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Home My WebLink About20210621 - CC Workshop PacketCity of Hastings  101 Fourth Street East  Hastings, MN 55033-1944  Phone: 651-480-2350  www.hastingsmn.gov Agenda June 21, 2021 City Council Workshop 2022 Budget Discussion 5:30 p.m. 1. Budget Preparation Schedule 2. 2022 Budget Cost Pressures 3. Capital Needs 4. Property Taxes 5. American Rescue Plan 6. Council Direction Preliminary 2022 Budget Discussion June 21, 2021 Overview •Budget Preparation Schedule •Budgetary cost pressures •Capital needs City-wide •Property Taxes •American Rescue Plan •Council Direction for 2022 Budget 2022 Budget Preparation Schedule •May 24 –City Administrator Budget Instructions given to departments •June 21 –City Council Workshop •July 9 –Department Requests to City Administrator •July –Internal Department Budget Meetings •August 6 –City Administrator’s Budget Proposal •August –Finance Committee Budget Meetings •Sept 7 –City Council Sets Preliminary Tax Levy •Dec 6 –Truth In Taxation Hearing •Dec 20 –City Council Adopts Budget and Certifies Tax Levy Budgetary Cost Pressures •Personnel Costs (total city-wide -$14.4M) •COLA (each 1% is $128K) •Current union agreements expire on 12/31/21 •Average COLA increase for 2022 is 2.55% (CGMC) •Compensation Study •Last significant review 2006-2007 •Some indications we are below market for some positions •Health Insurance –increased 9.6% in 2021 •Legal Costs –new firms in 2021 •2021 budget projecting to be 70k greater than prior budget •Workers Compensation Insurance –increased $110k (26%) in 2021 •Strategic Plan Priorities •Park Maintenance and other priorities •Growth & Development –new housing may require increased staff/services •Capital Projects –current funding not keeping pace with CIP/CEP Capital Needs Identified Costs 2022-25 •Governmental Funds --largest areas of need •Public Works Streets --$15.0 million •Parks (including Pool) --$6.1 million •Facilities --$4.9 million •Fire and Ambulance --$3.4 million •Arena --$2.4 million •Governmental Funds Remainder --$1.7 million •Note: in process of updating CIP/CEP, amounts may change City-wide 2022 2023 2024 2025 Total Governmental Funds 6,626,426 12,059,746 6,669,758 8,168,251 33,524,181 Enterprise Funds 3,275,500 2,562,500 2,787,500 2,170,000 10,795,500 HEDRA 600,000 60,000 10,000 10,000 680,000 City-wide Total 10,501,926 14,682,246 9,467,258 10,348,251 44,999,681 Property Taxes •2021 Tax Rate 57.351% (same as 2020, 5th year of decline/even) •2021 Tax Levy $15,312,300 (3.54% over 2020) •1% of levy equates to approximately $153k •Estimated Impact on Residence •Tax Capacity -$1,115,579 increase (5.06%) •If growth follows same pattern as 2020 Home Value Increase in Market Value City Tax 2021 Increase City Tax Due to Market Value $234,000 4.66%$1,304 $61 $325,000 4.66%$1,894 $88 $425,000 4.66%$2,529 $118 American Rescue Plan Act •The City will be receiving $2.4 million •Eligible Uses •Responding to Public Health Emergency / Negative Economic Impacts •Replacing Lost Revenue •Premium Pay •Water, Sewer, Broadband Infrastructure •Costs must be obligated by 12/31/2024 and expended by 12/31/26 •Should confer with our auditor before proceeding w/ specific projects Council Direction for 2022 Budget •What parameters does Council want to put on property tax rate/levy? •Is Council ready for financial support to initiatives in strategic plan? •Does Council have other direction/priorities? •For example 2020, increase funding for roads •For example 2021, no new personnel •For example 2021, hold CIP/CEP projects until LGA comes through •Is the Council comfortable with using ARPA in our budget proposal?