2020 BudgetADOPTED BUDGET
2020FISCAL YEAR
www.ci.monticello.mn.uswww.ci.monticello.mn.us
CITY OF MONTICELLO . 505 WALNUT STREET . MONTICELLO . MINNESOTA
phone: 763.295.2711 fax: 763.295.4404
Table of Contents
Directory of Public Officials
Distinguished Budget Presentation Award
Budget Message
Community, Demographic, and Statistical Information
Map
Core Values
Monticello 2040: Vision + Plan
Planning Process
Financial Policies
Budget Development & Administration
Revenue Collection
Expenditures and Payments
Debt Administration
Reserves and Fund Balances
Financial Reporting & Accounting
Cash Management & Investment
Financial Structure
Matrix of Funds and Budget Units
Operating Fund Crosswalk
The Budget Process (and Calendar)
Organization Chart
All Funds Summary By Fund Type
All Funds Summary By Year
Changes in Fund Balance/Working Capital
Fund Balance/Working Capital History
Balanced Budgets
Balanced Budget - General Fund
Staffing Summary
Tax Levy History
Tax Capacity History
Largest Property Taxpayer
Revenue Sources By Fund
Long Range Financial Plans
Long-Term Fiscal Objectives
Capital Expenditures (Recurring vs Nonrecurring)
Capital Investments and Operating Budgets
Legal Debt Limit and Bond Rating
Bond Rating Scales
Debt Service Levy History
G.O. Debt Service
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G.O. Debt Levels
Debt Levels By Fund Type
Effect of Debt Levels on Government Operations
Interfund Transfers
Service Level Changes
Revenue Trends & Analysis
Appropriations By Category and Fund-Type
General Fund - Summary
Mayor and City Council
City Administration
City Clerk
Finance
Audit
Assessing
Legal
Human Resources
Planning, Zoning & Community Development
City Hall
Prairie Center Building
Law Enforcement
Fire & Rescue
Fire Relief
Building Inspections
Emergency Management
Animal Control
National Guard
Public Works - Administration
Public Works - Engineering
Public Works - Inspections
Public Works - Streets, Alleys & Parking Lots
Public Works - Ice & Snow Removal
Public Works - Shop & Garage
Public Works - Stormwater
Public Works - Street Lighting
Public Works - Refuse Collection
Transit
Senior Center
Park Operations
Park Ballfields
Public Arts
Shade Tree
Library
Insurance
Special Revenue Funds - Summary
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Economic Development Authority Fund
Cemetery Fund
Small Cities Development Program (SCDP) Fund
Community Center Fund
Debt Service Funds - Summary
2011A G.O. Refunding Bond Sub-Fund
2014A G.O. Judgment Bond Sub-Fund
2015B G.O. Street Reconstruction-Improvement Bond Sub-Fund
2016A G.O. Street Reconstruction-Improvement Bond Sub-Fund
2017A G.O. Improvement-Abatement Bond Sub-Fund
2018A G.O. Abatement Bond Sub-Fund
2019A G.O. Abatement, Equipment, CIP & Improvement Bond Sub-Fund
Closed Debt Service Funds
Capital Project Funds - Summary
Capital Project Fund
Closed Bond Fund
Park & Pathway Dedication Fund
Stormwater Access Fund
Street Lighting Improvement Fund
Street Reconstruction Fund
Enterprise Funds - Summary
Water Fund
Sewage Fund
Water Quality Fund
Liquor Fund
Deputy Registrar Fund
Fiber Optics Fund
Internal Service Funds - Summary
IT Services Fund
Central Equipment Fund
Benefit Accrual Fund
Capital Improvement Program
Capital Improvement Program - Funding Source Summary
Capital Improvement Program - Projects & Funding Sources By Department
Capital Improvement Program - Projects
Appendix - Property Tax Basics
Appendix - Truth-in-Taxation
Appendix - Debt Guide
Appendix - Minnesota Statutes
Appendix - Utility Rates
Appendix - Capitalization Thresholds
Appendix - Tax Capacity, Tax Levy, & Tax Rate History
Appendix - Useful Terms (Glossary)
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DIRECTORY OF PUBLIC OFFICIALS
MAYOR & CITY COUNCIL
Position Name Term Expires
Mayor......................................................................Brian Stumpf 12/31/2020
Council......................................................................Lloyd Hilgart 12/31/2022
Council............................................................... Charlotte Gabler 12/31/2022
Council...............................................................................Bill Fair 12/31/2020
Council.....................................................................Jim Davidson 12/31/2020
CITY STAFF
City Administrator.......................................................Jeff O’Neill
Public Works Director/City Engineer......................Matt Leonard
Acting Finance Director.................................Sarah Rathlisberger
Community Development Director................. Angela Schumann
Community Center Director..................................... Ann Mosack
City Clerk .........................................................Jennifer Schreiber
Human Resource Manager........................................ Tracy Ergen
Communications Coordinator............................. Rachel Leonard
Street Superintendent..............................................Tom Moores
Parks Superintendent................................................Tom Pawelk
Water & Sewage Superintendent ................................Mat Stang
Finance Manager...........................................Sarah Rathlisberger
Deputy Registrar Manager.................................Carolyn Granger
Liquor Store Manager ........................................Randall Johnsen
Economic Development Manager...............................Jim Thares
Chief Building Official....................................Ron Hackenmueller
Fire Chief ............................................................Michael Mossey
JOINT CITY/COUNTY/OUTSIDE STAFFING
Wright County Sheriff.............................................Sean Deringer
NAC Planning Consultant .....................................Steve Grittman
Northland Securities Financial Advisor.................Tammy Omdal
Veolia Environmental Services....................................Larry Cook
Fibernet Management Services...........................................Arvig
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DISTINGUISHED BUDGET PRESENTATION AWARD
The Government Finance Officers Association of the United States and Canada (GFOA) presented an
award of Distinguished Budget Presentation to the City of Monticello for its annual budget for the
fiscalyearbeginningJanuary1,2019.Thecityhasreceivedthisawardforeachbudgetithasprepared
for the past eight years.
In order to receive this award, a governmental unit must publish a budget document that meets program
criteria asa policydocument,asanoperationsguide,asafinancialplanandasacommunicationsdevice.
This award is valid for a period of one year only. We believe our current budget continues to conform to
programrequirements,andwearesubmittingittoGFOAtodetermineitseligibilityforanotheraward.
GOVERNMENT FINANCE OFFICERS ASSOCIATION
D istinguished
B udget Presentation
Award
PRESENTED TO
City of Monticello
Minnesota
For the Fiscal Year Beginning
January 1, 2019
Executive Director
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BUDGET MESSAGE
INTRODUCTION
The budget is a tool. How this versatile tool is used depends on the stakeholder. Policy makers use
the budget to provide direction on service levels and place limits on spending. For managers, the
budget offers benchmarks for measuring performance and assessing stewardship. To community
advocates and activists, the budget conveys visibility as to whether their concerns are being
addressed. Universally, the budget is an essential tool for communicating the city's plans, policies,
procedures, and objectives regarding the services to be delivered and the assets to be acquired in
the upcoming and future fiscal years. Indeed, the budget’s effectiveness is meaningfully influenced
by the conviction of the various stakeholders using this dynamic tool.
BUDGET POLICY AND STRATEGY
This budget document was prepared after analyzing and evaluating requests from various
departments and budget units. The content represents the requested financial support for the
operation of the city of Monticello for the upcoming fiscal year. Revenue estimates are conservative
and realistic. The importance of a sound revenue picture cannot be overstated. Revenue estimates
are based on historical trends with greater weight placed on the most current years.
The city of Monticello provides a range of services to the community, including police (contracted)
and fire protection, street and park maintenance, snow and ice removal, water and sewer utility
services, and administrative and planning services. In addition, the city owns and operates a
community center (MCC), department of motor vehicles (DMV), municipal off-sale liquor store (Hi-
Way Liquors), and a fiber optic network (FiberNet Monticello). The level of service provided by the
proposed budget is similar to that currently enjoyed by the community.
STRATEGIC OR KEY INITIATIVES
The city of Monticello provides a full range of municipal services, as listed in the previous paragraph
and as authorized by state statute. Monticello is blessed with many assets, including a beautiful
setting, an excellent location, a rich heritage, and a talented population. The city seeks to use,
preserve and enhance these assets in building a great, affordable place to live, work and do
business. The city will fulfill the goals below to achieve this mission:
1. Continue to maintain the lowest possible tax rate while providing the best possible service.
The 2020 property tax levy exceeded inflation and the tax levy (capacity) rate increased
over 2019 with the lower power plant valuation. 2020 Budget: The city levy increases
$483,000 (4.8%) to $10,445,000 and the Housing and Redevelopment (HRA) levy increases
$7,000 (2.0%) to $355,000. Combined (city + HRA) tax levy increase: $490,000 (4.8%). The
tax levy rate is under 1% less than the next lowest for cities in Wright County.
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2. Continue to develop and provide an unmatched system of parks, trails, and recreational
facilities, including the unique assets of the Monticello Community Center, the Mississippi
River, and conversion of the Bertram Chain of Lakes (BCOL) property into a regional park.
In partnership with the county, the city acquired park land with state grants and local
contributions. The city and county evenly split the local contribution, which is roughly 50%
for land designated for non-athletic purposes and 50% for land designated for athletic
purposes. 2020 Budget: $420,000 turn lane construction on Briarwood Avenue for BCOL.
3. Continue to maintain the city streets by following an annual seal coat and crack seal
program and by overlaying streets before they are beyond repair and need replacing.
The city’s pavement management program identifies varying condition levels of every
street. The 2020 General Fund includes a robust amount for chip/seal maintenance. This
higher maintenance level began in 2014. 2020 Budget: $185,000
4. Develop and adopt a long-range transportation plan which will improve traffic flow around
and through the city.
Monticello is one of three cities (along with two counties and two townships) taking part in
a study to identify an additional or expanded interstate interchange site and Mississippi
River crossing. The city is also an active, due-paying member of the I-94 Coalition. 2020
Budget: $15,000 – study; $ 6,600 - membership
5. Implement the downtown redevelopment plan which will maintain a downtown area that
combines a successful commercial district, community identity and heritage, and
connection with the Mississippi River.
The 2017 Small Area Study plan for downtown identified various options for re-creating the
city’s downtown. The city transferred $300,000 from the General Fund to the Capital
Project Fund in 2017 to start implementing the plan. 2020 Budget: None.
6. Seek to expand the supply of "move up" housing that allows people to upgrade their home
without leaving the community.
Staff is facilitating the development of additional residential home lots on the perimeter of
the city by working with developers and engineers. Infrastructure needs are regularly
assessed and incorporated into the city’s capital improvement plan.
7. Seek to develop and attract a wide range of employment opportunities with a growing
emphasis on higher-paying jobs.
This concept promotes the city’s competitive advantages (i.e. low taxes, property
availability, transportation access, etc.) to businesses looking to move or grow. 2020
Budget for non-study redevelopment activity: $145,000
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8. Continue to maintain high quality water and sewage treatment facilities.
With some of the lowest water and sewage rates in Minnesota, the city provides excellent
services from these two utilities to residents and businesses. The budget includes funds for
wastewater treatment facility improvements along with sufficient amounts for additional,
ongoing system improvements in each fund. Our water is rated as one of the best tasting in
Minnesota. 2020 Budget: Water - $150,000, $500,000 SCADA system update; Sewage -
$250,000, $250,000 wastewater facility parking lot improvements, and $500,000 SCADA
system update.
9. Provide unsurpassed access to information with high speed internet, phone and television
through the city-owned fiber optic network.
The Fiber Optics Fund is budgeted to receive a transfer from the Liquor Fund to continue
operations in 2020. The 2019 budgeted transfer was not needed, and the 2020 transfer will
not be made if unnecessary. With settlement of the bondholder’s 2014 class-action lawsuit,
the mission of the city’s telecommunications utility will continue to adapt to competitive
market conditions. The city hired a third party to run FiberNet in July 2016. 2020 Budget:
$50,000 Transfer
City Council and city staff used the goals set during the strategic planning process to direct the
development of the 2020 budget.
TOTAL BUDGET
The 2020 budget includes all the funds maintained by the city. Each fund is responsible to account
for a particular activity or activities. Each fund-type will be discussed within this message and in the
budget document.
The following compares the adopted 2019 and 2020 budgets:
Total revenues decrease nearly 15% and total expenditures decrease about 20% in 2020. General
Fund revenues and expenditures increase 3.7%. The increase in debt service expenditures reflects
the rapid amortization of existing debt and partial early redemption of one issue. Capital project
funds will incur lower expenditures due to the construction of a fire station, Bertram park
Fund-type 2019 2020 2019 2020
General Fund 8,586,000$ 8,903,000$ 8,586,000$ 8,903,000$
Special Revenue Funds 3,123,000 3,122,000 3,035,000 2,945,000
Debt Service Funds 2,335,522 3,373,291 3,046,108 4,148,774
Capital Project Funds 11,795,000 4,177,013 13,875,000 3,910,000
Enterprise Funds 12,612,778 13,254,299 14,989,954 14,729,826
Internal Service Funds 574,700 579,397 780,800 861,400
Total 39,027,000$ 33,409,000$ 44,312,862$ 35,498,000$
Total Budget
Revenues Expenditures
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development, and completion of prior year projects in 2019. A new fire ladder truck was bonded for
in 2019, but will be purchased in 2020, The Water Fund (enterprise fund) includes a $900,000
transfer to the Capital Project Fund for acquisition of a site suitable for a new public works campus.
The water and sewage funds have budgeted $500,000 each for a SCADA system upgrade. No other
enterprise fund has a significant project planned for 2020.
The following graphs display the revenues and expenditures attributable to each fund-type in the
2020 Budget:
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PROPERTY TAXES
The state of Minnesota has granted local municipalities the authority to levy taxes to fund
operations and debt payments. For the city of Monticello, the property tax levy accounts for over
76% of revenues in the General Fund and over 24% in the special revenue funds. In 2020, debt
services funds will receive $2,939,987 in property taxes for principal and interest payments on
general obligation debt, which is 32% higher than the prior year’s $1,787,000. The city levied
$300,013, down from prior year $662,354, for the Capital Projects Fund in 2020 and will re-allocate
this levy for debt service purposes in the future. For 2020, the city's general (operations and debt)
property tax levy will increase to $10,445,000, an increase of $483,000 (4.8%) over the prior year.
For the fifth consecutive year, the city imposed a Housing and Redevelopment Authority (HRA)
special benefit levy. The HRA levy increases to $355,000 (+2.0%) from $348,000 in the prior year.
The special benefit levy is receipted in the Economic Development Authority Fund. When added
together, the two levies represent a 4.8% increase in property taxes.
The following table provides a historical view of the tax capacity value, tax capacity rate and tax levy
without the HRA levy:
Under contract, the Wright County assessor values all properties located within the city’s corporate
limits. This market value is applied to the class rates assigned by the state to determine a property's
tax capacity. The county estimates the city's tax capacity for taxes payable in 2020 at $29,878,176, a
2.8% increase. The Xcel Energy nuclear power plant taxable market valued dropped 1% in 2020 to
$787 million. The value of the plant is still 2.6 times greater than its 2012 value of $298 million. The
Xcel plant alone accounts for over ½ of the city’s tax capacity. The city's property tax levy is divided
by the tax capacity to determine the city's tax capacity rate. The tax capacity rate is applied to each
property's tax capacity to determine the tax the city will collect before any credits are applied. For
2020, the city's combined (city + HRA) tax capacity rate is expected to change from 35.459% to
36.147%, a 1.9% increase.
The city, at this time, does not have the authority to levy or collect local sales taxes or other types
of taxes under the state's tax system.
Tax Capacity Capacity Tax Capacity Rate Tax Levy
Year Value % Change Rate % Change Levy % Change
2010 16,691,266$ 3.1% 46.942 10.2% 7,648,272$ 0.6%
2011 16,429,431 -1.6% 46.942 0.0% 7,677,309 0.4%
2012 15,771,688 -4.0% 46.191 -1.6% 7,850,000 2.2%
2013 18,692,762 18.5% 42.262 -8.5% 7,900,000 0.6%
2014 18,244,090 -2.4% 44.672 5.7% 8,150,000 3.2%
2015 23,882,689 30.9% 35.737 -20.0% 8,535,000 4.7%
2016 25,891,898 18.6% 34.470 -15.1% 8,925,000 4.6%
2017 27,583,160 6.5% 33.172 -3.8% 9,150,000 2.5%
2018 29,528,145 7.1% 32.332 -2.5% 9,547,000 4.3%
2019 29,076,227 -1.5% 34.262 6.0% 9,962,000 4.3%
2020 29,878,176 2.8% 34.959 2.0% 10,445,000 4.8%
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PERSONNEL SERVICES
The 2020 budget includes a partial year of wages and benefits for a new parks position.
Furthermore, the city continues to experiment with different staffing scenarios. Additionally, the
city hired a consultant to perform a compensation study in 2019. The new pay scales were adopted
by the Council with an effective date of February 29, 2020. The effects of the new pay scales, step
increases for employees still moving up in the pay scale system, and a 3% wage adjustment (2% in
January and 1% in July) for all employees were included in the 2020 budget. Public Works
employees belong to a union, and their collective bargaining agreement expires December 31,
2022.
Union and non-union employees participate in separate health benefit plans. The union health
benefit is $1,164 per participant, and the non-union health benefit is $778 for single plan and
$1,439 for family plan participants. The union’s plan requires a flat premium for union employees
regardless of participation. Monthly health insurance plan costs increased slightly in 2020. Staff will
continue to explore ways to reduce future premium increases to both the city and its employees.
The contribution rates to the Public Employees Retirement Association (PERA) will remain the same
in 2020 for both employer and employees. Effective 2019 PERA rates: 7.50% of wages for
employer and 6.50% for employee. The budget also calculates FICA and Medicare taxes at 6.20%
and 1.45% respectively for 2020.
The remainder of this section will describe the major initiatives for 2020 for each of the fund types
and their activities.
GENERAL FUND
Expenditures
The following schedule displays 2020 budgeted General Fund expenditures by department
compared with the prior year:
The 2020 budget increased 3.7% over the 2019 budget. Personnel service includes wages and
benefits for all full-time, part-time, and seasonal employees. This cost category rises with wage and
benefit inflation and additions to staff. The 2020 personnel services budget includes an update to
Department 2019 2020 % Change
General Government 1,778,772$ 1,883,967$ 5.9%
Public Safety 2,487,285 2,636,008 6.0%
Public Works 3,033,696 2,994,279 -1.3%
Transit 5,000 - -100.0%
Recreation & Culture 1,274,583 1,382,394 8.5%
Unallocated 6,664 6,352 -4.7%
Operating Transfers - - ---
Total 8,586,000$ 8,903,000$ 3.7%
2020 General Fund Expenditures and Other Uses
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the pay scale, a 2% raise in January and 1% raise in July. It also includes adding a parks department
employee for 60% of the year.
The chart below presents the 2020 budgeted expenditures allocated by function/department:
The Public Works Department is the largest department in terms of budgeted expenditures and the
street and alleys activity budget is the largest activity within the department. The 2020 budget for
the Public Works department decreased 1.3%. While public works administration (+6.0%), ice &
snow (+11.7%), and refuse collection (+7.1%) budgeted expenditures increased, a decrease in the
budget for engineering (-19.9%) and the transfer of stormwater expenditures to a new Water
Quality enterprise fund created an overall decrease. The increase in refuse collection is based on an
anticipated increase in the contract renewal with the city’s residential garbage hauler. The current
contract ends on May 31, 2020.
As with all departments, personnel services increased with wage and benefit inflation.
The second largest department based on expenditures is the Public Safety Department. The 2020
Public Safety Department budget increased 6.0%. The fire and rescue activity budget increased
9.0% due to liberally estimating expenditures at the new fire station. Public safety activities include
law enforcement, fire, building inspections, emergency management, National Guard, and animal
control. The city contracts with the Wright County Sheriff's department for law enforcement. The
2020 contract includes a $3.75 increase in the hourly service rate for 52 hours per day.
The 2020 budget for general government activities increased 5.9%. The city clerk activity increases
17.6% because 2020 is an election year. The State of Minnesota is once again holding a third
election during the year, the Presidential Nominating Primary in March. The Planning & Zoning
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budget increased 19.2% with the update of the Comprehensive Plan: Monticello 2040. The increase
(+7.4%) in city assessing reflects higher charges by the county assessor. Lower maintenance and
utilities costs at city hall drive the decrease for this activity.
Recreation and culture increased by 8.5% in 2020. Park operation activities (+10.6%) increased with
wage and benefit inflation as well as a new position for 60% of the year. The public arts (+18.9%)
activity budget demonstrates a roughly $6,000 increase in support of the program.
Including services for police, assessor, and legal services, other services and charges account for
48% of General Fund appropriations. Appropriations for personnel services follow with 40% of the
total and rises with wage and benefit inflation plus the new position. Capital outlays include the
internal rent payments to the Central Equipment Fund. Additional equipment purchases will
translate into higher rent payments.
The following table and graph provide perspective on expenditures and other uses for the various
General Fund expenditure classifications in the 2020 budget:
Classification 2019 2020 % Change
Personnel Services 3,417,837$ 3,522,314$ 3.1%
Supplies 666,700 754,000 13.1%
Other Services & Charges 4,202,563 4,295,886 2.2%
Capital Outlay 298,900 330,800 10.7%
Operating Transfers - - ---
Total 8,586,000$ 8,903,000$ 3.7%
2020 General Fund Appropriations
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Revenues and other sources
Revenues and other sources supporting General Fund expenditures and other uses are classified as
follows:
The General Fund’s tax levy increases by 1.8%, while the General Fund’s portion of the combined
levy (city + HRA) decreases from 64.7% to 62.9%. Licenses & permits reflect a modest uptick in
residential and commercial development, with the rebound beginning in 2013 and continuing
through 2019. Intergovernmental revenues increase to budget based on recent years’ actual
figures, most notably for state highway aid. Charges for services reflect the increase in the city-wide
residential monthly garbage charge ($8.25 effective 1/1/2020 and $9.00 effective 6/1/2020. A new
city-wide residential monthly recycling charge was instituted at $0.75 effective 1/1/2020 and $1.50
effective 6/1/2020.
The property tax levy generates 76% of the General Fund revenues. Other than franchise fees, the
city does not impose other taxes, such as local sales taxes or income taxes. Therefore, the city will
continue to be dependent on property tax revenue as its major source of future revenues.
SPECIAL REVENUE FUNDS
The city of Monticello currently operates special revenue funds for economic development,
cemetery, and community center activities. Special revenue funds also include the Minnesota
Investment Fund, which will likely see little activity in 2020 outside of one loan to a local business.
Like the General Fund, the special revenue fund budgets are set at a level to maintain services. The
tax levy supports community center operations ($417,000) and the Economic Development
Authority ($355,000). Tax increments support economic development activities but their use is
generally restricted to a specific activity in a specific area. Charges for services are the largest
revenue source for both the community center (memberships) and the cemetery (plot sales).
Classification 2019 2020 % Change
Property Taxes 6,670,000$ 6,788,000$ 1.8%
Franchise & Other Taxes 266,500 270,000 1.3%
Licenses & Permits 405,700 407,200 0.4%
Intergovernmental Revenues 364,500 397,200 9.0%
Charges for Services 636,800 815,900 28.1%
Fines & Forfeits 36,500 40,400 10.7%
Special Assessments 500 200 -60.0%
Miscellaneous 180,500 184,100 2.0%
Operating Transfers 25,000 - -100.0%
Total 8,586,000$ 8,903,000$ 3.7%
2020 General Fund Revenues and Other Sources
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The following tables display the change in budgeted revenues and other sources and the change in
budgeted expenditures and other uses for special revenue funds in 2020:
DEBT SERVICE FUND (Aggregate of Sub-Funds)
The city's debt service for 2020 is $4,148,774, or $651,551 more than the prior year. Funding for
debt service comes from special assessments, tax increments, property taxes and transfers from the
stormwater access, water, and sewage funds. Additional resources may be needed in one debt
service fund because two parcels with $1.7 million in special assessments received a Green Acres
deferral. The reserves in the affected fund were drawn down to make debt service payments.
Further transfers from utility funds supplanted transfers from depleted and closed access funds.
Outstanding debt: debt service funds - $28,895,000; enterprise funds - $3,710,000; internal service
funds - $365,000. The city's bond rating from Moody’s Investors Services was upgraded in 2019 to
an "A1".
CAPITAL PROJECT FUNDS
The budgets for capital project funds are based on the 2020 project expenditures listed in the city's
five-year capital improvement plan. The city's five-year capital improvement plan is included in a
later section of this report. The city has three major expenditures moving forward in 2020: 2020
street improvements, completion of the new fire station on Chelsea Road, SCADA system updates,
and fire ladder truck purchase. Additionally, Fallon Avenue overpass construction will be completed
in 2020. Debt will be issued in 2020 for the street improvements.
Classification 2019 2020 % Change
Property Taxes 750,000$ 772,000$ 2.9%
Tax Increments 617,344 617,344 0.0%
Charges for Services 1,624,000 1,604,800 -1.2%
Miscellaneous 131,656 127,856 -2.9%
Operating Transfers - - ---
Total 3,123,000$ 3,122,000$ 0.0%
2020 Special Revenue Fund Revenues & Other Sources
Classification 2019 2020 % Change
Personnel Services 1,336,090$ 1,411,864$ 5.7%
Supplies 219,535 221,285 0.8%
Other Services & Charges 745,649 690,851 -7.3%
Capital Outlay 508,726 421,000 -17.2%
Operating Transfers 225,000 200,000 -11.1%
Total 3,035,000$ 2,945,000$ -3.0%
2020 Special Revenue Fund Appropriations
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ENTERPRISE FUNDS
Total revenues and other sources for the enterprise funds (Water, Sewage, Water Quality, Fiber
Optic, DMV, and Liquor) is estimated at $13,254,299 for 2020. Charges for services increases with
higher rates charged on enterprise fund customers. Operating transfers in of $50,000 are from
another enterprise fund: Liquor Fund to Fiber Optics Fund. The change in Sale of Goods represents
a conservative budget policy of estimating liquor sales at the prior year level.
Personnel services increase with wage and benefit inflation and the adoption of a new pay scale
effective February 29, 2020. Other services and charges increase because Fibernet and wastewater
treatment operations are outsourced. While a $900,000 operating transfer from the Water Fund to
the Capital Project Fund for future construction of a public works facility is included in operating
transfers out, a decrease to $420,000 (from $2,100,000 in 2019) from the Liquor Fund to the Park
and Pathway Fund causes an overall decrease.
INTERNAL SERVICE FUNDS
Two internal service funds were created in 2013: IT (Information Technologies) Services Fund and
Central Equipment Fund. These funds operate on a cost-recovery basis but the time horizon for the
basis differs greatly. The IT Services Fund is relatively less capital intensive with annual small tools
and equipment purchases in the $20,000 to $30,000 range. IT equipment usually has a shorter
replacement cycle. The Central Equipment Fund has incurred debt to make major purchases.
Annual rental charges to benefitting budget units recover the equipment purchase costs over 7-10
year periods. Annual depreciation and inflation for each capital asset will be used in calculating
Classification 2019 2020 % Change
Sale of Goods 5,979,220$ 6,264,651$ 4.8%
Licenses & Permits 2,000 2,000 0.0%
Charges for Services 6,228,363 6,529,760 4.8%
Special Assessments 38,000 38,000 0.0%
Miscellaneous 124,300 90,100 -27.5%
Contributed Capital 140,895 279,788 98.6%
Operating Transfers 100,000 50,000 -50.0%
Debt Proceeds - - ---
Total 12,612,778$ 13,254,299$ 5.1%
2020 Enterprise Fund Revenues & Other Sources
Classification 2019 2020 % Change
Personnel Services 1,703,198$ 1,897,654$ 11.4%
Supplies 4,853,245 5,235,252 7.9%
Other Services & Charges 3,785,960 3,861,388 2.0%
Capital Outlay 1,573,000 2,000,000 27.1%
Debt Service 373,574 365,532 -2.2%
Operating Transfers 2,700,000 1,370,000 -49.3%
Total 14,988,977$ 14,729,826$ -1.7%
2020 Enterprise Fund Appropriations
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annual rental payments, which will provide funds for major equipment replacement through annual
operating budgets. Internal service fund charges are recorded as expenditures in other funds.
A third internal service fund (Benefit Accrual Fund) was started at the end of 2015. This internal
service fund accumulates resources from governmental funds to match the city’s paid leave (paid-
time-off, sick leave, and vacation) liability for governmental fund employees. Except for debt
proceeds, internal service fund revenues are recorded as expenditures in other funds.
FUND BALANCES
Fund balances decline when expenditures exceed revenues. The General Fund and Monticello
Community Center (MCC) Fund normally have balanced budgets where revenues equal
expenditures. The fund balance in the Debt Service Fund declines through normal debt amortization
and the early redemption of one bond issue. The Debt Service Fund is the aggregation of the sub-
funds for each debt issue. The city accumulates money in several debt service sub-funds for debt
service payments in the following year.
Additionally, the fund balance for the group of capital projects funds rises $267,000 with the
transfer in from the water fund for future construction of a public works facility. Enterprise fund
balances decline by nearly $1.4 million, largely the result of the aforementioned water fund transfer
and a water and sewage fund SCADA system update.
The city adopted a balanced budget for the General Fund in 2020.
CHALLENGES IN CONTEXT
The preparation of this budget reflects the need to meet both short-term and long-term challenges.
While the local economy has improved, the commercial and residential tax base is growing slowly.
What is more, the growth was offset by a huge decline in market value for the city’s largest
taxpayer. Growth requires additional near-term public safety enhancements and long-term
transportation improvements. Indeed, the City Council desires to meet current and future growth
needs by maintaining the lowest tax capacity rate in Wright County.
Second, the 2014 settlement of the telecommunication bondholder’s class-action lawsuit provided
certainty and allowed city leaders to focus on other concerns such as day-to-day operations at
Fibernet. Consequently, the city hired a third party to manage the telecommunications utility
starting July 1, 2016. Fibernet now requires less support from the Liquor Fund. 2019 was the first
year that a transfer was not needed from the liquor fund. However, a transfer from the liquor fund
is budgeted at $50,000 in 2020 as a precaution if needed. Less liquor fund support will allow the city
to redirect liquor store profits to other needs.
Third, the city is moving ahead with a street improvement project in 2020 as well as other capital
projects thereafter. All large projects have reimbursement resolutions, meaning the city plans to
recover their temporary draw on reserves with debt proceeds. A new public works facility is being
considered in the next few years.
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Fourth, stable leadership is taking a longer view. The mayor and two councilors were re-elected in
2018, and the mayor and two councilors have terms expiring at the end of 2020. While policy
perspectives still exist, the mayor and council are looking at ways to meet future challenges through
increased public participation. In 2019, the city started a two-year process for developing a vision
for the future and creating a new comprehensive plan. The 2020 budget will be subject to minor
modification as priorities change as the year progresses.
In summary, as with the 2019 budget, modest economic improvement, public safety service
enhancement, transportation improvements, stabilization in Fibernet operations, and park
development impacted the decisions made in drafting the 2020 budget.
DISTINGUISHED BUDGET PRESENTATION AWARD
The Government Finance Officers Association of the United States and Canada (GFOA) presented a
Distinguished Budget Presentation Award to the City of Monticello, Minnesota for its annual budget
for the fiscal year beginning January 1, 2019. In order to receive this award, a governmental unit
must publish a budget document that meets program criteria as a policy document, as an
operations guide, as a financial plan, and as a communications device.
This award is valid for a period of one year only. We believe our current budget continues to
conform to program requirements, and we are submitting it to GFOA to determine its eligibility for
another award.
CONCLUSION
Conservation of city financial resources continues to be a very important objective. The budget is
the prime tool in making sure limited resources are wisely utilized. It is our belief that the 2020
budget allows the city to deliver excellent municipal services in a cost effective and efficient manner
at current levels. The 2020 budget is a product of collective efforts by the city council, staff and
various other stakeholders. Their commitment, good judgment, and expertise are invaluable to the
budget process.
Sincerely,
Sarah Rathlisberger
Acting Finance Director
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COMMUNITY, DEMOGRAPHIC, AND STATISTICAL INFORMATION
Classifieda501(a)entityundertheInternalRevenueCode,thecityofMonticellowasorganizedasa
municipalityin1856.Monticelloislocatedapproximately45milesnorthwestoftheMinneapolis-St.Paul
metropolitanareaalongtheI-94corridorinWrightCounty.The2010U.S.CensusestimatedMonticello's
populationat12,759andthecityencompassesanareaof8.94squaremiles.Thecityoperatesundera
statutoryformofgovernment.Themayorandfourcouncilors(togetherknownas"CityCouncil")governthe
city.Thecouncilorsareeachelectedtostaggered,four-yeartermsandthemayoratwo-yearterm.The
mayorpresidesoverandisavotingmemberoftheCityCouncil.Themayoristhechiefauthorityfor
administeringcitygovernmentandappointsdepartmentheads,variousboardmembersandcommission
members.TheCityCouncilisthelegislativebodyandmeetsregularlytwiceamonth.TheCouncil'smain
responsibilitiesaretoappropriatefunds,setsalaries,adoptordinances,andapprovebudgets.
Monticellohasavariedbusinesscommunitywithahealthymixofretailandmanufacturing.Thecitywashit
hardbytherecessionandhasslowlyrecovered.Cityunemploymentratesaresimilartothatofthestate,but
recentlythestate’sratehasbeenslightlylower,asshownbelow.
Hometooneofthetwostatenucleargenerationplants,Monticello’slargestemployerisXcelEnergy. Agri-
giantCargillalsomaintainsastrongpresenceinthecity.Thefollowingtableliststhecity’stoptenemployers.
Average Employment
Year Wright County Wright County State of Minnesota
2010 64,739 7.5%7.4%
2011 65,228 6.8%6.5%
2012 66,564 5.6%5.6%
2013 67,224 4.7%4.9%
2014 68,091 4.0%4.1%
2015 38,855 3.8%3.6%
2016 69,254 4.3%4.0%
2017 71,796 3.5%3.1%
2018 72,455 3.4%3.2%
2019 73,062 3.8%3.5%
HISTORICAL EMPLOYMENT/UNEMPLOYMENT DATA
(Rates are not compiled for individual communities within counties)
Average Unemployment
Employer Employees
Xcel Energy (Northern States)600
ISD No. 882 (Monticello)576
CentraCare Health - Monticello 500
Cargill Kitchen Sol. (Sunny Fresh)350
Walmart Supercenter 300
City of Monticello 202
Home Depot 150
Target 150
Ultra Machining Corporation 140
Cub Foods 100
TOP TEN CITY EMPLOYERS
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Monticello’spopulationandhouseholdsare0.2%ofstate’stotalforbothmeasures.WithaWalmart,Target,
HomeDepot,andMillsFleetFarm,itisnosurprisethatretailsalesperpersonarehigherthanthestate
average. Thefollowingtablecontainsselectedfactsaboutthecity:
Thenuclearplantaccountsforapproximately56%ofthecity’snettaxcapacity. Xcel’staxcapacityandthe
council’sconservativetaxlevyphilosophyarethemainreasonsthecitytaxcapacityrateisthelowestin
WrightCounty.Indeed,upgradestotheXcelplantin2011contributedto15%declineinthe2013tax
capacityrate.Likewise,Xcelupgradesin2013produceda20%declineinthe2015taxrate.A2018plant
valuationdeclinecontributedtoa2020taxrateincrease. Thetaxbaseisaboutone-thirdresidentialand
two-thirdscommercial.ThefollowingtableliststhetaxratesforeachcityinWrightCounty,Minnesota:
People QuickFacts Monticello Minnesota
Population, 2018 estimate July 1 13,747 5,611,179
Population, 2010 12,759 5,303,925
Population, percent change, April 1, 2010 to July 1, 2017 7.5%5.8%
Persons under 5 years, percent, 2010 10.0%6.3%
Persons under 18 years, percent, 2010 28.8%23.2%
Persons 65 years and over, percent, 2010 12.3%15.9%
Female persons, percent, 2010 49.1%50.2%
White persons, percent, 2010 (a)90.6%84.1%
Total number of firms, 2012 1,132 489,494
Retail sales per capita, 2012 $26,746 $14,667
Land area in square miles, 2019 8.94 79,626.74
Persons per square mile, 2010 1,427.2 66.6
Housing units, 2010 4,973 2,456,064
Homeownership rate, 2014-2018 73.2%71.6%
Median value of owner-occupied housing units, 2014-2018 $189,100 $211,800
Households, 2014-2018 4,984 2,167,801
Persons per household, 2014-2018 2.66 2.49
Per capita money income in the past 12 months (2018 dollars)$27,292 $36,245
Median household income, 2014-2018 $65,938 $68,411
2016 2017 2018 2019 2020 2019-20 2019-20
City Tax Rate Tax Rate Tax Rate Tax Rate Tax Rate Change Change %
City of Monticello 34.471 33.172 32.333 34.262 34.959 0.697 2.0%
City of Otsego 37.921 37.973 36.556 36.060 35.077 -0.983 -2.8%
City of St. Michael 37.772 37.484 37.060 36.939 36.737 -0.202 -0.5%
City of Hanover 48.395 51.928 44.841 43.935 45.124 1.189 2.6%
City of Albertville 52.370 51.566 49.158 47.294 47.030 -0.264 -0.6%
City of Rockford 56.620 56.746 52.999 50.931 48.349 -2.582 -5.3%
City of Montrose 53.365 55.141 57.213 56.457 50.895 -5.562 -10.9%
City of Delano 53.520 53.895 53.980 53.399 52.885 -0.514 -1.0%
City of Dayton 57.150 55.047 55.664 55.212 54.490 -0.722 -1.3%
City of Annandale 67.921 63.884 60.107 58.156 55.618 -2.538 -4.6%
City of Buffalo 54.838 59.604 60.079 57.199 55.748 -1.451 -2.6%
City of Waverly 83.349 83.676 78.880 69.011 64.165 -4.846 -7.6%
City of Maple Lake 59.304 65.441 65.992 66.307 66.357 0.050 0.1%
City of Cokato 77.853 80.740 80.816 77.029 71.274 -5.755 -8.1%
City of Clearwater 75.857 75.189 74.272 71.144 72.583 1.439 2.0%
City of Howard Lake 71.649 65.941 68.520 70.532 79.184 8.652 10.9%
City of South Haven 134.401 148.770 132.047 113.063 107.109 -5.954 -5.6%
CITY TAX RATES IN WRIGHT COUNTY, MINNESOTA
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Monticellogrewbyapproximately20%inthelasttenyears.Thecityhasampleundevelopedcommercial
andresidentialrealestateandispositionedwelltobenefitfrommoreurbanflightfromtheTwinCities.
Accesstomajortransportationcorridorsmakesthecityanideallocationforfuturegrowth. Thefollowing
tableincludespopulationstatisticsoverthelasttenyears:
TheabovestatisticsreflectamoreaccurateCensuscount,whichisthe2011total.Theothercountsare
fromthestatedemographer.
Year Polulation Change
2010 11,501 25
2011 12,759 1,258
2012 12,840 81
2013 12,901 61
2014 12,993 92
2015 13,125 132
2016 13,311 186
2017 13,409 98
2018 13,553 144
2019 13,782 229
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CORE VALUES
This documentis preparedbythecity’s finance department.Thecorevaluesofthedepartmentserveas
aguide forthewaywedeliverinternalandexternalcustomerservices.Thesecorevaluesarehowwe
conductourselvesandwhatcreatesthecultureofthe financedepartment.
Competent
(How well we do our jobs)
Be open, hardworking, reliable, innovative, safe, and
accountable to the public.
Courteous
(How well we treat others)
Work unselfishly in a positive, polite and professional
manner for our community and its citizens.
Collaborative
(How well we work together)
Lead by example and work together
to achieve the best result.
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MONTICELLO 2040: VISION + PLAN
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PLANNING PROCESSES
The city plans for the long-term needs of the community through a number of efforts and studies.
These documents are usually developed by consultants and staff, with numerous public hearings
and advisory board meetings prior to their formal adoption by the City Council. Once adopted, city
staff works diligently to implement the recommendations and changes outlined in the plans. Here is
the status of our primary planning documents:
Plans for service provision, facility expansion & maintenance:
1. Monticello Comprehensive Plan - Adopted 2008.
The Comprehensive Plan is a tool for guiding the growth, redevelopment, and improvement
of Monticello. The Comprehensive Plan outlines the vision for the community. The current
plan update was adopted in 2008. Various chapters of the Comprehensive Plan have been
amended in part or full since adoption. The professional services line item, under the 2020
planning and zoning budget, includes funds for interpreting and implementing the current
comprehensive plan. A full update to the Comprehensive Plan, the 2040 Monticello Vision
and Comprehensive Plan, began with the visioning phase in 2019 and will continue with
plan formation based on the visioning in 2020. The Community Vision was adopted by the
City Council on February 24th, 2020.
2. Transportation Plan - Adopted 2011.
The city’s Transportation Plan is a guide that: identifies and characterizes the city’s existing
transportation system; identifies and discusses general planning factors pertaining to future
transportation needs for the city; identifies potential future roadway deficiencies and
assesses improvement options to address the deficiencies; and provides an overall plan
addressing capital improvement needs, functional classification, jurisdiction, right-of-way
issues, bicycle/pedestrian considerations and transit. It is anticipated that the
Transportation Plan document will be updated in 2020 with the Monticello 2040
Comprehensive Plan. Ongoing major transportation efforts include: TH 25/CSAH 75
Intersection improvements completed in 2016, Fallon Avenue Overpass construction started
in 2018 with completion in 2019, Ongoing regional transportation planning to address the
TH 25 corridor, TH 25/7th Street intersection improvements completed in 2017, and future
improvements at various intersections. The City will be updating the Transportation Plan
with the 2040 Monticello Vision & Comprehensive Plan process.
3. Parks & Pathways Plan - Adopted 2011.
Chapter 5 – Parks of the Monticello Comprehensive Plan was amended in 2011 for the
adoption of an updated Park and Pathway Plan. The Monticello Parks and Pathways Plan
identifies the City’s objectives for Parks and Pathways planning and development, and
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building on the existing parks infrastructure. It also provides context for the City’s
participation in the acquisition and development of the Bertram Chain of Lakes Regional
Park. Additional Bertram Chain of Lakes improvements are planned for 2020. The General
Fund includes $40,000 for annual improvements to existing pathways, which were
previously financed by the Park and Pathway Dedication Fund. The City has recently
completed a Pathway Connections map, a planning document related to pathway
connections within the larger system in direct response to the objectives identified within
the plan. The City will be updating the Park & Pathway Plan with the 2040 Monticello Vision
& Comprehensive Plan process.
4. Downtown Small Area Plan – Adopted 2017
Chapter 3 – Land Use of the Monticello Comprehensive Plan was amended in 2017 for the
adoption of the Downtown Small Area Plan. The Downtown Small Area Plan is an
implementation plan which integrates market, transportation, and land use considerations
for the purpose of creating a vibrant downtown district. The City and Economic
Development Authority will be asked to consider a number of implementation strategies to
realize plan goals. The Downtown Small Area Plan will be incorporated into the 2040
Monticello Vision & Comprehensive Plan process.
5. Economic Development Strategic Plan - Updated 2018.
In 2016, the city adopted a Housing and Redevelopment Authority property tax levy of
$280,000. The HRA levy increases to $355,000 for 2020. The levy is used for EDA
redevelopment activities. The EDA has adopted a strategic work plan for 2020, which
requires ratification by the City Council.
6. Natural Resource Inventory & Assessment - Adopted 2008.
The purpose of the Natural Resource Inventory and Assessment (NRI/A), adopted in 2008, is
to identify existing natural resources within the City of Monticello and its growth area (the
Monticello Orderly Annexation Area), inventory these resources, and assess the resource
quality. These resources are then considered and evaluated during growth/development.
7. Bertram Chain of Lakes Recreation Plan – Adopted 2016.
The 2008 Comprehensive Plan and 2011 Park & Pathway Plan recognize the Bertram Chain
of Lakes Regional Park as a significant component of the community’s quality of life
initiatives. The concept plan for the full regional park and athletic complex was adopted in
2011 as part of the Park and Pathway plan. A Master Plan for the Bertram Chain of Lakes
Regional Athletic Complex was approved in 2016. Land acquisition is complete and major
improvements took place in 2019 and final work on those improvements will continue in
2020.
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8. Storm Water Pollution Prevention Program - Adopted 2007.
In 2005 the City of Monticello was designated as a regulated small municipal separate
storm sewer system (MS4) under Minnesota Rules, Chapter 7090. This required the City to
obtain a National Pollutant Discharge Elimination System/State Disposal System
(NPDES/SDS) storm water permit, and to develop and implement a Storm Water Pollution
Prevention Plan (SWPPP) to reduce the discharge of pollutants, including sediments, from
our storm sewer system to the maximum extent practicable.
The City is continuing to implement the required six minimum control measures (MCM’s)
as follows:
A. Public Education and Outreach,
B. Public Participation and Involvement,
C. Illicit Discharge Detection and Elimination,
D. Construction Site Stormwater Runoff Control,
E. Post-Construction Stormwater Management Measures; and,
F. Pollution Prevention/Good Housekeeping Measures.
Zoning, subdivision, and illicit discharge ordinances were adopted in 2014 related to
grading, drainage, erosion control, and storm water management to meet current MPCA
requirements per the city’s new MS4 permit issued on January 16, 2014. The permit expired
July 31, 2018. The city has paid for a new permit, but MPCA will reissue the new permit
requirements sometime in 2020 in order for the permit to be officially updated.
9. Comprehensive Water Resource Management Plan - Updated 2006.
The Comprehensive Water Resource Management Plan was developed to meet local
watershed management planning requirements of the Metropolitan Surface Water
Management Act and Board of Water and Soil Resources Rules 8410. It was developed to
be in conformance with the requirements of Metropolitan Council requirements, and
applicable State and Federal laws. The plan and its referenced literature is intended to
provide a comprehensive inventory of pertinent water resource related information that
affects the City and management of those resources. It is anticipated to update the
hydraulic model and plan to conform with new stormwater ponding design requirements as
a result of the new NOAAA Atlas 14 standard released by the National Weather Service
Hydrometeorlogical Design Studies for rainfall frequency estimates.
10. Plan Requirements and Design Guidelines (“Design Manual”) - Updated 2017.
These guidelines were established for developers of property within the City of Monticello.
The guidelines provide design standards, specifications, and detail plates for the design of
infrastructure improvements, street, utility, and site work construction.
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These guidelines are now referenced in the city’s zoning and subdivision ordinances that
were adopted in 2014 related to grading, drainage, erosion control, and storm water
management. The Design Manual will be updated as needed as new design regulations and
requirements come forth.
11. General Specifications and Standard Detail Plates for Street and Utility Construction -
Updated 2017.
These specifications represent the City’s requirements for construction of public street and
utility systems.
12. Water System Plan – Adopted 2004.
A water distribution system model was created in 2004 to evaluate the existing water system.
The water system plan was then developed using this model to identify water system capital
improvements necessary to serve future land use designations in accordance with the City’s
Comprehensive Plan.
13. Sanitary Sewer Comprehensive Plan – Adopted 1995.
The sanitary sewer comprehensive plan was adopted in 1995 and identified the existing
sanitary sewer system and also projected future wastewater flows and service areas based
on future land use designations in accordance with the City’s Comprehensive Plan. Several
individual sanitary sewer studies were developed after the adoption of this plan in response
to development. Future utility studies will likely be needed in response to development.
14. Interchange Planning Study – Pending.
The Interchange planning study will determine a reasonable location or locations for a
future I-94 Interchange within the city west of TH 25. The 2008 Comprehensive Plan
recognizes that the Northwest Monticello, which includes the CSAH39 to Orchard Road
corridor, as a primary focus for future development and further cites the Interchange
Planning as a critical component of understanding growth potential and land use in the
Northwest Area. A land use analysis component related to this study was completed in
2016. The City will continue to evaluate interchange planning as the Monticello2040 Plan
proceeds.
15. Wellhead Protection Plan (Part 1 and 2) - completed 2016.
The goal of the Wellhead Protection Plan is to prevent human-caused contaminants from
entering the water supply wells and to protect all who use the water supply from adverse
health effects associated with groundwater contamination. The preparation of the city’s
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plan was required by Minnesota Rules 4720.5100 to 5720.5590. Part 1 was completed in
2015 and Part 2 was completed in 2016. The plan is anticipated to be updated by 2026 as
determined by the Minnesota Department of Health.
16. Central Mississippi River Regional Planning Partnership (CMRP) – formerly the TH
25/Regional Transportation Planning Group – Ongoing.
A series of meetings have taken place with representatives invited from the City of Big Lake,
Big Lake Township, City of Becker, Becker Township, Wright County, Sherburne County,
MnDOT District 3 and the City of Monticello to discuss regional transportation planning. A
joint power agreement was adopted by the city in December 2015. The TH 25 area
transportation study was completed in 2018 and identified options for near-term and long-
term improvements to the corridor.
Plans for Facility and Infrastructure Maintenance:
1. Wastewater Treatment Facility Biosolids Dewatering, Energy Efficiency, Headworks and
Site Improvements Feasibility Report – Adopted 2012.
Dewatering facility is complete at year-end 2014. The energy-efficient aeration blowers
and piping was completed in 2016. This project is financed by the Sewage Fund.
Future improvements identified in the Capital Improvement Plan include SCADA system
upgrades, Phase 2 facility and site improvements, solids handling improvements and
headworks improvements.
2. Wastewater Treatment Phosphorus Reduction Facility Plan – Adopted 2014.
Construction began in 2015 and the project was completed in 2017. The facility plan was
amended to include replacement of two digester covers. The digester covers are part of the
current construction project. The project final cost was $3.3 million, financed by a $2.2
million loan and $1.1 million grant, both from the Minnesota Public Facilities Authority.
3. Overall Street Reconstruction Program – Adopted 2004, ongoing as part of capital
improvement plan.
The 2020-2024 Capital Improvement Plan includes projects related to the program, with
various projects located through the city slated for start in 2020 and beyond. The city held a
street reconstruction plan public hearing in June 2015. Design began in 2019 for the 2020
street improvement project, which is estimated at $2.2 million.
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4. Transportation Projects
TH25/7th Street Intersection Improvements – This project was completed in 2017 and
included traffic signal system improvements, including flashing yellow arrows, (estimated
at $250,000), northbound and southbound right turn lanes on TH25 and a westbound 7 th
Street right turn lane (estimated at $1.5 million). This project was included in the capital
improvement plan.
Fallon Avenue Overpass- This project includes a new bridge overpass over I-94 and three
roundabouts. Right-of-way acquisition and design occurred in 2017, construction, started in
2018, and was substantially completed in 2019. Final costs exceed $9 million.
Financial Plans:
1. Annual Budget - Adopted each December.
2. Capital Improvements Plan - Updated and adopted each year; most recently for 2020 -
2024.
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FINANCIAL POLICIES
Theoverallgoalofthecity'sfinancialpoliciesistoestablishandmaintaineffectivemanagementofthecity's
financialresources.Formalpolicystatementsandmajorobjectivesprovidethefoundationforachievingthis
goal.Accordingly,this sectionoutlines the policies usedinguidingthe preparation andmanagementofthe
city'soverallbudgetandthemajorobjectivestobeaccomplished.Inaddition,therationalewhichledtothe
establishmentofthefiscalpolicystatementsisalsoidentified.
Budget Development & Administration
1.Acomprehensiveannualbudgetwillbepreparedforallfundsexpendedbythecity.
Thecitycouncil shall have full authority over the financial affairs of the city and shall provide
for the collection of all revenue and other assets, the auditing and settlement of accounts, the
safekeeping and disbursement of public monies, and, in the exercise of a sound discretion, shall
make appropriations for the payment of all liabilities and expenses. Inclusionofallfundsinthe
budgetenablesthecouncil,administration,andthepublictoconsiderallfinancialaspectsofcity
governmentwhenpreparing,modifying,andmonitoringthebudget,ratherthandealwiththecity's
financesona"piecemeal"basis.
2.The budget will be prepared in such a manner as to facilitate its understanding by citizens and
elected officials.
Oneofthestatedpurposesofthebudgetistopresentapictureofcitygovernmentoperationsand
intentionsfortheyeartothecitizensofMonticello.Presentingabudgetdocumentthatisunderstandable
tothecitizensfurthersthegoalofeffectivelycommunicatinglocalgovernmentfinanceissuestoboth
electedofficialsandthepublic.
3.Budgetaryemphasiswillfocusonprovidingthosebasicmunicipalserviceswhichprovidethe
maximumlevelofservices,tothemostcitizens,inthemostcosteffectivemanner,withdue
considerationbeinggiventoallcosts--economic,fiscal,andsocial.
Adherence to this basic philosophy provides the citizens of Monticello assurance that their
governmentandelectedofficialsareresponsivetothebasicneedsofthecitizensandthatitscitygovernment
isoperatedinaneconomicalandefficientmanner.
4.The budget will provide for adequate maintenance of capital, plant, and equipment and
for their orderly replacement.
Allgovernmentalentitiesexperienceprosperoustimesaswellasperiodsofeconomicdecline.In
periodsofeconomicdecline,propermaintenanceandreplacementofcapital,plant,andequipmentis
generallypostponedoreliminatedasafirstmeansofbalancingthebudget.Recognitionoftheneedfor
adequatemaintenanceandreplacementofcapital,plant,andequipment,regardlessoftheeconomic
conditions,willassistinmaintainingthegovernment'sequipmentandinfrastructureingoodoperating
condition.
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5.The city will avoid budgetary practices that balance current expenditures at the expense of
meeting future year expenditures.
Budgetarypracticessuchaspostponingcapitalexpenditures,accruingfutureyears'revenues,or
rollingovershort-termdebtarebudgetarypracticeswhichcansolveshort-termfinancialproblems.
However,theycancreatemuchlargerfinancialproblemsforfutureadministrationsandcouncils.
Avoidanceofthesebudgetarypracticeswillassurecitizensthatcurrentproblemsarenotsimplybeing
delayedtoafutureyear.
6.The city will give highest priority in the use of one-time revenues to the funding of capital
assets or other non-recurring expenditures.
Utilizing one-time revenues to fund on-going expenditures results in incurring annual
expenditure obligations, which may be unfunded in future years. Using one-time revenues to fund
capital assets or other non-recurring expenditures better enables future administrations and
councils to cope with the financial problems when these revenue sources are discontinued, since
these types of expenditures can more easily be eliminated.
7.The city will maintain abudgetary control systemto helpit adhereto the established budget.
Thebudgetpassedbythecouncilestablishesthelegalspendinglimitsforthecity.A
budgetarycontrolsystem isessentialinordertoensurelegalcompliancewiththecity'sbudget.
8.The city will exercise budgetary control (maximum spending authority) through city council
approval of appropriation authority for each appropriated budget unit.
Exercisingbudgetarycontrolforeachappropriatedbudgetunitsatisfiesrequirementsofstate
law.Italsoassiststhecouncilinmonitoringcurrentyearoperationsandactsasanearlywarning
mechanismwhendepartments deviate inanysubstantivewayfromtheoriginalbudget.
9.Reports comparing actual revenues and expenditures to budgeted amounts will be
prepared monthly.
Thecity'sbudgetisineffectivewithoutasystem toregularlymonitoractualspendingand
revenuecollectionswiththoseanticipatedatthe beginningofthe year.Monthlyreportscomparing
actualrevenuesandexpendituresto budgetamounts providethemechanismfor thecouncilandthe
administrationtoregularlymonitorcompliancewiththeadoptedbudget.
10.State Requirement: Truth-in-Taxation
The Truth in Taxation (TNT) law requires the city to hold a series of public hearings in order to
present the proposed levy and budget, and to provide an opportunity for the public to comment and
make recommendations. The city’s proposed general levy has to be certified to the county auditor by
September 30th. The city’s proposed HRA (housing and redevelopment levy) must be certified by
September 15th. The final levies for both have to be certified by December 29th.
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Revenue Collection
1.Thecitywillseektomaintainadiversifiedandstablerevenuebase.
Acitydependentuponafewvolatilerevenuesources isfrequentlyforcedtosuddenlyadjust
taxratesoralterexpenditurelevelstocoincidewithrevenuecollections.Establishmentofadiversified
andstablerevenue base,however,servestoprotectthecityfromshort-termfluctuationsinanyone
majorrevenuesource.
2.The city will estimate revenues in a realistic and conservative manner.
Aggressive revenue estimates significantly increase the chances of budgetary shortfalls
occurringduringtheyear--resultingineitherdeficitspendingorrequiredspendingreductions.
Realisticandconservativerevenueestimates,ontheother hand,willservetominimizetheadverse
impactofrevenueshortfallsandwillalsoreducetheneedformid-yearspendingreductions.
3.Thecitywillpursueanaggressivepolicyofcollectingrevenues.
Anaggressive policyofcollectingrevenueswillhelpto ensurethecity'srevenue estimatesare
met,alltaxpayersaretreatedfairlyandconsistently,anddelinquenciesarekepttoaminimum.
4.Thecitywillaggressivelypursueopportunitiesforfederalorstategrantfunding.
Anaggressivepolicyofpursuingopportunitiesforfederalorstategrantfundingprovidescitizens
assurancethatthecityisstrivingtoobtainallstateandfederalfundstowhichitiseligible--thereby
reducingdependenceuponlocaltaxpayersforthesupportoflocalpublicservices.
5.User fees and charges will be used, as opposed to general taxes, when distinct beneficiary
populations or interest groups can be identified.
Userfeesandchargesarepreferabletogeneraltaxesbecauseuserchargescanprovideclear
demandsignalswhichassistindeterminingwhatservicestooffer,theirquantity,andtheirquality.User
chargesarealsomoreequitable,sinceonlythosewhousetheservicemustpay--therebyeliminatingthe
subsidyprovidedbynonuserstousers,whichisinherentingeneraltaxfinancing.
6.Userfeeswillbecollectedonlyifitiscost-effectiveandadministrativelyfeasibletodoso.
User fees are often times costly to administer. Prior to establishing user fees, the costs to
establish and administer the fees will be considered in order to provide assurance that the city's
collection mechanisms are being operated in an efficient manner.
Expenditures and Payments
1.On-goingexpenditureswillbelimitedtolevelswhichcanbesupportedbycurrentrevenues.
Utilizationofreservestofundon-goingexpenditureswillproduceabalancedbudget,however,
thispracticewilleventuallycauseseverefinancialproblems.Oncereservelevelsaredepleted,thecity
wouldfaceeliminationofon-goingcostsinordertobalancethebudget.Therefore,thefundingofon-
goingexpenditureswillbelimitedtocurrentrevenues.
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2.Minor capital projects or recurring capital projects, which primarily benefit current residents,
will be financed from current revenues.
Minorcapitalprojectsorrecurringcapitalprojectsrepresentrelativelysmallcostsofanon-going
nature,andtherefore,shouldbefinancedwithcurrentrevenuesratherthanutilizingdebtfinancing.This
policyalsoreflectstheviewthatthosewhobenefitfromacapitalprojectshouldpayfortheproject.
3.Major capital projects, which benefit future as well as current residents, will be financed with
current revenues as well as other financing sources (e.g. debt financing).
This policy reflects the view that those who benefit from a capital project should pay
for the project.
4.Major capital projects, which benefit future residents, will be financed with other financing
sources (e.g. debt financing).
Majorcapitalprojectsrepresentlargeexpendituresofanon-recurringnaturewhichprimarily
benefitfutureresidents.Debtfinancingprovidesameansofgeneratingsufficientfundstopayforthecosts
ofmajorprojects.Debtfinancingalsoenablesthecostsoftheprojecttobesupportedbythosewho
benefitfromtheproject,sincedebtservicepaymentswillbefundedthroughchargestofutureresidents.
5.Constructionprojectsandcapitalexpendituresof$10,000ormorewillbeincludedinthe
CapitalImprovementProgram(CIP);minorcapitaloutlaysoflessthan$10,000willbeincludedin
theregularoperatingbudgetassmalltoolsandequipmentorrepairsandmaintenance.
TheCapitalImprovementProgram(CIP)differentiatesthefinancingofhighcostlong-livedphysical
improvementsfromlowcost"consumable"equipmentitemscontainedintheoperatingbudget.CIPitems
maybefundedthroughdebtfinancingorcurrentrevenueswhileoperatingbudgetitemsareannualor
routineinnatureandshouldonlybefinancedfromcurrentrevenues.
6.SpendingPolicy:Thecitywillspenditsresourcesinthefollowingorder.Resourceswillbe
categorizedaccordingtoGenerallyAcceptedAccountingPrinciples(GAAP)forstateandlocal
governments,withthefollowinggeneraldefinitions:
Restricted -- Amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government) through constitutional
provisions or by enabling legislation.
Committed--Amountsconstrainedtospecificpurposesbythecitycouncil; tobe reported
ascommitted,amountscannotbe usedforanyother purposeunlessthecitycouncil
takesactiontoremoveorchange theconstraint.
Assigned -- Amounts the city intends to use for a specific purpose; intent can be
expressed by the council or by an official or body to which the council delegates the
authority. The city council can delegate this authority to the city administrator or
finance director.
Unassigned -- Amounts that are available for any purpose; these amounts are
reported only in the General Fund.
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When both restricted and unrestricted resources are available, spending will occur in the
following order, for the identified fund types:
FundType Orderof Spending
GeneralFund 1.Restricted
2.Committed
3.Assigned
4.Unassigned
Thecitycouncil,cityadministrator,andfinancedirectorhavetheauthorityto
expressassignmentsintheGeneralFund.
Special Revenue
Funds
1.Restricted
2.Committed
3.Assigned
Thecitycouncilhastheauthoritytoexpressassignmentsinspecial
revenuefunds.
Debt
Service
Funds
1.Assigned
2.Committed
3.Restricted
Thecitycouncilhastheauthoritytoexpressassignmentsindebt
servicefunds.
Capital Projects
Funds
1.Restricted
2.Committed
3.Assigned
Thecitycouncilhastheauthoritytoexpressassignmentsincapital
project funds.
Debt Administration
1.The city will limit long-term debt to capital improvements which cannot be financed from
current revenues.
Incurringlong-termdebtservestoobligatefuturetaxpayers.Excessrelianceonlong-termdebt
cancausedebtlevelstoreachorexceedthegovernment'sabilitytopay.Therefore,conscientioususeof
long-termdebtwillprovideassurancethatfutureresidentswillbeabletoservicethedebtobligationsleft
byformerresidents.
2.The city will repay borrowed funds, used for capital projects, within a period not to
exceed the expected useful life of the project.
Thispolicyreflectstheviewthatthoseresidentswhobenefitfromaprojectshouldpayforthe
project.Adherencetothispolicywillalsohelppreventthegovernmentfromover-extendingitselfwith
regardtotheincurrenceoffuturedebt.
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3.Thecitywillnotuselong-termdebtforfinancingcurrentoperations.
Thispolicyreflectstheviewthatthoseresidentswhobenefitfromaserviceshouldpayforthe
service.Utilizationoflong-termdebttosupportcurrentoperationswouldresultinfutureresidents
supportingservicesprovidedtocurrentresidents.
4.Thecitywilladheretoapolicyoffullpublicdisclosurewithregardtotheissuanceofdebt.
Fullpublicdisclosurewithregardtotheissuanceofdebtprovidesassurancethattheincurrenceof
debt, for which the public is responsible, is based upon a genuine need and is consistent with
underwriter guidelines.
Reserves and Fund Balances
1.ReservesandFundBalanceswillbeproperlydesignatedintothefollowingcategories:
Nonspendable fundbalance--Amountsthatarenotinaspendable form(suchas
inventory)orarerequiredtobemaintainedintact(suchasthe principalofan
endowmentfund).
Restricted fund balance -- Amounts constrained to specific purposes by their providers
(such as grantors, bondholders, and higher levels of government) through
constitutional provisions or by enabling legislation.
Committed fund balance -- Amounts constrained to specific purposes by the city
council; to be reported as committed, amounts cannot be used for any other purpose
unless the city council takes action to remove or change the constraint.
Assigned fund balance -- Amounts the city intends to use for a specific purpose; intent
can be expressed by the council or by an official (city administrator or finance
director) or body to which the council delegates the authority.
Unassigned fund balance -- Amounts that are available for any purpose; these
amounts are reported only in the General Fund or a deficit in other fund types.
2. Aminimumlevelofgeneralfundreserveequalto75%ofannualoperatingexpenditureswillbe
maintainedbythecity.Thisreserveiscommittedtobeusedforcashflowpurposes,unanticipated
equipmentacquisitionandreplacement,andtootherwiseenablethecitytomeetunexpected
expendituredemands(naturaldisasters,catastrophicevents,etc.)orrevenueshortfalls.
Propertytaxesrepresentthecity'sprimarysourceofgeneralfundrevenue.Propertytaxesare
collectedinJuneandDecemberofeachfiscalyear.Sincethecity'sfiscalyearbeginsonJanuary1st,thecity
mustmaintainanadequatecashbalanceinordertomeetitsexpenditureobligationsbetweensemi-
annualcollectionsofpropertytaxes.
Accrued employee payroll benefits, such as sick leave, vacation or paid-time off, represent
a significant obligation of the city. The city will maintain sufficient reserves to meet its annual
expenditure obligations to the Benefit Accrual internal service fund.
Thecityrecognizestheneedtomaintainadequateequipmentinordertocarryoutrequiredpublic
services.Equipmentacquisitionandreplacementrepresenton-goingcostsofarelativelyminornature,as
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comparedtomajorcapitalpurchases.ThecityplansforequipmentreplacementwithintheCapital
ImprovementProgram.However,unforeseenequipmentproblemswillarise.Thereservewillprovide
resourcesfortheimmediate,unanticipatedreplacementofcriticalequipment.
Thecityissubjecttorevenueshortfallsandunexpectedexpendituredemandsduringthefiscalyear.
Anunassignedgeneralfundreservewillbemaintainedtobeabletooffsettheserevenueshortfallsormeet
unexpecteddemandsoccurringduringtheyear,withoutsuddenlyadjustingtaxratesorreducing
expenditures.
Financial Reporting & Accounting
1.ThecitywillmanageandaccountforitsfinancialactivityinaccordancewithGenerallyAccepted
AccountingPrinciples(GAAP)assetforthbytheGovernmentalAccountingStandardsBoard(GASB).
GASBisrecognizedastheauthoritywithrespecttogovernmentalaccounting.Managingthe
city'sfinancesinaccordancewithGAAPandinaccordancewiththerulessetforthbyGASBprovidesthe
Monticellocitizensassurancethattheirpublicfundsarebeingaccountedforinapropermanner.
2.Thecitywillmaintainitsaccountingrecordsforgeneralgovernmentaloperationsonamodified
accrualbasis,withrevenuesrecordedwhenavailableandmeasurable,andexpendituresrecordedwhen
servicesorgoodsarereceivedandliabilitiesincurred.Accountingrecordsforproprietaryfundtypesand
similartrustfundswillbemaintainedonanaccrualbasis,withallrevenuesrecordedwhenearnedand
expensesrecordedatthetimeliabilitiesareincurred,withoutregardtoreceiptorpaymentofcash.
Adherencetothispolicywillenablethecitytoprepareitsfinancialstatementsinaccordancewith
GenerallyAcceptedAccountingPrinciplesassetforthbytheGovernmentalAccountingStandardsBoard.
3.ThecityofMonticellowillprepareaComprehensiveAnnualFinancialReport(CAFR)inconformity
withGenerallyAcceptedAccountingPrinciples(GAAP).Thereportwillbemadeavailabletothegeneral
public.TheCAFRshallbepreparedinaccordancewiththestandardsestablishedbytheGFOAforthe
CertificateofAchievementforExcellenceinFinancialReportingProgram
TheCertificateofAchievementrepresentsasignificantaccomplishmentforagovernmentandits
financialleadership.Theprogramencouragesgovernmentstoprepareandpublishaneasilyreadableand
understandablecomprehensiveannualfinancialreportcoveringallfundsandfinancialtransactionsofthe
governmentduringtheyear.TheCAFRprovidesuserswithawidevarietyofinformationusefulin
evaluatingthefinancialconditionofagovernment.Theprogramalsoencouragescontinuedimprovement
inthecity'sfinancialreportingpractices.
4.The city will ensure the conduct of timely, effective, and annual audit coverage of all
financial records in compliance the Local, State, and Federal law.
Auditsofthecity'sfinancialrecordsprovidethepublicassurancethatitsfundsarebeingexpended
inaccordancewithLocal,State,andFederallawandinaccordancewithGenerallyAcceptedAccounting
Principles.Auditsalsoprovidemanagementandthecitycouncilwithsuggestionsforimprovementinits
financialoperationsfromindependentexpertsintheaccountingfield.
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5.ThecityofMonticellowillmaintainapolicyoffullandopenpublicdisclosureofallfinancialactivity.
Fullandopenpublicdisclosureofallfinancialactivityprovidesthepublicwithassurancethatits
electedofficialsandadministratorscommunicatefullyallfinancialmattersaffectingthepublic.
6.Themodifiedaccrualbasisofaccountingandbudgetingisusedforthegovernmentalfunds.Under
themodifiedaccrualbasisofaccounting,revenuesarerecordedwhensusceptibletoaccrual,i.e.,both
measurableandavailable.Availablemeanscollectiblewithinthecurrentperiodorsoonenough
thereaftertobeusedtopayliabilitiesofthecurrentperiod.Expendituresarerecordedwhentherelated
liabilityisincurred.Employeecompensatedabsencesandprincipalandinterestonlong-termdebt
expendituresarerecordedwhendueinthecurrentperiod.Theaccrualbasisofaccountingisusedfor
ProprietaryFunds.Underthismethod,revenuesarerecordedwhenearnedandexpensesarerecorded
whentherelatedliabilityisincurred.Forbudgetpreparationandpresentation,theproprietaryfunds’
expensesareconvertedtoexpendituresandfollowthesamebudgetformatasthegovernmentalfund
types.Capitaloutlaysintheenterprisefundsarepresentedasexpensesforbudgetbasis,butare
recordedasassetsalongwithassociateddepreciationexpenseontheGAAPbasis.Debtserviceprincipal
paymentsintheenterprisefundsareaccountedforasexpensesforbudgetpurposes,butarereportedas
reductionoflong-termdebtliabilityontheGAAPbasis.
Recording capital outlays and principal payments on long-term debt as expenditures for
budget purposes, presents a clearer picture of the city’s financial operations, is easier to
administer for cash flow purposes, and is easier for the lay person to understand.
Cash Management & Investment
SCOPE
This policy applies to all activities with regards to managing and investing the financial assets of the
city of Monticello. This policy pertains to the financial assets of all funds including the General Fund,
special revenue funds, capital project funds, debt service funds, enterprise funds, and internal service
funds. The covered funds are defined in the city’s Comprehensive Annual Financial Report.
Except for cash in certain restricted and special funds, the city of Monticello consolidates all cash
balances from all funds into one central set of accounts. Each fund’s participation in this cash pool is
denoted by its equity-in-pooled-cash account. Investment income is allocated to the various funds
based upon the average monthly balance of each fund’s account. Use of this pooling-of-funds
method of accounting allows the city of Monticello to manage its cash more efficiently and to
maximize its investment earnings.
OBJECTIVES
The primary objectives, in priority order, of city of Monticello’s investment activities shall be safety,
liquidity, and yield:
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a.Safety
Safety of principal is the foremost objective of the investment program. Investments shall be
undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The
objective will be to mitigate credit risk and interest rate risk.
1.Credit Risk The city will minimize credit risk by
Limiting investments to the safest types of securities;
Pre-qualifying the financial institutions, brokers/dealers, intermediaries, and advisers
with which the city of Monticello will do business; and
Diversifying the investment portfolio so that potential losses on individual securities
will be minimized.
2.Interest Rate Risk The city will minimize interest rate risk by:
Structuring the investment portfolio so that securities invested from operating funds
mature to meet cash requirements for ongoing operations, thereby minimizing the
need to sell securities on the open market prior to maturity; and
Investing operating funds primarily in shorter-term maturities, money market funds,
or similar investment pools.
b.Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may
be reasonably anticipated. This will be accomplished by structuring the portfolio so that securities
mature concurrent with cash needs to meet anticipated demands (static liquidity). In addition, since
all possible cash demands cannot be anticipated, the portfolio shall consist largely of securities with
active secondary or resale markets (dynamic liquidity).
c.Yield
The city of Monticello’s investment portfolio shall be designed with the objective of attaining a
market rate of return throughout budgetary and economic cycles, commensurate with Monticello’s
investment risk constraints and the cash flow characteristics of the portfolio. Return on investment
is of least importance compared to the safety and liquidity objectives described above. The core of
investments is limited to relatively low risk securities in anticipation of earning a fair return relative
to the risk being assumed. Securities shall not be sold prior to maturity with the following
exceptions:
a declining credit security may be sold early to minimize the loss of principal;
a security may be sold to maximize gain, when appropriate;
a security swap may be appropriate to improve the quality, yield, or target duration in the
portfolio; or
a security may be sold based upon liquidity demands of the portfolio.
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AUTHORITY
Management responsibility for the investment program and for ensuring compliance with this policy
is hereby delegated to the finance director and is derived from Minnesota statutes and mayor &
council actions. The finance director shall be responsible for all transactions undertaken and shall
establish a system of procedures and internal controls for the operation of the investment program
consistent with this policy. No person may engage in an investment transaction except as provided
under the terms of this policy and the procedures established by the finance director. All participants
in the investment process shall seek to act responsibly as custodians of the public trust. No officer or
designee may engage in an investment transaction except as provided under the terms of this policy
and supporting procedures.
The finance director shall establish written statements of investment policy procedures for the
operation of the investment program consistent with this policy. Such procedures shall include
explicit delegation of authority for persons responsible for investment and cash management
transactions. The finance director is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the city of Monticello are protected from loss, theft,
or misuse. The internal control structure shall be designed to provide reasonable assurance that
these objectives are met. The concept of reasonable assurance recognizes that the cost of control
should not exceed the benefits likely to be derived and that the valuation of costs and benefits
requires estimates and judgments by management.
The internal controls shall address the following points at a minimum: control of collusion, separation
of transaction authority from accounting and recordkeeping, custodial safekeeping, avoidance of
physical delivery securities, clear delegation of authority to subordinate staff members, written
confirmation of transactions for investments and wire transfers, dual authorizations of wire transfers,
staff training, and review, maintenance and monitoring of security procedures both manual and
automated.
The city may engage the services of one or more external investment managers to assist in the
management of the city’s investment portfolio in a manner consistent with the city’s objectives. Such
external managers may be granted discretion to purchase and sell investment securities in
accordance with this Investment Policy. Such managers must be registered under the Investment
Advisers Act of 1940.
ETHICS & CONFLICTS OF INTEREST
The finance director and other employees involved in the investment process shall refrain from
personal financial activity that could conflict with the proper execution and management of the
investment program, or which could impair their ability to make impartial investment decisions. The
finance director and other employees involved in the investment process shall disclose to the mayor
& council any material financial interests in financial institutions with which they conduct business.
They shall further disclose any personal financial/investment positions that could be related to the
performance of the city’s portfolio. The finance director and other employees involved in the
investment process shall subordinate their personal investment transactions to those of the city of
Monticello shall refrain from undertaking personal investment transactions with the same individual
with whom business is conducted on behalf of the city.
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PRUDENCE
The general investment policies of the city of Monticello will be guided by the "prudent person"
standard. Those with investment responsibility for public funds are fiduciaries and, as such, shall
exercise the judgment and care, under circumstances then prevailing, which persons of prudence,
discretion, and intelligence exercise in the management of their own affairs, not for speculation, but
for investment, considering the probable safety of their capital as well as the probable income to be
derived.
The standard of prudence shall be applied in the context of managing the overall portfolio.
Investment officers, acting in accordance with this investment policy and exercising due diligence,
shall be relieved of personal responsibility for an individual security's credit risk or market price
changes, provided significant deviations from expectations are reported in a timely fashion and
appropriate action is taken to control adverse developments. Investment officers acting in good faith
are not personally liable for investment or deposit losses.
AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The finance director shall designate and maintain a list of financial institutions and depositories
authorized to provide investment services. In addition, a list will also be maintained of approved
security brokers/dealers that maintain an office within the State of Minnesota. These may include
"primary" dealers or regional dealers that qualify under Security and Exchange Commission's Uniform
Net Capital Rule (Rule 15C3-1). The mayor & council shall designate the financial institution for the
city’s operating account.
All financial institutions and brokers/dealers that wish to become qualified bidders for investment
transactions must supply the following:
a copy of the latest audited financial statements demonstrating compliance with state and
federal capital adequacy guidelines
proof of state registration,
evidence of adequate insurance coverage,
certification of having read, understood, and agree to comply with Monticello’s Cash
Management and Investment Policy,
proof of National Association of Securities Dealers (NASD) or Financial Industry Regulatory
Authority (FINRA) certification (brokers/dealers only), and
completed broker/dealer questionnaire (brokers/dealers only).
An annual review of the financial condition and registration of qualified financial institutions and
broker/dealers may be conducted by the finance director.
Financial institutions, which serve as depositories of city funds, shall comply with all prevailing
provisions of Minnesota statutes and shall meet the established criteria for overall financial strength,
adequate capitalization, appropriate liquidity, and proper collateralization to reasonably ensure the
safety and availability of such deposits. To monitor and assess the overall financial strength of current
and potential depositories, the city will utilize third-party rating agencies.
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AUTHORIZED AND SUITABLE INVESTMENTS
Authorized investments for municipalities in Minnesota are stipulated in Minnesota State Statutes.
Although the following lists of authorized and prohibited investments for the city of Monticello is
slightly more restrictive than what is allowed under state law, it is in full compliance with Minnesota
State Statutes.
The finance director is authorized to invest in the following:
Demand deposits, of commercial banks, saving and loan associations, and federal savings
banks authorized to do business in the State of Minnesota and authorized as described
above, and to the extent that the deposit is fully insured by the Federal Deposit Insurance
Corporation or collateralized as required in Minnesota State Statutes.
Time deposits and certificates of deposit of commercial banks, saving and loan associations,
and federal savings banks authorized to do business in the United States or its territories to
the extent that the investment is fully insured by the Federal Deposit Insurance Corporation
or collateralized as required in Minnesota State Statutes.
Governmental bonds, notes, bills, mortgages, and other securities, which were direct
obligations or are guaranteed or insured issues of the United States, its agencies, its
instrumentalities, or organizations created by an act of Congress, excluding mortgage-backed
securities
State and local government obligation as follows:
o an obligation of the State of Minnesota or any of its municipalities,
o obligation of other state and local governments that have taxing power, and are rated
“A” or better by a national bond rating service.
o general obligations of the Minnesota Housing Finance Agency that are rated “A” or
better by a national bond rating service.
o general obligations of housing finance agencies of other states, provided that they
include a moral obligation of the state, and they are rated “A” or better by a national
bond rating service,
o general revenue obligation of any agency or authority of the State of Minnesota other
than those found already mentioned above that are rated “AA” or better by a
national bond rating service.
o Repurchase agreements whose underlying purchased securities consist of U.S.
government obligations, U.S. government agency obligations, or U.S. government
instrumentality (including government sponsored enterprises) obligations. Adoption
of a master repurchase agreement by the mayor & council is required before the
finance director is authorized to enter into a repurchase agreement.
o Banker’s Acceptances of United States Corporation or their Canadian subsidiaries that
are rated “A1” by Moody’s Investors Service and/or P1 by Standard and Poor’s
Corporation and matures in 270 days or less. Banker’s Acceptances can only be
purchased if the yield is greater than the United States Treasury obligations or Federal
Agency issues.
o Guaranteed investment contracts if issued and guaranteed by a United States
commercial bank or a United States insurance company. The credit quality of the
issuer and guarantor shall be rated in the highest category by the major national
rating services. The contract shall provide the governmental entity a non-penalized
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right of withdrawal of the investment if the credit quality of the investment is
downgraded.
o Commercial Paper issued by United States corporations or their Canadian subsidiaries
that are rated “A1” by Moody’s Investors Service and/or “P1” by Standard and Poor’s
Corporation and matures in 270 days or less.
o Money market funds consisting of United States Treasury Obligations and/or Federal
Agency Issues.
PROHIBITED INVESTMENTS
The finance director is currently prohibited from investing in securities that are considered highly
sensitive, including the following:
Purchases on margins or short sales.
Derivative securities that are, in effect, a leveraged bet on future movements of interest rates
or some price index.
Mortgage-backed securities due to their complexity and prepayment rate uncertainty.
Reverse repurchase agreements (lending securities with an agreement to buy them back
after a stated period of time).
COLLATERALIZATION
The provisions of Minnesota State Statutes require that banks and savings and loan institutions
collateralize all deposits of public funds. The city also requires collateralization of time deposits and
repurchase agreements. Banks and savings and loan associations are authorized to use any of the
investments as specified by Minnesota State Statutes as collateral. In order to anticipate market
changes and provide a level of security for all funds, the collateralization level will be 110%of the
market value of principle and accrued interest. Collateral will always be held by a third party. A
clearly marked evidence of ownership (safekeeping receipt) will be supplied to the city and retained.
SAFEKEEPING AND CUSTODY
Pledged collateral consisting of instruments of the United States Government, U.S. government
agencies, and U. S. government sponsored enterprises will be safe kept at a Federal Reserve Bank
Branch. Other acceptable collateral that cannot be held by the Federal Reserve shall be held by a
non-affiliated, independent, third-party safekeeping institution with whom the city has a current
custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) will be supplied
to the city and retained. The right of collateral substitution upon prior notification and acceptance
by the city is granted.
All securities transactions, including collateral for repurchase agreements shall be conducted on a
delivery-versus-payment (DVP) basis to ensure that securities are deposited in the city’s safekeeping
institution prior to the release of funds.
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DIVERSIFICATION
Diversification of investments reduces overall portfolio risks while attaining market average rates of
return. The city of Monticello will diversify its investments by security type, sector (excluding U.S.
Treasury securities), maturity, and institution. With the exception of U.S. government securities, U.S.
government agency securities, U.S. government sponsored enterprise securities, certificates of
deposit, collateralized bank money market accounts, and authorized local government investment
pools, no more than 25% of the city of Monticello’s total investment portfolio will be invested in a
single security type. To provide assurance that the city will be able to continue financial operations
without interruption and dependent upon interest rates, satisfaction with services, and practicality,
the city of Monticello may utilize more than one financial institution as its depository.
MAXIMUM MATURITIES
To the extent possible, the city of Monticello will attempt to match its investments with anticipated
cash flow requirements. Unless matched to a specific cash flow, the city will not directly invest from
operating funds in securities maturing more than five (5) years from the date of purchase. However,
the city of Monticello may collateralize its repurchase agreements using longer-dated investments
not to exceed fifteen (15) years to maturity.
Reserve funds and other funds with longer-term investment horizons may be invested in securities
exceeding five (5) years if the maturity of such investments is made to coincide as nearly as
practicable with the expected use of funds. No investment shall have a maturity exceeding twenty
(20) years from the time of purchase. The intent to invest securities with longer maturities shall be
approved by the finance director.
Because of the inherent difficulties in accurately forecasting cash flow requirements, a portion of the
portfolio shall be continuously invested in readily available funds such as demand accounts, local
government investment pools, money market funds, or overnight repurchase agreements to ensure
that appropriate liquidity is maintained to meet ongoing obligations. The city will not actively buy
and sell investments, but realizes the risk of not seeking higher market returns for longer maturities
outweighs occasional liquidity demands exceeding cash and money market investments.
PERFORMANCE STANDARDS
The investment portfolio will be managed in accordance with the parameters specified within this
policy. The portfolio should obtain a market average rate of return during a market/economic
environment of stable interest rates. The finance director will establish a series of appropriate
benchmarks which portfolio performance shall be compared on a regular basis. The benchmarks shall
be reflective of the actual securities being purchased and risks undertaken and the benchmarks shall
have a similar weighted average maturity and credit profile as the portfolio.
REPORTING
The finance director will maintain investment reports that provide a clear picture of the status of the
current investment portfolio. The report shall include a management summary that will allow the city
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of Monticello to ascertain whether investment activities during the reporting period have conformed
to the investment policy. Information contained within the reports shall include the following:
A listing of the individual securities held at the end of the reporting period by authorized
investment category.
Term and maturity date of all investments listed.
Par value and current market value of all investments listed.
Yield to maturity or worse call of portfolio investments.
Percentage of portfolio represented by each investment category.
POLICY CONSIDERATIONS
Any investment currently held that does not meet the guidelines of this policy shall be exempted
from the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only
as provided by this policy.
This Statement of Cash Management and Investment Policy was adopted by motion/resolution of the
city’s mayor & council. The finance director and city administrator will review this policy annually.
Any modifications made to this policy must be approved by resolution of the mayor& council.
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FINANCIAL STRUCTURE
To better understand this budget document, a basic understanding of the structure, often-used
terms, and fund types is helpful.
The city’s operating expenditures are organized into the following hierarchical categories: fund,
department, activity, and budget units.
Fund:Funds (specific or general purpose) represents the highest level of summarization used in
the city’s financial structure. This level is primarily used for entity-wide financial reporting and
for summarization in this budget document.
Department: Department is the second level of summarization used in the city’s financial
structure. The function classification represents a grouping of related operations and programs
aimed at accomplishing a broad goal or providing a major service.
Departments (Functions)
General Government
PublicSafety
PublicWorks
RecreationandCulture
Other
Activity:Departmentscanbefurthersplitintodivisionswhichareusuallyassociatedwithfunctioningwork
groupsthathavemorelimitedsetsofworkresponsibilities.Theirprimarypurposeisorganizationaland
budgetaryaccountability.
Budget Unit: Activities may be further subdivided into budget units. A budget unit is used to
account for a specific service performed within an activity in the pursuit of individual goals and
objectives. A budget unit is aimed at accomplishing a specific service or regulatory program for
which a government is responsible.
GOVERNMENTAL FUND TYPES
General Fund:The general fund is used to account for all financial resources of the city, except for
those required to be accounted for in another fund. The general fund supports such basic services as
the legislative branch, judicial branch, general administration, police, fire, finance, streets,
engineering, recreation, and library services.
RevenueSources:Thecity'sGeneralFundisfinancedprimarilybypropertytaxes,providingroughly
78% of the general fund revenue. Other revenue sources include: licenses and permits, intergovernmental
revenue, charges for services, fines and forfeitures, interest on investments, operating transfers, and
miscellaneousrevenues.
49
SpecialRevenueFunds:Specialrevenuefundsareusedtoaccountfortheproceedsofspecificrevenue
sources(otherthanspecialassessments,expendabletrusts,orformajorcapitalprojects)thatarelegally
restrictedorcommittedtoexpenditureforspecificpurposes.Specialrevenuefundssupporteconomic
developmentprograms,designateduserfeebasedcommunityactivities,insurancecosts,retirementcosts,
planningfunctions,andotherserviceslegallyrestrictedforspecificpurposes.
RevenueSources:Specialrevenuefundsaresupportedeitherthroughpropertytaxesorthrough
grantsorotherrestrictedrevenuesources.Anexampleofaspecialrevenuefundsupportedbyproperty
taxesincludestheMonticelloCommunityCenter.Anexampleofaspecialrevenuefundsupportedby
grantsorotherrestrictedrevenuesourcesincludetheEconomicDevelopmentAuthorityFund.
DebtServiceFunds:Debtservicefundsareusedtoaccountfortheaccumulationofresourcesfor,andthe
paymentof,generallong-termdebtprincipalandinterest.Debtservicefundsprovidefinancingfora
varietyofthecity'sgeneralobligationimprovementandrevenuebonds.
Revenue Sources: Debtservice funds are supportedwithspecialassessments,access and utility
fund transfers, propertytaxes,andinterestoninvestments.
CapitalProjectFunds:Capitalprojectfundsareusedtoaccountforfinancialresourcestobeusedforthe
acquisitionorconstructionofmajorcapitalfacilities(otherthanthosefinancedbyproprietaryfunds).
Revenue Sources: Capital project funds are supported by long-term debt proceeds, special
assessments, donations, state and federal grants, operating transfers from other funds, and impact
fees.
PROPRIETARY FUND TYPES
EnterpriseFunds:Enterprisefundsareusedtoaccountforoperationsthatarefinancedandoperatedina
mannersimilartoprivatebusinessenterprises--wheretheintentofthegoverningbodyisthatthecosts
(expenses,includingdepreciation)ofprovidinggoodsorservicestothegeneralpubliconacontinuingbasis
befinancedorrecoveredprimarilythroughusercharges.Enterprisefundsaccountforthecity'swater,
sewage,waterquality,liquorstore,DMV,andfiberopticsservices.
Revenue Sources: Enterprise funds are supported through user charges, sale of goods,
penalties, and interest income.
Internal Service Funds:Internal service funds are used to account for the financing of goods or
services provided by one department to other departments on a cost-reimbursement basis. Internal
service funds account for the city's capital equipment internal leasing program and IT Service
(created in 2013) and the city’s accrued benefit liability to employees (created in 2015).
Revenue Sources: Internal service funds are supported through charges to other budget
units based on lease payments or level of provided services.
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FUND BALANCESINEACHFUND TYPE
In governmental funds, fund balance is typically defined as current assets less current liabilities.
Unlike governmental funds, enterprise funds focus on the determination of operating income,
changes in net position (or cost recovery), financial position, and cash flows. Enterprise funds use
an accrual basis of accounting for financial reporting purposes. A modified accrual basis will be used
for budgeting purposes in this report. Consequently, the bottom line for each enterprise fund is
labeled fund balance rather than net position, which includes capital assets, long-term debt, and
other noncurrent items. Fund balance in enterprise funds is roughly the same as working capital.
USEFULTERMS
To better assist readers in understanding the budget document, a basic knowledge of the following
terms is useful:
A FUND isafiscalandaccountingentitywithaself-balancingsetofaccountsrecordingcashandother
financialresources,togetherwithallrelatedliabilitiesandresidualequitiesorbalances,andchanges
therein.Fundsaresegregatedforthepurposeofcarryingonspecificactivitiesorattainingcertain
objectivesinaccordancewithspecialregulations,restrictions,orlimitations.Fundsinthegovernment
modelareclassifiedintothreebroadcategories:governmental,proprietary,andfiduciary.
The most common reason for establishing a fund is to separately account for restricted-use
revenue or to comply with state or federal law.
A DEPARTMENT is an organizational or budgetary breakdown which is found within city funds. Each
department serves a specific function as a distinct organizational unit of government within the
given fund. Its primary purpose is to facilitate organizational and budgetary accountability.
An OBJECT OF EXPENDITURE refers to specific, detailed expenditure classification. It relates to a specific
typeofitempurchasedorserviceobtained.Examplesofobjectsofexpenditureincludesalaries,supplies,
contractedservice,etc.
Thecity’sfinancialoperationsandfundstructureconformwithGenerallyAcceptedAccountingPrinciples
(GAAP).Thefundsaregroupedbyfundtype(General,SpecialRevenue,DebtService,CapitalProjects,
Enterprise,andInternalService).Allofthecity’sfundsarebudgeted.
A CAPITALEXPENDITURE occurswhenacapitalassetispurchased.CAPITALASSETS areusedinoperations
andhaveinitialusefullivesextendingbeyondasinglereportingperiod.Theseassetsmustalsomeet
capitalizationthresholds,whichvarybyassetclassificationandtypicallycostsmorethan$10,000.Land,
improvementstoland,vehicles,machinery,equipment,infrastructure,andothertangibleandintangible
assetsusedinoperationsareexamplesofcapitalassets.Expendituresthatdonotbenefitmorethanone
reportingperiodormeetthecapitalizationthresholdsareclassifiedasa CURRENTEXPENDITURE.
51
MATRIX OF FUNDS AND BUDGET UNITS
Allcapitalprojectfundswerecombinedforthis presentation.Parkoperationsis responsible forthe
CemeteryFund,whichisnotincludedintheMatrix.Principalandinterestpaymentsondebtoccurin
theDebtServiceFund(comprisedofsubfunds),SewageFund,andCentralEquipmentFund.
Community Capital Park &Liquor Deputy Water, Sewage Fiber IT Central Benefit
EXPENDITURES General Center EDA Projects Pathway Store Registrar & Water Quality Optics Services Equipment Accrual
GENERAL GOVERNMENT
Mayor and Council ●●●
City Administration ●●●
City Clerk ●●●
Finance ●●●●●●●●
Audit ●
City Assessing ●
Legal ●
Human Resources ●●●
Planning & Zoning ●●●●●
City Hall ●●●
Prairie Center Building ●●
Economic Development ●●●
PUBLIC SAFETY
Law Enforcement ●
Fire & Rescue ●●●●
Fire Relief ●
Building Inspections ●●●
Emergency Management ●●●
Animal Control ●
National Guard ●
PUBLIC WORKS
PW Administration ●●●●
Engineering ●●●●●
PW Inspecitons ●●●●
Streets & Alleys ●●●●
Ice & Snow ●●
Shop & Garage ●●●●
Street Lighting ●●●
Refuse Collection ●
Water Utility ●●
Sewage Utility ●●
Water Quality Utility ●●
RECREATION AND CULTURE
Senior Center ●
Park Operations ●●●●
Park Improvements ●●●
Park Ballfields ●●
Shade Tree ●●
Library ●
Fiber Optics ●●
Community Center ●●
OTHER FINANCING USES ●●●●●●
FUND
52
OPERATING FUND CROSSWALK
Thismatrixshowstherelationshipbetweenfunctionalunitsandfunds.Forexample,thePublic Works
DepartmenthassomeauthorizedappropriationsintheGeneralFund,fivecapitalprojectfunds,and
threeenterprisefunds.Public Worksisalsoresponsibleforthecity’s parks.
The city contracts with Wright County for law enforcement services and maintains a volunteer Fire
Department. Administration and Finance provide staff support for both functions. Community
Development provides staff for building inspections.
Public Community Community
Operating Fund Administration Finance Works Center Development
General Fund x x x x
Special Revenue Funds
Economic Development x x
Cemetery x
Minnesota Investment x
Monticello Community Center x
Debt Service Funds x
Capital Project Funds
Capital Project x x x x
Closed Bond Fund x
Park & Pathway Dedication x x
Stormwater Access x
Street Lighting Improvement x
Street Construction x
Enterprise Funds
Water x
Sewage x
Water Quality x
Liquor x
Deputy Registrar x
Fiber Optics x
Internal Service Funds
IT Services x
Central Equipment x
Benefit Accrual x
Administration of Funds
53
THE BUDGET PROCESS
ThecityofMonticellobudgetservesseveralpurposes:
For the citizens of the city of Monticello, it presents a picture of the city government
operations and intentions for the year.
Forthe citycouncil,itservesasapolicytoolandasanexpressionofgoalsandobjectives.
For citymanagement,itis usedasanoperatingguideandacontrolmechanism.
The city'sbudgetencompassesboththeoperatingbudgetandthe capitalimprovementbudget.Each
budget unit includes amounts appropriated for both operating expenses and capital items.
Accompanying narrative for each budget unit/fund briefly explains the items included in the budget.
BASIS OFBUDGETING
Thecity’saccountsareorganizedonthebasisoffunds,eachofwhichisconsideredaseparateentity.The
operationsofeachfundareaccountedforwithaseparatesetofself-balancingaccountsthatcompriseits
assets,deferredinflow/outflows,liabilities,fundequity,revenuesandexpenditures/expenses.
Governmentalfunds(theGeneralFundandspecialrevenue,debtservice,andcapitalprojectfunds)use
themodifiedaccrualbasisforbudgetingandaccounting.Revenuesarerecognizedintheaccountingperiod
inwhichtheybecomeavailableandmeasurable.Expendituresarerecognizedwhenliabilitiesareincurred.
Proprietaryfunds(EnterpriseandInternalServicefunds)usethemodifiedaccrualbasisforbudgetingand
theaccrualbasisforaccounting. Forexample,accrualbasisaccountingdifferswiththemodifiedaccrual
basisbyrecordingexpensesfordepreciationandcompensatedabsencesbutnotdebtprincipalpayments.
Eachproprietaryfund’sfinancialstatements,locatedinthecity’sComprehensiveAnnualFinancialReport
(CAFR),arereportedonthefullaccrualbasis.Intheaccrualbasisofaccounting,revenuesarerecognizedin
theaccountingperiodinwhichtheyareearned.Expensesarerecognizedintheaccountingperiodinwhich
theyareincurred.
BUDGET DEVELOPMENT PROCESS
AftersubmittingtheCityAdministrator-FinanceDirectorRecommendedBudgetto thecitycouncil,public
work sessions are held by the councilors. At this time the city administrator, finance director, and
departmentheadsexplainthebudgetrecommendationsandunderlyingjustificationfortherequests.The
councilalsoreviewsdepartmentalrequestswhichcouldnotbefunded,as anindicationofun-metneeds.
During or following the work sessions, the council may make adjustments to the proposed budget.
Followinganyadjustmentsto therecommendedbudget,atentativeappropriationresolutionis prepared
and a public hearing is held. The Council may again make adjustments to the budget following the public
hearing,afterwhichtime,theCouncilpassestheappropriationresolutioninfinalform.
Appropriationsareestablishedbybudgetunit.Theaccountingsystem,budgetingsystem,andthebudget
document itself, however, break these classes into subclasses--thereby providing more detailed
information.Asanexample,operatingsupplies,gasandoil,andsubscriptionsareallclassifiedasoperating
expenses. The accounting and budgeting systems provide detail for these specific sub-classes. However,
appropriationcontrolisexercisedonlyatthebudgetunitlevel.
54
BUDGET CALENDAR/PROCEDURES
The following budget timeline outlines the process the city customarily follows for creation and
adoption of the annual budget.
Date Activity
June7, 2019 2020-2024 capitalequipment/projects (CIP) worksheets and budget
worksheets to departmentheads.
July 1, 2019 2020-2024 CIP and budgetworksheets dueto financedepartment
July 8, 2019 Workshop with city counciland staff to set2020 goals and priorities.
July, 2019 Departmentheads meetwith various advisory boards and commissions for
inputinto 2020 preliminary budgetand CIP.
July, 2019 Departmentdirectors and supervisors meetwith city administrator and finance
staff to develop 2020 preliminary budgetand CIP.
July 22, 2019 Workshop with city councilto review draftdepartmentbudgets and set2020
goals and priorities.
August12, 2019 Financedepartmentdevelops revenueestimates and 2020 preliminary
property tax levy.
August26, 2019 Councilworkshop to review various departmentgoals, budgets, and CIP
continued.
September 9, 2019 Budgetworkshop with city counciland staff.
September 9, 2019 Counciladopts 2020 preliminary HRA property tax levy. (SeeSeptember 23)
September 23, 2019 Lastregular meeting for city councilto consider adopting the2020 preliminary
city property taxlevy. Counciladopts 2020 preliminary city property tax levy.
September 30, 2019 2020 preliminary property tax levy certified to WrightCounty auditor.
October/November, 2019 Departmentheads meetwith city administrator and financestaff to develop
2020 proposed budgetand finalproperty tax levy.
December 9, 2019 Counciladopts 2020 budgetand property taxlevy.
December 28, 2019 City certifies final2020 property taxlevy to WrightCounty auditor and files
Form TNTwith theMNDepartmentof Revenue.
January 1, 2020 2020 fiscalyear begins.
55
WORKLOAD/PERFORMANCEBUDGETING
Beginning with the fiscal year 2010 budget, the city of Monticello started the development of a
workload/performance budget. The move to this type of budgeting resulted in a shift in emphasis
away from describing what will be purchased (inputs) towards describing what will be accomplished
(outputs and outcomes). While this budgeting process faces numerous structural and cultural
hurdles, this work-in-progress continues today with both an organization-wide and budget-unit
specific focus on outcomes.
PRESENTATION
Thetextofthebudgetdocumentcustomarilycontainssixsectionsofinformationforeachactivity.
Someactivitiesalsoincludehighlightsoraccomplishmentsfortheprioryearand/orthecomingyear.
The first section provides a description of the activity.
The second section describes its major objectives to be accomplished.
The third section identifies issues/challenges the activity/division faces.
The fourth section lists the workload/performance indicators for the division.
The fifth section provides budget commentary.
The sixth section provides detailed financial information.
Thefinancialinformationincludesexpenditureinformationforthelastthreecompletedfiscalyears,the
appropriatedamountsforthecurrentyear,andtherecommendedamountscoveredbythebudget.
Costsaresegregatedintosixbasicclassifications:personnelservices(wage&benefits);supplyexpenses;
otherservicesandcharges;capitaloutlay;debtservice;andoperatingtransfers.Appropriationcontrolis
exercisedonlyattheactivityunitlevelandnotattheindividualobjectofexpenditurelevel.
The narrative information is presented together with the financial detail to assist readers in
understanding the planned outcomes for each activity/division, the purpose of each budget
unit, and major changes or expenditures for the coming year.
MONITORING AND REPORTING PROCESS
As the budget year proceeds, individual departments and the finance department have dual responsibility
formonitoringthestatusofeachbudgetunit.Departmentstaffhasprimaryresponsibilityformonitoringthe
statusofexpendituresagainsttheirbudget.ThisresponsibilityincludesinformingtheFinanceDepartmentof
anysignificantdeparturesfromtheplansanticipatedinthebudget.
The finance department has overall responsibility for monitoring the status of all departments and funds.
This is accomplished primarily through analysis of computerized budget performance reports which
compare appropriationamounts onaline-item basis withactualexpenditures throughoutthe year.These
reports aid department staff in controlling costs and act as an early warning system for the finance
department. Department staff may exercise their judgment in exceeding expenditures by object code, as
longastheydonotexceedthetotalamountappropriatedforthebudgetunit.
The Finance Department reviews the budget reports on a monthly basis and discusses any variances
from expected performance with the department staff. The finance department conducts in-depth
quarterly budget reviews of all expenditures and revenues.
56
Significantchangesineitherexpendituresorrevenuesrequireabudgetrevision.Recommendationsarealso
madebythefinancedirectorforanycorrectiveactionsthatarebelievednecessary.
BUDGET AMENDMENT PROCESS
State statute provides anumber of different ways to amend the budget. The first involves a reallocationof
existingappropriationsamongthelineitemswithinaspecificfund. Theseconddefinesaseriesofscenarios
where the governing body has authority to amend the budget without a hearing for donations, land sales,
and fee based budgets. All other increases in appropriation authority that are not specifically permitted by
statutemustbeapprovedthroughapublicprocess.
Thefinancedirectorisresponsibleforinsuringcompliancewithspendinglimitationsimposedbythebudget.
Accordingly,thefinancedirectorsubmitsaBudgetStatusReporttothecitycouncilafterthree,six,nine,and
twelve month periods. The budget reviews evaluate overall revenues and expenditures in comparison to
thebudgetedamounts.Incaseswhereitappearstheoriginalspendingauthorityauthorizedwillnotprove
sufficient, transfers of spending authority or additional spending authority are requested together with
explanationsfortherequests.Thepublicapprovalprocessforbudgetamendmentsisheldifnecessary.
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58
ORGANIZATION CHART
Residents of
Monticello
City Commissions
Council &Boards
City
Administrator
Human Finance Community City Public Community City Fire Contracted
Resource Director Development Engineer Works Center Clerk Chief Services
Manager Director Director Director
Finance Economic Construction Streets Community Elections Fire City
Department Development Inspectors Department Center Department Attorney
Audit Building Consulting Parks Sheriff
Inspections Engineer Department Department
Deputy Receptionist Water&Animal
Registrar Sewage Control
Department
Liquor Consulting Refuse County
Operations Planner Collection Assessor
FiberNet
Operation
59
ALL FUNDS SUMMARY BY FUND TYPE
In most years, the city adopts a balanced budget for the General Fund and the Monticello Community
Center Fund (MCC), a special revenue fund. A budget is balanced when revenues and other sources
equals (or exceeds) expenditures and other uses. Fund balances/working capital increase with surpluses
and decrease with deficits.
Capital Project Funds commonly accumulate resources in one budget period and expend those resources
over multiple budget periods. Transfers from enterprise funds for future projects are planned in 2020.
Debt amortization and early redemption of issue will lead to a significant decline in fund balance for the
Debt Service Fund. Multiple debt service sub-funds are aggregated into one debt service fund for
reporting purposes.
Internal service funds provide services to other funds and typically function on a cost recovery basis. The
city has three: IT Services Fund, Central Equipment Fund, and Benefit Accrual Fund. Central Equipment
Fund equipment purchases will exceed lease revenue in 2020. The Benefit Accrual Fund is the only one of
the three that is not used for capital asset acquisitons.
Special Debt Capital Internal 2020
General Revenue Service Project Enterprise Service Total
Fund Funds Funds Funds Funds Funds Budget
Fund Balance/Working Capital - Jan. 1 6,909,478$8,470,303$1,663,733$12,459,847$11,373,293$1,106,813$41,983,467$
Revenues and Other Sources
Property Taxes 6,788,000$772,000$2,939,987$300,013$-$-$ 10,800,000$
Tax Increments -617,344 ----617,344
Franchise & Other Taxes 270,000 --100,000 --370,000
Sale of Goods ----6,264,651 -6,264,651
Licenses & Permits 407,200 ---2,000 -409,200
Intergovernmental Revenues 397,200 -----397,200
Charges for Services 815,900 1,604,800 -60,000 6,529,760 572,300 9,582,760
Fines & Forfeits 40,400 -----40,400
Special Assessments 200 -228,104 70,000 38,000 -336,304
Miscellaneous 184,100 127,856 5,200 127,000 90,100 7,097 541,353
Contributed Capital ----279,788 -279,788
Operating Transfers In --200,000 1,320,000 50,000 -1,570,000
Debt Proceeds ---2,200,000 --2,200,000
Total Revenues and Other Sources 8,903,000$3,122,000$3,373,291$4,177,013$13,254,299$579,397$33,409,000$
Expenditures and Other Uses
Personnel Services 3,522,314 1,411,864 --1,897,654 -6,831,832
Supplies 754,000 221,285 --5,235,252 35,200 6,245,737
Other Services & Charges 4,295,886 690,851 --3,861,388 167,300 9,015,425
Capital Outlay 330,800 421,000 -3,910,000 2,000,000 524,500 7,186,300
Debt Service --4,148,774 -365,532 134,400 4,648,706
Operating Transfers Out -200,000 --1,370,000 -1,570,000
Total Expenditures and Other Uses 8,903,000 2,945,000 4,148,774 3,910,000 14,729,826 861,400 35,498,000
Net Change in
Fund Balance/Working Capital -$177,000$(775,483)$267,013$(1,475,527)$(282,003)$(2,089,000)$
Fund Balance/Working Capital - Dec. 31 6,909,478$8,647,303$888,250$12,726,860$9,897,766$824,810$39,894,467$
All FUNDS SUMMARY - BY FUND TYPE
60
ALL FUNDS SUMMARY - BY YEAR
Intergovernmental revenues are projected to decrease in 2020 as the city receives less state/federal aid
for street projects. Special assessments will decline due to normal amortization. Operating transfers are
lower in 2020 because of a larger Liquor Fund transfer to the Park & Pathway Fund for Bertram park
development in 2019. One debt issuance is planned in 2020 to finance street improvements. Charges
for services reflect higher garbage and recycling and utility charges.
Personnel services increased with the addition of a full-time parks department position for a portion of
the year in 2020. A 3% wage and health benefit increase are budgeted for 2020. Capital expenditures
(outlay) decrease in 2020 due to a smaller projects and purchases planned than as in prior years. Debt
service increases with the early redemption of one bond issue as well as the additional amortization of
$8,000,000 of debt issued in 2019.
Capital expenditures reflect disbursements for acquisition or replacement of assets with long-lives
(benefit two or more accounting periods) and usually have significant price tags. In contrast, current
expenditures only benefit the current or next accounting period and usually have smaller price tags.
Capital expenditures can be recurring or non-recurring in nature. The construction of a new fire hall
would be an example of non-recurring capital expenditure. On the other hand, the city budgets annually
$200,000-$500,000 to replace or repair streets. This would be an example of a recurring capital
expenditure. Recurring capital expenditures usually have a pay-as-you-go funding source (enterprise
funds) and non-recurring capital expenditures typically include debt as a funding component.
TOTAL ALL FUNDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 9,275,414$9,557,768$9,946,415$10,310,000$10,310,000$10,800,000$4.8%
Tax Increments 668,352 648,031 638,278 617,344 617,344 617,344 0.0%
Franchise & Other Taxes 432,785 471,926 407,757 382,500 382,500 370,000 -3.3%
Sale of Goods 5,448,584 5,751,197 6,086,293 5,979,220 5,979,220 6,264,651 4.8%
Licenses & Permits 671,602 603,223 507,674 407,700 407,700 409,200 0.4%
Intergovernmental Revenues 2,041,363 1,340,094 907,625 514,500 514,500 397,200 -22.8%
Charges for Services 8,290,396 8,561,045 9,849,648 9,116,766 9,174,966 9,582,760 5.1%
Fines & Forfeits 30,656 36,702 45,350 36,500 36,500 40,400 10.7%
Special Assessments 984,916 960,696 726,201 370,876 369,766 336,304 -9.3%
Miscellaneous 1,672,272 1,102,912 938,415 590,699 590,699 541,353 -8.4%
Contributed Capital 1,993,232 1,330,370 914,666 140,895 140,895 279,788 98.6%
Operating Transfers 2,542,636 1,209,628 2,512,845 3,060,000 4,878,000 1,570,000 -48.7%
Debt Proceeds 6,410,568 5,258,366 5,024,333 8,000,000 8,000,000 2,200,000 -72.5%
TOTAL REVENUES 40,462,776$36,831,958$38,505,500$39,527,000$41,402,090$33,409,000$-15.5%
EXPENDITURES
Personnel Services 5,671,244$5,759,652$6,064,439$6,457,125$6,457,125$6,831,832$5.8%
Supplies 5,173,563 5,312,317 5,855,328 5,771,480 5,771,480 6,245,737 8.2%
Other Services & Charges 7,712,853 8,360,954 9,619,927 8,937,849 9,116,049 9,015,425 0.9%
Capital Outlay 10,036,239 6,931,102 11,427,782 16,535,126 14,645,126 7,186,300 -56.5%
Debt Service 6,983,866 4,880,042 3,308,979 4,002,397 4,002,397 4,648,706 16.1%
Operating Transfers 2,542,636 1,209,628 2,512,845 3,060,000 4,878,000 1,570,000 -48.7%
TOTAL EXPENDITURES 38,120,401$32,453,695$38,789,300$44,763,977$44,870,177$35,498,000$-20.7%
FUND BALANCE - JANUARY 1 39,014,716$41,357,091$45,735,354$45,451,554$45,451,554$41,983,467$
Excess (Deficiency) of
Revenues over Expenditures 2,342,375 4,378,263 (283,800)(5,236,977)(3,468,087)(2,089,000)
FUND BALANCE - DECEMBER 31 41,357,091$45,735,354$45,451,554$40,214,577$41,983,467$39,894,467$
61
CHANGES IN FUND BALANCE/WORKING CAPITAL
The fund balances/working capital for the city’s major operating funds are expected to be relatively stable
with balanced (revenues equal expenditures) or nearly-balanced budgets. Debt amortization and partial
early redemption (2011A) in various debt service sub-funds, water and sewage improvements, and
equipment purchases will decrease fund balances.
Projected Beginning Projected Ending
Fund Balance/Estimated Fund Balance/
Working Capital Revenues Appropriations Working Capital
General Fund 6,909,478$8,903,000$8,903,000$6,909,478$
Special Revenue Funds
Economic Development 7,397,465 1,066,000 904,000 7,559,465
Cemetery 13,060 33,000 33,000 13,060
Minnesota Investment 687,983 15,000 -702,983
Monticello Community Center 371,795 2,008,000 2,008,000 371,795
Total Special Revenue Funds 8,470,303 3,122,000 2,945,000 8,647,303
Debt Service Funds
2010A G.O. Improvement Bond ----
2011A G.O. Refunding Bond 868,003 425,402 1,271,450 21,955
2014A G.O. Judgment Bond 116,668 536,501 510,801 142,368
2015B G.O. Street/Improvement 104,959 220,594 211,250 114,303
2016A G.O. Street/Improvement 333,248 503,798 525,350 311,696
2017A G.O. Improvement/Abate 181,942 485,742 470,140 197,544
2018A G.O. Abatement 53,913 472,634 450,737 75,810
2019A G.O. Bonds 5,000 728,620 709,046 24,574
Total Debt Service Funds 1,663,733 3,373,291 4,148,774 888,250
Capital Project Funds
Capital Project 7,755,851 3,460,013 2,875,000 8,340,864
Closed Bond Fund 757,649 75,000 -832,649
Park & Pathway Dedication 253,465 467,000 515,000 205,465
Stormwater Access 1,423,936 65,000 360,000 1,128,936
Street Lighting Improvement 672,585 90,000 160,000 602,585
Street Construction 1,596,361 20,000 -1,616,361
Total Capital Project Funds 12,459,847 4,177,013 3,910,000 12,726,860
Enterprise Funds
Water 4,535,133 1,524,139 2,535,322 3,523,950
Sewage 4,535,115 2,776,509 3,351,136 3,960,488
Water Quality 58,200 207,000 168,013 97,187
Liquor 521,134 6,269,651 6,159,541 631,244
Deputy Registrar 1,371,049 627,000 461,814 1,536,235
Fiber Optics 352,662 1,850,000 2,054,000 148,662
Total Enterprise Funds 11,373,293 13,254,299 14,729,826 9,897,766
Internal Service Funds
IT Services 178,760 226,097 225,000 179,857
Central Equipment 622,094 333,800 636,400 319,494
Benefit Accrual 305,959 19,500 -325,459
Total Internal Service Funds 1,106,813 579,397 861,400 824,810
Total All Funds 41,983,467$33,409,000$35,498,000$39,894,467$
Fiscal Year 2020
62
FUND BALANCE/WORKING CAPITAL HISTORY
Adopted
Actual Actual Actual Budget Projected Budget
2016 2017 2018 2019 2019 2020
General Fund 6,276,716$7,029,093$7,109,478$7,109,478$6,909,478$6,909,478$
Special Revenue Funds 325,775
Economic Development 7,142,330 7,468,105 7,240,465 7,402,465 7,397,465 7,559,465
Cemetery 31,726 50,946 52,060 13,060 13,060 13,060
Minnesota Investment 1,138,164 1,153,959 872,983 882,983 687,983 702,983
Monticello Community Center 761,834 580,521 606,795 561,795 371,795 371,795
Total Special Revenue Funds 9,074,054 9,253,531 8,772,303 8,860,303 8,470,303 8,647,303
Debt Service Funds
2007A G.O. Improvement (Closed)(175,846)-----
2008B G.O. Sewer (Closed)1,067,790 -----
2010A G.O. Improvement Bond (Closed)1,023,462 959,700 793,743 76,110 --
2011A G.O. Refunding Bond (2005A)1,261,576 1,260,962 896,336 863,003 868,003 21,955
2014A G.O. Judgment Bonds 36,519 62,814 90,886 116,668 116,668 142,368
2015B G.O. Street/Improvement 66,414 80,200 94,095 104,959 104,959 114,303
2016A G.O. Street/Improvement 263,638 334,760 348,442 333,248 333,248 311,696
2017A G.O. Improvement/Abatement -102,545 163,014 181,942 181,942 197,544
2018A G.O. Improvement/Abatement --5,028 53,913 53,913 75,810
2019A G.O. Bonds ----5,000 24,574
Total Debt Service Funds 3,543,553 2,800,981 2,391,544 1,729,843 1,663,733 888,250
Capital Project Funds
Capital Project 6,632,410 8,017,460 6,913,851 6,127,851 7,755,851 8,340,864
Closed Bond Fund 251,819 456,048 613,649 682,649 757,649 832,649
Park & Pathway Dedication 620,861 508,102 696,465 253,465 253,465 205,465
Stormwater Access 1,397,396 1,241,888 1,358,936 623,936 1,423,936 1,128,936
Street Lighting Improvement 719,319 842,972 602,585 532,585 672,585 602,585
Street Construction 1,758,512 1,736,686 1,711,361 1,596,361 1,596,361 1,616,361
Total Capital Project Funds 11,380,317 12,803,156 11,896,847 9,816,847 12,459,847 12,726,860
Enterprise Funds
Water 4,396,684 5,341,438 5,520,476 5,568,133 4,535,133 3,523,950
Sewage 3,085,916 4,308,695 4,917,894 4,185,115 4,535,115 3,960,488
Water Quality ----58,200 97,187
Liquor 1,353,627 1,871,630 2,058,979 421,134 521,134 631,244
Deputy Registrar 776,349 990,502 1,271,258 1,371,049 1,371,049 1,536,235
Fiber Optics 305,914 408,170 399,862 245,862 352,662 148,662
Total Enterprise Funds 9,918,490 12,920,435 14,168,469 11,791,293 11,373,293 9,897,766
Internal Service Funds
IT Services 209,622 276,816 174,660 178,760 178,760 179,857
Central Equipment 690,120 393,703 651,794 422,094 622,094 319,494
Benefit Accrual 264,219 257,639 286,459 305,959 305,959 325,459
Total Internal Service Funds 1,163,961 928,158 1,112,913 906,813 1,106,813 824,810
Total All Funds 41,357,091$45,735,354$45,451,554$40,214,577$41,983,467$39,894,467$
Fiscal Year Ended December 31,
63
BALANCED BUDGETS
A BALANCEDBUDGET canbedefinedasasituationwheretotalrevenuesandotherfinancingsourcesis
equalto(orgreaterthan)totalexpendituresandotheruses.Revenuesandotherfinancingsourcesincrease
financialresources.Expendituresandotherusesdecreasefinancialresources.Operatingtransfersinand
debtissueproceedsareconsideredotherfinancingsources.Operatingtransfersoutareconsideredother
financinguses.
Abalancedbudgetdoesnotdipintoreservesorfundbalances.However,anunbalancedbudget(deficit)is
notnecessarilypoorfinancialmanagement.Forexample,debtservicefundsoftenaccumulateresourcesin
theyearpriortoexpenditure.Further,debt-financedcapitalprojectsfrequentlystretchovermultipleyears.
Thecityhasneveruseddebttofinancecurrentorongoingexpenditures.
Itisthecity’spolicytoadoptbalancedbudgetsfortheGeneralFundandtheCommunityCenterFund.
Indeed,bothfundsaresupportedbypropertytaxes.
64
BALANCED BUDGET – GENERAL FUND
A BALANCEDBUDGET canbedefinedasasituationwheretotalrevenuesandotherfinancingsourcesis
equalto(orgreaterthan)totalexpendituresandotheruses.Revenuesandotherfinancingsourcesincrease
financialresources.Expendituresandotherusesdecreasefinancialresources.Operatingtransfersinand
debtissueproceedsareconsideredotherfinancingsources.Operatingtransfersoutareconsideredother
financinguses.
Revenues and Other Sources:
Property Taxes 6,788,000$
Franchise & Other Taxes 270,000
Licenses & Permits 407,200
Intergovernmental Revenues 397,200
Charges for Services 815,900
Fines & Forfeits 40,400
Special Assessments 200
Miscellaneous 184,100
Operating Transfers -
Total 8,903,000$
Expenditures and Other Uses:
General Government 1,883,967$
Public Safety 2,636,008
Public Works 2,994,279
Transit -
Recreation & Culture 1,382,394
Unallocated 6,352
Operating Transfers -
Total 8,903,000$
DeficitSurplus
B
A
L
A
N
C
E
D
Revenues and Other Sources
GREATER than
Expenditures and Other Uses
Revenues and Other Sources
LESS than
Expenditures and Other Uses
65
STAFFING SUMMARY
STAFFING HISTORY
Staffing,as measuredby full-time equivalents, has beenrelativelystable for thelast five years.Many
employees perform across multiple activities/divisions and funds.The table below does notreflect
the seasonalor part-timecommunitycenteremployees.The budgetincludes a new full-time parks
departmentpositionstarting inJune2020.All the employees for Fiber Optics Fund were eliminated
whentheservice was outsourced2016.
Adopted
Actual Actual Actual Budget Projected Budget
2016 2017 2018 2019 2019 2020
General Fund
City Administration 1.85 2.18 3.60 3.60 3.60 3.60
Finance 4.00 4.00 4.00 4.00 4.00 3.85
City Clerk 0.35 0.35 1.00 1.00 1.00 1.00
Human Resources 1.00 1.00 1.00 1.00 1.00 1.00
Planning & Zoning 1.30 1.30 1.30 1.30 1.30 1.30
City Hall 1.40 1.90 ----
Fire & Rescue --0.50 1.00 1.00 1.00
Building Inspections 3.00 4.00 4.00 4.00 4.00 4.00
Public Works Administration 2.00 1.50 1.80 1.80 1.80 1.80
Engineering ------
Public Works Inspections 1.30 1.00 1.00 1.00 1.00 0.90
Shop & Garage 1.50 1.50 1.50 1.50 1.50 1.50
Streets & Alleys 10.30 10.05 9.80 9.80 9.80 9.05
Ice & Snow 2.20 1.70 1.65 1.65 1.65 1.60
Park Operations 6.85 6.85 6.00 6.00 6.00 6.60
Shade Tree 0.40 0.50 0.60 0.60 0.60 0.60
Total General Fund
37.45 37.83 37.75 38.25 38.25 37.80
Special Revenue Funds
Economic Development 0.20 1.20 1.20 1.20 1.20 1.20
Monticello Community Center 8.40 8.40 8.40 8.40 8.40 8.75
Total Special Revenue Funds 8.60 9.60 9.60 9.60 9.60 9.95
Enterprise Funds
Water 3.15 3.80 4.00 4.00 4.00 3.60
Sewage 3.15 3.80 4.00 4.00 4.00 3.60
Water Quality -----1.00
Liquor 10.00 10.00 10.00 10.00 10.00 10.00
Deputy Registrar 6.00 6.10 6.20 6.20 6.20 6.20
Fiber Optics 3.75 -----
Total Enterprise Funds
26.05 23.70 24.20 24.20 24.20 24.40
Total All Funds
72.10 71.13 71.55 72.05 72.05 72.15
NUMBER OF FULL-TIME EQUIVALENTS
Fiscal Year Ended December 31,
66
TAX LEVY HISTORY
2016 2017 2018 2019 2020
GeneralFund 6,177,000$6,291,000$6,590,000$6,670,000$6,788,000$
Percent Change 5.0%1.8%4.8%1.2%1.8%
SpecialRevenue Funds
Economic Development (HRA Levy)280,000 280,000 323,000 348,000 355,000
Monticello Community Center 364,000 372,000 387,000 402,000 417,000
TotalSpecialRevenue Funds 644,000 652,000 710,000 750,000 772,000
Percent Change -52.8%1.2%8.9%5.6%2.9%
Debt Service Funds
2011A GO Refunding Bonds (2005A)330,000 139,783 148,061 150,581 172,641
2007A GO Improvement Bond 420,000 610,000 ---
2008B GO Sewer Refunding 500,000 500,000 ---
2010A GO Improvement Bond 40,000 40,000 40,000 --
2014A GO Judgement Bond 544,000 536,929 537,586 537,244 535,501
2015B GO SR&I Bond 250,000 195,288 203,425 200,905 198,385
2016A GO SR&I Bond -415,000 407,769 409,134 405,039
2017A GO I&A Bond --450,159 429,782 427,367
2018A GO Abatement Bond ---500,000 $472,434
2019A GO Bonds ----$728,620
TotalDebt Service Funds**2,084,000 2,437,000 1,787,000 2,227,646 2,939,987
Percent Change 61.6%16.9%-26.7%24.7%32.0%
Capital Project Funds
Capital Projects Fund 300,000 50,000 783,000 662,354 300,013
TotalCapital Project Funds 300,000 50,000 783,000 662,354 300,013
Percent Change ----83.3%1466.0%-15.4%-54.7%
TotalTax Levy - All Funds 9,205,000$9,430,000$9,870,000$10,310,000$10,800,000$
Percent Change 7.9%2.4%4.7%4.5%4.8%
Levy Summary
City General and Debt Levies 8,925,000$9,150,000$9,547,000$9,962,000$10,445,000$
Percent Change 4.6%2.5%4.3%4.3%4.8%
HRA Levy 280,000$280,000$323,000$348,000$355,000$
Percent Change ---0.0%15.4%7.7%2.0%
TAX LEVY HISTORY
67
TAX CAPACITY HISTORY
The Housing Redevelopment Authority (HRA) special benefit levy is capped at .0185% (or .000185) of
the city’s taxable market value. The city’s taxable market value for taxes collected in 2019 totaled
$1,897,813,900. HRA levyproceeds canonlybe usedfor purposes includedin the HRA Act(Minnesota
Statutes,Section469.033,subd.6).Thosepurposesincluderedevelopmenttocorrectorpreventblight
and development of, or assistance to, housing for low- or moderate-income persons.
In 2020, Northern States Power (dba Xcel Energy), the city’s largest taxpayer, succeeded in getting
the Minnesota Department of Revenue to lower the estimated market value of its nuclear power
plant. However, Xcel’s estimated market value drop did not exceed residential and commercial tax
base growth, therefore, Xcel still absorbs a portion of the city’s tax levy increase.
The graph below reflects the annual change in the city’s property tax levy and the annual change in
Xcel’s property taxes owed. When the green column is larger than the blue column, Xcel absorbed
the entire levy and lowered the taxes paid by others. In 2019, the green column was in negative
territory. In this case, other taxpayers picked up the entire levy increase plus the amount Xcel’s taxes
declined.
More information on the city’s largest taxpayer can be found on the following page.
2016 2017 2018 2019 2020
Tax Capacity 25,891,898$27,583,160$29,528,145$29,076,227$29,878,176$
Percent Change 8.4%6.5%7.1%-1.5%2.8%
City Levy - Tax Capacity Rate 34.470 33.172 32.332 34.262 34.959
Percent Change -3.5%-3.8%-2.5%6.0%2.0%
HRA Levy - Tax Capacity Rate 1.081 1.015 1.094 1.197 1.188
Percent Change ----6.1%7.8%9.4%-0.7%
TAX CAPACITY HISTORY
68
LARGEST PROPERTY TAXPAYER
The city’s largest property taxpayer is Northern States Power (dba Xcel Energy). In 2011, Xcel
completed the first of two major uprates (energy producing improvements) at its nuclear power
plant, which is located just inside the western boundary of the city. The second uprate was
completed in 2013. The uprates resulted in major tax capacity increases for tax collection years 2013
and 2015. Current year property taxes are calculated on the taxable market value on January 1 of the
prior year. For tax year 2019, Xcel was successful in getting the Minnesota Department of Revenue to
change the valuation method for the plant. As a result, the plant valuation dropped by nearly $81
million. The below schedule and graph reflect the importance of the plant to the city’s tax base:
The green line is the plant’s percentage of the city’s total tax capacity and consequently its share of
the annual property tax levy. In 2015 the percentage rose above 60% and remained there until 2019,
when it dropped to just above 56%. This tax capacity decline means the city’s other taxpayers will
absorb more of the tax levy. The power plant also pays a significant portion of the HRA levy:
Tax
Year Amount Change $$Amount $$ Change % Chg.Amount $$ Change % Chg.
2012 298,023,900$5,960,478$2,966,335$
2013 479,449,000$181,425,100$9,588,980$3,628,502$61%4,052,178$1,085,843$37%
2014 448,484,200$(30,964,800)$8,969,684$(619,296)$-6%4,010,278$(41,900)$-1%
2015 706,645,500$258,161,300$14,132,910$5,163,226$58%5,050,410$1,040,132$26%
2016 779,539,900$72,894,400$15,590,798$1,457,888$10%5,374,045$323,635$6%
2017 832,073,500$52,533,600$16,641,470$1,050,672$7%5,520,059$146,014$3%
2018 877,855,100$45,781,600$17,557,102$915,632$6%5,676,496$156,437$3%
2019 797,167,200$(80,687,900)$15,943,344$(1,613,758)$-9%5,462,252$(214,244)$-4%
2020 786,603,300$(10,563,900)$15,732,066$(211,278)$-1%5,499,511$37,259$1%
Northern States Power (dba Xcel Energy)
Taxable Market Value Tax Capacity City Property Tax on Plant
2016 2017 2018 2019 2020
HRA Levy 280,000$280,000$323,000$348,000$355,000$
NSP Paid 168,528$168,904$192,066$190,833$186,888$
% NSP Paid 60%60%59%55%53%
69
REVENUE SOURCES BY FUND
Revenue Classifications
Property Franchise Tax Licenses/ Intergovern- Charges for
Taxes & Other Increments Permits mental Services
General Fund 6,788,000$270,000$-$407,200$397,200$815,900$
Special Revenue Funds
Economic Development 355,000 -617,344 ---
Cemetery -----33,000
Minnesota Investment ------
Monticello Community Center 417,000 ----1,571,800
Total Special Revenue Funds 772,000 -617,344 --1,604,800
Debt Service Funds
2010A G.O. Improvement Bond ------
2011A G.O. Refunding Bond 172,641 -----
2014A G.O. Judgment Bond 535,501 -----
2015B G.O. Street/Improvement 198,385 -----
2016A G.O. Street/Improvement 405,039 -----
2017A G.O. Improvement/Abate 427,367 -----
2018A G.O. Abatement 472,434 -----
2019A G.O. CIP/Impr/Abate $728,620 -----
Total Debt Service Funds 2,939,987 -----
Capital Project Funds
Capital Project 300,013 20,000 ----
Closed Bond Fund ------
Park & Pathway Dedication ------
Stormwater Access -----60,000
Street Lighting Improvement -80,000 ----
Street Construction ------
Total Capital Project Funds 300,013 100,000 ---60,000
Enterprise Funds
Water ---2,000 -1,348,539
Sewage -----2,551,721
Water Quality -----206,000
Liquor ------
Deputy Registrar -----625,500
Fiber Optics -----1,798,000
Total Enterprise Funds ---2,000 -6,529,760
Internal Service Funds
IT Services -----225,000
Central Equipment -----330,800
Benefit Accrual -----16,500
Total Internal Service Funds -----572,300
Total All Funds 10,800,000$370,000$617,344$409,200$397,200$9,582,760$
70
Revenue Classifications
Fines &Special Miscell-Sale of Debt Contributed Operating
Forfiets Assess aneous Goods Proceeds Capital Transfers Total
40,400$200$184,100$-$-$-$-$8,903,000$
--93,656 ----1,066,000
-------33,000
--15,000 ----15,000
--19,200 ----2,008,000
--127,856 ----3,122,000
--------
-50,761 2,000 ---200,000 425,402
--1,000 ----536,501
-21,709 500 ----220,594
-97,759 1,000 ----503,798
-57,875 500 ----485,742
--200 ----472,634
-------728,620
-228,104 5,200 ---200,000 3,373,291
--40,000 -2,200,000 -900,000 3,460,013
-70,000 5,000 ----75,000
--47,000 ---420,000 467,000
--5,000 ----65,000
--10,000 ----90,000
--20,000 ----20,000
-70,000 127,000 -2,200,000 -1,320,000 4,177,013
-38,000 55,600 --80,000 -1,524,139
--25,000 --199,788 -2,776,509
--1,000 ----207,000
--5,000 6,264,651 ---6,269,651
--1,500 ----627,000
--2,000 ---50,000 1,850,000
-38,000 90,100 6,264,651 -279,788 50,000 13,254,299
--1,097 ----226,097
--3,000 ----333,800
--3,000 ----19,500
--7,097 ----579,397
40,400$336,304$541,353$6,264,651$2,200,000$279,788$1,570,000$33,409,000$
71
LONG RANGE FINANCIAL PLANS
General Fund Community Center EDA Capital Projects
Routine
Expenditures
Expected to riseatthepace
of inflation but mitigated by
gains in productivity. Some
capital expenditures are
incorporated as routine
through rental charges by
internal servicefunds.
Additions to staff and an
increaseto thelaw
enforcement ratehavean
impact in 2018-2020.
Expected to riseatthepace
of inflation. Routinecapital
expenditures areset at
$75,000 per year.
Non-TIF expenditures are
expected to riseat thepace
of inflation.
Non-routine
Expenditures
Basic level of non-routine
items areincluded in overall
budget but vary within each
budget unitfromyear-to-
year.
Largerepair and maintence
items and total capital
expenditures exceeding
$75,000 could besupported
by transfers fromother
funds.
2020:$100,000 roof
replacement.
Tax increment financing (TIF)
expenditures will vary
considerabley fromyear-to-
year in each district as
developmentoccurs.
Largecapital projects usually
receivefunding fromdebt
issuance. Thecity usually
covers initial project costs
with reserves or other
sources and reimburses itself
with debtproceeds.
2020:Street Improvement
project- $2.2M.
Revenues
Property taxes provide
nearly 80% of General Fund
revenue. Consequently,
spending is constrained by
growth in thetax levy. The
city started diversifying
revenuewith residential
refusecharges in 2018 and
residential recycling charges
in 2020.
Theproperty tax levy is set at
$417K in 2020. User fees
should cover 85% on-going
expenditures.
Tax increment revenues
widely vary from district to
districtbutnot much from
year-to-year. Often reserves,
accumulation of prior year
increments, areused to fund
projects. Transfers from the
General Fund were
eliminated in 2016 with the
initiation of an HRAlevy. The
2020 levy is $355,000.
Fallon Overpass will receive
somefederal aid in 2021.
Statestreet aid is used as
temporary financing and
later replaced with debt
proceeds.
Debt
None:Indirectly supports
Central EquipmentFund debt
servicethrough annual
rental payments.
No debtissues are
anticipated over thenext five
years. Further, debt for
recreational projects either
requires voter approval or
must beincurred as part of a
lease-purchaseagreement
with theEDA.
Intrafund loans fromtheEDA
General sub-fund will
financesomeTIF activities.
No external debtissuanceis
planned.
2020:$2.2M street
improvement bonds. Thedebt
servicefor thesebonds will
bestructured to take
advantageof thedeclinein
other tax supported debt.
72
Water Sewage Liquor Fiber Optics Central Equipment
Expected to riseatthe
paceof inflation but
mitigated by reinvestment
in plantand equipment.
Annual capital
expenditures financed on
a pay-as-you-go basis
rangebetween $150,000
to $300,000.
2020:SCADAsytem
upgrade- $500,000.
Expected to riseatthe
paceof inflation but
mitigated by reinvestment
in plantand equipment.
Annual capital outlays
financed on a pay-as-you-
go basis rangebetween
$150,000 to $300,000.
2020:SCADAsytem
upgrade- $500,000.
Expected to riseat the
paceof inflation and
increases in demand.
Costof sales aretypically
passed onto customers
through higher prices. The
Liquor Storemaintains a
consistent gross profit
margin of 25%-27%.
Operating revenues cover
non-capital expenditures.
Amanagement firm was
hired to run day-to-day
operations in 2016.
Capital equipment
purchases will vary
widely every year. Adebt
servicescheduleis
contained in theInternal
Servicesection of this
report. All expenditures in
this fund areeither for
capital equipment
purchases or debtservice.
2020:$500k SCADA
systems.
2022:$1.2M Well 6.
2023:$4.5M water
treatmentfacility.
Sewer access fees areno
longer needed to support
debt service. 2020:$500k
SCADAsystems.
2021:$1.4M WWTP
solids handling
improvements.
2022:$1.8M phase2
WWTF;$2.1M WWTF
headworks improvements.
Thefund generates
sufficient annual
revenues to support its
needs.
2022: $100K for roof
repairs, point-of-sale
software, and coolers.
Operating revenues are
notquiteadequateto
support non-routine
expenditures.
Consequently, Liquor Fund
transfers havebeen
providing funding for
operations.
Anticipated future
expenditureby year:
2020:$502,000;
2021:$852,500;
2022:$610,000;
2023:$465,000;
2019:$435,000.
A$1.3M ladder truck will
bepurchased outsideof
this fund in 2020.
User rates arehigh
enough to cover planned
expenditures for thenext
fiveyears.
User rates areexpected to
riseto providefor pay-as-
you-go routinesystem
replacementand debt
financeupgrades to meet
new environmental
regulations. Aphased ten
percent rateincreaseis
needed for thephophorus
reduction wastewater
treatmentplantproject.
Sales haveincreased
steadly for thelastfive
years. Going forward,
sales may level out
becauseof space
limitations.
2020:$50K transfer from
theLiquor Fund. A
budgeted $100K tranfer
fromtheLiquor Fund in
2019 is notneeded.
Transfers from Liquor
Fund will likely continue
to declinewith further
operational changes.
Rental revenues
(expenditures in other
funds and budgetunits)
will risewith equipment
purchases. Therefore,
revenuesources in other
funds becometherevenue
sourcefor this internal
servicefund. Thecity
transferred $300K into the
fund in 2018 and another
$200K in 2019.
No debtissues are
anticipated over nextfive
years.
TheMinnesota Public
Facilities Authority
(MPFA) may provide
funding for thefuture
projects. Revenuebonds
may besold as reserves
aredepleted.
No debt issues are
anticipated over nextfive
years.
In 2014, a resolution was
reached with telcom bond
holders, thecity issued $6
million in settlement
bonds in 2014. Thecity
levies property taxes for
debtserviceon these
bonds. Debtserviceis not
recorded in this fund. No
new debt is contemplated
for thefuture.
Thefund is expected to
becomeself-sustaining.
Thecity issued $515,000
in bonds to financefuture
purchaseof a plow truck
and the2014 purchaseof
a firetender. Futuredebt
issues may beneeded to
makeall theacquistions
listed in theCIP.
73
LONG RANGE FINANCIAL PLANS (continued)
Prior to the start of the budget process, council and staff review service needs, growth trends, and
capital investment requirements. A long-range financial model is developed for the city’s four main
operating funds: General, Monticello Community Center, Water, and Sewage. This is done in
conjunction with the Capital Improvement Plan (CIP), which is a five-year forecast that includes
funding sources. Financial planning is segregated into two components: operations for the four
main operating funds and capital investments (CIP).
The Municipal Liquor Fund, Deputy Registrar Fund, and Fiber Optic Fund are excluded from long
range financial plan. The liquor store and DMV are largely retail operations with no major
forecasted capital investment needs. The Fiber Optic Fund presents interesting challenges in a
dynamic and competitive market where strategies and a business plan need refinement.
Items impacting long range financial planning:
Current financial position (fund balances)
Debt burden
Regulatory environment
Condition of existing capital assets
Growth trends, inflation, and aspirations
The city annually adopts a balanced budget for the General Fund. Consequently, the
revenues/sources line and the expenditures/uses line will overlap for the 2020 budget and for
future year projections. After 2020, annual expenditures are projected to increase at 3% per year.
The property tax levy and all other revenues are projected to increase at the same rate as
expenditures/uses. According to policy, the city shall maintain a fund balance of 75% of
expenditures and recurring uses. The following chart assumes the city will continue to provide the
same current levels of service.
74
Like the General Fund, the Monticello Community Center Fund normally adopts a balanced budget.
Therefore, the revenues/sources line and the expenditures/uses line will overlap for the 2020
budget and for future year projections. After 2020, annual expenditures are projected to increase at
3% per year. The following chart assumes the city will continue to provide the same current levels
of service.
The Water Fund is the city’s most self-sustained utility fund. The fund has no direct debt and
adequate reserves to cover almost any expenditure for major capital projects, of which none are
planned in the next couple years. In 2019, transfers to debt service funds for water related
improvements ceased. These transfers supplemented water access fees which all but dried up as a
result of slower commercial and residential development. The peak in 2016 expenditures reflect the
$1 million in water improvements as part of the 2016 Core Street Project. A new well is planned for
2022. Debt and reserves will finance a treatment plant that is tentatively planned for 2024.
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Unlike the Water Fund, the Sewage Fund represents funding challenges. First, sanitary sewer
access fees declined significantly with the lack of development. Transfers to debt service funds
supplementing these access fees dropped significantly in 2017 and ceased altogether in 2018.
Second, environmental regulatory changes require large investments in the wastewater treatment
plant. The city incurred nearly $2 million in debt for the wastewater treatment plant phosphorous
reduction project and for replacement of two digester covers, both in 2016. Other debt supported
treatment plant improvements are planned for 2020 through 2022.
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LONG-TERM FISCAL OBJECTIVES
The city council and staff are committed to expending public resources in the most cost-effective and
economical manner possible to ensure the stability of the city property tax levy. In light of changes to
tax policy, state aid reductions for various purposes, state imposed levy limits in prior years, and the
potential of future levy limits, fiscal strategies will need to be constantly monitored to ensure a
balanced approach in providing sufficient revenues to fund services:
1.Employ a strategy aimed at reducing the city’s reliance on the property tax levy to fund basic
services through “sustainable” revenue sources such as franchise fees, special revenues, user fees,
and charges for services.
The city’s property tax levy generates nearly 80% of the General Fund’s revenue. This
overdependence is largely attributable to a healthy tax base, which includes a nuclear power plant. In
recent years, the city’s tax levy has kept pace with inflation. The current council philosophy seems to
indicate a willingness to take advantage of the growth in the tax base. While a growth plus inflation
tax levy formula would not reduce the dependence on property taxes, it would alleviate the strain
placed on city finances by inflation. City services will continue to be evaluated in terms of identifying
all relevant funding sources to underwrite specific service expenditures, promoting alternatives to
traditional funding methodologies, and encouraging public-private partnerships in service delivery
systems.
2.The development and use of appropriate cost accounting structure that will lead to creation of
individualcostcentersforallcitydepartmentactivitiestoaccuratelyreflectthetruecostofproviding
specific services.
The city employs a cost accounting system that is department specific and attempts to
accurately reflect service delivery costs at the department and division levels. By including all
supplemental services as they relate to personnel, charges and services, supplies, and capital outlays
the city will further distinguish the total cost of services provided. The city has the ability to analyze
these costs at the sub-category detail levels in support of overall policy goals.
3.The adoption of a financial philosophy that seeks to spread the cost of significant capital outlay
expenditures over an extended period of time to ensure that current and future taxpayers share
equally in underwriting those costs.
The city continues to capitalize the cost of significant capital expenditures over several years to
ensure that both existing and future taxpayers share equally in the cost. In addition, the city has
dedicated a portion of the tax levy to underwrite the cost of selected capital projects and equipment,
avoiding a fiscal environment based on reactive tax and spend policies. The five-year capital
improvement planning process is critical in achieving these results.
77
4.The development of a long-term financial model (proforma) that identifies anticipated trends in
community growth and establishes a link between fiscal targets and budgetary expenditures.
The cityisintheprocessofdevelopingandmaintainingafinancialmodelto determinethelong-
term impacts of present day expenditures and financing decisions. Fiscal assumptions are based upon
a complex set of financial data including growth factors, tax capacity valuations, per capita spending,
anddebtratios.Theproformawillbe utilizedasatoolas partofthe budgetplanningprocess toensure
that key short-term fiscal targets are in line with long-term fiscal projections. The city will continually
update the proforma to ensure that long-term fiscal outcomes remain consistent with council
budgetary policies.
5.Thedevelopmentofworkperformancegoalsforeachdepartmenttoascertainandmeasurehow
each operating division contributes to the city’s overall public service mission.
Each department is responsible for identifying relevant performance data to allow for an
independent analysis ofspecific service outcomes.Data isreviewed to provide the counciland general
public with a better understanding of the operational demands, resource inputs, and performance
outcomes associated with a specific service delivery system.
6.The aggressive and appropriate investment of idle city funds to maximize the generation of
interest income, while ensuring adequate cash flow requirements.
Investment ofcity funds is controlledby statestatute and managed by the finance director. Idle
funds are invested in a variety of financial instruments such as certificates of deposit, federal agencies
(FHLMC, FNMA, etc.), and appropriately rated bonds. Long-term investing is designed to achieve the
best yield in the current market, following a strategy that structures long-term investments in ladder
format and reinvests short-term investment in rotating terms of up two years.
7.Greater reliance on technology to enhance employee productivity in all areas of city operations
and improve customer communications.
The city has taken steps to invest additional time and energy on labor saving technology, such
as software programming and electronic file storage. Staff has discussed the need to look at optic
imagingsolutions.Imagingcityrecordswillenable the citytoreducestorageareas presentlydedicated
to paper files and look at more economical and efficient systems of data retrieval.
78
8.Involving all employees in the process of re-engineering the work environment by encouraging
cross-training opportunities, reducing and eliminating bureaucratic barriers, streamlining public
process requirements, and adopting private sector customer service business values in city
operations.
City staff is encouraged to identify work practice issues that are inefficient or overly
bureaucratic. The management team is committed to involving their employees and fostering an
environment that challenges the status quo of city operations.
9.Continuously reviewing opportunities to form partnerships with neighboring communities to
share services and equipment, jointly purchase equipment, and develop strategies to deal withlocal
issues using a regional approach.
The city has established several equipment and service delivery sharing arrangements with
neighboring communities and has several joint powers agreements in place on a variety of local and
regional issues in the area of public safety and public works initiatives.
Recent steps taken to achieve long-term fiscal objectives
The city began monthly billing of water and sewage services in 2017. Monthly bills allow the city to bill
customers for other services, such as residential garbage, recycling, and storm water. Other charges
may be added in the future. There are benefits to the customers: lower monthly bills instead of larger
quarterly bills, a payment cycle in line with other customer bills, timely consumption information, and
earlier alert to service problems.
The Monticello Community Center Fund implemented a new chart of accounts in 2017. This change
breaks the fund’s accounts into major costs centers: administration, rentals, aquatics, guest services
and concessions, maintenance, and fitness programs. The 2020 budget reflects the new chart of
accounts.
In 2018, the city started billing all residential garbage customers with an individual service cart a flat
fee plus 9.75% tax per month. This charge replaces a $13.00 monthly fee that was mainly paid by
mobile home parks. In 2020, the $7.00 charge rises to $8.25, and then to $9.50 in June. A recycling
charge is added in 2020 starting at $0.75 and rising to $1.50 in June.
The city is implemented a storm water utility charge in the middle of 2019. A storm water utility fund
was established for recording revenues and expenses, with full implementation occurring in budget
year 2020. Some General Fund expenditures, such as street sweeping and storm water pond
maintenance, will now be accounted for in the new fund.
79
CAPITAL EXPENDITURES (Recurring vs Nonrecurring)
A CAPITALEXPENDITURE occurswhenacapitalassetispurchased.Capitalassetsareusedinoperations
andhaveinitialusefullivesextendingbeyondasinglereportingperiod.Theseassetsmustalsomeet
capitalizationthresholds(seeAppendix),whichvarybyassetclassificationandtypicallycostsmorethan
$10,000.Land,improvementstoland,vehicles,machinery,equipment,infrastructure,andothertangible
andintangibleassetsusedinoperationsareexamplesofcapitalassets.
Capitalexpenditures(alsocalledcapitaloutlays)canbeclassifiedaseitherrecurringornon-recurring.Fleet
equipmentreplacementisanexampleofrecurringcapitalexpendituresbyassetclass.Thecitybudgetsto
replaceaportionofthefleeteveryyearonapay-as-you-gobasisorthroughaleasearrangementwiththe
CentralEquipmentFund.Thecityalsobudgetstoreplaceasmallfractionofitswaterandsewer
infrastructureonanannualbasis.Largeprojectsaddingtoorreplacinginfrastructureareusuallynon-
recurringinnature.Forexample,the2017corestreetreconstructionprojectwasnon-recurringinnature.
However,fiveothercorestreetreconstructionprojectswerespreadover15years.The2020Street
improvements,AGloriousChurchstormwaterpondexpansion,andawater/sewageSCADAsystemupdate
accountforthebulkofthe2020non-recurringprojects.FuturedevelopmentofBCOLamenitieswillhavea
recurringnature.Largenon-recurringprojectsaretypicallyfinancedbydebt,intergovernmentalrevenue
(state/federalgrantsandaids),anddrawsonreservesaccumulatedinanticipationoftheproject.
80
CAPITAL INVESTMENTS AND OPERATING BUDGETS
Capitalinvestments(outlays)toreplaceorimproveexistingassetscanhavesignificantimpactsonoperating
budgets.Forexample,capitalinvestmentsreplacingagingequipmentcanreduceannualrepairsand
maintenanceexpenditures,andpersonnelservicescosts.Indeed,equipmentnearingtheendofitsusefullife
oftenrequiresexpensiverepairswithhard-to-findreplacementparts.Further,personnelservicecostsare
impactedintwoways:thecostofthepeoplerepairingtheequipmentandthelossofproductivity.In2013,the
cityinitiatedtheCentralEquipmentFundforthepurposeofcreatingarevolvingfundforfutureequipment
purchases.Thisfundpurchasesequipmentandleasesitbacktothebenefitingbudgetunits.Theleasepayments
assurethatequipmentpurchaseswillreceiveannualfunding,gettingthesamepriorityasotheroperating
expenditures.Lastly,newequipmentmaybemoreproductiveandlessexpensivetooperate.
Anothertypeofcapitalinvestmentincludesbetterments,whichareimprovementsthatprolonganasset’slifeor
increaseitsefficiencyorcapacity.Agreatexample,thecommunitycenterreplacedtheroofovertheaquatics
portionofthebuilding,loweringannualenergycosts.Still,thesavingscanbeelusivewhentheenergyproviders
consistentlyraisetheirprices.
Thecityannuallybudgetsforreplacementofwaterandsewagemainsthrougheachrespectiveenterprisefund.
Forpublicutilities,customersatisfactionisdifficulttoquantifyindollars.However,agenerallysatisfiedcustomer
maybelesslikelytocomplainabouttherateincreasesneededtosupportthoseservices.Annually,thecity
budgetsmoreforwaterandsewermainreplacementthanitdoesforrepairsandmaintenance.
Finally,nearly70milesinlength,thestreetsystemisthecity’slargestcapitalasset.In2019,thecityincreased
thesealcoatbudgetforroadsto$185,000. Additionally,thecityannuallybudgetsover$200,000foramore
durablemillandoverlayintheCapitalProjectandStreetReconstructionFunds. Theseoperatingandcapital
expendituresworkintandemtoforestallenormouslymoreexpensivestreetreconstructionprojects.
81
Central Equipment Fund (CE) leases are set at rates to recover depreciation plus inflation. The lease
amounts do not include operating costs such as repairs and maintenance (R&M), gas, or insurance.
These expenses are borne by benefiting fund and budget unit. Generally, R&M expenses on old
equipment are generally higher than that of newer equipment. Less work is done on equipment
that is scheduled for replacement. Items with a (+) are additional equipment, incurring additional
R&M. Items with a (-) are replacement equipment with lower R&M in the near term. R&M expenses
for roads include estimates for snow removal, boulevard maintenance, street sweeping, crack
sealing, and striping. Listed amounts are for expenses in excess of those already being incurred.
With no impact on expenses, some are replaced due to obsolescenceor aesthetics reasons. In
reality, some of these amounts may or may not be close to those actually realized.
Department - Operating Fund Fund Amount Year Amount Comment
Public Works - General Fund
Plow truck Central Equip.270,000$2021 26,700$CE lease and R&M (+)
2020 street improvements Capital Project 2,200,000$2021 (22,000)$R&M
Fallon Avenue overpass Capital Project 9,400,000$2020 13,500$R&M
A Glorious Church pond expansion Stormwater 360,000$2020 900$R&M
Recreation & Culture - General Fund
Parks mowers Central Equip.112,000$2020 14,800$CE lease and R&M (+)
Truck Central Equip.65,000$2020 8,900$CE lease and R&M (+)
Toro workman Central Equip.30,000$2020 5,500$CE lease and R&M (+)
Kifco water wheel Central Equip.13,000$2020 2,500$CE lease, utilities and R&M (+)
Kawasaki mule Central Equip.12,000$2020 2,200$CE lease and R&M (+)
CSAH 75 pathway lighting Street Lighting 60,000$2020 1,000$Utilities and R&M
Ellison Park log shelter Capital Project 95,000$2020 (2,000)$R&M
Briarwood turn lanes Park & Pathway 420,000$2020 -$No impact - County hwy
Bertram Park buildout Park & Pathway 2,300,000$2020 75,000$Utilities and R&M
Recreation - Community Center
Vanitiy and partition replacement Community Ctr.20,000$2020 (1,000)$R&M
Card access readers Community Ctr.16,000$2020 (500)$R&M
Roof replacement Community Ctr.100,000$2020 (1,500)$R&M
Cardio-equipment Community Ctr.42,000$2020 (3,000)$R&M
Public Works - Sewage Fund
WWTP parking lot improvements Sewage 250,000$2020 (5,000)$R&M
Vactor Dump Station Sewage 100,000$2020 5,000$R&M
SCADA Sewage 500,000$2020 20,000$R&M, software support
Public Works - Water Fund
Meter upgrades Water 65,000$2020 (3,250)$R&M
SCADA Water 500,000$2020 20,000$R&M, software support
Fire
Fire Ladder Truck Fire 1,300,000$2020 (7,000)$R&M
Fire Station Fire 5,700,000$2020 25,000$Utilities and R&M
Investment
Annual Impact on
Operating Expense
82
Major Capital Investment Effect on Operating Expenses (Examples)
The buildout of Bertram Chain of Lakes Park (athletic fields and amenities) occurred in 2020.
Bertram will require more maintenance as the park experiences additional usage. Maintenance
includes seeding, fertilizing, irrigating and mowing more space. The full-year increase in personnel
services, supplies, equipment, and other services is estimated to increase by $75,000 in 2020.
The wastewater treatment plant SCADA (Supervisory Control and Data Acquisition) system upgrade
is long overdue. The old SCADA system lacks vendor support and has outdated features. The new
SCADA system would require an annual maintenance support contract whereas the current system
functions on a pay-as-you-go basis. Because a contractor manages the facility, there would not be
any offsetting savings from staffing changes. Additional costs are built into sewage rates.
The city is adding various pieces of equipment to its inventory due to increased need. The public
works department is adding a plow truck in 2020 to ensure all streets can be cleared of ice and
snow in a timely manner. Under recreation & culture, new parks mowers, a truck, Toro workman,
Kifco water wheel, and Kawasaki mule will all be purchased to meet the increased needs from the
Bertram Chain of Lakes buildout. The productivity benefits are difficult to quantify, and the new
equipment will age and require repairs and maintenance as time passes. These equipment items
will be purchased by the Central Equipment Fund and leased back to the General Fund.
The new fire station will require less maintenance to start, but the city utilities costs will increase
significantly in 2020. Utility costs are estimated at $2,000 per month more because the new
building will be larger than the current station. Further, the current station will be repurposed for
other uses, moving existing building costs to other parts of the budget.
The new fire ladder truck replaces an aging, repair and maintenance dinosaur. Higher insurance
costs on the new truck will offset some of the R&M savings.
83
LEGAL DEBT LIMIT AND BOND RATING
DebtLimit:Minnesotacitiesmaynotincurdebtinexcessofthreepercentofthemarketvalueoftaxable
propertyinthecity(thelimitis2percentinFirstClasscitiesunlessacharterprovidesahigherrate,withthe
higherratecappedbylawat3 2/3 percent).Exceptedfromthisoverallthreepercentlimitarealmostalldebt
obligationsforwhichsomeothersourceofrevenueispledgedassecurity.Thus,improvementassessment
bonds,taxincrementbonds,utilityrevenuebonds,purerevenuebonds,capitalimprovementbondsunderan
approvedcapitalimprovementplan,judgmentbonds,andsimilarbondsmaybeissuedwithoutregardtothe
statutorydebtlimit.(Theremaybeotherrequirementsforbondsthatareexemptfromthedebtlimit;for
example,capitalimprovementbondsmustbeapprovedbyanaffirmativevoteofthree-fifthsofthemembers
ofafive-membergoverningbody.)Theresultisthat,withonlyafewexceptions,theonlyobligationssubjectto
thedebtlimitaregeneralobligation(G.O.)bondspayablesolelyfromadvalorempropertytaxes.Thelegal
debtlimithasnothingtodowiththepracticaldebtlimitofacity,whichisthedebtburdenbeyondwhichthe
credit-worthinessofthecityisputintoquestion.(SeeMinnesotaStatutes,Section475.53)
AnticipatedBorrowingthisFiscalYear:ThecityisexpectedtoissueG.O.bondstoreimburseitselffor
expendituresonstreetimprovementsinthelatterhalfof2020. The2020reimbursementamountiscurrently
estimatedat$2,200,000. Further,thecityisconsideringthepossibilityofissuingdebtinthenearfutureto
financetheconstructionofanewpublicworksfacility.
BondRatings:Thecity’sgeneralobligationbondratingwasreviewedinAugust2019withthesaleofthe
2019Ageneralobligationbonds.Moody’supgradedthecity’spriorG.O.debtratingof“A2”to“A1.)The“A1”
ratingisan“uppermediumgrade.”Thisisgenerallydescribedas“strong,investmentgrade”creditby
Moody’s.
Marketvalue (payable 2019)1,974,154,400$
Debtlimit(3% of marketvalue)59,224,632$
Debtapplicable tolimit
General obligation debt 31,170,000
Less general obligation bonds
notsubjectto the limit (11,110,000)$
Total netdebtapplicable tolimit 20,060,000$
Legal debtmargin 39,164,632$
Legal DebtMarginCalculationforFiscal Year2020
84
BOND RATING SCALES
Moody’sMonticellorating: A1forGeneralObligationDebt
Moody's S&P Fitch
Long-
term
Short-
term
Long-
term
Short-
term
Long-
term
Short-
term
Aaa
P-1
AAA
A-1+
AAA
F1+
Prime
Aa1 AA+AA+
High gradeAa2AAAA
Aa3 AA-AA-
A1 A+A-1 A+F1 Upper medium gradeA2AA
A3 P-2 A-A-2 A-F2Baa1BBB+BBB+
Lower medium gradeBaa2P-3 BBB A-3 BBB F3Baa3BBB-BBB-
Ba1
Not prime
BB+
B
BB+
B
Non-investment grade
speculativeBa2BBBB
Ba3 BB-BB-
B1 B+B+
Highly speculativeB2BB
B3 B-B-
Caa1 CCC+
C CCC C
Substantial risks
Caa2 CCC Extremely speculative
Caa3 CCC-Default imminent with
little
prospect for recoveryCaCC
C
C
D /
DDD
/In default/DD
/D
85
DEBT SERVICE LEVY HISTORY
Most city debt issues are supported on some level by property taxes. The 2013B Wastewater
Treatment Bonds and 2015A Minnesota Public Facilities Authority G.O. Note Payable are both
supported directly by Sewage Fund revenues. The city issued $6,595,000 in general obligation
bonds in 2014. This dual purpose issue had two portions: judgment - $6,080,000 and capital
equipment - $515,000. The capital equipment debt is carried in an internal service fund; lease
payments from the General Fund provide money for the debt service. In 2015, the city issued
$2,605,000 in street reconstruction and improvement bonds. In October 2016, the city issued
$4,900,000 for the same purposes. In 2017, the city issued $5,000,000 in improvement and tax
abatement bonds. In 2018, the city issued $5,000,000 in tax abatement bonds. In 2019, the city
issued $8,000,000 in bonds: $1,040,000 in tax abatement bonds, $1,290,000 in equipment bonds,
$5,350,000 in capital improvement bonds, and $320,000 in street improvement bonds. The tax
levies for years 2016 through 2020 included amounts for future debt service: $300,000 in 2016;
$50,000 in 2017; $783,000 in 2018; $662,354 in 2019; $300,013 in 2020.
Year 2010AImp 2011AImp 07/08 Bonds 2014A JE 2015B SRI 2016ASRI 2017A 2018A 2019A Total
2016 40,000$330,000$920,000$544,000$250,000$-$-$-$-$2,084,000$
2017 40,000 139,783 1,110,000 536,929 195,288 415,000 ---2,437,000
2018 40,000 148,061 -537,586 203,425 407,769 450,159 783,000 -2,570,000
2019 -150,581 -537,244 200,905 409,133 429,781 500,000 662,354 2,889,998
2020 -172,641 -535,501 198,385 405,038 427,367 472,434 728,620 2,939,986
2021 ---537,570 201,325 406,089 430,096 468,077 751,782 2,794,939
2022 ---538,226 197,651 406,929 427,367 468,812 756,752 2,795,737
2023 ---537,609 199,436 407,558 424,531 469,232 750,629 2,788,995
2024 ---536,081 200,223 407,979 426,842 469,337 754,606 2,795,068
2025 ---538,861 200,879 408,190 428,941 469,127 752,716 2,798,714
2026 ---540,499 223,990 408,189 430,832 468,602 750,301 2,822,413
2027 ---535,698 219,135 70,718 425,175 467,762 757,530 2,476,018
2028 ---540,812 223,808 68,827 253,460 471,857 753,146 2,311,910
2029 ---540,083 222,915 66,938 253,197 470,229 555,749 2,109,111
2030 ---537,941 227,115 70,297 252,577 468,287 559,555 2,115,772
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G.O. DEBT SERVICE
Early redemptions and normal amortization caused annual general obligation (G.O) debt service
to decline sharply in 2016 and 2017. Early redemption of the 2010A G.O. bonds caused a small
increase in 2019 debt service paid, and the partial redemption of the 2011A bonds will cause the
peak in 2020. In 2014, the city issued $6,595,000 in G.O. bonds: judgment ($6,080,000) and capital
equipment ($515,000). In 2015, the city issued $2,605,000 in G.O. bonds: street reconstruction
($1,885,000) and improvements ($720,000). In 2016, the city issued $4,900,000 in G.O. bonds:
improvements ($4,130,000) and street reconstruction ($770,000). The $5,000,000 2017A bond
issue included $2,960,000 in tax abatement bonds for Fallon Avenue overpass construction. In
2018, the city issued an additional $5,000,000 in G.O. Abatement Bonds for the Fallon overpass. In
2019, the city issued $8,000,000 in bonds: $1,040,000 in tax abatement bonds for the Fallon
overpass, $1,290,000 in equipment bonds for a new ladder fire truck, $5,350,000 in capital
improvement bonds for a new fire hall, and $320,000 in street improvement bonds. Recorded as
debt in the sewage enterprise fund, the Minnesota Public Facilities Authority (MPFA) $2.3 million
loan is excluded from the schedule and graph below.
Year 2010AImp. 2011AImp. 2007AImp. 2008 Sewer 2013 COI 2013 WWT 2014AJ&E 2015B SR&I 2016ASR&I 2017A 2018A 2019A Total
2016 304,050$2,423,950$1,482,967$1,566,998$65,250$246,998$580,872$211,969$-$-$-$-$ 6,883,054$
2017 304,618 783,650 535,500 1,521,432 69,590 243,398 576,821 207,500 523,821 ---4,766,330
2018 299,324 779,350 --68,713 244,798 576,759 215,250 527,150 469,511 --3,180,855
2019 880,753 428,350 --67,673 241,098 575,608 212,850 528,450 471,640 450,315 -3,856,737
2020 -1,258,050 --71,470 242,398 572,931 210,450 524,550 469,340 449,938 708,245 4,507,372
2021 -198,700 ---243,598 578,691 213,050 525,550 471,940 445,787 713,588 3,390,904
2022 -197,925 ---244,406 577,816 209,750 526,350 469,340 446,488 717,387 3,389,462
2023 -----244,706 575,578 211,450 526,950 466,640 446,887 710,888 3,183,099
2024 -----244,376 572,384 212,200 527,350 468,840 446,988 709,287 3,181,425
2025 -----243,600 513,201 212,825 527,550 470,840 446,787 712,488 3,127,291
2026 -----247,150 514,761 213,325 527,550 472,640 446,288 710,387 3,132,101
2027 -----245,400 510,189 208,700 67,350 472,140 445,487 713,088 2,662,354
2028 -----248,040 515,059 213,150 65,550 241,390 449,388 715,487 2,448,064
2029 -----245,400 510,189 208,700 63,750 241,140 447,837 512,588 2,229,604
2030 ------515,059 213,150 66,950 240,550 445,988 513,487 1,995,184
87
G.O. DEBT LEVELS
The city’s general obligation (G.O.) debt level increased by $4,840,000 with the issuance of $8
million of new debt in 2019. Normal debt amortization offset about 40% of the 2019 added debt.
New debt of $2,200,000 in 2020 will be issued; offset by $3,7000,000 of amortization causing a
$1,500,000 decrease in overall general obligation debt in 2020. Rapid amortization of debt reflects
an opportunity for financing new projects included in the capital improvement program (CIP). The
schedule below reflects the refinancing of 2005A improvement bonds with 2011A bonds—the two
are combined on the schedule less the redemption bond payment. Accounted for in the Sewage
Fund, the Minnesota Public Facilities Authority $1.8 million loan is excluded from the schedule
and graph below.
Year 2010A Imp. 2011A Imp. 2007A Imp. 2008 Sewer 2013 COI 2013 WWT 2014A JE 2015B SRI 2016A SRI 2017A 2018A 2019A Outstanding
2016 1,420,000$3,425,000$525,000$1,496,000$265,000$2,460,000$6,190,000$2,460,000$4,900,000$-$-$-$ 23,141,000$
2017 1,145,000 2,715,000 --200,000 2,280,000 5,785,000 2,310,000 4,485,000 5,000,000 --23,920,000
2018 870,000 1,995,000 --135,000 2,095,000 5,375,000 2,150,000 4,050,000 4,660,000 5,000,000 -26,330,000
2019 -1,615,000 --70,000 1,910,000 4,960,000 1,990,000 3,605,000 4,295,000 4,725,000 8,000,000 31,170,000
2020 -385,000 ---1,720,000 4,540,000 1,830,000 3,155,000 3,925,000 4,420,000 7,495,000 27,470,000
2021 -195,000 ---1,525,000 4,105,000 1,665,000 2,695,000 3,545,000 4,110,000 6,935,000 24,775,000
2022 -----1,325,000 3,660,000 1,500,000 2,225,000 3,160,000 3,790,000 6,360,000 22,020,000
2023 -----1,120,000 3,205,000 1,330,000 1,745,000 2,770,000 3,460,000 5,780,000 19,410,000
2024 -----910,000 2,740,000 1,155,000 1,255,000 2,370,000 3,120,000 5,190,000 16,740,000
2025 -----695,000 2,320,000 975,000 755,000 1,960,000 2,770,000 4,585,000 14,060,000
2026 -----470,000 1,885,000 790,000 245,000 1,540,000 2,410,000 3,970,000 11,310,000
2027 -----240,000 1,440,000 605,000 185,000 1,110,000 2,040,000 3,340,000 8,960,000
2028 ------975,000 410,000 125,000 900,000 1,655,000 2,695,000 6,760,000
2029 ------495,000 210,000 65,000 685,000 1,260,000 2,240,000 4,955,000
2030 ---------465,000 855,000 1,775,000 3,095,000
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DEBT LEVELS BY FUND TYPE
The following schedule and chart separate debt by fund type. Governmental funds typically have
varying sources of revenue: property taxes, special assessments, impact fees, etc. Enterprise fund
debt is usually supported by charges for services. Internal service funds are supported by charges for
services to budget units within other funds, which have their own revenue sources (taxes, licenses
and permits, charges for services, etc.).
Year Governmental Enterprise Internal Service Total
2016 19,661,000$2,760,000$720,000$23,141,000$
2017 21,035,000 2,280,000 605,000 23,920,000
2018 23,750,000 2,095,000 485,000 26,330,000
2019 28,895,000 1,910,000 365,000 31,170,000
2020 25,510,000 1,720,000 240,000 27,470,000
2021 23,070,000 1,525,000 180,000 24,775,000
2022 20,575,000 1,325,000 120,000 22,020,000
2023 18,230,000 1,120,000 60,000 19,410,000
2024 15,830,000 910,000 -16,740,000
2025 13,365,000 695,000 -14,060,000
2026 10,840,000 470,000 -11,310,000
2027 8,720,000 240,000 -8,960,000
2028 6,760,000 --6,760,000
2029 4,955,000 --4,955,000
2030 3,095,000 --3,095,000
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EFFECT OF DEBT LEVELS ON GOVERNMENT OPERATIONS
Debt is carried in three fund types: Governmental Funds, Enterprise Funds, and Internal Service Funds.
Consequently, debt has a different impact on the operations of each fund type. Indeed, debt service is a
fixed cost that does not vary with activity levels. Debt amortization and redemption reduces fixed costs,
freeing resources for other purposes.
Governmental Funds
Governmental fund debt service is provided through debt service funds, which accumulate money from
various sources for principal and interest payments. Those sources include property taxes, special
assessments, transfers from enterprise funds, and transfers from capital project funds collecting impact
fees. The debt effect on services delivered through governmental funds with current plant and
equipment is somewhat diminished because the city is not constrained by state-imposed levy limits for
property taxes. When levy limits have been in place, statutes have allowed for special levies for debt
service. While there are limits to what taxpayers can bear, Monticello has the lowest tax capacity rate in
Wright County because of its large commercial tax base—including the nuclear power plant. In a stable
market value environment, the power plant absorbs over half of any tax increase. The General Fund is
primarily supported (roughly 78%) by property taxes and the Monticello Community Center (MCC) Fund
is primarily supported by charges for services. The General Fund has other underutilized revenue
sources, and the MCC Fund can adjust its fee schedule and reduce costs. Still, one negative consequence
of using impact fees for debt services is the city’s reduced ability to finance water and sewer trunk
improvements with money on hand. High debt levels lower the city’s ability (debt limit and debt rating)
to issue new debt for capital assets, which may improve efficiency or meet a growing need.
Enterprise Funds
The Sewage Fund is the only enterprise fund with debt. All utility rates are reviewed annually and
adjusted to cover operating, capital, and debt service expenses. Transfers support principal and interest
payments in debt service funds where water and sewer impact fees have been deficient. This drain on
resources means new debt will need to be issued for Sewage Fund wastewater treatment plant
upgrades and trunk improvements. According to an AE2S survey, Monticello has some of the lowest
water and sewage rates in the Minnesota. However, the council is aware that the city needs to maintain
its competitive position with taxes and utility charges to attract economic development.
Internal Service Funds
Two debt issues have provided capital for creating a Central Equipment internal service fund. This fund
finances governmental fund equipment purchases over $10,000. The equipment is then leased back to
the benefitting budget unit for a fixed duration. The lease payments provide for additional future
equipment purchases. Currently, the General Fund is the only governmental fund internally leasing
equipment. The debt serves as a mechanism for maintaining the fund and its equipment purchases.
With nearly 80% of the General Fund revenue comprised of property taxes, the Central Equipment Fund
debt and the related lease payments have a direct effect on the resources available for other uses.
Again, this is mitigated by the city’s low tax capacity rate and the lack of a levy limit.
In summary, debt is a valid way to match customers with the cost of providing a particular service.
Current service customers pay for current service delivery with annual debt service payments supported
by user fees and taxes. Future service customers make future debt service payments through future
taxes and user fees.
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INTERFUND TRANSFERS
Operatingtransfers support theoperations ofother funds, provide for specialprojects,and
contribute to debtservice payments. The followingschedule provides the2020 budgetedoperating
transfers:
Fund No.TransferIn Fund Amount Fund No.Transfer Out Fund Amount
312 2011A GO Improvement Bond 200,000$213 Economic Development 200,000$
229 Park & Pathway Dedication 420,000 609 Liquor 420,000
400 Capital Project Fund 900,000 601 Water 900,000
656 FiberOptics 50,000 609 Liquor 50,000
Total Transfers In 1,570,000$Total Transfers Out 1,570,000$
SCHEDULE OF OPERATINGTRANSFERS
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SERVICE LEVEL CHANGES
Parks Position: In 2020, the city has budgeted for an additional full-time parks department position to be hired
no earlier than June 1, 2020. The 2021 budget will include an increase to reflect an entire year of the new parks
department position. Full-year cost: $66,041 (partial year at 60% = $39,625).
Recreation and Culture: The first phase of the Bertram Chain of Lakes buildout occurred in 2019 with the
construction of athletic fields and related improvements. In 2020, the city will contribute to the expansion of
Briarwood Avenue to include turn lanes into the park. City’s portion of construction cost: $420,000. There are
no ongoing costs related to the turn lanes because the road is a township/County road and will be maintained
by those jurisdictions. However, anticipated annual park buildout operating cost beginning in 2020 is $75,000.
Community Vision and Comprehensive Plan: The Comprehensive Plan reflects the community’s vision and
articulates the goals for how Monticello will grow and develop. The plan update will address the
transformational issues at work in the community and region, shaping Monticello over the next 20 years. In
Monticello’s case, the need to update this plan is amplified by significant changes on the horizon, which include
major transportation and utility infrastructure improvements, potential tax base and land use transitions as
related to the nuclear plant, and land use questions left unresolved with the last plan update. The visioning
process will gather input from the community’s many stakeholders. The following page provides the
framework for the community vision and comprehensive plan process. Cost: $90,000 over two years (2019
and 2020).
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REVENUE TRENDS & ANALYSIS
Revenuesareconservativelyestimatedforeveryfundtype.Thescheduleofrevenueestimatesbelowis
supportedbydetailedrevenueestimatesforeachfundinsubsequentsections.This sectionofthe
budget highlights majorrevenue sources for allthecity funds as combinedand for major governmental
and enterprise funds: GeneralFund andMonticello CommunityCenter Fund (governmentalfunds),
alongwiththe Water,Sewage,Water Quality,Liquor,DeputyRegistrar and Fiber Optics funds
(enterprise funds).Trends for these funds andindividualrevenues areshowntogether withestimates
for the coming year.
TOTAL CITY REVENUES AND OTHER SOURCES
Property taxes account for the single largest revenue source for the city. Other sources such as debt
proceeds occasionally surpass property taxes, but they do not support day-to-day operations.
Tax increments are the main source of revenue for the Economic Development Fund. This fund
accounts for the city’s tax increment financing (TIF) districts and other general economic
development activities. Two TIF districts were decertified in 2018.
Licenses & permits are comprised primarily of building permits, which are conservatively estimated
at prior year(s) average levels to smooth the cyclical nature of this revenue category.
Intergovernmental revenues are expected to decrease with the prior year receipts of state aid for
left-turn signal betterments for traffic lights. With a strong commercial tax base, the city generally
does not qualify for state aid that is not project specific.
Special assessments primarily support debt service funds. Early prepayment of future certified
assessments has affected collections in subsequent years.
Charges for services reflect some changes to the fee schedule occurring prior to adoption of the
budget. The city uses conservative revenue budgeting practices to ensure revenues will be sufficient
to meet operating needs.
TOTAL ALL FUNDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 9,275,414$9,557,768$9,946,415$10,310,000$10,310,000$10,800,000$4.8%
Tax Increments 668,352 648,031 638,278 617,344 617,344 617,344 0.0%
Franchise & Other Taxes 432,785 471,926 407,757 382,500 382,500 370,000 -3.3%
Sale of Goods 5,448,584 5,751,197 6,086,293 5,979,220 5,979,220 6,264,651 4.8%
Licenses & Permits 671,602 603,223 507,674 407,700 407,700 409,200 0.4%
Intergovernmental Revenues 2,041,363 1,340,094 907,625 514,500 514,500 397,200 -22.8%
Charges for Services 8,290,396 8,561,045 9,849,648 9,116,766 9,174,966 9,582,760 5.1%
Fines & Forfeits 30,656 36,702 45,350 36,500 36,500 40,400 10.7%
Special Assessments 984,916 960,696 726,201 370,876 369,766 336,304 -9.3%
Miscellaneous 1,672,272 1,102,912 938,415 590,699 590,699 541,353 -8.4%
Contributed Capital 1,993,232 1,330,370 914,666 140,895 140,895 279,788 98.6%
Operating Transfers 2,542,636 1,209,628 2,512,845 3,060,000 4,878,000 1,570,000 -48.7%
Debt Proceeds 6,410,568 5,258,366 5,024,333 8,000,000 8,000,000 2,200,000 -72.5%
TOTAL REVENUES 40,462,776$36,831,958$38,505,500$39,527,000$41,402,090$33,409,000$-15.5%
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Miscellaneous revenues are conservatively estimated to decrease, but the investment earnings—
the largest portion of this revenue classification—are expected to hold steady. The amount of
investible funds is expected to decline as fund balances are drawn down. Overall revenues and
other sources lag expenditures and other uses.
Operating transfers (in) are expected to decrease in 2020 because prior years had more capital
projects support from internal sources. In 2016 and 2017, operating transfers were largely going to
debt service funds for annual principal and interest payments on bonded debt. In 2018, 2019 and
budgeted in 2020, the enterprise funds are transferring fund to the capital project funds for the
future construction of a new public works facility.
In 2020, debt proceeds to finance the 2020 street improvement project are budgeted at $2.2
million.
The chart below provides an overall picture of estimated 2020 revenues and other sources.
PROPERTY TAXES
The city relies on property taxes to support functions such as general government, public safety,
public works, recreation and culture, and debt service. For 2020, the council adopted a general levy
of $10,445,000, which is $483,000 (4.8%) greater than the prior year. The council also adopted a
Housing and Redevelopment Authority (HRA) special benefit levy of $355,000, which is $7,000
(2.0%) greater than the prior year. The HRA levy is recorded in the Economic Development
Authority (EDA) Fund. The General Fund discontinued operating transfers—annually about $90,000-
-to the EDA Fund when the HRA levy was first adopted in 2016. Both levies are combined for
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graphical and contextual purposes. The tax levy has risen ahead of inflation the last seven years.
The following chart reflects the changes in the tax levy over the last twelve years:
Accounting for a variety of activities, the General Fund will receive slightly less than 70% of the 2019
property tax levy. However, property taxes provide approximately 75% of the General Fund’s
revenue. The levy for the Monticello Community Center (MCC) increased $15,000 (3.7%) to
$417,000. The following chart represents the distribution of the tax levy for 2020.
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When determining the property tax levy, city council and staff consider the impact the levy will
have on various property owners. This impact is then balanced against services provided and service
levels. In the past, the city was able to fund services at current levels with a relatively flat levy. The
growing economy and increased property values have led to a drop in the tax capacity rate. Still,
from 2008 through 2012, property values declined as a result of a weaker national and local
economy. Estimated market values are converted to tax capacity by using specific state formulas for
various types of properties.
In 2013, the tax capacity grew a healthy $2.9 million (18.6%) to $18.7 million. Why? The nuclear
power plant located within the city limits added over $160 million in new taxable value with capital
equipment upgrades. Consequently, equipment retirements related to the same uprate caused a
slight decline in 2014. History repeating itself, the tax capacity for 2015 grew by $5.7 million (31%)
to $23.9 million with another uprate at the nuclear power plant. Further, the benefits from the last
uprate extended into 2016, adding $80 million in tax market value and nearly $2 million in tax
capacity. The tax capacity for 2018 taxes payable was $29.5 million, or 7.1%, higher than 2017.
Increases in residential market values and new construction added to tax capacity gains in both
2017 and 2018.
In a stable levy environment, tax capacity and tax capacity rates will typically have an inverse
relationship. With city and HRA tax capacity rates added together, the following chart demonstrates
that relationship over the last 15 years:
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GENERAL FUND
The GeneralFund is used to account for allfinancialresources ofthecity,except for those requiredto
be accountedfor inanother fund.Major functions supportedbyGeneralFundrevenues include: city
and finance administration, police andfireservices, public works,andrecreation andculture.
Revenue is estimatedto be $8,903,000 (+3.7%) for the 2020 budget year. TheprimaryGeneral Fund
sourceofrevenue is propertytaxes at$6,788,000 (+1.8%),whichaccounts for 76%of totalrevenues.
At9%,charges forservices is the onlyother categoryto exceed5%of totalrevenues.
The followingcharts depicts General Fundrevenues as representedin the 2020adopted budget:
The followingchartrepresentsGeneralFundrevenuesover the lastten years,with2019 projected and
2020 budgeted:
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In recentyears,GeneralFund revenues have beenbolstered byanincreasingpropertytax levy and
higher license and permit fee collections.Typically,license and permitfees are arelativelysmall
portionofoverallrevenues. Licenses and permits consistmostlyofbuilding-type permits and have
reboundedalongwith the economyandcommercialandresidentialconstruction. Peakingin2008
above$1million, licenses& permits are conservatively estimatedat$407,200 for 2020.
MONTICELLO COMMUNITY CENTER
The Monticello Community Center (MCC)provides afacilitywithspace for avarietyofrecreational,
professional,andeducationalopportunities. Aside from its portionofthe property tax levy,the MCCis
supported bya varietyof fees for memberships,activities,rentals,andconcessions.Council passeda
revenuerecoverypolicyalongwithbudgetadoptionthat nowrequires the MCCtocover 85%ofits
operatingcosts—includingequipment—with fees and charges.
In the followingchart,2016 through2018 are actualamounts and2019 and2020 are estimates.
Reflectinga policychange,some activityfeeswere rolledintomembershipfees in 2017 and2018.
WATER AND SEWAGE FUNDS
Water andsewagecharges for services are primarilycomprisedof providingMonticello residents and
businesses withwater andsewage services.Based partiallyonthe levelofconsumption,these utility
funds each have separatecharges for deliveredservices.The citysetrates to coveroperatingcosts,a
portionof depreciation,and debtservice.As new developmentslowed, the burdenon infrastructure
replacementcostsshiftedto utilityrates from impact(access)charges.Thewater andsewage funds
are expected to provide some levelof future supportfor debtservice incurredto make water and
sewage system improvements.
After peakingin2012 (a dry year),water consumption declined aswater andsewage rates climbed,
pushing upbothwater andsewage revenues.In2018,thesewage fundsoldaparcelof propertythat
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had been usedforstorage and abio-solids site.With2019 projectedand2020 budgeted,the following
chartplotsrevenues for water andsewageserviceson the primary axis (left)againstwater sales onthe
secondaryaxis (right):
Water service charges have two components: base charge withaminimum usage amountand
consumptioncharge for usage above theminimum amount. Bothcharges have increasedsteadilyover
the last ten years: average base andconsumptioncharge increases were5.5% and 5.3%,respectively.
For 2020,no rate increases were includedinthe budget. However,thecounciladoptedanew fee for a
StateofMinnesotawaterconnection fee ($0.81/month). Sewage charges,similar to water charges,
have two components: basechargewithaminimum usage amountandconsumptioncharge for usage
above the minimum amount. Bothcharges have increasedsteadilyover the years: average base and
consumptioncharge increaseswere 6.4% and5.3%,respectively. For 2020,no rate increases were
includedinthe budgetnordid councilraiseeithercharge.
The followingchartreflects the water andsewage baserates over the lastten years:
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WATER QUALITY FUND
The WaterQuality Fundwas establishedin2019 withauser charge of$1.00/month per drainage unit.
Eachresidential dwellingis equivalentto one drainage unit,and non-residentialproperties are
equivalent to 7 drainage units per roundedimpervious surface area.The fee increases to $1.50/month
in 2020.Expenses in this fund were accounted for in the Generalfund prior to 2020.
FIBER OPTICSFUND (FiberNet)
Monticello’s telecommunications utility, FiberNetMonticello, provides internet, voice (telephone) and
video (TV)services.Cityresidentialandcommercialcustomerscansubscribe to one, two,or all three
services.FiberNetcontinues to face competition from two large private providers withsignificant
resources. As aresult,subscriber counts for voice and video have declinedinrecentyears. Internet
has shownoccasionalgrowthwithmore customersstreaming video services. Still,commercialand
residentialcustomers are benefitting from lower bills withFiberNet’s presencein themarketplace even
if theyare notFiberNetcustomers.
The datainthe graphs belowshow astable competitive environment for FiberNetin2019.
In July 2016, the city contracted with Arvig to manage FiberNet. All FiberNet employees are now Arvig
employees. Through leaner operations, shared resources, and economies of scale, the city expects to
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haveapositivecashflowin2019fromdailyoperations.However,potentialnewserviceareaswillcause
increases in capital costs. Arvig will continue to assess the marketplace and service delivery costs and
willraisepricesasneeded.The2020budgetedsubsidytoFiberNetfromotherfunds(Liquor)is$50,000.
DEPUTY REGISTRAR (DMV)
The city is authorized bythe State ofMinnesotato operate aDMV.Fees collected from motor vehicle
licenses are the DMV’smain revenue source.Fees are regulatedby the state.Anincrease instate
approvedfees,startingin2012,alongwith better economic conditions resulted in higher revenues.
The followingchartshows the historyofDMV transactions over afive-year period.
Motor vehicle licenses (new andrenewals)as percentage oftotal transactions increasedslightly from
89% in2015 to 93% in2019.A new state licensingsystem (MNLARS)counts vehicle transactions
differently,skewingtransactioncomparisons with prior years.Nevertheless,2019was an incredibly
busy year for the DMV.MNLARSwill be replacedbyMNDrive inNovember 2020.
With darker shades ofgreen representing higher (better) numbers,the followingchartshows the
monthly DMV revenues over the last five years.The chartalso provides informationonannual
revenues,annual transactions,andrevenues per transaction.
DMV Revenue by Month
Month 2015 2016 2017 2018 2019
Jan 46,375$44,033$55,543$70,671$72,633$
Feb 44,030 48,449 50,185 52,069 61,256
Mar 58,146 51,587 64,926 65,795 68,239
Apr 50,202 48,811 56,859 61,523 74,913
May 45,042 51,480 56,163 61,440 81,261
Jun 47,721 45,794 51,287 68,194 60,228
Jul 46,171 42,991 40,006 60,012 60,941
Aug 42,362 57,346 40,225 59,421 71,189
Sep 40,759 44,186 52,492 49,448 69,558
Oct 37,245 44,178 39,900 51,622 43,915
Nov 32,457 37,700 48,766 44,136 59,010
Dec 40,608 44,803 37,837 47,497 61,763
Total 531,118$561,357$594,188$691,829$784,905$
% Change 6.8%5.7%5.8%16.4%13.5%
Transactions 72,135 75,891 78,515 119,543 139,965
% Change 6.9%5.2%3.5%52.3%17.1%
Revenue per
Transaction 7.36$7.40$7.57$5.79$5.61$
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LIQUORFUND
With total2018 sales ofnearly$6.4 million,Monticello’s municipal liquor store ranks near the topof
Minnesotacities withonlyonestore.However,revenue growth is expectedtoslow because ofstore
size limitations.Totalsaleshave climbedan average of 4.5% for the lastfive years; liquor is the fastest
growthcategoryaveragingnearly25% over five years.
Liquor sales have increased over the last five years and the budgetreflects thistrend. The Liquor Fund
has one retailoutlet: Hi-Way Liquors. This fundprovides vitalresources for many communityprojects
includingBertram ChainofLakes andstreetimprovements.Conservative revenue estimates are used
for budgetingpurposes. However,2020 netcash flow from operationsshouldtop$600,000.Inprior
years,interestearnings contributedsignificantlyto netcashflows.
Beer accounts for approximately51% oftotalsales; liquor andwine follow at31% and14%,
respectively. Non-alcoholitems contribute 4%.Beer typically has the lowestgross marginat23% and
wine the highestat39%. Liquor is in the middle atabout30%.The chart belowprovides sales
information bycategory:
LiquorStore Revenue byCategory
Category 2015 2016 2017 2018 2019 5 Yr Chg
Beer 2,764,583$2,768,394$2,933,853$3,074,408$3,252,142$18%
% Change 6.1%0.1%6.0%4.8%5.8%
Liquor 1,634,069$1,624,908$1,739,562$1,909,953$2,019,096$24%
% Change 5.7%-0.6%7.1%9.8%5.7%
Wine 927,778$889,082$894,151$904,385$894,005$-4%
% Change 6.8%-4.2%0.6%1.1%-1.1%
Other 165,631$171,420$192,616$201,481$263,998$59%
% Change 13.5%3.5%12.4%4.6%31.0%
Total Sales 5,492,061$5,453,804$5,760,182$6,090,227$6,429,241$17%
% Change 6.3%-0.7%5.6%5.7%5.6%
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APPROPRIATIONS BY CATEGORY AND FUND-TYPE
Expenditures, often called appropriations, are classified under one of six major categories:
personnel services (wages & benefits), supplies, other services & charges (professional fees,
utilities, etc.), capital outlay, debt service, and operating transfers (other financing uses). The graph
below shows the relative percentage of FY20 budgeted expenditures for these six major categories
for all funds, combined.
APPROPRIATIONS BY TYPE, GENERAL FUND ONLY— Using those same categories of expenditure
type, the relative percentages of budgeted expenditures for the General Fund are shown below. As
you can see, the General Fund is comprised of a much higher percentage of personnel services costs
compared to all funds, as a whole. The General Fund supports very little capital improvements and
no debt service compared to all funds, as a whole.
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In governmental agencies, salaries, wages and benefits (personnel services) normally represent the
largest of these categories. However, due to the significant investment in infrastructure, cities have
a much higher percentage of the budget devoted to operating and capital costs, including debt
service, than most other governmental entities. One other factor is that the city contracts (other
services and charges) for law enforcement, legal and assessing services.
As shown, the General Fund, Debt Service Fund (aggregation of debt service sub-funds) and
enterprise funds account for 79%, up from 60% in 2018, of the total expenditures of the city.
The General Fund is the city’s primary operating fund for general government
operations.
The Debt Service fund includes only non-enterprise and non-internal service fund
debt. These funds are supported with property taxes, special assessments, tax
increments, and utility access fund transfers.
Enterprise funds consist of water, sewage, liquor, deputy registrar (DMV), and fiber
optics funds. These funds operate on a self-supporting basis.
Special revenue funds, totaling 8% of appropriations, include a variety of fee supported funds
including the community center and cemetery.
Capital project funds total 11% (down from 31% in 2018) of appropriations, which includes
financing for street construction, street lighting and park improvements, and other governmental
capital asset acquisitions but excludes capital assets acquired in the enterprise and internal service
funds.
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ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
GENERAL
FUND
GENERAL FUND - SUMMARY
FUND DESCRIPTION
One of five governmental fund types, the General Fund serves as the chief operating fund of the
city. The General Fund is used to account for all financial resources not accounted for in some other
fund. The fund uses the modified accrual basis of accounting for budgeting and financial reporting
purposes. This means expenditures are recorded when the liability is incurred and revenues are
recorded when they become measurable and available. The adopted General Fund budget is a
balanced budget--current revenues and other sources equal expenditures and other uses.
ISSUES
The General Fund’s largest revenue source is property taxes. In 2020 the General Fund’s portion of
the levy grew by 1.8% as the city and HRA combined levy grew by 4.8% The Public Works
Department has the largest appropriation for 2020.
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 6,183,861$6,348,766$6,613,634$6,670,000$6,670,000$6,788,000$1.8%
Franchise & Other Taxes 284,468 285,678 266,135 266,500 266,500 270,000 1.3%
Licenses & Permits 668,602 600,733 504,464 405,700 405,700 407,200 0.4%
Intergovernmental Revenues 389,005 429,697 424,591 364,500 364,500 397,200 9.0%
Charges for Services 374,046 419,397 518,497 636,800 636,800 815,900 28.1%
Fines & Forfiets 30,656 36,702 45,350 36,500 36,500 40,400 10.7%
Special Assessments 275 2,289 206 500 500 200 -60.0%
Miscellaneous 351,819 371,812 331,916 180,500 180,500 184,100 2.0%
Operating Transfers ---25,000 25,000 --100.0%
TOTAL REVENUES 8,282,732$8,495,074$8,704,793$8,586,000$8,586,000$8,903,000$3.7%
EXPENDITURES BY DEPARTMENT
GENERAL GOVERNMENT
Mayor and Council 54,264$54,123$53,928$58,639$58,639$57,798$-1.4%
City Administration 332,926 482,039 449,100 465,631 465,631 491,649 5.6%
City Clerk 69,966 102,422 130,948 127,861 127,861 150,400 17.6%
Finance 393,754 425,247 430,924 475,957 475,957 491,791 3.3%
Audit 39,273 44,745 40,531 44,000 44,000 44,000 0.0%
City Assessing 50,415 51,972 66,190 68,000 68,000 73,000 7.4%
Legal 29,152 35,714 27,967 38,000 38,000 37,000 -2.6%
Human Resources 116,522 123,206 126,581 137,412 137,412 129,407 -5.8%
Planning & Zoning 210,173 216,007 239,045 278,269 278,269 331,630 19.2%
City Hall 182,990 62,953 59,683 67,033 67,033 58,743 -12.4%
Prairie Center Building 8,917 17,202 25,232 17,970 17,970 18,549 3.2%
TOTAL GENERAL GOVERNMENT 1,488,352$1,615,630$1,650,129$1,778,772$1,778,772$1,883,967$5.9%
Continued…
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GENERAL FUND 2016 2017 2018 2019 2019 2020 %
(Continued)ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
PUBLICSAFETY
Law Enforcement 1,212,080$1,257,194$1,362,411$1,457,430$1,457,430$1,532,621$5.2%
Fire & Rescue 289,010 350,891 435,068 420,078 420,078 457,772 9.0%
Fire Relief 123,656 125,764 132,874 124,000 124,000 130,000 4.8%
Building Inspections 350,304 381,260 351,511 415,885 415,885 443,860 6.7%
Civil Defense 1,234 1,933 12,332 3,054 3,054 5,000 63.7%
Animal Control 46,943 48,166 46,608 52,838 52,838 52,755 -0.2%
National Guard 13,550 13,520 13,649 14,000 14,000 14,000 0.0%
TOTAL PUBLICSAFETY 2,036,777$2,178,728$2,354,453$2,487,285$2,487,285$2,636,008$6.0%
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
PUBLICWORKS
Public Works Administration 126,327$120,785$196,851$211,857$211,857$224,484$6.0%
Engineering 111,795 130,325 126,179 145,589 145,589 116,662 -19.9%
Public Works Inspections 62,100 62,882 83,560 111,913 111,913 111,035 -0.8%
Streets & Alleys 804,574 846,575 891,117 1,086,814 1,086,814 1,061,105 -2.4%
Ice & Snow 264,232 267,095 344,974 294,410 294,410 328,990 11.7%
Shop & Garage 171,079 200,690 168,049 209,692 209,692 214,727 2.4%
Stormwater 29,277 30,743 23,883 85,850 85,850 --100.0%
Street Lighting 233,500 245,296 244,478 246,500 246,500 250,500 1.6%
Refuse Collection 600,300 614,328 615,586 641,071 641,071 686,776 7.1%
TOTAL PUBLICWORKS 2,403,184$2,518,719$2,694,677$3,033,696$3,033,696$2,994,279$-1.3%
TRANSIT
Bus 41,250 3,191 18,333 5,000 5,000 --100.0%
TOTAL TRANSIT 41,250 3,191 18,333 5,000 5,000 --100.0%
RECREATIONANDCULTURE
Senior Center 99,124 103,161 103,226 105,952 105,952 107,452 1.4%
Park Operations 775,738 871,121 916,335 975,591 975,591 1,078,841 10.6%
Park Ballfields 20,538 21,936 21,063 26,900 26,900 27,400 1.9%
Public Arts --29,876 30,000 30,000 35,664 18.9%
Shade Tree 75,800 80,922 80,916 90,027 90,027 85,892 -4.6%
Library 44,823 42,203 48,972 46,113 46,113 47,145 2.2%
TOTAL RECREATIONANDCULTURE 1,016,023$1,119,343$1,200,388$1,274,583$1,274,583$1,382,394$8.5%
UNALLOCATED
Insurance 7,226 7,086 6,428 6,664 6,664 6,352 -4.7%
TOTAL UNALLOCATED 7,226$7,086$6,428$6,664$6,664$6,352$-4.7%
OTHERUSES
Operating Tranfers -$300,000$700,000$-$200,000$-$---
TOTAL OTHERUSES -$300,000$700,000$-$200,000$-$---
TOTAL EXPENDITURES 6,992,812$7,742,697$8,624,408$8,586,000$8,786,000$8,903,000$3.7%
FUNDBALANCE- JANUARY 1 4,986,796$6,276,716$7,029,093$7,109,478$7,109,478$6,909,478$
Excess (Deficiency) of
Revenues over Expenditures 1,289,920 752,377 80,385 -(200,000)-
FUNDBALANCE- DECEMBER31 6,276,716$7,029,093$7,109,478$7,109,478$6,909,478$6,909,478$
108
The previous table summarizes General Fund revenues by classifications and expenditures by
activities/divisions and departments. The table below summarizes both revenues and expenditures
by classifications.
BUDGET COMMENTARY:
Revenues
For 2020, budgeted revenues are estimated to increase by 3.7%. The General Fund portion of the
tax levy is budgeted to increase by 1.8%, which is less than the total (city & HRA) levy increase of
4.8%. Property taxes account for 76% of General Fund revenues. The General Fund’s allocation of
franchise and other taxes is level and largely matches related expenditures (street lighting). The
increase in charges for services reflects higher residential garbage charges and the implementation
of a residential recycling charge. Permits and fees will increase with additional development.
Expenditures
Expenditures are budgeted to increase 3.7%. All of the capital outlay amount reflects Capital
Equipment Fund purchases, which are charged back through lease payments. The personnel
services budget includes a full step increase and a 3% (2% in January and 1% in July) market rate
wage increase as well as an adjustment in the pay scale based on a 2019 wage study. The 2017-
2019 operating transfers were to the Capital Project Fund for future year capital expenditures.
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 6,183,861$6,348,766$6,613,634$6,670,000$6,670,000$$6,788,000 1.8%
Tax Increments ---------
Franchise & Other Taxes 284,468 285,678 266,135 266,500 266,500 270,000 1.3%
Licenses & Permits 668,602 600,733 504,464 405,700 405,700 407,200 0.4%
Intergovernmental Revenues 389,005 429,697 424,591 364,500 364,500 397,200 9.0%
Charges for Services 374,046 419,397 518,497 636,800 636,800 815,900 28.1%
Fines & Forfeits 30,656 36,702 45,350 36,500 36,500 40,400 10.7%
Special Assessments 275 2,289 206 500 500 200 -60.0%
Miscellaneous 351,819 371,812 331,916 180,500 180,500 184,100 2.0%
Operating Transfers ---25,000 25,000 --100.0%
TOTAL REVENUES 8,282,732$8,495,074$8,704,793$8,586,000$8,586,000$8,903,000$3.7%
EXPENDITURES
Personnel Services 2,785,408$2,988,500$3,161,509$3,417,837$3,417,837$3,522,314$3.1%
Supplies 494,690 555,135 700,957 666,700 666,700 754,000 13.1%
Other Services & Charges 3,518,914 3,688,362 3,812,142 4,202,563 4,202,563 4,295,886 2.2%
Capital Outlay 193,800 210,700 249,800 298,900 298,900 330,800 10.7%
Operating Transfers -300,000 700,000 -200,000 ----
TOTAL EXPENDITURES 6,992,812$7,742,697$8,624,408$8,586,000$8,786,000$8,903,000$3.7%
FUNDBALANCE- JANUARY 1 4,986,796$6,276,716$7,029,093$7,109,478$7,109,478$6,909,478$
Excess (Deficiency) of
Revenues over Expenditures 1,289,920 752,377 80,385 -(200,000)-
FUNDBALANCE- DECEMBER31 6,276,716$7,029,093$7,109,478$7,109,478$6,909,478$6,909,478$
109
MAYOR AND CITY COUNCIL
DEPARTMENT: General Government
SUPERVISOR: Mayor & Council
FUND #:101
ACTIVITY #: 41110
ACTIVITY SCOPE:
The mayor and council provide elected representation to the community with control over policy,
goals, budget, administration, and operations. Members participate in various committees and
direct staff through the city administrator.
OBJECTIVES:
1.Adopt policies and ordinances consistent with the council’s positions on growth, zoning,
and financial strategies.
2.Examine city facility needs to meet future city operations.
ISSUES:
1.Capitalize on the city’s uniqueness by developing a comprehensive vision statement and
setting achievable goals.
2.Succession planning of city staff.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The council’s budget remains consistent with previous years. The mayor earns $700 per month and
each councilor earns $600 per month.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Council meetings 24 24 24 24 24
Special meetings/workshops 19 19 14 14 14
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
MAYOR& COUNCIL Actual Actual Actual Budget Projected Budget Change
Personnel Services 39,928$40,004$40,224$41,339$41,339$41,548$0.5%
Supplies ---------
Other Services & Charges 14,336 14,119 13,704 17,300 17,300 16,250 -6.1%
Capital Outlay ---------
TOTAL EXPENDITURES 54,264$54,123$53,928$58,639$58,639$57,798$-1.4%
110
CITY ADMINISTRATION
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41310
ACTIVITY SCOPE:
City administration provides the overall direction of the city, as determined by the council and
mayor. The city administrator serves as the chief administrative officer, ensuring that laws,
ordinances, and resolutions are implemented and enforced. The administrator is also responsible for
managing the operations of all city departments and providing customer service for general city hall
activities, such as reception and meeting room management.
OBJECTIVES:
1.Assist city council in setting policies and procedures in accordance with council
positions.
2.Provide direction and leadership on major city projects and budget management; oversee
performance evaluation and long-range planning.
3.Continue with proactive succession planning regarding key staffing roles within the
organization.
4.Provide friendly, knowledgeable customer service to the public.
5.Provide adequate and consistent hours of business throughout the year.
ISSUES:
1.Long-range comprehensive planning.
2.Long-range comprehensive traffic planning.
3.Leading and focusing council on policy matters.
4.Continuing to improve internal and external communication systems.
5.Management of Citizen Service Desk with continued growth of inquiries and need to
improve response times.
6.Maintaining current, accurate information for all public sources.
111
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
In 2017, many of the expenditures charged to the city hall budgetary unit were re-allocated to the
city administration budgetary unit. The city hall activity is now limited to expenditures for the facility,
not providing internal or external services. The 2020 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage increase in addition to a pay scale
adjustment recommended in a pay study completed in 2019.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Council meetings agendas 42 43 37 38 38
Records digitally converted 75%90% 100%100%100%
Ordinances processed 27 47 13 27 25
Council minutes approved 42 43 37 38 38
Newsletters published 2 2 2 2 2
Utility inserts published 2 12 8 8 8
Park inserts published 4 4 3 1 3
All otherinserts published --13 12 12
Service desk dataentry 499 557 625 641 675
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
ADMINISTRATION Actual Actual Actual Budget Projected Budget Change
Personnel Services 250,702$360,662$346,161$362,852$362,852$380,880$5.0%
Supplies 985 15,231 11,111 14,500 14,500 14,500 0.0%
Other Services & Charges 81,239 106,146 91,828 88,279 88,279 98,602 11.7%
Capital Outlay ---------
TOTAL EXPENDITURES 332,926$482,039$449,100$465,631$465,631$493,982$6.1%
112
CITY CLERK
DEPARTMENT: General Government
SUPERVISOR: City Clerk
FUND #:101
ACTIVITY #: 41410
ACTIVITY SCOPE:
The city clerk activity is responsible for administering elections, maintaining official records, updating
the city code, improving records management and data practices, and serving as the data practices
compliance officer and responsible authority.
OBJECTIVES:
1.Recruit and train judges for future elections.
2.Upgrade election equipment.
3.Improve data storage practices with digital storage through Laserfiche.
4.Update city code to meet legal requirements and community needs.
ISSUES:
1.Antiquated city code.
2.Storage space.
3.Laserfiche training.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Elections are held in even-numbered years. In 2020, there will be a Presidential Nominating Primary
election in Minnesota for the first time since 1992.Off-year election expenditures are for
maintenance contracts on voting equipment. Other service and charges reflect increased IT Services
expenditures for the Laserfiche document management system. The 2020 personnel services budget
includes a full step increase and a 3% (2% in January and 1% in July) market rate wage increase in
addition to a pay scale adjustment recommended in a pay study completed in 2019.
Measurement 2016 2017 2018 2019 2020
Voters, numberof 6,161 0 7,112 0 7,237
Registervoters, numberof 6,923 7,079 7,112 7,237 7,600
Pollingplaces 1 1 1 1 2
Election judges 46 0 38 0 40
Ordinances amendments na 41 13 27 25
Council resolutions 94 87 100 95 90
113
BUDGET:
2016 2017 2018 2019 2019 2020 %
CITY CLERK Actual Actual Actual Budget Projected Budget Change
Personnel Services 50,964$90,677$103,793$108,869$108,869$115,208$5.8%
Supplies -1,164 2,132 1,300 1,300 1,500 15.4%
Other Services & Charges 19,002 10,581 25,023 17,692 17,692 34,492 95.0%
Capital Outlay ---------
TOTAL EXPENDITURES 69,966$102,422$130,948$127,861$127,861$151,200$18.3%
114
FINANCE
DEPARTMENT: General Government
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 41520
ACTIVITY SCOPE:
The Finance Department conducts the financial affairs of the city of Monticello in accordance with
the Government Accounting Standards Board (GASB) and Generally Accepted Accounting Principles
(GAAP). This includes protection of the assets of the city, the initiation of financial plans, investment
and debt management, review and implementation of internal controls, and accounting for every
financial transaction of the city including accounts payable, accounts receivable, payroll, and
accounting control. The preparation of the annual audited financial report and annual budget
document are also facilitated through finance.
OBJECTIVES:
1.Continue working to develop a financial management plan for the city.
2.Develop financial documents in a format to be eligible for review and award of the
Government Finance Officers Association’s (GFOA) award programs.
3.Provide meaningful and timely financial reports and information to council, commissions,
and other city departments.
4.Complete financial, payroll, and utility billing transactions.
ISSUES:
1.Complete implementation of software systems for financial, payroll, and utility billing
functions with integration of new processes for web-based applications, and remote
time card entry.
2.Implement improved reporting procedures to inform council, commissions, and
departments.
3.Develop methods for simplifying data analysis for various stakeholders.
4.Work with other departments to find ways to reduce costs of city operations.
5.Construct a work environment that provides growth through learning, self-determination
through autonomy, and relatedness through the creation of enduring work products.
6.Cross-training of finance team members in core functions (payroll, accounts payable, utility
billing, and accounts receivable).
115
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The Finance budget includes funds to handle the financial transactions of the city, in an efficient
manner, while maintaining the highest level of internal controls and segregation of duties. The 2020
personnel services budget includes a full step increase and a 3% (2% in January and 1% in July)
market rate wage increase in addition to a pay scale adjustment recommended in a pay study
completed in 2019. Other budget items are expected to remain close to prior year levels.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
GFOA BudgetAward Yes Yes Yes Yes Yes
GFOA Certificate of
Achievement Yes Yes Yes Yes Yes
GFOA PopularAnnual
Financial Report Yes Yes Yes Yes Yes
Bond Rating A2 A2 A2 A1 A1
Efficiency:
AP &ACHs perFTE(1.5)1,998 1,824 1,949 1,944 1,950
ACHs as % of total AP activity 41%42%43%44%44%
WorkLoad:
AP checks, numberof 1,755 1,578 1,668 1,622 1,625
AP ACHs, numberof 1,242 1,158 1,255 1,294 1,300
W-2s 294 307 315 286 300
1099's 53 47 67 65 70
Journal entries 2,484 2,496 2,542 2,479 2,500
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
FINANCE Actual Actual Actual Budget Projected Budget Change
Personnel Services 318,445$339,765$353,185$390,096$390,096$409,533$5.0%
Supplies 1,952 2,786 3,054 3,100 3,100 2,800 -9.7%
Other Services & Charges 73,357 82,696 74,685 82,761 82,761 80,393 -2.9%
Capital Outlay ---------
TOTAL EXPENDITURES 393,754$425,247$430,924$475,957$475,957$492,726$3.5%
116
AUDIT
DEPARTMENT: General Government
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 41540
ACTIVITY SCOPE:
An audit of city finances must be completed on an annual basis for the city to remain in compliance
with federal and state accounting practices.
OBJECTIVES:
1.Complete the financial audit in a timely fashion.
2.Continue to reduce the number of audit findings and adjustments.
ISSUES:
1.Comply with changing reporting requirements and auditing standards.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The budget for auditing consists entirely of the expenses associated with the required audit process.
In late 2007, a request for proposal (RFP) for audit services was sent to several firms. The RFP
guaranteed the cost for audit services for the years ended 2007 through 2009 and resulted in a cost
decrease from previous years. This contract was extended for the 2020 fiscal year. The finance
department prepared the entire financial report for the first time in 2015.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Auditsubmittal date 6/27 6/20 6/14 5/22 5/31
Auditfindings 0 2 0 1 0
Opinion Unmodified Unmodified Unmodified Unmodified Unmodified
GFOA Award Yes Yes Yes Yes Yes
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
AUDIT Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 39,273 44,745 40,531 44,000 44,000 44,000 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 39,273$44,745$40,531$44,000$44,000$44,000$0.0%
117
ASSESSING
DEPARTMENT: General Government
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 41550
ACTIVITY SCOPE:
Property tax assessing requirements are provided through a contract with the Wright County
assessor. There are no plans to alter this activity.
OBJECTIVES:
1.Assess new and existing parcels within the city as required.
ISSUES:
1.Meet state requirements in appraising properties.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Assessing services are provided by contract with Wright County. Estimated costs for assessments are
based on the number of existing and new parcels. The city paid $12.00 per parcel for assessment
services and $50 for each new permit with an estimated construction value under $499,999 and
$150 for values over $500,000 in 2019. Those rates have climbed slightly each year.
BUDGET:
Measurement 2016 2017 2018 2019 2020
New residentialproperties 44 61 64 58 60
New commercialproperties 2 7 3 5 3
Tax exempt parcels 333 347 350
Taxable parcelsassessed 4,633 4,636 5,028 4,689 4,700
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
ASSESSING Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 50,415 51,972 66,190 68,000 68,000 73,000 7.4%
Capital Outlay ---------
TOTAL EXPENDITURES 50,415$51,972$66,190$68,000$68,000$73,000$7.4%
118
LEGAL
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41610
ACTIVITY SCOPE:
Private legal firms provide all the city’s legal services. Activities include issuance of legal opinions;
preparation of ordinances, resolutions, contracts, and agreements; and the conduct of civil litigation.
Additional legal expenditures, such as publications, fees, and other costs are accounted for in the
benefitting unit.
OBJECTIVES:
1.Continue to realize savings by contracting legal services.
ISSUES:
1.Rising costs associated with the need for existing and new legal services.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The city continues to realize savings from not having full-time counsel. Legal services provided to
FiberNet are charged to the Fiber Optics Fund.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Billedhours:
Administration 222.3 196.8 192.6 299.3 200.0
Code enforcement 9.0 5.5 20.4 11.8 15.0
Fiber optics 36.5 1.0 5.0
City ConstructionProjects 40.1 39.5 192.5 197.3 50.0
All other 65.8 87.4 21.2 83.1 130.0
Total 373.7 330.2 426.7 591.5 400.0
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
LEGAL Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 29,152 35,714 27,967 38,000 38,000 37,000 -2.6%
Capital Outlay ---------
TOTAL EXPENDITURES 29,152$35,714$27,967$38,000$38,000$37,000$-2.6%
119
HUMAN RESOURCES
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41800
ACTIVITY SCOPE:
Human Resources activities support the primary mission of the city through the effective
recruitment, selection, development, training, and assessment of appropriate human resource
needs. Employee benefits and compensation administration, implementation of and compliance with
Federal and State employment laws, labor negotiations, processing of employee grievances, and
development of personnel policies are major human resource functions.
OBJECTIVES:
1.Provide recruiting, interviewing, and other personnel services for all city departments.
2.Administer classification and compensation system for all employees in compliance
with pay equity.
3.Plan and coordinate in-house training programs for city staff.
4.Administer city benefit plans.
ISSUES:
1.Update personnel policies to accommodate changing employment law.
2.Communicate benefit changes to employees.
3.Develop and implement city drug and alcohol testing program.
4.Negotiate new union contract for public works employees.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Workers compensation
experience modification 93%108%100%127%127%
Full-time positions 52 51 53 53 54
Part-time positions 111 130 120 153 153
Full-time positions filled 6 6 11 2 2
Otherpositions filled 92 103 104 87 87
Terminations processed 89 100 115 81 81
Job Postings 18 37 42 34 34
Application count- all city 224 408 656 546 546
Avg. numberof employess 163 181 196 202 202
120
BUDGET COMMENTARY:
The 2020 budget reflects estimated costs for setting up training, providing city staff with benefit and
compensation information, and other expenses based on past experience. The 2019 increase in other
services and charges represented expenditures on professional services to update the city’s pay
scale. The 2020 personnel services budget includes a full step increase and a 3% (2% in January and
1% in July) market rate wage increase in addition to a pay scale adjustment recommended in the pay
study completed in 2019. Other budget items are expected to remain close to prior year levels.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
HUMANRESOURCES Actual Actual Actual Budget Projected Budget Change
Personnel Services 93,155$100,426$102,788$98,029$98,029$103,607$5.7%
Supplies 1,121 687 408 600 600 650 8.3%
Other Services & Charges 22,246 22,093 23,385 38,783 38,783 25,428 -34.4%
Capital Outlay ---------
TOTAL EXPENDITURES 116,522$123,206$126,581$137,412$137,412$129,685$-5.6%
121
PLANNING, ZONING & COMMUNITY DEVELOPMENT
DEPARTMENT: General Government
SUPERVISOR: Community Development Director
FUND #:101
ACTIVITY #: 41910
ACTIVITY SCOPE:
The Community Development and Planning & Zoning Department is responsible for long-range and
current planning efforts for Monticello. The department is responsible for regulating development
and use standards as outlined in the zoning and subdivision ordinance; these standards are aimed at
protecting and promoting public health, safety, and welfare. The department oversees coordination
with regional planning and service providers including Monticello Township Board, Monticello
Orderly Annexation Board, Wright County Planning & Zoning, Sherburne County Planning & Zoning
and regional transit entities. The department also provides citizens, business owners, and developers
with current, easily accessible information about Monticello's planning process and projects
happening in their community.
OBJECTIVES:
1.Implementation of Comprehensive Plan objectives.
2.Completion of subdivision ordinance amendments consistent with the “Next Steps”
outlined by the Comprehensive Plan.
3.Support for downtown redevelopment and revitalization, including the Embracing
Downtown Monticello Project.
4.Involvement in regional transportation planning and its impact on land use and
growth objectives.
5.Bertram Chain of Lakes master planning.
6.Continued implementation and training on the city's GIS.
7.Continued improvements of the city's development and planning process.
8.Increased support for neighborhood organizations and involvement.
ISSUES:
1.Zoning compliance and enforcement.
2.Records management and integration for planning and zoning.
3.Land use and transportation relationships.
4.Emerging technology and land use impacts.
122
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Grants awarded ---------1 1
Grantawards ---------$10,000 Unknown
Administrative applications (total)16 4 8 6 6
processed within 5workingdays 5 3 7 6 6
Site Plan reviews processed
within 14workingdays ---1 1 1 1
Change in Use forms 3 4 11 8 8
reviewed withing5working days 3 1 9 8 8
Sign Permitzoningreviews 5 26 30 34 30
processed within 5workingdays 3 21 30 31 30
Land Use applications processed 23 43 33 28 30
within 60working days 23 42 33 21 25
Reconciliations processed 14 7 21 12 20
Annexation petitions ------1 2 0
Efficiency:
Applications processed perFTE 49 41 57 56 45
WorkLoad:
Planning Applications:
Variances 2 1 6 2 1
CUPs 17 9 10 4 5
PUD/Amendments to PUD 8 14 12 9 4
Interim Use permits ---------------
Comp Plan amendments 3 1 3 1
Map amendments 8 12 3 6 5
Non-city zoning textamendments 8 1 -1 1
Plats/adminstrative subdivisions 7 9 3 9 2
Administrative permits 15 4 8 6 5
Site plan reviews ---1 1 1 2
Appeals ------1 0 0
Vacations 1 3 ---1 2
Sign permitapplication review 5 ---30 34 30
Change in Use review 3 4 11 8 10
Total applications 74 61 86 84 68
Planning reconciliations 14 28 21 12 20
Planning Commission meetings 17 12 13 12 19
EDA Meetings 11 11 14 14 25
IEDCMeetings 7 10 11 11 11
Grantapplications 1 ------1 1
123
BUDGET COMMENTARY:
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in additional to a pay scale adjustment recommended in a pay study
completed in 2019. Other services and charges includes $80,000 for a comprehensive plan update.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PLANNING & ZONING Actual Actual Actual Budget Projected Budget Change
Personnel Services 123,909$136,761$144,676$147,386$147,386$156,579$6.2%
Supplies 117 29 14 200 200 200 0.0%
Other Services & Charges 86,147 79,217 94,355 130,683 130,683 174,851 33.8%
Capital Outlay ---------
TOTAL EXPENDITURES 210,173$216,007$239,045$278,269$278,269$331,630$19.2%
124
CITY HALL
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41940
ACTIVITY SCOPE:
The activity for this department consists of maintenance and upkeep for the suite housing city hall.
OBJECTIVES:
1.Provide adequate and consistent hours of business throughout the year.
2.Maintain a clean, inviting facility to house meetings and staff.
ISSUES:
1.Depreciation of facility and work platforms.
2.Reconfiguring layout to accommodate work flow.
3.Timely maintenance.
4.Utility costs.
5.Building and office security.
6.Re-purposing storage area.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Items budgeted for in the city hall activity are commonly shared among all departments operating
out of city hall. Much of the cost associated with this activity was transferred to the administration
activity in 2017. Personnel services activity was eliminated when custodial services started, and
utilities are the main expenditures in other services and charges.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Numberof times cleaned 104 104 104 104 104
Utility expenses $25,073 $23,125 $24,064 $22,278 $28,000
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
CITY HALL Actual Actual Actual Budget Projected Budget Change
Personnel Services 109,552$8,651$8,139$-$-$-$---
Supplies 11,890 -3,596 2,500 2,500 2,000 -20.0%
Other Services & Charges 61,548 54,302 47,948 64,533 64,533 56,743 -12.1%
Capital Outlay ---------
TOTAL EXPENDITURES 182,990$62,953$59,683$67,033$67,033$58,743$-12.4%
125
PRAIRIE CENTER BUILDING
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41941
ACTIVITY SCOPE:
The city-owned Prairie Center Building leases space to its FiberNet operations. Further, the Wright
County Sheriff's Department occupies non-rent paying space in the building. This activity is for the
operations of the facility.
OBJECTIVES:
1.To provide a well-maintained building.
ISSUES:
1.Maintain facility with current staff and available funds.
2.Tenant retention.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The Prairie Center Building was purchased in 2009 to provide FiberNet Monticello with office space.
FiberNet is now the building’s only year-round tenant. The 2017 increase in other services and
charges reflected the change to contracted custodial services as well as an increase in utilities and
repairs. The 2020 budget reflects prior year levels.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Tenants 1 1 1 1 1
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PRAIRIECENTERBLDG Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 313 601 352 750 750 750 0.0%
Other Services & Charges 8,604 16,601 24,880 17,220 17,220 17,799 3.4%
Capital Outlay ---------
TOTAL EXPENDITURES 8,917$17,202$25,232$17,970$17,970$18,549$3.2%
126
LAW ENFORCEMENT
DEPARTMENT: Public Safety
SUPERVISOR: City Administrator
FUND #: 101
ACTIVITY #: 42100
ACTIVITY SCOPE:
All law enforcement services are contracted with the Wright County Sheriff's Department. The
Sheriff’s Department maintains a local office in the Prairie Center building. The Sheriff sets the hourly
rate and the city contracts for the number of hours, typically 17,000 to 19,000 hours annually.
Contracted hours change in 4 hour-per-day increments.
OBJECTIVES:
1. Protect life and property, and improve the quality of community life.
2. Continue contracting for law enforcement services from Wright County.
3. Provide coverage for commercial and residential growth.
ISSUES:
1. Concerns from residents regarding having our own police force.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Arrests 172 207 233 206 200
Arrests to crimes ratio 0.19 0.23 0.24 0.22 0.21
Efficiency:
Hours contracted 17,568 17,520 18,256 18,980 18,980
Calls per hour contracted 0.44 0.47 0.51 0.48 0.49
Costs per workload unit $152.27 $148.76 $140.85 $156.71 $161.44
Work Load:
Life quality calls, number of 3,511 3,440 3,589 3,774 3,850
Traffic calls, number of 2,981 3,533 4,428 3,912 4,000
Vehicle crashes, number of 334 327 337 388 400
Crimes, number of 904 885 978 949 975
127
BUDGET COMMENTARY:
Law enforcement services are contracted in four-hour-per-day increments from the Wright County
Sheriff’s Department. Past hourly rates and contracted hours are presented in the schedule below:
The city contracted for 52 hours per day from 2011 through 2013. From 2014 through 2017, the city
contracted for 48 hours per day. In July 2018, the city returned to contracting for 52 hours per day.
The leap years of 2012, 2016, and 2020 include one more day of coverage (52 hours in 2012 and
2020, and 48 hours in 2016).
BUDGET:
Hourly Hours
Year Rate Contracted
2011 $59.00 18,980
2012 $59.75 19,032
2013 $60.50 18,980
2014 $62.50 17,520
2015 $64.50 17,520
2016 $67.00 17,568
2017 $69.50 17,520
2018 $72.00 18,256
2019 $74.50 18,980
2020 $78.25 18,980
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
LAW ENFORCEMENT Actual Actual Actual Budget Projected Budget Change
Personnel Services -$ -$ -$ -$ -$ -$ ---
Supplies - - - - - - ---
Other Services & Charges 1,212,080 1,257,194 1,362,411 1,457,430 1,457,430 1,532,621 5.2%
Capital Outlay - - - - - - ---
TOTAL EXPENDITURES 1,212,080$ 1,257,194$ 1,362,411$ 1,457,430$ 1,457,430$ 1,532,621$ 5.2%
128
FIRE & RESCUE
DEPARTMENT: Public Safety
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 42200
ACTIVITY SCOPE:
The Fire Department responds to fire, rescue, hazardous materials, medical, and accident incidents
within the city and the surrounding townships. The department also provides fire inspection services.
Paid-on-call volunteers provide the department’s staffing.
OBJECTIVES:
1.Assemble a confined space entry team with personnel and equipment.
2.Improve response times.
3.Develop National Incident Management System (NIMS) training for all city departments.
ISSUES:
1.Training and retention of paid-on-call personnel.
BUDGET COMMENTARY:
The Fire Department is staffed with paid-on-call volunteers. Firefighter pay increased $2.00 per hour
to $12.00 per hour per response in 2016. The purchase of turn-out gear contributed to the sharp rise
in 2018 supplies. Grants may offset some of these expenditures. Capital outlay reflects the
acquisition of a fire tender truck in 2014 and a fire half-ton truck in 2019 through the Central
Equipment Fund.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
FIRE Actual Actual Actual Budget Projected Budget Change
Personnel Services 132,913$150,821$155,224$228,018$228,018$234,623$2.9%
Supplies 33,836 53,187 147,645 51,050 51,050 61,800 21.1%
Other Services & Charges 80,961 105,583 90,899 91,410 91,410 111,749 22.3%
Capital Outlay 41,300 41,300 41,300 49,600 49,600 49,600 0.0%
TOTAL EXPENDITURES 289,010$350,891$435,068$420,078$420,078$457,772$9.0%
129
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Respondents to fire calls:
City 2,603 3,385 3,050 3,152 3,150
MonticelloTownship 1,161 1,627 1,104 1,024 1,025
SilverCreek Township 537 409 585 698 700
Mutual Aid 393 363 292 399 400
Drills &Maintenance 2,410 2,574 3,295 2,628 2,625
Total 7,104 8,358 8,326 7,901 7,900
Efficiency:
Average respondents percall
City 15 16 16 16 16
MonticelloTownship 18 23 23 16 16
SilverCreek Township 18 16 22 23 23
Mutual Aid 13 26 37 29 27
Drills &Maintenance 46 54 57 34 35
Total 20 22 25 20 21
WorkLoad:
Numberof fire calls:
City 175 216 195 200 200
MonticelloTownship 65 70 47 63 65
SilverCreek Township 30 26 27 31 30
Mutual Aid 31 14 8 14 15
Drills &Maintenance 52 48 58 78 75
Total 353 374 335 386 385
Firefighters, numberof 26 27 26 27 27
130
FIRE RELIEF
DEPARTMENT: Public Safety
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 42202
ACTIVITY SCOPE:
Providing a retirement benefit to paid-on-call volunteers, the fire relief activity is specifically
designed to track the city’s contribution to the Monticello Fire Relief Association.
OBJECTIVES:
1.Provide pension funds for the Monticello Fire Relief Association.
ISSUES:
1.Pension assets greater than pension liabilities.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The fire relief budget is basically a conduit for distribution of state fire aid to the pension fund for
volunteer firefighters. State aid revenue equals the contribution to the relief association and it is
conservatively estimated for budgetary purposes.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Pension assets 1,200,706$1,286,019$1,354,939$1,204,278$1,250,000$
Pension liabilities 1,177,526$1,154,458$1,098,915$962,822$1,125,000$
Assets-liabilities ratio 1.02 1.11 1.23 1.25 1.11
Pension perservice year $3,600 $3,900 $4,200 $4,200 $4,200
Fire state aid $123,656 $125,764 $130,874 $123,640 $130,000
State aid peremployee $4,756 $4,658 $5,034 $4,579 $4,815
Active firefighters 26 27 26 27 27
Deferred firefighters 2 1 5 6 6
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
FIRERELIEF Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 123,656 125,764 132,874 124,000 124,000 130,000 4.8%
Capital Outlay ---------
TOTAL EXPENDITURES 123,656$125,764$132,874$124,000$124,000$130,000$4.8%
131
BUILDING INSPECTIONS
DEPARTMENT: Public Safety
SUPERVISOR: Community Development Director
FUND #:101
ACTIVITY #: 42400
ACTIVITY SCOPE:
The Building Department inspects all new and remodeled construction within the city by a state
certified building inspector. The department initiates all building permits and oversees the
enforcement of all public nuisance and ordinance issues.
OBJECTIVES:
1.Continue implementation of the rental licensing program.
2.Continue implementation of zoning ordinance changes.
3.Continue sign ordinance update.
4.Implement yearly contractor, realtor, and rental property owner workshops.
5.Continue public relations contact. Improve city's public perception image.
6.Continue implementation of the building codes.
ISSUES:
1.Managing and prioritizing department workloads.
2.Meeting the residential and commercial growth challenges as a regional center.
3.Keeping up with biennial rental license inspections.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Value of permits issued 59,426,683$43,853,123$33,125,788$45,723,446$50,000,000$
Value of permits perFTE 14,856,671$10,963,281$9,464,511$15,241,149$16,666,666$
Efficiency:
Departmental FTEs 4 4 3.5 3 3
Rental inspections perFTE(2)793 782 787 773 845
Permits perFTE 267 304 245 279 297
WorkLoad:
Buildingpermits issued 802 911 856 837 890
Nuisance notices issued 118 109 116 116 125
Rental units, numberof 1,586 1,563 1,573 1,545 1,690
132
BUDGET COMMENTARY:
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in addition to a pay scale adjustment recommended in a pay study
completed in 2019. One building inspector was added in 2016.The added position became vacant in
2018 and went unfilled as staff re-evaluates departmental needs. The other budget items are
expected to remain close to prior year levels.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
BUILDING INSPECTIONS Actual Actual Actual Budget Projected Budget Change
Personnel Services 320,623$344,422$297,047$378,272$378,272$409,594$8.3%
Supplies 3,861 5,910 3,856 7,300 7,300 6,800 -6.8%
Other Services & Charges 22,120 26,728 46,408 26,113 26,113 23,266 -10.9%
Capital Outlay 3,700 4,200 4,200 4,200 4,200 4,200 0.0%
TOTAL EXPENDITURES 350,304$381,260$351,511$415,885$415,885$443,860$6.7%
133
EMERGENCY MANAGEMENT
DEPARTMENT: Public Safety
SUPERVISOR: Chief Building Official
FUND #:101
ACTIVITY #: 42500
ACTIVITY SCOPE:
The emergency management department provides constant defense coverage for all weather and
power plant related emergency situations within the city.
OBJECTIVES:
1.Implement city hall, community center, and National Guard emergency preparedness.
ISSUES:
1.Preparedness - little or no warning when an emergency occurs.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The 2020 budget is based on the 2019 budget with an increase in training. With the retirement of the
city's previous building official, much of this activity's responsibilities had been transferred to Wright
County. However, the city is an active participant of the emergency management team, and, with the
new Fire Marshal/Emergency Management Coordinator position added in 2018, this budget unit will
continue to see more activity going forward.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Meetinghours peryear 72 72 72 72 72
Sirens, numberof 106 106 106 106 106
Annual successful siren tests 48 48 48 48 78
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
EMERGENCY MANAGEMENT Actual Actual Actual Budget Projected Budget Change
Personnel Services 103$1,123$440$1,612$1,612$1,612$0.0%
Supplies --9,942 100 100 100 0.0%
Other Services & Charges 1,131 810 1,950 1,342 1,342 3,288 145.0%
Capital Outlay ---------
TOTAL EXPENDITURES 1,234$1,933$12,332$3,054$3,054$5,000$63.7%
134
ANIMAL CONTROL
DEPARTMENT: Public Safety
SUPERVISOR: Project Coordinator
FUND #:101
ACTIVITY #: 42700
ACTIVITY SCOPE:
The city contracts with a private individual for animal control services. The city owns and maintains
the animal control facility. The city also contracts with nearby communities, allowing them to use our
services and facility.
OBJECTIVES:
1.To address issues within the city and surrounding communities in a timely and
courteous manner.
2.Continue to improve animal control response time.
3.Continue to improve billing procedures for animal control issues.
ISSUES:
1.Provide quick response to residents on animal control concerns.
2.Allocation of service costs based on usage by customers (townships and cities).
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The professional service contract to handle all animal control issues is the largest budgeted item at
$37,800. The remaining budget items are for supplies and other service charges related to operating
the animal control facility.
Measurement 2016 2017 2018 2019 2020
Stray animal reports 532 413 496 476 500
Barking dogreports 180 199 190 175 175
Lost/found reports 1,487 1,460 1,670 1,580 1,600
Feral cattrapping 245 250 261 266 250
Unsanitary condition reports 223 215 201 189 190
Abuse/neglectreports 149 213 171 163 170
Impounds 563 523 556 487 500
Dog bite reports 78 92 78 76 80
Animal control fees $37,838 $50,519 $46,497 $43,320 $46,300
135
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
ANIMAL CONTROL Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 537 2,016 469 3,300 3,300 3,300 0.0%
Other Services & Charges 46,406 46,150 46,139 49,538 49,538 49,455 -0.2%
Capital Outlay ---------
TOTAL EXPENDITURES 46,943$48,166$46,608$52,838$52,838$52,755$-0.2%
136
NATIONAL GUARD
DEPARTMENT: Public Safety
SUPERVISOR: Project Coordinator
FUND #:101
ACTIVITY #: 42800
ACTIVITY SCOPE:
The National Guard facility is housed in the Monticello Community Center complex. The city will
maintain the facility in perpetuity in return for a one-time payment in 1998 that helped fund
construction of the community center. The Guard provides no direct services to the city.
OBJECTIVES:
1.To maintain a clean, modern facility for use by the National Guard.
ISSUES:
1.There are no current issues to maintaining the National Guard facility.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The National Guard operates a security division within the Monticello Community Center complex.
The city maintains the Guard’s site within the complex. The budget for this activity is relatively static,
consisting only of building rent and utilites.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Not Applicable
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
NATIONAL GUARD Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 13,550 13,520 13,649 14,000 14,000 14,000 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 13,550$13,520$13,649$14,000$14,000$14,000$0.0%
137
PUBLIC WORKS - ADMINISTRATION
DEPARTMENT: Public Works
SUPERVISOR: Public Works Director
FUND #:101
ACTIVITY #: 43110
ACTIVITY SCOPE:
The public works (PW) administration activity oversees the daily operations of the street, parks,
water, sewer, wastewater treatment plant, water quality, and inspection activities. PW
administration also manages all large city projects and implements all changes to PW operations and
policy.
OBJECTIVES:
1.Continue the implementation of a bio-solids management system.
2.Implement the major street lighting project plan.
3.Continue implementing the wellhead protection plan.
4.Manage the development of a new public works facility and expansion of the wastewater
treatment plant.
5.Determine location for future wells, utilizing information gathered from various
sources including grants.
6.Develop a program to lease antenna space on elevated water towers, thus generating
a new revenue source.
7.Implement a new SCADA system as budgeted in the water and sewage operating
funds.
ISSUES:
1.Balance the public works department needs with available funds.
2.Management of city's water and wastewater treatment systems.
3.Implement a capital improvement program for city infrastructure.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Budget units 14 14 14 14 14
Employees supervised - FT 20 20 20 20 21
138
BUDGET COMMENTARY:
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in additional to a pay scale adjustment recommended in a pay study
completed in 2019. Personnel services also included the 2018 re-instatement of a public works
director/engineering position. The director position is spread over three budgets: General Fund -
60%, Sewage Fund – 20%, and Water Fund 20%. While other budget items may have large
percentage changes, in dollar terms they are relatively insignificant.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - ADMINISTRATION Actual Actual Actual Budget Projected Budget Change
Personnel Services 99,998$102,601$170,517$179,582$179,582$188,155$4.8%
Supplies 3,641 1,666 5,059 3,000 3,000 6,000 100.0%
Other Services & Charges 22,688 16,518 21,275 29,275 29,275 30,329 3.6%
Capital Outlay ---------
TOTAL EXPENDITURES 126,327$120,785$196,851$211,857$211,857$224,484$6.0%
139
PUBLIC WORKS - ENGINEERING
DEPARTMENT: Public Works
SUPERVISOR: City Engineer
FUND #:101
ACTIVITY #: 43111
ACTIVITY SCOPE:
Engineering assists with the provision, development, and management of the city's streets,
pathways, public utilities systems, geographic information system (GIS), Storm Water Pollution
Prevention Program (SWPPP), improvement projects, and miscellaneous mapping. In addition,
engineering responds to residents with issues related to storm water drainage and/or pedestrian,
bicycle and vehicular traffic, and reviews. Engineering updates and supports the city's General
Specifications and Standard Detail Plates for Street and Utility Construction and the Plan
Requirements and Design Guidelines. Engineering also issues driveway, grading, and right-of-way
permits.
OBJECTIVES:
1.Improve ability to assist other departments with CADD and GIS related requests.
2.Continue to administer and maintain the city's SWPPP.
3.Continue to implement and improve the city's GIS.
4.Continue toeducatethe public onpurposesandpracticesassociatedwithconservationand
drainage easements and storm water ponds.
5.Create a one-stop shop for city driveway, grading, and right-of-way permits.
6.Continue to develop an in-house Pavement Management Program.
7.Review development plans and agreements.
8.Continue to work towards improving transportation system, and collaborate with MNDOT
and Wright County.
9.Prepare capital infrastructure planning and budgeting.
10.Integrate with other departments on public improvement projects and development plans.
11.Apply for grants and track funding for improvement projects.
ISSUES:
1.Increasing restrictions by Minnesota Pollution Control Agency (MPCA) for storm water
runoff.
2.Lack of public knowledge regarding purposes and practices associated with conservation
and drainage easements and storm water ponds.
3.Increasing phosphorus restrictions by MPCA for wastewater effluent.
4.Reduction in available federal and state funding for transportation improvements.
140
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The engineering activity predominantly consists of engineering and other professional service fees.
These expenditures consist of both reimbursable and non-reimbursable expenditures. The 2020
budget provides for continued improvements and development of the city's GIS system and reduces
reliance on consulting services with the re-instatement of the City Engineer position in 2018.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Service requests 10 10 70 72 70
On-line service requests 17 19 17 19 18
Active improvementprojects 10 10 10 12 12
Driveway permits issued 1 11 7 18 7
Right-of-way permits issued 130 120 86 99 100
Developmentapplications 7 9 8 9 8
Gradingpermits issued 11 8 5 3 5
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - ENGINEERING Actual Actual Actual Budget Projected Budget Change
Personnel Services 935$-$-$-$-$-$---
Supplies 69 429 452 500 500 500 0.0%
Other Services & Charges 110,791 129,896 125,727 145,089 145,089 116,162 -19.9%
Capital Outlay ---------
TOTAL EXPENDITURES 111,795$130,325$126,179$145,589$145,589$116,662$-19.9%
141
PUBLIC WORKS - INSPECTIONS
DEPARTMENT: Public Works
SUPERVISOR: City Engineer
FUND #:101
ACTIVITY #: 43115
ACTIVITY SCOPE:
The public works inspection activity is responsible to design and inspect city infrastructure projects,
and to review and approve right-of-way excavation/obstruction permit applications. Personnel are
also responsible for managing records retention for plats, city maps, infrastructure data bases, soil
borings, development plans, and as-builts. Using various computer software programs including
ArcGIS, AutoCADm and CarteGraph, staff provides design and mapping assistance.
OBJECTIVES:
1.Improve staff use of the city's GIS system through training.
2.Maintain certifications, and attend appropriate classes and workshops for inspections.
3.Provide support for the engineering activity.
4.Improve communication between public works, engineering, and inspection activities.
5.Improve knowledge, skills, and ability in using CarteGraph software for development
of an in-house Pavement Management and Sign Program.
6.Improve knowledge, skills, and ability in using GIS software for assisting other
departments with their mapping needs.
7.Assistother citydepartments inacquiringutilityinformationnotreadilyavailable from
other sources, including GIS.
8.Assist with design and implementation of solutions to drainage issues.
9.Complete cost estimates and design for small improvement projects.
10.Complete cost estimates for budgeting purposes for upcoming improvement projects.
11.Complete inspections and documentation for city’s SWPPP.
ISSUES:
1.Workload is unevenly distributed throughout the year.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
NPDES Inspections 106 220 252 370 250
Outfall Inspections 30 1 1 1 6
StormwaterInspections 47 47 47 49 49
Pond Inspections 0 70 37 1 25
Inspection revenue -$16,610 $14,300 $12,788 $13,750
Inspection hours billed -151 130 116 125
142
BUDGET COMMENTARY:
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in addition to a pay scale adjustment recommended in a pay study
completed in 2019. Personnel services also reflects the re-allocation of a portion of this position to
the new Water Quality enterprise fund. Small reductions in IT Services caused the decrease in other
service & charges.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - INSPECTIONS Actual Actual Actual Budget Projected Budget Change
Personnel Services 47,876$53,397$75,303$98,579$98,579$98,283$-0.3%
Supplies 1,400 665 972 4,000 4,000 4,000 0.0%
Other Services & Charges 12,824 8,820 7,285 9,334 9,334 8,752 -6.2%
Capital Outlay ---------
TOTAL EXPENDITURES 62,100$62,882$83,560$111,913$111,913$111,035$-0.8%
143
PUBLIC WORKS – STREETS, ALLEYS & PARKING LOTS
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43120
ACTIVITY SCOPE:
The main responsibility of the streets and alleys activity is to perform the necessary tasks to reduce
the depreciation of the city streets and uphold desirable standards of appearance, serviceability, and
safety. This includes upkeep such as repair of roadway surface areas, medians, sidewalks, boulevards,
alleys, catch basins, and storm sewers.
OBJECTIVES:
1.Continue street reconstruction of older road surfaces by evaluating road wear.
2.Increase street chip seal coating projects.
3.Maintain and update equipment and vehicles.
4.Help maintain and use City GIS system.
5.Continue street crack sealing program.
ISSUES:
1.Educating the public on what the boulevards are to be used for.
2.Increased costs of fuel and street products due to fuel costs.
3.Educating the public on the value of good maintenance programs for our
infrastructure.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The 2019 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in addition to a pay scale adjustment recommended in a pay study
completed in 2019. However, re-allocation of wages with the new Water Quality enterprise fund
caused a decrease in wages. Capital outlay includes the 2020 addition of an additional plow truck
leased from the Central Equipment Fund. Other budget items are expected to remain close to prior
year levels. The difference between budget and actual can vary widely because the seasonal nature
of some departmental expenditures.
Measurement 2016 2017 2018 2019 2020
Pounds of crack sealer 49,039 46,721 46,868 47,176 47,000
Sq. yards of chip sealing 109,708 115,125 102,487 76,655 95,000
Miles of streets 69.0 69.0 70.0 70.0 70.0
Tons of black top patching 220 167 164 492 300
144
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW- STREETS & ALLEYS Actual Actual Actual Budget Projected Budget Change
Personnel Services 382,280$378,578$393,134$493,091$493,091$446,633$-9.4%
Supplies 154,533 170,977 212,484 190,100 190,100 194,600 2.4%
Other Services & Charges 192,161 220,220 180,999 266,323 266,323 256,272 -3.8%
Capital Outlay 75,600 76,800 104,500 137,300 137,300 163,600 19.2%
TOTAL EXPENDITURES 804,574$846,575$891,117$1,086,814$1,086,814$1,061,105$-2.4%
145
PUBLIC WORKS – ICE & SNOW REMOVAL
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43125
ACTIVITY SCOPE:
The city's ice and snow removal activity is responsible for the control of ice and snow on city streets,
sidewalks, and city-owned public parking lots. The activity provides control in a safe and cost-
effective manner while keeping in mind safety, budget, personnel, and environmental concerns.
OBJECTIVES:
1.Maintain and update equipment and vehicles in a timely manner.
2.Learn ways to effectively use the city's GIS system.
ISSUES:
1.Staffing and budgeting for unpredictable circumstances.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The 2019 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in addition to a pay scale adjustment recommended in a pay study
completed in 2019. Weather variability greatly impacts budget-to-actual comparisons.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Inches of snow 50 31 72 62 57
Plowing events, numberof 16 11 15 20 15
Tons of saltused 525 461 585 752 800
Tons of sand used 300 397 329 432 400
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - ICE& SNOW Actual Actual Actual Budget Projected Budget Change
Personnel Services 194,874$184,594$242,726$171,485$171,485$172,503$0.6%
Supplies 66,996 79,376 96,318 120,200 120,200 154,200 28.3%
Other Services & Charges 2,362 3,125 5,930 2,725 2,725 2,287 -16.1%
Capital Outlay ---------
TOTAL EXPENDITURES 264,232$267,095$344,974$294,410$294,410$328,990$11.7%
146
PUBLIC WORKS – SHOP & GARAGE
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43127
ACTIVITY SCOPE:
Shop & Garage maintains all city vehicles and equipment for the streets, ice & snow, parks, water,
and sewage activities in a safe and efficient manner.
OBJECTIVES:
1.Maintain equipment and vehicles to maximize efficiencies and safety.
2.Update equipmentand vehicles.
ISSUES:
1.Aging equipment.
2.Increased safety regulation for equipment and vehicles.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase in addition to a pay scale adjustment recommended in a pay study
completed in 2019. Other budget items are expected to remain close to prior year levels. The city has
a wide variety of talent in the Public Works Department. Most are capable of assisting a true
craftsman, the city’s highly-skilled chief mechanic.
Measurement 2016 2017 2018 2019 2020
Service orders 90 88 92 91 95
Service orderhours 369 352 396 370 375
Hours perservice order 4.1 4.0 4.3 4.1 3.9
Total service ordercosts $22,844 $22,600 $20,017 $23,797 $25,000
Service costperorder $253.82 $256.82 $217.58 $261.51 $263.16
Repairorders 95 91 85 70 75
Repairhours 272 268 455 413 425
Hours perrepairorder 2.9 2.9 5.4 5.9 5.7
Total repairordercosts $39,250 $36,100 $35,493 $46,532 $48,000
Repaircosts perorder $413.16 $396.70 $417.56 $664.74 $640.00
147
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - SHOP& GARAGE Actual Actual Actual Budget Projected Budget Change
Personnel Services 90,597$103,706$98,444$105,914$105,914$112,049$5.8%
Supplies 39,151 42,635 24,875 47,100 47,100 45,100 -4.2%
Other Services & Charges 41,331 54,349 44,730 56,678 56,678 57,578 1.6%
Capital Outlay ---------
TOTAL EXPENDITURES 171,079$200,690$168,049$209,692$209,692$214,727$2.4%
148
PUBLIC WORKS – STORMWATER
DEPARTMENT: Public Works
SUPERVISOR: Public Works Director
FUND #:101
ACTIVITY #: 43130
ACTIVITY SCOPE:
Stormwater is responsible for expenditures related to the maintenance of the city's stormwater
system. This activity included inspecting, cleaning, and repairing all stormwater trunk lines, ditches,
and ponds. The city created a Water Quality enterprise fund in 2019 when it established a
stormwater utility fee. That fund will absorb the operations of this department beginning in 2020.
OBJECTIVES:
1.None.
ISSUES:
1.None.
MEASURABLE WORKLOAD DATA:
See the Water Quality Fund.
BUDGET COMMENTARY:
See the Water Quality Fund.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - STORMWATER Actual Actual Actual Budget Projected Budget Change
Personnel Services 16,283$27,322$21,171$25,550$25,550$-$-100.0%
Supplies 12,234 2,061 1,081 9,500 9,500 --100.0%
Other Services & Charges 760 1,360 1,631 50,800 50,800 --100.0%
Capital Outlay ---------
TOTAL EXPENDITURES 29,277$30,743$23,883$85,850$85,850$-$-100.0%
149
PUBLIC WORKS – STREET LIGHTING
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43160
ACTIVITY SCOPE:
The street Iighting activity maintains new and existing street lighting within the city. This includes
maintaining installed bulbs and fixtures, as well as the electricity used for keeping the lights on.
OBJECTIVES:
1.Replace inefficient, sodium-based lights with high-powered, energy efficient LED lights.
2.Draft a new street lighting policy.
ISSUES:
1.Increasing electricity costs.
2.Verify lamp and fixtures maintenance by utility companies.
3.Maintenance and upgrades on aging signal systems and streetlights.
4.Lack of assistance from Wright County and MNDOT.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Electricity for the street lights is the largest expenditure at $181,500. Other services and charges
include $30,000 for repainting traffic signals. In 2018, the city assumed the maintenance on those
streetlights previously maintained by Wright-Hennepin Electric under service agreements.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Streetlights maintained 889 889 937 973 973
Streetlights maintained includethoseowned by thecity, Xcel, and Wright-Hennepin Electric.
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PW - STREET LIGHTING Actual Actual Actual Budget Projected Budget Change
Personnel Services 4,630$5,157$5,338$-$-$-$---
Supplies 3,373 5,275 14,191 15,000 15,000 20,000 33.3%
Other Services & Charges 225,497 234,864 224,949 231,500 231,500 230,500 -0.4%
Capital Outlay ---------
TOTAL EXPENDITURES 233,500$245,296$244,478$246,500$246,500$250,500$1.6%
150
PUBLIC WORKS – REFUSE COLLECTION
DEPARTMENT: Public Works
SUPERVISOR: Refuse Collection
FUND #:101
ACTIVITY #: 43230
ACTIVITY SCOPE:
The city contracts with a private company for residential refuse collection and recycling services.
OBJECTIVES:
1.Research expanding city hauler’s contracted service prices to business and determine the
percentage of participation to achieve a desirable rate.
ISSUES:
1.Wear and tear on city streets.
2.Increasing recycling efficiency and effectiveness.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Nearly the entire budget is based on the city’s contract obligations with its private refuse hauler. The
contract expires on May 31, 2020. The contract extension in 2015 raised rates by 14% for the last
seven months of that year. The contract increases annually with inflation and the addition of
customers.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Residential refuse collections 52 52 52 52 52
Residential recyclingcollections 26 26 26 26 26
Residential containerbase 3,785 3,859 3,892 3,945 4,000
Additional containers 605 600 601 609 615
Recycling containers 4,378 4,454 4,483 4,534 4,600
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
REFUSECOLLECTION Actual Actual Actual Budget Projected Budget Change
Personnel Services 1,072$1,181$390$576$576$576$0.0%
Supplies ---------
Other Services & Charges 599,228 613,147 615,196 640,495 640,495 686,200 7.1%
Capital Outlay ---------
TOTAL EXPENDITURES 600,300$614,328$615,586$641,071$641,071$686,776$7.1%
151
TRANSIT
DEPARTMENT: Transit
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 45178
ACTIVITY SCOPE:
The transit service is provided by contract through a subsidized, regional transit provider. Transit
operations were absorbed by Wright County in 2019.
OBJECTIVES:
1.None.
ISSUES:
1.None.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The city changed to a regional transit services provider, Wright County Area Transit (WCAT), in 2017.
The prior provider charged a flat $40,000 regardless of ridership. WCAT received significant state and
federal subsidies. The 2018 budget reflected uncertainty in WCAT’s funding. The 2019 decrease
reflects the final obligations toward the dissolution of the WCAT joint powers agreement. Wright
County is the provider of transit, beginning in 2019.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Ridership 10,681 18,416 18,465 na na
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
TRANSIT Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 41,250 3,191 18,333 5,000 5,000 --100.0%
Capital Outlay ---------
TOTAL EXPENDITURES 41,250$3,191$18,333$5,000$5,000$-$-100.0%
152
SENIOR CENTER
DEPARTMENT: Recreation and Culture
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 45175
ACTIVITY SCOPE:
The senior center facility is housed in the Monticello Community Center complex. The facility is
maintained by the city, but senior center management is provided by an outside entity.
OBJECTIVES:
1.Maintain a clean, modern facility for use by Monticello’s senior citizens.
2.Provide recreational activities to improve mental and physical health.
3.Engage senior citizen participation in other community center activities.
4.Encourage greater social participation by offering discounted lunches.
ISSUES:
1.Decline in revenue from sources other than the city.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcomes/Effectiveness
Volunteers hours 7,821 8,524 8,266 8,923 8,950
Noon meals served 3,136 4,011 3,378 3,609 3,700
Efficiency:
Duplicated participants
peractivity 18 18 18 19 19
Unduplicated participants
peractivity 159 146 148 171 169
WorkLoad:
Unduplicated participants 2,343 2,455 2,509 2,563 2,580
Duplicated participants 20,313 19,504 20,171 22,973 23,000
Received phone calls 4,531 4,487 4,456 4,400 4,500
Activities offered 128 134 136 134 136
153
BUDGET COMMENTARY:
The senior center rents space within the community center complex. The city maintains and insures
the senior center. Additionally, the city gives an annual contribution to the group managing the
senior center. The 2020 adopted contribution is $63,300, which is $1,500 greater than 2019.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
SENIORCENTER Actual Actual Actual Budget Projected Budget Change
Personnel Services 1,369$1,437$25$863$863$863$0.0%
Supplies ---------
Other Services & Charges 97,755 101,724 103,201 105,089 105,089 106,589 1.4%
Capital Outlay ---------
TOTAL EXPENDITURES 99,124$103,161$103,226$105,952$105,952$107,452$1.4%
154
PARK OPERATIONS
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:101
ACTIVITY #: 45201
ACTIVITY SCOPE:
The park operations activity maintains the parks and trails within the city. This includes maintaining
and improving playground and picnic facilities, fertilizing and mowing of grass, maintaining athletic
fields, flooding and maintaining of outdoor ice rinks, snow and ice removal, and tree preservation
within the parks system.
OBJECTIVES:
1.Continue pathways maintenance.
2.Improve efficiencies through use of the city’s GIS.
3.Progress in implementing plan for the Bertram Chain of Lakes regional park.
ISSUES:
1.Increase in maintenance costs with acquisition of more park land.
2.Coordination with other entities regarding park use and design.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The parks budget consists of expenditures needed to maintain city parks and trails. Capital outlay
reflects the acquisition of capital equipment through the Central Equipment internal service fund.
Additional Central Equipment Fund purchases are planned for 2020. The 2020 personnel services
budget includes a full step increase and a 3% (2% in January and 1% in July) market rate wage
increase in addition to a pay scale adjustment for a pay study completed in 2019. A new full-time
position is budgeted for a partial year in 2020. Supplies increase due to the Bertram Chain of Lakes
(BCOL) regional park buildout. Other budget items are expected to remain close to prior year levels.
Measurement 2016 2017 2018 2019 2020
Park land acres maintained 185 320 320 360 360
Trail miles maintained 20.0 40.0 40.5 41.0 41.0
Park events held 150 500 515 520 520
Winterskating days 125 120 78 120 120
155
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PARK - OPERATIONS Actual Actual Actual Budget Projected Budget Change
Personnel Services 434,816$478,198$521,037$526,143$526,143$588,584$11.9%
Supplies 136,948 154,104 146,032 149,500 149,500 195,500 30.8%
Other Services & Charges 130,774 150,419 149,466 192,148 192,148 181,357 -5.6%
Capital Outlay 73,200 88,400 99,800 107,800 107,800 113,400 5.2%
TOTAL EXPENDITURES 775,738$871,121$916,335$975,591$975,591$1,078,841$10.6%
156
PARK BALLFIELDS
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:101
ACTIVITY #: 45203
ACTIVITY SCOPE:
The park ballfields activity prepares and maintains city athletic fields, including the NSP Ballfield.
OBJECTIVES:
1.Prepare and maintain city athletic fields.
2.Improve the structures at the ballfields.
3.Enhance player and visitor experience.
ISSUES:
1.Demographic and activity trends.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The 2020 budget is similar to the 2019 budget for field maintenance, concessions, and park activities.
Other services and charges include items that do not meet the capitalization threshold.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Ball games played, numberof 615 620 625 625 575
Soccerfields maintained 2 20 20 27 32
Lacrosse fields maintained 1 4 4 8 10
Ball fields maintained 7 7 7 7 7
Numberof times mowed 50 50 50 50 50
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PARK - BALLFIELDS Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 11,014 10,823 10,528 15,600 15,600 15,600 0.0%
Other Services & Charges 9,524 11,113 10,535 11,300 11,300 11,800 4.4%
Capital Outlay ---------
TOTAL EXPENDITURES 20,538$21,936$21,063$26,900$26,900$27,400$1.9%
157
PUBLIC ARTS
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:101
ACTIVITY #: 45204
ACTIVITY SCOPE:
The public arts activity is a focused use of arts and culture as a catalyst for economic and community
development. While art in and of itself can be valuable, the purpose is to harness the creative energy
within the community and channel it into revitalizing downtown and creating connections between
people and community.
OBJECTIVES:
1.Enhance the community aesthetics and revitalize downtown.
2.Engage the community in creating public art.
3.Connect people to the community.
ISSUES:
1.Perception of need.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
While 2018 had activity, 2019 represented the inaugural, stand-alone budget for the public arts
initiative. 2020 other services and charges include contracting for a creative consultant as well as
utilities and repairs at the MontiArts building.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Projects 1 1 1 2 7
Events ------------31
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
PARK - PUBLICARTS Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies --2,478 --3,100 ---
Other Services & Charges --27,398 30,000 30,000 32,564 8.5%
Capital Outlay ---------
TOTAL EXPENDITURES -$-$29,876$30,000$30,000$35,664$18.9%
158
SHADE TREE
DEPARTMENT: Recreation and Culture
SUPERVISOR: Park Superintendent
FUND #:101
ACTIVITY #: 46102
ACTIVITY SCOPE:
Shade Tree consists of planting and maintaining trees and shrubbery within the city limits. This
activity provides for regulating, developing, planting, maintaining, and removing of trees in any
street, park, right-of-way, or other public place. Shade trees aid the larger goal of soil conservation,
climate moderation, air quality, noise reduction, etc. The budget provides the mechanisms for
funding a uniform program for the purpose of beautifying the community as a whole, and increasing
property values.
OBJECTIVES:
1.Provide trees for spring tree planting.
2.Continue with Shade Tree Disease Control Program.
3.Replace dead and diseased trees throughout the city and parks.
4.Continue chippingprogram.
5.Continue education program.
6.Begin a boulevard tree planting program.
ISSUES:
1.Stress on trees caused by weather and diseases.
2.Funding availability.
3.Chipper replacement.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
A portion of the total time of park employees is allocated to the Shade Tree activity. The 2020
personnel services budget includes a full step increase and a 3% (2% in January and 1% in July)
market rate wage adjustment increase along with a pay scale adjustment from a pay study
completed in 2019. Part of the personnel services change reflects the reallocation of wages within
Recreation and Culture. Supplies in 2019 included $10,000 for Chelsea Road landscaping, and, while
Measurement 2016 2017 2018 2019 2020
Trees planted 280 320 305 314 220
Trees removed 60 40 12 15 6
Students in programs 500 500 500 500 500
159
higher than prior years due to increased activity, decreases slightly in 2020. Other budget items are
expected to remain close to prior year levels.
BUDGET:
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
SHADETREE Actual Actual Actual Budget Projected Budget Change
Personnel Services 64,959$75,518$79,463$59,581$59,581$61,484$3.2%
Supplies 8,514 2,654 1,250 25,500 25,500 19,000 -25.5%
Other Services & Charges 2,327 2,750 203 4,946 4,946 5,408 9.3%
Capital Outlay ---------
TOTAL EXPENDITURES 75,800$80,922$80,916$90,027$90,027$85,892$-4.6%
160
LIBRARY
DEPARTMENT: Recreation and Culture
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 45501
ACTIVITY SCOPE:
Library services are contracted through the Great River Regional Library System. The city owns and
maintains the library building and provides programs through the library to residents.
OBJECTIVES:
1.Provide residents with quality programs and life-long learning opportunities.
2.Provide access to global information resources.
ISSUES:
1.Maintaining a relevant role in the community.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The city contracts with Great River Regional Library System for information sources and operating
personnel. The city owns and maintains the library building and funds a number of programs. Total
2020 estimated expenditures are consistent with prior year levels. By statute, the city must annually
expend at least $35,160 for the library.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Checkedout items 190,433 182,986 182,691 171,460 175,000
Number of requests placed*8,033 8,037 8,220 18,380 40,000
Summer readingparticipants 744 589 824 1,159 1,200
Winter readingparticipants 257 149 284 207 160
Patrons usingwireless 4,071 3,963 3,224 4,022 4,200
Patrons usinginternet stations 7,487 7,304 6,211 6,362 6,300
Programs offered 212 290 287 243 250
Program attendance 4,306 5,336 5,059 4,788 4,900
*Measurement calculation changed in October 2019
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
LIBRARY Actual Actual Actual Budget Projected Budget Change
Personnel Services 5,425$3,499$2,284$-$-$-$---
Supplies 2,205 2,859 2,658 2,000 2,000 2,000 0.0%
Other Services & Charges 37,193 35,845 44,030 44,113 44,113 45,145 2.3%
Capital Outlay ---------
TOTAL EXPENDITURES 44,823$42,203$48,972$46,113$46,113$47,145$2.2%
161
INSURANCE
DEPARTMENT: Other
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 49240
ACTIVITY SCOPE:
This activity accounts for a variety of undistributed General Fund insurance costs.
OBJECTIVES:
1.To accurately distribute insurance costs to all activities by fund.
ISSUES:
1.Purchasing the proper level of insurance coverage with the appropriate deductibles at the
lowest possible costs.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Other services and charges remain fairly steady with minor fluctuations due to changes in allocation
of overall premiums throughout the various budget units in the General Fund. An effective safety
program administered by the human resource manager helps to keep the cost of workers
compensation insurance low. Additionally, liability insurance decreased slightly and property
insurance increased slightly.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Not Applicable
GENERAL FUND 2016 2017 2018 2019 2019 2020 %
INSURANCE Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 7,226 7,086 6,428 6,664 6,664 6,352 -4.7%
Capital Outlay ---------
TOTAL EXPENDITURES 7,226$7,086$6,428$6,664$6,664$6,352$-4.7%
162
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
SPECIAL
REVENUE
FUNDS
SPECIAL REVENUE FUNDS - SUMMARY
DESCRIPTION
Thecitycurrentlyhasfouractivespecialrevenuefunds.Specialrevenuefundsareusedtoaccountforthe
proceedsofspecificrevenuesourcesthatarerestricted,committed,orassignedtoexpendituresforspecific
purposesotherthandebtserviceorcapitalprojects.UnliketheGeneralFund,thebudgetsofspecialrevenue
fundsdonotalwaysbalance--revenuesequalexpenditures.Specialrevenuefundsusethemodifiedaccrual
basisofaccountingforbothfinancialreportingandbudgetingpurposes.
BUDGETISSUES
Eachspecialrevenuefundhasspecificchallengesthatwillbeaddressedinthenarrativeforeachfund.
BUDGETSUMMARY
SPECIAL REVENUEFUNDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 643,421$652,593$710,186$750,000$750,000$772,000$2.9%
Tax Increments 668,352 648,031 638,278 617,344 617,344 617,344 0.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 1,409,430 1,401,616 1,460,829 1,624,000 1,624,000 1,604,800 -1.2%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 516,620 278,169 161,878 131,656 131,656 127,856 -2.9%
Operating Transfers --116,473 ------
Debt Proceeds ---------
TOTAL REVENUES 3,237,823$2,980,409$3,087,644$3,123,000$3,123,000$3,122,000$0.0%
EXPENDITURES
Personnel Services 1,131,101$1,218,008$1,312,151$1,336,090$1,336,090$1,411,864$5.7%
Supplies 215,057 164,250 154,804 219,535 219,535 221,285 0.8%
Other Services & Charges 666,607 957,062 795,603 745,649 1,130,649 690,851 -7.3%
Capital Outlay 258,181 261,612 873,368 508,726 508,726 421,000 -17.2%
Operating Transfers 188,500 200,000 432,946 225,000 230,000 200,000 -11.1%
TOTAL EXPENDITURES 2,459,446$2,800,932$3,568,872$3,035,000$3,425,000$2,945,000$-3.0%
FUNDBALANCE- JANUARY 1 8,295,677$9,074,054$9,253,531$8,772,303$8,772,303$8,470,303$
Excess (Deficiency) of
Revenues over Expenditures 778,377 179,477 (481,228)88,000 (302,000)177,000
FUNDBALANCE- DECEMBER31 9,074,054$9,253,531$8,772,303$8,860,303$8,470,303$8,647,303$
163
ECONOMIC DEVELOPMENT AUTHORITY FUND
DEPARTMENT: Economic Development
SUPERVISOR: Community Development Director
FUND #:213
ACTIVITY #: 46301
ACTIVITY SCOPE:
The Monticello Economic Development Authority (EDA) is responsible for the on-going
redevelopment efforts within the city. This consists of housing and businesses, including all related
public improvements and land acquisitions. These programs are administered, based on direction of
the EDA board, by the Economic Development Manager. In addition, all tax increment financing
districts are initiated and administered by the EDA. There are currently 8 active tax increment
districts. The EDA also administers loans to city businesses, based on local, state, and federal criteria.
Businesses who will generate higher paying jobs in the community are prime candidates for these
loans.
OBJECTIVES:
1.Explore medical manufacturing, food-related, and data center facilities for Monticello.
2.Promote city's fiber optics network to attract and retain businesses.
3.Implement short, intermediate, and long-term objectives outlined in the TIF Analysis and
Management Plan.
4.Continue to implement Embracing Downtown Plan.
5.Continue to purchase land that makes sense for redevelopment purposes.
6.Continue to market the Monticello business center.
7.Implement training/education program for existing businesses and future workforce.
8.Utilize Jobz Bill to initiate private development/redevelopment.
9.Work with community development department and developers to create upper-end
housing in Monticello to attract CEOs.
10.Explore options to generate additional electrical supply to industrial areas.
11.Explore options to relocate electrical substation from Cargill's downtown site to create
expansion opportunities.
12.Implement recommendations from consultants regarding uses of funds available in TIF
District 1-22.
13.Engage in the Greater MSP organization.
14.Implement monitoring/tracking methods for EDA programs.
15.Continue to build a more robust website and marketing brand.
ISSUES:
1.Consistent administration of city policies, plans, ordinances, guidelines, statutes, etc.
2.Need for higher wage jobs in the community.
3.Promotion of city's fiber optic network.
164
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
This budget represents the Monticello Economic Development Authority programs and general
administration activities. The main revenue source for the EDA Fund is tax increments from the
various districts. Under Section 469.033, subd. 6, of the HRA Act, the city levied $280,000 special
benefit tax for collection in 2016 and 2017, $323,000 for 2018, $348,000 for 2019, and $355,000
for 2020. This levy against all taxable real property supports redevelopment activities. The special
benefit levy is limited to .0185% of the taxable market value. Expenditures include administrative
costs, pay-as-you-go payments to various development projects, and a transfer to debt service
funds for its share of the 2005 (refunded in 2011) improvement bond, which financed an
interchange project in tax increment district 1-34. Without any new TIF districts, tax increments will
decline as the result of decertification of entire districts or individual parcels within a district. Much
of the fund balance is non-spendable (land held for resale) or restricted to specific activities such as
development in tax increment districts and loans to qualifying businesses.
BUDGET:
Measurement 2016 2017 2018 2019 2020
Property acquisitions 0 1 4 2 4
Loans outstanding 0 1 2 3 5
Active TIF districts 10 9 9 8 10
EDA FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 279,421$280,593$323,186$348,000$348,000$355,000$2.0%
Tax Increments 668,352 648,031 638,278 617,344 617,344 617,344 0.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 470,349 211,951 59,034 95,656 95,656 93,656 -2.1%
Operating Transfers --116,473 ------
TOTAL REVENUES 1,418,122$1,140,575$1,136,971$1,061,000$1,061,000$1,066,000$0.5%
EXPENDITURES
Personnel Services 68,957$104,374$111,962$121,702$121,702$129,866$6.7%
Supplies 81 79 -100 100 100 0.0%
Other Services & Charges 272,448 420,129 270,442 253,472 253,472 253,034 -0.2%
Capital Outlay 257,980 90,218 782,207 298,726 298,726 321,000 7.5%
Operating Transfers 188,500 200,000 200,000 225,000 230,000 200,000 -11.1%
TOTAL EXPENDITURES 787,966$814,800$1,364,611$899,000$904,000$904,000$0.6%
FUNDBALANCE- JANUARY 1 6,512,174$7,142,330$7,468,105$7,240,465$7,240,465$7,397,465$
Excess (Deficiency) of
Revenues over Expenditures 630,156 325,775 (227,640)162,000 157,000 162,000
FUNDBALANCE- DECEMBER31 7,142,330$7,468,105$7,240,465$7,402,465$7,397,465$7,559,465$
165
CEMETERY FUND
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:651
ACTIVITY #: 49010
ACTIVITY SCOPE:
The Cemetery Fund sustains itself with revenues from plot sales and from services, such as
excavations, staking for monuments, memorial programs, and perpetual care. The city maintains
two cemeteries: Riverside and Hillside. Staff assists customers/visitors with memorials and perpetual
care for both. Hillside cemetery is no longer open to burial and expenditures are recorded through
park operations in the General Fund. An ossuary-columbarium was purchased in 2019 that is also
accounted for in this fund.
OBJECTIVES:
1.Serve the public in a courteous, professional manner.
2.Maintain cemetery grounds and grave markers.
ISSUES:
1.Increasing maintenance costs.
2.Competition from cremations.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Plotoccupied 3,514 3,535 3,553 3,575 3,598
Plots reserved 745 743 739 683*683
Plots available forsale 1,020 1,106 1,097 1,132 1,132
Numberof plots sold 11 20 13 10 20
Numberof internments 18 26 22 21 20
Numberof markers staked 14 13 13 12 16
Columbariumslots occupied ------------1
Columbariumslots reserved ---------2 2
Columbariumslots available ---------96 93
Columbariumslots sold ------------3
Ossuary slots occupied ---------------
Ossuary slots reserved ---------50 50
Ossuary slots available ---------265 265
Ossuary slots sold ---------50 50
Installed in 2019, theColumbarium-Ossuary willhave96columbarium and 315ossuary slots.
*2019- Reclaim year
166
BUDGET COMMENTARY:
In 2019, the city acquired an ossuary-columbarium for an estimated $60,000. Other expenditures are
estimated near prior year levels. 2019 charges for services includes the sale of 50 ossuary slots to a
local hospital for $20,000.
BUDGET:
CEMETERY 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 14,517 36,907 19,086 51,500 51,500 33,000 -35.9%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 596 653 528 500 500 --100.0%
Contributed Capital ---------
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 15,113$37,560$19,614$52,000$52,000$33,000$-36.5%
EXPENDITURES
Personnel Services 1,070$1,394$584$3,803$3,803$2,652$-30.3%
Supplies 474 669 418 1,135 1,135 1,135 0.0%
Other Services & Charges 15,494 16,277 17,498 26,062 26,062 29,213 12.1%
Capital Outlay ---60,000 60,000 --100.0%
Operating Transfers ---------
TOTAL EXPENDITURES 17,038$18,340$18,500$91,000$91,000$33,000$-63.7%
FUNDBALANCE- JANUARY 1 33,651$31,726$50,946$52,060$52,060$13,060$
Excess (Deficiency) of
Revenues over Expenditures (1,925)19,220 1,114 (39,000)(39,000)-
FUNDBALANCE- DECEMBER31 31,726$50,946$52,060$13,060$13,060$13,060$
167
SMALL CITIES DEVELOPMENT PROGRAM (SCDP) FUND
DEPARTMENT: Small Cities Development Program Fund
SUPERVISOR: Community Development Director
FUND #:221
ACTIVITY #: 46500
ACTIVITY SCOPE:
Following state and federal guidelines, the Small Cities Development Program Fund administers
loans to local businesses.
OBJECTIVES:
1.Match available funds with qualifying businesses in Monticello.
ISSUES:
1.Number of qualified businesses in Monticello.
2.Loan program and bank requirements.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Repayment of loans and interest earned on investments make up the anticipated activity in 2020.
Effective July 1, 2017, cities with uncommitted money received from repayment of funds may choose
to give 20% of the funds back to the state general fund before June 30, 2018. The remaining 80% of
the uncommitted funds can then be used for any lawful expenditure. The city chose to take
advantage of this change in statute. Consequently, other services and charges in 2018 reflect the
amount returned to the state. Operating transfers included a 50-50 split to the EDA and Capital
Projects Fund for the portion retained by the city.
Measurement 2016 2017 2018 2019 2020
Loans outstanding 0 0 0 1 1
168
BUDGET:
SCDPFUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 17,760 15,795 10,207 10,000 10,000 15,000 50.0%
Operating Transfers ---------
TOTAL REVENUES 17,760$15,795$10,207$10,000$10,000$15,000$50.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges --58,237 -195,000 ----
Capital Outlay ---------
Operating Transfers --232,946 ------
TOTAL EXPENDITURES -$-$291,183$-$195,000$-$---
FUNDBALANCE- JANUARY 1 1,120,404$1,138,164$1,153,959$872,983$872,983$687,983$
Excess (Deficiency) of
Revenues over Expenditures 17,760 15,795 (280,976)10,000 (185,000)15,000
FUNDBALANCE- DECEMBER31 1,138,164$1,153,959$872,983$882,983$687,983$702,983$
169
COMMUNITY CENTER FUND
DEPARTMENT: Community Center
SUPERVISOR: Community Center Director
FUND #:226
ACTIVITY #: 4512X
ACTIVITY SCOPE:
The Monticello Community Center provides space for a variety of recreational, professional, and
educational opportunities. Expenditures for the community center are divided into six activities:
administration, rentals and events, aquatics, guest services and concessions, maintenance, and
programming.
OBJECTIVES:
1.Develop a plan for the future use of the area which was used as a wheel park (skateboard,
bike, and rollerblade) including design, financing, construction, and marketing.
2.Develop an on-line registration system for program and membership sign up.
3.Provide facility improvements to increase customers.
4.Improve financial controls and budget management.
ISSUES:
1.Staff turnover and vacancies.
2.Limitations to facility size and parking availability.
3.Competition from other fitness facilities.
4.Segregation of revenues and expenditures to various community center activities.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Customervisits, numberof 168,459 190,475 182,486 184,106 185,000
Gross program sales 199,189$149,821$183,194$112,506$155,000$
Annual memberships 486 408 467 1,123 1,000
Monthly memberships 743 712 651 568 560
Three-month memberships 118 232 158 258 250
Ratioof annual memberships
toothermemberships 5.31 3.48 4.98 10.04 9.16
Rental revenue 198,471$190,342$199,201$197,352$217,200$
170
BUDGET COMMENTARY:
Starting in 2017, community center revenues are divided by activity. The largest revenue sources for
2020 are memberships ($775,000) and property taxes ($417,000). Other revenues include
concession sales, room rentals, and program fees. The 2020 personnel services budget includes a full
step increase and a 3% (2% in January and 1% in July) market rate wage increase as well as an
adjustment to the pay scale from a pay study conducted in 2019. With exception to capital outlays,
other budget items are expected to remain close to prior year levels.
Within the Community Center fund, revenues and costs are allocated to various activities:
administration, rentals and events, aquatics, guest services and concessions, maintenance, and
programming.
BUDGET:
COMMUNITY CENTER 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 364,000$372,000$387,000$402,000$402,000$417,000$3.7%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 1,394,913 1,364,709 1,441,743 1,572,500 1,572,500 1,571,800 0.0%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 27,915 49,770 92,109 25,500 25,500 19,200 -24.7%
Operating Transfers ---------
TOTAL REVENUES 1,786,828$1,786,479$1,920,852$2,000,000$2,000,000$2,008,000$0.4%
EXPENDITURES
Personnel Services 1,061,074$1,112,240$1,199,605$1,210,585$1,210,585$1,279,346$5.7%
Supplies 214,502 163,502 154,386 218,300 218,300 220,050 0.8%
Other Services & Charges 378,665 520,656 449,426 466,115 656,115 408,604 -12.3%
Capital Outlay 201 171,394 91,161 150,000 150,000 100,000 -33.3%
Operating Transfers ---------
TOTAL EXPENDITURES 1,654,442$1,967,792$1,894,578$2,045,000$2,235,000$2,008,000$-1.8%
FUNDBALANCE- JANUARY 1 629,448$761,834$580,521$606,795$606,795$371,795$
Excess (Deficiency) of
Revenues over Expenditures 132,386 (181,313)26,274 (45,000)(235,000)-
FUNDBALANCE- DECEMBER31 761,834$580,521$606,795$561,795$371,795$371,795$
171
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172
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
DEBT
SERVICE
FUNDS
DEBT SERVICE FUNDS - SUMMARY
DESCRIPTION
Debtservicesfundsareusedtoaccountfortheaccumulationofresourcesforthepaymentofgenerallong-
termdebt,excludingdebtissuedbyanenterpriseorinternalservicefund.Debtservicefundsusethemodified
accrualbasisofaccountingforbothfinancialreportingandbudgetingpurposes.Thecityhassevenactivedebt
service(sub)fundsthatarecombinedintoonedebtservicefundforfinancialreportingpurposes.
BUDGETISSUES
Thecity'sbondratingwasdowngradedfromAa3toA2in2012byMoody'sInvestorServices.Thisratingwas
upgradedwiththesaleofthecity’ssoledebtissuein2019: 2019A$8,000,000G.O.bondswithfour
components:$1,040,000abatementbonds,$1,290,000equipment,$5,350,000CIP,and$320,000street
improvements.In2018,thecityissued$5,000,000inG.O.abatementbonds.In2017,thecityissued
$5,000,000inG.O.bondswithtwocomponents:$2,040,000improvementbondportionand$2,960,000
abatementbondportion.In2016,thecityissued$4,900,000inG.O.bondsforstreetreconstructionand
assessableimprovements.Seeindividual(sub)fundsforthebudgetissuesfacingeachdebtservice(sub)fund.
Fundbalancesinsome(sub)fundsdeclinedwithearlybondredemptions.Additionally,thelastlargepayment
ononeserialbondreducedtheneedtoaccumulatecashintheprioryearforthenextFebruarypayment.New
bondissuesarestructuredtohaveDecember,ratherthanFebruary,principalpayments.
BUDGETSUMMARY
DEBT SERVICEFUNDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 2,084,000$2,437,000$1,787,000$2,227,646$2,227,646$2,939,987$32.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 812,545 631,946 327,110 268,376 267,266 228,104 -15.0%
Miscellaneous 36,426 30,895 33,774 4,500 4,500 5,200 15.6%
Operating Transfers 1,439,136 599,362 249,899 335,000 345,000 200,000 -40.3%
Debt Proceeds ---------
TOTAL REVENUES 4,372,107$3,699,203$2,397,783$2,835,522$2,844,412$3,373,291$19.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 208 --------
Capital Outlay ---------
Debt Service 6,210,561 4,391,509 2,807,220 3,497,223 3,497,223 4,148,774 18.6%
Operating Transfers -50,266 --75,000 ----
TOTAL EXPENDITURES 6,210,769$4,441,775$2,807,220$3,497,223$3,572,223$4,148,774$18.6%
FUNDBALANCE- JANUARY 1 5,382,215$3,543,553$2,800,981$2,391,544$2,391,544$1,663,733$
Excess (Deficiency) of
Revenues over Expenditures (1,838,662)(742,572)(409,437)(661,701)(727,811)(775,483)
FUNDBALANCE- DECEMBER31 3,543,553$2,800,981$2,391,544$1,729,843$1,663,733$888,250$
173
2011A G.O. REFUNDING BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:312
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2011A G.O.Refunding Bonds refinanced the 2005A G.O.Improvement Bonds. The debt service
schedule calls for semi-annual payments in February (principal and interest) and August (interest
only). The average interest rate is 1.6112%. The revenue sources include a combination of impact
fees, property taxes, special assessments, and tax increments. The 2011A bonds will be partially
redeemed on February 1, 2020. The remaining debt service payments match anticipated tax
increment receipts.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Certify or collect deferred special assessments when development occurs.
3.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The city issued $10,735,000 in 2011 G.O. Refunding Bonds to advance refund the 2005A G.O.
Improvement Bonds. The 2005A issue was redeemed on February 1, 2013.
The 2011A G.O. Refunding Bond revenue sources are a combination of transfers from the Economic
Development Fund, a property tax levy, and special assessments. The debt is structured to reflect the
nature of underlying projects and assessment policy. Consequently, there is large drop in 2017 debt
service for this sub fund.
Measurement 2016 2017 2018 2019 2020
Assessmentbalance $1,927,740 $2,093,333 $2,570,679 $2,535,167 $2,471,129
Assessmentbalance deferred $1,798,022 $1,741,746 $2,258,015 $1,972,819 $1,972,819
Deferred % of balance 93%83%88%78%80%
Delinquentbalance $117 ------------
Prepaid assessments ------$2,270 ------
Assessmentrolls 6 3 3 4 4
Assessed parcels 66 6 7 7 7
174
BUDGET:
REMAINING DEBT SERVICE:
2011A G.O. BONDFUND(2005A)2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 330,000$139,783$148,061$150,581$150,581$172,641$14.6%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 336,960 164,937 58,261 44,236 44,236 50,761 14.8%
Miscellaneous 4,795 10,665 9,106 1,000 1,000 2,000 100.0%
Operating Transfers 188,500 468,376 200,000 200,000 205,000 200,000 0.0%
Debt Proceeds ---------
TOTAL REVENUES 860,255$783,761$415,428$395,817$400,817$425,402$7.5%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service 2,427,008 784,375 780,054 429,150 429,150 1,271,450 196.3%
Operating Transfers ---------
TOTAL EXPENDITURES 2,427,008$784,375$780,054$429,150$429,150$1,271,450$196.3%
FUNDBALANCE- JANUARY 1 2,828,329$1,261,576$1,260,962$896,336$896,336$868,003$
Excess (Deficiency) of
Revenues over Expenditures (1,566,753)(614)(364,626)(33,333)(28,333)(846,048)
FUNDBALANCE- DECEMBER31 1,261,576$1,260,962$896,336$863,003$868,003$21,955$
Payable Principal Interest Rate Total
2/1/2020 1,230,000$22,275$2.00%1,252,275$
8/1/2020 5,775 5,775
2/1/2021 190,000 5,775 3.00%195,775
8/1/2021 2,925 2,925
2/1/2022 195,000 2,925 3.00%197,925
Total 1,615,000$39,675$1,654,675$
Note: Thefollowing amounts willberedeemed on 2/1/2020:
2/1/2021 205,000$
2/1/2022 215,000
2/1/2023 420,000
Total 840,000$
GO RefundingBonds, Series2011A
175
2014A G.O. JUDGMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:318
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2014A G.O. Judgment Bonds financed the settlement with telecommunications bondholders.
The $5,750,000 settlement essentially relieves the city of liability for the $26,445,000 in revenue
bonds used to finance its telecommunications utility. The judgment portion of the 2014A bonds
totaled $6,080,000. The city borrowed (capitalized interest) the 2015 interest only payments.
Thereafter, the city added the annual principal and interest debt service payments to its tax levy.
The average interest rate is 3.0696%. The bonds are eligible for early redemption in 2021.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Maintain adherence to bond covenants and awareness of arbitrage limitations.
2.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The $6,595,000 2014A G.O. bond issue had two components: $6,080,000 judgment portions and
$515,000 capital equipment portion. The capital equipment portion is accounted for in the Central
Equipment Fund. Beginning in 2016, annual debt service payments were added to the property tax
levy. The final payment on the bonds is in December 2030. The bonds are redeemable in 2021.
However, an extraordinary optional redemption provision allows the city to redeem the bonds at any
time for 101% of par if the fiber optics system is sold or leased. The settlement proceeds were
distributed directly to the trustee for the bondholders.
Measurement 2016 2017 2018 2019 2020
Not Applicable
176
BUDGET:
REMAINING DEBT SERVICE:
2014A G.O. JUDGMENT BONDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 544,000$536,929$537,586$537,244$537,244$535,501$-0.3%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 689 1,452 3,151 1,000 1,000 1,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 544,689$538,381$540,737$538,244$538,244$536,501$-0.3%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service 515,520 512,086 512,665 512,462 512,462 510,801 -0.3%
Operating Transfers ---------
TOTAL EXPENDITURES 515,520$512,086$512,665$512,462$512,462$510,801$-0.3%
FUND BALANCE- JANUARY 1 7,350$36,519$62,814$90,886$90,886$116,668$
Excess (Deficiency) of
Revenues over Expenditures 29,169 26,295 28,072 25,782 25,782 25,700
FUND BALANCE- DECEMBER 31 36,519$62,814$90,886$116,668$116,668$142,368$
Payable Principal Interest Rate Total
6/15/2020 -$72,501$72,501$
12/15/2020 365,000 72,501 2.20%437,501
6/15/2021 -68,486 68,486
12/15/2021 375,000 68,486 2.50%443,486
6/15/2022 -63,798 63,798
12/15/2022 385,000 63,798 2.75%448,798
6/15/2023 -58,504 58,504
12/15/2023 395,000 58,504 2.90%453,504
6/15/2024 -52,777 52,777
12/15/2024 405,000 52,777 3.05%457,777
6/15/2025 -46,600 46,600
12/15/2025 420,000 46,600 3.20%466,600
6/15/2026 -39,881 39,881
12/15/2026 435,000 39,881 3.35%474,881
6/15/2027 -32,594 32,594
12/15/2027 445,000 32,594 3.40%477,594
6/15/2028 -25,029 25,029
12/15/2028 465,000 25,029 3.38%490,029
6/15/2029 -17,182 17,182
12/15/2029 480,000 17,182 3.55%497,182
6/15/2030 -8,663 8,663
12/15/2030 495,000 8,663 3.50%503,663
Total 4,665,000 972,030 5,637,030$
GOBonds, Series2014A(JudgmentPortion)
177
2015B G.O. STREET RECONSTRUCTION-IMPROVEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:319
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2015B G.O. Street Reconstruction and Improvement Bonds provided financing for School
Boulevard, Fallon Avenue, and 85th Street improvements. This issue also provided financing for
street and other infrastructure improvements in the area east of Highway 25 and north of Interstate
94. The $2,605,000 bond issue allocated $1,885,000 for street reconstruction and $720,000 for
improvements. The school district was assessed $172,000 for School Boulevard. The city levies for
the gap between annual debt service payments and annual assessment collections. The bonds have
an average interest rate of 2.5856% and are redeemable in December of 2022.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The $2,605,000 2015B G.O. bond issue has two components: $1,885,000 street reconstruction
portion and $720,000 improvement portion. Property taxes support the reconstruction portion of
the debt issue. The improvement portion is supported by a single assessment of $175,000 on school
district property and property taxes. The tax levy covers the gap between assessment revenue and
debt service. The 2016 $250,000 levy exceeded the bond covenant required levy by $50,000.
Measurement 2016 2017 2018 2019 2020
Assessmentbalance $154,754 $137,560 $120,365 $103,170 $85,975
Deferred assessments ---------------
Deferred % of balance ---------------
Delinquentbalance ---------------
Prepaid assessments ---------------
Assessmentrolls 1 1 1 1 1
Assessed parcels 1 1 1 1 1
178
BUDGET:
REMAINING DEBT SERVICE:
2015B G.O. Bonds 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 250,000$195,288$203,425$200,905$200,905$198,385$-1.3%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 27,855 25,320 24,416 22,611 22,611 21,709 -4.0%
Miscellaneous 520 1,403 2,033 1,000 1,000 500 -50.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 278,375$222,011$229,874$224,516$224,516$220,594$-1.7%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service 212,626 208,225 215,979 213,652 213,652 211,250 -1.1%
Operating Transfers ---------
TOTAL EXPENDITURES 212,626$208,225$215,979$213,652$213,652$211,250$-1.1%
FUNDBALANCE- JANUARY 1 665$66,414$80,200$94,095$94,095$104,959$
Excess (Deficiency) of
Revenues over Expenditures 65,749 13,786 13,895 10,864 10,864 9,344
FUNDBALANCE- DECEMBER31 66,414$80,200$94,095$104,959$104,959$114,303$
Payable Principal Interest Rate Total
6/15/2020 -$25,225$25,225$
12/15/2020 160,000 25,225 1.50%185,225
6/15/2021 -24,024 24,024
12/15/2021 165,000 24,024 2.00%189,024
6/15/2022 -22,376 22,376
12/15/2022 165,000 22,376 2.00%187,376
6/15/2023 -20,724 20,724
12/15/2023 170,000 20,724 2.50%190,724
6/15/2024 -18,600 18,600
12/15/2024 175,000 18,600 2.50%193,600
6/15/2025 -16,413 16,413
12/15/2025 180,000 16,413 2.50%196,413
6/15/2026 -14,162 14,162
12/15/2026 185,000 14,162 2.50%199,162
6/15/2027 -11,850 11,850
12/15/2027 185,000 11,850 3.00%196,850
6/15/2028 -9,075 9,075
12/15/2028 195,000 9,075 3.00%204,075
6/15/2029 -6,150 6,150
12/15/2029 200,000 6,150 3.00%206,150
6/15/2030 -3,150 3,150
12/15/2030 210,000 3,150 3.00%213,150
Total 1,990,000$343,498$2,333,498$
GOBonds, Series 2015B
179
2016A G.O. STREET RECONSTRUCTION-IMPROVEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:320
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2016A G.O. Street Reconstruction and Improvement Bonds financed improvements included in
the 2016 core street project and at the intersection of Highway 25 and 7th Street. The $4,900,000
bond issue allocated $770,000 for street reconstruction and $4,130,000 for improvements. The city
levies for the gap between annual debt service payments and annual assessment collections. The
bonds have an average interest rate of 2.1034% and are redeemable in December of 2022.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
2.Investment earnings on assessment prepayments will be less than assessed interest rates.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The $4,900,000 2016A G.O. bond issue has two components: $770,000 street reconstruction portion
and $4,130,000 improvement portion. Property taxes support the reconstruction portion of the debt
issue. The improvement portion is supported by assessments of $1,143,000 in the core street
reconstruction area. Property taxes are levied for the gap between assessment revenue and debt
service. The bond issue resolution requires a $405,039 property tax levy for collection year 2020.
Future levies will be adjusted to reflect assessment prepayments, interest earned on the
prepayments and interest foregone on the prepayments.
Measurement 2016 2017 2018 2019 2020
Assessmentbalance $818,044 $712,355 $614,712 $516,625 $445,564
Deferred assessments ---------------
Deferred % of balance ---------------
Delinquentbalance ---$176 ---------
Prepaid assessments $263,182 $53,682 $18,023 $21,619 $0
Assessmentrolls 1 2 2 2 2
Assessed parcels 102 95 89 85 85
180
BUDGET:
REMAINING DEBT SERVICE:
2016A G.O. Bonds 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$415,000$407,769$409,134$409,134$405,039$-1.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 263,182 174,352 127,157 103,922 103,922 97,759 -5.9%
Miscellaneous 456 6,316 6,585 1,000 1,000 1,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 263,638$595,668$541,511$514,056$514,056$503,798$-2.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service -524,546 527,829 529,250 529,250 525,350 -0.7%
Operating Transfers ---------
TOTAL EXPENDITURES -$524,546$527,829$529,250$529,250$525,350$-0.7%
FUNDBALANCE- JANUARY 1 -$263,638$334,760$348,442$348,442$333,248$
Excess (Deficiency) of
Revenues over Expenditures 263,638 71,122 13,682 (15,194)(15,194)(21,552)
FUNDBALANCE- DECEMBER31 263,638$334,760$348,442$333,248$333,248$311,696$
Payable Principal Interest Rate Total
6/15/2020 -$37,275$37,275$
12/15/2020 450,000 37,275 2.00%487,275
6/15/2021 -32,775 32,775
12/15/2021 460,000 32,775 2.00%492,775
6/15/2022 -28,175 28,175
12/15/2022 470,000 28,175 2.00%498,175
6/15/2023 -23,475 23,475
12/15/2023 480,000 23,475 2.00%503,475
6/15/2024 -18,675 18,675
12/15/2024 490,000 18,675 2.00%508,675
6/15/2025 -13,775 13,775
12/15/2025 500,000 13,775 2.00%513,775
6/15/2026 -8,775 8,775
12/15/2026 510,000 8,775 2.00%518,775
6/15/2027 -3,675 3,675
12/15/2027 60,000 3,675 3.00%63,675
6/15/2028 -2,775 2,775
12/15/2028 60,000 2,775 3.00%62,775
6/15/2029 -1,875 1,875
12/15/2029 60,000 1,875 3.00%61,875
6/15/2030 -975 975
12/15/2030 65,000 975 3.00%65,975
Total 3,605,000$344,450$3,949,450$
GO Bonds, Series 2016A
181
2017A G.O. IMPROVEMENT-ABATEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:321
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2017A G.O. Improvement and Abatement Bonds financed improvements to rural outlying roads
and various other city street projects. Additionally, the issue provided funding for Fallon Avenue
overpass right-of-way acquisition, engineering, and construction. The $5,000,000 bond issue
allocated $2,040,000 for street improvements and $2,960,000 for the overpass (Abatement). The
city levies for the gap between annual debt service payments and annual assessment collections.
The bonds have an average interest rate of 2.443% and are redeemable in December of 2026.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
2.Investment earnings on assessment prepayments may be less than assessed interest rates.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The $5,000,000 2017A G.O. bond issue has two components: $2,040,000 improvement portion and
$2,960,000 abatement portion. Property taxes and assessments support the improvement portion of
the debt issue. The abatement portion is supported by abatement tax levy for bond principal and a
debt service levy for bond interest. Property taxes will be levied for any gap between assessment
revenue and debt service. The bond issue resolution requires the following 2020 collection year
property tax levy: $176,716 for improvements, $75,651 for abatement interest, and $175,000 for
abatement principal.
Measurement 2016 2017 2018 2019 2020
Assessmentbalance ---$434,759 $382,993 $262,955 $230,085
Deferred assessments ---------------
Deferred % of balance ---------------
Delinquent balance ------$702 ------
Prepaid assessments ---$102,235 $8,290 $77,483 $0
Assessmentrolls ---2 2 2 2
Assessed parcels --- 72 69 59 59
182
BUDGET:
REMAINING DEBT SERVICE:
2017A G.O. Bonds 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$450,159$429,782$429,782$427,367$-0.6%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments -102,235 76,170 61,084 61,084 57,875 -5.3%
Miscellaneous -310 4,330 500 500 500 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES -$102,545$530,659$491,366$491,366$485,742$-1.1%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service --470,190 472,438 472,438 470,140 -0.5%
Operating Transfers ---------
TOTAL EXPENDITURES -$-$470,190$472,438$472,438$470,140$-0.5%
FUNDBALANCE- JANUARY 1 -$-$102,545$163,014$163,014$181,942$
Excess (Deficiency) of
Revenues over Expenditures -102,545 60,469 18,928 18,928 15,602
FUNDBALANCE- DECEMBER31 -$102,545$163,014$181,942$181,942$197,544$
Payable Principal Interest Rate Total
6/15/2020 -$49,671$49,671$
12/15/2020 370,000 49,671 2.00%419,671
6/15/2021 -45,969 45,969
12/15/2021 380,000 45,969 2.00%425,969
6/15/2022 -42,171 42,171
12/15/2022 385,000 42,171 2.00%427,171
6/15/2023 -38,320 38,320
12/15/2023 390,000 38,320 2.00%428,320
6/15/2024 -34,420 34,420
12/15/2024 400,000 34,420 2.00%434,420
6/15/2025 -30,420 30,420
12/15/2025 410,000 30,420 2.00%440,420
6/15/2026 -26,320 26,320
12/15/2026 420,000 26,320 2.50%446,320
6/15/2027 -21,069 21,069
12/15/2027 430,000 21,069 2.50%451,069
6/15/2028 -15,695 15,695
12/15/2028 210,000 15,695 2.50%225,695
6/15/2029 -13,070 13,070
12/15/2029 215,000 13,070 2.60%228,070
6/15/2030 -10,275 10,275
12/15/2030 220,000 10,275 3.00%230,275
6/15/2031 -6,975 6,975
12/15/2031 230,000 6,975 3.00%236,975
6/15/2032 -3,525 3,525
12/15/2032 235,000 3,525 3.00%238,525
Total 4,295,000$675,800$4,970,800$
GOBonds, Series 2017A
183
2018A G.O. ABATEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:322
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2018A G.O. Abatement Bonds provided funding for Fallon Avenue overpass right-of-way
acquisition, engineering, and construction. This $5,000,000 issue does not provide financing for any
other project types (improvement, street reconstruction, etc.). The city levies for the entire annual
principal and interest payments. The bonds have an average interest rate of 3.151% and are
redeemable in December of 2026. Abatement bonds were issued in 2019 to reimburse the city for
the remaining costs on the overpass project. All three abatement issues (2017, 2018, and 2019) will
have the same redemption date and term, with the last payment occurring in 2032.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
2.Accumulating resources for early redemption.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Unlike the 2017A bond issue, the $5,000,000 2018A G.O. bond issue has only one component:
Abatement. Property taxes are levied for annual principal and interest payments. A debt service levy
covers the annual bond interest payment and an abatement levy covers the annual bond principal
payment. Required 2020 collection year property tax levy: $167,434 for abatement interest and
$305,000 for abatement principal. Expenditures consist of debt principal and interest payments and
fiscal agent fees.
Measurement 2016 2017 2018 2019 2020
NotApplicable
184
BUDGET:
REMAINING DEBT SERVICE:
2018A G.O. Bonds 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes $0 $0 $0 $500,000 $500,000 $472,434 -5.5%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous --28 --200 ---
Operating Transfers --5,000 ------
Debt Proceeds ---------
TOTAL REVENUES -$-$5,028$500,000$500,000$472,634$-5.5%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service ---451,115 451,115 450,737 -0.1%
Operating Transfers ---------
TOTAL EXPENDITURES -$-$-$451,115$451,115$450,737$-0.1%
FUNDBALANCE- JANUARY 1 -$-$-$5,028$5,028$53,913$
Excess (Deficiency) of
Revenues over Expenditures --5,028 48,885 48,885 21,897
FUNDBALANCE- DECEMBER31 -$-$5,028$53,913$53,913$75,810$
Payable Principal Interest Rate Total
6/15/2020 -$72,469$72,469$
12/15/2020 305,000 72,469 3.00%377,469
6/15/2021 -67,894 67,894
12/15/2021 310,000 67,894 3.00%377,894
6/15/2022 -63,244 63,244
12/15/2022 320,000 63,244 3.00%383,244
6/15/2023 -58,443 58,443
12/15/2023 330,000 58,443 3.00%388,443
6/15/2024 -53,494 53,494
12/15/2024 340,000 53,494 3.00%393,494
6/15/2025 -48,394 48,394
12/15/2025 350,000 48,394 3.00%398,394
6/15/2026 -43,143 43,143
12/15/2026 360,000 43,143 3.00%403,143
6/15/2027 -37,744 37,744
12/15/2027 370,000 37,744 3.00%407,744
6/15/2028 -32,194 32,194
12/15/2028 385,000 32,194 3.00%417,194
6/15/2029 -26,419 26,419
12/15/2029 395,000 26,419 3.00%421,419
6/15/2030 -20,494 20,494
12/15/2030 405,000 20,494 3.13%425,494
6/15/2031 -14,165 14,165
12/15/2031 420,000 14,165 3.25%434,165
6/15/2032 -7,341 7,341
12/15/2032 435,000 7,341 3.38%442,341
Total 4,725,000$1,090,876$5,815,876$
GOBonds, Series2018AAbatementBonds
185
2019A G.O.ABATEMENT, EQUIPMENT, CIP & IMPROVEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:323
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2019A G.O. Bonds are comprised of four components: $1,040,000 abatement, $1,290,000
equipment, $5,350,000 CIP, and $320,000 street improvement. The 2019A bonds financed the
completion of the Fallon Avenue overpass, purchase of a fire ladder truck, construction of a new fire
hall, and street improvements. The debt service schedule calls for semi-annual payments in June
(interest only) and December (principal and interest). The revenue sources include a combination of
existing city funds, property taxes, and special assessments. The bonds have an average interest rate
of 2.0825% and are redeemable in December of 2027. All three abatement issues (2017, 2018, and
2019) will have the same redemption date and term, with the last payment occurring in 2032.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
2.Accumulating resources for early redemption.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The city issued the $8,000,000 2019A G.O. Bonds to finance the construction of the Fallon Avenue
overpass, purchase of a fire ladder truck, construction of a new fire hall, and street improvements.
Property taxes and special assessments also support debt service payments. Expenditures consist of
debt principal and interest payments and fiscal agent fees.
Measurement 2016 2017 2018 2019 2020
Assessmentbalance ------ --- $92,070 $81,840
Deferred assessments ---------------
Deferred % of balance ---------------
Delinquentbalance ---------------
Prepaid assessments ---------------
Assessmentrolls ---------1 1
Assessed parcels --- ------9 9
186
BUDGET:
REMAINING DEBT SERVICE:
2019A GO BONDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$728,620$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous ---------
Operating Transfers ----5,000 ----
Debt Proceeds ---------
TOTAL REVENUES -$-$-$-$5,000$728,620$---
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service -----709,046 ---
Operating Transfers ---------
TOTAL EXPENDITURES -$-$-$-$-$709,046$---
FUNDBALANCE- JANUARY 1 -$-$-$-$-$5,000$
Excess (Deficiency) of
Revenues over Expenditures ----5,000 19,574
FUNDBALANCE- DECEMBER31 -$-$-$-$5,000$24,574$
Payable Principal Interest Rate Total
6/15/2020 -$121,402$121,402$
12/15/2020 505,000 81,844 2.00%586,844
6/15/2021 -76,794 76,794
12/15/2021 560,000 76,794 2.00%636,794
6/15/2022 -71,194 71,194
12/15/2022 575,000 71,194 2.00%646,194
6/15/2023 -65,444 65,444
12/15/2023 580,000 65,444 2.00%645,444
6/15/2024 -59,643 59,643
12/15/2024 590,000 59,643 2.00%649,643
6/15/2025 -53,744 53,744
12/15/2025 605,000 53,744 2.00%658,744
6/15/2026 -47,694 47,694
12/15/2026 615,000 47,694 2.00%662,694
6/15/2027 -41,544 41,544
12/15/2027 630,000 41,544 2.00%671,544
6/15/2028 -35,244 35,244
12/15/2028 645,000 35,244 2.00%680,244
6/15/2029 -28,793 28,793
12/15/2029 455,000 28,793 2.00%483,793
6/15/2030 -24,244 24,244
12/15/2030 465,000 24,244 2.00%489,244
6/15/2031 -19,593 19,593
12/15/2031 475,000 19,593 2.10%494,593
6/15/2032 -14,606 14,606
12/15/2032 485,000 14,606 2.20%499,606
6/15/2033 -9,271 9,271
12/15/2033 405,000 9,271 2.25%414,271
6/15/2034 -4,715 4,715
12/15/2034 410,000 4,715 2.30%414,715
8,000,000$1,308,292$9,308,292$
GOBonds, Series 2019AAbatementBonds
187
CLOSED DEBT SERVICE FUNDS
CLOSED FUNDS INCLUDED IN SUMMARY TOTAL:
2007A G.O. Improvement Bond Sub-Fund
2008B G.O. Sewer Revenue Refunding Bond Sub-Fund
2010A G.O. Improvement Bond Sub-Fund
CLOSED FUNDS SUMMARY TOTAL:
CLOSEDDEBT SERVICEFUNDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 960,000$1,150,000$40,000$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 184,548 165,102 41,106 36,523 35,413 --100.0%
Miscellaneous 29,966 10,749 8,541 ------
Operating Transfers 1,250,636 130,986 44,899 135,000 135,000 --100.0%
Debt Proceeds ---------
TOTAL REVENUES 2,425,150$1,456,837$134,546$171,523$170,413$-$ -100.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 208 --------
Capital Outlay ---------
Debt Service 3,055,407 2,362,277 300,503 889,156 889,156 --100.0%
Operating Transfers -50,266 --75,000 ----
TOTAL EXPENDITURES 3,055,615$2,412,543$300,503$889,156$964,156$-$ -100.0%
FUNDBALANCE- JANUARY 1 2,545,871$1,915,406$959,700$793,743$793,743$-$
Excess (Deficiency) of
Revenues over Expenditures (630,465)(955,706)(165,957)(717,633)(793,743)-
FUNDBALANCE- DECEMBER31 1,915,406$959,700$793,743$76,110$-$-$
188
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
CAPITAL
PROJECT
FUNDS
CAPITAL PROJECT FUNDS - SUMMARY
DESCRIPTION
Capitalprojectfundsareusedtoaccountforfinancialresourcesthatarerestricted,committed,orassignedto
expenditureforcapitaloutlaysincludingtheacquisitionorconstructionofcapitalfacilitiesandothercapital
assets—excludingcapitalassetsfinancedbyproprietaryfunds(enterpriseorinternalservice).Capitalproject
fundsusethemodifiedaccrualbasisofaccountingforbothfinancialreportingandbudgetingpurposes.Thecity
currentlyhassixactivecapitalprojectfunds.
BUDGETISSUES
Financingcapitalassetadditionsorreplacementshasbeenanongoingchallenge,especiallyinanenvironment
wherethefocusisonmaintainingalow,stablepropertytaxlevy,andothertraditionalresources(LiquorFund
transfers)aredivertedtootherneeds.Seetheindividualfundsforthebudgetissuesfacingeachcapitalproject
fund.
BUDGETSUMMARY
TOTAL CAPITAL PROJECT 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 364,132$119,409$835,595$662,354$662,354$300,013$-54.7%
Tax Increments ---------
Franchise & Other Taxes $148,317 $186,248 $141,622 $116,000 $116,000 $100,000 -13.8%
Licenses & Permits ---------
Intergovernmental Revenues 1,652,358 910,397 483,034 150,000 150,000 --100.0%
Charges for Services 460,683 107,166 120,360 60,000 60,000 60,000 0.0%
Fines & Forfeits ---------
Special Assessments 171,602 312,433 372,874 64,000 64,000 70,000 9.4%
Miscellaneous 150,500 130,635 156,818 142,646 142,646 127,000 -11.0%
Operating Transfers 753,500 430,266 1,716,473 2,600,000 4,308,000 1,320,000 -49.2%
Debt Proceeds 4,997,503 5,078,814 5,040,882 8,000,000 8,000,000 2,200,000 -72.5%
TOTAL REVENUES 8,698,595$7,275,368$8,867,658$11,795,000$13,503,000$4,177,013$-64.6%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 193,695 199,582 159,910 ------
Capital Outlay 6,350,430 5,258,878 9,564,158 13,740,000 12,800,000 3,910,000 -71.5%
Operating Transfers 1,034,675 394,069 49,899 135,000 140,000 --100.0%
TOTAL EXPENDITURES 7,578,800$5,852,529$9,773,967$13,875,000$12,940,000$3,910,000$-71.8%
FUND BALANCE - JANUARY 1 10,260,522$11,380,317$12,803,156$11,896,847$11,896,847$12,459,847$
Excess (Deficiency) of
Revenues over Expenditures 1,119,795 1,422,839 (906,309)(2,080,000)563,000 267,013
FUND BALANCE - DECEMBER 31 11,380,317$12,803,156$11,896,847$9,816,847$12,459,847$12,726,860$
189
CAPITAL PROJECT FUND
DEPARTMENT: Capital Project Fund
SUPERVISOR: City Engineer
FUND #:400
ACTIVITY #: 43300
ACTIVITY SCOPE:
The Capital Project Fund is a generic fund of the same type used to account for on-going capital
asset additions and replacements. Capital assets acquired through this fund include street
improvements or other infrastructure and buildings.
OBJECTIVES:
1.Improve city infrastructure.
2.Extend city infrastructure to new developments.
3.Acquire large, non-proprietary fund, capital equipment (e.g. fire ladder truck).
ISSUES:
1.Funding growth and replacement improvements in a stable debt and property tax levy
environment.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
For 2020, notable projects include: fire ladder truck - $1,300,000 (bonded and budgeted, but not
purchased in 2019); 2020 street improvements - $2,200,000; Public Works equipment storage -
$600,000. Funding sources include: debt proceeds - $2,200,000; tax levy - $300,000; fund balance -
$1,600,000 (debt proceeds and other revenues from prior years). Reimbursement resolutions have
been passed by council on these projects. These resolutions allow the city to reimburse itself with
debt issuance proceeds. The 2020 property tax levy reduces the need for future debt and stabilizes
the overall levy to accommodate future debt.
Measurement 2016 2017 2018 2019 2020
Projects supported 4 5 5 8 6
190
BUDGET:
CAPITAL PROJECT FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 364,132$119,409$835,595$662,354$662,354$300,013$-54.7%
Franchise & Other Taxes 70,527 77,057 19,363 36,000 36,000 20,000 -44.4%
Intergovernmental Revenues 1,652,358 910,397 483,034 150,000 150,000 --100.0%
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 40,670 67,743 224,387 ------
Miscellaneous 44,476 67,569 85,315 40,646 40,646 40,000 -1.6%
Operating Transfers -300,000 1,316,473 500,000 2,133,000 900,000 80.0%
Debt Proceeds 4,997,503 5,078,814 5,040,882 8,000,000 8,000,000 2,200,000 -72.5%
TOTAL REVENUES 7,169,666$6,620,989$8,005,049$9,389,000$11,022,000$3,460,013$-63.1%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 112,400 186,550 147,511 ------
Capital Outlay 4,957,987 5,049,389 8,956,147 10,175,000 10,175,000 2,875,000 -71.7%
Operating Transfers --5,000 -5,000 ----
TOTAL EXPENDITURES 5,070,387$5,235,939$9,108,658$10,175,000$10,180,000$2,875,000$-71.7%
FUND BALANCE - JANUARY 1 4,533,131$6,632,410$8,017,460$6,913,851$6,913,851$7,755,851$
Excess (Deficiency) of
Revenues over Expenditures 2,099,279 1,385,050 (1,103,609)(786,000)842,000 585,013
FUND BALANCE - DECEMBER 31 6,632,410$8,017,460$6,913,851$6,127,851$7,755,851$8,340,864$
191
CLOSED BOND FUND
DEPARTMENT: Closed Bond Fund
SUPERVISOR: Finance Director
FUND #:300
ACTIVITY #: 47000
ACTIVITY SCOPE:
The Closed Bond Fund, formerly accounted for in the debt service section, is the combination of
multiple closed debt service funds. The fund has no debt obligation. However, special assessments
supporting past debt service continue to provide funding for city projects.
OBJECTIVES:
1.Provide funding for various city projects, including Bertram Chain of Lakes improvements.
2.Certifyorcollectdeferredspecialassessmentswhendevelopmentoccursafterrelateddebt
has been fully amortized.
ISSUES:
1.Declining assessment collections on retired debt.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
This fund is used to accumulate special assessment collections from discontinued debt service funds.
The debts related to these special assessments have matured or been redeemed early. In prior years,
this fund primarily financed Bertram Chain of Lakes land acquisitions. Other smaller transfers were
used for park and pathway improvements. Yearend transfers to the Park & Pathway Dedication Fund
would finance projects in the following year. Future assessment collections for 2020 and beyond are
estimated at $300,000.
Measurement 2016 2017 2018 2019 2020
Not Applicable
192
BUDGET:
CLOSED BOND FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 130,932 244,690 148,487 64,000 64,000 70,000 9.4%
Miscellaneous 15,308 (10,727)9,114 5,000 5,000 5,000 0.0%
Operating Transfers -50,266 --75,000 ----
Debt Proceeds ---------
TOTAL REVENUES 146,240$284,229$157,601$69,000$144,000$75,000$8.7%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers 753,500 80,000 -------
TOTAL EXPENDITURES 753,500$80,000$-$-$-$-$---
FUND BALANCE - JANUARY 1 859,079$251,819$456,048$613,649$613,649$757,649$
Excess (Deficiency) of
Revenues over Expenditures (607,260)204,229 157,601 69,000 144,000 75,000
FUND BALANCE - DECEMBER 31 251,819$456,048$613,649$682,649$757,649$832,649$
193
PARK & PATHWAY DEDICATION FUND
DEPARTMENT: Recreation & Culture
SUPERVISOR: Parks Superintendent
FUND #:229
ACTIVITY #: 45202
ACTIVITY SCOPE:
Activities of the Park and Pathway Dedication Fund include updating and maintaining the city's
pathway system, as well as designating funds for future city parks and pathways.
OBJECTIVES:
1.Improve pathways and parks systems.
2.Development of Bertram Chain of Lakes Park.
ISSUES:
1.Economic impact on new development and home construction.
2.Time constraints of other projects.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The Parks & Pathway Dedication Fund was initially set-up as a special revenue fund. However, park
dedication fees became an irregular source of revenue because of weak economic conditions and
sporadic new development. Consequently, the city reclassified the fund to a capital projects fund.
Transfers from other funds typically surpasses all other revenue sources. When possible, the city
transfers money into this fund prior to the year of expenditure.
The 2020 budgeted expenditures include the construction of turn lanes on Briarwood at the Bertram
Chain of Lakes park ($420,000), and the construction of a log shelter at Ellison Park ($95,000). Land
acquisition at Bertram Chain of Lakes concluded in 2016.
Measurement 2016 2017 2018 2019 2020
LandAcquisition 1,083,500$-$-$-$-$
Projects supported 4 4 2 4 3
Dedicationfees -$-$18,997$-$-$
194
BUDGET:
PARK & PATHWAY DEDICATION 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services --18,997 ------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 36,439 17,922 10,688 62,000 62,000 47,000 -24.2%
Operating Transfers 753,500 80,000 400,000 2,100,000 2,100,000 420,000 -80.0%
TOTAL REVENUES 789,939$97,922$429,685$2,162,000$2,162,000$467,000$-78.4%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 62,755 1,192 12,185 ------
Capital Outlay 1,342,983 209,489 229,137 2,605,000 2,605,000 515,000 -80.2%
Operating Transfers ---------
TOTAL EXPENDITURES 1,405,738$210,681$241,322$2,605,000$2,605,000$515,000$-80.2%
FUND BALANCE - JANUARY 1 1,236,660$620,861$508,102$696,465$696,465$253,465$
Excess (Deficiency) of
Revenues over Expenditures (615,799)(112,759)188,363 (443,000)(443,000)(48,000)
FUND BALANCE - DECEMBER 31 620,861$508,102$696,465$253,465$253,465$205,465$
195
STORMWATER ACCESS FUND
DEPARTMENT: Public Works
SUPERVISOR: City Engineer/Public Works Director
FUND #:263
ACTIVITY #: 49201
ACTIVITY SCOPE:
The Stormwater Access Fund provides resources for major improvements to the storm sewer
system. Impact fees are collected on building permits for new construction and lot development.
These fees are also used to retire debt service related to improvements to the sanitary sewer
system.
OBJECTIVES:
1.Maintain and upgrade storm sewer system.
2.Meet changing ponding rules.
3.Retire debt service related to system improvements in a timely manner.
ISSUES:
1.Building permits for residential and commercial development are increasing.
2.The economy is recovering.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The main revenue sources are storm sewer access and trunk fees on new construction or special
assessments of past access and trunk fees. Past operating transfers have supported debt service
incurred to finance stormwater improvements. The debt service funds include the 2011A (formerly
2005A) Refunding Improvement Bond--part of the interchange project, and the 2010A Improvement
and Refinancing Bond--its share of the 2010 storm sewer project. Beginning in 2016, funding for
routine stormwater pond maintenance improvements came from the General Fund. A Water Quality
enterprise fund was created in 2019, which will be responsible for routine stormwater pond
maintenance improvement costs going forward. Small stormwater improvements were made in 2016
and 2017. In 2020, there is one non-routine planned capital outlay: pond expansion at A Glorious
Church ($360,000). Past transfers have supported debt service.
Measurement 2016 2017 2018 2019 2020
Not Applicable
196
BUDGET:
STORMWATER ACCESS FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 460,683 107,166 101,363 60,000 60,000 60,000 0.0%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 16,771 17,542 15,899 5,000 5,000 5,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 477,454$124,708$117,262$65,000$65,000$65,000$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 18,540 11,840 214 ------
Capital Outlay ---800,000 -360,000 -55.0%
Operating Transfers 235,567 268,376 -------
TOTAL EXPENDITURES 254,107$280,216$214$800,000$-$360,000$-55.0%
FUND BALANCE - JANUARY 1 1,174,049$1,397,396$1,241,888$1,358,936$1,358,936$1,423,936$
Excess (Deficiency) of
Revenues over Expenditures 223,347 (155,508)117,048 (735,000)65,000 (295,000)
FUND BALANCE - DECEMBER 31 1,397,396$1,241,888$1,358,936$623,936$1,423,936$1,128,936$
197
STREET LIGHTING IMPROVEMENT FUND
DEPARTMENT: Public Works
SUPERVISOR: City Engineer/Public Works Director
FUND #:245
ACTIVITY #: 43162
ACTIVITY SCOPE:
The Street Lighting Improvement Fund provides resources for improvements to the street lighting
system. Electric franchise fees are the fund’s primary revenue sources.
OBJECTIVES:
1.Upgrade traditional lights to colonial style lights.
2.Collaborate with MNDOT to add battery back-up to signals on TH25.
3.Replace and modify lighting system in the downtown area.
4.Add lighting for pathways and other high use areas.
ISSUES:
1.Project scope and timing.
2.Develop a light replacement program with Wright Hennepin and Xcel Energy.
3.Verify lamp and fixture maintenance by utility companies.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Electric franchise fees provide resources for lighting projects, often in conjunction with other street
improvement projects. Capital outlays for 2020 include $100,000 for downtown re-lighting projects
and $60,000 for pathway lighting.
Measurement 2016 2017 2018 2019 2020
Projects supported 0 1 3 2 2
198
BUDGET:
STREET LIGHT IMPROVEMENTS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Franchise & Other Taxes 77,790 109,191 122,259 80,000 80,000 80,000 0.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 9,329 14,462 16,228 10,000 10,000 10,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 87,119$123,653$138,487$90,000$90,000$90,000$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay 49,460 -378,874 160,000 20,000 160,000 0.0%
Operating Transfers ---------
TOTAL EXPENDITURES $49,460 $0 $378,874 $160,000 $20,000 $160,000 0.0%
FUND BALANCE - JANUARY 1 681,660$719,319$842,972$602,585$602,585$672,585$
Excess (Deficiency) of
Revenues over Expenditures 37,659 123,653 (240,387)(70,000)70,000 (70,000)
FUND BALANCE - DECEMBER 31 719,319$842,972$602,585$532,585$672,585$602,585$
199
STREET RECONSTRUCTION FUND
DEPARTMENT: Public Works
SUPERVISOR: City Engineer/Public Works Director
FUND #:212
ACTIVITY #: 43121
ACTIVITY SCOPE:
The Street Reconstruction Fund was established to track annual improvements to city infrastructure.
Improvements are based on an annual reconstruction schedule.
OBJECTIVES:
1.Improve city streets in the capital improvement plan.
ISSUES:
1.City no longer levies for this fund.
2.Other traditional resources have been diverted to other needs.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
Past revenue sources have included property taxes and operating transfers from the Liquor Fund.
Neither the tax nor transfer has been budgeted for 2020. Reimbursement resolutions have been
passed by council on various projects that could be supported by the Street Reconstruction Fund.
These resolutions allow the city to reimburse itself with debt proceeds. Staff has not made a final
determination of the mix of funding sources for 2020 projects. All the operating transfers in the
budget schedule below are to a debt service fund.
Measurement 2016 2017 2018 2019 2020
Not Applicable
200
BUDGET:
STREET RECONSTRUCTION 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 28,177 23,867 19,574 20,000 20,000 20,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 28,177$23,867$19,574$20,000$20,000$20,000$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers 45,608 45,693 44,899 135,000 135,000 --100.0%
TOTAL EXPENDITURES 45,608$45,693$44,899$135,000$135,000$-$ -100.0%
FUND BALANCE - JANUARY 1 1,775,943$1,758,512$1,736,686$1,711,361$1,711,361$1,596,361$
Excess (Deficiency) of
Revenues over Expenditures (17,431)(21,826)(25,325)(115,000)(115,000)20,000
FUND BALANCE - DECEMBER 31 1,758,512$1,736,686$1,711,361$1,596,361$1,596,361$1,616,361$
201
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202
ENTERPRISE
FUNDS
Adopted 2020
ENTERPRISE
FUNDS
ENTERPRISE FUNDS - SUMMARY
DESCRIPTION
Enterprisefundsareusedtoreportanactivityforwhichafeeischargedtoexternalusersforgoodsorservices.
Unlikegovernmentalfunds,enterprisefundsfocusonthedeterminationofoperatingincome,changesinnet
position(orcostrecovery),financialposition,andcashflows.Enterprisefundsuseanaccrualbasisofaccounting
forfinancialreportingpurposes.Amodifiedaccrualbasiswillbeusedforbudgetingpurposesinthisreport.
Consequently,thebottomlineforeachenterprisefundislabeledfundbalanceratherthannetposition,which
includescapitalassets,long-termdebtandothernoncurrentitems.Fundbalanceinenterprisefundsisroughly
thesameasworkingcapital. Thecitycurrentlyhassixactiveenterprisefunds:Water,Sewage,WaterQuality,
Liquor(Hi-WayLiquors),DeputyRegistrar(DMV),andFiberOptics(FiberNet).
BUDGETISSUES
Eachenterprisefundhasspecificchallengesthatwillbeaddressedinthenarrativeforeachfund.
BUDGETSUMMARY
TOTAL ENTERPRISEFUNDS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Sale of Goods 5,448,584 5,751,197 6,086,293 5,979,220 5,979,220 6,264,651 4.8%
Licenses & Permits 3,000 2,490 3,210 2,000 2,000 2,000 0.0%
Intergovernmental Revenues ---------
Charges for Services 5,515,395 6,157,134 7,198,440 6,228,363 6,286,563 6,529,760 4.8%
Fines & Forfeits ---------
Special Assessments 494 14,028 26,011 38,000 38,000 38,000 0.0%
Miscellaneous 602,932 226,658 244,088 124,300 124,300 90,100 -27.5%
Contributed Capital 1,993,232 1,330,370 914,666 140,895 140,895 279,788 98.6%
Operating Transfers 350,000 180,000 130,000 100,000 -50,000 -50.0%
Debt Proceeds 1,413,065 179,552 (16,549)------
TOTAL REVENUES 15,326,702$13,841,429$14,586,159$12,612,778$12,570,978$13,254,299$5.1%
EXPENDITURES
Personnel Services 1,754,735$1,553,144$1,590,779$1,703,198$1,703,198$1,897,654$11.4%
Supplies 4,406,720 4,563,602 4,968,285 4,850,245 4,850,245 5,235,252 7.9%
Other Services & Charges 3,179,969 3,362,996 4,716,567 3,789,937 3,583,137 3,861,388 1.9%
Capital Outlay 3,095,592 741,626 564,220 1,573,000 623,000 2,000,000 27.1%
Debt Service 642,045 352,823 368,274 373,574 373,574 365,532 -2.2%
Operating Transfers 1,319,461 265,293 1,130,000 2,700,000 4,233,000 1,370,000 -49.3%
TOTAL EXPENDITURES 14,398,522$10,839,484$13,338,125$14,989,954$15,366,154$14,729,826$-1.7%
FUNDBALANCE- JANUARY 1 8,990,310$9,918,490$12,920,435$14,168,469$14,168,469$11,373,293$
Excess (Deficiency) of
Revenues over Expenditures 928,180 3,001,945 1,248,034 (2,377,176)(2,795,176)(1,475,527)
FUNDBALANCE- DECEMBER31 9,918,490$12,920,435$14,168,469$11,791,293$11,373,293$9,897,766$
203
WATER FUND
DEPARTMENT: Public Works
SUPERVISOR: Utilities Superintendent
FUND #:601
ACTIVITY #: 49440
ACTIVITY SCOPE:
The Water Fund is a self-sustaining city utility fund. The water department manages the water
utility, providing a continuous supply of high-quality water to customers at a reasonable cost. The
water system is maintained at proper pressure levels, and it is bacteria-free. Further, metering
equipment is maintained to account for accurate usage and billing.
OBJECTIVES:
1.Continue to add GPS data point to GIS system.
2.Improve well head protection program.
3.Advance installation of radio reading devices on water meters.
ISSUES:
1.Additional state and federal regulations.
2.Aging water control system (SCADA).
3.Project demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Water customers 4,225 4,270 4,341 4,396 4,450
Meters read*16,800 51,240 52,092 52,752 53,400
Meters replaced 57 84 64 45 50
New meters installed 57 55 81 43 50
Water locates**300 300 300 2,404 2,500
Gallons pumped(MG)519 577 592 512 550
Valves maintained 400 400 401 447 120
Hydrants maintained 400 400 172 428 153
Times mains flushed 2 2 2 2 2
Mains/wells rebuilt 0 0 2 0 2
Water towers inspections 2 2 2 2 2
Reservoir inspections 0 1 0 0 1
Water samples to sent 250 250 190 186 190
Radio units installed 650 650 584 368 500
Service shut-offs 150 150 150 43 100
* Monthly utility billing started at the beginning of 2017.
**Water locates were being combined with Fiber locates andnot counted separately prior to 2019.
204
BUDGET COMMENTARY:
The Water Fund’s main source of revenue is user charges. Since 2015, rates have increase annually
between 2% and 5%. Usage rates did not increase in 2020, but a new Minnesota Department of
Health connection fee was created.
Capital outlays in 2016 were largely attributable to a core street project, and capital outlays in 2020
are for a SCADA system upgrade. Outlays will decline with fewer projects with water components.
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage adjustment increase in addition to an adjustment to the pay scale from a pay
study completed in 2019. In 2016, one new full-time operator position was split between the Water
Fund and Sewage Fund. The 2018-2020 transfers out will be used to acquire land for the next public
works building site.
BUDGET:
WATER FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits 3,000 2,490 3,210 2,000 2,000 2,000 0.0%
Intergovernmental Revenues ---------
Charges for Services 1,130,120 1,376,492 1,349,647 1,386,147 1,386,147 1,348,539 -2.7%
Fines & Forfeits ---------
Special Assessments 494 14,028 26,011 38,000 38,000 38,000 0.0%
Miscellaneous 108,664 97,938 136,244 55,600 55,600 55,600 0.0%
Contributed Capital 187,358 102,070 299,628 80,000 80,000 80,000 0.0%
Operating Transfers ---------
Debt Proceeds --(16,549)------
TOTAL REVENUES 1,429,636$1,593,018$1,798,191$1,561,747$1,561,747$1,524,139$-2.4%
EXPENDITURES
Personnel Services 258,068$253,566$255,694$329,016$329,016$341,491$3.8%
Supplies 181,391 142,492 168,350 196,150 196,150 221,650 13.0%
Other Services & Charges 230,153 240,276 295,341 338,924 338,924 422,181 24.6%
Capital Outlay 949,832 11,930 299,768 150,000 150,000 650,000 333.3%
Operating Transfers 199,327 -600,000 500,000 1,533,000 900,000 80.0%
TOTAL EXPENDITURES 1,818,771$648,264$1,619,153$1,514,090$2,547,090$2,535,322$67.4%
FUND BALANCE - JANUARY 1 4,785,819$4,396,684$5,341,438$5,520,476$5,520,476$4,535,133$
Excess (Deficiency) of
Revenues over Expenditures (389,135)944,754 179,038 47,657 (985,343)(1,011,183)
FUND BALANCE - DECEMBER 31 4,396,684$5,341,438$5,520,476$5,568,133$4,535,133$3,523,950$
205
SEWAGE FUND
DEPARTMENT: Public Works
SUPERVISOR: Utilities Superintendent
FUND #:602
ACTIVITY #: 49480 & 49490
ACTIVITY SCOPE:
The Sewage Fund is a self-sustaining city utility fund. The Sewage Fund has two divisions: sanitary
sewer collection operations and treatment plant operations. The water department manages the
sanitary sewer system and a private vendor provides treatment plant services.
OBJECTIVES:
1.Continue to add GPS data points to GIS system.
2.Research alternative waste disposal options, including costs.
3.Advance long-range planning regarding plant capacity and expansion.
4.Monitor infiltration of ground water in to the sanitary sewer system.
ISSUES:
1.Treatment plant is nearing capacity.
2.Aging of control system (SCADA) and other assets.
3.Ground water infiltration.
4.Cost of treatment alternatives.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Collection
Sewer mains maintained 28 Miles 26 Miles 20 Miles 25 Miles 28 Miles
Liftstations 7 7 7 7 7
Sewer mainlocates*300 300 300 2,404 2,500
Manholes maintained**716 716 400 728 344
New service hookups 68 55 78 42 50
Treatment
Screw press influent flow (gals) 4,430,130 4,420,272 6,540,105 6,596,750 6,500,000
Thickenedsludge (wet tons)1,449 1,578 2,115 2,145 2,100
Thickenedsludge (dry tons)216 229 333 336 325
Dry ton% of wet ton 14.9%14.5%15.7%15.7%15.5%
Raw influent flow (milliongals)432 445 434 473 450
*Sewer locates were being combined with Fiber locates and not counted separately prior to 2019.
** Manholes are maintained by quadrants. Fewer manholes in one quadrant allows more time for
cleaning longer main sewer lines.
206
BUDGET COMMENTARY:
The Sewage Fund’s main source of revenue is user charges. Since 2016, rates have increased
annually between 2% and 5%.
Treatment plant capital outlays in 2016 included $2,333,000 for digester cover replacement and
phosphorous reduction. The funding mix for these plant upgrades included a loan from the
Minnesota Public Facilities Authority.
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage adjustment increase in addition to a pay scale adjustment recommended in a
pay study completed in 2019. Operating transfers out were budgeted to retire debt service for
system improvements. The city renewed its contract with a third-party provider of wastewater
treatment plant management services for five years starting in 2018. Other budget items are
expected to remain close to prior year levels.
BUDGET:
SEWAGE FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 2,203,729 2,446,046 3,430,411 2,459,516 2,459,516 2,551,721 3.7%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 62,168 70,126 52,459 50,000 50,000 25,000 -50.0%
Contributed Capital 1,805,874 1,228,300 615,038 60,895 60,895 199,788 228.1%
Operating Transfers ---------
Debt Proceeds 1,413,065 179,552 -------
TOTAL REVENUES 5,484,836$3,924,024$4,097,908$2,570,411$2,570,411$2,776,509$8.0%
EXPENDITURES
Personnel Services 347,720$338,722$328,965$347,255$347,255$360,071$3.7%
Supplies 17,831 24,639 131,864 26,550 26,550 160,000 502.6%
Other Services & Charges 1,116,983 1,170,072 2,395,154 1,235,811 1,235,811 1,240,533 0.4%
Capital Outlay 2,145,760 729,696 264,452 1,320,000 370,000 1,225,000 -7.2%
Debt Service 642,045 352,823 368,274 373,574 373,574 365,532 -2.2%
Operating Transfers 770,134 85,293 --600,000 ----
TOTAL EXPENDITURES 5,040,473$2,701,245$3,488,709$3,303,190$2,953,190$3,351,136$1.5%
FUND BALANCE - JANUARY 1 2,641,553$3,085,916$4,308,695$4,917,894$4,917,894$4,535,115$
Excess (Deficiency) of
Revenues over Expenditures 444,363 1,222,779 609,199 (732,779)(382,779)(574,627)
FUND BALANCE - DECEMBER 31 3,085,916$4,308,695$4,917,894$4,185,115$4,535,115$3,960,488$
207
CONTRACTED WASTEWATER TREATMENT PLANT SERVICES:
The city started directly paying for chemicals (polymer) in 2018. Electricity and gas charges were
assumed by the city in 2016. The waste disposal biosolids site was abandoned in 2014 when new
screw press technology was installed.
Year Service Change $Change %
2011 522,281.04$
2012 544,788.96$22,507.92$4.3%
2013 562,361.04$17,572.08$3.2%
2014 585,096.00$22,734.96$4.0%
2015 582,360.00$(2,736.00)$-0.5%
2016 582,360.00$-$0.0%
2017 593,196.00$10,836.00$1.9%
2018 563,400.00$(29,796.00)$-5.0%
2019 577,476.00$14,076.00$2.5%
2020 591,913.00$14,437.00$2.5%
2021 606,711.00$14,798.00$2.5%
2022 621,879.00$15,168.00$2.5%
Schedule of Non-Reimbursables (O&M Services)
Year R&M Polymer Hauling Landfill Electricity Gas Total
2011 89,899.16$11,427.06$-$-$154,982.64$44,604.29$300,913.15$
2012 91,406.38 16,303.76 --145,043.48 36,722.51 289,476.13
2013 89,620.47 17,453.23 --170,537.98 46,497.96 324,109.64
2014 57,883.83 62,735.70 32,949.54 33,237.11 160,825.74 68,416.61 416,048.53
2015 50,239.23 35,090.95 25,807.56 28,373.57 145,833.19 44,092.79 329,437.29
2016 52,872.08 32,395.63 20,875.73 30,784.18 --136,927.62
2017 54,704.50 33,019.20 23,144.50 51,057.37 --161,925.57
2018 61,020.34 -39,248.92 67,654.36 --167,923.62
2019*50,004.00 -43,020.00 51,000.00 --144,024.00
2020*50,004.00 -43,020.00 51,000.00 --144,024.00
*Budgeted
Schedule of Reimbursable Costs
208
REMAINING DEBT SERVICE:
The optional redemption date on these bonds
is December 1, 2021.
Payable Principal Interest Rate Total
6/1/2020 -$26,199$26,199$
12/1/2020 190,000 26,199 2.00%216,199
6/1/2021 -24,299 24,299
12/1/2021 195,000 24,299 2.15%219,299
6/1/2022 -22,203 22,203
12/1/2022 200,000 22,203 2.35%222,203
6/1/2023 -19,853 19,853
12/1/2023 205,000 19,853 2.60%224,853
6/1/2024 -17,188 17,188
12/1/2024 210,000 17,188 2.75%227,188
6/1/2025 -14,300 14,300
12/1/2025 215,000 14,300 3.00%229,300
6/1/2026 -11,075 11,075
12/1/2026 225,000 11,075 3.00%236,075
6/1/2027 -7,700 7,700
12/1/2027 230,000 7,700 3.20%237,700
6/1/2028 -4,020 4,020
12/1/2028 240,000 4,020 3.35%244,020
Total 1,910,000$293,670$2,203,670$
GO Wastewater Treatment Bonds, Series 2013B
Payable Principal Interest Rate Total
2/20/2020 -$9,567$9,567$
8/20/2020 104,000 9,567 1.063%113,567
2/20/2021 -9,014 9,014
8/20/2021 105,000 9,014 1.063%114,014
2/20/2022 -8,456 8,456
8/20/2022 106,000 8,456 1.063%114,456
2/20/2023 -7,893 7,893
8/20/2023 107,000 7,893 1.063%114,893
2/20/2024 -7,324 7,324
8/20/2024 108,000 7,324 1.063%115,324
2/20/2025 -6,750 6,750
8/20/2025 109,000 6,750 1.063%115,750
2/20/2026 -6,171 6,171
8/20/2026 111,000 6,171 1.063%117,171
2/20/2027 -5,581 5,581
8/20/2027 112,000 5,581 1.063%117,581
2/20/2028 -4,985 4,985
8/20/2028 113,000 4,985 1.063%117,985
2/20/2029 -4,385 4,385
8/20/2029 114,000 4,385 1.063%118,385
2/20/2030 -3,779 3,779
8/20/2030 115,000 3,779 1.063%118,779
2/20/2031 -3,168 3,168
8/20/2031 117,000 3,168 1.063%120,168
2/20/2032 -2,546 2,546
8/20/2032 118,000 2,546 1.063%120,546
2/20/2033 -1,919 1,919
8/20/2033 119,000 1,919 1.063%120,919
2/20/2034 -1,286 1,286
8/20/2034 120,000 1,286 1.063%121,286
2/20/2035 -648 648
8/20/2035 122,000 648 1.063%122,648
Total 1,800,000$166,944$1,966,944$
MPFA-15-0004-R-FY16
209
WATER QUALITY FUND
DEPARTMENT: Public Works
SUPERVISOR: Utilities Superintendent
FUND #:652
ACTIVITY #: 4948x
ACTIVITY SCOPE:
The Water Quality Fund, established in 2019, is a self-sustaining city utility fund. The streets and
engineering department manages the water quality utility, which includes street sweeping, MS4
management, storm sewer televising and cleaning, pond maintenance, and system enhancements.
These operations were previously accounted for in the stormwater activity in the General Fund. Fees
are based on 1 drainage unit per residence and 7 drainage units per impervious acre for non-
residential properties.
OBJECTIVES:
1.Monitor, repair, and clean storm water trunk lines, laterals, structures, ditches, holding
ponds, and structural pollution control devices.
ISSUES:
1.Continued deterioration of storm water system, without proper funding for repairs,
replacement, or improvements.
2.Educating the public on storm water operations.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The Water Quality Fund’s main source of revenue is user charges in the form of a stormwater fee,
which is based on 1 drainage unit per residence and 7 drainage units per impervious acre for non-
residential properties. The fee was established at $1 per drainage unit per month beginning in July
2019. The fee increased to $1.50 per drainage unit per month for 2020.
Measurement 2016 2017 2018 2019 2020
Stormwatermain miles --72 72.5 72.5
Numberof manholes --1,613 1,645 1,645
Numberof ponds --107 107 107
Numberof outfalls --31 31 31
Numberof stormwaterBMPS --47 49 49
Gopher1utility locates --1,892 2,404 2,100
*Started using GIS data in 2018. 2018&2019activity was accounted forin theGeneralFund.
210
Personnel services consists of allocated wages from staff in the streets and engineering departments.
Capital outlay consists of expenditures for boulevard drainage tile.
BUDGET:
WATERQUALITY FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ----58,200 206,000 ---
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous -----1,000 ---
Contributed Capital ---------
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES -$-$-$-$58,200$207,000$---
EXPENDITURES
Personnel Services -$-$-$-$-$93,374$---
Supplies -----18,250 ---
Other Services & Charges -----6,389 ---
Capital Outlay -----50,000 ---
Debt Service ---------
Operating Transfers ---------
TOTAL EXPENDITURES -----168,013 ---
FUNDBALANCE- JANUARY 1 -$-$-$-$-$58,200$
Excess (Deficiency) of
Revenues over Expenditures ----58,200 38,987
FUNDBALANCE- DECEMBER31 -$-$-$-$58,200$97,187$
211
LIQUOR FUND
DEPARTMENT: Liquor Fund
SUPERVISOR: Liquor Store Manager/Finance Director
FUND #:609
ACTIVITY #: 49750
ACTIVITY SCOPE:
The Liquor Fund provides customers with the opportunity to purchase alcohol and other related
products. Profits from store operations are used to support other city funds and activities.
OBJECTIVES:
1.Match product selection to changes in demand.
2.Enhance alcohol training program for all liquor store employees.
3.Elevate store attractiveness through customer focused improvements.
4.Boost sales to existing customers.
5.Increase sales per transaction.
6.Improve gross profit margin [1 – (cost/price)].
7.Grow customer base and sales by aggressively marketing the store.
ISSUES:
1.Promote and control the safe and responsible sale of alcohol.
2.Competitive pricing.
3.Staff turnover.
4.Proposed legislative action to allow liquor sales in retail stores, thereby causing more
competition.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Gross profit 1,407,360$1,498,816$1,539,546$1,674,968$1,700,000$
Gross profit% of sales 26%26%25%26%26%
Sales persquare foot $624 $654 $691 $724 $761
Wine tasting tickets sold*252 238 105 ------
Total numberof sales 235,901 248,044 261,071 267,273 270,000
Staff hours worked 20,104 21,173 22,318 23,800 24,000
Sales perhourworked 11.7 11.7 11.7 11.2 11.3
Average sale (including tax)$25.25 $25.39 $25.59 $26.19 $26.50
*Theliquorstorereduced winetasting events from two to onein 2018, and ceased hosting any in 2019.
212
BUDGET COMMENTARY:
Hi-Way Liquors is a profitable city enterprise fund, with excess cash directed toward special projects
or other needs. Revenues are generated by the sale of alcoholic beverages and liquor-industry
related merchandise.
In 2018, the Liquor Fund transferred $400,000 to the Park & Pathway Fund and $130,000 to the Fiber
Optics Fund. The 2019 transfers out include $2,100,000 to the Parks and Pathway Fund for Bertram
park development. An additional $100,000 was budgeted to the Fiber Optics Fund, but that transfer
was not needed. The 2020 transfers out include $420,000 to the Parks and Pathway Fund and
$50,000 to the Fiber Optics Fund. The operating transfers from 2016 and 2017 went to the Fiber
Optics Fund. Since 2012, the Liquor Fund has transferred $5,610,000 to support Fibernet.
The 2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase as well as a pay scale adjustment recommended in a pay study
completed in 2019. Additionally, starting in 2018, an increase was budgeted in personnel services for
extra staffing for Sunday sales, which began in July 2017. Budgeted revenues are conservatively
estimated.
BUDGET:
LIQUORFUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Sale of Goods 5,448,584$5,751,197$6,086,293$5,979,220$5,979,220$6,264,651$4.8%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 14,713 23,769 25,028 5,000 5,000 5,000 0.0%
Contributed Capital ---------
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 5,463,297$5,774,966$6,111,321$5,984,220$5,984,220$6,269,651$4.8%
EXPENDITURES
Personnel Services 537,220$594,639$623,999$628,927$628,927$680,614$8.2%
Supplies 4,042,321 4,256,732 4,547,304 4,483,245 4,483,245 4,691,052 4.6%
Other Services & Charges 197,572 225,592 222,669 234,893 234,893 242,875 3.4%
Capital Outlay ---75,000 75,000 75,000 0.0%
Operating Transfers 350,000 180,000 530,000 2,200,000 2,100,000 470,000 -78.6%
TOTAL EXPENDITURES 5,127,113$5,256,963$5,923,972$7,622,065$7,522,065$6,159,541$-19.2%
FUNDBALANCE- JANUARY 1 1,017,443$1,353,627$1,871,630$2,058,979$2,058,979$521,134$
Excess (Deficiency) of
Revenues over Expenditures 336,184 518,003 187,349 (1,637,845)(1,537,845)110,110$
FUNDBALANCE- DECEMBER31 1,353,627$1,871,630$2,058,979$421,134$521,134$631,244$
213
DEPUTY REGISTRAR FUND
DEPARTMENT: Deputy Registrar (DMV)
SUPERVISOR: Finance Director
FUND #:217
ACTIVITY #: 41990
ACTIVITY SCOPE:
The Deputy Registrar (DMV) is a city-based service entity, which assists customers with the purchase
of vehicle license plates/tabs, DNR licenses, and other licenses as required by Minnesota state
agencies. The DMV is one of four limited driver’s license agents in Wright County. A limited agent
can process change of address and lost license applications for driver’s licenses.
OBJECTIVES:
1.Market DMV services to public and dealerships.
2.Expand and improve customer service.
3.Update employee training and certifications.
ISSUES:
1.Changes to state licensing regulations.
2.Availability/limitations of state portal for license processing (MNLARS).
3.Providing services with little or no revenue.
4.Competition with other customer options: Other DMVs, on-line, and mail-in.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
License Revenue $561,775 $594,701 $693,862 $787,658 $825,000
Revenue perstaff hour $56.87 $54.40 $50.87 $48.57 $48.53
Netrevenue perstaff hour $23.44 $19.08 $19.09 $20.53 $21.00
Efficiency:
Transactions perhour 7.7 7.2 8.8 8.6 8.5
WorkLoad:
Total transactions 75,891 78,515 119,543 139,965 145,300
Motorvehicle transactions 67,508 70,605 110,574 129,825 135,000
DNRtransactions 6,318 5,873 7,009 8,148 8,250
Game &Fish transactions 600 647 549 709 750
Driver's license transactions 1,465 1,390 1,411 1,283 1,300
Staff hours 9,878 10,931 13,640 16,218 17,000
Dealerships serviced 21 27 28 30 30
214
BUDGET COMMENTARY:
The main revenue source for the DMV is the fees charged for the issuance of various licenses. The
2020 personnel services budget includes a full step increase and a 3% (2% in January and 1% in July)
market rate wage adjustment increase as well as a pay scale adjustment from a wage study
completed in 2019. Revenue by service type: DNR licenses = $2-$7; game & fish licenses = $1; driver’s
licenses = $8; motor vehicle transactions = $6-$10. Revenues are always estimated conservatively.
BUDGET:
DEPUTY REGISTRAR 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 561,775 594,701 692,217 550,300 550,300 625,500 13.7%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 10,385 13,096 17,063 1,100 1,100 1,500 36.4%
Operating Transfers ---------
TOTAL REVENUES 572,160$607,797$709,280$551,400$551,400$627,000$13.7%
EXPENDITURES
Personnel Services 301,567$347,851$381,916$376,100$376,100$415,804$10.6%
Supplies 4,342 5,132 9,364 9,300 9,300 9,300 0.0%
Other Services & Charges 34,889 40,661 37,244 38,209 38,209 36,710 -3.9%
Capital Outlay ---28,000 28,000 --100.0%
Operating Transfers ---------
TOTAL EXPENDITURES 340,798$393,644$428,524$451,609$451,609$461,814$2.3%
FUNDBALANCE- JANUARY 1 544,987$776,349$990,502$1,271,258$1,271,258$1,371,049$
Excess (Deficiency) of
Revenues over Expenditures 231,362 214,153 280,756 99,791 99,791 165,186
FUNDBALANCE- DECEMBER31 776,349$990,502$1,271,258$1,371,049$1,371,049$1,536,235$
215
FIBER OPTICS FUND
DEPARTMENT: Fiber Optics Fund
SUPERVISOR: City Administrator
FUND #:656
ACTIVITY #: 49870-49877
ACTIVITY SCOPE:
As with all enterprise funds, the goal of the Fiber Optics Fund is to become a self-sustaining
enterprise. Fiber Optics delivers internet, phone, and cable television services to customers within
the city. Residential and commercial customers can subscribe to individual or bundled services.
OBJECTIVES:
1.Offer a variety of internet speeds and cable packages to customers.
2.Increase subscribers and subscriptions.
3.Minimize subsidy from other funds.
ISSUES:
1.Competition from other service providers.
2.Industry trends (cord cutting, etc.).
3.Various legal aspects of operating a telecommunication business.
MEASURABLE WORKLOAD DATA:
BUDGET COMMENTARY:
The Fiber Optics Fund began operations in 2009, and construction of the fiber optic network was
completed in 2010. Revenues come from charges to subscribers, and expenditures are incurred as a
result of operating the system and new customer service installations. The city defaulted on the
revenue bonds used to finance construction of the system. Judgment bonds were issued to finance
the settlement with revenue bondholders. Property taxes are levied to support debt service on
judgment bonds. There is no current debt service recorded in the Fiber Optics Fund.
In 2012, the city transferred $4,450,000 to the fund, eliminating the interfund loan balance. In 2013,
the Liquor Fund and other city funds transferred $860,000 into the Fiber Optics Fund. In years 2014
through 2019, the Liquor Fund provided $1,710,000 for Fiber Optics operations. The 2019 budget
included a $100,000 transfer from the Liquor Fund; however, the transfer was not needed and,
Measurement 2016 2017 2018 2019 2020
Internetsubscibers 1,487 1,554 1,544 1,631 1,700
Phone subscribers 461 431 386 354 325
Cable TV subscribers 641 543 458 385 350
216
therefore, not made. A $50,000 transfer in is budgeted from the liquor store in 2020. The transfer
will not be made if not necessary based on 2020 operations. By the end of 2019, Fibernet operations
and debt service had consumed a total of $8,876,892. The Liquor Fund contributed $5,610,000 of
the $7,020,000 total transfers to the Fiber Optics Fund since 2012.
Personnel services (employee costs) were eliminated in July of 2016 with the outsourcing of
operations to a third party. There are some minor employee costs still allocated the fund. The 2020
budget includes $300,000 in other services and charges for system improvements to new service
areas.
BUDGET:
FIBEROPTICS 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 1,619,771 1,739,895 1,726,165 1,832,400 1,832,400 1,798,000 -1.9%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 407,002 21,729 13,294 12,600 12,600 2,000 -84.1%
Contributed Capital ---------
Operating Transfers 350,000 180,000 130,000 100,000 -50,000 -50.0%
Debt Proceeds ---------
TOTAL REVENUES 2,376,773$1,941,624$1,869,459$1,945,000$1,845,000$1,850,000$-4.9%
EXPENDITURES
Personnel Services 310,160$18,366$205$21,900$21,900$6,300$-71.2%
Supplies 160,835 134,607 111,403 135,000 135,000 135,000 0.0%
Other Services & Charges 1,600,372 1,686,395 1,766,159 1,942,100 1,735,300 1,912,700 -1.5%
Capital Outlay ---------
Operating Transfers ---------
TOTAL EXPENDITURES 2,071,367$1,839,368$1,877,767$2,099,000$1,892,200$2,054,000$-2.1%
FUNDBALANCE- JANUARY 1 508$305,914$408,170$399,862$399,862$352,662$
Excess (Deficiency) of
Revenues over Expenditures 305,406 102,256 (8,308)(154,000)(47,200)(204,000)
FUNDBALANCE- DECEMBER31 305,914$408,170$399,862$245,862$352,662$148,662$
217
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218
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
INTERNAL
SERVICE
FUNDS
INTERNAL SERVICE FUNDS - SUMMARY
DESCRIPTION
Internalservicefundsareaproprietaryfundtypethatmaybeusedtoreportanyactivitythatprovidesgoodsor
servicestootherfunds,departments,oragenciesoftheprimarygovernmentanditscomponentunits,orto
othergovernments,onacost-reimbursementbasis.Internalservicefundsuseanaccrualbasisofaccountingfor
financialreportingpurposes.Amodifiedaccrualbasiswillbeusedforbudgetingpurposesinthisreport.
Consequently,thebottomlineforeachinternalservicefundislabeledfundbalanceratherthannetposition,
whichincludescapitalassets,long-termdebtandothernoncurrentitems.Fundbalanceinaninternalservice
fundisroughlythesameasworkingcapital. Thecitycurrentlyhasthreeactiveinternalservicefunds:IT
Services,CentralEquipment,andBenefitAccrual.
BUDGETISSUES
Eachinternalservicefundhasspecificchallengesthatwillbeaddressedinthenarrativeforeachfund.
BUDGETSUMMARY
TOTAL INTERNAL SERVICE 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 530,842 475,732 551,522 567,603 567,603 572,300 0.8%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 13,975 64,743 9,941 7,097 7,097 7,097 0.0%
Operating Transfers --300,000 -200,000 ----
Debt Proceeds ---------
TOTAL REVENUES 544,817$540,475$861,463$574,700$774,700$579,397$0.8%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies 57,096 29,330 31,282 35,000 35,000 35,200 0.6%
Other Services & Charges 153,460 152,952 135,705 199,700 199,700 167,300 -16.2%
Capital Outlay 138,236 458,286 176,236 414,500 414,500 524,500 26.5%
Debt Service 131,260 135,710 133,485 131,600 131,600 134,400 2.1%
Operating Transfers --200,000 ------
TOTAL EXPENDITURES 480,052$776,278$676,708$780,800$780,800$861,400$10.3%
FUND BALANCE - JANUARY 1 1,099,196$1,163,961$928,158$1,112,913$1,112,913$1,106,813$
Excess (Deficiency) of
Revenues over Expenditures 64,765 (235,803)184,755 (206,100)(6,100)(282,003)
FUND BALANCE - DECEMBER 31 1,163,961$928,158$1,112,913$906,813$1,106,813$824,810$
219
IT SERVICES FUND
DEPARTMENT: Finance
SUPERVISOR: Finance Director
FUND #: 702
ACTIVITY #: XXXXX
ACTIVITY SCOPE:
The IT (Information Technology) Services Fund is a self-sustaining internal service fund. The finance
department manages the network of servers and peripheral equipment to provide continuity and
accountability for IT related services. The fund’s revenues are derived from service charges to each
budget unit receiving IT services. Service charges are adjusted annually to cover all current costs plus
a portion of capital outlays.
OBJECTIVES:
1. Centralize provision of information technology services into one fund.
2. Improve management of IT resources.
3. Distribute capital costs over multiple annual reporting periods.
4. Provide financial management stability to each budget unit.
ISSUES:
1. Appropriate costs distribution.
2. Coordination of service delivery to multiple departments and budget units.
3. Demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Network uptime 99% 99% 99% 99% 99%
Work Load:
Number of clients/users 83 85 87 94 94
Number of PC, servers, and
network devices 167 170 180 162 162
220
BUDGET COMMENTARY:
The IT Services Fund’s main source of revenue is internal user charges. Except for point-of-sale
software and hardware and surveillance equipment, the IT Services Fund accounts for the all activity
supporting the city’s information technology infrastructure, including servers, routers, PCs, printers,
copiers, phones, and professional services.
BUDGET:
IT SERVICES 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL
BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$ -$ -$ -$ -$ -$ ---
Licenses & Permits - - - - - - ---
Intergovernmental Revenues - - - - - - ---
Charges for Services 298,981 271,612 272,902 252,203 252,203 225,000 -10.8%
Fines & Forfeits - - - - - - ---
Special Assessments - - - - - - ---
Miscellaneous 1,850 3,667 3,911 1,097 1,097 1,097 0.0%
Operating Transfers - - - - - - ---
Debt Proceeds - - - - - - ---
TOTAL REVENUES 300,831$ 275,279$ 276,813$ 253,300$ 253,300$ 226,097$ -10.7%
EXPENDITURES
Personnel Services -$ -$ -$ -$ -$ -$ ---
Supplies 57,096 29,330 31,282 35,000 35,000 35,200 0.6%
Other Services & Charges 153,460 152,952 135,705 199,700 199,700 167,300 -16.2%
Capital Outlay - 25,803 11,982 14,500 14,500 22,500 55.2%
Operating Transfers - - 200,000 - - - ---
TOTAL EXPENDITURES 210,556$ 208,085$ 378,969$ 249,200$ 249,200$ 225,000$ -9.7%
FUND BALANCE - JANUARY 1 119,347$ 209,622$ 276,816$ 174,660$ 174,660$ 178,760$
Excess (Deficiency) of
Revenues over Expenditures 90,275 67,194 (102,156) 4,100 4,100 1,097
FUND BALANCE - DECEMBER 31 209,622$ 276,816$ 174,660$ 178,760$ 178,760$ 179,857$
221
CENTRAL EQUIPMENT FUND
DEPARTMENT: Finance
SUPERVISOR: Finance Director
FUND #:703
ACTIVITY #: XXXXX
ACTIVITY SCOPE:
The Central Equipment Fund is a self-sustaining internal service fund. The finance department
participates along with various department directors and division leaders in the acquisition of capital
assets. The acquired capital asset is charged back against the benefitting budget unit through rental
charges over a predetermined number of years. The rental charge reflects depreciation plus
inflation. Service charges for each asset are fixed for the duration of rental payments.
OBJECTIVES:
1.Build mechanism for replacing capital assets into annual budgets.
2.Improve management of capital assets.
3.Distribute capital costs over multiple annual reporting periods.
4.Provide financial management stability to each budget unit.
ISSUES:
1.Appropriate cost distribution over multiple accounting periods.
2.Efficient coordination of asset replacement activities.
3.Adequate start-up resources.
4.Demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Annual cost recovery 204,600$210,700$249,800$298,900$330,800$
Total costs of assets acquired 960,855$1,467,515$1,646,638$1,941,941$2,443,941$
Efficiency:
Cost recovery as % of
acquired assets 21%14%15%15%14%
Work Load:
Number of fund assets 17 24 27 31 37
222
BUDGET COMMENTARY:
The Central Equipment Fund’s main source of revenue is internal rental charges. The fund was
initiated near the beginning of 2013 with the sale of $500,000 in certificates of indebtedness. The city
also issued $515,000 in G.O. bonds in 2014 to finance the acquisition of a fire tender and a plow
truck. The 2018 operating transfers came from the General Fund ($100,000) and IT Services Fund
($200,000), and the 2019 operating transfers came from the General Fund. These transfers will help
the fund with future equipment purchases.
The 2020 budgeted equipment acquisitions: [public works equipment] plow truck - $270,000;
[recreation equipment] mower - $112,000; water wheel - $13,000; Kawasaki mule - $12,000; one-ton
truck - $65,000; Toro workman - $30,000; [public safety] none.
BUDGET:
CENTRAL EQUIPMENT FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 193,800 210,700 249,800 298,900 298,900 330,800 10.7%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 12,125 61,076 6,030 3,000 3,000 3,000 0.0%
Operating Transfers --300,000 -200,000 ----
Debt Proceeds ---------
TOTAL REVENUES 205,925$271,776$555,830$301,900$501,900$333,800$10.6%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay 138,236 432,483 164,254 400,000 400,000 502,000 25.5%
Debt Service 131,260 135,710 133,485 131,600 131,600 134,400 2.1%
Operating Transfers ---------
TOTAL EXPENDITURES 269,496$568,193$297,739$531,600$531,600$636,400$19.7%
FUND BALANCE - JANUARY 1 753,691$690,120$393,703$651,794$651,794$622,094$
Excess (Deficiency) of
Revenues over Expenditures (63,571)(296,417)258,091 (229,700)(29,700)(302,600)
FUND BALANCE - DECEMBER 31 690,120$393,703$651,794$422,094$622,094$319,494$
223
REMAINING DEBT SERVICE:
The early redemption date on these certificates is December 1, 2018.
The early redemption date on these bonds is December 15, 2021.
Payable Principal Interest Rate Total
12/1/2020 70,000$1,470$2.10%71,470$
Total 70,000$1,470$71,470$
GO Certificates of Indebtedness, Series 2013A
Payable Principal Interest Rate Total
6/15/2020 -$3,965$3,965$
12/15/2020 55,000 3,965 2.20%58,965
6/15/2021 -3,360 3,360
12/15/2021 60,000 3,360 2.50%63,360
6/15/2022 -2,610 2,610
12/15/2022 60,000 2,610 2.75%62,610
6/15/2023 -1,785 1,785
12/15/2023 60,000 1,785 2.90%61,785
6/15/2024 -915 915
12/15/2024 60,000 915 3.05%60,915
Total 295,000$25,270$320,270$
GO Bonds, Series 2014A (Equipment Portion)
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BENEFIT ACCRUAL FUND
DEPARTMENT: Finance
SUPERVISOR: Finance Director
FUND #:704
ACTIVITY #: XXXXX
ACTIVITY SCOPE:
The Benefit Accrual Fund is a self-sustaining internal service fund. The finance department
participates with various department directors, division leaders and the human resources manager
in managing vacation, sick leave, and paid-time-off (PTO) benefit. The non-enterprise fund liability
for this benefit is recorded in the Benefit Accrual Fund. Enterprise funds (Liquor, DMV, Water &
Sewer) maintain the liability for employees involved in enterprise operations. Expenditures in each
governmental fund budget unit are adjusted annually to reflect changes to the liability caused by the
employees of that budget unit.
OBJECTIVES:
1.Build mechanism for recording governmental fund liability for paid leaves.
2.Improve management of vacation, sick, and PTO leave.
3.Distribute accumulating paid leave costs to budget units.
4.Provide financial management stability to each budget unit.
ISSUES:
1.Increasing cost of paid leave benefits.
2.Stability of liability based on accumulation of additional leave.
MEASURABLE WORKLOAD DATA:
Measurement 2016 2017 2018 2019 2020
Outcome/Effectiveness:
Annual hours accrued:
PTO 6,966 8,677 9,007 8,905 9,000
Vacation 2,180 1,409 528 528 528
Sick leave 1,443 910 289 288 288
Balance of accrued hours:
PTO 4,405 7,485 7,828 7,949 8,000
Vacation 2,454 732 693 565 450
Sick leave 8,121 1,952 1,976 2,205 2,400
Efficiency:
Annual hours accrued per employee:
PTO 145 170 170 175 176
Vacation 136 94 176 176 176
Sick leave 90 61 96 96 96
Work Load:
Employees accruing hours:
PTO employees 48 51 53 51 51
Vacation employees 16 15 3 3 3
Sick leave employees 16 15 3 3 3
Union employees joined the PTO system in July 2017.
225
BUDGET COMMENTARY:
The Benefit Accrual Fund’s main source of revenue is internal charges to personnel services in the
city’s two main governmental funds: General Fund and Monticello Community Center Fund.
Personnel services expenditures in each governmental fund budget unit will be adjusted up or down
based on the change in liability caused by each unit. The liability is based on the number of hours
accrued multiplied by the hourly compensation for each individual. Employees are allowed to carry-
over 320 hours of accrued PTO.
BUDGET:
BENEFIT ACCRUAL FUND 2016 2017 2018 2019 2019 2020 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 38,061 (6,580)28,820 16,500 16,500 16,500 0.0%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous ---3,000 3,000 3,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 38,061$(6,580)$28,820$19,500$19,500$19,500$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers ---------
TOTAL EXPENDITURES -$-$-$-$-$-$---
FUND BALANCE - JANUARY 1 226,158$264,219$257,639$286,459$286,459$305,959$
Excess (Deficiency) of
Revenues over Expenditures 38,061 (6,580)28,820 19,500 19,500 19,500
FUND BALANCE - DECEMBER 31 264,219$257,639$286,459$305,959$305,959$325,459$
226
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
CAPITAL
IMPROVEMENT
PROGRAM
CAPITAL IMPROVEMENT PROGRAM
INTRODUCTION
The capital improvements presented in this section comprise the 2020-2024 Capital Improvements
Program (CIP). The Monticello CIP integrates capital and major noncapital expenditures into a
comprehensive plan for forecasting needed future resources for acquiring and maintaining assets
used in municipal operations. By integrating major noncapital expenditures, such as maintenance
items or asset purchases not meeting specific dollar thresholds, the city can better plan and prepare
for future financial challenges.
The Monticello integrative CIP has four expenditure categories: capital improvements, vehicles and
equipment (Garage), major repair and maintenance items (First Aid Kit), and small tools and
equipment (Tool Box).
The Capital Improvements category primarily deals with projects that carry high price tags. In the
simplest of terms, capital improvements are expansions of, or improvements to, the city's physical
structures such as buildings, streets, sidewalks, parking facilities, open space, and utility systems
(infrastructure).
The Garage category contains capital outlays for vehicles and equipment essential to accomplishing
work. Generally, these assets have shorter useful lives and must be replaced on a regularly
scheduled basis.
The First Aid Kit category includes noncapital repair and maintenance expenditures related to the
preservation of existing assets, such as painting a water tank. Additionally, expenditures on projects
that do not meet certain capitalization thresholds are considered repairs and maintenance.
The Tool Box category is comprised of major noncapital small tool and equipment purchases. For
example, the purchase of multiple similar items that individually do not exceed the capitalization
threshold would be included in this section.
Q&A
WHAT IS A CAPITAL IMPROVEMENT PROGRAM?
A capital improvement program is a five-year plan for the evaluation of the city's facility, equipment,
and infrastructure needs. It serves as a guide for construction, development, and maintenance of the
city's infrastructure assets--as well as other less expensive assets--in the most cost-efficient manner
possible. It is the result of systematic review of each project, as it relates to the city council goals and
the established priority scheme, to maximize the use of all financial resources.
While the program serves as a long-range plan, it is reviewed annually and revised based on current
circumstances and opportunities. Priorities may be changed due to grant opportunities or
circumstances that caused a more rapid deterioration of an asset resulting in a liability issue. Projects
may be revised for significant costing variances.
227
WHAT ARE THE OBJECTIVES OF A CAPITAL IMPROVEMENT PROGRAM?
· To forecast public facilities and improvements that will be needed in the near future.
· To anticipate and project financing needs in order to maximize available federal, state, and county
funds.
· To promote sound financial planning in order to enhance and protect future bond ratings and
bonding capacity.
· To focus attention on and assist in the implementation of established city council objectives as
outlined in the “Purpose and Mission”.
· To serve as a guide for local officials in making budgetary decisions.
· To balance the needs of new development with existing development.
· To promote and enhance the economic development of the city of Monticello.
· To strike a balance between needed public improvements and the present financial capability of the
city to provide for these improvements.
· To provide an opportunity for citizens and interest groups to voice opinions on development of city
facilities and infrastructure.
· To provide for improvements in a timely and systematic manner.
Changes have been made to improve the reliability of the capital improvement project estimates and
the focus of the funding. Previously the funding effort was focused primarily on the budget year. The
new process is intended to change that focus to funding over five years. This will enable decision
makers to identify opportunity costs of shifting priorities. It creates a better understanding of the
balancing act that is required to allocate scarce resources to the capital improvement effort.
WHAT IS THE CAPITAL IMPROVEMENT PROGRAM DEVELOPMENT PROCESS?
Assign Project Titles
· Make the title descriptive of the work.
· TIP: Title the project based on the problem to be solved at a location, rather than titling based on
the solution.
· Group projects in a meaningful way for your department. A project title of Boomerang
Improvements won’t work if it includes everything from the kitchen sink replacement to the cart
path overlay. It is a judgment decision.
Formulate Project Descriptions
· Include the target activities to be completed each year on the project. This should be a brief
statement of the work that will be performed and its location.
Formulate Project Cost Estimates
The costs of each project are broken down into any of the following categories:
Land Acquisition
Planning/Design/Construction
Vehicles/Equipment/Furnishing
228
Assign Priorities
Priorities: required on all projects based on the following categories:
Priority I: Imperative (MUST-DO)-Projects that cannot reasonably be postponed in order to avoid
harmful or otherwise undesirable consequences.
_ Corrects a condition dangerous to public health or safety
_ Satisfies a legal obligation (law, regulation, court order, contract)
_ Alleviates an emergency service disruption or deficiency
_ Prevents irreparable damage to a valuable public facility
Priority II: Essential (SHOULD-DO)-Projects that address clearly demonstrated needs or objectives.
_ Rehabilitates or replaces an obsolete public facility or attachment thereto
_ Stimulates economic growth and private capital investment
_ Reduces future operating and maintenance costs
_ Leverages available State or Federal funding
Priority III: Important (COULD-DO)-Projects that benefit the community but may be delayed
without detrimental effects to basic services.
_ Provides a new or expanded level of service
_ Promotes intergovernmental cooperation
_ Reduces energy consumption
_ Enhances cultural or natural resources
Document Project Justifications
The following things should be considered:
· Reason the project is necessary
· Related projects (timing issues)
· Coordination efforts required with other agencies (timing issues)
· Mandates and deadlines for compliance
· Service impact (number of participants impacted)
· New fees that could be generated as a result of the completion of the project (community center
usage fees, program fees)
· Community goal references (refer to your budget document)
· Safety requirements
Document Operating Impact
This is a required field; projects are not accepted without it. Record the costs in the year they will
initially occur. It will be assumed that the cost continues from that point on, unless information is
provided otherwise. The following possibilities exist:
· Maintenance project that doesn’t require any more than is already in the budget for
maintenance.
229
· Maintenance project that replaces existing items with a more cost-effective material or device
that would result in a slight savings in operating dollars. Examples: more energy efficient HVAC
unit resulting in an electricity savings.
· New project will always have some kind of operating impact.
Note Unfunded Projects
· All projects not funded are placed on an unfunded list.
Present product to the city council for review and final consideration
· Five-year funded capital improvements
· Ranked list of unfunded needs
HOW DOES THE CAPITAL IMPROVEMENT PROGRAM IMPACT THE OPERATING BUDGET?
All capital improvement projects are required to show the operating budget impact at the time the
projects are submitted for consideration in the Capital Improvement Program. This includes the
number of full-time equivalent positions that would be needed or could be eliminated and the cost
or savings for salaries/benefits, supplies/services, and equipment. It would not be prudent to make
funding decisions in favor of a project the city could not afford to maintain, staff, or provide
equipment for.
Capital improvements can impact the budget by increasing or decreasing revenues and expenditures.
Revenues could be increased if the improvement attracts new businesses (building permits or
property tax). The improvement could also increase expenditures. Perhaps an expansion requires
new employees, additional maintenance services, or additional utility costs. Construction of a new
street may require additional costs for police patrol services, snow and ice removal, or street light
utility costs. Perhaps new technology could make the operation of a plant more efficient resulting in
a reduction in power costs, utility costs, and personnel costs (reduction in overtime or man-hours).
Many projects are associated with prevention of future excessive costs that are difficult to measure.
The cost of the maintenance should not exceed the benefit of the asset. The projects may have
maintenance costs, but the existing maintenance budgets are sufficient. The priority for available
capital project funds has been maintenance of existing facilities and infrastructure. Most of
Monticello’s projects fall into this category.
HOW IS CITIZEN INPUT INCORPORATED IN THE CIP DEVELOPMENT PROCESS?
The citizens are involved in the capital improvements plan through participation at council meetings,
and through citizen boards, commissions, and participation in public meetings, work sessions, and
public hearings.
Participation in Citizen Boards and Commissions
Several disciplines within the city have a citizen board or commission that helps to identify and
prioritize needs within their scope of interest. These priorities are reflected in the department head
230
numeric ranking when the project is initially submitted for consideration. The citizen boards and
commissions are particularly influential with regard to the addition of a project to the plan and the
priority it has within the scope of needs for the community.
Participation in Public Meetings
Each year in the spring, a workshop is held to inform the city council and all interested citizens about
the proposed budget for the year. A session within this workshop is devoted to capital
improvements. Since annual appropriations are required by statute, one required public hearing is
held in conjunction with the operating budget each year. Capital improvements typically represent
20% of the total budget and are considered carefully.
Beyond participation in boards and public meetings, the city makes a considerable effort to inform
the citizens through various publications, news releases, and the website.
HOW IS THE CAPITAL IMPROVEMENT PROGRAM FORMULATED?
The following time line is a specific listing of the steps used to develop the Capital Improvement Plan:
May-June: The finance department distributes “CIP Budget Request Instructions” along with prior
year submissions. Existing projects roll forward one year. There is also dialogue reminding
departments about the general philosophies mentioned earlier in this discussion. Each project is
evaluated by the department head. New projects are then submitted to the Finance Department and
entered into the database along with updates or changes to existing projects.
July-September: The budget staff finalizes the plan by shifting funding priorities as necessary and
incorporating new projects, particularly in year five. The city administrator determines the overall
budget recommendation.
October-November: Work sessions are held to consider budget issues (for operations and the CIP).
December: The truth-in-taxation public hearing is held, and the budget is approved.
HOW IS THE CAPITAL IMPROVEMENT PROGRAM FINANCED?
In analyzing the financial viability of the capital improvements in the 2020-2024 CIP, the city has
three basic choices for methods of financing: pay-as-you-go,joint power agreement development
authority capital leasing, and debt financing. The following sources provide revenue for the three
financing methods:
General Fund revenues, such as property taxes, local government aid (not applicable to the city of
Monticello), and service charges are current revenues used to finance relatively small capital outlays.
An internal service fund (Central Equipment Fund) has been established to accumulate resources for
regularly planned equipment purchases through rental charges to various divisions within benefitting
funds. This will reduce the impact of large equipment purchases on annual budget unit expenditures
231
by essentially amortizing the cost of such equipment to the division through rental charges. The
rental charges include a small inflation factor to provide for the future replacement of that item.
Similarly, a hybrid of the aforementioned fund has been established for IT Services, which will also
include IT-related equipment purchases.
Enterprise fund revenues, derived from user charges, are used to finance capital improvements and
equipment necessary for delivering a specific service. Additionally, accumulated revenues in
enterprise funds can be transferred to other funds to provide financing for capital asset acquisitions.
Debt issuance is used to finance large capital improvements. General obligation improvement bonds
and general obligation revenue bonds are used to finance improvements to the city’s infrastructure.
Many of the items identifying the Capital Project Fund as funding source will need some level of debt
issuance to come to fruition.
Federal and state grants provide funding for various capital improvement projects. Currently, the
Fallon Avenue overpass is eligible for post-project federal funding of $2.1 million in 2021. Other
sources include local grants, donations, reserves, and other governmental units that share
boundaries.
Items listed on the following pages are typically labeled with prefixes VEQ- for vehicles and
equipment, MNC- (major non-capital) repairs & maintenance, STE- for small tools and equipment. All
other label prefixes represent capital improvements. The below graph and table provide a
breakdown of expenditures within the CIP:
Expenditure Category 2020 2021 2022 2023 2024
Capital Improvements 5,046,000$21,961,000$16,560,000$2,695,000$9,890,000$
Garage (Capital Equipment)1,578,000 2,593,100 1,355,000 685,000 435,000
First Aid Kit (Repairs and Maintenance)305,000 447,500 305,000 307,500 305,000
Tool Box (Small Tools and Equipment)89,400 303,100 130,800 35,000 55,700
7,018,400$25,304,700$18,350,800$3,722,500$10,685,700$
232
Capital Improvement Plan
City of Monticello, Minnesota
FUNDING SOURCE SUMMARY
2020 thru 2024
TotalSource2020 2021 2022 2023 2024
Capital Equipment Fund 3,034,500527,000 852,500 635,000 585,000 435,000
Capital Project Fund 8,451,0002,695,000 1,416,000 2,500,000 790,000 1,050,000
Community Center Fund 882,000214,000 237,500 170,000 252,500 8,000
Debt Proceeds 37,565,0002,200,000 12,365,000 15,250,000 7,750,000
General Fund 2,170,000377,000 627,500 435,000 359,000 371,500
IT Services Fund 209,00070,400 45,600 30,800 31,000 31,200
Municipal Liquor Fund 170,00095,000 75,000
Parks & Pathways Fund 2,945,000420,000 750,000 925,000 850,000
Sewage Fund 3,110,6001,225,000 760,600 375,000 375,000 375,000
State Aid 250,00050,000 200,000
Stormwater Access Fund 2,580,000410,000 960,000 1,110,000 50,000 50,000
Stormwater Fund 240,00040,000 40,000 40,000 80,000 40,000
Street Construction Fund 150,000150,000
Street Lighting Fund 810,000160,000 100,000 400,000 75,000 75,000
Water Fund 2,515,000715,000 150,000 1,350,000 150,000 150,000
9,053,400 18,304,700 23,315,800 3,722,500 10,685,700 65,082,100GRAND TOTAL
Produced Using the Plan-It Capital Planning Software
233
Capital Improvement Plan
City of Monticello, Minnesota
PROJECTS & FUNDING SOURCES BY DEPARTMENT
2020 2024thru
Total2020 2021 2022 2023 2024Department Project # Priority
Community Center
882,000214,000 237,500 170,000 252,500 8,000Community Center Fund
882,000214,000 237,500 170,000 252,500 8,000Community Center Total
MCC-13-001 40,00040,000Movable Walls 3
MCC-13-003 20,00020,000City Council Diaz 3
MCC-13-004 100,000100,000Concession Counter Improvements 3
MCC-13-005 100,000100,000New Roofs 2
MCC-17-003 6,0006,000East/West Handicap Doors 1
MCC-18-001 250,000250,000New Patio - Replaces Skate Park 2
MCC-18-003 16,00016,000Card Access Reader 3
MNC-13-006 20,00020,000Carpet and Terrazo Replace/Repair 2
MNC-13-010 20,00020,000Vanity and Partition Replacement 3
MNC-13-011 10,0005,000 2,500 2,500Facility Door Replacement 3
MNC-19-001 30,00030,000Climbing Wall Resurfacing 2
MNC-19-002 5,0005,000Childcare Countertop Replacement 3
STE-13-013 127,00042,000 85,000Recreation Equipment 2
STE-13-015 10,0005,000 5,000Tables 3
STE-15-001 65,00065,000Survelliance Camera Upgrade 3
STE-18-005 8,0008,000Floor Scrubber 2
VEQ-13-045 20,00020,000Dishwasher 3
VEQ-18-001 35,00035,000Recreation Software 3
882,000214,000 237,500 170,000 252,500 8,000Community Center Total
Fire & Rescue
120,000120,000Capital Equipment Fund
700,000700,000Debt Proceeds
325,00012,000 262,500 30,000 4,000 16,500General Fund
1,145,00012,000 262,500 730,000 124,000 16,500Fire & Rescue Total
STE-13-006 180,000180,000SCBA Packs 1
STE-16-002 70,00012,000 7,500 30,000 4,000 16,500Turnout Gear 1
VEQ-18-005 700,000700,000Engine 1 - Replacement 1
VEQ-18-006 120,000120,000Utility 1 - Replacement 1
VEQ-19-004 75,00075,000Squad 5 - Replacement 2
1,145,00012,000 262,500 730,000 124,000 16,500Fire & Rescue Total
Produced Using the Plan-It Capital Planning Software
234
Total2020 2021 2022 2023 2024Department Project # Priority
IT Services
209,00070,400 45,600 30,800 31,000 31,200IT Services Fund
209,00070,400 45,600 30,800 31,000 31,200IT Services Total
STE-13-001 78,00015,600 15,600 15,600 15,600 15,600Personal Computers 2
STE-13-005 15,0003,000 3,000 3,000 3,000 3,000Laptops 2
STE-13-007 40,0008,000 8,000 8,000 8,000 8,000GIS Hardware and Software 2
STE-13-008 21,0003,800 4,000 4,200 4,400 4,600Pavement Management Software 2
VEQ-19-003 25,00025,000Laserfiche Upgrade 3
VEQ-19-006 30,00015,000 15,000New Website 3
209,00070,400 45,600 30,800 31,000 31,200IT Services Total
Municipal Liquor
170,00095,000 75,000Municipal Liquor Fund
170,00095,000 75,000Municipal Liquor Total
LIQ-13-002 75,00075,000Parking Lot Improvements 1
LIQ-13-046 25,00025,000Liquor Store Coolers 1
LIQ-18-001 50,00050,000Roof 1
VEQ-13-046 20,00020,000Point of Sale Software 1
170,00095,000 75,000Municipal Liquor Total
Public Works
2,317,500270,000 627,500 590,000 465,000 365,000Capital Equipment Fund
2,600,0002,600,000Capital Project Fund
18,400,00011,000,000 7,400,000Debt Proceeds
23,317,5002,870,000 11,627,500 7,990,000 465,000 365,000Public Works Total
PWK-13-001 21,000,000600,000 18,000,000 2,400,000Public Works Facility 3
VEQ-13-013 65,00065,000One-Ton Truck 2
VEQ-13-014 35,00035,000Truck - Pickup 4X4 2
VEQ-13-016 100,000100,000Blacktop Paver 1
VEQ-13-021 95,00095,000Backhoe 3
VEQ-13-022 810,000270,000 270,000 270,000Plow Truck 1
VEQ-13-023 65,00065,000One-Ton Truck and Plow 1
VEQ-13-025 215,000215,000Snow Go Snow Blower 1
VEQ-13-028 20,00020,000Paver Trailer 3
VEQ-14-001 492,500242,500 250,000Wheel Loader - 3 yd. 3
VEQ-16-005 20,00020,000Mini Tank Tack Trailer 3
VEQ-16-006 100,000100,000Mid Size Loader 3
VEQ-16-007 300,000300,000Road Grader 3
23,317,500870,000 18,627,500 2,990,000 465,000 365,000Public Works Total
Produced Using the Plan-It Capital Planning Software
235
Total2020 2021 2022 2023 2024Department Project # Priority
Recreation & Culture
522,000232,000 200,000 20,000 70,000Capital Equipment Fund
1,951,00095,000 716,000 440,000 700,000Capital Project Fund
420,00085,000 85,000 150,000 50,000 50,000General Fund
2,945,000420,000 750,000 925,000 850,000Parks & Pathways Fund
60,00060,000Street Lighting Fund
5,898,000892,000 1,751,000 1,095,000 1,340,000 820,000Recreation & Culture Total
MNC-14-007 250,00050,000 50,000 50,000 50,000 50,000Pathway Maintenance (Annual) 2
MNC-16-002 10,00010,000Park Gazebo(s) 3
PAR-13-003 16,00016,000Sunset Ponds Shelter 3
PAR-13-004 90,00090,000Pioneer Park - Band Shell 3
PAR-13-012 1,400,000700,000 700,000BCOL Ball Fields 3
PAR-13-013 95,00095,000Ellison Park Log Shelter 3
PAR-13-014 60,00060,000CSAH 75 Pathway Lighting 3
PAR-15-004 750,000750,000Fenning Avenue Pathway Connection 3
PAR-17-002 100,000100,000West Bridge Playground Structure 3
PAR-17-007 25,00025,000Front Street Pier 3
PAR-20-001 35,00035,000Park Master Plan 3
PAR-20-002 250,000250,000East BCOL Trail Connection 3
PAR-20-003 750,000750,000Briarwood Trail Connection 3
PAR-20-004 350,000350,000Briarwood Road Improvements 2
PAR-20-005 420,000420,000Briarwood Turn Lanes 3
PAR-20-006 425,000425,0004th St Park Improvements 2
PAR-20-007 100,000100,000Ellison Playground Equipment 3
PAR-20-008 250,000250,000Ellison Restrooms 3
VEQ-13-031 172,000112,000 60,000Park Mowers 2
VEQ-13-032 135,00065,000 70,000Trucks 2
VEQ-13-037 30,00030,000Toro Workman 3
VEQ-13-038 50,00050,000JD Tractor 3
VEQ-13-039 70,00070,000Skid Loader 3
VEQ-13-041 20,00020,000Toro Infield Pro 5040 2
VEQ-15-001 12,00012,000Mule - Kawaski replacement 2
VEQ-19-008 13,00013,000Kifco Water Wheel 3
VEQ-19-009 20,00020,000Top Dresser 3
5,898,000857,000 1,751,000 1,130,000 1,340,000 820,000Recreation & Culture Total
Stormwater\Drainage
SWD-13-001 200,00040,000 40,000 40,000 40,000 40,000Stormwater Pond Restoration 3
SWD-13-002 1,060,0001,060,000Stormwater Liftstation (TH 25 Pond) 1
SWD-13-004 250,00050,000 50,000 50,000 50,000 50,000Boulevard Drainage Tile 3
SWD-17-001 450,000450,000Fallon Avenue Pond Expansion 3
SWD-20-001 460,000460,000Otter Creek - Pond A Construction 3
SWD-20-004 360,000360,000A Glorious Church Pond Expansion 3
SWD-20-005 40,00040,000Chelsea Road Outlet Control - HB07 2
Produced Using the Plan-It Capital Planning Software
236
Total2020 2021 2022 2023 2024Department Project # Priority
2,580,000410,000 960,000 1,110,000 50,000 50,000Stormwater Access Fund
240,00040,000 40,000 40,000 80,000 40,000Stormwater Fund
2,820,000450,000 1,000,000 1,150,000 130,000 90,000Stormwater\Drainage Total
2,820,000450,000 1,000,000 1,150,000 130,000 90,000Stormwater\Drainage Total
Streets
75,00025,000 25,000 25,000Capital Equipment Fund
3,900,000700,000 2,500,000 350,000 350,000Capital Project Fund
8,700,0002,200,000 3,250,000 3,250,000Debt Proceeds
1,425,000280,000 280,000 255,000 305,000 305,000General Fund
250,00050,000 200,000State Aid
150,000150,000Street Construction Fund
750,000100,000 100,000 400,000 75,000 75,000Street Lighting Fund
15,250,0002,605,000 1,105,000 6,430,000 780,000 4,330,000Streets Total
MNC-13-001 50,00025,000 25,000City Street Signs 1
MNC-14-001 925,000185,000 185,000 185,000 185,000 185,000Annual Chip Seal 1
MNC-20-001 350,00070,000 70,000 70,000 70,000 70,000Annual Crack Seal 1
STR-13-001 400,00050,000 350,000School Blvd/Cedar St Roundabout Signal System 3
STR-13-010 450,000100,000 100,000 100,000 75,000 75,000Street Light Improvements 2
STR-15-003 450,000450,000Elm Street Sidewalk - 3rd St Pedestrian Blinker 3
STR-15-004 400,000100,000 100,000 100,000 100,000Sidewalk Gap Improvement Project (TBD) 2
STR-16-002 300,000300,000Flashing Yellow Arrow Signal 1
STR-17-002 100,000100,000Fallon Ave & Trail - Chelsea to School Bvld 3
STR-17-004 900,00050,000 850,0007th St Mill & Overlay & Cedar St Improvements 2
STR-18-001 500,00050,000 450,000TH25/4th Street Signal 1
STR-19-001 9,200,0002,200,000 250,000 3,250,000 250,000 3,250,000Pavement Management Projects 1
STR-19-004 75,00025,000 25,000 25,000Broadway Corridor Parklets 3
STR-19-005 50,00050,000Chelsea/Cedar Roundabout 3
STR-20-001 200,000200,000School Blvd Pedestrian Improvements 1
STR-20-002 50,00050,000School Blvd/Cedar Roundabout 3
STR-20-003 50,00050,000School Blvd/Fallon Roundabout 3
STR-20-004 100,00050,000 50,000School Zone Improvements 3
STR-20-005 700,00050,000 650,000Walnut River Street Connection 3
15,250,0002,605,000 1,105,000 6,430,000 780,000 4,330,000Streets Total
Utility - Sewage
MNC-17-005 110,000110,000Demo Obsolete WWTP Equipmnet 3
UTS-13-001 1,250,000250,000 250,000 250,000 250,000 250,000Annnual Sewage Trunk Improvements 1
UTS-13-002 275,600275,600Liftstation - Marvin Road 3
UTS-13-005 1,365,0001,365,000WWTP Solids Handling Improvements 1
UTS-13-006 1,800,0001,800,000WWTP Phase 2 Improvements 1
UTS-16-001 625,000125,000 125,000 125,000 125,000 125,000WWTP Repair & Maintenance Annual Upgrades 2
UTS-17-001 2,100,0002,100,000WWTP Headworks Improvements 2
Produced Using the Plan-It Capital Planning Software
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Total2020 2021 2022 2023 2024Department Project # Priority
5,265,0001,365,000 3,900,000Debt Proceeds
3,110,6001,225,000 760,600 375,000 375,000 375,000Sewage Fund
8,375,6001,225,000 2,125,600 4,275,000 375,000 375,000Utility - Sewage Total
UTS-19-001 250,000250,000WWTP Parking Lot Improvements 3
UTS-20-001 100,000100,000Vactor Dump Station 1
VEQ-13-004 500,000500,000SCADA System - Sewage 2
8,375,6001,225,000 2,125,600 4,275,000 375,000 375,000Utility - Sewage Total
Utility - Water
4,500,0004,500,000Debt Proceeds
2,515,000715,000 150,000 1,350,000 150,000 150,000Water Fund
7,015,000715,000 150,000 1,350,000 150,000 4,650,000Utility - Water Total
UTW-13-001 750,000150,000 150,000 150,000 150,000 150,000Annual Water System Improvements 1
UTW-13-002 4,500,0004,500,000Water Treatment Facility 1
UTW-13-003 1,200,0001,200,000Well #6 1
UTW-15-001 65,00065,000Water Meter MXUs - System Upgrade 2
VEQ-13-003 500,000500,000SCADA System - Water 2
7,015,000715,000 150,000 1,350,000 150,000 4,650,000Utility - Water Total
65,082,1007,018,400 25,304,700 18,350,800 3,722,500 10,685,700Grand Total
Produced Using the Plan-It Capital Planning Software
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CIP PROJECT – 2020 STREET IMPROVEMENTS
Project cost: $2,200,000
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CIP PROJECT – BRIARWOOD TURN LANES
City’s project contribution: $420,000
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CIP PROJECT – EQUIPMENT
Plow Truck - Price: $270,000
Toro Mower - Price: $112,000
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One-Ton Truck - Price: $65,000
Toro Workman - Price: $30,000
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Kifco Water Wheel - Price: $13,000
Kawasaki Mule - Price: $13,000
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ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2020
APPENDIX
PROPERTY TAX BASICS
Assessment and classification
The property tax system is a continuous cycle, but it effectively begins with the estimation of
property market values by local assessors. Assessors attempt to determine the approximate selling
price of each parcel of property based on the current market conditions.
Along with the market value determination, a property class is assigned to each parcel of property
based on the use of the property. For example, property that is owner-occupied as a personal
residence is classified as a residential homestead. The “use class” is important because the
Minnesota system, in effect, assigns a weight to each class of property. Generally, properties that are
associated with income production (e.g. commercial and industrial properties) have a higher
classification weight than other properties.
The property classification system defines the tax capacity of each parcel as a percentage of each
parcel’s market value. For example, a $75,000 home which is classified as a residential homestead
has a class rate of 1.0 percent and therefore has a tax capacity of $75,000 x .01 or $750. (A sample of
the class rates is included in the table on the next page.)
[parcel market value] * [class rate] = [parcel tax capacity]
The next step in calculating the tax burden for a parcel involves the determination of each local unit
of government’s property tax levy. The city, county, school district, and any special property taxing
authorities must establish their levy by December 28 of the year preceding the year in which the levy
will be paid by taxpayers. The property tax levy is set after the consideration of all other revenues
including state aids such as LGA.
[city budget] - [all non-property tax revenues] = [city levy]
Local tax rates
Local governments do not directly set a tax rate. Instead, the tax rate is a function of the levy and the
total tax base. To compute the local tax rate, a county must determine the total tax capacity to be
used for spreading the levies. The total tax capacity is computed by first aggregating the tax
capacities of all parcels within the city. Several adjustments to this total must be made because not
all tax capacity is available for general tax purposes. The result of this calculation produces taxable
tax capacity. Taxable tax capacity is used to determine the local tax rates.
[city levy] / [taxable tax capacity] = [city tax rate]
Parcel tax calculations
The property tax bill for each parcel of property is determined by multiplying the parcel’s tax capacity
by the total local tax rate. The tax statement for each individual parcel itemizes the taxes for the
county, municipality, school district, and any special taxing authorities.
[parcel tax capacity] * [total local tax rate] = [parcel property tax bill]
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Terms Defined
Class rates - The percent of market value set by state law that establishes the property’s tax capacity
subject to the property tax. See table below for a sample list of class rates.
Local tax rate - The rate used to compute taxes for each parcel of property. Local tax rate is
computed by dividing the certified levy (after reduction for fiscal disparities distribution levy and
disparity reduction) by the taxable tax capacity.
Market value - An assessor’s estimate of what property would be worth on the open market if sold.
The market value is set on January 2 of the year before taxes are payable.
Homestead Market Value Exclusion (HMVE)– Starting with taxes payable in 2012, eligible
homesteads will pay property taxes on only a portion of the value of their homes. The maximum
exclusion, 40% of value, occurs at home value of $76,000 and phases out as home value grows
Property class - The classification assigned to each parcel of property based on the use of the
property. For example, owner-occupied residential property is classified as homestead.
Property tax levy - The tax imposed by a local unit of government. The tax is established on or around
December 28 of the year preceding the year the levy will be paid by taxpayers.
Tax capacity - The valuation of property based on market value and statutory class rates. The
property tax for each parcel is based on its tax capacity.
Total tax capacity - The amount computed by first totaling the tax capacities of all parcels of property
within a city. Adjustments for fiscal disparities, tax increment, and a portion of the powerline value
are made to this total since not all tax capacity is available for general tax purposes.
Truth-in-Taxation - The “taxation and notification law” which requires local governments to set
estimated levies, inform taxpayers about the impacts, and announce which of their regularly
scheduled council meetings will include a discussion of the budget and levy. Taxpayer input is taken
at that meeting.
Property Class Local Taxes
Payable 2020
State Tax Payable
2020
Residential Homestead:
1st $500,000 1.00%No state tax
>$500,000 1.25%
Non-homestead Residential:
Single unit:
1st $500,000 1.00%
>$500,000 1.25%No state tax
2-3 unit buildings 1.25%
Market-rate Apartments:1.25%No state tax
Commercial/Industrial:Subject to state
1st $150,000 1.50%levy (commercial-
>$150,000 2.00%industrial rate)
Seasonal Recreational Subject to state
1st $500,000 1.00%levy (seasonal-
>$500,000 1.25%recreational rate)
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TRUTH-IN-TAXATION
TNT Summary Chart for Taxes Payable 2020
Date Action
On or Before
Sept. 30
All cities and special taxing districts (EDAs, HRAs, port authorities, etc.) must
adopt any proposed property tax levy and certify the proposed levy to the
county auditor.
On or Before
Sept. 30
At one meeting, the city council adopts the proposed property tax levy and
announces the time and place of a future city council meeting at which the
budget and levy will be discussed and public input allowed, prior to final
budget and levy determination. This public input meeting must occur after
Nov. 24 and must start at or after 6 p.m. The time and place of the public
input meeting must be included in the minutes but newspaper publication of
the minutes is not required. (September 23, 2019)
On or before
Sept. 30
Cities must provide the county auditor with the following information:
The time and place of the meeting at which the budget and levy will be
discussed and public input allowed. (Again, meeting must occur after Nov. 24
and must not start before 6 p.m.)
A phone number that city taxpayers may call if they have questions
related to the auditor’s property tax notice; this does not require listing a
private phone number.
An address where comments will be received by mail; this does not
require listing a private address. (September 24, 2019)
Nov. 11 to
Nov. 24
County auditor prepares and sends parcels specific notices.
Nov. 25 to
Dec.28
City council holds meeting to discuss the budget and property tax levy and,
before a final determination, allows public input.(December 9, 2019)
On or before
Dec. 28
Cities must certify final property tax levy to the county auditor. Cities must
also file the certificate of compliance (Form TNT) with the Department of
Revenue by December 28th. (December 10, 2019)
**The date an activity occurred is highlighted.
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DEBT GUIDE
Equipment Certificates/Capital Notes
A statutory city may issue certificates of indebtedness or capital notes (Section 412.301) to purchase:
Public safety equipment, ambulance, and other medical equipment; road construction and main-
tenance equipment; and other capital equipment.
Computer hardware and software, whether bundled with machinery or equipment or unbundled,
together with application development services and training related to the use of the computer
hardware or software.
The statute does not define “other capital equipment”. Cities seeking to borrow for equipment not
specifically listed should work with bond counsel to determine eligibility.
The term of the Certificates/Notes cannot exceed 10 years from the dated date of the obligations. This
limitation may affect the timing of principal and interest payments. This debt is subject to the debt limit.
A reverse referendum provision applies if the amount of the borrowing exceeds 0.25% of the estimated
market value of taxable property within the city. An election is required if a petition signed by voters equal
to 10% of the voters in the last regular municipal election is submitted to the city clerk within 10 days after
publication of the resolution authorizing the issuance of the Certificates/Notes.
Different statutory authority exists for home rule charter cities (Section 410.32). Capital Notes issued by
charter cities are subject to the same statutory requirements as statutory cities with the following ex-
ceptions:
The total principal amount of the capital notes issued in a fiscal year shall not exceed 0.03% of the
estimated market value of taxable property in the city.
No reverse referendum provision applies, but issuance must be approved by a two-thirds vote of the
city council.
Unless prohibited by the charter, these cities may also issue Capital Notes under the authority granted
to statutory cities.
Tax Abatement Bonds
Tax Abatement Bonds (Section 469.1814) may be used to finance a variety of development activities and
public improvements. The statute allows proceeds of Tax Abatement Bonds be used to (1) pay for public
improvements that benefit the property, (2) to acquire and convey land or other property, as provided
under this section, (3) to reimburse the property owner for the cost of improvements made to the
property, or (4) to pay the costs of issuance of the bonds.
Tax Abatement Bonds are often used to facilitate economic development in ways not allowed by tax
increment financing. They have also evolved into a tool for financing community recreation and cultural
facilities. The statutory authority creates an abatement levy based on the property value of parcels
subject to the abatement. The authority to use tax abatement applies separately to each taxing
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jurisdiction. If other jurisdictions (county and school district) approve an abatement, this revenue may be
pledged to bonds issued by the city.
The principal amount of the bonds may not exceed the sum of the authorized abatements. A debt
service levy may be used to pay interest on the bonds.
The annual amount of all abatements cannot exceed the greater of 10% net tax capacity value of the
jurisdiction or $200,000.
The parameters of the abatement and authorization for the bonds are set by resolution. The
resolution cannot be approved until after a public hearing is held.
Street Reconstruction Bonds
Street Reconstruction Bonds are an example of debt issuing authority found in unusual places. The statu-
tory provisions for Street Reconstruction Bonds appear in the portion of Chapter 475 dealing with election
requirements for debt issuance (Section 475.58, Subd. 3b).
Street Reconstruction Bonds can be used to finance the reconstruction and bituminous overlay of existing
city streets. Eligible improvements may include turn lanes and other improvements having a substantial
public safety function, realignments, other modifications to intersect with state and county roads, and the
local share of state and county road projects. Except in the case of turn lanes, safety improvements, re-
alignments, intersection modifications, and the local share of state and county road projects, street recon-
struction and bituminous overlays does not include the portion of project cost allocable to widening a street
or adding curbs and gutters where none previously existed. The enabling statute sets forth specific
requirements for the issuance of Street Reconstruction Bonds:
The projects financed under this authority must be described in a street reconstruction plan. The plan
must describe the street reconstruction or overlay to be financed, the estimated costs, and any planned
reconstruction or overlay of other streets in the municipality over the next five years
The city must hold a public hearing on the proposed plan and the related issuance of bonds.
The plan and the issuance of bonds must be approved by the city council by a vote of all of the
members of the governing body present at the meeting.
The issuance of bonds is subject to a reverse referendum. An election is required if voters equal to 5%
of the votes cast in the last municipal general election file a petition with the city clerk within 30 days
of the public hearing. If the city decides not to undertake an election, it may not propose the issuance
of Street Reconstruction Bonds for the same purpose and in the same amount for a period of 365 days
from the date of receipt of the petition. If the question of issuing the bonds is submitted and not
approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply (no resubmission
for same purpose/ amount for 180 days).
Street Reconstruction Bonds are subject to the debt limit.
Revenue Bonds
One exception to the previous statement is the issuance of Revenue Bonds. Chapter 475 authorizes
borrowing for “any utility or other public convenience from which a revenue is or may be derived”. This
authority is sufficient when the sole security is the pledge of revenue from a public enterprise. Although
this debt is most frequently associated with municipal utilities, any “public convenience” with a pledge-
able source of revenue may use this authority. Minnesota cities do not frequently issue Revenue Bonds.
Most borrowing needs have separate statutory authority that allows a general obligation pledge. The
most common Revenue Bonds are for electric utilities, sales taxes, and liquor stores.
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Improvement Bonds
One of the most commonly used tools is General Obligation (G.O.) Improvement Bonds issued pursuant
to Chapter 429. Improvement Bonds can be issued for a wide range of public improvements.
Eligible Improvements
The types of improvements specifically authorized in Chapter 429 can be found in Section 429.021. It is
important to read and understand the specific statutory provisions. Some provisions are broader than
the basic improvement. For example, a “street improvement” may also include streetscape (beauti-
fication), storm sewers and utility connection lines. Other provisions may contain important expansions
or limitations on the authority. Sanitary and storm sewer improvements may be made outside of the city
limits.
The public improvements currently authorized in Chapter 429 include the following:
1. Acquire, open, and widen any street, and improve the same by constructing, reconstructing, and
maintaining sidewalks, pavement, gutters, curbs, and vehicle parking strips of any material, or by
grading, graveling, oiling, or otherwise improving the same, including the beautification thereof
and including storm sewers or other street drainage and connections from sewer, water, or similar
mains to curb lines.
2. Acquire, develop, construct, reconstruct, extend, and maintain storm and sanitary sewers and sys-
tems, including outlets, holding areas and ponds, treatment plants, pumps, lift stations, service
connections, and other appurtenances of a sewer system, within and without the corporate limits.
3. Construct, reconstruct, extend, and maintain steam heating mains.
4. Install, replace, extend, and maintain street lights and street lighting systems and special lighting
systems.
5. Acquire, improve, construct, reconstruct, extend, and maintain water works systems, including
mains, valves, hydrants, service connections, wells, pumps, reservoirs, tanks, treatment plants, and
other appurtenances of a water works system, within and without the corporate limits.
6. Acquire, improve and equip parks, open space areas, playgrounds, and recreational facilities
within or without the corporate limits.
7. Plant trees on streets and provide for their trimming, care, and removal.
8. Abate nuisances and drain swamps, marshes, and ponds on public or private property, and fill the
same.
9. Construct, reconstruct, extend, and maintain dikes and other flood control works.
10. Construct, reconstruct, extend, and maintain retaining walls and area walls.
11. Acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and promote a pe-
destrian skyway system. Such improvement may be made upon a petition pursuant to section
429.031, subdivision 3.
12. Acquire, construct, reconstruct, extend, operate, maintain, and promote underground pedestrian
concourses.
13. Acquire, construct, improve, alter, extend, operate, maintain, and promote public malls, plazas or
courtyards.
14. Construct, reconstruct, extend, and maintain district heating systems.
15. Construct, reconstruct, alter, extend, operate, maintain, and promote fire protection systems in
existing buildings, but only upon a petition pursuant to section 429.031, subdivision 3.
16. Acquire, construct, reconstruct, improve, alter, extend, and maintain highway sound barriers.
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17. Improve, construct, reconstruct, extend, and maintain gas and electric distribution facilities owned by
a municipal gas or electric utility.
18. Purchase, install, and maintain signs, posts, and other markers for addressing related to the operation
of enhanced 911 telephone service.
19. Improve, construct, extend, and maintain facilities for Internet access and other communications
purposes, if the council finds that: (i) the facilities are necessary to make available Internet access or
other communications services that are not and will not be available through other providers or the
private market in the reasonably foreseeable future; and (ii) the service to be provided by the facilities
will not compete with service provided by private entities.
20. Assess affected property owners for all or a portion of the costs agreed to with an electric utility,
telecommunications carrier, or cable system operator to bury or alter a new or existing distribution
system within the public right-of-way that exceeds the utility’s design and construction standards, or
those set by law, tariff, or franchise, but only upon petition under section 429.031, subdivision 3.
21. Assess affected property owners for repayment of voluntary energy improvement financings under
section 216C.436, subdivision 7.
Other statutes may also authorize the use of special assessments to pay for improvements. For example,
authorized improvements with in a Housing Improvement Area may be paid with special assessments.
Minimum Assessment
General Obligation Improvement Bonds require a minimum 20% assessment. It is important to under-
stand the method for determining the minimum assessment. A common assumption is that assessments
must equal or exceed 20% of the amount to be borrowed. While this calculation works for Tax Increment
Bonds, the 20% calculation for Improvement Bonds is different:
1. The assessment calculation is based on the cost of the improvement to the city. This cost may or may
not equal the amount of the Improvement Bonds.
2. The cost of the improvement does not include activities that will not be assessed to benefitted property
owners and not financed with G.O. Improvement Bonds. These improvements can be made without
following the procedures of Chapter 429. This exclusion typically applies to utility (sanitary sewer,
watermain, and storm sewer) improvements paid from reserves or bonds issued under Minnesota
Statutes, Chapter 444.
3. The cost to the city excludes all monies contributed by other units of government to pay for the
improvement.
4. The up-front use of city non-utility reserves (both General Fund and capital improvement) does not
reduce the cost to the city.
One exception to this 20% requirement is improvements for automobile parking facilities (Section 459.14).
Bonds issued to finance the construction or maintenance of automobile parking facilities require special
assessments in an amount not less than 50% of the amount of the bonds.
Assessment Considerations
State Law does not prescribe assessment methodology. Some cities have formal assessment policies.
Other cities deal with assessments on a project-by-project basis.
A guiding factor in setting assessments is the market value test. The amount assessed to a property cannot
exceed the increase in market value of the property as a result of the improvement. There is no requirement
to make this finding as part of the improvement process. The issue comes into play primarily in projects with
larger assessments and greater risk of appeal.
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Assessments are also constrained by the notice of hearing for the improvement. The total amount assessed
cannot exceed the amount stated in the notice. The area assessed cannot be larger, but can be smaller, than
the area receiving notice of the Hearing.
The special assessment calculation is based on the “improvement”. An improvement may be more than a
single project. There are two ways to manage multiple projects into a single improvement for the purposes
of Chapter 429. Section 429.021, Subd. 2 allows for an improvement on two or more streets, or two or more
types of improvements, in or on the same street or streets or different streets may be included in one
proceeding and conducted as one improvement. This combining of improvements is typically spelled out in
the engineering feasibility report and considered at the improvement hearing. Projects that are instituted
separately may be subsequently combined under the authority of Section 435.56.
Revenues to pay debt service on the portion that is not assessed may come from any legally available
source including a property tax levy.
Bond Issues
Planning for the issuance of Improvement Bonds requires a clear understanding of the special assess-
ments. In addition to the total amount assessed, several other factors are important:
What is the term of repayment? First levy year payable? Total number of years payable?
Will the assessments be repaid with level annual installments of principal or level annual payments of
principal and interest?
What interest rate will be charged on the unpaid balance? Is it tied to the interest rate on the bonds?
Will any of the assessments be deferred? If so, when will they be paid?
When is the assessment hearing and when will the assessments be certified to the County?
What are the expectations for the initial prepayment of assessments?
The timing of the improvement process is another important consideration. Improvement Bonds can be
issued any time after the city council conducts the improvement hearing and authorizes the improvements.
No improvement hearing is needed if the parties that petition for the improvement will be assessed 100%
of the cost. Each point in time has different implications for issuing bonds:
Bonds issued soon after the improvement hearing will be based on estimated construction costs and
assumptions about special assessments.
Bonds may be issued immediately after the receipt of bids to provide construction financing. The
finance plan will rely on assumptions about special assessments.
Bonds may be issued after completion of the assessment process. This allows the finance plan to be based
on final construction costs and actual assessments. This approach can also consider the amount of initial
prepayments. Delaying financing until after the assessment process requires city funds to pay for
construction and a reimbursement resolution to allow the repayment of these funds with the proceeds
of tax-exempt bonds.
For controversial projects with a higher risk of assessment appeals, cities will conduct the assessment process
during the period between the receipt and award of construction bids. This approach allows the city to know
the appeal risk before committing to undertake the improvement. Improvement Bonds are not subject to
the statutory debt limit.
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Utility Revenue Bonds
Minnesota cities rarely issue pure Revenue Bonds to finance sanitary sewer, water, and storm sewer utility
improvements. State Law allows cities to add its general obligation to the pledge of net utility revenues for
these improvements (Section 444.075). G.O. Utility Revenue Bonds may be issued to build, construct,
reconstruct, repair, enlarge, improve, or in any other manner obtain sanitary sewer, water, and storm
sewer facilities, and maintain and operate the facilities inside or outside its corporate limits.
These bonds are sometimes called “double barreled”. They are secured by both utility revenues and the
city’s general obligation. The bonds may be secured by a single utility or by combined utility funds. Debt
service on Utility Revenue Bonds is paid from the net revenues of the utilities pledged to secure the
bonds. Special assessments may also be levied and pledged to the bonds. Unlike Improvement Bonds,
property taxes cannot be a permanent and ongoing source of revenue to pay debt service. Property
taxes should only be used on a temporary basis when the other revenues are insufficient to meet the
obligations.
It is important to understand the nature of the revenues that will be used to support the bonds.
How much of the revenue comes from connection charges and other fees associated with growth?
Are rate increases needed? If so, are there any procedural issues (such as a public hearing or ap-
proval by the utilities commission)?
Are there any large users that constitute a significant portion of the revenue base?
Are there special agreements with large users?
There are no special procedural requirements for the issuance of Utility Revenue Bonds.
Capital Improvement Plan Bonds
Cities may issue Capital Improvement Plan (CIP) Bonds to finance the construction and maintenance of city
hall, town hall, library, public safety facility, and public works facility (Section 475.521). These bonds may
not be used to finance any other type of facility or improvement. Expenditures for eligible capital im-
provements incurred before adoption of the capital improvement plan are allowed if included in a plan
approved at or prior to the public hearing on the issuance of bonds.
The projects to be financed must be included in a capital improvements plan (CIP) that meets the criteria of
the statute. The plan must cover at least a five-year period beginning with the date of its adoption. The plan
must set forth the estimated schedule, timing, and details of specific capital improvements by year, together
with the estimated cost, the need for the improvement, and sources of revenue to pay for the improvement.
The CIP should also include information about the factors required by the statute to be considered by the
city council. These factors are:
Condition of the municipality’s existing infrastructure, including the projected need for repair or
replacement;
Likely demand for the improvement;
Estimated cost of the improvement;
Available public resources;
Level of overlapping debt in the municipality;
Relative benefits and costs of alternative uses of the funds;
253
Operating costs of the proposed improvements; and
Alternatives for providing services most efficiently through shared facilities with other municipali-
ties or local government units.
The required CIP may be a document prepared specifically for authorizing the issuance of bonds or it
may be incorporated into other capital improvement planning by the city.
The maximum amount of CIP Bonds is limited. The maximum principal and interest payable in any year
for all outstanding CIP Bonds cannot exceed 0.16% of the estimated market value of taxable property in
the city. This calculation is made using the estimated market value for the taxes payable year in which
the bonds are issued and sold.
The bonds are subject to the debt limit for cities with a population of 2,500 or more. Both approval of
the CIP and the issuance of bonds require a public hearing. A single public hearing may be held to meet
these requirements. The bonds must be authorized by a three-fifths vote of a five-member city council.
If the city council has more than five members, two-thirds approval is needed.
Issuance of the bonds is subject to reverse referendum. An election is required for the issuance of the
bonds if a petition signed by voters equal to 5% of the votes cast in the city in the last municipal general
election is filed with the city clerk within 30 days after the public hearing. If the city does not submit the
question to the voters, it may not propose the issuance of bonds under this section for the same purpose
and in the same amount for a period of 365 days from the date of receipt of the petition. If the question
of issuing the bonds is submitted and not approved by the voters, the city must wait 180 days before
voting on the same question again.
Lease Revenue Bonds
Lease Revenue Bonds are used by cities to finance public facilities. There is no specific statutory authority
for Lease Revenue Bonds. This form of financing combines two statutory powers. Economic development
authorities (EDA) and housing and redevelopment authorities (HRA) have the authority to issue Revenue
Bonds for their corporate purposes, including the construction of public facilities. The security for the
bonds and the revenue to pay debt service comes from a lease purchase with the city. Not all public
facilities are equally suited for the use of Lease Revenue Bonds. As a general rule, the more essential the
facility, the better the application of this tool. This is due to the perception of investors that the city is less
likely to not appropriate and walk away from an essential facility.
A similar form of financing is Certificates of Participation. The investor receives a certificate secured by
a share of the lease payments. The underlying security is the same as Lease Revenue Bonds. The status
of the tax levy to make lease payments is another consideration in the use of Lease Revenue Bonds.
Under the most recent version of levy limits, the levy for Lease Revenue Bonds can be made of a special
levy and outside of levy limits. The special levy authority is to pay debt service of another political
subdivision, and the EDA is a political subdivision. Levies to make lease payments do not currently qualify
as a special levy and, therefore, are subject to levy limits. The taxing power of the EDA may also be
pledged to Lease Revenue Bonds.
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Other Debt Terms
Bank Qualified
Issuers that reasonably expect to issue $10,000,000 or less in tax-exempt bonds during a calendar year
may designate bonds as “bank qualified”. The name refers to the fact that banks may deduct a portion
of the interest cost on the carry purchased for its portfolio. This preferential tax treatment usually
results in lower interest rates than bonds that are not bank qualified. The difference between bank
qualified and not bank qualified rates varies over time and is typically higher for longer maturities.
Both the direct debt of the issuer and any conduit debt count against the issuer’s $10,000,000 annual
cap.
Arbitrage
Arbitrage regulations govern the ability to invest the proceeds of tax-exempt bonds. The basic rule of
arbitrage is that the gross proceeds of a bond issue may not be invested at a rate “materially higher”
than the yield on the bonds. The complexities of arbitrage calculation and compliance are not discussed
in this guide. Instead, this guide focuses on the three basic arbitrage considerations for most Minnesota
cities: construction fund, debt service fund, and arbitrage rebate.
Arbitrage Rebate
Issuers must pay (rebate) to the federal government income earned in excess of the bond yield unless
subject to the small issuer or the spenddown exceptions.
The small issuer exception applies when the total principal amount of tax exempt, non-private activity
bonds does not exceed $5,000,000 in any calendar year. Current refunding bonds up to the amount
of the outstanding principal refunded do not count against this limit. There are three options for
meeting the spenddown exception:
1. 6-month exception - gross proceeds and interest earnings are allocated to expenditures for govern-
mental or qualified purposes that are incurred within 6 months after the date of issuance.
2. 18-month exception - gross proceeds and interest earnings are spent within the following schedule
from date of issuance: (1) 15% within 6 months; (2) 60% within 12 months; and (3) 100% within 18
months (with a 5% reasonable retainage carryover amount for an additional 12 month period).
3. 2-year spending exception – issue is a “construction issue” (75% of issue is actually spent on
construction) and gross proceeds and interest earnings are spent within the following schedule from
date of issuance: (1) 10% within 6 months; (2) 45% within 12 months; (3) 75% within 18 months; and
4) 100% within 24 months.
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MINNESOTA STATUTES
DEBT LIMIT
475.53 LIMIT ON NET DEBT
Subdivision 1.Terms.
For the purposes of this chapter, the terms defined in this section shall have the meanings given
them.
Subd. 2. Municipality.
"Municipality" means a city of any class, county, town, or school district.
Subd. 3. Obligation.
"Obligation" means any promise to pay a stated amount of money at a fixed future date or upon
demand of the obligee, regardless of the source of funds to be used for its payment, made for the
purpose of incurring debt, including the purchase of property through an installment purchase
contract or any other deferred payment agreement, for which funds are not appropriated in the
current year's budget.
Subd. 4. Net debt.
"Net debt" means the amount remaining after deducting from its gross debt the amount of current
revenues which are applicable within the current fiscal year to the payment of any debt and the
aggregate of the principal of the following:
(1) Obligations issued for improvements which are payable wholly or partly from the proceeds of
special assessments levied upon property specially benefited thereby, including those which are
general obligations of the municipality issuing them, if the municipality is entitled to reimbursement
in whole or in part from the proceeds of the special assessments.
(2) Warrants or orders having no definite or fixed maturity.
(3) Obligations payable wholly from the income from revenue producing conveniences.
(4) Obligations issued to create or maintain a permanent improvement revolving fund.
(5) Obligations issued for the acquisition, and betterment of public waterworks systems, and public
lighting, heating or power systems, and of any combination thereof or for any other public
convenience from which a revenue is or may be derived.
(6) Debt service loans and capital loans made to a school district under the provisions of sections
126C.68 and 126C.69.
(7) Amount of all money and the face value of all securities held as a debt service fund for the
extinguishment of obligations other than those deductible under this subdivision.
(8) Obligations to repay loans made under section 216C.37.
(9) Obligations to repay loans made from money received from litigation or settlement of alleged
violations of federal petroleum pricing regulations.
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(10) Obligations issued to pay pension fund or other postemployment benefit liabilities under
section 475.52, subdivision 6, or any charter authority.
(11) Obligations issued to pay judgments against the municipality under section 475.52, subdivision
6, or any charter authority.
(12) All other obligations which under the provisions of law authorizing their issuance are not to be
included in computing the net debt of the municipality.
PROPERTY TAX LEVY
275.08 AUDITOR TO FIX RATE.
Subdivision 1. Generally.
The rate percent of all taxes, except the state tax and taxes the rate of which may be fixed by law,
shall be calculated and fixed by the county auditor according to the limitations in this chapter
hereinafter prescribed; provided, that if any county, city, town, or school district shall return a
greater amount than the prescribed rates will raise, the auditor shall extend only such amount of
tax as the limited rate will produce.
Subd. 1a. Computation of tax capacity.
The county auditor shall compute the net tax capacity for each parcel according to the classification
rates specified in section 273.13. The net tax capacity will be the appropriate classification rate
multiplied by the parcel's market value.
Subd. 1b. Computation of tax rates.
(a) The amounts certified to be levied against net tax capacity under section 275.07 by an individual
local government unit shall be divided by the total net tax capacity of all taxable properties within
the local government unit's taxing jurisdiction. The resulting ratio, the local government's local tax
rate, multiplied by each property's net tax capacity shall be each property's net tax capacity tax for
that local government unit before reduction by any credits.
273.032 MARKET VALUE DEFINITION.
For the purpose of determining any property tax levy limitation based on market value or any limit
on net debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, any qualification to receive state aid based on market value, or any state aid amount based
on market value, the terms "market value," "estimated market value," and "market valuation,"
whether equalized or unequalized, mean the estimated market value of taxable property within the
local unit of government before any adjustments for tax increment, fiscal disparity, powerline
credit, or wind energy values, but after the limited market adjustments under section 273.11,
subdivision 1a, and after the market value exclusions of certain improvements to homestead
property under section 273.11, subdivision 16. Unless otherwise provided, "market value,"
"estimated market value," and "market valuation" for purposes of this paragraph, refer to the
taxable market value for the previous assessment year.
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273.13 CLASSIFICATION OF PROPERTY.
Subdivision 1. How classified.
All real and personal property subject to a general property tax and not subject to any gross
earnings or other in-lieu tax is hereby classified for purposes of taxation as provided by this section.
Subd. 21b. Tax capacity.
"Net tax capacity" means the product of the appropriate classification rates in this section and
taxable market values.
Subd. 22. Class 1.
(a) Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is residential
and used for homestead purposes is class 1a. In the case of a duplex or triplex in which one of the
units is used for homestead purposes, the entire property is deemed to be used for homestead
purposes. The market value of class 1a property must be determined based upon the value of the
house, garage, and land.
The first $500,000 of market value of class 1a property has a net classification rate of one percent
of its market value; and the market value of class 1a property that exceeds $500,000 has a
classification rate of 1.25 percent of its market value.
(b) Class 1b property includes homestead real estate or homestead manufactured homes used for
the purposes of a homestead by:
(1) any person who is blind as defined in section 256D.35, or the person who is blind and the spouse
of the person who is blind;
(2) any person who is permanently and totally disabled or by the person with a disability and the
spouse of the person with a disability; or
(3) the surviving spouse of a veteran who was permanently and totally disabled homesteading a
property classified under this paragraph for taxes payable in 2008.
Etc.
HOUSING AND REDEVELOPMENT AUTHORITY TAX LEVY
469.033 PUBLIC REDEVELOPMENT COST; PROCEEDS; FINANCING.
Subd. 6. Operation area as taxing district, special tax.
All of the territory included within the area of operation of any authority shall constitute a taxing
district for the purpose of levying and collecting special benefit taxes as provided in this subdivision.
All of the taxable property, both real and personal, within that taxing district shall be deemed to be
benefited by projects to the extent of the special taxes levied under this subdivision. Subject to the
consent by resolution of the governing body of the city in and for which it was created, an authority
may levy a tax upon all taxable property within that taxing district. The tax shall be extended,
spread, and included with and as a part of the general taxes for state, county, and municipal
purposes by the county auditor, to be collected and enforced therewith, together with the penalty,
interest, and costs. As the tax, including any penalties, interest, and costs, is collected by the county
treasurer it shall be accumulated and kept in a separate fund to be known as the "housing and
redevelopment project fund." The money in the fund shall be turned over to the authority at the
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same time and in the same manner that the tax collections for the city are turned over to the city,
and shall be expended only for the purposes of sections 469.001 to 469.047. It shall be paid out
upon vouchers signed by the chair of the authority or an authorized representative.The amount of
the levy shall be an amount approved by the governing body of the city, but shall not exceed
0.0185 percent of estimated market value.The authority shall each year formulate and file a
budget in accordance with the budget procedure of the city in the same manner as required of
executive departments of the city or, if no budgets are required to be filed, by August 1. The
amount of the tax levy for the following year shall be based on that budget.
469.001 PURPOSES.
The purposes of sections 469.001 to 469.047 are:
(1) to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to protect the
health, safety, morals, and welfare of the citizens of this state;
(2) to clear and redevelop blighted areas;
(3) to perform those duties according to comprehensive plans;
(4) to remedy the shortage of housing for low- and moderate-income residents, and to redevelop
blighted areas, in situations in which private enterprise would not act without government
participation or subsidies; and
(5) in cities of the first class, to provide housing for persons of all incomes.
Public participation in activities intended to meet the purposes of sections 469.001 to 469.047 and
the exercise of powers confined by sections 469.001 to 469.047 are public uses and purposes for
which private property may be acquired and public money spent.
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UTILITY RATES
Residential Water: 10, 12, 16, 17
0 - 1,000 gallons $7.10
1,001 - 10,000 gallons (9,000 gallons)1.74/1,000 gallons
10,001 - 33,000 gallons (23,000 gallons)2.02/1,000 gallons
33,001 gallons and over 2.21/1,000 gallons
Commercial Water: 11, 11NT & 11TX, 13, 90
0 - 1,000 gallons $7.10
1,001 - 10,000 gallons (9,000 gallons)1.74/1,000 gallons
10,001 - 33,000 gallons (23,000 gallons)2.02/1,000 gallons
33,001 gallons and over 2.21/1,000 gallons
Sprinklers - Res Twnhm & Commercial: 30, 31, 31NT, 32, 32NT, 91, 91NT
0 - 1,000 gallons $7.10
1,001 - 10,000 gallons (9,000 gallons)1.74/1,000 gallons
10,001 - 33,000 gallons (23,000 gallons)2.02/1,000 gallons
33,001 gallons and over 2.21/1,000 gallons
Industrial Water: 14
All Water Usage $2.11/1,000 gallons
State Water Service Connection Fee $0.81/mo.
Sewer Rates - Residential & Commercial: 20, 25, 26
0 - 1,000 gallons $9.18
1,001 gallons and over 5.89/1,000 gallons
Sewer Special Cases: SW21, SW22
Has own well $10 per person
Industrial Sewer Rates: 24
All Sewer Usage $3.660/1,000 gallons
BOD5 (Biochemical Oxygen Demand)0.395/lb.
TSS (Total Suspended Solids)0.543/lb.
Testing Actual cost + 10%
Water On/Off Charge:
ON $25 & OFF $25
Water Availability Charge:
$41/yr.
Final Bill Processing Fee:
$20.00
Manual Meter Reading Charge:
$20.00
Residential Refuse Charges
1st Individual Residential Cart $9.00
2nd Individual Residential Cart $13.00
Residential Recycling Charges $1.50
Rates for 2020 Utility Billing
Increasing Block Rates
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CAPITALIZATION THRESHOLDS
Class of
Asset Details
Useful
Life Threshold
Land/land improvements N/A Land - $1, Improvements - $50,000
Building/building improvements:$20,000
Floor cover
Construction Interior and Roof Cover
Heating Ventilation AC and Lighting
Electrical
Elevators, Fire, Piping and Plumbing
Site Preparation
Walls Exterior
Floor structure, foundation, roof
structure, steel frame
Primary Infrastructure and Utility $75,000
Paving Systems
Water, Sanitary and Storm Sewer
Secondary Infrastructure $25,000
Sidewalk, Boardwalk, Pathways
Street lights, Signage
Equipment $10,000
Vehicles
Machinery
Equipment
Software and
non-tangible $10,000
Purchased and Internally developed
Construction Work In Progress Upon completion, per above class
Equipment expenditures for items between $500 and $10,000 are recorded as small tools and
equipment, which is a supply account. Building and improvement expenditures below the thresholds
are recorded as repairs and maintenance. Current revenues finance expenditures for supplies and
repairs and maintenance.
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TAX CAPACITY, TAX LEVY, & TAX RATE HISTORY
Tax Capacity City Tax HRA Tax Total Tax Tax Capacity
Year Value Levy Levy Levy Rate
2006 13,224,144$6,750,000$-$6,750,000$51.028
2007 15,257,996$6,500,000$-$6,500,000$42.458
2008 16,190,597$7,600,000$-$7,600,000$46.942
2009 16,783,843$7,750,000$-$7,750,000$46.191
2010 16,691,266$7,648,272$-$7,648,272$45.822
2011 16,429,431$7,677,309$-$7,677,309$46.729
2012 15,771,688$7,850,000$-$7,850,000$49.773
2013 18,692,762$7,900,000$-$7,900,000$42.262
2014 18,289,491$8,150,000$-$8,150,000$44.561
2015 23,882,689$8,535,000$-$8,535,000$35.737
2016 25,891,898$8,925,000$280,000$9,205,000$35.552
2017 27,583,160$9,150,000$280,000$9,430,000$34.188
2018 29,528,145$9,547,000$323,000$9,870,000$33.426
2019 29,076,227$9,962,000$348,000$10,310,000$35.459
2020 29,878,176$10,445,000$355,000$10,800,000$36.147
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USEFUL TERMS (GLOSSARY)
ACCOUNT:An organizational or budgetary breakdown found within city funds. A term used to
identify an individual asset, liability, expenditure (and other uses), revenue (and other sources), or
fund balance.
ACCOUNTS PAYABLE:Amounts owed to others for goods or services received.
ACCOUNTS RECEIVABLE:Amounts due from others for goods furnished or services rendered.
ACCOUNTING SYSTEM:The total set of records and procedures which are used to record, classify,
and report information on financial status and operations of an entity.
ACCRUAL BASIS OF ACCOUNTING:The method of accounting under which revenues are recorded
when they are earned and expenditures are recorded when goods and services are received.
ACTIVITY:A specific and distinguishable line of work performed by one or more organizational
components of a governmental unit for the purpose of accomplishing a function for which the
governmental unit is responsible. For example, "Ice & Snow Removal” is an activity performed as
part of the "Public Works" function.
ADOPTION:Formal action taken by the City Council to authorize or approve the budget.
AD VALOREM:In proportion to value. The basis for levying taxes on property.
AGENCY FUND:A fiduciary fund used to account for situations where the government’s role is
purely custodial.
APPROPRIATION:An authorization granted by a legislative body to make expenditures and to incur
obligations for specific purposes. An appropriation is limited in amount to the time it may be
expended.
ASSESSED VALUATION:Value placed upon real estate or other property as a basis for levying taxes.
ASSESSMENTS:Charges made upon parties for actual services or benefits received.
ASSETS:Property owned by a governmental unit, which has a monetary value.
ASSIGNED FUND BALANCE:Resources the government intends to use for specific purposes, but are
neither restricted nor committed.
AUDIT:The examination of documents, records, reports, systems of internal control, accounting
and financial procedures, and other evidence for one or more of the following purposes: a) To
attest to whether the statements prepared from the accounts present fairly the financial position
and the results of financial operations of the constituent funds and balanced account groups of the
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city in accordance with generally accepted accounting principles applicable to city and on a basis
consistent with that of the preceding year; b) To determine the propriety, legality, and
mathematical accuracy of a governmental unit's financial transactions; c) To ascertain whether all
financial transactions have been properly recorded; d) To evaluate the stewardship of public
officials who handle and are responsible for the financial resources of a governmental unit.
BALANCED BUDGET:A budget in which estimated revenues and other sources equals estimated
expenditures and other uses. A balanced budget does not use reserves or retained earnings to fund
expenditures.
BOND:A written promise, generally under seal, to pay a specified sum of money, called the face
value or principal amount, at a fixed time in the future, called the date of maturity, and carrying
interest at a fixed rate, usually payable periodically.
BONDED INDEBTEDNESS:Outstanding debt by issues of bonds, which are repaid by ad valorem
taxes or other revenue.
BUDGET:A plan of financial operation embodying an estimate of proposed expenditures for a
given period and the proposed means of financing them.
BUDGET DOCUMENT:The official written statement prepared by the city’s Finance Department
and adopted by the City Council.
BUDGET MESSAGE:A general discussion of the proposed budget presented in writing as a part of
the budget document. The budget message explains principal budget issues against the
background of financial experience in recent years and presents recommendations made by city
staff.
BUDGET CALENDAR:The schedule of key dates, which a government follows in the preparation
and adoption of the budget.
BUDGETARY CONTROL:The control or management of a governmental unit or enterprise in
accordance with an approved budget for the purpose of keeping expenditures within the limitation
of available appropriations and available revenues.
CAPITAL ASSETS:Assets with historical acquisition costs (value if donated) above the capitalization
threshold, typically $10,000 or more, and a useful life of more than one reporting period. Capital
assetsareusedinoperationsandhaveinitialusefullivesextendingbeyondasinglereportingperiod.These
assetsmustalsomeetcapitalizationthresholds,whichvarybyassetclassification.Land,improvementsto
land,vehicles,machinery,equipment,infrastructure,andothertangibleandintangibleassetsusedin
operationsareexamplesofcapitalassetclassifications.
CAPITAL EXPENDITURES:Acapitalexpenditure occurswhenacapitalassetispurchased.Expenditures
thatdonotbenefitmorethanonereportingperiodormeetthecapitalizationthresholdsareclassifiedas
currentexpenditures.
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CAPITAL IMPROVEMENT BUDGET:A plan of proposed capital expenditures and a means of
financing them. The capital improvement budget is enacted as part of the complete annual budget.
CAPITAL PROGRAM:A plan for capital expenditures to be incurred each year over a fixed period
of years to meet capital needs arising from the long-term work program or otherwise. It sets forth
each project or other contemplated expenditure in which the government is to have a part and
specifies the full resources estimated to be available to finance the projected expenditures.
CAPITAL PROJECTS FUNDS:A governmental fund type used to account for financial resources to be
expended for the acquisition or construction of major capital assets.
CAPITALIZATION THRESHOLD:The level at which an item is considered either a current
expenditure or a capital expenditure. The threshold for equipment is $10,000.
CASH BASIS:The method of accounting under which revenues are recorded when received in cash
and expenditures are recorded when paid.
CHARGES FOR SERVICES:Charges for current services rendered to customers.
CHART OF ACCOUNTS:The classification system used by a government entity to organize the
accounting for various funds and departments.
COMMITTED FUND BALANCE:Resources used for specific purposes pursuant to constraints
imposed by formal action of the government’s highest level of decision-making authority (i.e. City
Council).
CONSUMER PRICE INDEX (CPI):A statistical description of price levels provided by the U.S.
Department of Labor. The index is used as a measure of the increase in the cost of living (i.e.,
economic inflation).
CONTINGENCY:Budget for expenditures which cannot be placed in departmental budgets,
primarily due to uncertainty about the level or timing of expenditures when the budget is adopted.
The contingency also serves as a hedge against shortfalls in revenues or unexpected expenditures.
CURRENT:A term applied to budgeting and accounting, designating the operations of the present
fiscal period as opposed to past or future periods.
DEBT:An obligation resulting from borrowing money or purchasing goods and services.
DEBT LIMIT:The maximum amount of gross or net debt, which is legally permitted.
DEBT MARGIN:The amount of available debt, which may be issued by a governmental unit before
reaching its debt limit.
DEBT SERVICE FUND:A governmental fund type used to account for the accumulation of
resources for the payment of general long-term debt principal and interest. Proprietary fund type
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debt is accounted for in the enterprise fund or internal service fund receiving the debt issue
proceeds.
DEPARTMENT:Basic organizational unit of government, responsible for carrying out related
functions. Each department serves a specific function as a distinct organizational unit of
government within the given fund. Its primary purpose is to facilitate organizational and budgetary
accountability.
DEPRECIATION:Expiration in the service life of capital assets attributable to wear and tear,
deterioration, action of the physical elements, inadequacy, or obsolescence.
DEPUTY REGISTRAR (DMV):City service of processing state-issued licenses for motor vehicles and
equipment, such as license plates and tabs for cars, trucks, trailers, and recreational vehicles.
DISTINGUISHED BUDGET PRESENTATION AWARDS PROGRAM:A voluntary awards program
administered by the Government Finance Officers Association to encourage governments to
prepare effective budget documents.
ENTERPRISE FUND:A proprietary fund type used to report an activity for which a fee is charged to
external users for goods or services. In theory, these funds operate in a manner similar to private
business enterprises, where the intent of the governing body is to recover the cost of delivering
services through user fees or charges (Water, Sewage, Liquor, Deputy Registrar, and Fiber Optic
funds).
ESTIMATED MARKET VALUE:Represents the selling price of a property if it were on the market.
Estimated market value is converted to tax capacity before property taxes are levied.
EXPENDITURE:For accounts kept on the accrual or modified accrual basis of accounting, the cost of
goods received or services rendered whether cash payment have been made or not. Where
accounts are kept on a cash basis, expenditures are recognized only when the cash payments for
the above purposes are made.
FIBERNET MONTICELLO (FNM):The name of the city-owned fiber optic network, which provides
internet, phone, and cable television to residents and businesses of Monticello.
FIDUCIARY FUND:A fund classification used to report assets held in a trustee or agency capacity for
others and therefore cannot be used in the government’s own programs.
FINES:Revenues from penalties imposed for violation of laws or regulations.
FISCAL POLICY:A government’s policies with respect to revenues, spending, and debt management
as these relate to government services, programs, and capital investment. Fiscal Policy provides an
agreed-upon set of principles for the planning and programming of budgets and their funding.
FISCAL YEAR:The budget and accounting year that begins on the first day of January and ends on
the last day of December of each year.
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FULL TIME EQUIVALENT (FTE):The number of employee hours (2,080) needed to be equal to one
full time employee. Several part time employees may be combined to make one FTE.
FUNCTION:A group of related activities aimed at accomplishing a major service or regulatory
program for which the government unit is responsible.
FUND:A fiscally independent accounting entity with a self-balancing set of accounts recording cash
and/or other resources together with all related liabilities, obligations, and reserves, which are
segregated for the purpose of carrying on specific activities or attaining certain objectives.
FUND BALANCE:Governmental fund assets minus liabilities.
GENERAL FUND:Accounts for the general operation of the city and all financial resources except
those to be accounted for in another fund.
GENERAL GOVERNMENT:A set of accounts, to which the expenditures for operating the city are
charged.
GENERAL OBLIGATION BONDS:Bonds for which the government pledges its full faith and credit to
the repayment of the bonds principal, including interest.
GOAL:A statement of broad direction, purpose, or intent based on the need of a community. A
goal is general and timeless; that is, it is not concerned with a specific achievement in a given
period.
GOVERNMENTAL ACCOUNTING:The composite of analyzing, recording, summarizing, reporting,
and interpreting the financial transactions of governmental units and agencies.
GOVERNMENTAL FUND TYPES:Funds generally used for tax-supported activities. Under current
GAAP, there are five governmental fund types in this: general, special revenue, debt service, capital
projects, and permanent funds. The city has no permanent funds.
GRANT:A contribution of assets by one governmental unit or other organization to another.
Grants are usually made for specified purposes.
HOMESTEAD AND AGRICULTURAL CREDIT (HACA):A form of state-paid property tax relief for
farm property and owner-occupied homes.
HOUSING AND REDEVELOPMENT ACT – SPECIAL BENEFIT LEVY:Property tax levied against the
city’s taxable market value. The HRA levy limit is .0185% of the taxable market value and must be
used solely for redevelopment purposes.
IMPROVEMENT BONDS:Bonds payable from the proceeds of special assessments from properties
benefiting from an improvement.
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IMPROVEMENTS:Buildings, structures, and other attachments or annexations to land which are
intended to remain so attached or annexed, such as sidewalks, trees, drains, and sewers.
INFRASTRUCTURE:The basic physical and organizational structures and facilities (e.g., buildings,
roads, bridges) needed for the operation of the city. Infrastructure thus consists of improvements
with significant cost to develop or install that return an important value over time to the city.
INTERFUND TRANSFERS:See operating transfers.
INTERGOVERNMENTAL REVENUES:Revenues from other governments in the form of grants,
entitlement, or shared revenues.
INTERNAL SERVICE FUNDS:A proprietary fund type used to report activity that provides goods or
services to other funds, departments, or agencies of the primary government and its component
units, or to other governments, on a cost-reimbursement basis.
INVESTMENTS:Securities held for the production of income in the form of interest.
LEVY:(Verb) To impose taxes, special assessments, or service charges for the support of
governmental activities. (Noun) Taxes, special assessments, or service charges imposed by a
governmental unit.
LEVY LIMIT:The city’s maximum property tax levy without special authorization as defined by
Minnesota State Statue.
LICENSE REVENUES:Revenues received from the sale of business and non-business licenses.
LINE ITEM:A specific item or group of similar items defined by detail in a unique account in the
financial records.
LOCAL GOVERNMENT AID (LGA):Intergovernmental revenue from the state to municipalities to
help fund general expenditures.
LONG-TERM DEBT:Debt with a maturity of more than one year after the date of issuance.
MAINTENANCE:The upkeep (repairs and maintenance) of physical properties in condition for use
or occupancy.
MARKET VALUE:The value a property is worth.
MARKET VALUE HOMESTEAD CREDIT (MVHC):State paid property tax reduction on owner
occupied homes based on the property’s market value.
MARKET VALUE EXCLUSION (MVE):Provision in the state property tax system which exempts or
removes a portion of a property’s market value from property taxes.
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MISCELLANEOUS:Revenues or expenditures not classified in any other revenue or expenditure
category.
MODIFIED ACCRUAL BASIS:The basis of accounting under which expenditures other than accrued
interest on general long-term debt are recorded at the time liabilities are incurred and revenues are
recorded when received in cash except for material and/or available revenues, which should be
accrued to reflect properly the tax levied and revenue earned.
NONSPENDABLE FUND BALANCE:Amounts that cannot be spent because they are either (a) not in
spendable form or (b) legally or contractually required to be maintained intact. Nonspendable fund
balances typically include inventory, prepaid items, and land held for resale.
OBJECT OF EXPENDITURE:Expenditure classifications based upon the types or categories of goods
and services purchased.
OBJECTIVE:Desired output-oriented accomplishments, which can be measured and achieved
within a given time frame.
OPERATING BUDGET:A financial plan that estimates revenues and expenditures for a specified
period.
OPERATING EXPENSE:The cost for personnel, materials, and equipment required for a department
to function.
OPERATING REVENUE:Monies received from ongoing operations. Operating revenues are used to
pay for day-to-day services.
OPERATING TRANSFERS:Amounts transferred from one fund to another, shown as an expenditure
in the originating fund and a revenue in the receiving fund.
ORDINANCE:A formal legislative enactment by the City Council.
PAY-AS-YOU-GO BASIS:A term used to describe a financial policy by which capital outlays are
financed from current revenues rather than through borrowing.
PERFORMANCE MEASURE:See Service Levels.
PERSONNEL SERVICES:Expenditures for salaries, wages, and fringe benefits of employees.
PROGRAM:A group of related activities performed by one or more organizational units for the
purpose of accomplishing a function for which the governmental unit is responsible.
PROJECT:A plan of work, job assignment, or task.
PROPRIETARY FUNDS:Funds focusing on the determination of operating income, changes in net
position (or cost recovery), financial position, and cash flows. There are two types of proprietary
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funds: enterprise funds and internal service funds. For this report, these funds have the same
budgetary basis as governmental funds.
PUBLIC SAFETY:Expenditures related to the protection of persons and property.
PUBLIC WORKS:Expenditures for the maintenance of city property and infrastructure.
PURPOSE:A broad statement of the goals, in terms of meeting public service needs, that a
department is organized to accomplish.
REFUNDING BONDS:Bonds issued to redeem outstanding (unpaid) debt.
REIMBURSEMENT:Cash or other assets received as a repayment of the cost of work or services
performed or of other expenditures made for or on behalf of another governmental unit or
department or for an individual, firm, or corporation.
RESERVE:An account which records a portion of the fund balance which must be segregated for
some future use and which is, therefore, not available for further appropriation or expenditure.
RESOLUTION:A special or temporary order of a legislative body; an order of a legislative body
requiring less legal formality than an ordinance or statute.
RESOURCES:The actual assets of a governmental unit, such as cash, plus contingent assets such
as estimated revenues applying to the current fiscal year not accrued or collected, and bonds
authorized and not issued.
RESTRICTED FUND BALANCE:Fund balance should be reported as restricted when constraints
placed on the use of resources are either: a) externally imposed by creditors (such as through debt
covenants), grantors, contributors, or laws or regulations of other governments; or b) imposed by
law through constitutional provisions or enabling legislation.
REVENUE:The term designates an increase to a fund's assets which: 1) does not increase a liability;
2) does not represent a repayment of an expenditure already made; 3) does not represent a
cancellation of certain liabilities; and 4) does not represent an increase in contributed capital.
REVENUE BOND:A bond that is backed by a particular revenue source such as water user fees,
typically accounted for in proprietary fund types.
SERVICE LEVELS:Data to determine how effective/efficient a program is in achieving its objective.
SPECIAL ASSESSMENT:A compulsory levy made by a local government against certain properties
to defray part or all of the cost of a specific improvement or service which is presumed to be of
general benefit to the public and of special benefit to such properties.
SPECIAL REVENUE FUND:A governmental fund type used to account for revenue derived from
specific revenue sources that are legally restricted or committed for specific purposes.
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TAX CAPACITY:The valuation of property based on market value and statutory class rates. The
property tax for each parcel is based on its tax capacity. The total tax capacity of all individual
parcels is the basis for determining the tax capacity rate.
TAX CAPACITY RATE:Tax rate applied to tax capacity to generate property tax revenue. The rate
is obtained by dividing the property tax levy by the available tax capacity.
TAX INCREMENT FINANCING (TIF):Financing tool originally intended to combat severe blight in
areas, which would not be redeveloped without government subsidies derived from locally
generated property tax revenues.
TAX LEVY:The total amount to be raised by general property taxes for the purpose stated in the
resolution certified to the county auditor. See levy also.
TAXABLE MARKET VALUE:The market value of a property less the market value exclusion. This is
the value used to calculate property taxes on a property.
TAXES:Compulsory charges levied by a governmental unit for the purpose of financing services
performed for the common benefit.
TOTAL TAX CAPACITY:The amount computed by first totaling the tax capacities of all parcels of
property within a city. Adjustments for fiscal disparities, tax increment, and a portion of the
powerline value are made to this total since not all tax capacity is available for general tax purposes.
TRUST FUND:A fund consisting of resources received and held by the governmental unit as
trustee, which is to be expended or invested in accordance with the conditions of the trust.
UNASSIGNED FUND BALANCE:This is the residual classification for the General Fund. This is fund
balance that has not been reported in any other classification. The General Fund is the only fund
that can report a positive unassigned fund balance. Other governmental funds would report deficit
fund balances as unassigned.
UNBALANCED BUDGET:A budget in which undesignated fund balance or reserves are used or
increased, in order to balance estimated revenues to estimated expenditures or expenses.
UNRESTRICTED FUND BALANCE:The portion of a fund’s balance that is not restricted for a specific
purpose and is available for general appropriation.
USER FEE:The service charge for delivering a specific service to one benefiting party.
WORKLOAD DATA:A unit of work to be done.
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ACRONYMS
BMP Best Management Practices
BCOL Bertram Chain of Lakes
CAFR Comprehensive Annual Financial Report
CD Certificate of Deposit
CIP Capital Improvement Plan
CP Commercial Paper
CPI Consumer Price Index
DMV Department of Motor Vehicle or Deputy Registrar
EDA Economic Development Authority
MVE Market Value Exclusion
EMV Estimated Market Value
FHLB Federal Home Loan Bank
FNM FiberNet Monticello
FNMA Federal National Mortgage Association
FTE Full Time Equivalent
GAAP Generally Accepted Accounting Principles
GASB Governmental Accounting Standards Board
GFOA Government Finance Officers Association
GO General Obligation
HACA Homestead and Agricultural Credit Aid
HRA Housing and Redevelopment Authority
HVAC Heating, ventilation, and air conditioning
LGA Local Government Aid
MCC Monticello Community Center
MPFA Minnesota Public Facilities Authority
MVHC Market Value Homestead Credit
SAC Sewer Availability Charge
SY Square Yard
TIF Tax Increment Financing
WAC Water Availability Charge
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