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101122 CAC Agenda PacketCitizen Advisory Commission Meeting City Hall, 4401 Xylon Avenue North October 11, 2022 7 p.m. 1. Call to Order. 2. Roll Call. 3. Approval of July 12, 2022 minutes. 4. 2023 Budget Update with Tim Hoyt, Acting City Manager and Vicki Holthaus, Abdo Financial Solutions. 5. Discuss December agenda and 2023 topics. 6. Discuss 2022-23 Snowman/Snow Sculpture Contest. 7. Brainstorming — Ideas to bring attention to New Hope. 8. Parks and Recreation project updates. 9. Other business. 10. Adjournment. If you are unable to attend the meeting, please contact Susan Rader at 763-531-5152 or sraderCnewhopemn.gov Citizen Advisory Commission Regular Meeting CALL TO ORDER ROLL CALL CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 July 12, 2022 New Hope City Hall, 7 p.m. Chair Kulzer called the meeting to order at 7 p.m. Present: Commissioners Jeff Harper, Jill Kaufman, Scott Kulzer, Carrie Neuburger, Rick Riley, Bill Wills Absent: Commissioner Randy Herman Staff Present: Susan Rader, Staff Liaison Bernie Weber, Director of Public Works Nick Macklem, Stormwater Specialist/Project Coordinator APPROVAL OF MINUTES Commissioner Kaufman made a motion to approve the minutes of the June 14, 2022 meeting as written. Commissioner Neuburger seconded the motion. Voting in favor: Commissioners Harper, Kaufman, Kulzer, Neuburger, Riley, Wills. Opposed: None. Absent: Commissioner Herman. Motion carried. PUBLIC WORKS UPDATE Bernie Weber, Public Works Director introduced himself and Nick Macklem, Stormwater Specialist/Project Coordinator. Mr. Macklem conducted a PowerPoint presentation. He began by discussing infrastructure projects and noted that the 2021 infrastructure improvement project in the Lions Park neighborhood had been largely completed with good results. Mr. Macklem informed the commissioners that the 2022 infrastructure improvement project was well underway in the Liberty Park neighborhood. He explained that the project would include street reclaim and overlay on Independence Avenue, as well as mill and overlay on Hillsboro, Gettysburg, 59th, and 60th avenues. He added that water main improvements would take place on the north side of Bass Lake Road at the entrance ramp to Highway 169 and explained that improvements to Independence Avenue would include water main improvements as well as storm sewer improvements along the north and south sides of the street. Mr. Macklem then briefly reviewed the timeline for infrastructure improvement projects and reported that the 2022 contract had been awarded to Northwest Asphalt in March. He explained that site preparations had begun in April, as well as curb repair and spot replacements on mill and overlay streets. He added that water main improvements along Bass Lake Road had begun in May along with milling and overlaying of sections of Hillsboro, Gettysburg and 60th avenues. He also mentioned that water main improvements and curb repair and installation had occurred along Independence Avenue in June, and grading and paving of the first asphalt lift on Independence Avenue had begun in July. Mr. Macklem displayed before - and -after photos of street projects. Commissioner Riley thought that property owners were given the opportunity to connect their drain tile to the city's storm sewer system during full street reconstruction projects. Mr. Macklem replied that while that service was still offered during full reconstruction projects, he noted that it was not an option for properties along Independence Avenue, as there was no existing drain tile system in the street. Mr. Macklem then displayed a map of seal coat and fog seal projects for 2022. He reviewed that streets near Holiday and Sunnyside parks would receive crack repair, seal coat and fog seal, and the section of Boone Avenue between 42nd Avenue and Bass Lake Road would receive mastic crack repair, crack repair, seal coat and fog seal. He reported that a section of Nevada Avenue between 4511~ and 4911, avenues would be crack -filled and explained that the street bordered the city of Crystal with both cities providing maintenance on an alternating basis. He added that sections of 60th and Louisiana avenues would also receive crack filling. The Meadow Lake drawdown project was then discussed. Mr. Macklem reviewed that the surface area of the lake was 12 acres with an average depth of around two feet. He explained that a watershed of approximately 88 acres fed into the lake and commented that approximately five inches of rain would cause the lake to flush completely. Mr. Macklem displayed graphs of the water quality and clarity of Meadow Lake in years past and noted that the amounts of phosphorus and chlorophyll had consistently exceeded acceptable levels. He added that water clarity had also been below ideal standards. Mr. Macklem reported that the lake had previously been infested with curly - leaf pondweed, an invasive, non-native plant that can overtake native vegetation in the spring but dies off during the summer. He displayed past images of the lake taken during the month of June, in which curly -leaf pondweed was abundant, and August after it had died off. Mr. Macklem then displayed a chart of the proposed plan for Meadow Lake, which had been developed in cooperation with the Shingle Creek Watershed Management Commission. He stated that this five-year plan had included the drawdown in year one. Mr. Macklem briefly reviewed the drawdown process and explained that a pump had been installed in the northwest corner of the lake last fall which fed into a storm sewer. He noted that while a few inches of water had remained the lake was able to freeze completely. He reported that the lake had returned to pre-drawdown levels by the end of March and had shown good water clarity and the return of some natural vegetation. He then New Hope Citizen Advisory Commission July 12, 2022 Page 2 discussed the next steps which included water quality monitoring, vegetation surveys, fishery surveys and sediment surveys. Commissioner Riley wondered about the turtle population prior to the drawdown. Mr. Macklem replied that there had been some impact to turtles due to the delay in the drawdown process but commented that staff had observed several turtle sightings beginning this spring. Chair Kulzer asked about the idea that curly -leaf pondweed would die off over the winter freeze. Mr. Macklem replied that ideally the frost level would penetrate deep enough to kill the turions, a type of augured -in root system. He stated that staff had not observed the return of curly -leaf pondweed so far but had noticed the return of some native plants. Chair Kulzer wondered about the long-term effect of the drawdown. Mr. Macklem replied that he was unsure but commented that he planned to utilize an adapted management strategy based on ongoing observations. Mr. Macklem then discussed sanitary sewer lining projects for 2022-23 and noted that projects were completed in two-year cycles with the goal of preventing stormwater inflow and infiltration (I/I) from entering the sanitary sewer system. He reviewed that in 2022, sewer lining projects were planned for the northwest corner of the city between Bass Lake Road and 61s' Avenue. He noted that improvements were planned for Bass Creek Circle, and sections of Louisiana, West Broadway and 6011, Avenues in 2023. He added that alternate areas had also been identified if funding was available. Mr. Macklem shared images of clay piping prior to and after lining. Commissioner Riley wondered whether the lining was constructed of some type of material or if it was a liquid that formed. Mr. Weber replied that the lining was made of fiberglass and was fed through the pipe utilizing an auguring system. Commissioner Kaufman wondered who supervised the city's lift stations. Mr. Weber replied that New Hope staff was responsible for monitoring the city's 11 lift stations. Mr. Macklem then discussed 2023 infrastructure improvement projects and reported that a reclaim and overlay was scheduled for the Northwood Park area east of Boone Avenue as well as south of 36th Avenue in the Sonnesyn Elementary area. He added that a mill and overlay was also planned for a small section north of Bass Lake Road. New Hope Citizen Advisory Commission July 12, 2022 Page 3 Mr. Macklem reported that a noise wall had been proposed for the east side of Highway 169 between Bass Lake Road and 62nd Avenue. He stated that MN DOT would oversee the installation, which was planned for 2023. He also mentioned that the city had recently completed street infrastructure projects in that area as well as water main, storm sewer and sanitary sewer improvements in anticipation of this project. Commissioner Wills wondered about the future of Bass Creek, which flowed under Highway 169. Mr. Macklem replied that he was not aware of any specifics but thought that MN DOT would discuss the situation with the Shingle Creek Watershed Management Commission in the future. Commissioner Riley felt that older noise walls throughout the area appeared weathered. He wondered if the painting process could be improved. Mr. Macklem replied that MN DOT had informed him that the painting formula had been improved to provide longer lasting coverage. He added that he would like to see better ongoing maintenance of the noise walls. Mr. Macklem reported that the signal lights at 42nd and Boone avenues were scheduled for replacement in 2023 and informed the commissioners that costs for the purchase and installation of the lights would be shared with Hennepin County. He explained that the project would include more accessible pedestrian signals, push button improvements, and ADA improvements. He stated that a hydrant had been relocated in 2019 in anticipation of this project. He added that this project had been planned to coincide with a mill and overlay project on 42nd Avenue between Gettysburg and Xylon avenues. Mr. Macklem briefly reviewed the 42nd Avenue bridge/interchange replacement project that was scheduled to start in 2023. He explained that the current design would be replaced with a folded diamond layout and would include two stoplights. Chair Kulzer commented that he had heard that Hennepin County and/or the City of Plymouth were not interested in installing lighting for the pedestrian trail. Mr. Weber replied that the city of Plymouth currently did not support lighting for its portion of the pedestrian trail, which was planned for the south side of the bridge. Commissioner Riley wondered what would happen to the area where the south cloverleaf and on -ramps currently exist. Mr. Weber replied that staff had considered a watershed project for that area. New Hope Citizen Advisory Commission July 12, 2022 Page 4 Mr. Macklem reported that MN DOT planned to replace the 3611, Avenue bridge over Highway 169 in 2025, as it did not meet current height requirements. He added the current pedestrian bridge would not be affected by this project. Commissioner Kaufman mentioned street improvement projects and wondered how staff determined the type of project to implement. Mr. Macklem replied that it would depend on the age of the roadway as well as its current condition. He explained that all projects were factored in to a 10- year pavement management plan, which was reviewed and updated on an annual basis. Commissioner Neuburger commented on sinkholes that had formed in the city of Robbinsdale in the past and wondered about inspection methods to prevent that from happening in New Hope. Mr. Weber replied that the entire system had been reviewed utilizing cameras and sonar. He also mentioned that automated valves had since been installed to localize shutdowns if problems occurred. Commissioner Kulzer inquired whether the 36f Avenue bridge replacement would utilize the same footprint. Mr. Weber replied yes and noted that the existing bridge did not meet current height requirements. The commissioners thanked Mr. Weber and Mr. Macklem for their presentation. They excused themselves from the meeting at 7:47 p.m. GARAGE SALE UPDATE Ms. Rader reviewed that 69 residents had participated in the city-wide garage sale on June 17 and 18. She added that published maps had been available on the city's website and paper copies had been available at city hall. She also mentioned that a resident had requested set hours for the sale. BRAINSTORMING — IDEAS Commissioner Neuburger referred to Friday Morning Bingo offered by the TO BRING ATTENTION TO Parks and Recreation Department and commented that some of her neighbors NEW HOPE had expressed interest in an evening option. PARKS AND RECREATION Ms. Rader referred to the playground project at Hidden Valley Park and PROJECT UPDATES reported that Public Works staff had removed the old equipment and the contractor had removed the retaining wall. She stated that new cement had been poured around the warming house but noted that the new retaining wall blocks had been backordered. She also mentioned that minor court repairs should occur in late July to early August. Chair Kulzer commented on the success of the Aquatic Park last year and wondered about attendance thus far in 2022. New Hope Citizen Advisory Commission July 12, 2022 Page 5 Ms. Rader stated that attendance had been up by about 1,000 customers year to date and noted that more season passes had been purchased this year. She added that staffing levels had been more stable this year and commented that she felt that operations had been going well. Ms. Rader reminded the commissioners that the Aquatic Park would be closed July 15-17 for a swim meet. She explained that as part of the aquatic park project, the city had received a $40,000 grant from Minnesota Swimming in exchange for allowing one regional swim meet annually for four years. She added that the city still received rental fees for the use of the facility. She also mentioned that the Aquatic Park would be open one week later in August compared to previous years. OTHER BUSINESS Ms. Rader made the following announcements: • There would be no Food Truck Friday on July 15 nor Farmer's Market on July 16 due to the regional swim meet. • There would be no August meeting of the Citizen Advisory Commission due to primary elections. • The commissioner bus tour was scheduled for September 13. • Citizen Advisory Commission annual dialog with City Council was scheduled for September 19 at 6 p.m. The commissioners scheduled Liberty Park cleanup for September 20 at 6 p.m. Ms. Rader reminded the commissioners that the city was still accepting nominations for the RAVE Award! Program. Ms. Rader also reported that a bridge dedication for Harvey Feldman, New Hope's first Parks and Recreation Director, had been held earlier this evening at Northwood Park. She added that the bridge selected was located on the east side of the park, near the ball fields. Commissioner Riley inquired about the attendance levels for the concerts in the park. Ms. Rader replied that attendance had been good. She made the following additional announcements: • Blue Ox Trio was scheduled to perform on July 27 at 7 p.m. • Salsa del Soul would perform on August 10 at 7 p.m. • The Teddy Bear Band and Rich & The Resistors was scheduled to perform on August 31 at 7 p.m. and was sponsored by the New Hope Women of Today. • Movie in the Park "The Lion King' was scheduled for July 14 at approximately 9:15 p.m. and was sponsored by the New Hope Lions. • Movie in the Park "Remember the Titans" would take place on August 25 at 8:30 p.m. and was sponsored by Thrivent-New Hope Group. • Performances of "Joseph and the Amazing Technicolor Dreamcoat" would take place Thursdays -Saturdays, July 21-August 6 at 8 p.m. at the New Hope Performance Center. New Hope Citizen Advisory Commission July 12, 2022 Page 6 Commissioner Kulzer wondered whether there had been any interest in the Curbside Appeal Program. Mayor Hemken requested the floor and replied that three properties had been approved for the program but noted that she was unsure of the dollar amounts. She added that three additional applications were currently under review. ADJOURNMENT Commissioner Wills made a motion to adjourn the regular meeting of the Citizen Advisory Commission. Commissioner Riley seconded the motion. All present voted in favor. Motion carried. The meeting adjourned at 8:07 p.m. Respectfully submitted, Penny Spitzer Recording Secretary New Hope Citizen Advisory Commission July 12, 2022 Page 7 CAC AGENDA ITEMS FOR 2022 AS OF 10/3/22 The following is a tentative listing of major agenda items that have either been assigned to the CAC, a CAC member has asked that the item be discussed, or city staff has asked that the item be discussed by the CAC. October 11- Budget Discussion November 8 - No meeting due to General Election December 13 -?Update from Community Development; ?Discussion with Cooper HS students *Note: A meeting may be cancelled if there are no agenda items. On -going • Continue to sponsor Snowman Contest, City-wide Garage Sale • Ideas to bring attention to New Hope • Promotion of existing City programs: In Focus, RAVE, Outstanding Business • Volunteering at P&R/City events Updates • Park/Facility Projects Possible Future Topics • Ice Arena Operations Discussion w/ Mark Severson, Recreation Facilities Manager & Tour • CD Projects including St. Therese Renovation • Organics and HRG Reimbursements, Curbside Cleanup and Load Limits • Police Department - Joint Community Police Partnership • P&R Update • Discussion with Cooper High School students • Follow-up discussion with Three Rivers Park District re: CP Rail Regional Trail (later in 2022 or early 2023) Memorandum To: Susan Rader, Director of Parks and Recreation From: Tim Hoyt, Acting City Manager Date: October 5, 2022 Subj ect: Review 2023 Preliminary Budget and Discuss Long -Term Sustainability Analysis for Golf Course, Ice Arena and Swimming Pool Per the request of the City Council, staff will be reviewing the 2023 preliminary budget with the commission and discussing the long-term sustainability of the golf course, ice arena and swimming pool operations. Representatives from Abdo will be in attendance to assist with the presentation. This is an ongoing effort to keep the commission better informed about city operations. Abdo has served as the city's financial consultant since 2009 and has implemented a ten-year financial plan for all city funds, which is updated and reviewed with the City Council annually. A financial plan update will be reviewed with the City Council at a work session in November. 2023 Preliminary Budget The preliminary budget and tax levy was adopted at the September 12 city council meeting. This is the maximum tax levy and budget that can be adopted; it can be reduced before final adoption in December, but it cannot be increased. The Council reviewed all general fund budgets with department heads at their September work session and will be reviewing utility and enterprise fund budgets at the October work session. The Council will continue discussion at the November 21 work session, and a public hearing on the budget will be held on December 5. Attached are excerpts from the introduction to the budget, along with the presentation that will be reviewed with the commission. 2023 Budget The 2023 preliminary general fund budget is $17,235,207, which is an increase of $1,056,014 (6.5%) over the 2022 budget of $16,179,193. The major changes in the budget include: • An increase of $643,628 for wage and benefit increases (see personnel budget memo for additional information). A 3% cost of living adjustment is budgeted for employees along with an increase in the city's share of health insurance coverage and a comparable cities adjustment. Council salary increases have also been budgeted for 2023. IT charges to the general fund increased $62,158. Similar to 2022, the charges are based on the new allocation method for indirect charges (number of phones, computers and employees per department), with direct departmental LOGIS IT costs being allocated to the benefitting department. Significant direct allocations to the general fund include the software for body worn cameras (WatchGuard, $30,000), the records management for Police through Law Enforcement Technology Group (LETG, $32,448) and the recreation software ($36,620). • An increase of $145,000 for portable radios for the police department, due to the phase out of their current equipment. It is recommended that a one-time transfer from the temporary financing fund be utilized for this capital expense. • A compensation study is anticipated for 2023. A one-time transfer from the employee leave fund is recommended to provide funding for the consulting fees. • There is an increase of $133,595 in the budget for West Metro Fire -Rescue District. This increase is to provide funding for the payment on two new fire truck leases. Similar to 2019, it is recommended that the increase in the joint powers agreement be funded with a transfer from the Fire Capital Fund. • There is a $62,661 decrease in central garage charges. Similar to 2022, operations and capital will be funded at 100%. • The city is scheduled to receive $847,830 in LGA (local government aid) in 2023, which is a $18,812 decrease from 2022. The revenue will be utilized in the general fund to offset central garage equipment and building replacement charges; it is not used for general operations. 2023 Tax Levy The tax levy for the general fund is $12,076,955, which is $683,601 or a 6% increase over the 2022 general fund levy of $11,393,354. The total tax levy for 2023, including the general fund, street and park infrastructure funds, economic development housing and redevelopment authorities, and prior debt levies for City Center, Northwood South and Northwood North infrastructure bonds, the 2017 Police Station/City Hall facility bonds, and the 2018/2019 Pool and Park improvement bonds is $19,053,316. This represents a 4.51% or $822,305 increase over the 2022 levy of $18,231,011. The total tax levy includes a 5% increase in the street and park infrastructure levies to support the long-term funding plans for street and park improvements. An HRA levy of $437,850 is recommended for 2023, which is established as a special taxing district. The EDA levy of $160,650 will be included in the city's tax rate. Both levies are needed to support the scattered site housing program and other redevelopment due to funding changes in the CDBG program. Overall, the combined debt levies are increasing by $9,070. The median home value for taxes payable in 2023 is $325,000, which is an 18% increase from the median value home in 2022. At this time the estimated impact on residential homes based on the proposed 4.51% increase in the city tax levy is 8%. This is primarily attributed to an estimated 18% increase in the market value of residential homes. For homes valued between $150,000 and $400,000 the tax increase estimate is $61 to $192. The city tax rate is projected to decrease from 62.82% in 2022 to 57.23% in 2023. The tax levy resolution included with this request for $18,615,466 excludes the $437,850 HRA tax levy ($19,053,316 less $437,850), as the HRA tax levy must be acted upon by the EDA. Sustainability of Ice Arena, Golf Course, Swimming Pool and Park Infrastructure Fund Abdo has prepared the attached memorandum that discusses the long-term sustainability of the golf course, ice arena, swimming pool, and park infrastructure fund. The golf course and ice arena are enterprise funds, which means the operation of the facilities should be supported with revenues from the facility. In 2018, the Council approved increasing the park infrastructure levy to address long-term debt and capital improvements at the ice arena, so a sustainable plan is in place to pay off the energy improvement project costs. The swimming pool is a general fund budget and is supported by pool revenues and general tax dollars. Staff and ■ Page 2 the City Council closely review operations of all the three facilities on an annual basis and the staff at the facilities are very conscientious about operational costs and are to be commended for their efforts. Abdo will review the memorandum with the commission, and staff will be glad to respond to questions or comments. Attachments • 2023 Budget Information • Abdo Memo Re: Facilities Page 2 2023 Preliminary Budget Information August 15, 2022 (updated September 2, 2022) Budget Message Mayor and Council Members: Annually, the city manager must prepare a budget and present it to the city council. A preliminary budget is considered and the maximum tax levy is adopted in September, with review and discussion of all budgets between September and December, with the final budget and tax levy adopted in December. The following preliminary general and enterprise fund budgets represent a summary of all services to be provided by the city in 2023. The 2023 Budget includes the operations of the general fund that are supported by property taxes and budgets for certain special revenue and enterprise funds. The city's budget is reflective of the city's plans, policies, procedures, and objectives regarding services to be provided in fiscal year 2023 and beyond. Prior Years 2020 BJ_ etet The 2020 general fund budget was $15,410,550, and included a $136,483 levy increase (or 1.32% levy increase) over the 2019 budget of $14,224,112 for a total general fund tax levy of $10,511,431. The total city tax levy for 2020 was $16,844,716, which represented a 10.08% or $1,543,106 increase over the 2019 levy. The major increases in the general fund were adding pool operations back into the budget, wage and benefit increases (3% wage increase for city employees and council members), central garage charges, West Metro Fire -Rescue District joint powers agreement and 2020 election costs. The city received $815,623 in local government aid (LGA), and it was utilized in the general fund to help fund equipment replacement savings (not used for general operations). The total tax levy included a new levy for pool and park improvement bonds, a $100,000 increase in the park infrastructure fund for ice arena debt service/capital improvements and a $48,000 increase in the EDA levy for redevelopment. The tax levy for the 2010 fire truck certificates was eliminated from the total levy as that debt was paid off in 2019. 2021 Budget The 2021 general fund budget was $15,936,977, and included a $368,034 levy increase (or 3.5% levy increase) over the 2020 budget of $15,410,550 for a total general fund tax levy of $10,879,465. The total city tax levy for 2021 was $17,417,601 which represented a 3.4% or $572,885 increase over the 2020 levy. The major increases in the general fund were for police department body and squad camera purchase, wage and benefit increases (3% wage increase for city employees and council members), West Metro Fire -Rescue District joint powers agreement, central garage charges and the city hall budget (increases in utility cost and liability insurance for larger building and new emergency generator replacement cost). The city received $865,307 in local government aid (LGA), and it was utilized in the general fund to help fund equipment replacement savings (not used for general operations). The total tax levy included a 5% increase in the street and park infrastructure levies, a $100,000 increase in the park infrastructure fund for ice arena debt service/capital improvements and a $17,000 increase in the EDA levy for redevelopment. Overall, the combined debt levies decreased by $3,611. -1- 2022 Bea et The 2022 general fund budget was $16,179,193, and included a $513,889 levy increase (or 4.72% levy increase) over the 2021 budget of $15,936,977 for a total general fund tax levy of $11,393,354. The total city tax levy for 2022 was $18,231,011, which represented a 4.67% or $831,410 increase over the 2021 levy. The major increases in the general fund were for wage and benefit increases (3% wage increase for city employees and council members), IT charges (including software for body worn cameras), West Metro Fire -Rescue District joint powers agreement, Emerald Ash borer removal/replacement program and 2022 election costs. The city received $866,642 in local government aid (LGA), and it was utilized in the general fund to help fund equipment replacement (not used for general operations). The total tax levy included a 5% increase in the street and park infrastructure levies and a new HRA levy to support the scattered site housing program. Overall, the combined debt levies decreased by $1,797. 2023 BudZet The 2023 preliminary general fund budget is $17,235,207, which is an increase of $1,056,014 (6.5%) over the 2022 budget of $16,179,193. The major changes in the budget include: • An increase of $643,628 for wage and benefit increases (see personnel budget memo for additional information). A 3% cost of living adjustment is budgeted for employees along with an increase in the city's share of health insurance coverage and a comparable cities adjustment. Council salary increases have also been budgeted for 2023. • IT charges to the general fund increased $62,158. Similar to 2022, the charges are based on the new allocation method for indirect charges (number of phones, computers and employees per department), with direct departmental LOGIS IT costs being allocated to the benefitting department. Significant direct allocations to the general fund include the software for body worn cameras (WatchGuard, $30,000), the records management for Police through Law Enforcement Technology Group (LETG, $32,448) and the recreation software ($36,620). • An increase of $145,000 for portable radios for the police department, due to the phase out of their current equipment. It is recommended that a one-time transfer from the temporary financing fund be utilized for this capital expense. • A compensation study is anticipated for 2023. A one-time transfer from the employee leave fund is recommended to provide funding for the consulting fees. • There is an increase of $133,595 in the budget for West Metro Fire -Rescue District. This increase is to provide funding for the payment on two new fire truck leases. Similar to 2019, it is recommended that the increase in the joint powers agreement be funded with a transfer from the Fire Capital Fund. • There is a $62,661 decrease in central garage charges. Similar to 2022, operations and capital will be funded at 100%. ■ The city is scheduled to receive $847,830 in LGA (local government aid) in 2023, which is a $18,812 decrease over 2022. The revenue will be utilized in the general fund to offset central garage equipment and building replacement charges; it is not used for general operations. 2023 Tax Lemy The tax levy for the general fund is $12,076,955, which is $683,601 or a 6% increase over the 2022 general fund levy of $11,393,354. The total tax levy for 2023, including the general fund, street and park infrastructure funds, economic development an housing and redevelopment authorities, and prior debt levies for City Center, Northwood South and Northwood North infrastructure bonds, the 2017 Police Station/City Hall facility bonds, and the 2018/2019 Pool and Park improvement bonds is $19,053,316. This represents a 4.51% or $822,305 increase over the 2022 levy of $18,231,011. The total tax levy includes a 5% -2- increase in the street and park infrastructure levies to support the long-term funding plans for street and park improvements. An HRA levy of $437,850 is recommended for 2023, which is established as a special taxing district. The EDA levy of $160,650 will be included in the city's tax rate. Both levies are needed to support the scattered site housing program and other redevelopment due to funding changes in the CDBG program. Overall, the combined debt levies are increasing by $9,070. The median home value for taxes payable in 2023 is $325,000, which is an 18% increase from the median value home in 2022. At this time the estimated impact on residential homes based on the proposed 4.51% increase in the city tax levy is 8%. This is primarily attributed to an estimated 18% increase in the market value of residential homes; an increase which is disproportionate to the change in commercial and industrial valuations. For homes valued between $150,000 and $400,000 the tax increase estimate is $61 to $192. The city tax rate is projected to decrease from 62.82% in 2022 to 57.23% in 2023. Overview The budget provides a plan for the city for 2023 and beyond. It includes priorities and initiatives for the current year, as well as a focus for the future. The major key points and initiatives include: Budget Fermat • A new budget format was implemented in 2010 in an effort to enhance understandability and improvements continued to be made. The 2011-2022 budgets were prepared in a way that utilized the J.D. Edwards finance software to make the process more efficient for the department heads. The budgets included the Council approved priorities for each department. These will continue to be reviewed and updated as needed for future budget documents. ■ In 2012 a services/programs priorities matrix was completed by the city council and commissioners rating functions as core or discretionary and the amount of expenditure for the service was identified. Departments were reviewed and discussed and percentage of budget information has been inserted on each budget narrative page. Public purpose statements were added to budget narratives. • Budget narratives under the summary section include major changes to budgets and personnel changes are noted. • A listing of positions and salaries is included with the organization chart and the salary information ties directly to departmental budgets. ■ A memorandum from the city's financial consultant is included that summarizes personnelibenefit costs, staffing changes and city consultant costs. • A pie chart is included to illustrate the percentage of budget devoted to each function. ■ In conjunction with the League of Minnesota Cities, New Hope participates in a local performance measures program in key city service areas. This is done through an on-line and/or paper city services survey, and every five years a professional random telephone survey is completed with more statistically accurate information. The city will solicit resident feedback on the delivery of services, specific performance measures will be developed and the information will be incorporated intp the final 2023 budget presentation. • Per the request of the City Council, starting in 2015 the budget was reviewed with the Citizens Advisory Commission and that practice will be continued for the 2023 budget. • In 2016 staff compiled a performance measurement report to track and compare the city's performance over a period of years and to compare performance to similar sized cities. The department heads also developed a list of SMART goals (specific, measureable, achievable, realistic and time sensitive) which are reviewed by the City Council and incorporated into the Performance Measurement Report. This -3- document can be found on the city's website and is reviewed with the City Council and updated annually. 10-Year Financial Plan In 2017, Abdo Financial Solutions coordinated with department heads and the city manager and expanded the city's five-year financial plan to include an additional five years. Abdo presented the 10-year planning model to Council in November of last year and presented select enterprise fund capital analysis in March of this year. The model is intended to show stakeholders the results of current budget actions and provide scenarios for future actions at the staff and Council level. This format integrated the current 10-year capital plan and 2021 budget. This plan provides information and analysis on the Enterprise and Internal Service Funds as well as the Street and Park Infrastructure Funds. When the preliminary 2023 budget is completed, the budget assumptions will be integrated into an updated 10-year plan and presented to Council. The city's credit rating was upgraded several years ago as a result of the implementation of this long-term financial planning tool, and the AA credit rating was reaffirmed in 2017, 2018 and 2021 by Standard & Poors. An overall financial management plan for the city integrating all policies and procedures was completed in August 2016, which improved the management score from "strong" to "very strong", the highest value assigned by S&P for that part of the rating. 2023 Goals/Priiorffies 1. Hold the line on spending; continue to provide existing services and programs with current resources. 2. Keep the general fund tax levy/property taxes as low as possible (levy limits are not in effect for 2023). Continue to proactively pursue all outside funding opportunities for infrastructure and facility improvements and other programs including public safety, parks and recreation, public works and housing/redevelopment. 4. Implement 5% annual increase in street and park infrastructure levies to fund capital improvements outlined in the Pavement Management and Long -Term Financial Plan. 5. Staff is recommending that the city continue with the EDA levy for redevelopment purposes and an HRA levy to provide additional funding for the scattered site housing program. Abdo and staff are recommending that the Council consider implementing levies for long-term capital improvements at the police station/city hall, fire station #3 and the new aquatic park. Overall, the city's debt service levies will increase for 2023. 6. Central Garage equipment replacement costs will be funded at 100% in the general fund and staff recommends using LGA funding for that purpose (not general operations). 7. 2023 is not an election year so there is an approximate $40,000 decrease in the elections budget. If any new council members are elected in 2022, appropriate orientation and training will be provided. 8. The overall safety of the general public is always the top priority of the police department and continuing an emphasis on building upon our relationships with residents through our community engagement programs. The Chief of Police is recommending two additional staff members. The first -4- being an Evidence Technician to oversee the evidence room and body worn camera tasks. The second would be a transition of the shared Embedded Social Worker Program from a shared position to New Hope having its sole use because of resident mental health needs and workload. Major CIP items include replacement of half (26) of the portable radios, two (2) stalker radar units, three (3) SWAT vests and bicycles and equipment for the bike unit. 9. Continue support and coordination with West Metro Fire -Rescue District, including emergency preparedness and EOC, in partnership with city of Crystal; continue to support long-term capital plan based on major apparatus report. New Hope's share of JPA budget to increase approximately $133,000 including annual lease payments for aerial and first year of new engines. Continue to budget annually for Station #3 improvements that are the city's responsibility ($30,000 per year). 10. Redevelopment will remain a high priority with a continued effort to seek out potential commercial and industrial redevelopment opportunities. Coordinate with St. Therese Nursing Home on their multi -phase renovation project. Continue to coordinate on scattered site housing program and curbside appeal reimbursement program. Property maintenance and inspections will continue as a top priority. 11. Continue with infrastructure and environmental improvements; major CIP projects for 2023 include street/water/sewer/storm water improvements in the Northwood East neighborhood, coordination with MnDOT on the Bass Lake Road/62od Avenue noise wall on TH 169, and coordination with Hennepin County on 42°d and Boone Avenues signal and watermain replacement, trail, street lighting and monument sign. Continue coordination on both 42°1 and 361h Avenue TH 169 bridge replacements and coordinate with JWC on the repainting of south water tower. Plan for phase two public works building expansion. Continue coordination with watershed districts and Northwood/Meadow Lake Associations and make scheduled equipment replacements. 12. In Parks and Recreation, operate the new aquatic facility for a third season. Park CIP projects include replacing playground equipment and basketball court at Liberty Park, Lighted Field baseball project (leveling of field, retrofit lights, new fencing), and purchase/replacement of picnic tables and replacement of older drinking fountains. Improvements at ice arena include south rink project (re - cementing floor, replacement of piping and replace boards/glass), upgrades to concession stand, rebuild ice compressors and replace 3 water heaters and replacement of skate tile in south rink and bleacher caps in the north rink. Golf course improvements include maintenance garage updates, addition of cold storage space, replacement of fire system and updating clubhouse fireplace. The Director of Parks and Recreation is recommending the addition of a golf course superintendent position. Continue movies and music in the parks at the performance center and continue to work with OBMT to offer musical performances. Continue to offer a variety of programs including dance, gymnastics, and playground programs. 13. Continue Emerald Ash Borer program on public property and invasive species (buckthorn) removal in parks. 14. Continue contractual arrangement with Abdo for financial oversight, continue to implement technological efficiencies on departmental basis to retrieve budget data, continue to update 10-year financial plan and monitor utility and enterprise fund operations. Continue to work on implementing long-term equipment schedule replacement program for all park and recreation facilities and prepare plan to internally fund phase two public works building and site improvements. -5- 15. Continue contractual agreement with Solution Builders for IT services, continue replacing computers as appropriate in order to keep up-to-date with technological capabilities and meet IT needs of staff. In addition to the day-to-day operations of the city, some highlights of the IT budget include funding for: the city's share of replacing the LOGIS fiber optic network in 2024, moving to a new police record management system in 2023 or 2024, annual renewal of the body worn camera software, and conduct a request for proposals for a new website in 2023. 16. Conduct city services survey to solicit feedback on city services/projects/issues, continue to encourage/improve public participation in city affairs and promote inclusiveness, continue to promote Nextdoor.com, update performance measurement report and SMART goals and conduct commissioner bus tour and other public events. 17. Continue to update 10-year pavement management and street infrastructure plans and monitor curbside residential organics collection program. 18. Continue participation in Green Steps program and implement actions to potentially achieve higher ranking in program. 19. Staff recommends incorporation of a 3% cost of living adjustment for employees and a 50/50 cost share for employee insurance increases. Staff recommends that funding be budgeted to update the compensation study for non -union employees. Council salary adjustments to be considered for 2023/2024 before the General Election. All line items in the budget received several series of reviews and evaluations by department heads and the city manager. Sanitary Sewer — At 12/31/21 the sanitary sewer utility fund had a cash balance of $2,070,556. The City Council approved a 4% rate increase for 2022. A 4% rate increase is recommended for 2023 to meet ongoing capital needs and to keep pace with the rate increases approved by the Metropolitan Council. Water — At 12/31/21 the water fund had a cash balance of $3,154,081. A 4% rate increase was implemented in 2022. A 4% rate increase is recommended for 2023 to meet ongoing capital needs and to keep pace with the rate increases approved by the Joint Water Commission. Storm Water — At 12/31/21 this fund had a cash balance of $1,240,598. A 4% rate increase was implemented in 2022 and a 4% rate increase is recommended for 2023 to meet ongoing capital needs. Street Lighting — At 12/31/21 this fund had a cash balance of $128,962. A 5% rate increase was implemented in 2022 and a 5% rate increase is recommended for 2023 to meet ongoing capital needs. Golf Course — At 12/31/21 this fund had a cash balance of $341,554. The 2022 budget calls for a $26,678 decrease in cash, after accounting for $54,000 in capital improvements. Ice Arena — This fund had an interfund loan of $194,063 to assist with cash flow management as of 12/31/21. The 2022 budget calls for an increase in the cash balance of $41,373 after factoring in a $500,000 -6- transfer in from the Park Infrastructure Fund, payment on capital improvements of $260,000 and a $245,000 principal paydown on the 2021A Bonds. Conclusion Historically (or in prior years), legislative changes to levy limits, local government aid and other state aid programs have placed increased pressure on municipal budgets. To counteract these changes and ensure the financial health of the city, certain financial practices have been implemented. Measures include implementation of a financial management plan in 2016, a ten-year long -tern financial plan in 2018 (replaced the city's existing five-year program) as well as adherence to fund balance policies. Collectively, these practices have contributed to the city's AA bond rating and ensure the city can maintain a strong financial position even in challenging economic times. The 2023 budget represents staff s best efforts to hold the line on spending and keep the overall increase in levy to a minimum. Council and staff are committed to providing quality services and maintaining the city's investment in infrastructure. As the Council is aware, the city has utilized the services of Abdo Financial Solutions to assist in developing the current budget format and facilitating meetings with department heads. Their assistance as a change agent has been beneficial as the city has significantly modified the budget presentation. Respectfully Submitted, Tim W. Hoyt Acting City Manager -7- Budget Process The annual budget is prepared in accordance with Minnesota statutes which previously mandated a "Truth in Taxation" program for local governments. This process required local governments to give notice to each property owner regarding their intention on budgets and levies. Under statutes passed in the 2009 legislative session, the published notices, public hearings and meetings were essentially abolished. Pursuant to state law, councils must include information on the budget and levy process in meeting minutes. Citizens must be allowed to speak at "regularly scheduled meetings" dealing with budgets and levies and these meetings must not be held before 6 p.m. Cities must provide the same specific meeting information to county auditors on or before September 30. The city manager and finance consultant, in conjunction with department heads, are responsible for the development of the annual budget. The city attempts to adopt a balanced budget so that the appropriated expenditures do not exceed the estimated revenues and reserves available from prior years. As the budget calendar indicates, the budget process begins in May each year with the distribution of budget information to all departments. All departments are responsible for compiling budget figures which are then reviewed and adjusted by the city manager during individual department meetings. After the departmental meetings the city manager presents the proposed budget to the City Council. The proposed budget is reviewed by the City Council and the final budget is adopted by the end of December. A public hearing to receive public comment on the budget will be held on December 5, 2022. 2023 BUDGET SCHEDULE May - June, 2022 General discussion/direction. By July 31, 2022 Department head meetings with city manager and finance consultant. August 15, 2022 Preliminary budget presented at work session/discuss tax levy. September 6, 2022 Tentative additional budget work session if no consensus on tax levy at August work session. September 12, 2022 Preliminary maximum levy adopted by council. September - Nov. Continue to refine general fund budget and discuss all enterprise and utility fund budgets. September 19, 2022 Review individual department budgets with department heads. October 17, 2022 Review HRG programs and rates as well as utility and enterprise fund budgets. November 21, 2022 Review budget document for public hearing. December 5, 2022 Budget public hearing. December 12, 2022 Adopt final approved budget. Revenues Property Taxes are a revenue source in the general, special revenue and infrastructure funds. This revenue source is primarily used in the general fund to pay for general government services and is determined on the basis of availability of other revenue sources and the expenditure level necessary to conduct city business in accordance with council policies and directives. Intergovernmental Revenues includes state aid for police, street maintenance, and grant funding. These budget items are susceptible to overall State of Minnesota budget conditions. -8- Revenues (continued) Licenses & Permits include business licenses, building -related permits and fees, and other non -business licenses and permits. Charges for Services include administrative charges, recreation program fees, police and fire services, and facility use fees. Fines & Forfeits include fines paid for traffic violations and criminal offenses occurring within city limits. Investment income includes interest earned on the city's investment portfolio. Interest income continues to be difficult to predict due to the current market conditions. Franchise fees were implemented in 2003. The rate for residential properties was $1.50 per month for gas and electric franchise fees. Between years 2003 to 2009 the revenue from franchise fees was split between the EDA and the general fund. Between years 2010 to 2016, due to the reduction of LGA, the entire revenue from franchise fees (approximately $440,000) was placed in the general fund. Council adopted ordinance 2016-11 to increase franchise fee rates effective January, 2017, to raise additional revenue for the street infrastructure fund based on the long-term pavement management plan. The new rate for residential properties is set at $3.00 per month for gas and electric franchise fees. It was agreed that the first $880,000 of revenue would be divided equally between the general fund and the street infrastructure fund ($440,000 per fund) and that any excess revenue above the first $880,000 would be allocated to the general fund in an effort to keep the tax levy lower. -9- Tax Levy, Tax Capacity, and Tax Impact The proposed budget for 2023 reflects a tax levy of $19,053,316 which is an increase of 4.51 percent. The following table summarizes the 2022 tax levy compared with 2023: Property Tax Levy — All Funds Comparison of Property Taxes Program or service Base Levy General fund Street Improvements Park Improvements (1) Economic Development Authority Housing and Redevelopment Authority Debt Service 2015A GO TIF Bonds (City Center) 2015B GO Imp Bonds (Northwoods South) 2016A GO Imp Bonds (Northwoods North) 2017A GO Bonds (Police Dept/City Hall) 2018A GO Tax Abatement Bonds (Pool and Park) 2019A GO Tax Abatement Bonds (Pool and Park Ph. 2) % Change Increase/ from Prior % of Total 2022 Levied 2023 Requested Decrease Year Change $ 11,393,354 $ 12,076,955 $ 683,601 6.00 3.75 1,617,735 1,698,622 80,887 5.00 0.44 904,938 925,185 20,247 2.24 0.11 153,000 160,650 7,650 5.00 0.04 417,000 437,850 20,850 5.00 0.11 235,227 237,853 2,626 205,240 208,745 3,505 262,502 263,709 1,207 1,706,828 1,705,515 (1,313) 862,739 867,464 4,725 472,448 470,768 (1,680) Total Property Taxes $ 18,231,011 $ 19,053,316 $ 822,305 (1) Includes an increase of 5% as the annual Park Infrastructure Levy increase, plus an additional $500,000 levy to support Ice Arena debt service. 1.12 0.01 1.71 0.02 0.46 0.01 (0.08) (0.01) 0.55 0.03 (0.36) (0.01) 4.51 4.51 The city-wide tax capacity represents the taxable property value within the city. It is determined by applying the state-wide property tax formula for each parcel, then adding each parcel's tax capacity. The city-wide tax capacity is then applied to the proposed levy to determine the local tax rate. The following table shows the change in tax capacities by property type: New Hope Tax Capacities per the Assessor's Annual Report Property Ty pe 2020 Pay 2021 2021 Pav 2022 2022 Pay 2023 Perot Residential $ 12,717,695 $ 13,791,310 $ 16,598,033 20.35% Commercial / Industrial 9,465,719 9,594,259 10,865,579 13.25% Apartment 4,843,947 5,150,623 5,554,255 7.84% Total $ 27,027,361 $ 28,536,192 $ 33,017,867 15.71% Source: Hennepin County Assessor's Annual Assessment Report. The report does not include personal property values. Tax capacity estimates in the Assessor's Report will vary from the tax capacity that is certified for use in calculating the City's tax rate. -10- The following table summarizes the local tax rate: Payable 2021 Payable 2022 Payable 2023 Tax Capacity 27,338,807 28,720,529 33,191,296 TIF Captured Value (1,565,751) (1,634,255) (1,910,032) Fiscal Disparities Contribution (3,317,874) (3,682,171) (3,670,779) Net Tax Capacity 22,455,182 23,404,103 27,610,485 Certified Levy 17,052,601 17,814,011 18,615,466 Fiscal Disparities Distribution (2,996,822) (3,110,358) (2,815,427) Local Levy 14,055,779 14,703,653 15,800,039 Tax Rate Trends 2021 2022 2023 City Tax Rate 62.596% 62.826% 57.225% BRA Tax Rate 1.344% 1.497% 1.535% (1) County Tax Rate 38.210% 38.535% 38.535% (1) School Tax Rate 25.529% 26.507% 26.507% (1) Other Tax Rate 8.598% 8.742% 8.742% (1) Total Tax Rate 136.277% 138.107% 132.544% (1) Amounts for county, school and other districts are not known at this time. Prior year actual tax rates have been used for this illustration. -11- The following table summarizes the estimated tax impact on residential homes based on the proposed increase in the city tax levy. 2022 Market Value of a Taxable Home Market Value 2022 Actual 2023 Estimated $ Increase / % Increase / (decrease) (decrease) $ 150,000 $ 126,300 $ 793 $ 854 $ 61 8% 175,000 153,500 964 1,038 74 8% 200,000 180,800 1,136 1,223 87 8% 225,000 208,000 1,307 1,407 100 8% 250,000 235,300 1,478 1,591 113 8% 300,000 289,800 1,821 1,960 139 8% 350,000 344,300 2,163 2,328 165 8% 400,000 398,800 2,506 2,697 192 8% *The median home value for taxes payable in 2023 is $325,000, which is an 18% increase from the median value -12- �rN1 1 1 1 1 1 1 1 1 YV 1 1 1 1 1 1 I 1 1 1 1 1 CL 3 N i E 19 i Q i i i to Q N a by �� 1 1 (7 1 ttl 1 Z 1 (J 6 1 1 1 f n -0 x! ---r-- 1 4-J I V r r l I S t I I ! I I o�u uEd 60 U O O p ODDo t+ O > '� 0�! p " �0 CO• 'fin Id fw0 u 1~.1 A u u U0 u A 3 Uu u w w ------------------------- I I I f f I ! � I I I 1 ! I I � I f k I k k 1 V k ' I o e~ ; 1 1 1 1 1 3 r�wwa LQ� I I I I I I ! -13- a� c� g •� � °n .�po,pyy E G72 u� v� �••� G itl ujFl: ,9 VCC o u MEMO TO: TIM HOYT FROM: VICKI HOLTHAUS SUBJECT: GENERAL FUND PERSONNEL BUDGET DATE: AUGUST 2, 2022 BACKGROUND The 2023 Preliminary Budget included $643,630 or 6.31 % in changes from the 2022 General Fund personnel budget. This memo was prepared by staff to further highlight the major drivers of the budget increase. Key points The 2023 Personnel Budget accounts for the City's compensation and benefits plan, which includes the following components: Total employment is as follows: 104 full-time, 3 part-time, and an average of 70 seasonal • 3% cost of living adjustment (COLA) to union and non -union wage scales • Step increases (percentage varies based on employee compensation scale) ■ 1 % merit increases for eligible employees C Contributions to Public Employee's Retirement Association (percentage varies based on employee group) ■ Health benefit contributions (contribution varies based on employee elections) ■ Life insurance contributions • Worker's compensation insurance expense (percentage varies based on employee group) ■ Applicable taxes Budget increase — major drivers GeneralFu\d Personnel Budgcl Increases E, idence rech - tick, Changes in pail- position C-0 nine seamial.and �`•• a posvtin allucak m t)^.. Ikahh Insutmhe 174a Step I5"a Wotka's Cnmpensm ion -14- The above chart highlights the major drivers in the General Fund personnel budget increase. The increases in the personnel budget are summarized as follows: • COLA increases account for $152,499 or 24% of the increase in the personnel budget • Step increases account for $98,990 or 15% of the increase in the personnel budget ■ Changes in worker's compensation expense accounts for $173,665 or 27% of the increase in the personnel budget ■ Change to health insurance elections and premiums cost accounts for $109,626 or 17% of the increase in the personnel budget ■ Addition of an Evidence Tech position accounts for a $54,362 or 8% increase in the personnel budget • Other changes in part-time, seasonal, and position allocations account for $54,486 or 9% of the increase in the personnel budget 2023 Personnel Budget — All City Funds The above highlights specifically address the personnel budget changes as they relate to the City's General Fund. Overall, the City's personnel budget will increase by $942,001 to $13,464,973 in 2023. In addition to the personnel costs incurred for City staff, City Council, EDA and the Personnel Board, the City contracts with several consultants to augment the work of staff. The following is a summary of some of the key consulting costs incorporated into the 2023 budget. A break -down of the consulting fees by fund is attached. Vendor AEM Financial Solutions, LLC Ehlers, Inc. (4) Morris Leatherman Survey Hennepin County Jensen, Sondrall, Persellin & Woods, P.A. LOGIS (1,2) Malloy, Montague, Kamowsld, LLC Service Accounting Financial Administrative Assessor Legal Information Technology Services Audit Actual2021 Total 2023 Fees Budget 223,364 137,250 3,875 15,000 165,000 180,000 234,094 229,200 416,849 414,790 45,750 42,865 Northwest Associated Consultants, Inc. (3) Planning 12,817 12,000 Solution Builders, Inc. t1 r Information Technology Services 151,710 167,961 Stantec Consulting Services, Inc. Engineering 146.605 104,800 Total 1,400,06=1 1,303,866 (1) Costs paid by the intemal service funds are charged out to other City funds. (2) Only managed service cost has been included in the budget figures for contracted service fees. (3) A significant portion of these fees are offset by fees charged to applicants. (4) Does not include fees paid from bond sales. -15- x La G S ro 8 O V1 O p 00 O nl h oO O Q O O O h O O N N Y m _ v 2023 BUDGET -GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES & CHANGES IN FUND BALANCE REVENUES Property taxes Franchise taxes and other Licenses and permits Intergovernmental revenues Fines and forfeits Charges for services Recreation fees Assessment revenue Investment income Miscellaneous TOTAL REVENUES EXPENDITURES General government Public safety Public works Parks and recreation TOTAL EXPENDITURES OTHER FINANCING SOURCES (USES) Other -transfers in TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCE, JANUARY 1 FUND BALANCE, DECEMBER 31 Revenues - 2023 Budget IntergovernT- 1 9% Charges and Fees, 14% Franchise fees, 3% Other, 0, 2023 Budget $ 12,076,955 535,000 335,720 1,502,330 200,000 548,615 1,253,400 30,000 25,000 10,000 16,517,020 2,426,061 10,058,585 1,616,757 3,133,804 17,235,207 718,187 718,187 (0) 8,673,743 $ 8,673,743 Expenditures - 2023 Budget Parks and recreation 18% Public works s Taxes, 70% —24— General government 14% Public safety 5$ iS 2023 BUDGET- GENERAL FUND SCHEDULE OF REVENUES 2020 2021 2022 2023 2022 to 2023 2022 to 2023 Proposed Increase Increase Actual Actual Budget Budget (Decrease) (Decrease) REVENUES Taxes Property taxes $ 10,422,724 $ 10,909,748 $ 31,393,354 $ 12,076,955 $ 693,601 6.0% Franchise taxes and other 518,260 527,220 535,000 535,000 0.0% Licenses and permits 393,911 392,030 329,570 335,720 6,150 1.9% Intergovernmental revenues 3,151,217 2,603,365 1,524,542 1,502,330 (22,212) -1.5% Fines and forfeits 138,922 185,603 200,000 200,000 0.0% Charges for services 422,491 535,906 554,260 548,615 (5,645) -1.0% Recreation fees 285,337 973,475 1,240,425 1,253,400 12,975 1.0% Assessment revenue 110,670 32,210 40,000 30,000 (10,ODO) -25.0% Investment income 113,294 (93,318) 50,000 25,D00 (25,000) -50.0% Administrative Transfer Fee 287,488 294,672 302,042 309,593 7,551 2.5% Other Transfers 51,800 156,D00 408,594 408,594 N/A Miscellaneous 9,673 69,926 10,000 10,000 0.0% TOTAL REVENUES $ 15,905,789 $ 16,586,837 $ 16,179,193 $ 17,235,207 $ 1,056,014 6.5% Major changes in revenue Property Taxes $ 683,601 Transfers Temporary Financing Fund for Police Department Radio Purchases 145,000 Fire Capital Fund forJolnt Powers Agreement with West Metro Fire 133,594 Park Infrastructure Fund for Emerald Ash Borer Mitigation 100,000 Employee Leave Fund for Compensation Study 30,000 Other changes 11,031 Local Government Aid and Other Intergovernmental Revenue (22,212) Investment Income (25,000) Total increase in revenue $ 1,056,014 -25- 2023 BUDGET - GENERAL FUND SCHEDULE OF EXPENDITURES 2020 2021 2022 2023 2022 to 2023 2022 to 2023 Proposed Increase Increase Actual Actual Budget Budget (Decrease) (Decrease) EXPENDITURES General government Mayor and council $ 94,661 $ 105,867 $ 103,349 $ 106,836 $ 3,487 3.4% City manager 431,613 453,788 463,853 480,013 16,160 3.5% Elections 55,717 4,956 42,906 4,900 (38,006) -88 6% Finance 310,087 317,266 309,314 327,618 18,304 5.9% Assessing 160,000 165,000 172,000 180,000 8,000 4.7% Legal 29,429 16,901 20,000 20,000 0.0% Human resources 299,827 325,426 320,032 354,859 34,827 10.9% Planning 153,023 159,826 296,103 312,792 15,689 5.6% Communications 114,179 144,249 178,013 177,732 (281) -0.2% City hall 413,876 454,847 424,016 461,311 37,295 8.8% Total general government 2.062,412 2,148,126 2,329,586 2,426,062 96,475 4.1% Public safety Police 6,262,954 6,629,957 6,967,656 7,571,601 603,945 87% Police reserves 23,488 9,709 12,740 12,912 172 1.4% Fire services 1,423,808 1,428,843 1,505,680 1,643,504 137,824 9.2% Protective inspection 595,796 602,907 666,895 705,573 38,678 5.8% Animal Control 103,830 104,562 123,532 124.995 1,463 1.2% Total public safety 8,409,877 8,765,978 9,276,503 10,058,585 782,082 8.4% Public works Engineering 40,842 43,492 40,000 40,000 - 0.0% Streets 1,581,200 1,609,512 1,558,929 1,576,757 17,828 1.1% Total public works 1,622,041 1,653,004 1,598,929 1,616,757 17,828 1.1% Parks and recreation Recreation 858,899 948,551 1,065,701 1,101,531 35,830 3.4% Parks 1,030,859 1,127,574 1,193,818 1,232,256 38,438 3.296 Swimming pool 145,901 553,327 714,656 800,017 85,361 12.9% 2,035,657 2,629,452 2,974,175 3,133,804 359,629 5.4% Other Financing Uses Transfers Out 1,642,533 - N/A 1,642,533 N/A TOTAL EXPENDITURES $ 14,129,987 $ 16,839,093 $ 16,179,193 $ 17,235,207 $ 1,056,014 6.5% Major changes in expenditures Personnel Budget Changes Including Evidence Technician (Police Department) $ 421,206 Portable Radios (Police) 145,000 Joint Powers Agreement with West Metro Fire 137,824 Personnel Budget Changes Including Seasonal (Swimming Pool) 85,816 Central Garage Charges 62,661 Personnel Budget Changes (Parks) 41,036 Prosecution Fees (Police) 40,000 Personnel Budget Changes (Protective Inspections) 32,027 Compensation Study 30,001) Personnel Budget Changes(Recreation) 27,915 Increases in Utility Costs (City Hall) 27,000 No Election in 2023 (38,006) Other Changes 43,635 Total increase in expenditures 1,056,014 -26- 10/5/2022 Presentation Outline Review budget process Review general fund budget Present preliminary tax levy Review debt levies Review estimated tax impact and tax rate 10/5/2022 Budget Process September 12, 2022 Council Meeting o Approve 2023 preliminary tax supported budgets o Approve 2023 preliminary tax levy (maximum amount) o Schedule public hearing date for 2023 budget (December 5 at 7:00 pm) City Clerk submits maximum tax levy to county auditor for certification along with public hearing date September 19, 2022 Work Session General fund budgets reviewed with city manager, Abdo and department heads 3 Budget Process October 17, 2022 Work Session Utility and enterprise fund budgets reviewed with city manager, Abdo and department heads a HRG budget/program/rates discussed o Utility rate recommendations reviewed November 21, 2022 Work Session o County assessor information reviewed o City services survey results presented • Budget public hearing presentation reviewed IJ F7 4 2 10/5/2022 Budget Process December 5, 2022 Budget Public Hearing Presentation and comments from residents December 12, 2022 Council Meeting Final budget approved Utility/recycling rate changes approved Certify final levy to Hennepin County Auditor and Department of Revenue ez(t I I :,� � a 5 General Fund Budget 2021 2022 Adopted Adopted 2021 to 2022 2021-2022 Budget Budget Increase % Increase $15,936,977 $16,179,193 $242,216 1.5% 2022 2023 Adopted Preliminary 2022 to 2023 2022-2023 Budget Budget Increase % Increase $16,179,193 $17,235,207 $1,056,014 6.5% f� I 3 10/5/2022 2023 Preliminary General Fund Major Budget Changes $643,628 increase to fund 3% increase in wages/benefits; increase includes evidence technician, new union contract rates, adjustment to health insurance contributions, and Council salary increase. $145,000 increase for portable radios, due to phase out of current equipment. $133,595 increase in West Metro Fire -Rescue District joint powers agreement (includes aerial lease and two new truck leases). $62,158 increase in IT charges, including WatchGuard, records management through LETG, and LOGIS software. rA 2023 Preliminary General Fund Major Budget Changes L - - - - - -- E3 $62,661 decrease in central garage charges. ® $38,000 decrease in elections budget for election judge costs. City to receive $847,830 in Local Government Aid (LGA) which is a decrease of $18,812 over 2022; LGA used for equipment replacement savings — it is not used for general operations. 8 4 10/5/2022 2023 Preliminary Tax Levy General fund tax levy is $12,076,955, which is $683,601 or 6% increase over 2022 general fund levy of $1 1,393,354 (4.72%). Total tax levy, including: ® General Fund a Street and Park Infrastructure Funds a EDA Levy a H RA Levy ® Prior Debt Levies is $19,053,316, which is $822,305 or 4.51 % increase over 2022 total levy of $18,231,01 1 (4.67%). 2023 Preliminary Tax Levy Total tax levy includes: a 5% (80,887) increase in street infrastructure levy ® 2.24% (20,247) increase in park infrastructure levy a 5% (7,650) increase in EDA levy for redevelopment projects o 5% (20,850) increase in HRA levy to achieve long-term funding plan for scattered site housing program due to CDBG funding changes I.7 10/5/2022 2023 Preliminary Tax Levy Total tax levy includes: Prior Debt Levies: 19 2015 City Center infrastructure Bi 2015 Northwood South infrastructure m 2016 Northwood North infrastructure B: 2017 Police Department/City Hall a 2018 Pool and Park r 2019 Pool and Park a Two of the bond debt levies are decreasing for a total of $2,993 a Four of the bond debt levies are increasing for a total of $12,063 a Overall, the combined debt levies are increasing by $9,070 11 Property Tax Levy PROPERTY TAX LEVY -ALL FUNDS COMPARISON OF PROPERTY TAXES Change°of 2023 Increase / from To. 2022 Levied Reel—t d Decrease Prior Change Prog—or servI e Base Levy General fund $ 11,393,354 $ 12,076,955 S 683,601 6 00 3.75 "° Sbeetknpmvements 1,617,735 1,698,622 80,987 5.00 0.44 Park Improvements n 904,938 925,185 20,247 2.24 0.11 Economic Development Authority 153,000 160,650 7,650 5.00 0.04 He using and Redevelopment Authority 417,000 417,850 20,850 5.00 0.11 DebtService - 2015A GO T1F Bonds (City Center) 235,227 237,853 2,626 1.12 0.01 2015B GO Lnp Bonds(Northwoods South) 205,240 208,745 3,505 1.71 0.02 2016A GO Imp Bonds (Northwoods North) 262,502 263,709 1,207 0.46 0.01 2017A GO Bands (Police Depl/City Hall) 1,706,828 1,705,515 (1,313) (0.08) (0.01) 2018A GO Tax Abatement Bonds(Pool and Park) 862,739 867,464 4,725 0.55 0.03 2019A GO Tax Abatement Bonds (Pool and Park Ph, 2) 472,448 470,768 (1,680) (0.36) (0.01) Total Property Taxes $ 18,231,011 $ 19,053,316 $ 822,305 4.51 4.51 ° (1) Includes an increase of5%as the annual Park Infrastructure Levy increase, plus an additional $500,000 levy to support Ice Arena deb[service. 12 l� 10/5/2022 Estimated Tax Impact Median home value in 2023 is $325,000, which is an 18% increase from 2022 Current estimated impact on residential homes based on 4.51 % increase in city tax levy is 8% For homes valued between $150,000 and $400,000 the tax increase estimate is $61 to $192. 2022 Market Taxable Value of a Market 2023 $ Increase / % Increase / Home Value 2022 Actual Estimated (decrease) (decrease) $ 150,000 $ 126,300 $ 793 $ 854 $ 61 8% 175,000 153,500 964 1,038 74 8% 200,000 180,800 1,136 1,223 87 8% 225,000 208,000 1,307 1,407 100 8% 250,000 235,300 1,478 1,591 113 8% 300:000 289:800 1,821 1,960 139 8% 350000 344,300 21163 2,328 165 8% 400:000 398,800 2,506 2,697 192 8% 13 Tax Rate Based on current information: The city tax rate is projected to decrease from 62.826% in 2022 to a 57.225% in 2023 ® The total tax rate is projected to decrease from 138.107% in 2022 to * 132.544% in 2023 2021 2022 2023 City Tax Rate 62,596 % 64826% 57.225% HRA Tax Rate 1.344% 1.497% 1.535% County Tax Rate 38,210% 3&535% 38.535% School Tax Rate 25.529% 26.507% 26.507% Other Tax Rate 8.598% 8.742% 8.742% Total Tax Rate 136,277 % 138.107% 132.544% *Amounts for County, School, and Other are estimates. [ , 14 7 10/5/2022 Summary Staff feels this is a reasonable place to start for the preliminary maximum budget and tax levy. More detailed discussions to take place over next several months. Council needs to determine if preliminary budget/tax levy is acceptable for September 12 Council Meeting where maximum budget/tax levy will be adopted. KER 15 I-1 MEMO TO: TIM HOYT FROM: VICKI HOLTHAUS - ABDO FINANCIAL SOLUTIONS SUBJECT: SUSTAINABILITY OF ICE ARENA, GOLF COURSE, SWIMMING POOL, AND PARK INFRASTRUCTURE DATE: OCTOBER 4, 2022 Introduction Upon your request, we have updated the long-term sustainability analysis of the Ice Arena, Golf Course, Pool, and Park Infrastructure Fund. Ice Arena The question of sustainability would revolve around two different components of the business. The first component would be revenue and the composition of that revenue. Staff has provided updated information on hours sold through 2021. A summary of total hours sold is listed below: YOUTH OTHER HOURLY OPEN OPEN SKATE YEAR DIST 281 HOCKEY CONTRACTS RENTALS SKATE HOCKEY SCHOOL YR TOTAL 2021 630.00 1,423.25 2,141.50 - 82.50 - 139.00 14% 32% 48% 0% 2% 0% 3% 2020 198.00 1,139.25 1,492.00 - 59.50 - 96.00 2019 571.50 1,454.00 1,940.25 - 103.75 - 132.50 2018 576.00 1,442.50 1,908.42 87.00 - 137.75 2017 564.75 1,433.00 1,816.25 - 79.00 - 137.50 2016 534.00 1,349.25 1,437.25 12.00 94.50 - 140.00 2015 510.25 1,403.00 1,544.00 15.00 94.25 12.00 144.25 2014 504.75 1,399.50 1,570.75 13.50 90.50 9.00 146.00 2013 620.50 1,268.50 1,556.50 62.00 89.50 142.00 2012 513.25 1,219.50 1,526.75 82.75 88.50 - 127.00 4,416.25 2,984.75 4,202.00 4,151.67 4,030.50 3,567.00 3,722.75 3,734.00 3,739.00 3,557.75 Hours decreased slightly in 2016, due to the youth association cancelling their Junior Gold program and the cancellation of two full weekend Showcase tournaments during summer months. Over the last several years the hours have fluctuated depending on Showcase tournaments and Midwest Prep Elite season and tournaments. Between 2015 and 2019, the number of hours used by District 281 for the boy's and girl's high school hockey programs increased and use by youth hockey and other contracts continued to be strong. From 2013 to 2019, cash receipts increased from $866k to $960k. In 2020 cash receipts decreased to $581 k due to the impacts of COVID-19. In 2020, ice rentals and revenues were greatly impacted by COVID-19. The ice arena was closed for approximately 4 months. When open, guidelines for the facility had an impact to operations in terms of limited numbers of players, participants and spectators allowed, reduced use of locker rooms, modified traffic patterns and increased sanitizing of public use areas throughout the facility. Revenues were further impacted by the concession stand and dryland training area unable to be used from mid -March through mid-2021, so the lease payments were not collected during that time. Ice rentals in 2021 were strong due in part to the hockey season continuing later in the spring because of the arena being closed in December 2020 (COVID-19). In 2021, cash receipts increased to $884k. The second consideration for sustainability includes the expense side. Expenses for the purposes of sustainability include operating expenses, payroll, debt service and capital needs. Operating would include all expenses to supply and operate the facility. Payroll includes all staff time allocated to the Arena. Capital expenses include improvements greater than $5,000 that have a useful life greater than one year. The 2023 revenue budget is $1,439,355. The 2023 budget for operating expenditures is $2,478,733, with $1,338,100 of that being for capital items. Recently, two large capital projects took place including the roof and skylight replacement for the south rink in 2021 and the dasher boards and glass replacement for the north rink in 2022. The replacement of the cement floor, dasher boards and glass for the south rink are scheduled for 2023. Due to the significant costs, the City issued a loan from the Temporary Financing Fund to help fund the 2021 and 2022 projects. The City is planning on issuing an additional loan for the 2023 south rink project. Until 2013, capital costs were funded in the park infrastructure fund. These projections assume that all capital will be paid for by the Ice Arena. This will have a significant effect on the overall cash flow. The scheduled capital through 2026 is as follows: Vearto Replace Item 2022 2023 2024 ?025 202 Estimated Estimated Estimated Estimated Estimated Cost Amounts Amounts Amounts Amounts Amounts 2022 IA door security and security cameras 60,000 60,000 - 2022 IA HVAC upgrades 50,000 50,000 - 2022 IA replace dasher boards and glass (north rink) 210,000 210,000 2022 IA scoreboard (south rink) 25,000 25,000 2022 IA weight room upgrades 20,000 20,000 2023 IA compressors 26,500 - 26,500 2023 IA concession stand 36,000 - 36,000 2023 IA meeting room carpet 91600 - 9,600 2023 IA re -cement floor and replace glass and boards (south rink) 1,200,000 - 1,200,000 2023 IA skate tile 18,000 - 18,000 2023 IAwaterheaters 48,000 - 48,000 2024 IAbathrooms 50,000 - - 2024 IA bleacher caps (south rink) 25,000 2024 IA HVAC (south rink) 50,000 - - 2024 IA Zamboni room garage doors 20,000 - - 2025 IA bleacher caps (north rink) 33,000 - - 2025 IA HVAC (south rink) 50,000 - - 2025 IA reader board 55,000 - 2025 IA skate tile for locker rooms 20,000 - 2025 IA system relief valves 8,000 - - 2026 IA community room tile 22,000 - 2026 IA compressors 24,000 - 2026 IA HVAC 75,000 - - 2026 IA radiant heaters (north rink) 30,000 - 2026 IA shower 20,000 - 50,000 25,000 50,000 20,000 33,000 50,000 55,000 20,000 8,000 22,000 24,000 75,000 30,000 20.000 City Management has modified the long-term plan for the Ice Arena and structured in transfers from the Park Infrastructure Fund as well as financing assumptions for major capital improvements, in an effort to rebuild the operating cash balance over the next ten years. $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Ice Arena Fund 2022 2023 2024 2025 2026 Total Revenues Total Expenses Cash and Cash Equivalents In our experience with the majority of ice arenas, these facilities generate sufficient cash flow to cover operations, but major capital will cause a shortfall. Introduction of a property tax levy to support ice, is helping to improve the Fund's ability to cover operations, capital, and debt service needs. Enterprise Fund Pro acted AtEwltv 2022 2023 2024 2025 2026 Estimated Estimated Estimated Estimated Estimated Cash Flows from Operating Activities Receipts from customers and users (enterprise assumption of 2 5% growth) Payments to suppliers and employees (enterprise modified assumption of 2 5 % growth) Net Cash Provided (Used) by Operating Activities $ 1,052,117 $ 1,078,420 $ 1,105,380 $ 1,133,015 $ 1,161,340 (839,738) (860.731) (882250) (904,306) (926,914]_ 212,379 217,6BB 223,131 228,709 234.427 As a result, the City will continue to consider the following options to maintain sufficient reserves: 1. Annual re -prioritization of capital will continue to be done. This has been past practice and ensured the highest need is presented prior to purchasing any item. 2. A Park Infrastructure Levy of $200,000 was implemented in the 2018 budget. It has increased $100,000 through 2021 to $500,000 and is expected to remain at $500,000 for 2023. 3. The proposed long-term plan for the Ice Arena Fund will require financing for major capital improvements. An interfund loan from the Temporary Financing Fund was necessary in 2022 and another loan is expected in 2023. The annual debt service, including interest, has been modeled into our analysis. 4. Continue to look at opportunities to generate additional revenue including grants and donations. Golf Course As discussed above, the sustainability question revolves around separate considerations for revenue and expenses. In 2015 and 2016, the Golf Course saw an increase in the rounds of golf played, but due to the wet weather and late openings, rounds decreased in 2017-2019. In 2020, the impact of COVID-19 was a positive one for the Golf Course. Although the number of rentals, tournaments and lesson registrations were reduced, the number of rounds of golf played increased more than 50% compared to 2019. For 2021, the golf course continued to be busy with the number of rounds played slightly higher than the 2020 rounds. In 2022, rounds have continued to be strong, but slightly lower than the previous two years. Revenue from concessions, merchandise, cart rental and league fees continue to be higher than budgeted and the clubhouse rentals have started to resume following the drastic reduction during COVID-19. The parking lot agreement with Ironwood Apartments continues to be a successful source of revenue and was extended through March 2025. The table below shows the number of rounds played from 2012 to 2022. Generally, the Golf Course has been able to generate sufficient revenue to cover all operating and debt service needs. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022(9120) Rounds of Golf Played 19,568 16,782 16,431 18,190 20,375 18,662 17,800 16,837 26,553 27,654 21,268 4.2% -14.2% -2.1 % 10.7% 12.0% -8.4% -4.6% -5.4% 57.7% 4.1 % -23.1 % The analysis of expense revolves around two areas - operating expense and planned major capital. Budgeted revenue for 2023 is $396,150. Budgeted operating expenses for 2023 are $596,197. A capital budget of $116,000 is planned for 2023. As part of the 2023 budget, staff is also requesting the rehiring of the Golf Course Superintendent position. Due to staff promotions, this position has been vacant since 2012. Previously major capital was paid for out of the Park Infrastructure fund. As noted below, planned future capital could result in an additional $539,500 of new costs to the Golf Course fund over the next 5 years, or an average of $107,900 per year. 2022 2023 2024 2025 2026 Yearto Estimated Estimated Estimated Estimated Estimated Department Replace Item Cost Amounts Amounts Amounts Amounts Amounts Parks & Recreation 2022 GC cash register S 5,000 $ 5,000 $ Parks & Recreation 2022 GC clubhouse update 20,000 20.000 Parks & Recreation 2022 GC door security and security cameras 40,000 40.000 Parks & Recreation 2022 GC golf cart parking area 20,000 20.000 Parks & Recreation 2022 GC golf carts (4 of 5) 8,000 8.000 Parks & Recreation 2022 GC misc equipment 6,000 6.000 Parks & Recreation 2022 GC tee protector fence 6,000 6.000 Parks & Recreation 2023 GC fire system 36,000 Parks & Recreation 2023 GCfireplace 24,000 Parks & Recreation 2023 GC golf carts (5 of 5) 8,000 Parks & Recreation 2023 GC maintenance garage updates (doors and heaters) 30,000 Parks & Recreation 2023 GC maintenance shop -paint 12,000 Parks & Recreation 2023 GC misc equipment 6,000 Parks & Recreation 2024 GC cart paths 20,000 Parks & Recreation 2024 GC clubhouse exterior 10,000 Parks & Recreation 2024 GC cold storage 63,000 Parks & Recreation 2024 GC fencing 25,000 Parks & Recreation 2024 GC golf cart lease (1 of 5) 10,000 Parks & Recreation 2024 GC misc equipment 6,000 Parks & Recreation 2025 GC clubhouse carpet 15,000 Parks & Recreation 2025 GC fencing 25,000 Parks & Recreation 2025 GC gas grills 7,500 Parks & Recreation 2025 GC golf cart lease (2 of 5) 10,000 Parks & Recreation 2025 GC irrigation pump and motor 20,000 Parks & Recreation 2025 GC misc equipment 6,000 Parks & Recreation 2026 GC fencing 25,000 Parks & Recreation 2026 GC golf cart lease (3 of 5) 10,000 Parks & Recreation 2026 GC misc equipment 6,000 Parks & Recreation 2026 GC reader board 60,000 36,000 24,000 B4O00 30,000 12,000 6,000 20,000 10,000 63,000 25,000 10,000 6,000 - - 15,000 25,000 7,500 1Q000 20,000 6,000 25,000 10,000 6 Ono 60,000 Fund Cash Flows from Operating Activities Receipts from customers and users (modified enterprise assumption of 5% growth) Payments to suppliers and employees (modified enterprise assumption of 3% growth) Net Cash Provided (Used) by Operating Activities 2022 2023 2024 2025 2026 Estimated Estimated EsUrnared EstJmated Estimated $ 343,573 $ 360,752 $ 378,789 $ 397,729 $ 417,615 29 677 304,547 313.684 094 787 47,896 56,204 65,106 7R.534 BM1.BYB The current scenario is presented below. As discussed above, it is anticipated that revenue will be sufficient to cover operations, but major capital will make it difficult to maintain adequate working capital. $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 6,4. 2022 Golf Fund 2023 2024 2025 2026 Total Revenues Total Expenses Cash and Cash Equivalents, December 31 Options to consider for addressing the golf course are listed below: 1. Sales have been increasing in the past two years, providing adequate cash flows for capital purchases. Should trends change over time, Management may want to reconsider the timing of certain capital projects. Swimming Pool The outdoor pool was closed in 2018 and 2019 due to construction of the new city hall, aquatic facility, and Civic Center Park improvements. The new aquatic facility was expected to be operational by June 2020, however due to COVID-19, the opening was postponed. The Aquatic Park finally opened on June 5, 2021 and had a great first pool season. The success of the new facility continued in 2022. The open swim daily attendance average increased from 260 in 2017 to 673 in 2021 and 676 in 2022. In addition to open swim, programs such as swim lessons, lap swim and water walking continued to be offered. Local swim teams also rented practice time during the weekday mornings. And a regional swim meet was held for three full days in July. The pool is considered to be a program within the City's overall parks and recreation system, and such, the City provides general property tax support for the operation. The table below provides sales data for 2015-2023. A 10-year capital improvement plan for the new facility is being developed now that the construction is complete. 2023 2015 2016 2017 2018 2019 2020 2021 2022 Projected Pool Passes Sold* 591 665 657 1,929 2,303 2.500 Pool Open Swim Total Attendance** 17,210 19,755 18,761 - - - 46,590 49,337 51,800 Pool Daily Admission Fees $ 21,910 $ 30,249 $ 27,727 $ - $ - $ - $203,490 $ 190,752 $ 264,000 The analysis of expense revolves around operations. The overall operating expense budget for the swimming pool in 2023 is $703,750. The 2023 revenue is projected at $800,017. A contributing factor to the increase in expenses is seasonal wages. *Passes sold in 2015-2017 were family passes. In 2022, passes were sold individually. **Ages 2 and older. Park Infrastructure Fund The capital budget for the pool and parks are included in the Park Infrastructure Fund. Capital expenses related to parks infrastructure are summarized below. A 10-year capital plan for the pool is being developed now that the construction is complete. Capital expenses related to the park infrastructure fund are summarized below. 2022 2023 2024 2025 2026 Year to Estimated Estimated Estimated Estimated Estimated Replace Item Cost Amounts Amounts Amounts Amounts Amounts 2022 Parks EAB 100,000 100,000 - - - - 2022 Parks concrete, trail work 75,000 75,000 2022 Parks Hidden Valley Parkplay equipment project 250,000 250,000 - - - - 2022 Parks fighting improvements 100,000 100,000 2022 Parks maintenance (courts, equipment painting, benches and picnic tables) 80,000 80,000 - - - - 2023 Parks EAB 100,000 - 100.000 2023 Parks concrete, trod work 75,000 - 75,000 - - - 2023 Parks Liberty Park play equipment project 200,000 - 200,000 - - - 2023 Parks lighted Baseball Field 828,000 - 828,000 - - - 2023 Parks lighting improvements 90,000 90,000 2023 Parks maintenance (Liberty Park basketball courts) 150,000 - 150,000 - - - 2023 Pool misc equipment 5,000 - 5,000 2024 Parks Cgyms pitching machines 5,000 - 5,000 2024 Parks EAB 100,000 - - 100,000 - 2024 Parks concrete, trail work 60,000 - - 60,000 - 2024 Parks fighting improvements 90,0 90,000 2024 Parks maintenance (courts, equipment painting, benches and picnic tables) 80,000 - - 80,000 - 2024 Parks outdoor fitness equipment 49,000 - - 48,000 - 2024 Pool misc equipment 5,000 - 5,000 2025 Parks EAB 100,000 - - 100,000 2025 Parks concrete, trail work 60,000 - - - 60,000 - 2025 Parks hockey rink fencing 13,000 - 13,000 2025 Parks lighting improvements 90.000 90,000 2025 Parks maintenance (courts, equipment painting, benches and picnic tables) 102,000 - - - 102,000 - 2025 Parks picnic shelter at Northwood 200,000 200,000 2025 Parks Sun Shade at Victory Park Softball Field 85,000 - 85,000 2025 Pool miscequipment 5,000 5,000 2025 Parks Bocce Ball Courts/General Activity 30,000 - - - 30,000 - 2026 Parks EAB 100,000 - 100,000 2026 Parks concrete, trail work 60,000 - - 60,000 2026 Parks lighting improvements 90,000 - 90,000 2026 Parks maintenance (courts, equipment painting, benches and picnic tables) 30,000 - - - - 30,000 2026 Parks Sun Shade for Lighted Softball Field 88,000 88,000 2026 Pool misc equipment 5,000 - - - 5,000 $2,500,000 $2,000,000 $1, 500,000 $1,000,000 $500,000 $_ Park Infrastructure Fund 2022 2023 2024 L 2025 N L 2026 Total Revenues Total Expenditures Fund Balances, December 311 Options to consider for addressing the Park Infrastructure fund are listed below: 1. Annual re -prioritization of capital will continue to be done. This has been past practice and ensured the highest need is present prior to purchasing any item. 2. Financing for Ice Arena improvement projects may reduce the amount that will need to be contributed by the Park Infrastructure Fund to support the Ice Arena's operation cash balance. 3. Additionally, intergovernmental revenue (grants) should be explored for eligible trail and other park improvements.