2023 Monticello Budget
2023 Adopted Budget
City of Monticello, Minnesota
505 Walnut Street • 763-295-2711 • ci.monticello.mn.us
Table of Contents
Introduction and Overview
Directory of Public Officials .......................................................................................................... 1
Distinguished Budget Presentation Award ................................................................................... 2
Strategic Goals & Strategies ......................................................................................................... 3
Priorities & Issues ....................................................................................................................... 11
Budget Overview ........................................................................................................................ 15
Organization Chart ..................................................................................................................... 27
Financial Structure, Policy & Process
Fund Descriptions & Structure ................................................................................................... 28
Departments & Funds Relationship ........................................................................................... 31
Basis of Budgeting ...................................................................................................................... 32
Financial Policies ........................................................................................................................ 33
Budget Development & Administration ............................................................................... 33
Revenue Collection .............................................................................................................. 35
Expenditures and Payments ................................................................................................. 35
Debt Administration ............................................................................................................ 37
Reserves and Fund Balances ................................................................................................ 37
Financial Reporting & Accounting ........................................................................................ 38
Cash Management & Investment......................................................................................... 40
Balanced Budgets ................................................................................................................. 47
The Budget Process .................................................................................................................... 49
Financial Summaries
Consolidated Financial Schedules
All Funds Summary By Fund Type ........................................................................................ 53
Revenues By Category and Fund Type ................................................................................ 55
Appropriations By Category and Fund Type ......................................................................... 57
Interfund Transfers .............................................................................................................. 59
Three Year Consolidated and Fund Financial Schedules
All Funds Summary By Year .................................................................................................. 60
Fund Balance/Working Capital ................................................................................................... 62
Changes in Fund Balance/Working Capital ........................................................................... 63
Fund Balance/Working Capital History ................................................................................ 64
Revenue Sources By Fund
Revenue Trends & Analysis .................................................................................................. 65
Tax Levy History ................................................................................................................... 73
Tax Capacity History ............................................................................................................. 74
Largest Property Taxpayer ................................................................................................... 75
Revenues Sources By Fund .................................................................................................. 76
Long Range Financial Plans ........................................................................................................ 78
Long-Term Fiscal Objectives ................................................................................................. 83
Capital & Debt
Capital Expenditures & Capital Improvement Plan .................................................................... 86
Funding Source Summary .................................................................................................... 93
Projects By Funding Sources And Department ..................................................................... 94
Debt ......................................................................................................................................... 100
Departmental Information
Staffing Summary ..................................................................................................................... 103
General Fund – Summary ......................................................................................................... 105
General Government
Mayor and City Council (101-41110) ............................................................................... 108
City Administration (101-41310) ..................................................................................... 109
City Clerk (101-41410) .................................................................................................... 111
Finance (101-41520) ....................................................................................................... 112
Assessing (101-41550) .................................................................................................... 114
Legal (101-41610) ........................................................................................................... 115
Human Resources (101-41800) ....................................................................................... 116
Planning, Zoning & Community Development (101-41910) ............................................ 118
City Hall (101-41940) ...................................................................................................... 121
Public Safety
Law Enforcement (101-42100) ........................................................................................ 122
Fire & Rescue (101-42200) .............................................................................................. 124
Fire Relief (101-42202).................................................................................................... 126
Building Inspections (101-42400) .................................................................................... 127
Emergency Management (101-42500) ............................................................................ 129
Animal Control (101-42700) ............................................................................................ 130
National Guard (101-42800) ........................................................................................... 131
Public Works
Public Works Administration (101-43110) ...................................................................... 132
Engineering (101-43111) ................................................................................................. 133
Engineering & Inspections (101-43115) .......................................................................... 134
Streets & Alleys (101-43120) .......................................................................................... 136
Ice & Snow Removal (101-43125) ................................................................................... 137
Shop & Garage (101-43127) ............................................................................................ 138
Street Lighting (101-43160) ............................................................................................ 139
Refuse Collection (101-43230) ........................................................................................ 140
Recreation and Culture
Senior Center (101-45175) .............................................................................................. 141
Park Operations (101-45201) .......................................................................................... 142
Park Ballfields (101-45203) ............................................................................................. 143
Public Arts (101-45204) .................................................................................................. 144
Library (101-45501) ........................................................................................................ 145
Shade Tree (101-46102) .................................................................................................. 146
Special Revenue Funds – Summary .......................................................................................... 147
Economic Development Authority Fund (213-46301) ........................................................ 148
Cemetery Fund (215-49010) .............................................................................................. 150
Small Cities Development Program (SCDP) Fund (221-46500) ........................................... 152
Community Center Fund (226-4512x) ................................................................................ 153
Debt Service Funds – Summary ................................................................................................ 155
2015B G.O. Bond Sub-Fund (319-47000) ........................................................................... 156
2016A G.O. Bond Sub-Fund (320-47000) ........................................................................... 158
2017A G.O. Bond Sub-Fund (321-47000) ........................................................................... 160
2018A G.O. Bond Sub-Fund (322-47000) ........................................................................... 162
2019A G.O. Bond Sub-Fund (323-47000) ........................................................................... 164
2020A G.O. Bond Sub-Fund (324-47000) ........................................................................... 166
Closed Debt Service Funds ................................................................................................. 168
Capital Project Funds – Summary ............................................................................................. 169
Capital Project Fund (400-4xxxx) ........................................................................................ 170
Street Lighting Improvement Fund (403-43162) ................................................................ 172
Park & Pathway Improvement Fund (404-45202) .............................................................. 173
Park Dedication Fund (405-45202) ..................................................................................... 174
Closed Capital Projects Funds ............................................................................................ 175
Enterprise Funds – Summary ................................................................................................... 177
Water Fund (601-4944x) .................................................................................................... 178
Sewer Fund (602-49480 & 602-4949x) ............................................................................... 180
Stormwater Fund (652-4948x) ........................................................................................... 184
Liquor Fund (609-4975x) .................................................................................................... 186
Deputy Registrar Fund (653-41990) ................................................................................... 188
Fiber Optics Fund (656-4987x) ........................................................................................... 190
Internal Service Funds – Summary ........................................................................................... 193
Facilities Maintenance Fund (701-00000) .......................................................................... 194
IT Services Fund (702-00000) ............................................................................................. 196
Central Equipment Fund (703-00000) ................................................................................ 198
Benefit Accrual Fund (704-00000) ..................................................................................... 200
Community, Demographic, and Statistical Information ................................................................. 203
Appendix
Property Tax Basics .................................................................................................................. 206
Truth-in-Taxation (TNT) ............................................................................................................ 208
Debt Guide ............................................................................................................................... 209
Minnesota Statutes .................................................................................................................. 218
Utility Rates .............................................................................................................................. 222
Capitalization Thresholds ......................................................................................................... 223
Tax Capacity, Tax Levy, & Tax Rate History .............................................................................. 224
Useful Terms (Glossary) ........................................................................................................... 225
Acronyms ................................................................................................................................. 233
DIRECTORY OF PUBLIC OFFICIALS
MAYOR & CITY COUNCIL
Position Name Term Expires Contact Information
Mayor Lloyd Hilgart 12/31/2024 Lloyd.Hilgart@ci.monticello.mn.us
Council Bill Fair 12/31/2022 Bill.Fair@ci.monticello.mn.us
Council Charlotte Gabler 12/31/2026 Charlotte.Gabler@ci.monticello.mn.us
Council Lee Martie 12/31/2024 Lee.Martie@ci.monticello.mn.us
Council Sam Murdoff 12/31/2024 Sam.Murdoff@ci.monticello.mn.us
CITY STAFF
City Administrator ............................................................ Rachel Leonard
Public Works Director/City Engineer ................................... Matt Leonard
Finance Director ......................................................... Sarah Rathlisberger
Community Development Director .............................. Angela Schumann
Parks, Arts & Recreation Director .......................................... Tom Pawelk
City Clerk ...................................................................... Jennifer Schreiber
Human Resources Manager ................................................... Tracy Ergen
Communications & Marketing Specialist .............................. Haley Foster
Street Superintendent ........................................................ Mike Haaland
Parks Superintendent .................................................... Josh Berthiaume
Utilities Superintendent ............................................................ Mat Stang
Finance Manager ..................................................................... Liz Lindrud
Deputy Registrar Manager .............................................. Carolyn Granger
Liquor Store Manager ..................................................... Randall Johnsen
Economic Development Manager ............................................ Jim Thares
Chief Building Official ................................................. Ron Hackenmueller
Fire Chief .............................................................................. Mike Mossey
EXTERNAL CONSULTANTS
Wright County Sheriff ........................................................ Sean Deringer
NAC Planning Consultant .................................................. Steve Grittman
Northland Securities Financial Advisor ............................... Tammy Omdal
Veolia Environmental Services ............................................ Chris Gardner
Fibernet Management Services ............................ Arvig Communications
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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 fiscal year beginning January 1, 2022. The city has submitted its budget for consideration
since 2009 and has received this award each year.
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.
GOVERNMENT FINANCE OFFICERS ASSOCIATION
Distinguished
Budget Presentation
Award
PRESENTED TO
City of Monticello
Minnesota
For the Fiscal Year Beginning
January 1, 2022
Executive Director
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STRATEGIC GOALS & STRATEGIES
The City of Monticello continues to use strategic planning as an important mechanism for
balancing the needs and wants of the community with sound fiscal management. Strategic
planning is also the first step in the annual budget process. The City Council, with two new
members, met in February of 2021 to discuss projects in process, projects on the horizon,
and the ongoing effects of the COVID-19 pandemic. With two new Councilmembers, this
exercise will be completed again in early 2023 to reinforce or redirect the city’s strategic
direction.
Leadership staff developed the city’s Mission Statement, Strategic Goals, and Core Values,
which were affirmed by the Council at the worksession.
•The mission of the City of Monticello is to responsibly use our resources to
provide quality services and programs that foster a dynamic community
rooted in history and preparing for a vibrant future.
Mission Statement
1.Create & Preserve Sustainable Livability
2.Build a Connected Community
3.Strengthen our Image as a Destination
4.Support a Vibrant Economy
5.Be a Regional Leader
6.Invest in People
Strategic Goals
•Leadership
•Stewardship
•Responsiveness
•Integrity
•Community
Core Values
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Furthermore, this worksession brought about the idea of the “Big 6”:
• Improvements to the city’s downtown with a focus on Block 52
• A new operations, maintenance, and storage facility for the Public Works department
• The Pointes at Cedar (formerly known as Chelsea Commons) 100-acre development &
recreation area
• Bertram Chain of Lakes Regional Park, a joint venture with Wright County of which the
city is responsible for the athletic park area
• A Water Treatment Facility to treat the city’s water supply
• Fallon Avenue Improvements, including trunk lines that are necessary for future
development to the South and for increased pedestrian safety
Through the 2023 budget process, Council and staff considered the impacts these projects
would have on the next 10 years. While these are long-term projects, the city’s 2023 budget
supports continuation of four of these projects, while others are on hold until triggered by
development or external funding. A desire for sustainable growth, as highlighted in the city’s
Monti:2040 Comprehensive Plan, continues to drive decision making along with a funding
approach that will avoid large impacts to the property tax levy each year.
The city has completed numerous plans to help guide future growth and spending priorities. A
chance to develop additional planning for the future decommissioning of the Xcel Energy
Nuclear Generating Plant, which makes up about half of the city’s tax base, became a reality in
2021 when the city was awarded a grant from the MN Department of Employment and
Economic Development as part of its Community Energy Transitions (CET) grant program. In
2021 and 2022, the city completed:
• The Pointes at Cedar stormwater, grading, and water management plan
• The Pointes at Cedar traffic analysis
Downtown
Revitalization
New Public
Works Facility
The Pointes at
Cedar
Bertram Chain
of Lakes
Regional Park
Development
Fallon Avenue
Improvements
Water
Treatment
Facility
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• Comprehensive water and sewer studies
• A formal long-term financial plan and model
• A strategic transition plan summary
• Predesign for Otter Creek Industrial Park grading, drainage, wetland, and stormwater
• Survey for platting the Otter Creek Industrial Park
• Shovel-Ready Certification of vacant lots in Otter Creek Industrial Park
• Cost-Benefit Analysis of the areas Northwest and East of city limits for future annexation
and development
• Related marketing plans
The city previously adopted plans that were incorporated with the CET grant studies, including:
Plans for service provision, facility expansion & maintenance:
1. Monti:2040 Comprehensive Plan - Adopted 2020.
The Comprehensive Plan is a tool for guiding the growth, redevelopment, and improvement of
Monticello. The Comprehensive Plan outlines the vision for the community. Development of the
Monti:2040 Vision and Comprehensive Plan, began with the visioning phase in 2019 and
concluded in 2020 with the plan formation based on the visioning.
The city’s Transportation Plan, now Chapter 4 of the Monti:2040 Comprehensive Plan, is a guide
that outlines the goals, policies, and transportation strategies to improve mobility and
connectivity in Monticello by continuing to build a safe and efficient multimodal transportation
system that strengthens the economy and enhances quality of life. Ongoing major
transportation efforts include:
• Continued evaluation of collector street network improvements for safety, intersection,
and congestion improvements.
• Progress on mobility and connectivity improvements outlined within the Downtown
Small Area Plan, including the connection of Walnut to River Street.
• Work with regional and state partners on alternatives and projects related to Highway
25 congestion relief and I-94 capacity expansion.
• Extension of School Boulevard west from current terminus.
• Installation of new roundabout locations throughout the city.
• Street improvements from rural to urban standards for certain streets including Fenning
Ave, Fallon Ave. and Edmonson Ave, among others.
2. Parks & Pathways Plan – Adopted 2011.
The Monticello Parks and Pathways Plan identifies the city’s objectives for Parks and Pathways
planning and development and for building on the existing parks infrastructure. The city has
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 2040
Plan provides updates but does not duplicate the detailed analysis in this plan. A Parks Master
Plan is recommended by the Monticello2040 Plan to update the detailed portion of this plan,
which is included in the 2023 with planning beginning in late 2022.
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3. Bertram Chain of Lakes Recreation Plan – Adopted 2016.
The Monti:2040 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.
4. Downtown Small Area Plan – Adopted 2017.
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 several
implementation strategies to realize plan goals. The Downtown Small Area Plan is incorporated
in the Monti:2040 Vision & Comprehensive Plan.
5. Economic Development Strategic Plan - Updated 2018.
The EDA adopts a strategic work plan annually, which directs EDA staff focus and resources over
the following three years.
6. Natural Resource Inventory & Assessment - Adopted 2008.
The purpose of the Natural Resource Inventory and Assessment (NRI/A) 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. 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 related to grading, drainage,
erosion control, and storm water management to meet current MPCA requirements per the
city’s new MS4 permit issued on October 29, 2021.
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8. 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 are 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 because of the new NOAAA Atlas 14 standard
released by the National Weather Service Hydrometeorological Design Studies for rainfall
frequency estimates.
9. 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.
These guidelines are referenced in the city’s zoning and subdivision ordinances related to
grading, drainage, erosion control, and storm water management. The Design Manual is
updated as needed for new design regulations and requirements.
10. General Specifications and Standard Detail Plates for Street and Utility Construction -
Updated 2017.
These specifications represent the city’s requirements for construction of public streets and
utility systems.
11. Comprehensive Water System Plan – Updated 2022.
A water distribution system model was created 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. In 2022, the City conducted an analysis of its water system to determine
improvements necessary for future expansion of the City. These improvements include necessary
water main improvements, trunk lines, additional storage, and other water distribution assets.
12. Comprehensive Sanitary Sewer System Plan – Updated 2022.
The sanitary sewer comprehensive plan identifies the existing sanitary sewer system and
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. The Sanitary Sewer Plan
was updated in 2022 as a concentrated effort to provide the City of Monticello with working
knowledge of the flow characteristics of the sanitary sewer system, identify issues, concerns or
deficiencies with the collection system, and recommend changes or improvements that would
address issues and benefit system operation for the long term.
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13. Interchange Planning Study – Ongoing.
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 Monti:2040 Comprehensive Plan recognizes
that Northwest Monticello, which includes the CSAH39 to Orchard Road corridor, is a primary
focus for future development and further cites the Future Interchange as a critical component of
understanding growth potential and land use in the Northwest Area. However, CET grant funds
were used to study the feasibility of development to the East side of city limits as well.
14. 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 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.
15. Central Mississippi River Regional Planning Partnership (CMRP) – Ongoing.
A series of meetings have taken place with representatives invited from area jurisdictions to
discuss regional planning and economic development. A joint power agreement was adopted by
the city in December 2015, with a shift in focus from strictly transportation to broader regional
planning taking place a few years later. A 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.
Future wastewater improvements identified in the Capital Improvement Plan include SCADA
system upgrades, Phase 2 facility and site improvements, solids handling improvements and
headworks improvements.
2. Overall Street Reconstruction Program – Adopted 2004, ongoing as part of capital
improvement plan.
The 2023-2027 Capital Improvement Plan includes projects related to the program, with various
projects planned throughout the city, which typically occur in even-numbered years.
3. New Public Works Facility
The city completed a study of the public works facility in 2007 which identified the need for
additional storage and more efficient configuration of the public works department. Due to the
recession shortly thereafter, the project never gained traction, but was recently revived because
of need. Concept plans have been drafted, and land was purchased in 2021 for the future
facility. An architect was hired in late 2022 with designs, specifications and beginning
construction included in the 2023 budget. Construction is anticipated to be complete in 2024 or
early 2025.
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4. Transportation Projects
TH25 Safety and Lighting Improvements – MnDOT is proposing an interim improvement project
that mixes permanent and temporary elements to promote traffic calming and accessibility.
MnDOT is also installing additional streetlights along TH25. The new lighting will be added at
neighborhood entrances south of School Boulevard as well as at the J-turn located
approximately a quarter of a mile down the road.
The Monticello EDA sold 10 parcels in downtown’s Block 52 in 2022 and entered into a final
development agreement with a developer to redevelop the central block next to the only
Mississippi River crossing within 20 miles. While much of the interior block redevelopment will
be handled by private investment, the city included a street improvement project to River and
Walnut streets in the 2023 budget. Wright County planned for an improvement project to
County Road 75 (Broadway), which is adjacent to Block 52 in 2023, and the city budgeted funds
for additional improvements to the vital connection to downtown.
The city was successful in securing Safe-Routes-To-Schools grant funding for School Boulevard
and Elm Street. Both projects include improvements to streets and sidewalks to improve safety
and accessibility for those traveling near school areas. While some funding will not be available
until 2025, the city has budgeted to complete the projects in 2023.
The city also secured funding from the State of Minnesota and Wright County for flashing yellow
arrows to be installed a various intersections along State Highway 25 and County Road 75. This
project is budgeted for 2023.
Financial Plans:
1. Annual Budget - Adopted each December.
2. Capital Improvement Plan - Updated and adopted each year; most recently for 2023 -2027.
3. Long-term Financial Management Plan – Model was approved in 2022 and will be updated
annually.
9
This first phase of the Comprehensive Plan
process, the Visioning phase, included a
community engagement process to identify
common values, growth aspirations and a vision
to inform the planning direction for the next
20 years. The vision, value statements and
preferred development scenario will serve as the
foundation for creating the new Comprehensive
Plan during the second phase of the planning
process. The Comprehensive Plan provides a set
of goals, policies and strategies for achieving
Monticello’s vision for the future.
PHASE ONE | JANUARY 2020
In 2040 the City of Monticello is an inclusive community focused around sustainable
growth while maintaining its small-town character. Monticello is a Mississippi River
town known for its schools, parks, biking and walking trails and vibrant downtown.
Monticello is an evolving, friendly and safe community that respects the quality of its
environment, fosters a sense of belonging and connection, encourages a healthy and
active lifestyle and supports innovation to promote a prosperous economy.
A balanced land use and transportation framework that provides options and connectivity.
A range of attainable housing options in terms of type, cost, and location.
A respected school and education system serving the community.
A healthy community focused on physical and mental health and wellness of its residents.
A safe, clean, and beautiful community
supported by caring and helpful residents.
A network of parks, open space and trail connections that provide recreation opportunities.
An inclusive community welcoming people of all ages, races, religions and ethnic backgrounds.
A diversified and strong local economy competitive at regional, state and national levels.
A vibrant downtown that embraces the River and provides a focal point for the community.
A thriving arts and culture scene that reflects the creativity of the community and supports a sense of place.
VISION STATEMENT
VALUE STATEMENTS
VISIT
CI.MONTICELLO.MN.US/MONTI2040
TO LEARN MORE!
PREFERRED SCENARIO
PRIORITYGREENWAYSMIXED RESIDENTIAL/COMMERCIAL
INDUSTRIALCOMMERCIAL
PLANNED DETACHED
RESIDENTIAL DEVELOPMENT INTERCHANGE
LEGEND:DETACHED RESIDENTIAL
MIXED COMMERCIAL/OFFICE/LIGHT INDUSTRIALATTACHED RESIDENTIAL RIVER
ACCESS
• Sustainability - Focus on sustainability, open space and wetland
preservation throughout City.
• Infill Development - New service commercial and light industrial infill.
• Conservation Neighborhoods - Single-family housing developed as
conservation subdivisions in a clustered fashion mitigating impacts to
sensitive areas.
• Industrial Expansion - Full build out and expansion of Otter Creek
Industrial Park and growth around future Interchange.
• Multi-Family Housing - New multi-family infill development near core
of downtown and other focus areas.
• New School - New elementary and middle school campus with
environmental focus.
• Downtown - Downtown plan implementation thriving with new
commercial, mixed-use and public realm improvements.
• Mississippi River - Focus on River with new access, connections and
riverfront trail.
• New Employment Center - New industrial business park developed
around new interchange with green technology, renewable energy,
manufacturing and other uses.
• Xcel Facility - The Xcel Monticello Nuclear Generating Plant is
licensed through 2030 and will seek relicensing to 2040.
• Annexation Area - Portions of the Orderly Annexation Area are
designated as an Urban Reserve for future development. Development
would likely include conservation single-family cluster subdivisions.
Note: The Preferred Scenario guidance and mapping provided in the Vision
Report will be further refined during the Comprehensive Plan process. This
map is not the City of Monticello’s final Land Use Plan. This map provides
initial guidance for the next phase of the project, the Comprehensive Plan,
and will be further detailed and refined.
The preferred development scenario is the result of community feedback on the four previous scenarios and the community’s vision.
The community envisions Monticello in 2040 as an environmentally and economically sustainable community that has experienced
strong, balanced growth.
A
B
C
D
E
F
G
H
I
J
K
PHASE ONE | JANUARY 2020
Development Assumptions
Key Preferred Scenario Aspects
URBANRESERVE
INCREMENTAL, SUSTAINABLE Growth Scenario
Downtown Focus
New School
Industrial and Employment
Conservation Neighborhoods
Retail and Commercial
Trails and Open Space
VISIT
CI.MONTICELLO.MN.US/MONTI2040
TO LEARN MORE!
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W
A
Y
S
T 172ND ST NW172ND ST NW165TH AVE SE165TH AVE SELAKE ST SLAKE ST SJEFFERSON BLVDJEFFERSON BLVD
157TH
S
T
S
E
157TH
S
T
S
E
LABEAUX AVE NELABEAUX AVE NECOU
N
T
Y
R
D
3
9
N
E
COU
N
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3
9
N
E
80TH
S
T
N
E
80TH
S
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JA
S
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N
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V
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JA
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9494
9494
COUNTY
R
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3
7
N
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COUNTY
R
D
3
7
N
EBRIARWOOD AVEBRIARWOOD AVEBERTRAMCHAIN OFLAKES
BERTRAMCHAIN OFLAKES
85TH ST NE85TH ST NE
COUNTY RD 39 NECOUNTY RD 39 NE
COUNTY
R
D
3
7
N
E
COUNTY
R
D
3
7
N
E
MI
S
S
I
S
S
I
P
P
I
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V
E
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MI
S
S
I
S
S
I
P
P
I
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V
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R
Downtown Mixed Use10-18 Unit/Acre10-18 Unit/Acre
Service Commercial and Light Industrial Infill
Regional Oriented Commercial
Multi-Family10-18 Unit/Acre10-18 Unit/Acre
Medium and Small Lot Conservation Developments4-10 Units/Acre4-10 Units/Acre Potential School Site withEnvironmental Focus
Medium and Small Lot Conservation Developments4-10 Units/Acre4-10 Units/Acre
Otter Creek
Industrial Park
Commercial/Residential Mix (Neo Traditional) Development
Residential (South) Residential (South) 8-10 Units/Acre8-10 Units/Acre
A
B
CC
C
D
E
F
G
H
H
I
J
K
K
K
Technology, Renewable Energy,
Manufacturing &
Distribution Warehousing
10
PRIORITIES & ISSUES
The city’s priorities were redefined in the Monti:2040 Comprehensive Plan adopted in 2020.
This Comprehensive Plan highlights the city’s desire to grow from within before expanding out
by focusing on three key themes: Sustainability, Community Health and Sense of Place. The
Comprehensive Plan is the primary influence in financial planning.
Monticello, like all other levels of government, had to learn how to operate in the
unprecedented time of the COVID-19 pandemic. The basic services a government offers cannot
be eliminated or postponed, so operations shifted greatly and unexpectedly. Fortunately, 2021
and 2022 were years spent learning about and responding to the spread of the virus, and the
2023 budget reflects a more routine approach to operations while at the same time retaining
efficiencies and other opportunities discovered during the height of the pandemic. While the
city as a whole has mostly returned to pre-pandemic levels of service and funding, the
Community Center Fund has been slower to return to normal. The ongoing effects of the
pandemic can be hard to forecast, but revenues are budgeted conservatively, and expenditures
are estimated liberally to ensure sound financial position.
The American Rescue Plan Act of 2021 (ARPA) provided just over $1.5 million directly to the
city. Of these funds, $715,000 were used in 2021 and $385,718 were used in 2022 for wages
and benefits at the Monticello Community Center. Staff and Council are working to ensure the
remaining funds are used in achieving strategic goals in the community. An additional $533,799
is available for water or sewer infrastructure improvements through Wright County, of which
$228,700 was used in 2022 for the SCADA Upgrade project.
The city changed its strategy for budgeting in 2021 from a department-by-department
approach to an entity-wide “bucket” approach including the following areas:
Notable changes in service levels and fees include:
Personnel:
• Public Safety: Shift vacant Fire Marshal position from the Fire Department to the
Building Department. Budget impact: $0.
Personnel
Facilities Maintenance
Information Technology
Equipment
Capital Projects
11
• Public Safety: Increase police hours (contracted with Wright County Sheriffs Office)
from 52 hours/day to 60 hours/day beginning May 1, 2023. Budget impact: $170,030.
• Streets: Add an additional operator to assist with growing department needs due to
development within the city beginning April 1, 2023. Budget impact: $73,300.
• Deputy Registrar: Replace one part-time clerk with a full-time clerk, which entails 10
additional hours per week plus benefits. Budget impact: $45,000.
• Hi-Way Liquors Store: Hire one additional full-time clerk to strengthen scheduling
shortages. Budget impact: $65,000.
• Overall: A cost of living adjustment (COLA) was applied to the wage scales in 2023.
Budget impact: $228,000.
Facilities Maintenance:
• Community Center: Install new fire alarm system. Budget impact: $45,000.
• Animal Shelter: Replace HVAC system. Budget impact: $30,000.
• Library: Replace boiler unit. Budget impact: $60,000.
• Parks Shop: Upgrade lights to LED and install new garage door openers. Budget impact:
$20,000.
• Water System: Re-paint well houses 1 & 2 and add gutters on Well 5. Budget impact:
$20,000.
• Hi-Way Liquors Store: Replace coolers as existing have reached end of life. Budget
impact: $130,000.
Information Technology:
• Zoning Code Update: Update the zoning code and upgrade to the same out-sourced
vendor as City’s code. Budget impact: $12,000.
• Software Upgrades and Training: The city is investing in various software packages to
assist with staff efficiency and cybersecurity.
o Springbrook upgrade: The finance department relies on Springbrook as its
enterprise resource planning (ERP) software for everything from paying invoices
and payroll checks to utility billing and cash receipts. The city implemented
version 7.16 in 2009 and will upgrade to the newest cloud-based version. Budget
impact: $37,600.
o NeoGov onboarding module: The human resources department using NeoGov
for employee recruitment and to tracking the application and interview process.
A module for the onboarding process, including electronic completion of
employee paperwork is scheduled for 2023. Budget impact: $6,100.
o Laserfiche training hours: Laserfiche is the city’s official electronic document
storage platform. Additional users and training are needed to use the software
to its maximum potential. Budget impact: $20,000.
o Cartegraph training hours: The public works and facilities maintenance
departments implemented Cartegraph for work order tracking in 2020. The
parks department will be using the software now and need to be trained in using
it. Budget impact: $5,000.
12
o Email archiving system: The city transitioned from an on-premise email server to
Microsoft 365 in 2021. To assist with records retention and data requests, an
archiving system is planned for implementation in 2023. Budget impact: $8,000.
Equipment:
• Vehicles: Replacement vehicles for the building, streets, and utilities departments are
included for 2023. Budget impact: $170,000.
• Streets: The Streets Department, through the Central Equipment Fund, budgeted for a
plow truck, wheel loader, and forklift. Budget impact: $658,000.
• PAR: The parks operations department, through the Central Equipment Fund, budgeted
for a Bobcat grader blade attachment, Cushman Trakster, Bobcat Toolcat, and trailer.
Budget impact: $168,000.
• Carryover: Due to supply chain issues, the city has not received some equipment
ordered in 2022. With anticipated delivery in 2023, these items were included in the
2023 budget, including a Streets plow truck and Parks Isuzu.
Capital Projects:
• Downtown Roadway & Pedestrian Improvement Projects: Connect Walnut and River
Streets, improve sidewalks and landscaping on Broadway, improve traffic flow at the
Hwy 25 & Broadway Intersection and relocate utilities in and around Block 52
underground. Budget impact: $5,250,000.
• Public Works Facility: The city hired an architect in 2022to begin plans and
specifications on a new Public Works Facility in 2022 with anticipated construction in
2023 and 2024. Budget impact: $5,000,000.
• The Pointes at Cedar: A 100-acre area in the middle of the city has been relatively
untouched until the past few years. To create a unique community space, The Pointes at
Cedar project envisions a large, shared pond (serving stormwater purposes) with public
park space surrounded by mixed-use residential and commercial development.
Continued planning and design is included for 2023. Budget impact: $510,000.
• Bertram Chain of Lakes Improvements: The Bertram Chain of Lakes Regional Park
improvements will build on the base infrastructure constructed in 2019. The project is
the next phase in a long-term full park buildout which includes parking, safety, and
accessibility improvements along with minor amenities such as benches and
landscaping. Budget impact: $1,000,000.
• SCADA System Upgrade: The Water and Sewer utilities use a Supervisory Control and
Data Acquisition (SCADA) system to collect and analyze data. The project began in 2021
and will be completed in 2023. Budget impact: $400,000.
• School Boulevard & Elm Street Improvements: Safe Routes to Schools grant funding
will be used to complete safety improvements on trails and sidewalks. Budget impact:
$1,625,000.
Furthermore, the city analyzes utility rates annually. The following increases were adopted in
the 2023 Fee Schedule and incorporated into the 2023 budget.
13
• Water: Usage charges were increased by 8% in anticipation of large upcoming capital
improvements and a new water treatment facility. Commercial rates were separated
from the residential/irrigation rates to encourage water conservation by residents when
watering their lawn.
• Sewer: Usage charges increase 2% for base and usage charges. Access and trunk charges
increased 3%.
• Stormwater: Stormwater fees increase 12.5% in 2023, from $4.00/drainage unit to
$4.50/drainage unit to fund significant capital costs coming up in the next couple years.
• Garbage & recycling: Garbage and recycling fees increase in 2023. Prior to the
implementation of fees in 2018, residential garbage and recycling services were wholly
subsidized by the tax levy. Since then, the city has phased in the charges. In 2023, fees
will completely offset the cost of residential garbage and recycling services for the first
time.
14
BUDGET OVERVIEW
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, 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. 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, based on historical trends with greater weight placed on the most
current years. The importance of a sound revenue picture cannot be overstated.
The City of Monticello provides a range of services to the community, including police
(contracted) and fire protection; street maintenance; snow and ice removal; water, sewer and
stormwater utility services; parks, arts, and recreation amenities (including community center
facility) and programming; and administrative and planning services. In addition, the city owns
and operates a 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 as 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 fortunate to have 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, recreate, and do business. The city will fulfill the goals below to achieve this mission:
1. Continue to maintain a low tax rate while providing the best possible service.
While the 2023 property tax levy increase was greater than in prior years, the tax levy (capacity)
rate decreased from 2022 due to a large increase in property values, most notably residential.
2023 Budget: The city levy increases $697,000 (6.1%) to $12,050,000 and the Housing and
Redevelopment (HRA) levy increases $14,000 (3.6%) to $402,000. Combined (city + HRA) tax levy
increase: $711,000 (6.1%). The tax levy rate is the third lowest of the 17 cities in Wright County.
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.
15
In partnership with the county, the city acquired park land, which is roughly 50% designated for
non-athletic purposes and 50% designated for athletic purposes. The city also maintains 365
acres of park land and 42.0 miles of trails. 2023 Budget: $1,000,000 BCOL improvements,
$525,000 School Boulevard pathway improvements and lighting, and $175,000 Fenning Avenue
pathway lighting.
3. Continue to maintain the city sidewalks and streets by following an annual seal coat and
crack seal program and by overlaying streets before they are beyond repair and need
replacing. Emphasis is placed on safety by ensuring stoplights are functioning optimally.
The city’s pavement management program identifies varying condition levels of every street.
The 2023 General Fund includes a modest amount for striping, and the Capital Projects fund is
utilized for improvement projects. The installation of yellow flashing arrows at a number of
intersections is one priority. 2023 Budget: $1,960,000.
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 four townships) taking part in
regional planning and economic development initiatives, including 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. 2022 Budget: $18,750 – memberships.
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. A major redevelopment is taking place on Block 52
in 2023, and the city is completing the Downtown Roadway and Safety Improvement project to
supplement the investment from the private developer. 2023 Budget: $5,250,000.
6. Seek to expand the supply of "step 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. A housing needs and market demand
study was completed in 2020. 2022 Budget: $0; however, the Economic Development Authority
(EDA) has been working on various new TIF districts related to affordable housing.
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. 2023 Budget: $0; however,
the EDA continues to prioritize new development opportunities through TIF districts, Greater
Monticello Enterprise Fund (GMEF) low-interest loans, and other inventive packages via State
funding.
16
8. Continue to maintain high quality water and sewer treatment facilities.
With some of the lowest water and sewer 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 enough for additional, ongoing system
improvements in each fund. Monticello’s water is rated as one of the best tasting in Minnesota.
2023 Budget: Water - $760,000 annual improvements, $165,000 building & systems
maintenance; Sewer - $250,000 annual improvements, $125,000 wastewater facility repair and
maintenance, and $400,000 SCADA system update.
9. Provide unsurpassed access to information with high-speed internet, phone, and television
through the city-owned fiber optic network.
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. The contract with Arvig Enterprises was
extended in July of 2021 for an additional five years. 2023 Budget: $200,000 system expansion
to new neighborhood developments.
City Council and city staff used the goals set during the strategic planning process to direct the
development of the 2023 budget.
TOTAL BUDGET
The 2023 budget includes all the funds maintained by the city. Each fund is responsible to
account for a particular activity or activities. Each fund-type will be discussed within this
message and/or in the budget document.
The following compares the adopted 2022 and 2023 budgets:
Total revenues decrease 34.0% and total expenditures increase about 37.8% in 2023. General
Fund revenues and expenditures increase 9.0%, almost two-thirds of which is due to the
property tax levy increase. The increase in special revenue activity reflects increased activity for
the Community Center Fund and the planned use of pooled tax increment in the Economic
Development Authority (EDA) Fund. The decrease in debt service expenditures reflects the final
payoff of the 2011A bonds. Capital project funds will incur higher expenditures due projects for
the Downtown Area, Public Works Facility, The Pointes at Cedar development area planning
and design, and Bertram Chain of Lakes Park improvements. Deputy registrar and liquor funds
Fund Type 2022 2023 2022 2023
General 10,530,000$ 11,480,000$ 10,530,000$ 11,480,000$
Special Revenue 2,934,000 3,159,000 2,720,000 3,976,000
Debt Service 2,739,000 2,268,000 2,925,000 2,607,000
Capital Project 2,702,000 12,540,000 7,290,000 15,375,000
Enterprise 14,898,000 15,962,000 15,519,000 20,409,000
Internal Service 1,345,000 1,705,000 1,800,000 2,356,000
Total 35,148,000$ 47,114,000$ 40,784,000$ 56,203,000$
Total Budget
Revenues Expenditures
17
will transfer out a combined $4,000,000 to pay for the Downtown project. The Central
Equipment internal service fund is funding $1,337,000 of equipment acquisitions in 2023.
The following graphs display the revenues and expenditures attributable to each fund-type in
the 2023 Budget:
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
70% of revenues in the General Fund and 24% in the special revenue funds. In 2023, debt
service funds will receive $1,999,581 in property taxes for principal and interest payments on
general obligation debt, which is $311,819 (18%) lower than the prior year due the payoff of
the 2011A bond issue. With the available levy capacity, the city levied $393,819 more for the
Capital Projects Fund in 2023. For 2023, the city's general property tax levy will increase to
$12,050,000, by $697,000 (6.1%) over the prior year. For the eighth consecutive year, the
Economic Development Authority Fund levied a Housing and Redevelopment Authority (HRA)
special benefit levy. The HRA levy increases to $402,000 (3.6%) from $388,000 in the prior year.
When added together, the two levies represent a 6.1% increase in property taxes.
The following table is a historical view of the tax capacity value, tax capacity rate and tax levy:
General
24%
Special
Revenue
7%Debt Service
5%
Capital
Project
26%
Enterprise
34%
Internal
Service
4%
2023 Revenues by Fund Type
General
21%
Special
Revenue
7%Debt Service
5%
Capital
Project
27%
Enterprise
36%
Internal
Service
4%
2023 Expenditures by Fund Type
Tax Capacity Capacity Tax Capacity Rate City Tax HRA Levy
Year Value % Change Rate % Change Levy Levy % Change
2014 $18,244,090 -2.4% 44.672 5.7% $8,150,000 $0 3.2%
2015 $23,882,689 30.9% 35.737 -20.0% $8,535,000 $0 4.7%
2016 $25,891,898 8.4% 34.470 -3.5% $8,925,000 $280,000 4.6%
2017 $27,583,160 6.5% 33.172 -3.8% $9,150,000 $280,000 2.5%
2018 $29,528,145 7.1% 32.332 -2.5% $9,547,000 $323,000 4.3%
2019 $29,076,227 -1.5% 34.262 6.0% $9,962,000 $348,000 4.3%
2020 $29,870,392 2.7% 34.968 2.1% $10,445,000 $355,000 4.8%
2021 $31,026,583 3.9% 35.659 2.0% $11,063,700 $355,000 5.9%
2022 $31,073,603 0.2% 36.536 2.5% $11,353,000 $388,000 2.6%
2023 $34,925,732 12.4% 34.502 -5.6% $12,050,000 $402,000 6.1%
18
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 2022 at $34,925,732, a 12.4% increase. The Xcel Energy nuclear power plant taxable
market value increased 3.7% for 2023 to $780 million. The Xcel plant alone accounts for just
under half 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, which is then applied to each property's tax capacity to
determine the city’s tax. For 2023, the city's tax capacity rate is expected to decrease 5.6% to
34.502.
The city currently does not have the authority to levy or collect local sales taxes or other types
of taxes under the state's tax system.
PERSONNEL SERVICES
The 2023 budget includes a few staffing changes. One additional full-time clerk was added to
both the Liquor Fund and Deputy Registrar Fund. A new streets operator is all included in the
2023 with a projected start date of April 1. A 4.0% wage adjustment for all employees is
included in the 2023 budget. Public Works employees belong to a union, and their collective
bargaining agreement was renegotiated in late 2022 for the three years from January 1, 2023
through December 31, 2025.
Union and non-union employees participate in separate health benefit plans. The union health
benefit is $1,253.58 per participant, and the non-union health benefit is $922.51 for single plan
and $1,711.93 for family plan participants. The union’s plan requires a flat premium for union
employees regardless of participation. Staff will continue to explore ways to reduce future
premium increases to both the city and its employees.
The contribution rates to the Public Employees Retirement Association (PERA) will remain the
same in 2023 for both employer and employees. PERA rates: 7.50% of wages for employer and
6.50% for employee. The budget also calculates FICA and Medicare taxes at 6.20% and 1.45%
respectively for 2023.
GENERAL FUND
Expenditures
The following schedule displays 2023 budgeted General Fund expenditures by department
compared with the prior year budget:
Department 2022 2023 % Change
General Government 2,501,429$ 2,613,701$ 4.5%
Public Safety 3,010,890 3,278,367 8.9%
Public Works 3,403,902 3,667,863 7.8%
Recreation & Culture 1,607,779 1,914,069 19.1%
Operating Transfers Out 6,000 6,000 0.0%
Total 10,530,000$ 11,480,000$ 9.0%
General Fund Expenditures and Other Uses
19
The 2023 budget increased 9.0% over the 2022 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 chart below presents the 2023 budgeted expenditures allocated by function/department:
The Public Works Department, which also includes Sanitation, is the largest department in
terms of budgeted expenditures and the streets & alleys activity budget is the largest activity
within the department. The 2023 budget for the Public Works department increased 7.8%.
Streets & alleys (+11.2%), ice & snow (+11.4%), and street lighting (+23.2%) budgeted
expenditures vary the largest due to the addition of a full-time streets operator, which is split
between streets & alleys and ice & snow. The street lighting department increased due to an
increase in utility costs. The city’s contract with its residential garbage hauler ends on May 31,
2025.
The second largest department based on expenditures is the Public Safety Department. The
2023 Public Safety Department budget increased 8.9%. 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 2023 contract includes a $2.55 increase in the hourly service rate for 52 hours per day from
January through April and 60 hours per day from May through December. The fire and rescue
activity budget increased 12.6% and the building inspections activity increased 19.8% due to a
shift in the fire inspection program, which is no longer managed by a Fire Marshal. While
emergency management shows a 12.7% decrease, the decrease simply reflects a lower
budgeted use of a State Preparedness grant, which is offset by budgeted grant revenues.
The 2023 budget for general government activities increases 4.5%. The city clerk activity
increased 9.8%, the finance activity increased 23.7%, and the human resources activity
increased 11.1% due to investment in software packages to promote efficiencies and a shift
away from paper-based document storage. The planning & zoning activity increased because
the new administrative assistant position was re-allocated for 2023 from the administration
department to the city clerk and planning & zoning departments. The city hall activity increased
with the anticipated replacement of a conference room table and chairs.
General Fund Expenditures &
Transfers -2023
General Government (23%)
Public Safety (29%)
Public Works (32%)
Recreation & Culture (16%)
Operating Transfer to EDA (0.1%)
20
Recreation and culture expenditures increase by 19.1% in 2023. Public art (+140.2%) increased
with additional consulting time and budgeted use of successful grant applications. The parks
operations (+16.1%) budget reflects professional services for a parks needs study along with
anticipated inflation of costs.
Including services for police, assessor, and legal services, other services, and charges account
for 52% of General Fund appropriations, mostly due to the increase in contracted police patrol
hours. Appropriations for personnel services follow at 37% of the total, which can be
contributed to a general 4.0% wage and benefit inflation plus the new streets operator
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 2022 and 2023 budgets:
Department 2022 2023 % Change
Personnel Services 3,897,421$ 4,091,941$ 5.0%
Supplies 874,870 1,020,200 16.6%
Other Services & Charges 5,173,309 5,728,859 10.7%
Capital Outlay 578,400 633,000 9.4%
Operating Transfers Out 6,000 6,000 0.0%
Total 10,530,000$ 11,480,000$ 9.0%
General Fund Appropriations
Personnel
Services
37%Supplies
7%
Other Services &
Charges
52%
Capital Outlay
4%
2023 Appropriations -General Fund
21
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 7.8%, while the General Fund’s portion of the
combined levy (city + HRA) increases from 63.7% to 64.7%. Franchise & Other Taxes increase to
offset the increased cost of street lighting due to inflation Increases in Intergovernmental
Revenues and Fines & Forfeits are due to budgeting more closely with trends from the previous
years. The increase in Charges for Services reflects higher residential garbage and recycling
charges. In 2023, the city will fully cover its cost of garbage service for the first time.
Miscellaneous Revenues are projected higher due to an increased number of anticipated
donations.
The property tax levy generates 70% of the General Fund revenues. Other than franchise fees,
the city does not impose other taxes, such as local option sales taxes or income taxes.
Therefore, the city will continue to be dependent on property tax revenue as its major source of
future revenues.
Classification 2022 2023 % Change
Property Taxes 7,475,000$ $8,060,000 7.8%
Franchise & Other Taxes 258,000 316,500 22.7%
Licenses & Permits 471,100 484,000 2.7%
Intergovernmental Revenues 463,000 513,895 11.0%
Charges for Services 1,118,600 1,246,779 11.5%
Fines & Forfeits 51,600 51,600 0.0%
Special Assessments 100 100 0.0%
Miscellaneous 692,600 807,126 16.5%
Total 10,530,000$ 11,480,000$ 9.0%
General Fund Revenues and Other Sources
70.2%
2.8%
4.2%
4.5%
10.9%
0.4%7.0%
2023 Revenues -General Fund
Property Taxes
Franchise & Other Taxes
Licenses & Permits
Intergovernmental
Revenues
Charges for Services
Fines & Forfeits
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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 Small Cities
Development Program (SCDP) Fund, which will likely see little activity in 2023 outside of one
loan to a local business. In 2021, the Economic Development Authority (EDA) Fund was
reclassified from a blended component unit (special revenue fund) to a discretely presented
component unit in the city’s Annual Comprehensive Financial Report. However, it is still
presented as a special revenue fund for budget purposes.
Like the General Fund, the special revenue fund budgets are set at a level to maintain services.
The tax levy supports community center operations ($515,000) and the Economic Development
Authority ($402,000). 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).
Community center charges were budgeted with added conservatism due to the uncertain
nature of discretionary spending in the current economic environment. The city’s final $400,000
in American Rescue Plan Act (ARPA) funding is budgeted to be used in the community center
fund in 2023.
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:
DEBT SERVICE FUND (Aggregate of Sub-Funds)
The city's debt service for 2023 is $2,605,800, or $207,200 less than the prior year due to
routine amortization of outstanding bond issues. Funding for debt service comes from special
assessments and property taxes. Outstanding debt at January 1, 2023: debt service funds -
$18,795,000; Sewer enterprise fund - $2,810,000; Central Equipment internal service fund -
$120,000. The city's bond rating from Moody’s Investors Services is "A1."
Classification 2022 2023 % Change
Property Taxes 873,000$ 917,000$ 5.0%
Tax Increments 630,344 529,000 -16.1%
Intergovernmental Revenues 425,000 400,000 -5.9%
Charges for Services 931,900 1,228,300 31.8%
Miscellaneous 67,756 78,700 16.2%
Operating Transfers In 6,000 6,000 0.0%
Total 2,934,000$ 3,159,000$ 7.7%
Special Revenue Funds Revenues and Other Sources
Department 2022 2023 % Change
Personnel Services 1,246,373$ 1,375,157$ 10.3%
Supplies 120,900 119,100 -1.5%
Other Services & Charges 962,826 2,139,893 122.3%
Capital Outlay 191,976 341,850 78.1%
Operating Transfers Out 197,925 - -100.0%
Total 2,720,000$ 3,976,000$ 46.2%
Special Revenue Funds Appropriations
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CAPITAL PROJECT FUNDS
The budgets for capital project funds are based on the 2023 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. $5,000,000 in one debt issuance are planned for 2023,
which will be used to fund the beginning phases of construction on a new Public Works Facility.
ENTERPRISE FUNDS
Total revenues and other sources for the enterprise funds (Water, Sewer, Stormwater, Liquor,
DMV, and Fiber Optics) is estimated at $15,962,000 for 2023. The change in Sale of Goods
represents a conservative budgeting policy. Charges for services increases with higher rates
charged on enterprise fund customers. Special assessments decrease to remain conservative.
Personnel services increase with wage and benefit inflation of 4.0%, additional full-time clerks
at the liquor store and DMV as well as a new streets operator effective April 1. 2023 operating
transfers out are from the Liquor Store and DMV to fund the Downtown Pedestrian &
Roadways Improvements project and improvements at the Bertram Chain of Lakes Regional
Athletic Park (BCOL).
INTERNAL SERVICE FUNDS
The City of Monticello operates four internal service funds: Facilities Maintenance, Information
Technologies (IT) Services, Central Equipment Fund, and Benefits Accrual. These funds operate
on a cost-recovery basis, but the time horizon differs greatly. Internal service fund charges are
recorded as expenditures in other funds.
The Facilities Maintenance and IT Services funds are not capital intensive with annual small
tools and equipment purchases in the $20,000 to $30,000 range. IT equipment usually has a
shorter replacement cycle. The Facilities Maintenance Fund focuses on proactive monitoring
Classification 2022 2023 % Change
Sale of Goods 7,013,000$ 7,357,694$ 4.9%
Licenses & Permits 2,000 2,000 0.0%
Intergovernmental Revenues - 300,000 ---
Charges for Services 7,634,757 8,076,101 5.8%
Special Assessments 38,000 10,000 -73.7%
Miscellaneous 135,243 141,205 4.4%
Contributed Capital 75,000 75,000 0.0%
Total 14,898,000$ 15,962,000$ 7.1%
Enterprise Funds Revenues and Other Sources
Department 2022 2023 % Change
Personnel Services 2,278,593$ 2,503,619$ 9.9%
Supplies 5,699,100 6,027,117 5.8%
Other Services & Charges 3,942,490 4,975,273 26.2%
Capital Outlay 3,237,500 2,535,000 -21.7%
Debt Service 361,317 367,991 1.8%
Operating Transfers Out - 4,000,000 ---
Total 15,519,000$ 20,409,000$ 31.5%
Enterprise Funds Appropriations
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and repairs & maintenance of existing city buildings. Major capital improvements or
replacements are funded through the appropriate capital projects fund or enterprise fund.
The Central Equipment Fund is funded through annual rental charges to benefitting budget
units to recover equipment purchase costs over 7–10-year periods. Annual depreciation and
inflation for each capital asset are used in calculating annual rental payments.
The Benefits Accrual 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.
FUND BALANCES
Fund balances decline when expenditures exceed revenues. The General Fund and Monticello
Community Center (MCC) Fund generally have balanced budgets where revenues equal
expenditures. The Economic Development Authority (EDA)’s fund balance is projected to
decrease with the use of pooled TIF for development related projects in 2023. The fund balance
in the Debt Service Fund declines through normal debt amortization. Additionally, the fund
balance for the capital projects funds declines with anticipated use of existing resources for
various projects. Enterprise fund balances decline by roughly $4,447,000, largely the result of
transfers to capital projects funds.
CHALLENGES IN CONTEXT
The preparation of this budget reflects the need to meet both short-term and long-term
challenges. While the local economy is stable, inflation has been extremely high and levels of
unemployment in upcoming months and years are uncertain. The commercial and residential
tax base grew at a rapid pace in 2023 while the Monticello Nuclear Generating Plant still
represents a significant portion of the tax base, but grew at a much slower rate. 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 a low tax capacity rate.
Second, in 2021, the city paid off the judgment bonds related to the 2014 settlement of the
telecommunication bondholder’s class-action lawsuit, which further allows the city to put the
bond default behind it. The city renewed its contract with Arvig Enterprises through June of
2026. Since 2019, Fibernet has had positive cash flow from operations and is situated to cover
the majority, if not all, of the capital investment into new neighborhoods in the coming years.
Third, the city is moving ahead with several capital projects. Most large projects have
reimbursement resolutions, meaning the city can recover their temporary draw on reserves
with debt proceeds. Major Council initiatives in the next few years include improvements to
downtown with a focus on Block 52, a new public works facility, the Pointes at Cedar
development area, and additional phases for improvements at the Bertram Chain of Lakes
(BCOL) Regional Park. Other large projects further on the horizon include safety and utility
improvements on Fallon Avenue and construction of a Water Treatment Plant.
Fourth, stable leadership is requires long term planning, but council seats are not as long as
planning efforts require. The mayor was re-elected for a second two-year term, one existing
councilmember was re-elected for an additional four-year term, and two new councilmembers
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began their terms; one was elected to a vacant four-year term and the other was appointed to
fill the remaining two years of a vacated four-year term. The mayor and two councilmembers
have terms expiring at the end of 2024. While policy perspectives still exist, the mayor and
council are looking at ways to meet future challenges through increased public participation.
In summary, the uncertain economic environment, public safety service enhancement,
transportation improvements, stabilization in Fibernet operations, and economic and park
development impacted the decisions made in drafting the 2023 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, 2022. 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 the city’s belief that
the 2023 budget allows the city to deliver excellent municipal services in a cost effective and
efficient manner at current levels. The 2023 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
Finance Director
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ORGANIZATION CHART
Residents
City Council
City Administrator
Human Resources Manager
Communications & Marketing Finance Director
Finance
& Audit
Deputy Registrar
Liquor Operations
Information Technology
Community Development Director
Economic Development
Building Inspections
Consulting Planner
CIty Engineer
Project Engineer
Construction Inspections
Consulting Engineer
Public Works Director
Streets Department
Water & Sewer Department
Refuse Collection
Parks, Art & Recreation Director
Community Center
Parks Department
MontiArts
City Clerk
Elections
Reception
Contracted Animal Control
Fire Chief
Fire Department
Contracted Services
City Attorney
Sheriffs Department
County Assessor
FiberNet Operation
Commissions
& Boards
27
FUND DESCRIPTIONS & STRUCTURE
BUDGETED FUNDS
The city has legally adopted budgets for the General Fund and all special revenue funds.
Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring
of budgets is maintained at the department level. Any amounts over budget would need to be
approved by the city council through the disbursement process. Although the city is not legally
required to adopt an annual budget for the nonmajor special revenue funds, the debt service
funds, capital projects funds, enterprise funds, and internal service funds, it does so as a means
of implementing an entity-wide view of the city’s finances, all of which are included in the city’s
Annual Comprehensive Financial Report (ACFR).
Budgets are adopted on a basis consistent with accounting principles generally accepted in the
United States of America. Budgeted amounts are as originally adopted or amended by the city
council. All annual appropriations lapse at year-end.
MAJOR FUNDS
A fund is considered major if its revenues or expenditures, excluding other financing sources and
uses, constitute more than 10% of the revenues or expenditures of the appropriated budget.
Major funds are bolded in the hierarchy on the following pages and do not necessarily match the
major funds presented in the city’s ACFR because the calculation for purposes of the ACFR differ
slightly and are based on actual rather than budgeted revenues and expenditures.
General Fund - The General Fund is used to account for all financial resources except those
required to be accounted for in another fund.
Capital Projects - The Capital Projects (capital project) Fund is used to account for all capital
acquisition and construction activities of the city not accounted for in another capital project,
enterprise, or internal service fund.
Liquor - The Liquor (enterprise) Fund is used to account for the operations of the city’s liquor
store.
Details on the purposes of the nonmajor funds are included with each fund later in this report.
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GovernmentalGeneral
Special Revenue
Economic Development Authority
Fund
Cemetery Fund
Small Cities Development Program
(SCDP) Fund
Community Center Fund
Debt Service
2015B GO Bond Sub-Fund
2016A GO Bond Sub-Fund
2017A GO Bond Sub-Fund
2018A GO Bond Sub-Fund
2019A GO Bond Sub-Fund
2020A GO Bond Sub-Fund
Capital Projects
Capital Project Fund
Street Lighting Improvement Fund
Park & Pathway Dedication Fund
Park Dedication Fund
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ProprietaryEnterprise
Water Fund
Sewer Fund
Stormwater Fund
Liquor Fund
Deputy Registrar Fund
Fiber Optics Fund
Internal Service
Facilities Maintenance Fund
IT Services Fund
Central Equipment Fund
Benefit Accrual Fund
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DEPARTMENTS & FUNDS RELATIONSHIP
The departments within each fund’s budget are noted in the matrix below:
All capital project funds, except the Parks & Pathway Improvement Fund, were combined for
this presentation. Principal and interest payments on debt occur in the Debt Service Fund
(comprised of subfunds), Sewer Fund, and Central Equipment Fund.
Community Capital Park &Water, Sewer Liquor Deputy Fiber Facilities IT Central Benefit
General EDA Cemetery Center Projects Pathway & Stormwater Store Registrar Optics Maintenance Services Equipment Accrual
GENERAL GOVERNMENT
Mayor and Council ●●
City Administration ●●●●
City Clerk ●●●
Finance & Audit ●●●●●●●●
City Assessing ●
Legal ●
Human Resources ●●●
Planning & Zoning ● ●●●●
City Hall ●●●
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 ●●●
Stormwater Utility ●●
RECREATION AND CULTURE
Senior Center ● ●
Park Operations ● ●●●
Park Improvements ● ●
Park Ballfields ●
Shade Tree ●
Library ● ●
Cemetery ●●
Community Center ●●●
Fiber Optics ●●●
FUND
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BASIS OF BUDGETING
The City of Monticello budget serves several purposes:
• For the residents, it presents a picture of the city government operations and
intentions for the year.
• For the city council, it serves as a policy tool and as an expression of goals and
objectives.
• For city management, it is used as an operating guide and a control mechanism.
The city's budget encompasses both the operating budget and the capital improvement
budget. Each budget unit includes amounts appropriated for both operating expenditures and
capital acquisitions and improvements. Accompanying narrative for each budget unit briefly
explains the items included.
BASIS OF BUDGETING
The city’s accounts are categorized by funds, each of which is accounted for as an individual
entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, deferred inflow/outflows, liabilities, fund equity, revenues,
and expenditures.
Governmental funds (the General Fund, special revenue, debt service, and capital project
funds) use the modified accrual basis for budgeting and accounting. Revenues are
recognized in the accounting period in which they become measurable and available.
Expenditures are recognized when liabilities are incurred.
Proprietary funds (enterprise and internal service funds) use the modified accrual basis for
budgeting and the full accrual basis for accounting for financial reporting. In the full accrual
basis of accounting, revenues are recognized in the accounting period in which they are
earned, and expenses are recognized in the accounting period in which they are incurred,
regardless of when the actual cash flow occurs. For example, the full accrual basis accounting
differs from the modified accrual basis by recording expenses for depreciation and
compensated absences but not debt principal payments, whereas the modified accrual basis
of accounting would classify the original capital cost as an expenditure (and would therefore
have nothing to depreciate), the compensated absence payment as an expenditure at the
time of payment rather than when earned, and debt proceeds as revenue when received and
expenditures when repaid. Each proprietary fund’s financial statements, located in the city’s
Annual Comprehensive Financial Report (ACFR), are reported on the full accrual basis.
WORKLOAD/PERFORMANCE BUDGETING
For many years, the City of Monticello started the development of a workload/performance
budget. The type of budgeting shifts the 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.
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FINANCIAL POLICIES
The overall goal of the city's financial policies is to establish and maintain effective
management of the city's financial resources. Formal policy statements and major objectives
provide the foundation for achieving this goal. Accordingly, this section outlines the policies
used in guiding the preparation and management of the city's overall budget and the major
objectives to be accomplished. In addition, the rationale which led to the establishment of the
fiscal policy statements is also identified.
Budget Development & Administration
1. A comprehensive annual budget will be prepared for all funds expended by the city.
The City Council 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. Inclusion of
all funds in the budget enables the council, administration, and the public to consider all
financial aspects of city government when preparing, modifying, and monitoring the budget,
rather than deal with the city's finances on a "piece meal" basis.
2. The budget will be prepared in such a manner as to facilitate its understanding by
residents and elected officials.
One of the stated purposes of the budget is to present a picture of city government
operations and intentions for the year to the residents of Monticello. Presenting a budget
document that is understandable to the residents furthers the goal of effectively
communicating local government finance issues to both elected officials and the public.
3. Budgetary emphasis will focus on providing those basic municipal services that provide
the maximum level of services, to the most residents, in the most cost-effective manner, with
consideration being given to all costs - economic, fiscal, and social.
Adherence to this basic philosophy provides the residents of Monticello assurance that
their government and elected officials are responsive to the basic needs of the residents and
that their city government is operated in an economical and efficient manner.
4. The budget will provide for adequate maintenance of capital, plant, and equipment and
for their orderly replacement.
All governmental entities experience prosperous times as well as periods of economic
decline. In periods of economic decline, proper maintenance and replacement of capital, plant,
and equipment is generally postponed or eliminated as a first means of balancing the budget.
Recognition of the need for adequate maintenance and replacement of capital, plant, and
equipment, regardless of the economic conditions, will assist in maintaining the government's
equipment and infrastructure in good operating condition.
5. The city will avoid budgetary practices that balance current expenditures at the expense
of meeting future year expenditures.
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Budgetary practices such as postponing capital expenditures, accruing future years'
revenues, or rolling over short-term debt are budgetary practices which can solve short-term
financial problems. However, they can create much larger financial problems for future
administrations and councils. Avoidance of these budgetary practices will assure residents that
current problems are not simply being delayed to a future year.
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 a budgetary control system to help it adhere to the established
budget.
The budget passed by the council establishes the legal spending limits for the city. A
budgetary control system is essential to ensure legal compliance with the city's budget.
8. The city will exercise budgetary control (maximum spending authority) through City
Council approval of appropriation authority for each appropriated budget unit.
Exercising budgetary control for each appropriated budget unit satisfies requirements of
state law. It also assists the council in monitoring current year operations and acts as an early
warning mechanism when departments deviate in any substantive way from the original
budget.
9. Reports comparing actual revenues and expenditures to budgeted amounts will be
prepared monthly as practical and formally reported to City Council quarterly.
The city's budget is ineffective without a system to regularly monitor actual spending
and revenue collections with those anticipated at the beginning of the year. Monthly and
quarterly reports comparing actual revenues and expenditures to budget amounts provide the
mechanism for the council and administration to regularly monitor compliance with the
adopted budget.
10. State Requirement: Truth-in-Taxation
The Truth in Taxation (TNT) law requires the city to hold a series of public hearings 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 and the EDA
(economic development authority)’s proposed HRA (housing and redevelopment authority) levy
must be certified to the county auditor by September 30th. The final levies for both must be
certified by December 29th.
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Revenue Collection
1. The city will seek to maintain a diversified and stable revenue base.
A city dependent upon a few volatile revenue sources is frequently forced to suddenly
adjust tax rates or alter expenditure levels to coincide with revenue collections. Establishment
of a diversified and stable revenue base, however, serves to protect the city from short-term
fluctuations in any one major revenue source.
2. The city will estimate revenues in a realistic and conservative manner.
Aggressive revenue estimates significantly increase the chances of budgetary shortfalls
occurring during the year--resulting in either deficit spending or required spending reductions.
Realistic and conservative revenue estimates, on the other hand, will serve to minimize the
adverse impact of revenue shortfalls and will also reduce the need for mid-year spending
reductions.
3. The city will pursue an aggressive policy of collecting revenues.
An aggressive policy of collecting revenues will help to ensure the city's revenue
estimates are met, all taxpayers are treated fairly and consistently, and delinquencies are kept
to a minimum.
4. The city will aggressively pursue opportunities for federal or state grant funding.
An aggressive policy of pursuing opportunities for federal or state grant funding
provides residents assurance that the city is striving to obtain all state and federal funds to
which it is eligible--thereby reducing dependence upon local taxpayers for the support of local
public services.
5. User fees and charges will be used, as opposed to general taxes, when distinct beneficiary
populations or interest groups can be identified.
User fees and charges are preferable to general taxes because user charges can provide
clear demand signals which assist in determining what services to offer, their quantity, and
their quality. User charges are also more equitable, since only those who use the service must
pay--thereby eliminating the subsidy provided by nonusers to users, which is inherent in
general tax financing.
6. User fees will be collected only if it is cost-effective and administratively feasible to do so.
User fees are often costly to administer. Prior to establishing user fees, the costs to
establish and administer the fees will be considered to provide assurance that the city's
collection mechanisms are being operated in an efficient manner.
Expenditures and Payments
1. Ongoing expenditures will be limited to levels which can be supported by ongoing
revenues.
Utilization of reserves to fund on-going expenditures will produce a balanced budget,
however, this practice will eventually cause severe financial problems. Once reserve levels are
35
depleted, the city would face elimination of on-going costs to balance the budget. Therefore,
the funding of on-going expenditures will be limited to current revenues.
2. Minor capital projects or recurring capital projects, which primarily benefit current
residents, will be financed from current revenues.
Minor capital projects or recurring capital projects represent relatively small costs of an
on-going nature, and therefore, should be financed with current revenues rather than utilizing
debt financing. 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) as appropriate.
Major capital projects represent large expenditures of a non-recurring nature which
primarily benefit future residents. Debt financing provides a means of generating sufficient
funds to pay for the costs of major projects. Debt financing also enables the costs of the project
to be supported by those who benefit from the project, since debt service payments will be
funded through charges to future residents.
5. Construction projects and capital expenditures of $10,000 or more will be included in the
Capital Improvement Plan (CIP) and related capital outlay line item; minor capital outlays
(less than $10,000) will be included in the operating budget as small tools & equipment or
repairs & maintenance.
The Capital Improvement Plan (CIP) differentiates the financing of high-cost, long-lived
physical improvements from low cost "consumable" equipment items contained in the
operating budget. CIP items may be funded through debt financing, a planned buildup of
reserves, or current revenues while operating budget items are annual or routine in nature and
should only be financed from current revenues.
6. Spending Policy: The city will spend its resources in the following order. Resources will be
categorized according to Generally Accepted Accounting Principles (GAAP) for state and local
governments, with the following general definitions:
• 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: Amounts constrained to specific purposes by the City Council by Resolution;
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 also by Resolution.
• Assigned: Amounts the city intends to use for a specific purpose; intent can be
expressed by the council or by a designee to which the council delegates the authority.
The City Council delegated this authority to itself, City Administrator, or Finance
Director.
• Unassigned: Amounts that are available for any purpose; these amounts are reported
only in the General Fund.
When both restricted and unrestricted resources are available, spending will occur in the
following order: Restricted, Committed, Assigned, Unassigned.
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Debt Administration
1. The city will limit long-term debt to capital improvements which cannot be financed from
current revenues.
Incurring long-term debt serves to obligate future taxpayers. Excess reliance on long-
term debt can cause debt levels to reach or exceed the government's ability to pay. Therefore,
conscientious use of long-term debt will provide assurance that future residents will be able to
service the debt obligations left by former residents.
2. The city will repay borrowed funds within a period not to exceed the expected useful life
of the asset.
This policy reflects the view that those residents who benefit from a project should pay
for the project. Adherence to this policy will also help prevent the government from over-
extending itself regarding the incurrence of future debt.
3. The city will not use long-term debt for financing current operations.
This policy reflects the view that those residents who benefit from a service should pay
for the service. Utilization of long-term debt to support current operations would result in
future residents supporting services provided to current residents.
4. The city will adhere to a policy of full public disclosure regarding the issuance of debt.
Full public disclosure regarding the issuance of debt provides assurance that the
incurrence of debt, for which the public is responsible, is based upon a genuine need and is
consistent with underwriter guidelines.
Reserves and Fund Balances
1. Reserves and Fund Balances will be properly designated into the following categories:
• Nonspendable fund balance: Amounts that are not in a spendable form (such as
inventory) or are required to be maintained intact (such as the principal of an
endowment fund).
• 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
by Resolution; 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 also by
Resolution.
• Assigned fund balance: Amounts the city intends to use for a specific purpose. The City
Council, City Administrator, or Finance Director can express intent.
• 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. A minimum level of general fund reserve of 60-75% of annual operating expenditures will
be maintained. This reserve is committed to be used for cash flow purposes, unanticipated
equipment acquisition and replacement, and to otherwise enable the city to meet
37
unexpected expenditure demands (natural disasters, catastrophic events, etc.) or revenue
shortfalls.
Property taxes represent the city's primary source of general fund revenue. Property
taxes are collected in June and December of each fiscal year. Since the city's fiscal year begins
on January 1st, the city must maintain an adequate cash balance to meet its expenditure
obligations between semi-annual collections of property taxes.
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 in the Benefit Accrual internal service fund.
The city recognizes the need to maintain adequate equipment to carry out required
public services. Equipment acquisition and replacement represent on-going costs of a minor
nature, as compared to major capital purchases. The city plans for equipment replacement
within the Capital Improvement Plan. However, unforeseen equipment problems will arise. The
reserve will provide resources for the immediate, unanticipated replacement of critical
equipment.
The city is subject to revenue shortfalls and unexpected expenditure demands during the
fiscal year. An unassigned general fund reserve will be maintained to be able to offset these
revenue shortfalls or meet unexpected demands occurring during the year, without suddenly
adjusting tax rates or reducing expenditures.
Financial Reporting & Accounting
1. The city will manage and account for its financial activity in accordance with Generally
Accepted Accounting Principles (GAAP) as set forth by the Governmental Accounting
Standards Board (GASB).
GASB is recognized as the authority with respect to governmental accounting. Managing
the city's finances in accordance with GAAP and in accordance with the rules set forth by GASB
provides the Monticello residents assurance that their public funds are being accounted for in a
proper manner.
2. The city will maintain its accounting records for general governmental operations on a
modified accrual basis, with revenues recorded when available and measurable, and
expenditures recorded when services or goods are received, and liabilities incurred.
Accounting records for proprietary fund types and similar trust funds will be maintained on
an accrual basis, with all revenues recorded when earned and expenses recorded when
liabilities are incurred, without regard to timing of cash receipt or payment.
Adherence to this policy will allow the city to prepare its financial statements in
accordance with Generally Accepted Accounting Principles as set by the Governmental
Accounting Standards Board.
3. The city of Monticello will prepare an Annual Comprehensive Financial Report (ACFR) in
conformity with Generally Accepted Accounting Principles (GAAP). The report will be made
available to the public. The ACFR shall be prepared in accordance with the standards
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established by the GFOA for the Certificate of Achievement for Excellence in Financial
Reporting Program.
The Certificate of Achievement represents a significant accomplishment for a
government and its financial leadership. The program encourages governments to prepare and
publish an easily readable and understandable comprehensive annual financial report covering
all funds and financial transactions of the government during the year. The ACFR provides users
with a wide variety of information useful in evaluating the financial condition of a government.
The program also encourages continued improvement in the city's financial reporting practices.
4. The city will ensure the conduct of timely, effective, and annual audit coverage of all
financial records in compliance with Local, State, and Federal laws.
Audits of the city's financial records provide the public assurance that its funds are being
expended in accordance with Local, State, and Federal laws and in accordance with Generally
Accepted Accounting Principles. Audits also provide management and the City Council with
suggestions for improvement in its financial operations from independent experts in the
accounting field.
5. The city of Monticello will maintain a policy of full and open public disclosure of all
financial activity.
Full and open public disclosure of all financial activity provides the public with assurance
that its elected officials and administrators communicate fully all financial matters affecting the
public.
6. The modified accrual basis of accounting and budgeting is used for the governmental
funds.
Under the modified accrual basis of accounting, revenues are recorded when
susceptible to accrual, i.e., both measurable and available. Available means collectible within
the current period or soon enough thereafter to be used to pay liabilities of the current period.
Expenditures are recorded when the related liability is incurred. Employee compensated
absences and principal and interest on long-term debt expenditures are recorded when due in
the current period.
7. The full accrual basis of accounting is used for Proprietary Funds for financial reporting
purposes.
Under this method, revenues are recorded when earned and expenses are recorded
when the related liability is incurred. For budget preparation and presentation, the proprietary
funds’ expenses are converted to expenditures and follow the same budget format as the
governmental fund types. Capital outlays in the enterprise funds are presented as expenditures
for budget basis but are recorded as assets along with associated depreciation expense on the
GAAP basis. Debt service principal payments in the enterprise funds are accounted for as
expenditures for budget purposes but are reported as reduction of long-term debt liability on
the GAAP basis. 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.
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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 Annual Comprehensive
Financial Report.
Except for cash in certain restricted 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:
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).
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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.
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
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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.
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,
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• 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.
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.
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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 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
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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.
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
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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 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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BALANCED BUDGETS
A BALANCED BUDGET is as a situation where total revenues and other financing sources is
equal to (or greater than) total expenditures and other uses. Revenues and other financing
sources increase financial resources. Expenditures and other financing uses decrease financial
resources.
A balanced budget does not dip into reserves or fund balances. However, an unbalanced
budget (deficit) is not necessarily poor fiscal management. For example, debt service funds
often accumulate resources in the year prior to expenditure, and debt-financed capital projects
frequently stretch over multiple years. The city has never used debt to finance current or
ongoing expenditures.
It is the city’s policy to adopt balanced budgets for the General Fund and the Community Center
Fund. Both funds are supported, to some extent, by property taxes.
Property Taxes 8,060,000$ Personnel Services $4,091,941
Franchise & Other Taxes 316,500 Supplies 1,020,200
Licenses & Permits 484,000 Other Services & Charges 5,728,859
Intergovernmental Revenues 513,895 Capital Outlay 633,000
Charges for Services 1,246,779 Debt Service -
Fines & Forfeits 51,600 Operating Transfers 6,000
Special Assessments 100
Miscellaneous 807,126
Total $11,480,000 Total $11,480,000
General Fund
Revenues and Other Sources Expenditures and Other Uses
B
A
L
A
N
C
E
D
Surplus
Revenues and Other Sources
GREATER than
Expenditures and Other Uses
Deficit
Revenues and Other Sources
LESS than
Expenditures and Other Uses
47
Absence of a line in the above chart is due to the fund having a balanced budget (zero effect on
Fund Balance/Working Capital) for 2023. Deficits reflect planned use of fund balance or future
bond issuance to reimburse for upfront costs.
$(1,800) $(1,400) $(1,000) $(600) $(200) $200 $600 $1,000
Benefit Accrual
Central Equipment
IT Services
Facilities Maintenance
Fiber Optics
Deputy Registrar
Liquor
Stormwater
Sewer
Water
Park Dedication
Park & Pathway Improvement
Street Lighting Improvement
Capital Projects
2020A G.O. Bonds
2019A G.O. Bonds
2018A G.O. Abatement
2017A G.O. Improvement/Abate
2016A G.O. Street/Improvement
2015B G.O. Street/Improvement
2011A G.O. Refunding Bond
Monticello Community Center
Minnesota Investment
Cemetery
Economic Development
General Fund
Thousands
Budgeted Change in Fund Balances/Working Capital
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THE BUDGET PROCESS
BUDGET DEVELOPMENT PROCESS
To initiate the budget process, the Finance Director distributes budget request worksheets to
all department heads and supervisors. The Finance Director and City Administrator then meet
with each department director and supervisor to review the requests made. Requests are
separated into “buckets” including staffing, IT and facilities maintenance, equipment, and
capital expenditures. Each “bucket” is discussed at the public budget workshops along with a
comprehensive draft budget and projected changes to the city’s tax capacity and levy.
Significant increases or decreases from the previous budget are highlighted to focus on high-
level goals for the upcoming year. The council then gives feedback for staff to research and
present at the next public budget workshop. Following any adjustments to the proposed
budget, a preliminary tax levy resolution is prepared, and a public hearing is held in September.
The Council may again adjust the budget following the public hearing, after which time, the
Council adopts the final tax levy and final budget resolutions.
BUDGET CALENDAR/PROCEDURES
The following budget timeline outlines the process the city customarily follows for creation and
adoption of the 2023 budget.
Date Activity
May 3, 2022
1. 2023-2027 capital equipment/projects (CIP) worksheets and 2023 budget
worksheets to department heads.
2. Department heads meet with various advisory boards and commissions for
input into 2023 preliminary budget and CIP.
May 25, 2022 2023-2027 CIP and 2023 budget worksheets due to finance department
June 1, 2022
1. Department directors and supervisors meet with city administrator and
finance staff to develop 2023 preliminary budget and CIP.
2. Finance department develops revenue estimates and 2023 preliminary
property tax levy.
July 11, 2022
Public City Council Budget Workshop #1. Workshops with city council, which
are open to the public, are held to set 2023 goals and priorities and review
draft department budgets and CIP.
July 25, 2022 Public City Council Budget Workshop #2
August 22, 2022 Public City Council Budget Workshop #3.
September 12, 2022 Public City Council Budget Workshop #4.
September 26, 2022 Council adopts 2023 preliminary city and HRA property tax levies. (See
September 30)
September 30, 2022 2023 preliminary property tax levy certification due to Wright County auditor.
October/November 2022 Department heads meet with city administrator and finance staff to refine
2023 proposed budget and final property tax levy. County mails TNT notices.
December 12, 2022 Council adopts 2023 budget and property tax levy. (Due December 28)
December 13, 2022 City certifies final 2023 property tax levy to Wright County auditor and files
TNT Compliance and Tax Levy forms with the MN Department of Revenue.
January 1, 2023 2023 fiscal year begins.
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PRESENTATION
The text of the budget document customarily contains six sections of information for each
activity. Some activities also include highlights or accomplishments for the prior year and/or the
coming year.
• 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 detailed financial information.
• The sixth section provides budget commentary.
The financial information includes expenditure information for the last two completed fiscal
years, the budgeted and draft yearend amounts for the current year, and the proposed
amounts for the budget year. Costs are segregated into six basic classifications: personnel
services (wage & benefits); supplies; other services and charges; capital outlay; debt service;
and operating transfers. Appropriation control is exercised only at the activity unit level and not
at the individual object of expenditure level.
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 for monitoring the status of each budget unit. Department staff has primary
responsibility for monitoring the status of expenditures against their budget. This responsibility
includes informing the finance department of any significant departures from the plans
anticipated in the budget.
The finance department has overall responsibility for monitoring the budget-to-actual status of
all departments and funds. This is accomplished primarily through analysis of computerized
budget performance reports which compare appropriation amounts on a line-item basis with
actual expenditures throughout the year. These reports aid department staff in controlling
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costs and function as an early warning system for the finance department. Department staff
may exercise their judgment in exceeding expenditures by object code, provided they do not
exceed the total amount appropriated for the budget unit.
The finance department reviews the budget reports and discusses any variances from expected
performance with the department staff. The finance department conducts in-depth budget
reviews of all expenditures and revenues in its quarterly report to the council.
Significant changes in either expenditures or revenues may require a budget revision.
Recommendations are also made by the Finance Director for any recommended corrective
actions. It is the practice of the City of Monticello not to amend the budget unless absolutely
necessary.
BUDGET AMENDMENT PROCESS
State statute provides various ways to amend the budget. This first involves a reallocation of
existing appropriations among the line items within a specific fund. The second defines a series
of scenarios 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 statute must be approved through a public process.
The Finance Director is responsible for ensuring compliance with spending limitations imposed
by the budget. Accordingly, the Finance Director submits a quarterly financial report to the City
Council after three-, six-, nine-, and twelve-month periods. The budget reviews evaluate overall
revenues and expenditures in comparison to the budgeted amounts. In cases where it appears
the original spending authority authorized will not prove sufficient, transfers of spending
authority or additional spending authority are requested together with explanations for the
requests. The public approval process for budget amendments is held if necessary.
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2023 Adopted Budget
Financial Summaries
ALL FUNDS SUMMARY BY FUND TYPE
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
equal expenditures and other uses. Fund balances/working capital increase with surpluses and
decrease with deficits. The Economic Development Authority (EDA) special revenue fund is
budgeting a use in 2023 of previously collected tax increment for qualifiying development-
related projects.
Debt amortization and early redemption of issues can 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. Prepaid assessments collected in prior years, included
in the Jan 1 beginning fund balance, will be used in 2023 as a way to keep the property tax levy
manageable.
Capital Project Funds commonly accumulate resources in one budget period and expend those
resources over multiple budget periods. Expenditures of fund balance are anticipated in 2022,
including prior years’ electric franchise fees.
Enterprise funds budget debt service and capital acquisitions as expenditures under the
modified accural basis. While that typically contributes to a budgeted negative net change in
fund balance/working capital, the large decrease budgeted in 2023 is for the use of
accumulated funds in the Liquor and Deputy registrar funds that will be transferred out to the
Special Debt Capital Internal 2023
General Revenue Service Project Enterprise Service Total
Fund Funds Funds Funds Funds Funds Budget
Fund Balance/Working Capital - Jan. 1 7,164,324$ 8,555,941$ 974,306$ 12,979,777$ 29,240,380$ 4,343,980$ 63,258,709$
Revenues and Other Sources
Property Taxes 8,060,000$ 917,000$ 1,999,581$ 1,475,419$ -$ -$ 12,452,000$
Tax Increments - 529,000 - - - - 529,000
Franchise & Other Taxes 316,500 - - 190,000 - - 506,500
Sale of Goods - - - - 7,357,694 - 7,357,694
Licenses & Permits 484,000 - - - 2,000 - 486,000
Intergovernmental Revenues 513,895 400,000 - 1,559,500 300,000 - 2,773,395
Charges for Services 1,246,779 1,228,300 - - 8,076,101 1,552,008 12,103,188
Fines & Forfeits 51,600 - - - - - 51,600
Special Assessments 100 - 259,275 128,549 10,000 - 397,924
Miscellaneous 807,126 78,700 9,144 186,532 141,205 43,992 1,266,699
Contributed Capital - - - - 75,000 109,000 184,000
Operating Transfers In - 6,000 - 4,000,000 - - 4,006,000
Debt Proceeds - - - 5,000,000 - - 5,000,000
Total Revenues and Other Sources 11,480,000$ 3,159,000$ 2,268,000$ 12,540,000$ 15,962,000$ 1,705,000$ 47,114,000$
Expenditures and Other Uses
Personnel Services 4,091,941 1,375,157 - - 2,503,619 252,350 8,223,067
Supplies 1,020,200 119,100 - - 6,027,117 93,932 7,260,349
Other Services & Charges 5,728,859 2,139,893 1,200 - 4,975,273 581,938 13,427,163
Capital Outlay 633,000 341,850 - 15,375,000 2,535,000 1,361,780 20,246,630
Debt Service - - 2,605,800 - 367,991 66,000 3,039,791
Operating Transfers Out 6,000 - - - 4,000,000 - 4,006,000
Total Expenditures and Other Uses 11,480,000 3,976,000 2,607,000 15,375,000 20,409,000 2,356,000 56,203,000
Net Change in
Fund Balance/Working Capital -$ (817,000)$ (339,000)$ (2,835,000)$ (4,447,000)$ (651,000)$ (9,089,000)$
Fund Balance/Working Capital - Dec. 31 7,164,324$ 7,738,941$ 635,306$ 10,144,777$ 24,793,380$ 3,692,980$ 54,169,709$
All FUNDS SUMMARY - BY FUND TYPE
53
Capital Projects fund as a means to fund the Downtown Pedestrian & Roadway Improvements
project.
Internal service funds provide services to other funds and typically function on a cost recovery
basis. The city has four: Facilities Maintenance Fund, IT Services Fund, Central Equipment Fund,
and Benefit Accrual Fund. Central Equipment Fund equipment purchases will exceed lease
revenue in 2023 due to delayed delivery of items ordered in 2021 and 2022. The Benefit Accrual
Fund is the only internal service fund that does not record capital asset acquisitons.
54
REVENUES BY CATEGORY AND FUND TYPE
Revenues are classified under one of thirteen major categories: property taxes, tax increments,
franchise & other taxes, sale of goods, licenses & permits, intergovernmental revenues, charges
for services, fines & forfeits, special assessments, miscellaneous, contributed capital, operating
transfers in, and debt proceeds. The chart below shows the relative percentage of 2023
budgeted revenues for these major categories for all funds combined. Fines & forfeits and
contributed capital show in the chart as 0%, which represents less than 0.5%, but each category
has budgeted revenues.
REVENUES BY TYPE, GENERAL FUND ONLY— Using those same categories of revenue type, the
relative percentages for the General Fund are shown below. The General Fund is comprised of a
much higher percentage of property taxes compared to all funds, levying 65% of the total city
and HRA combined tax levy.
Property Taxes
26%Tax Increments
1%
Franchise &
Other Taxes
1%
Sale of Goods
16%
Licenses &
Permits
1%
Intergovernmental
Revenues
6%
Charges for
Services
26%
Fines & Forfeits
0%
Special
Assessments
1%
Miscellaneous
3%
Contributed
Capital
0%
Operating
Transfers In
8%
Debt
Proceeds
11%
2023 Revenues by Category -All Funds
Property Taxes
68%
Franchise &
Other Taxes
2%Licenses &
Permits
6%
Intergovernmental
Revenues
5%
Charges for
Services
10%
Fines & Forfeits
0%Special
Assessments
0%Miscellaneous
9%
2023 Revenues by Category -General Fund
55
The General Fund is the city’s primary property tax levying fund, and it accounts for 24%
of the overall budgeted revenues of the city. This is a decrease from 30% in 2022.
Special revenue funds, totaling 7% of appropriations (remaining consistent from 7% in
2022), rely mainly on property taxes, tax increments, and charges for services.
The Debt Service Fund includes only non-enterprise and non-internal service fund debt.
These funds represent 5% of the city’s 2023 budgeted revenues and are supported with
property taxes and special assessments. This is a decrease from 8% in 2022.
Capital project funds total 26% (up from 8% in 2022) of budgeted revenues, which
includes financing from bond proceeds (if applicable), property taxes, special
assessments, operating transfers in, franchise fees and intergovernmental revenues
(grants) for capital projects and acquisitions.
Enterprise funds consist of water, sewer, stormwater, liquor, deputy registrar (DMV),
and fiber optics funds. These funds operate on a self-supporting basis, mostly from the
sale of goods and charges for services. They are responsible for 34% of the overall
revenue appropriations, which is a decrease from 42% in 2022.
Internal Service funds consist of facilities maintenance, IT services, central equipment,
and benefits accrual. These funds are supported by staff allocation or rental charges
from other funds of the city. Appropriations are 4% of the city’s 2023 budget, which is
consistent with 2023.
General
24%Special Revenue
7%
Debt Service
5%
Capital Projects
26%Enterprise
34%
Internal Service
4%
2023 Revenues by Fund Type
56
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 out (other financing uses).
The chart below shows the relative percentage of 2023 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. The General Fund supports very little capital
improvements and no debt service compared to all funds overall.
Personnel
Services
15%
Supplies
13%
Other Services &
Charges
24%
Capital Outlay
36%Debt Service
5%
Operating
Transfers Out
7%
2023 Appropriations by Category -All Funds
Personnel
Services
37%Supplies
7%
Other Services &
Charges
52%
Capital Outlay
4%
2023 Appropriations by Category -General
Fund
57
In governmental agencies, personnel services (salaries, wages, and benefits) 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 the city’s
contracts (other services and charges) for law enforcement, legal, and assessing services.
The General Fund is the city’s primary operating fund for general government
operations, and it accounts for 21% of the overall appropriations of the city in 2023. This
is a decrease from 26% in 2022.
Special revenue funds, totaling 7% of 2023 appropriations (consistent with 2022),
include a variety of fee-supported funds including the community center and cemetery.
The Debt Service Fund includes only non-enterprise and non-internal service fund debt.
These funds represent 5% of the city’s 2023 appropriations for bond principal and
interest payments. This is a decrease from 7% in 2022.
Capital project funds total 27% (up from 18% in 2022) of appropriations, which includes
costs for street construction, street lighting and park improvements, and other
governmental capital asset acquisitions excluding internal service funds. The city has
several large projects on the horizon, including the Downtown Pedestrian & Roadway
Improvement Project, construction of a new Public Works facility, planning for
development in the Pointes at Cedar area, and improvements at the Bertram Chain of
Lakes Regional Park.
Enterprise funds consist of water, sewer, stormwater, liquor, deputy registrar (DMV),
and fiber optics funds. These funds operate on a self-supporting basis and are
responsible for 36% of the overall appropriations. This is down from 38% in 2022.
Internal Service funds consist of facilities maintenance, IT services, central equipment,
and benefits accrual. These funds operate to provide services to the other internal
departments of the city. Appropriations are 4% of the city’s 2023 budget, which is
consistent with 2022.
General
21%
Special Revenue
7%
Debt Service
5%
Capital Projects
27%
Enterprise
36%
Internal Service
4%
2023 Appropriations by Fund Type
58
INTERFUND TRANSFERS
Operating transfers support the operations of other funds, provide for special projects, and
contribute to debt service payments. The following schedule provides the 2023 budgeted
operating transfers:
Fund No.Transfer Out Fund Amount Fund No.Transfer In Fund Amount
101 General 6,000$ 213 Economic Development Authority 6,000$
609 Liquor 1,000,000 400 Capital Projects 1,000,000
609 Liquor 250,000 403 Street Lighting Improvement 250,000
609 Liquor 1,000,000 404 Park & Pathway Improvement 1,000,000
653 Deputy Registrar 1,750,000 400 Capital Projects 1,750,000
Total Transfers Out 4,006,000$ Total Transfers In 4,006,000$
SCHEDULE OF BUDGETED OPERATING TRANSFERS IN 2023
59
ALL FUNDS SUMMARY BY YEAR
Tax increments will decrease in 2023 due to newly decertified districts. Franchise & other taxes
increase to better match prior year trends. Intergovernmental revenues are projected to
increase in 2023 due to grants received to offset project costs for four projects: Downtown
Pedestrian & Roadway Improvements, School Boulevard Improvements, and Elm Street
Improvements, and Yellow Flashing Arrow Intersection Upgrades. Special assessments decrease
due to regular amortization, which is accelerated by prepayments when properties change
ownership. The increase in contributed capital is caused by projections of development.
Operating transfers are from the Liquor and Deputy Registrar funds to the Capital Projects Fund
to pay for the Downtown Pedestrian & Roadway Improvements Project. Debt is projected to be
issued for the beginning stages of construction of a new Public Works Facility; additional debt
will be issued in 2024 to complete the project.
Personnel services budget increased by a 4.0% wage and health benefit increase budgeted in
2023. A new streets operator is budgeted for beginning 4/1/23. The Liquor and Deputy
Registrar funds each added a full-time employee in 2022, adding to the 2023 budget. Other
TOTAL ALL FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 10,836,757$ 11,540,278$ 11,741,000$ 11,798,194$ 12,452,000$ 6.1%
Tax Increments 707,824 732,688 630,344 720,301 529,000 -16.1%
Franchise & Other Taxes 441,584 461,898 398,000 410,299 506,500 27.3%
Sale of Goods 7,404,955 7,104,357 7,013,000 7,168,374 7,357,694 4.9%
Licenses & Permits 524,464 810,239 473,100 615,185 486,000 2.7%
Intergovernmental Revenues 1,641,228 4,007,667 1,788,000 1,815,699 2,773,395 55.1%
Charges for Services 9,974,480 11,747,161 11,015,657 12,788,488 12,103,188 9.9%
Fines & Forfeits 31,852 49,566 51,600 34,221 51,600 0.0%
Special Assessments 647,195 1,797,837 468,243 1,000,511 397,924 -15.0%
Miscellaneous 1,565,605 1,064,694 1,179,131 118,489 1,266,699 7.4%
Contributed Capital 1,142,944 981,521 75,000 646,137 184,000 145.3%
Operating Transfers In 2,760,000 8,952,690 314,925 461,626 4,006,000 1172.0%
Debt Proceeds 2,256,280 - - - 5,000,000 ---
TOTAL REVENUES 39,935,168$ 49,250,597$ 35,148,000$ 37,577,526$ 47,114,000$ 34.0%
EXPENDITURES
Personnel Services 6,152,627$ 6,449,844$ 7,666,235$ 7,377,135$ 8,223,067$ 7.3%
Supplies 6,672,104 6,463,849 6,867,290 6,655,548 7,260,349 5.7%
Other Services & Charges 10,314,137 10,031,711 10,363,277 11,451,971 13,427,163 29.6%
Capital Outlay 5,221,894 7,888,500 12,332,156 3,398,771 20,246,630 64.2%
Debt Service 4,274,436 7,314,973 3,240,117 2,857,810 3,039,791 -6.2%
Operating Transfers Out 2,760,000 8,952,690 314,925 461,627 4,006,000 1172.0%
TOTAL EXPENDITURES 35,395,198$ 47,101,566$ 40,784,000$ 32,202,862$ 56,203,000$ 37.8%
FUND BALANCE - JANUARY 1 51,195,044$ 55,735,014$ 57,884,045$ 57,884,045$ 63,258,709$
Excess (Deficiency) of
Revenues over Expenditures 4,539,970 2,149,031 (5,636,000) 5,374,664 (9,089,000)
FUND BALANCE - DECEMBER 31 55,735,014$ 57,884,045$ 52,248,045$ 63,258,709$ 54,169,709$
60
services & charges expenditures increase in 2023 due to anticipated repairs needed, most
notably in the utilities (water, sewer, and stormwater) enterprise funds.
Estimated capital outlay expenditures increase due to construction on several large projects the
have been in the planning stages for a few years. These projects include Downtown Pedestrian
& Roadways Improvements, a new Public Works Facility, The Pointes at Cedar development
area, Bertram Chain of Lakes Regional Park Improvements, and School Boulevard & Elm Street
Safety Improvements.
Debt service decreases in 2023 due to amortization of existing debt and no new debt issued.
The early redemption of one bond issue in 2021 caused a one-time large payment. Operating
transfers are from the Liquor and Deputy Registrar funds to the Capital Projects Fund to pay for
the Downtown Pedestrian & Roadway Improvements Project.
More detailed information on each fund, including the major funds, is included later in this
document.
61
FUND BALANCE/WORKING CAPITAL
FUND BALANCE is calculated as governmental fund assets minus liabilities. WORKING CAPITAL
is the modified accrual balance of resources in enterprise funds after factoring out long-term
assets and liabilities that do not impact current, near-term operations.
The Economic Development Authority Fund is planning to use pooled tax increment from
previous years to fund development related incentives in 2023, which will decrease the fund
balance.
The fund balances in most debt service subfunds, including the 2015B, 2016A, and 2017A
issuances, are projected to decrease due to the planned spend down of accumulated fund
balance, most notably from prepaid assessment revenues received.
The Capital Projects Fund, Street Lighting Improvement Fund, and Park & Pathway
Improvement Fund are budgeted to decrease by more than 10% due to the planned use of fund
balance to support projects. Reimbursement resolutions have been passed for activity related
to the Public Works Facility, which allows the City to bond in 2023 and 2024 for project costs
expended on the project.
The Liquor and Deputy Registrar funds’ working capital balances are estimated to decrease by
more than 10%, which reflects transfers out to the Capital Projects and Park & Pathway
Improvements funds to finance capital improvements paid with existing monies.
The Central Equipment Fund is expected to decrease by more than 10% in 2023, which reflects
the use of fund balance (transferred from the General Fund in 2021 & 2022) for a number of
acquisitions that will not be received until 2023 due to supply chain issues.
62
Projected Beginning Projected Ending
Fund Balance/Estimated Estimated Fund Balance/
Working Capital Revenues Appropriations Working Capital
General Fund 7,164,324$ 11,480,000$ 11,480,000$ 7,164,324$
Special Revenue Funds
Economic Development Authority 7,020,352 987,000 1,823,000 6,184,352
Cemetery 117,844 42,000 31,000 128,844
Small Community Development Grant 898,209 8,000 - 906,209
Monticello Community Center 519,536 2,122,000 2,122,000 519,536
Total Special Revenue Funds 8,555,941 3,159,000 3,976,000 7,738,941
Debt Service Funds
2015B G.O. Bonds 121,706 186,000 213,000 94,706
2016A G.O. Bonds 313,731 357,000 528,000 142,731
2017A G.O. Bonds 274,359 340,000 468,000 146,359
2018A G.O. Bonds 79,500 446,000 448,000 77,500
2019A G.O. Bonds 48,734 712,000 712,000 48,734
2020A G.O. Bonds 136,277 227,000 238,000 125,277
Total Debt Service Funds 974,306 2,268,000 2,607,000 635,306
Capital Project Funds
Capital Projects 10,416,582 10,615,000 11,870,000 9,161,582
Street Lighting Improvement 1,254,883 922,000 2,130,000 46,883
Park & Pathway Improvement 1,207,608 1,002,000 1,375,000 834,608
Park Dedication 100,705 1,000 - 101,705
Total Capital Project Funds 12,979,777 12,540,000 15,375,000 10,144,777
Enterprise Funds
Water 7,733,540 1,760,000 2,242,000 7,251,540
Sewer 11,606,592 3,119,000 3,679,000 11,046,592
Stormwater 3,287,089 962,000 986,000 3,263,089
Liquor 2,862,566 7,370,000 9,010,000 1,222,566
Deputy Registrar 2,371,303 871,000 2,542,000 700,303
Fiber Optics 1,379,290 1,880,000 1,950,000 1,309,290
Total Enterprise Funds 29,240,380 15,962,000 20,409,000 24,793,380
Internal Service Funds (1) (1)
Facilities Maintenance 36,544 403,000 403,000 36,544
IT Services 242,719 538,000 538,000 242,719
Central Equipment 3,704,738 752,000 1,403,000 3,053,738
Benefit Accrual 359,980 12,000 12,000 359,980
Total Internal Service Funds 4,343,979 1,705,000 2,356,000 3,692,979
Total All Funds 63,258,709$ 47,114,000$ 56,203,000$ 54,169,709$
CHANGES IN FUND BALANCE/WORKING CAPITAL - FISCAL YEAR 2023
63
Adopted
Actual Actual Budget Estimated Budget
2020 2021 2022 2022 2023
General Fund 6,640,235$ 6,624,782$ 6,624,782$ 7,164,324$ 7,164,324$
Special Revenue Funds
Economic Development Authority 6,518,705 7,008,094 7,214,094 7,020,352 6,184,352
Cemetery 55,339 80,184 80,184 117,844 128,844
Small Community Development Grant 924,538 924,622 932,622 898,209 906,209
Monticello Community Center 52,357 389,738 389,738 519,536 519,536
Total Special Revenue Funds 7,550,939 8,402,638 8,616,638 8,555,941 7,738,941
Debt Service Funds
2011A G.O. Refunding Bonds (2005A)111,460 109,552 (2,448) - -
2014A G.O. Bonds 148,714 - - - -
2015B G.O. Bonds 121,687 135,877 140,877 121,706 94,706
2016A G.O. Bonds 399,967 368,684 327,684 313,731 142,731
2017A G.O. Bonds 278,557 280,978 279,978 274,359 146,359
2018A G.O. Bonds 79,719 80,503 85,503 79,500 77,500
2019A G.O. Bonds 39,494 49,780 54,780 48,734 48,734
2020A G.O. Bonds 124,934 98,836 51,836 136,277 125,277
Total Debt Service Funds 1,304,532 1,124,210 938,210 974,306 635,306
Capital Project Funds (1)
Capital Project 16,243,546 11,862,620 7,919,620 10,416,582 9,161,582
Street Lighting Improvement 995,928 1,180,207 905,207 1,254,883 46,883
Park & Pathway Improvement 717,478 1,100,572 727,572 1,207,608 834,608
Park Dedication - 41 3,041 100,705 101,705
Closed Bond Fund 914,050 - - - -
Streets Reconstruction 1,667,656 - - - -
Total Capital Project Funds 20,538,658 14,143,440 9,555,440 12,979,777 10,144,777
Enterprise Funds
Water 5,280,477 6,511,005 6,436,005 7,733,540 7,251,540
Sewer 7,285,407 9,601,117 9,175,117 11,606,592 11,046,592
Stormwater 2,284,845 2,800,863 1,866,863 3,287,089 3,263,089
Liquor 1,014,600 2,032,400 2,822,400 2,862,566 1,222,566
Deputy Registrar 1,848,750 2,195,481 2,289,481 2,371,303 700,303
Fiber Optics 401,584 698,071 628,071 1,379,290 1,309,290
Total Enterprise Funds 18,115,663 23,838,937 23,217,937 29,240,380 24,793,380
Internal Service Funds (1)
Facilities Maintenance - (33,854) (33,854) 36,544 36,544
IT Services 267,384 260,444 260,444 242,719 242,719
Central Equipment 962,590 3,170,333 2,715,333 3,704,738 3,053,738
Benefit Accrual 355,013 353,116 353,116 359,980 359,980
Total Internal Service Funds 1,584,987 3,750,039 3,295,039 4,343,979 3,692,980
Total All Funds 55,735,014$ 57,884,045$ 52,248,045$ 63,258,709$ 54,169,709$
FUND BALANCE/WORKING CAPITAL HISTORY
Fiscal Year Ended December 31,
64
REVENUE TRENDS & ANALYSIS
Revenues are conservatively estimated for every fund type. The schedule of revenue estimates
below is supported by detailed revenue estimates for each fund in subsequent sections. This
section of the budget highlights major revenue sources for all the city funds as combined and
for key governmental and enterprise funds: General Fund and Monticello Community Center
Fund (governmental funds), along with the Water, Sewer, Stormwater, Liquor, Deputy Registrar
and Fiber Optics funds (enterprise funds). Trends for these funds and individual revenues are
shown together with estimates for the coming year.
TOTAL CITY REVENUES AND OTHER SOURCES
Property taxes, charged to all non-exempt parcels in city limits, account for the single largest
revenue source for the city. Property taxes are levied for the following funds: General,
Monticello Community Center, Debt Service, Capital Projects, and Economic Development
Authority. Budget estimates are based off the final levy certified.
Tax increments are the main source of revenue for the Economic Development Fund accounting
for 54% of 2023 budgeted revenues. This fund accounts for the city’s tax increment financing
(TIF) districts and other general economic development activities of the Monticello Economic
Development Authority. Budget estimates are taken from the prior year’s TIF collections and
adjusted for known changes to each TIF district.
Franchise & other taxes increase to better match prior year trends.
Sales of goods reflect sales at the city’s Hi-Way Liquors off-sale store. Budget estimates are
calculated using analysis of the actual sales trends over the past 3-5 years.
Intergovernmental revenues are projected to increase in 2023 due to grants received to offset
project costs for four projects: Downtown Pedestrian & Roadway Improvements, School
Boulevard Improvements, and Elm Street Improvements, and Yellow Flashing Arrow
Intersection Upgrades.
Charges for services reflect increases in the city’s fee schedule, including refuse and recycling
charges and community center membership and day pass fees. The city uses conservative
TOTAL ALL FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 10,836,757$ 11,540,278$ 11,741,000$ 11,798,194$ 12,452,000$ 6.1%
Tax Increments 707,824 732,688 630,344 720,301 529,000 -16.1%
Franchise & Other Taxes 441,584 461,898 398,000 410,299 506,500 27.3%
Sale of Goods 7,404,955 7,104,357 7,013,000 7,168,374 7,357,694 4.9%
Licenses & Permits 524,464 810,239 473,100 615,185 486,000 2.7%
Intergovernmental Revenues 1,641,228 4,007,667 1,788,000 1,815,699 2,773,395 55.1%
Charges for Services 9,974,480 11,747,161 11,015,657 12,788,488 12,103,188 9.9%
Fines & Forfeits 31,852 49,566 51,600 34,221 51,600 0.0%
Special Assessments 647,195 1,797,837 468,243 1,000,511 397,924 -15.0%
Miscellaneous 1,565,605 1,064,694 1,179,131 118,489 1,266,699 7.4%
Contributed Capital 1,142,944 981,521 75,000 646,137 184,000 145.3%
Operating Transfers In 2,760,000 8,952,690 314,925 461,626 4,006,000 1172.0%
Debt Proceeds 2,256,280 - - - 5,000,000 ---
TOTAL REVENUES 39,935,168$ 49,250,597$ 35,148,000$ 37,577,526$ 47,114,000$ 34.0%
65
revenue budgeting practices to ensure revenues will be sufficient to meet operating needs. The
effects of the COVID-19 pandemic made projecting charges for services at the Monticello
Community Center especially challenging.
Special assessments decrease due to regular amortization, which is accelerated by prepayments
when properties change ownership.
Miscellaneous revenues, including donations, interest earned on investments, and rebates
related to a solar farm investment, are conservatively estimated based on prior year trends.
Known factors, such as the number of kilowatt-hours (kWh) subscribed in the solar program,
are factored into the 2023 budget. While the investment earnings—the largest portion of this
revenue classification—are expected to hold steady, adjustments to market value create
volatility that makes estimating difficult. However, 2022’s market value adjustment was larger
than interest received, which led to negative investments earnings reported.
Operating transfers are expected to increase in 2022 because the Liquor and Deputy Registrar
funds will transfer monies to the Capital Projects Fund to pay for the Downtown Pedestrian &
Roadway Improvements Project.
Debt is projected to be issued for the beginning stages of construction of a new Public Works
Facility; additional debt will be issued in 2024 to complete the project.
The chart below provides an overall picture of estimated 2023 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, capital outlay and debt service. For 2023, the
council adopted a general levy of $12,050,000, which is $697,000 (6.1%) greater than the prior
Property Taxes
26%Tax Increments
1%
Franchise &
Other Taxes
1%
Sale of Goods
16%
Licenses &
Permits
1%
Intergovernmental
Revenues
6%
Charges for
Services
26%
Fines & Forfeits
0%
Special
Assessments
1%
Miscellaneous
3%
Contributed
Capital
0%
Operating
Transfers In
8%
Debt
Proceeds
11%
2023 Revenues by Category -All Funds
66
year. The EDA and council also adopted a Housing and Redevelopment Authority (HRA) special
benefit levy of $402,000, which is $14,000 (3.6%) greater than 2022. The HRA levy is recorded
in the Economic Development Authority (EDA) Fund.
The following chart reflects the changes in the tax levy over the last ten years:
Accounting for a variety of activities, the General Fund will receive 65% of the 2023 property
tax levy. However, property taxes provide 70% of the General Fund’s revenue. The levy for the
Monticello Community Center (MCC) increased $30,000 (6.2%) to $515,000. The following chart
represents the distribution of the tax levy for 2023.
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. Estimated market values are converted to tax capacity by using specific state
formulas for various types of properties.
GENERAL FUND
The General Fund is used to account for all financial resources of the city, except for those
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
City & HRA Property Tax Levies
City Tax Levy HRA Levy
General Fund
$8,060,000
65%
MCC Operations
$515,000
4%
HRA Levy
$402,000
3%
Capital
$1,475,419
12%
Debt Service
$1,999,581
16%
Property Tax Levy (Proposed 2023)
67
required to be accounted for in another fund. Major functions supported by General Fund
revenues include administration and finance, police and fire services, public works, and
recreation and culture.
Revenue is estimated to be $11,480,000 (+9.0%) for the 2023 budget year. The primary General
Fund source of revenue is property taxes at $8,060,000 (+7.8%), which accounts for 70% of
total revenues. At 11% and 7%, charges for services and miscellaneous revenues are the only
other categories to exceed 5% of total revenues.
The following charts depicts General Fund revenues as represented in the 2023 adopted
budget:
The following chart represents General Fund revenues trends.
MONTICELLO COMMUNITY CENTER
The Monticello Community Center (MCC) provides a facility with space for a variety of
recreational, professional, and educational opportunities. Aside from its portion of the property
tax levy, the MCC is supported by a variety of fees for memberships, activities, rentals, and
concessions. Council passed a revenue policy that requires the MCC to cover 85% of its
General Fund Revenues -2023
Property Taxes (70%)
Franchise & Other Taxes (3%)
Licenses & Permits (4%)
Intergovernmental Revenues (5%)
Charges for Services (11%)
All Other (7%)
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
ACTUAL ACTUAL BUDGET BUDGET
2020 2021 2022 2023
Revenues -General Fund
Miscellaneous
Fines & Forfeits
Charges for Services
Intergovernmental
Revenues
Licenses & Permits
Franchise & Other Taxes
Property Taxes
68
operating costs—including equipment—with fees and charges. The effects of the COVID-19
pandemic have affected the ability of this fund to meet that threshold. American Rescue Plan
Act (ARPA) funds have been and will be used to supplement the reduction of charges for
services revenues in 2021 – 2023.
In the following chart, 2020 and 2021 are actual amounts and 2022 and 2023 are estimates.
WATER AND SEWER FUNDS
Water and sewer charges for services are primarily comprised of providing Monticello residents
and businesses with water and sewer services. Based partially on the level of consumption,
these utility funds each have separate charges for delivered services. The city sets rates to
cover operating costs, a portion of depreciation, and debt service. The water and sewer funds
are expected to provide some level of future support for debt service incurred to make water
and sewer system improvements.
In 2018, the sewer fund shows increased revenue because the city sold a parcel of property
that had been used for storage and a bio-solids site. With 2022 and 2023 shown as a projected
amount, the following chart plots revenues for water and sewer services on the primary axis
(left) against gallons of water sold on the secondary axis (right):
Water service charges have two components: base charge with a minimum usage amount and
consumption charge for usage above the minimum amount. Rates have increased steadily over
the last ten years: average annual base and consumption charge increases were 6.0%. Sewer
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
$2,200,000
ACTUAL ACTUAL BUDGET BUDGET
2020 2021 2022 2023
Revenues -Community Center Fund
Operating Transfers In
Miscellaneous
Charges for Services
Intergovernmental
Revenues
Property Taxes
0
100
200
300
400
500
600
700
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Gallons Sold (Millions)Revenues (Millions)Water & Sewer Revenues
Water Revenue
Sewer Revenue
H20 Sold (Gallons)
69
charges, like water charges, have two components: base charge with a minimum usage amount
and consumption charge for usage above the minimum amount. Rates have increased steadily
over the years: average annual base and consumption charge increases were 5.0%. For 2023,
increases of 8% for water and 2% for sewer, for both the base rate and usage rates, were
included in the budget for both funds.
The following chart reflects the water and sewer base rates over the last ten years:
STORMWATER FUND
The Stormwater Fund was established in 2019 along with the creation of a per drainage unit
user charge. Each residential dwelling is equivalent to one drainage unit, and non-residential
properties are equivalent to 7 drainage units per rounded impervious surface area. The fee
increases to $4.50/month in 2023. Expenses in this fund were accounted for in the General
fund prior to 2020.
DEPUTY REGISTRAR (DMV)
The city is authorized by the State of Minnesota to operate a DMV. Fees collected from motor
vehicle licenses are the DMV’s main revenue source. Fees are regulated by the state.
The following chart shows the history of DMV revenues by transaction type over a five-year
period. The State transitioned to the MNLARS system in 2019 and to MNDrive in 2020. All three
systems measured transactions differently which creates skewed numbers in the graph below.
However, 2020 and 2021 were incredibly busy years for the DMV as the COVID-19 pandemic
caused changes in operations and increased car sales contributed to increased workload.
Motor vehicle licenses (new and renewals) as percentage of total transactions decreased
slightly from 87% in 2021 to 85% in 2022.
$-
$2
$4
$6
$8
$10
$12
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Monthly ChargeWater and Sewer Base Rates
Water
Sewer
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2018 2019 2020 2021 2022
DMV Transactions by Type & Annual Revenues
Drivers License ($8)
Game & Fish ($1)
DNR ($2-$7)
Motor vehicle ($6-$10)
Annual Revenue
70
LIQUOR FUND
With total 2022 sales of $7.18 million, Monticello’s municipal liquor store ranks in the top 3 of
Minnesota cities with only one store. While the COVID-19 pandemic caused a rapid increase in
sales in 2020, revenue growth slowed in 2021 and remained steady in 2022, as stay-at-home
orders only occurred in 2020 and more people returned to dining out and enjoying on-sale
venues once again. Total sales have climbed an average of 4.7% for the last five years (16.2%
alone in 2020); liquor is the fastest growth category averaging 6.3% over five years.
The 2023 Liquor Fund budget reflects a steady increasing sales trend. The Liquor Fund has one
retail outlet: Hi-Way Liquors. This fund provides vital resources for many community projects
including Bertram Chain of Lakes and other capital improvements. Conservative revenue
estimates are used for budgeting purposes. However, 2023 net cash flow from operations
should remain stable around $750,000.
Beer accounts for approximately 51% of total sales; liquor and wine follow at 33% and 12%,
respectively. Non-alcohol items contribute 4%. Beer typically has the lowest gross margin at
23% and wine the highest at 39%. Liquor is in the middle at about 30%. The chart below
provides sales information by category:
Beer
51%
Liquor
33%
Wine
12%
Misc.
4%
Hi-Way Sales by Category -2022
Liquor Store Revenue by Category
Category 2018 2019 2020 2021 2022 5 Yr Chg
Beer 3,074,408$ 3,252,142$ 3,838,912$ 3,665,223$ 3,695,976$ 20%
% Change 6.0% 5.8% 18.0% -4.5% 0.8%
Liquor 1,909,953$ 2,019,096$ 2,351,072$ 2,276,808$ 2,340,709$ 23%
% Change 7.1% 5.7% 16.4% -3.2% 2.8%
Wine 904,385$ 894,005$ 982,113$ 915,444$ 882,772$ -2%
% Change 0.6% -1.1% 9.9% -6.8% -3.6%
Other 201,462$ 211,687$ 235,777$ 253,775$ 257,966$ 28%
% Change 12.4% 5.1% 11.4% 7.6% 1.7%
Total Sales 6,090,208$ 6,376,930$ 7,407,874$ 7,111,250$ 7,177,423$ 18%
% Change 5.6% 4.7% 16.2% -4.0% 0.9%
71
FIBER OPTICS FUND (FiberNet)
Monticello’s telecommunications utility, FiberNet Monticello, provides internet, voice
(telephone) and video (TV) services. City residential and commercial customers can subscribe to
one, two, or all three services. FiberNet continues to face competition from two large private
providers with significant resources and challenges with the societal shift away from traditional
telephone and television services. As a result, subscriber counts for voice and video have
declined in recent years. Internet has shown occasional growth with more customers
streaming video services.
The data in the graphs below show a stable competitive environment for FiberNet in 2022.
In July 2016, the city contracted with Arvig to manage FiberNet. The contract was renewed for
an additional 5 years in 2021. Through leaner operations, shared resources, and economies of
scale, the Fiber Optics Fund has had positive cash flow from operations since 2019. However,
potential new service areas will cause increases in capital costs. Arvig will continue to assess the
marketplace and service delivery costs and will raise prices as needed.
1,815 1,817 1,809 1,806 1,801 1,788 1,781 1,771 1,769 1,770 1,761 1,752
285 283 281 280 267 266 265 267 264 261 256 256
293 295 295 295 291 287 284 278 277 276 275 275
0
500
1,000
1,500
2,000
2,500
2022 Total Subscribed Services
Phone
Television
Internet
72
TAX LEVY HISTORY
2020 2021 2022 2023
General Fund $6,788,000 $7,169,000 $7,475,000 $8,060,000
Percent Change 1.8% 5.6% 4.3% 7.8%
Special Revenue Funds
Economic Development (HRA Levy)355,000 366,300 388,000 402,000
Monticello Community Center 417,000 485,000 485,000 515,000
Total Special Revenue Funds 772,000 851,300 873,000 917,000
Percent Change 2.9% 10.3% 2.5% 5.0%
Debt Service Fund
2011A GO Refunding Bonds 172,641 - - -
2014A GO Judgement Bonds 535,501 513,570 - -
2015B GO Bonds 198,385 201,115 192,650 164,435
2016A GO Bonds 405,039 406,089 406,929 282,559
2017A GO Bonds 427,367 430,097 427,367 299,532
2018A GO Bonds 472,434 448,077 451,812 444,232
2019A GO Bonds 728,620 714,945 709,446 697,133
2020A GO Bonds - 117,586 123,196 111,690
Total Debt Service Fund 2,939,987 2,831,479 2,311,400 1,999,581
Percent Change 32.0% -3.7% -18.4% -13.5%
Capital Project Funds
Capital Projects Fund 300,013 578,221 1,081,600 1,475,419
Percent Change -54.7% 92.7% 87.1% 36.4%
Total Tax Levy - All Funds 10,800,000$ 11,430,000$ 11,741,000$ 12,452,000$
Percent Change 4.8% 5.8% 2.7% 6.1%
Levy Summary
City General and Debt Levies 10,445,000$ 11,063,700$ 11,353,000$ 12,050,000$
Percent Change 4.8% 5.9% 2.6% 6.1%
HRA Levy 355,000$ 366,300$ 388,000$ 402,000$
Percent Change 2.0% 3.2% 5.9% 3.6%
TAX LEVY HISTORY
73
TAX CAPACITY HISTORY
The Housing Redevelopment Authority (HRA) special benefit levy is capped at 0.0185% of the
city’s taxable market value. The city’s taxable market value for taxes collected in 2022 totaled
$2,134,994,875. HRA levy proceeds can only be used for purposes included in the HRA Act
(Minnesota Statutes, Section 469.033, subd. 6). Those purposes include redevelopment to
correct or prevent blight and development of, or assistance to, housing for low- or moderate-
income persons.
In 2022, Northern States Power (dba Xcel Energy), the city’s largest taxpayer, succeeded in
getting the Minnesota Department of Revenue to lower the estimated market value of its
nuclear power plant. Xcel’s estimated market value only increased by 3.7%, and because
residential and commercial tax base grew significantly, the city’s tax capacity increased overall,
but the tax burden shifted away from Xcel to the other taxpayers.
The graph below reflects the annual change in the city’s property tax levy and the annual
change in Xcel’s property taxes owed. If the green column is larger than the blue column, Xcel
absorbed the entire levy and lowered the taxes paid by others. In the case where the green
column is negative, other taxpayers paid for the entire levy increase plus the amount Xcel’s
taxes declined.
2020 2021 2022 2023
Tax Capacity 29,870,392$ 31,026,583$ 31,073,603$ 34,925,732$
Percent Change 2.7% 3.9% 0.2% 12.4%
City Levy - Tax Capacity Rate 34.968 35.659 36.536 34.502
Percent Change 2.1% 2.0% 2.5% -5.6%
HRA Levy - Tax Capacity Rate 1.188 1.181 1.249 1.151
Percent Change -0.7% -0.7% 5.8% -7.8%
TAX CAPACITY HISTORY
$(400,000)
$(200,000)
$-
$200,000
$400,000
$600,000
$800,000
2019 2020 2021 2022 2023
City Levy and Xcel Property Tax Change
City Levy Increase Xcel Change in City Taxes
74
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 2 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 plant’s percentage of the city’s total tax capacity (and its share of the annual property tax
levies) has been significant for many years. In 2015 the percentage rose above 60% and
remained there until 2019, when it dropped to 56%. The percentage has continued to decline,
and 2023 estimates calculate Xcel’s percentage of tax base at 46%. This tax capacity decline
means the city’s other taxpayers absorbed more of the tax levy.
Tax
Year Amount $ Change Amount $ Change % Chg.Amount $ Change % Chg.
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 789,572,500$ (88,282,600)$ 15,791,450$ (1,765,652)$ -10% 5,410,467$ (266,029)$ -5%
2020 780,422,700$ (9,149,800)$ 15,608,454$ (182,996)$ -1% 5,457,964$ 47,497$ 1%
2021 806,039,800$ 25,617,100$ 16,120,796$ 512,342$ 3% 5,748,515$ 290,551$ 5%
2022 751,329,900$ (54,709,900)$ 15,026,598$ (1,094,198)$ -7% 5,490,118$ (258,397)$ -4%
2023 779,500,000$ 28,170,100$ 15,590,000$ 563,402$ 4% 5,378,862$ (111,256)$ -2%
Northern States Power (dba Xcel Energy)
Taxable Market Value Tax Capacity City Property Tax on Plant
$448
$707
$780 $832 $878
$790 $780 $806 $751 $780
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023MillionsXcel Power Plant -Taxable Market Value
75
REVENUE SOURCES BY FUND
Property Tax Franchise Sale of Licenses/
Taxes Increments & Other Taxes Goods Permits Intergovernmental
General Fund 8,060,000$ -$ 316,500$ -$ 484,000$ 513,895$
Special Revenue Funds
Economic Development Authority 402,000 529,000 - - - -
Cemetery - - - - - -
Small Cities Development Program - - - - - -
Monticello Community Center 515,000 - - - - 400,000
Total Special Revenue Funds 917,000 529,000 - - - 400,000
Debt Service Funds
2015B G.O. Bonds 164,435 - - - - -
2016A G.O. Bonds 282,559 - - - - -
2017A G.O. Bonds 299,532 - - - - -
2018A G.O. Bonds $444,232 - - - - -
2019A G.O. Bonds 697,133 - - - - -
2020A G.O. Bonds 111,690 - - - - -
Total Debt Service Funds 1,999,581 - - - - -
Capital Project Funds
Capital Project 1,475,419 - - - - 1,087,000
Street Lighting Improvement - - 190,000 - - 472,500
Park & Pathway Improvement - - - - - -
Park Dedication - - - - - -
Total Capital Project Funds 1,475,419 - 190,000 - - 1,559,500
Enterprise Funds
Water - - - - 2,000 -
Sewer - - - - - -
Stormwater - - - - - 300,000
Liquor - - - 7,357,694 - -
Deputy Registrar - - - - - -
Fiber Optics - - - - - -
Total Enterprise Funds - - - 7,357,694 2,000 300,000
Internal Service Funds
Facilities Maintenance - - - - - -
IT Services - - - - - -
Central Equipment - - - - - -
Benefit Accrual - - - - - -
Total Internal Service Funds - - - - - -
Total All Funds 12,452,000$ 529,000$ 506,500$ 7,357,694$ 486,000$ 2,773,395$
Revenue Classifications
76
Charges for Fines &Special Miscell-Contributed Operating Debt
Services Forfiets Assessments aneous Capital Transfers Proceeds Total
General Fund 1,246,779$ 51,600$ 100$ 807,126$ -$ -$ -$ 11,480,000$
Special Revenue Funds
Economic Development Authority - - - 50,000 - 6,000 - 987,000
Cemetery 41,700 - - 300 - - - 42,000
Small Cities Development Program - - - 8,000 - - - 8,000
Monticello Community Center 1,186,600 - - 20,400 - - - 2,122,000
Total Special Revenue Funds 1,228,300 - - 78,700 - 6,000 - 3,159,000
Debt Service Funds
2015B G.O. Bonds - - 19,903 1,662 - - - 186,000
2016A G.O. Bonds - - 73,063 1,378 - - - 357,000
2017A G.O. Bonds - - 39,098 1,370 - - - 340,000
2018A G.O. Bonds - - - 1,768 - - - 446,000
2019A G.O. Bonds - - 13,299 1,568 - - - 712,000
2020A G.O. Bonds - - 113,912 1,398 - - - 227,000
Total Debt Service Funds - - 259,275 9,144 - - - 2,268,000
Capital Project Funds
Capital Project - - 127,734 174,847 - 2,750,000 5,000,000 10,615,000
Street Lighting Improvement - - - 9,500 - 250,000 - 922,000
Park & Pathway Improvement - - - 2,000 - 1,000,000 - 1,002,000
Park Dedication - - 815 185 - - - 1,000
Total Capital Project Funds - - 128,549 186,532 - 4,000,000 5,000,000 12,540,000
Enterprise Funds
Water 1,677,049 - 10,000 55,951 15,000 - - 1,760,000
Sewer 3,089,344 - - 29,656 - - - 3,119,000
Stormwater 600,000 - - 2,000 60,000 - - 962,000
Liquor - - - 12,306 - - - 7,370,000
Deputy Registrar 840,000 - - 31,000 - - - 871,000
Fiber Optics 1,869,708 - - 10,292 - - - 1,880,000
Total Enterprise Funds 8,076,101 - 10,000 141,205 75,000 - - 15,962,000
Internal Service Funds
Facilities Maintenance 378,000 - - 25,000 - - - 403,000
IT Services 529,008 - - 8,992 - - - 538,000
Central Equipment 633,000 - - 10,000 109,000 - - 752,000
Benefit Accrual 12,000 - - - - - - 12,000
Total Internal Service Funds 1,552,008 - - 43,992 109,000 - - 1,705,000
Total All Funds 12,103,188$ 51,600$ 397,924$ 1,266,699$ 184,000$ 4,006,000$ 5,000,000$ 47,114,000$
Revenue Classifications (continued)
77
LONG RANGE FINANCIAL PLANS
General Fund Community Center EDA Capital Projects
Routine
Expenditures
Expected to rise at the pace
of inflation but mitigated by
gains in productivity. Some
capital expenditures are
incorporated as routine
through rental charges by
internal service funds.
Additions to staff and an
increase to the law
enforcement rate and patrol
have an impact going
forward.
Expected to rise at the pace
of inflation. Routine capital
expenditures vary by year,
but are being completed
modestly and strategicly as
the current ecomony
continues to affect
discretionary spending such
as fitness memberships.
Non-TIF expenditures are
expected to rise at the pace
of inflation.
N/A
Non-routine
Expenditures
Basic level of non-routine
items are included in overall
budget but vary within each
budget unit from year-to-
year.
Large R&M items and capital
expenditures could be
supported by transfers from
other funds. The only CIP
purchases budgeted in 2023
are for small tools and
equipment or building
repairs run through the
operating budget.
Tax increment financing (TIF)
expenditures will vary
considerably from year-to-
year in each district as
development occurs.
Large capital projects may
receive funding from debt
issuance, typically as a
reimbursement of spent
reserves.
Major projects in 2023
include improvements in
the Downtown, Pointes at
Cedar, and Bertram Chain of
Lakes (BCOL) Regional Park.
Additionally, construction
of a PW Facility will begin.
Revenues
Property taxes provide 70%
of General Fund revenue. The
budget is somewhat limited
by sustainable growth in the
tax levy. The city looks to
diversify revenues by
implementing more charges
for services, as applicable.
Additional revenue is earned
from a solar farm investment
that began in 2020.
The property tax levy is set at
$515K in 2023. Ideally, user
fees will cover 85% on-going
expenditures. However, the
current ecomony continues
to affect discretionary
spending such as fitness
memberships. The fund has
been kept solvent by
American Rescue Plan Act
(ARPA) Federal grant dollars.
Tax increment revenues
widely vary from district to
district but not much from
year-to-year. Often reserves
(accumulation of prior year
increments) are used to fund
projects. The 2023 levy is
$402,000.
In the past, state street aid
has been used as temporary
financing and later replaced
with debt proceeds. The city
is analyzing a greater use of
reserves or other sources to
control its debt levels.
Debt
None: Indirectly supports
Central Equipment Fund debt
service through annual rental
payments.
No debt issues are
anticipated over the next five
years. Further, debt for
recreational projects either
requires voter approval or
must be incurred as part of a
lease-purchase agreement
with the EDA.
Intrafund loans from the EDA
General sub-fund will finance
some TIF activities. No
external debt issuance is
planned.
2023: $5M planned.
The city has a new Public
Works Facility included in
the CIP. The debt needed to
finance this project will be a
significant amount of the
city's debt capacity and is
planned for 202 and 2024.
Payments on these bonds
will be structured to take
advantage of the decline in
other tax supported debt.
78
Water Sewer Liquor Fiber Optics Central Equipment
Routine
Expenditures
Expected to rise at the
pace of inflation but
mitigated by
reinvestment in plant
and equipment.
Annual capital
expenditures financed
on a pay-as-you-go
basis are estimated at
$760,000.
Expected to rise at the
pace of inflation but
mitigated by
reinvestment in plant
and equipment.
Annual capital outlays
financed on a pay-as-
you-go basis estimated
at $200,000.
Expected to rise at the
pace of inflation and
increases in demand.
Cost of sales are
typically passed onto
customers through
higher prices. The
Liquor Store maintains
a consistent gross
profit margin of 25%-
27%.
Since the management
agreement with Arvig
began in 2016,
FiberNet has seen
significant
improvement in
operations due to
lower costs from
economies of scale.
Routine expenditures
are now fully covered
by operating revenues.
Capital equipment
purchases will vary
widely every year. All
expenditures in this
fund are either for
capital equipment
purchases or debt
service.
Non-routine
Expenditures
2026 & 2029: $1.8M
trunk line
improvements with
Fallon Avenue street
improvement project.
2026: $1.2M Well 6.
2028: $28M water
treatment facility.
2023: $400k SCADA
systems & $500k
CSAH 39 extension.
2024: $750k Marvin
Rd lift station.
2025: $2.5M WWTP
improvements.
2026 & 2029: $5.5M
trunk line
improvements with
Fallon Avenue street
improvement project.
2031: $5M WWTP
improvements.
The fund generates
sufficient annual
revenues to support its
needs.
2024: $75k for parking
lot improvements.
2025: $50K for roof
repairs.
2026: $2M
construction of second
store. This will change
based on activity and
necessity.
Operating revenues are
currently adequate to
support non-routine
expenditures.
However, non-routine
expenditures are tied
to development, which
is unpredictable.
Reserves from recent
operating revenues
have been sufficient.
Anticipated future
expenditure by year:
2023: $1.34M; 2024:
$1.08M; 2025: $671k;
2026: $660k; 2022:
$1.16M.
The CIP reflects ideal
timing for replacement
of equipment, but will
be adjusted as
financing allows.
Revenues
User rates are high
enough to cover
planned expenditures
for the next five years.
In anticipation of a
new water treatment
plant in 2028, the city
is projecting 8% rate
increases over the next
5 years to fund capital
and operating costs
related to the plant.
User rates are
expected to rise to
provide for pay-as-you-
go routine system
replacement and debt
finance upgrades to
meet new
environmental
regulations.
Anticipated rate
increases are 3%
annually.
Sales have increased
steadily. 2020 was a
record year for sales at
a 16.2% increase. Sales
cooled, and the 2021
decreased 3.5%. 2022
sales were only 0.8%
higher than 2021.
Sales are expected to
return to normal
annual increases
around 5% in the
Revenues mainly
consist of charges for
services to those
subscribers to
FiberNet's services.
The original agreement
with Arvig expired on
June 30, 2021, and the
contract was re-
negotiated for an
additional 5 years term
through mid-2026.
Rental revenues
(expenditures in other
funds, funded by
revenues sources in
other funds) rise with
equipment purchases.
Excess fund balance in
the General Fund at
the end of 2021 was
transferred in for
future purchases.
Debt
No debt issues or
Minnesota Public
Facilities Authority
(MPFA) loans are
anticipated unless
external funding is
received related to
construction of a
Water Treatment
Facility (if so,
construction is
tentatively projected in
2028).
The Minnesota Public
Facilities Authority
(MPFA) may provide
funding for the future
projects. Revenue
bonds may be sold if
reserves are depleted.
No debt issues are
anticipated over next
five years.
No new debt is
planned for the future.
However, the
requirement to install
service to all new
developments could
call for issuing debt in
the future.
The 2014A Equipment
Bonds are paid out of
this fund. Future debt
issues will not be
needed if acquisitions
listed in the CIP are
adjusted to provide for
more level purchases
from year to year. A
debt service schedule
is contained in the
Internal Service section
of this report.
79
As part of the budget process, council and staff review service needs, growth trends, and capital
investment requirements. A long-term financial plan (LTFP) model was developed by the city’s
financial advisor in 2022 for all city funds. However, the following discussion with focus on the
city’s four main operating funds: General, Monticello Community Center, Water, and Sewer.
This is done in conjunction with the Capital Improvement Plan (CIP), which is a five- to 10-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 Stormwater Fund, Liquor Fund, Deputy Registrar Fund, and Fiber Optic Fund are excluded
from the discussion. The Stormwater Fund is in its infancy, and the capital needs and planning
are still somewhat unknown. The liquor store and DMV are retail operations with no major
forecasted capital investment needs. The Fiber Optic Fund presents challenges in a dynamic
and competitive market where the strategies and business plan need consistent refinement.
Items impacting long range financial planning:
• Current financial position (fund balances) and growth trends, inflation, and aspirations
• Debt burden
• Tax base considerations and concentration
• Regulatory environment
• Condition of existing capital assets
The city annually adopts a balanced budget for the General Fund. Consequently, the
expenditures line matches the revenue bar height each year. After 2022, 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. According to policy, the city shall
maintain a fund balance of 60-75% of the following year’s budgeted expenditures. The
following charts assume the city will continue to provide the same current levels of service.
Like the General Fund, the Monticello Community Center (MCC) Fund adopts a balanced
budget. Changes caused by the COVID-19 pandemic created budgetary challenges for the fund,
relying on American Rescue Plan Act (ARPA) funding from 2021 – 2023 to support the MCC
Fund. The following charts assume a modest return of patrons while providing the same current
levels of service, although some may be altered to meet safety regulations. Future planning and
budgets will address the negative cash and fund balance issue identified in the LTFP.
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsChart 33.
General Fund
Expenditures and Revenues
All other revenues
Property tax
Expenditures
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsChart 32.
General Fund
Ending fund balance is projected to continue to be at levels above the minimum required
Ending Fund Balance
Ending Cash Balance
80
The Water Fund is the city’s most self-sustained utility fund in the short-term. The fund has no
direct debt and has adequate reserves to cover almost any expenditure for major capital
projects, with none scheduled in the next couple years. A new well is planned for 2026. A new
water treatment plant is tentatively projected for 2028 construction, depending on receipt of
external funding sources. The city’s share of costs would likely require the issuance of debt.
While the budget focuses on working capital, the LTFP presents net position which includes
long-term assets and debt as applicable. Rates will be adjusted beginning in 2023 to prevent the
negative net position projected in 2028 – 2031.
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsCommunity Center Fund
Expenditures and Revenues
All other revenues
Property tax
Expenditures
($3.0)
($2.5)
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
$0.5
$1.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsCommunity Center Fund
Ending fund balance is projected to continue to be at levels above the minimum required
Ending Fund Balance
Ending Cash Balance
-1200%
-1000%
-800%
-600%
-400%
-200%
0%
200%
400%
600%
800%
1000%
($12.0)
($10.0)
($8.0)
($6.0)
($4.0)
($2.0)
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Ending unrestricted Net Position as % of ExpensesMillionsChart 43.
Water Fund
Unrestricted Net Position
Ending Unrestricted
Net Position
Ending Unrestricted
Net Position as % of
Expenses
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsChart 42.
Water Fund
Ending Cash Balance by Purpose
Cash available for future
capital / unassigned
Cash for 3-months
operating reserve
Cash for next year debt
service
Cash for next year planned
capital
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsChart44.
Water Fund
Revenues and Expenses
Revenues
Expenses
81
The Sewer Fund has its own funding challenges. Environmental regulatory changes require
large investments in the wastewater treatment plant. Wastewater treatment plant
improvements are planned for 2024 and 2025. However, the model shows the Sewer Fund’s
current projections are sustainable. Along with the water fund, the LTFP presents net position
which includes long-term assets and debt as applicable rather than working capital which is
reported in the budget.
0%
100%
200%
300%
400%
500%
600%
700%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Ending unrestricted Net Position as % of ExpensesMillionsChart 47.
Sewer Fund
Unrestricted Net Position
Ending Unrestricted
Net Position
Ending Unrestricted
Net Position as % of
Expenses
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsChart 46.
Sewer Fund
Ending Cash Balance by Purpose
Cash available for future
capital / unassigned
Cash for 3-months
operating reserve
Cash for next year debt
service
Cash for next year
planned capital
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031MillionsChart 48.
Sewer Fund
Revenues and Expenses
Revenues
Expenses
82
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
and financial position. Considering 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 70% 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 been above inflation. The increase in assessed
value at the nuclear power plant was lower than other property tax classes, which caused a tax
shift to other property taxpayers in the city. Accordingly, the levy was set at a 6.1% increase,
which responds to the city’s increased costs due to inflation while still aiming to control the
impact to property taxpayers who are also feeling the effects of inflation. The current council
philosophy indicates a desire to balance the impacts to taxpayers while not delaying necessary
spending. 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 the
creation of individual cost centers for all city department activities to accurately reflect the
true cost of providing 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 analyzes
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 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.
83
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 city contracted with Northland Securities, Inc. in 2022 to develop a financial model,
which is used to determine the long-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, and debt ratios. The proforma will be
utilized as a tool as part of the budget planning process to ensure that key short-term fiscal
targets are in line with long-term fiscal projections. The city will update the proforma annually
to ensure that long-term fiscal outcomes remain consistent with council budgetary policies.
5. The development of work performance goals for each department to ascertain and
measure how 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 of specific service outcomes. Data is reviewed to provide the council and
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 of city funds is controlled by state statute 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. While volatility from year to year is seen as interest rates fluctuate, investing
brings solid returns in the long run.
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. Imaging city records will enable the
city to reduce storage areas presently dedicated to paper files and look at more economical and
efficient systems of data retrieval.
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, prioritizing transparency with the public, 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 other community
stakeholders and neighboring communities to share services and equipment, jointly contract
84
with vendors and purchase equipment, and develop strategies to deal with local issues using
a regional approach.
The city has established several equipment and service delivery sharing arrangements
with other community stakeholders and neighboring communities and has several joint powers
agreements in place on a variety of local and regional issues in planning, public safety and
public works initiatives.
Recent steps taken to achieve long-term fiscal objectives:
The city has shifted its focus from issuing debt for all street projects in the Pavement
Preservation Program to funding those projects on a pay-as-you-go basis due to the relatively
routine nature of road improvements in the city. The debt level and debt levy capacities are
reserved for major projects that are truly unique such as the Bertram Chain of Lakes Regional
Park, Public Works Facility construction, and The Pointes at Cedar development area.
In 2018, the city started billing all residential garbage customers with an individual service cart a
flat fee plus 9.75% garbage tax per month. In 2023, the garbage and recycling charges will be
sufficient to recover all costs paid for the hauler’s service contract for the first time.
In 2021, the city created the Facilities Maintenance internal service fund. This allows costs for
city facility repairs and maintenance to be viewed across the board while also seeing each
department’s impact through the internal charges paid by each cost center. A new software
program, Cartegraph, was implemented to track work orders to provide the breakdown of costs
to each facility and department.
In 2022, the city completed a long-term financial planning model. This was a city initiative for
many years and was finally accomplished through the use of Community Energy Transition
(CET) grant funds from the Minnesota Department of Employment and Economic Development
(DEED).
85
CAPITAL EXPENDITURES & CAPITAL IMPROVEMENT PLAN
INTRODUCTION
Capital expenditures (also called capital outlays) are the purchases of capital assets, which are
used in operations and have initial useful lives extending beyond a single reporting period.
These assets must also meet capitalization thresholds (see Appendix), which vary by asset
classification and typically costs more than $10,000.
Capital expenditures can be classified as either recurring or non-recurring. Large projects
adding to or replacing infrastructure are usually non-recurring in nature. Pedestrian and
roadway improvements in the downtown, design and grading work at the Pointes at Cedar
development area, design and construction of a new Public Works Facility, and the School
Boulevard and Elm Street safety improvements projects account for the bulk of the 2023 non-
recurring projects. Large non-recurring projects are typically financed by debt,
intergovernmental revenue (state/federal grants and aids) and draws on reserves
accumulated in anticipation of the project.
The capital improvements presented in this section comprise the 2023-2027 Capital
Improvements Plan (CIP). The Monticello CIP identifies capital and select major noncapital
expenditures in a comprehensive plan to forecast future resources needed to acquire or build
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.
WHAT IS A CAPITAL IMPROVEMENT PLAN?
A capital improvement plan is a five-year projection for the evaluation of the city's capital
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. The
Monticello CIP has four expenditure categories: capital improvements, vehicles and major
equipment, major repair and maintenance items, and small tools and equipment. Capital asset
classes also include land acquisitions.
While the plan serves as a long-range plan, it is reviewed annually and revised based on current
circumstances and opportunities. Priorities may change due to grant opportunities or
circumstances that caused a more rapid deterioration of an asset. Projects may be revised for
significant cost variances.
WHAT ARE THE OBJECTIVES OF A CAPITAL IMPROVEMENT PLAN?
· To forecast public facilities and improvements in a timely and systematic manner while
providing an opportunity for residents and interest groups to provide input.
· To strike a balance between needed public improvements and the present financial capability
of the city to provide for these improvements.
86
· To anticipate and project financing needs in order to maximize available federal, state, and
county funds, and enhance and protect future bond ratings and bonding capacity.
· To implement city council objectives as outlined in the “Purpose and Mission” and serve as a
guide for local officials in making budgetary decisions.
· To promote and enhance the economic development of the city of Monticello while balancing
the needs of new development with existing development.
The CIP is developed with the intent of improving the reliability of cost estimates and funding
forecasts by focusing on five years rather than only the upcoming year. 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 capital improvement efforts.
WHAT IS THE CAPITAL IMPROVEMENT PLAN DEVELOPMENT PROCESS?
Assign Project Titles
Make the title descriptive of the nature and scope work.
Group projects in a meaningful way by department. A project title of ABC Improvements will
not work if it includes everything from the kitchen sink replacement to the pathway overlay.
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
Assign Priorities
Priorities: required on all projects based on the following categories:
Priority I: Imperative (MUST-DO) - Projects that cannot reasonably be postponed to avoid
harmful or otherwise undesirable consequences.
1. Corrects a condition dangerous to public health or safety
2. Satisfies a legal obligation (law, regulation, court order, contract)
3. Alleviates an emergency service disruption or deficiency
4. Prevents irreparable damage to a valuable public facility
Priority II: Essential (SHOULD-DO) - Projects that address clearly demonstrated needs or
objectives.
5. Rehabilitates or replaces an obsolete public facility or attachment thereto
6. Stimulates economic growth and private capital investment
87
7. Reduces future operating and maintenance costs
8. 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.
9. Provides a new or expanded level of service
10. Promotes intergovernmental cooperation
11. Reduces energy consumption
12. 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 (timing issues)
· Service impact (number of participants impacted)
· New fees that could be generated because of the completion of the project (funding/cost
recovery)
· Community goal references (refer to Strategic Goals & Strategies section)
· 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.
· 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 an 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
88
HOW DOES THE CAPITAL IMPROVEMENT PLAN 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 Plan. 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, for example by attracting new businesses; by requiring new employees or
additional maintenance or utility costs; or by reducing maintenance costs, utility costs, or
personnel costs (reduction in overtime or man-hours). Specifically, new equipment may be
more productive and less expensive to operate.
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.
One capital asset that requires a delicate balance of operating maintenance and capital
replacement is the city’s more than 80-mile street system. For more durable mill and overlay,
the city budgets every other year for chip sealing and each year for crack sealing. These
operating and capital expenditures work together to prevent more expensive street
reconstruction projects.
Finally, the city annually budgets for replacement of water and sewer mains through each
respective enterprise fund. For public utilities, customer satisfaction is difficult to quantify in
dollars. However, a generally satisfied customer may be less likely to complain about the rate
increases needed to support those services.
89
Investment
Department - Operating Fund Amount Starting Year Amount Comment
Public Safety - General Fund
Building Inspector Vehicle #1 35,000$ 2023 5,500$ CE lease (+) and R&M (-)
Animal Shelter HVAC 30,000$ 2023 (350)$ Utilities and R&M
Public Works - General Fund
Dump Truck 328,000$ 2023 39,220$ CE lease (+) and R&M (-)
Plow Truck 328,000$ 2023 39,220$ CE lease (+) and R&M (-)
Forklift 50,000$ 2023 6,000$ CE lease (+) and R&M (-)
Wheel Loader 280,000$ 2023 33,600$ CE lease (+) and R&M (-)
One-Ton Pickup w/ Dump Box 85,000$ 2023 10,150$ CE lease (+) and R&M (-)
School Boulevard Improvements 550,000$ 2024 11,000$ Utilities and R&M
Elm Street Improvements 700,000$ 2024 14,000$ Utilities and R&M
Downtown Roadway & Pedestrian Improvements 5,250,000$ 2024 78,750$ R&M
The Pointes at Cedar Planning & Design 510,000$ 2024 -$ Plans and design only
New Public Works Facility 5,000,000$ 2024 (75,000)$ Utilities and R&M
Yellow Flashing Arrow Signal Improvements 700,000$ 2024 3,500$ Utilities
Sidewalk Gap & Pavement Preservation 550,000$ 2024 5,500$ R&M
West 7th Street Retaining Wall 400,000$ 2024 2,000$ R&M
Recreation & Culture - General Fund
2021 Isuzu 63,000$ 2023 7,570$ CE lease (+) and R&M (-)
Bobcat Grader Blade 96" Attachment 25,000$ 2023 2,950$ CE lease (+) and R&M (-)
Cushman TRKSTR S660K6AT 61,000$ 2023 7,290$ CE lease (+) and R&M (-)
Bobcat Toolcat 70,000$ 2023 8,400$ CE lease (+) and R&M (-)
Danko Plus Trailer 12,000$ 2023 1,480$ CE lease (+) and R&M (-)
Parks Shop Garage Door Openers 20,000$ 2023 (500)$ R&M
BCOL Safety Improvements 1,000,000$ 2024 10,000$ R&M
School Boulevard Pathway 375,000$ 2024 3,750$ R&M
Fenning Avenue Pathway Lighting 175,000$ 2024 2,625$ Utilities and R&M
Library Boiler Replacement 60,000$ 2024 (300)$ R&M
Recreation - Community Center
MCC Fire Alarm System 45,000$ 2023 (225)$ R&M
Vanity and Partition Replacement 22,000$ 2023 -$ Cleaning and R&M
Recreation Equipment & Spin Bikes 47,000$ 2023 (2,350)$ R&M
Hallway & Pool Blinds 20,000$ 2023 (2,000)$ Utilities and R&M
Pool Stairs 70,000$ 2023 (1,400)$ R&M
Public Works - Water Fund
Cast Iron Watermain Replacement 460,000$ 2023 7,150$ R&M
Trunk Water Improvements 300,000$ 2023 3,000$ R&M
1/2 Ton Pickup 50,000$ 2023 (500)$ R&M
Well Repairs 20,000$ 2023 (200)$ R&M
Public Works - Sewer Fund
SCADA System 400,000$ 2023 7,000$ R&M, software support
East CSAH 39 Utility Extension 500,000$ 2023 10,000$ R&M
WWTP Native Grass Conversion 75,000$ 2023 (3,750)$ R&M
Public Works - Stormwater Fund
Otter Creek Industrial Park - Karlsburger Outlet 120,000$ 2023 3,000$ R&M
Ditch 33 Upgrades 300,000$ 2023 7,500$ R&M
Liquor Fund
Liquor Store Coolers 130,000$ 2023 (3,250)$ R&M
Fiber Optics Fund
Expansion to New Neighborhoods 200,000$ 2023 2,000$ R&M
Impact on
Operating Expense
90
In the table above, items with an increase in operating costs are additional equipment or new
projects/improvements. Items with a decrease in operating costs are replacement equipment
with lower R&M in the near term. Items with both increases and decreases to operating costs
are noted with (+) and (-) in the Comment column. R&M expenses for roads include estimates
for snow removal, boulevard maintenance, street sweeping, crack sealing, and striping. Listed
amounts are for expenses more than those already being incurred. With no impact on
expenses, some are replaced due to obsolescence or aesthetics reasons. The amounts listed
are estimates; many of these amounts may or may not be close to those actually incurred.
HOW IS INPUT FROM RESIDENTS INCORPORATED IN THE CIP DEVELOPMENT PROCESS?
Residents are involved in the capital improvements plan through participation at council
meetings, participation in public meetings, work sessions, and public hearings, and through
boards, commissions. 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 along with holding public input meetings for major projects and setting up booths at
various city events to garner feedback from residents and regular community visitors.
HOW IS THE CAPITAL IMPROVEMENT PLAN FINANCED?
In analyzing the financial viability of the capital improvements in the 2023-2027 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.
The Central Equipment Fund, created for the purpose of establishing a revolving fund
for future equipment purchases, reduces the impact of large equipment purchases on
annual budget unit expenditures. This fund purchases equipment and leases it back to
the benefiting budget units. The lease payments assure that equipment purchases will
receive annual funding and are set at rates to recover depreciation plus inflation, but
not operating costs such as repairs and maintenance (R&M), gas, or insurance. Similarly,
internal service funds have been established for Facilities Maintenance and IT Services,
which will also include equipment purchases related to each respective fund.
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, specifically
the Capital Projects Fund, to provide financing for capital asset acquisitions.
Federal and state grants provide funding for various capital improvement projects.
Other sources include local grants, donations, reserves, and other governmental units.
Debt issuance is used to finance large, non-recurring 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.
91
The below graphs provide a breakdown of expenditures and funding sources within the CIP:
The large increase of capital activity in 2023 is attributable to the following projects: Downtown
Pedestrian & Roadway, Public Works Facility, and the School Boulevard and Elm Street
Improvements. 2024 expenditures are related to the completion of the construction of a new
Public Works building and improvements in the Pointes at Cedar recreation and development
area. 2025’s capital activity portrays additional work on the Pointes at Cedar recreation and
development area along with trail and pathway improvements, water trunk line improvements,
and upgrades to the influent lift station and grit removal at the wastewater treatment plant.
Notable capital expenditures in 2026 include street and utility improvements, including deep
water and sewer trunk lines, on Fallon Avenue from Chelsea Road to School Boulevard. In
addition, an additional phase of upgrades at the Bertram Chain of Lakes Regional Athletic Park.
2027 capital outlays consist of projects and acquisitions recurring in nature.
$-
$5
$10
$15
$20
$25
$30
$35
$40
2020
Actual
2021
Actual
2022
Projected
2023
Budgeted
2024
Budgeted
2025
Budgeted
2026
Budgeted
2027
BudgetedMillionsCIP -Expenditures for FY 2020 -2027
Buildings Infrastructure - Streets Infrastructure - Utilities Improvements - Parks Vehicles & Equipment Land
$-
$5
$10
$15
$20
$25
$30
$35
$40
2020
Actual
2021
Actual
2022
Projected
2023
Budgeted
2024
Budgeted
2025
Budgeted
2026
Budgeted
2027
BudgetedMillionsCIP -Funding Sources for FY 2020 -2027
Capital Projects Fund Central Equipment Fund Enterprise Funds Other Funds
92
Capital Improvement Plan
City of Monticello, Minnesota
FUNDING SOURCE SUMMARY
2023 thru 2027
TotalSource20232024202520262027
Capital Equipment Fund 4,905,1851,337,000 1,080,773 670,779 660,339 1,156,294
Capital Project Fund 31,031,9546,870,000 9,150,000 8,885,000 3,376,954 2,750,000
Community Center Fund 2,025,000204,000 729,000 264,000 314,000 514,000
Debt Proceeds 19,000,0005,000,000 14,000,000
DMV Fund 150,000105,000 15,000 15,000 15,000
Facility Maintenance Fund 40,00040,000
Fibernet Fund 1,041,592200,000 210,398 210,398 210,398 210,398
General Fund 952,96420,000 263,241 223,241 223,241 223,241
Municipal Liquor Fund 2,349,500130,000 106,500 50,000 2,031,500 31,500
Parks & Pathways Fund 11,037,0001,375,000 2,437,000 2,025,000 5,200,000
Sewer Fund 1,301,225475,000 458,196 186,000 182,029
Sewer Trunk Fund 9,244,295500,000 1,292,000 3,358,260 3,501,777 592,258
Stormwater Trunk Fund 5,319,000420,000 3,730,000 560,000 609,000
Street Lighting Fund 2,115,0002,055,000 60,000
Water Fund 2,480,000530,000 460,000 570,000 460,000 460,000
Water Trunk Fund 11,425,605300,000 2,236,540 2,236,540 4,279,780 2,372,745
19,416,000 36,358,648 19,254,218 21,064,018 8,325,436 104,418,320GRAND TOTAL
Produced Using the Plan-It Capital Planning Software
93
Capital Improvement Plan
City of Monticello, Minnesota
PROJECTS BY FUNDING SOURCE AND DEPARTMENT
2023 2027thru
TotalSourceProject #Priority 2023 2024 2025 2026 2027
Capital Equipment Fund
Community Development - Bldg
VEQ-22-037 35,00035,000Building Inspector Vehicle n/a
VEQ-22-038 35,00035,000Building Inspector Vehicle n/a
70,00035,000 35,000Community Development - Bldg Total
Fire & Rescue
VEQ-18-006 200,000200,000Utility 11 - Replacement 1
VEQ-21-002 450,000450,000Tender 11 - Replacement 1
650,000200,000 450,000Fire & Rescue Total
Public Works
VEQ-21-997 1,937,136558,008 150,009 104,732 1,124,387Fleet Replacement - PW 3
VEQ-22-004 328,000328,000Dump Truck n/a
VEQ-23-001 328,000328,000Plow Truck 2
VEQ-23-002 50,00050,000Forklift2
VEQ-23-003 280,000280,000Wheel Loader 2
VEQ-23-004 85,00085,000One-Ton Pickup w/ Dump Box 2
VEQ-24-001 40,00040,000Tack Wagon 2
VEQ-24-002 165,000165,000Backhoe2
VEQ-24-003 55,00055,000Asphalt Roller 2
VEQ-24-004 22,00022,000Tilt Bed Trailer 2
3,290,1361,071,000 840,008 150,009 104,732 1,124,387Public Works Total
Recreation & Culture
PAR-22-021 63,00063,0002021 Isuzu n/a
VEQ-21-998 594,049135,765 320,770 105,607 31,907Fleet Replacement - Parks 3
VEQ-23-005 25,00025,000Bobcat Grader Blade 96" Attachment 2
VEQ-23-006 61,00061,000Cushman TRKSTR S660K6AT 2
VEQ-23-007 70,00070,000Bobcat Toolcat 2
VEQ-23-008 12,00012,000Danko Plus Trailer 2
VEQ-24-005 70,00070,000Ford 1-Ton Dump w/plow 2
895,049231,000 205,765 320,770 105,607 31,907Recreation & Culture Total
4,905,1851,337,000 1,080,773 670,779 660,339 1,156,294Capital Equipment Fund Total
Capital Project Fund
Downtown
STR-19-004 25,00025,000Broadway Corridor Parklets 3
STR-20-005 2,100,0002,100,000Walnut River Street Connection 3
STR-21-001 1,500,0001,500,000Broadway Sidewalk & Landscaping Improvements 3
STR-22-007 650,000650,000Hwy25/Broadway Intersection Improvements 2
4,275,0004,250,000 25,000Downtown Total
Facilities Maintenance
FAM-23-001 30,00030,000Animal Shelter HVAC 2
FAM-23-002 60,00060,000Library Boiler Replacement 1
Produced Using the Plan-It Capital Planning Software
94
TotalSourceProject #Priority 2023 2024 2025 2026 2027
90,00090,000Facilities Maintenance Total
Fallon Avenue Improvements
STR-17-002 2,026,954100,000 1,776,954 150,000Fallon Avenue & Trail - Chelsea to School Bvld 3
2,026,954100,000 1,776,954 150,000Fallon Avenue Improvements Total
Pointes at Cedar
STR-20-002 935,000100,000 835,000School Blvd/Cedar Roundabout 3
STR-23-005 835,000835,000School Blvd/Edmonson Roundabout 1
SWD-22-013 9,800,000510,000 4,690,000 4,600,000The Pointes at Cedar Pond n/a
11,570,000510,000 4,790,000 6,270,000Pointes at Cedar Total
Recreation & Culture
STR-20-001 400,000400,000School Blvd Pedestrian Improvements 1
400,000400,000Recreation & Culture Total
Streets
STR-15-003 670,000670,000Elm Street Sidewalk - 3rd St Pedestrian Blinker 3
STR-15-004 550,000150,000 100,000 100,000 100,000 100,000Sidewalk Gap Improvement Project (TBD)2
STR-19-001 4,650,000400,000 2,750,000 1,500,000Pavement Management Program 1
STR-20-003 500,00050,000 450,000School Blvd/Fallon Roundabout 3
STR-20-007 2,500,0002,500,00090th St Reconstruction - Chelsea to City Limits 2
STR-20-008 840,000200,000 640,000School Blvd Extension - Redford Ln to 90th St 3
STR-22-009 1,000,0001,000,000Dalton Way Extension and Industrial Park Grading 2
STR-23-002 400,000400,000West 7th Street Retaining Wall 1
STR-23-003 60,00060,000River Terrace Secondary Access Culvert Replacement 1
STR-23-004 1,500,000200,000 1,300,000CSAH 39 Pedestrian Improvements - Elm to Chelsea 2
12,670,0001,620,000 4,360,000 2,490,000 1,600,000 2,600,000Streets Total
31,031,9546,870,000 9,150,000 8,885,000 3,376,954 2,750,000Capital Project Fund Total
Community Center Fund
Community Center
MCC-13-001 40,00040,000Movable Walls 3
MCC-13-003 20,00020,000City Council Dais Top 3
MCC-13-004 100,000100,000Concession Counter Improvements 3
MCC-18-001 250,000250,000New Patio - Replaces Skate Park 2
MCC-23-001 465,000465,000MCC Pavement & Sidewalk Improvements 2
MCC-23-002 10,00010,000MCC Hallway Blinds 2
MCC-23-003 10,00010,000MCC Pool Blinds 2
MCC-23-004 70,00070,000Pool Stairs 2
MNC-13-006 60,00020,000 40,000Carpet and Terrazo Replace/Repair 2
MNC-13-010 22,00022,000Vanity and Partition Replacement 3
MNC-19-001 35,00035,000Climbing Wall Resurfacing 2
STE-13-013 107,00047,000 60,000Recreation Equipment 2
STE-18-005 15,00015,000Floor Scrubber 2
VEQ-13-045 20,00020,000Dishwasher3
VEQ-18-001 35,00035,000Recreation Software 3
1,259,000159,000 600,000 160,000 90,000 250,000Community Center Total
Facilities Maintenance
FAM-23-003 45,00045,000MCC Fire Alarm System 1
FAM-99-991 721,000129,000 104,000 224,000 264,000Facility Repairs - MCC 2
766,00045,000 129,000 104,000 224,000 264,000Facilities Maintenance Total
2,025,000204,000 729,000 264,000 314,000 514,000Community Center Fund Total
Produced Using the Plan-It Capital Planning Software
95
TotalSourceProject #Priority 2023 2024 2025 2026 2027
Debt Proceeds
Public Works
PWK-13-001 19,000,0005,000,000 14,000,000Public Works Facility 3
19,000,0005,000,000 14,000,000Public Works Total
19,000,0005,000,000 14,000,000Debt Proceeds Total
DMV Fund
DMV - Deputy Registrar
DMV-23-001 90,00090,000DMV Parking Lot Improvements 2
90,00090,000DMV - Deputy Registrar Total
Facilities Maintenance
FAM-99-994 60,00015,000 15,000 15,000 15,000Facility Repairs - DMV Building 2
60,00015,000 15,000 15,000 15,000Facilities Maintenance Total
150,000105,000 15,000 15,000 15,000DMV Fund Total
Facility Maintenance Fund
Facilities Maintenance
VEQ-22-039 40,00040,000Facility Maintenance Vehicle 3
40,00040,000Facilities Maintenance Total
40,00040,000Facility Maintenance Fund Total
Fibernet Fund
Facilities Maintenance
FAM-99-997 41,59210,398 10,398 10,398 10,398Facility Repairs - Head End 2
41,59210,398 10,398 10,398 10,398Facilities Maintenance Total
Fibernet
FNM-22-045 1,000,000200,000 200,000 200,000 200,000 200,000Capital Expansion 2
1,000,000200,000 200,000 200,000 200,000 200,000Fibernet Total
1,041,592200,000 210,398 210,398 210,398 210,398Fibernet Fund Total
General Fund
Facilities Maintenance
FAM-22-041 40,00040,000Carpet - Library 2
FAM-23-004 20,00020,000Parks Shop Garage Door Openers 2
FAM-99-993 112,00028,000 28,000 28,000 28,000Facility Repairs - Library 2
FAM-99-995 420,000105,000 105,000 105,000 105,000Facility Repairs - PW Building 2
FAM-99-996 100,00025,000 25,000 25,000 25,000Facility Repairs - Parks Shop 2
FAM-99-998 14,8323,708 3,708 3,708 3,708Facility Repairs - Animal Shelter 2
FAM-99-999 246,13261,533 61,533 61,533 61,533Facility Repairs - Fire Station 2
952,96420,000 263,241 223,241 223,241 223,241Facilities Maintenance Total
952,96420,000 263,241 223,241 223,241 223,241General Fund Total
Municipal Liquor Fund
Facilities Maintenance
FAM-99-992 94,50031,500 31,500 31,500Facility Repairs - Liquor Store 2
LIQ-13-046 130,000130,000Liquor Store Coolers 1
224,500130,000 31,500 31,500 31,500Facilities Maintenance Total
Produced Using the Plan-It Capital Planning Software
96
TotalSourceProject #Priority 2023 2024 2025 2026 2027
Municipal Liquor
LIQ-13-002 75,00075,000Parking Lot Improvements 1
LIQ-13-003 2,000,0002,000,000Liquor Store - #2 3
LIQ-18-001 50,00050,000Roof1
2,125,00075,000 50,000 2,000,000Municipal Liquor Total
2,349,500130,000 106,500 50,000 2,031,500 31,500Municipal Liquor Fund Total
Parks & Pathways Fund
Downtown
PAR-15-005 1,500,0001,500,000West Bridge Park Improvements 3
1,500,0001,500,000Downtown Total
Recreation & Culture
MNC-22-016 12,00012,000Bike Route Map 2
PAR-13-007 675,00075,000 600,000Pathway Improvements (Annual)2
PAR-13-012 5,700,0001,000,000 200,000 4,500,000BCOL Ball Fields 3
PAR-17-004 100,000100,000Pioneer Park Playground Structure 3
PAR-17-007 30,00030,000Front Street Pier 3
PAR-20-003 200,000200,000Briarwood Trail Connection 3
PAR-20-004 25,00025,000BCOL Road Improvements 2
PAR-20-006 425,000425,0004th St Park Improvements 2
PAR-20-007 125,000125,000Ellison Playground Equipment 3
PAR-21-005 50,00050,000Welcome Sign for Monticello 3
PAR-21-006 70,00070,000Columbarium-Riverside Cemetery 3
PAR-21-008 1,000,000500,000 500,000Great River Regional Trail 3
PAR-22-015 500,000500,000BCOL County/City Maintenance Facility n/a
PAR-23-001 250,000250,000Pickleball Court 3
STR-20-001 375,000375,000School Blvd Pedestrian Improvements 1
9,537,0001,375,000 937,000 2,025,000 5,200,000Recreation & Culture Total
11,037,0001,375,000 2,437,000 2,025,000 5,200,000Parks & Pathways Fund Total
Sewer Fund
Facilities Maintenance
FAM-23-005 16,00016,000WWTP Comp Bldg Lower Roof Replacement 2
FAM-23-006 46,00046,000WWTP Digester Bldg Roof Replacement 2
FAM-23-007 30,00030,000WWTP Garage Roof Replacement 2
FAM-23-008 26,00026,000WWTP Influent Bldg Roof Replacement 2
118,00042,000 76,000Facilities Maintenance Total
Utility - Sewer
MNC-17-005 110,000110,000Demo Obsolete WWTP Equipment 3
MNC-23-002 75,00075,000WWTP Native Grass Conversion 3
UTS-20-001 100,000100,000Vactor Dump Station 1
VEQ-13-004 400,000400,000SCADA System - Sewage 2
VEQ-21-999 498,225316,196 182,029Fleet Replacement - Sewage 2
1,183,225475,000 416,196 110,000 182,029Utility - Sewer Total
1,301,225475,000 458,196 186,000 182,029Sewer Fund Total
Sewer Trunk Fund
Fallon Avenue Improvements
UTS-17-002 3,226,769300,000 2,926,769Fallon Avenue Trunk Line Extension - Sewer 3
3,226,769300,000 2,926,769Fallon Avenue Improvements Total
Produced Using the Plan-It Capital Planning Software
97
TotalSourceProject #Priority 2023 2024 2025 2026 2027
Utility - Sewer
UTS-13-001 2,267,526542,000 558,260 575,008 592,258Annnual Sewer Trunk Improvements 1
UTS-13-002 750,000750,000Liftstation - Marvin Road 3
UTS-13-003 2,500,0002,500,000WWTP Influent Wetwell and Grit Chamber 1
VEQ-22-035 500,000500,000West CSAH 39 Utility Extension 3
6,017,526500,000 1,292,000 3,058,260 575,008 592,258Utility - Sewer Total
9,244,295500,000 1,292,000 3,358,260 3,501,777 592,258Sewer Trunk Fund Total
Stormwater Trunk Fund
Stormwater\Drainage
SWD-13-002 1,060,0001,060,000Stormwater Liftstation (TH 25 Pond)1
SWD-17-001 1,059,000450,000 609,000Chelsea/Fallon Avenue Pond Expansion 3
SWD-20-001 480,000480,000Otter Creek - Pond A Construction 3
SWD-20-002 560,000560,000Otter Creek - Pond D Construction 3
SWD-20-003 120,000120,000Otter Creek - Karlsburger Pond Outlet 2
SWD-20-005 40,00040,000Chelsea Road Outlet Control - HB07 2
SWD-22-014 2,000,000300,000 1,700,000Ditch 33 Upgrades 2
5,319,000420,000 3,730,000 560,000 609,000Stormwater\Drainage Total
5,319,000420,000 3,730,000 560,000 609,000Stormwater Trunk Fund Total
Street Lighting Fund
Downtown
PAR-13-014 60,00060,000CSAH 75 Pathway Lighting 3
STR-23-006 1,000,0001,000,000Block 52 Utility Relocates 2
1,060,0001,000,000 60,000Downtown Total
Recreation & Culture
PAR-15-004 175,000175,000Fenning Avenue Pathway Lighting 3
STR-20-001 150,000150,000School Blvd Pedestrian Improvements 1
325,000325,000Recreation & Culture Total
Streets
STR-15-003 30,00030,000Elm Street Sidewalk - 3rd St Pedestrian Blinker 3
STR-16-002 700,000700,000Flashing Yellow Arrow Signal 1
730,000730,000Streets Total
2,115,0002,055,000 60,000Street Lighting Fund Total
Water Fund
Utility - Water
MNC-23-001 20,00020,000Well Repairs 2
UTW-13-005 110,000110,000Booster Station Upgrade 3
UTW-22-033 2,300,000460,000 460,000 460,000 460,000 460,000Cast Iron Watermain Replacement 2
VEQ-22-034 50,00050,0001/2 Ton Pickup 2
2,480,000530,000 460,000 570,000 460,000 460,000Utility - Water Total
2,480,000530,000 460,000 570,000 460,000 460,000Water Fund Total
Water Trunk Fund
Fallon Avenue Improvements
UTW-17-002 1,076,144300,000 776,144Fallon Avenue Trunk Line Improvements - Water 3
1,076,144300,000 776,144Fallon Avenue Improvements Total
Utility - Water
Produced Using the Plan-It Capital Planning Software
98
TotalSourceProject #Priority 2023 2024 2025 2026 2027
UTW-13-001 9,149,461300,000 2,236,540 1,936,540 2,303,636 2,372,745Trunk Water System Improvements 1
UTW-13-003 1,200,0001,200,000Well #6 1
10,349,461300,000 2,236,540 1,936,540 3,503,636 2,372,745Utility - Water Total
11,425,605300,000 2,236,540 2,236,540 4,279,780 2,372,745Water Trunk Fund Total
104,418,32019,416,000 36,358,648 19,254,218 21,064,018 8,325,436GRAND TOTAL
Produced Using the Plan-It Capital Planning Software
99
DEBT
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.
However, 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, and transfers from enterprise funds collecting
development 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 one of the lowest tax capacity rates in Wright County because of its large
commercial tax base—including the Xcel Energy nuclear power plant. In a stable market value
environment, the power plant absorbs roughly half of any tax increase. The General Fund is
primarily supported (roughly 70%) by property taxes and the Monticello Community Center
(MCC) Fund is primarily supported by charges for services and supplemented by a property tax
levy. High debt levels lower the city’s ability to issue new debt for capital assets, which may
improve efficiency or meet a growing need.
Enterprise Funds
The Sewer Fund is the only enterprise fund with debt, the 2013B G.O. revenue bonds, and a
Public Facilities Authority (PFA) G.O. Sewer Revenue Note. All utility rates are reviewed annually
and adjusted to cover operating, capital, and debt service expenses. According to a survey by
engineering firm, AE2S, Monticello has some of the lowest water and sewer rates in 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
One outstanding debt issue (2014A) provided financing 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 about 70% 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.
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.
100
Anticipated Borrowing this Fiscal Year
The City of Monticello anticipates issuing $5 million of General Obligation Capital Improvement
Plan (CIP) Bonds in 2023 to begin construction on a new Public Works facility. Because interest
rates and maturities are not yet known, no payment schedules for 2023A bonds (which will
begin in 2024) are included in this budget document.
Bond Rating
The city’s general obligation bond rating was reviewed in August 2020 with the sale of the
2020A general obligation bonds. Moody’s affirmed the city’s prior G.O. debt rating of A1, which
can be described as “strong, investment grade”.
Legal Debt Limit
Most Minnesota cities may not incur debt more than three percent of the market value of
taxable property in the city. Excepted from this overall three percent limit are almost all debt
obligations for which some other source of revenue is pledged as security. The result is that,
with only a few exceptions, the only obligations subject to the debt limit are general obligation
(G.O.) bonds payable solely from ad valorem property taxes. The legal debt limit has nothing to
do with the practical debt limit of a city, which is the debt burden beyond which the
creditworthiness of the city is put into question. (See Minnesota Statutes, Section 475.53)
Moody's S&P Fitch
Aaa AAA AAA Prime
Aa1 AA+AA+
Aa2 AA AA
Aa3 AA-AA-
A1 A+A+
A2 A A
A3 A-A-
Baa1 BBB+BBB+
Baa2 BBB BBB
Baa3 BBB-BBB-
High grade
Upper
medium
grade
Lower
medium
grade
Market value (payable 2022)*2,134,994,875$
Debt limit (3% of market value)64,049,846$
Total net debt applicable to limit (12,135,000)$
Legal debt margin 51,914,846$
*Final Payable 2023 not yet available.
Legal Debt Margin Calculation for Fiscal Year 2023
101
G.O. Debt Service Levies: Most city debt issues are supported on some level by property taxes.
Annual debt service levies are as follows:
G.O. Debt Service Payments: Annual debt service payments are as follows:
G.O. Debt Outstanding as of 12/31: Projected balances of outstanding debt are as follows:
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
G.O. Debt Service Levies
2015B 2016A 2017A 2018A 2019A 2020A 2023A
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
G.O. Debt Service Payments
2013B 2014A 2015B 2016A 2017A 2018A 2019A 2020A
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035MillionsG.O. Debt Outstanding as of 12/31
2013B 2014A 2015B 2016A 2017A 2018A 2019A 2020A
102
STAFFING SUMMARY
Staffing, as measured by full-time equivalents, decreased in 2020 due to the COVID-19
pandemic and has been increasing each year, now above pre-pandemic levels. Many employees
perform across multiple activities/divisions and funds. The budget reflects updates to the
allocation of time spent in various departments by all staff. The Liquor Fund and Deputy
Registrar Fund each added an additional full-time employee in 2022. These positions along with
a new Streets Operator, beginning on April 1, are included in the 2023 budget.
Adopted
Actual Actual Actual Budget
2020 2021 2022 2023
General Fund
City Administration 3.60 3.60 3.60 2.90
Finance 3.35 3.80 3.85 3.75
City Clerk 1.00 1.00 1.85 1.50
Human Resources 1.00 1.00 1.00 1.00
Planning & Zoning 1.30 1.10 1.40 1.90
Fire & Rescue 1.00 1.00 1.00 -
Building Inspections 3.00 3.00 4.20 5.20
Public Works Administration 1.80 1.90 1.10 1.10
Engineering & Inspections 0.90 1.35 1.55 1.55
Streets & Alleys 3.55 4.40 3.90 4.30
Shop & Garage 0.80 0.80 1.30 1.35
Ice & Snow 1.60 2.10 2.30 2.45
Park Operations 8.60 8.85 9.40 9.40
Shade Tree 0.60 0.75 0.90 0.90
Total General Fund 32.10 34.65 37.35 37.30
Special Revenue Funds
Economic Development 1.20 1.20 1.50 1.60
Monticello Community Center 13.95 13.40 18.05 18.05
Total Special Revenue Funds 15.15 14.60 19.55 19.65
Enterprise Funds
Water 3.15 3.80 3.60 3.80
Sewer 3.15 3.75 3.75 3.55
Stormwater 1.00 1.10 1.40 1.55
Liquor 10.80 10.20 10.95 11.95
Deputy Registrar 7.50 7.50 8.35 9.35
Total Enterprise Funds 25.60 26.35 28.05 30.20
Internal Service Funds
Facilities Maintenance - 0.50 1.10 1.10
IT Services - 0.40 1.00 1.00
Total Internal Service Funds - 0.90 2.10 2.10
Total All Funds 72.85 76.50 87.05 89.25
NUMBER OF FULL-TIME EQUIVALENTS
103
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104
2023 Adopted Budget
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
another fund and uses the modified accrual basis of accounting for budgeting and financial
reporting purposes. The adopted General Fund budget is a balanced budget--current revenues
and other sources equal expenditures and other uses.
SUMMARY
GENERAL FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 6,774,776$ 7,208,949$ 7,475,000$ 7,461,349$ 8,060,000$ 7.8%
Franchise & Other Taxes 216,864 217,833 258,000 250,593 316,500 22.7%
Licenses & Permits 521,369 804,889 471,100 613,015 484,000 2.7%
Intergovernmental Revenues 737,650 625,382 463,000 606,826 513,895 11.0%
Charges for Services 885,951 1,214,288 1,118,600 1,162,311 1,246,779 11.5%
Fines & Forfeits 31,852 49,566 51,600 34,221 51,600 0.0%
Special Assessments 166 468 100 418 100 0.0%
Miscellaneous 621,431 712,287 692,600 773,493 807,126 16.5%
TOTAL REVENUES 9,790,059$ 10,833,663$ 10,530,000$ 10,902,227$ 11,480,000$ 9.0%
GENERAL FUND 2020 2021 2022 2022 2023 %
EXPENDITURES BY DEPT ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
GENERAL GOVERNMENT
Mayor and Council 52,589$ 57,171$ 59,262$ 55,262$ 59,462$ 0.3%
City Administration 789,820 949,428 1,075,361 906,677 1,045,775 -2.8%
City Clerk 180,824 125,285 195,337 225,698 214,549 9.8%
Finance 491,378 500,647 537,515 625,522 664,739 23.7%
City Assessing 70,115 77,600 78,000 - - -100.0%
Legal 29,340 25,883 27,500 24,524 27,500 0.0%
Human Resources 142,232 131,467 148,810 139,335 165,336 11.1%
Planning & Zoning 339,005 685,171 308,957 421,238 354,158 14.6%
City Hall 60,501 68,095 70,687 75,956 82,182 16.3%
General City Buildings 14,857 16,315 - - - ---
TOTAL GENERAL GOVERNMENT 2,170,661$ 2,637,060$ 2,501,429$ 2,474,212$ 2,613,701$ 4.5%
PUBLIC SAFETY
Law Enforcement 1,524,150$ 1,602,877$ 1,650,816$ 1,633,774$ 1,869,245$ 13.2%
Fire & Rescue 414,399 459,591 553,127 522,527 483,309 -12.6%
Fire Relief 131,638 134,691 140,000 146,181 140,000 0.0%
Building Inspections 354,251 599,567 567,751 583,076 680,289 19.8%
Emergency Management 257,565 13,725 25,225 6,936 22,032 -12.7%
Animal Control 49,522 50,586 59,971 59,080 63,992 6.7%
National Guard 12,429 13,143 14,000 14,398 19,500 39.3%
TOTAL PUBLIC SAFETY 2,743,954$ 2,874,179$ 3,010,890$ 2,965,973$ 3,278,367$ 8.9%
PUBLIC WORKS
Public Works Administration 221,881$ 244,353$ 157,673$ 140,020$ 166,456$ 5.6%
Engineering 80,432 93,846 - - - ---
Engineering & Inspections 102,110 107,586 359,683 262,695 340,801 -5.2%
Streets & Alleys 777,633 919,551 1,124,296 1,141,178 1,250,020 11.2%
Ice & Snow 326,120 294,313 407,126 299,230 453,741 11.4%
Shop & Garage 199,310 269,192 315,246 294,814 320,948 1.8%
Street Lighting 191,829 195,055 237,000 226,690 292,000 23.2%
TOTAL PUBLIC WORKS 1,899,315$ 2,123,896$ 2,601,024$ 2,364,626$ 2,823,966$ 8.6%
105
The previous table summarizes General Fund expenditures by activities/divisions and
departments. The table below summarizes expenditures by classifications.
BUDGET COMMENTARY:
Revenues
For 2023, budgeted revenues are estimated to increase by 9.0%. The General Fund portion of
the tax levy is budgeted to increase by 7.8%, which is more than the total (city & HRA) levy
increase of 6.1%. Property taxes account for 70% of General Fund revenues. Franchise & Other
Taxes increase to offset the increased cost of street lighting due to inflation. Increases in
Intergovernmental Revenues and Fines & Forfeits are due to budgeting more closely with
trends from the previous years. The increase in Charges for Services reflects higher residential
garbage and recycling charges. In 2023, the city will fully cover its cost of garbage service for the
GENERAL FUND 2020 2021 2022 2022 2023 %
EXP ENDITURES BY DEPT ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
SANITATION
Refuse Collection 681,948$ 754,132$ 802,878$ 718,236$ 843,897$ 5.1%
TOTAL SANITATION 681,948$ 754,132$ 802,878$ 718,236$ 843,897$ 5.1%
RECREATION AND CULTURE
Senior Center 103,662$ 105,689$ 106,363$ 108,123$ 101,863$ -4.2%
Park Operations 1,040,665 1,098,442 1,230,204 1,234,381 1,428,756 16.1%
Park Ballfields 23,685 28,072 27,400 59,737 26,200 -4.4%
Public Arts 36,092 93,246 72,241 139,940 173,528 140.2%
Shade Tree 79,024 87,526 118,175 94,217 145,707 23.3%
Library 48,068 44,506 53,396 48,339 38,015 -28.8%
TOTAL RECREATION AND CULTURE 1,331,196$ 1,457,480$ 1,607,779$ 1,684,737$ 1,914,069$ 19.1%
Operating Transfers 1,000,000$ 1,002,368$ 6,000$ 154,900$ 6,000$ 0.0%
TOTAL EXPENDITURES 9,827,074$ 10,849,116$ 10,530,000$ 10,362,685$ 11,480,000$ 9.0%
GENERAL FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 6,774,776$ 7,208,949$ 7,475,000$ 7,461,349$ 8,060,000$ 7.8%
Franchise & Other Taxes 216,864 217,833 258,000 250,593 316,500 22.7%
Licenses & Permits 521,369 804,889 471,100 613,015 484,000 2.7%
Intergovernmental Revenues 737,650 625,382 463,000 606,826 513,895 11.0%
Charges for Services 885,951 1,214,288 1,118,600 1,162,311 1,246,779 11.5%
Fines & Forfeits 31,852 49,566 51,600 34,221 51,600 0.0%
Special Assessments 166 468 100 418 100 0.0%
Miscellaneous 621,431 712,287 692,600 773,493 807,126 16.5%
TOTAL REVENUES 9,790,059$ 10,833,663$ 10,530,000$ 10,902,227$ 11,480,000$ 9.0%
EXPENDITURES
Personnel Services 3,306,432$ 3,433,833$ 3,897,421$ 3,739,051$ 4,091,941$ 5.0%
Supplies 620,101 748,686 874,870 792,320 1,020,200 16.6%
Other Services & Charges 4,569,741 5,111,861 5,173,309 5,098,014 5,728,859 10.7%
Capital Outlay 330,800 552,369 578,400 578,400 633,000 9.4%
Operating Transfers Out 1,000,000 1,002,368 6,000 154,900 6,000 0.0%
TOTAL EXPENDITURES 9,827,074$ 10,849,116$ 10,530,000$ 10,362,685$ 11,480,000$ 9.0%
FUND BALANCE - JANUARY 1 6,677,250$ 6,640,235$ 6,624,782$ 6,624,782$ 7,164,324$
Excess (Deficiency) of
Revenues over Expenditures (37,015) (15,453) - 539,542 -
FUND BALANCE - DECEMBER 31 6,640,235$ 6,624,782$ 6,624,782$ 7,164,324$ 7,164,324$
106
first time. Miscellaneous Revenues are projected higher due to an increased number of
anticipated donations.
Expenditures
Expenditures are budgeted to increase 9.0%. City Clerk department expenditures increase due
to investments in the City’s electronic document storage software. The Finance department
budget increased due to absorbing the City Assessing department expenditures and an upgrade
to the department software, Springbrook. A software investment in the Human Resources
department contributes to that department’s increase. Planning & Zoning expenditures
increase to better reflect spending in response to development in recent years. The City Hall
budget increased due to an anticipated increase in maintenance costs of the facility. The
General City Buildings (formerly Prairie Center Building) department was eliminated in 2021
because the DMV relocated, and the building costs are now accounted for in the DMV
enterprise fund.
The Law Enforcement department increase reflects an increase in the contracted hourly rate
and the number of patrol hours per day from 52 to 60 effective May 1. The Fire & Rescue and
Building Inspections department budgets were both impacted by a shift in staffing where the
Fire Marshal position was eliminated, but fire inspections were absorbed by building
department personnel. National Guard expenditures increase to better reflect the portion of
the Community Center building’s use and expenditure allocation.
The Engineering and Engineering & Inspections departments were combined in 2022. The
Streets & Alley and Ice & Snow budgets increased with the addition of an additional streets
operator effective April 1. The Street Lighting department increased to reflect the increases in
the costs of gas and electricity.
Park Operations increased due to a parks needs study and repairs to the parks shop building.
Public Arts increased the hours worked by the main arts consultant, higher building rent, and
anticipated additional projects in 2023. Shade Tree expenditures increased as Emerald Ash
Borer (EAB) was found spreading in some trees in the City. Library expenditures decrease due
to cleaning services transitioning to internal staff rather than contracted out.
The 2023 personnel services budget includes a full step increase, where applicable, and a 4.0%
market rate wage increase. Supplies are projected to increase due to inflation, and Other
Services & Charges increase from increased professional costs, such as the parks needs study.
All the capital outlay amount reflects Capital Equipment Fund purchases, which are charged
back through lease payments. The 2020 operating transfers were to the Capital Project Fund for
future year capital expenditures, and the 2021 operating transfer was to the Central Equipment
Fund for future acquisitions. The operating transfer out in 2022 is to build a healthy reserve in
the new Facilities Maintenance internal service fund. The $6,000 budgeted in 2023 is to the
EDA Fund for board member stipends.
107
MAYOR AND CITY COUNCIL (101-41110)
DEPARTMENT: General Government SUPERVISOR: City Clerk
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.
3. Provide opportunities for public input in decision making.
ISSUES:
1. Capitalize on the city’s uniqueness by communicating a comprehensive vision
statement and setting achievable goals.
2. Succession planning of city staff.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The council’s budget remains consistent with previous years. The mayor earns $700 per month
and each councilmember earns $600 per month. Other services and charges are mainly
comprised of rental charges for the meeting room at the Monticello Community Center.
Measurement 2020 2021 2022 2023
Council meetings 22 23 23 23
Special meetings/workshops 13 23 21 17
GENERAL FUND 2020 2021 2022 2022 2023 %
MAYOR & COUNCIL Actual Actual Budget Estimated Budget Change
Personnel Services 42,223$ 45,952$ 43,023$ 41,739$ 42,012$ -2.3%
Supplies - - - - - ---
Other Services & Charges 10,366 11,219 16,239 13,523 17,450 7.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 52,589$ 57,171$ 59,262$ 55,262$ 59,462$ 0.3%
108
CITY ADMINISTRATION (101-41310)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
City administration provides the overall direction of the city, as determined by the mayor and
council. 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.
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.
6. Communicate mission, vision, and values along with city services and events to
the public.
ISSUES:
1. Long-range comprehensive planning, including for development and traffic.
2. Leading and focusing council on policy matters.
3. Continuing to improve internal and external communication systems.
4. Management of Citizen Service Desk with continued growth of inquiries and need to
improve response times.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Counc il meetings agendas 35 46 44 40
Ordinances processed 22 20 26 20
Council minutes approved 35 46 44 40
Newsletters published 2 2 2 2
Monthly newletters sent*0 0 9 12
Utility inserts published*4 8 3 0
Park inserts published* 1 3 2 0
All other inserts published*11 12 5 0
Service desk data entry**775 351 143 150
*Individual inserts with utility bills were combined into one monthly newsletter
**Entries reduced with the implementation of an online resident reporting system
for Public Works issues
109
BUDGET:
BUDGET COMMENTARY:
The city administration activity is limited to expenditures for daily operations in providing
services and does not include upkeep of the city hall facility. The 2023 personnel services
budget includes a full step increase and a 4.0% market rate wage increase. However, re-
allocation of a portion of the new administrative assistant position to the City Clerk and
Planning & Zoning departments results in a decrease. Other services and charges have steadily
increased due to the increased capacity of the city’s investments in a solar farm. The city is
given credit on its electric bill as a return on investment in the solar farm.
GENERAL FUND 2020 2021 2022 2022 2023 %
ADMINISTRATION Actual Actual Budget Estimated Budget Change
Personnel Services 376,883$ 377,760$ 386,660$ 304,433$ 321,078$ -17.0%
Supplies 8,830 9,445 13,000 19,136 12,000 -7.7%
Other Services & Charges 404,107 562,223 675,701 583,108 712,697 5.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 789,820$ 949,428$ 1,075,361$ 906,677$ 1,045,775$ -2.8%
110
CITY CLERK (101-41410)
DEPARTMENT: General Government SUPERVISOR: City Clerk
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.
ISSUES:
1. Storage space.
2. Laserfiche training.
3. Identify and organize decades of files.
4. Maintaining current, accurate information for all public sources.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Elections are held in even-numbered years. In 2020, there was 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 2023 personnel
services budget includes a full step increase and a 4.0% market rate wage increase along with a
re-allocation of the administrative assistant position.
Measurement 2020 2021 2022 2023
Voters, number of 7,110 0 5,175 0
Register voters, number of 7,895 8,101 8,791 8,791
Polling places 2 2 4 4
Election judges 35 0 59 0
Ordinances amendments 22 20 26 20
Council resolutions 99 99 142 100
GENERAL FUND 2020 2021 2022 2022 2023 %
CITY CLERK Actual Actual Budget Estimated Budget Change
Personnel Services 151,816$ 110,706$ 153,703$ 187,127$ 172,967$ 12.5%
Supplies 3,797 308 5,750 5,145 3,000 -47.8%
Other Services & Charges 25,211 14,271 35,884 33,425 38,582 7.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 180,824$ 125,285$ 195,337$ 225,698$ 214,549$ 9.8%
111
FINANCE (101-41520)
DEPARTMENT: General Government SUPERVISOR: Finance Director
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. 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. Keeping the long-term financial management plan updated annually 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.
5. Complete the financial audit in a timely fashion.
6. Continue to reduce the number of audit findings and adjustments.
7. Assess new and existing parcels within the city as required.
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
timecard 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).
7. Comply with changing reporting requirements and auditing standards.
8. Meet state requirements in appraising properties.
112
MEASURABLE WORKLOAD DATA:
BUDGET:
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
2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase. Other Services & Charges expenditures increase with the combining of the finance
and assessing departments.
Measurement 2020 2021 2022 2023
Outcome/Effectiveness:
GFOA Budget Awards 12 13 14 15
GFOA Certificates of
Achievement 12 13* 14* 15
GFOA Popular Annual
Financial Report Awards 6 7*8*9
Bond Rating A1 A1 A1 A1
Audit submittal date 5/18 5/14 6/8 6/7
Audit findings 0 0 0 0
Opinion Unmodified Unmodified Unmodified Unmodified
Efficiency:
AP & ACHs per FTE (1.5)1,835 2,027 2,020 2,067
ACHs as % of total AP activity 45% 45% 48% 48%
Work Load:
AP checks, number of 1,526 1,685 1,568 1,600
AP ACHs, number of 1,227 1,355 1,462 1,500
Invoices processed 4,788 5,376 5,106 5,250
1099's 87 77 70 70
Paychecks issued 3,706 3,830 4,569 4,500
W-2s 287 255 322 275
Utility bills generated 52,918 53,647 54,898 56,000
Non-utility charges billed 294 243 262 275
Cash receipts entered 37,772 37,707 38,091 38,250
Journal entries 2,355 2,501 2,500* 2,500
*Not yet available. Value is an estimate.
GENERAL FUND 2020 2021 2022 2022 2023 %
FINANCE Actual Actual Budget Estimated Budget Change
Personnel Services 390,695$ 387,444$ 415,481$ 408,605$ 432,098$ 4.0%
Supplies 1,431 859 2,500 1,701 2,300 -8.0%
Other Services & Charges 99,252 112,344 119,534 215,217 230,341 92.7%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 491,378$ 500,647$ 537,515$ 625,522$ 664,739$ 23.7%
113
ASSESSING (101-41550)
DEPARTMENT: General Government SUPERVISOR: Finance Director
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. See finance department.
ISSUES:
1. See finance department.
MEASURABLE WORKLOAD DATA:
BUDGET:
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 will pay $15.00 per
parcel for assessment services and $50 for each new permit with an estimated construction
value under $499,999 and $150 for values over $500,000 in 2023. Those rates have climbed
slightly each year. The department was combined with the finance department in 2022.
Measurement 2020 2021 2022 2023
New residential properties 59 68 95 100
New commercial properties 6 5 8 5
Tax exempt parcels 349 355 357 360
Taxable parcels assessed 4,714 4,732 4,821 4,850
GENERAL FUND 2020 2021 2022 2022 2023 %
ASSESSING Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 70,115 77,600 78,000 - - -100.0%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 70,115$ 77,600$ 78,000$ -$ -$ -100.0%
114
LEGAL (101-41610)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
Private legal firms provide all the city’s legal services. Activities include issuance of legal
opinions; preparation and/or review 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. Potentially rising costs associated with the need for existing and new legal services.
MEASURABLE WORKLOAD DATA:
BUDGET:
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 while those performed related to planning and
development projects are passed through to the applicant.
Measurement 2020 2021 2022 2023
Billed hours:
Administration 252.8 237.5 232.4 240.0
Code enforcement 6.4 19.6 23.4 25.0
Fiber optics 0.0 2.0 0.0 2.0
City Construction Projects 90.4 174.2 98.4 125.0
All other, including development 70.9 78.5 86.1 75.0
Total 420.5 511.8 440.3 467.0
GENERAL FUND 2020 2021 2022 2022 2023 %
LEGAL Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 29,340 25,883 27,500 24,524 27,500 0.0%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 29,340$ 25,883$ 27,500$ 24,524$ 27,500$ 0.0%
115
HUMAN RESOURCES (101-41800)
DEPARTMENT: General Government SUPERVISOR: City Administrator
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 union contracts for public works employees.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2020 2021 2022 2023
Full-time positions 55 56 60 61
Part-time positions 116 116 133 133
Full-time positions filled 12 9 11 11
Other positions filled 51 85 93 93
Terminations processed 80 93 69 69
Job Postings 33 34 30 30
Application count - all city 408 491 511 511
Avg. number of employees 171 172 186 186
GENERAL FUND 2020 2021 2022 2022 2023 %
HUMAN RESOURCES Actual Actual Budget Estimated Budget Change
Personnel Services 106,981$ 110,914$ 117,865$ 113,327$ 126,160$ 7.0%
Supplies 104 1,223 700 1,384 750 7.1%
Other Services & Charges 35,147 19,330 30,245 24,624 38,426 27.0%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 142,232$ 131,467$ 148,810$ 139,335$ 165,336$ 11.1%
116
BUDGET COMMENTARY:
The 2023 budget reflects estimated costs for setting up training, providing city staff with benefit
and compensation information, and other expenses based on experience. The 2020 increase in
other services and charges represented expenditures on professional services to update the
city’s pay scale. The 2023 personnel services budget includes a full step increase and a 4.0%
market rate wage increase. With the exception of contributions to the IT Services fund for the
addition of an onboarding module in NeoGov, budget items are expected to remain close to
prior year levels.
117
PLANNING, ZONING & COMMUNITY DEVELOPMENT (101-41910)
DEPARTMENT: General Government SUPERVISOR: Community Development Director
ACTIVITY SCOPE:
The Planning & Zoning and Community Development 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 residents, 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
Implementation Chart outlined by the Comprehensive Plan.
3. Support for downtown redevelopment and revitalization, including the Embracing
Downtown Monticello Project.
4. Involvement in regional 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.
118
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Outcome/Effectiveness:
Grants awarded 1 1 0 1
Administrative applications (total)7 7 8 7
processed within 5 working days 7 7 5 7
Site Plan reviews processed
within 14 working days 4 0 2 2
Change in Use forms 3 8 6 5
reviewed withing 5 working days 3 5 6 5
Zoning Confirmation/Request Ltrs --10 10
processed within 10 working days --10 10
Sign Permit zoning reviews 17 20 23 20
processed within 5 working days 16 20 10 20
Land Use applications processed 66 94 95 50
within 60 working days 65 90 87 48
Reconciliations processed 20 16 31 30
Annexation petitions 2 1 0 1
Efficiency:
Applications processed per FTE 44 47 48 33
Work Load:
Planning Applications:
Variances 3 5 0 1
CUPs 7 15 8 5
PUD/Amendments to PUD 11 15 15 5
Interim Use permits 1 1 2 0
Comp Plan amendments 3 0 1 1
Map amendments 3 2 6 5
Non-city zoning text amendments 2 1 1 2
Plats/adminstrative subdivisions 5 11 16 7
Administrative permits 7 7 8 10
Site plan reviews 2 2 2 2
Appeals 0 3 0 0
Vacations 2 4 7 2
Sign permit application review 17 20 23 20
Change in Use review 3 8 6 5
Total applications 66 94 95 65
Planning reconciliations 25 16 31 30
Planning Commission meetings 18 20 29 15
BCOL Advisory Meetings 4 4 1 2
PARC Meetings (Report Prep)3 3 4 4
EDA Meetings 21 18 33 24
IEDC Meetings 12 8 11 11
119
BUDGET:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase. Additionally, the new administrative assistant position was re-allocated for 2023 from
the Administration department to the City Clerk and Planning, Zoning & Community
Development departments. Other services & charges in 2020 include amounts for a
comprehensive plan update, and the receipt of a Community Energy Transitions (CET) grant
from the State of Minnesota’s Department of Employment and Economic Development (DEED)
in 2021 and 2022 led to expenditures well over budget. The Monti:2040 Comprehensive Plan
was adopted in 2020.
GENERAL FUND 2020 2021 2022 2022 2023 %
PLANNING & ZONING Actual Actual Budget Estimated Budget Change
Personnel Services 163,455$ 168,500$ 181,845$ 217,645$ 234,095$ 28.7%
Supplies 53 168 200 745 300 50.0%
Other Services & Charges 175,497 516,503 126,912 202,848 119,763 -5.6%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 339,005$ 685,171$ 308,957$ 421,238$ 354,158$ 14.6%
120
CITY HALL (101-41940)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
The activity for this department consists of maintenance and upkeep for the city hall suite.
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 workflow.
3. Timely maintenance.
4. Utility costs.
5. Building and office security.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Items budgeted in the city hall activity are commonly shared among all departments operating
out of city hall. Personnel services costs were eliminated when contracted custodial services
started, and that contract plus utilities are the main expenditures in other services & charges.
Supplies increased with a budgeted replacement of conference room table and chairs.
Measurement 2020 2021 2022 2023
Number of times cleaned 51 104 104 104
Utility expenses $18,327 $21,321 $26,713 $24,000
GENERAL FUND 2020 2021 2022 2022 2023 %
CITY HALL Actual Actual Budget Estimated Budget Change
Personnel Services 9,280$ 2,579$ -$ 4,894$ -$ ---
Supplies 921 - 2,000 1,694 7,000 250.0%
Other Services & Charges 50,300 65,516 68,687 69,368 75,182 9.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 60,501$ 68,095$ 70,687$ 75,956$ 82,182$ 16.3%
121
LAW ENFORCEMENT (101-42100)
DEPARTMENT: Public Safety SUPERVISOR: City Administrator
ACTIVITY SCOPE:
All law enforcement services are contracted with the Wright County Sheriff's Department. The
Sheriff’s Department uses space at the new Fire Station for staff break time and other officing
uses. 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 have changed to 5 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 the city not having its own police force.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2020 2021 2022 2023
Outcome/Effectiveness:
Arrests 262 204 230 235
Arrests to crimes ratio 0.34 0.26 0.34 0.34
Efficiency:
Hours contracted 19,032 18,980 18,980 20,940
Calls per hour contracted 0.43 0.41 0.50 0.43
Costs per workload unit $180.04 $197.36 $168.06 $199.62
Work Load:
Life quality calls, number of 3,178 2,693 4,774 4,000
Traffic calls, number of 4,051 4,074 3,683 4,000
Vehicle crashes, number of 270 325 371 400
Crimes, number of 773 770 681 700
GENERAL FUND 2020 2021 2022 2022 2023 %
LAW ENFORCEMENT Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 1,524,150 1,602,877 1,650,816 1,633,774 1,869,245 13.2%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 1,524,150$ 1,602,877$ 1,650,816$ 1,633,774$ 1,869,245$ 13.2%
122
BUDGET COMMENTARY:
Law enforcement services are contracted in five-hour-per-day increments from the Wright
County Sheriff’s Office (WCSO) Department. Prior to 2023, the WCSO contract was handled in
four-hour-per-day increments. Past hourly rates and contracted hours are presented in the
schedule below:
The city contracted for 52 hours per day 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 2016 and 2020 include one more day of coverage (48 hours in 2016 and
52 hours in 2020). The city and WCSO updated the contract for 2023 to 60 hours per day.
Hourly Hours
Year Rate Contracted
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 19,032
2021 $81.75 18,980
2022 $84.20 18,980
2023 $86.75 20,940
123
FIRE & RESCUE (101-42200)
DEPARTMENT: Public Safety SUPERVISOR: City Administrator
ACTIVITY SCOPE:
The Fire Department responds to fire, rescue, hazardous materials, medical, and accident
incidents within the city and the surrounding townships. Paid-on-call volunteers provide the
department’s staffing.
OBJECTIVES:
1. Assemble a confined space entry team with personnel and equipment.
2. Improve response times.
ISSUES:
1. Training and retention of paid-on-call personnel.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Outcome/Effectiveness:
Respondent-hours on fire calls:
City 2,433 2,903 3,443 3,500
Monticello Township 937 1,183 1,138 1,100
Silver Creek Township 434 385 562 550
Mutual Aid 636 406 130 250
Drills & Maintenance 2,053 2,310 2,396 2,400
Total 6,493 7,187 7,669 7,800
Efficiency:
Average respondent-hours per call
City 14 11 13 14
Monticello Township 17 15 15 15
Silver Creek Township 18 17 19 18
Mutual Aid 27 25 19 17
Drills & Maintenance 35 37 43 40
Total 20 16 17 18
Work Load:
Number of fire calls:
City 168 254 273 250
Monticello Township 56 80 74 75
Silver Creek Township 24 23 30 30
Mutual Aid 24 16 7 15
Drills & Maintenance 59 63 56 60
Total 331 436 440 430
Firefighters, number of 29 30 30 30
124
BUDGET:
BUDGET COMMENTARY:
The Fire Department is staffed with paid-on-call volunteers. The purchase of turn-out gear
contributed to the higher supplies budget in 2023. Grants and donations may offset some of
these expenditures. Other services & charges increased to due inflated gas and electric rates.
Capital outlay reflects lease payments to the Central Equipment Fund for the acquisition of a
fire tender truck in 2014, a fire half-ton truck in 2019, and a new chief squad vehicle in 2021
through the Central Equipment Fund.
GENERAL FUND 2020 2021 2022 2022 2023 %
FIRE & RESCUE Actual Actual Budget Estimated Budget Change
Personnel Services 207,551$ 212,845$ 258,259$ 208,445$ 147,061$ -43.1%
Supplies 48,070 45,909 62,300 59,604 71,300 14.4%
Other Services & Charges 109,178 138,137 169,868 191,777 202,248 19.1%
Capital Outlay 49,600 62,700 62,700 62,700 62,700 0.0%
TOTAL EXPENDITURES 414,399$ 459,591$ 553,127$ 522,527$ 483,309$ -12.6%
125
FIRE RELIEF (101-42202)
DEPARTMENT: Public Safety SUPERVISOR: Finance Director
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. Balancing pension assets with pension liabilities.
MEASURABLE WORKLOAD DATA:
BUDGET:
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.
Measurement 2020 2021 2022* 2023
Pension assets 1,472,948$ 1,712,617$ 1,793,203$ 1,850,000$
Pension liabilities 1,073,956$ 1,459,556$ 1,222,830$ 1,361,221$
Assets-liabilities ratio 1.37 1.17 1.47 1.36
Pension per service year $4,200 $5,100 $5,100 $5,100
Fire state aid $131,638 $134,691 $146,181 $140,000
State aid per employee $4,875 $4,490 $4,873 $4,667
Active firefighters 27 30 30 30
Deferred firefighters 6 6 6 6
*2022 assets and liabilities estimated per Form SC-22
GENERAL FUND 2020 2021 2022 2022 2023 %
FIRE RELIEF Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 131,638 134,691 140,000 146,181 140,000 0.0%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 131,638$ 134,691$ 140,000$ 146,181$ 140,000$ 0.0%
126
BUILDING INSPECTIONS (101-42400)
DEPARTMENT: Public Safety SUPERVISOR: Community Development Director
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. Beginning in 2022, the department
also provides fire inspection services, which used to be handled by the Fire & Rescue
department.
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 2020 2021 2022 2023
Outcome/Effectiveness:
Value of permits issued 32,453,366$ 66,827,121$ 41,989,848$ 50,000,000$
Value of permits per FTE 10,817,789$ 22,275,707$ 10,497,462$ 12,500,000$
Efficiency:
Departmental FTEs 3 3 4 4
Rental inspections per FTE 179 385 159 188
Permits per FTE 319 336 227 223
Work Load:
Building permits issued 957 1008 909 890
Nuisance notices issued 71 82 142 75
Rental inspections 537 1,156 636 750
Rental units, number of 1,616 1,776 1,895 1,800
127
BUDGET:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase along with an additional staff member. The fire marshal position, previously reported
in the fire & rescue department, was eliminated in 2022 and the building department budgeted
for an additional position because the fire inspections have been absorbed by the department.
Supplies increase with enforcement of lock boxes throughout the city and additional office
furniture as needed for the additional position. Other services & charges reflect higher costs for
code enforcement. Capital outlay reflects the replacement of one building inspector vehicle.
GENERAL FUND 2020 2021 2022 2022 2023 %
BUILDING INSPECTIONS Actual Actual Budget Estimated Budget Change
Personnel Services 299,690$ 367,552$ 462,137$ 466,452$ 592,885$ 28.3%
Supplies 4,412 41,500 5,500 12,974 9,000 63.6%
Other Services & Charges 45,949 74,746 30,114 33,651 43,404 44.1%
Capital Outlay 4,200 115,769 70,000 70,000 35,000 -50.0%
TOTAL EXPENDITURES 354,251$ 599,567$ 567,751$ 583,076$ 680,289$ 19.8%
128
EMERGENCY MANAGEMENT (101-42500)
DEPARTMENT: Public Safety SUPERVISOR: Emergency Management Coordinator
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.
2. Develop National Incident Management System (NIMS) training for all city
departments.
ISSUES:
1. Preparedness - little or no warning when an emergency occurs.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2023 budget is based on the 2022 budget with a slight decrease in expenditures for
supplies and other services & charges related to a state grant received through Wright County.
Much of this activity's responsibilities had been transferred to Wright County. However, the city
is an active participant of the emergency management team.
Measurement 2020 2021 2022 2023
Data under development
GENERAL FUND 2020 2021 2022 2022 2023 %
EMERGENCY MANAGEMENT Actual Actual Budget Estimated Budget Change
Personnel Services 587$ 1,615$ 3,224$ 2,126$ 3,225$ 0.0%
Supplies 104,835 8,781 9,000 3,906 6,500 -27.8%
Other Services & Charges 152,143 3,329 13,001 904 12,307 -5.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 257,565$ 13,725$ 25,225$ 6,936$ 22,032$ -12.7%
129
ANIMAL CONTROL (101-42700)
DEPARTMENT: Public Safety SUPERVISOR: City Clerk
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 the city’s services and facility.
OBJECTIVES:
1. 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:
BUDGET COMMENTARY:
The professional service contract to handle all animal control issues is the largest budgeted
item. The remaining budget items are for supplies and other service charges related to
operating the animal control facility. Rate increases cause the budgeted increase in animal
control fee.
Measurement 2020 2021 2022 2023
Stray animal reports 488 432 501 550
Barking dog reports 181 206 241 200
Lost/found reports 1,613 1,732 2,117 2,200
Feral cat trapping 282 284 313 300
Unsanitary condition reports 193 197 157 200
Abuse/neglect reports 176 186 206 200
Impounds 501 440 524 600
Dog bite reports 73 67 51 70
Animal control fees $41,863 $52,482 $58,544 $60,000
GENERAL FUND 2020 2021 2022 2022 2023 %
ANIMAL CONTROL Actual Actual Budget Estimated Budget Change
Personnel Services 3,901$ -$ -$ -$ -$ ---
Supplies 1,117 260 2,000 2,172 1,750 -12.5%
Other Services & Charges 44,504 50,326 57,971 56,908 62,242 7.4%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 49,522$ 50,586$ 59,971$ 59,080$ 63,992$ 6.7%
130
NATIONAL GUARD (101-42800)
DEPARTMENT: Public Safety SUPERVISOR: Project Coordinator
ACTIVITY SCOPE:
The National Guard (NG) 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. However, the NG will contribute to capital
improvements made to the building. 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. None.
MEASURABLE WORKLOAD DATA:
BUDGET:
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 utilities. However, the budget was
increased in 2023 to reflect higher gas and electric rates and to properly reflect the time the NG
uses certain amenities of the facility for their training purposes.
Measurement 2020 2021 2022 2023
Not Applicable
GENERAL FUND 2020 2021 2022 2022 2023 %
NATIONAL GUARD Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 12,429 13,143 14,000 14,398 19,500 39.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 12,429$ 13,143$ 14,000$ 14,398$ 19,500$ 39.3%
131
PUBLIC WORKS ADMINISTRATION (101-43110)
DEPARTMENT: Public Works SUPERVISOR: Public Works Director
ACTIVITY SCOPE:
The public works (PW) administration activity oversees the daily operations of the street, water,
sewer, wastewater treatment plant, stormwater, 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, expansion of the wastewater
treatment plant, and future construction of a water 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.
ISSUES:
1. Balance the public works department needs with available funds.
2. Manage city's water and wastewater treatment systems and SCADA system.
3. Implement the capital improvement plan for city infrastructure.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase. The public works director/engineering position is spread over four budgets: General
Fund (split between PW Administration and Engineering & Inspections) - 60%, Sewer Fund –
20%, Water Fund – 15%, and Stormwater Fund – 5%. Other services & charges increase to
support the IT internal service fund for increased use of software packages for operations.
Measurement 2020 2021 2022 2023
Budget units 16 15 15 15
Employees supervised - FT 21 16 16 16
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - ADMINISTRATION Actual Actual Budget Estimated Budget Change
Personnel Services 193,099$ 209,417$ 114,579$ 113,560$ 118,819$ 3.7%
Supplies 6,423 6,118 7,000 4,692 7,000 0.0%
Other Services & Charges 22,359 28,818 36,094 21,767 40,637 12.6%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 221,881$ 244,353$ 157,673$ 140,020$ 166,456$ 5.6%
132
ENGINEERING (101-43111)
DEPARTMENT: Public Works SUPERVISOR: City Engineer
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. This department was combined with the Engineering & Inspections (101-
43115) department beginning in 2022 because the departments share the same staff and
overlap significantly.
OBJECTIVES:
1. See Engineering & Inspections Department.
ISSUES:
1. See Engineering & Inspections Department.
MEASURABLE WORKLOAD DATA:
See Engineering & Inspections Department.
BUDGET:
BUDGET COMMENTARY:
See Engineering & Inspections Department.
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - ENGINEERING Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies 33 327 - - - ---
Other Services & Charges 80,399 93,520 - - - ---
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 80,432$ 93,846$ -$ -$ -$ ---
133
ENGINEERING & INSPECTIONS (101-43115)
DEPARTMENT: Public Works SUPERVISOR: City Engineer
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 along with the items noted in the Engineering (101-43111)
department.
OBJECTIVES:
1. Maintain certifications and attend appropriate classes and workshops for inspections.
2. Improve knowledge, skills, and ability in GIS system and in using CarteGraph software
for development of an in-house Pavement Management and Sign Program.
3. Assist other city departments in acquiring utility information not readily available from
other sources, including GIS.
4. Complete cost estimates (capital infrastructure planning and budgeting) and design
for all improvement projects and continue to develop an in-house Pavement
Management Program.
5. Assist with design and implementation of solutions to drainage issues.
6. Complete inspections, documentation, and administration of city’s SWPPP.
7. Continue to educate the public on purposes and practices associated with
conservation and drainage easements and storm water ponds.
8. Create a one-stop shop for city driveway, grading, and right-of-way permits.
9. Continue to work towards improving transportation system and collaborate with
MNDOT and Wright County.
10. Work with other departments on public improvements and review development plans
and agreements.
11. Apply for grants and track funding for improvement projects.
ISSUES:
1. Workload is unevenly distributed throughout the year.
2. Increasing restrictions by Minnesota Pollution Control Agency (MPCA) for storm water
runoff.
3. Lack of public knowledge regarding purposes and practices associated with
conservation and drainage easements and storm water ponds.
4. Increasing phosphorus restrictions by MPCA for wastewater effluent.
5. Volatility in available federal and state funding for transportation improvements.
134
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase. The engineering activity predominantly consists of engineering and other professional
service fees. These expenditures consist of both reimbursable and non-reimbursable
expenditures. The 2023 budget provides for continued improvements and development of the
city's GIS system and reduces reliance on consulting services, but supplies and other services &
charges were reduced to better reflect prior year trends in activity.
Measurement 2020 2021 2022 2023
Improvement projects 14 16 17 15
Driveway permits issued 8 3 15 8
Right-of-way permits issued 88 87 59 70
Development applications 6 7 7 6
Grading permits issued 4 4 5 5
NPDES Inspections 327 383 394 350
Outfall Inspections 2 10 1 5
Stormwater Inspections 50 50 50 50
Pond Inspections 0 0 31 32
Inspection revenue $13,695 $31,339 $45,864 $46,000
Inspection hours billed 123.38 259.00 385.50 400.00
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - ENG. & INSPECTIONS Actual Actual Budget Estimated Budget Change
Personnel Services 95,811$ 95,509$ 195,211$ 188,966$ 208,696$ 6.9%
Supplies 635 1,751 21,000 9,597 16,500 -21.4%
Other Services & Charges 5,664 10,325 137,472 58,132 109,605 -20.3%
Capital Outlay - - 6,000 6,000 6,000 0.0%
TOTAL EXPENDITURES 102,110$ 107,586$ 359,683$ 262,695$ 340,801$ -5.2%
135
STREETS & ALLEYS (101-43120)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
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 and on the value of
good maintenance programs for our infrastructure.
2. Increased costs of fuel and street products.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase. A new streets operator, effective April 1, was added to the budget in 2023. This
budget unit also shares staff with the Ice & Snow activity, which can create significant
fluctuations from year to year. Increases in capital outlay reflects purchases in the Central
Equipment Fund for equipment leased to the streets department. Other services & charges
continues to decrease with much of the preventative maintenance being handled internally.
Measurement 2020 2021 2022 2023
Pounds of crack sealer 44,456 18,276 0* 20,000
Sq. yards of chip sealing 103,000 0 0 75,000
Miles of streets 70.0 70.0 81.0 81.0
Tons of black top patching 443 527 664 675
*0 lbs of crackfiller used due to crack filler kettle out of service.
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - STREETS & ALLEYS Actual Actual Budget Estimated Budget Change
Personnel Services 267,333$ 376,850$ 378,240$ 352,831$ 425,071$ 12.4%
Supplies 96,826 219,967 263,500 317,643 287,000 8.9%
Other Services & Charges 249,874 75,635 184,656 172,805 156,349 -15.3%
Capital Outlay 163,600 247,100 297,900 297,900 381,600 28.1%
TOTAL EXPENDITURES 777,633$ 919,551$ 1,124,296$ 1,141,178$ 1,250,020$ 11.2%
136
ICE & SNOW REMOVAL (101-43125)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
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:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase. Weather variability greatly impacts budget-to-actual comparisons.
Measurement 2020 2021 2022 2023
Inches of snow 29 26 48 55
Plowing events, number of 22 34 28 30
Tons of salt used 730 700 600 600
Tons of sand used 400 0 24 100
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - ICE & SNOW Actual Actual Budget Estimated Budget Change
Personnel Services 232,200$ 154,847$ 244,828$ 161,455$ 268,232$ 9.6%
Supplies 90,158 133,850 155,000 110,532 156,000 0.6%
Other Services & Charges 3,762 5,617 7,298 27,243 29,509 304.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 326,120$ 294,313$ 407,126$ 299,230$ 453,741$ 11.4%
137
SHOP & GARAGE (101-43127)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
ACTIVITY SCOPE:
Shop & Garage maintains all city vehicles and equipment for the streets, ice & snow, water, and
sewer activities in a safe and efficient manner. The department also assists with equipment
maintenance of other city departments as needed.
OBJECTIVES:
1. Maintain equipment and vehicles to maximize efficiencies and safety.
2. Update equipment and vehicles.
ISSUES:
1. Aging equipment.
2. Increased safety regulation for equipment and vehicles.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
increase along with allocation adjustments for staff in the Public Works department. The slight
increase in Other services & charges is due to increases rate for electricity and gas.
Measurement 2020 2021 2022 2023
Service orders 87 100 85 100
Service order hours 270 401 114 150
Hours per service order 3.1 4.0 1.3 1.5
Total service order costs $8,438 $27,000 $14,367 $16,000
Service cost per order $96.99 $270.00 $169.02 $160.00
Repair orders 62 70 28 30
Repair hours 303 420 127 125
Hours per repair order 4.9 6.0 4.5 4.2
Total repair order costs $30,267 $40,000 $16,513 $20,000
Repair costs per order $488.18 $571.43 $589.75 $666.67
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - SHOP & GARAGE Actual Actual Budget Estimated Budget Change
Personnel Services 110,655$ 130,946$ 160,308$ 160,499$ 161,965$ 1.0%
Supplies 47,563 48,723 74,500 47,329 74,000 -0.7%
Other Services & Charges 41,092 89,523 80,438 86,987 84,983 5.7%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 199,310$ 269,192$ 315,246$ 294,814$ 320,948$ 1.8%
138
STREET LIGHTING (101-43160)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
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 lights with high-powered, energy efficient LED lights.
2. Draft a new street lighting policy.
ISSUES:
1. Verify lamp and fixtures maintenance by utility companies.
2. Maintenance and upgrades on aging signal systems and streetlights.
3. Lack of assistance from Wright County and MNDOT.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The supplies budget increased by $50,000 to replace the city’s holiday lights. Electricity for the
streetlights is the largest expenditure at $185,000, in Other services and charges, which also
includes, $35,000 for repairs and maintenance of traffic signals.
Measurement 2020 2021 2022 2023
Street lights maintained*973 973 973 973
Utility expenses $170,241 $177,026 $201,145 $185,000
*Includes those owned by the city and Xcel Energy.
GENERAL FUND 2020 2021 2022 2022 2023 %
PW - STREET LIGHTING Actual Actual Budget Estimated Budget Change
Personnel Services 5,278$ 2,218$ -$ 882$ -$ ---
Supplies 4,778 3,219 20,000 5,083 70,000 250.0%
Other Services & Charges 181,773 189,619 217,000 220,724 222,000 2.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 191,829$ 195,055$ 237,000$ 226,690$ 292,000$ 23.2%
139
REFUSE COLLECTION (101-43230)
DEPARTMENT: Public Works SUPERVISOR: Refuse Collection
ACTIVITY SCOPE:
The city contracts with a private hauler for residential refuse and recycling collection services.
OBJECTIVES:
1. Research expanding city hauler’s contracted service prices to businesses 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:
BUDGET COMMENTARY:
Nearly the entire budget is based on the city’s contract obligations with its private refuse
hauler. The contract includes fixed rates for the five-year term, which expires on May 31, 2025.
The contract increases annually with inflation and the addition of residents/customers.
Measurement 2020 2021 2022 2023
Residential refuse collections 52 52 52 52
Residential recycling collections 26 26 26 26
Residential container base 3,992 4,091 4,159 4,200
Additional containers 627 644 652 650
Recycling containers 4,581 4,680 4,757 4,900
GENERAL FUND 2020 2021 2022 2022 2023 %
REFUSE COLLECTION Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ 576$ -$ -$ -100.0%
Supplies - - - - - ---
Other Services & Charges 681,948 754,132 802,302 718,236 843,897 5.2%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 681,948$ 754,132$ 802,878$ 718,236$ 843,897$ 5.1%
140
SENIOR CENTER (101-45175)
DEPARTMENT: Recreation and Culture SUPERVISOR: City Administrator
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:
BUDGET:
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 2023 adopted contribution is $65,000, which is the same as
2021 and 2022.
Measurement 2020 2021 2022 2023
Outcomes/Effectiveness
Volunteers hours 3,511 5,631 7,004 7,100
Noon meals served 919 1,799 3,108 3,200
Work Load:
Unduplicated participants 1,579 1,762 2,450 2,500
Duplicated participants 8,072 16,225 24,795 25,200
Received phone calls 2,748 3,439 3,875 3,900
Activities offered 89 104 127 130
GENERAL FUND 2020 2021 2022 2022 2023 %
SENIOR CENTER Actual Actual Budget Estimated Budget Change
Personnel Services 980$ 635$ 863$ 1,220$ 863$ 0.0%
Supplies 82 - - 501 - ---
Other Services & Charges 102,600 105,054 105,500 106,402 101,000 -4.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 103,662$ 105,689$ 106,363$ 108,123$ 101,863$ -4.2%
141
PARK OPERATIONS (101-45201)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
The park operations activity maintains the parks and trails within the city and at the city’s area
of the Bertram Chain of Lakes Regional Park (BCOL). This includes maintaining and improving
playground and picnic facilities, fertilizing and mowing grass, maintaining athletic fields,
flooding and maintaining outdoor ice rinks, snow and ice removal on pathways, and tree
preservation within the parks system.
OBJECTIVES:
1. Maintain a high-quality parks and trails system.
2. Continue pathways maintenance.
3. Improve efficiencies through use of the city’s GIS.
4. 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:
BUDGET COMMENTARY:
The parks budget consists of expenditures needed to maintain city parks and trails. The 2023
personnel services budget includes a full step increase and a 4.0% market rate wage increase.
Supplies increase due to higher costs for purchases, notably fertilizer and motor fuels. Other
services & charges increase to complete a parks needs study. Capital outlay reflects the
acquisition of capital equipment through the Central Equipment internal service fund.
Additional Central Equipment Fund purchases are planned for 2023.
Measurement 2020 2021 2022 2023
Park land acres maintained 360 365 365 365
Trail miles maintained 41.0 42.0 43.0 43.0
Park events held 63 100 215 215
Winter skating days 120 120 120 120
GENERAL FUND 2020 2021 2022 2022 2023 %
PARK - OPERATIONS Actual Actual Budget Estimated Budget Change
Personnel Services 575,682$ 601,077$ 692,576$ 733,894$ 740,623$ 6.9%
Supplies 177,195 197,544 185,000 149,105 243,500 31.6%
Other Services & Charges 174,388 173,021 210,828 209,582 296,933 40.8%
Capital Outlay 113,400 126,800 141,800 141,800 147,700 4.2%
TOTAL EXPENDITURES 1,040,665$ 1,098,442$ 1,230,204$ 1,234,381$ 1,428,756$ 16.1%
142
PARK BALLFIELDS (101-45203)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
The park ballfields activity prepares and maintains city athletic fields, including the NSP (Xcel)
Ballfields.
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:
BUDGET COMMENTARY:
The 2023 budget is consistent with the budget in prior years. An act of vandalism in 2022
increased Other services & charges. However, the increases expenditures were offset by
insurance claim proceeds.
Measurement 2020 2021 2022 2023
Ball games played, number of 100 650 650 650
Soccer fields maintained 32 35 24 24
Lacrosse fields maintained 10 10 10 10
Ball fields maintained 7 7 8 8
Number of times mowed 50 50 50 50
GENERAL FUND 2020 2021 2022 2022 2023 %
PARK - BALLFIELDS Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies 10,536 10,126 10,600 3,481 10,600 0.0%
Other Services & Charges 13,149 17,946 16,800 56,256 15,600 -7.1%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 23,685$ 28,072$ 27,400$ 59,737$ 26,200$ -4.4%
143
PUBLIC ARTS (101-45204)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
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:
BUDGET COMMENTARY:
Other services and charges include contracting for two creative consultants with increased
participation of the community, and the 2023 budget increases to reflect additional time spent
by one of the consultants. Anticipated projects funded through Central Minnesota Arts Board
(CMAB) grants are difficult to predict, and the increase in Other services & charges is also
caused by budgeting based on prior year success in obtaining grant funding for projects. This
budget unit is also responsible for utilities and repairs at the MontiArts building.
Measurement 2020 2021 2022 2023
Projects 7 15 32 40
Events 31 45 242 260
GENERAL FUND 2020 2021 2022 2022 2023 %
PARK - PUBLIC ARTS Actual Actual Budget Estimated Budget Change
Personnel Services -$ -$ -$ 220$ -$ ---
Supplies 3,047 6,010 6,800 14,797 7,200 5.9%
Other Services & Charges 33,045 87,235 65,441 124,923 166,328 154.2%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 36,092$ 93,246$ 72,241$ 139,940$ 173,528$ 140.2%
144
LIBRARY (101-45501)
DEPARTMENT: Recreation and Culture SUPERVISOR: City Administrator
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:
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 handful of
programs. Total 2023 estimated expenditures are lower than prior year levels due to
efficiencies gained with the Facilities Maintenance internal service fund and bringing custodial
services in-house rather than contracting out. By state statute, the city must annually expend at
least $35,160 for the library.
Measurement 2020 2021 2022 2023
Checked out items 112,334 143,223 138,428 140,000
Number of requests placed 7,375 4,997 4,754 4,750
Summer reading participants 148 377 829 900
Winter reading participants 209 55 237 300
Patrons using wireless 1,355 1,933 2,201 2,500
Internet sessions used 160 208 176 200
Programs offered 102 104 133 150
Program attendance 4,810* 1,772 3,317 3,500
* Some programs offered after March 17, 2020 were virtual and offered only on
Facebook. Counts include the number of views on FB.
GENERAL FUND 2020 2021 2022 2022 2023 %
LIBRARY Actual Actual Budget Estimated Budget Change
Personnel Services 1,901$ 1,848$ -$ -$ -$ ---
Supplies 1,725 1,517 2,500 295 1,500 -40.0%
Other Services & Charges 44,442 41,141 50,896 48,044 36,515 -28.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 48,068$ 44,506$ 53,396$ 48,339$ 38,015$ -28.8%
145
SHADE TREE (101-46102)
DEPARTMENT: Recreation and Culture SUPERVISOR: Park Superintendent
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, and noise reduction. 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 chipping and education programs.
5. Begin a boulevard tree planting program.
ISSUES:
1. Stress on trees caused by weather and diseases.
2. Funding availability.
3. Managing Emerald Ash Borer (EAB) disease discovered in 2022.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
A portion of the total time of park employees is allocated to the Shade Tree activity. The 2023
personnel services budget includes a full step increase and a 4.0% market rate wage increase.
Part of the personnel services change reflects the reallocation of wages within recreation and
culture activities. Supplies budgets increased with a greater focus on prioritizing new plantings,
especially to replace trees infected with EAB.
Measurement 2020 2021 2022 2023
Trees planted 220 300 75 75
Trees removed 6 25 15 15
Students in programs 500 0 0 0
Trees with Emerald Ash Borer ----25 25
GENERAL FUND 2020 2021 2022 2022 2023 %
SHADE TREE Actual Actual Budget Estimated Budget Change
Personnel Services 70,496$ 74,621$ 88,043$ 70,802$ 96,091$ 9.1%
Supplies 8,418 10,824 26,020 20,802 33,000 26.8%
Other Services & Charges 110 2,081 4,112 2,613 16,616 304.1%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 79,024$ 87,526$ 118,175$ 94,217$ 145,707$ 23.3%
146
2023 Adopted Budget
Special Revenue Funds
SPECIAL REVENUE FUNDS - SUMMARY
DESCRIPTION
The city currently has four active special revenue funds. Special revenue funds are used to
account for the proceeds of specific revenue sources that are restricted, committed, or
assigned to expenditures for specific purposes other than debt service or capital projects.
Unlike the General Fund, the budgets of special revenue funds do not always balance. Special
revenue funds use the modified accrual basis of accounting for both financial reporting and
budgeting purposes. In 2021, the Economic Development Authority (EDA) Fund was reclassified
from a blended component unit (special revenue fund) to a discretely-presented component
unit in the city’s Annual Comprehensive Financial Report. However, it is still presented as a
special revenue fund for budget purposes.
BUDGET ISSUES
Each special revenue fund has specific challenges that will be addressed in the narrative for
each fund.
BUDGET SUMMARY
TOTAL SPECIAL REVENUE FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 771,390$ 852,765$ 873,000$ 871,970$ 917,000$ 5.0%
Tax Increments 707,824 732,688 630,344 720,301 529,000 -16.1%
Franchise & Other Taxes 690 662 - 1,322 - ---
Intergovernmental Revenues 227,827 715,000 425,000 761,265 400,000 -5.9%
Charges for Services 540,071 828,981 931,900 1,112,025 1,228,300 31.8%
Miscellaneous 172,626 340,379 67,756 727,941 78,700 16.2%
Operating Transfers In 425,000 2,368 6,000 4,900 6,000 0.0%
TOTAL REVENUES 2,845,428$ 3,472,843$ 2,934,000$ 4,199,723$ 3,159,000$ 7.7%
EXPENDITURES
Personnel Services 1,008,315$ 911,689$ 1,246,373$ 1,196,717$ 1,375,157$ 10.3%
Supplies 96,372 56,259 120,900 98,629 119,100 -1.5%
Other Services & Charges 2,069,919 997,979 962,826 2,226,140 2,139,893 122.3%
Capital Outlay 403,069 31,516 191,976 327,009 341,850 78.1%
Operating Transfers Out 200,000 623,700 197,925 197,925 - -100.0%
TOTAL EXPENDITURES 3,777,675$ 2,621,144$ 2,720,000$ 4,046,420$ 3,976,000$ 46.2%
FUND BALANCE - JANUARY 1 8,483,186$ 7,550,939$ 8,402,638$ 8,402,638$ 8,555,941$
Excess (Deficiency) of
Revenues over Expenditures (932,247) 851,699 214,000 153,303 (817,000)
FUND BALANCE - DECEMBER 31 7,550,939$ 8,402,638$ 8,616,638$ 8,555,941$ 7,738,941$
147
ECONOMIC DEVELOPMENT AUTHORITY FUND (213-46301)
DEPARTMENT: Economic Development SUPERVISOR: Economic Development Manager
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 and 2 decertified, active districts. 5 additional TIF districts have
been authorized by the EDA Board, but not certified to the Office of the State Auditor (OSA).
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.
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,
especially 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.
148
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Under Section 469.033, subd. 6, of the HRA Act, the HRA’s special benefit tax is levied annually
and is limited to 0.0185% of the taxable market value. The main revenue source for the EDA
Fund is tax increments from the various districts. One district decertified in 2022 and will have
no increment in 2023. The 2022 intergovernmental revenues were a pass-through Minnesota
Investment Fund (MIF) grant passed through from the state to a private developer. The
increase in miscellaneous revenues in 2022 from a land sale.
Expenditures include administrative costs, pay-as-you-go payments to various development
projects, and a transfer to debt service funds for 2011A bond payment. Other services &
charges in 2022 reflect use of pooled TIF for a land sale to a private developer associated with
a new TIF district that will be certified in 2023.
Measurement 2020 2021 2022 2023
Properties acquired 4 1 1 1
Properties sold 0 0 11 1
GMEF loans outstanding 2 3 3 3
GMEF loans originated 0 1 0 1
Façade loans originated 1 0 2 1
Façade loans outstanding 1 0 0 3
Misc. other ED subsidy loans/g 0 0 3 3
Misc. other ED subsidy loans/g 0 0 2 5
TIF Districts newly created 0 0 5 1
Active TIF districts 8 9 8 12
EDA FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 354,390$ 367,765$ 388,000$ 386,970$ 402,000$ 3.6%
Tax Increments 707,824 732,688 630,344 720,301 529,000 -16.1%
Franchise & Other Taxes 690 662 - 1,322 - ---
Intergovernmental Revenues 185,000 - 25,000 375,547 - -100.0%
Charges for Services 2,275 26,951 - 8,700 - ---
Miscellaneous 82,465 304,007 43,656 718,441 50,000 14.5%
Operating Transfers In - 2,368 6,000 4,900 6,000 0.0%
TOTAL REVENUES 1,332,644$ 1,434,441$ 1,093,000$ 2,216,181$ 987,000$ -9.7%
EXPENDITURES
Personnel Services 134,190$ 119,333$ 172,135$ 171,262$ 189,639$ 10.2%
Supplies - 54 200 374 300 50.0%
Other Services & Charges 1,757,517 595,449 324,764 1,560,593 1,418,211 336.7%
Capital Outlay 35,496 31,516 191,976 273,769 214,850 11.9%
Operating Transfers Out 200,000 198,700 197,925 197,925 - -100.0%
TOTAL EXPENDITURES 2,127,203$ 945,052$ 887,000$ 2,203,923$ 1,823,000$ 105.5%
FUND BALANCE - JANUARY 1 7,313,264$ 6,518,705$ 7,008,094$ 7,008,094$ 7,020,352$
Excess (Deficiency) of
Revenues over Expenditures (794,559) 489,389 206,000 12,258 (836,000)
FUND BALANCE - DECEMBER 31 6,518,705$ 7,008,094$ 7,214,094$ 7,020,352$ 6,184,352$
149
CEMETERY FUND (215-49010)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
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, which 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 2020 2021 2022 2023
Plot occupied 3,598 3,626 3,650 3,675
Plots reserved 683 683 696 700
Plots available for sale 1,119 1,092 1,062 1,030
Number of plots sold 11 23 32 32
Number of internments 22 28 25 25
Number of markers staked 15 9 17 20
Columbarium slots occupied 6 9 16 20
Columbarium slots reserved 2 3 8 10
Columbarium slots available 88 84 80 75
Columbarium slots sold 6 4 6 5
Ossuary slots occupied 0 0 3 5
Ossuary slots reserved 50 50 52 55
Ossuary slots available 265 265 268 266
Ossuary slots sold 0 0 2 2
150
BUDGET:
BUDGET COMMENTARY:
Burial plot and ossuary-columbarium slot sales continue to increase but are budgeted
conservatively. Market value adjustments in the city’s investment portfolio created negative
miscellaneous revenues.
CEMETERY 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services 40,884$ 53,891$ 32,900$ 67,838$ 41,700$ 26.7%
Miscellaneous 15,701 (282) 100 (3,518) 300 200.0%
TOTAL REVENUES 56,585$ 53,609$ 33,000$ 64,320$ 42,000$ 27.3%
EXPENDITURES
Personnel Services 2,982$ 3,628$ 2,228$ 386$ 2,228$ 0.0%
Supplies 60 1,314 1,100 106 1,100 0.0%
Other Services & Charges 24,279 23,823 29,672 26,169 27,672 -6.7%
TOTAL EXPENDITURES 27,321$ 28,764$ 33,000$ 26,660$ 31,000$ -6.1%
FUND BALANCE - JANUARY 1 26,075$ 55,339$ 80,184$ 80,184$ 117,844$
Excess (Deficiency) of
Revenues over Expenditures 29,264 24,845 - 37,660 11,000
FUND BALANCE - DECEMBER 31 55,339$ 80,184$ 80,184$ 117,844$ 128,844$
151
SMALL CITIES DEVELOPMENT PROGRAM (SCDP) FUND (221-46500)
DEPARTMENT: Small Cities Development Program Fund SUPERVISOR: Community Development Director
ACTIVITY SCOPE:
Following state and federal guidelines, the SCDP 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:
BUDGET COMMENTARY:
Repayment of loans and interest earned on investments make up the anticipated activity in
2023. The city’s pooled investment market value adjustment was negative in 2022, more than
fully offsetting the interest earned on the outstanding loan.
Measurement 2020 2021 2022 2023
Loans outstanding 1 1 1 1
SCDP FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Miscellaneous 20,173$ 84$ 8,000$ (26,413)$ 8,000$ 0.0%
FUND BALANCE - JANUARY 1 904,365$ 924,538$ 924,622$ 924,622$ 898,209$
Excess (Deficiency) of
Revenues over Expenditures 20,173 84 8,000 (26,413) 8,000
FUND BALANCE - DECEMBER 31 924,538$ 924,622$ 932,622$ 898,209$ 906,209$
152
COMMUNITY CENTER FUND (226-4512x)
DEPARTMENT: Community Center SUPERVISOR: Parks, Arts & Recreation Director
ACTIVITY SCOPE:
The Monticello Community Center (MCC) 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 area previously used as a wheel park (skateboard, bike, and
rollerblade) including design, financing, construction, and marketing.
2. Develop an online 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.
5. Residual impacts from the COVID-19 pandemic and subsequent inflation.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Custo mer visits, number of 71,632 94,448 117,942 122,642
Gross program sales 17,930$ 44,937$ 62,485$ 73,000$
Annual memberships 1,150 343 416 437
Monthly memberships 1,433 843 1,166 1,283
Three-month memberships 308 153 186 195
Ratio of annual memberships
to other memberships 0.66 0.34 0.31 0.30
Rental revenue 73,096$ 127,144$ 167,003$ 196,400$
Numbers dropped significantly in 2020 due to the COVID-19 pandemic. 2023 amounts
are estimated conservatively as local operations restrictions are subject to change.
153
BUDGET:
BUDGET COMMENTARY:
The MCC’s largest revenue sources are charges for services (memberships and day passes) and
property taxes. Other revenues include concession sales, room rentals, and program fees.
While charges for services are typically the largest source of revenue, the COVID-19 pandemic
forced closure of the facility for 4 months in 2020. The closure created great financial burden
on the Community Center which caused an increased reliance on property taxes and a transfer
from the Liquor Fund to avoid a negative fund balance. Activities in the facility increased in
2021, while still impacted by the pandemic. Use of $715,000 of American Rescue Plan Act
(ARPA) funding in 2021 brought back stability to the fund balance.
The current labor market necessitated a wage increase for many of the part time positions.
Uncertainty over how inflation will affect patron levels, the 2023 budget is conservative in
estimating revenues and liberal in estimating potential costs. Capital expenditures were halted
when the pandemic began and were delayed to conserve resources. However, in thinking long-
term, methodical investments in the facility to engage patrons took place in 2022 and are
planned for 2023.
COMMUNITY CENTER 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 417,000$ 485,000$ 485,000$ 485,000$ 515,000$ 6.2%
Intergovernmental Revenues 42,827 715,000 400,000 385,718 400,000 0.0%
Charges for Services 496,912 748,139 899,000 1,035,486 1,186,600 32.0%
Miscellaneous 54,287 36,570 16,000 39,431 20,400 27.5%
Operating Transfers In 425,000 - - - - ---
TOTAL REVENUES 1,436,026$ 1,984,709$ 1,800,000$ 1,945,635$ 2,122,000$ 17.9%
EXPENDITURES
Personnel Services 871,143$ 788,729$ 1,072,010$ 1,025,069$ 1,183,290$ 10.4%
Supplies 96,312 54,891 119,600 98,150 117,700 -1.6%
Other Services & Charges 288,123 378,708 608,390 639,378 694,010 14.1%
Capital Outlay 367,573 - - 53,240 127,000 ---
Operating Transfers Out - 425,000 - - - ---
TOTAL EXPENDITURES 1,623,151$ 1,647,328$ 1,800,000$ 1,815,837$ 2,122,000$ 17.9%
FUND BALANCE - JANUARY 1 239,482$ 52,357$ 389,738$ 389,738$ 519,536$
Excess (Deficiency) of
Revenues over Expenditures (187,125) 337,381 - 129,798 -
FUND BALANCE - DECEMBER 31 52,357$ 389,738$ 389,738$ 519,536$ 519,536$
154
2023 Adopted Budget
Debt Service Funds
DEBT SERVICE FUNDS - SUMMARY
DESCRIPTION
Debt services funds are used to account for the accumulation of resources for the payment of
general long-term debt, excluding debt issued by an enterprise or internal service fund. Debt
service funds use the modified accrual basis of accounting for both financial reporting and
budgeting purposes. The city has six active debt service (sub)funds that are combined into one
debt service fund for financial reporting.
BUDGET ISSUES
The city's bond rating was downgraded from Aa3 to A2 by Moody's Investor Services in 2012.
This rating was upgraded to A1 with the sale of the city’s 2019A debt issue in 2019 and affirmed
with the city’s 2020A debt issue. See individual (sub)funds for the purpose and budget issues
facing each debt service (sub)fund. Fund balances in some (sub)funds declined with planned
use of fund balances built up over time due to items such as prepaid assessments.
BUDGET SUMMARY
TOTAL DEBT SERVICE FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 2,939,987$ 2,831,479$ 2,311,400$ 2,311,400$ 1,999,581$ -13.5%
Special Assessments 469,028 272,950 222,472 317,270 259,275 16.5%
Miscellaneous 15,864 (7,195) 7,203 (53,739) 9,144 26.9%
Operating Transfers In 200,000 3,975,237 197,925 197,925 - -100.0%
TOTAL REVENUES 3,624,879$ 7,072,472$ 2,739,000$ 2,772,856$ 2,268,000$ -17.2%
EXPENDITURES
Other Services & Charges 1,372$ 8,850$ 1,200$ 7,250$ 1,200$ 0.0%
Debt Service 4,140,536 7,243,943 2,812,800 2,806,708 2,605,800 -7.4%
Operating Transfers Out - - 111,000 108,802 - -100.0%
TOTAL EXPENDITURES 4,141,908$ 7,252,793$ 2,925,000$ 2,922,759$ 2,607,000$ -10.9%
FUND BALANCE - JANUARY 1 1,821,561$ 1,304,532$ 1,124,210$ 1,124,210$ 974,306$
Excess (Deficiency) of
Revenues over Expenditures (517,029) (180,322) (186,000) (149,904) (339,000)
FUND BALANCE - DECEMBER 31 1,304,532$ 1,124,210$ 938,210$ 974,306$ 635,306$
155
2015B G.O. BOND SUB-FUND (319-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
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 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 were
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. Accumulating resources for early redemption.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2020 2021 2022 2023
Assessment balance $92,013 $68,780 $51,585 $34,390
Deferred assessments $0 $0 $0 $0
Deferred % of balance 0% 0% 0% 0%
Delinquent balance $0 $0 $0 $0
Prepaid assessments $0 $4,629 $0 $0
Assessment rolls 1 2 1 1
Assessed parcels 1 28 1 1
2015B G.O. Bonds 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTI MATED BUDGET CHANGE
Property Taxes 198,385$ 201,115$ 192,650$ 192,650$ 164,435$ -14.6%
Special Assessments 23,416 27,767 21,776 10,403 19,903 -8.6%
Miscellaneous 2,557 (785) 1,574 (6,508) 1,662 5.6%
TOTAL REVENUES 224,358$ 228,097$ 216,000$ 196,545$ 186,000$ -13.9%
EXPENDITURES
Other Services & Charges 196$ 357$ 200$ 417$ 200$ 0.0%
Debt Service 211,891 213,550 210,800 210,300 212,800 0.9%
TOTAL EXPENDITURES 212,087$ 213,907$ 211,000$ 210,717$ 213,000$ 0.9%
FUND BALANCE - JANUARY 1 109,416$ 121,687$ 135,877$ 135,877$ 121,706$
Excess (Deficiency) of
Revenues over Expenditures 12,271 14,190 5,000 (14,171) (27,000)
FUND BALANCE - DECEMBER 31 121,687$ 135,877$ 140,877$ 121,706$ 94,706$
156
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 $175,000 on
school district property and property taxes. The tax levy covers the gap between assessment
revenue and debt service payments. Developer fees were assessed to the platted parcels in
2021 causing an increase in assessment rolls and assessed parcels related to the bond issue.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2023 -$ 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 1,500,000$ 200,248$ 1,700,248$
GO Bonds, Series 2015B
157
2016A G.O. BOND SUB-FUND (320-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
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 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 2023.
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:
Measurement 2020 2021 2022 2023
Assessment balance $396,383 $316,688 $246,567 $185,457
Deferred assessments $0 $0 $0 $0
Deferred % of balance 0% 0% 0% 0%
Delinquent balance $0 $0 $0 $0
Prepaid assessments $46,478 $9,621 $7,209 $0
Assessment rolls 2 2 2 2
Assessed parcels 76 76 66 66
2016A G.O. Bonds 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTI MATED BUDGET CHANGE
Property Taxes 405,039$ 406,089$ 406,929$ 406,929$ 282,559$ -30.6%
Special Assessments 145,564 91,510 78,800 83,117 73,063 -7.3%
Miscellaneous 8,875 (2,525) 1,271 (17,733) 1,378 8.4%
TOTAL REVENUES 559,478$ 495,074$ 487,000$ 472,313$ 357,000$ -26.7%
EXPENDITURES
Other Services & Charges 196$ 357$ 200$ 417$ 200$ 0.0%
Debt Service 525,941 526,000 527,800 526,850 527,800 0.0%
TOTAL EXPENDITURES 526,137$ 526,357$ 528,000$ 527,267$ 528,000$ 0.0%
FUND BALANCE - JANUARY 1 366,626$ 399,967$ 368,684$ 368,684$ 313,731$
Excess (Deficiency) of
Revenues over Expenditures 33,341 (31,283) (41,000) (54,954) (171,000)
FUND BALANCE - DECEMBER 31 399,967$ 368,684$ 327,684$ 313,731$ 142,731$
158
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 $1,143,000
in the core street reconstruction area. Property taxes are levied for the gap between
assessment revenue and debt service payments. Future levies will be adjusted to reflect
assessment prepayments, interest earned on the prepayments and interest foregone on the
prepayments.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2023 -$ 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 2,225,000$ 148,000$ 2,373,000$
GO Bonds, Series 2016A
159
2017A G.O. BOND SUB-FUND (321-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
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 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. Accumulating resources for early redemption.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2020 2021 2022 2023
Assessment balance $226,644 $191,502 $150,373 $120,298
Deferred assessments $0 $0 $0 $0
Deferred % of balance 0% 0% 0% 0%
Delinquent balance $0 $0 $0 $0
Prepaid assessments $3,442 $2,763 $9,211 $0
Assessment rolls 2 2 2 2
Assessed parcels 57 57 52 52
2017A G.O. Bonds 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTI MATED BUDGET CHANGE
Property Taxes 427,367$ 430,097$ 427,367$ 427,367$ 299,532$ -29.9%
Special Assessments 47,347 46,859 41,120 49,837 39,098 -4.9%
Miscellaneous 6,141 (1,788) 1,513 (13,567) 1,370 -9.5%
TOTAL REVENUES 480,855$ 475,168$ 470,000$ 463,637$ 340,000$ -27.7%
EXPENDITURES
Other Services & Charges 196$ 357$ 200$ 417$ 200$ 0.0%
Debt Service 470,731 472,390 470,800 469,840 467,800 -0.6%
TOTAL EXPENDITURES 470,927$ 472,747$ 471,000$ 470,257$ 468,000$ -0.6%
FUND BALANCE - JANUARY 1 268,629$ 278,557$ 280,978$ 280,978$ 274,359$
Excess (Deficiency) of
Revenues over Expenditures 9,928 2,421 (1,000) (6,619) (128,000)
FUND BALANCE - DECEMBER 31 278,557$ 280,978$ 279,978$ 274,359$ 146,359$
160
BUDGET COMMENTARY:
The $5,000,000 2017A G.O. bond issue has two components: $2,040,000 improvement portion
and $2,960,000 abatement portion. Property taxes and assessments support the improvement
portion of the debt issue. The abatement portion is supported by an abatement tax levy for
bond principal and a debt service levy for bond interest. Property taxes will be levied for any
gap between assessment revenue and debt service.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2023 -$ 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 3,160,000$ 400,178$ 3,560,178$
GO Bonds, Series 2017A
161
2018A G.O. ABATEMENT BOND SUB-FUND (322-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
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 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:
BUDGET COMMENTARY:
The $5,000,000 2018A G.O. bond issue has only one component: Abatement. Property taxes
are levied for annual principal and interest payments. A debt service levy covers the annual
bond interest payment, and an abatement levy covers the annual bond principal payment.
Measurement 2020 2021 2022 2023
Not Applicable
2018A G.O. Bonds 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 472,434$ 448,077$ 451,812$ 451,812$ 444,232$ -1.7%
Miscellaneous 1,817 (648) 1,188 (5,361) 1,768 48.8%
TOTAL REVENUES 474,251$ 447,429$ 453,000$ 446,451$ 446,000$ -1.5%
EXPENDITURES
Other Services & Charges 196$ 357$ 200$ 417$ 200$ 0.0%
Debt Service 451,379 446,288 447,800 447,038 447,800 0.0%
TOTAL EXPENDITURES 451,575$ 446,645$ 448,000$ 447,454$ 448,000$ 0.0%
FUND BALANCE - JANUARY 1 57,043$ 79,719$ 80,503$ 80,503$ 79,500$
Excess (Deficiency) of
Revenues over Expenditures 22,676 784 5,000 (1,003) (2,000)
FUND BALANCE - DECEMBER 31 79,719$ 80,503$ 85,503$ 79,500$ 77,500$
162
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
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 3,790,000$ 683,662$ 4,473,662$
GO Bonds, Series 2018A Abatement Bonds
163
2019A G.O. BOND SUB-FUND (323-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
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 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:
Measurement 2020 2021 2022 2023
Assessment balance $81,840 $71,610 $61,380 $51,150
Deferred assessments $0 $0 $0 $0
Deferred % of balance 0% 0% 0% 0%
Delinquent balance $0 $0 $0 $0
Prepaid assessments $0 $0 $0 $0
Assessment rolls 1 1 1 1
Assessed parcels 9 9 9 9
2019A GO BONDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTI MATED BUDGET CHANGE
Property Taxes 728,620$ 714,945$ 709,446$ 709,446$ 697,133$ -1.7%
Special Assessments 14,833 14,322 13,810 13,811 13,299 -3.7%
Miscellaneous 912 (536) 744 (5,948) 1,568 110.8%
TOTAL REVENUES 744,365$ 728,731$ 724,000$ 717,309$ 712,000$ -1.7%
EXPENDITURES
Other Services & Charges 196$ 4,357$ 200$ 417$ 200$ 0.0%
Debt Service 709,686 714,088 718,800 717,938 711,800 -1.0%
TOTAL EXPENDITURES 709,882$ 718,445$ 719,000$ 718,354$ 712,000$ -1.0%
FUND BALANCE - JANUARY 1 5,011$ 39,494$ 49,780$ 49,780$ 48,734$
Excess (Deficiency) of
Revenues over Expenditures 34,483 10,286 5,000 (1,046) -
FUND BALANCE - DECEMBER 31 39,494$ 49,780$ 54,780$ 48,734$ 48,734$
164
BUDGET COMMENTARY:
The 2019A G.O. Bonds are comprised of four components: $1,040,000 abatement, $1,290,000
equipment, $5,350,000 CIP, and $320,000 street improvement. The revenue sources include a
combination of existing city funds, property taxes, and special assessments.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2023 -$ 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
Total 6,360,000$ 809,070$ 7,169,070$
GO Bonds, Series 2019A
165
2020A G.O. BOND SUB-FUND (324-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2020A bonds financed the 2020 and 2022 Street Improvement projects. The revenue
sources include property taxes and special assessments. The city levies for the gap between
annual debt service payments and annual assessment collections. The bonds have an average
interest rate of 1.5067% and are redeemable in December of 2028.
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:
Measurement 2020 2021 2022 2023
Assessment balance $508,813 $435,493 $387,104 $301,768
Deferred assessments $0 $0 $0 $0
Deferred % of balance 0% 0% 0% 0%
Delinquent balance $0 $0 $0 $0
Prepaid assessments $124,520 $22,831 $96,838 $0
Assessment rolls 1 1 2 2
Assessed parcels 251 251 437 437
2020A GO BONDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTI MATED BUDGET CHANGE
Property Taxes -$ 117,586$ 123,196$ 123,196$ 111,690$ -9.3%
Special Assessments 124,520 92,491 66,966 160,103 113,912 70.1%
Miscellaneous 414 (836) 838 (4,623) 1,398 66.8%
TOTAL REVENUES 124,934$ 209,241$ 191,000$ 278,675$ 227,000$ 18.8%
EXPENDITURES
Other Services & Charges -$ 357$ 200$ 4,417$ 200$ 0.0%
Debt Service - 234,982 237,800 236,818 237,800 0.0%
TOTAL EXPENDITURES -$ 235,339$ 238,000$ 241,234$ 238,000$ 0.0%
FUND BALANCE - JANUARY 1 -$ 124,934$ 98,836$ 98,836$ 136,277$
Excess (Deficiency) of
Revenues over Expenditures 124,934 (26,098) (47,000) 37,441 (11,000)
FUND BALANCE - DECEMBER 31 124,934$ 98,836$ 51,836$ 136,277$ 125,277$
166
BUDGET COMMENTARY:
The city issued the $2,155,000 2020A G.O. Bonds to finance the 2020 and 2022 Street
Improvement projects. Property taxes and special assessments also support debt service
payments. Expenditures consist of debt principal and interest payments and fiscal agent fees.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2023 -$ 13,609$ 13,609$
12/15/2023 210,000 13,609 2.00% 223,609
6/15/2024 - 11,509 11,509
12/15/2024 210,000 11,509 2.00% 221,509
6/15/2025 - 9,409 9,409
12/15/2025 215,000 9,409 0.45% 224,409
6/15/2026 - 8,925 8,925
12/15/2026 215,000 8,925 2.00% 223,925
6/15/2027 - 6,775 6,775
12/15/2027 220,000 6,775 2.00% 226,775
6/15/2028 - 4,575 4,575
12/15/2028 225,000 4,575 2.00% 229,575
6/15/2029 - 2,325 2,325
12/15/2029 230,000 2,325 1.00% 232,325
6/15/2030 - 1,175 1,175
12/15/2030 235,000 1,175 1.00% 236,175
Total 1,760,000$ 116,603$ 1,876,603$
GO Bonds, Series 2020A
167
CLOSED DEBT SERVICE FUNDS
CLOSED FUNDS PRESENTED:
• 2011A G.O. Refunding Bond Sub-Fund (312-47000)
• 2014A G.O. Judgement Bond Sub-Fund (318-47000)
CLOSED FUNDS BUDGETS:
2011A G.O. BOND FUND (2005A)2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 172,641$ -$ -$ -$ -$ ---
Special Assessments 113,348 - - - - ---
Miscellaneous (8,015) (76) 75 - - -100.0%
Operating Transfers In 200,000 198,700 197,925 197,925 - -100.0%
TOTAL REVENUES 477,974$ 198,624$ 198,000$ 197,925$ -$ -100.0%
EXPENDITURES
Other Services & Charges 196$ 1,357$ -$ 750$ -$ ---
Debt Service 1,259,466 199,175 199,000 197,925 - -100.0%
Operating Transfers Out - - 111,000 108,802 - -100.0%
TOTAL EXPENDITURES 1,259,662$ 200,532$ 310,000$ 307,477$ -$ -100.0%
FUND BALANCE - JANUARY 1 893,148$ 111,460$ 109,552$ 109,552$ -$
Excess (Deficiency) of
Revenues over Expenditures (781,688) (1,908) (112,000) (109,552) -
FUND BALANCE - DECEMBER 31 111,460$ 109,552$ (2,448)$ -$ -$
2014A G.O. JUDGMENT BONDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 535,501$ 513,570$ -$ -$ -$ ---
Miscellaneous 3,163 - - - - ---
Operating Transfers In - 3,776,537 - - - ---
TOTAL REVENUES 538,664$ 4,290,107$ -$ -$ -$ ---
EXPENDITURES
Other Services & Charges 196$ 1,350$ -$ -$ -$ ---
Debt Service 511,442 4,437,471 - - - ---
TOTAL EXPENDITURES 511,638$ 4,438,821$ -$ -$ -$ ---
FUND BALANCE - JANUARY 1 121,688$ 148,714$ -$ -$ -$
Excess (Deficiency) of
Revenues over Expenditures 27,026 (148,714) - - -
FUND BALANCE - DECEMBER 31 148,714$ -$ -$ -$ -$
168
2023 Adopted Budget
Capital Project Funds
CAPITAL PROJECT FUNDS - SUMMARY
DESCRIPTION
Capital project funds are used to account for financial resources that are restricted, committed,
or assigned to expenditure for capital outlays including the acquisition or construction of capital
facilities and other capital assets—excluding capital assets financed by proprietary funds
(enterprise or internal service). Capital project funds use the modified accrual basis of
accounting for both financial reporting and budgeting purposes. The city currently has four
active capital project funds.
BUDGET ISSUES
Financing capital asset additions or replacements has been an ongoing challenge, especially in
an environment where the focus is on maintaining a low, stable property tax levy. See the
individual funds for the budget issues facing each capital project fund.
BUDGET SUMMARY
TOTAL CAPITAL PROJECTS FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 350,604$ 647,085$ 1,081,600$ 1,153,476$ 1,475,419$ 36.4%
Franchise & Other Taxes 224,030 189,460 140,000 158,384 190,000 35.7%
Intergovernmental Revenues 675,751 2,571,685 900,000 150,000 1,559,500 73.3%
Charges for Services - 23,492 - 171,697 - ---
Special Assessments 163,822 1,425,724 207,671 401,086 128,549 -38.1%
Miscellaneous 434,396 6,119 261,729 (539,654) 186,532 -28.7%
Contributed Capital 333,550 271,840 - - - ---
Operating Transfers In 2,135,000 3,201,427 111,000 108,801 4,000,000 3503.6%
Debt Proceeds 2,256,280 - - - 5,000,000 ---
TOTAL REVENUES 6,573,433$ 8,336,831$ 2,702,000$ 1,603,791$ 12,540,000$ 364.1%
EXPENDITURES
Other Services & Charges 66,888$ 100,814$ -$ 294,687$ -$ ---
Capital Outlay 4,476,428 7,304,615 7,290,000 2,472,266 15,375,000 110.9%
Debt Service 53,475 - - 500 - ---
Operating Transfers Out - 7,326,622 - - - ---
TOTAL EXPENDITURES 4,596,791$ 14,732,050$ 7,290,000$ 2,767,453$ 15,375,000$ 110.9%
FUND BALANCE - JANUARY 1 18,562,016$ 20,538,658$ 14,143,440$ 14,143,440$ 12,979,777$
Excess (Deficiency) of
Revenues over Expenditures 1,976,642 (6,395,219) (4,588,000) (1,163,662) (2,835,000)
FUND BALANCE - DECEMBER 31 20,538,658$ 14,143,440$ 9,555,440$ 12,979,777$ 10,144,777$
169
CAPITAL PROJECT FUND (400-4xxxx)
DEPARTMENT: Capital Project Fund SUPERVISOR: City Engineer/Public Works Director
ACTIVITY SCOPE:
The Capital Project Fund is a generic fund of the same type used to account for capital asset
construction and acquisitions. Capital assets accounted for in this fund include street
improvements and 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) that the
Central Equipment internal service fund cannot support.
ISSUES:
1. Funding growth and replacement improvements in a stable debt and property tax levy
environment.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2020 2021 2022 2023
Projects supported 4 5 9 5
CAPITAL PROJECT FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Property Taxes 350,604$ 647,085$ 1,081,600$ 1,153,476$ 1,475,419$ 36.4%
Franchise & Other Taxes 33,694 - - - - ---
Intergovernmental Revenues 675,751 2,571,685 900,000 - 1,087,000 20.8%
Charges for Services - 23,492 - 26,865 - ---
Special Assessments 58,039 667,337 205,575 400,235 127,734 -37.9%
Miscellaneous 316,439 26,090 248,825 (452,158) 174,847 -29.7%
Contributed Capital 333,550 271,840 - - - ---
Operating Transfers In 1,900,000 2,088,430 111,000 108,801 2,750,000 2377.5%
Debt Proceeds 2,256,280 - - - 5,000,000 ---
TOTAL REVENUES 5,924,357$ 6,295,959$ 2,547,000$ 1,237,220$ 10,615,000$ 316.8%
EXPENDITURES
Other Services & Charges 66,888$ 100,814$ -$ 294,187$ -$ ---
Capital Outlay 3,969,151 6,599,533 6,490,000 2,388,571 11,870,000 82.9%
Debt Service 53,475 - - 500 - ---
Operating Transfers Out - 3,976,538 - - - ---
TOTAL EXPENDITURES 4,089,514$ 10,676,885$ 6,490,000$ 2,683,258$ 11,870,000$ 82.9%
FUND BALANCE - JANUARY 1 14,408,703$ 16,243,546$ 11,862,620$ 11,862,620$ 10,416,582$
Excess (Deficiency) of
Revenues over Expenditures 1,834,843 (4,380,926) (3,943,000) (1,446,038) (1,255,000)
FUND BALANCE - DECEMBER 31 16,243,546$ 11,862,620$ 7,919,620$ 10,416,582$ 9,161,582$
170
BUDGET COMMENTARY:
Lower required debt service levies have created capacity for the capital projects fund to levy
about $500,000 more than it previously could in previous years. The 2023 property tax levy
reduces the need for future debt and stabilizes the overall levy to accommodate future debt.
Intergovernmental revenues of $2.1 million were received in 2021 but are related to the Fallon
Avenue Overpass project that was completed in 2018. The 2021 transfer in is from the closure
of the Closed Bond fund, which had previously been presented in conjunction with the Capital
Projects fund, so the city formally combined them in 2021. 2023 transfers are from the Liquor
and Deputy Registrar funds for the improvement project in Monticello’s core downtown.
Budgeted debt proceeds will be used to fund the beginning stages of construction of a new
Public Works Facility, which additional debt anticipated to be issued in 2024.
For 2023, notable projects include: Downtown Pedestrian & Roadways Improvements, a new
Public Works Facility, The Pointes at Cedar development area, Bertram Chain of Lakes Regional
Park Improvements, and School Boulevard & Elm Street Safety Improvements. Some funding is
budgeted to come from fund balance.
171
STREET LIGHTING IMPROVEMENT FUND (403-43162)
DEPARTMENT: Public Works SUPERVISOR: City Engineer/Public Works Director
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 Electric and Xcel
Energy.
3. Verify lamp and fixture maintenance by utility companies.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Intergovernmental revenues in 2023 include a grant from the State for a Flashing Yellow Arrow
project. A transfer from the Liquor Fund and fund balance will be used for undergrounding
electric lines as part of the Downtown Pedestrian & Roadways Improvements.
Measurement 2020 2021 2022 2023
Projects supported 0 0 1 2
STREET LIGHT IMPROVEMENTS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Franchise & Other Taxes 190,336$ 189,460$ 140,000$ 158,384$ 190,000$ 35.7%
Intergovernmental Revenues - - - - 472,500 ---
Miscellaneous 17,709 (5,181) 10,000 (45,716) 9,500 -5.0%
Operating Transfers In - - - - 250,000 ---
TOTAL REVENUES 208,045$ 184,279$ 150,000$ 112,668$ 922,000$ 514.7%
EXPENDITURES
Capital Outlay 621$ -$ 425,000$ 37,993$ 2,130,000$ 401.2%
TOTAL EXPENDITURES 621$ -$ 425,000$ 37,993$ 2,130,000$ 401.2%
FUND BALANCE - JANUARY 1 788,504$ 995,928$ 1,180,207$ 1,180,207$ 1,254,883$
Excess (Deficiency) of
Revenues over Expenditures 207,424 184,279 (275,000) 74,675 (1,208,000)
FUND BALANCE - DECEMBER 31 995,928$ 1,180,207$ 905,207$ 1,254,883$ 46,883$
172
PARK & PATHWAY IMPROVEMENT FUND (404-45202)
DEPARTMENT: Recreation & Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
Activities of the Park & Pathway Improvement Fund include updating and maintaining the
city's pathway system.
OBJECTIVES:
1. Improve pathways and parks systems.
2. Development of Bertram Chain of Lakes Park.
ISSUES:
1. Time constraints of other projects.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Transfers from other funds typically surpass all other revenue sources. When possible, the city
transfers money into this fund prior to the year of expenditure.
2021 transfers were due to the closure of the unused Streets Reconstruction Fund as street
improvement projects are funded through the Capital Projects Fund. 2023 transfers are
budgeted to come from the Liquor Fund, which will provide funding for the Bertram Chain of
Lakes (BCOL) Pedestrian and Safety Improvements project. The BCOL project and pathways as
part of the School Boulevard and Elm Street projects make up the capital outlay budget.
Measurement 2020 2021 2022 2023
Projects supported 4 2 1 2
PARK & PATHWAY IMPROVEMENT 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTI MATED BUDGET CHANGE
Intergovernmental Revenues -$ -$ -$ 150,000$ -$ ---
Special Assessments 1,033 - - - - ---
Miscellaneous 48,760 (14,831) 2,000 (42,464) 2,000 0.0%
Operating Transfers In 235,000 1,094,000 - - 1,000,000 ---
TOTAL REVENUES 284,793$ 1,079,169$ 2,000$ 107,536$ 1,002,000$ 50000.0%
EXPENDITURES
Other Services & Charges -$ -$ -$ 500$ -$ ---
Capital Outlay 506,656 677,078 375,000 - 1,375,000 266.7%
Operating Transfers Out - 18,997 - - - ---
TOTAL EXPENDITURES 506,656$ 696,075$ 375,000$ 500$ 1,375,000$ 266.7%
FUND BALANCE - JANUARY 1 939,341$ 717,478$ 1,100,572$ 1,100,572$ 1,207,608$
Excess (Deficiency) of
Revenues over Expenditures (221,863) 383,094 (373,000) 107,036 (373,000)
FUND BALANCE - DECEMBER 31 717,478$ 1,100,572$ 727,572$ 1,207,608$ 834,608$
173
PARK DEDICATION FUND (405-45202)
DEPARTMENT: Public Works SUPERVISOR: Community Development Director
ACTIVITY SCOPE:
The Park Dedication Fund is used to account for funds charged to developers for future city
park areas.
OBJECTIVES:
1. Provide quality park area within walkable distance to all residential parcels in the
City.
ISSUES:
1. Economic impact on new development and home construction.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The Park Dedication Fund was created in 2021 to properly account for restricted park
dedication fees received from developers for the construction of park areas within new
developments. Park dedication fees are an irregular source of revenue because of
unpredictable economic conditions and sporadic new development.
Measurement 2020 2021 2022 2023
Acres deeded to city 1.96 0.00 1.02 2.00
Fees collected*-$ -$ 144,832$ 110,000$
*Land may be donated by developer in lieu of paying a park dedication fee.
PARK DEDICATION 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services -$ -$ -$ 144,832$ -$ ---
Special Assessments - 9,006 2,096 850 815 -61.1%
Miscellaneous - 41 904 684 185 -79.5%
Operating Transfers In - 18,997 - - - ---
TOTAL REVENUES -$ 28,044$ 3,000$ 146,366$ 1,000$ -66.7%
EXPENDITURES
Capital Outlay -$ 28,003$ -$ 45,702$ -$ ---
TOTAL EXPENDITURES -$ 28,003$ -$ 45,702$ -$ ---
FUND BALANCE - JANUARY 1 -$ -$ 41$ 41$ 100,705$
Excess (Deficiency) of
Revenues over Expenditures - 41 3,000 100,664 1,000
FUND BALANCE - DECEMBER 31 -$ 41$ 3,041$ 100,705$ 101,705$
174
CLOSED CAPITAL PROJECTS FUNDS
CLOSED FUNDS PRESENTED:
• Closed Bond Fund (402-00000)
• Streets Reconstruction Fund (212-43121)
CLOSED FUNDS BUDGETS:
CLOSED BOND FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Special Assessments 104,750$ 749,380$ -$ -$ -$ ---
Miscellaneous 17,602 - - - - ---
TOTAL REVENUES 122,352$ 749,380$ -$ -$ -$ ---
EXPENDITURES
Operating Transfers Out -$ 1,663,430$ -$ -$ -$ ---
TOTAL EXPENDITURES -$ 1,663,430$ -$ -$ -$ ---
FUND BALANCE - JANUARY 1 791,698$ 914,050$ -$ -$ -$
Excess (Deficiency) of
Revenues over Expenditures 122,352 (914,050) - - -
FUND BALANCE - DECEMBER 31 914,050$ -$ -$ -$ -$
STREET RECONSTRUCTION FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Miscellaneous 33,886$ -$ -$ -$ -$ ---
EXPENDITURES
Operating Transfers Out -$ 1,667,656$ -$ -$ -$ ---
FUND BALANCE - JANUARY 1 1,633,770$ 1,667,656 -$ -$ -$
Excess (Deficiency) of
Revenues over Expenditures 33,886 (1,667,656) - - -
FUND BALANCE - DECEMBER 31 1,667,656$ -$ -$ -$ -$
175
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176
2023 Adopted Budget
Enterprise Funds
ENTERPRISE FUNDS - SUMMARY
DESCRIPTION
Enterprise funds are used to report an activity for which a fee is charged to external users for
goods or services. 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. The city currently has six active enterprise funds: Water, Sewer,
Stormwater, Liquor (Hi-Way Liquors), Deputy Registrar (DMV), and Fiber Optics (FiberNet).
BUDGET ISSUES
Each enterprise fund has specific challenges that will be addressed in the narrative for each
fund.
BUDGET SUMMARY
TOTAL ENTERPRISE FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Franchise & Other Taxes -$ 53,942$ -$ -$ -$ ---
Sale of Goods 7,404,955 7,104,357 7,013,000 7,168,374 7,357,694 4.9%
Licenses & Permits 3,095 5,350 2,000 2,170 2,000 0.0%
Intergovernmental Revenues - 95,601 - 297,608 300,000 ---
Charges for Services 7,986,117 8,717,242 7,634,757 8,895,152 8,076,101 5.8%
Special Assessments 14,179 98,695 38,000 281,738 10,000 -73.7%
Miscellaneous 296,319 (27,667) 135,243 (775,326) 141,205 4.4%
Contributed Capital 809,394 664,726 75,000 612,608 75,000 0.0%
Operating Transfers In - 200,000 - - - ---
TOTAL REVENUES 16,514,059$ 16,912,246$ 14,898,000$ 16,482,324$ 15,962,000$ 7.1%
EXPENDITURES
Personnel Services 1,831,339$ 2,016,660$ 2,278,593$ 2,204,110$ 2,503,619$ 9.9%
Supplies 5,856,726 5,592,137 5,699,100 5,659,127 6,027,117 5.8%
Other Services & Charges 3,370,925 3,515,803 3,942,490 3,172,003 4,975,273 26.2%
Capital Outlay - - 3,237,500 190 2,535,000 -21.7%
Debt Service 70,257 64,371 361,317 45,451 367,991 1.8%
Operating Transfers Out 1,560,000 - - - 4,000,000 ---
TOTAL EXPENDITURES 12,689,247$ 11,188,972$ 15,519,000$ 11,080,881$ 20,409,000$ 31.5%
FUND BALANCE - JANUARY 1 14,290,851$ 18,115,663$ 23,838,937$ 23,838,937$ 29,240,380$
Excess (Deficiency) of
Revenues over Expenditures 3,824,812 5,723,274 (621,000) 5,401,443 (4,447,000)
FUND BALANCE - DECEMBER 31 18,115,663$ 23,838,937$ 23,217,937$ 29,240,380$ 24,793,380$
177
WATER FUND (601-4944x)
DEPARTMENT: Public Works SUPERVISOR: Utilities Superintendent
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 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.
4. Elevated manganese levels.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Water customers 4,458 4,547 4,621 4,700
Meters read 53,496 54,564 56,402 57,000
Meters replaced 52 58 75 75
New meters installed 62 100 92 100
Water locates 2,018 2,289 1,820 1,800
Gallons pumped (MG)601 674 627 650
Valves maintained 120 533 479 475
Hydrants maintained 153 216 225 225
Times mains flushed 2 2 2 2
Mains/wells rebuilt 2 0 0 0
Water towers inspections 1 2 2 2
Reservoir inspections 1 1 1 1
Water samples sent 190 191 190 190
Radio units installed 125 197 167 175
Service shut-offs 25 30 26 25
178
BUDGET:
BUDGET COMMENTARY:
The Water Fund’s main source of revenue is user charges. Rates increase 8% for the base
charge and usage charges in 2023 in anticipation of the need to fund a future water treatment
plant.
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
adjustment, and an updated allocation of utilities staff time leads to an increase in wages in the
Water Fund. Supplies expenditures increase as staff looked to resume meter updates now that
the concerns of the pandemic have waned. Other services & charges increase due to additional
engineering services and anticipated repairs and maintenance needed on equipment. Capital
outlays in 2023 are for watermain replacements as necessary. The 2020 transfers out was used
in 2021 to acquire land for a new public works facility site.
WATER FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Licenses & Permits 3,095$ 5,350$ 2,000$ 2,170$ 2,000$ 0.0%
Intergovernmental Revenues - 17,491 - 76,233 - ---
Charges for Services 1,750,503 1,815,365 1,559,049 1,780,794 1,677,049 7.6%
Special Assessments 13,960 37,421 38,000 192,821 10,000 -73.7%
Miscellaneous 141,264 38,128 55,951 (205,140) 55,951 0.0%
Contributed Capital 34,602 78,430 15,000 184,921 15,000 0.0%
TOTAL REVENUES 1,943,424$ 1,992,186$ 1,670,000$ 2,031,799$ 1,760,000$ 5.4%
EXPENDITURES
Personnel Services 250,345$ 264,499$ 357,798$ 310,435$ 401,193$ 12.1%
Supplies 104,801 130,598 224,150 163,866 281,000 25.4%
Other Services & Charges 339,048 366,561 513,052 334,963 749,807 46.1%
Capital Outlay - - 650,000 - 810,000 24.6%
Operating Transfers Out 900,000 - - - - ---
TOTAL EXPENDITURES 1,594,194$ 761,658$ 1,745,000$ 809,263$ 2,242,000$ 28.5%
FUND BALANCE - JANUARY 1 4,931,247$ 5,280,477$ 6,511,005$ 6,511,005$ 7,733,540$
Excess (Deficiency) of
Revenues over Expenditures 349,230 1,230,528 (75,000) 1,222,536 (482,000)
FUND BALANCE - DECEMBER 31 5,280,477$ 6,511,005$ 6,436,005$ 7,733,540$ 7,251,540$
179
SEWER FUND (602-49480 & 602-4949x)
DEPARTMENT: Public Works SUPERVISOR: Utilities Superintendent
ACTIVITY SCOPE:
The Sewer Fund is a self-sustaining city utility fund. The Sewer Fund has three divisions:
sanitary sewer administration, 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 into 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 2020 2021 2022 2023
Collection
Sewer mains maintained (miles)28 21 16 20
Liftstations 7 7 7 7
Sewer main locates 2,018 2,289 1,820 2,000
Manholes maintained*344 385 389 390
New service hookups 62 105 85 100
Treatment
Screw press influent flow (gals)5,778,250 7,226,500 5,848,200 6,000,000
Thickened sludge (wet tons)2,072 2,207 2,231 2,250
Thickened sludge (dry tons)314 336 317 325
Dry ton % of wet ton 15.2% 15.2% 14.2% 14.4%
Raw influent flow (million gals)446 482 425 425
* Manholes are maintained by quadrants. Fewer manholes in one quadrant allows
more time for cleaning longer main sewer lines.
180
BUDGET:
BUDGET COMMENTARY:
The Sewer Fund’s main source of revenue is user charges. Rates increase 2% for the base
charge and usage charges in 2023. 2021 and 2022 experienced larger unfavorable market value
adjustments in the city’s investment portfolio than interest earned, resulting in negative
miscellaneous revenues. Operating transfers in were budgeted in 2021 to the sewer access
charges sub-fund to replenish use of charges for debt service in prior years.
The 2023 personnel services budget includes a full step increase and a 4.0% market rate wage
adjustment. However, an updated allocation of utilities staff time leads to an overall decrease
in budgeted wages in 2023. The city renewed its contract with a third-party provider of
wastewater treatment plant management services for five years for 2023 - 2027. Capital outlays
in 2023 include $400,000 for completion of a SCADA upgrade, $500,000 for potential new
sewer line extensions related to new development and $75,000 for native grass conversion at
the wastewater treatment plant.
SEWER FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Intergovernmental Revenues -$ 38,978$ -$ 166,458$ -$ ---
Charges for Services 3,346,053 3,658,444 3,020,000 3,729,466 3,089,344 2.3%
Special Assessments 219 39,124 - 56,410 - ---
Miscellaneous 74,575 (37,099) 30,000 (334,401) 29,656 -1.1%
Contributed Capital 84,521 257,766 - 249,385 - ---
Operating Transfers In - 200,000 - - - ---
TOTAL REVENUES 3,505,368$ 4,157,212$ 3,050,000$ 3,867,317$ 3,119,000$ 2.3%
EXPENDITURES
Personnel Services 354,812$ 419,721$ 383,531$ 426,651$ 367,996$ -4.1%
Supplies 154,593 151,227 176,000 151,579 198,000 12.5%
Other Services & Charges 1,153,829 1,206,183 1,338,152 1,238,161 1,770,013 32.3%
Capital Outlay - - 1,217,000 - 975,000 -19.9%
Debt Service 70,257 64,371 361,317 45,451 367,991 1.8%
TOTAL EXPENDITURES 1,733,491$ 1,841,502$ 3,476,000$ 1,861,842$ 3,679,000$ 5.8%
FUND BALANCE - JANUARY 1 5,513,530$ 7,285,407$ 9,601,117$ 9,601,117$ 11,606,592$
Excess (Deficiency) of
Revenues over Expenditures 1,771,877 2,315,710 (426,000) 2,005,475 (560,000)
FUND BALANCE - DECEMBER 31 7,285,407$ 9,601,117$ 9,175,117$ 11,606,592$ 11,046,592$
181
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total Payable Principal Interest Rate Total
6/1/2023 -$ 19,853$ 19,853$ 2/20/2023 -$ 7,893$ 7,893$
12/1/2023 205,000 19,853 2.60% 224,853 8/20/2023 107,000 7,893 1.06% 114,893
6/1/2024 - 17,188 17,188 2/20/2024 - 7,324 7,324
12/1/2024 210,000 17,188 2.75% 227,188 8/20/2024 108,000 7,324 1.06% 115,324
6/1/2025 - 14,300 14,300 2/20/2025 - 6,750 6,750
12/1/2025 215,000 14,300 3.00% 229,300 8/20/2025 109,000 6,750 1.06% 115,750
6/1/2026 - 11,075 11,075 2/20/2026 - 6,171 6,171
12/1/2026 225,000 11,075 3.00% 236,075 8/20/2026 111,000 6,171 1.06% 117,171
6/1/2027 - 7,700 7,700 2/20/2027 - 5,581 5,581
12/1/2027 230,000 7,700 3.20% 237,700 8/20/2027 112,000 5,581 1.06% 117,581
6/1/2028 - 4,020 4,020 2/20/2028 - 4,985 4,985
12/1/2028 240,000 4,020 3.35% 244,020 8/20/2028 113,000 4,985 1.06% 117,985
Total 1,325,000$ 148,270$ 1,473,270$ 2/20/2029 - 4,385 4,385
*Original redemption date was December 1, 2021.8/20/2029 114,000 4,385 1.06% 118,385
2/20/2030 - 3,779 3,779
8/20/2030 115,000 3,779 1.06% 118,779
2/20/2031 - 3,168 3,168
8/20/2031 117,000 3,168 1.06% 120,168
2/20/2032 - 2,546 2,546
8/20/2032 118,000 2,546 1.06% 120,546
2/20/2033 - 1,919 1,919
8/20/2033 119,000 1,919 1.06% 120,919
2/20/2034 - 1,286 1,286
8/20/2034 120,000 1,286 1.06% 121,286
2/20/2035 - 648 648
8/20/2035 122,000 648 1.06% 122,648
Total 1,485,000$ 112,870$ 1,597,870$
MPFA-15-0004-R-FY16GO Wastewater Treatment Bonds, Series 2013B
182
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 and are not reported above as a contract cost.
Year Service Change $ Change %
2014 585,096$ 22,735$ 4.0%
2015 582,360$ (2,736)$ -0.5%
2016 582,360$ -$ 0.0%
2017 593,196$ 10,836$ 1.9%
2018 563,394$ (29,802)$ -5.0%
2019 577,476$ 14,082$ 2.5%
2020 591,913$ 14,437$ 2.5%
2021 606,711$ 14,798$ 2.5%
2022 621,714$ 15,003$ 2.5%
2023 643,474$ 21,760$ 3.5%
Schedule of Non-Reimbursables (O&M Services)
$-
$100
$200
$300
$400
$500
$600
$700
2014201520162017201820192020202120222023ThousandsO&M Services Costs
Year R&M Polymer Hauling Landfill Electricity Gas Total
2014 57,884$ 62,736$ 32,949$ 33,237$ 160,826$ 68,417$ 416,049$
2015 50,239 35,091 25,808 28,374 145,833 44,093 329,438
2016 52,872 32,396 20,876 30,784 - - 136,928
2017 54,705 33,019 23,145 51,057 - - 161,926
2018 61,020 - 39,249 67,654 - - 167,923
2019 43,570 - 34,073 70,871 - - 148,514
2020 56,583 - 28,842 67,993 - - 153,418
2021 71,362 - 32,571 74,783 - - 178,716
2022* 55,500 - 37,200 51,300 - - 144,000
2023* 75,000 - 45,000 60,000 - - 180,000
*Budgeted
Schedule of Reimbursable Costs
$-
$100
$200
$300
$400
2014 2015 2016 2017 2018 2019 2020 2021 2022*2023*ThousandsReimbursable Costs 2014-2023
R&M Polymer Hauling Landfill Electricity Gas
183
STORMWATER FUND (652-4948x)
DEPARTMENT: Public Works SUPERVISOR: Utilities Superintendent
ACTIVITY SCOPE:
The Stormwater 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.
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:
Measurement 2020 2021 2022 2023
Sto rmwater main miles 73.0 73.5 73.8 74.0
Number of manholes 1,655 1,631 1,632 1,632
Number of ponds 109 112 112 112
Number of outfalls 31 29 29 29
Number of stormwater BMPs*50 50 50 50
*BMPs = best management practices
184
BUDGET:
BUDGET COMMENTARY:
The Stormwater 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 rate increases and new development contribute to the
increases in revenue. 2021 and 2022 experienced larger unfavorable market value adjustments
in the city’s investment portfolio than interest earned, resulting in negative miscellaneous
revenues. Contributed capital is from development access and trunk charges. Due to the
unknown nature of development, these revenues are budgeted conservatively.
Personnel services consists of wages previously allocated to the streets and engineering
departments. Other services & charges include engineering fees and licenses & permits. Capital
outlay consists of expenditures for stormwater improvements.
STORMWATER FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Intergovernmental Revenues -$ 39,132$ -$ 54,917$ 300,000$ ---
Charges for Services 241,873 356,457 386,000 522,852 600,000 55.4%
Special Assessments - 22,150 - 32,507 - ---
Miscellaneous 2,030 (7,723) 2,000 (54,240) 2,000 0.0%
Contributed Capital 690,271 328,530 60,000 178,302 60,000 0.0%
TOTAL REVENUES 934,174$ 738,546$ 448,000$ 734,339$ 962,000$ 114.7%
EXPENDITURES
Personnel Services 127,167$ 156,640$ 143,044$ 171,201$ 161,188$ 12.7%
Supplies 641 418 21,000 2,089 21,000 0.0%
Other Services & Charges 10,468 65,470 40,956 74,633 383,812 837.1%
Capital Outlay - - 1,177,000 190 420,000 -64.3%
TOTAL EXPENDITURES 138,276$ 222,528$ 1,382,000$ 248,113$ 986,000$ -28.7%
FUND BALANCE - JANUARY 1 1,488,947$ 2,284,845$ 2,800,863$ 2,800,863$ 3,287,089$
Excess (Deficiency) of
Revenues over Expenditures 795,898 516,018 (934,000) 486,226 (24,000)
FUND BALANCE - DECEMBER 31 2,284,845$ 2,800,863$ 1,866,863$ 3,287,089$ 3,263,089$
185
LIQUOR FUND (609-4975x)
DEPARTMENT: Liquor Fund SUPERVISOR: Liquor Store Manager
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.
5. Balancing sharp increase in demand with staffing levels and physical space of the
store.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Gross profit 1,903,732$ 1,909,014$ 1,811,123$ 1,962,500$
Gross profit % of sales 26% 27% 25%26%
Sales per square foot $842 $808 $815 $838
Total number of sales 260,957 250,894 249,604 250,000
Staff hours worked 21,828 21,641 21,571 21,750
Sales per hour worked 12.0 11.6 11.6 11.5
Average sale (including tax)$31.19 $31.14 $31.58 $31.86
186
BUDGET:
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. 2021 and 2022 experienced larger unfavorable market value
adjustments in the city’s investment portfolio than interest earned, resulting in negative
miscellaneous revenues.
The 2023 personnel services budget includes a full step increase, a 4.0% market rate wage
increase for existing staff and the addition of one full-time clerk. An increase in budgeted other
services & charges reflects increases in utilities costs. Capital outlay includes new liquor store
coolers. The 2020 transfers out included $235,000 to the Parks and Pathway Improvement Fund
for installation of a turn lane on Briarwood by BCOL and $425,000 to the Community Center
Fund for roof repairs and operating shortfalls because of the COVID-19 pandemic. The
budgeted 2023 operating transfers out are to capital projects funds, most notably for the
Downtown Pedestrian & Roadways Improvements project and the Bertram Chain of Lakes
(BCOL) Pedestrian and Safety Improvements project.
LIQUOR FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Sale of Goods 7,404,955$ 7,104,357$ 7,013,000$ 7,168,374$ 7,357,694$ 4.9%
Miscellaneous 23,827 (8,044) 12,000 (78,822) 12,306 2.6%
TOTAL REVENUES 7,428,782$ 7,096,313$ 7,025,000$ 7,089,553$ 7,370,000$ 4.9%
EXPENDITURES
Personnel Services 628,667$ 647,423$ 757,420$ 743,585$ 877,711$ 15.9%
Supplies 5,477,861 5,189,566 5,167,350 5,246,272 5,415,117 4.8%
Other Services & Charges 247,714 241,524 300,230 269,529 337,172 12.3%
Capital Outlay - - 10,000 - 130,000 1200.0%
Operating Transfers Out 660,000 - - - 2,250,000 ---
TOTAL EXPENDITURES 7,014,242$ 6,078,513$ 6,235,000$ 6,259,386$ 9,010,000$ 44.5%
FUND BALANCE - JANUARY 1 600,060$ 1,014,600$ 2,032,400$ 2,032,400$ 2,862,566$
Excess (Deficiency) of
Revenues over Expenditures 414,540 1,017,800 790,000 830,166 (1,640,000)
FUND BALANCE - DECEMBER 31 1,014,600$ 2,032,400$ 2,822,400$ 2,862,566$ 1,222,566$
187
DEPUTY REGISTRAR FUND (653-41990)
DEPARTMENT: Deputy Registrar (DMV) SUPERVISOR: DMV Manager
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 but cannot process routine license renewals. Furthermore, the DMV facility leases
space to FiberNet operations and the Community Center.
OBJECTIVES:
1. Market DMV services to public and dealerships.
2. Expand and improve customer service.
3. Update employee training and certifications.
4. To provide a well-maintained building.
ISSUES:
1. Changes to state licensing regulations.
2. Providing some services with little or no revenue.
3. Competition with other customer options: other DMVs, on-line, and mail-in.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Outcome/Effectiveness:
License Revenue $800,666 $936,870 $882,432 $840,000
Revenue per staff hour $49.51 $52.06 $58.46 $54.19
Net revenue per staff hour $16.87 $20.14 $16.28 $16.50
Efficiency:
Transactions per hour 7.9 5.7 6.0 6.0
Work Load:
Total transactions 127,128 101,784 91,078 93,750
115,466 88,875 77,515 80,000
DNR transactions 8,424 8,759 9,984 10,000
Game & Fish transactions 311 265 245 250
Driver's license transactions 2,927 3,885 3,334 3,500
Staff hours 16,172 17,997 15,094 15,500
Dealerships serviced 32 41 47 48
*The transition to the State's new MNDrive system in late 2020 creates skewed
transaction numbers due to the differences in how transactions are counted.
Motor vehicle transactions*
188
BUDGET:
BUDGET COMMENTARY:
The main revenue source for the DMV is the fees charged for the issuance of various licenses.
Revenue by service type: DNR licenses = $2-$7; game & fish licenses = $1; driver’s licenses = $8;
motor vehicle transactions = $6-$10. Revenues are always estimated conservatively. 2021 and
2022 experienced larger unfavorable market value adjustments in the city’s investment
portfolio than interest earned, resulting in negative miscellaneous revenues.
The 2023 personnel services budget includes a full step increase, a 4.0% market rate wage
adjustment, and the addition of one full-time clerk. The budgeted 2023 operating transfers out
is to the Capital Projects funds for the Downtown Pedestrian & Roadways Improvements
project.
DEPUTY REGISTRAR 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services 800,954$ 941,759$ 800,000$ 883,451$ 840,000$ 5.0%
Miscellaneous 40,622 (10,954) 25,000 (66,343) 31,000 24.0%
TOTAL REVENUES 841,576$ 930,805$ 825,000$ 817,108$ 871,000$ 5.6%
EXPENDITURES
Personnel Services 466,262$ 526,113$ 630,525$ 552,239$ 689,256$ 9.3%
Supplies 7,109 10,977 10,600 7,806 12,000 13.2%
Other Services & Charges 47,183 46,983 89,875 81,241 90,744 1.0%
Operating Transfers Out - - - - 1,750,000 ---
TOTAL EXPENDITURES 520,554$ 584,074$ 731,000$ 641,286$ 2,542,000$ 247.7%
FUND BALANCE - JANUARY 1 1,527,728$ 1,848,750$ 2,195,481$ 2,195,481$ 2,371,303$
Excess (Deficiency) of
Revenues over Expenditures 321,022 346,731 94,000 175,821 (1,671,000)
FUND BALANCE - DECEMBER 31 1,848,750$ 2,195,481$ 2,289,481$ 2,371,303$ 700,303$
189
FIBER OPTICS FUND (656-4987x)
DEPARTMENT: Fiber Optics Fund SUPERVISOR: City Administrator/Finance Director
ACTIVITY SCOPE:
As with all enterprise funds, the goal of the Fiber Optics Fund is to be 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:
Measurement 2020 2021 2022 2023
Internet subscibers 1,801 1,808 1,752 1,750
Phone subscribers 315 297 275 275
Cable TV subscribers 323 289 256 250
FIBER OPTICS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Franchise & Other Taxes -$ 53,942$ -$ -$ -$ ---
Charges for Services 1,846,734 1,945,217 1,869,708 1,978,589 1,869,708 0.0%
Miscellaneous 14,001 (1,975) 10,292 (36,380) 10,292 0.0%
TOTAL REVENUES 1,860,735$ 1,997,184$ 1,880,000$ 1,942,209$ 1,880,000$ 0.0%
EXPENDITURES
Personnel Services 4,086$ 2,264$ 6,275$ -$ 6,275$ 0.0%
Supplies 111,721 109,351 100,000 87,515 100,000 0.0%
Other Services & Charges 1,572,683 1,589,081 1,660,225 1,173,475 1,643,725 -1.0%
Capital Outlay - - 183,500 - 200,000 9.0%
TOTAL EXPENDITURES 1,688,490$ 1,700,697$ 1,950,000$ 1,260,990$ 1,950,000$ 0.0%
FUND BALANCE - JANUARY 1 229,339$ 401,584$ 698,071$ 698,071$ 1,379,290$
Excess (Deficiency) of
Revenues over Expenditures 172,245 296,487 (70,000) 681,219 (70,000)
FUND BALANCE - DECEMBER 31 401,584$ 698,071$ 628,071$ 1,379,290$ 1,309,290$
190
BUDGET COMMENTARY:
Revenues in the Fiber Optics Fund come from charges to subscribers, and expenditures are
incurred in operating the system. Projections remain consistent with prior years.
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
2022 budget includes $200,000 in capital outlay for system extensions to new service areas.
191
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192
2023 Adopted Budget
Internal Service Funds
INTERNAL SERVICE FUNDS - SUMMARY
DESCRIPTION
Internal service funds are a proprietary fund type that may be used to report any activity that
provides goods or services to other funds, departments, or agencies of the primary government
and its component units, or to other governments, on a cost-reimbursement basis. Internal
service funds use an accrual basis of accounting for financial reporting purposes. A modified
accrual basis will be used for budgeting purposes in this report. Consequently, the bottom line
for each fund is labeled fund balance rather than net position, which includes capital assets,
long-term debt, and other noncurrent items. Fund balance in an internal service fund is roughly
the same as working capital. The city currently has four active internal service funds: Facilities
Maintenance, IT Services, Central Equipment, and Benefit Accrual.
BUDGET ISSUES
Each internal service fund has specific challenges that will be addressed in the narrative for
each fund.
BUDGET SUMMARY
TOTAL INTERNAL SERVICE FUNDS 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services 562,341$ 963,159$ 1,330,400$ 1,447,303$ 1,552,008$ 16.7%
Miscellaneous 24,969 40,771 14,600 (14,226) 43,992 201.3%
Contributed Capital - 44,955 - 33,529 109,000 ---
Operating Transfers In - 1,573,658 - 150,000 - ---
TOTAL REVENUES 587,310$ 2,622,542$ 1,345,000$ 1,616,606$ 1,705,000$ 26.8%
EXPENDITURES
Personnel Services 6,541$ 87,662$ 243,848$ 237,257$ 252,350$ 3.5%
Supplies 98,905 66,767 172,420 105,472 93,932 -45.5%
Other Services & Charges 235,292 296,404 283,452 653,878 581,938 105.3%
Capital Outlay 11,597 - 1,034,280 20,906 1,361,780 31.7%
Debt Service 10,168 6,658 66,000 5,151 66,000 0.0%
TOTAL EXPENDITURES 362,503$ 457,491$ 1,800,000$ 1,022,664$ 2,356,000$ 30.9%
FUND BALANCE - JANUARY 1 1,360,180$ 1,584,987$ 3,750,039$ 3,750,039$ 4,343,980$
Excess (Deficiency) of
Revenues over Expenditures 224,807 2,165,052 (455,000) 593,942 (651,000)
FUND BALANCE - DECEMBER 31 1,584,987$ 3,750,039$ 3,295,039$ 4,343,980$ 3,692,980$
193
FACILITIES MAINTENANCE FUND (701-00000)
DEPARTMENT: Public Works
SUPERVISOR: Facilities Maintenance Manager
ACTIVITY SCOPE:
The Facilities Maintenance Fund is a self-sustaining internal service fund. The Public Works
Director oversees a Facilities Maintenance Manager who manages the city’s various facilities.
The fund’s revenues are derived from service charges to the budget unit of each facility that
receives services. Service charges are adjusted annually to cover all operating maintenance
costs.
OBJECTIVES:
1. Centralize and standardize management of city facilities.
2. Provide financial management stability to each budget unit.
ISSUES:
1. Appropriate costs distribution.
2. Coordination of service delivery to multiple departments and budget units.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2020 2021 2022 2023
Buildings maintained -18 21 23
R&M orders -318 799 800
R&M order hours -209 474 475
Ho urs per R&M service order -0.7 0.6 0.6
Total R&M service order costs $- $91,704 $307,638 $310,000
R&M service cost per order $- $288.38 $385.03 $387.50
Note: The Facilities Maintenance department was created in 3rd quarter 2021.
FACILITIES MAINTENANCE 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services -$ 160,139$ 325,000$ 419,827$ 378,000$ 16.3%
Miscellaneous - - - 53,656 25,000 ---
Operating Transfers In - - - 150,000 - ---
TOTAL REVENUES -$ 160,139$ 325,000$ 623,483$ 403,000$ 24.0%
EXPENDITURES
Personnel Services -$ 74,340$ 134,103$ 131,379$ 135,858$ 1.3%
Supplies - 21,885 123,000 64,595 70,000 -43.1%
Other Services & Charges - 97,768 27,897 357,112 197,142 606.7%
Capital Outlay - - 40,000 - - -100.0%
TOTAL EXPENDITURES -$ 193,993$ 325,000$ 553,086$ 403,000$ 24.0%
FUND BALANCE - JANUARY 1 -$ -$ (33,854)$ (33,854)$ 36,544$
Excess (Deficiency) of
Revenues over Expenditures - (33,854) - 70,398 -
FUND BALANCE - DECEMBER 31 -$ (33,854)$ (33,854)$ 36,544$ 36,544$
194
BUDGET COMMENTARY:
The Facilities Maintenance Fund’s main source of revenue is internal user charges, and the fund
accounts for all activity supporting the city’s facilities, including the Community Center/City
Hall, Public Works, Fire station, Hi-Way Liquors, the DMV, FM facility, animal control facility,
and Library. Transfers in from the General Fund in 2022 helped the fund establish a stable fund
balance. As the balance of work between the Facilities Maintenance Manager and the staff at
each city facility is determined, the fund will see more stable year-to-year budgets and actual
amounts.
195
IT SERVICES FUND (702-00000)
DEPARTMENT: Finance
SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The IT (Information Technology) Services Fund is a self-sustaining internal service fund. The IT
Technician 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. Increasing threats to cyber security.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Work Load:
Number of employees 0 1 1 1
Number of users 91 88 109 109
Number of PC, servers, and
network devices 122 126 ----
Number of computers & phones ----207 207
Number of back-end support
network devices ----62 62
Network availability (estimate)99% 98% 99% 99%
An audit of the city's IT inventory found previously uncounted users and devices in 2022.
196
BUDGET:
BUDGET COMMENTARY:
The IT Services Fund’s main source of revenue is internal user charges. The IT Services Fund
accounts for all activity supporting the city’s information technology infrastructure, including
servers, routers, PCs, printers, copiers, phones, and professional services. The city added an
internal staff position in 2021. A large number of devices were purchased in 2020 due to the
Federal CARES Act grant providing a funding source for upgrading the city’s IT environment with
the need to telework during the COVID-19 pandemic. A desire to account for all departments’
IT-related purchases, managed by the IT Technician, through this internal service fund led to an
increased budget in 2023.
IT SERVICES 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services 225,000$ 270,566$ 421,000$ 421,000$ 529,008$ 25.7%
Miscellaneous 5,621 (751) 4,000 (4,529) 8,992 124.8%
TOTAL REVENUES 230,621$ 269,815$ 425,000$ 416,471$ 538,000$ 26.6%
EXPENDITURES
Personnel Services -$ 33,237$ 97,745$ 96,553$ 104,492$ 6.9%
Supplies 98,905 44,882 49,420 40,877 23,932 -51.6%
Other Services & Charges 235,292 198,636 255,555 296,766 384,796 50.6%
Capital Outlay 11,597 - 22,280 - 24,780 11.2%
TOTAL EXPENDITURES 345,794$ 276,755$ 425,000$ 434,196$ 538,000$ 26.6%
FUND BALANCE - JANUARY 1 382,557$ 267,384$ 260,444$ 260,444$ 242,719$
Excess (Deficiency) of
Revenues over Expenditures (115,173) (6,940) - (17,725) -
FUND BALANCE - DECEMBER 31 267,384$ 260,444$ 260,444$ 242,719$ 242,719$
197
CENTRAL EQUIPMENT FUND (703-00000)
DEPARTMENT: Finance
SUPERVISOR: Finance Director
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 set 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 a 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. Demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2020 2021 2022 2023
Outcome/Effectiveness:
Annual cost recovery 330,800$ 552,369$ 578,400$ 633,000$
Total costs of assets acquired 375,450$ 1,269,093$ 560,113$ 1,337,000$
Efficiency:
Cost recovery as % of
acquired assets 88% 44% 103% 47%
Work Load:
Number of fund assets 37 51 61 71
198
BUDGET:
BUDGET COMMENTARY:
The Central Equipment Fund’s main source of revenue is internal rental charges. The city
issued $515,000 in G.O. bonds in 2014 to finance the acquisition of a fire tender and a plow
truck. The 2021 operating transfers came from the closure of the Streets Reconstruction capital
projects fund and excess fund balance in the General Fund, which will help the fund with future
equipment purchases.
The 2023 budgeted equipment acquisitions: [public works equipment] plow trucks (2) -
$656,000; wheel loader - $280,000; 1-ton truck - $85,000; forklift - $50,000; [recreation
equipment] Bobcat Toolcat - $70,000; Isuzu - $63,000; Cushman Trakster - $61,000; Bobcat
Grader Blade Attachment - $25,000; Trailer - $12,000; [public safety] building inspection vehicle
- $35,000.
REMAINING DEBT SERVICE:
CENTRAL EQUIPMENT FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services 330,800$ 552,369$ 572,400$ 578,400$ 633,000$ 10.6%
Miscellaneous 12,421 43,420 10,600 (51,468) 10,000 -5.7%
Contributed Capital - 44,955 - 33,529 109,000 ---
Operating Transfers In - 1,573,658 - - - ---
TOTAL REVENUES 343,221$ 2,214,401$ 583,000$ 560,461$ 752,000$ 29.0%
EXPENDITURES
Capital Outlay -$ -$ 972,000$ 20,906$ 1,337,000$ 37.6%
Debt Service 10,168 6,658 66,000 5,151 66,000 0.0%
TOTAL EXPENDITURES 10,168$ 6,658$ 1,038,000$ 26,057$ 1,403,000$ 35.2%
FUND BALANCE - JANUARY 1 629,537$ 962,590$ 3,170,333$ 3,170,333$ 3,704,738$
Excess (Deficiency) of
Revenues over Expenditures 333,053 2,207,743 (455,000) 534,405 (651,000)
FUND BALANCE - DECEMBER 31 962,590$ 3,170,333$ 2,715,333$ 3,704,738$ 3,053,738$
Payable Principal Interest Rate Total
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 120,000$ 5,400$ 125,400$
GO Bonds, Series 2014A (Equipment Portion)
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BENEFIT ACCRUAL FUND (704-00000)
DEPARTMENT: Finance
SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The Benefit Accrual Fund is a self-sustaining internal service fund. The finance department,
supervisors and the human resources manager oversee vacation, sick leave, and paid-time-off
(PTO) benefits. The non-enterprise fund liability for this benefit is recorded in the Benefit
Accrual Fund. Enterprise funds 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 2020 2021 2022 2023
Outcome/Effectiveness:
Annual hours accrued:
PTO 8,719 9,391 10,373 10,500
Comp Time 946 1,134 1,246 1,250
Vacation & Sick Leave 613 272 272 272
Balance of accrued hours:
PTO 9,134 9,127 9,320 9,500
Comp Time 669 749 768 750
Vacation & Sick Leave 1,907 647 689 750
Efficiency:
Annual hours accrued per employee:
PTO 156 168 176 175
Comp Time 28 33 34 33
Vacation & Sick Leave 307 272 272 272
Work Load:
Employees accruing hours:
PTO employees 56 56 59 60
Full-time hourly employees 34 34 37 38
Vacation & Sick Leave
employees (pre-1990)2 1 1 1
200
BUDGET:
BUDGET COMMENTARY:
The Benefit Accrual Fund’s main source of revenue is internal charges to personnel services in
three of the city’s main governmental funds: General Fund, Economic Development Authority
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 can carry-over up to 320 hours of accrued
PTO.
BENEFIT ACCRUAL FUND 2020 2021 2022 2022 2023 %
REVENUES ACTUAL ACTUAL BUDGET ESTIMATED BUDGET CHANGE
Charges for Services 6,541$ (19,915)$ 12,000$ 28,075$ 12,000$ 0.0%
Miscellaneous 6,927 (1,898) - (11,886) - ---
TOTAL REVENUES 13,468$ (21,813)$ 12,000$ 16,190$ 12,000$ 0.0%
EXPENDITURES
Personnel Services 6,541$ (19,915)$ 12,000$ 9,325$ 12,000$ 0.0%
TOTAL EXPENDITURES 6,541$ (19,915)$ 12,000$ 9,325$ 12,000$ 0.0%
FUND BALANCE - JANUARY 1 348,086$ 355,013$ 353,116$ 353,116$ 359,980$
Excess (Deficiency) of
Revenues over Expenditures 6,927 (1,897) - 6,865 -
FUND BALANCE - DECEMBER 31 355,013$ 353,116$ 353,116$ 359,980$ 359,980$
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COMMUNITY, DEMOGRAPHIC, AND STATISTICAL INFORMATION
Classified as a 501(a) entity under the Internal Revenue Code, the city of Monticello was
organized as a municipality in 1856. Monticello is located approximately 45 miles northwest of
the Minneapolis-St. Paul metropolitan area along the I-94 corridor in Wright County. The 2020
U. S. Census estimated Monticello's population at 14,455, and the city encompasses an area of
8.87 square miles. The city operates under a statutory form of government. The mayor and four
councilmembers (together known as "City Council") govern the city. The councilmembers are
each elected to staggered, four-year terms and the mayor a two-year term. The mayor presides
over and is a voting member of the City Council. The mayor is the chief authority for
administering city government and appoints department heads, various board members and
commission members. The City Council is the legislative body and meets twice per month. The
City Council's main responsibilities are guiding the growth and development of the City using
the Monti 2040 Comprehensive Plan, appropriating funds, setting salaries, adopting ordinances
and resolutions, and approving the budget.
Monticello has a varied business community with a healthy mix of retail and manufacturing.
City unemployment rates are like that of the state, but from 2015 to 2019, the state’s rate was
slightly lower, as shown below. Wright County’s average unemployment was lower than the
State average through November of 2022, but an uptick in December 2022 created a higher
unemployment rate.
Home to one of the two nuclear generation plants in Minnesota, Monticello’s second largest
employer is Xcel Energy, not far behind the Monticello School District. Regional medical
provider, CentraCare, and Agri-giant Cargill also maintain a strong presence in the city.
Average Employment
Year Wright County Wright County State of Minnesota
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 73,088 3.8%3.5%
2020 69,972 4.4%4.4%
2021 72,474 2.7%3.0%
2022 75,573 3.2%2.5%
HISTORICAL EMPLOYMENT/UNEMPLOYMENT DATA
(Rates are not compiled for individual communities within counties)
Average Unemployment
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Monticello’s population and households are roughly 0.25% of the state’s total for both
measures. With Target, Walmart, Home Depot, Runnings, and Mills Fleet Farm, it is no surprise
that retail sales per person are higher than the state average. The following table contains
selected facts about the city:
The nuclear plant accounts for approximately 45% of the city’s net tax capacity. Xcel’s tax
capacity and the council’s conservative tax levy philosophy are the main reasons the city tax
capacity rate is the third lowest in Wright County. Large residential property valuation increases
in 2022 contributed to a 2023 tax rate decrease. The overall tax base is about one-third
residential and two-thirds commercial.
Employer Employees
ISD No. 882 (Monticello)684
Xcel Energy (Northern States)650
CentraCare Health - Monticello 577
Cargill Kitchen Sol. (Sunny Fresh)425
Target 307
Walmart Supercenter 225
Ultra Machining Corporation 215
City of Monticello 176
Home Depot 157
WSI Industries 120
TOP TEN CITY EMPLOYERS
People QuickFacts Monticello Minnesota
Population, 2022 estimate July 1 14,619 5,717,184
Population, Census, April 1, 2020 14,455 5,706,494
Population, percent change, April 1, 2020 to July 1, 2022 1.1% 0.2%
Persons under 5 years, percent 8.5% 5.9%
Persons under 18 years, percent 27.7% 23.1%
Persons 65 years and over, percent 9.9% 16.7%
Female persons, percent 52.6% 49.9%
White persons, percent 90.9% 83.0%
Hispanic or Latino, percent 8.5% 5.8%
Housing units, July 1, 2021 X 2,517,248
Homeownership rate, 2017-2021 70.1% 72.3%
Median value of owner-occupied housing units, 2017-2021 $230,600 $250,200
Households, 2017-2021 5,379 2,229,100
Persons per household, 2017-2021 2.62 2.49
Retail sales per capita, 2017 $33,121 $16,518
Median household income, 2017-2021 $73,651 $77,706
Per capita money income in the past 12 months, 2017-2021 $30,796 $41,204
Population per square mile, 2020 1,629.8 71.7
Land area in square miles, 2020 8.87 79,626.68
204
Monticello grew by approximately 14% in the last ten years. The city has undeveloped
commercial and residential real estate and is positioned well to benefit from more urban flight
from the Twin Cities. Access to major transportation corridors makes the city an ideal location
for future growth. The following table includes population statistics over the last ten years:
2020 2021 2022 2023 2022-23 2022-23
City Tax Rate Tax Rate Tax Rate Tax Rate Change Change %
City of St. Michael 36.691 35.817 33.909 27.149 -6.760 -24.9%
City of Otsego 35.099 34.653 34.545 29.397 -5.148 -17.5%
City of Monticello 34.967 35.659 36.536 34.794 -1.742 -5.0%
City of Dayton 54.139 51.378 47.733 35.082 -12.651 -36.1%
City of Hanover 44.889 46.491 43.569 38.213 -5.356 -14.0%
City of Rockford 48.674 44.345 43.836 40.916 -2.920 -7.1%
City of Delano 52.913 49.369 49.061 42.644 -6.417 -15.0%
City of Albertville 47.067 46.801 46.355 42.737 -3.618 -8.5%
City of Waverly 64.252 60.997 57.262 44.560 -12.702 -28.5%
City of Annandale 55.706 54.571 54.606 48.290 -6.316 -13.1%
City of Buffalo 55.811 54.256 55.034 50.910 -4.124 -8.1%
City of Montrose 50.952 51.607 51.719 51.692 -0.027 -0.1%
City of Howard Lake 70.889 72.596 67.661 61.715 -5.946 -9.6%
City of Maple Lake 65.428 61.994 62.164 62.607 0.443 0.7%
City of Cokato 71.410 68.015 68.079 62.711 -5.368 -8.6%
City of Clearwater 72.662 69.513 69.978 63.489 -6.489 -10.2%
City of South Haven 105.298 91.707 90.696 81.082 -9.614 -11.9%
CITY TAX RATES IN WRIGHT COUNTY, MINNESOTA
Year Population Change
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
2020 13,886 104
2021 14,455 569
2022 14,619 164
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2023 Adopted Budget
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 taxpayers will pay the levy. 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]
206
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.
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.
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.
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 2023
State Tax Payable 2023
Residential Homestead: No state tax
1st $500,000 1.00%
>$500,000 1.25%
Non-homestead Residential: No state tax
Single unit:
1st $500,000 1.00% >$500,000 1.25%
2–3-unit buildings 1.25%
Market-rate Apartments: 1.25% No state tax
Commercial/Industrial:
1st $150,000 1.50% Subject to state levy
>$150,000 2.00% (Commercial-industrial rate)
Seasonal Recreational
1st $500,000 1.00% Subject to state levy
>$500,000 1.25% (Commercial-industrial rate)
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TRUTH-IN-TAXATION (TNT)
Summary Chart for Taxes Payable 2023
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. (September 26, 2022)
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. (September 26, 2022)
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. (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.)
• 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 27, 2022)
Nov. 11 - Nov. 24 County auditor prepares and sends parcels specific notices.
Nov. 25 - Dec. 28 City council holds meeting to discuss the budget and property tax levy and,
before a final determination, allows public input. (December 12, 2022)
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 13, 2022)
**The date an activity occurred is highlighted.
208
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
maintenance equipment; and other capital equipment.
Computer hardware and software, whether bundled with machinery or equipment or un-
bundled, 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 exceptions:
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
209
to each taxing 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 statutory 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, realignments, intersection modifications, and the local share
of state and county road projects, street reconstruction 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 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.
210
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.
Improvement Bonds
One of the most 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 (beautification), 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 systems, 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 streetlights 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.
211
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
pedestrian 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.
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 within a Housing Improvement Area may be paid with special
assessments.
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Minimum Assessment
General Obligation Improvement Bonds require a minimum 20% assessment. It is important to
understand 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) im-
provements 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 because 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.
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.
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Bond Issues
Planning for the issuance of Improvement Bonds requires a clear understanding of the special
assessments. 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 number 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.
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
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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 approval 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 improvements 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;
Operating costs of the proposed improvements; and
Alternatives for providing services most efficiently through shared facilities with other
municipalities or local government units.
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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
governmental 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.
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
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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 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 & Sprinklers: 10, 12, 16, 17, 30
0 - 1,000 gallons $8.68
1,001 - 6,500 gallons (5,500 gallons)$2.03/1,000 gallons
6,501 - 11,500 gallons (5,000 gallons)$2.35/1,000 gallons
11,501 - 16,500 gallons (5,000 gallons)$2.58/1,000 gallons
16,501 - 33,000 gallons (16,500 gallons)$2.80/1,000 gallons
33,001 gallons and over $3.00/1,000 gallons
Commercial Water & Sprinklers: 11, 13, 90, 31, 32, 90, 91, 92, 93
0 - 1,000 gallons $8.68
1,001 - 6,500 gallons (5,500 gallons)$2.03/1,000 gallons
6,501 - 33,000 gallons (26,500 gallons)$2.35/1,000 gallons
33,001 gallons and over $2.58/1,000 gallons
Industrial Water: 14 (effective 7/1/23)
All Water Usage $2.47/1,000 gallons
State Water Service Connection Fee: 18
Per Connection $0.81/mo.
Sewer Rates - Residential & Commercial: 20, 25, 26
0 - 1,000 gallons $10.61
1,001 gallons and over $6.51/1,000 gallons
Sewer Special Cases: SW21, SW22
Has own well $10 per person
Industrial Sewer Rates: 24 (effective 7/1/23)
All Sewer Usage $4.04/1,000 gallons
BOD5 (Biochemical Oxygen Demand)$0.436/lb.
TSS (Total Suspended Solids)$0.599/lb.
Testing Actual cost + 10%
Stormwater Rates:
Residential: 40 $4.50
Non-Residential (7 drainage units per impervious acre): 41 $4.50
Residential Garbage Charges - Taxable (effective 2/1/23)
1st Individual Residential Cart $10.06
2nd Individual Residential Cart $13.00
Residential Recycling Charges (effective 2/1/23)
Per Cart $5.17
Other:
Water On/Off Charge $25/each
Water Availability Charge: 15 $42/year
Final Bill Processing Fee $25.00
Refusal of Equipment (manual read) Charge $50.00
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CAPITALIZATION THRESHOLDS
Class of Asset Details
Useful
Life (Yrs) Threshold
Land N/A $1
Land improvements 10-20 $50,000
Building/building improvements: 12-40 $20,000
Construction Interior & Roof Cover
Heating Ventilation AC & Lighting
Electrical
Elevators, Fire, Piping & Plumbing
Site Preparation
Floor Structure & Cover, Foundation, Roof
Structure, Steel Frame, Walls Exterior
Primary Infrastructure and Utility 10-40 $75,000
Paving Systems
Water, Sanitary & Stormwater
Secondary Infrastructure 10-40 $25,000
Sidewalk, Boardwalk, Pathways
Streetlights, Signage
Equipment 5-20 $10,000
Vehicles
Machinery
Software and
non-tangible 5-20 $10,000
Purchased and internally developed
Construction Work in Progress
Upon completion,
per above class
Equipment expenditures for items between $500 and $10,000 are recorded as small tools and
equipment, which is a supply account. Building and improvement expenditures below the
thresholds are recorded as repairs and maintenance. Current revenues finance expenditures for
supplies, repairs, and maintenance.
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TAX CAPACITY, TAX LEVY, & TAX RATE HISTORY
Tax Capacity City Tax HRA Tax Total Tax City Tax
Year Value Levy Levy Levy Capacity Rate
2014 18,244,090$ 8,150,000$ -$ 8,150,000$ 44.672
2015 23,882,689$ 8,535,000$ -$ 8,535,000$ 35.737
2016 25,891,898$ 8,925,000$ 280,000$ 9,205,000$ 34.470
2017 27,583,160$ 9,150,000$ 280,000$ 9,430,000$ 33.172
2018 29,528,145$ 9,547,000$ 323,000$ 9,870,000$ 32.332
2019 29,076,227$ 9,962,000$ 348,000$ 10,310,000$ 34.262
2020 29,870,392$ 10,445,000$ 355,000$ 10,800,000$ 34.968
2021 31,026,583$ 11,063,700$ 366,300$ $11,430,000 35.659
2022 31,073,603$ 11,353,000$ 388,000$ $11,741,000 36.536
2023 34,925,732$ 12,050,000$ 402,000$ $12,452,000 34.502
$-
$5
$10
$15
$20
$25
$30
$35
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023MillionsTax Levies and Tax Capacity History
City Tax Levy HRA Tax Levy Tax Capacity Value
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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.
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.
AMERICAN RESCUE PLAN ACT (ARPA): Signed into law on March 11, 2021, this $1.9 trillion
funding program provided resources for a wide variety of recipients and for an extensive list of
uses. $350 billion of the funds were provided to state and local governments for emergency
funding in response to the COVID-19 pandemic.
AMORTIZATION: The action or process of gradually writing off the initial cost of an asset.
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.
ARBITRAGE: The simultaneous purchase and sale of the same asset in different markets in
order to profit from tiny differences in the asset's listed price. In governments, this typically
refers to the investment of funds received as proceeds from bond issuances.
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
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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 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 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 used in operations and have initial useful lives extending beyond a
single reporting period. These assets must also meet capitalization thresholds, which vary by
asset classification and typically costs more than $10,000. Land, improvements to land,
vehicles, machinery, equipment, infrastructure, and other tangible and intangible assets used in
operations are examples of capital assets.
CAPITAL EXPENDITURES: A capital expenditure occurs when a capital asset is purchased.
Expenditures that do not benefit more than one reporting period or meet the capitalization
thresholds are classified as current expenditures.
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
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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.
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 including expenditures that do not
benefit more than one reporting period or meet the capitalization thresholds.
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 debt is accounted for in the enterprise fund or internal service fund receiving the debt
issue proceeds.
DEFICIT: An excess of expenditure or liabilities over income or assets in a given period.
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.
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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, Sewer, 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.
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.
Funds in the government model are classified into three broad categories: governmental,
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proprietary, and fiduciary. The most common reason for establishing a fund is to separately
account for restricted-use revenue or to comply with state or federal law.
FUND BALANCE: Governmental fund assets and deferred outflows of resources minus liabilities
and deferred inflows of resources.
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 bond’s principal, including interest.
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.
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.
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 OPERATING TRANSFERS: Amounts transferred from one fund to another, shown as
an expenditure in the originating fund and a revenue in the receiving fund.
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.
LEVY: (Verb) To impose taxes, special assessments, or service charges for the support of
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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.
LINE ITEM: A specific item or group of related 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.
MAJOR FUND: For budgetary purposes, a fund whose revenues or expenditures, excluding
other financing sources and uses, constitute more than 10% of the revenues or expenditures of
the appropriated budget.
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.
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.
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.
NON-MAJOR FUND: For budgetary purposes, a fund whose revenues and expenditures,
excluding other financing sources and uses, are less than 10% of the revenues and expenditures
of the appropriated budget.
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 of items purchased
or services obtained. Examples of objects of expenditure include salaries, supplies, contracted
service, etc.
OBJECTIVE: Desired output-oriented accomplishments, which can be measured and achieved
within a given period.
OPERATING BUDGET: A financial plan that estimates revenues and expenditures for a specified
period.
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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.
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.
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.
PROPERTY TAX LEVY: The total amount to be raised by general property taxes for the purpose
stated in the resolution certified to the county auditor by December 28th. Also see levy.
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 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.
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
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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.
SPECIAL ASSESSMENT: A compulsory levy made by a local government against certain
properties to defray part or all 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.
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.
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, 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.
WORKING CAPITAL: Current assets less current liabilities. The modified accrual balance of
resources in enterprise funds after factoring out long-term assets and liabilities that do not
impact current, near-term operations.
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ACRONYMS
ACFR Annual Comprehensive Financial Report
ARPA American Rescue Plan Act
BCOL Bertram Chain of Lakes
CARES Coronavirus Aid, Relief & Economic Security Act
CIP Capital Improvement Plan
CPI Consumer Price Index
DMV Department of Motor Vehicle
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
GIS Geographic Information System
GO General Obligation
HACA Homestead and Agricultural Credit Aid
HRA Housing and Redevelopment Authority
HVAC Heating, ventilation, and air conditioning
IEDC Industrial & Economic Development Committee
LGA Local Government Aid
MCC Monticello Community Center
MCM Minimum Control Measures
MVE Market Value Exclusion
PTO Paid Time Off
SAC Sewer Availability Charge
SCADA Supervisory Control and Data Acquisition
SCDP Small Cities Development Program
TIF Tax Increment Financing
WAC Water Availability Charge
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2023 Adopted
Budget