HomeMy WebLinkAboutCity Council Packet 12-05-2005 SpecialAgenda
City of Plymouth
Special City Council Meeting
Monday, December 5, 2005
7:00 PM
Black Box Theater, Plymouth Creek Center)
1. Call to Order
2. Truth in Taxation Hearing
3. Adj ourn
Agenda Number: a,
TO: Laurie Ahilps, City Manager
FROM: Dale Hahn , inane Director
SUBJECT: 2006 Truth in Taxation Public Hearing
DATE: November 30, 2005 for City Council Meeting December 5, 2005
1. ACTION REQUESTED: Hold the 2006 Truth in Taxation Public Hearing and
determine if a continuation hearing is needed. If no continuation hearing is needed,
announce that the date for the adoption of the 2006 budgets and tax levies will be
December 131n
2. BACKGROUND: Attached is an updated budget memo for 2006 which reflects
direction given by City Council in the budget study sessions held on August 23 and
September 6, 2005, and the reduced tax levy resulting from decreased medical insurance
rates. It also reflects all utility and fee rate changes approved since the proposed budgets
were adopted on September 13`n.
3. DISCUSSION: At the November 291n City Council meeting, the Council approved
the proposed Capital Improvement Plan (CIP), which included carrying forward the
Timber Creek erosion control improvement. This project could not be accomplished in
2005, and the CIP provides $250,000 in funding to complete the project in 2006. I have
revised the Water Resources Fund operating budget to include funding for this project in
2006. I have included this and the other previously mentioned budget adjustments on the
attached exhibit 1.
In early November, taxpayers were mailed notices of their proposed 2006 taxes, including
information about where and when the Truth in Taxation Public Hearing would be held.
In addition, a notice was published in the Star Tribune announcing the date and time of
the hearing. Prior to the public hearing, staff will provide additional information on the
proposed 2006 budgets and tax levies, after which time the public hearing will be opened,
and comments received.
4. RECOMMENDATION: At the conclusion of the Truth in Taxation hearing, the
City Council should determine if a continuation hearing is necessary. If a continuation
hearing is not needed, it should be announced that the proposed adoption of the 2006
budgets and tax levies will be on December 13th. Please bring your 2006 draft budgets
along to the meeting.
2006 Budget Changes Since Preliminary Adoption
Fund
General Solid Water
Fund Waste Resources
Revenue:
Reduce tax levy, A/C #4001 -page 1 -$35,195
Increase miscellaneous revenue A/C #4703-page171 0 $5,000
Increase transfer from retained earnings, A/C #5999-page181 0 0 $250,000
Total revenue -$35,195 5 000 $250,000
Expenditures:
Decrease Group Hospital/dental insurance, A/C #6032 -various pages -$35,195
Increase machinery and equipment, A/C #8004 -page 174 0 $5,000
Increase improvements to land, A/C #8002-page184 0 0 $250,000
Total Expenditures -$35,195 5 000 $250,000
N
Od
CITY OF PLYMOUTH
2006 Proposed Budget
December 2005
Attached is the proposed 2006 budget for the City of Plymouth. The proposed budget is
designed to maintain service levels. It places particular emphasis on the council's annual
goals and core services most heavily impacted by the City's continued growth and aging,
such as street maintenance and reconstruction, public safety, drainage, and the City's water
system.
The City's overall tax rate is proposed to be 24.52, which is a decrease from the 2005 tax rate
of 24.66. The total rate is comprised of a tax capacity rate of 23.73, plus 0.29 for the Open
Space Bond issue and 0.50 for the Activity Center/Field House debt service. Because the tax
rate will be reduced in 2006, a supermajority vote of the Council will not be required to adopt
the tax levy. The projected numbers and percentages are based on our best-known sources at
this time and will have some minor adjustments when the final numbers are obtained.
Background
We historically begin the annual budget process with a look at growth and inflation, as both
of these factors significantly impact our ability to maintain service levels. There are no levy
limits for 2006; however, we have used a similar formula for comparison purposes. The
Implicit Price Deflator is used for inflation, and growth in households and 50% of the growth
in commercial/industrial market value due to new construction is used for a growth factor.
This is the same formula that the State has used in years when levy limits were imposed.
Total
Increase
Implicit Price Deflator- 5.078%
March 2004 -March 2005
Households % Increase 1.247%
April 2003 -April 2004
Com/Ind Market Value 0.821%
50% of Increase -
Jan 2004 -Jan 2005
Total 7.146%
The City Council conducted a preliminary budget planning session with facilitator Jim Rice
in early June. Two budget study sessions were held to consider the proposed 2006 budget,
with adoption of the preliminary tax levies and budgets on September 13. The Truth in
Taxation hearing will be held on December 5, and the City Council is scheduled to adopt the
final budget and tax levies on December 13. The 2006-2010 Capital Improvement Program is
also being prepared coincident with the operating budget. This will help us more accurately
identify and budget the operating cost impacts related to capital projects.
City Councils of the past few years have adopted tax increases needed to maintain and
enhance core services. The following charts indicate how the priority of expenditures has
changed in the General Fund from 2001 to 2006 (proposed budget):
2001 General Fund Budget & Debt Service Allocation 2006 General Fund Budget & Debt Service Allocation
Street Community Support Street Community Support
Maintenance Service Services Maintenance Service Services
16.1% 1.7% 13.1 % 14.5% 1.9% 11.2%
Fire Fire
7.4% 7.6%
Inspections & Inspections &
Planning Police Planning Police
8.7% 32.5% 8.1% 37.1%
Parks, Trails & Parks, Trails &
Recreation Recreation
20.5% 19.6%
Proposed 2006 Budget
General Fund spending is proposed to increase in 2006 by 6.03% over the budgeted amount
for 2005. This is less than the City's growth rate plus inflation. Due to the City's growth, no
tax increase would be needed to fund the proposed continued service levels in the General
Fund. An increase is needed due to other factors described below.
The overall City property tax levy is proposed to increase by 9.14%. This is needed to
maintain service levels and to make substantive progress with street reconstruction. The
Legislature did not place levy limit restrictions on 2006 levies.
The projected increase for an average home valued at $356,200 is 6.58%, or an increase of
53.95. There are a number of factors that contribute to this increase:
Additional Street Reconstruction levy 4.2%
Phase-out of Limited Market Value 0.7%
State mandated PERA increase for all employees 0.4%
Valuation change differential between C/I & residential 0.2%
If the City was not required to levy for the State's Market Value Credit Aid program
634,691), the projected tax increase on the average valued home would be 3% less.
The projected increase for a business property valued at $1,000,000 is 5.15%, or $147.95.
The disparity between residential and business property is not due to any action of the City in
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the budget process. It will primarily occur because residential property appreciated at a rate of
6.5%, while commercial/industrial property experienced a 5.5% increase in value for the year.
Limited Market Value
In 2006, taxes on some Plymouth homes will be impacted by the phase-out of limited market
value. The 2001 tax bill included a six-year phase-out of limited market value that began in
2003. This phase-out did not impact most Plymouth homes in 2003 because the average 11 %
appreciation in value was greater than the 10% increase in the phase-out amount. In 2004,
approximately 14,500 parcels experienced some degree of phase out because the phase out
percentage was 12% whereas the average home value appreciated by only 8%. In 2005,
approximately 7,250 parcels experienced some degree of phase out because the phase out
percentage was 15% whereas the average home value appreciated by only 9%.
In 2006, some homes will continue to be impacted by the phase-out. Currently, about 3,187
of the 24,661 parcels in the City qualify for limited market value. Although residential
properties increased in value by 6.5%, the phasing out of limited market value provides that
taxes may be levied on taxable valuations that are increasing by up to 15%. Nearly all of the
impact resulting from the limited market value phase-out will occur in 2005 and 2006, rather
than phasing over the next few years until the program sunsets. The 2005 legislature extended
the program sunset until 2009. The weighted average of Plymouth homes will see a 7.2%
increase in their taxable value for 2006. Most Plymouth properties will be taxed at their full
value by 2007.
State Reductions
The City lost all Local Government Aid ($74,579) and all Market Value Credit Aid
688,700) in 2004. Plymouth was scheduled to get back the Market Value Credit in 2005,
but the legislature once again decided to use this as a source for funding the State deficit.
This is proposed to continue through the 2007 budget.
Interest Earnings
The historically low interest rates continue to negatively affect all City funds. The impact on
the General Fund is moderate, but the impact is significant on the capital projects funds,
enterprise funds, HRA funds, and internal service funds. This will turn around if interest rates
rise in the future.
Salary Vacancy Factor
The 2006 budget includes a budget correction factor of $130,000 to acknowledge an ongoing
statistical job vacancy rate. Approximately 20-30 employees leave City employment each
year. The salary vacancy factor recognizes the savings that occurs when there is a lapse in
time from the former to new employee, as well as the fact that a new employee typically
begins employment at a lower rate of pay.
Earlier Spending Decisions
New operating costs will affect the 2006 budget for several capital projects where
construction is underway. The operating costs for the public safety building are estimated to
increase due to expansion and are included in the General Fund budget. Also, the new water
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treatment plants and reservoir will have additional operating costs that will be fully funded by
the water operating fund.
Working Capital/Contingency Fund
Some General Fund surplus is beneficial and expected, since the City budgets contingency
funds that are normally not needed. Moderate surpluses help the City maintain its policy of
having the equivalent of 40% of our General Fund budget in cash reserves. This is necessary
to provide "working capital" for the City since the City does not receive any property tax
revenue until June each year. The 2006 budget proposes a contingency amount of $200,000.
Revenues
All fee levels have been evaluated as part of the budget process. A new revenue item of
electrical permit fees is included, which correlates with the hiring of an electrical inspector.
Also, a revenue of Disabled Officer Reimbursement is included in the budget for the first
time. In recent years, the City has been responsible for payments of continued health
insurance coverage when a police officer is disabled because the State did not set aside
sufficient funds. The State fund has been increased, and we are hopeful that all costs will be
covered by a reimbursement from the State for 2006.
Increased revenues are proposed in several areas including plumbing and HVAC permit fees,
tobacco license fees, and rentals at the Plymouth Creek Center. Protective inspection fee
revenue is also proposed to increase by 20%. The City's housing maintenance code was
adopted in 1995, and the only increase in fees was in 1999.
Alarm permit fees have declined in recent years, which is a desired outcome of the program.
The revenue has been reduced to reflect this trend.
In an effort to reduce reliance on the Utility Trunk Fund, the annual transfer from the Utility
Trunk to the General Fund has been decreased by $15,000.
Tax Capacity/Fiscal Disparities
The following chart illustrates the changes in total tax capacity and fiscal disparity
contributions. The City's net contribution to the fiscal disparities pool will be $5,582,147.
This equals 6.1 % of our total tax capacity value.
Total Tax Capacity for Payable 2005 and 2006
The table shows that Plymouth has had a healthy growth in the tax base during the last year.
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2005 2006
Actual Actual
Real Property: Tax Capacity 94,585,521 102,625,486
Personal Property: Tax Capacity 893,652 913,287
Total Tax Capacity 94,479,173 103,538,773
Fiscal Disparity Contribution 11,363,043) 11,139,652)
Tax Increment591 9,691) 708,473)
83.516.439 91,690,64a
The table shows that Plymouth has had a healthy growth in the tax base during the last year.
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The differences in valuation and tax capacity growth have an impact on the actual taxes paid
by Plymouth homes and businesses. The following table illustrates the changes in tax
capacity and taxes paid by an average value home ($356,200). An increase of 7.2% is due to
the real increase in property value (6.5%), with an additional .7% applied to property value
that was previously not taxed under limited market value.
Estimated Tax Burden on Average Home
2005 versus 2006
2005 2006
Average home value — $332,300
Homestead:
332,300 @1%
Total Tax Capacity
City Tax Rate
Subtotal
Mkt. Value Levy
332,300 @ .00311% (Open Space
Bonds)
332,300 @ .00543% (Activity Center
Bonds)
Total City Tax
356,200
3,562
3,562
23.73%
843.33
Open Space
10.44
356,200 @.00499% (Activity Center
18.04 Bonds) 17.77
819.59 Total City Tax JU3J4
The average $1,000,000 business increased in value by 5.5% during 2005. The following table
shows the change in 2006 taxes payable:
Estimated Tax Burden on $1,000,000 Business
2005 versus 2006
2005
Average home value —
Business value — $1,000,000
Homestead:
150,000 @ 1.50%=
356,200 @ I% _
3,323 Total Tax Capacity
23.81% City Tax Rate
791.22 Subtotal
Net Tax Capacity Value
Mkt. Value Levy:
City Tax Rate
356,200 @.00293%
10.33 Bonds)
356,200
3,562
3,562
23.73%
843.33
Open Space
10.44
356,200 @.00499% (Activity Center
18.04 Bonds) 17.77
819.59 Total City Tax JU3J4
The average $1,000,000 business increased in value by 5.5% during 2005. The following table
shows the change in 2006 taxes payable:
Estimated Tax Burden on $1,000,000 Business
2005 versus 2006
2005
2,250
Business value — $1,000,000
18,100
150,000 @ 1.50%= 2,250
850,000 @ 2.00%= 17,000
Gross Tax Capacity Value 19,250
Less Fiscal Disp. 7,533
Net Tax Capacity Value 11,717
City Tax Rate 23.81%
Subtotal 2,789.88
Mkt. Value Levy:
52.64
1,000,000 @.00311% (Open Space Bonds) 31.10
1,000,000 @.00543% (Act Center Bonds) 54.30
Total City Tax
2006
Business Value — $1,055,000
150,000 @ 1.5%= 2,250
905,000 @ 2.0%= 18,100
Gross Tax Capacity Value 20,350
Less Fiscal Disp. 7,963
Net Tax Capacity Value 12,387
City Tax Rate 23.73%
Subtotal 2,939.68
Mkt. Value Levy:
1,055,000@.00293% (Open Spc Bonds) 30.91
1,055,000 @ .00499% (Act Cent Bonds) 52.64
Total City Tax 3 023.23
US
2006 Budget Overview
Estimating the Tax Levy Rate
City revenues from all sources in the General Fund will be $23,849,211, a 6.03% increase
from 2005. Of this amount, $18,211,578 (76.4%) comes from property taxes. We propose
a 2006 tax rate estimated at 23.73, plus a market value rate of .00293 for the Open Space
Bonds and .00499 for the Activity Center/Field House bonds, for a total estimated rate
equal to 24.52, compared to 24.66 for 2005.
Plymouth's overall tax levy will increase by 9.14% in 2006. The City's overall tax rate
will decrease by -.14 to an estimated 24.52. The following table compares the tax levy by
fund for 2005 and 2006:
1)Equals Market Value Rate of .00543 % (2)Equals Market Value Rate of .00311% (3)Equals Market
Value Rate of .00499% -Est. (4) Equals Market Value Rate of .00293 %-Est.
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2006
2005 2005 2006 Proposed Proposed
Tax Levy Tax Rate Tax Levy Tax Rate
GENERAL PURPOSE LEVIES
General Fund 17,035,807 20.38 18,211,578 19.86
Mkt. Value Cr Aid -State Aid Cut 688,700 0.82 634,691 0.69
Street Reconstruction 600,000 0.72 1,500,000 1.63
Mill & Overlay 47,000 0.06 47,000 0.05
Recreation Fund 623,569 0.75 623,569 0.68
Capital Improvement Levy 318,270 0.38 327,818 0.36
Total General Purpose 19,313,346 23.11 21,344,656 23.28
SPECIAL LEVIES
Act. Center/Field House Bonds 429,962 0.54 428,866 131 0.50
2003 Open Space Refunding 246,060 2) 0.31 251,835 a) 0.29
2003 Street Recon. Bonds 181,388 0.22 178,553 0.19
2004 Street Recon. Bonds 418,222 0.50 419,036 0.46
2004 Public Safety Bonds 619,942 0.74 601,342 0.66
HRA 607,556 0.73 540,297 0.59
Total Special Levies 2,503,130 3.04 2,419,929 2.69
TOTAL ALL LEVIES 21,816,476 26.15 23,764,585 25.97
LESS:
Fiscal Disparity -City 1,215,708) 1.45 1,285,562) 1.40
Fiscal Disparity -HRA 38,969) 0.05 37,847) 0.04
20.561.799 24.66 22.441.176 24.52
Tax Capacity value 83.516.439 91.690.648
Referendum Market value 7.924.237.200 8.598.255.800
1)Equals Market Value Rate of .00543 % (2)Equals Market Value Rate of .00311% (3)Equals Market
Value Rate of .00499% -Est. (4) Equals Market Value Rate of .00293 %-Est.
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Expenditures
The 2006 budget includes total General Fund expenditures of $23,849,211. This
represents an increase of 6.03% over the 2005 adopted budget. The following chart lists
expenditures in all major operating funds:
Expenditures 2005 2006
General Fund 22,493,654 23,849,211
Recreation Fund 1,481,622 1,578,302
Transit Fund 4,518,060 4,172,500
HRA Funds 4,661,527 5,386,182
Water Fund 4,019,700 4,685,353
Sewer Fund 5,733,392 6,268,236
Solid Waste Fund 1,041,494 1,067,413
Ice Center Fund 1,292,674 1,353,300
Water Resources Fund 3,068,232 3,202,082
Field House Fund 290,000 297,000
Central Equipment Fund 2,154,955 2,161,860
Risk Management Fund 684,752 701,073
Design Engineering 378,982 329,090
Employee Benefit Fund 2,652,900 2,856,300
Information Technology Services Fund 1,837,647 1,858,271
Facilities Management Fund 1,082,602 1,126,441
Area of Emphasis -- Streets
The City has been experiencing a decline in street conditions. On May 17, 2005, the City
Council adopted a long-range plan for street reconstruction/resurfacing. The plan retains
the level of expenditures proposed in the Capital Improvement Plan (CIP) through 2007.
After that time, expenditures are proposed to increase by 10% per year through 2012, and
at a slightly lesser pace thereafter. The level of expenditures in the CIP for 2006 and 2007
are almost double the current level, and additional funding will be needed to finance this
increase.
Street reconstruction efforts were largely funded through an annual tax levy,
approximately $1,200,000, until 2002. In 2003, the legislature eliminated all Local
Government Aid (LGA) and Market Value Credit Aid (MVCA) to the City of Plymouth.
As a result, the City issued street reconstruction bonds for 2003 and 2004 to fund the
street reconstruction program of approximately $2,000,000/year. The 2005 program,
2,500,000, was to be funded with a tax levy, reinstatement of the MVCA and funds on
hand. However, the legislature again chose to eliminate the MVCA, approximately
634,700, and use it to cover the State shortfall. As a result, the 2005 reconstruction
program was not funded as planned, and we will need to cover these costs plus the 2006
reconstruction costs. The funds on hand have been reduced substantially, and it is now
necessary to levy additional taxes and/or issue bonds to finance these efforts.
The CIP and long-range street reconstruction plan contain proposals to increase the street
reconstruction effort to approximately $4,500,000 per year for 2006 & 2007. This can be
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financed with a combination of an increased tax levy and the issuance of additional
bonds. The tax levy as proposed, increases the street reconstruction levy to $1,500,000.
This increased levy is critical to keep debt issuance to a minimum and future tax increases
reasonable.
Due to the state aid cuts and strict levy limits of the past several years, the City bonded all
street reconstruction in 2003 and 2004. We do not recommend continuing this as a long-
term strategy for annual reconstruction due to increased interest costs. In addition, sole
reliance on bonding for street reconstruction could negatively affect our Aaa bond rating.
Our last two conferences with Moody's have included a discussion about getting more of
the annual street reconstruction amount back within our normal levy, and this is a high
priority for this budget.
We are working on options for future street reconstruction bond issues to assist in the
effort to catch up with reconstruction of local streets in serious need of repair. A number
of financing options will be reviewed during the budget process. Limited issuance of
bonds in 2006 to bridge the gap between levy support and needed expenditures would
result in manageable, new debt service beginning in 2007. We also need to continue
increasing the amount of our annual levy for street reconstruction to support a viable
long-term program.
Area of Emphasis -- PERA
The legislature enacted new PERA pension contribution rates for both employees and
employers that are effective in 2006. The cost to the City of the 2006 change is $107,614,
of which $93,735 is in the General Fund. Budgets will be impacted by this change for the
next five years as the City contribution rates are incrementally increased from 5.53% to
7% for employees on the coordinated plan and from 9.3% to 14.1% for police and fire
employees.
Other Areas of Emphasis
There are several other areas emphasized through proposed budget dollars. For the first
time, the budget contains funding for a traffic signal inspection program ($15,000) and
increased funds for traffic signal maintenance ($10,000). Preventive maintenance will pay
off because total replacement costs are significant. A four-year inspection cycle is
proposed.
Median maintenance is also specifically addressed in the budget, with proposed
expenditures for plant material replacements and median maintenance ($45,000). This
would bring the medians back to a good condition, and the plant material replacements
would be less in future years.
Public safety areas for emphasis in this budget include purchase of a replacement
weapons package ($35,795 net after trade-in) and the remaining cost for the MDC's in the
squad cars ($87,608). Also, funds are proposed for a security improvement at the fire
stations ($4,500) and for two laptops and wireless connections for fire vehicles ($15,824).
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Drainage maintenance continues to be a priority. Contractual services and equipment has
been increased. We are finding a great number of needed drainage corrections during the
pond inspections and are still working on repairing system damage from the June 2003
rain event.
Recommended Staffing Changes
The 2006 budget proposes the addition of an Electrical Inspector. The City's total full-
time work force of 265 would remain the same, since the Risk Management duties have
been assumed by an existing Finance employee. This arrangement will run through 2006
and perhaps beyond.
Electrical Inspector: 07/01/06
This is a proposed new position to perform inspections relating to the electrical code.
Electrical inspections are currently provided through contract by the State. This position
would bring convenience for residents and builders by creating a "one-stop shop" for
permits, improving permit processing and inspection scheduling times, and allowing the
City to enforce its lighting standards and complaints. This position is revenue neutral. The
start date of July 1 is proposed to coincide with the State's fiscal year.
Recommended New Equipment
The budget proposes purchase of new equipment — a vehicle for the electrical inspector
15,000), a park maintenance vehicle ($29,000), and an anti -icing unit ($13,000). Three
equipment upgrades are also proposed for additional versatility and efficiency. A truck
scheduled for replacement is proposed to be upgraded to a swap loader ($20,000), a
hydro -seeder upgrade is proposed ($19,000), and a dozer is proposed to be traded in and
upgraded ($115,000).
Other Funds
While the General Fund is the City's largest operating fund, the City has a number of
other important operating funds. These include:
Recreation Fund. General tax support of the Recreation Fund will not increase for 2006,
which is the fourth year of no tax increase. Increased costs will be covered by registration
revenue. The Plymouth Fine Arts Council will make decisions on expenditures for arts
groups. The Plymouth Civic League has requested an increase in the contribution from
the City for Music in Plymouth from $25,000 to $30,000. According to Council policy,
this contribution is made from the charitable gambling fund, with the balance funded by
the Recreation Fund.
Transit Fund. This budget anticipates a reduction in transit service due to reduced
MVST revenues, as estimated by the Met Council. The budget also proposes operation of
a transit facility for eight months.
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Facilities Management Fund. This fund is an internal service fund, similar to the
Central Equipment Fund. Major expenditures planned for the Facilities Management
Fund include a number of significant repairs to the fire stations.
Housing and Redevelopment Fund. The HRA levy is proposed to decrease from
607,556 to $540,297. The HRA has recommended reducing its expenditure for the
housing loan program by half ($50,000) since there has only been one project identified
for 2006. The budget also proposes transfers to the General Fund to cover administrative
costs relating to financial support of the HRA's programs,.
Water Fund. The Water Fund budget includes increased expenditures for payment of
debt service for the water treatment plant projects. Additional operating expenditures
have also been included for operation of the expanded treatment plants and the new
reservoir. A rate increase of 5% is projected for 2006 due to newly identified needs of
watermain replacement as part of several upcoming street reconstruction projects. This
will be further discussed as part of the Capital Improvement Program process.
Sewer Fund. This budget reflects a proposed sewer rate increase of 5 percent to provide
funding for the increase estimated by the Met Council for treatment costs and long-range
system improvements. The program for lift station upgrades and replacement will be
continued. A program for relining existing sewer main will be explored as part of the CIP
process.
Solid Waste Fund. The solid waste fund proposes continued service levels and
programming for 2006. A rate decrease from $2.00 to $1.50 per month, (25%) is
recommended for 2006. The current solid waste contract runs through 2009, and the
existing fund balance of $1,727,834 is sufficient to cover future container purchases,
County funding reductions, and possible decreases in contract costs due to declining
markets for recycled materials.
Risk Management Fund. The budget would increase charge backs to other funds by
98,059 over the 2005 budget. Even with the increased allocation, the fund is anticipated
to have a $184,930 loss in 2006. The increased charge -backs are one-step toward
stabilizing the fund long-term. The consistently low interest rates have had a significant
impact on this fund, which previously maintained an adequate fund balance solely
through interest earnings. Growth of the City and increase of City facilities has also
increased exposure and premiums.
Central Equipment Fund. Expenditures of $1,057,000 are recommended for
replacement of equipment according to the master schedule for equipment replacement.
The equipment replacement schedule is a guide, and we carefully evaluate each piece of
equipment before making the replacement.
Design Engineering. This fund manages the annual street reconstruction program in-
house.
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Ice Center Fund. This fund is again projected to be self-supporting with fees and rental
charges, and will provide its share of the outdoor maintenance costs. An amount for
retained earnings is also allocated, which will be reserved for future building repairs and
equipment replacement. The budget includes funds for a restroom/locker room cleaning
machine, recarpeting the Blue Line Meeting Room, and replacing water heaters.
Information Technologies Fund. This budget maintains the current level of services.
The data processing allocations have been readjusted based on the number of computers
in each program area.
Field House Fund. The operating costs of the field house are anticipated to be fully
covered by rental revenue. A new allocation of $3,500 is included to cover services
provided from the General Fund such as snowplowing. An amount for retained earnings,
which will be reserved for future replacement, is also projected.
Water Resources. The proposed budget includes funds for cleaning the first few water
quality ponds and increased funds for pond and drainageway maintenance. A rate increase
of 8.36% ($.31 per month/residential equivalent factor) is proposed. This rate increase is
the second of a series of five proposed by the Surface Water Taskforce and reviewed by
the City Council earlier this year.
Conclusion
The City remains in excellent financial shape. Plymouth is among an elite group of cities
with a Aaa bond rating — the highest rating possible. This rating has saved the City
thousands of dollars in bond interest costs. The City has a diverse tax base and a low debt
per capita. Plymouth recently received an exemplary audit report, and the Financial
Trends are positive. The 2006 budget attempts to maintain core services and make
specific progress on street condition, while maintaining a balance of services that
Plymouth residents expect and enjoy.
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