HomeMy WebLinkAbout08.10.15 Work Session Packet City ofFamvngton MlcswnStwetaent
430 Third Street Through teamwork and cooperation,the
Farmington,MN 55024 City ofFarmington provides quality services
that preserve our proud past and foster a
promising
future.
AGENDA
CITY COUNCIL WORKSHOP
August 10, 2015
6:30 PM
Farmington City Hall
1. CALL TO ORDER
2. APPROVE AGENDA
3. DISCUSSION ITEMS
(a) 2016 Trunk Highway 3 Project Discussion
(b) Draft 2016 Budgets
(c) Potential 2007A Bond Refunding Discussion Continued
4. CITY ADMINISTRATOR UPDATE
5. ADJOURN
Aoki**. City of Farmington
430 Third Street
Farrington,Minnesota
.A �
651.280.6800 -Fax 651.280.6899
W W W.CLfairYlQ)gtOn.Iffi1.115
TO: Mayor,Coumclunembers and City Administrator
FROM: Kevin Schorzman,City Engineer
SUBJECT: 2016 Trunk Highway 3 Project Discussion
DATE: August 10,2015
INTRODUCTION
As the city council is aware,the Minnesota Department of Transportation(MnDOT)will be doing a rehabilitation project on TH-3 in 2016.
The project limits are Ash Street on the south and 170th Street on the north
DISCUSSION
In general,the project is a mill and overlay project that will also include ADA improvements to crossings on TH-3 as well as a sidewalk from
Elm Street to 213th Street on the east side ofTH-3 and the completion ofthe trail on the west side of TH-3 from 194th Street to the
roundabout The project will also involve some access modifications between Ash Street and Main Street on TH-3.
These access modifications have been discussed at several city council work sessions this year and an open house was held on July 21,2015,
to provide the public with an opportunity to view MnDOTs proposed plan and provide comments on it. Since the open house,MnDOT has
been working to incorporate cothi,rruts fromboth the public and the city council into the final plan for the project
At this meeting,MnDOT will share the final plan for the project,discuss any items council would like to discuss,and then go over the
mmicipal consent required for the project
BUDGET IMPACT
As discussed previously,the city's portion ofthe project costs will be approximately$50,000 for the sigiral replacement at Elm Street,and up
to one-half of the cost of the trail extension on the west side of TH-3 near the roundabout MnDOT will be covering the other half ofthe trail
construction cost
,ACTION REQUESTED
Listen to the information provided at the meeting by MnDOT and ask any questions related to the 2016 TH-3 project
4E10i6,� City of Farmington
iti o 430 Third Street
Farmington,Minnesota
d .,:
651.280.6800 -Fax 651.280.6899
An
www.cifimimgtonnn.us
TO: Mayor,Counc r embers and City Administrator
FROM: Robin Hanson,Finance Director
SUBJECT: Draft 2016 Budgets
DATE: August 10,2015
INTRODUCTION
Attached for your review are the summary pages for the draft 2016 budgets and an updated fund balance projections.
This evening is your last scheduled opportunity to review the draft budgets before you are asked to adopt the preliminary levy on Tuesday,
September 8,2015.
DISCUSSION
The current draft 2016 General Fund and Debt Service Funds budget summary is as follows:
2016
2015 Proposed
Budget Budget Change
Revenues $3,140,207 3,050,980 $89,227
Fiscal Disparities 2,237,937 2,077,080 160,857
Less:Expenditures 11,482,624 11,770,466 287,842
General Fund Levy 6,104,480 6,642,406 537,926
Debt Levy 3.059,728 2.970.848 (88,880)
Farmington Net Tax Levy $9,164.208 $9,613,254 $449.046 4.90%
Since your July 20,2015 council workshop the following revisions have been made to the budget proposed Farmington Net Tax Levy:
Proposed Net Tax Levy at July 20,2015 workshop $9,530,233
Add:
Restore EDA transfer from General Fund to$40,000 20,000
Restore'to be determined'position 75,000
Subtract:
Administrative reserve to bring levy below 5% 11,979
Proposed Net Tax Levy as of August 10,2015 $9,613,254
In addition the General Fund budget has been updated to reflect the pool will be open in 2016.This change was budget neutral
General Fund and Debt Service Fund Items Yet To Be Finalised
The following amounts are still subject to change:
• local government aid(LGA),
• fiscal disparities,
• human resource costs,and
• debt repayment obligations.
The first two bulleted itens above will be updated by the end of August Human resource costs will not be known until the various contract
negotiations are complete. Debt repayment amounts will be finald when the 195th street bond issue is awarded this fill,
Tax Notes
A briefhistory ofthe tax levy changes is listed below.
2010 2.39% 2012 0% 2014 1.92%
2011 3.42% 2013 0% 2015 4.96%
The estimated market value(EMV)for residential tones in Farmington is expected to increase from$199,426 to$213,155,an increase of
6.88%.
The County estimates the market value fir last year's new construction in Fam ngton was$23.4 million.This translates to$256,935 in new
tax capacity. Applying the city's 2015 tax rate to this amount would result in$157,899 oftax levy related to new construction or 1.49%.
Ifthe 2016 tax levy were to increase 4.90%,it is estimated the average residential honneowner's property taxes would increase$46.52/year
or$3.88/month.
Other Budgets
Two changes were made to the renaming budgets.
The operating transfers into the EDA were restored to$40,000.
Sewer
The professional services line item was decreased to$150,000 which represents the updated project costs,of$50,000,for the reconstruction
of the sewer line that goes north on Embers through the new adjoining Lakeville development.This armunt was included in case that project is
carried over to 2016.The remaining$100,000 is unchanged and provides fluids to begin to update the Sanitary Sewer plan that is part of the
camp plan as well as other potential items,such as,sewer lining The 2016 MCES foes will not be fmalimd until the city receives updated
numbers fromthe Met Council later this year.
BUDGET IMPACT
All information is related to the development of the 2016 city budget and tax levy.The 2017 projected budget numbers have had minimal
review;they continue to be a work in progress.
,ACTION REQUESTED
Review the proposed 2016 budgets and ask any reaming questions in preparation of adoption of the preliminary levy during the Tuesday,
September 8,2015 council meeting.
ATTACHMENTS:
Type Description
❑ Backup Material General Fund Draft Budget
❑ Backup Material Debt Levy Draft Budget
❑ Backup Material Special Revenue Funds Draft Budget
❑ Backup Material Capital Projects Funds Draft Budget
❑ Backup Material Enterprise Funds Draft Budget
Cl Backup Material Updated Fund Balance Projections
City of Farmington
Budget and Tax Levy
2015 Budget,2016 Proposed and 2017 Proposed
Company 2015 2016 Budget% 2017 Budget Change
Budget Proposed Change Proposed
Non-Property Tax Revenues 1
Licenses and Permits 483220 385,905 (20.14)% 371,490 (3.74)%1
intergovernmental Revenue 760,857 794,857 4.47% 778,857 (2.01)%
Charge for Service __ 558,950 591,700E 5.86% 575,200 (2.79)%
Fines and Forfeitures 72,000 65,000' (9.72)% 65,000 0.00%
investment Interest 20,000 18,462, (7.69)% 18,462 0.00%
Miscellaneous 121,000 46,685 (61.42)% 48,185 3.21%
Transfers In 1,124,180 1,148,371 2.15% 1,182,840 3.00%';
Total Revenues 3,140,207 3,050,980, (2.84)% 3,040,034 (0.36)%
Expenditures ■
Administration 829,877 802,223 (3.33)% 934,125 16.44%1
Human Resource 263,344 279,035 5.96% 290,102 3.97%j
1
Finance and Risk Mgmt 614,019 681,973 11.07% 715,940 4.98%
Police 4,114,992 4,182,762 1.65%1 4,331,161 3.55%
Fire 1,042,717 1,125,007' 7.89%I 1,386,877 23.28%1
Community Development 526,475 594,498 12.92%I 692,830 _16.54%
Engineering 698,835 656,688 (6.03)% 690,684 5.18%
Municipal Services 1,289,684 1,245,499 (3.43)% 1,394,511 11.96%
Parks and Recreation 1,276,674 _ 1,290,7951 1.11% 1,3.18,993 2.18%,
Perm Levy Ad)(15,16,17) 30,000 5,379' (82.07)% 30,000 457.72%
Transfers Out 796,007 906,6071 13.89% 911,607 0.55%
Total Expenditures 11,482,624 11,770,466; 2.51% 12,696,830 7.87%;
Revenues Over(Under)Expenditures (8,342,417) (8,719,486) 4.52% (9,656,796) 10.75%
Fiscal Disparities 2,237,937 2,077,0801 (7.19)% 2,077,080 0.00%
General Fund Levy 6,104,480 6,64Z406 8.81% 7,579,716 14.11%'
Debt Le - -
Debt Levy-Bonds __ 2,939,728 2,850,848 (3.02)% 3,184,903 11.72%
Debt Levy-Fire Truck _ 120,000 120,000 0.00% 117,562 (2.03)%1
Total Debt Levy I 3,059,728 2,970,8481 (2.90)% 3,302,465 11.16%1
Ag Credit 0 1
Farmington Net Tax Levy 9,164,208 9,613,254' 4.90%I 10,882,181 13.20%
Location: Documents\FARMINGTON\Budget 2016-2017\1 General Fund Budget Summary Page 2015 Base
7/29/2015 8:14:12 AM
Debt Service Funds Summary
*Includes Fund 3005 (formerly 86A) as placeholder for Fire Truck loan,
Fund 3093 as Placeholder for 2015A 195th St Bond Issue
2014 Actual,2015 Budget,
2016 Proposed and 2017 Proposed
Company Actual Budget Proposed Proposed
2014 2015 2016 2017
Revenues
Property Taxes(Le.Debt Levy) 2,857,711 3,059,728 2,970,848 3,302,465
Special Assessments 502,299 489,6.07 4.66,817 447,368
Deferred Assessments(VRC) 18,073 0
MSA Construction 0 335,000 135,000
Interest on Investments 1,825 0 24,745 24,745
Total Revenues 3,379,908 3,549,335 3,797,410 3,909,578
Expenditures
Principal Repayment 3,817,055 3,082,819 4,527,474 3,285,834
Interest on Debt 1,069,463 973,822 972,115 843,441
Debt-Fiscal Charges 17,959 28,162 28,623 27,1861
Total Expenditures 4,904,476 4,084,803 5,528,212 4,156,461
Other Financing Sources
Bond Proceeds 0 4,290,000
Transfers In 639,860 826,140 1,878,552 343,552
Transfers Out (186,417) (4,437,000) (117,000) (171,000)
Total Transfers 453,443 679,140 1,761,552 172,552
Change in Fund Balance (1,071,126) 143,672 30,750 (74,331)
7/29/2015 8:17:27 AM Page 1 of 1
Special Revenue Funds Budget Summary
2014 Actual,2015 Budget,
2016 Proposed and 2017 Proposed
Company 2014 2015 2016 2017
Actual Budget Proposed Proposed
Revenues
EDA(2000) 54,764 7501 1,572 1,572
TIF-City Center(2050) 110,906 137,120 1 111,978 1,978
TIF-Eagles(2051) 4,273 190
Police Donations&Forfeitures(2100) 3,212 5,0601 5,084 84
Park Improvement Fund(2300) 78,802 21,193, 9,008 8,708 i
Ice Arena(2500) 301,647 306,860 I 321,750 326,4501
Total Revenues 553,604 471,173 449,392 338,7921
Expenditures
EDA(2000) 29,627 40,7501 42,430 40,7231
TIF-City Center(2050) 6,874 9,3041 8,704
TIF-Eagles(2051) 27,868 0
Police Donations&Forfeitures(2100) 4,936 6,500 6,500
Park Improvement Fund(2300) 81,350 70,000 60,000 150,000
Ice Arena(2500) 302,084 316,2041 317,418 445,120
Total Expenditures 452,738 442,758� 435,052 635,843
Transfers
Transfers In 79,417 130,000 1 80,000 80,000
Transfers Out (101,959) 0
Total Transfers (22,541) 130,000, 80,000 80,000
Change In Fund Balance 78,324 158,415 94,340 (217,051)
7/29/2015 8:18:00 AM Page 1 of 1
Capital Projects Funds Summary
2014 Actual,2015 Budget,
2016 Proposed and 2017 Proposed
Company 2014 2015 2016 2017
Actual Budget Proposed Proposed
Revenues
i
Sanitary Sewer Trunk(3900) 64,824 34,790 32,437 2,4371
Cable Communications Fund(4000) 169,208 173,210 174,177 174,177;
Road and Bridge/Street Reconstruction Fund(4100) 135,634 53,135 35,978 23,716
I Fire Capital Projects Fund(4300) 49,150 15,090 15,6581 658
Storm Water Trunk(4400) 106,586 36,270 30,238, 30,238
RRC&Youth Hockey Cap Proj Donations(Rec Cap Proj Fund-4500) , 18,901 5,140 5,210' 210
Private Capital Projects(4600) 26,050 21,990 22,354 1 2,354
Permanent imp Revolving Fund(4900) 23,892 17,038 16,400 780
Gen'1 Cap Equip Fund(5600) 6,260 13 131
Maintenance Fund(5700) 0 4,180 11,631 11,631
Total Revenues 600,506 360,843 344,096 246,2141
Expenditures
Sanitary Sewer Trunk 7,588 0
Cable Communications Fund 230,785 71,0001 81,000 81,000
Road and Bridge/Street Reconstruction Fund(4100) 1 3,313 01 1
Fire Capital Projects Fund(4300) 120,960
62,500 347,5001 -
Storm Water Trunk Fund 447 350,000. _
RRC&Youth Hockey Cap Proj Donations(Rec Cap Proj Fund-4500) 15,817 7,500 7,500
Private Capital Projects 1,661 20,000 20,000
Permanent Imp Revolving Fund 388 0 474
Gen'I Cap Equip Fund(5600) 165,707 141,607
- - 1
Maintenance Fund 1,338,754 5,020,000 621,500 594,250
Total Expenditures 1,719,712 5,696,707 1,219,581 675,250
Transfers
Transfers In 820,579
i 5,072,707 983,607 1,042,607
, 1
(257633)
Transfers Out (518,633) (1,754,000) (219,000)
Total Transfers 562,946 4,554,074 1 (770,393) 823,607
Change In Fund Balance (556,260) (781,790)1 (1,645,878) 394,571
7/29/2015 8:18:48 AM Page 1 of 1
Enterprise Funds Budget Summary
2014 Actual,2015 Budget,
2016 Proposed and 2017 Proposed
Company 2014 2015 2016 2017
Actual Budget Proposed Proposed
Revenues
Liquor Stores,Net of Cost of Goods Sold(6100:6115) 1,171,397 1,156,3721 1,157,1261 1,170,575
Sewer Operations(6200:6205) 1,863,708 1,803,2811 2,046,426 2,056,526
Solid Waste(6300:6302) 2,003,020 1,928,430 1,927,295 1,953,295
Storm Water(6400:6405) 568,527 556,350 641,396 644,596
Water(6500:6508) 1,714,253 1,732,312 1,677,698 1,821,158
Streetlights(6600:6602) 219,052 216,070 219,380 220,380
Total Revenues 7,539,9571 7,392,815 7,669,321 7,866,530
Expenditures
Liquor Stores 848,032 872,022 934,208 954,450
Sewer Operations 1,712,646 2,703,969 1,963,024 2,074,902
Solid Waste 1,600,436 1,711,408 2,072,302 1,822,505
Storm Water 615,686 701,759 f 637,676 736,976
Water 1,410,215 1,538,39611 1,551,597
Streetlights 174,957 216,900; 222,100 231,745
Total Expenditures 6,361,973 7,744,454 7,352,592 7,372,175
Transfers
Transfers In 0 0
Transfers Out (1,414,119) (1,466,687) (1,312,923), (1,347,392)
Total Transfers (1,414,119) (1,466,687)! (1,312,923) (1,347,392)
Change In Fund Balance (236,135) (1,818,326), (996,194) (853,037)
7/29/2015 8:19:23 AM Page 1 of 1
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�o�E t, City of Farmington
430 Third Street
if Farmington,Minnesota 651.280.6800 -Fax 651.280.6899
�*'•a ° www.cifarmfrigton.nnus
TO: Mayor,Councin embers and City Administrator
FROM: Robin Hanson,Finance Director
SUBJECT: Potential 2007A Bond Refiur>ding Discussion Continued
DATE: August 10,2015
INTRODUCTION
The 2007A bonds are optionally redeemable February 1,2017.The city has the opportunity to refund the 2007A bonds now and lock-in
future interest rate savings.This series of bonds would be 2015B.
DISCUSSION
The city council has a choice regarding whether to refirnd the 2007A bonds now or wait until it is closer to the February 1,2017 optional
redenption date.
The following summarizes the nnre significant pros and cons of refimdung the bonds at this time:
os
• Lock-in estimated net present value savings of$312,000
Cons
• The savings above are net of$173,000 in negative arbitrage,which means the amount of investment earnings on the bonds proceeds
would be less than the amount of interest being incurred on the bonds fromthe time the bonds are issued until the optional redemption
date.
• Lose the option to expand the type oftenants to whom the vacant space on the second floor of city hall could be rented,though,even
with taxable financing the timing restrictions make this extremely difficult.
Now Versus Then
The most difficult issue with the proposed refimding is deciding whether or not it is better to lock-in the potential interest rate savings now or
wait until closer to February 1,2017.Waiting would reduce the amount of negative arbitrage the city irons.
alms,rs,the city's financial advisor,completed two sets of cash flow projections to provide some additional context. Utilizing the same interest
rates for the two comparisons,so the only diflirrence was when the bonds were issued,they estmrated the net present value savings would
increase from$312,000 to$523,000 ifthe city waited to issue the bonds. This makes sense,because ifyou waited until late 2016 to refimd
the bonds you wouldn't have minimal negative arbitrage.
Ifthe city council believes the city's borrowing costs will be the sane or even less 15 months fromnow,then waiting would clearly make
sense. However,we know interest rates will not be the sane;interest rates will change. How much higher or lower the rates may be in
November/December of2016,we cannot predict
Further analysis shows the city's overall cost of borrowing could increase.45%-.50%and the estimated savings would be about the sane as
the savings that are expected to be realized at this tine. If rates were to increase more than.45%-.50%,than the savings would be further
reduced and it nay not make economic sense to rebid the bonds at that tine.
BUDGET IMPACT
The 2007A bond refimding would be cost neutral to the 2015 budget. The interest rate savings would be realized in the future.
ACTION REQUESTED
Staff seeks direction fromthe city council on whether or not to proceed with the 2007A bond refimding,