HomeMy WebLinkAbout09-10-19 Worksession Packet 0
City of Oak Park Heights Worksession
Date: Tuesday, September 10, 2019
Time: 5:00 PM
Location: Oak Park Heights City Hall
1. Call to Order
2. 2020 Budget
3. 95-Gallon Solid Waste Container
4. Adjourn
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01- OAK PARK
ltl
MemoF_.
To: Mayor and Council
From: Betty Caruso,Finance Director
Date: September 10,2019
Re: 2020 Budget Work Session
The budget work session will be a summary of the budget and tax levy with possible changes to
them. This will be discussed in the following agenda:
I. Summary of the Budget and Tax Levy with Tax Impacts
(Using the values adjusted for the reduction in Xcel properties)
II. Possible Reductions to the Budget/Tax Levy and the impacts
a) Option 1: Street Reconstruction Funds Transfers
b) Option 2: Other Transfers
c) Option 3: Use of Other Funds
III. Direction from Council
IV. Approach to Preliminary Tax Levy and TNT notices
PLEASE BRING YOUR BUDGET DOCUMENTS FROM LAST WORKSESSION
Information Included:
• Outline of Options for Budget Reductions—2020 BUDGET NOTES-SEPT 10
MEETING
• Street Reconstruction Original
• Street Reconstruction Actual(with changes)
• Budget for Transfers from General Fund
• Budgeted Projects and Equipment Fund-2020 Budget
• Funds Available
September 10a'/24th Council Meeting Summary of Budget
Approve Proposed Levy for TNT Hearing
(Due to County September 301)
December 10th Council Meeting TNT Hearing and possible Budget Adoption
(Due to County December 30')
Page 3 of 14
1) SUMMARY OF THE PRELIMINARY TAX LEVY
2020
2019 FINAL PRELIMINARY INCREASE %CHANGE
LEVY TAX LEVY TAX LEVY OVER 2019 2020
OPERATIONS , (1) $ 3,423,846 $ 3,831,559 $ 407,713 11.91%
TRANSFERS $ 1,087,400 $ 1,149,635 $ 62,235 5.72%
DEBTSERVICE $ 579,000 $ 579,000 $ - 0.00%
TOTAL TAX LEVY $ 5,090,246 $ 5,56Q1% $ 469,948 9.23%
TAX RATES 50.031 52.984 1953 5.90%
ESTIMATED CITY TAXES
HOME VALUE 2019ACTUAL 2020ACTUAL INCREASE Value Budget %CHANGE
$ 246,400 $ 1,037.42 $ 1,225.66 $ 188.24 79.52 108.73 18.15%
$ 100,000 $ 310.49 $ 380.37 $ 69.89 36.15 33.74 22.51%
$ 150,000 $ 558.61 $ 668.90 $ 110.29 50.95 59.34 19.74%
$ 250,000 $ 1,055.41 $ 1,246.59 $ 191.17 80.59 110.58 18.11%
$ 400,000 $ 1,800.34 $ 2,112.80 $ 312.46 125.04 187.42 17.36%
(1) Reduced by 203,666 use of Fund Balance
2) POSSIBLE CHANGES TO BUDGET AND TAX LEVY
• OPTION 1- REDUCTION IN TRANSFERS FOR THE STREET MAINTENANCE PROGRAM (REDUCTION
OF$200,000)
Scheduled Funding for street maintenance is approx.$400,000+3%annual increase PLUS
$200,000 to help Mill and Overlay funding.
Proposing elimination of$200,000 M&O funding for 2020(restoring the funds over a 4 year
period)
RESULTS: Reduction of taxes on median home by$46.27.
• OPTION 2-REDUCTION OF TRANSFERS FOR PARK BUILDING AND IMPROVEMENTS
(REDUCTIONOF$100,000)
Reduce Park Building Maintenance Transfer from$50,000 to$0. (Balance in fund$258,948.)
Reduce Park Trail Maintenance from$50,000 to$0. (Balance in fund $401,154)
RESULTS: Reduction of taxes on median home by$23.13.
• OPTION 3—USE OF MN DOT/HWY 36 FUND BALANCE-REVOLVING CAPITAL PROJECT FUND
Since 1992 through 2017 the Hwy 36 Bridge Project incurred$1,468,000 of expenses including
construction approx.$1,280,000 and legal and other related expenses of$188,000.The balance
remaining in this fund is$390,000,a result from the$380,000 received from MNDot due to the
City's proactive enforcement of the Utility Agreement that required City reimbursements.
These funds should be transferred to the General Fund and could possibly be utilize for tax
reductions.
Apply$100,000 towards tax relief for 2020 and the balance toward future tax relief as we
continue on this shift of valuation.
RESULTS: Reduction of taxes on median home by$23.13.
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Page 9 of 14
UTILIZATION OF FUND BALANCE - PER POLICY
2018 2019
BALANCE 12/31 $ 5,097,274 $ 4,893,608
Non-Spendable Prepaid Items (34,940) (35,000)
Assigned Employee Benefits (194,000) (194,000)
Ensuing Years Budget (203,666) -
Deseinated
Cash Flow (2,300,000) (2,500,000)
Contingeny (870,000) (900,000)
Snow Plow Reserve (140,000) (141,000)
Used Reserve for Snow Plow 2019 (50,000)
Tax Petition Adjustments (65,000) (65,000)
Transfer from Revovling CP Fund 390,000
UNASSIGNED $ 1,289,668 $ 1,398,608
Reserve for Interfund Loan
to Realignment of Frontage Road-(Invested for
Development in Osgood/North Frontage Rd) (410,000) (410,000)
BALANCE FOR ALLOCATION $ 879,668 $ 988,608
POLICY I-UNFUNDED PROJECTS
TAX PETITIONS-LOSE OF TAX REVENUE INC 100,000 Boutwells/Xcel/Menards
PLANNING FOR XCEL REDUCTIONS 290,000
POLICY If-TRANSFER TO OTHER FUND
STREET-MILL AND OVERLAY-UNKNOWNS ?
POLICY III-REDUCES TAXES 100,000
TOTAL ALLOCATIONS $ 490,000
BALANCE REMAINING $ 498,608
9/6/2019 POSSIBLE USES OF FUND BALANCE 2020 BUDGET PLANNING-.xlsx Page 10 of 14
City of Oak Park Heights pap,of1
1416$Oak Pack H1v& N•Oak Park Heights,MN 55M*Phone&511439-4439 a Fax{631)4390574
l;/20/is
TO: Mayor and City Councl
FROM: Eric Johnson,City � i
RE: C I —CONTINUED
a ton Solid W ste Conte
At the July 2019 Budget Workshop,the Council did discuss the possibility of the Implementation of
billing the additional costs of a 95-gallon solid waste container.
To accomplish this Staff is recommending:
1. Adoption of a Formal Policy—DRAFT ENCLOSED.Any input or concerns?
2. For discussion,I have attached a draft letter of communication to those residents who have the
95-gallon container. How this is walled-out will be as important as the policy Itself.(Feedback Is
helpful on this letter)
3. Ultimately,the City will need to amend its Annual billing/fees resolution to reflect these casts—
this will happen In December AND develop are related ordinance.(NO ENCLOSURE)
If the Council would like to continue to move forward with this,I will prepare these for the 9/10/19 City
Council Agenda.
Page 11 of 14
CITY OF OAK PARK HEIGHTS
POLICY RELATING TO THE BILLING OF DISPOSAL FEES—95,llon Qntainers
AMM:
In total,the City expends over$250,000 annually in solid waste disposal,recycling services and spd*fall clean-
up costs and generally handles over 2,000,000 lbs.of trash and 500,000 lbs. of recycling annually.Prior to 2009,
these costs were billed directly to residents through a monthly billing based on garbage bin sizing with each eligible
property paying a correlating rate based on requested size of bin(35,65 or 95 Gallon). Ebwever,since 2010 the
City has directly paid for 100%of the monthly solid waste collection costs through its general property tax levy
and the City has not billed a price difference based on requested cart aiza.
For 2019 the City is billed at$79.00 per ton by the Ramsey/Washington County Recycling&Energy Board
(RWREB). NOTE: The City and its Haulers are REQUIRED to take all Solid Wastes to the R&E Center as
operated by the RWREB. In 2005 the per ton rate was
$39.00. as anon as 8011an e6 Gahan
iffids 3.73 g an s AAOBased on current rata,the monthly household charge billed A 4,00 $ 4.ao s 4.60
to the City is noted.in the Exhibit.This DISPOSAL FEE is S 100 —0-1.M
20 5-5 s ±opo
based upon the tonnage disposal Cost of the solid waste per5 0.41 i 0.41 S 0.41
i 11.60 $ 15.89 $ 1666
relative Container Slee.
Un%ftunately, solid waste costs for disposal of this tonnage has v%ub dy increased and the City's ability to
continue to fierily fund these costs through the general property tax levy is declining. 'Therefore,the City must
evaluate cost savings options where appropriate BUT MUST ensure that a balanced solid waste collection system
is kept in place fur all residents
current oft Polic_►
As noted above, the current City Policy is that the City does pay 100% of all solid waste costs— including
DISPOSAL FEES which is essentially calculated and billed to the City fivm the waste hauler through this three-
tier
hre-tier bin sizing.The City does not bill for any portion of these costs bank to the residential users.
Cly Policy—Effective Janwy 1,2j20,
As of 1/1/2020 the City will continue to pay for 100%the 35 to 65 gallon bin sizes;however due to the rising costs
of Disposal Fees and the fka that the current policy de-incentivizes the reduction of solid waste the City will
commence billing for the Disposal Fee cost portion of the 95-gallon bin over the 65 gallon bin to the property in
the quarterly billing. The 2020 rate shall be$2.97 per month but may increase or decrease as tonnage rates are
adjusted. Residents would have an option to pay the monthly fee increase OR switch to the 35- or 65-gallon
container.
I1V��ATIOPi:
All 95-gallon carts shall be replaced.with 65-gallon carts unless affirmative acknowledgement is made by
the property owner of the additional charges.
The implementation of the new policy is expected to take up to six months as carts are switched out
(commencing only after Feb 14; 2020 following the holiday lesson)and billing cycles catch up to the
correct bin size.
Page 12 of 14
City of Oak Park Heights
14168 Oak Pack Blvd. N e Oak park HcWft mN 55062•phone 651 439-4439•Fax 651 439-0574
X
X
X
Dear 95-gallon user;
In total,the City expends over$250,000 annual*in solid waste disposal,recycling services and spsirsglfall clan-up cosi
and generally handles over 2,000,000 lbs.of trash and 500,040 63.of recycling annually.Prior to
2009,these costs were
billed dirrctiy 10 resldeats through a monthly billing based on garbage bin sing with each eligible property paying a
correlating raps fora requested site of bin being a 35,65 or 95 Callon. However,since 2010 the City has directly paid for
100%of the monthly solid waste collection oasts through its general property tax levy and the Cray has not billed a price
d10erence basted on oluested cart ste.
Unfortunately,solid waste casts for disposal of this tonnage has regularly increased and the C-Ws ability to continue to
fully fund these costs through the general properly tart tejs dec0ining. Therelb%the City must evalualae cost savings
options where appropriate BUT MUST also ensure Bret a balanced solid waste colieft sysbarn is kept in place for an.
Commencing in 2020,(between Febmary 18%202D and July 14,2no)all"Ion garbage carts will be replaced
"Ion Ion carts and the City will continue to pay 100%of tcosh of cof 35 and ftdlon carts, Nowurrrer, If
residents desire to use the 93Vifon add waste 00ft lner they will be responsible to pay the coat dNfwonm
between the 55 and 9&gallon container a may be duly charged by the C IVs conbacted wests,hauler,As of July
112019,that price dltfenence Is$2.95 monthly.These teen would be billed to you quartehdy by the City.
You need to do nothino at this lime unless you still desire a 95-gallon container.Which ti you do,please eontad City Nall
at 651-g39 M9 so we can coordinate tins matter formally,however we would ask that you first Plesse considec,
• That 35 galm or 65101on oornalner Is what the majority of houeONM have In the City.
• Perhaps that you glue the wnWWomtatner a try,It can be WAMed to the Vkgdm 5neceNW.
• If you haus the WMIDnal eucba NO of garthege It h$1.75 per bag arra Could be a dheaperoption when necem".
• Rewlde*may putout an unlhnitad volume of recydW*z and may use any reasmatde emkiner.
• Consider the use of Waawngibn Courtly Corrrpodng Site or Environmental Cerner to dispose of other ttams that may be
eiglbte.
The City does understand that there will be challenges to this switch for some larger households,we trope these can be
resolved though more recycling and less generation of solid waste where possible and that adequate lead-time will be
helpful. Please let me know If you have any questions and I will do my best to answer these.
IQnd regards
Eric Johnson
City Administrator
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