Public Hearing Truth In Taxation Budget & Property Taxes Proposed Payable 2011

Transcription

1 Public Hearing Truth In Taxation Budget & Property Taxes Proposed Payable 2011 Sibley County Special County Board Meeting Thursday, December 2, :00 p.m. Sibley County Courthouse Commissioners Room 400 Court Avenue PO Box 171 Gaylord, Minnesota Phone: Fax: Sibley County Board of Commissioners Chair Leo Anderly Vice-Chair Bill Pinske Harold Pettis Jim Swanson Charlie Woehler 1

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3 SIBLEY COUNTY BOARD OF COMMISSIONERS Address Phone Term of Office COMMISSIONER DISTRICT #1 Leo Lee Anderly th Street, Henderson, MN (507) January 2011 COMMISSIONER DISTRICT #2 William Bill Pinske 409 E. Baker St., Box 527, Arlington, MN (507) January 2013 COMMISSIONER DISTRICT #3 James Jim Swanson 1020 Lakeside Drive, Gaylord, MN (507) January 2013 COMMISSIONER DISTRICT #4 Charles Charlie Woehler th Ave., Arlington, MN (507) January 2011 COMMISSIONER DISTRICT #5 Harold Pettis 249 W. 5th St., Box 72, Gibbon, MN 5533 (507) January 2011 SIBLEY COUNTY ELECTED OFFICERS Address Phone Term of Office ATTORNEY David Schauer 307 N Pleasant Ave., Box H, Winthrop, MN (507) David@co.sibley.mn.us January 2011 AUDITOR Lisa Pfarr Box 171, Courthouse, Gaylord, MN (507) pfarrl@co.sibley.mn.us January 2011 RECORDER Kathy Dietz Box 44, Courthouse, Gaylord, MN (507) KathyD@co.sibley.mn.us January 2011 SHERIFF Bruce Ponath Box 102, Jail Bldg, Gaylord, MN (507) Bruce@co.sibley.mn.us January 2011 TREASURER Mary Fisher Box 51, Courthouse, Gaylord, MN (507) MaryF@co.sibley.mn.us January

4 SIBLEY COUNTY APPOINTED DEPARTMENT HEADS Address Phone Term of Office ASSESSOR Calvin Roberts Box 532, Courthouse, Gaylord, MN (507) December 2012 COUNTY SURVEYOR LeRoy Grewe Ave, Gaylord, MN (507) January 2011 COURT ADMINISTRATOR (STATE) Karen Messner Box 867, Courthouse, Gaylord, MN (507) Indefinite COURT SERVICES DIRECTOR (STATE) Mary Karl Box 405, Courthouse, Gaylord, MN (507) Indefinite ECONOMIC DEVELOPMENT DIRECTOR Tim Dolan Box 207, Sibley Co. Service Center, Gaylord, MN (507) Indefinite EMERGENCY MANAGEMENT DIRECTOR Tom Phillips Box 1054, Courthouse, Gaylord, MN (507) Indefinite ENVIRONMENTAL SERVICES DIRECTOR Jeff Majeski Box 82, Courthouse, Gaylord, MN (507) Indefinite EXTENSION EDUCATOR Tim Dolan Box 207, Sibley Co. Service Center, Gaylord, MN (507) Indefinite HUMAN RESOURCE DIRECTOR Roseann Nagel Box 256, Courthouse, Gaylord, MN (507) Indefinite HUMAN SERVICES DIRECTOR Vicki Stock Box 237, Sibley Co. Service Center, Gaylord, MN (507) Indefinite INFORMATION SERVICES DIRECTOR Beth Wilson Box 231, Courthouse, Gaylord, MN (507) Indefinite MEDICAL EXAMINER Dr. A. Quinn Strobl MD Rhinestone Street NW, Ramsey, MN (763) January 2011 PUBLIC HEALTH DIRECTOR Alethea Freidrichs Box 166, Sibley Co. Service Center, Gaylord, MN (507) Indefinite PUBLIC WORKS DIRECTOR (COUNTY ENGINEER) Darin Mielke Box 897, Sibley Co. Service Center, Gaylord, MN (507) April 2014 TRI-COUNTY SOLID WASTE DIRECTOR Al Christensen Box 238, Courthouse, Gaylord, MN (507) Indefinite VETERANS SERVICE OFFICER Lisa Klenk Box 1061, Sibley Co. Service Center, Gaylord, MN (507) August

5 HOW YOUR PROPERTY TAXES ARE DETERMINED FINANCE PROPERTY Taxing Authorities Proposed Expenditure Budget (activity/function/program/service) ( ) Subtract Non Property Tax Revenue (aids/fees/grants/interest/fines/misc.) (=) Results Proposed Property Tax Revenue (Tax Levy) Assessor's Market Value (x) Multiplied By State Mandated Class Rates (=) Results Total "Tax Capacity" (f.k.a. assessed value) Proposed Property Tax Revenue (Tax Levy) (/) Divided By Total "Tax Capacity" (f.k.a. assessed value) (=) Results Property Tax Rate (a.k.a "Tax Capacity" Rate) YOUR PROPERTY TAX = Your Property's Market Value X Class Rate(s) X "Tax Capacity" Rate 5

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7 County of Sibley SPECIAL COUNTY BOARD MEETING 6:00 p.m., Tuesday, December 2, 2010 Proposed 2011 Budget/Levy Adopted Adopted Adopted Proposed 11 VS 10 Percent (%) Sibley County Budget/Levy INC/(DEC) INC/(DEC) Other Taxes $ 117,400 $ 105,900 $ 105,900 $ 130,500 24,600 Special Assessments 130, , , ,000 0 Licenses & Permits 55,720 56,320 31,300 33,500 2,200 Federal Grants 1,031,217 2,497,891 4,166,384 1,584,707 (2,581,677) Local Grants 4,374,930 3,979,594 5,377,964 4,723,074 (654,890) State Categorical Aid 1,086,225 1,433,018 1,368,226 1,508, ,925 Charges for Services 1,388,535 1,233,210 1,321,540 1,506, ,079 Fines & Forfeits 2,500 1,500 5,250 9,370 4,120 Interest on Investments 595, , , ,465 (82,389) Miscellaneous Revenue 405, , , ,598 76,683 Other Financing Sources 105,625-23, , ,500 Transfers from Other Funds 745, ,000 19,617 5,117 (14,500) Use of Fund Balance 1,174,614 1,415,151 1,100, ,379 (256,821) NON-TAX REVENUES: $ 11,213,431 $ 12,042,667 $ 14,440,850 $ 11,399,680 (3,041,170) % Personal Services $ 8,711,267 $ 9,018,276 $ 9,045,193 $ 9,159, , % Other Services & Charges 6,586,335 7,680,376 11,018,117 7,556,354 (3,461,763) % Supplies 1,494,266 1,676,304 1,411,102 1,282,604 (128,498) -9.11% Capital Expenses 1,818,733 1,622,686 1,051,918 1,186, , % Appropriations & Pass Through Funding 1,641,307 1,347,067 1,219,843 1,240,995 21, % Program Expenses 1,639,611 1,907,430 1,811,656 1,949, , % EXPENDITURES: $ 21,891,519 $ 23,252,139 $ 25,557,829 $ 22,375,206 (3,182,623) % PROPERTY TAX LEVY: $ 10,678,088 $ 11,209,472 $ 11,116,979 $ 10,975,526 (141,453) -1.27% COUNTY PROGRAM AID: $ 541,797 $ 668,019 $ 543,619 $ 420,708 (122,911) % NET PROPERTY TAX LEVY: $ 10,136,291 $ 10,541,453 $ 10,573,360 $ 10,554,818 (18,542) -0.18% 2008 December County Program Aid Unallotment $ - $ - $ 177,481 $ July/December County Program Aid Unallotment , July/December County Program Aid Unallotment ,593 COUNTY PROGRAM AID UNALLOTMENT: $ - $ - $ 310,758 $ 270,593 ADJUSTED NET PROPERTY TAX LEVY: $ 10,136,291 $ 10,541,453 $ 10,884,118 $ 10,825,411 (58,707) -0.54% Prepared by the Office of the Sibley County Auditor 12/2/2010 1:17 PM paper color: white 7

8 This page has been left blank intentionally. Note to Packet: Comparing the adopted 2010 $25,557,829 to the proposed 2011 $22,375,206 one may formulate the following: $3,179,388 decrease in Federal/State Aids 58,707 decrease in taxes 82,389 decrease in interest income 256,821 decrease in use of fund balance $3,577,305 Reconciled/Balanced by $ 185,079 increase in fees for services 209,603 increase in other revenue sources 3,182,623 decrease in spending $3,577,305 8

9 County of Sibley Estimated Market Value By Class of Property Source: County Assessor's Report to the Sibley County Board of Appeal and Equalization 2006 Assessment 2007 Assessment 2008 Assessment 2009 Assessment 2010 Assessment vs for for for for for Pay 10 Payable 2007 Payable 2008 Payable 2009 Payable 2010 Payable 2011 % of Inc/(Dec) Residential Homestead 509,682, ,341, ,840, ,057, ,866, % Res NHS, MHP & Apartments 73,937,241 78,970,072 80,804,315 83,160,600 73,999, % Mobile Home Park 332, , , , , % Apartments 8,872,600 9,311,000 9,115,800 9,350,200 13,855, % Commercial 30,520,600 32,115,800 33,526,500 34,419,400 37,413, % Industrial 15,242,200 22,736,700 22,442,500 25,387,600 25,217, % Agricultural - Productive 1,247,898,459 1,299,865,150 1,375,550,947 1,548,724,400 1,627,534, % Agricultural - Non Productive 44,937,000 44,763, % Seasonal Recreation 3,092,100 3,750,500 5,032,400 6,226,400 8,603, % EMV* 1,889,578,200 1,995,423,800 2,086,645,400 2,292,595,200 2,342,586, % amount of inc./(dec.) from prior year 229,370, ,845,600 91,221, ,949,800 49,991,200 % inc./(dec.) from prior year 13.82% 5.60% 4.57% 9.87% 2.18% *Data from County Assessor's Reports Sibley County Board of Appeal & Equalization - REAL ESTATE ONLY *Does Include New Construction *Does Not Include market values for personal property or utilities NEW CONSTRUCTION Source: County Assessor's Report to the Sibley County Board of Appeal and Equalization Residential Homestead 16,683,500 12,017,400 6,964,500 5,107,600 8,273,800 Res NHS, MHP & Apartments Mobile Home Park Apartments Commercial 305, ,500 1,397, ,600 3,383,800 Industrial 110,300 6,112, ,100 2,889,600 0 Agricultural 3,500,900 5,460,700 3,029,200 4,450,000 3,846,800 Seasonal Recreation 43, NEW CONSTRUCTION 20,643,900 24,546,300 11,593,000 12,729,800 15,504,400 % of Amount of Inc./(Dec.) in Total EMV 9.00% 23.19% 12.71% 6.18% 31.01% Pay 11 Sibley County Estimated Market Value (EMV) By Class of Property EMV Millions 2,000 1,500 1, Payable 2007 Payable 2008 Payable 2009 Payable 2010 Payable Residential Homestead Res NHS, MHP & Apartments Mobile Home Park Apartments Commercial Industrial Agricultural - Productive Class of Property Agricultural - Non Productive Seasonal Recreation S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 11/22/2010 2:36 PM paper color: white 9

10 County of Sibley INITIAL TAX CAPACITY RATE Payable 2007 Payable 2008 Payable 2009 Payable 2010 Payable 2011 TAX CAPACITY: FINAL FINAL FINAL FINAL Proposed Real Estate (830): *Values from Abstract Dated: 3/26/2009 *Values from Abstract Dated: 3/15/2010 *Values from Abstract Dated: 10/29/2010 AG (265) 8,923,060 9,502,413 9,762,637 12,015,015 12,498,588 NON-AG (820) 6,444,044 7,100,921 7,434,125 7,454,248 7,224,917 Sub-Total 15,367,104 16,603,334 17,196,762 19,469,263 19,723,505 Personal Property (1020) 586, , , , ,510 TOTAL TAX CAPACITY 15,953,588 17,095,197 17,683,896 19,949,238 20,330,015 TIF Capt. Tax Capacity (1040) (196,176) (185,037) (130,090) (134,308) (143,218) TOTAL NET TAX CAPACITY 15,757,412 16,910,160 17,553,806 19,814,930 20,186,797 % of NTC inc./(dec.) 12.76% 7.32% 3.81% 12.88% 1.88% Certified Levy 9,722,017 10,136,291 10,541,453 10,884,118 10,825,411 % of levy inc./(dec.) 7.02% 4.26% 4.00% 3.25% -0.54% Initial Tax Capacity Rate % % % % % % of initial tax rate inc./(dec.) -5.09% -2.85% 0.18% -8.53% -2.37% Disclaimers: The above two page report represents "county-wide" averages. Increases/(Decreases) to Estimated Market Value by Class of Property relative to a specific Taxing District and/or a specific Parcel may vary +/- from the "county-wide" average. S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 11/22/2010 2:36 PM paper color: white 10

11 Truth - In - Taxation Tax Capacity Rates Comparison County of Sibley (Authority 12) Final Taxes Payable Proposed Tax Rate If NO Levy Increase Proposed Taxes Payable 2011 Tax Tax Tax Capacity Capacity Capacity Real Est: (830) Ag (290/265) 12,015,015 12,498, % Non-Ag (820) 7,454,248 7,224, % Sub-Total 19,469,263 19,723, % Pers. Prop. (1020) 479, , % TOTAL TAX CAP 19,949,238 20,330, % TIF Capt. TC (1040) (134,308) (143,218) 6.63% TOTAL NET TAX CAP 19,814,930 20,186, % Certified Percent of Proposed Percent of Fund Levy Total Levy Levy Total Levy Levy County Revenue 5,733, % 5,778, % 0.79% Road & Bridge 3,168, % 3,022, % -4.61% Human Services 1,870, % 1,899, % 1.55% Sub-Total 10,773,179 10,701, % Debt Service 343, , % % of Inc./(Dec.) TOTAL 11,116, % 10,975, % -1.27% CPA CPA Fund Distribution Distribution Aid County Revenue 289, , % Public Works 159, , % Human Services 94,400 74, % Sub-Total 543, , % Debt Service - - TOTAL 543, , % CPA CPA Fund Unallotment Unallotment Aid County Revenue 165, , % Road & Bridge 91,405 76, % Human Services 53,963 48, % Sub-Total 310, , % Debt Service - - TOTAL 310, , % HRA Special Benefits Tax Levy (Authority 14) Certified Initial Tax Initial Tax Proposed Initial Tax Initial Fund Levy Capacity Rate Capacity Rate Levy Capacity Rate Levy Rate HRA Revenue (01) 118, % % 120, % 2.00% 0.12% County of Sibley Tax Levy (Authority 12) Levy after Initial Tax Initial Tax Levy after Initial Tax Initial Fund CPA Capacity Rate Capacity Rate CPA Capacity Rate Levy Rate Co. Revenue (01) 5,491, % % 5,577, % 1.56% -0.31% Road & Bridge (02) 3,100, % % 2,980, % -3.87% -5.65% Human Service (03) 1,830, % % 1,873, % 2.34% 0.45% Sub-Total 10,421,887, 10,430,366, 0.08% Debt Service (05) 343, % % 274, % % % Total 10,765, % % 10,704, % -0.57% -2.40% Total All Funds 10,884, % % 10,825, % -0.54% -2.37% % % % -2.37% % of Inc./(Dec.) Initial Rate % Proof Payable ,186,797 X % = 10,704, ,186,797 X % = 120, ,825, /6/2010 lkp Prepared by the Office of the Sibley County Auditor 12/2/2010 1:28 PM paper color: white S:\AUD\SHARED\Property Tax Administration OLD\Taxes\Levy Forms\Marilee's\County Levy - Current Year-mjp 11

12 Class Rate Percentages of Real and Personal Property by Property Type Taxes Payable 2010 and 2011 Payable 2010 Payable 2011 Class Real Property Description Class Rate Class Real Property Description Class Rate 1a Residential homestead 1a Residential homestead first $500, % first $500, % over $500, % over $500, % 1b Blind/Disabled homestead 1b Blind/Disabled homestead agricultural: agricultural: first $50, % first $50, % non-agricultural: non-agricultural: first $50, % first $50, % 1c Commercial seasonal - residential 1c Commercial seasonal - residential recreational - under 250 recreational - under 250 days and includes homestead days and includes homestead first $600, % first $600, % $600,000 to $2,300, % $600,000 to $2,300, % over $2,300, % * over $2,300, % * 1d Migrant housing (structures only) 1d Migrant housing (structures only) first $500, % first $500, % over $500, % over $500, % 2a Agricultural homestead 2a Agricultural homestead House, Garage, One Acre: House, Garage, One Acre: first $500, % first $500, % over $500, % over $500, % 12

13 Payable 2010 Payable 2011 Class Real Property Description Class Rate Class Real Property Description Class Rate 2a Remainder of Agricultural Homestead 2a Remainder of Agricultural Homestead classified as 2a - Productive Agricultural: classified as 2a - Productive Agricultural: first $1,010, % ** first $1,140, % ** over $1,010, % ** over $1,140, % ** 2b Remainder of Agricultural Homestead 2b Remainder of Agricultural Homestead classified as 2b - Rural Vacant: classified as 2b - Rural Vacant: first $1,010, % ** first $1,140, % ** over $1,010, % ** over $1,140, % ** 2a Non-homestead Property classifed as 1.00% ** 2a Non-homestead Property classifed as 1.00% ** 2a - Productive Agricultural: 2a - Productive Agricultural: 2a 2a Agricultural Non-Homestead Property 0.50% ** owned by Farming Entities with shareholders or members utilizing unused 1st tier Agricultural Homestead Value 2b Non-homestead Property classified as 1.00% ** 2b Non-homestead Property classified as 1.00% ** 2b - Rural Vacant: 2b - Rural Vacant: 2b 2b Rural Vacant Non-Homestead Property 0.50% ** owned by Farming Entities with shareholders or members utilizing unused 1st tier Agricultural Homestead Value 2c Managed Forest 0.65% ** 2c Managed Forest 0.65% ** 2d Private Airport 1.00% ** 2d Private Airport 1.00% ** 2e Unmined Commercial Aggregate Deposit 1.00% ** 2e Unmined Commercial Aggregate Deposit 1.00% ** 13

14 Payable 2010 Payable 2011 Class Real Property Description Class Rate Class Real Property Description Class Rate 3a Commercial-Industrial 3a Commercial-Industrial and public utility and public utility first $150, % * first $150, % * over $150, % * over $150, % * 3a Electric generating public utility 3a Electric generating public utility machinery 2.00% machinery 2.00% 3a All other public utility machinery 2.00% * 3a All other public utility machinery 2.00% * 3a Real property owned in fee by a utility for 3a Real property owned in fee by a utility for transmission line right-of-way 2.00% * transmission line right-of-way 2.00% * 3b Employment property 3b Employment property border city: border city: first $150, % * first $150, % * over $150, % * over $150, % * 4a Apartment (four or more units, including 4a Apartment (four or more units, including private for-profit hospitals) 1.25% private for-profit hospitals) 1.25% 4b(1) Residential non-homestead one to three units 4b(1) Residential non-homestead one to three units that does not qualify for class 4bb 1.25% that does not qualify for class 4bb 1.25% 4b(2) Unclassified manufactured homes 1.25% 4b(2) Unclassified manufactured homes 1.25% 4b(3) Farm non-homestead containing more than one 4b(3) Farm non-homestead containing more than one residence but fewer than four along with the residence but fewer than four along with the acre(s) and garage(s) 1.25% acre(s) and garage(s) 1.25% 4b(4) Residential non-homestead not containing a 1.25% 4b(4) Residential non-homestead not containing a 1.25% structure structure 4bb(1) Residential non-homestead single unit 4bb(1) Residential non-homestead single unit first $500, % first $500, % over $500, % over $500, % 14

15 Payable 2010 Payable 2011 Class Real Property Description Class Rate Class Real Property Description Class Rate 4bb(2) Single house, garage and 1st acre on ag 4bb(2) Single house, garage and 1st acre on ag non-homestead land non-homestead land first $500, % first $500, % over $500, % over $500, % 4c(1) Seasonal residential recreational 4c(1) Seasonal residential recreational commercial commercial first $500, % * first $500, % * over $500, % * over $500, % * non-commercial non-commercial first $500, % * ** first $500, % * ** over $500, % * ** over $500, % * ** 4c(2) Qualifying golf courses 1.25% 4c(2) Qualifying golf courses 1.25% 4c(3) Nonprofit community service 4c(3) Nonprofit community service oriented organization oriented organization (i) Non-Revenue 1.50% (i) Non-Revenue 1.50% (ii) Donations 1.50% * (ii) Donations 1.50% * 4c(4) Post secondary student housing 1.00% ** 4c(4) Post secondary student housing 1.00% ** 4c(5) Manufactured home parks 1.25% 4c(5)(i) Manufactured home park 1.25% 4c(5)(ii) Manufactured home park cooperative over 50% shareholder occupied 0.75% 50% or less shareholder occupied 1.00% 4c(6) Metro non-profit recreational property 1.25% 4c(6) Metro non-profit recreational property 1.25% 4c(7) Certain leased or privately owned non- 1.50% 4c(7) Certain leased or privately owned non- 1.50% commercial aircraft storage hangars commercial aircraft storage hangars (includes land) : on leased land (includes land) : on leased land 15

16 Payable 2010 Payable 2011 Class Real Property Description Class Rate Class Real Property Description Class Rate 4c(8) Certain leased or privately owned non- 1.50% 4c(8) Certain leased or privately owned non- 1.50% commercial aircraft storage hangars commercial aircraft storage hangars (includes land) : on private land (includes land) : on private land 4c(9) Bed and Breakfast up to 5 units 1.25% 4c(9) Bed and Breakfast up to 5 units 1.25% 4c(10) Seasonal Restaurant on a Lake 1.25% 4c(10) Seasonal Restaurant on a Lake 1.25% 4c(11) Qualifying Marinas: 4c(11) Qualifying Marinas: First $500, % First $500, % Over $500, % Over $500, % 4d Qualifying low income - land and buildings 0.75% 4d Qualifying low income - land and buildings 0.75% 5(1) Unmined or low recovery iron ore 2.00% * 5(1) Unmined or low recovery iron ore 2.00% * 5(2) All other property not 5(2) All other property not included in any other class 2.00% included in any other class 2.00% * State tax is applicable to these classifications NOTE: For purposes of the state general property tax only, the net tax capacity of non-commercial class 4c(1) seasonal residential recreational property has the following class rate structure: First $76, % $76,000 $500, % Over $500, % In addition to the state tax base exemptions referenced by property classification, airport property exempt from city and school district property taxes under M.S is exempt from the state general property tax (MSP International Airport and Holman Field in St.Paul are exempt under this provision). ** Exempt from referendum market value based taxes. 16

17 Examples Calculating Net Tax Capacity and Net Tax Capacity Tax T-IN-T Payable 2011 Sibley County s Net Tax Capacity Tax Rate = % Residential Homestead Residential Homestead (Class 1a) parcel with a taxable market value of $249,000. Net Tax Capacity = Taxable Market Value x Class Rate $249,000 x 1.00% = $2,490 Net Tax Capacity Tax = Net Tax Capacity x Tax Rate $2,490 x % = $1,335 Agricultural Homestead A 160-acre farm parcel (2a) has a taxable market value of $279,000. The house, garage and first acre have a value of $120,000. The remainder of the farm (Productive Ag.) is valued at $159,000. Net Tax Capacity = Taxable Market Value x Class Rate HGA: $120,000 x 1.00% = $1,200 Remainder of farm: $159,000 x 0.50% = $795 Total Net Tax Capacity = $1,200 + $795 = $1,995 Net Tax Capacity Tax = Net Tax Capacity x Tax Rate $1,995 x % = $1,070 Commercial A commercial (Class 3a) parcel with a taxable market value of $352,000. Net Tax Capacity = Taxable Market Value x Class Rate $150,000 x 1.50% = $2,250 $202,000 x 2.00% = $4,040 Total Net Tax Capacity = $6,290 Net Tax Capacity Tax = Net Tax Capacity x Tax Rate $6,290 x % = $3,373 17

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19 County of Sibley Comparison of County Tax by Property Type County SCMMCHRA (Amberfield Housing Project) Payable 2004 Payable 2005 Payable 2006 Payable 2007 Payable 2008 Payable 2009 Payable 2010 Payable 2011 Proposed Rate Rate Rate Rate Rate Rate Rate Rate % % % % % % % % % % % % % % % % % % % % % % % % 1.46% 4.82% 5.09% 2.85% 0.18% 8.53% 2.37% Class Description Estimated Market Value Tax Capacity Tax Tax Tax Tax Tax Tax Tax Tax Residential Homestead 50, , ,000 1, ,000 1, ,000 1,500 1,040 1, ,000 1,750 1,213 1,195 1,138 1,080 1,049 1, ,000 2,000 1,386 1,366 1,300 1,234 1,199 1,201 1,099 1, ,000 2,250 1,560 1,537 1,463 1,388 1,349 1,351 1,236 1, ,000 2,500 1,733 1,707 1,625 1,542 1,499 1,501 1,373 1, ,000 2,750 1,906 1,878 1,788 1,697 1,648 1,651 1,511 1, ,000 3,000 2,079 2,049 1,950 1,851 1,798 1,802 1,648 1,609 Agricultural Homestead 100, (Productive Ag Value Only) 200,000 1, Add Residential Homestead value 300,000 1,500 1,040 1, from above to get Total Tax 400,000 2,000 1,386 1,366 1,300 1,234 1,199 1,201 1,099 1, ,000 2,500 1,733 1,707 1,625 1,542 1,499 1,501 1,373 1, ,000 3,000 2,079 2,049 1,950 1,851 1,798 1,802 1,648 1, ,000 3,500 2,426 2,390 2,275 2,159 2,098 2,102 1,923 1, ,000 4,000 2,772 2,732 2,600 2,468 2,398 2,402 2,197 2, , ,500 3,119 3,073 2,925 2,776 2,697 2,702 2,472 2,413 1,000,000 5,000 3,466 3,415 3,250 3,085 2,997 3,003 2,746 2,681 Agricultural Non Homestead 100,000 1, (Productive Ag Value Only) 200,000 2,000 1,386 1,366 1,300 1,234 1,199 1,201 1,099 1, ,000 3,000 2,079 2,049 1,950 1,851 1,798 1,802 1,648 1, ,000 4,000 2,772 2,732 2,600 2,468 2,398 2,402 2,197 2, ,000 5,000 3,466 3,415 3,250 3,085 2,997 3,003 2,746 2, ,000 6,000 4,159 4,098 3,900 3,702 3,597 3,603 3,296 3, ,000 7,000 4,852 4,781 4,550 4,319 4,196 4,204 3,845 3, ,000 8,000 5,545 5,464 5,201 4,936 4,795 4,804 4,394 4, ,000 9,000 6,238 6,147 5,851 5,553 5,395 5,405 4,944 4,826 1,000,000 10,000 6,931 6,830 6,501 6,170 5,994 6,005 5,493 5,363 Commercial/Industrial 100,000 1,500 1,040 1, ,000 2,250 1,560 1,537 1,463 1,388 1,349 1,351 1,236 1, ,000 3,250 2,253 2,220 2,113 2,005 1,948 1,952 1,785 1, ,000 4,250 2,946 2,903 2,763 2,622 2,548 2,552 2,334 2, ,000 5,250 3,639 3,586 3,413 3,239 3,147 3,153 2,884 2, ,000 7,250 5,025 4,952 4,713 4,473 4,346 4,354 3,982 3, ,000 9,250 6,411 6,317 6,013 5,707 5,545 5,555 5,081 4, ,000 11,250 7,798 7,683 7,313 6,941 6,743 6,756 6,180 6, ,000 13,250 9,184 9,049 8,613 8,175 7,942 7,957 7,278 7, ,000 15,250 10,570 10,415 9,914 9,409 9,141 9,158 8,377 8, ,000 17,250 11,956 11,781 11,214 10,643 10,340 10,359 9,475 9,251 1,000,000 19,250 13,343 13,147 12,514 11,877 11,539 11,560 10,574 10,323 S:\AUD\SHARED\Finance Administration\Budget\2011\TNT\TNT 2011 Packet Comparison of County Tax by Property Type Prepared by the Office of the Sibley County Auditor 12/2/2010 1:40 PM paper color: white 19

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21 COMPARISON OF SIBLEY COUNTY'S TAX CAPACITY FOR PAYABLE 2010 TO 2011 FINAL PAYABLE 2010 PROPOSED PAYABLE 2011 Total TIF Adjusted Total TIF Adjusted Net Net Net Net Net Net Tax Tax Tax Tax Tax Tax Percent NAME Capacity Capacity Capacity Capacity Capacity Capacity Change ARLINGTON CITY OF 1,006,197 37, ,235 1,015,493 1,015, % GAYLORD CITY OF 1,131,739 88,314 1,043,425 1,089, , , % GIBBON CITY OF 289,586 5, , ,140 5, , % GREEN ISLE CITY OF 390, , , , % HENDERSON CITY OF 503,215 2, , ,307 2, , % NEW AUBURN CITY OF 183, , , , % WINTHROP CITY OF 880, , , , % Cities Total 4,385, ,308 4,251,594 4,301, ,218 4,158, % ALFSBORG TOWN OF 1,004,919 1,004,919 1,036,458 1,036, % ARLINGTON TOWN OF 1,051,208 1,051,208 1,068,917 1,068, % BISMARCK TOWN OF 975, ,049 1,009,986 1,009, % CORNISH TOWN OF 940, , , , % DRYDEN TOWN OF 772, , , , % FAXON TOWN OF 1,023,462 1,023,462 1,060,822 1,060, % GRAFTON TOWN OF 966, ,218 1,004,344 1,004, % GREEN ISLE TOWN OF 963, , , , % HENDERSON TOWN OF 976, , , , % JESSENLAND TOWN OF 902, , , , % KELSO TOWN OF 930, , , , % MOLTKE TOWN OF 907, , , , % NEW AUBURN TOWN OF 699, , , , % SEVERANCE TOWN OF 785, , , , % SIBLEY TOWN OF 870, , , , % TRANSIT TOWN OF 821, , , , % WASHINGTON LAKE TOWN OF 973, ,018 1,039,727 1,039, % Townships Total 15,563,336-15,563,336 16,028,340-16,028, % SIBLEY COUNTY Total 19,949, ,308 19,814,930 20,330, ,218 20,186, % Prepared by the Office of the Sibley County Auditor 12/2/2010 1:42 PM paper color: white S:\AUD\SHARED\Finance Administration\Budget\2011\TNT\TNT 2011 Comparison of Sibley County's Tax Capacity 21

22 COMPARISON OF TAX LEVIES BY TAXING AUTHORITIES FOR TAXES PAYABLE 2010 TO 2011 NET TAX CAPACITY MARKET VALUE 2010 FINAL 2011 PROPOSED Percent 2010 FINAL 2011 PROPOSED Percent NAME LEVY LEVY Change LEVY LEVY Change SIBLEY COUNTY 10,884,118 10,825, % County Government Total 10,884,118 10,825, % ARLINGTON CITY OF 740, , % GAYLORD CITY OF 737,125 1,018, % GIBBON CITY OF 365, , % GREEN ISLE CITY OF 462, , % HENDERSON CITY OF 649, , % NEW AUBURN CITY OF 190, , % WINTHROP CITY OF 531, , % Cities Total 3,676,126 4,121, % ALFSBORG TOWN OF 97, , % ARLINGTON TOWN OF 162, , % BISMARCK TOWN OF 130, , % CORNISH TOWN OF 95, , % DRYDEN TOWN OF 68,900 89, % FAXON TOWN OF 80,483 87, % GRAFTON TOWN OF 165, , % GREEN ISLE TOWN OF 140, , % HENDERSON TOWN OF 171, , % JESSENLAND TOWN OF 112, , % KELSO TOWN OF 95,000 95, % MOLTKE TOWN OF 116, , % NEW AUBURN TOWN OF 155, , % SEVERANCE TOWN OF 76,500 75, % SIBLEY TOWN OF 95, , % TRANSIT TOWN OF 101, , % WASHINGTON LAKE TOWN OF 167, , % Townships Total 2,030,692 2,160, % IND SCHOOL DIST , , % 649, , % IND SCHOOL DIST ,220,813 1,221, % 426, , % School Districts Total 1,871,081 1,896, % 1,076, , % BUFFALO CREEK WATERSHED 2,447 2, % HIGH ISLAND WATERSHED 80,416 78, % REGION NINE 33,605 36, % Special Taxing Districts Total 116, , % Total 18,578,485 19,122, % 1,076, , % Prepared by the Office of the Sibley County Auditor 12/3/2010 1:17 PM paper color: white S:\AUD\SHARED\Finance Administration\Budget\2011\TNT\TNT Packet Pages\TNT 2011 Comparison of Tax Levies by Taxing Authorities 22

23 ** Proposed** SIBLEY COUNTY 2011 TAX EXTENSION RATES STATE MKT MKT 2011 STATE SPECIAL T.D. MULTI LOCAL VALUE LOCAL VALUE SRR C/I CODE DISTRICT TWP/CITY SCHOOL COUNTY WTRSHD REG. 9 CO HRA TAX RATE RATE TAX RATE RATE TAX RATE TAX RATE 801 Alfsborg 2310 (732) Alfsborg Arlington Arlington HI Arlington 2310 (732) parcels and valuations transferred to Code Arlington 2310 (732) - HI parcels and valuations transferred to Code Arlington HI Bismarck Bismarck HI Cornish Dryden Dryden HI Dryden 2310 (732) parcels and valuations transferred to Code Dryden 2310 (732) - HI parcels and valuations transferred to Code Faxon Faxon Grafton 2159 (Old 2887) - HI Grafton Grafton HI Grafton BC Grafton HI Green Isle Green Isle HI Green Isle BC Green Isle Green Isle HI Green Isle BC Henderson Henderson 2397 (393) Henderson HI Henderson 2397 (393) - LS/Exempt Jessenland Jessenland HI Jessenland Jessenland HI Kelso Kelso Kelso HI Kelso 2310 (732) parcels and valuations transferred to Code Kelso 2397 (393) Moltke Moltke HI New Auburn HI New Auburn BC New Auburn HI New Auburn 2310 (732) New Auburn 2310 (732) - HI parcels and valuations transferred to Code Severance Sibley 2310 (732) Transit 2310 (732) Transit 2310 (732) - HI Transit Transit HI Washington Lake 108 (FD #2) Washington Lake 716 (FD #1) Washington Lake 2310 (FD #1) Washington Lake HI (FD #1) Washington Lake 2397 (FD #1) Washington Lake 716 (FD#2) Washington Lake 2310 (FD #2) Washington Lake 2310 (FD #1) Washington Lake 2397 (FD #1) Arlington City HI Arlington RSD HI Arlington Annex HI Gaylord City 2310 (732) Gaylord City Annex Gibbon City Gibbon RSD Green Isle City Green Isle RSD Henderson City New Auburn City HI Frauendienst Annex 2859 HI Winthrop City Winthrop RSD S:\AUD\SHARED\Property Tax Administration OLD\Taxes\TAX EXTENSION RATES\2011 TAX EXTENSION RATES - Proposed Prepared by the Office of the Sibley County Auditor 11/6/ :30PM.. lkp 23

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25 Examples Comprehensive Tax Calculations T-IN-T Payable 2011 For All Examples: Unique Taxing Area = District 1505 County Net Tax Capacity Rate % + Township (City) Rate % + School District Rate % + Special Taxing District Rate % = Total Net Tax Capacity Tax Rate (Local Tax Rate) % Total Referendum Market Value Rate.15313% State Tax Rate % (C/I Rate = % & SRR Rate = %) Basic Formula for Calculating Net Tax: Local NTC Tax Credits + Ref. MV Tax + State Tax = Net Tax Residential Homestead Residential Homestead (Class 1a) parcel with a taxable market value of $249,000. Net Tax Capacity = Taxable Market Value x Class Rate $249,000 x 1.00% = $2,490 Local NTC Tax Net Tax Capacity Tax = Net Tax Capacity x Local Tax Rate $2,490 x % = $1,931 ($1,335 is County Tax) Credits Residential Homestead Credit = Base Credit Credit Reduction Base credit: $76,000 x 0.4% = $304 Credit reduction: ($249,000 - $76,000) x 0.09% = $156 Final credit: $304 - $156 = $148 Referendum Market Value Tax Referendum Market Value Tax = RMV X RMV Tax Rate Referendum Market Value = $249,000 Referendum Market Value Tax = $249,000 x % = $381 State Tax State Tax = State Net Tax Capacity X State Tax Rate State Net Tax Capacity = $0 State Tax = $0 (Not Subject to State Tax) Net Tax = $1,931 - $148 + $381 + $0 = $2,164 25

26 Examples Comprehensive Tax Calculations T-IN-T Payable 2011 For All Examples: Unique Taxing Area = District 1505 County Net Tax Capacity Rate % + Township (City) Rate % + School District Rate % + Special Taxing District Rate % = Total Net Tax Capacity Tax Rate (Local Tax Rate) % Total Referendum Market Value Rate.15313% State Tax Rate % (C/I Rate = % & SRR Rate = %) Basic Formula for Calculating Net Tax: Local NTC Tax Credits + Ref. MV Tax + State Tax = Net Tax Agricultural Homestead A 160-acre farm parcel (2a) has a taxable market value of $279,000. The house, garage and first acre have a value of $120,000. The remainder of the farm (Productive Ag.) is valued at $159,000. Net Tax Capacity = Taxable Market Value x Class Rate HGA: $120,000 x 1.00% = $1,200 Remainder of farm: $159,000 x 0.50% = $795 Total Net Tax Capacity = $1,200 + $795 = $1,995 Local NTC Tax Net Tax Capacity Tax = Net Tax Capacity x Local Tax Rate $1,995 x % = $1,547 ($1,070 is County Tax) Credits Residential Homestead Credit = Base Credit Credit Reduction Base credit: $76,000 x 0.4% = $304 Credit reduction: ($120,000 - $76,000) x 0.09% = $40 Final credit: $304 - $40 = $264 Agricultural Homestead Credit = Base Credit Credit Reduction Base credit: $115,000 x 0.3% = $345 Credit reduction: ($159,000 - $115,000) x 0.05% = $22 Final credit: $345 - $22 = $323 Referendum Market Value Tax Referendum Market Value Tax = Referendum Market Value X RMV tax rate Referendum Market Value = $120,000 Referendum Market Value Tax = $120,000 x % = $184 State Tax State Tax = State Net Tax Capacity X State Tax Rate State Net Tax Capacity = $0 State Tax = $0 (Not Subject to State Tax) Net Tax = $1,547 - $264 - $323 + $184 + $0 = $1,144 26

27 Examples Comprehensive Tax Calculations T-IN-T Payable 2011 For All Examples: Unique Taxing Area = District 1505 County Net Tax Capacity Rate % + Township (City) Rate % + School District Rate % + Special Taxing District Rate % = Total Net Tax Capacity Tax Rate (Local Tax Rate) % Total Referendum Market Value Rate.15313% State Tax Rate % (C/I Rate = % & SRR Rate = %) Basic Formula for Calculating Net Tax: Local NTC Tax Credits + Ref. MV Tax + State Tax = Net Tax Commercial A commercial (Class 3a) parcel with a taxable market value of $352,000. Net Tax Capacity = Taxable Market Value x Class Rate $150,000 x 1.50% = $2,250 $202,000 x 2.00% = $4,040 Total Net Tax Capacity = $6,290 Local NTC Tax Net Tax Capacity Tax = Net Tax Capacity x Local Tax Rate $6,290 x % = $4,877 ($3,373 is County Tax) Credits This property receives no credits. Referendum Market Value Tax Referendum Market Value Tax = Referendum Market Value X RMV tax rate Referendum Market Value = $352,000 Referendum Market Value Tax = $352,000 x % = $539 State Tax State Tax = State Net Tax Capacity X State Tax Rate State Net Tax Capacity = $6,290 State Tax = $6,290 x % = $3,145 Net Tax = $4, $539 + $3,145 = $8,561 27

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29 Fourteen Reasons Why Property taxes vary from year to year The Market Value of a Property may change. Each parcel of property is assessed at least once every five years and a sales ratio study is done to determine if the property is assessed similarly to like properties. If not, the Commissioner of Revenue may issue an order that would affect the taxable value of a parcel. Additions and improvement made to a property generally increases its market value. The Market value of other properties in your taxing district may change, shifting taxes from one property to another. If the market value of a property increases more or less than the average increase or decrease in a taxing district, the taxes on that property will also change. New construction in a taxing district increases the tax base and will affect the district s tax rate. The State General Property Tax may change. The state legislature directly applies a State General Property Tax to commercial/industrial and season/recreational property classes. A publication of the Association of Minnesota Counties A publication of the Association of Minnesota Counties 29

30 The City budget and levy may change. Each year, cities review the needs and wants of their citizens and how to meet those needs and wants. This is called discretionary spending in the city budget. Also included in the budget is non-discretionary spending which is required by state and federal mandates and court decisions and orders. The township budget and levy may change. Each March, townships set the levy and budget for the next year. The County budget and levy may change. Each year, counties review the needs and wants of their citizens and how to meet those discretionary needs and wants. In addition, also included in the county budget is nondiscretionary spending which is required by state and federal mandates and court decisions and orders. As much as sixty to eighty-five percent of the county expenditures are used to deliver mandated services. The School district s budget and levy may change. The Legislature determines basic funding levels for K-12 education and mandates services that schools must perform. On average, approximately seventy percent of school costs are paid by the state. Local school districts set levies for purposes including safe school and community education, etc. A special district s budget and levy may change. Special districts such as the Metropolitan Council, hospital districts, watershed districts, drainage districts, etc. set levies to balance their budgets. Special Assessments may be added to your property tax bill. Water lines, curb and gutter, and street improvements that directly benefit your property may be funded, in whole or in part, through a special assessment that is added to your tax bill. A publication of the Association of Minnesota Counties 30

31 Voters may have approved a School, City/ Township, County, or special District referendum. Local referendums may be held for local government construction projects, excess operating levies for schools or many other purposes. Referendum levies may be spread on the market value or the tax capacity of a property depending on process and type of referendum levy. Federal and state mandates may have changed. Both the state and federal governments require local governments to provide certain services and follow certain rules. These mandates often require an increase in the cost and level of service delivery. Aid and revenue from the state and federal governments may have changed. Each year the state legislature reviews and adjusts the level of funding for a variety of aids provided to local governments including Local Government Aid and County Program Aid. The formulas for how aid is determined and distributed among local governments may have changed. While direct aid and revenue from the federal government to local governments has declined greatly in recent years, federal revenue continues to be a key portion of the local government revenue stream and that revenue stream may have changed. The state legislature may have changed the portion of the tax base paid by different types of properties. A change in class rates will require a change in the tax rate to raise the same amount of money. Other state law changes may adjust the tax base. Fiscal disparities, personal property taxes on utility properties, limited market value, and tax increment financing are example of laws that affect property taxes. A publication of the Association of Minnesota Counties 31

32 Glossary of Terms Categorical Aid: Aid given to a local unit of government to be used only for a specific purpose. Circuit Breaker: See Property Tax Refund. Class Rates: The percent of market value set by state law that establishes the property s tax capacity subject to the property tax. County Program Aid: State property tax relief aid to counties, distributed with a formula based on needs (households on foodstamps, age of the population, number of serious crimes) and tax base equalization for counties with smaller tax bases. Education Aid: The total amount of state dollars paid for K-12 education. This aid is paid to the school districts. Fiscal Disparities: A program in the Twin Cities metropolitan area and on the iron range in which a portion of the commercial and industrial property value of each city and township is contributed to a tax base sharing pool. Each city and township then receives a distribution of property value from the pool based on market value and population in each city. General Purpose Aid: Aid given to units of government to be used at their own discretion. Examples are Local Government Aid and County Program Aid. Highway Aid: Motor fuels tax and license tab money the state distributes to counties, cities and townships for highways and bridges. Homestead: A residence occupied by the owner. Individual Income Tax: A state tax on the income of residents and non-residents with Minnesota sources of income that is deposited into the state general fund. Levy: The imposition of a tax, associated with the property tax. Levy Limit: The amount a local unit of government is permitted to levy for specific services under state law. Limited Market Value: A state imposed limit on property value increases for the purpose of calculating property taxes. Local Government Aid (LGA): A state government revenue sharing program for cities with low property wealth or high service burdens that is intended to provide an alternative to the property tax. Local sales tax: A local tax, authorized by the state, levied on the sale of goods and services to be used for specific purposes by the local government. Local Tax Rate: The tax rate usually expressed as a percentage of tax capacity, used to determine the property tax due on a property. Market Value: An assessor s estimate of what property would be worth if it were sold. Market Value Agriculture Credit: A state credit to reduce the property tax paid by agricultural homesteads to the local taxing jurisdiction. Market Value Homestead Credit: A state credit to reduce the property tax paid by a residential homestead to the local taxing jurisdiction. Property Tax: A tax levied on any kind of property. Property Tax Refund: A partial property tax refund program for those who have property taxes out of proportion with their income. This program is available to homeowners and renters. Sales Ratio Study: A study conducted by the Department of Revenue of open market property sales, which is then compared to local assessments to ensure that local assessments adequately reflect the market. State General Property Tax: A state-imposed property tax on commercial, industrial, and seasonal recreational properties. State Sales Tax: A state tax (6.5%) levied on the sale of goods and services that is deposited into the state general fund. Tax Capacity: The valuation of property based on market value and class rates, on which property taxes are determined. Revised July 2008 Association of Minnesota Counties 125 Charles Avenue Saint Paul, MN Main Line/Switchboard: Fax:

33 County Budget Overview A publication of the Association of Minnesota Counties by Jim Culotta, Research Assistant, National Association of Counties (NACo); Edited by Association of Minnesota Counties (AMC) The budget is one of the most important documents a county government prepares because it identifies the services to be provided and how they are to be financed. Almost every decision, activity and program in a county government can be expressed in the financial language of the budget. To fully understand county budgets, it is essential to know the critical parts of the budget document, the primary budget players, the budget process, the different types of budgets, and how the budget is a tool for governing. Critical Parts of a County Budget Operating Budget The operating budget section is usually the longest of the budget document. This section outlines the operational and spending plans for county government agencies and programs. The operating budget is an aggregation of the individual budgets of each department and agency. Information on the mission, staffing levels, performance objectives and indicators, expenditure levels, and possibly even financing sources, are presented for each county department and agency. Financial Summaries The financial summary section of a county budget summarizes information contained in the operating detail section. At a minimum, most financial summaries present a consolidated budget summary, cross-classify financial data, and present information on revenues, indebtedness, and capital spending. The Budget Process The budget process is nearly as important as the budget itself. The process determines whose opinions will be solicited and how they will be weighed. The period for which a budget is authorized typically spans a fiscal year that may correspond to a calendar year or to some other twelve-month period. Budgeting is a yearlong process that consists of four phases: preparation, adoption, implementation and evaluation. Below is a typical budget process. Date June June/July activity Distribute instructions and forms for the next fiscal year to department managers for proposed capital improvements. Deadline for submission of capital improvements proposed by departments. Planning Department begins preparation of budget for capital improvement plan. Distribute operating budget request forms to department managers. Managers prepare department budgets. Begin study of capital improvements program. Capital Budget A capital budget is the appropriation of bonds or operating revenue for improvements to facilities and other infrastructure. A capital project is the acquisition or construction of fixed assets, which are of a long-term and permanent nature. Examples include land, buildings, streets and highways, bridges, sewers, and parks. July/August September Complete preliminary revenue estimates, based on current year s experience. Managers submit departmental budget requests, which are reviewed for accuracy and adherence to guidelines. Conduct meetings with department managers. Submit preliminary levy to the state. Note: the final levy cannot be higher than this amount. Primary Budget Players County Commission: The ultimate holder of the purse strings. Makes and approves all budgetary changes. Chief Financial Officer (CFO): The primary architect of the budget. Provides options and recommendations to County Commission. This may be the County Administrator or Coordinator, Auditor, Financial Manager or other individual given this responsibility by the board. Central budget office/finance office: The CFO s main tool in preparing the budget for consideration and coordinating its implementation. Performs analyses and makes projections of revenues, expenditures and trends. This function can be performed in many offices. Department officials: The day-to-day managers of county programs and services. October November December Prepare revenue estimates based on current year expenditures. Complete preliminary budget, including staff recommendations. Submit budget to County Commission for approval. Conduct Truth in Budgeting Hearing. County Commission finalizes budget decisions and adopts budget. January January-December New fiscal year begins. Adopted budget implemented, annual financial reports are prepared, external auditor hired and budget review conducted. Financial audit completed and submitted to the state auditor. Adopted budget is implemented, monitored and evaluated. 33

34 Major Types of Budgets Line-Item Budget: Focus is on financial accountability. Control oriented. Departmental outlays are grouped according to the items that will be purchased, with one item or group of items on each line (e.g. salaries and wages, contract services, supplies and equipment). Predominant form of budgeting because it is easiest to prepare and implement. Performance Budget: Focus is on improving service delivery. Output oriented. Budget becomes a work contract between departments and commission based on desired service levels. Workload measures help justify the budget; cost and output measures help evaluate whether service delivery is efficient and economical; and outcome measures reveal to what extent programs are achieving their goals. Program Budget: Focus is on goal attainment or effectiveness. Outcome oriented. Organizes budgetary information into a set of organized activities directed to particular goals. Funds are allocated along program rather than departmental lines. In pure form, depends heavily on analytical techniques (e.g. costbenefit analysis) to determine best allocation of resources. Zero Base Budget: Focus is on cost efficiency of services. Priority ranking oriented. Departments divide their activities into discrete services called decision units. Decision units area considered at various funding levels called decision packages (elimination, minimum, current and enhancements) and rank ordered. Departmental rankings are merged across the whole governmental unit to form a single, ranked list and final resource allocations are assigned. Target Base Budget: Focus is on limiting expenditures. Justification oriented. Revenue projections are done and a proportion is set aside for discretionary budget decisions. The remainder of the budget is allocated to departments based on historical share. Departments submit budgets showing spending plans for target base budget. Departments also submit requests that justify the need for enhancement packages, which are funded out of the discretionary set aside. Typically used in budget cutting situations. The Budget: A Tool for Governing Policy Making Tool: All budgets reflect decisions about a variety of policy issues. Ignoring the policy dimensions of budgeting may result in poor policy decisions by default. (For example, failure to allocate funds for ADA renovations could allow outdated policies to remain in effect.) The budget format, presentation, and even wording of a document all influence the making of public policy. A budget that explicitly reveals trade-offs can help ensure the making of policy rather than the obscuring of policy is the primary focus. Planning and Management Tool: A budget is a plan of financial activity for a specified period of time (either a fiscal year or biennium) indicating all planned revenues and expenses for the budget period. It provides a mechanism to allocate resources for the pursuit of community goals. Budgeting helps policy makers set goals, and assists program managers and department heads in improving organizational performance. Communication Tool: The budget is a concise way for decision makers to communicate changes in priorities and rationale for decisions made. The budget document and process can be an effective tool in helping citizens understand the need for change and the reasons behind policy and political decisions. A budget also provides a means of establishing public accountability by offering residents a clear statement of how tax money is spent and proof that county finances are in good shape. Sources and Additional References Berman, David R., State-Local Relations: Devolution, Mandates and Money in The Municipal Year Book 1997 (Washington, DC: International City Management Association, 1997) Petersen, John E. and Stachota, Dennis R., Local Government Finance (Chicago, IL: Government Finance Officers Association of the United States and Canada, 1991) U.S. Advisory Commission on Intergovernmental Relations, State Laws Governing Local Government Structure and Administration, March 1993 (Washington DC: United States Government Printing Office, 1993) Revised July 2002 Association of Minnesota Counties 125 Charles Avenue Saint Paul, MN Main Line/Switchboard: Fax: A publication of the Association of Minnesota Counties 34

35 Proposed 2011 PROPERTY TAX LEVY AND CPA DISTRIBUTION Proposed 2011 Property Tax Levy & County Program Aid (CPA) Distribution Adopted 2010 Property Tax Levy & County Program Aid (CPA) Distribution Total Total Adopted 2009 Property Tax Levy & County Program Aid (CPA) Distribution All Levy Adopted 2008 Property Tax Levy & County Program Aid (CPA) Distribution Funds County Fund Payable Proposed Proposed CPA Net CPA Adjusted Net % of % of Year Revenue Amt of % of Expenditure Amt of % of Property Amt of % of % of Amt of Property Amt of % of Amt of Property Amt of % of Inc./(Dec.) Inc./(Dec.) Budget Inc./(Dec.) Inc./(Dec.) Budget Inc./(Dec.) Inc./(Dec.) Tax Levy Inc./(Dec.) Inc./(Dec.) Tax Levy Distribution Tax Levy Inc./(Dec.) Inc./(Dec.) Unallotment Tax Levy Inc./(Dec.) Inc./(Dec.) 2011 $ 3,741,822 $ (52,337) -1.38% $ 9,520,805 $ (6,977) -0.07% $ 5,778,983 $ 45, % 54.00% $ 227,194 $ 5,551,789 $ 107, % $ 146,128 $ 5,697,917 $ 88, % % 0.81% 2010 $ 3,794,159 $ (190,932) -4.79% $ 9,527,782 $ (107,716) -1.12% $ 5,733,623 $ 83, % 53.22% $ 289,321 $ 5,444,302 $ 147, % $ 165,389 $ 5,609,691 $ 312, % 91.19% 2.96% 2009 $ 3,985,091 $ (535,350) % $ 9,635,498 $ (199,837) -2.03% $ 5,650,407 $ 335, % 52.87% $ 353,182 $ 5,297,225 $ 265, % $ 5,297,225 $ 265, % 65.56% 2.62% General Revenue 2008 $ 4,520,441 $ 9,835,335 $ 5,314, % $ 283,275 $ 5,031,619 $ 5,031, $ 5,324,384 $ (3,088,813) % $ 8,346,958 $ (3,235,025) % $ 3,022,574 $ (146,212) -4.61% 28.24% $ 118,829 $ 2,903,745 $ (105,143) -3.49% $ 76,429 2,980, $ 8,413,197 $ 2,941, % $ 11,581,983 $ 2,845, % $ 3,168,786 $ (95,048) -2.91% 29.41% $ 159,898 $ 3,008,888 $ (50,938) -1.66% $ 91,405 3,100, $ 5,472,155 $ 836, % $ 8,735,989 $ 1,189, % $ 3,263,834 $ 352, % 30.54% $ 204,008 $ 3,059,826 $ 303, % 3,059,826 Public Works 2008 $ 4,635,749 $ 7,546,729 $ 2,910, % $ 155,150 $ 2,755,830 $ 2,755, $ 2,333,474 $ 99, % $ 4,233,198 $ 128, % $ 1,899,724 $ 28, % 17.75% $ 74,685 $ 1,825,039 $ 48, % $ 48,036 1,873, $ 2,233,494 $ (351,927) % $ 4,104,264 $ (254,258) -5.83% $ 1,870,770 $ 97, % 17.37% $ 94,400 $ 1,776,370 $ 114, % $ 53,963 1,830, $ 2,585,421 $ 528, % $ 4,358,522 $ 361, % $ 1,773,101 $ (166,383) -8.58% 16.59% $ 110,829 $ 1,662,272 $ (173,840) -9.47% 1,662,272 Human Services 2008 $ 2,057,241 $ 3,996,725 $ 1,939, % $ 103,371 $ 1,836,113 $ 1,836, $ 11,399,680 $ 22,100,961 $ 10,701, % $ 420,708 $ 10,280,573 $ 270,593 $ 10,551, $ 14,440,850 $ 25,214,029 $ 10,773, % $ 543,619 $ 10,229,560 $ 310,758 $ 10,540, $ 12,042,667 $ 22,730,009 $ 10,687, % $ 668,019 $ 10,019,323 $ - $ 10,019,323 Sub-Total: 2008 $ 11,213,431 $ 21,378,789 $ 10,165, % $ 541,797 $ 9,623,561 $ - $ 9,623, $ - $ - #DIV/0! $ 274,245 $ (69,555) % $ 274,245 $ (69,555) % $ 274,245 $ (69,555) % 274, $ - $ - #DIV/0! $ 343,800 $ (178,330) % $ 343,800 $ (178,330) % $ 343,800 $ (178,330) % 343, $ - $ - #DIV/0! $ 522,130 $ 9, % $ 522,130 $ 9, % $ 522,130 $ 9, % 522,130 Debt Service 2008 $ - $ 512,730 $ 512,730 $ 512,730 $ 512, $ 11,399,680 $ (3,041,170) % $ 22,375,206 $ (3,182,623) % $ 10,975,526 $ (141,453) -1.27% $ 420,708 $ 10,554,818 $ (18,542) -0.18% $ 270,593 10,825, $ 14,440,850 $ 2,398, % $ 25,557,829 $ 2,305, % $ 11,116,979 $ (92,493) -0.83% $ 543,619 $ 10,573,360 $ 31, % $ 310,758 10,884, $ 12,042,667 $ 829, % $ 23,252,139 $ 1,360, % $ 11,209,472 $ 531, % $ 668,019 $ 10,541,453 $ 405, % N/A 10,541,453 Total All Funds 2008 $ 11,213,431 $ 21,891,519 $ 10,678,088 $ 541,797 $ 10,136,291 N/A $ 10,136,291 $ $ (120,119) -3.87% % -1.10% $ $ 40, % 11.81% 0.38% $ $ 303, % 75.03% 3.00% $ $ 42, % % 0.39% $ $ 168, % 49.05% 1.59% $ $ (173,840) -9.47% % -1.72% $ $ (69,555) % % $ $ (178,330) % % $ $ 9, % % $ $ (58,707) -0.54% % -0.54% $ $ 342, % % 3.25% $ $ 405, % % 4.00% S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Property Tax Levy and County Program Aid Distribution Prepared by the Office of the Sibley County Auditor 12/2/2010 2:00 PM paper color: white 35

36 Proposed 2011 PROPERTY TAX LEVY AND CPA DISTRIBUTION Proposed 2011 Property Tax Levy & County Program Aid (CPA) Distribution Adopted 2010 Property Tax Levy & County Program Aid (CPA) Distribution Total Total Adopted 2009 Property Tax Levy & County Program Aid (CPA) Distribution All Levy Adopted 2008 Property Tax Levy & County Program Aid (CPA) Distribution Funds County Fund Payable Proposed Proposed CPA Net CPA Adjusted Net % of % of Year Revenue Amt of % of Expenditure Amt of % of Property Amt of % of % of Amt of Property Amt of % of Amt of Property Amt of % of Inc./(Dec.) Inc./(Dec.) Budget Inc./(Dec.) Inc./(Dec.) Budget Inc./(Dec.) Inc./(Dec.) Tax Levy Inc./(Dec.) Inc./(Dec.) Tax Levy Distribution Tax Levy Inc./(Dec.) Inc./(Dec.) Unallotment Tax Levy Inc./(Dec.) Inc./(Dec.) SPECIAL LEVIES , ,800 Sub-Total Special Levies - DEBT SERVICE , $ 512, ,274, ,326,613 Sub-Total Special Levies - OTHER ,006, $ 1,855, ,548, ,670,413 TOTAL SPECIAL LEVIES ,528, $ 2,367, ,276, ,213,705 Adjusted Property Tax Levy "Subject to Levy Limitation" ,013, $ 7,768, ,492, ,213,705 CERTIFIED PAYABLE LEVY LIMIT ,013, $ 7,768, $ (215,122) 2010 $ - Over/(Under) Levy Limit 2009 $ $ - $ $ (69,555) % $ $ (178,330) % $ $ 9, % $ $ (52,420) -2.25% $ $ 320, % $ $ 151, % $ $ (121,975) -4.57% $ $ 142, % $ $ 160, % $ $ 63, % $ $ 200, % $ $ 244, % $ $ 278, % $ $ 200, % $ $ 244, % Tax Capacity Rates - County of Sibley (Authority 12) Payable NTC Net Tax Amount of Initial Tax Tax Rate Percent Year Percent of Capacity Increase/ Capacity Rate Inc./(Dec.) Inc./(Dec.) Inc./(Dec.) (Decrease) 2011 as of 10/29/2010 Assessor's Abstract of Assessments 1.88% $ 20,186,797 $ 371, % % % 2010 as of 3/15/2010 Assessor's Abstract of Assessments 12.88% $ 19,814,930 $ 2,261, % % % Total County 2009 as of 3/26/2009 Assessor's Abstract of Assessments 3.81% $ 17,553,806 $ 643, % % % Net Tax Capacity 2008 $ 16,910, % S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Property Tax Levy and County Program Aid Distribution Prepared by the Office of the Sibley County Auditor 12/2/2010 2:00 PM paper color: white 36

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39 Sibley County 2011 Expenses by Function Public Works Community/Economic Development 45.3% 1.2% Non Departmental 0.0% Conservation/Natural Resources 1.5% Culture & Recreation 1.9% Health & Sanitation 7.3% Public Safety 10.5% General Government 15.0% Debt Services 1.3% Human Services 16.1% Adopted Adopted Adopted Proposed Expenditures 2008 Percent 2009 Percent 2010 Percent 2011 Percent % of inc/(dec) General Government $ 4,076, % $ 4,127, % $ 3,828, % $ 3,813, % (14,879) -0.39% Public Safety 2,549,105, 11.6% 2,569,123, 11.0% 2,671,508, 10.5% 2,645,738, 11.8% (25,770) -0.96% Health & Sanitation 1,920, % 1,824, % 1,855, % 1,885, % 30, % Culture & Recreation 468, % 416, % 474, % 453, % (21,375) -4.50% Conservation/Natural Resources 388, % 406, % 384, % 391, % 7, % Community/Economic Development 193, % 197, % 312, % 330, % 17, % Non-Departmental 239, % 93, % - 0.0% - 0.0% 0 #DIV/0! Public Works 7,546, % 8,735, % 11,581, % 8,346, % (3,235,025) % Human Services 3,996, % 4,358, % 4,104, % 4,233, % 128, % Debt Services 512, % 522, % 343, % 274, % (69,555) % Total Expenditures $ 21,891, % $ 23,252, % $ 25,557, % 22,375, VS 10 INC/(DEC) $ 100.0% (3,182,623) % 6.22% 9.92% % $12,000,000 $11,500,000 $11,000,000 $10,500,000 $10,000,000 $9,500,000 $9,000,000 $8,500,000 $8,000,000 $7,500,000 $7,000,000 $6,500,000 $6,000,000 $5,500,000 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- General Government Public Safety Health & Sanitation Culture & Recreation Conservation/Natural Resources Community/Economic Development Non-Departmental Public Works Human Services Debt Services S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 3:38 PM paper color: white 39

40 General Revenue Fund Sibley County Expenses by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) Personal Services $ 5,178,370 $ 5,289,501 $ 5,327,796 $ 5,401,125 73,329 Other Services & Charges 2,109,058 2,160,634 2,326,623 2,273,891 (52,732) Supplies 626, , , ,064 (116,988) Capital Expenses 692, , , ,757 89,950 Appropriations & Pass Through Funding 1,102, , , ,468 (6,636) Program Expenses 126,360 48,360 41,400 47,500 6,100 SUB-TOTAL: $ 9,835,335 $ 9,635,498 $ 9,527,782 $ 9,520,805 (6,977) $6,000,000 $5,000,000 $4,000,000 $3,000, $2,000,000 $1,000,000 $ Personal Services Other Services & Charges Supplies Capital Expenses Appropriations & Pass Through Funding Program Expenses S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:29 PM paper color: white 40

41 Public Works Sibley County Expenses by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) Personal Services $ 1,631,593 $ 1,710,684 $ 1,704,852 $ 1,727,789 22,937 Other Services & Charges 4,168,132 5,189,055 8,398,092 4,995,442 (3,402,650) Supplies 837, , , ,100 (8,050) Capital Expenses 641, , , , ,450 Appropriations & Pass Through Funding 269, , , ,527 42,288 Program Expenses SUB-TOTAL: $ 7,546,729 $ 8,735,989 $ 11,581,983 $ 8,346,958 (3,235,025) $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000, $3,000,000 $2,000,000 $1,000,000 $ Personal Services Other Services & Charges Supplies Capital Expenses Appropriations & Pass Through Funding Program Expenses S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:29 PM paper color: white 41

42 Human Services Sibley County Expenses by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) Personal Services $ 1,901,304 $ 2,018,091 $ 2,012,545 $ 2,030,400 17,855 Other Services & Charges 281, , , ,992 (3,071) Supplies 30,400 37,000 32,900 29,440 (3,460) Capital Expenses Appropriations & Pass Through Funding 270, ,500 14,500 - (14,500) Program Expenses 1,513,251 1,859,070 1,770,256 1,902, ,110 SUB-TOTAL: $ 3,996,725 $ 4,358,522 $ 4,104,264 $ 4,233, ,934 $2,500,000 $2,000,000 $1,500,000 $1,000, $500,000 $ Personal Services Other Services & Charges Supplies Capital Expenses Appropriations & Pass Through Funding Program Expenses S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:29 PM paper color: white 42

43 Debt Service Sibley County Expenses by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) Personal Services $ - $ - $ - $ - 0 Other Services & Charges 27,375 27,826 19,339 16,029 (3,310) Supplies Capital Expenses 485, , , ,216 (66,245) Appropriations & Pass Through Funding Program Expenses SUB-TOTAL: $ 512,730 $ 522,130 $ 343,800 $ 274,245 (69,555) $600,000 $500,000 $400,000 $300, $200,000 $100,000 $ Personal Services Other Services & Charges Supplies Capital Expenses Appropriations & Pass Through Funding Program Expenses S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:29 PM paper color: white 43

44 Total Funds Sibley County Expenses by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) Personal Services $ 8,711,267 $ 9,018,276 $ 9,045,193 $ 9,159, ,121 Other Services & Charges 6,586,335 7,680,376 11,018,117 7,556,354 (3,461,763) Supplies 1,494,266 1,676,304 1,411,102 1,282,604 (128,498) Capital Expenses 1,818,733 1,622,686 1,051,918 1,186, ,155 Appropriations & Pass Through Funding 1,641,307 1,347,067 1,219,843 1,240,995 21,152 Program Expenses 1,639,611 1,907,430 1,811,656 1,949, ,210 GRAND TOTAL: $ 21,891,519 $ 23,252,139 $ 25,557,829 $ 22,375,206 (3,182,623) $12,000,000 $10,000,000 $8,000,000 $6,000, $4,000,000 $2,000,000 $ Personal Services Other Services & Charges Supplies Capital Expenses Appropriations & Pass Through Funding Program Expenses S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:29 PM paper color: white 44

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46 County Government Revenue A publication of the Association of Minnesota Counties In Minnesota, local governments derive the majority of their funding from property taxes and from state and federal grants. Fees, fines, forfeitures, sale of public lands, investments and special assessments are other sources that augment these major revenue sources. Property Tax The property tax is the chief source of revenue for Minnesota counties. Most counties receive between 30 and 50 percent of their revenues from property tax collections. All property except that owned by governments, churches, charitable institutions and certain other tax exempt entities, is subject to the ad valorem property tax. The ad valorem tax is based on the value of an undivided piece of property or building. Minnesota has one of the most complicated property tax systems in the nation. Property taxes are levied by counties, cities and school districts, and some special purpose taxing jurisdictions such as watershed districts. County commissioners have the power to raise the county property tax levy, i.e., the amount of money which homes, businesses and land within the county will pay, if additional income is needed to fund county programs and services. However, city and school district officials also levy taxes on property within the county. The state establishes the class rates, or the percentage of each property s market value subject to taxation. For example, the class rate for low value homes is 1.0 percent while the class rate for most commercial property is 3.4 percent (recently reduced from 4.0 percent). These class rates are one factor that makes Minnesota s property tax system so complex. State and Federal Grants Grants from the state and federal government are another large source of revenue for counties. Generally, these grants assist the county in providing and paying for mandated services. However, the amount of the grant is often insufficient to cover the full cost of services, and the county must supplement the state or federal revenues with local property tax dollars. Categorical aids and block grants are the two basic categories of grants. They differ primarily in terms of the amount of flexibility they offer the county board. Categorical aids are the most restrictive, with the money provided on the condition that it is spent to provide specific services. Often, the purpose of a categorical grant and the associated mandate is to increase spending for specific programs. Block grants provide the county board with greater flexibility in using the money. In fact, some block grants are intended to provide property tax relief by replacing local property tax dollars. The distinctions between categorical aids and property tax relief are not always clear. One of the larger aids to counties, the County State Aid Highway money, has characteristics of both a block grant and a categorical aid. It reduces the property tax cost for county highway maintenance, the money must be used for county highways, and there are specific requirements and highway standards that accompany the money. SOURCE: Minnesota County Finances; 2008 Revenues, Expenditures and Debt produced by the Minnesota Office of State Auditor. 46

47 County Program Aid In the 2003 legislative session, county general-purpose aids were restructured into a single program called County Program Aid ) CPA. The following individual aid programs were eliminated: homestead and agricultural aid credit (including manufactured housing HACA), county criminal justice aid, family preservation aid, and attached machinery aid. The formula for distributing county program aid encompasses some factors from the programs being subsumed, along with some new ones. One-half of the funding for county program aid is distributed based on each county s relative shares of (1) persons receiving food stamps, (2) age-adjusted population (population weighted more heavily for the number of persons over age 65), and (3) reported crimes. The other half is distributed based on a formula that takes into account each county s population and its property wealth. For 2004, approximately $112 million was distributed based on the distribution formulas of the aid programs that were eliminated, minus the substantial aid cuts enacted during the 2003 legislative session. For 2005 through 2008, about $205 million was distributed according to the new formula, with the aid cuts fully restored. The total amount of county program aid for taxes payable in 2007 is $205,382,792. This total is after subtraction of $500,000 to pay for court-ordered counsel and $214,000 to pay for preparation of local impact notes. SOURCE: The county program aid data was obtained from the Department of Revenue and appeared in Major State Aids and Taxes: A Comparative Analysis produced by the Minnesota House of Representatives Research Division, December Fees The law permits certain fees to be charged for services provided by various county departments. Counties charge fees for, among other things, examining the record for taxes due, serving and filing legal papers in court actions, and renewing licenses. Most of the money generated by these fees go into the county s general revenue fund. In some cases, fees are set to fully cover the cost of the related services. Counties, acting as an agent of the state, also collect fees set by the state. In some instances, such as for game and fish licenses, the law allows counties to keep a small portion of the fees collected when acting as an agent of the state. Other Revenue Sources Fines and forfeitures of bail money are paid into a county s general fund. Some of this money is shared with the State of Minnesota as payment for state takeovers of certain judicial districts. Counties can assess property owners with a special assessment if their property benefits from county-made improvements. Such special assessments account for a small amount of county revenue. Some counties have pursued an aggressive program of investing county funds not needed immediately and have yielded considerable returns on their investments. In most cases, the law requires that income from such investments be used to support county expenditures. Counties can also invest funds not currently needed for cash flow purposes (i.e., funds needed on hand to pay bills as they become due) in securities issued by the U.S. government, the State of Minnesota, or any political subdivision or municipality therein subject to certain conditions and repurchase agreements as laid out in Minnesota statute. Updated September Charles Avenue Saint Paul, MN Main Line/Switchboard: Fax: A publication of the Association of Minnesota Counties 47

48 Sibley County 2011 Revenues By Source Local Taxes 48.4% Fees For Services 6.7% Interest Income 1.5% Budgeted From Reserves 3.8% All other Sources 4.0% Federal/State Aids 35.6% Adopted Adopted Adopted Proposed Revenues 2008 Percent 2009 Percent 2010 Percent 2011 Percent Federal/State Aids $ 7,034, % $ 8,578, % $ 11,145, % $ 7,966, % (3,179,388) 388) % Local Taxes 10,136, % 10,541, % 10,884, % 10,825, % (58,707) -0.54% Fees For Services 1,388, % 1,233, % 1,321, % 1,506, % 185, % Interest Income 595, % 495, % 414, % 332, % (82,389) % Budgeted From Reserves 1,174, % 1,415, % 1,100, % 843, % (256,821) % All other Sources 1,562, % 988, % 691, % 901, % 209, % Total Revenue $ 21,891, % $ 23,252, % $ 25,557, % 22,375, VS 10 INC/(DEC) % of inc/(dec) $ 100.0% (3,182,623) % 6.22% 9.92% % $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- Federal/State Aids Local Taxes Fees For Services Interest Income Budgeted From Reserves All other Sources S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:36 PM paper color: white 48

49 Sibley County Revenues by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) GENERAL REVENUE FUND Property Taxes $ 5,031,619 $ 5,297,225 $ 5,609,691 $ 5,697,917 88,225 Other Taxes 49,400 49,400 49,400 47,500 (1,900) Special Assessments 130, , , ,000 0 Licenses & Permits 55,720 56,320 31,300 33,500 2,200 Federal Grants 235, , , ,424 4,679 Local Grants 278, , , ,060 (13,368) County Program Aid 283, , ,932 81,066 (42,865) State Grants 537, , , ,430 43,907 Charges for Services 1,222,535 1,091,260 1,177,540 1,299, ,460 Fines & Forfeits 2,500 1,500 5,250 9,370 4,120 Interest on Investments 595, , , ,465 (82,389) Miscellaneous Revenue 191, , , ,820 12,475 Other Financing Sources 105, ,700 5,700 4,000 Transfers from Other Funds 213, ,117 5,117 0 Use of Fund Balance 903, , , ,436 (147,521) SUB-TOTAL: $ 9,835,335 $ 9,635,498 $ 9,527,782 $ 9,520,805 (6,977) $6,000,000 $5,000,000 $4,000, $3,000, $2,000,000 $1,000,000 $ S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:38 PM paper color: white 49

50 Sibley County Revenues by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) PUBLIC WORKS FUND Property Taxes $ 2,755,830 $ 3,059,826 $ 3,100,293 $ 2,980,174 (120,119) Other Taxes 68,000 56,500 56,500 83,000 26,500 Special Assessments Licenses & Permits Federal Grants - 1,400,000 3,100, ,000 (2,625,000) Local Grants 3,851,038 3,453,339 4,851,110 4,156,927 (694,183) County Program Aid 155, ,008 68,493 42,400 (26,093) State Grants Charges for Services 127,500 87,500 97,000 83,219 (13,781) Fines & Forfeits Interest on Investments Miscellaneous Revenue 57, ,816 33,844 53,795 19,951 Other Financing Sources , , ,500 Transfers from Other Funds 532, , Use of Fund Balance - 125, , ,943 85,200 SUB-TOTAL: $ 7,546,729 $ 8,735,989 $ 11,581,983 $ 8,346,958 (3,235,025) $6,000,000 $5,000,000 $4,000, $3,000, $2,000,000 $1,000,000 $ S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:38 PM paper color: white 50

51 Sibley County Revenues by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) HUMAN SERVICES FUND Property Taxes $ 1,836,113 $ 1,662,272 $ 1,830,334 $ 1,873,075 42,742 Other Taxes Special Assessments Licenses & Permits Federal Grants 796, , , ,283 38,644 Local Grants 245, , , ,087 52,661 County Program Aid 103, ,829 40,436 26,649 (13,788) State Grants 549, , , ,721 96,018 Charges for Services 38,500 54,450 47, ,400 77,400 Fines & Forfeits Interest on Investments Miscellaneous Revenue 157, , , ,983 44,257 Other Financing Sources Transfers from Other Funds ,500 - (14,500) Use of Fund Balance 271, , ,500 - (194,500) SUB-TOTAL: $ 3,996,725 $ 4,358,522 $ 4,104,264 $ 4,233, ,934 $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800, $600,000 $400,000 $200,000 $ S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:38 PM paper color: white 51

52 Sibley County Revenues by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) DEBT SERVICE FUND Property Taxes $ 512,730 $ 522,130 $ 343,800 $ 274,245 (69,555) Other Taxes Special Assessments Licenses & Permits Federal Grants Local Grants County Program Aid State Grants Charges for Services Fines & Forfeits Interest on Investments Miscellaneous Revenue Other Financing Sources Transfers from Other Funds Use of Fund Balance SUB-TOTAL: $ 512,730 $ 522,130 $ 343,800 $ 274,245 (69,555) $600,000 $500,000 $400, $300, $200,000 $100,000 $ S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:38 PM paper color: white 52

53 Sibley County Revenues by Classification Adopted Adopted Adopted Proposed VS 10 INC/(DEC) ALL FUNDS Property Taxes $ 10,136,291 $ 10,541,453 $ 10,884,118 $ 10,825,411 (58,707) Other Taxes 117, , , ,500 24,600 Special Assessments 130, , , ,000 0 Licenses & Permits 55,720 56,320 31,300 33,500 2,200 Federal Grants 1,031,217 2,497,891 4,166,384 1,584,707 (2,581,677) Local Grants 4,374,930 3,979,594 5,377,964 4,723,074 (654,890) County Program Aid 541, , , ,115 (82,746) State Grants 1,086,225 1,433,018 1,368,226 1,508, ,925 Charges for Services 1,388,535 1,233,210 1,321,540 1,506, ,079 Fines & Forfeits 2,500 1,500 5,250 9,370 4,120 Interest on Investments 595, , , ,465 (82,389) Miscellaneous Revenue 405, , , ,598 76,683 Other Financing Sources 105,625-23, , ,500 Transfers from Other Funds 745, ,000 19,617 5,117 (14,500) Use of Fund Balance 1,174,614 1,415,151 1,100, ,379 (256,821) GRAND TOTAL: $ 21,891,519 $ 23,252,139 $ 25,557,829 $ 22,375,206 (3,182,623) $12,000,000 $10,000,000 $8,000, $6,000, $4,000,000 $2,000,000 $ S:\AUD\SHARED\Finance Administration\Budget\2011\Budget 2011 Prepared by the Office of the Sibley County Auditor 12/2/2010 2:38 PM paper color: white 53

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55 Debt Management for Counties A publication of the Association of Minnesota Counties By Jim Culotta, Research Assistant, National Association of Counties (NACo) The act of borrowing, obtaining funds today in exchange for a promise to pay them back tomorrow, is one of the most potent and profound activities undertaken in government finance. In recent years, counties have increasingly turned toward the issuance of debt to help finance basic infrastructure projects, such as schools, roads, and hospitals. A poorly designed or poorly managed bond issue can burden taxpayers with excess interest costs over the life of the issue. For this reason, it is more critical than ever that counties effectively manage their debt. Debt Policy: An Important Financial Management Tool A formal debt policy is an essential part of effective financial management and should be incorporated into a county s capital improvement program. There are several reasons to establish a debt policy. First, it establishes the parameters for the issuance of debt, which help prevent exceeding acceptable levels of indebtedness. Second, debt policies give investors and rating agencies evidence of the county s commitment to sound financial management. Third, debt policies provide consistency and continuity for public policy development and help guide county decision makers. The Government Finance Officers Association (GFOA) recommends that all state and local governments intending to issue debt develop a comprehensive debt policy. A debt policy should include the following elements: Purposes for which debt may be issued. Legal debt limitations, or limitations established by policy. Use of moral obligation pledges. Types of debt permitted to be issued and criteria for issuance. Structural features that may be considered. Credit objectives. Method of sale. Selection of external financial professionals. Refunding of debt. Disclosure (primary and secondary market). Compliance with federal tax law provisions, including arbitrage requirements. Integration of capital planning and debt financing activities. Investment of bond proceeds where otherwise not covered by explicit written law or written investment policy. In order to be an effective management tool, debt policy provisions must be compatible with the jurisdiction s goals pertaining to the capital program and budget, the financial plan, and the operating budget. It is important to find the appropriate balance between establishing limits on the debt program and providing sufficient flexibility to respond to unforeseen circumstances and opportunities. The debt policy should be formally adopted by the county board and continuously monitored to ensure compliance. Analyzing Debt Capacity and Establishing Debt Limits When a county issues bonds, it enters into a long-term commitment that requires it to make timely principal and interest payments over the life of the bonds. Therefore, the county needs to ensure that future debt service payments to bondholders can be made on time, without jeopardizing essential county services. A comprehensive and routine analysis of debt capacity provides assurance that the amount of debt issues by the county is affordable and cost-effective. An analysis of debt capacity should cover the following range of factors: Statutory or constitutional limitations affecting the amount that can be issued. Other legal limitations, such as coverage requirements or additional bonds tests imposed by bond covenants. Measures of the tax and revenue base. Evaluation of trends relating to the county s financial performance. Debt service obligations. Measures of debt burden on the community. Tax-exempt market factors affecting interest costs. Bond Ratings When a county borrows money by selling bonds, the most important variable that determines the interest cost of the bonds is their bond rating. Bond ratings are an assessment of credit quality or, conversely, the risk that the borrower will not make scheduled payments of principal and interest. Rating agencies base their ratings on a number of key economic, debt, financial and governmental factors. Economic Factors Rating agencies focus on major employers and taxpayers, regional economic factors, the impact of national and international economic developments on the local economy, and demographic data regarding the county s population (such as per capita income, average age, educational attainment, etc.). Debt Factors Rating agencies evaluate debt per capital, debt as a percentage of the assessed value of property, debt service as a percentage of annual revenues, payout rate, use of short term or variable rate debt, authorized but unissued debt and the legal structure of the issue s security. 55

56 Financial Factors Rating agencies analyze the county s comprehensive annual financial reports, annual budgets, revenue and expenditure composition and growth rates, accounting methods, contingent obligations (such as pension liabilities), intergovernmental transfers, and cash liquidity levels. Administrative Factors Rating agencies assess the county s management professionalism, ability to respond to economic adversity, willingness of elected officials to make unpopular financial decisions, the county s state objectives related to debt management, economic development activities, tax policies, capital improvement planning, employee relationships (e.g. unions), and the county s willingness to adhere to long-range financial plans. Major Forms of Debt Securities General Obligation (GO) Bonds are the most common form of debt issuance by state and local governments. These securities are commonly referred to as full-faith-and credit bonds because they are based on the pledge of a government unit to levy the necessary taxes to pay the interest and retire the principal. Unlimited-tax GO bonds legally obligate the county to levy taxes on all assessed property within its jurisdiction at whatever level necessary to meet the debt service payments. Limited-tax GO bonds are backed only by special taxes such as a sales tax; others are backed only by specific revenue sources. Historically, voter approval has been required to authorize the issuance of GO bonds. However, a growing number of jurisdictions have been given authority to issue limited amounts of GO bonds without referendum. Revenue Bonds are limited-liability obligations. The security for revenue bond issues is provided by a pledge of a specific revenue stream - usually derived from the project being funded or the enterprise system of which the project is a part. This ensures equitable distribution of the debt burden. These bonds are not backed by the taxing power, and as a result, they are not included in the usual debt limits. Unlike GO bonds, revenue bonds typically do not require voter approval. Certificates of Participation (COP) are a form of lease obligation in which the county enters into an agreement to pay a fixed amount annually to a third party, usually a nonprofit agency or a private leasing company. Otherwise, they do what municipal bonds do: They raise money to acquire equipment or construct a facility. According to municipal finance experts, almost anything can be engineered for lease. COPs do not need voter approval, and they do not generally count toward a jurisdiction s debt volume limitations. Payments are subject to annual appropriations. However, COPs are not permissible in all states, and they are generally more expensive to issue than bonds due to the involvement of a third party. More importantly, COPs are considered riskier investments because government can, in any given year, negate a lease contract without being considered in default. As a result, investors often require higher interest rates. Investment Grade Rating Designations of Major Rating Agencies Investment Grade Category Fitch Moody s Standard & Poor s Highest Quality AAA Aaa AAA Very high quality AA Aa AA High or strong quality A A A Adequate or satisfactory quality BBB Baa BBB Note: Fitch and Standard & Poor s use + and - to indicate relative quality with a major category. Moody s indicates better quality within a category by the symbols Aa1, A1 and Baa1. How To Win A Bond Referendum Most capital finance experts agree that bond referendums are risky business. This helps explain why a growing number of local officials are turning to COPs and other bond alternatives that do not require voter approval. However, bonds remain the basic means of raising money for capital improvements. When the voters say no to a bond referendum, more than a worthwhile infrastructure project my be at stake. A county s bond rating may be downgraded if county officials can t deliver the votes most of the time. The following are a few tips for a successful bond referendum campaign: Start off with a clearly defined statement of purpose - why the project that will be bond-financed is necessary. Get your voters attention and educate them on the issue. Meet with the news media early and often to gain their support and free publicity. Develop a good track record by promising only what you can deliver. Finance the bond campaign adequately by tapping funds from private industries and county government agencies affected by the bond, if allowable by law. Internet Resources Fitch Investors Service, L.P. ( Moody s Investors Service ( Standard & Poor s Rating Services ( Government Finance Officers Association ( U.S. Securities and Exchange Commission ( Municipal Securities Rulemaking Board ( The Bond Buyer ( Revised July 2002 Association of Minnesota Counties 125 Charles Avenue Saint Paul, MN Main Line/Switchboard: Fax: A publication of the Association of Minnesota Counties 56

57 SIBLEY COUNTY STATEMENT OF CHANGES IN LONG-TERM LIABILITIES DECEMBER 31, 2009 Type of Indebtedness Date of Issue Maturity Date: Interest Rate Outstanding January 01 Issued in 2009 Paid in 2009 Outstanding December 31 Due Within One Year General Obligation Bonds 2001 Law Enforcement Refunding Bonds December 1, 2001 January 30, % $ 160,000 $ - $ 160,000 $ - $ Jail Facility Refunding Bonds November 5, 2003 January 30, % 135,000-70,000 65,000 65, Capital Improvement Refunding Bonds February 1, 2005 January 30, % 2,630, ,000 2,465, ,000 Total General Obligation: $ 2,925,000 $ - $ 395,000 $ 2,530,000 $ 235,000 General Obligation Special Assessment Bonds 1996 Drainage Ditch (JD LAT 1,2,3, & 4) December 1, 1996 January 31, % $ 180,000 $ - $ 20,000 $ 160,000 $ 20, Watershed District (High Project #11) December 30, 2002 January 31, % 655,000-30, ,000 35, Drainage Ditch (CD 2A, 24B, & 18C) November 5, 2003 January 31, % 10,000-10, Total General Obligation Special Assessment Bonds: $ 845,000 $ - $ 60,000 $ 785,000 $ 55,000 Less: Discounts: $ (42,642.00) $ - $ (3,560) $ (39,082.00) Total Bonds Payable: $ 3,727,358 $ - $ 451,440 $ 3,275,918 $ 290,000 General Obligation Revenue Note County Wide Individual Sewage Treatment System I August 1, 2001 January 30, % $ 103,300 $ - $ - $ 103,300 $ 5,000 Total General Obligation Special Assessment Bonds: $ 103,300 $ - $ - $ 103,300 $ 5,000 Minnesota Pollution Control Agency Loans MnPCA Loan - High Island Creek I November 18, 2004 May 31, % $ 237,684 $ - $ 24,355 $ 213,329 $ 24,845 MnPCA Loan - High Island Creek II November 13, % 97, , ,028 - MnPCA Loan - Rush River Creek I July 24, 2006 May 31, % 253,296-24, ,830 24,955 MnPCA Loan - Rush River Creek II December 1, % 159, , ,186 - MnPCA Loan - Buffalo Creek I December 17, % 34,000 11,500-45,500 - MnPCA Loan - Middle Minnesota I July 10, % 7, ,500 - Total Minnesota Pollution Contraol Agency Loans: $ 789,058 $ 317, $ 48, $ 1,057,373 $ 49, Total Bonded & Notes Payable: $ 4,619,716 $ 317,136 $ 500,261 $ 4,436,591 Compensated Absences: $ 980,154 $ 67,203 $ 6,977 $ 1,040,380 $ 280,903 Net OPEB Obligation - Non-current $ 40,721 $ 31,635 $ - $ 72,356 Governmental Activates Long-Term Liabilities: $ 5,640,591 $ 415,974 $ 507,238 $ 5,549,327 $ 625,703 57

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59 Who Does What? A Guide to Minnesota s Property Tax System Assessor Locates the property to be taxed, estimates its market value (how much the property would sell for in today s market), and assigns it to a class according to its use. Sends out notices in the spring to all property owners. Multiplies the estimated market value of each piece of property by the tax capacity percentage set by law for its class. The result is the tax capacity. Adds together the tax capacities for all the property in the taxing district and gives the total to: Property owners who disagree with the assessor may appeal to: Taxing Districts (your school district, City or Township, county, etc.) Determine the services (such as street maintenance, fire and police protection) to be provided in the coming year. Boards of Appeal AND Equalization Estimate the costs of those services and determine what portion will come from property taxes. Prepare proposed budget/levy amounts Send final levy amounts to: Hold Truth-in-Taxation (TnT) hearings on budgets (if required by state law). Send final levy amounts to: City or Township Board of Appeal and Equalization: The city council or township board. Meets between April 1 and May 31. County Board of Equalization: County board of commissioners. Meets for two weeks in June. Finance Department Auditor/treasurer Determines the tax capacity rates and also uses the state general tax rate by dividing the proposed levy by the proposed total amount of tax capacity in the taxing district. Auditor uses state general tax rate to compute taxes (certified by the Commissioner of MN Dept. of Revenue). Calculates the amount of each property owner s proposed state paid credits and net tax amount. State Board of Equalization: Commissioner of Revenue. Meets between April 15 and June 30. The review board may change the estimate of the market value of the classification. Minnesota Tax Court: Small claims or regular division. Prepares TnT notice and mails to each taxpayer. Recalculates the amount of each property owner s tax based upon the final levy amounts. Prepares a listing of the tax on all property owners in the county and gives the list to: Creates the property tax statements from the county tax lists. Mails the statements by March 31 of the following year. Property owners mail in their payments (due in two installments on May 15 and October 15; except that the second installment of taxes on agricultural property is due on November 15). A A publication of of the Association of of Minnesota Counties 59