Public Hearing Presentation

Proposed 2011 Budget

for the

City of Rochester

December 6, 2010

CITY OF ROCHESTER2011 PROPOSED BUDGET SUMMARY

December 6, 2010,  7:00 p.m., City Council Chambers• Initial Public Hearing on 2011 Proposed Budget

December 6, 2010,  2:00 p.m., Room 104, City Hall• Mayor/Council Review of Individual Department Budget Requests

December 7, 2010, 2:00 p.m., Room 104, City Hall• Mayor/Council Continued Review of Individual Department Budget 

Requests

December 8, 2010, 2:00 p.m., Room 104, City Hall• Mayor/Council Continued Review of Individual Department Budget 

Requests ( if needed)

December 20, 2010, 7:00 p.m., City Council Chambers• Adoption Public Hearing for 2011 Budget

CITY OF ROCHESTERPhysical Trend Data

-10

0

10

20

30

40

50

60

70

80

Ten Year Trend

2000 Actual compared to 2009 Actual

--------------------------Miles---------------------

Streets Sanitary Storm

Sewer Sewer

Park Acres

CityArea

Pop.-----City Employment------

# of Per

Employees 1,000

Pop.

-5.70%

15%

21.9%26.9%

36.1%34.7%

24.6%

18.5%

APPLICATION BY CHARACTERTotal Budget

PROPOSED 2011

36.2%

29.2%1.5%

29.0%

4.1%

EMPLOYEE SERVICES

OTHER CURRENT

CAPITAL OUTLAY

CAPITAL IMPROVEMENT

DEBT SERVICE

EMPLOYEE SERVICES

OTHER CURRENT

CAPITAL OUTLAY

CAPITAL IMPROVEMENTS

DEBT SERVICE

21.9%

6.0%

2.0%

8.5%

3.4%13.3%2.7%

29.0%

1.9%1.3%

4.1%5.9%

PUBLIC SAFETY

PUBLIC WORKS

AIRPORT

LEISURE TIME

LIBRARY

SEWER UTILITY

TRANSIT

CAPITAL PROJECTS

STORMWATER UTILITY

DEBT SERVICE

GENERAL GOV’T. OTHER

APPLICATION BY FUNCTIONWITHOUT CIP PROJECTS ALLOCATED PROPOSED 2011

REVENUE SOURCESPROPOSED 2011 TOTAL BUDGET

26.2%

2.7%

2.1%

10.2%

22.5%

36.3%

Property Taxes

Non Property Taxes

Licenses & FinesOther Govts

Charges for Services

Misc. / Prior Yr

2011 PROPOSED BUDGETANALYSIS OF MAJOR REVENUES

2011 Budget 2010 Budget Increase/(Decrease)

Tax Levy & TaxAbatements

45,967,888 44,272,624 1,695,264

Local Government Aid 5,101,571 5,101,571 -0-

Hotel/Motel Tax 3,500,000 3,250,000 250,000

Cable TV Franchise Fee 1,275,000 1,300,000 (25,000)

Inspection Permits 2,020,000 1,885,000 135,000

In Lieu of Tax 10,845,623 10,755,268 90,355

Sewer Utility Charge 17,261,577 15,820,000 1,441,577

Storm Water Utility Fee 5,014,143 4,432,372 581,771

Library Fund-City Share-County Share

4,893,321948,696

4,802,357894,168

90,96454,528

Municipal Recreation Fund-Fee Revenues-Non-Fee Revenues

7,376,7326,330,899

7,124,9955,787,986

251,737542,913

Parking Fund-Parking Fines-Parking Ramps-Street Meters-Parking Lots

531,6243,469,696

885,682394,323

525,0003,189,070

790,000342,019

6624280,626

95,68252,304

Amount of Property Tax Levy (including abatement) attributable to Capital Improvement Project Budget from 

2005 ‐ 2011

$5,285,000 

$4,708,657 $4,929,749  $4,824,716  $4,824,716 

$4,963,500 

$1,000,000 

 $‐

 $1,000,000

 $2,000,000

 $3,000,000

 $4,000,000

 $5,000,000

 $6,000,000

2005 2006 2007 2008 2009 2010 2011 ( proposed)

$2,529

,914

LGA

$3,529,914TOTAL

$11,139,885

$7,784,426

$7,511,068

$6,329,526

$5,719,725

$6,343,929

$7,620,306

$5,679,345

$8,979,816

$7,307,970 $8,959,155

$5,101,571

$5,101,571

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

2003 certified

2003 actual

2004

2005

2006

2007

2008

2008 after unallotment

2009 certified & budgeted

2009  LGA after unallotment

2010 certified LGA

2010 LGA after unallotment

2011 anticpated LGA

City of Rochester LGA History Since 2003

*In addition to the LGA unallotment, the City also had an additional $1.85M of MVC unalloted as well.

$(3,355,459)

$(3,628,817)

$(4,810,359)

$(5,420,160)

$(4,795,926)

$(5,460,540)

$(3,831,915)

$(6,038,314)

$(1,825,158)

$(6,038,314)

$(45,204,962)

 $(50,000,000)

 $(45,000,000)

 $(40,000,000)

 $(35,000,000)

 $(30,000,000)

 $(25,000,000)

 $(20,000,000)

 $(15,000,000)

 $(10,000,000)

 $(5,000,000)

 $‐

Annual LGA loss from 2003 proposed baseof $11,139,885

Cumulative LGA loss for City of Rochester since 2003, with actual and proposed LGA cuts through 2011

20.06%

13.18%

5.74%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

LGA % of Total Gov't. Operating Budget

1990 2000 2011

LGA as a % of City Governmental Operating Budget

12

Property Taxes, LGA, HACA & Market Value Credit(Per Capita, Inflation Adjusted)

$0

$50

$100

$150

$200

$250

$300

$350

$400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Property Taxes LGA/HACA/Market Value Credit

• Per Capita Property Taxes (Excluding Market Value Credit)

• 2000 $249• 2004 290• 2009 374

• Per Capita LGA/HACA/Market Value Credit

• 2000 $160• 2004 113• 2009 93

• Per Capita Total of Property Taxes, LGA/HACA/Market Value Credit

• 2000 $409• 2004 403• 2009 467

• Population• 2000 85,806• 2004 94,820• 2009 104,578

City of Rochester Tax Capacity rates since 2002

YearCity of Rochester Tax Capacity 

Rate2002 41.302003 40.832004 40.672005 41.442006 41.472007 41.512008 42.242009 40.762010 42.81

41.30

40.83

40.67

41.44

41.47

41.51

42.24

40.76

42.81

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

2002 2003 2004 2005 2006 2007 2008 2009 2010

Series1

Series2

City2009 City Property Tax Capacity 

Rate Comparison2009 LGA / Capita 

Comparison 

Minneapolis 57.05 $                                   205.70 

St. Paul 32.38 $                                   199.85 

Duluth 25.40 $                                   342.65 

Winona 31.22 $                                   349.10 

Austin 33.64 $                                   311.31 

Moorhead 33.97 $                                   202.75 

Mankato 36.56 $                                   189.63 

St. Cloud 40.14 $                                   170.41 

Rochester 40.76 $                                     71.34 

Albert Lea 44.18 $                                   281.57 

Owatonna 44.77 $                                   149.96 

Comparison of 2009 City tax Rates and LGA / Capita between Rochester and other Minnesota cities

51.8%

26.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

% Property Tax of Gov't. Operating Budget % Property Tax of Total City Budget

Series1

2011 Property Tax as a % of City Gov’t Operating Budget and Total Budget (incl. CIP)

$45,967,888 

$88,661,067 

$175,284,450 

 $‐

 $20,000,000

 $40,000,000

 $60,000,000

 $80,000,000

 $100,000,000

 $120,000,000

 $140,000,000

 $160,000,000

 $180,000,000

 $200,000,000

2011 ProposedProperty Tax

2011 Gov't OperatingBudget

2011 Total City Budget( incl. CIP)

Series1

2011 City Property Tax Comparison to Public Safety Costs

*The 2011 City Public Safety costs include Police, Fire, Emergency Mgmt. & Building Safety and equate to 83.7% of the property tax levy amount

$45,967,888 

$38,470,931 

 $34,000,000

 $36,000,000

 $38,000,000

 $40,000,000

 $42,000,000

 $44,000,000

 $46,000,000

 $48,000,000

2011 Proposed Property Tax 2011 City Public Safety Costs

Series1

2011Recommended Property Tax Levy $45,967,888Minus property taxes allocated to Capital Improvements ‐$1,000,000

Property Taxes available to fund City service $44,967,888

Proposed expenditures for:

Police Department $20,625,482Fire Department $13,196,801Street Maintenance $5,366,684Traffic Management $1,215,877Street Lighting $1,346,600

$41,391,444

Proposed 2011 Budget Amounts for Essential Services

120.50

0.00

94.50

111.50

61.00

38.75 49.75

17.00

138.00

22.20

95.00

122.00

68.00

47.00

50.50

20.00

165.18

25.00

104.00

134.00

72.00

50.75 63

.50

26.00

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

Police Dispatch Fire Public Works Park & Rec. Library General Gov't. Building Safety

1990

2000

2010

Comparison of City Employees by Department between 1990 & 2010

YEAR NO. CITY EMPLOYEES CITY POPULATIONCITY EMPLOYEES / 1000 

POPULATION

1980 450.25 57,890 7.77

1990 501 70,745 7.08

2000 570.70 85,806 6.64

2010 646.93 104,578 6.19

City Employee / Thousand Population Data Comparison

Percentage of Market Value

2011 TAX BASE BY PROPERTY CLASSCITY OF ROCHESTER

Percentage of Tax Capacity

2011 TAX BASE BY PROPERTY CLASSCITY OF ROCHESTER

Note:All shares are after the market value School levy is applied and theMarket Value Homestead Credit is applied to all three levies.

Average Residential Home

PROPOSED 2011 COMBINED TAX LEVYCITY OF ROCHESTER

Note: Commercial & Industrial properties beganpaying a State property tax in 2002

Commercial/ Industrial

PROPOSED 2011 COMBINED TAX LEVYCITY OF ROCHESTER

Taxpayer Taxable Market Value  Tax Capacity % Total City Tax 

Capacity

Mayo $                             292,784,600  $                            5,780,784  5.50%

Sunstone Properties $                               56,288,100  $                            1,123,512  1.07%

MEPC Apache Properties $                               54,607,100  $                            1,089,892  1.04%

IBM $                               41,552,200  $                                825,239  0.79%

BGD 5 Properties $                               34,518,400  $                                688,118  0.65%

NNN 3050, LLC. $                               28,099,700  $                                560,494  0.53%

IRET Properties $                               38,649,900  $                                528,207  0.50%

Maine Land, LLC. $                               26,195,700  $                                518,664  0.49%

Leslie Nelson $                               23,696,200  $                                454,969  0.43%

Rochester Development, Inc. $                               19,671,000  $                                358,328  0.34%

Top 10 Taxpayers – City of Rochester – Pay 2011

25

Estimated Market ValueReal and Personal Property

• Estimated Market Value for 2010 is $8.6 Billion, up $179 Million or 2.1%from 2009

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

$7,000,000,000

$8,000,000,000

$9,000,000,000

1994 1996 1998 2000 2002 2004 2006 2008 2010

City of Rochester2011 Proposed Budget Hearing

December 6, 2010

2010 City of Rochester Growth Information

1)  From 1/1/10 to 10/31/10 building permits were issued for  167 (64 less than 2009) single family dwellings (detached and attached) and 142(10 more than 2009) multi‐family dwelling units were issued; to date a total of 309 units (54 less than 2009).   

2) The 2000 Census had a Rochester population of 85,806 persons.  The most recent estimate of population for the City for the year 2010 is 104,578 persons.   

3) In the calendar year of 2009, the City grew by 288 acres to a City total of 34,470 acres for an area of 53.86 sq. miles.   As of this date, the City has annexed 573acres in 2010  The City is 35,043 acres for an area of  54.75 sq. miles 

Proposed 2010 Budget Amounts for Essential Services

Note that the Police, Fire and Street & Alley Services make up 96.8% of the 2010 Property Tax Levy not attributable to the CIP.

$19,500,825 

$12,822,833 

$5,272,615 

$1,209,317  $1,226,031 

Police

Fire

Street & Alley

Traffic

City LightingFIRE

STREET & ALLEY

TRAFFIC LIGHTING

POLICE

24.97%

21.97%

20.57%

14.04%

8.38%

6.60% 3.46%

Police

Fire

Public Works

Park & Rec.

General Gov't.

Library

Building Safety

30.33%

17.84%18.79%

11.96%

9.43%

7.60%4.04%

Police

Fire

Public Works

Park & Rec.

General Gov't.

Library

Building Safety

Comparison of % of Employee Services Budget by Department in 1990 & 2009

1990 2009

Rental Housing‐4+ Units Combined Tax Bill

$850,000 Market Value Example

2010 2011Amount Percent

Market Value 850,000 850,000 Change ChangeProperty Tax:

City 4,549 4,906 357 7.8%County 5,588 5,720 132 2.4%School 3,188 3,264 76 2.4%

Total 13,325 13,890 565 4.2%

Commercial / Industrial Combined Tax Bill

$750,000 Market Value Example

2010 2011Amount Percent

Market Value 750,000 750,000 Change ChangeProperty Tax:

City 6,101 6,580 479 7.9%County 7,495 7,672 177 2.4%School 3,820 3,949 129 3.4%State 6,538 7,125 587 9.0%

Total 23,954 25,326 1,372 5.7%

Residential Combined Tax Bill

$170,000 Market Value Example

2010 2011Amount Percent

Market Value 170,000 170,000 Change ChangeProperty Tax:

City 647 702 55 8.5%County 795 818 23 2.9%School 511 520 9 1.8%

Total 1,953 2,040 87 4.5%

24.4%

19.2%

22.6%

12.4%

7.9%

10.1%

3.4%

24.5%

3.9%

16.9%

21.7%

12.1%

8.4% 9.0%

3.6%

25.8%

3.9%

16.2%

20.9%

11.2%

7.9%

9.9%

4.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Police Dispatch Fire Public Works Park & Rec. Library General Gov't. Building Safety

1990

2000

2010

Comparison of the Percentage of City Employees by Department between 1990 & 2010 

% Increase in number of City Employees by Department between 1990 and 2010

In comparison, the City of Rochester population increased 32.3% in the timeframe from 1990‐2010.

37.1%

10.1%

20.2%18.0%

31.0%27.6%

52.9%

29.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Police Dispatch Fire PublicWorks

Park &Rec.

Library GeneralGov't.

BuildingSafety

TOTAL

Series1

Amount of 2011 Property Tax Levy attributed to General Operating Budget and Capital Improvements Program

$44,252,845 

$1,000,000 

General Operating

Capital Improvements

General Operating – 96.3%

CIP‐2.2%

$7,784,426

 

$7,511,068

 

$6,329,526

 

$5,719,725

 

$6,343,929

 

$5,679,345

 

$7,307,970

 

$5,101,571

 

$5,101,571

 

$56,879,131 

$11,139,885 

$11,491,193 

$11,781,956 

$12,290,791 

$12,621,049 

$13,254,852 

$13,065,735 

$13,203,363 

$13,335,396 

$112,184,220

 

 $‐

 $20,000,000

 $40,000,000

 $60,000,000

 $80,000,000

 $100,000,000

 $120,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 TOTAL

ACTUAL LGA AMOUNT

CPI ADJUSTED LGA AMOUNTBASED UPON CERTIFIED 2003LGA AMOUNT

Note: The actual LGA amount represents a 49% loss ($55,945,689) over LGA amount projected based upon 2003 certified LGA amount

Comparison of actual LGA amount vs. LGA projections based upon 2003 certified LGA amount (CPI adjusted)

The City’s property tax levy increase over 2010 =$1,643,324 or 3.7% of the proposed tax levy.

In 2010, the City aid cuts =$5.7 million, which = 12.4% of the proposed tax levy.  The State allowed for the aid cuts to be levied back.  

The proposed levy increase only amounts to 30% of the aid cut amount.