2021-08-25 Council Work Session agenda packet - budget
CITY OF MENDOTA HEIGHTS
CITY COUNCIL WORK SESSION
AGENDA
August 25, 2021
7:00 pm
Mendota Heights City Hall
1. Call to Order
2. Continuation of Discussion of FY 2022 Proposed Budget
A. Departmental Reviews
a. City Clerk/ Elections (Page 12)
b. Administration (Page 8) / Council (Page 6)
c. Miscellaneous
i. City Hall (Page 93)
ii. IT (Page 14)
d. Operating, and Budget Improvement Package Funding
e. Capital Improvements (Page 102)
3. Discussion and Direction
4. Adjourn
Date: August 25, 2021
To: Mayor and City Council
From: Kristen Schabacker, Finance Director
Cheryl Jacobson, Asst. City Administrator
Mark McNeill, City Administrator
Subject: Budget Work Session—August 25
Comment:
The Council has scheduled a third work session to discuss the FY 22 budget for 7 PM on Wednesday,
August 25th. The budget discussion will follow what is anticipated to be a brief special meeting of the
City Council, which will be scheduled to begin at 7 PM.
The following items remain to be considered:
• City Clerk/Elections
• City Council
• Administration, including City Hall, and IT
• Capital Improvements
Please bring your previously distributed budget documents. If you need replacements, please contact
us.
Status Report:
Following the discussions from the first two meetings, the Finance Director has prepared an update of the
current status of the Fund Balance, and what the impact on property taxes will be if there are no changes.
Capital Items:
The attached Page 3 shows a summary of the various requested capital Requests from the Budget
Improvements Packages. The total of the recommended BIP’s is just under $2 million ($1,973,497).
Following the previous recommendations of staff, the capital expenditure funding would come from the
Fund Balance ($1.3 million) and the remaining proceeds from the sale of the Village lots ($200,000). To
cover the $473,497 difference and fully fund the proposed expenditures would mean that that additional
amount of money which would need to come from Fund Balance. And while $135,000 for Wentworth
Park improvements will be reimbursed from future grant proceeds, for the time being, we must plan on
the Fund Balance being further depleted by that amount.
Page 4 shows that, if fully spent as contemplated, the fund balance would be $8,360,904, or 80.25% of
the Gneral Fund expenditures. That is still above the 75% fund balance threshold normally seen as
necessary for the retention of the City’s AAA Bond rating. $547,003 would remain in excess of the 75%
minimum.
Note that these numbers do not include the requested $420,000 in the Budget Improvement Package
needed to have an architect prepare shelf-ready plans for the expansion of the Police Department, and
remodeling of the City Hall Building. However, once the City decides to move ahead with the
remodeling and expansion project, the architect’s fees could come from the same source of funding as
would be determined for the construction costs. The only difference between funding the architectural
services now vs. then is that there will be a bigger lag time needed to get started.
Impact on Property taxes:
Page 5 shows the impact on property tax rates. The rate for Taxes Payable 2021 is .37849. The Pay
2022 tax rate without the added Parks and Recreation Manager position would be .38700. With the
position, it rises to .39371.
Page 6 demonstrates the impact of the City’s portion of property taxes on homes valued at $300,000;
$438,000 (the average valued home); $550,000; and $700,000. This page also shows the history of the
City’s property tax levies in Mendota Heights since 2006.
Assuming no other changes, the amount of the proposed budget without the additional employee position
and the added recreation programming costs, is an increase of 5.94%, or $97.43 annually for the $438,000
home. Adding the new position and programming costs increases the amount of property taxes by
7.73%, or $126.82 annually for that same home.
Other Issues:
This budget includes a continuation of the Community Service Officer position in the Police Department,
which could be repurposed as a Code Enforcement officer ($34,000), and retains the July 4th fireworks at
$15,000. It does NOT include the $70,042 which would be needed to start to replenish an Equipment
Reserve Fund.
If more time is needed, remember that the major need at this time is to establish spending priorities for
those items which are funded through the General Fund and related property taxes. Council has until the
City Council meeting of December 7th to fine tune the expenditure needs, as long as it reduces any
expenditures—they cannot be increased once the preliminary levy is set. Enterprise funds, and CIP items
(beyond the first year) which are not levy-funded also can wait for further discussion until a future
meeting.
Needed Steps:
The Council should give final direction regarding the levels of funding, both from an operational
standpoint, and for capital expenditures. Once those have been established, the preparation of a
preliminary budget and levy will be made, for consideration at the September 9th City Council meeting.
The City must certify the preliminary budget and levy to the County no later than September 30, 2021.
Kristen Schabacker Cheryl Jacobson Mark McNeill
Finance Director Asst. City Administrator City Administrator
Capital Items Requested and Recommended Amount Depreciation Required
Marked Ford Explorer - Police Dept 26,947$
8 Squad Radios/1 Building Radio - Police Dept 55,800$
3 Thermal Imaging Cameras - Fire Dept (10 years)21,000$ 2,100$
ATV - Fire Dept (10 years)32,500$ 3,250$
Ladder 10 - Fire Dept (20 years)950,000$ 47,500$
Replace Mobile Radios - Fire Dept 70,000$
Utility Vehicle Upgrades - Fire Dept 17,000$
Computer Equipment for Training Lab - Fire Dept 12,000$
2022 Mack Plow - Street Dept (15 years)205,000$ 13,667$
John Deer Gator Diesel (replace Kubota) - Parks Dept (10 years)22,250$ 2,225$
Replace Gated Parking Lot Area - Public Works 125,000$
Salt Storage Bin - Public Works 250,000$
Friendly Hills Tennis Court Resurfacing 25,000$
Par 3 Aerator (20 years)26,000$ 1,300$
Wentworth Warming House (to be reimbursed by grant)35,000$
Wentworth Parking Lot (to be reimbursed by grant)100,000$
TOTAL 1,973,497$ 70,042$
Capital Items Requested from Specific Funds Amount
Council Chambers AV 60,000$ Cable Fund
Update City Website 60,000$ Cable Fund
Trail Markers & Signage 20,000$ Special Park Fund
Wentworth Warming House 215,000$
Wentworth Pave Hockey Rink 200,000$
Par 3 Clubhouse Furniture 3,500$
Sand Pro Replacement - Par 3 (20 Years)15,000$ Par 3 750$
Top Dresser Replacement - Par 3 (20 Years)55,000$ Par 3 2,750$
Capital Items Requested - Possible Referendum Expenses Amount
Wentworth Tennis Court Reconstruction 85,000$
Rogers Lake Skate Park Redesign & Renovation 175,000$
Valley View Heights Playground Replacement 55,000$
Capital Items Requested but not Recommended Amount
City Hall Architectural Services 420,000$
John Deere Gator - Park Dept 17,865$
2021 Ford Pickup Truck - Engineering Dept 31,590$
New Generator at Main Lift Station - Utility Dept 60,000$
Par 3 Clubhouse Furnace & AC Replacement 10,000$
Requests that have been moved to the levy
Recreation Requests 157,642$
Reclassify K. Speiter to Natural Resources Coordinator 2,110$
General Fund Balance Spending 2022
12/31/2020 10,134,401$ 10,418,534$ 0.75 7,813,901$ Fund Balance Threshold
Capital Items to be paid out of fund balance (1,773,497)$ **
Ending Balance 8,360,904$ (80.25%)
Cushion to 75% balance $547,003
** $200,000 of the capital items requested will be paid for from remaining proceeds from the Village lots
Net Tax Capacity Includes Fire Relief and Salary Requests
Pay 2021 Pay 2022 Pay 2022
Actual Preliminary Preliminary
Tax Capacity Value 28,860,073 30,101,564 4.30%30,101,564 4.30%
Tax Increment (177,214) (293,025) (293,025)
Fiscal disparaties Contribution (2,882,018) (2,882,018) 0.00%(2,882,018) 0.00%
Net Tax Capacity 25,800,841 26,926,521 4.36%26,926,521 4.36%
Tax Capacity Rate
Estimate
Tax levy 10,184,442 10,841,887 6.46%11,022,639 8.23%
Fiscal disparities (421,435) (421,436) 0.00%(421,436) 0.00%
Net tax levy 9,763,007 10,420,451 6.73%10,601,203 8.59%
Net Tax Capacity 25,800,841 26,926,521 4.36%26,926,521 4.36%
Tax Capacity Rate 0.37849 0.38700 2.25%0.39371 4.02%
City of Mendota Heights
Market Value for Residential Properties Increased an Average of 3.75% from 2021 to 2022
2022 2022
Home Value Total 2021 Tax City Tax Referendum Total 2022 Tax Difference % Change
289,160$ 1,123.67$
300,000$ 1,161.00$ 29.40$ 1,190.40$ 66.73$ 5.94%Base Budget
300,000$ 1,181.13$ 29.40$ 1,210.53$ 86.86$ 7.73%With Additional Salary/Position
$422,170 $1,640.55
$438,000 $1,695.06 42.92$ $1,737.98 97.43$ 5.94%Base Budget
$438,000 1,724.45$ 42.92$ 1,767.37$ 126.82$ 7.73%With Additional Salary/Position
$530,120 $2,060.05
$550,000 $2,128.50 53.90$ $2,182.40 122.35$ 5.94%Base Budget
$550,000 2,165.41$ 53.90$ 2,219.31$ 159.26$ 7.73%With Additional Salary/Position
$674,700 $2,621.88
$700,000 $2,709.00 68.60$ $2,777.60 155.72$ 5.94%Base Budget
$700,000 2,755.97$ 68.60$ 2,824.57$ 202.69$ 7.73%With Additional Salary/Position
Tax Rates for Mendota Heights
2006 28.027
2007 26.398
2008 24.142
2009 26.165
2010 28.061
2011 29.733
2012 32.057
2013 34.479
2014 34.737
2015 34.964 0.0001511 2015 referendum rate
2016 35.247 0.0001284 2016 referendum rate
2017 37.487 0.0001297 2017 referendum rate
2018 37.826 0.0001207 2018 referendum rate
2019 39.294 0.0001146 2019 referendum rate
2020 38.315 0.0001061 2020 referendum rate
2021 37.849 0.0001011 2021 referendum rate
2022 38.700 0.0000980 2022 preliminary rates
39.371 **
** Includes additional salary/position requests