9.b. 2020 Budget
20190917 CCM RM
9.b. 2020 Budget
9/13/2019 2:37:17 PM
9/13/2019 2:30:23 PM
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EXECUTIVE SUMMARY <br /> <br /> <br />City Council Regular Meeting September 17, 2019 <br />AGENDA ITEM: 2020 Budget AGENDA SECTION: <br />New Business <br />PREPARED BY: Logan Martin, City Administrator <br /> Jeff May, Finance Director AGENDA NO. 9.b. <br />ATTACHMENTS: Resolution, 2020 Preliminary Budget <br />Summary APPROVED BY: LJM <br />RECOMMENDED ACTION: Adopt a Resolution Setting the Preliminary 2020 General <br />Fund Operating Budget, the Preliminary 2020 C.I.P. Budgets, the Preliminary 2020 <br />Insurance Budget, the Preliminary 2020 Port Authority Operating Levy and the Preliminary <br />2019 Levy and a Budget Hearing Date of December 3, 2019 at 7:00 p.m. at City Hall. <br /> <br />BACKGROUND <br /> <br />In response to direction received from the City Council at work sessions in June, July, and August, staff is <br />prepared to present the City’s Preliminary Operating Budget and Preliminary Levy for 2020. The City is <br />required to establish a “ceiling” for the tax levy by the end of September, which allows the City the <br />opportunity to reduce the levy after the ceiling is set until final certification in December. A final work <br />session in November is planned to discuss any final changes to the budget prior to final certification. <br /> <br />The preliminary 2020 Budget shows an increase of 4.99% to the operating budget, which results in a 5.89% <br />increase ($725,804) in the property tax levy. The impact of this levy increase on a median valued home is <br />projected to be $56 per year. The City’s tax rate (the percentage used to calculate the City’s portion of the <br />property tax) is projected to be reduced to 38.5%, as compared to 39.3% in 2019. This rate continues to be <br />lower than it was in 2016 (43%), which is a reflection of the growth of the City in recent years and the effect <br />of added taxable value. <br /> <br />In 2020, the median value home is estimated to be $295,900, which reflects a 6.71% value growth over last <br />year’s median valued home. This is the 4th highest value per median-valued home in Dakota County. <br /> <br />It is important to note that the City’s tax rate is going down while the amount of City taxes paid by a <br />homeowner is going up. This is due to market value increases in property values as assessed by Dakota <br />County (7.91% citywide). If a homeowner were to see no value growth on their property, their taxes would <br />actually decrease by $24 (on a $300,000 home). <br /> <br />A summary of key characteristics of the proposed 2019 Budget is shown in the following table: <br />Budget Facts at a Glance <br />Growth of Property Tax Base from ‘19 + 7.91% <br />Avg. value increase on Median-Valued Home + 6.71% <br />Change in General Fund Budgets + $683,600 or 4.99% <br />City Tax Increase on Median Valued Home + $56 <br />% Tax Change on Median Valued Home + 5.36% <br />Change in Estimated City Tax Rate - 2.12% (from 0.39355 to 0.38521)
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