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HomeMy WebLinkAboutTNT Hearing Documents AGENDA CITY OF OAR PARK HEIGHTS WEDNESDAY, NOVEMBER 29, 1995 -- 7:00 P.M. TRUTH -IN- TAXATION PUBLIC HEARING I. Call To Order, II. Truth in Taxat Public Hearina 1. City Budget Summary Enclosure 1 & 1B 2. City Auditor - City Financial Presentation 3. Questions /Comments from Audience Adjournment: ENCLOSURE 1 MEMO Date: November 29, 1995 To: City of Oak Park Heights Property Owners From: Mike Robertson, City Administrator Re: Proposed 1996 Budget & Tax Levy You have before you a proposed 1996 budget for the City of Oak Park Heights. Projected expenditures are $1,950,605. Non -tax revenues are projected to be $647,468. A tax levy of $1,303,137 is required to balance the budget. This tax levy represents an increase of $27,137 over last year's tax levy, an increase of 2.130. However, according to the Washington County Assessor's office, the City's tax capacity has risen 2.2 due to growth in the City tax base. This means the actual property tax increase for the City portion of your taxes should be 0 %. If the market value of your property does not increase, that means the City portion of your taxes should be unchanged. The market value of your property is determined by the Washington County Assessor's office. Your valuation for 1996 has already been set by the County Assessor. If you have any questions about your market value, you can call the Assessor's office at 430- 6090. The proposed budget balances resources against services. It provides levels of service consistent with the City's financial ability. What follows is a review of City revenues and expenditures, and the proposed or expected changes in 1996. I have also enclosed (Enclosure 1B) a summary of the City's Budget. REVENUES Revenues are expected to rise from $1,894,300 to $1,950,605, an increase of 2.97 %. Permit revenues are expected to rise $19,000 due to an increase in construction. Interest earnings are expected to increase $8,000 due to increases in interest rates and in fund balances. The only projected decrease is a reduction in Homestead Credit received from the State of Minnesota from $76,000 to $67,000. EXPENDITURES Police Department - The Police Department is $683,515 or 350 of the general budget. This reflects the salaries and benefits of the police officers, their training and equipment, the maintenance and repair of equipment, and their portion of supplies and insurance. Sanitation & Waste - The Sanitation budget is $356,000 or 18.25 of the general budget. This reflects the total cost to the City for garbage pickup and recycling. The City contracts for this service. The City pays approximately 670 of garbage pickup and recycling costs and property owners pay the rest. Recreation - The Recreation budget is $198,875 or 10.200 of the general budget. This reflects the salaries and benefits of the Utilities Department personnel and their portion of City insurance costs, the maintenance and repair of City Parks, and materials and supplies necessary for maintaining the parks. Citv_ Clerk -.The City Clerk's Department is $195,725 or 10.030 of the general budget. This reflects the salaries and benefits of administration personnel, their training and equipment, and their portion of office supplies, insurance, and materials. General Management - General Management is $137,800 or 7.06% of the general budget. This reflects general fixed charges such as insurance on buildings and equipment, workmen's compensation insurance, general liability insurance, grants and contributions, and consultants. Buildina Inspector - Building Inspections is $63,425 or 3.25% of the general budget. This reflects the City's costs of building inspections, both the salary and benefits of the building inspector along with the costs of office supplies, gasoline, insurance, and other supplies which are charged to that office. Fire Protection - Fire Protection costs are $54,500, or 2.80% of the general budget. This reflects the costs to the City for contracting with the City of Bayport for fire protection. Street Liahtincr - Street Lighting costs are $42,000 or 2.15% of the general budget. This reflects the estimated electricity charge by NSP for the City streetlights. Mavor & Council - Mayor & Council is 36,595 or 1.88 of the general budget. This reflects the salaries of the Mayor and Councilmembers, the costs for the City Attorney and other special professional consultants, the costs for printing legal notices, and the costs for travel and conferences for the Mayor and Council. Capital Improvements - Capital Improvements are $35,000, or 1.79% of the general budget. This reflects money placed aside by the City Council for upcoming or scheduled capital improvements. This is scheduled for the 1995 Street Improvements bond payment in 1996. Snow /Ice Removal - Snow /Ice Removal is $30,000 or 1.54% of the general budget. The City contracts for snow and ice removal and this reflects an average of the past few years expenditures. An exceptionally snowy year could cause this item to run over budget, while a light snow year could result in significant savings. Municipal Building - Municipal Building costs are 22,500 or 1.15% of the general budget. This reflects The maintenance and upkeep of the City Hall building, utility costs, cleaning, and general materials and supplies. Plannina & Zonina - Planning and Zoning is $20,000 or 1.03 of the general budget. This reflects the costs to the City of planning studies done by the City's Planning Consultant. An example of this in 1995 was the Planning Consultant's work in preparing the City's first Trail Plan. Any work done by the Planning Consultant in reviewing development proposals is charged to the developer. Street Maintenance - Street Maintenance is $16,825 or 0.860 of the general budget. This reflects the costs of street maintenance, which are contracted out on a yearly basis. Tree & Weed Control - Tree & Weed Control is $13,000 or 0.67% of the general budget. This reflects the costs of tree planting and removal, which are contracted on a yearly basis. Assessor, - The Assessor is $12,000 or 0.620 of the general budget. This reflects the amount of money charged by the Washington County Assessor for the process of assessing the market value of all property in the City and maintaining that information. Enaineerincr - Engineering is $10,500 or 0.540 of the general budget. This reflects the costs to the City of engineering studies done by the City's Engineering Consultant. An example of this in 1995 was the Engineer's work studying site locations and street access for a potential Fire Substation. Any work done by the Engineering Consultant in reviewing development proposals is charged to the developer. Elections - Elections are $3,920 or 0.200 of the general budget. They reflect the costs to the City of hiring and training election judges for the regular elections. Special School Bond Elections are paid for by the School District. Arborist - Arborist is $2,175 or 0.11% of the general budget. This reflects the City's contract with an arborist. The arborist visits or calls residents upon request to answer tree related questions for them, helps determine planting locations for new trees, and monitors the condition of City trees and marks diseased trees for removal. Animal Control - Animal Control is $1,250 or 0.060 of the general budget. This reflects the City's costs of holding and /or disposing of stray animals. ENCL URE 1B ~ CITY OF OAK PARK HEIGHTS 111 MOFT OVF,RVMW- CTENFRAT, Fl1NT.) Percent * Licrea a Licrease 1995 "` (Decrease) (Decrease) 1994 1995 Actual to Date * 1996 1996 over 1995 over 1995 (Acihml) (Rndszeted) 10 /:il /95 * (Requested) (Revised) Rndaet RndQet FIRT: LET CLAZ COMMMIEN T'S: 1. I xpendiiures: General Management 132,670 137,725 115,139 * 130,500 137,800 75 0.05% Mayor & Council 29,699 37,770 28,123 * 43,220 36,595 (1,175) (3.11 %) Elections 3,644 720 720 * 3,420 3,920 3,200 444.44% Ci y Clcrk 165 19 144,362 * 211,875 195,725 775 0.10% Plaruting &. Zoiung 12,572 30,000 25,366 * 20,000 20,000 (10,000) (33.33°/0) Municipal Building 21,204 25,100 16,733 * 20,500 22,500 (2,600) (10.36 %) Assessor 11,005 11,500 0 * 12,000 12,000 500 4.35% Engineering 4,300 8,000 6,349 * 14,000 10 2,500 31.25% Police 598,790 655,160 500,016 * 690,,'80 683,515 28,355 4.3390 Fire 46,081 43,000 42,136 * 55,000 54,500 11,500 26.74% Building Inspector 60,653 73,660 55,336 * 63,425 63,425 (10,235) (13.89%) Animal Control 1,008 1,950 591 * 1,250 1,250 (700) (35.90%) Street Maintenance 24,181 16,125 7,952 * 21,825 16,8 �5 700 4.34% Snow; /Icc Rcmoval 33,744 30,000 15,056 *, 30,000 30,000 0 0.009'0 Street Lighting 40,130 42,800 36,448 * 42,000 42,000 (800) (1.87%5 Arborist 2,004 2,000 1,958 2,175 2,175 175 8.75% Sanitation/Waste 326,926 348,000 249,612 * 356,000 356,000 8,000 2.30% Tree &c. Weed 11,572 15 6,195 * 13,000 13,000 (2,000) (13.33 %) Recreation 166,065 181,840 147,645 * 208,175 198,8,, "5 17,035 9.3790 Contingency - General 0 4,000 0 * 15,000 15,000 11,000 275.00% Subtotal 1,691,685 1,859,300 1,394,037 * 1,954,145 1,915,605 56,305 3.03% 2. Transfers Chit: Capitallmprovements 50,000 35,000 35,000 * 35,000 35,000 0 0.00% Total C u mmitments 1,741,685 1,894,300 1,429,037 * 1,989,145 1,950,605 56,305 2.97 M- NANCIAL, RESOURCES: 1. Revenue Tax Levy: Net Net Tax Levy 1,178,773 1,276,000 754,562 * 1,303,137 27,137 2.13% HACA 75,245 76,615 38,308 * 67,070 (9,545) (1.16 %) Fiscal Disparities 61,829 53,370 0 * 64,408 11,038 20.68% 1,315,847 1,405,985 792,870 * 1,475,155 1,434,615 28,630 2.04% Excess= 14,397 0 7,936 * 0 0 0.00% Special Assessments 0 0 1 * 0 0 0.00% Licenses e.- Permits 60,914 88,865 74,833 * 102,3, 102,370 13,505 15.20% Fuses & Forfeits 55 49,200 35,729 * 51,100 51,100 1,900 3.86% Local Government Aid 0 0 0* 0 0 0 0.00% Other Aids 61,114 58,650 65,968 * 62,470 64,470 5 9.92% Charges for Services: Charges Utility Fund 94,250 95,000 0 * _ 98,850 98,850 3,850 4.05 0 ,o General Government 2,681 2,000 1,895 * 2,000 2,000 0 0,00% Waste Removal 108,310 113,000 82,432 * 114,000 114,000 1,000 0.88% Bayport Inspections 34,402 20,000 22,577 * 25,000 25,000 5,000 25.00% Interest Earnings 34,473 36,900 44,541 * 45,000 45,000 8,100 21.95% Other Revenue 36,139 19,700 15,573 * 13,200 13,200 (6,500) (32.9990) Fund Balance -Comp. Absense 0 5,000 4,75'2 * 0 0 (5,00a) (100.00 Subtotal 1,817,638 1,894,300 1,150,314 * 1,989,145 1,950,605 56,305 2.97% 2. Transfers In: 15,000 0 0* 0 0 0 0.00% Total Resources 1,832,638 1,994,300 1,150,314 * 1,989,145 1,950,605 56,305 2.97% * EXCESS /(DEFICIENCY) OF RESOURCES OVER COMMl'1'MI:NI S 90,953 0 (278,723) * 0 0 0 0.00% 11/17/95 10:09 AM BUDOV96.XLS lo n TAX CAPACITY V ALUES The City's tax base is measured by tax capacity values rather than market values. These tax capacity values are determined by a property's classification. Minnesota Statutes define five separate classifications of property as follows: Class 1 - Residential Class 2 - Agricultural Class 3 - Commercial /Industrial and Utility Class 4 - Residential containing Multiple Units Class 5 - Tools, Implements and Machinery of a Utility and Pipeline Each classification has a separate set of class rates. These class rates are applied to a property's market value to determine its tax capacity. An example of calculating tax capacity for a residential homestead and a commercial property is as follows: 1. Market Value of $150,000 classified as a residential homestead. Market Class Tax Value Rate Capacity $72,000 x 1.00% _ $720 78,000 x 2.00% = 1,560 $150,000 $2,280 2. Market Value of $150,000 classified as commercial. Market Class Tax Value Rate Capacity $100,000 x 3.00% _ $3,000 50,000 x 4.60% = 2,300 $150,000 $5,300 The above class rates are designed to limit property taxes on selected property classifications (i.e. homestead, farm, etc.). Homestead property (valued $72,000 or less) is given the lowest tax capacity factor of 1 %. This means (in theory) that homestead property valued at $72,000 or less will pay annual property taxes equal to 1% of its market value. Alternatively, public utility property and industrial/commercial property is given the highest tax capacity factor of 4.60 %. Accordingly, (in theory) public utility property and industrial/commercial property will pay annual property taxes equal to 4.60% of its market value. It should be noted that this methodology of applying different class rates to different property classifications is a State - controlled methodology. The Citv has no c ontrol o ver this pro City of Oak Park Heights Tax Capacity Values Page 2 The total tax capacity value (T.C.V.) of the City's tax base is $6,469,635 for 1995 representing a $645,454 or 9% decrease over the past five years. The following schedule details this change by the various property classifications: Five Year 1990 1995 increasequecrease) Property Class Amount "/o A moun t "/o A mount 'Yo Utility $4,492,661 63.1% $3,622,427 56.0% ($870,234) 134.8% Commercial 1,250,376 17.6% 1,468,981 22.7% 218,605 (33.9 %) Homestead 735,166 10.3% 999,734 15.5% 264,568 (41.0 %) Seasonal Residential 12,787 0.2% 5,131 0.1% (7,656) 1.2% Apartment - NHA 93,868 1.3% - 0.0% (93,868) 14.5% Apartment - (1 - 3 Units) 248,300 3.5% 150,581 2.3% (97,719) 15.1% Apartment - (4+ Units) 281,931 4.0% 222,781 3.4% (59,150) 9.2% Totals Vt, i to,voa IVV.V7o iP0,90V,000 Iw.uio kW40.14014) ka. 1 io) A graphic illustration of the City's tax capacity value tax base over the past five years is presented below: City of Oak Park Heights $7,500,000 Tax Capacity $7 $6,500,000 $6,000,000 _ .- Total $5,500,000 -0_ Utility $5,000,000 $4,500,000 ■ -- -_ E_Commercial $4,000,0 :� _ Y �-- Homestead $3,500,000 $3,000,000 -� All Other $2,500,000 $2,000,000 $1,500,000 $1,000,000 s s s 4&- s $500,000 - - ri �- i $0 1 1 1 1 89/90 90/91 91/92 92/93 93/94 94/95 City of Oak Park Heights Tax Capacity Values Page 3 Tax capacity values are a product of: (1) property market values; and (2) State mandated class rates. Market value increases /decreases have corresponding effects on tax capacity values. The second element affecting a City's tax capacity is the state mandated tax class rates. Such ratios have changed substantially over the past six years as shown below: Class Rates Property Classification 1989/90 1995/96 Amount Public Utility 5.06% 4.60% (0.46 %) (9.1 %) Industrial /Commercial 1 st Tier 3.30% 3.00% (0.30 %) (9.1%) 2nd Tier 5.06% 4.60% (0.36 %) (9.1%) Homestead 1 st Tier 1.00% 1.00% 0.00% 0.0% 2nd Tier 2.00% 2.00% 0.00% 0.0% 3rd Tier 3.00% 2.00% (1.00 %) (33.3 %) Apartment 1 - 3 Units 3.00% 2.30% (0.70 %) (23.3 %) 4+ Units 3.60% 3.40% (0.20 %) (5.6 %) The above schedule of class rate changes from 1989/90 to 1995/96 is the primary cause of the decrease in the City's tax base. The State uses these class rates as a method of allocating property taxes to the various property classifications. Prior to 1989/90, homestead property was always "protected" from major property tax increases by relatively low assessed value /tax capacity value. This resulted in shifting the greater portion of tax increases toward non - homestead property. Over the years, this shift became too great and the State began a policy of reducing the class rates for non - homestead property. The net effect has been a re- distribution of property taxes and a depletion of the City's tax base. The City of Oak Park Heights was especially affected by this process because of its significant amount of public utility property. The net effect of this action by the State is a reduction of the City's tax base (i.e. Tax Capacity Values) and an increase in the City's tax capacity rate. County and School District tax capacity rates are similarly effected by this State action. City of Oak Park Heights Tax Capacity Values Page 4 The following schedule details the components of the decreas Citv tax ba_ag over the past six years: Tax Capacity Values/Real Tax Base mantet value Mass rate Changes Changes Totals Property Classification Amount "/o Amoun /o Amount 7 70 Utility ($507,400) (11.3 %) ($362,800) (8.1 %) ($870,200) (19.4 %) Commercial 365,500 29.2% (146,900) (11.7 %) 218,600 17.5% Homestead 272,600 38.4% (25,400) (3.5 %) 247,200 34.9% Seasonal Residential (6,800) 0.0% (900) 0.0% (7,700) 0.0% Apartment - NHA (90,100) (96.0 %) (3,800) (4.0 %) (93,900) (100.0 %) Apartment - (1 - 3 Units) (42,700) (17.2 %) (48,000) (19.3 %) (90,700) (36.5 %) Apartment - (4+ Units) (35,100) (12.4 %) (13,700) (4.9 %) (48,800) (17.3 %) Totals \�►4,wv/ (0.5 %) t$ou 1,3vv 8.4% ) As clearly shown above, the City's tax base (i.e. overall tax capacity value) decreased by $645,500 or 9% over the past five years. This decrease happened in spite of a $12,135,700 or a 6% increase to the market value of the City's tax base. The major cause of this decrease was actions of the Minnesota Legislature rather than changes to valuations of taxable property. Class rate changes account for $601,500 or 93% of the decrease to the City's tax base over the past six years as shown above. This change has the effect of increasing the City's tax rate without an actual City tax increase. PAYABLE le"S PROPERTY TAX IMPAC"" WORKSHEET Taxing District: City of Oak Park Heights STEP I Calculate the Taxing District's Payable 1996 Local Tax Rate: 4 Net Tax Capacity Market Value Based Based .Levies Referenda Levies Taxing District's Budget Requirement A. 1,950.605 J. Local Government Aid (LGA) B. -0- NA Homestead & Ag Credit Aid (HACA) C. 67,070 NA Other Revenue Sources D. 515,990 K. Certifed Property Tax Levy E. 1,367,545 L. Fiscal Disparity Portion of Levy F. 64,408 NA Local Portion of Levy G. 1,303,137 NA Local Taxable Value H. 5,636,360 M. Local Tax Rate I. 23,120 N. STEP 2 — Calculate the Impact of the Taxing District's Tax Rate on Residential Homestead Properties (Taxing District portion of tax only) Pay 1995 Local Tax Rate O. 23.122 P. Q. R. S. T. U. V. W. X. .... ..... ... ...... . ..... . ...... . . ...... ..... .. ... ...... ..... ...... Payl 996 ... . .. ..... .. .. . ...... . . .. ... .... .... . . axa Tax Proposed % T bl e ........ .... Change Change !: :Market..: I ',Capacity . Tax V.- 1tv.. .. arket.'::: a a e R),:+ x Q). Value (I x U) + (N x (V - S) (W - S) T) 75,000 780 $180.35 75,000 780 $ 180.34 $(.01) 0 % 100,000 1,280 $295.96 100,000 1,280 s 295-94 s(.02) 0 % 125,000 1,780 s411.57 125,000 1,780 s 411.54 s(.03) 0 % 150,000 2,280 $ 527.18 150,000 2,280 $ 527.14 s(.04) 0 % $ $ $ % $ $ $ % Q. - Taxable Market Value of Residential Homestead for Pay 1995 R. - Calculate the Not Tax Capacity Of A Residential Homestead for Pay 1995 1 st 72,000 of Market Value @ 1.00%, remainder @ 2.00% S. - Calculate the taxing district's portion of the Pay 1995 tax multiply the Pay 1995 net tax capacity (R) by the Pay 1995 tax capacity local tax rate (0), plus multiply the Pay 1995 market value (0) by the Pay 1995 market value local tax rate (P) T. - Taxable Market Value of Residential Homestead for Pay 1996 U. - Calculate the Net Tax Capacity of a Residential Homestead for Pay 1996 1 st 72,000 of Market Value @ 1.00%, remainder @ 2.00% V. - Calculate the taxing district's portion of the Pay 1996 tax multiply the Pay 1996 net tax capacity " by the Pay 1996 tax capacity local tax rate (1) , plus multiply the Pay 1996 market value (T) by the Pay 1996 market value local tax rate (N) W. - Calculate the Dollar amount of the increase/decrease subtract the Pay 1995 tax amount calculated in (S) from the Pay 1996 tax amount calculated in M. W. - Calculate the Percentage of increase/decrease divide the Dollar amount of increase/decrease (W) by the Pay 1995 tax amount (S) CITY OF OAK PARK HEIGHTS, MINNESOTA Schedule Calculation of 1996 Tax Capacity Rate Storm Sewer Total District City Market Value Real Estate $116,290,200 $211,178,700 Personal Property 0 2,846,300 Total $116,290,200 $214,025,000 1. Taxable Value Calculation Tax Capacity Value Real Estate $ 4,118,558 $ 6,417,630 Personal Property 129,330 Subtotal 4,118,558 6,546,960 Deductions Tax Increment (155,088) Fiscal Disparity Contribution (538,271) (755,512) Taxable Value for Local Tax Rate $ 3,580,287 $ 5,636,360 II. Net Tax Levy Calculation Gross Tax Levy General $0 $1,434,615 Debt 25,000 0 Subtotal 25,000 1,434,615 Less HACA (1,160) (67,070) Fiscal Disparity Distribution (1,115) (64,408) Net Tax Levy $22,725 $1,303,137 III. Tax Capacity Rate Calculation Net Tax Taxable Tax Levy Value Rate Total City $1,303,137 _ $ 5,636,360 = 23.120 Storm Sewer District $22,725 _ $ 3,580,287 = 0.635 Tautges Redpath 11/22/95 96BUD.XLS MINNESOTA Departmen, _r Revenue Property Tax Division Mail Station 3340 St. Paul, MN 55146 3340 Phone (612) 296 -5145 Fax (612) 297 -2166 June 16, 1995 TO: CLERKS, ADMINISTRATORS, MANAGERS, AND FINANCE DIRECTORS FOR CITIES OVER 1,000 POPULATION RE: THE REQUIRED FORM FOR PUBLISHED NOTICES OF PROPOSED PROPERTY TAXES AND PUBLIC HEARINGS FOR TAXES PAYABLE IN 1996 THE REQUIREMENTS FOR THE CERTIFICATION OF THE PROPOSED PROPERTY TAX LEVY FOR TAXES PAYABLE IN 1996 THE REQUIREMENTS FOR PUBLIC HEARINGS ON PROPOSED PROPERTY TAXES FOR TAXES PAYABLE IN 1996 Enclosed is the sample notice which the Department of Revenue has prescribed for your city to follow in publishing the announcement of the city's proposed property tax amount for taxes payable in 1996 and of the meeting on the proposed budget and property tax as required by state law. Also enclosed are the "Instructions to Newspaper," "Truth in Taxation Provisions That Cities Should Be Aware of for the Taxes Payable Year 1996," and a calendar of dates relating to your city's proposed property tax, required public hearing, and final property tax for payable 1996. The Minnesota Legislature made a few changes in the Truth in Taxation Law effective beginning with taxes payable in 1996. These changes include: 1. School districts are now allowed to certify their proposed property tax levy on or before September 30 ( October 2 in 1995 since September 30, 1995 falls on a Saturday). In addition, school districts may certify their proposed levy as (a) a specific dollar amount, or (b) an amount equal to the maximum levy limitation certified by the Commissioner of Education to the county auditor according to M.S. 124.918, Subd. 1. (Laws 1995, Chapter 264, Article 3, Section 14) 2. The joint initial hearing for the metropolitan special taxing districts (Metropolitan Council, Metropolitan Airports Commission, and the Metropolitan Mosquito Control District) is to be held on the first Monday in December (December 4 in 1995). The continuation hearing of a metropolitan special taxing district, if continued. . . JUN 1 6 1995 CITY Of An equal opportunity employer OAK PARK HEIGHTS TDD: (612) 297 -2196 needed, is to be held on the second Monday in December (December 11 in 1995). This affects the seven counties of Anoka, Carver, Dakota, Hennepin, Ramsey Scott, and Washington. The cities located wholly or partly within these seven counties cannot select December 4 or December 11 as the date for an initial hearing or as the date for a continuation hearing in 1995. (Laws 1995, Chapter 264, Article 16, Section 12). 3. The parcel specific Truth in Taxation notice will no longer include the estimated percentage increase in Minnesota personal income for the taxes payable year. (Laws 1995, Chapter 264, Article 3, Section 15). In addition to reading this letter, please read the enclosed "Truth in Taxation Provisions That Cities Should Be Aware of for the Taxes Payable Year 1996," the enclosed prescribed form for a published notice, the enclosed "Instructions to Newspaper," and the enclosed calendar of Truth in Taxation dates carefully. They differ from the previous year's documents because of the 1995 law changes. If you have any questions concerning this letter or any of the enclosures, please contact me. Sincerely, a " a� W. qa ROBERT W. JOHNSON, Research Analyst Intermediate Enclosures