HomeMy WebLinkAbout2018.07.17 Memo Resolution - Award Contract - Masonry
To: Mayor Hicks & City Councilmembers
From: Melanie Mesko Lee, City Administrator
Date: September 4, 2018
Item: 2019 Preliminary Levy and Budget
Council Action Requested:
Approve the resolutions:
2019 Preliminary Budget, Property Tax Levy and Public Hearing Date for 2019 Budget
2019 HEDRA/HRA Special Tax Levy
Background Information
Purpose of the Budget
The budget represents the financial plan and priorities of the City of Hastings, within established limits
set by the City Council. It is intended to clearly communicate the City’s goals and how resources are
allocated to those priorities. In essence, the budget process is an ongoing one whereby priorities and
goals are established and funded in alignment with Council directives, our CORE values, and our
strategic objectives.
Council/Finance Committee Direction
The Finance committee (Vaughan*, Balsanek, Braucks) held a budget meeting on May 14, 2018
where staff went over the preliminary outlook on market value, tax rates, and expenditures.
The market value increased by 8.21% ($1,620,000) to $21,300,000. This is a high level review
based on the information available at the time and is intended to provide the Finance
Committee with some initial information going in to the 201 budget process.
The City Council held a workshop on June 18, 2018 where staff provided additional context and
data on preliminary financial projections including revenue and expenditure trends, market
value and tax capacity, and debt projections. The Council provided valuable feedback regarding
their desire for new initiatives and large projects. At that meeting, staff was directed to prepare
a preliminary budget that does not allocate one time revenues (such as Local Government Aid)
to funding on-going operating expenses. The initial projection included budgeted salary, health
insurance, and debt levy increases.
During June, departments prepared their budget requests for 2019, including updating their
Capital Improvement Plan data for identification of future needs.
City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
The next budget meeting was held with the Finance Committee (Vaughan*, Balsanek, Braucks)
on August 2, 2018. At this meeting, each department head provided an overview of their top
priorities for initiatives, staff, and capital investments for 2019 and the Finance Committee
provided feedback.
The final budget meeting was a Council Workshop held on August 16. Based on department
requests, review of debt and revenue projections, the Council provided direction to set a
preliminary levy at $14,233,201 and the preliminary budget at $32,976,425. The preliminary
proposal as recommended by the Council would reduce the City’s tax rate from 60.89% to
59.43%. This continues a multi-year goal of the Council to continue to reduce the City’s tax rate.
YearTax Rate
201466.25%
201562.58%
201663.58%
201762.52%
201860.89%
2019*59.43%
* proposed rate
Historical Information
Following several years of decline due to the Recession i10 years ago, over the last few years
the City’s tax capacity has steadily increased. In 2019, that increase is estimated at
approximately 8.21% ($1,620,000), bringing the overall market value to $21,300,000. This is the
highest level since 2009. The chart blow provides a historical view of shows this increase, as
well as an overall continual reduction in the tax rate.
City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
Preliminary Budget Revenues
As we prepare our annual budget recommendations, we review our available funding, potential
revenue, and how we can present a responsible budget that supports the diverse services we
offer. Resources are available through both our levy supported budget as well as our non-levy
supported budgets. These non-levy resources includes utility (water, wastewater, hydro),
franchise fees (cable), dedicated funding (LeDuc) and parks capital (park dedication fees).
Based on the Council’s direction, staff sought feedback from the Finance Committee on a
number of operating and capital items for the 2019 budget. As with many local government
entities, a large amount of our budget is reflected in personnel costs. We are also continually
evaluating our service delivery model in an ongoing effort to provide high quality, constituent
focused services in a financially responsible manner. The preliminary 2019 budget reflects those
objectives as well as elements from our Strategic Plan which outlines Transportation/Transit,
Economic Development and Redevelopment, and Community Image as priorities.
Preliminary Budget Expenses
Each year, we are challenged with meeting many important needs with limited resources.
Unfortunately, there are unmet needs each and every budget cycle. Departments are tasked
with preparing recommendations that are innovative, cost sensitive, and responsive.
Additionally, as a Green Steps City, Council has provided direction that sustainability should be
considered as we evaluate budget proposals. Finally, we work to prepare a budget that takes
care of current assets and amenities---our buildings, parks, recreational facilities—that our
community values.
City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
Hastings Preliminary Operating Expenses by
Function
all funds -excludes capital and other one-time items
Debt Service
Economic
15%
Development
Culture and
2%
Recreation
11%
General
Government
10%
Public Works
26%
Public Safety
36%
Preliminary Recommended Budget
As part of the preliminary levy and budget, we have the following items identified within the
recommendations. This list is not comprehensive and is subject to change as the Finance
Committee and full Council meet further and provide further direction. It should be noted that
some of these items are capital and are not included in the operating figures presented above.
Pool Improvements (Play Structure reconditioning, Main Drain Replacement, etc.)
New equipment for Fire ( Fire hose, Confined Space Respirators, Exercise Equipment)
Computer/IT updates
Website Upgrades
LED lighting for Public works
Arena exterior building repairs
Economic Development initiatives
Replace 3 marked safety vehicles (Police)
Remount Ambulance
Infrastructure improvements
Neighborhood improvement projects
o
Hwy 61 Scoping Study
o
Mill & Overlay
o
Impact on Homeowner
The City Council has consistently shown a high sensitivity to how our budget decisions impact
the Hastings homeowner. Accordingly, based on the preliminary levy the Council is being asked
to set, we have prepared the following analysis:
City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
Next Steps
From a timing perspective, the 2019 preliminary levy and budget must be set by October 1,
2018. The HRA/HEDRA levy must be set by October 1, 2018. Once set, the City Council cannot
establish a final levy which is higher than the preliminary levy. A Truth in Taxation hearing will
be held at the Council Meeting at 7 p.m. on Monday, December 3, 2018. The final 2019 budget
and levy will be acted upon at the Council’s December 17, 2018 meeting.
I would like to extend a sincere appreciation to the leadership of the Finance Committee as well
as our staff for their work and involvement thus far on the 2019 budget.
City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov