds will be credited to this account and $42,000 will be transferred from the General Fund annually. The outlook for this fund is stable until 2023, provided the City increases annual appropriations from the General Fund in an amount sufficient to cover planned overlay projects. Significant increases in the amount transferred in will be needed for overlays beginning in PROJECTIONS Revenues Special Assessments $0 $6,400 $4,265 $851 $851 $851 $851 Intergovernmental Revenue $0 $0 $0 $91,820 $97,329 $103,169 $109,359 Interest on Investments $11,523 $24,130 $13,639 $14,215 $12,273 $13,155 $14,080 Miscellaneous $55,000 $0 $51,175 $0 $0 $0 $0 Total Revenues $66,523 $30,530 $69,079 $106,886 $110,453 $117,175 $124,290 Expenditures by Classification Contractual Services $0 $0 $0 $143,098 $129,904 $119,849 $65,759 Capital Outlay $10,676 $396,297 $331,294 $200,000 $34,263 $239,850 $383,918 Total Expenditures $10,676 $396,297 $331,294 $343,098 $164,167 $359,699 $449,677 Other Financing Sources (Uses) Transfers In $157,000 $397,742 $87,984 $42,000 $142,000 $335,000 $385,000 Total Other Financing Sources (Uses) $157,000 $397,742 $87,984 $42,000 $142,000 $335,000 $385,000 Net Change in Fund Balance Fund Balance December 31 $212,847 $31,975 $-174,231 $-194,212 $88,286 $92,476 $59,613 $1,563,728 $1,595,703 $1,421,472 $1,227,260 $1,315,546 $1,408,022 $1,467, Page

84 2017 STREET IMPROVEMENT PROJECT FUND SERVICES PROVIDED The 2017 Street Improvement Project Fund accounts for resources accumulated for the reclaim of streets in the following neighborhoods: McKnight, Field Creek, Narcissus, Swiss Mountain, Sunny Shadows, and Baycliffe. BUDGET HIGHLIGHTS & FUTURE TRENDS The project is funded from bond proceeds and special assessments. The bonds will be repaid from special assessments and a tax levy PROJECTIONS Revenues Interest on Investments $2,468 $2,000 Total Revenues $2,468 $2,000 Expenditures by Classification Capital Outlay $917,839 $294,197 Bond Issuance Costs $40,754 $0 Total Expenditures $958,593 $294,197 Other Financing Sources (Uses) Bond Proceeds $1,205,000 $0 Premium on Bonds Sold $14,040 $0 Transfer from Other Funds $0 $63,200 Transfer to Other Funds $0 $-33,918 Total Other Financing Sources (Uses) $1,219,040 $29,282 Net Change in Fund Balance Fund Balance December 31 $262,915 $-262,915 $262,915 $0 83 Page

85 2018 STREET IMPROVEMENT PROJECT FUND SERVICES PROVIDED The 2018 Street Improvement Project Fund accounts for resources accumulated for the reclaim of streets in the following neighborhoods: Kelzer Pond, Rhoy Street, Narcissus Street, and Marigold Circle. BUDGET HIGHLIGHTS & FUTURE TRENDS The project is funded from bond proceeds and special assessments. The bonds will be repaid from special assessments and a tax levy PROJECTIONS Revenues Interest on Investments $0 $2,000 Total Revenues $0 $2,000 Expenditures by Classification Capital Outlay $7,358 $1,193,000 Bond Issuance Costs $0 $50,605 Total Expenditures $7,358 $1,243,605 Other Financing Sources (Uses) Bond Proceeds $0 $1,1165,000 Premium on Bonds Sold $0 $19,937 Transfer from Other Funds $0 $71,890 Transfer to Other Funds $0 $-7,864 Total Other Financing Sources (Uses) $0 $1,248,963 Net Change in Fund Balance Fund Balance December 31 $-7,358 $7,358 $-7,358 $0 84 Page

86 TAX INCREMENT FINANCING DISTRICT #3-490 SERVICES PROVIDED The Tax Increment District #3 Fund accounts for tax increment revenues received from those properties retained within TIF Redevelopment District #3 that are pledged for debt service. This TIF district decertifies in December BUDGET HIGHLIGHTS & FUTURE TRENDS A transfer is made each year to Fund 377 for debt service on the bonds issued for this district. Tax increments received through 2020 will be sufficient for the debt service payments on the bonds. The last bond payment is scheduled for 2020, so the district will likely be decertified early, after the last bond payment is made. The remaining balance of $529,753 will be transferred to Tax Increment Financing District #5 (Fund 400) to repay the bonds from that district PROJECTIONS Revenues Taxes $211,333 $215,651 $219,954 $222,154 $224,376 $226,620 Interest on Investments $-52 $1,100 $1,286 $409 $530 $764 Total Revenues $211,281 $216,751 $221,240 $222,563 $224,906 $227,384 Expenditures by Classification Contractual Services $2,885 $3,370 $2,996 $3,086 $3,179 $3,274 Total Expenditures $2,885 $3,370 $2,996 $3,086 $3,179 $3 Other Financing Sources (Uses) Transfers Out (Funds $-179,950 $-291,000 $-171,000 $-171,000 $-128,220 $-529, /400) Transfers In $0 $42,348 $0 $0 $0 $0 Total Other Financing $-179,950 $-248,652 $-171,000 $-171,000 $-128,220 $-529,753 Sources (Uses) Net Change in Fund Balance Fund Balance December 31 $28,446 $-35,271 $47,244 $48,477 $93,507 $-305,643 $151,686 $116,415 $163,659 $212,136 $305,643 $0 85 Page

87 TAX INCREMENT FINANCING DISTRICT #4-495 SERVICES PROVIDED The Tax Increment District #4 Fund accounts for tax increment revenues received from those properties retained with TIF Redevelopment District #4 that are pledged for pay-as-you-go notes. This TIF district decertifies in December BUDGET HIGHLIGHTS & FUTURE TRENDS The City entered into an agreement with a developer whereby 90% of tax increment received is paid to the developer provided the other provisions in the development agreement are met. The City can use the remaining 10% of tax increment for administration of the district PROJECTIONS Revenues Taxes $41,274 $42,521 $41,863 $42,000 $42,000 $42,000 $42,000 Interest on Investments $301 $610 $775 $435 $644 $663 $683 Total Revenues $41,575 $43,131 $42,638 $42,435 $42,644 $42,663 $42,683 Expenditures by Classification Capital Outlay $55,864 $2,416 $836 $38,661 $38,687 $38,714 $38,741 Total Expenditures $55,864 $2,416 $ 836 $38,661 $38,687 $38,714 $38,741 Other Financing Sources (Uses) Transfers Out $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) Net Change in Fund Balance $-14,289 $40,715 $41,802 $3,774 $3,957 $3,949 $3,942 Fund Balance December 31 $46,286 $87,001 $128,803 $132,577 $136,534 $140,483 $144, Page

88 TAX INCREMENT FINANCING DISTRICT #5-400 SERVICES PROVIDED The City created Tax Increment Financing District #5 in 2016 to redevelop the parking and area near the old City Hall on Rose Street. The City issued bonds for the project that will be repaid from tax increment and a property tax levy PROJECTIONS Revenues Tax Increment $0 $105 $13,124 $13,431 $13,737 $14,050 Interest on Investments $337 $2,144 $820 $196 $320 $2,066 Total Revenues $ 337 $2,249 $13,944 $13,627 $14,057 $16,116 Expenditures by Classification Capital Outlay $366,547 $227,010 $76,262 $1,262 $1,262 $1,262 Total Expenditures $366,547 $227,010 $76,262 $1,262 $1,262 $1,262 Other Financing Sources (Uses) Bond Proceeds $660,000 $0 $0 $0 $0 $0 Bond Premium $15,913 $0 $0 $0 $0 $0 Bond Discount $-5,883 $0 $0 $0 $0 $0 Bond Issuance Costs $-3,167 $0 $0 $0 $0 $0 Transfer In $0 $0 $0 $0 $529,753 $0 Transfers Out $0 $0 $0 $0 $-33,000 $-33,000 Total Other Financing Sources (Uses) $666,863 $0 $0 $0 $496,753 $-33,000 Net Change in Fund Balance Fund Balance December 31 $309,676 $-229,259 $-62,318 $12,365 $509,548 $-18,146 $-28,273 $-253,034 $-315,352 $-302,987 $206,562 $188, Page

89 TAX INCREMENT FINANCING DISTRICT #6-407 SERVICES PROVIDED The City created Tax Increment Financing District #6 in 2016 to redevelop the parking lot and another site near the new City Hall on Stieger Lake Lane. The City plans to issue bonds to reconstruct Stieger Lake Lane from Quamoclit east to Highway 5 that will be repaid from tax increment and a property tax levy. BUDGET HIGHLIGHTS & FUTURE TRENDS The City entered into an agreement with a developer whereby 75% of tax increment received is paid to the developer provided the other provisions in the development agreement are met. The City can use the remaining 25% of tax increment for the improvements to Stieger Lake Lane PROJECTIONS Revenues Tax Increment $0 $0 $165,991 $168,537 $171,121 Total Revenues $0 $0 $165,991 $168,537 $171,121 Expenditures by Classification Capital Outlay $87,056 $1,112,944 $126,493 $128,403 $130,341 Bond Issuance Costs $0 $50,000 $0 $0 $0 Total Expenditures $87,056 $1,162,944 $126,493 $128,403 $130,341 Other Financing Sources (Uses) Bond Proceeds $0 $1,250,000 $0 $0 $0 Transfers Out $0 $0 $39,498 $40,134 $40,780 Total Other Financing $0 $1,250,000 $-39,498 $-40,134 $-40,780 Sources (Uses) Net Change in Fund Balance Fund Balance December 31 $-87,056 $87,056 $0 $0 $0 $-87,056 $0 $0 $0 $0 88 Page

90 UNDERGROUNDING FUND SERVICES PROVIDED The Undergrounding Fund accounts for the construction proceeds and expenditures associated with the undergrounding of electrical power lines within the City. The City issued bonds in 2016 for the project which was completed in The bonds will be repaid from a franchise fee on Xcel and MVEC electric customers and CenterPoint Energy natural gas customers. The debt service fund for the bonds is Fund 529. The City will use remaining bond funds and available franchise fees to complete additional undergrounding projects PROJECTIONS Revenues Franchise Fees $0 $234,213 $274,468 $282,702 $291,183 $299,919 Interest on Investments $-1,916 $6,700 $15,698 $7,507 $128 $2,473 Total Revenues $-1,916 $240,913 $290,166 $290,209 $291,311 $302,392 Expenditures by Classification Capital Outlay $665,385 $151,232 $286,233 $647,158 $0 $0 Total Expenditures $665,385 $151,232 $286,233 $647,158 $0 $0 Other Financing Sources (Uses) Bond Proceeds $1,730,000 $0 $0 $0 $0 $0 Bond Premium $45,054 $0 $0 $0 $0 $0 Bond Discount $-19,030 $0 $0 $0 $0 $0 Bond Issuance Costs $-6,861 $0 $0 $0 $0 $0 Transfer Out (Fund 529) $0 $-125,000 $-135,000 $-135,000 $-135,000 $-135,000 Total Other Financing $1,749,163 $-125,000 $-135,000 $-135,000 $-135,000 $-135,000 Sources (Uses) Net Change in Fund Balance Fund Balance December 31 $1,081,862 $-35,319 $-131,067 $-491,949 $156,311 $167,391 $1,081,862 $1,046,543 $915,476 $423,527 $579,838 $747, Page

91 PARK DEDICATION FEES FUND SERVICES PROVIDED The Park Dedication Fund accounts for the cash contributions made from developers that shall be used to purchase park land and /or funding of park facilities, in accordance with Minnesota Statutes. BUDGET HIGHLIGHTS & FUTURE TRENDS A transfer out to the Park Improvement Fund for $600,000 was made in 2016 for the construction of the next phase of Madelyn Creek Park, the construction of Laketown Park, trail improvements, and other park improvements. Transfers are made to the Park Improvement Fund as needed PROJECTIONS Revenues Park Dedication Fees $64,798 $210,195 $91,629 $0 $0 $0 $0 Investment Income $6,137 $11,833 $5,367 $5,073 $3,624 $2,660 $2,687 Total Revenues $70,935 $222,028 $96,996 $5,073 $3,624 $2,660 $2,687 Other Financing Sources (Uses) Transfer Out $0 $-600,000 $0 $-150,000 $-100,000 $0 $0 Total Other Financing Sources (Uses) $0 $-600,000 0 $-150,000 $-100,000 $0 $0 Net Change in Fund Balance Fund Balance December 31 $70,935 $-377,972 $96,996 $-144,927 $-96,376 $2,660 $2,687 $788,297 $410,322 $507,318 $362,391 $266,015 $268,675 $271, Page

92 PARK IMPROVEMENT FEES FUND SERVICES PROVIDED The Park Improvement Fees Fund accounts for the park improvement fees collected when a new home building permit is issued. Funds are used for the express purpose of park capital improvements. BUDGET HIGHLIGHTS & FUTURE TRENDS The City plans has three new park projects for 2018: construct Goodman Park for $300,000, pave the Woodlands neighborhood trail for $50,000, and add skate park equipment for $25,000. The City will also finish the 2 nd phase of Madelyn Creek Park for $90,000. The City is also working with the Lions Club on a new shelter. This project will be finished in 2018 and the Lions will repay the City for most of the costs. The City is also purchasing land from the Minnehaha Creek Watershed District for $850,000 for a new park on Wassermann Lake. The City is paying half down, with the balance to be paid by In 2019, the City plans to add a picnic shelter and dugouts to Diethelm Park for $60,000 and complete the 2 nd phase of Lakeside Estates Park for $300,000. In 2016, the City transferred $600,000 from the Park Dedication Fund to complete projects. Additional transfers are planned from the Park Dedication Fund to complete projects PROJECTIONS Revenues Park Improvement Fees $192,240 $290,000 $422,000 $277,500 $277,500 $277,500 $277,500 Investment Income $2,237 $143 $3,657 $4,765 $959 $1,167 $2,206 Miscellaneous $1,350 $5,000 $0 $40,000 $40,000 $40,000 $40,000 Total Revenues $195,827 $295,143 $425,657 $322,265 $318,459 $318,667 $319,706 Expenditures by Classification Capital Outlay $428,451 $480,742 $530,534 $1,576,000 $360,000 $205,000 $200,000 Debt Service Principal $0 $0 $0 $0 $42,500 $42,500 $42,500 Debt Service Interest $0 $0 $0 $0 $2,125 $1,913 $1,700 Total Expenditures $428,451 $480,742 $530,534 $1,576,000 $404,625 $249,413 $244,200 Other Financing Sources (Uses) Note Proceeds $0 $0 $0 $425,000 $0 $0 $0 Transfer In $0 $600,000 $0 $575,000 $100,000 $0 $0 Total Other Financing Sources (Uses) $0 $600,000 $0 $1,000,000 $100,000 $0 $0 Net Change in Fund Balance Fund Balance December 31 $-232,625 $414,402 $-104,877 $-253,735 $13,834 $69,254 $75,506 $8,164 $422,566 $317,687 $63,952 $77,786 $147,040 $222, Page

93 TRAIL FUND SERVICES PROVIDED The Trail Fund accounts for the cash contributions in lieu of land from the developers for trail improvements. There are no planned transfers to the Park Improvement Fund for trail improvements PROJECTIONS Revenues Interest on Investments $403 $845 $315 $349 $353 $357 $360 Total Revenues $403 $845 $315 $349 $353 $357 $360 Expenditures Capital Outlay $0 $19,015 $0 $0 $0 $0 $0 Total Expenditures $0 $19,015 $0 $0 $0 $0 $0 Other Financing Sources (Uses) Transfer Out $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 $404 $-18,170 $315 $349 $353 $357 $360 $52,803 $34,633 $34,948 $35,297 $35,650 $36,007 $36, Page

94 TREE REPLACEMENT FUND SERVICES PROVIDED The Tree Replacement Fund accounts for the cash contributions received from developers when a significant number of trees are removed when development occurs. The City plans to use the funds for tree replacement and maintenance in the City PROJECTIONS Revenues Tree Replacement Fees $150,690 $128,700 $0 $0 $0 $0 Interest on Investments $175 $1,280 $2,605 $2,481 $2,356 $2,230 Total Revenues $150,865 $129,980 $2,605 $2,481 $2,356 $2,230 Expenditures Capital Outlay $20,320 $0 $15,000 $15,000 $15,000 $15,000 Total Expenditures $20,320 $0 $15,000 $15,000 $15,000 $15,000 Other Financing Sources (Uses) Transfer Out $0 $0 $0 $0 $0 $0 Total Other Financing Sources (Uses) $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 $130,545 $ $-12,395 $-12,519 $-12,644 $-12,770 $130,545 $260,525 $248,130 $235,611 $222,968 $210, Page

95 CHARITABLE GAMBLING DONATIONS FUND SERVICES PROVIDED The Charitable Gambling Donations Fund accounts for the contributions from permitted lawful gambling within the City and for expenditures of lawful purpose in accordance with Minnesota Statute , Subd. 25. BUDGET HIGHLIGHTS & FUTURE TRENDS The City plans to replace the ballfield lights at Lions Park in 2020, with $100,000 of the expense coming from this fund and $100,000 from the Park Improvement Fees Fund # PROJECTIONS Revenues Interest on Investments $900 $1,847 $1,148 $789 $897 $1,006 $116 Donations $13,904 $5,000 $0 $10,000 $10,000 $10,000 $10,000 Total Revenues $14,804 $6,847 $1,148 $10,789 $10,897 $11,006 $10,116 Expenditures Capital Outlay $0 $0 $52,718 $0 $0 $100,000 $0 Total Expenditures $0 $0 $52,718 $0 $0 $100,000 $0 Net Change in Fund Balance $14,804 $6,847 $-51,570 $10,789 $10,897 $-88,994 $10,116 Fund Balance December 31 $123,615 $130,462 $78,892 $89,681 $100,578 $11,584 $21, Page

96 AFFORDABLE HOUSING PROGRAM FUND SERVICES PROVIDED The Affordable Housing Program Fund accounts for the funds received from the sale of land trust lots and will be used for affordable housing. The only planned expenditures through 2021 are for property taxes on the City owned lots PROJECTIONS Revenues Interest on Investments $1,435 $2,762 $1,705 $1,893 $1,899 $1,905 $1,911 Total Revenues $1,435 $2,762 $1,705 $1,893 $1,899 $1,905 $1,911 Expenditures Property Taxes $1,276 $1,332 $1,218 $1,276 $1,276 $1,276 $1,276 Total Expenditures $1,276 $1,332 $1,218 $1,276 $1,276 $1,276 $1,276 Other Financing Sources Sale of Land Trust Lot $0 $0 $0 $0 $0 $0 $0 Total Other Financing Sources $0 $0 $0 $0 $0 $0 $0 Net Change in Fund Balance Fund Balance December 31 $159 $1,430 $487 $617 $623 $629 $635 $187,350 $188,780 $189,267 $189,884 $190,507 $191,136 $191, Page

97 ENTERPRISE FUNDS ENTERPRISE FUNDS SUMMARY DESCRIPTION Enterprise funds are used to report an activity for which a fee is charged to external users for goods or services. Unlike governmental funds, enterprise funds focus on the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. Enterprise funds use an accrual basis of accounting for financial reporting purposes. A modified accrual basis will be used for budgeting purposes in this report. Consequently, the bottom line for each enterprise fund is labeled available cash balance rather than net position, which includes capital assets, long-term debt, and other noncurrent items. The City currently has three active enterprise funds: Water Fund, Sewer Fund, and Storm Water Management Fund. BUDGET ISSUES Each enterprise fund has specific challenges that will be addressed in the narrative for each fund. 96 Page

98 WATER FUND SERVICES PROVIDED The Water Fund is a self-sustaining city utility fund. The water utility provides a safe, reliable, efficient, and cost-effective water operation system to meet the needs of residents and businesses now and into the future. Services include water pumping, water treatment, water storage, water distribution, repairs and maintenance, hydrant flushing, water locates, and responding to emergency water main breaks. BUDGET HIGHLIGHTS AND FUTURE TRENDS The City classifies water revenues as either operating or non-operating. Operating Revenues are projected to increase due to the increase in new homes. No rate increase is planned. Connection Fees are projected to increases in 2018, due to the expected increase in the number of new homes. The Interfund Loan Repayment is higher for The City will repay the remaining balance of $300,000 by Expenses are classified by character or object. Wages & Benefits are increasing due to a higher allocation from Public Works. Capital Outlay for 2018 includes reimbursement to developers for oversizing water mains and the completion of Phases 2 through 4 of the Well Siting Study. 97 Page

99 2018 BUDGET Revenues Operating Revenues Water Sales $1,096,123 $1,097,177 $1,140,177 $1,272,312 $1,291,597 $1,329,870 Late Fees $25,807 $23,360 $18,598 $25,200 $25,700 $25,700 Meter Sales $37,875 $28,131 $39,610 $32,850 $40,515 $40,515 Other Charges $1,935 $3,233 $2,977 $1,125 $2,825 $2,825 Total Operating Revenues $1,161,740 $1,151,901 $1,201,362 $1,331,487 $1,360,637 $1,398,910 Non-Operating Revenues Special Assessment Interest $410 $191 $181 $0 $500 $500 Connection Fees $1,240,990 $493,120 $961,810 $354,600 $437,340 $437,340 Investment Income(Loss) $26,978 $18,963 $17,361 $8,820 $25,022 $47,213 Miscellaneous $1,676 $2,503 $2,547 $200 $200 $200 Interfund Loan Repayment $150,000 $150,000 $58,319 $125,000 $150,000 $150,000 Total Non-Operating Revenues $1,420,054 $664,777 $1,040,218 $488,620 $613,062 $635,253 Total Revenues $2,581,794 $1,816,678 $2,241,580 $1,820,107 $1,973,699 $2,034,163 Expenses Wages & Benefits $104,642 $152,535 $184,577 $209,941 $222,632 $228,421 Supplies, Repairs & Maint $200,296 $266,506 $224,372 $277,327 $319,865 $286,278 Contractual Services $70,644 $68,207 $76,381 $76,630 $75,914 $77,873 Utilities $133,398 $116,739 $144,155 $147,318 $162,288 $166,926 Miscellaneous $9,297 $11,867 $12,059 $11,562 $12,800 $12,938 Capital Outlay $136,018 $2,391,331 $73,645 $158,446 $282,000 $1,347,750 Debt Service $821,373 $822,496 $821,850 $823,125 $823,475 $823,225 Total Expenses $1,475,668 $3,829,681 $1,537,039 $1,704,349 $1,898,974 $2,943,411 Difference Between Revenues & Expenses $1,106,126 $-2,013,003 $646,222 $115,758 $74,725 $-909,248 Cash at Year-end $3,323,947 $1,421,660 $1,685,627 $1,801,385 $3,147,514 $2,238,266 Available Cash at Year-end $3,276,091 $1,266,144 $1,570,873 Non-Cash Revenues Infrastructure Contributed by Developers $1,106,126 $1,135,820 $623,125 Non-Cash Expenses Depreciation $547,299 $555,651 $578, Page

100 SEWER FUND SERVICES PROVIDED The Sewer Fund is a self-sustaining city utility fund. The sewer utility provides an efficient, well-maintained, and cost-effective sewer collection system to meet the needs of the growing community. Services include operating and maintaining the sanitary sewer collection system, sewer jetting, inspecting lift stations, inflow and infiltration improvements, and emergency sewer repairs. Waste is transferred to the Metropolitan Council interceptor for treatment. BUDGET HIGHLIGHTS AND FUTURE TRENDS Like the Water Fund, the City classifies sewer revenues as either operating or non-operating. Operating Revenues are projected to increase due to the increase in new homes and a 2% rate increase. Connection Fees will be higher in 2018 due to the projected increase in the number of new homes. Expenses are classified by character or object. Wages & Benefits are increasing due to a higher allocation from public works. Supplies, Repairs, and Maintenance is higher due to the planned replacement of a pipe along County Road 11. Capital Outlay for 2018 includes reimbursements to developers for oversizing sewer mains. One of the largest operating expense increases is due to MCES Fees. This is the amount charged to the City to transport wastewater to a treatment facility. These fees are increasing $63,213 from The City received a credit of approximately $54,000 towards the 2017 charges when the City successfully appealed the amount of its 2016 billing and received a onetime credit and reduced rate based on the City being considered a dry community. 99 Page

101 2018 BUDGET Revenues Operating Revenues Sewer Sales $749,049 $826,945 $866,350 $890,105 $940,992 $991,929 Late Fees $16,440 $17,062 $17,530 $17,200 $17,700 $17,700 Other Charges $1,256 $1,113 $1,586 $1,125 $1,125 $1,125 Total Operating Revenues $766,745 $845,120 $885,466 $908,430 $959,817 $1,010,754 Non-Operating Revenues Special Assessment Interest $3,483 $2,688 $2,163 $11,938 $11,938 $11,938 Connection Fees $176,450 $143,650 $341,300 $296,100 $370,740 $370,740 Investment Income(Loss) $5,137 $5,758 $4,679 $3,500 $15,000 $12,873 Miscellaneous $4,680 $242 $3,315 $0 $0 $0 Transfers from Other Funds $197,114 $0 $0 $0 $0 $0 Total Non-Operating Revenues $386,864 $152,338 $351,457 $311,538 $397,678 $395,551 Total Revenues $1,153,609 $997,458 $1,236,923 $1,219,968 $1,357,495 $1,406,305 Expenses Wages & Benefits $25,099 $47,093 $70,060 $76,994 $81,537 $83,604 Supplies, Repairs & Maint $93,799 $187,175 $117,875 $140,500 $215,815 $181,910 Contractual Services $39,223 $42,286 $85,283 $58,046 $66,839 $68,845 Utilities $6,138 $189 $761 $7,834 $8,069 $8,311 MCES Fees $419,186 $486,911 $516,557 $450,250 $513,463 $539,136 Miscellaneous $3,329 $4,012 $5,515 $6,416 $7,720 $7,946 Capital Outlay $592,875 $373,076 $36,213 $695,622 $215,000 $215,000 Total Expenses $1,179,649 $1,140,742 $832,264 $1,435,662 $1,108,443 $1,104,752 Difference Between Revenues & Expenses $-26,040 $-143,284 $404,659 $-215,694 $249,052 $301,553 Cash at Year-end $655,233 $533,104 $502,350 $270,696 $858,174 $1,159,727 Available Cash at Year-end $650,486 $509,191 $486,390 $270,696 $858,174 $1,159,727 Non-Cash Revenues Infrastructure Contributed by Developers Infrastructure Contributed by Government Funds $470,598 $1,619,293 $792,969 $177,170 $0 $94,560 Non-Cash Expenses Depreciation $279,635 $329,346 $365, Page

102 STORM WATER MANAGEMENT FUND SERVICES PROVIDED The Storm Water Management Fund is a self-sustaining city utility fund. The storm water management utility exists to improve and protect Victoria s surface water resources and provide flood protection through the installation and maintenance of storm water infrastructure, the preservation and enhancement of natural features, and through education and outreach. The City partners with organizations to achieve these goals. Services include compliance with federal, state, and local rules and policies, storm water management, infrastructure management, erosion and sediment protection, drainage improvement and flood abatement, Wetland Conservation Act administration, and education and outreach. BUDGET HIGHLIGHTS AND FUTURE TRENDS Storm Water revenues are also classified as either operating or non-operating. Operating Revenues are projected to increase in 2018 due to a planned increase in the utility billing from $19 to $23 per quarter and from the increase in new homes. In 2019, quarterly rates are expected to increase from $23 to $24. Expenses are classified by character or object. Wages & Benefits are increasing due to a higher allocation from Public Works. Contractual Services is lower due to less planned maintenance. Capital Outlay for 2018 includes the purchase of a mini excavator and the replacement of a culvert in the Parkwood neighborhood. 101 Page

103 2018 BUDGET Revenues Operating Revenues Storm Water Fees $140,523 $145,909 $150,318 $225,796 $288,604 $311,808 Late Fees $3,185 $3,254 $2,538 $3,000 $3,000 $3,000 Other Charges $306 $240 $2,404 $0 $0 $0 Total Operating Revenues $144,014 $149,403 $155,260 $228,796 $291,604 $314,808 Non-Operating Revenues Investment Income(Loss) $4,237 $3,728 $5,759 $3,055 $3,547 $2,595 Total Non-Operating Revenues $4,237 $3,728 $5,759 $3,055 $3,547 $2,595 Total Revenues $148,251 $153,131 $161,019 $231,851 $295,151 $317,403 Expenses Wages & Benefits $25,259 $39,621 $51,724 $51,826 $56,847 $58,724 Supplies, Repairs & Maint $35,407 $47,551 $4,823 $20,215 $15,321 $20,430 Contractual Services $40,253 $129,278 $120,788 $150,400 $140,550 $158,312 Miscellaneous $1,811 $4,928 $5,489 $3,170 $2,670 $2,670 Capital Outlay $0 $0 $18,994 $0 $175,000 $0 Total Expenses $102,730 $221,378 $201,818 $225,611 $390,388 $240,136 Difference Between Revenues $45,521 $-68,274 $-40,799 $6,240 $-95,237 $77,267 & Expenses Cash at Year-end $472,297 $422,135 $349,734 $354,711 $259,474 $336,741 Available Cash at Year-end $466,684 $400,137 $348,295 $354,711 $259,474 $336,741 Non-Cash Revenues Infrastructure Contributed by Developers Infrastructure Contributed by Government Funds $583,542 $1,263,149 $3,054,936 $50,620 $0 $73,546 Non-Cash Expenses Depreciation $134,386 $147,515 $174, Page

104 UTILITY RATES RATES FOR 2018 UTILITY BILLS WATER No water rate increase is planned for The quarterly water base rate charge is $ The City collects and remits a quarterly fee of $1.59 per connection to the Minnesota Department of Health. The City charges a rate of $2.81 per thousand gallons from October 1 through March 31. Tiered rates are in effect from April 1 through September 30: Gallons Used Cost Per 1,000 Gallons Up to 19,999 $2.81 Between 20,000 and 29,999 $3.10 Between 30,000 and 39,999 $3.37 Between 40,000 and 49,999 $3.66 Between 50,000 and 59,999 $3.93 Between 60,000 and 69,999 $4.22 Between 70,000 and 79,999 $4.49 Between 80,000 and 89,999 $4.78 Between 90,000 and 99,999 $5.06 Over 100,000 $5.34 SEWER The quarterly sewer base rate will increase in 2018 from $34.33 to $ The City also charges a consumption rate based on the winter quarter average. This rate will increase in 2018 from $2.40 per thousand gallons to $2.45 per thousand gallons. STORM WATER A storm water rate is increase is planned for The storm water base rate will increase from $19.00 to $23.00 per quarter. 103 Page

105 CAPITAL EQUIPMENT & IMPROVEMENT PLAN PROJECTS BY FUNDING SOURCE 104 Page

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