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A Property Owner’s Budget Overview Fiscal Year 2010 Budget

A Property Owner’s Budget Overview Fiscal Year 2010 Budget. City of Mankato. Overview of Funds. Fee Supported Utility Storm Water Transit Parking Airport Housing Internal Service Funds Central Garage Administrative Services Equipment Replacement Central Insurance. Tax Supported

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A Property Owner’s Budget Overview Fiscal Year 2010 Budget

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  1. A Property Owner’s Budget OverviewFiscal Year 2010 Budget City of Mankato

  2. Overview of Funds Fee Supported Utility Storm Water Transit Parking Airport Housing Internal Service Funds Central Garage Administrative Services Equipment Replacement Central Insurance • Tax Supported • General Fund (i.e. police, fire, streets, parks) • Debt Service Fund • Economic Development Fund • Transit Fund • Special Tax Supported • Sales Tax • Food, Beverage, and Entertainment Tax

  3. Overview of Funds continued • The Funds are used to support 10 Service Areas • Public Services: Civic Center, Community Development, Engineering, Public Safety, and Public Works • Administrative Services: Council/Manager, Finance, Human Resources, Information Technology, Legal, and Public Information • 253 Full-Time Authorized Positions (2009) • 237 Full-Time Authorized Positions (2010) • 16 open unfunded positions

  4. All Funds Summary • Expenditures for 2010 are projected at $91,471,164, compared to revenues of $94,080,009, reflecting a net income of $2,608,930. • The majority of net income reflects lease repayments and program revenues associated with funds related to economic development and housing. • Most of this revenue is dedicated for specific housing and economic and redevelopment activities, and can not be used to offset operational activities. • Lower expenditure and revenue levels are projected for 2011 due to the unresolved nature of program expenditures, capital improvements, and uncertainty in funding for the City’s extensive federal and state grant program efforts.

  5. Tax Supported Funds

  6. Tax Supported Funds • General Fund (i.e. police, fire, streets, parks) • Debt Service Fund • Economic Development Fund • Transit Fund • Service areas funded by Tax Supported Funds: • Public Safety • Public Works • Community Development • Engineering • Legal • City Council - Grants

  7. Commonly Used Terms Estimated Market Value = the amount the County Assessor says the property is worth. Net Tax Capacity = the calculation applying the Assessors Market Value against the respective Property Classification Rate. The City’s Net Tax Capacity is the summation of this calculation for each parcel located within the City limits. Net Tax Capacity Extension Rate = the rate at which a property tax bill is calculated. Rate is calculated by dividing the levy of a jurisdiction into the Net Tax Capacity (assessed value – net of any tax increment).

  8. Net Tax Capacity Extension Rates December 2008 estimated 2009 Extension Rate = 38.30 2009 Actual Extension Rate = 38.30 2009 Net Tax Capacity = $32,997,980 2009 Estimated Net Tax Capacity Increase = 3.02% December 2009 estimated 2010 Extension Rate = 38.01 2010 Net Tax Capacity is $34,648,481 2010 Net Tax Capacity Increase = $1,650,501 2010 Estimated Net Tax Capacity Increase = 5.00% Information based upon: Estimates obtained from Blue Earth County A proposed levy of $13,171,585 An estimated increase of 5.00% in Net Tax Capacity

  9. Proposed Tax Levy General Fund 9,050,085 (143,403 levy increase) Debt Service Fund 3,694,000 (mandatory increase for debt service payments) Transit Fund 167,500 (levy reduction) EDA Levy 260,000 (no levy increase) Total 2010 Proposed Levy13,171,585 Total 2009 Levy 12,639,182

  10. General Fund Tax Supported General Fund expenditures are below 2007 level 12% or $3 million reduction in 2010 projected spending Personnel cost $500,000 below 2009 Required debt service levy increase of $409,000 Tax Capacity Increase by 5.00% General Fund Levy Increase = $143,403 Debt service levy must increase by 3.08% Local Government Aid (LGA) base decrease by $1.4 million LGA previously represented 54.9% of General Fund 2010, LGA will represent 29.7% of General Fund Decisions to unallot LGA directly impacts core services of the General Fund and has a “ripple effect” upon other funds Utilized $1 million of cash reserves to address 2009 unalottment

  11. General Fund Tax Supported continued Costs related to energy and employee related costs (i.e. health insurance and wages) continue to outpace inflation ( note: impact all funds) Health insurance premiums are estimated to increase by 10.2% Contracts in place with labor union wage increase of 2.5% However, as a result of workforce reductions the number of personnel are below 2009 level

  12. General Fund Tax Supported continued Within the proposed budget there is a $143,403 of unallocated funds. The City Manager recommends the following: Reinstatement of one Police Officer 70,871.93 Officer assigned to investigations Reinstatement of VINE/senior citizen space 13,899.00 Reflects 7.64% reduction instead of 50% Reinstatement of non-profit community grants 7,500.00 Reflects 50% reduction instead of 62.5% 2010 Contingency 51,132.07 Hold for consideration of firefighter pending outcome of SAFER Grant request and further staffing per capita comparisons. 143,403.00

  13. Debt Service Fund Summary Debt service payments and related expenditures are $14,461,591, and forecasted revenues are projected at $14,485,740, for a net income gain of $24,149. Special Assessment repayments make up over $11,000,000 of the revenue, and tax levy-supported payments are $3,285,000. The $389,000 increase in tax levy is related to Charter Bond repayments and other general obligation debt payments for the street reconstruction program and All Seasons Arena.

  14. Tax Supported Funds Service Level Changes • City Council Community Grant Funding: • 2009 budget = $60,000 • 2009 revised budget = $45,000 • 2010 preliminary budget = $22,500 (Includes funding for community performing arts & misc, community beautification & public art, community events, and community social services). • Blue Earth County Library funding reduced to minimum funding level. • Summit Center/VINE funding reduced by 50% to $20,000 (unless City Manager’s recommendation is adopted) • Neighborhood Association Grants reduced 50% to $2,500

  15. Tax Supported Funds Service Level Changes continued • Building Inspections will be scheduled within 48 hours instead of current 24 hour goal. • Building permit application review period increased to two weeks for residential and three weeks for commercial. • Community Development will assume fire inspections for new fire suppression installation and fire suppression/alarm system/hood certifications. • Inspectors will work four-day staggered 10-hour shifts to provide service before and after scheduled work hours. • Reduce annual rental reinspections of units by 20% (220 units). Units to be selected based on previous inspection results (Gold Star Program). An alternative, extend period of reinspection from 3 years to 4 years.

  16. Tax Supported Funds Service Level Changes continued • Eliminate or reduce number of I & I and Firewall inspections requested by homeowners and realtors. • AUAR planning studies will not be conducted until annexation imminent. • Other planning studies deferred or completed in-house with longer time horizons for completion. Less pro-active planning. • Reduce staffing of Planning Commission meetings to build capacity for coordinating Neighborhood Associations. Staff support to Neighborhood Associations will be reduced. • Reduce monitoring and coordination of Mankato Sustainability Plan.

  17. Tax Supported Funds Service Level Changes continued • Reduced intern hours will reduce annual enforcement of non-permitted signs and unplanned research initiatives. • Incorporate City Center Partnership business development initiatives into Business Accelerator Program. • Business proposals that have long-term ideation stages, i.e. those that are not moving toward start-up, will either be removed from Accelerator Program or redirected to self-help options on website.

  18. Tax Supported Funds Service Level Changes continued • Twin Rivers Center for the Arts has been requested to assist in the 2010 Riverfront Park Art and Music Festival as part of the partnership agreement. • Engineering goal of a 24 hour response time to customer inquiries increased to 48-72 hours. Scheduling done during regular business hours due to reduction in staffing and overtime. • Reduce the GO portion of the Capital Improvements Program by $150,000 resulting in the elimination of approximately $500,000 of improvements. • If the trend is to continue reducing GO spending, maintenance costs on these delayed projects will increase as well as future reconstruction costs. These increased future costs are difficult to ascertain, but are dependant on fuel and material costs as well as the state of the economy.

  19. Tax Supported Funds Service Level Changes continued • Gaps in Engineering field inspection process will occur with staggered shifts and intern staff reduction. • The City Attorney is appearing in Arraignment Court and making more criminal appearances to avoid numerous trips by staff to the Blue Earth County Justice Center. • This requires her to be out of the office for at least 2 mornings a week which is resulting in delays in processing code enforcement actions, council packet preparation, and other projects requiring the City Attorney’s input. • Eliminate/reduce the City's fiscal involvement with the School Crossing Guard Program. • For the 2009/2010 school year we will reduce the number of crossing locations where crossing guards historically have been used.

  20. Tax Supported Funds Service Level Changes continued • Elimination of School Liaison Officer Program. School district will no longer fund a full position. Having just one officer for the entire district does not seem effective; therefore, the position will not be filled. • Assistant Fire Marshal position will be transferred to shift. Duties related to on-going fire code questions outside of those assumed by Community Development will be handled by the shifts. • Due to the resignation of one of the deputy directors and the decision that the position will not be replaced; there will be a single deputy director over both operational divisions.

  21. Tax Supported Funds Service Level Changes continued • Two fire commanders are retiring and just one will be replaced. With this decision we will realign the Fire Division structure to establish two fire commanders working alternate schedules to provide administrative oversight for the division and mentoring of newly created positions of shift leadership. • The Fire Division will incorporate GIS into their pre-planning efforts to streamline the effort. • Response to medicals will be further reduced. • Online police incident reporting will be implemented to reduce the numbers of times officers need to respond to non-emergency calls for service.

  22. Tax Supported Funds Service Level Changes continued • Investigator schedules will be modified to include evening hours. • Hours of the part-time community service officers will be reduced by 50%. • Elimination of tobacco compliance checks. • Alcohol servers training will be reduced to two times per year and will be limited to Gold Star members. • End participation in the School District’s Career Expo event, an annual day of exhibition and interaction for Juniors in High School.

  23. Tax Supported Funds Service Level Changes continued • Reduce participation in numerous public education/ outreach efforts by 75%, including, but not limited to: Senior Expo, Night to Unite, Popsicles in the Park, Bicycle Safety Rally, Safety Camp, Open House, Homestretch, Citizens Academy, building tours and determine if our efforts need to be condensed into semi-annual or quarterly outreach events. • End participation in the enforcement of parking permits in the MSUM neighborhoods and train neighborhood volunteers to issue tickets. This neighborhood is the only permit parking zone not handled by the residents. • Reduce the number of overtime hours dedicated to providing the downtown foot patrols. • Reduce City's financial contribution to the Police Explorer Program.

  24. Tax Supported Funds Service Level Changes continued • Eliminate conducting of drug court checks. • End the Adopt an Offender Program that had officers making regular, but random, checks on the registered predatory offenders in Mankato to ensure they were living where they reported (unless one open unfunded patrol position is funded). • Reduce banner change outs to once per year for the holiday season--otherwise require organizations requesting banners to pay for the banner change out service. Current standard is to replace banners on approximately a monthly basis for organizations that have provided banners to the City. The standard banner will be the City Center banner.

  25. Tax Supported Funds Service Level Changes continued • Identify low impact areas and reduce City-wide mowing operations by 10%. Current standard is to mow all City property on a rotating schedule. A mowing operations plan will be completed by the end of fiscal year 2009. • Reduce operating hours by 33% at Tourtellotte Pool--new hours are to be Noon – 6:00 p.m. The pool is currently open from Noon until 9:00 p.m. • Reduce crosswalk painting to major arterials and school areas only.

  26. Tax Supported Funds Service Level Changes continued • Inventory all landscaping areas and transition areas to sustainable perennial plantings. • Current standard is that most landscaped areas contain some amount of annual plantings. • Annual plantings will be contained to Sibley Park and the Downtown Core area. • Hanging baskets will be reduced by 50%. • There will be an increase in annual potted plantings in the City Center; however, this will only occur if there are businesses /groups/individuals that adopt the planter(s). • A planting plan will be finalized by the end of fiscal year 2009. • Implement a new, more frequent snow emergency policy that includes small consecutive events that produce more than three inches of accumulation.

  27. Tax Supported Funds Service Level Changes continued • Implement a new snow removal plan that focuses on main arterials and collectors until the snow event has ceased--residential plowing will commence after the snow event. All streets are now plowed during the snow event. • Reduce salt usage by 25% and replace with sand. Sand will provide traction, but won't allow packed snow and ice to melt as quickly from the surface. Currently, the City uses 100% salt for most applications. • Salt usage in residential areas will be limited to safety needs only. • The following hills will be closed during major snow events: Parkway Avenue, Monks Avenue, Warren Street, and Stadium Road. One lane in either direction will be cleared on all other major hills until the snow event has ended.

  28. Tax Supported Funds Service Level Changes continued • A reduced street sweeping plan will be implemented for residential areas focusing on the spring and fall--key areas (arterials and downtown) will continue to receive the same service. Currently, streets are swept on a more frequent basis.

  29. Special Tax SupportedFunds

  30. Special Tax Supported • Sales Tax • Food, Beverage, and Entertainment Tax • Service areas funded by Special Tax Supported Funds: • Civic Center • Public Works – Airport • Capital Improvements – Riverfront 2000

  31. Special Tax Supported Funds Service Level Changes • Civic Center staff travel and industry memberships virtually eliminated. • Reduction in part-time/contractual staffing levels. • Events can pay a fee to have additional staff available. • Reducing the Civic Center ticket office hours to 10:00 a.m. to 5:00 p.m. Monday through Friday. • Closing the Civic Center at 6:00 p.m. on non-event days.

  32. Special Tax Supported Funds Service Level Changes continued • The Airport will develop a mowing plan where only key areas are kept at a 4-inch height. All other areas will be allowed to grow to 8 inches. Current standard is four inches for the entire airfield. • Airport snow plowing operations are being modified to include three stages for plowing.

  33. Fee Supported Funds

  34. Fee Supported Funds • Utility • Storm Water • Transit • Parking • Airport • Housing • Service areas funded by Fee Supported Funds: • Public Works • Civic Center • Finance • Community Development

  35. Fee Supported Fund Summary • The 2010 revenue and expenditure forecast for sewer, water, and refuse are approximately $15,000,503. • The City Manager projects a more typical, or tempered, level of capital improvement spending for the Utility Fund. • Energy-related (natural gas and electric) expenditures in the Utility Fund are projected to increase 6.5% due to increased production and consummation demand. • Utility rates will remain the same for 2010; however, rates will need to be adjusted in 2011 to reflect rising energy costs and increased debt service payments for PFA loans.

  36. Fee Supported Fund Summary continued • Expenditures for the Stormwater Utility Fund, Mass Transit Fund, Parking Fund, and Airport Fund are expected to remain consistent with the previous year. • Spending related to capital improvement does contemplate use of dedicated cash reserves for the purchase of property associated with northeast drainage and the Highway 14/12 interchange project. • Mass Transit and Airport Fund operating expenditures are in balance with revenue from federal/state funding support and sufficient user charges/fees. • Capital improvements for both Mass Transit and Airport are financed through a state/federal grant and local funding match, including capital depreciation for Mass Transit and sales tax for the airport.

  37. Fee Supported Fund Summary continued • City staff is currently conducting an analysis of airport building and hangar lease rates. • The City is negotiating with North Star Aviation for renewal of rates for the various FBO activities and hangar leases. • In the future, all rates shall be adjusted to cover the cost of maintaining hangar buildings and also maintenance of runway, taxiway, and tarmac surfaces. • It is council policy that general tax revenues should not subsidize the cost of airport operations. • Sales tax proceeds have been used solely as a match to federal/state capital improvements grants, with fees and lease rates paying for the balance of the operating budget after the Federal Aviation subsidies are applied.

  38. Economic Development Fund Summary • The Mankato and Blue Earth County EDA Fund should reflect a net income due to the unresolved nature of the capital improvement spending associated with various programs. • The 705 Economic Development Fund will gain in net income from various building leases and administrative charges. • This income is set aside to offset a future roof and repairs on properties owned by the EDA. • As stated previously, in 2011, City staff expects to merge revolving loan funds, MHFA programs, and the Technology Plus Fund with the Mankato and Blue Earth County EDA Program Fund and centralized Economic Development Fund.

  39. Fee Supported Funds Service Level Changes • Utility Billing • Lower costs of processing utility billing by transitioning to mandatory landlord billing for rental properties via ordinance change. • By implementing quarterly conversion of outstanding utility balances to assessable charges, the organization will eliminate utility terminations, excessive postage, and excessive staff time by both maintenance and utility billing. • Leaf pickup will be reduced from a six-week period to a four-week period. SMC's compost site is available for free disposal for all other times. • Appliance pickup will no longer be a free service. • Housing Choice Voucher list to remain closed for new applications.

  40. Internal Services Supported Funds

  41. Internal Service Funds • Central Garage • Administrative Services • Equipment Replacement • Central Insurance • Service areas funded by Internal Service Funds: • Public Works • City Council, City Manager, Finance, Human Resources, Information Technology, and Public Information/ Customer Service

  42. Internal Services Funds Summary • The Administrative Services Fund budgets for various expenses associated with general government activities (Council, Manager, Finance, Human Resources, etc.). Expenses are allocated to the various operations funds. • It is recommended that a portion of the encumbered fund balance of the Administrative Services Fund be used to replace carpeting, furniture, fixtures, and painting in the Intergovernmental building.

  43. Internal Services Funds Summary continued • The Central Garage Fund is considering a capital expenditure of $400,000 from cash reserves to finance the move, remodeling, and roof replacements at the old MN/DOT facility. • The Central Insurance Fund accounts for the cost associated with the City’s employee health insurance program. • A ten percent (10%) premium increase is projected to be paid to the fund by benefiting funds. In turn, health insurance claims and stop-gap coverage is paid from the fund to providers. • The Equipment Replacement Fund is balanced using depreciation charges to finance equipment and vehicle replacements, and maintains a healthy fund balance of $9,000,000.

  44. Internal Service Supported Funds Service Level Changes • City Manager budget reflects 12,000 reduction in intern position, postage and printing/publishing. • Start to phase out Technology Center's Community Access located in the Civic Center which will reduce IT support time and maintenance costs. • There will be lower costs of processing accounts payable with transition to electronic ACH debit payments with all vendors. • Enhanced customer service for the organization to include a centralized customer service focus, including a 311 Call Center to serve as a customer service expeditor and to off-load non-emergency 911 telephone calls. Call Center will streamline citizen access and City service delivery.

  45. Internal Service Supported Funds Service Level Changes continued • There will be a lower volume of on-site payments made (i.e. utility, housing, etc) as we continue to "target and market" electronic receipt (ACH) payment for usage by our customer base. This will include incentives for those that pay electronically. • Employee benefits communications and administration will be provided via the intranet rather than directly to employees in paper format. • Payroll process will be fully automated eliminating paper timesheets, leave request forms, and pay stubs. • Job applicants submitting online applications will receive an automatic e-mail response rather than a personalized letter at the end of the recruitment process. Only veterans (as required by law) and applicants receiving an interview will receive a personalized letter.

  46. Internal Service Supported Funds Service Level Changes continued • Elimination of paid newspaper advertisements for job vacancies. • Formation and administration of a Volunteer Service Corps. • Eliminate City Calendar print project (unless sponsor is secured). • Eliminate April edition of City-School News print project, release City-School News annually in October. • Eliminate City Beat employee newsletter. Replace with departmental postings on intranet. • Transition from print to technology communications. • Change vehicle and equipment depreciation to a monthly rate versus the current mileage or hourly based system.

  47. Capital Improvement Plan

  48. CIP Overview • The 2010-2014 Capital Improvement Plan (CIP) provides an overview of construction and street improvements for a five year period. • Total construction spending for 2010 is projected at $24,911,574; however, only 90,000 of the spending is General Fund expenditures and Charter Bonds comprise of $957,423. • There are projects included (i.e. Riverfront Park-Amphitheater) that will not move forward until a donation or grant is received, which skews the total 2010 spending level.

  49. CIP Overview continued • Street reconstruction fund projects are projected at $41,008,600. Of the total, $50,000 are General Fund expenditures, and $2,929,317 are General Obligation Bonds. Thompson Ravine Road, delay from 2009, accounts for 1,031,100 of General Obligation Bond spending (total project cost $1,963,000). • Proposed 2010 street and construction projects will create construction/trades jobs.

  50. 2010 Construction • Eastwood Energy Center = $2,226,384 • Public Housing Replacement = $414,000 • Rehabilitation of Orness Plaza = $9,450,000 • Sibley Park Building Better Neighborhoods (Phase I) = $918,367 • Sibley Parkway (Phase 2B) = $1,731,400 • Civic Center Parking Ramp Rehab = $125,000 • Commercial/FBO Hangar = $1,400,000 • Community Athletic Fields Neighborhood Park = $72,000 • Community Athletic Field Complex = $307,423 • ICG Carpet Replacement and Painting = $162,000

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