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File #:
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WS 12-19
Version:
1
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Name:
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2011 Summary / 2013 Budget Intro
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Type:
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Workshop Item
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Status:
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Filed
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On agenda:
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4/12/2012
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Final action:
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4/12/2012
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Title:
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GENERAL FUND: 2011 FINANCIAL SUMMARY & 2013 BUDGET INTRODUCTION
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Workshop Item: 1 - Joe Huss, Finance Director
Title
GENERAL FUND: 2011 FINANCIAL SUMMARY & 2013 BUDGET INTRODUCTION
Background
2011 Financial Summary
The City Manager recently reported to Council a summary of the City's 2011 financial performance pointing out the positive performance of the General Fund. In summary, through a combination of under-spending across all departments and better than anticipated performance in a number of revenue categories, the General Fund's reserve increased in excess of $1 million in 2011.
(Pre Audit) |
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Amended Budget |
Projected Final |
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Beginning Fund Balance |
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$ 10,549,238 |
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REVENUES |
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Property Taxes |
16,912,060 |
16,595,966 |
98.1% |
Licenses & Permits |
1,511,900 |
1,631,943 |
107.9% |
Market Value Credit |
- |
45,545 |
0.0% |
Other Intergovernmental |
976,500 |
1,058,779 |
108.4% |
Charges for Service |
1,059,500 |
1,160,999 |
109.6% |
Administrative Charges |
2,673,100 |
2,763,925 |
103.4% |
Fines / Forfeits |
308,000 |
294,829 |
95.7% |
Interest Earnings |
250,000 |
191,539 |
76.6% |
Fair value adjustment |
- |
229,696 |
0.0% |
Miscellaneous |
92,000 |
64,270 |
69.9% |
TOTAL REVENUES |
$23,783,060 |
$24,037,491 |
101.1% |
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EXPENDITURES |
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Legislative |
528,820 |
464,109 |
87.8% |
Administration |
1,179,740 |
1,094,651 |
92.8% |
Finance |
2,028,565 |
2,027,196 |
99.9% |
Safety Services |
10,303,753 |
10,077,677 |
97.8% |
Public Services |
7,885,470 |
7,714,607 |
97.8% |
Community Development |
1,315,300 |
1,256,015 |
95.5% |
Unallocated |
378,350 |
374,011 |
98.9% |
TOTAL EXPENDITURES |
$23,619,998 |
$23,008,266 |
97.4% |
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Revenues over expenditures |
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$1,029,225 |
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This positive performance brings the General Fund's reserve to just under $11 million, and allows the maintenance of required cash flow ($7.2 million) and contingency ($1.2 million) reserves, while further allowing for the current funding of 2012 capital items ($685,000). Taking these items, as well as 2011 labor agreement commitments ($62,500) and the 2012 budget drawdown, into account, the General Fund has nearly $1.1 million in unrestricted and uncommitted reserves:
Fund Balance Summary |
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12-31-11 Ending Fund Balance |
$ 10,918,463 |
Reserved for Capital Equip. Transfer |
$ (685,000) |
2012 Budget draw-down |
$ (650,000) |
Reserved for Police retro salaries |
$ ( 62,500) |
12-31-11 Available Fund Balance |
$ 9,520,963 |
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Designated for cash flow |
$ 7,209,000 |
Designated for contingencies: |
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Tax levy delinquency |
$ 815,000 |
State funding loss |
$ 400,000 |
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12-31-11 Unrestricted Fund Balance |
$ 1,096,963 |
2013 Budget Introduction - Tax Base
As the first quarter of 2012 ends, the Finance Department is starting the 2013 budget process with the preliminary gathering and analysis of tax base and property valuation information. Current information from Anoka County regarding property values indicates a challenging 2013 budget process. Per Anoka County, taxable property values in Blaine have declined by 9%:
Taxable Market Value Estimates
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2012/13 |
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2011/12 Final |
04/01/12 Estimate |
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Agriculture |
20,128,718 |
13,947,027 |
-30.7% |
Residential |
3,599,771,818 |
3,279,946,018 |
-8.9% |
C and I |
976,684,700 |
891,824,500 |
-8.7% |
Personal Prop |
70,961,300 |
68,450,000 |
-3.5% |
TOTAL |
4,667,546,536 |
4,254,167,545 |
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-3.1% |
-8.9% |
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The above figures are somewhat assisted by new construction, as County data indicates that existing residential property values declined in total by 11%, while existing commercial/industrial property declined in total by just over 9%. Blaine's tax capacity, which takes into account TIF districts and the Fiscal Disparities program, also shows decline, although not quite as deep a decline as there are three TIF districts scheduled for decertification at the end of the current year.
Net Tax Capacity
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2011/12 Final |
2012/13 Estimate |
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Agriculture |
191,088 |
132,500 |
.95% |
Residential |
36,582,348 |
33,455,400 |
1.02% |
C and I |
19,545,942 |
17,847,368 |
2.00% |
Personal Prop |
1,289,228 |
1,245,800 |
1.82% |
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57,608,606 |
52,681,068 |
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TIF |
(1,806,320) |
(903,200) |
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FD Contrib. |
(8,105,961) |
(8,106,000) |
0.0% |
FD Dist. |
8,281,287 |
8,281,300 |
0.0% |
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55,977,612 |
51,953,168 |
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-2.9% |
-7.2% |
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The above figures are extremely raw and must be presented with the disclaimer that the Fiscal Disparities numbers presented have not changed from 2012. While it is highly unlikely that these will remain unchanged from 2012, it merely points out that, all other things being equal, we expect to see a declining tax base as we begin planning for the 2013 budget.
Given what is known currently, with a tax base decline of just over 7%, a levy equal to the 2012 levy would yield a tax rate of 36.6% compared to a rate of 33.6% for 2012. With no change in the tax levy, residential properties experiencing an 11% decline in value would see their City property taxes drop between 3% - 6%, while C/I properties experiencing an average decline in value of 9%, would see their City property taxes decline about 1%. A constant-dollar levy indicates a zero-sum scenario, and thus the declines that "average" properties experience would be offset by those properties that experience a lesser decline or an increase in value.
Recommendation
Staff is seeking Council direction regarding preparation for the 2013 budget.
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