2018 BudgetADOPTED BUDGET
2018FISCAL YEAR
www.ci.monticello.mn.us
CITY OF MONTICELLO . 505 WALNUT STREET . MONTICELLO . MINNESOTA
phone: 763.295.2711 fax: 763.295.4404
Table of Contents
Directory of Public Officials
Distinguished Budget Presentation Award
Budget Message
Community, Demographic, and Statistical Information
Map
Core Values
Strategic Planning: Vision, Mission, and Goals
Planning Process
Financial Policies
Budget Development & Administration
Revenue Collection
Expenditures and Payments
Debt Administration
Reserves and Fund Balances
Financial Reporting & Accounting
Cash Management & Investment
Financial Structure
Matrix of Funds and Budget Units
Operating Fund Crosswalk
The Budget Process (and Calendar)
Organization Chart
All Funds Summary By Fund Type
All Funds Summary By Year
Changes in Fund Balance/Working Capital
Fund Balance History
Balanced Budgets
Capital Expenditurs (Recurring vs Nonrecurring)
Tax Levy History
Tax Capacity History
Revenue Sources By Fund
Long Range Financial Plans
Long-Term Fiscal Objectives
Capital Investments and Operating Budgets
Legal Debt Limit and Bond Rating
Bond Rating Scales
Debt Service Levy History
G.O. Debt Service
G.O. Debt Levels
Effect of Debt Levels on Government Operations
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Debt Levels By Fund Type
Interfund Transfers
Staffing Summary
Revenue Trends & Analysis
Appropriations By Category and Fund-Type
General Fund - Summary
Mayor and City Council
City Administration
City Clerk
Finance
Audit
Assessing
Legal
Human Resources
Planning, Zoning & Community Development
City Hall
Prairie Center Building
Law Enforcement
Fire & Rescue
Fire Relief
Building Inspections
Civil Defense
Animal Control
National Guard
Public Works - Administration
Public Works - Engineering
Public Works - Inspections
Public Works - Streets, Alleys & Parking Lots
Public Works - Ice & Snow Removal
Public Works - Shop & Garage
Public Works - Stormwater
Public Works - Street Lighting
Public Works - Refuse Collection
Transit
Senior Center
Park Operations
Park Ballfields
Shade Tree
Library
Insurance
Special Revenue Funds - Summary
Economic Development Authority Fund
Cemetery Fund
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Minnesota Investment Fund
Community Center Fund
Debt Service Funds (aggregate of sub-funds) - Summary
2010A G.O. Improvement Bond Sub-Fund
2011A G.O. Refunding Bond Sub-Fund
2014A G.O. Judgement Bond Sub-Fund
2015B G.O. Street Reconstruction and Improvement Bond Sub-Fund
2016A G.O. Street Reconstruction and Improvement Bond Sub-Fund
2017A G.O. Improvement and Abatement Bond Sub-Fund
Closed Debt Service Funds
Capital Project Funds - Summary
Capital Project Fund
Closed Bond Fund
Park & Pathway Dedication Fund
Stormwater Access Fund
Street Lighting Improvement Fund
Street Reconstruction Fund
Enterprise Funds - Summary
Water Fund
Sewage Fund
Liquor Fund
Deputy Registrar Fund
Fiber Optics Fund
Internal Service Funds - Summary
IT Services Fund
Central Equipment Fund
Benefit Accrual Fund
Capital Improvement Program
Capital Improvement Program Introduction
Capital Improvement Plan - Funding Source Summary
Capital Improvement Plan - Projects & Funding Sources By Department
CIP Projects
Property Tax Basics
Truth-in-Taxation
Debt Guide
Minnesota Statutes
Utility Rates
Capitalization Thresholds
Tax Capacity, Tax Levy, & Tax Rate History
Useful Terms (Glossary)
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DIRECTORY OF PUBLIC OFFICIALS
MAYOR & CITY COUNCIL
Position Name Term Expires
Mayor......................................................................Brian Stumpf 12/31/2018
Council......................................................................Lloyd Hilgart 12/31/2018
Council............................................................... Charlotte Gabler 12/31/2018
Council...............................................................................Bill Fair 12/31/2020
Council.....................................................................Jim Davidson 12/31/2020
CITY STAFF
City Administrator.......................................................Jeff O’Neill
Finance Director.....................................................Wayne Oberg
Public Works Director .......................................................Vacant
Community Development Director................. Angela Schumann
Community Center Director..................................... Ann Mosack
Economic Development Manager...............................Jim Thares
City Clerk .........................................................Jennifer Schreiber
Human Resource Manager........................................ Tracy Ergen
Chief Building Official...................................................John Rued
City Engineer .....................................................................Vacant
Fire Chief ............................................................Michael Mossey
Deputy Registrar Manager.................................Carolyn Granger
Liquor Store Manager ........................................Randall Johnsen
Finance Manager...........................................Sarah Rathlisberger
Street Superintendent..............................................Tom Moores
Parks Superintendent................................................Tom Pawelk
Water & Sewage Superintendent ...........................Matt Theisen
Communications Coordinator............................. Rachel Leonard
JOINT CITY/COUNTY/OUTSIDE STAFFING
Wright County Sheriff................................................Joe Hagerty
WSB Engineering Consultant.................................Shibani Bisson
Veolia Environmental Services.................................Chuck Keyes
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DISTINGUISHED BUDGET PRESENTATION AWARD
The Government Finance Officers Association of the United States and Canada (GFOA) presented an
award of Distinguished Budget Presentation to the City of Monticello for its annual budget for the
fiscalyearbeginningJanuary1,2017.Thecityhasreceivedthisawardforeachbudgetithasprepared
for the past six years.
In order to receive this award, a governmental unit must publish a budget document that meets program
criteriaasa policydocument,asanoperationsguide,asafinancialplanandasacommunicationsdevice.
This award is valid for a period of one year only. We believe our current budget continues to conform to
programrequirements,andwearesubmittingittoGFOAtodetermineitseligibilityforanotheraward.
GOVERNMENT FINANCE OFFICERS ASSOCIATION
D istinguished
B udget Presentation
Award
PRESENTED TO
City of Monticello
Minnesota
For the Fiscal Year Beginning
January 1, 2017
Executive Director
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BUDGET MESSAGE
INTRODUCTION
The budget is a tool. How this versatile tool is used depends on the stakeholder. Policy makers use
the budget to provide direction on service levels and place limits on spending. For managers, the
budget offers benchmarks for measuring performance and assessing stewardship. To community
advocates and activists, the budget conveys visibility as to whether their concerns are being
addressed. Universally, the budget is an essential tool for communicating the city's plans, policies,
procedures, and objectives regarding the services to be delivered and the assets to be acquired in
the upcoming and future fiscal years. Indeed, the budget’s effectiveness is meaningfully influenced
by the conviction of the various stakeholders using this dynamic tool.
BUDGET POLICY AND STRATEGY
This budget document was prepared after analyzing and evaluating requests from various
departments and budget units. The content represents the requested financial support for the
operation of the city of Monticello for the upcoming fiscal year. Revenue estimates are conservative
and realistic. The importance of a sound revenue picture cannot be overstated. Revenue estimates
are based on historical trends with greater weight placed on the most current years.
The city of Monticello provides a range of services to the community, including police (contracted)
and fire protection, street and park maintenance, snow and ice removal, water and sewer utility
services, and administrative and planning services. In addition the city owns and operates a
community center (MCC), department of motor vehicles (DMV), municipal off-sale liquor store, and
a fiber optic network (FiberNet Monticello). The level of service provided by the proposed budget is
similar to that currently enjoyed by the community.
STRATEGIC OR KEY INITIATIVES
The city of Monticello provides a full range of municipal services, as listed in the previous paragraph
and as authorized by state statute. Monticello is blessed with many assets, including a beautiful
setting, an excellent location, a rich heritage, and a talented population. The city seeks to use,
preserve and enhance these assets in building a great, affordable place to live, work and do
business. The city will fulfill the goals below to achieve this mission:
1.Continue to maintain the lowest possible tax rate while providing the best possible service.
While the 2018 property tax levy exceeded inflation, the city’s tax levy (capacity) rate
declined slightly from 2017. 2018 Budget: The city levy increases $397,000 (4.3%) to
$9,547,000 and the Housing and Redevelopment (HRA) levy increases $43,000 (15.2%) to
$323,000. Combined (city + HRA) tax levy increase: $440,000 (4.7%). The tax levy rate is
still nearly 10% less than the next lowest rate for cities in Wright County.
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2.Continue to develop and provide an unequaled system of parks, trails, and recreational
facilities, including the unique assets of the Monticello Community Center, the Mississippi
River, and conversion of the Bertram Chain of Lakes (BCOL) property into a regional park.
In partnership with the county, the city acquired park land with state grants and local
contributions. The city and county evenly split the local contribution, which is roughly 50%
for land designated for non-athletic purposes and 50% for land designated for athletic
purposes. 2018 Budget: $400,000 2019 Budget: $2,100,000 buildout of BCOL.
3.Continue to maintain the city streets by following an annual seal coat and crack seal
program and by overlaying streets before they are beyond repair and need replacing.
The city’s pavement management program identifies varying condition levels of every
street. The 2018 General Fund includes a robust amount for chip/seal maintenance. This
higher maintenance level began in 2014. 2018 Budget: $176,000
4.Develop and adopt a long-range transportation plan which will improve traffic flow around
and through the city.
Monticello is one of three cities (along with two counties and two townships) taking part in
a study to identify an additional or expanded interstate interchange site and Mississippi
River crossing. The city is also an active, due paying member of the I-94 Coalition. 2018
Budget: $15,000 – study; $ 6,600 - membership
5.Implement the downtown redevelopment plan which will maintain a downtown area that
combines a successful commercial district, community identity and heritage, and
connection with the Mississippi River.
The 2017 Small Area Study plan for downtown identified various options for re-creating the
city’s downtown. The city transferred $300,000 from the General Fund to the Capital
Project Fund in 2017 to start implementing the plan. 2018 Budget: $300,000
6.Seek to expand the supply of "move up" housing that allows people to upgrade their home
without leaving the community.
Staff is facilitating the development of additional residential home lots on the perimeter of
the city by working with developers and engineers. Infrastructure needs are regularly
assessed and incorporated into the city’s capital improvement plan.
7.Seek to develop and attract a wide range of employment opportunities with a growing
emphasis on higher-paying jobs.
This concept promotes the city’s competitive advantages (i.e. low taxes, property
availability, transportation access, etc.) to businesses looking to move or grow. 2018
Budget for non-study redevelopment activity: $144,000
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8.Continue to maintain high quality water and sewage treatment facilities.
With the some of the lowest water and sewage rates in Minnesota, the city provides
excellent services from these two utilities to residents and businesses. The budget includes
funds for wastewater treatment facility improvements along with sufficient amounts for
additional, ongoing system improvements in each fund. Our water is rated as one of the
best tasting in Minnesota. 2018 Budget: Water - $150,000; Sewage - $150,000 and
$700,000 wastewater facility control systems
9.Provide unequaled access to information with high speed internet, phone and television
through the city-owned fiber optic network.
The Fiber Optics Fund will receive a transfer from the Liquor Fund to continue operations in
2018. 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. 2018 Budget: $130,000 Transfer
City council and staff used the goals set during the strategic planning process to direct the
development of the 2018 budget.
TOTAL BUDGET
The 2018 budget includes all the funds maintained by the city. Each fund is responsible to account
for a particular activity or activities. Each fund-type will be discussed within this message and in the
budget document.
The following compares the adopted 2017 and 2018 budgets:
Fund-type 2017 2018 2017 2018
General Fund 7,842,000$8,287,000$7,842,000$8,287,000$
Special Revenue Funds 2,964,539 2,918,028 2,699,590 3,010,339
Debt Service Funds 3,960,940 2,328,345 4,396,961 2,807,160
Capital Project Funds 5,588,900 7,055,000 7,477,069 10,664,899
Enterprise Funds 12,116,002 11,875,641 11,841,744 12,738,243
Internal Service Funds 492,177 548,800 810,030 711,500
Total 32,964,558$33,012,814$35,067,394$38,219,141$
Revenues Expenditures
Total Budget
Total revenues increase less than 1% and total expenditures increase nearly 9% in 2018. General
Fund revenues and expenditures increased 5.7%. The decrease in debt service expenditures reflects
the rapid amortization of existing debt. Capital project funds will incur higher expenditures as the
Fallon Avenue overpass and nearby street improvement projects begin. The Water Fund (enterprise
fund) includes a $600,000 transfer to the Capital Project Fund for acquisition of a site suitable for a
new public works campus. No other enterprise fund has a significant project planned for 2018.
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The following graphs display the revenues and expenditures attributable to each fund-type in the
2018 Budget:
General Fund
25%
Special
Revenue
Funds
9%
Debt Service
Funds
7%
Capital
Project Funds
21%Internal
Service Funds
2%
Enterprise
Funds
36%
2018 Revenues by Fund-Type
General Fund
22%
Special
Revenue
Funds
8%
Debt Service
Funds
7%
Capital
Project Funds
28%
Internal
Service Funds
2%
Enterprise
Funds
33%
2018 Expenditures by Fund-Type
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PROPERTY TAXES
The state of Minnesota has granted local municipalities the authority to levy taxes to fund
operations and debt payments. For the city of Monticello, the property tax levy accounts for over
80% of revenues in the General Fund and over 30% in the special revenue funds. In 2018, debt
services funds will receive $1,787,000 in property taxes for principal and interest payments on
general obligation debt, which is much lower than the prior year’s $2,437,000. However, the city
levied $783,000 for the Capital Projects Fund as offset and will re-allocate this levy for debt service
purposes in the future. For 2018, the city's general (operations and debt) property tax levy will
increase to $9,547,000, an increase of $397,000 (4.3%) over the prior year. For the third
consecutive year, the city imposed a Housing and Redevelopment Authority (HRA) special benefit
levy. The HRA levy increases to $323,000 (+15.4%) from $280,000 in the prior year. The special
benefit levy is receipted in the Economic Development Authority Fund. When added together, the
two levies represent a 4.7% increase in property taxes.
The following table provides a historical view of the tax capacity value, tax capacity rate and tax levy
without the HRA levy:
Tax Capacity Capacity Tax Capacity Rate Tax Levy
Year Value % Change Rate % Change Levy % Change
2008 16,190,597$36.7%42.601 -31.8%7,600,000$16.9%
2009 16,783,843 3.7%46.942 10.2%7,750,000 2.0%
2010 16,691,266 -0.6%46.191 -1.6%7,648,272 -1.3%
2011 16,429,431 -1.6%46.729 1.2%7,677,309 0.4%
2012 15,771,688 -4.0%49.773 6.5%7,850,000 2.2%
2013 18,692,762 18.5%42.262 -15.1%7,900,000 0.6%
2014 18,244,090 18.6%44.672 -15.1%8,150,000 3.2%
2015 23,882,689 30.9%35.737 -20.0%8,535,000 4.7%
2016 25,891,898 8.4%34.470 -3.5%8,925,000 4.6%
2017 27,583,160 6.5%33.172 -3.8%9,150,000 2.5%
2018 29,533,213 7.1%32.326 -2.6%9,547,000 4.3%
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 2018 at $29,533,213,
which is a 7.1% increase. The Xcel Energy nuclear power plant taxable market valued grew 4% in
2018 to $744 million. The value of the plant has risen nearly 3.5 times from its 2012 value of $213
million. The Xcel plant alone accounts for over ½ of the city’s tax capacity. The city's property tax
levy is divided by the tax capacity to determine the city's tax capacity rate. The tax capacity rate is
applied to each property's tax capacity to determine the tax the city will collect before any credits
are applied. For 2018, the city's combined (city + HRA) tax capacity rate is expected to change from
33.420% to 34.188%, a 2.2% increase.
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The city at this time does not have the authority to levy or collect local sales taxes or other types of
taxes under the state's tax system.
PERSONNEL SERVICES
The city's 2018 budget includes two new position: engineer/public works director and deputy fire
chief. Additionally, the budget includes a step increase for employees still moving up in the pay
scale system and a 3% wage adjustment (2% in January and 1% in July) for all employees. In 2013,
the city re-instituted the step-pay scale plan discontinued in 2010. Many of the full-time employees
have reached the last step of their pay scale. Public Works employees belong to a union. The
union’s collective bargaining agreement expires December 31, 2019.
The city will participate in the union’s health insurance plan in 2018. The union’s plan requires a flat
premium for union and non-union full-time employees regardless of participation. Monthly health
insurance plan costs increase $77 per employee, with employees paying $43. Staff will continue to
explore ways to reduce future premium increases to both the city and its employees.
While there are two new positions in the 2018 budget, the city continues to experiment with
different staffing scenarios. One such experiment has merged the duties and responsibilities of the
city administrator and the public works director.
The contribution rates to the Public Employees Retirement Association (PERA) will remain the same
in 2018 for both employer and employees. Effective 2018 PERA rates: 7.50% of wages for
employer and 6.50% for employee. The budget also estimates FICA and Medicare taxes at 6.20%
and 1.45% respectively for 2018.
The remainder of this section will describe the major initiatives for 2016 for each of the fund types
and their activities.
GENERAL FUND
Expenditures
The following schedule displays 2018 budgeted General Fund expenditures by department
compared with the prior year:
Department 2017 2018 % Change
General Government 1,623,981$1,721,583$6.0%
Public Safety 2,194,769 2,363,495 7.7%
Public Works 2,883,792 2,995,735 3.9%
Transit 5,000 30,000 500.0%
Recreation & Culture 1,125,946 1,169,808 3.9%
Unallocated 8,512 6,379 -25.1%
Operating Transfers -----
Total 7,842,000$8,287,000$5.7%
2018 General Fund Expenditures and Other Uses
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The 2018 budget increased 5.7% over the 2017 budget. Without the personnel services increase,
total expenditures would rise by 3.2%. 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 2018 personnel services budget includes a 2% raise in January and 1%
raise in July. It also includes adding an engineer/public works director for the full year and a deputy
fire chief beginning in July.
The chart below presents the 2018 budgeted expenditures allocated by function/department:
General
Government
21%
Public Safety
29%
Public Works
36%
Recreation
14%
General Fund Expenditures - 2018
The Public Works Department is the largest department in terms of budgeted expenditures and the
street and alleys activity budget is the largest activity within the department. The 2018 budget for
the Public Works department increased 3.9%. Public works administration (+37%), streets and alleys
(+4.6%), refuse collection (+1.7%), storm water (+2%), and public works inspections (+10.3%) are
largely responsible for the overall increase. The increase in public works administration is largely
attributable to re-instatement of an engineer/public works director position.
As with all departments, personnel services increased with wage and benefit inflation.
The second largest department based on expenditures is the Public Safety Department. The 2018
Public Safety Department budget increased 7.7%. The fire and rescue activity budget increased
16.4% with gear replacement and the additional full-time fire position. Public safety activities
include law enforcement, fire, building inspections, civil defense, National Guard, and animal
control. The city contracts with the Wright County Sheriff's department for law enforcement. The
2018 contract includes a $2.50 increase in the hourly service rate. The city will also contract for four
additional hours (from 48 to 52) per day, starting in July 2018.
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The 2018 budget for general government activities increased 6%. The city clerk activity increased
significantly because 2018 is an election year. Updating the comprehensive plan contributes to the
increase in planning and zoning (+7.4%). The human resources activity increases with the addition
of on-line employment licensing. The increase (+24.7%) in city assessing reflects higher charges by
the county assessor. Finance increased with wages and benefits. Maintenance at city hall and the
Prairie Center building drive the increase in both activities.
Recreation and culture increased by 3.9% in 2018. Park operation activities (+2.9%) increased with
wage and benefit inflation and additional Bertram costs. The shade tree (+14.7%) activity budget
demonstrates a desire to improve Monticello’s livability and more accurately reflect actual costs.
Including services for police, assessor, and legal services, other services and charges account for
48% of General Fund appropriations. Appropriations for personnel services follow with 40% of the
total and rises with wage and benefit inflation plus the new positions. 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 2018 budget:
Classification 2017 2018 % Change
Personnel Services 3,096,654$3,295,557$6.4%
Supplies 731,825 742,050 1.4%
Other Services & Charges 3,807,021 4,003,793 5.2%
Capital Outlay 206,500 245,600 18.9%
Operating Transfers -----
Total 7,842,000$8,287,000$5.7%
2018 General Fund Appropriations
Personnel
Services
40%
Supplies
9%
Capital
Outlay
3%
Other
Services &
Charges
48%
Expendituresand OtherUses - 2018
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Revenues and other sources
Revenues and other sources supporting General Fund expenditures and other uses are classified as
follows:
Classification 2017 2018 % Change
Property Taxes 6,291,000$6,590,000$4.8%
Franchise & Other Taxes 283,900 289,500 2.0%
Licenses & Permits 379,400 398,750 5.1%
Intergovernmental Revenues 346,440 374,440 8.1%
Charges for Services 320,470 398,400 24.3%
Fines & Forfeits 42,300 36,500 -13.7%
Special Assessments 300 300 0.0%
Miscellaneous 178,190 199,110 11.7%
Operating Transfers -----
Total 7,842,000$8,287,000$5.7%
2018 General Fund Revenues and Other Sources
The General Fund’s tax levy increases by 4.8%, while the General Fund’s portion of the combined
levy (city + HRA) decreases slightly from 66.7% to 66.0%. Licenses & permits reflect a modest uptick
in residential and commercial development, with the rebound beginning in 2013 and continuing
through 2017. Intergovernmental revenues improve with more state and county grants and aids.
Charges for services reflect the implementation of a city-wide residential garbage charge.
The property tax levy generates 80% of the General Fund revenues. Other than franchise fees, the
city does not impose other taxes, such as local sales taxes or income taxes. Therefore, the city will
continue to be dependent on property tax revenue as its major source of future revenues.
SPECIAL REVENUE FUNDS
The city of Monticello currently operates special revenue funds for economic development,
cemetery, and community center activities. Special revenue funds also include the Minnesota
Investment Fund, but it will likely see very little activity in 2018.
Like the General Fund, the special revenue fund budgets are set at a level to maintain services. The
tax levy supports community center operations ($372,000) and the Economic Development
Authority ($323,000). Tax increments support economic development activities but their use is
generally restricted to a specific activity in a specific area. Beginning in 2016, operating transfers
(in) decreased to zero with initiation of a $280,000 Housing and Redevelopment Authority special
benefit levy. Charges for services are the largest revenue source for both the community center
(memberships) and the cemetery (plot sales).
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The following tables display the change in budgeted revenues and other sources and the change in
budgeted expenditures and other uses for special revenue funds in 2018:
Classification 2017 2018 % Change
Property Taxes 652,000$710,000$8.9%
Tax Increments 653,564 635,678 -2.7%
Charges for Services 1,496,725 1,434,500 -4.2%
Miscellaneous 162,250 137,850 -15.0%
Operating Transfers -----
Total 2,964,539$2,918,028$-1.6%
2018 Special Revenue Fund Revenues & Other Sources
Classification 2017 2018 % Change
Personnel Services 1,223,132$1,279,434$4.6%
Supplies 198,635 183,435 -7.7%
Other Services & Charges 800,904 770,400 -3.8%
Capital Outlay 276,919 577,070 108.4%
Operating Transfers 200,000 200,000 0.0%
Total 2,699,590$3,010,339$11.5%
2018 Special Revenue Fund Appropriations
DEBT SERVICE FUND (Aggregate of Sub-Funds)
The city's debt service for 2018 is $2,807,160, or $712,523 less than the prior year. Funding for debt
service comes from special assessments, tax increments, property taxes and transfers from the
stormwater access, water, and sewage funds. Additional resources may be needed in one debt
service fund because two parcels with $1.7 million in special assessments received a Green Acres
deferral. The reserve in the affected fund were drawn down to make debt service payments.
Further transfers from utility funds supplanted transfers from depleted and closed access funds.
Outstanding debt: debt service funds - $21,035,000; enterprise funds - $4,278,401; internal service
funds - $605,000. The city's bond rating from Moody’s Investors Services is an "A2".
CAPITAL PROJECT FUNDS
The budget for capital project funds are based on the 2018 project expenditures listed in the city's
five-year capital improvement plan. The city's five-year capital improvement plan is included in a
later section of this report. The city has three major projects moving forward in 2018: Fallon Avenue
overpass, street improvements on 7th Street, and infrastructure improvements on Chelsea Road.
Debt was issued in 2017 to start the projects and new debt will be issued in 2018 to provide the
financing to complete those three projects.
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ENTERPRISE FUNDS
Total revenues and other sources for the enterprise funds (Water, Sewage, Fiber Optic, DMV, and
Liquor) is estimated at $11,875,641 for 2018. The 2018 budget includes no debt proceeds, down
from $700,000 in 2017. Operating transfers in of $130,000 are from another enterprise fund: Liquor
Fund to Fiber Optics Fund. The change in Sale of Goods represents a conservative budget policy of
estimating liquor sales at prior year levels plus the addition of Sunday sales.
Classification 2017 2018 % Change
Sale of Goods 5,435,194$5,770,784$6.2%
Licenses & Permits 200 2,000 900.0%
Charges for Services 5,414,861 5,670,207 4.7%
Special Assessments 30,000 38,000 26.7%
Miscellaneous 165,297 124,200 -24.9%
Contributed Capital 140,450 140,450 0.0%
Operating Transfers 230,000 130,000 -43.5%
Debt Proceeds 700,000 --100.0%
Total 12,116,002$11,875,641$-2.0%
2018 Enterprise Fund Revenues & Other Sources
Classification 2017 2018 % Change
Personnel Services 1,555,441$1,683,446$8.2%
Supplies 4,414,130 4,710,245 6.7%
Other Services & Charges 3,422,406 3,694,978 8.0%
Capital Outlay 1,760,900 1,146,000 -34.9%
Debt Service 373,574 373,574 0.0%
Operating Transfers 315,293 1,130,000 258.4%
Total 11,841,744$12,738,243$7.6%
2018 Enterprise Fund Appropriations
Personnel services increase with wage and benefit inflation and additional staffing needed for
Sunday liquor sales. Other services and charges increase because Fibernet’s operations are
outsourced. A $600,000 operating transfer from the Water Fund to the Capital Project Fund for site
acquisition for a public works facility contributes to the large increase in transfer out. A $400,000
transfer from the Liquor Fund to the Park and Pathway Fund will support Bertram Chain of Lakes
engineering costs.
INTERNAL SERVICE FUNDS
Two internal service funds were initiated in 2013: IT (Information Technologies) Services Fund and
Central Equipment Fund. These funds operate on a cost-recovery basis but the time horizon for the
basis differs greatly. The IT Services Fund is relatively less capital intensive with annual capital
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outlays in the $20,000 to $30,000 range. IT equipment usually has a shorter replacement cycle. The
Central Equipment Fund has incurred debt to make major purchases. Annual rental charges to
benefitting budget units recover the equipment purchase costs over 7-10 year periods. Annual
depreciation and inflation for each capital asset will be used in calculating annual rental payments,
which will provide funds for major equipment replacement through annual operating budgets.
Internal service fund charges are recorded as expenditures in other funds.
A third internal service fund (Benefit Accrual Fund) was started at the end of 2015. This internal
service fund accumulates resources from governmental funds to match the city’s paid leave (paid-
time-off, sick leave, and vacation) liability for governmental fund employees. Except for debt
proceeds, internal service fund revenues are recorded as expenditures in other funds.
FUND BALANCES
Fund balances decline when expenditures exceed revenues. The General Fund and Monticello
Community Center (MCC) Fund normally have balanced budgets where revenues equal
expenditures. In 2018, the city has budgeted to draw down the MCC fund balance to finance
improvements of the community center’s mechanical systems. The fund balance in the Debt Service
Fund declines nearly $500,000 through normal debt amortization. No early redemptions are
planned for 2018. The Debt Service Fund is the aggregation of the sub-funds for each debt issue.
The city accumulates money in several debt service sub-funds for debt service payments in the
following year.
Additionally, the fund balance for the group of capital projects funds declines $3.6 million with the
expenditure of prior year debt proceeds. Enterprise fund balances decline by nearly $900,000 with
transfers to other funds and capital expenditures.
The city adopted a balanced budget for the General Fund in 2018.
CHALLENGES IN CONTEXT
The preparation of this budget reflects the collision of both short-term and long-term challenges.
While the local economy has improved, the commercial and residential tax base is growing by less
than 2%. Growth requires additional near term public safety enhancements and long-term
transportation improvements. Indeed, the council desires to meet current and future growth needs
by maintaining the lowest tax capacity rates in Wright County.
Second, the 2014 settlement of the telecommunication bondholder’s class-action lawsuit provided
certainty and allowed city leaders to focus on other concerns such as day-to-day operations at
Fibernet. Consequently, the city hired a third party to manage the telecommunications utility
starting July 1, 2016. Fibernet now requires less support from the Liquor Fund. This will allow the
city to redirect liquor store profits to other needs, such as park improvements at Bertram Chain of
Lakes.
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Third, the city is moving ahead with larger capital projects for 2018 and thereafter. All large projects
have reimbursement resolutions, meaning the city will likely recover their temporary draw on
reserves with debt proceeds. Three of the larger projects include construction of the Fallon Avenue
overpass, 7th Street improvements, and Chelsea Road infrastructure improvements.
Fourth, changes in leadership occurred in 2017 (first budget – 2018). Two new councilors with
different policy outlooks were added when two other councilors did not seek re-election. In
addition, one new councilor was seated in 2015. The 2018 budget will be subject to minor
modification as priorities change as that year progresses. Growth themes and emphasis on public
safety dominated in drafting the 2018 budget.
In summary, modest economic improvement, public safety service enhancement, transportation
improvements, stabilization in Fibernet operations, park development, and new leadership
impacted the decisions made in drafting the 2018 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, 2017. In order to receive this award, a governmental unit
must publish a budget document that meets program criteria as a policy document, as an
operations guide, as a financial plan, and as a communications device.
This award is valid for a period of one year only. We believe our current budget continues to
conform to program requirements, and we are submitting it to GFOA to determine its eligibility for
another award.
CONCLUSION
Conservation of city financial resources continues to be a very important objective. The budget is
the prime tool in making sure limited resources are wisely utilized. It is our belief that the 2018
budget allows the city to deliver excellent municipal services in a cost effective and efficient manner
at current levels. The 2018 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,
Wayne W. Oberg Sarah K. Rathlisberger
Finance Director Finance Manager
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COMMUNITY, DEMOGRAPHIC, AND STATISTICAL INFORMATION
Classifieda501(a)entityundertheInternalRevenueCode,thecityofMonticellowasorganizedasa
municipalityin1856.Monticelloislocatedapproximately45milesnorthwestoftheMinneapolis-St.Paul
metropolitanareaalongtheI-94corridorinWrightCounty.The2010U.S.CensusestimatedMonticello's
populationat12,759andthecityencompassesanareaof8.94squaremiles.Thecityoperatesundera
statutoryformofgovernment.Themayorandfourcouncilors(togetherknownas"citycouncil")governthe
city.Thecouncilorsareeachelectedtostaggered,four-yeartermsandthemayoratwo-yearterm.The
mayorpresidesoverandisavotingmemberoftheCityCouncil.Themayoristhechiefauthorityfor
administeringcitygovernmentandappointsdepartmentheads,variousboardmembersandcommission
members.TheCityCouncilisthelegislativebodyandmeetsregularlytwiceamonth.TheCouncil'smain
responsibilitiesaretoappropriatefunds,setsalaries,adoptordinances,andapprovebudgets.
Monticellohasavariedbusinesscommunitywithahealthymixofretailandmanufacturing.Thecitywashit
hardbytherecessionandhasslowlyrecovered.Cityunemploymentratesaresimilartothatofthestate,but
thestate’sratehasbeenslightlybetterlately,asshownbelow.
Hometooneofthetwostatenucleargenerationplants,Monticello’slargestemployerisXcelEnergy. Agri-
giantCargillalsomaintainsastrongpresenceinthecity.Thefollowingtableisthecity’stoptenemployers.
Average Employment
Year Wright County Wright County State of Minnesota
2008 62,830 7.9%5.4%
2009 61,629 8.8%7.8%
2010 64,739 7.5%7.4%
2011 65,228 6.8%6.5%
2012 66,564 5.6%5.6%
2013 67,224 4.7%4.9%
2014 68,091 4.0%4.1%
2015 38,855 3.8%3.6%
2016 69,254 4.3%4.0%
2017 71,796 3.5%3.1%
HISTORICAL EMPLOYMENT/UNEMPLOYMENT DATA
(Rates are not compiled for individual communities within counties)
Average Unemployment
Employer Employees
Xcel Energy (Northern States)700
ISD No. 882 (Monticello)544
CentraCare Medical Center 500
Cargill Kitchen Sol. (Sunny Fresh)450
Walmart Supercenter 325
Cub Foods 180
Ultra Machine Corporation 173
Home Depot 160
City of Monticello 150
WSI Industries 100
TOP TEN CITY EMPLOYERS
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Monticello’spopulationandhouseholdsare.2%ofstate’stotalforbothmeasures.WithaWal-Mart,Target,
HomeDepot,andMillsFleetFarm,itisnosurprisethatretailsalesperpersonarehigherthanthestate
average. Thefollowingtablecontainsselectedfactsonthecity:
Thenuclearplantaccountsforapproximately60%ofcity’snettaxcapacity. Xcel’staxcapacityandthe
council’sconservativetaxlevyphilosophyaremainreasonsthecitytaxcapacityrateisthelowestinWright
County.Indeed,upgradestotheXcelplantin2011contributedto15%declineinthe2013taxcapacityrate.
Likewise,Xcelupgradesin2013produceda20percentdeclineinthe2015taxrate.Thetaxbaseisabout
one-thirdresidentialandtwo-thirdscommercial.ThefollowingtableliststhetaxratesforeachcityinWright
County,Minnesota:
People QuickFacts Monticello Minnesota
Population, 2016 estimate July 1 13,429 5,576,606
Population, 2010 12,759 5,303,925
Population, percent change, April 1, 2010 to July 1, 2016 4.9%4.1%
Persons under 5 years, percent, 2010 10.1%6.7%
Persons under 18 years, percent, 2010 30.8%24.2%
Persons 65 years and over, percent, 2010 9.5%12.9%
Female persons, percent, 2010 50.8%50.4%
White persons, percent, 2010 (a)92.6%85.3%
Total number of firms, 2012 1,132 489,494
Retail sales per capita, 2012 $26,746 $14,667
Land area in square miles, 2017 8.94 79,626.74
Persons per square mile, 2010 1,427.2 66.6
Housing units, 2010 4,973 2,347,201
Homeownership rate, 2012-2016 71.5%71.7%
Median value of owner-occupied housing units, 2012-2016 $169,400 $186,200
Households, 2012-2016 4,822 2,135,310
Persons per household, 2012-2016 2.7 2.49
Per capita money income in the past 12 months (2016 dollars)$27,101 $33,225
Median household income, 2012-2016 $67,752 $63,217
2014 2015 2016 2017 2018 2017-18 2017-18
City Tax Rate Tax Rate Tax Rate Tax Rate Tax Rate Change Change %
City of Monticello 44.709 35.737 34.471 33.172 32.326 -0.846 -2.6%
City of Otsego 44.575 41.162 37.921 37.852 35.565 -2.287 -6.0%
City of St. Michael 41.843 38.476 37.772 37.496 37.025 -0.471 -1.3%
City of Hanover 52.141 48.207 48.395 48.152 44.824 -3.328 -6.9%
City of Albertville 51.092 51.273 52.370 51.586 49.125 -2.461 -4.8%
City of Delano 56.681 54.081 53.520 53.557 54.056 0.499 0.9%
City of Rockford 59.032 57.335 56.620 55.170 54.358 -0.812 -1.5%
City of Montrose 60.204 57.218 53.365 55.159 57.144 1.985 3.6%
City of Dayton 65.600 56.945 57.150 55.467 57.507 2.040 3.7%
City of Annandale 71.525 69.012 67.921 63.955 60.024 -3.931 -6.1%
City of Buffalo 49.893 52.456 54.838 59.609 60.060 0.451 0.8%
City of Maple Lake 57.733 59.139 59.304 65.459 68.514 3.055 4.7%
City of Howard Lake 76.180 72.093 71.649 65.998 71.036 5.038 7.6%
City of Clearwater 87.259 75.294 75.857 75.226 75.845 0.619 0.8%
City of Waverly 93.137 87.064 83.349 82.131 80.229 -1.902 -2.3%
City of Cokato 74.684 80.426 77.853 80.773 80.792 0.019 0.0%
City of South Haven 137.657 130.381 134.401 135.237 131.644 -3.593 -2.7%
CITY TAX RATES IN WRIGHT COUNTY, MINNESOTA
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Monticellogrewbyapproximately20%inthelasttenyears.Thecityhasampleundevelopedcommercial
andresidentialrealestateandispositionedwelltobenefitfrommoreurbanflightfromtheTwinCities.
Accesstomajortransportationcorridorsmakesthecityanideallocationforfuturegrowth. Thefollowing
tableincludespopulationstatisticsoverthelasttenyears:
TheabovestatisticsreflectamoreaccurateCensuscount,whichisthe2011total.Theothercountsare
fromthestatedemographer.
Year Polulation Change
2008 11,366 113
2009 11,476 110
2010 11,501 25
2011 12,759 1,258
2012 12,840 81
2013 12,901 61
2014 12,993 92
2015 13,125 132
2016 13,311 186
2017 13,409 98
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MAP FOR MONTICELLO, MINNESOTA
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CORE VALUES
This documentis preparedbythecity’s finance department.Thecorevaluesofthedepartmentserveas
aguide forthewaywedeliverinternalandexternalcustomerservices.Thesecorevaluesare howwe
conductourselvesandwhatcreatethecultureofthe finance department.
Competent
(How well we do our jobs)
Be open, hardworking, reliable, innovative, safe, and
accountable to the public.
Courteous
(How well we treat others)
Work unselfishly in a positive, polite and professional
manner for our community and its citizens.
Cooperative
(How well we work together)
Lead by example and work together
to achieve the best result.
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STRATEGIC PLANNING: VISION, MISSION AND GOALS
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PLANNING PROCESSES
The city plans for the long-term needs of our community through a number of efforts and studies.
These documents are usually developed by consultants and staff, with numerous public hearings
and advisory board meetings prior to their formal adoption by the City Council. Once adopted, city
staff works diligently to implement the recommendations and changes outlined in the plans. Here is
the status of our primary planning documents:
Plans for service provision, facility expansion & maintenance:
1.Monticello Comprehensive Plan - Adopted 2008.
The Comprehensive Plan is a tool for guiding the growth, redevelopment, and improvement
of Monticello. The Comprehensive Plan outlines the vision for the community. The current
plan update was adopted in 2008. Various chapters of the Comprehensive Plan have been
amended in part or full since adoption. The professional services line item, under the 2017
planning and zoning budget, includes funds for interpreting and implementing the
comprehensive plan.It is anticipated that amendments to the plan will occur as conditions
affecting the plan evolve, including those related to Downtown and the Interchange
Planning Area. An update to Chapter 3 – Land Use, is planned for 2018-2019.
2.Transportation Plan - Adopted 2011.
The city’s Transportation Plan is a guide that: identifies and characterizes the city’s existing
transportation system; identifies and discusses general planning factors pertaining to future
transportation needs for the city; identifies potential future roadway deficiencies and
assesses improvement options to address the deficiencies; and provides an overall plan
addressing capital improvement needs, functional classification, jurisdiction, right-of-way
issues, bicycle/pedestrian considerations and transit. The Transportation Plan document
will be updated as necessary as growth increases. Ongoing major transportation efforts
include: TH 25/CSAH 75 Intersection improvements completed in 2016, Fallon Avenue
Overpass construction anticipated in 2018, Regional transportation planning to address the
TH 25 corridor in 2018/2019, TH 25/7th Street intersection improvements--completed in
2017, future improvements at various intersections.
3.Parks & Pathways Plan - Adopted 2011.
Chapter 4 – Parks of the Monticello Comprehensive Plan was amended in 2011 for the
adoption of an updated Park and Pathway Plan. The Monticello Parks and Pathways Plan
identifies the City’s objectives for Parks and Pathways planning and development, and
building on the existing parks infrastructure. It also provides context for the City’s
participation in the acquisition and development of the Bertram Chain of Lakes Regional
Park. Major Bertram Chain of Lakes improvements are planned for 2019. The General Fund
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includes $40,000 for annual improvements to existing pathways, which were previously
financed by the Park and Pathway Dedication Fund. The City has recently completed a
Pathway Connections map, a planning document related to pathway connections within the
larger system in direct response to the objectives identified within the plan.
4.Downtown Small Area Plan – Adopted 2017
Chapter 3 – Land Use of the Monticello Comprehensive Plan was amended in 2017 for the
adoption of the Downtown Small Area Plan. The Downtown Small Area Plan is an
implementation plan which integrates market, transportation, and land use considerations
for the purpose of creating a vibrant downtown district. The City and Economic
Development Authority will be asked to consider a number of implementation strategies to
realize plan goals.
5.Economic Development Strategic Plan - Updated 2018.
In 2016, the city adopted a Housing and Redevelopment Authority property tax levy of
$280,000. The HRA levy increasess to $323,000 for 2018. The levy is used for EDA
redevelopment activities. The EDA has adopted a strategic work plan for 2018, which has
been ratified by the City Council.
6.Natural Resource Inventory & Assessment - Adopted 2008.
The purpose of the Natural Resource Inventory and Assessment (NRI/A), adopted in 2008, is
to identify existing natural resources within the City of Monticello and its growth area (the
Monticello Orderly Annexation Area), inventory these resources, and assess the resource
quality. These resources are then considered and evaluated during growth/development.
7.Bertram Chain of Lakes Recreation Plan – Adopted 2016.
The 2008 Comprehensive Plan and 2011 Park & Pathway Plan recognize the Bertram Chain
of Lakes Regional Park as a significant component of the community’s quality of life
initiatives. The concept plan for the full regional park and athletic complex was adopted in
2011 as part of the Park and Pathway plan. A Master Plan for the Bertram Chain of Lakes
Regional Athletic Complex was approved in 2016. Land acquisition is complete and major
improvements are planned to begin in 2019.
8.Storm Water Pollution Prevention Program - Adopted 2007.
In 2005 the City of Monticello was designated as a regulated small municipal separate
storm sewer system (MS4) under Minnesota Rules, Chapter 7090. This required the City to
obtain a National Pollutant Discharge Elimination System/State Disposal System
(NPDES/SDS) storm water permit, and to develop and implement a Storm Water Pollution
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Prevention Plan (SWPPP) to reduce the discharge of pollutants, including sediments, from
our storm sewer system to the maximum extent practicable.
The City is continuing to implement the required six minimum control measures (MCM’s)
as follows:
A.Public Education and Outreach,
B.Public Participation and Involvement,
C.Illicit Discharge Detection and Elimination,
D.Construction Site Stormwater Runoff Control,
E.Post-Construction Stormwater Management Measures; and,
F.Pollution Prevention/Good Housekeeping Measures.
Zoning, subdivision, and illicit discharge ordinances were adopted in 2014 related to
grading, drainage, erosion control, and storm water management to meet current MPCA
requirements per the city’s new MS4 permit issued on January 16, 2014. The permit expires
July 31, 2018. The MPCA will reissue the new permit requirements sometime in 2018.
9.Comprehensive Water Resource Management Plan - Updated 2006.
The Comprehensive Water Resource Management Plan was developed to meet local
watershed management planning requirements of the Metropolitan Surface Water
Management Act and Board of Water and Soil Resources Rules 8410. It was developed to
be in conformance with the requirements of Metropolitan Council requirements, and
applicable State and Federal laws. The plan and its referenced literature is intended to
provide a comprehensive inventory of pertinent water resource related information that
affects the City and management of those resources. It is anticipated to update the
hydraulic model and plan to conform with new stormwater ponding design requirements as
a result of the new NOAAA Atlas 14 standard released by the National Weather Service
Hydrometeorlogical Design Studies for rainfall frequency estimates.
10.Plan Requirements and Design Guidelines (“Design Manual”) - Updated 2017.
These guidelines were established for developers of property within the City of Monticello.
The guidelines provide design standards, specifications, and detail plates for the design of
infrastructure improvements, street, utility, and site work construction.
These guidelines are now referenced in the city’s zoning and subdivision ordinances that
were adopted in 2014 related to grading, drainage, erosion control, and storm water
management.The Design Manual will be updated as needed as new design regulations and
requirements come forth.
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11.General Specifications and Standard Detail Plates for Street and Utility Construction -
Updated 2017.
These specifications represent the City’s requirements for construction of public street and
utility systems. This document is anticipated to be updated in 2018 with minor
modifications.
12.Water System Plan – Adopted 2004.
Awaterdistributionsystemmodelwascreatedin2004toevaluatetheexistingwatersystem.
The water system plan was then developed using this model to identify water system capital
improvements necessary to serve future land use designations in accordance with the City’s
Comprehensive Plan.
13.Sanitary Sewer Comprehensive Plan – Adopted 1995.
The sanitary sewer comprehensive plans was adopted in 1995 and identified the existing
sanitary sewer system and also projected future wastewater flows and service areas based
on future land use designations in accordance with the City’s Comprehensive Plan. Several
individual sanitary sewer studies were developed after the adoption of this plan in response
to development. Future utility studies will likely be needed in response to development.
14.Interchange Planning Study – Pending (2018/2019).
The Interchange planning study will determine a reasonable location or locations for a
future I-94 Interchange within the city west of TH 25. The 2008 Comprehensive Plan
recognizes that the Northwest Monticello, which includes the CSAH39 to Orchard Road
corridor, as a primary focus for future development and further cites the Interchange
Planning as a critical component of understanding growth potential and land use in the
Northwest Area. A land use analysis component related to this study was completed in
2016. The full Interchange Planning study is on hold until the TH 25 area transportation
study is complete.
15.Wellhead Protection Plan (Part 1 and 2) - completed 2016.
The goal of the Wellhead Protection Plan is to prevent human-caused contaminants from
entering the water supply wells and to protect all who use the water supply from adverse
health effects associated with groundwater contamination. The preparation of the City’s
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.
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16.TH 25/Regional Transportation Planning Group – Ongoing.
A series of meetings have taken place with representatives invited from the City of Big Lake,
Big Lake Township, City of Becker, Becker Township, Wright County, Sherburne County,
MnDOT District 3 and the City of Monticello to discuss regional transportation planning. A
joint power agreement was adopted by the city in December 2015. The TH 25 area
transportation study is scheduled to be complete in 2018 and will identify near and long
term improvements to the corridor.
Plans for Facility and Infrastructure Maintenance:
1.Wastewater Treatment Facility Biosolids Dewatering, Energy Efficiency, Headworks and
Site Improvements Feasibility Report – Adopted 2012.
Dewatering facility is complete at year-end 2014. The energy-efficient aeration blowers
and piping was completed in 2016. This project is financed by the Sewage Fund.
Future improvements identified in the Capital Improvement Plan include SCADA system
upgrades, Phase 2 facility and site improvements, solids handling improvements and
headworks improvements.
2.Wastewater Treatment Phosphorus Reduction Facility Plan – Adopted 2014.
Construction began in 2015 and the project was completed in 2017. The facility plan was
amended to include replacement of two digester covers. The digester covers are part of the
current construction project. The project’s estimated final cost is $3.3 million, financed by a
$2.2 million loan and $1.1 million grant, both from the Minnesota Public Facilities
Authority.
3.Overall Street Reconstruction Program – Adopted 2004, ongoing as part of capital
improvement plan.
The 2018-2022 Capital Improvement Plan includes projects related to the program, with
various projects located through the city slated for start in 2018. The city held a street
reconstruction plan public hearing in June 2015. The 2018 projects with infrastructure and
amenities is estimated at $3 million.
4.Transportation Projects
TH25/7th Street Intersection Improvements – This project was completed in 2017 and
included traffic signal system improvements, including flashing yellow arrows, (estimated
at $250,000), northbound and southbound right turn lanes on TH25 and a westbound 7th
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Street right turn lane (estimated at $1.5 million). This project is included in the capital
improvement plan.
Fallon Avenue Overpass- This project includes a new bridge overpass over I-94 and three
roundabouts. Right-of-way acquisition and design occurred in 2017 and will continue to
occur along with construction in 2018.
Financial Plans:
1.Annual Budget - Adopted each December.
2.Capital Improvements Plan - Updated and adopted each year; most recently for 2018 -
2022.
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FINANCIAL POLICIES
Theoverallgoalofthecity'sfinancialpoliciesistoestablishandmaintaineffectivemanagementofthecity's
financialresources.Formalpolicystatementsandmajorobjectivesprovidethefoundationforachievingthis
goal.Accordingly,this sectionoutlines the policies usedinguidingthe preparation andmanagementofthe
city'soverallbudgetandthemajorobjectivestobeaccomplished.Inaddition,therationalewhichledtothe
establishmentofthefiscalpolicystatementsisalsoidentified.
Budget Development & Administration
1.Acomprehensiveannualbudgetwillbepreparedforallfundsexpendedbythecity.
Thecitycouncil shall have full authority over the financial affairs of the city and shall provide
for the collection of all revenue and other assets, the auditing and settlement of accounts, and 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. Inclusionofallfundsinthebudget
enablesthecouncil,theadministration,andthepublictoconsiderallfinancialaspectsofcitygovernment
whenpreparing,modifying,andmonitoringthebudget,ratherthandealwiththecity'sfinancesona
"piecemeal"basis.
2.The budget will be prepared in such a manner as to facilitate its understanding by citizens and
elected officials.
Oneofthestatedpurposesofthebudgetistopresentapictureofcitygovernmentoperationsand
intentionsfortheyeartothecitizensofMonticello.Presentingabudgetdocumentthatisunderstandable
tothecitizensfurthersthegoalofeffectivelycommunicatinglocalgovernmentfinanceissuestoboth
electedofficialsandthepublic.
3.Budgetaryemphasiswillfocusonprovidingthosebasicmunicipalserviceswhichprovidethe
maximumlevelofservices,tothemostcitizens,inthemostcosteffectivemanner,withdue
considerationbeinggiventoallcosts--economic,fiscal,andsocial.
Adherence to this basic philosophy provides the citizens of Monticello assurance that their
governmentandelectedofficialsareresponsivetothebasicneedsofthecitizensandthatitscitygovernment
isoperatedinaneconomicalandefficientmanner.
4.The budget will provide for adequate maintenance of capital, plant, and equipment and
for their orderly replacement.
Allgovernmentalentitiesexperienceprosperoustimesaswellasperiodsofeconomicdecline.In
periodsofeconomicdecline,propermaintenanceandreplacementofcapital,plant,andequipmentis
generallypostponedoreliminatedasafirstmeansofbalancingthebudget.Recognitionoftheneedfor
adequatemaintenanceandreplacementofcapital,plant,andequipment,regardlessoftheeconomic
conditions,willassistinmaintainingthegovernment'sequipmentandinfrastructureingoodoperating
condition.
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5.The city will avoid budgetary practices that balance current expenditures at the expense of
meeting future year expenditures.
Budgetarypracticessuchaspostponingcapitalexpenditures,accruingfutureyears'revenues,or
rollingovershort-termdebtarebudgetarypracticeswhichcansolveshort-termfinancialproblems.
However,theycancreatemuchlargerfinancialproblemsforfutureadministrationsandcouncils.
Avoidanceofthesebudgetarypracticeswillassurecitizensthatcurrentproblemsarenotsimplybeing
delayedtoafutureyear.
6.The city will give highest priority in the use of one-time revenues to the funding of capital
assets or other non-recurring expenditures.
Utilizing one-time revenues to fund on-going expenditures results in incurring annual
expenditure obligations, which may be unfunded in future years. Using one-time revenues to fund
capital assets or other non-recurring expenditures better enables future administrations and
councils to cope with the financial problems when these revenue sources are discontinued, since
these types of expenditures can more easily be eliminated.
7.The citywill maintain abudgetary control systemto helpit adhereto the established budget.
Thebudgetpassedbythecouncilestablishesthelegalspendinglimitsforthecity.A
budgetarycontrolsystem isessentialinordertoensurelegalcompliancewiththecity'sbudget.
8.The city will exercise budgetary control (maximum spending authority) through city council
approval of appropriation authority for each appropriated budget unit.
Exercisingbudgetarycontrolforeachappropriatedbudgetunitsatisfies requirementsofstate
law.Italsoassiststhecouncilinmonitoringcurrentyearoperationsandactsasanearlywarning
mechanismwhendepartments deviate inanysubstantivewayfromtheoriginalbudget.
9.Reports comparing actual revenues and expenditures to budgeted amounts will be
prepared monthly.
Thecity'sbudgetisineffectivewithoutasystem toregularlymonitoractualspendingand
revenuecollectionswiththoseanticipatedatthe beginningofthe year.Monthlyreportscomparing
actualrevenuesandexpendituresto budgetamounts providethemechanismforthecouncilandthe
administrationto regularlymonitorcompliancewiththeadoptedbudget.
10.State Requirement: Truth-in-Taxation
The Truth in Taxation (TNT) law requires the city to hold a series of public hearings in order to
present the proposed levy and budget, and to provide an opportunity for the public to comment and
make recommendations. The city’s proposed general levy has to be certified to the county auditor by
September 30th. The city’s proposed HRA (housing and redevelopment levy) must be certified by
September 15th. The final levies for both have to be certified by December 29th.
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Revenue Collection
1.Thecitywillseektomaintainadiversifiedandstablerevenuebase.
Acitydependentuponafewvolatile revenuesources isfrequentlyforcedtosuddenlyadjust
taxratesoralterexpenditurelevelstocoincidewithrevenuecollections.Establishmentofadiversified
andstable revenue base,however,servestoprotectthecityfromshort-termfluctuationsinanyone
majorrevenuesource.
2.The city will estimate revenues in a realistic and conservative manner.
Aggressive revenue estimates significantly increase the chances of budgetary shortfalls
occurringduringtheyear--resultingineitherdeficitspendingorrequiredspendingreductions.
Realisticandconservativerevenueestimates,ontheotherhand,willservetominimizetheadverse
impactofrevenueshortfallsandwillalsoreducetheneedformid-yearspendingreductions.
3.Thecitywillpursueanaggressivepolicyofcollectingrevenues.
Anaggressive policyofcollectingrevenueswillhelpto ensurethecity's revenue estimatesare
met,alltaxpayersare treatedfairlyandconsistently,anddelinquenciesarekepttoaminimum.
4.Thecitywillaggressivelypursueopportunitiesforfederalorstategrantfunding.
Anaggressivepolicyofpursuingopportunitiesforfederalorstategrantfundingprovidescitizens
assurancethatthecityisstrivingtoobtainallstateandfederalfundstowhichitisentitled--thereby
reducingdependenceuponlocaltaxpayersforthesupportoflocalpublicservices.
5.User fees and charges will be used, as opposed to general taxes, when distinct beneficiary
populations or interest groups can be identified.
Userfeesandchargesarepreferabletogeneraltaxesbecauseuserchargescanprovideclear
demandsignalswhichassistindeterminingwhatservicestooffer,theirquantity,andtheirquality.User
chargesarealsomoreequitable,sinceonlythosewhousetheservicemustpay--therebyeliminatingthe
subsidyprovidedbynonuserstousers,whichisinherentingeneraltaxfinancing.
6.Userfeeswillbecollectedonlyifitiscost-effectiveandadministrativelyfeasibletodoso.
User fees are often times costly to administer. Prior to establishing user fees, the costs to
establish and administer the fees will be considered in order to provide assurance that the city's
collection mechanisms are being operated in an efficient manner.
Expenditures and Payments
1.On-goingexpenditureswillbelimitedtolevelswhichcanbesupportedbycurrentrevenues.
Utilizationofreservestofundon-goingexpenditureswillproduceabalancedbudget,however,
thispracticewilleventuallycauseseverefinancialproblems.Oncereservelevelsaredepleted,thecity
wouldfaceeliminationofon-goingcostsinordertobalancethebudget.Therefore,thefundingofon-
goingexpenditureswillbelimitedtocurrentrevenues.
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2.Minor capital projects or recurring capital projects, which primarily benefit current residents,
will be financed from current revenues.
Minorcapitalprojectsorrecurringcapitalprojectsrepresentrelativelysmallcostsofanon-going
nature,andtherefore,shouldbefinancedwithcurrentrevenuesratherthanutilizingdebtfinancing.This
policyalsoreflectstheviewthatthosewhobenefitfromacapitalprojectshouldpayfortheproject.
3.Major capital projects, which benefit future as well as current residents, will be financed with
current revenues as well as other financing sources (e.g. debt financing).
This policy reflects the view that those who benefit from a capital project should pay
for the project.
4.Major capital projects, which benefit future residents, will be financed with other financing
sources (e.g. debt financing).
Majorcapitalprojectsrepresentlargeexpendituresofanon-recurringnaturewhichprimarily
benefitfutureresidents.Debtfinancingprovidesameansofgeneratingsufficientfundstopayforthecosts
ofmajorprojects.Debtfinancingalsoenablesthecostsoftheprojecttobesupportedbythosewho
benefitfromtheproject,sincedebtservicepaymentswillbefundedthroughchargestofutureresidents.
5.Constructionprojectsandcapitalexpendituresof$10,000ormorewillbeincludedinthe
CapitalImprovementProgram(CIP);minorcapitaloutlaysoflessthan$10,000willbeincludedin
theregularoperatingbudgetassmalltoolsandequipmentorrepairsandmaintenance.
TheCapitalImprovementProgram(CIP)differentiatesthefinancingofhighcostlong-livedphysical
improvementsfromlowcost"consumable"equipmentitemscontainedintheoperatingbudget.CIPitems
maybefundedthroughdebtfinancingorcurrentrevenueswhileoperatingbudgetitemsareannualor
routineinnatureandshouldonlybefinancedfromcurrentrevenues.
6.SpendingPolicy:Thecitywillspenditsresourcesinthefollowingorder.Resourceswillbe
categorizedaccordingtoGenerallyAcceptedAccountingPrinciples(GAAP)forstateandlocal
governments,withthefollowinggeneraldefinitions:
Restricted -- Amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government) through constitutional
provisions or by enabling legislation.
Committed--Amountsconstrainedtospecificpurposesbythecitycouncil; tobe reported
ascommitted,amountscannotbe usedforanyotherpurposeunlessthecitycouncil
takesactionto removeorchange theconstraint.
Assigned -- Amounts the city intends to use for a specific purpose; intent can be
expressed by the council or by an official or body to which the council delegates the
authority. The city council can delegate this authority to the city administrator.
Unassigned -- Amounts that are available for any purpose; these amounts are
reported only in the General Fund.
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When both restricted and unrestricted resources are available, spending will occur in the
following order, for the identified fund types:
FundType Orderof Spending
GeneralFund 1.Restricted
2.Committed
3.Assigned
4.Unassigned
ThecitycouncilhastheauthoritytoexpressassignmentsintheGeneralFund.
Special Revenue
Funds
1.Restricted
2.Committed
3.Assigned
Thecitycouncilhastheauthoritytoexpressassignmentsinspecial
revenue funds.
Debt
Service
Funds
1.Assigned
2.Committed
3.Restricted
Thecitycouncilhastheauthoritytoexpressassignmentsindebt
service funds.
Capital Projects
Funds
1.Restricted
2.Committed
3.Assigned
Thecitycouncilhastheauthoritytoexpressassignmentsincapital
project funds.
Debt Administration
1.The city will limit long-term debt to capital improvements which cannot be financed from
current revenues.
Incurringlong-termdebtservestoobligatefuturetaxpayers.Excessrelianceonlong-termdebt
cancausedebtlevelstoreachorexceedthegovernment'sabilitytopay.Therefore,conscientioususeof
long-termdebtwillprovideassurancethatfutureresidentswillbeabletoservicethedebtobligationsleft
byformerresidents.
2.The city will repay borrowed funds, used for capital projects, within a period not to
exceed the expected useful life of the project.
Thispolicyreflectstheviewthatthoseresidentswhobenefitfromaprojectshouldpayforthe
project.Adherencetothispolicywillalsohelppreventthegovernmentfromover-extendingitselfwith
regardtotheincurrenceoffuturedebt.
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3.Thecitywillnotuselong-termdebtforfinancingcurrentoperations.
Thispolicyreflectstheviewthatthoseresidentswhobenefitfromaserviceshouldpayforthe
service.Utilizationoflong-termdebttosupportcurrentoperationswouldresultinfutureresidents
supportingservicesprovidedtocurrentresidents.
4.ThecityofMonticellowilladheretoapolicyoffullpublicdisclosurewithregardtotheissuanceof
debt.
Fullpublicdisclosurewithregardtotheissuanceofdebtprovidesassurancethattheincurrenceof
debt, for which the public is responsible, is based upon a genuine need and is consistent with
underwriter guidelines.
Reserves and Fund Balances
1.ReservesandFundBalanceswillbeproperlydesignatedintothefollowingcategories:
Nonspendable fundbalance--Amountsthatare notinaspendable form (suchas
inventory)orare requiredtobemaintainedintact(suchasthecorpusofan
endowmentfund).
Restricted fund balance -- Amounts constrained to specific purposes by their providers
(such as grantors, bondholders, and higher levels of government) through
constitutional provisions or by enabling legislation.
Committed fund balance -- Amounts constrained to specific purposes by the city
council; to be reported as committed, amounts cannot be used for any other purpose
unless the city council takes action to remove or change the constraint.
Assigned fund balance -- Amounts the city intends to use for a specific purpose; intent
can be expressed by the council or by an official (city administrator or finance
director) or body to which the council delegates the authority.
Unassigned fund balance -- Amounts that are available for any purpose; these
amounts are reported only in the General Fund or a deficit in other fund types.
2. Aminimumlevelofgeneralfundreserveequalto65%ofannualoperatingexpendituresornoless
thansixmonthsofoperatingexpenditureswillbemaintainedbythecity.Thisreserveiscommittedtobe
usedforcashflowpurposes,unanticipatedequipmentacquisitionandreplacement,andtootherwise
enablethecitytomeetunexpectedexpendituredemands(naturaldisasters,catastrophicevents,etc.)or
revenueshortfalls.
Propertytaxesrepresentthecity'sprimarysourceofgeneralfundrevenue.Propertytaxesare
collectedinJuneandDecemberofeachfiscalyear.Sincethecity'sfiscalyearbeginsonJanuary1st,thecity
mustmaintainanadequatecashbalanceinordertomeetitsexpenditureobligationsbetweensemi-
annualcollectionsofpropertytaxes.
Accrued employee payroll benefits, such as sick leave, vacation or paid-time off, represent
a significant obligation of the city. The city will maintain sufficient reserves to meet its annual
expenditure obligations.
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Thecityrecognizestheneedtomaintainadequateequipmentinordertocarryoutrequiredpublic
services.Equipmentacquisitionandreplacementrepresenton-goingcostsofarelativelyminornature,as
comparedtomajorcapitalpurchases.ThecityplansforequipmentreplacementwithintheCapital
ImprovementProgram.However,unforeseenequipmentproblemswillarise.Thereservewillprovide
resourcesfortheimmediate,unanticipatedreplacementofcriticalequipment.
Thecityissubjecttorevenueshortfallsandunexpectedexpendituredemandsduringthefiscalyear.
Anunassignedgeneralfundreservewillbemaintainedtobeabletooffsettheserevenueshortfallsormeet
unexpecteddemandsoccurringduringtheyear,withoutsuddenlyadjustingtaxratesorreducing
expenditures.
Financial Reporting & Accounting
1.ThecitywillmanageandaccountforitsfinancialactivityinaccordancewithGenerallyAccepted
AccountingPrinciples(GAAP)assetforthbytheGovernmentalAccountingStandardsBoard(GASB).
GASBisrecognizedastheauthoritywithrespecttogovernmentalaccounting.Managingthe
city'sfinancesinaccordancewithGAAPandinaccordancewiththerulessetforthbyGASB,providesthe
Monticellocitizensassurancethattheirpublicfundsarebeingaccountedforinapropermanner.
2.Thecitywillmaintainitsaccountingrecordsforgeneralgovernmentaloperationsonamodified
accrualbasis,withrevenuesrecordedwhenavailableandmeasurable,andexpendituresrecordedwhen
servicesorgoodsarereceivedandliabilitiesincurred.Accountingrecordsforproprietaryfundtypesand
similartrustfundswillbemaintainedonanaccrualbasis,withallrevenuesrecordedwhenearnedand
expensesrecordedatthetimeliabilitiesareincurred,withoutregardtoreceiptorpaymentofcash.
Adherencetothispolicywillenablethecitytoprepareitsfinancialstatementsinaccordancewith
GenerallyAcceptedAccountingPrinciplesassetforthbytheGovernmentalAccountingStandardsBoard.
3.ThecityofMonticellowillprepareaComprehensiveAnnualFinancialReport(CAFR)inconformity
withGenerallyAcceptedAccountingPrinciples(GAAP).Thereportwillbemadeavailabletothegeneral
public.TheCAFRshallbepreparedinaccordancewiththestandardsestablishedbytheGFOAforthe
CertificateofAchievementforExcellenceinFinancialReportingProgram
TheCertificateofAchievementrepresentsasignificantaccomplishmentforagovernmentandits
financialleadership.Theprogramencouragesgovernmentstoprepareandpublishaneasilyreadableand
understandablecomprehensiveannualfinancialreportcoveringallfundsandfinancialtransactionsofthe
governmentduringtheyear.TheCAFRprovidesuserswithawidevarietyofinformationusefulin
evaluatingthefinancialconditionofagovernment.Theprogramalsoencouragescontinuedimprovement
inthecity'sfinancialreportingpractices.
4.The city will ensure the conduct of timely, effective, and annual audit coverage of all
financial records in compliance the Local, State, and Federal law.
Auditsofthecity'sfinancialrecordsprovidethepublicassurancethatitsfundsarebeingexpended
inaccordancewithLocal,State,andFederallawandinaccordancewithGenerallyAcceptedAccounting
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Principles.Auditsalsoprovidemanagementandthecitycouncilwithsuggestionsforimprovementinits
financialoperationsfromindependentexpertsintheaccountingfield.
5.ThecityofMonticellowillmaintainapolicyoffullandopenpublicdisclosureofallfinancialactivity.
Fullandopenpublicdisclosureofallfinancialactivityprovidesthepublicwithassurancethatits
electedofficialsandadministratorscommunicatefullyallfinancialmattersaffectingthepublic.
6.Themodifiedaccrualbasisofaccountingandbudgetingisusedforthegovernmentalfunds.Under
themodifiedaccrualbasisofaccounting,revenuesarerecordedwhensusceptibletoaccrual,i.e.,both
measurableandavailable.Availablemeanscollectiblewithinthecurrentperiodorsoonenough
thereaftertobeusedtopayliabilitiesofthecurrentperiod.Expendituresarerecordedwhentherelated
liabilityisincurred.Employeecompensatedabsencesandprincipalandinterestonlong-termdebt
expendituresarerecordedwhendueinthecurrentperiod.Theaccrualbasisofaccountingisusedfor
ProprietaryFunds.Underthismethod,revenuesarerecordedwhenearnedandexpensesarerecorded
whentherelatedliabilityisincurred.Forbudgetpreparationandpresentation,theproprietaryfunds’
expensesareconvertedtoexpendituresandfollowthesamebudgetformatasthegovernmentfund
types.Capitaloutlaysintheenterprisefundsarepresentedasexpensesforbudgetbasis,butare
recordedasassetsalongwithassociateddepreciationexpenseontheGAAPbasis.Debtserviceprincipal
paymentsintheenterprisefundsareaccountedforasexpensesforbudgetpurposes,butarereportedas
reductionoflong-termdebtliabilityontheGAAPbasis.
Recording capital outlays and principal payments on long-term debt as expenditures for
budget purposes, presents a clearer picture of the city’s financial operations, is easier to
administer for cash flow purposes, and is easier for the lay person to understand.
Cash Management & Investment
SCOPE
This policy applies to all activities with regards to managing and investing the financial assets of the
city of Monticello. This policy pertains to the financial assets of all funds including the General Fund,
special revenue funds, capital project funds, debt service funds, enterprise funds, and internal service
funds. The covered funds are defined in the city’s Comprehensive Annual Financial Report.
Except for cash in certain restricted and special funds, the city of Monticello consolidates all cash
balances from all funds into one central set of accounts. Each fund’s participation in this cash pool is
denoted by its equity-in-pooled-cash account. Investment income is allocated to the various funds
based upon the average monthly balance of each fund’s account. Use of this pooling-of-funds
method of accounting allows the city of Monticello to manage its cash more efficiently and to
maximize its investment earnings.
OBJECTIVES
The primary objectives, in priority order, of city of Monticello’s investment activities shall be safety,
liquidity, and yield:
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a.Safety
Safety of principal is the foremost objective of the investment program. Investments shall be
undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The
objective will be to mitigate credit risk and interest rate risk.
1.Credit Risk The city will minimize credit risk by
Limiting investments to the safest types of securities;
Pre-qualifying the financial institutions, brokers/dealers, intermediaries, and advisers
with which the city of Monticello will do business; and
Diversifying the investment portfolio so that potential losses on individual securities
will be minimized.
2.Interest Rate Risk The city will minimize interest rate risk by:
Structuring the investment portfolio so that securities invested from operating funds
mature to meet cash requirements for ongoing operations, thereby minimizing the
need to sell securities on the open market prior to maturity; and
Investing operating funds primarily in shorter-term maturities, money market funds,
or similar investment pools.
b.Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may
be reasonably anticipated. This will be accomplished by structuring the portfolio so that securities
mature concurrent with cash needs to meet anticipated demands (static liquidity). In addition, since
all possible cash demands cannot be anticipated, the portfolio shall consist largely of securities with
active secondary or resale markets (dynamic liquidity).
c.Yield
The city of Monticello’s investment portfolio shall be designed with the objective of attaining a
market rate of return throughout budgetary and economic cycles, commensurate with Monticello’s
investment risk constraints and the cash flow characteristics of the portfolio. Return on investment
is of least importance compared to the safety and liquidity objectives described above. The core of
investments is limited to relatively low risk securities in anticipation of earning a fair return relative
to the risk being assumed. Securities shall not be sold prior to maturity with the following
exceptions:
a declining credit security may be sold early to minimize the loss of principal;
a security may be sold to maximize gain, when appropriate;
a security swap may be appropriate to improve the quality, yield, or target duration in the
portfolio; or
a security may be sold based upon liquidity demands of the portfolio.
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AUTHORITY
Management responsibility for the investment program and for ensuring compliance with this policy
is hereby delegated to the finance director and is derived from Minnesota statutes and Mayor &
Council actions. The finance director shall be responsible for all transactions undertaken and shall
establish a system of procedures and internal controls for the operation of the investment program
consistent with this policy. No person may engage in an investment transaction except as provided
under the terms of this policy and the procedures established by the finance director. All participants
in the investment process shall seek to act responsibly as custodians of the public trust. No officer or
designee may engage in an investment transaction except as provided under the terms of this policy
and supporting procedures.
The finance director shall establish written statements of investment policy procedures for the
operation of the investment program consistent with this policy. Such procedures shall include
explicit delegation of authority for persons responsible for investment and cash management
transactions. The finance director is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the city of Monticello are protected from loss, theft,
or misuse. The internal control structure shall be designed to provide reasonable assurance that
these objectives are met. The concept of reasonable assurance recognizes that the cost of control
should not exceed the benefits likely to be derived and that the valuation of costs and benefits
requires estimates and judgments by management.
The internal controls shall address the following points at a minimum: control of collusion, separation
of transaction authority from accounting and recordkeeping, custodial safekeeping, avoidance of
physical delivery securities, clear delegation of authority to subordinate staff members, written
confirmation of transactions for investments and wire transfers, dual authorizations of wire transfers,
staff training, and review, maintenance and monitoring of security procedures both manual and
automated.
The city may engage the services of one or more external investment managers to assist in the
management of the city’s investment portfolio in a manner consistent with the city’s objectives. Such
external managers may be granted discretion to purchase and sell investment securities in
accordance with this Investment Policy. Such managers must be registered under the Investment
Advisers Act of 1940.
ETHICS & CONFLICTS OF INTEREST
The finance director and other employees involved in the investment process shall refrain from
personal financial activity that could conflict with the proper execution and management of the
investment program, or which could impair their ability to make impartial investment decisions. The
finance director and other employees involved in the investment process shall disclose to the Mayor
& Council any material financial interests in financial institutions with which they conduct business.
They shall further disclose any personal financial/investment positions that could be related to the
performance of the city’s portfolio. The finance director and other employees involved in the
investment process shall subordinate their personal investment transactions to those of the city of
Monticello shall refrain from undertaking personal investment transactions with the same individual
with whom business is conducted on behalf of the city.
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PRUDENCE
The general investment policies of the city of Monticello will be guided by the "prudent person"
standard. Those with investment responsibility for public funds are fiduciaries and, as such, shall
exercise the judgment and care, under circumstances then prevailing, which persons of prudence,
discretion, and intelligence exercise in the management of their own affairs, not for speculation, but
for investment, considering the probable safety of their capital as well as the probable income to be
derived.
The standard of prudence shall be applied in the context of managing the overall portfolio.
Investment officers, acting in accordance with this investment policy and exercising due diligence,
shall be relieved of personal responsibility for an individual security's credit risk or market price
changes, provided significant deviations from expectations are reported in a timely fashion and
appropriate action is taken to control adverse developments. Investment officers acting in good faith
are not personally liable for investment or deposit losses.
AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The finance director shall designate and maintain a list of financial institutions and depositories
authorized to provide investment services. In addition, a list will also be maintained of approved
security brokers/dealers that maintain an office within the State of Minnesota. These may include
"primary" dealers or regional dealers that qualify under Security and Exchange Commission's Uniform
Net Capital Rule (Rule 15C3-1). The Mayor & Council shall designate the financial institution for the
city’s operating account.
All financial institutions and brokers/dealers that wish to become qualified bidders for investment
transactions must supply the following:
a copy of the latest audited financial statements demonstrating compliance with state and
federal capital adequacy guidelines
proof of state registration,
evidence of adequate insurance coverage,
certification of having read, understood, and agree to comply with Monticello’s Cash
Management and Investment Policy,
proof of National Association of Securities Dealers (NASD) or Financial Industry Regulatory
Authority (FINRA) certification (brokers/dealers only), and
completed broker/dealer questionnaire (brokers/dealers only).
An annual review of the financial condition and registration of qualified financial institutions and
broker/dealers may be conducted by the finance director.
Financial institutions, which serve as depositories of city funds, shall comply with all prevailing
provisions of Minnesota statutes and shall meet the established criteria for overall financial strength,
adequate capitalization, appropriate liquidity, and proper collateralization to reasonably ensure the
safety and availability of such deposits. To monitor and assess the overall financial strength of current
and potential depositories, the city will utilize third-party rating agencies.
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AUTHORIZED AND SUITABLE INVESTMENTS
Authorized investments for municipalities in Minnesota are stipulated in Minnesota State Statutes.
Although the following lists of authorized and prohibited investments for the city of Monticello is
slightly more restrictive than what is allowed under state law, it is in full compliance with Minnesota
State Statutes.
The finance director is authorized to invest in the following:
Demand deposits, of commercial banks, saving and loan associations, and federal savings
banks authorized to do business in the State of Minnesota and authorized as described
above, and to the extent that the deposit is fully insured by the Federal Deposit Insurance
Corporation or collateralized as required in Minnesota State Statutes.
Time deposits and certificates of deposit of commercial banks, saving and loan associations,
and federal savings banks authorized to do business in the United States or its territories to
the extent that the investment is fully insured by the Federal Deposit Insurance Corporation
or collateralized as required in Minnesota State Statutes.
Governmental bonds, notes, bills, mortgages, and other securities, which were direct
obligations or are guaranteed or insured issues of the United States, its agencies, its
instrumentalities, or organizations created by an act of Congress, excluding mortgage-backed
securities
State and local government obligation as follows:
an obligation of the State of Minnesota or any of its municipalities,
obligation of other state and local governments that have taxing power, and are rated “A” or
better by a national bond rating service.
general obligations of the Minnesota Housing Finance Agency that are rated “A” or better by
a national bond rating service.
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,
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.
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 and Council is required before the finance director is authorized to
enter into a repurchase agreement.
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.
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
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provide the governmental entity a non-penalized right of withdrawal of the investment if the
credit quality of the investment is downgraded.
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.
Money market funds consisting of United States Treasury Obligations and/or Federal Agency
Issues.
PROHIBITED INVESTMENTS
The finance director is currently prohibited from investing in securities that are considered highly
sensitive, including the following:
Purchases on margins or short sales.
Derivative securities that are, in effect, a leveraged bet on future movements of interest rates
or some price index.
Mortgage-backed securities due to their complexity and prepayment rate uncertainty.
Reverse repurchase agreements (lending securities with an agreement to buy them back
after a stated period of time).
COLLATERALIZATION
The provisions of Minnesota State Statutes require that banks and savings and loan institutions
collateralize all deposits of public funds. The city also requires collateralization of time deposits and
repurchase agreements. Banks and savings and loan associations are authorized to use any of the
investments as specified by Minnesota State Statutes as collateral. In order to anticipate market
changes and provide a level of security for all funds, the collateralization level will be 110%of the
market value of principle and accrued interest. Collateral will always be held by a third party. A
clearly marked evidence of ownership (safekeeping receipt) will be supplied to the city and retained.
SAFEKEEPING AND CUSTODY
Pledged collateral consisting of instruments of the United States Government, U.S. government
agencies, and U. S. government sponsored enterprises will be safe kept at a Federal Reserve Bank
Branch. Other acceptable collateral that cannot be held by the Federal Reserve shall be held by a
non-affiliated, independent, third-party safekeeping institution with whom the city has a current
custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) will be supplied
to the city and retained. The right of collateral substitution upon prior notification and acceptance
by the city is granted.
All securities transactions, including collateral for repurchase agreements shall be conducted on a
delivery-versus-payment (DVP) basis to ensure that securities are deposited in the city’s safekeeping
institution prior to the release of funds.
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DIVERSIFICATION
Diversification of investments reduces overall portfolio risks while attaining market average rates of
return. The city of Monticello will diversify its investments by security type, sector (excluding U.S.
Treasury securities), maturity, and institution. With the exception of U.S. government securities, U.S.
government agency securities, U.S. government sponsored enterprise securities, certificates of
deposit, collateralized bank money market accounts, and authorized local government investment
pools, no more than 25% of the city of Monticello’s total investment portfolio will be invested in a
single security type. To provide assurance that the city will be able to continue financial operations
without interruption and dependent upon interest rates, satisfaction with services, and practicality,
the city of Monticello may utilize more than one financial institution as its depository.
MAXIMUM MATURITIES
To the extent possible, the city of Monticello will attempt to match its investments with anticipated
cash flow requirements. Unless matched to a specific cash flow, the city will not directly invest from
operating funds in securities maturing more than five (5) years from the date of purchase. However,
the city of Monticello may collateralize its repurchase agreements using longer-dated investments
not to exceed fifteen (15) years to maturity.
Reserve funds and other funds with longer-term investment horizons may be invested in securities
exceeding five (5) years if the maturity of such investments is made to coincide as nearly as
practicable with the expected use of funds. No investment shall have a maturity exceeding twenty
(20) years from the time of purchase. The intent to invest securities with longer maturities shall be
approved by the finance director.
Because of the inherent difficulties in accurately forecasting cash flow requirements, a portion of the
portfolio shall be continuously invested in readily available funds such as demand accounts, local
government investment pools, money market funds, or overnight repurchase agreements to ensure
that appropriate liquidity is maintained to meet ongoing obligations. The city will not actively buy
and sell investments, but realizes the risk of not seeking higher market returns for longer maturities
outweighs occasional liquidity demands exceeding cash and money market investments.
PERFORMANCE STANDARDS
The investment portfolio will be managed in accordance with the parameters specified within this
policy. The portfolio should obtain a market average rate of return during a market/economic
environment of stable interest rates. The finance director will establish a series of appropriate
benchmarks which portfolio performance shall be compared on a regular basis. The benchmarks shall
be reflective of the actual securities being purchased and risks undertaken and the benchmarks shall
have a similar weighted average maturity and credit profile as the portfolio.
REPORTING
The finance director will maintain investment reports that provide a clear picture of the status of the
current investment portfolio. The report shall include a management summary that will allow the city
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of Monticello to ascertain whether investment activities during the reporting period have conformed
to the investment policy. Information contained within the reports shall include the following:
A listing of the individual securities held at the end of the reporting period by authorized
investment category.
Term and maturity date of all investments listed.
Par value and current market value of all investments listed.
Yield to maturity or worse call of portfolio investments.
Percentage of portfolio represented by each investment category.
POLICY CONSIDERATIONS
Any investment currently held that does not meet the guidelines of this policy shall be exempted
from the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only
as provided by this policy.
This Statement of Cash Management and Investment Policy shall be 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 and
Council.
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FINANCIAL STRUCTURE
To better understand this budget document, a basic understanding of the structure, often-used
terms, and fund types is helpful.
The city’s operating expenditures are organized in to the following hierarchical categories: fund
department, activity, and budget units.
Fund:Funds (specific or general purpose) represents the highest level of summarization used in
the city’s financial structure. This level is primarily used for entity-wide financial reporting and
for summarization in this budget document.
Department: Department is the second level of summarization used in the city’s financial
structure. The function classification represents a grouping of related operations and programs
aimed at accomplishing a broad goal or providing a major service.
Departments (Functions)
General Government
PublicSafety
PublicWorks
RecreationandCulture
Other
Activity:Departmentscanbefurthersplitintodivisionswhichareusuallyassociatedwithfunctioningwork
groupsthathavemorelimitedsetsofworkresponsibilities.Theirprimarypurposeisorganizationaland
budgetaryaccountability.
Budget Unit: Activities may be further subdivided into budget units. A budget unit is used to
account for a specific service performed within an activity in the pursuit of individual goals and
objectives. A budget unit is aimed at accomplishing a specific service or regulatory program for
which a government is responsible.
GOVERNMENTAL FUND TYPES
General Fund:The general fund is used to account for all financial resources of the city, except for
those required to be accounted for in another fund. The general fund supports such basic services as
the legislative branch, judicial branch, general administration, police, fire, finance, streets,
engineering, recreation, and library services.
RevenueSources:Thecity'sGeneralFundisfinancedprimarilybypropertytaxeswhichprovideover
80% of the general fund revenue. Other revenue sources include: licenses and permits, intergovernmental
revenue, charges for services, fines and forfeitures, interest on investments, operating transfers, and
miscellaneousrevenues.
50
Special Revenue Funds:Special revenue funds are used to account for the proceeds of specific revenue
sources (other than special assessments, expendable trusts, or for major capital projects) that are legally
restricted or committed to expenditure for specific purposes. Special revenue funds support economic
developmentprograms,designateduserfee basedcommunityactivities,insurance costs,retirementcosts,
planningfunctions,andotherserviceslegallyrestrictedforspecificpurposes.
Revenue Sources: Special revenue funds are supported either through property taxes or through
grants or other restricted revenue sources. An example of a special revenue fund supported by property
taxes includes the Monticello Community Center. An examples of a special revenue fund supported by
grantsorotherrestrictedrevenuesourcesincludetheEconomicDevelopmentAuthorityFund.
DebtServiceFunds:Debtservicefundsare usedtoaccountforthe accumulationofresourcesfor,andthe
paymentof,generallong-termdebtprincipalandinterest.Debtservicefundsprovidefinancingforavariety
ofthecity'sgeneralobligationimprovementandrevenuebonds.
Revenue Sources: Debt service funds are supported with special assessments, access and utility
fund transfers, propertytaxes,andinterestoninvestments.
Capital Project Funds:Capital project funds are used to account for financial resources to be used for the
acquisitionorconstructionofmajorcapitalfacilities(otherthanthosefinancedbyproprietaryfunds).
Revenue Sources: Capital project funds are supported by long-term debt proceeds, special
assessments, donations, state and federal grants, operating transfers from other funds, and impact
fees.
PROPRIETARY FUND TYPES
Enterprise Funds:Enterprise funds are used to account for operations that are financed and operated in a
manner similar to private business enterprises--where the intent of the governing body is that the costs
(expenses,includingdepreciation)ofprovidinggoodsorservicestothegeneralpubliconacontinuingbasis
be financed or recovered primarily through user charges. Enterprise funds account for the city's water,
sewage,liquorstore,DMV,andfiberopticsservices.
Revenue Sources: Enterprise funds are supported through user charges, sale of goods,
penalties, and interest income.
InternalServiceFunds:Internalservicefundsareusedtoaccountforthefinancingofgoodsorservices
provided by one department to other departments on a cost-reimbursement basis. Internal service
funds account for the city's capital equipment internal leasing program and IT Service. These funds
were authorized for implementation in 2013.
Revenue Sources: Internalservicefunds are supportedthroughcharges tootherbudgetunits
based on lease payments or level of provided services.
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FUND BALANCESINEACHFUND TYPE
In governmental funds, fund balance is typically defined as current assets less current liabilities. Unlike
governmentalfunds,enterprisefundsfocusonthedeterminationofoperatingincome,changesinnetposition
(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,thebottomlineforeachenterprisefundislabeledfundbalanceratherthannetposition,which
includescapitalassets,long-termdebtandothernoncurrentitems.Fundbalanceinenterprisefundsisroughly
thesameasworkingcapital.
USEFULTERMS
To better assist readers in understanding the budget document, a basic knowledge of the following
terms is useful:
A FUND isafiscalandaccountingentitywithaself-balancingsetofaccountsrecordingcashandother
financialresources,togetherwithallrelatedliabilitiesandresidualequitiesorbalances,andchanges
therein.Fundsaresegregatedforthepurposeofcarryingonspecificactivitiesorattainingcertain
objectivesinaccordancewithspecialregulations,restrictions,orlimitations.Fundsinthegovernment
modelareclassifiedintothreebroadcategories:governmental,proprietary,andfiduciary.
The most common reason for establishing a fund is to separately account for restricted-use
revenue or to comply with state or federal law.
A DEPARTMENT is an organizational or budgetary breakdown which is found within city funds. Each
department serves a specific function as a distinct organizational unit of government within the
given fund. Its primary purpose is to facilitate organizational and budgetary accountability.
An OBJECT OF EXPENDITURE refers to specific, detailed expenditure classification. It relates to a specific
typeofitempurchasedorserviceobtained.Examplesofobjectsofexpenditureincludesalaries,supplies,
contractedservice,travel,etc.
Thecity’sfinancialoperationsandfundstructureconformwithGenerallyAcceptedAccountingPrinciples
(GAAP).Thefundsaregroupedbyfundtype(General,SpecialRevenue,DebtService,CapitalProjects,
Enterprise,andInternalService).Allofthecity’sfundsarebudgeted.
A CAPITALEXPENDITURE occurswhenacapitalassetispurchased.CAPITALASSETS areusedinoperations
andhaveinitialusefullivesextendingbeyondasinglereportingperiod.Theseassetsmustalsomeet
capitalizationthresholds,whichvarybyassetclassificationandtypicallycostsmorethan$10,000.Land,
improvementstoland,vehicles,machinery,equipment,infrastructureandothertangibleandintangible
assetsusedinoperationsareexamplesofcapitalassets.Expendituresthatdonotbenefitmorethanone
reportingperiodormeetthecapitalizationthresholdsareclassifieda CURRENTEXPENDITURE.
52
MATRIX OF FUNDS AND BUDGET UNITS
Allcapitalprojectfundswerecombinedforthis presentation.Parkoperationsis responsibleforthe
CemeteryFund,whichisnotincludedintheMatrix.Principalandinterestpaymentsondebtoccurin
theDebtServiceFund(comprisedofsubfunds),SewageFund,andCentralEquipmentFund.
Community Capital Park &Liquor Deputy Water &Fiber IT Central Benefit
EXPENDITURES General Center EDA Projects Pathway Store Registrar Sewage Optics Services Equipment Accrual
GENERAL GOVERNMENT
Mayor and Council ●●●
City Administration ●●●
City Clerk ●●●
Finance ●●●●●●●●
Audit ●
City Assessing ●
Legal ●
Human Resources ●●●
Planning & Zoning ●●●●●
City Hall ●●●
Prairie Center Building ●●
Economic Development ●●●
PUBLIC SAFETY
Law Enforcement ●
Fire & Rescue ●●●●
Fire Relief ●
Building Inspections ●●●
Civil Defense ●●●
Animal Control ●
National Guard ●
PUBLIC WORKS
PW Administration ●●●●
Engineering ●●●●●
PW Inspecitons ●●●●
Streets & Alleys ●●●●
Ice & Snow ●●
Shop & Garage ●●●●
Stormwater ●●●
Street Lighting ●●●
Refuse Collection ●
Water Utility ●●
Sewage Utility ●●
TRANSIT
Bus ●
RECREATION AND CULTURE
Senior Center ●
Park Operations ●●●●
Park Improvements ●●●
Park Ballfields ●●
Shade Tree ●●
Library ●
Fiber Optics ●●
Community Center ●●
OTHER FINANCING USES ●●●●●●
FUND
53
OPERATING FUND CROSSWALK
OperatingFundCrosswalk
Thismatrixshowstherelationshipbetweenfunctionalunitsandfunds.Forexample,thePublic Works
DepartmenthassomeauthorizedappropriationsintheGeneralFund,fivecapitalprojectfunds,andtwo
enterprisefunds.Public Worksisalso responsibleforthecity’sparks.
The city contracts with Wright County for law enforcement services and maintains a volunteer Fire
Department. Administration and Finance provide staff support for both functions. Community
Development provides staff for building inspections.
Public Community Community
Operating Fund Administration Finance Works Center Development
General Fund x x x x
Special Revenue Funds
Economic Development x x
Cemetery x
Minnesota Investment x
Monticello Community Center x
Debt Service Funds x
Capital Project Funds
Capital Project x x x x
Closed Bond Fund x
Park & Pathway Dedication x x
Stormwater Access x
Street Lighting Improvement x
Street Construction x
Enterprise Funds
Water x
Sewage x
Liquor x
Deputy Registrar x
Fiber Optics x
Internal Service Funds
IT Services x
Central Equipment x
Benefit Accrual x
Administration of Fund
54
THE BUDGET PROCESS
ThecityofMonticellobudgetservesseveralpurposes.
For the citizens of the city of Monticello, it presents a picture of the city government
operations and intentions for the year.
Forthe citycouncil,itservesasapolicytoolandasanexpressionofgoalsandobjectives.
For citymanagement,itis usedasanoperatingguideandacontrolmechanism.
The city'sbudgetencompassesboththeoperatingbudgetandthe capitalimprovementbudget.Each
budget unit includes amounts appropriated for both operating expenses and capital items.
Accompanying narrative for each budget unit/find briefly explains the items included in the budget.
BASISOFBUDGETING
Thecity’saccountsareorganizedonthebasisoffunds,eachofwhichisconsideredaseparateentity.The
operationsofeachfundareaccountedforwithaseparatesetofself-balancingaccountsthatcompriseits
assets,deferredinflow/outflows,liabilities,fundequity,revenuesandexpenditures/expenses.
Governmentalfunds(theGeneralFundandspecialrevenue,debtservice,andcapitalprojectfunds)use
themodifiedaccrualbasisforbudgetingandaccounting.Revenuesarerecognizedintheaccountingperiod
inwhichtheybecomeavailableandmeasurable.Expendituresarerecognizedwhenliabilitiesareincurred.
Proprietaryfunds(EnterpriseandInternalServicefunds)usethemodifiedaccrualbasisforbudgetingand
theaccrualbasisforaccounting. Forexample,accrualbasisaccountingdifferswiththemodifiedaccrual
basisbyrecordingexpensesfordepreciationandcompensatedabsencesbutnotdebtprincipalpayments.
Eachproprietaryfund’sfinancialstatements,locatedinthecity’sComprehensiveAnnualFinancialReport
(CAFR),arereportedonthefullaccrualbasis.Intheaccrualbasisofaccounting,revenuesarerecognizedin
theaccountingperiodinwhichtheyareearned.Expensesarerecognizedintheaccountingperiodinwhich
theyareincurred.
BUDGET DEVELOPMENT PROCESS
AftersubmittingtheCityAdministrator-FinanceDirectorRecommendedBudgetto thecitycouncil,public
work sessions are held by the councilors. At this time the city administrator, finance director, and
departmentheadsexplainthebudgetrecommendationsandunderlyingjustificationfortherequests.The
councilalsoreviewsdepartmentalrequestswhichcouldnotbefunded,as anindicationofun-metneeds.
During or following the work sessions, the councilors may make adjustments to the proposed budget.
Followinganyadjustmentsto therecommendedbudget,atentativeappropriationresolutionis prepared
and a public hearing is held. The Council may again make adjustments to the budget following the public
hearing,afterwhichtime,theCouncilpassestheappropriationresolutioninfinalform.
Appropriationsareestablishedbybudgetunit.Theaccountingsystem,budgetingsystem,andthebudget
document itself, however, break these classes into subclasses--thereby providing more detailed
information.Asanexample,operatingsupplies,gasandoil,andsubscriptionsareallclassifiedasoperating
expenses. The accounting and budgeting systems provide detail for these specific sub-classes. However,
appropriationcontrolisexercisedonlyatthebudgetunitlevel.
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BUDGET CALENDAR/PROCEDURES
The following budget timeline outlines the process the city customarily follows for creation and
adoption of the annual budget.
Date Activity
June12, 2017 2018-2022 capitalequipment/projects (CIP) worksheets and budget
worksheets to departmentheads.
July 3, 2017 2018-2022 CIP and budgetworksheets dueto financedepartment
July 10, 2017 Workshop with city counciland staff to set2018 goals and priorities.
July, 2017 Departmentheads meetwith various advisory boards and commissions for
inputinto 2018 preliminary budgetand CIP.
July, 2017 Departmentheads meetwith city administrator, and financestaff to develop
2018 preliminary budgetand CIP.
July 24, 2017 Workshop with city councilto review draftdepartmentbudgets and set2018
goals and priorities.
August14, 2017 Financedepartmentdevelops revenueestimates and 2018 preliminary
property tax levy.
August28, 2017 Councilworkshop to review various departmentgoals, budgets, and CIP
continued.
September 11, 2017 Budgetworkshop with city counciland staff.
September 11, 2017 Counciladopts 2018 preliminary HRA and city property tax levy. (See
September 25)
September 25, 2017 Lastregular meeting for city councilto consider adopting the2018 preliminary
city property taxlevy.
September 30, 2017 2018 preliminary property taxlevy certified to WrightCounty auditor.
October/November, 2017 Departmentheads meetwith city administrator and financestaff to develop
2018 proposed Budgetand finalproperty tax levy.
December 11, 2017 Counciladopts 2018 budgetand property taxlevy.
December 27, 2017 City certifies final2018 property taxlevy to WrightCounty auditor.
January 1, 2018 2018 fiscalyear begins.
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WORKLOAD/PERFORMANCEBUDGETING
Beginning with the fiscal year 2010 budget, the city of Monticello started the development of a
workload/performance budget. The move to this type of budgeting resulted in a shift in emphasis
away from describing what will be purchased (inputs) towards describing what will be accomplished
(outputs and outcomes). While this budgeting process faces numerous structural and cultural
hurdles, this work-in-progress continues today with both an organization-wide and budget-unit
specific focus on outcomes.
PRESENTATION
Thetextofthebudgetdocumentcustomarilycontainssixsectionsofinformationforeachactivity.
Someactivitiesalsoincludehighlightsoraccomplishmentsfortheprioryearand/orthecomingyear.
The first section provides a description of the activity.
The second section describes its major objectives to be accomplished.
The third section identifies issues/challenges the activity/division faces.
The fourth section lists the workload/performance indicators for the division.
The fifth section provides budget commentary.
The sixth section provides detailed financial information.
Thefinancialinformationincludesexpenditureinformationforthelastcompletedfiscalyear,the
appropriatedamountsforthecurrentyear,andtherecommendedamountscoveredbythebudget.
Costsaresegregatedintosixbasicclassifications:personnelservices(wage&benefits);supplyexpenses;
otherservicesandcharges;capitaloutlay;debtservice;andoperatingtransfers.Appropriationcontrolis
exercisedonlyattheactivityunitlevelandnotattheindividualobjectofexpenditurelevel.
The narrative information is presented together with the financial detail to assist readers in
understanding the planned outcomes for each activity/division, the purpose of each budget
unit, and major changes or expenditures for the coming year.
MONITORING AND REPORTING PROCESS
As the budget year proceeds, individual departments and the finance department have dual responsibility
formonitoringthestatusofeachbudgetunit.Departmentstaffhasprimaryresponsibilityformonitoringthe
statusofexpendituresagainsttheirbudget.ThisresponsibilityincludesinformingtheFinanceDepartmentof
anysignificantdeparturesfromtheplansanticipatedinthebudget.
The finance department has overall responsibility for monitoring the status of all departments and funds.
This is accomplished primarily through analysis of computerized budget performance reports which
compare appropriationamounts onaline-item basis withactualexpenditures throughoutthe year.These
reports aid department staff in controlling costs and act as an early warning system for the finance
department. Department staff may exercise their judgment in exceeding expenditures by object code, as
longastheydonotexceedthetotalamountappropriatedforthebudgetunit.
The Finance Department reviews the budget reports on a monthly basis and discusses any variances
from expected performance with the department staff. The finance department conducts in-depth
quarterly budget reviews of all expenditures and revenues.
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Significantchangesineitherexpendituresorrevenuesrequireabudgetrevision.Recommendationsarealso
madebythefinancedirectorforanycorrectiveactionsthatarebelievednecessary.
BUDGET AMENDMENT PROCESS
State statute provides a number of different ways to amend the budget. The first involves a reallocationof
existingappropriationsamongthelineitemswithinaspecificfund. Theseconddefinesaseriesofscenarios
where the governing body has authority to amend the budget without a hearing for donations, land sales,
and fee based budgets. All other increases in appropriation authority that are not specifically permitted by
statutemustbeapprovedthroughapublicprocess.
Thefinancedirectorisresponsibleforinsuringcompliancewithspendinglimitationsimposedbythebudget.
Accordingly,thefinancedirectorsubmitsaBudgetStatusReporttothecitycouncilafterthree,six,nine,and
twelve month periods. The budget reviews evaluate overall revenues and expenditures in comparison to
thebudgetedamounts.Incaseswhereitappearstheoriginalspendingauthorityauthorizedwillnotprove
sufficient, transfers of spending authority or additional spending authority are requested together with
explanationsfortherequests.Thepublicapprovalprocessforbudgetamendmentsisheldifnecessary.
58
ORGANIZATION CHART
CITY OF MONTICELLO Citizens of
ORGANIZATIONAL CHART Monticello
City Commissions
Council & Boards
City
Administrator
Human Finance Community City Public Community City Fire Contracted
Resource Director Development Engineer Works Center Clerk Chief Services
Manager Director Director Director
Finance Economic Construction Streets Community Elections Fire City
Department Development Inspectors Department Center Department Attorney
Data Building Consulting Parks Sheriffs
Processing Inspections Engineer Department Department
Audit Receptionist Utilities Animal
Department Control
Department Consulting Refuse County
of Motor Planner Collection Assessor
Vehicles
Liquor FiberNet
Operations Operation
59
ALL FUNDS SUMMARY BY FUND TYPE
Special Debt Capital Internal 2018
General Revenue Service Project Enterprise Service Total
Fund Funds Funds Funds Funds Funds Budget
Fund Balance/Working Capital - Jan. 1 5,976,716$9,199,003$3,110,649$7,967,067$10,292,748$892,108$37,438,291$
Revenues and Other Sources
Property Taxes 6,590,000$710,000$1,787,000$783,000$-$-$9,870,000$
Tax Increments -635,678 ----635,678
Franchise & Other Taxes 289,500 --116,000 --405,500
Sale of Goods ----5,770,784 -5,770,784
Licenses & Permits 398,750 ---2,000 -400,750
Intergovernmental Revenues 374,440 -----374,440
Charges for Services 398,400 1,434,500 -50,000 5,670,207 542,688 8,095,795
Fines & Forfeits 36,500 -----36,500
Special Assessments 300 -293,446 54,000 38,000 -385,746
Miscellaneous 199,110 137,850 3,000 52,000 124,200 6,112 522,272
Contributed Capital ----140,450 -140,450
Operating Transfers In --244,899 1,000,000 130,000 -1,374,899
Debt Proceeds ---5,000,000 --5,000,000
Total Revenues and Other Sources 8,287,000$2,918,028$2,328,345$7,055,000$11,875,641$548,800$33,012,814$
Expenditures and Other Uses
Personnel Services 3,295,557 1,279,434 --1,683,446 -6,258,437
Supplies 742,050 183,435 --4,710,245 35,000 5,670,730
Other Services & Charges 4,003,793 770,400 --3,694,978 225,400 8,694,571
Capital Outlay 245,600 577,070 -10,620,000 1,146,000 323,000 12,911,670
Debt Service --2,807,160 -373,574 128,100 3,308,834
Operating Transfers Out -200,000 -44,899 1,130,000 -1,374,899
Total Expenditures and Other Uses 8,287,000 3,010,339 2,807,160 10,664,899 12,738,243 711,500 38,219,141
Net Change in
Fund Balance/Working Capital -$(92,311)$(478,815)$(3,609,899)$(862,602)$(162,700)$(5,206,327)$
Fund Balance/Working Capital - Dec. 31 5,976,716$9,106,692$2,631,834$4,357,168$9,430,146$729,408$32,231,964$
All FUNDS SUMMARY - BY FUND TYPE
In most years, the city adopts a balanced budget for the General Fund and the Monticello Community
Center Fund (special revenue fund). In 2018, the community center will draw on reserves for HVAC
upgrades. A budget is balanced when revenues and other sources equals (or exceeds) expenditures and
other uses. Fund balances/working capital increase with surpluses and decrease with deficits.
Capital Project Funds commonly accumulate resources in one budget period and expend those resources
over multiple budget periods. Prior year debt proceeds will be used to finish a project in 2018.
Debt amortization will lead to a significant decline in fund balance for the Debt Service Fund. Multiple
debt service sub-funds are aggregated into one debt service fund for reporting purposes.
Internal service funds provide services to other funds and typically function on a cost recovery basis. The
city has three: IT Services Fund, Central Equipment Fund, and Benefit Accrual Fund. Central Equipment
Fund equipment purchases will exceed lease revenue in 2018. The Benefit Accrual Fund is the only one of
the three that is not used for capital asset acquisitons.
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ALL FUNDS SUMMARY - BY YEAR
TOTAL ALL FUNDS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 8,386,953$8,619,812$9,275,414$9,430,000$9,430,000$9,870,000$4.7%
Tax Increments 836,750 727,617 668,352 653,564 653,564 635,678 -2.7%
Franchise & Other Taxes 334,726 352,073 432,785 399,900 399,900 405,500 1.4%
Sale of Goods 5,165,737 5,489,430 5,448,584 5,435,194 5,635,194 5,770,784 6.2%
Licenses & Permits 381,544 465,469 671,602 379,600 379,600 400,750 5.6%
Intergovernmental Revenues 733,566 1,413,360 2,041,363 596,440 596,440 374,440 -37.2%
Charges for Services 7,303,528 7,854,450 8,091,397 7,786,080 7,764,510 8,095,795 4.0%
Fines & Forfeits 48,744 42,474 30,656 42,300 42,300 36,500 -13.7%
Special Assessments 1,953,370 3,331,901 984,916 576,666 656,666 385,746 -33.1%
Miscellaneous 1,840,271 1,149,501 1,902,367 786,790 858,360 522,272 -33.6%
Contributed Capital 966,494 1,435,870 1,993,232 140,450 140,450 140,450 0.0%
Operating Transfers 11,298,117 4,937,975 2,588,244 829,362 1,212,562 1,374,899 65.8%
Debt Proceeds 6,467,106 2,651,898 6,410,568 5,700,000 5,700,000 5,000,000 -12.3%
TOTAL REVENUES 45,716,906$38,471,830$40,539,480$32,756,346$33,469,546$33,012,814$0.8%
EXPENDITURES
Personnel Services 5,150,066$5,476,611$5,671,244$5,875,227$5,897,127$6,258,437$6.5%
Supplies 4,962,837 5,027,255 5,173,563 5,376,790 5,524,744 5,670,730 5.5%
Other Services & Charges 8,196,757 7,630,947 7,716,754 8,287,111 8,426,348 8,694,571 4.9%
Capital Outlay 3,473,466 4,222,516 10,802,472 9,793,319 9,708,228 12,911,670 31.8%
Debt Service 12,075,241 6,032,959 6,984,666 4,905,585 4,905,585 3,308,834 -32.5%
Operating Transfers 11,298,117 4,937,975 1,772,502 829,362 1,212,562 1,374,899 65.8%
TOTAL EXPENDITURES 45,156,484$33,328,263$38,121,201$35,067,394$35,674,594$38,219,141$9.0%
FUND BALANCE - JANUARY 1 31,521,071$32,081,493$37,225,060$39,643,339$39,643,339$37,438,291$
Excess (Deficiency) of
Revenues over Expenditures 560,422 5,143,567 2,418,279 (2,311,048)(2,205,048)(5,206,327)
FUND BALANCE - DECEMBER 31 32,081,493$37,225,060$39,643,339$37,332,291$37,438,291$32,231,964$
Intergovernmental revenues are projected to decrease in 2018 as the city receives less state/federal aid
for street projects. License and permits are anticipated to increase with construction activity. Special
assessments will decline because of 2015 prepayments and normal amortization. Operating transfers
are higher in 2018 because of the Liquor Fund transfer to the Park & Pathway Fund for Bertram park
development. One debt issuance is planned for 2018 to finance the Fallon Avenue overpass. The
increase in sale of goods reflects the improvement in liquor store sales.
Personnel services increased with the addition of two full-time positions (engineer-public works director
and deputy fire chief). A 3% wage and health benefit increase is budgeted for 2018. Capital expenditures
(outlay) increase in 2018 with the construction of the Fallon Avenue overpass and reconstruction of
Chelsea road. The increase in supplies (mainly inventory) are projected to increase with liquor sales.
Capital expenditures reflect disbursements for acquisition or replacement of assets with long-lives
(benefit two or more accounting periods) and usually have significant price tags. In contrast, current
expenditures only benefit the current or next accounting period and usually have smaller price tags.
Capital expenditures can be recurring or non-recurring in nature. The wastewater treatment plant
upgrade would be an example of non-recurring capital expenditure. On the other hand, the city budgets
annually $200,000-$500,000 to replace or repair streets. This would be an example of a recurring capital
expenditure. Recurring capital expenditures usually have a pay-as-you-go funding source (enterprise
funds) and non-recurring capital expenditures typically include debt as a funding component.
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CHANGES IN FUND BALANCE/WORKING CAPITAL
Projected Beginning Projected Ending
Fund Balance/Estimated Fund Balance/
Working Capital Revenues Appropriations Working Capital
General Fund 5,976,716$8,287,000$8,287,000$5,976,716$
Special Revenue Funds
Economic Development 7,387,279 1,073,928 903,116 7,558,091
Cemetery 31,726 18,600 27,723 22,603
Minnesota Investment 1,158,164 15,000 -1,173,164
Monticello Community Center 621,834 1,810,500 2,079,500 352,834
Total Special Revenue Funds 9,199,003 2,918,028 3,010,339 9,106,692
Debt Service Funds
2010A G.O. Improvement Bond 937,350 127,614 300,074 764,890
2011A G.O. Refunding Bond 1,662,173 395,375 780,100 1,277,448
2014A G.O. Judgment Bond 62,586 538,586 512,736 88,436
2015B G.O. Street/Improvement 80,702 228,842 216,000 93,544
2016A G.O. Street/Improvement 287,838 517,769 527,900 277,707
2017A G.O. Improvement/Abate 80,000 520,159 470,350 129,809
Total Debt Service Funds 3,110,649 2,328,345 2,807,160 2,631,834
Capital Project Funds
Capital Project 3,658,097 6,419,000 9,650,000 427,097
Closed Bond Fund 319,147 59,000 -378,147
Park & Pathway Dedication 454,861 402,000 670,000 186,861
Stormwater Access 1,017,216 65,000 -1,082,216
Street Lighting Improvement 734,319 90,000 300,000 524,319
Street Construction 1,783,427 20,000 44,899 1,758,528
Total Capital Project Funds 7,967,067 7,055,000 10,664,899 4,357,168
Enterprise Funds
Water 4,433,929 1,346,341 1,626,673 4,153,597
Sewage 2,959,016 2,386,516 2,860,203 2,485,329
Liquor 1,685,218 5,775,784 5,818,178 1,642,824
Deputy Registrar 868,513 526,400 429,589 965,324
Fiber Optics 346,072 1,840,600 2,003,600 183,072
Total Enterprise Funds 10,292,748 11,875,641 12,738,243 9,430,146
Internal Service Funds
IT Services 187,119 276,500 272,900 190,719
Central Equipment 420,770 252,800 438,600 234,970
Benefit Accrual 284,219 19,500 -303,719
Total Internal Service Funds 892,108 548,800 711,500 729,408
Total All Funds 37,438,291$33,012,814$38,219,141$32,231,964$
Fiscal Year 2018
CHANGES IN FUND BALANCE/WORKING CAPITAL
The fund balances/working capital for the city’s major operating funds are expected to be relatively stable
with balanced (revenues equal expenditures) or nearly-balanced budgets. The Monticello Community
Center Fund is expected to draw on reserves for capital improvements, which includes upgrading the
HVAC system. However, draws on reserves for debt amortization redemptions in various debt service sub-
funds and completion of a debt-funded project in the Capital Project Fund will decrease fund balances.
62
FUND BALANCE HISTORY
Amended Adopted
Actual Actual Actual Budget Projected Budget
2014 2015 2016 2017 2017 2018
General Fund 4,331,058$4,986,796$6,276,716$6,276,716$5,976,716$5,976,716$
Special Revenue Funds
Economic Development 6,911,667 6,512,174 7,142,330 7,387,279 7,387,279 7,558,091
Cemetery 32,047 33,651 31,726 31,726 31,726 22,603
Minnesota Investment 1,104,689 1,120,404 1,138,164 1,158,164 1,158,164 1,173,164
Monticello Community Center 440,828 629,448 761,834 761,834 621,834 352,834
Total Special Revenue Funds 8,489,231 8,295,677 9,074,054 9,339,003 9,199,003 9,106,692
Debt Service Funds
2007A G.O. Improvement (Closed)548,982 470,615 (175,846)2,242 --
2008A G.O. Revenue (Closed)1,631 -----
2008B G.O. Sewer (Closed)880,308 1,429,004 1,067,790 50,958 --
2010A G.O. Improvement Bond 586,511 646,252 1,023,462 937,350 937,350 764,890
2011A G.O. Refunding Bond (2005A)1,730,084 2,825,758 1,466,905 1,662,173 1,662,173 1,277,448
2014A G.O. Judgment Bonds 169,152 7,350 36,519 62,586 62,586 88,436
2015B G.O. Street/Improvement -665 66,414 80,702 80,702 93,544
2016A G.O. Street/Improvement --262,838 287,838 287,838 277,707
2017A G.O. Improvement/Abatement ----80,000 129,809
Total Debt Service Funds 3,916,668 5,379,644 3,748,082 3,083,849 3,110,649 2,631,834
Capital Project Funds
Capital Project 89,766 2,722,818 4,822,097 3,358,097 3,658,097 427,097
Closed Bond Fund 1,018,764 882,307 275,047 345,947 319,147 378,147
Park & Pathway Dedication 738,333 1,236,660 620,861 334,861 454,861 186,861
Stormwater Access 873,721 1,174,049 1,220,592 1,017,216 1,017,216 1,082,216
Street Lighting Improvement 922,880 681,660 719,319 734,319 734,319 524,319
Street Construction 1,751,033 1,775,943 1,804,120 1,783,427 1,783,427 1,758,528
Total Capital Project Funds 5,394,497 8,473,437 9,462,036 7,573,867 7,967,067 4,357,168
Enterprise Funds
Water 4,751,413 4,785,819 4,396,684 4,433,929 4,433,929 4,153,597
Sewage 3,142,903 2,641,553 3,085,916 2,959,016 2,959,016 2,485,329
Liquor 722,643 1,017,443 1,353,627 1,585,218 1,685,218 1,642,824
Deputy Registrar 333,114 544,987 776,349 868,513 868,513 965,324
Fiber Optics 29,962 508 305,914 346,072 346,072 183,072
Total Enterprise Funds 8,980,035 8,990,310 9,918,490 10,192,748 10,292,748 9,430,146
Internal Service Funds
IT Services 58,814 119,347 209,622 187,119 187,119 190,719
Central Equipment 911,190 753,691 690,120 394,770 420,770 234,970
Benefit Accrual -226,158 264,219 284,219 284,219 303,719
Total Internal Service Funds 970,004 1,099,196 1,163,961 866,108 892,108 729,408
Total All Funds 32,081,493$37,225,060$39,643,339$37,332,291$37,438,291$32,231,964$
FUND BALANCE/WORKING CAPITAL HISTORY
Fiscal Year Ended December 31,
63
BALANCED BUDGETS
A BALANCEDBUDGET canbedefinedasasituationwheretotalrevenuesandotherfinancingsourcesis
equalto(orgreaterthan)totalexpendituresandotheruses.Revenuesandotherfinancingsourcesincrease
financialresources.Expendituresandotherusesdecreasefinancialresources.Operatingtransfersinand
debtissueproceedsareconsideredotherfinancingsources.Operatingtransfersoutareconsideredother
financinguses.
Abalancedbudgetdoesnotdipintoreservesorfundbalances.However,anunbalancedbudget(deficit)is
notnecessarilypoorfinancialmanagement.Forexample,debtservicefundsoftenaccumulateresourcesin
theyearpriortoexpenditure.Further,debt-financedcapitalprojectsfrequentlystretchovermultipleyears.
Thecityhasneveruseddebttofinancecurrentorongoingexpenditures.
Itisthecity’spolicytoadoptbalancedbudgetsfortheGeneralFundandtheCommunityCenterFund.
Indeed,bothfundsaresupportedbypropertytaxes. However,thecommunitycenterexpectstodrawon
itsreservesforHVACupgradesin2018.Theseupgradesshouldlowerfutureheatingandcoolingcosts.
$(3,500)$(3,000)$(2,500)$(2,000)$(1,500)$(1,000)$(500)$-$500
BenefitAccrual
Central Equipment
IT Services
Fiber Optics
Deputy Registrar
Liquor
Sewage
Water
Street Construction
Street Lighting Improvement
StormwaterAccess
Park & Pathway Dedication
Closed Bond Fund
Capital Project
2017A G.O. Improvement/Abate
2016A G.O. Street/Improvement
2015B G.O.Street/Improvement
2014A G.O. JudgmentBond
2011A G.O. Refunding Bond
2010A G.O. Improvement Bond
Monticello Community Center
Minnesota Investment
Cemetery
Economic Development
General Fund
Thousands
Change in Fund Balances/WorkingCapital
64
CAPITAL EXPENDITURES (Recurring vs Nonrecurring)
A CAPITALEXPENDITURE occurswhenacapitalassetispurchased.Capitalassetsareusedinoperations
andhaveinitialusefullivesextendingbeyondasinglereportingperiod.Theseassetsmustalsomeet
capitalizationthresholds(seeAppendix),whichvarybyassetclassificationandtypicallycostsmorethan
$10,000.Land,improvementstoland,vehicles,machinery,equipment,infrastructure,andothertangible
andintangibleassetsusedinoperationsareexamplesofcapitalassets.
Capitalexpenditures(alsocalledcapitaloutlays)canbeclassifiedaseitherrecurringornon-recurring.Fleet
equipmentreplacementisanexampleofrecurringcapitalexpendituresbyassetclass.Thecitybudgetsto
replaceaportionofthefleeteveryyearonapay-as-you-gobasisorthroughaleasearrangementwiththe
CentralEquipmentFund.Thecityalsobudgetstoreplaceasmallfractionofitswaterandsewer
infrastructureonanannualbasis.Largeprojectsaddingtoorreplacinginfrastructureareusuallynon-
recurringinnature.Forexample,the2017corestreetreconstructionprojectwasnon-recurringinnature.
However,fiveothercorestreetreconstructionprojectswerespreadover15years.TheFallonAvenue
overpass,ChelseaRoadimprovements,and7th Streetreconstructionprojectsaccountforthebulkofthe
2018non-recurringprojects.Themulti-yearFallonAvenueoverpassstartedwithlandacquisitionand
designworkin2017.PriorlandpurchasesatBertramChainofLakeParkmayhavelookedrecurring,butall
thelandneededfortheparkwasacquiredbytheendof2016.FuturedevelopmentofBCOLamenitieswill
havearecurringnature.Largenon-recurringprojectsaretypicallyfinancedbydebt,intergovernmental
revenue(state/federalgrantsandaids),anddrawsonreservesaccumulatedinanticipationoftheproject.
Recurring-
currentrevenues
15%
Nonrecurring-
newdebt
48%
Nonrecurring-
priordebt
24%
Nonrecurring-
reserves
13%
Capital Expenditures
65
TAX LEVY HISTORY
2014 2015 2016 2017 2018
General Fund 5,497,000$5,882,000$6,177,000$6,291,000$6,590,000$
Percent Change 0.7%7.0%5.0%1.8%4.8%
Special Revenue Funds
Economic Development (HRA Levy)--280,000 280,000 323,000
Monticello Community Center*1,390,000 1,363,000 364,000 372,000 387,000
Total Special Revenue Funds 1,390,000 1,363,000 644,000 652,000 710,000
Percent Change 20.9%-1.9%-52.8%1.2%8.9%
Debt Service Funds
2011AGO Refunding Bonds (2005A)223,000 330,000 330,000 139,783 148,061
2007AGO Improvement Bond 540,000 420,000 420,000 610,000 -
2008B GO Sewer Refunding 500,000 500,000 500,000 500,000 -
2010AGO Improvement Bond -40,000 40,000 40,000 40,000
2014AGO Judgement Bond --544,000 536,929 537,586
2015B GO SR&I Bond --250,000 195,288 203,425
2016AGO SR&I Bond ---415,000 407,769
2017AGO I&ABond ----450,159
Total Debt Service Funds**1,263,000 1,290,000 2,084,000 2,437,000 1,787,000
Percent Change 3.6%2.1%61.6%16.9%-26.7%
Capital Project Funds
Capital Projects Fund --300,000 50,000 783,000
Total Capital Project Funds --300,000 50,000 783,000
Percent Change ----------83.3%1466.0%
Total Tax Levy - All Funds 8,150,000$8,535,000$9,205,000$9,430,000$9,870,000$
Percent Change 4.2%4.7%7.9%2.4%4.7%
Levy Summary
City General andDebt Levies 8,150,000$8,535,000$8,925,000$9,150,000$9,547,000$
Percent Change 4.2%4.7%4.6%2.5%4.3%
HRALevy -$-$280,000$280,000$323,000$
Percent Change ---------0.0%15.4%
* MCC levy for debt 890,000$1,040,000$-$-$-$
**Total debt levy withMCC debt 2,153,000$2,330,000$2,084,000$2,437,000$1,787,000$
Percent Change 9.9%8.2%-10.6%16.9%-26.7%
TAX LEVY AND TAX CAPACITYHISTORY
TAX LEVYHISTORY
66
TAX CAPACITY HISTORY
2014 2015 2016 2017 2018
Tax Capacity 18,289,490$23,882,689$25,891,898$27,583,160$29,533,213$
Percent Change 16.0%30.6%8.4%6.5%7.1%
City Levy - Tax Capacity Rate 42.262 44.709 35.737 33.172 32.326
Percent Change -15.1%5.8%-20.1%-7.2%-2.6%
HRA Levy - Tax Capacity Rate --1.081 1.015 1.094
Percent Change ----------6.1%7.7%
TAX CAPACITY HISTORY
The Housing Redevelopment Authority (HRA) special benefit levy is capped at .0185% (or .000185) of
the city’s taxable market value. The city’s taxable market value for taxes collected in 2017 totaled
$1,746,750,200. HRA levyproceeds canonlybe usedforpurposes includedin 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.
The city’s tax capacity increased significantly with improvements at the nuclear power plant. The
impact of those uprates on the tax base and tax collections is provided in table below:
2012 2013 2014 2015 2016 2017 2018
Taxable Market Value 213,300,800$377,028,900$346,559,800$597,753,900$680,037,200$714,047,000$743,551,900$
Change over prior year $163,728,100$(30,469,100)$251,194,100$82,283,300$34,009,800$29,504,900$
Change over prior year %77%-8%72%14%5%4%
Tax Capacity*4,266,016$7,540,578$6,931,196$11,955,078$13,600,744$14,280,940$14,871,038$
Change over prior year $3,274,562$(609,382)$5,023,882$1,645,666$680,196$590,098$
Change over prior year %77%-8%72%14%5%4%
*Tax capacity is calculated at 2% of taxable market value for utility properties and most commercial properties.
Residential properties typically have a tax class rate of 1%.
Percent of Total Tax Capacity 27%40%38%50%53%52%50%
Tax Impact on the City
City of Monticello 2,123,324$3,186,799$3,099,226$4,272,386$4,688,312$4,737,273$4,807,212$
Change over prior year $1,063,475$(87,573)$1,173,160$415,926$48,961$69,939$
Change over prior year %50%-3%38%10%1%1%
Monticello HRA -$-$-$-$147,024$144,952$162,689$
Northern States Power Company (dba Xcel Energy)
67
REVENUE SOURCES BY FUND
Revenue Classifications
Property Franchise Tax Licenses/ Intergovern- Charges for
Taxes & Other Increments Permits mental Services
General Fund 6,590,000$289,500$-$398,750$374,440$398,400$
Special Revenue Funds
Economic Development 323,000 -635,678 ---
Cemetery -----18,000
Minnesota Investment ------
Monticello Community Center 387,000 ----1,416,500
Total Special Revenue Funds 710,000 -635,678 --1,434,500
Debt Service Funds
2010A G.O. Improvement Bond 40,000 -----
2011A G.O. Refunding Bond 148,061 -----
2014A G.O. Judgment Bond 537,586 -----
2015B G.O. Street/Improvement 203,425 -----
2016A G.O. Street/Improvement 407,769 -----
2017A G.O. Improvement/Abate 450,159 -----
Total Debt Service Funds 1,787,000 -----
Capital Project Funds
Capital Project 783,000 36,000 ----
Closed Bond Fund ------
Park & Pathway Dedication ------
Stormwater Access -----50,000
Street Lighting Improvement -80,000 ----
Street Construction ------
Total Capital Project Funds 783,000 116,000 ---50,000
Enterprise Funds
Water ---2,000 -1,170,841
Sewage -----2,276,066
Liquor ------
Deputy Registrar -----525,300
Fiber Optics -----1,698,000
Total Enterprise Funds ---2,000 -5,670,207
Internal Service Funds
IT Services -----276,388
Central Equipment -----249,800
Benefit Accrual -----16,500
Total Internal Service Funds -----542,688
Total All Funds 9,870,000$405,500$635,678$400,750$374,440$8,095,795$
68
Revenue Classifications
Fines &Special Miscell-Sale of Debt Contributed Operating
Forfiets Assess aneous Goods Proceeds Capital Transfers Total
36,500$300$199,110$-$-$-$-$8,287,000$
--115,250 ----1,073,928
--600 ----18,600
--15,000 ----15,000
--7,000 ----1,810,500
--137,850 ----2,918,028
-42,715 ----44,899 127,614
-46,314 1,000 ---200,000 395,375
--1,000 ----538,586
-24,417 1,000 ----228,842
-110,000 -----517,769
-70,000 -----520,159
-293,446 3,000 ---244,899 2,328,345
----5,000,000 -600,000 6,419,000
-54,000 5,000 ----59,000
--2,000 ---400,000 402,000
--15,000 ----65,000
--10,000 ----90,000
--20,000 ----20,000
-54,000 52,000 -5,000,000 -1,000,000 7,055,000
-38,000 55,500 --80,000 -1,346,341
--50,000 --60,450 -2,386,516
--5,000 5,770,784 ---5,775,784
--1,100 ----526,400
--12,600 ---130,000 1,840,600
-38,000 124,200 5,770,784 -140,450 130,000 11,875,641
--112 ----276,500
--3,000 ----252,800
--3,000 ----19,500
--6,112 ----548,800
36,500$385,746$522,272$5,770,784$5,000,000$140,450$1,374,899$33,012,814$
69
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 law
enforcement have a large 2018
impact.
Expected to rise at the pace of
inflation. Routine capital
expenditures are set at
$50,000 per year.
Non-TIF expenditures are
expected to rise at the pace of
inflation.
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 repair and maintence
items and total capital
expenditures exceeding
$50,000 could be supported by
transfers from other funds.
2018: $246,000 HVAC
improvements, $48,000 for
pool deck restoration.
Tax increment financing (TIF)
expenditures will vary
considerabley from year-to-
year in each district as
development occurs.
Large capital projects usually
receive funding from debt
issuance. The city usually
covers initial project costs with
reserves or other revenue
sources and reimburses itself
with debt proceeds. 2018:
Fallon overpass - $8.3M
(started in 2017), road and
other improvements on 7th
Street and Chelsea Road - $3M.
2019-2022: Annual
mill/overlay/reconstruct
residential streets - $1M.
Revenues
Property taxes provide over
80% of the revenue for
General Fund. Consequently,
spending is constrained by
growth in the tax levy. The city
has resisted developing other
revenue sources such as fees
for residential refuse collection
or stormwater.
With the last payment on
community center debt service
coming in 2015, the property
tax levy for this debt declined
by $1M in 2016. User fees
should cover 85% of on-going
expenditures.
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. Transfers from the
General Fund were eliminated
in 2016 with the initiation of
an HRA levy. The 2018 levy is
$323,000.
Fallon Overpass and TH25/7th
Street will receive some federal
and state aid in 2020.
Debt
None: Indirectly supports
Central Equipment Fund debt
service through annual rental
payments.
No debt issues are anticipated
over 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 Fund sub-fund will
finance some TIF activities. No
external debt issuance is
planned.
2018: $5-$10 million in tax
abatement/reconstruction
bonds. The debt service for
these bonds will be structured
to take advantage of the
decline in other tax supported
debt.
70
Water Sewage Liquor Fiber Optics Central Equipment
Expected to riseat the
paceof inflation but
mitigated by reinvestment
in plant and equipment.
Annual capital
expenditures financed on
a pay-as-you-go basis
rangebetween $150,000
to $300,000.
Expected to riseat the
paceof inflation but
mitigated by reinvestment
in plant and equipment.
Annual capital outlays
financed on a pay-as-you-
go basis rangebetween
$150,000 to $300,000.
Expected to riseat the
paceof inflation and
increases in demand.
Cost of sales aretypically
passed onto customers
through higher prices. The
Liquor Storemaintains a
consistent gross profit
margin of 25%-27%.
Operating revenues cover
non-capital expenditures.
Amanagement firmwas
hired to run day-to-day
operations in 2016.
Capital equipment
purchases will vary
widely every year. Adebt
servicescheduleis
contained in theInternal
Servicesection of this
report. All expenditures in
this fund areeither for
capital equipment
purchases or debt service.
2022:$1.2M Well 6.Sewer access fees areno
longer need to support
debt service. 2018:$700k
supervisory controls.
2019:$1.8M phase2
WWTF. 2020: $2.5M
Fallon trunk line. 2021:
solid wastehandling
$2.1M.
TheLiquor Fund has
$75,000 budgeted for sign
replacement in 2018.
Coolers arereplaced as
needed. Thefund
generates sufficient
annual revenues to
support its needs.
Operating revenues are
not adequateto support
non-routineexpenditures.
Consequently, Liquor Fund
transfers will provide
funding for fund
operations.
Anticipated future
expenditureby year:
2018:$265,000;
2019:$747,000;
2020:$922,000;
2021:$400,000;
2022:$255,000.
A$1.4M ladder truck will
bepurchased outsideof
this fund in 2020.
User rates arehigh
enough to cover planned
expenditures for thenext
fiveyears. However, the
basechargefor water and
sewageservices will
increasein advanceof
going to monthly billing.
User rates areexpected to
riseto providefor pay-as-
you-go routinesystem
replacement and debt
financeupgrades to meet
new environmental
regulations. Aphased ten
percent rateincreaseis
needed for thephophorus
reduction wastewater
treatment plant project.
Sales haveincreased
steadly for thelast five
years. Going forward,
sales areexpected to level
out becauseof space
limitations.
2018:$130,000 transfer
fromtheLiquor Fund.
Transfers fromLiquor
Fund could declinewith
further operational
changes.
Rental revenues
(expenditures in other
funds and budget units)
will risewith equipment
purchases. Therefore,
revenuesources in other
funds becometherevenue
sourcefor this internal
servicefund.
No debt issues are
anticipated over next five
years.
TheMinnesota Public
Facilities Authority
(MPFA) may provide
funding for thefuture
projects. Revenuebonds
may besold as reserves
aredrewdown.
No debt issues are
anticipated over next five
years.
In 2014, a resolution was
reached with telcombond
holders, thecity issued $6
million in settlement
bonds in 2014. Thecity
levies property taxes for
debt serviceon these
bonds. Debt serviceis not
recorded in this fund. No
new debt is contemplated
for thefuture.
Thefund is expected to
becomeself-sustaining.
Thecity issued $515,000
in bonds to financefuture
purchaseof a plowtruck
and the2014 purchaseof
a firetender. Futuredebt
issues may beneeded to
makeall theacquistions
listed in theCIP.
71
LONG RANGE FINANCIAL PLANS (continued)
Prior to the start of the budget process, council and staff review service needs, growth trends, and
capital investment requirements. A long-range financial model is developed for the city’s four main
operating funds: General, Monticello Community Center, Water, and Sewage. This is done in
conjunction with the Capital Improvement Plan (CIP), which is a five-year forecast that includes
funding sources. Financial planning is segregated into two components: operations for the four
main operating funds and capital investments (CIP).
The Municipal Liquor Fund, Deputy Registrar Fund and Fiber Optic Fund are excluded from long
range financial plan. The liquor store and DMV are largely retail operations with no major
forecasted capital investment needs. The Fiber Optic Fund presents interesting challenges in a
dynamic and competitive market where strategies and a business plan need refinement.
Items impacting long range financial planning:
Current financial position (fund balances)
Debt burden
Regulatory environment
Condition of existing capital assets
Growth trends, inflation, and aspirations
ThecityannuallyadoptsabalancedbudgetfortheGeneralFund.Consequently,therevenues/sourceslineand
theexpenditures/useslinewilloverlapforthe2018budgetandforfutureyearprojections.After2018,annual
expendituresareprojectedtoincreaseat3%peryear.Thepropertytaxlevyandallotherrevenuesare
projectedtoincreaseatthesamerateasexpenditures/uses.In2012,theGeneralFundtransferredover$2
milliontootherfundstoeliminateinterfundreceivables.Accordingtopolicy,thecityshallmaintainafund
balanceof65%ofexpendituresandrecurringuses.Thefollowingchartassumesthecitywillcontinueto
providethesamecurrentlevelsofservice.
$-
$2
$4
$6
$8
$10
$12
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023MillionsGeneral Fund 2014-2023
Fund Balance Revenues/Sources Expenditures/Uses
72
LiketheGeneralFund,theMonticelloCommunityCenterFundnormallyadoptsabalancedbudget.However,
in2018and2019,theMCCexpectstodrawdownonitsfundbalancefordeferredmaintenanceitems.
Afterward,therevenues/sourceslineandtheexpenditures/useslinewilloverlapforthe2020budgetandfor
futureyearprojections.After2018,annualexpendituresareprojectedtoincreaseat3%peryear.Transfersto
thefundhavesupportedthecapitalprojectinthepast.Thelastpayment($1,001,000)onpropertytax
supporteddebtservice,relatedtotheinitialconstructionofthecommunitycenter,occurredin2015.
$-
$1
$2
$3
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023MillionsMonticello CommunityCenter 2014-2023
Fund Balance Revenues/Sources Expenditures/Uses
The Water Fund is the city’s most self-sustained utility fund. The fund has no direct debt and
adequate reserves to cover almost any expenditure for major capital projects, of which none are
planned in the next couple years. In 2019, transfers to other debt service funds for water related
improvements cease. These transfers supplement water access fees which all but dried up as a
result of slower commercial and residential development. The peak in 2016 expenditures reflect the
nearly $1 million in water improvements as part of the 2016 Core Street Project. A new well is
planned for 2022. Debt and reserves will finance a treatment plant that is tentatively scheduled for
2023.
$-
$1
$2
$3
$4
$5
$6
$7
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023MillionsWater Fund 2014-2023
Working Capital Revenues/Sources Expenditures/Uses
73
Unlike the Water Fund, the Sewage Fund represents funding challenges. First, sanitary sewer
access fees declined significantly with the lack of development. Transfers to other debt service
funds supplementing these access fees dropped significantly in 2017 and will cease altogether in
2018. Second, environmental regulatory changes require large investments in the wastewater
treatment plant. In 2013, the fund incurred $3 million in debt to improve treatment plant capacity.
The city incurred nearly $2.5 million in debt for the wastewater treatment plant phosphorous
reduction project and for replacement of two digester covers, both in 2016. Other debt supported
treatment plant improvements are planned for 2019 through 2021.
$-
$1
$2
$3
$4
$5
$6
$7
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022MillionsSewage Fund 2013-2022
WorkingCapital Revenues/Sources Expenditures/Uses
74
LONG-TERM FISCAL OBJECTIVES
The city council and staff are committed to expending public resources in the most cost-effective and
economical manner possible to ensure the stability of the city property tax levy. In light of changes to
tax policy, state aid reductions for various purposes, state imposed levy limits in prior years, and the
potential of future levy limits, fiscal strategies will need to be constantly monitored to ensure a
balanced approach in providing sufficient revenues to fund services:
1.Employ a strategy aimed at reducing the city’s reliance on the property tax levy to fund basic
services through “sustainable” revenue sources such as franchise fees, special revenues, user fees,
and charges for services.
The city’s property tax levy generates over 80% of the General Fund’s revenue. This
overdependence is largely attributable to a healthy tax base, which includes a nuclear power plant. In
prior years, the city’s tax levy had not kept pace with inflation. The current council philosophy seems
to indicate a willingness to take advantage of the growth in the tax base. While a growth plus inflation
tax levy formula would not reduce the dependence on property taxes, it would alleviate the strain
placed on city finances by inflation. City services will continue to be evaluated in terms of identifying
all relevant funding sources to underwrite specific service expenditures, promoting alternatives to
traditional funding methodologies, and encouraging public-private partnerships in service delivery
systems.
2.The development and use of appropriate cost accounting structure that will lead to creation of
individualcostcentersforallcitydepartmentactivitiestoaccuratelyreflectthetruecostofproviding
specific services.
The city employs a cost accounting system that is department specific and attempts to
accurately reflect service delivery costs at the department and division levels. By including all
supplemental services as they relate to personnel, charges and services, supplies, and capital outlays
the city will further distinguish the total cost of services provided. The city has the ability to analyze
these costs at the sub-category detail levels in support of overall policy goals.
3.The adoption of a financial philosophy that seeks to spread the cost of significant capital outlay
expenditures over an extended period of time to ensure that current and future taxpayers share
equally in underwriting those costs.
The city continues to capitalize the cost of significant capital expenditures over several years to
ensure that both existing and future taxpayers share equally in the cost. In addition, the city has
dedicated a portion of the tax levy to underwrite the cost of selected capital projects and equipment,
avoiding a fiscal environment based on reactive tax and spend policies. The five year capital
improvement planning process is critical in achieving these results.
75
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.
Thecityisintheprocessofdevelopingandmaintainingafinancialmodelto determinethelong-
term impacts of present day expenditures and financing decisions. Fiscal assumptions are based upon
a complex set of financial data including growth factors, tax capacity valuations, per capita spending,
anddebt ratios.Theproformais utilizedas atoolas partofthebudget planningprocess toensurethat
key short-term fiscal targets are in line with long-term fiscal projections. The city will continually
update the proforma to ensure that long-term fiscal outcomes remain consistent with council
budgetary policies.
5.Thedevelopmentofworkperformancegoalsforeachdepartmenttoascertainandmeasurehow
each operating division contributes to the city’s overall public service mission.
Each department is responsible for identifying relevant performance data to allow for an
independent analysis ofspecific serviceoutcomes.Data is reviewed to provide thecounciland general
public with a better understanding of the operational demands, resource inputs, and performance
outcomes associated with a specific service delivery system.
6.The aggressive and appropriate investment of idle city funds to maximize the generation of
interest income, while ensuring adequate cash flow requirements.
Investment ofcity funds is controlledby statestatute and managed by thefinance director. Idle
funds are invested in a variety of financial instruments such as certificates of deposit, federal agencies
(FHLMC, FNMA, etc.), and appropriately rated bonds. Long-term investing is designed to achieve the
best yield in the current market, following a strategy that structures long-term investments in ladder
format and reinvests short-term investment in rotating terms of up two years.
7.Greater reliance on technology to enhance employee productivity in all areas of city operations
and improve customer communications.
The city has taken steps to invest additional time and energy on labor saving technology, such
as software programming and electronic file storage. Staff has discussed the need to look at optic
imagingsolutions.Imagingcityrecordswillenable thecityto reducestorageareas presentlydedicated
to paper files and look at more economical and efficient systems of data retrieval.
76
8.Involving all employees in the process of re-engineering the work environment by encouraging
cross-training opportunities, reducing and eliminating bureaucratic barriers, streamlining public
process requirements, and adopting private sector customer service business values in city
operations.
City staff is encouraged to identify work practice issues that are inefficient or overly
bureaucratic. The management team is committed to involving their employees and fostering an
environment that challenges the status quo of city operations.
9.Continuously reviewing opportunities to form partnerships with neighboring communities to
share services and equipment, jointlypurchase equipment, and develop strategies to deal withlocal
issues using a regional approach.
The city has established several equipment and service delivery sharing arrangements with
neighboring communities and has several joint powers agreements in place on a variety of local and
regional issues in the area of public safety and public works initiatives.
Recent steps taken to achieve long-term fiscal objectives
The city began monthly billing of water and sewageservices in 2017. Monthly bills allow the city to bill
customers for other services, such as residential garbage, recycling, and storm water. There are
benefits to the customers: lower monthly bills instead of larger quarterly bills, a payment cycle in line
with other customer bills, timely consumption information, and earlier alert to service problems.
The Monticello Community Center Fund implemented a new chart of accounts in 2017. This change
breaks the fund’s accounts into major costs centers: administration, buildings, aquatics, guest services
and concessions, maintenance, and fitness programs. The 2018 budget reflects the new chart of
accounts.
In 2018, the city will start billing all residential garbage customers with an individual service cart $3.00
plus 9.75% tax per month. This charge replaces a $13.00 monthly fee that was mainly paid by mobile
home parks.
77
CAPITAL INVESTMENTS AND OPERATING BUDGETS
Capitalinvestments(outlays)toreplaceorimproveexistingassetscanhavesignificantimpactsonoperating
budgets.Forexample,capitalinvestmentsreplacingagingequipmentcanreduceannualrepairsand
maintenanceexpenditures,andpersonnelservicescosts.Indeed,equipmentnearingtheendofitsusefullife
oftenrequiresexpensiverepairswithhard-to-findreplacementparts.Further,personnelservicecostsare
impactedintwoways:thecostofthepeoplerepairingtheequipmentandthelossofproductivity.In2013,the
cityinitiatedtheCentralEquipmentFundforthepurposeofcreatingarevolvingfundforfutureequipment
purchases.Thisfundpurchasesequipmentandleasesitbacktothebenefitingbudgetunits.Theleasepayments
assurethatequipmentpurchaseswillreceiveannualfunding,gettingthesamepriorityasotheroperating
expenditures.Lastly,newequipmentmaybemoreproductiveandlessexpensivetooperate.
Anothertypeofcapitalinvestmentincludesbetterments,whichareimprovementsthatprolonganasset’slifeor
increaseitsefficiencyorcapacity.Agreatexample,thecommunitycenterreplacedtheroofovertheaquatics
portionofthebuilding,loweringannualenergycosts.Still,thesavingscanbeelusivewhentheenergyproviders
consistentlyraisetheirprices.
Thecityannuallybudgetsforreplacementofwaterandsewagemainsthrougheachrespectiveenterprisefund.
Forpublicutilities,customersatisfactionisdifficulttoquantifyindollars.However,agenerallysatisfiedcustomer
maybelesslikelytocomplainabouttherateincreasesneededtosupportthoseservices.Annually,thecity
budgetsmoreforwaterandsewermainreplacementthanitdoesforrepairsandmaintenance.
Finally,nearly70milesinlength,thestreetsystemisthecity’slargestcapitalasset.In2014,thecityincreased
thesealcoatbudgetforroadstoover$180,000. Additionally,thecityannuallybudgetsover$200,000fora
moredurablemillandoverlayintheCapitalProjectFund/StreetReconstructionFund. Theseoperatingand
capitalexpendituresworkintandemtoforestallenormouslymoreexpensivestreetreconstructionprojects.
78
CAPITAL INVESTMENTS AND OPERATING BUDGETS
Department - Operating Fund Fund Amount Year Amount Comment
Public Works - General Fund
Blacktop hotbox Central Equip.95,000$2018 10,700$CE lease and R&M (-)
Rubber melter Central Equip.60,000$2018 6,900$CE lease and R&M (-)
Tractor Central Equip.65,000$2018 6,500$CE lease and R&M (+)
Fallon Avenue overpass Capital Project 8,300,000$2018 10,500$R&M
7th Street reconstruction Capital Project 650,000$2018 (7,500)$R&M
Chelsea Road improvements Capital Project 1,600,000$2018 (7,500)$R&M
Walnut Street pedestrian improvements Capital Project 50,000$2018 (1,000)$R&M
Downtown street lights Street Lighting 150,000$2018 (3,000)$Electricity and R&M
Recreation Culture - General Fund
Spirit Hills pathway Park & Pathway 150,000$2018 1,500$Until developed
Rolling Woods sidewalk Park & Pathway 40,000$2018 400$R&M
Featherstone park Park & Pathway 80,000$2018 4,500$R&M
Utility mule Central Equip.15,000$2018 750$CE lease, Gas, R&M (+)
Aerator Central Equip.30,000$2018 4,300$CE lease, Gas, R&M (+)
Bertram Park buildout Park & Pathway 2,500,000$2019 75,000$CE lease, Gas, R&M (+)
Recreation - Community Center
HVAC system upgrades Community Ctr.246,000$2018 (24,600)$Electricity and R&M
Mississippi Room lighting Community Ctr.35,000$2018 (5,000)$Electricity and R&M
Locker room tile restoration Community Ctr.26,300$2018 -$ No impact on expenses
Pool deck tile restoration Community Ctr.48,000$2018 -$ No impact on expenses
Pool deck tile restoration Community Ctr.48,000$2018 -$ No impact on expenses
Public Works - Sewage Fund
WWTP phosphorous reduction Sewage 2,300,000$2017 75,000$Chemicals
SCADA Sewage 700,000$2018 20,000$R&M, software support
Public Works - Water Fund
Meter upgrades Water 65,000$2018 (3,250)$R&M
Pickup truck Water 45,000$2018 (1,500)$R&M
Liquor Fund
Sign Liquor 75,000$2018 (2,000)$Electricity and R&M
Investment
Annual Impact on
Operating Expense
Central Equipment Fund (CE) leases are set at rates to recover depreciation plus inflation. The lease
amounts do not include operating costs such as repairs and maintenance (R&M), gas, or insurance.
These expenses are borne by benefiting fund and budget unit. Generally, R&M expenses on old
equipment are generally higher than that of newer equipment. Less work is done on equipment
that is scheduled for replacement. Items with a (+) are additional equipment, incurring additional
R&M. Items with a (-) are replacement equipment with lower R&M in the near term. R&M expenses
for roads include estimates for snow removal, boulevard maintenance, street sweeping, crack
sealing, and striping. Listed amounts are for expenses in excess of those already being incurred.
With no impact on expenses, some are replaced for obsolesces or aesthetics reasons. In reality,
some of these amounts may or may not be close to those actually realized.
79
Major Capital Investment Effect on Operating Expenses (Examples)
The phosphorous reduction project was undertaken to meet state and federal regulation. Two
treatment approaches (natural and chemical) were studied for cost-benefit. Ultimately, the
chemical treatment approach was selected. The city’s engineer estimated the additional cost to run
the plant at $73,000 starting midway through 2017. Additional costs are built into sewage rates.
The wastewater treatment plant SCADA (Supervisory Control and Data Acquisition) system upgrade
is long overdue. The old SCADA system lacks vendor support and has outdated features. The new
SCADA system would require an annual maintenance support contract whereas the former system
function on a pay-as-you-go basis. Because a contractor manages the facility there would not be any
offsetting savings from staffing changes. Additional costs are built into sewage rates.
The city is replacing two equipment items essential to repair and maintenance to road surfaces, a
rubber melter for crack sealing and an asphalt hotbox for surface overlays. The productivity benefits
are difficult to quantify but repairs and maintenance costs associated with the old equipment will
drop significantly. This equipment will age much like the replaced equipment and require repairs
and maintenance as time passes. These two equipment items will be purchased by Central
Equipment Fund and leased back to the General Fund. The annual lease payments for the hotbox
and rubber melter are $11,700 and $7,400, respectively. Estimated annual maintenance on the
hotbox and melter is expected to drop by $1,000 and $500, respectively.
Continued development in 2017 at Bertram Chain of Lakes (BCOL) park included a pathway, parking
lot, and 20 plus acres of playing fields began in 2016. Maintenance of the area requires people,
equipment, and supplies. The area will need an aerator maximizing seeding, fertilizing, and watering
activities. The aerator can be used at other parks throughout the city. There are hard-to-measure
activity gains because the efficiency gained will be offset by wider use of the equipment. The annual
General Fund lease payment to the Central Equipment Fund is $3,700, and repairs and maintenance
is estimated at $600 per year.
Play equipment and a shelter will be installed at the new Featherstone Park. The park shelter does
not have electrical outlets or any other energy consuming features. Maintenance cost consists
mainly of ground maintenance and trash collection. Additional costs are built into the park
operations activity budget in the General Fund.
80
LEGAL DEBT LIMIT AND BOND RATING
DebtLimit:Minnesotacitiesmaynotincurdebtinexcessofthreepercentofthemarketvalueoftaxable
propertyinthecity(thelimitis2percentinFirstClasscitiesunlessacharterprovidesahigherrate,withthe
higherratecappedbylawat32/3percent).Butexceptedfromthisoverallthreepercentlimitarealmostall
debtobligationsforwhichsomeothersourceofrevenueispledgedassecurity.Thus,improvement
assessmentbonds,taxincrementbonds,utilityrevenuebonds,purerevenuebonds,capitalimprovement
bondsunderanapprovedcapitalimprovementplan,judgmentbonds,andsimilarbondsmaybeissued
withoutregardtothestatutorydebtlimit.(Theremaybeotherrequirementsforbondsthatareexemptfrom
thedebtlimit;forexample,capitalimprovementbondsmustbeapprovedbyanaffirmativevoteofthree-
fifthsofthemembersofafive-membergoverningbody.)Theresultisthat,withonlyafewexceptions,the
onlyobligationssubjecttothedebtlimitaregeneralobligationbondspayablesolelyfromadvaloremproperty
taxes.Thelegaldebtlimithasnothingtodowiththepracticaldebtlimitofacity,whichisthedebtburden
beyondwhichthecredit-worthinessofthecityisputintoquestion.(SeeMinnesotaStatutes,Section475.53)
AnticipatedBorrowingthisFiscalYear:ThecityisexpectedtoissueG.O.bondstoreimburseitselffor
expendituresonstreetreconstruction,FallonAvenuebridgeconstruction,andotherimprovementsinthe
latterhalfof2018. The2018reimbursementamountiscurrentlyestimatedtoexceed$5,000,000. Further,
thecityanticipatesissuingdebtforasimilaramountin2019tofinancefirestationimprovementsandother
roadprojects.
BondRatings:Thecity’sgeneralobligationbondratingwasreviewedinSeptember2017withthesaleof
improvementandabatementbonds.Moody’saffirmedthecity’spriorG.O.debtratingof“A2”.The“A2”
ratingisan“uppermediumgrade”.Thisisgenerallydescribedas“strong,investmentgrade”creditby
Moody’s.
Market value (payable 2018)1,828,437,600$
Debt limit (3% of market value)54,853,128$
Debt applicable to limit
General obligationdebt 23,920,000
Less general obligationbonds
not subject to the limit (14,975,000)$
Total net debt applicable to limit 8,945,000$
Legal debt margin 45,908,128$
Legal Debt Margin Calculation for Fiscal Year 2018
81
BOND RATING SCALES
Moody’sMonticellorating: A2forGeneralObligationDebt
Moody's S&P Fitch
Long-
term
Short-
term
Long-
term
Short-
term
Long-
term
Short-
term
Aaa
P-1
AAA
A-1+
AAA
F1+
Prime
Aa1 AA+AA+
High gradeAa2AAAA
Aa3 AA-AA-
A1 A+A-1 A+F1 Upper medium gradeA2AA
A3 P-2 A-A-2 A-F2Baa1BBB+BBB+
Lower medium gradeBaa2P-3 BBB A-3 BBB F3Baa3BBB-BBB-
Ba1
Not prime
BB+
B
BB+
B
Non-investment grade
speculativeBa2BBBB
Ba3 BB-BB-
B1 B+B+
Highly speculativeB2BB
B3 B-B-
Caa1 CCC+
C CCC C
Substantial risks
Caa2 CCC Extremely speculative
Caa3 CCC-Default imminent with
little
prospect for recoveryCaCC
C
C
D /
DDD
/In default/DD
/D
82
DEBT SERVICE LEVY HISTORY
Most of the city’s debt issues are supported on some level by property taxes. The 2013B
Wastewater Treatment Bonds and 2015A Minnesota Public Facilities Authority G.O. Note Payable
are both supported directly by Sewage Fund revenues. The city issued $6,595,000 in general
obligation bonds in 2014. This dual purpose issue had two portions: judgment - $6,080,000 and
capital equipment - $515,000. The capital equipment debt is carried in an internal service fund;
lease payments from the General Fund provide money for the debt service. In 2015, the city
issued $2,605,000 in street reconstruction and improvement bonds. In October 2016, the city
issued $4,900,000 for the same purposes. In 2017, the city issued $5,000,000 in improvement and
tax abatement bonds. The tax levies for years 2016 through 2018 included amounts for future
debt service: $300,000 in 2016; $50,000 in 2017; $783,000 in 2018.
Year 2010A Imp 2011A Imp 2007A Imp 2008 Swr 2008A MCC 2014A JE 2015B SRI 2016A SRI 2017A Total
2014 -$ 223,000$540,000$500,000$1,040,000$-$-$-$-$ 2,303,000$
2015 40,000 330,000 420,000 500,000 1,005,000 ----2,295,000
2016 40,000 330,000 420,000 500,000 -544,000 250,000 --2,084,000
2017 40,000 139,783 610,000 500,000 -536,929 195,288 415,000 -2,437,000
2018 40,000 148,061 ---537,586 203,425 407,769 450,159 1,787,000
2019 25,000 185,000 ---537,244 200,905 409,133 429,781 1,787,063
2020 25,000 185,000 ---535,501 198,385 405,038 427,367 1,776,291
2021 25,000 183,000 ---537,570 201,325 406,089 430,096 1,783,080
2022 25,000 187,000 ---538,226 197,651 406,929 427,367 1,782,173
2023 -185,000 ---537,609 199,436 407,558 424,531 1,754,134
2024 -----536,081 200,223 407,979 426,842 1,571,125
2025 -----538,861 200,879 408,190 428,941 1,576,871
2026 -----540,499 223,990 408,189 430,832 1,603,510
2027 -----535,698 219,135 70,718 425,175 1,250,726
2028 -----540,812 223,808 68,827 258,197 1,091,644
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Debt Service Levy (2014 - 2028)
2010AImp 2011AImp 2007AImp 2008 Swr 2008AMCC 2014AJE 2015B SRI 2016ASRI 2017A
83
G.O. DEBT SERVICE
Early redemption and normal amortization caused annual general obligation (G.O) debt service to
decline sharply in 2016 and 2017. Early redemption occurred for the 2008 sewer bonds in 2016
and 2017. Early redemption for the 2007A improvement bonds occurred in 2016. In 2014, the city
issued $6,595,000 in G.O. bonds: judgment ($6,080,000) and capital equipment ($515,000). In
2015, the city issued $2,605,000 in G.O. bonds: street reconstruction ($1,885,000) and
improvements ($720,000). In 2016, the city issued $4,900,000 in G.O. bonds: improvements
($4,130,000) and street reconstruction ($770,000). The $5,000,000 2017A bond issue included
$2,960,000 in tax abatement bonds for Fallon Avenue overpass construction. Recorded as debt in
the sewage enterprise fund, the Minnesota Public Facilities Authority (MPFA) $2.3 million loan is
excluded from the schedule and graph below.
Year 2010A Imp 2011A Imp 2007A Imp 2008 Swr 2008A MCC 2013 COI 2013 WWT 2014A JE 2015B SRI2016A SRI 2017A Total
2014 360,150$2,880,150$735,600$1,049,841$1,037,360$66,120$254,198$-$-$-$-$ 6,383,419$
2015 302,399 2,460,250 730,400 1,049,193 1,000,760 65,760 250,598 174,406 ---6,033,766
2016 304,050 2,423,950 1,482,967 1,566,998 -65,250 246,998 580,872 211,969 --6,883,054
2017 304,618 783,650 535,500 1,521,432 -69,590 243,398 576,821 207,500 523,821 -4,766,330
2018 299,324 779,350 ---68,713 244,798 576,759 215,250 527,150 469,511 3,180,855
2019 298,355 428,350 ---67,673 241,098 575,608 212,850 528,450 471,640 2,824,024
2020 301,653 430,650 ---71,470 242,398 572,931 210,450 524,550 469,340 2,823,442
2021 304,050 425,825 ----243,598 578,691 213,050 525,550 471,940 2,762,704
2022 -428,750 ----244,406 577,816 209,750 526,350 469,340 2,456,412
2023 -426,300 ----244,706 575,578 211,450 526,950 466,640 2,451,624
2024 ------244,376 572,384 212,200 527,350 468,840 2,025,150
2025 ------243,600 513,201 212,825 527,550 470,840 1,968,016
2026 ------247,150 514,761 213,325 527,550 472,640 1,975,426
2027 ------245,400 510,189 208,700 67,350 472,140 1,503,779
2028 ------248,040 515,059 213,150 65,550 241,390 1,283,189
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
G.O. Debt Service Paid/Due (2014 - 2028)
2010A Imp 2011A Imp 2007A Imp 2008 Swr 2008A MCC 2013 COI 2013 WWT 2014A JE 2015B SRI 2017A
84
G.O. DEBT LEVELS
The city’s general obligation (G.O.) debt level increased by less than $700,000 with the issuance of
$5 million of new debt in 2017. Normal debt amortization and a couple early redemptions nearly
offset the addition of new debt. The trend will reverse in 2018 when the planned issuance of $5
million in new debt surpasses redemptions and maturities. Rapid amortization of debt reflects an
opportunity for financing new projects included in the capital improvement program (CIP). The
schedule below reflects the refinancing of 2005A improvement bonds with 2011A bonds—the two
are combined on the schedule less the redemption bond payment. Accounted for in the Sewage
Fund, the Minnesota Public Facilities Authority $2.3 million loan is excluded from the schedule
and graph below.
Year 2010A Imp. 2011A Imp. 2007A Imp. 2008 Sewer 2008A MCC 2013 COI 2013 WWT 2014A J&E 2015B SR&I 2016A SR&I 2017A Outstanding
2014 1,955,000$8,055,000$1,930,000$3,376,000$985,000$385,000$2,820,000$6,595,000$-$-$-$ 26,101,000$
2015 1,690,000 5,745,000 1,290,000 2,452,000 -325,000 2,640,000 6,595,000 2,605,000 --23,342,000
2016 1,420,000 3,425,000 625,000 1,496,000 -265,000 2,460,000 6,190,000 2,460,000 4,900,000 -23,241,000
2017 1,145,000 2,715,000 ---200,000 2,280,000 5,785,000 2,310,000 4,485,000 5,000,000 23,920,000
2018 870,000 1,995,000 ---135,000 2,095,000 5,375,000 2,150,000 4,050,000 4,660,000 21,330,000
2019 590,000 1,615,000 ---70,000 1,910,000 4,960,000 1,990,000 3,605,000 4,295,000 19,035,000
2020 300,000 1,225,000 ----1,720,000 4,540,000 1,830,000 3,155,000 3,925,000 16,695,000
2021 -830,000 ----1,525,000 4,105,000 1,665,000 2,695,000 3,545,000 14,365,000
2022 -420,000 ----1,325,000 3,660,000 1,500,000 2,225,000 3,160,000 12,290,000
2023 ------1,120,000 3,205,000 1,330,000 1,745,000 2,770,000 10,170,000
2024 ------910,000 2,740,000 1,155,000 1,255,000 2,370,000 8,430,000
2025 ------695,000 2,320,000 975,000 755,000 1,960,000 6,705,000
2026 ------470,000 1,885,000 790,000 245,000 1,540,000 4,930,000
2027 ------240,000 1,440,000 605,000 185,000 1,110,000 3,580,000
2028 -------975,000 410,000 125,000 900,000 2,410,000
$-
$5
$10
$15
$20
$25
$30
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028MillionsG.O. Debt Outstanding (2014 - 2028)
2007AImp.2008 Sewer 2008A MCC 2010A Imp.2011AImp.2013 COI 2013 WWT 2014AJ&E 2015B SR&I 2016ASR&I 2017A
85
EFFECT OF DEBT LEVELS ON GOVERNMENT OPERATIONS
Debt is carried in three fund types: Governmental Funds, Enterprise Funds, and Internal Service Funds.
Consequently, debt has a different impact on the operations of each fund type. Indeed, debt service is a
fixed cost that does not vary with activity levels. Debt amortization and redemption reduces fixed costs,
freeing resources for other purposes.
Governmental Funds
Governmental fund debt service is provided through debt service funds, which accumulate money from
various sources for principal and interest payments. Those sources include property taxes, special
assessments, transfers from enterprise funds, and transfers from capital project funds collecting impact
fees. The debt effect on services delivered through governmental funds with current plant and
equipment is somewhat diminished because the city is not constrained by state-imposed levy limits for
property taxes. When levy limits have been in place, statutes have allowed for special levies for debt
service. While there are limits to what taxpayers can bear, Monticello has the lowest tax capacity rate in
Wright County because of its large commercial tax base—including the nuclear power plant. In a stable
market value environment, the power plant absorbs over half of any tax increase. The General Fund is
primarily supported (over 80%) by property taxes and the Monticello Community Center (MCC) Fund is
primarily supported by charges for services. The General Fund has other underutilized revenue sources,
and the MCC Fund can adjust its fee schedule and reduce costs. Still, one negative consequence of using
impact fees for debt services is the city’s reduced ability to finance water and sewer trunk
improvements with money on hand. High debt levels lower the city’s ability (debt limit and debt rating)
to issue new debt for capital assets, which may improve efficiency or meet a growing need.
Enterprise Funds
The Sewage Fund is the only enterprise fund with debt. All utility rates are reviewed annually and
adjusted to cover operating, capital, and debt service expenditures. Transfers support principal and
interest payments in debt service funds where water and sewer impact fees have been deficient. This
drain on resources means new debt will need to be issued for Sewage Fund wastewater treatment plant
upgrades and trunk improvements. According to an AE2S survey, Monticello has some of the lowest
water and sewage rates in the Minnesota. However, the council is aware that the city needs to maintain
its competitive position with taxes and utility charges to attract economic development.
Internal Service Funds
Two debt issues have provided capital for creating a Central Equipment internal service fund. This fund
finances governmental fund equipment purchases over $10,000. The equipment is then leased back to
the benefitting budget unit for a fixed duration. The lease payments provide for additional future
equipment purchases. Currently, the General Fund is the only governmental fund internally leasing
equipment. The debt serves as a mechanism for maintaining the fund and its equipment purchases.
With over 80% of the General Fund revenue comprised of property taxes, the Central Equipment Fund
debt and the related lease payments have a direct effect on the amount of resources available for other
uses. Again, this is mitigated by the city’s low tax capacity rate and the lack of a levy limit.
In summary, debt is a valid way to match customers with the cost of providing a particular service.
Current service customers pay for current service delivery with annual debt service payments supported
by user fees and taxes. Future service customers make future debt service payments through future
taxes and user fees.
86
DEBT LEVELS BY FUND TYPE
The following schedule and chart separate debt by fund type. Governmental funds typically have
varying sources of revenue: property taxes, special assessments, impact fees, etc. Enterprise fund
debt is usually supported by charges for services. Internal service funds are supported by charges for
services to budget units within other funds, which have their own revenue sources (taxes, licenses
and permits, charges for services, etc.).
Year Governmental Enterprise Internal Service Total
2014 22,421,000$3,295,000$385,000$26,101,000$
2015 19,532,000 3,030,000 780,000 23,342,000
2016 19,761,000 2,760,000 720,000 23,241,000
2017 21,040,000 2,280,000 600,000 23,920,000
2018 18,755,000 2,095,000 480,000 21,330,000
2019 16,765,000 1,910,000 360,000 19,035,000
2020 14,740,000 1,720,000 235,000 16,695,000
2021 12,550,000 1,525,000 290,000 14,365,000
2022 10,730,000 1,325,000 235,000 12,290,000
2023 8,870,000 1,120,000 180,000 10,170,000
2024 7,400,000 910,000 120,000 8,430,000
2025 5,950,000 695,000 60,000 6,705,000
2026 4,460,000 470,000 -4,930,000
2027 3,340,000 240,000 -3,580,000
2028 2,410,000 --2,410,000
$-
$5
$10
$15
$20
$25
$30
MillionsDebt Levels by Fund Type
Governmental Enterprise Internal Service
87
INTERFUND TRANSFERS
INTERFUND TRANSFERS
Operatingtransfers support theoperations ofotherfunds, provide forspecialprojects,and
contribute to debtservice payments. The followingschedule provides theoperatingtransfers inthe
2018 Budget:
Fund No.Transfer In Fund Amount Fund No.TransferOut Fund Amount
312 2011A GO Improvement Bond 200,000$213 Economic Development 200,000$
229 Park& Pathway Dedication 400,000 609 Liquor 400,000
317 2010A GO Improvement Bond 44,899 406 Street Reconstruction 44,899
400 Capital Projects Fund 600,000 601 Water 600,000
656 FiberOptics 130,000 609 Liquor 130,000
Total Transfers In 1,374,899$Total Transfers Out 1,374,899$
SCHEDULE OF OPERATINGTRANSFERS
Debt
Service
18%
Enterprise
9%
Capital
Projects
73%
2018 Transfers In
Fund-Type
Special
Revenue
15%
Capital
Projects
3%
Enterprise
82%
2018 Transfers Out Fund-
Type
88
STAFFING SUMMARY
STAFFING HISTORY
Staffing,as measuredby full-time equivalents, has been relativelystable for thelast five years.Many
employees perform across multiple activities/divisions and funds.The table below does not reflect
the seasonor part-time communitycenteremployees.The budget includes anew full-time fire
positionstartinginJuly2018.Alltheemployees forFiberOptics Fundwereeliminatedwhen the
service was outsourced2016.
Amended Adopted
Actual Actual Actual Budget Projected Budget
2014 2015 2016 2017 2017 2018
General Fund
City Administration 1.85 1.85 1.85 2.18 2.18 3.60
Finance 4.00 4.00 4.00 4.00 4.00 4.00
City Clerk 0.35 0.35 0.35 0.35 0.35 1.00
Human Resources 1.00 1.00 1.00 1.00 1.00 1.00
Planning & Zoning 1.30 1.30 1.30 1.30 1.30 1.30
City Hall 1.40 1.40 1.40 1.90 1.90 -
Fire & Rescue -----0.50
Building Inspections 3.00 3.00 3.00 4.00 4.00 4.00
Public Works Administration 2.00 2.00 2.00 1.50 1.50 1.80
Engineering 1.60 1.60 ----
Public Works Inspections 1.30 1.30 1.30 1.00 1.00 1.00
Shop & Garage 1.50 1.50 1.50 1.50 1.50 1.50
Streets & Alleys 10.30 10.30 10.30 10.05 10.05 9.80
Ice & Snow 2.20 2.20 2.20 1.70 1.70 1.70
Park Operations 6.85 6.85 6.85 6.85 6.85 6.60
Shade Tree 0.40 0.40 0.40 0.50 0.50 0.75
Total General Fund
39.05 39.05 37.45 37.83 37.83 38.55
Special Revenue Funds
Economic Development 0.20 0.20 0.20 1.20 1.20 1.20
Monticello Community Center 8.40 8.40 8.40 8.40 8.40 8.40
Total Special Revenue Funds 8.60 8.60 8.60 9.60 9.60 9.60
Enterprise Funds
Water 3.15 3.15 3.15 3.80 3.80 4.00
Sewage 3.15 3.15 3.15 3.80 3.80 4.00
Liquor 10.00 10.00 10.00 10.00 10.00 10.40
Deputy Registrar 6.00 6.00 6.00 6.10 6.10 6.20
Fiber Optics 7.45 7.45 3.75 ---
Total Enterprise Funds 29.75 29.75 26.05 23.70 23.70 24.60
Total All Funds
77.40 77.40 72.10 71.13 71.13 72.75
NUMBER OF FULL-TIME EQUIVALENTS
Fiscal Year Ended December 31,
89
REVENUE TRENDS & ANALYSIS
Revenuesareconservativelyestimatedforeveryfundtype.The belowscheduleofrevenueestimatesis
supportedbydetailedrevenueestimatesforeachfundinlatersections.This sectionofthe budget
highlights majorrevenue sources forallthecity funds as combinedand formajor governmentaland
enterprise funds: GeneralFund andMonticello Community Center Fund(governmental funds),along
withthe Water,Sewage,Liquor,DeputyRegistrarand FiberOptics funds (enterprise funds).Trends for
these funds andindividualrevenues areshowntogetherwithestimates forthecomingyear.
TOTAL CITY REVENUES AND OTHER SOURCES
2014 2015 2016 2017 2017 2018 %
TOTAL ALL FUNDS ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes $8,386,953 8,619,812$9,275,414$9,430,000$9,430,000$9,870,000$4.7%
Tax Increments 836,750 727,617 668,352 653,564 653,564 635,678 -2.7%
Franchise & Other Taxes 334,726 352,073 432,785 399,900 399,900 405,500 1.4%
Sale of Goods 5,165,737 5,489,430 5,448,584 5,435,194 5,635,194 5,770,784 6.2%
Licenses & Permits 381,544 465,469 671,602 379,600 379,600 400,750 5.6%
Intergovernmental Revenues 733,566 1,413,360 2,041,363 596,440 596,440 374,440 -37.2%
Charges for Services 7,303,528 7,854,450 8,091,397 7,786,080 7,764,510 8,095,795 4.0%
Fines & Forfeits 48,744 42,474 30,656 42,300 42,300 36,500 -13.7%
Special Assessments 1,953,370 3,331,901 984,916 576,666 656,666 385,746 -33.1%
Miscellaneous 1,840,271 1,149,501 1,902,367 786,790 858,360 522,272 -33.6%
Contributed Capital 966,494 1,435,870 1,993,232 140,450 140,450 140,450 0.0%
Operating Transfers 11,298,117 4,937,975 2,588,244 829,362 1,212,562 1,374,899 65.8%
Debt Proceeds 6,467,106 2,651,898 6,410,568 5,700,000 5,700,000 5,000,000 -12.3%
TOTAL REVENUES 45,716,906$38,471,830$40,539,480$32,756,346$33,469,546$33,012,814$0.8%
Property taxes account for the single largest revenue source for the city. Other sources such as
operating transfers (in) and debt proceeds occasionally surpass property taxes, but they generally
do not support day-to-day operations.
Tax Increments are the main source of revenue for the Economic Development Fund. This fund
accounts for the city’s tax increment financing (TIF) districts and other general economic
development activities. One TIF districts was decertified in 2017.
Licenses & permits are comprised primarily of building permits, which are conservatively
estimated at 2015 levels to smooth the cyclical nature of this revenue category.
Intergovernmental revenues are expected to decrease as state aid for some capital projects
(Fallon overpass, TH25/CSAH75 improvements, etc.) is distributed over multiple accounting
periods. With a strong commercial tax base, the city generally does not qualify for much state aid
that is not project specific.
Special assessments primarily support debt service funds. Prepayment of future certified
assessments in 2015 and 2016 has affected collections in subsequent years.
Charges for services do not reflect changes to the fee schedule occurring after adoption of the
budget. The city uses conservative revenue budgeting practices to ensure revenues will be
sufficient to meet operating needs.
90
Miscellaneous revenues are conservatively estimated to decrease but the investment earnings—
the largest portion of this revenue classification—are expected to hold steady. The amount of
investible funds is expected to decline as fund balances are drawn down. Overall revenues and
other sources lag expenditures and other uses.
Operating transfers (in) are expected to increase in 2018 because capital projects will receive
more support from internal sources. In 2016 and 2017, operating transfers were largely going to
debt service funds for annual principal and interest payments on bonded debt.
In 2018, debt proceeds to finance the Fallon Avenue overpass are estimated at $5 million. The city
may decide later to issue debt to support Chelsea and 7th Street improvements rather than use
reserves.
The chart below provides an overall picture of estimated 2018 revenues and other sources.
Property
Taxes
30%
Sale of
Goods
17%
Charges for
Services
25%
Operating
Transfers
4%
Debt
15%
All
Other
9%
Revenueand Other Sources
(All Funds)
PROPERTY TAXES
The city relies on property taxes to support such functions as general government, public safety,
public works, recreation and culture, and debt service. For 2018, the council adopted a general
levy of $9,547,000, which is $397,000 (4.3%) greater than the prior year. The council also adopted
a Housing and Redevelopment Authority (HRA) special benefit levy of $323,000, which is $43,000
(15.4%) greater than the prior year. The HRA levy is recorded in the Economic Development
Authority (EDA) Fund. The General Fund discontinued operating transfers—annually about
$90,000--to the EDA Fund when the HRA levy was first adopted in 2016. Both levies are combined
for graphical and contextual purposes. The tax levy has risen ahead of inflation the last five years.
91
The following chart reflects the changes in the tax levy over the last ten years:
$9,430,000
$9,870,000
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Property TaxLevy History
Accounting for a variety of activities, the General Fund will receive slightly less than 70% of the
2018 property tax levy. However, property taxes provide approximately 80% of the General
Fund’s revenue. In prior years, the levy for the Monticello Community Center (MCC) had two
components: operations and debt service. The MCC’s debt service levy portion dropped off in
2015. The operations component increased $15,000 (4.0%) to $387,000. The following chart
represents the distribution of the tax levy for 2018.
GeneralFund,
$6,590,000,67%
MCC Operations,
387,000, 4%
HRA Levy,
$323,000,3%
Debt Service,
2,570,000,26%
PropertyTax Levy (Adopted - 2018)
92
When determining the property tax levy, the city council and staff consider the impact the levy
will have on various property owners. This impact is then balanced against services provided and
service levels. In the past, the city was able to fund services at current levels with a relatively flat
levy. The growing economy and increased property values have led to a drop in the tax capacity
rate. Still, from 2008 through 2012, property values declined as a result of a weaker national and
local economy. Estimated market values are converted to tax capacity by using specific state
formulas for various types of properties.
In 2013, the tax capacity grew a healthy $2.9 million (18.6%) to $18.7 million. Why? The nuclear
power plant located within the city limits added over $160 million in new taxable value with
capital equipment upgrades. Consequently, equipment retirements related to the same uprate
caused a slight decline in 2014. History repeating itself, the tax capacity for 2015 grew by $5.7
million (31%) to $23.9 million with another uprate at the nuclear power plant. Further, the
benefits from the last uprate extended into 2016, adding $80 million in tax market value and
nearly $2 million in tax capacity. The tax capacity for 2018 taxes payable is $29.5 million, or 7.1%,
higher than 2017. Increases in residential market values and new construction added to tax
capacity gains in both 2017 and 2018.
In a stable levy environment, tax capacity and tax capacity rates will typically have an inverse
relationship. With city and HRA tax capacity rates added together, the following chart
demonstrates that relationship over the last 15 years:
$11.1M
$27.6M
$29.6M62.421
34.188
33.420
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
$-
$5
$10
$15
$20
$25
$30
$35
TaxCapacityRateTaxCapacityValue(millions)Tax Capacity Values and Tax Capacity Rates
Tax Capacity Value Tax Capacity Rate
93
GENERAL FUND
The GeneralFund is used to account forallfinancial resources ofthecity,except forthose requiredto
be accountedforinanother fund. Majorfunctions supportedby generalfund revenues include:city
and finance administration, police andfireservices, public works,and recreation andculture.
Revenue is estimatedto be $8,287,000 (+5.7%) forthe 2018 budget year. TheprimaryGeneral Fund
sourceof revenue is property taxes at$6,590,000 (+4.8%),whichaccounts for80%of total revenues.
No othersinglecategoryofrevenues exceeds 5% oftotalrevenues. TheGeneral Fundis not
supported byany transfers (othersources)from other funds.
The followingcharts depicts General Fundrevenues as representedin the 2018adopted budget:
Property Taxes,
80%
General Fund Revenues - 2018
Property Taxes
Franchise & Other Taxes
Licenses & Permits
Intergovernmental Revenues
Charges for Services
All Other
The followingchartrepresentsGeneralFund revenuesoverthe lastten years,with2017 projected
and 2018 budgeted:
$-
$1
$2
$3
$4
$5
$6
$7
$8
$9
2009 2010 2011 2012 2012 2014 2015 2016 2017 2018MillionsGeneral Fund Revenues
PropertyTaxes Licenses &Permits All Other
94
GeneralFund revenues peaked in2008 alongwithpropertytaxes andlicenses and permits. Since
2008,licenses andpermits have compriseda relatively less significantportionofthe overall revenues.
Licenses andpermits consistmostlyofbuilding-type permits and have rebounded alongwiththe
economyandcommercialand residentialconstruction. Peakingin2008 above $1 million,licenses &
permits areconservativelyestimatedat$398,750 for2018.
WATER AND SEWAGE FUNDS
Waterandsewagecharges forservices are primarilycomprisedof providingMonticello residents and
businesses withwaterandsewage services.Based partiallyonthe levelofconsumption,these utility
funds each have separatecharges for deliveredservices.The citysetrates to coveroperatingcosts,a
portionof depreciation,and debtservice.As new developmentslowed, the burdenon infrastructure
replacementcostsshiftedto utilityrates from impact(access)charges.Thewater andsewage funds
are expected to provide some levelof future supportfor debtservice incurredto make waterand
sewage system improvements.
Waterandsewage revenue grew from 2008 to 2011as consumptiondropped and rates increased.
After peakingin2012 (a dry year),waterconsumption again declinedas waterand sewage rates
climbed, pushingup bothwaterandsewage revenues. With2017 projectedand2018 budgeted,the
followingchartplots revenues forwater andsewageserviceson the primaryaxis (left)againstwater
sales onthe secondary axis (right):
-
100
200
300
400
500
600
700
$-
$0.5
$1.0
$1.5
$2.0
$2.5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 GallonsSold(Millions)Revenues(Millions)Water & Sewage Revenue
Water
Revenue
Sewage
Revenue
H2O Sold
(Gals)
Waterservice charges have two components: base charge withaminimum usage amountand
consumptioncharge for usage above theminimum amount. Bothcharges have increasedsteadily
overthe lastten years: average base andconsumptioncharge increases were6.0% and6.9%,
respectively. For2018,no rate increases were included inthe budget. However,subsequentto
budget adoption,thecouncilraised the base charge by $0.50 (7.8%)andthe usage charge by1.7%.
Sewage charges,similar towatercharges, have twocomponents: base charge withaminimum usage
95
amountandconsumptioncharge for usage above the minimum amount.Bothcharges have
increasedsteadilyoverthe years: average base andconsumptioncharge increaseswere 6.7% and
5.5%,respectively. For2018,no rate increases were includedinthe budget.However,subsequentto
budget adoption,thecouncilraised the base charge by $0.70 (8.7%)andthe usage charges by2.7%.
The followingchartreflects the waterandsewage base rates overthe lastten years:
$-
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018MonthlyChargeSewage and Water Base Rates
Sewage
Water
MONTICELLO COMMUNITY CENTER
The Monticello Community Center (MCC)provides afacilitywithspace for avarietyofrecreational,
professional,andeducationalopportunities. Aside from its portionofthe property tax levy,the MCC
is supportedby avarietyoffees formemberships,activities,rental,andconcessions.Council passeda
revenue recoverypolicyalongwithbudgetadoptionthat now requires the MCCtocover85%ofits
operatingcosts—includingequipment—with fees and charges.
In the followingchart,2014 through2016 are actualamounts and2017 and2018 are estimates.
Reflectinga policychange,some activityfeeswere rolledintomembershipfees in 2017 and2018.
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
UserFees Rental Activities Concessions
MCC MajorRevenues
2014
2015
2016
2017
2018
96
FIBER OPTICS FUND (FiberNet)
Monticello’s telecommunications utility, FiberNetMonticello, provides internet, telephone (voice)
and video (TV)services. City residentialandcommercialcustomerscansubscribe toone, two,orall
three services.FiberNetcontinues to face competition from two large private providers with deep
pockets. As aresult,subscribercounts forvoice andTV have declinedinrecentyears. Internetis
showingsome growthwith morecustomers streaming video services. Still,commercialand
residentialcustomers are benefitting from lowerbills withFiberNet’s presencein themarketplace
eveniftheyare not FiberNetcustomers.
The datainthe graphs belowshow astable competitive environment forFiberNetin2017.
1506 1512 1512 1521 1535 1545 1546 1544 1543 1550 1551 1554
643 626 600 589 580 572 567 562 549 543 543 543
465 459 454 448 446 440 437 436 432 433 432 431
0
500
1000
1500
2000
2500
3000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 Total Subscribed Services
Total Phone
Total Television
Total Internet
1512 1514 1508 1520 1531 1535 1537 1536 1530 1530 1533 1536
133 132 134 132 131 131 133 132 132 134 134 135
0
200
400
600
800
1000
1200
1400
1600
1800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 Residential and Business Customer Counts
Business
Residential
The2018budgetincludesrateincreasesforvariousservices.InJuly2016,thecitycontractedwithArvig
tomanageFiberNet.AllFiberNetemployeesarenowArvigemployees.Throughleaneroperationsand
sharedresources,thecityexpectstohaveapositivecashflowin2018.Arvigwillcontinuetoassessthe
marketplace and service delivery costs and will raise prices as conditions warrant. The 2018 budgeted
subsidy to FiberNetfrom other funds (Liquor)is $130,000.
97
DEPUTY REGISTRAR (DMV)
The city is authorized bythe State ofMinnesotato operate aDMV. Fees collected from motor vehicle
licenses is the DMV’s mainrevenuesource.Fees are regulated bythestate.Anincrease instate
approvedfees,startingin2012,alongwith bettereconomic conditions resulted in higher revenues.
The followingchartshows the historyofDMVtransactions over afive-yearperiod.
Motor vehicle licenses (new and renewals)as percentage oftotal transactions remains relatively
constantat88% to 89%. Totaltransactions surpassed two milestoneswithover 70,000 transactions
in 2015 andover75,000 in2016.Indeed,the Monticello DMVprocesses1.13% of thestate’s total
motorvehicle transactions with .24%of the state’s population,aratioof4.7.
With darkershades ofgreen representing higher(better) numbers,the followingchartshows the
monthly DMV revenues over the last five years.The chart also provides informationonannual
revenues,annual transactions,and revenues pertransaction.
DMV Revenue by Month
Month 2013 2014 2015 2016 2017
Jan 39,765$40,164$46,375$44,033$55,543$
Feb 40,770 38,911 44,030 48,449 50,185
Mar 36,276 46,503 58,146 51,587 64,926
Apr 44,208 49,621 50,202 48,811 56,859
May 48,814 47,105 45,042 51,480 56,163
Jun 37,904 43,703 47,721 45,794 51,287
Jul 40,822 44,600 46,171 42,991 40,006
Aug 38,530 43,821 42,362 57,346 40,225
Sep 36,622 35,072 40,759 44,186 52,492
Oct 32,969 38,840 37,245 44,178 39,900
Nov 27,357 33,506 32,457 37,700 48,766
Dec 32,140 35,647 40,608 44,803 37,837
Total 456,178$497,493$531,118$561,357$594,188$
% Change 24.9%9.1%6.8%5.7%5.8%
Transactions 62,420 67,462 72,135 75,891 78,515
% Change 7.1%8.1%6.9%5.2%3.5%
Revenue per
Transaction 7.31$7.37$7.36$7.40$7.57$
98
LIQUORFUND
With total2017 sales ofnearly$5.8 million,Monticello’s municipal liquorstore ranks nearthe topof
Minnesotacities withonlyonestore.However, revenue growth is expectedtoslow because ofstore
size limitations.Totalsaleshave climbedan average of 3.5% forthe lastfive years; liquoris the fastest
growthcategory averagingnearly25% over five years.
Liquorsales have increased over the last five years and the budgetreflects thistrend. The Liquor
Fund hasone retailoutlet: Hi-Way Liquors. This fund provides vitalresources for manycommunity
projects includingcommunity center andstreetimprovements.Conservative revenue estimates are
usedforbudgeting purposes. However,2018 netcash flow from operations should top$600,000.In
prior years,interestearnings contributedsignificantlyto netcashflows. A large operatingtransfer
outin2012 depletedcashand subsequentongoingtransfers have curtailedinvestmentearnings.
Beeraccounts forapproximately50% oftotalsales; liquorandwine follow at30% and16%,
respectively. Non-alcoholitems contribute 4%.Beer typically has the lowestgross marginat26% and
wine the highestat32%. Liquor is in the middle atabout30%.The chart belowprovides sales
information bycategory:
LiquorStore Revenue by Category
Category 2013 2014 2015 2016 2017 5 Yr Chg
Beer 2,539,167$2,604,942$2,764,583$2,768,394$2,933,853$18%
% Change 2.3%2.6%6.1%0.1%6.0%
Liquor 1,506,776$1,546,118$1,634,069$1,624,908$1,739,562$25%
% Change 7.9%2.6%5.7%-0.6%7.1%
Wine 860,817$868,779$927,778$889,082$894,151$10%
% Change 5.9%0.9%6.8%-4.2%0.6%
Other 138,855$145,902$165,631$171,420$192,616$26%
% Change -9.4%5.1%13.5%3.5%12.4%
Total Sales 5,045,615$5,165,741$5,492,061$5,453,804$5,760,182$19%
% Change 4.1%2.4%6.3%-0.7%5.6%
99
The state law prohibitingSunday sales changedeffective July1,2017. Liquorstores are now allowed
to be open from11:00am to 6:00pm on Sunday. The liquorstore is normallyopen from 9:00am to
10:00pm onMonday through Saturday. Sales on the 27 Sundays forthe halfyear totaled$316,280.
Fourofthose Sundays accountedfor$108,118 insales.
100
APPROPRIATIONS BY CATEGORY AND FUND-TYPE
Expenditures, often called appropriations, are classified under one of six major categories:
personnel services (wages & benefits), supplies, other services & charges (professional fees,
utilities, etc), capital outlay, debt service, and operating transfers (other financing uses). The graph
below shows the relative percentage of FY18 budgeted expenditures for these six major categories
for all funds, combined.
Personnel
Services
16%
Supplies
15%
Capital
Outlay
34%
Operating
Transfers
3%
Other
Services&
Charges
23%
DebtService
9%
2018 Appropriations by Category - All Funds
APPROPRIATIONS BY TYPE, GENERAL FUND ONLY— Using those same categories of expenditure
type, the relative percentages of budgeted expenditures for the General Fund are shown below. As
you can see, the General Fund is comprised of a much higher percentage of personnel services costs
compared to all funds, as a whole. The General Fund supports very little capital improvements and
no debt service compared to all funds, as a whole.
Personnel
Services
40%
Supplies
9%
Capital
Outlay
3%
Other
Services &
Charges
48%
Expendituresand OtherUses - 2018
101
In governmental agencies, salaries, wages and benefits (personnel services) normally represent the
largest of these categories. However, due to the significant investment in infrastructure, cities have
a much higher percentage of the budget devoted to operating and capital costs, including debt
service, than most other governmental entities. One other factor is that the city contracts (other
services and charges) for law enforcement, legal and assessing services.
As shown, the General Fund, Debt Service Fund (aggregation of debt service sub-funds) and
enterprise funds account for 62%, down from 69% in 2017, of the total expenditures of the city.
The General Fund is the city’s primary operating account for general government
operations.
Debt service funds include only non-enterprise and non-internal service fund debt.
These funds are supported with property taxes, special assessments, tax increments,
and access fund transfers.
Enterprise funds consist of water, sewage, liquor, deputy registrar (DMV), and fiber
optics funds. These funds operate on a self-supporting basis.
Special revenue funds, totaling 8% of appropriations, include a variety of fee supported funds
including the community center and cemetery.
Capital project funds total 28% (up from 21% in 2017) of appropriations, which includes financing
for street reconstruction, street lighting, and other governmental capital asset acquisitions but
excludes capital assets acquired in the enterprise and internal service funds.
General Fund
22%
Special
Revenue Funds
8%
Debt Service
Funds
7%
Internal
Service Funds
2%
Capital Project
Funds
28%
Enterprise
Funds
33%
2018 Expenditures by Fund-Type
102
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
GENERAL
FUND
GENERAL FUND - SUMMARY
FUND DESCRIPTION
One of five governmental fund types, the General Fund serves as the chief operating fund of the
city. The General Fund is used to account for all financial resources not accounted for in some other
fund. The fund uses the modified accrual basis of accounting for budgeting and financial reporting
purposes. This means expenditures are recorded when the liability is incurred and revenues are
recorded when they become measurable and available. The adopted General Fund budget is a
balanced budget--current revenues and other sources equal expenditures and other uses.
ISSUES
The General Fund’s largest revenue source is property taxes. In 2017 the General Fund’s portion of
the levy grew by 1.8% as the city and HRA combined levy grew by 2.4% The Public Works
Department has the largest appropriation for 2017.
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 5,507,285$5,887,666$6,183,861$6,291,000$6,291,000$6,590,000$4.8%
Franchise & Other Taxes 237,173 235,089 284,468 283,900 283,900 289,500 2.0%
Licenses & Permits 378,809 460,834 668,602 379,400 379,400 398,750 5.1%
Intergovernmental Revenues 321,891 355,729 389,005 346,440 346,440 374,440 8.1%
Charges for Services 309,297 347,486 351,297 320,470 320,470 398,400 24.3%
Fines & Forfiets 48,744 42,474 30,656 42,300 42,300 36,500 -13.7%
Special Assessments 22,808 1,330 275 300 300 300 0.0%
Miscellaneous 339,839 337,511 374,568 178,190 178,190 199,110 11.7%
Operating Transfers ---------
TOTAL REVENUES 7,165,846$7,668,119$8,282,732$7,842,000$7,842,000$8,287,000$5.7%
EXPENDITURES BY DEPARTMENT
GENERAL GOVERNMENT
Mayor and Council 52,182$52,572$54,264$57,350$57,350$57,350$0.0%
City Administration 281,033 314,719 332,926 444,313 444,313 448,881 1.0%
City Clerk 75,594 29,658 69,966 115,092 115,092 131,409 14.2%
Finance 385,662 377,867 393,754 445,375 445,375 467,242 4.9%
Audit 53,541 37,798 39,273 42,000 42,000 42,000 0.0%
City Assessing 49,832 50,466 50,415 52,115 52,115 65,000 24.7%
Legal 29,303 36,946 29,152 38,000 38,000 38,000 0.0%
Human Resources 90,565 117,249 116,522 124,288 124,288 133,118 7.1%
Planning & Zoning 220,080 244,976 210,173 230,848 230,848 248,020 7.4%
City Hall 186,833 183,997 182,990 61,759 61,759 72,810 17.9%
Prairie Center Building 14,409 13,327 8,917 12,841 12,841 17,753 38.3%
TOTAL GENERAL GOVERNMENT 1,439,034$1,459,575$1,488,352$1,623,981$1,623,981$1,721,583$6.0%
Continued…
103
GENERAL FUND 2013 2014 2015 2016 2016 2017 %
(Continued)ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
PUBLIC SAFETY
Law Enforcement 1,190,441$1,145,247$1,174,439$1,222,627$1,222,627$1,263,948$3.4%
Fire & Rescue 222,141 306,779 309,970 333,823 333,823 355,810 6.6%
Fire Relief 109,594 108,186 120,027 80,000 80,000 80,000 0.0%
Building Inspections 251,007 266,545 304,858 369,663 369,663 384,627 4.0%
Civil Defense 9,707 1,661 1,500 3,930 3,930 3,564 -9.3%
Animal Control 47,426 49,439 48,754 51,348 51,348 51,520 0.3%
National Guard 14,517 14,061 13,438 16,050 16,050 15,300 -4.7%
TOTAL PUBLIC SAFETY 1,844,833$1,891,918$1,972,986$2,077,441$2,077,441$2,154,769$3.7%
PUBLIC WORKS
Public Works Administration 113,882$122,151$124,504$194,771$194,771$147,431$-24.3%
Engineering 224,028 195,841 110,555 160,058 160,058 174,900 9.3%
Public Works Inspecitons 54,878 36,867 32,084 88,809 88,809 108,766 22.5%
Streets & Alleys 692,011 739,443 739,866 976,962 976,962 994,001 1.7%
Ice & Snow 210,552 308,387 263,020 284,280 284,280 290,156 2.1%
Shop & Garage 186,741 177,644 185,837 204,101 204,101 206,353 1.1%
Stormwater 12,064 16,842 26,712 73,121 73,121 72,048 -1.5%
Street Lighting 206,005 195,695 226,485 263,900 263,900 273,900 3.8%
Refuse Collection 505,996 517,955 563,477 614,437 614,437 616,237 0.3%
TOTAL PUBLIC WORKS 2,206,157$2,310,825$2,272,540$2,860,439$2,860,439$2,883,792$0.8%
TRANSIT
Bus -10,000 40,000 40,000 40,000 5,000 -87.5%
TOTAL TRANSIT -10,000 40,000 40,000 40,000 5,000 -87.5%
RECREATION AND CULTURE
Senior Center 90,219 97,547 97,115 101,672 101,672 102,572 0.9%
Ice Arena 75,000 --------
Park Operations 572,985 570,639 706,934 824,997 824,997 891,848 8.1%
Park Ballfields 25,517 18,149 16,971 27,300 27,300 27,300 0.0%
Shade Tree 53,475 68,891 104,990 63,527 63,527 66,226 4.2%
Library 35,395 36,764 36,176 40,526 40,526 38,000 -6.2%
TOTAL RECREATION AND CULTURE 852,591$791,990$962,186$1,058,022$1,058,022$1,125,946$6.4%
UNALLOCATED
Insurance 127,710 12,584 8,082 8,021 8,021 8,512 6.1%
TOTAL UNALLOCATED 127,710$12,584$8,082$8,021$8,021$8,512$6.1%
OTHER USES ---
Operating Tranfers 130,213$293,000$297,012$-$-$-$---
TOTAL OTHER USES 130,213$293,000$297,012$-$-$-$---
TOTAL EXPENDITURES 6,552,289$6,749,351$7,012,381$7,596,000$7,596,000$7,802,000$2.7%
FUND BALANCE - JANUARY 1 3,478,507$3,914,563$4,331,058$4,986,796$4,986,796$5,021,796$
Excess (Deficiency) of
Revenues over Expenditures 436,056 416,495 655,738 -35,000 -
FUND BALANCE - DECEMBER 31 3,914,563$4,331,058$4,986,796$4,986,796$5,021,796$5,021,796$
104
The previous table summarizes General Fund revenues by classifications and expenditures by
activities/divisions and departments. The table below summarizes both revenues and expenditures
by classifications.
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 5,507,285$5,887,666$6,183,861$6,291,000$6,291,000$6,590,000$4.8%
Tax Increments ---------
Franchise & Other Taxes 237,173 235,089 284,468 283,900 283,900 289,500 2.0%
Licenses & Permits 378,809 460,834 668,602 379,400 379,400 398,750 5.1%
Intergovernmental Revenues 321,891 355,729 389,005 346,440 346,440 374,440 8.1%
Charges for Services 309,297 347,486 351,297 320,470 320,470 398,400 24.3%
Fines & Forfeits 48,744 42,474 30,656 42,300 42,300 36,500 -13.7%
Special Assessments 22,808 1,330 275 300 300 300 0.0%
Miscellaneous 339,839 337,511 374,568 178,190 178,190 199,110 11.7%
Operating Transfers ---------
TOTAL REVENUES 7,165,846$7,668,119$8,282,732$7,842,000$7,842,000$8,287,000$5.7%
EXPENDITURES
Personnel Services 2,555,898$2,624,076$2,785,408$3,096,654$3,096,654$3,295,557$6.4%
Supplies 534,178 503,059 494,690 731,825 731,825 742,050 1.4%
Other Services & Charges 3,257,375 3,448,434 3,522,614 3,807,021 3,807,021 4,003,793 5.2%
Capital Outlay 108,900 139,800 190,100 206,500 206,500 245,600 18.9%
Operating Transfers 293,000 297,012 --300,000 ----
TOTAL EXPENDITURES 6,749,351$7,012,381$6,992,812$7,842,000$8,142,000$8,287,000$5.7%
FUND BALANCE - JANUARY 1 3,914,563$4,331,058$4,986,796$6,276,716$6,276,716$5,976,716$
Excess (Deficiency) of
Revenues over Expenditures 416,495 655,738 1,289,920 -(300,000)-
FUND BALANCE - DECEMBER 31 4,331,058$4,986,796$6,276,716$6,276,716$5,976,716$5,976,716$
BUDGET COMMENTARY:
Revenues
For 2018, budgeted revenues are estimated to increase by 5.7%. The General Fund’s portion of the
tax levy is budgeted to increase by 4.8%, which is greater than the total (city & HRA) levy increase of
4.7%. Property taxes account for 80% of General Fund revenues. The General Fund’s allocation of
franchise and other taxes is level and largely matches related expenditures (street lighting). The
charges for services increase reflects higher residential multi-unit garbage charges. Permits and fees
will increase with additional development. Miscellaneous revenues are estimated to fall slightly.
Expenditures
Expenditures are budgeted to increase 5.7%. Most of the capital outlay amount reflects Capital
Equipment Fund purchases, which are charged back through lease payments. The personnel
services budget includes a full step increase and a 3% (2% in January and 1% in July) market rate
wage increase. The operating transfer to the Economic Development Authority Fund for $94,900
was eliminated with the implementation of the HRA Levy in 2016.
105
MAYOR AND CITY COUNCIL
DEPARTMENT: General Government
SUPERVISOR: Mayor & Council
FUND #:101
ACTIVITY #: 41110
ACTIVITY SCOPE:
The mayor and council provide elected representation to the community with control over policy
goals, budget, administration, and operations. Members participate in various committees and
direct staff through the city administrator.
OBJECTIVES:
1.Adopt policies and ordinances consistent with the council’s positions on growth, zoning,
and financial strategies.
2.Examine city facility needs to meet future city operations.
ISSUES:
1.Capitalize on the city’s uniqueness by developing a comprehensive vision statement and
setting achievable goals.
2.Succession planning of city staff.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Council meetings 24 24 24 24 24
Special meetings/workshops 25 22 19 19 11
BUDGET COMMENTARY:
The council’s budget remains consistent with previous years. The mayor earns $700 per month and
each councilor earns $600 per month.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
MAYOR& COUNCIL Actual Actual Actual Budget Projected Budget Change
Personnel Services 39,835$39,922$39,928$40,500$40,500$40,500$0.0%
Supplies ---------
Other Services & Charges 12,347 12,650 14,336 16,850 16,850 16,850 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 52,182$52,572$54,264$57,350$57,350$57,350$0.0%
106
CITY ADMINISTRATION
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41310
ACTIVITY SCOPE:
City administration provides the overall direction of the city, as determined by the council and
mayor. The city administrator serves as the chief administrative officer, ensuring that laws,
ordinances, and resolutions are implemented and enforced. The administrator is also responsible for
managing the operations of all city departments and providing customer service for general city hall
activities, such as reception and meeting room management.
OBJECTIVES:
1.Assist city council in setting policies and procedures in accordance with council's
position.
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 rolls within the
city's organization.
4.Provide friendly, knowledgeable customer service to the public.
5.Provide adequate and consistent hours of business throughout the year.
ISSUES:
1.Long-range comprehensive planning.
2.Long-range comprehensive traffic planning.
3.Leading and focusing council on policy matters.
4.Operation of the city's fiber optic network.
5.Continuing to improve internal and external communication systems.
6.Management of Citizen Service Desk with continued growth of inquiries and need to
improve response times.
7.Assistance with phone system upgrade and training.
8.Maintaining current, accurate information for all public sources.
107
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Council meetings agendas 41 49 42 43 40
Records digitally converted 75%75%75%90% 100%
Ordinances processed 18 30 27 47 35
Council minutes approved 41 49 42 43 40
Newsletters published 2 2 2 2 2
Utility inserts published 2 2 2 12 12
Park inserts published 4 4 4 4 4
Service desk data entry 280 379 499 557 500
BUDGET COMMENTARY:
In 2017, many of the expenditures charged to the city hall budgetary unit were re-allocated to the
city administration budgetary unit. The city hall activity is now limited to expenditures for the facility,
not providing internal or external services. The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage increase.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
ADMINISTRATION Actual Actual Actual Budget Projected Budget Change
Personnel Services 214,085$242,064$250,702$339,721$339,721$348,099$2.5%
Supplies 30 234 985 14,300 14,300 14,300 0.0%
Other Services & Charges 66,918 72,421 81,239 90,292 90,292 86,482 -4.2%
Capital Outlay ---------
TOTAL EXPENDITURES 281,033$314,719$332,926$444,313$444,313$448,881$1.0%
108
CITY CLERK
DEPARTMENT: General Government
SUPERVISOR: City Clerk
FUND #:101
ACTIVITY #: 41410
ACTIVITY SCOPE:
The city clerk activity is responsible for administering elections, maintaining official records, updating
the city code, improving records management and data practices, and serving as the data practices
compliance officer and responsible authority.
OBJECTIVES:
1.Recruit and train judges for future elections.
2.Upgrade election equipment.
3.Improve data storage practices with digital storage through Laserfiche.
4.Update city code to meet legal requirements and community needs.
ISSUES:
1.Antiquated city code.
2.Storage space.
3.Laserfiche training.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Voters, number of 3,714 0 6,161 0 6,000
Register voters,number of 6,394 6,394 6,923 7,079 7,000
Pollingplaces 1 1 1 1 1
Election judges 50 0 46 0 40
Ordinances amendments na na na 41 35
Council resolutions 100 92 94 87 90
BUDGET COMMENTARY:
Elections are held in even-numbered years. In 2016, there were primary and general elections for
president and a full slate of federal (including president), state, and local offices. Off-year election
expenditures are for maintenance contracts on voting equipment. Supplies in 2017 were comprised
of election small tools and equipment. The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage increase.
109
BUDGET:
2014 2015 2016 2017 2017 2018 %
CITY CLERK Actual Actual Actual Budget Projected Budget Change
Personnel Services 56,372$26,200$50,964$90,546$90,546$100,808$11.3%
Supplies 632 --12,000 12,000 1,500 -87.5%
Other Services & Charges 18,590 3,458 19,002 12,546 12,546 29,101 132.0%
Capital Outlay ---------
TOTAL EXPENDITURES 75,594$29,658$69,966$115,092$115,092$131,409$14.2%
110
FINANCE
DEPARTMENT: General Government
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 41520
ACTIVITY SCOPE:
The Finance Department conducts the financial affairs of the city of Monticello in accordance with
the Government Accounting Standards Board (GASB) and Generally Accepted Accounting Principles
(GAAP). This includes protection of the assets of the city, the initiation of financial plans, investment
and debt management, review and implementation of internal controls, and accounting for every
financial transaction of the city including accounts payable, accounts receivable, payroll, and
accounting control. The preparation of the annual audited financial report and annual budget
document are also facilitated through finance.
OBJECTIVES:
1.Continue working to develop a financial management plan for the city.
2.Develop financial documents in a format to be eligible for review and award of the
Government Finance Officers Association’s (GFOA) award programs.
3.Provide meaningful and timely financial reports and information to council, commissions,
and other city departments.
4.Complete financial, payroll, and utility billing software conversions.
5.Coordinate a central purchasing system including developing the use of purchase orders.
ISSUES:
1.Complete implementation of new software systems for financial, payroll, and utility billing
functions with integration of new processes for purchase orders, web-based
applications, and remote time card entry.
2.Implement improved reporting procedures to inform council, commissions, and
departments.
3.Develop methods for simplifying data analysis for various stakeholders.
4.Work with other departments to find ways to reduce costs of city operations.
5.Construct a work environment that provides growth through learning, self-determination
through autonomy, and relatedness through the creation of enduring work products.
6.Cross-training of finance team members in core functions (payroll, AP, utility billing, and
accounts receivable).
111
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
GFOA Budget Award Yes Yes Yes Yes Yes
GFOA Certificate of
Achievement Yes Yes Yes Yes Yes
GFOA Popular Annual
Financial Report Yes Yes Yes
Bond Rating A2 A2 A2 A2 A2
ACHs as % of total AP activity 45%43%41%42%43%
Efficiency:
AP & ACHs per FTE (1.5)2,121 2,016 1,998 1,824 1,867
Work Load:
AP checks,number of 1,744 1,731 1,755 1,578 1,600
ACH's 1,437 1,293 1,242 1,158 1,200
W-2s 273 290 294 307 315
1099's 56 49 53 47 50
Journal entries 3,003 2,889 2,484 2,496 2,500
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 prior
year increase in other services and charges reflects the re-allocation of expenses for IT services and
insurances (property, liability and vehicle). The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage increase. Other budget items are
expected to remain close to prior year levels.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
FINANCE Actual Actual Actual Budget Projected Budget Change
Personnel Services 317,249$313,900$318,445$369,646$369,646$387,712$4.9%
Supplies 3,222 1,777 1,952 3,300 3,300 3,200 -3.0%
Other Services & Charges 65,191 62,190 73,357 72,429 72,429 76,330 5.4%
Capital Outlay ---------
TOTAL EXPENDITURES 385,662$377,867$393,754$445,375$445,375$467,242$4.9%
112
AUDIT
DEPARTMENT: General Government
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 41540
ACTIVITY SCOPE:
An audit of city finances must be completed on an annual basis for the city to remain in compliance
with federal and state accounting practices.
OBJECTIVES:
1.Complete the financial audit in a timely fashion.
2.Continue to reduce the number of audit findings and adjustments.
ISSUES:
1.Comply with changing reporting requirements and auditing standards.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Audit submittal date 6/30 6/25 6/27 6/20 6/15
Audit findings 2 2 0 2 0
Opinion Unmodified Unmodified Unmodified Unmodified Unmodified
GFOA Award Yes Yes Yes Yes Yes
BUDGET COMMENTARY:
The budget for auditing consists entirely of the expenses associated with the required audit process.
In late 2007, a request for proposal (RFP) for audit services was sent to several firms. The RFP
guaranteed the cost for audit services for the years ended 2007 through 2009 and resulted in a cost
decrease from previous years. This contract was extended for 2018 fiscal year. The finance
department prepared the entire financial report for the first time in 2015.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
AUDIT Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 53,541 37,798 39,273 42,000 42,000 42,000 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 53,541$37,798$39,273$42,000$42,000$42,000$0.0%
113
ASSESSING
DEPARTMENT: General Government
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 41550
ACTIVITY SCOPE:
Property tax assessing requirements are provided through a contract with the Wright County
assessor. There are no plans to alter this activity.
OBJECTIVES:
1.Assess new and existing parcels within the city as required.
ISSUES:
1.Meet state requirements in appraising properties.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
New residential properties 52 73 44 61 60
New commercial properties 2 2 2 7 5
Parcels assessed 4,603 4,611 4,633 4,636 4,714
BUDGET COMMENTARY:
Assessing services are provided by contract with Wright County. Estimated costs for assessments are
based on the number of existing and new parcels. The city paid $10.50 per parcel for assessment
services and $25 for each new permit with an estimated construction value under $499,999 and
$100 for values over $500,000 in 2017. Those rates climb to $11.50, $50.00, and $150, respectively,
in 2018 and will include parcels not included in the past.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
ASSESSING Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 49,832 50,466 50,415 52,115 52,115 65,000 24.7%
Capital Outlay ---------
TOTAL EXPENDITURES 49,832$50,466$50,415$52,115$52,115$65,000$24.7%
114
LEGAL
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41601
ACTIVITY SCOPE:
Private legal firms provide all the city’s legal services. Activities include issuance of legal opinions;
preparation of ordinances, resolutions, contracts, and agreements; and the conduct of civil litigation.
Additional legal expenditures, such as publications, fees, and other costs are accounted for in the
benefitting unit.
OBJECTIVES:
1.Continue to realize savings by contracting legal services.
ISSUES:
1.Rising costs associated with the need for existing and new legal services.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Billed hours:
Administration 280.5 344.7 222.3 196.8 200.0
Code enforcement 21.9 14.8 9.0 5.5 8.0
Fiber optics 116.5 56.0 36.5 1.0 1.0
All other 86.9 48.6 105.9 126.9 111.0
Total 505.8 464.1 373.7 330.2 320.0
BUDGET COMMENTARY:
The city continues to realize savings from not having full-time counsel. Legal services provided to
FiberNet are charged to the Fiber Optics Fund.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
LEGAL Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 29,303 36,946 29,152 38,000 38,000 38,000 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 29,303$36,946$29,152$38,000$38,000$38,000$0.0%
115
HUMAN RESOURCES
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41800
ACTIVITY SCOPE:
Human Resources activities support the primary mission of the city through the effective
recruitment, selection, development, training, and assessment of appropriate human resource
needs. Employee benefits and compensation administration, implementation of and compliance with
Federal and State employment laws, labor negotiations, processing of employee grievances, and
development of personnel policies are major human resource functions.
OBJECTIVES:
1.Provide recruiting, interviewing, and other personnel services for all city departments.
2.Administer classification and compensation system for all employees in compliance
with pay equity.
3.Plan and coordinate in-house training programs for city staff
4.Administer city benefit plans.
ISSUES:
1.Develop city personnel handbook.
2.Develop various personnel policies.
3.Develop and implement city drug and alcohol testing program.
4.Negotiate new union contract for public works employees.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Workers compensation
experience modification 71%69%93%108%100%
Full-time positions 55 55 52 51 53
Part-time positions 100 103 111 130 130
Full-time positions filled 7 5 6 6 6
Other positions filled 79 89 92 103 100
Avg,number of employess 155 158 163 181 180
116
BUDGET COMMENTARY:
The 2018 budget reflects estimated costs for setting up training, providing city staff with benefit and
compensation information, and other expenses based on past experience. The current year increase
in other services represents the implementation of NEOGOV, an on-line application tool for
government subdivisions. The 2018 personnel services budget includes a full step increase and a 3%
(2% in January and 1% in July) market rate wage increase. Other budget items are expected to
remain close to prior year levels.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
HUMAN RESOURCES Actual Actual Actual Budget Projected Budget Change
Personnel Services 70,988$92,213$93,155$99,826$99,826$103,179$3.4%
Supplies 356 500 1,121 600 600 600 0.0%
Other Services & Charges 19,221 24,536 22,246 23,862 23,862 29,339 23.0%
Capital Outlay ---------
TOTAL EXPENDITURES 90,565$117,249$116,522$124,288$124,288$133,118$7.1%
117
PLANNING, ZONING & COMMUNITY DEVELOPMENT
DEPARTMENT: General Government
SUPERVISOR: Community Development Director
FUND #:101
ACTIVITY #: 41910
ACTIVITY SCOPE:
The Community Development and Planning Department is responsible for long-range and current
planning efforts for Monticello. The department is responsible for regulating development and use
standards as outlined in the zoning and subdivision ordinance; these standards are aimed at
protecting and promoting public health, safety, and welfare. The department oversees coordination
with regional planning and service providers including Monticello Township Board, Monticello
Orderly Annexation Board, Wright County Planning & Zoning, Sherburne County Planning & Zoning
and regional transit entities. The department also provides citizens, business owners, and developers
with current, easily accessible information about Monticello's planning process and projects
happening in their community.
OBJECTIVES:
1.Implementation of Comprehensive Plan objectives.
2.Completion of subdivision ordinance amendments consistent with the “Next Steps”
outlined by the Comprehensive Plan.
3.Support for downtown redevelopment and revitalization, including the Embracing
Downtown Monticello Project.
4.Involvement in regional transportation planning and its impact on land use and
growth objectives.
5.Bertram Chain of Lakes acquisition and 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 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Grants awarded 2 1
Grant awards $1,163,248 $1,700
Administrative applications (total)16 20 16 4 4
processedwithin5 working days 7 5 5 3 -
Site Planreviews processed
within14 working days 3 4 -1 1
Change inUse forms --3 4 5
reviewedwithing 5 workingdays --3 1 -
SignPermit zoning reviews --5 26 20
processedwithin5 working days --3 21 -
Land Use applications processed --23 43 22
within60 working days 32 31 23 42 -
Reconciliations processedwithin -
60 days of the decision 18 15 14 7 15
Annexation petitions -1 ---
Efficiency:
Applications processedper FTE 47 56 49 41 36
Work Load:
Planning Applications:
Variances 2 1 2 1 1
CUPs 8 5 17 9 10
PUD/Amendments to PUD 6 3 8 14 3
Interim Use permits 2 1 ---
CompPlanamendments 1 1 3 1
Mapamendments 3 3 8 12 2
Non-city zoning text amendments 1 10 8 1 2
Plats/adminstrative subdivisions 3 7 7 9 3
Administrative permits 16 20 15 4 4
Site planreviews 3 5 -1 1
Appeals 1 ----
Vacations 1 -1 3 2
Signpermit applicationreview --5 -20
Change in Use review --3 4 5
Total applications 47 56 74 61 54
Planning reconciliations 18 15 14 28 15
Planning Commissionmeetings 15 12 17 12 12
EDAMeetings 12 12 11 11 11
IEDC Meetings 11 11 7 10 10
Grant applications 2 1 1 --
119
BUDGET COMMENTARY:
The 2014 increase in other services and charges reflects the re-allocation of expenses for IT services
and insurances (property, liability and vehicle). The 2018 personnel services budget includes a full
step increase and a 3% (2% in January and 1% in July) market rate wage increase. Other services and
charges includes $10,000 for updating the city’s comprehensive plan.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PLANNING & ZONING Actual Actual Actual Budget Projected Budget Change
Personnel Services 115,757$132,710$123,909$135,221$135,221$141,924$5.0%
Supplies 16 345 117 200 200 200 0.0%
Other Services & Charges 104,307 111,921 86,147 95,427 95,427 105,896 11.0%
Capital Outlay ---------
TOTAL EXPENDITURES 220,080$244,976$210,173$230,848$230,848$248,020$7.4%
120
CITY HALL
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41940
ACTIVITY SCOPE:
The activity for this department consists of maintenance and upkeep for the building housing city
hall.
OBJECTIVES:
1.Provide adequate and consistent hours of business throughout the year.
2.Maintain a clean, inviting facility to house meetings and staff.
ISSUES:
1.Depreciation of facility and work platforms.
2.Reconfiguring layout to accommodate work flow.
3.Timely maintenance.
4.Utility costs.
5.Building and office security.
6.Re-purposing storage area.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Number of times cleaned 104 104 104 104 104
Utility expenses $28,616 $26,717 $25,073 $23,125 $24,000
BUDGET COMMENTARY:
Items budgeted for the city hall activity are commonly shared among all departments operating out
of city hall. Much of the costs associated with this activity was transferred to the administration
activity in 2017. Personnel services activity was eliminated when custodial services started, and
utilities are the main expenditures in other services and charges.
121
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
CITY HALL Actual Actual Actual Budget Projected Budget Change
Personnel Services 114,071$119,954$109,552$7,801$7,801$-$ -100.0%
Supplies 12,308 13,140 11,890 --2,500 ---
Other Services & Charges 60,454 50,903 61,548 53,958 53,958 70,310 30.3%
Capital Outlay ---------
TOTAL EXPENDITURES 186,833$183,997$182,990$61,759$61,759$72,810$17.9%
122
PRAIRIE CENTER BUILDING
DEPARTMENT: General Government
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 41941
ACTIVITY SCOPE:
The city-owned Prairie Center Building leases space to its FiberNet operations. Further, the Wright
County Sheriff's Department occupies non-rent paying space in the building. This activity is for the
operations of the facility.
OBJECTIVES:
1.To provide a well maintained building.
ISSUES:
1.Maintain facility with current staff and available funds.
2.Tenant retention.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Tenants 3 2 1 1 1
BUDGET COMMENTARY:
The Prairie Center Building was purchased in 2009 to provide FiberNet Monticello with office space.
FiberNet is now the building’s only year-round tenant. The 2016 decrease in other services and
charges reflected the removal of the Center from the property tax roll after the loss of its only private
tenant. The 2018 increase reflects the additional costs for contracted custodial services.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PRAIRIE CENTER BLDG Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 114 60 313 750 750 750 0.0%
Other Services & Charges 14,295 13,267 8,604 12,091 12,091 17,003 40.6%
Capital Outlay ---------
TOTAL EXPENDITURES 14,409$13,327$8,917$12,841$12,841$17,753$38.3%
123
LAW ENFORCEMENT
DEPARTMENT: Public Safety
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 42100
ACTIVITY SCOPE:
All law enforcement services are contracted with the Wright County Sheriff's Department. The
Sheriff’s Department maintains a local office in the Prairie Center building. The Sheriff sets the hourly
rate and the city contracts for the number of hours, typically 17,000 to 19,000 hours annually.
Contracted hours change in 4 hour-per-day increments.
OBJECTIVES:
1.Protect life and property, and improve the quality of community life.
2.Continue contracting for law enforcement services from Wright County.
3.Provide coverage for commercial and residential growth.
ISSUES:
1.Concerns from residents regarding having our own police force.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Arrests 172 207 200
Arrests to crimes ratio 0.19 0.24 0.23
Efficiency:
Hours contracted 17,568 17,520 18,256
Calls per hour contracted 0.44 0.45 0.44
Costs per workloadunit $148.55 $138.40 $139.94
Work Load:
Life quality calls,number of 3,511 3,470 3,500
Traffic calls,number of 2,981 3,200 3,300
Vehicle crashes,number of 334 387 400
Crimes,number of 904 855 875
*In 2016 the county sheriff implemented a new reporting format making annual comparison difficult.
124
BUDGET COMMENTARY:
Law enforcement services are contracted in four-hour-per-day increments from the Wright County
Sheriff’s Department. Past hourly rates and contracted hours are presented in the schedule below:
The city contracted for 52 hours per day from 2011 through 2013. From 2014 through 2017, the city
contracted for 48 hours per day. In July 2018, the city will again contract for 52 hours per day. The
leap years of 2012 and 2016 include one more day of coverage (52 hours in 2012 and 48 hours in
2016).
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
LAW ENFORCEMENT Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 1,145,247 1,174,439 1,212,080 1,263,948 1,263,948 1,360,197 7.6%
Capital Outlay ---------
TOTAL EXPENDITURES 1,145,247$1,174,439$1,212,080$1,263,948$1,263,948$1,360,197$7.6%
Hourly Hours
Year Rate Contracted
2011 $59.00 18,980
2012 $59.75 19,032
2013 $60.50 18,980
2014 $62.50 17,520
2015 $64.50 17,520
2016 $67.00 17,568
2017 $69.50 17,520
2018 $72.00 18,256
125
FIRE & RESCUE
DEPARTMENT: Public Safety
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 42200
ACTIVITY SCOPE:
The Fire Department responds to fire, rescue, hazardous materials, medical, and accident incidents
within the city and the surrounding townships. The department also provides fire inspection services.
Paid-on-call volunteers provide the department’s staffing.
OBJECTIVES:
1.Assemble a confined space entry team with personnel and equipment.
2.Develop National Incident Management System (NIMS) training for all city departments.
ISSUES:
1.Improve response times.
2.Develop and implement NIMS training for all staff and council.
BUDGET COMMENTARY:
The Fire Department is staffed with paid-on-call volunteers. Firefighter pay increased $2.00 per hour
to $12.00 per hour per response in 2016. Starting in 2014, capital outlay reflects the acquisition of a
fire truck through the Central Equipment Fund. The purchase of turn-out gear contributes to the
sharp rise in 2018 supplies. Grants may offset some of these expenditures.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
FIRE Actual Actual Actual Budget Projected Budget Change
Personnel Services 142,331$132,349$132,913$162,088$162,088$192,069$18.5%
Supplies 50,324 54,040 33,836 70,300 70,300 101,200 44.0%
Other Services & Charges 72,824 82,281 80,961 82,122 82,122 79,759 -2.9%
Capital Outlay 41,300 41,300 41,300 41,300 41,300 41,300 0.0%
TOTAL EXPENDITURES 306,779$309,970$289,010$355,810$355,810$414,328$16.4%
126
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Respondents to fire calls:
City 2,918 2,552 2,603 3,385 3,000
Monticello Township 1,318 1,273 1,161 1,627 1,300
Silver Creek Township 509 674 537 409 500
Mutual Aid 486 758 393 363 400
Drills & Maintenance 2,888 2,687 2,410 2,574 2,600
Total 8,119 7,944 7,104 8,358 7,800
Efficiency:
Average respondents per call
City 15 15 15 16 17
Monticello Township 20 21 18 23 20
Silver Creek Township 18 20 18 16 17
Mutual Aid 29 28 13 26 20
Drills & Maintenance 49 40 46 54 54
Total 22 23 20 22 23
Work Load:
Number of fire calls:
City 190 165 175 216 180
Monticello Township 67 60 65 70 65
Silver Creek Township 29 33 30 26 30
Mutual Aid 17 27 31 14 20
Drills & Maintenance 59 67 52 48 48
Total 362 352 353 374 343
Firefighters,number of 30 30 30 30 30
127
FIRE RELIEF
DEPARTMENT: Public Safety
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 42202
ACTIVITY SCOPE:
Providing a retirement benefit to paid-on-call volunteers, the fire relief activity is specifically
designed to track the city’s contribution to the Monticello Fire Relief Association.
OBJECTIVES:
1.Provide pension funds for the Monticello Fire Relief Association.
ISSUES:
1.Pension assets greater than pension liabilities.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Pensionassets 1,053,739$1,026,460$1,198,328$1,286,019$1,300,000$
Pensionliabilities 924,403$1,017,135$1,177,526$1,063,693$1,173,483$
Assets-liabilities ratio 1.14 1.01 1.02 1.21 1.11
Pensionper service year $3,100 $3,300 $3,600 $3,900 $4,200
Fire state aid $108,186 $120,026 $123,656 $125,764 $127,904
State aidper employee $4,007 $4,287 $4,756 $4,658 $4,568
Active firefighters 27 28 26 27 28
Deferredfirefighters 4 3 2 1 1
BUDGET COMMENTARY:
The fire relief budget is basically a conduit for distribution of state fire aid to the pension fund for
volunteer firefighters. State aid revenue equals the contribution to the relief association and it is
conservatively estimated for budgetary purposes.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
FIRE RELIEF Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 108,186 120,027 123,656 120,000 120,000 120,000 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 108,186$120,027$123,656$120,000$120,000$120,000$0.0%
128
BUILDING INSPECTIONS
DEPARTMENT: Public Safety
SUPERVISOR: Community Development Director
FUND #:101
ACTIVITY #: 42401
ACTIVITY SCOPE:
The Building Department inspects all new and remodeled construction within the city by a state
certified building inspector. The department initiates all building permits and oversees the
enforcement of all public nuisance and ordinance issues.
OBJECTIVES:
1.Continue implementation of the rental licensing program.
2.Continue implementation of zoning ordinance changes.
3.Continue sign ordinance update.
4.Implement yearly contractor, realtor, and rental property owner workshops.
5.Continue public relations contact. Improve city's public perception image.
6.Continue implementation of the building codes.
ISSUES:
1.Managing and prioritizing department workloads.
2.Meeting the residential and commercial growth challenges as a regional center.
3.Keeping up with biennial rental license inspections.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Value of permits issued 19,714,895$36,242,742$59,426,683$43,853,123$45,000,000$
Value of permits per FTE 6,571,632$10,355,069$14,856,671$10,963,281$11,250,000$
Efficiency:
Departmental FTEs 3 3.5 4 4 4
Rental inspections per FTE (2)692 697 793 782 750
Permits per FTE 240 256 267 304 271
Work Load:
Buildingpermits issued 721 768 802 911 950
Nuisance notices issued 156 110 118 109 100,000
Rental units, number of 1,383 1,393 1,586 1,563 1,500
129
BUDGET COMMENTARY:
The prior year increase in other services and charges reflects the re-allocation of expenses for IT
services and insurances (property, liability and vehicle). The 2018 personnel services budget includes
a full step increase and a 3% (2% in January and 1% in July) market rate wage increase. One building
inspector was added in 2016.Other budget items are expected to remain close to prior year levels.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
BUILDING INSPECTIONS Actual Actual Actual Budget Projected Budget Change
Personnel Services 238,627$275,107$320,623$347,990$347,990$363,277$4.4%
Supplies 2,942 5,517 3,861 7,000 7,000 6,100 -12.9%
Other Services & Charges 24,976 24,234 25,820 29,637 29,637 30,032 1.3%
Capital Outlay ---------
TOTAL EXPENDITURES 266,545$304,858$350,304$384,627$384,627$399,409$3.8%
130
CIVIL DEFENSE
DEPARTMENT: Civil Defense
SUPERVISOR: Chief Building Official
FUND #:101
ACTIVITY #: 42501
ACTIVITY SCOPE:
The civil defense department provides constant defense coverage for all weather and power plant
related emergency situations within the city.
OBJECTIVES:
1.Implement city hall, community center, and National Guard emergency preparedness.
ISSUES:
1.Preparedness - little or no warning when an emergency occurs.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Meetings hours per year 60 72 72 72 72
Sirens,number of 106 106 106 106 106
Tests per year per siren 48 48 48 48 48
BUDGET COMMENTARY:
The 2018 budget is based on the 2017 budget. With the retirement of the city's previous building
official, much of this activity's responsibilities have been transferred to Wright County. However, the
city is an active participant of the emergency management team.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
CIVIL DEFENSE Actual Actual Actual Budget Projected Budget Change
Personnel Services -$592$103$1,612$1,612$1,612$0.0%
Supplies 490 --100 100 100 0.0%
Other Services & Charges 1,171 908 1,131 1,852 1,852 1,553 -16.1%
Capital Outlay ---------
TOTAL EXPENDITURES 1,661$1,500$1,234$3,564$3,564$3,265$-8.4%
131
ANIMAL CONTROL
DEPARTMENT: Animal Control
SUPERVISOR: Project Coordinator
FUND #:101
ACTIVITY #: 42700
ACTIVITY SCOPE:
The city contracts with a private individual for animal control services. The city owns and maintains
the animal control facility. The city also contracts with nearby communities, allowing them to use our
services and facility.
OBJECTIVES:
1.To address issues within the city and surrounding communities in a timely and
courteous manner.
2.Continue to improve animal control response time.
3.Continue to improve billing procedures for animal control issues.
ISSUES:
1.Provide quick response to residents on animal control concerns.
2.Allocation of service costs based on usage by customers (townships and cities).
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Stray animal reports 496 535 532 413 450
Barking dog reports 190 173 180 199 200
Lost/found reports 1,670 1,568 1,487 1,460 1,500
Feral cat trapping 261 301 245 250 250
Unsanitary condition reports 201 189 223 215 200
Abuse/neglect reports 171 191 149 213 200
Impounds 556 572 563 523 550
Dogbite reports 88 72 78 92 100
Animal control fees $35,169 $38,756 $37,838 $50,519 $45,000
BUDGET COMMENTARY:
The professional service contract to handle all animal control issues is the largest budgeted item at
$39,015. The remaining budget items are for supplies and other service charges related to operating
the animal control facility.
132
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
ANIMAL CONTROL Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 3,273 1,168 537 3,300 3,300 3,300 0.0%
Other Services & Charges 46,166 47,586 46,406 48,220 48,220 48,496 0.6%
Capital Outlay ---------
TOTAL EXPENDITURES 49,439$48,754$46,943$51,520$51,520$51,796$0.5%
133
NATIONAL GUARD
DEPARTMENT: Public Safety
SUPERVISOR: Project Coordinator
FUND #:101
ACTIVITY #: 42701
ACTIVITY SCOPE:
The National Guard facility is housed in the Monticello Community Center complex. The city will
maintain the facility in perpetuity in return for a one-time payment in 1998 that helped fund
construction of the community center. The Guard provides no direct services to the city.
OBJECTIVES:
1.To maintain a clean, modern facility for use by the National Guard.
ISSUES:
1.There are no current issues to maintaining the National Guard facility.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Not Applicable
BUDGET COMMENTARY:
The National Guard operates a security division within the Monticello Community Center complex.
The city maintains the Guard’s site within the complex. The budget for this activity is relatively static.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
NATIONAL GUARD Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 204 --300 300 --100.0%
Other Services & Charges 13,857 13,438 13,550 15,000 15,000 14,500 -3.3%
Capital Outlay ---------
TOTAL EXPENDITURES 14,061$13,438$13,550$15,300$15,300$14,500$-5.2%
134
PUBLIC WORKS - ADMINISTRATION
DEPARTMENT: Public Works
SUPERVISOR: Public Works Director
FUND #:101
ACTIVITY #: 43110
ACTIVITY SCOPE:
Public works (PW) administration activity oversees the daily operations of the street, parks, water,
sewer, wastewater treatment plant, and inspection activities. PW administration also manages all
large city projects and implements all changes to PW operations and policy.
OBJECTIVES:
1.Continue the implementation of a bio-solids management system.
2.Implement the major street lighting project plan.
3.Continue implementing the wellhead protection plan.
4.Manage the development of a new public works facility and expansion of the wastewater
treatment plant.
5.Determine location for future wells, utilizing information gathered from various
sources including grants.
6.Develop a program to lease antenna space on elevated water towers, thus generating
a new revenue source.
7.Implement a new SCADA system as budgeted in the water and sewage operating
funds.
ISSUES:
1.Balance the public works department needs with available funds.
2.Management of city's water and wastewater treatment systems.
3.Implement a capital improvement program for city infrastructure.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Budget units 15 14 14 14 14
Employees supervised - FT 19 19 20 20 20
135
BUDGET COMMENTARY:
The 2018 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase. Personnel services also includes the 2018 re-instatement of a public
works director position. The director position is spread over three budgets: General Fund - 60%,
Sewage Fund – 20%, and Water Fund 20%. The General Fund share of the total for the position is
$72,000. While other budget items have large percentage decreases, the change in dollar terms are
relatively insignificant.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - ADMINISTRATION Actual Actual Actual Budget Projected Budget Change
Personnel Services 96,090$101,190$99,998$115,330$115,330$172,276$49.4%
Supplies 4,337 2,070 3,641 3,250 3,250 3,000 -7.7%
Other Services & Charges 21,724 21,244 22,688 28,851 28,851 26,679 -7.5%
Capital Outlay ---------
TOTAL EXPENDITURES 122,151$124,504$126,327$147,431$147,431$201,955$37.0%
136
PUBLIC WORKS - ENGINEERING
DEPARTMENT: Public Works
SUPERVISOR: City Engineer
FUND #:101
ACTIVITY #: 43111
ACTIVITY SCOPE:
Engineering assists with the provision, development, and management of the city's street, pathways,
public utilities systems, geographic information system (GIS), Storm Water Pollution Prevention
Program (SWPPP), improvement projects, and miscellaneous mapping. In addition, engineering
responds to residents with issues related to storm water drainage and/or pedestrian, bicycle and
vehicular traffic, and reviews. Engineering updates and supports the city's General Specifications and
Standard Detail Plates for Street and Utility Construction and the Plan Requirements and Design
Guidelines. Engineering also issues driveway, grading, and right-of-way permits.
OBJECTIVES:
1.Improve ability to assist other departments with CADD and GIS related requests.
2.Continue to administer and maintain the city's SWPPP.
3.Continue to implement and improve the city's GIS.
4.Continue toeducatethe public onpurposesandpracticesassociatedwithconservationand
drainage easements and storm water ponds.
5.Create a one-stop shop for city driveway, grading, and right-of-way permits.
6.Continue to develop an in-house Pavement Management Program.
7.Review development plans and agreements.
8.Continue to work towards improving transportation system, and collaborate with MNDOT
and Wright County.
9.Prepare capital infrastructure planning and budgeting.
10.Integrate with other departments on public improvement projects and development plans.
11.Apply for grants and track funding for improvement projects.
ISSUES:
1.Increasing restrictions by Minnesota Pollution Control Agency (MPCA) for storm water
runoff.
2.Lack of public knowledge regarding purposes and practices associated with conservation
and drainage easements and storm water ponds.
3.Increasing phosphorus restrictions by MPCA for wastewater effluent.
4.Reduction in available federal and state funding for transportation improvements.
137
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Service requests 10 10 10 10 10
On-line service requests 5 11 17 19 25
Active improvement projects 10 10 10 10 13
Driveway permits issued 1 3 1 11 10
Right-of-way permits issued 116 101 130 120 130
Development applications 10 10 7 9 10
Gradingpermits issued 6 2 11 8 10
BUDGET COMMENTARY:
The engineering activity predominantly consists of engineering and other professional service fees.
These expenditures consist of both reimbursable and non-reimbursable expenditures. For 2014, the
engineering budget decreased substantially with the elimination of two positions. Consequently,
professional services increased to offset much of savings realized by elimination of those positions.
The 2018 budget provides for continued improvements and development of the city's GIS system.
Finally, the 2018 budget includes $15,000 for a Mississippi River crossing study.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - ENGINEERING Actual Actual Actual Budget Projected Budget Change
Personnel Services 38,764$1,500$935$-$-$-$---
Supplies 373 3,167 69 --500 ---
Other Services & Charges 156,704 105,888 110,791 174,900 174,900 164,992 -5.7%
Capital Outlay ---------
TOTAL EXPENDITURES 195,841$110,555$111,795$174,900$174,900$165,492$-5.4%
138
PUBLIC WORKS - INSPECTIONS
DEPARTMENT: Public Works
SUPERVISOR: City Engineer
FUND #:101
ACTIVITY #: 43115
ACTIVITY SCOPE:
The public works inspection activity is responsible to design and inspect city infrastructure projects,
and to review and approve right-of-way excavation/obstruction permit applications. Personnel are
also responsible for managing records retention for plats, city maps, infrastructure data bases, soil
borings, development plans, and as-builts. Using various computer software programs including
ArcGIS, AutoCADm and CarteGraph, staff provides design and mapping assistance.
OBJECTIVES:
1.Improve staff use of the city's GIS system through training.
2.Maintain certifications, and attend appropriate classes and workshops for inspections.
3.Provide support for the engineering activity.
4.Improve communication between public works, engineering, and inspection activities.
5.Improve knowledge, skills, and ability in using CarteGraph software for development
of an in-house Pavement Management and Sign Program.
6.Improve knowledge, skills, and ability in using GIS software for assisting other
departments with their mapping needs.
7.Assistothercitydepartments inacquiring utilityinformationnotreadilyavailable from
other sources, including GIS.
8.Assist with design and implementation of solutions to drainage issues.
9.Complete cost estimates and design for small improvement projects.
10.Complete cost estimates for budgeting purposes for upcoming improvement projects.
11.Complete inspections and documentation for city’s SWPPP.
ISSUES:
1.Access to city vehicles housed in cold storage at public works is difficult, limiting ability
to quickly respond to issues.
2.Workload and budget issues created by mandatory MPCA compliance
requirements in relation to city SWPPP.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Inspection sites 21 20 20
Stormwater inspections 105 100 100
*Data for 2014 and 2015 is not available.
139
BUDGET COMMENTARY:
The 2018 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase. Personnel services also reflects the re-allocation of the position
back to just this activity.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - INSPECTIONS Actual Actual Actual Budget Projected Budget Change
Personnel Services 23,021$20,533$47,876$88,488$88,488$103,643$17.1%
Supplies 2,416 600 1,400 4,600 4,600 4,100 -10.9%
Other Services & Charges 11,430 10,951 12,824 15,678 15,678 12,224 -22.0%
Capital Outlay ---------
TOTAL EXPENDITURES 36,867$32,084$62,100$108,766$108,766$119,967$10.3%
140
PUBLIC WORKS – STREETS, ALLEYS & PARKING LOTS
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43120
ACTIVITY SCOPE:
The main responsibility of the streets and alleys activity is to perform the necessary tasks to reduce
the depreciation of the city streets and uphold desirable standards of appearance, serviceability, and
safety. This includes upkeep such as street sweeping and repair of roadway surface areas, medians,
sidewalks, boulevards, alleys, catch basins, and storm sewers.
OBJECTIVES:
1.Continue street reconstruction of older road surfaces by evaluating road wear.
2.Increase street chip seal coating projects.
3.Maintain and update equipment and vehicles.
4.Help maintain and use City GIS system.
5.Continue street crack sealing program.
ISSUES:
1.Educating the public on what the boulevards are to be used for.
2.Educating the public on storm water operations.
3.Increased costs of fuel and street products due to fuel costs.
4.Educating the public on the value of good maintenance programs for our
infrastructure.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Pounds of crack sealer 23,282 29,580 49,039 46,721 47,000
Sq. yards of chip sealing 82,429 102,204 109,708 115,125 116,000
Miles of streets 68.0 69.0 69.0 69.0 69.0
Tons of black top patching 190 293 220 167 170
141
BUDGET COMMENTARY:
Contracted street repairs and maintenance, under other services and charges, increased $9,000 to
$185,000 for 2018. The renewed emphasis on street maintenance began in 2014. The 2018
personnel services budget includes a full step increase and a 3% (2% in January and 1% in July)
market rate wage increase. Increases in street maintenance supplies and small tools and equipment
contributed to the 2017 jump in supplies. Gas and diesel fuel is still budgeted at prior market price
highs. Other budget items are expected to remain close to prior year levels. The difference between
budget and actual can vary widely because the seasonal nature of some departmental expenditures.
Capital outlay includes the 2018 addition of two pieces of equipment leased from the Central
Equipment Fund.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - STREETS & ALLEYS Actual Actual Actual Budget Projected Budget Change
Personnel Services 350,888$354,121$382,280$470,578$470,578$489,743$4.1%
Supplies 189,295 152,827 154,533 226,550 226,550 220,300 -2.8%
Other Services & Charges 162,718 194,124 192,161 218,773 218,773 223,908 2.3%
Capital Outlay 35,200 37,500 75,600 76,800 76,800 104,500 36.1%
TOTAL EXPENDITURES 738,101$738,572$804,574$992,701$992,701$1,038,451$4.6%
142
PUBLIC WORKS – ICE & SNOW REMOVAL
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43125
ACTIVITY SCOPE:
The city's ice and snow removal activity is responsible for the control of ice and snow on city streets,
sidewalks, and city-owned public parking lots. The activity provides control in a safe and cost-
effective manner while keeping in mind safety, budget, personnel, and environmental concerns.
OBJECTIVES:
1.Maintain and update equipment and vehicles in a timely manner.
2.Learn ways to effectively use the city's GIS system.
ISSUES:
1.Staffing and budgeting for unpredictable circumstances.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Inches of snow 79 40 50 31 40
Plowing events,number of 18 14 16 11 12
Tons of salt used 385 534 525 461 500
Tons of sand used 600 285 300 397 400
BUDGET COMMENTARY:
The 2018 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase. Weather variability greatly impacts budget-to-actual comparisons.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - ICE & SNOW Actual Actual Actual Budget Projected Budget Change
Personnel Services 224,328$174,038$194,874$161,993$161,993$169,002$4.3%
Supplies 81,174 86,658 66,996 125,400 125,400 120,600 -3.8%
Other Services & Charges 2,885 2,324 2,362 2,763 2,763 2,713 -1.8%
Capital Outlay ---------
TOTAL EXPENDITURES 308,387$263,020$264,232$290,156$290,156$292,315$0.7%
143
PUBLIC WORKS – SHOP & GARAGE
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43127
ACTIVITY SCOPE:
Shop & Garage maintains all city vehicles and equipment for the streets, ice & snow, parks, water,
and sewage activities in a safe and efficient manner.
OBJECTIVES:
1.Maintain equipment and vehicles to maximize efficiencies and safety.
2.Update equipmentand vehicles.
ISSUES:
1.Aging equipment.
2.Increased safety regulation for equipment and vehicles.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Service orders 85 88 90 88 90
Service order hours 351 362 369 352 360
Hours per service order 4.1 4.1 4.1 4.0 4.0
Total service order costs $21,576 $22,337 $22,844 $22,600 $23,000
Service cost per order $253.84 $253.83 $253.82 $256.82 $255.56
Repair orders 52 87 95 91 90
Repair hours 205 252 272 268 270
Hours per repair order 3.9 2.9 2.9 2.9 3.0
Total repair order costs $28,719 $37,250 $39,250 $36,100 $37,000
Repair costs per order $552.29 $428.16 $413.16 $396.70 $411.11
BUDGET COMMENTARY:
The 2018 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage increase. Other budget items are expected to remain close to prior year
levels. The city has a wide variety of talent in the Public Works Department. Most are capable of
assisting a true craftsman, the city’s highly-skilled chief mechanic.
144
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - SHOP & GARAGE Actual Actual Actual Budget Projected Budget Change
Personnel Services 93,377$95,891$90,597$99,565$99,565$102,805$3.3%
Supplies 29,747 45,463 39,151 46,100 46,100 46,900 1.7%
Other Services & Charges 54,520 44,483 41,331 60,688 60,688 57,341 -5.5%
Capital Outlay ---------
TOTAL EXPENDITURES 177,644$185,837$171,079$206,353$206,353$207,046$0.3%
145
PUBLIC WORKS – STORMWATER
DEPARTMENT: Public Works
SUPERVISOR: Public Works Director
FUND #:101
ACTIVITY #: 43130
ACTIVITY SCOPE:
Stormwater is responsible for expenditures related to the maintenance of the city's stormwater
system. This activity includes inspecting, cleaning, and repairing all stormwater trunk lines, ditches,
and ponds.
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.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Stormwater main miles 1/4 city 1/4 city 1/4 city 1/4 city 1/4 city
Clean septor manholes 4 4 4 4 4
GPS storm structures 1/4 city 1/4 city 1/4 city 1/4 city 1/4 city
Stormwater manhole
maintenance 1/4 city 1/4 city 1/4 city 1/4 city 1/4 city
Stormwater main locates 100 100 100 100 100
BUDGET COMMENTARY:
The 2018 budget provides for the general maintenance of the city's stormwater system. Other
services and charges includes $40,000 for annual repairs and maintenance. Prior to 2015, such
expenditures, as well as the cleaning and restoration of the holding ponds, were made from the
Stormwater Access Fund. The 2018 personnel services budget includes a full step increase and a 3%
(2% in January and 1% in July) market rate wage increase. Other budget items are expected to
remain close to prior year levels.
146
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - STORMWATER Actual Actual Actual Budget Projected Budget Change
Personnel Services 9,817$13,882$16,283$22,748$22,748$23,165$1.8%
Supplies 5,752 4,908 12,234 8,500 8,500 9,500 11.8%
Other Services & Charges 1,273 7,922 760 40,800 40,800 40,800 0.0%
Capital Outlay ---------
TOTAL EXPENDITURES 16,842$26,712$29,277$72,048$72,048$73,465$2.0%
147
PUBLIC WORKS – STREET LIGHTING
DEPARTMENT: Public Works
SUPERVISOR: Street Superintendent
FUND #:101
ACTIVITY #: 43160
ACTIVITY SCOPE:
The street Iighting activity maintains new and existing street lighting within the city. This includes
maintaining installed bulbs and fixtures, as well as the electricity used for keeping the lights on.
OBJECTIVES:
1.Work with MNDOT to add battery back-up to signals on TH 25.
2.Draft a new street lighting policy.
ISSUES:
1.Increasing electricity costs.
2.Verify lamp and fixtures maintenance by utility companies.
3.Maintenance and upgrades on aging signal systems and streetlights.
4.Lack of assistance from Wright County and MNDOT.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Street lights maintained 150 175 185 185 185
Streetscape lights 60 60 60 60 60
BUDGET COMMENTARY:
Electricity for the street lights is the largest expenditure at $181,500. Other services and charges
include $30,000 for repainting traffic signals.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PW - STREET LIGHTING Actual Actual Actual Budget Projected Budget Change
Personnel Services 4,354$2,689$4,630$-$-$-$---
Supplies 2,532 1,758 3,373 12,000 12,000 12,000 0.0%
Other Services & Charges 190,151 223,332 225,497 263,200 263,200 258,500 -1.8%
Capital Outlay ---------
TOTAL EXPENDITURES 197,037$227,779$233,500$275,200$275,200$270,500$-1.7%
148
PUBLIC WORKS – REFUSE COLLECTION
DEPARTMENT: Public Works
SUPERVISOR: Refuse Collection
FUND #:101
ACTIVITY #: 43230
ACTIVITY SCOPE:
The city contracts with a private company for residential refuse collection and recycling services.
OBJECTIVES:
1.Research expanding city hauler’s contracted service prices to business and determine the
percentage of participation to achieve a desirable rate.
ISSUES:
1.Wear and tear on city streets.
2.Increasing recycling efficiency and effectiveness.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Residential refuse collections 52 52 52 52 52
Residential recyclingcollections 26 26 26 26 26
Residential container base 3,772 3,759 3,785 3,859 3,925
Additional containers 603 605 605 600 600
Recycling containers 4,277 4,349 4,378 4,454 4,520
BUDGET COMMENTARY:
Nearly the entire budget is based on the city’s contract obligations with its private refuse hauler. The
contract expires on the May 31, 2020. The contract extension raised rates by 14% for the last seven
months of 2015. The contract increases annually with inflation and the addition of customers.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
REFUSE COLLECTION Actual Actual Actual Budget Projected Budget Change
Personnel Services 463$307$1,072$1,037$1,037$576$-44.5%
Supplies 184 184 -200 200 200 0.0%
Other Services & Charges 517,308 562,986 599,228 615,000 615,000 625,768 1.8%
Capital Outlay ---------
TOTAL EXPENDITURES 517,955$563,477$600,300$616,237$616,237$626,544$1.7%
149
TRANSIT
DEPARTMENT: Transit
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 45178
ACTIVITY SCOPE:
The transit service is provided by contract through a subsidized, regional transit provider.
OBJECTIVES:
1.Research other less expensive alternatives to existing provider.
2.Evaluate service enhancements within the context of other transportation options,
including the Northstar commuter rail system.
3.Review involvement in study for I-94 commuter service options.
ISSUES:
1.Relatively low ridership for a city the size of Monticello.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Ridership 7,100 10,083 10,681 18,416 18,000
BUDGET COMMENTARY:
The city changed to a regional transit services provider, Wright County Area Transit (WCAT), in 2017.
The prior provider charged a flat $40,000 regardless of ridership. WCAT receives significant state and
federal subsidies. The 2018 increase reflects uncertainty in WCAT’s funding.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
TRANSIT Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 10,000 40,000 41,250 5,000 5,000 30,000 500.0%
Capital Outlay ---------
TOTAL EXPENDITURES 10,000$40,000$41,250$5,000$5,000$30,000$500.0%
150
SENIOR CENTER
DEPARTMENT: Recreation and Culture
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 45175
ACTIVITY SCOPE:
The senior center facility is housed in the Monticello Community Center complex. The facility is
maintained by the city, but senior center management is provided by an outside entity.
OBJECTIVES:
1.Maintain a clean, modern facility for use by Monticello’s senior citizens.
2.Provide recreational activities to improve mental and physical health.
3.Engage senior citizen participation in other community center activities.
4.Encourage greater social participation by offering discounted lunches.
ISSUES:
1.Decline in revenue from sources other than the city.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcomes/Effectiveness
Volunteers hours 8,022 8,094 7,821 8,524 8,000
Noon meals served 1,988 2,873 3,136 4,011 4,000
Efficiency:
Duplicatedparticipants
per activity 19 19 18 18 18
Unduplicated participants
per activity 170 170 159 146 154
Work Load:
Unduplicated participants 2,214 2,298 2,343 2,455 2,400
Duplicatedparticipants 19,325 20,098 20,313 19,504 20,000
Receivedphone calls 4,459 4,507 4,531 4,487 4,500
Activities offered 114 118 128 134 130
151
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 2018 adopted contribution is $60,160, which is $1,600 greater than 2017. The city
increased the internal rent paid to the community center by $5,000 (from $30,000 to $35,000) for
the space occupied by the senior center in 2015.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
SENIOR CENTER Actual Actual Actual Budget Projected Budget Change
Personnel Services 1,442$1,416$1,369$547$547$576$5.3%
Supplies ---------
Other Services & Charges 96,105 95,699 97,755 102,025 102,025 103,139 1.1%
Capital Outlay ---------
TOTAL EXPENDITURES 97,547$97,115$99,124$102,572$102,572$103,715$1.1%
152
PARK OPERATIONS
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:101
ACTIVITY #: 45201
ACTIVITY SCOPE:
The park operations activity maintains the parks and trails within the city. This includes maintaining
and improving playground and picnic facilities, fertilizing and mowing of grass, maintaining athletic
fields, flooding and maintaining of outdoor ice rinks, snow and ice removal, and tree preservation
within the parks system.
OBJECTIVES:
1.Continue pathways maintenance.
2.Improve efficiencies through use of the city’s GIS.
3.Progress in implementing plan for the Bertram Chain of Lakes regional park.
ISSUES:
1.Increase in maintenance costs with acquisition of more park land.
2.Coordination with other entities regarding park use and design.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Park land acres maintained 180 180 185 320 380
Trail miles maintained 16.5 17.0 20.0 40.0 40.0
Park events held 150 150 150 500 500
Winterskating days 125 128 125 120 135
BUDGET COMMENTARY:
The parks budget consists of expenditures needed to maintain city parks and trails. Capital outlay
reflects the acquisition of capital equipment through the Central Equipment internal service fund.
Additional Central Equipment Fund purchases are planned for 2018. In 2015, financing for annual
pathways maintenance improvements were shifted to park operations from the Park and Pathway
Dedication Fund. Part of the 2015 increase in other services and charges reflects the re-allocation of
expenses for IT services and insurances (property, liability, and vehicle). The 2018 personnel services
budget includes a full step increase and a 3% (2% in January and 1% in July) market rate wage
increase. Other budget items are expected to remain close to prior year levels.
153
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PARK - OPERATIONS Actual Actual Actual Budget Projected Budget Change
Personnel Services 351,322$391,007$434,816$488,950$488,950$499,683$2.2%
Supplies 111,436 110,433 136,948 159,600 159,600 158,100 -0.9%
Other Services & Charges 75,481 144,494 130,774 155,698 155,698 161,272 3.6%
Capital Outlay 32,400 61,000 73,200 88,400 88,400 99,800 12.9%
TOTAL EXPENDITURES 570,639$706,934$775,738$892,648$892,648$918,855$2.9%
154
PARK BALLFIELDS
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:101
ACTIVITY #: 45203
ACTIVITY SCOPE:
The park ballfields activity prepares and maintains city athletic fields, including the NSP Ballfield.
OBJECTIVES:
1.Prepare and maintain city athletic fields.
2.Improve the structures at the ballfields.
3.Enhance player and visitor experience.
ISSUES:
1.Demographic trends.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Ball games played,number of 600 610 615 620 620
Soccer fields maintained 2 2 2 20 20
Lacrosse fields maintained 1 1 1 4 4
Ball fields maintained 7 7 7 7 7
Number of times mowed 50 50 50 50 50
BUDGET COMMENTARY:
The 2018 budget is similar to the 2017 budget for field maintenance, concessions, and park activities.
Other services and charges include items that do not meet the capitalization threshold.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
PARK - BALLFIELDS Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies 10,531 6,647 11,014 15,800 15,800 15,600 -1.3%
Other Services & Charges 7,618 10,324 9,524 11,500 11,500 11,300 -1.7%
Capital Outlay ---------
TOTAL EXPENDITURES 18,149$16,971$20,538$27,300$27,300$26,900$-1.5%
155
SHADE TREE
DEPARTMENT: Recreation and Culture
SUPERVISOR: Park Superintendent
FUND #:101
ACTIVITY #: 46102
ACTIVITY SCOPE:
Shade Tree consists of planting and maintaining trees and shrubbery within the city limits. This
activity provides for regulating, developing, planting, maintaining, and removing of trees in any
street, park, right-of-way, or other public place. Shade trees aid the larger goal of soil conservation,
climate moderation, air quality, noise reduction, etc. The budget provides the mechanisms for
funding a uniform program for the purpose of beautifying the community as a whole, and increasing
property values.
OBJECTIVES:
1.Provide trees for spring tree planting.
2.Continue with Shade Tree Disease Control Program.
3.Replace dead and diseased trees throughout the city and parks.
4.Continue chippingprogram.
5.Continue education program.
6.Begin a boulevard tree planting program.
ISSUES:
1.Stress on trees caused by weather and diseases.
2.Funding availability.
3.Chipper replacement.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Trees planted 450 257 280 320 380
Trees removed 200 110 60 40 40
Students in programs 425 500 500 500 500
BUDGET COMMENTARY:
A portion of the total time of park employees is allocated to the Shade Tree activity. The 2018
personnel services budget includes a full step increase and a 3% (2% in January and 1% in July)
market rate wage adjustment increase. Part of the personnel services increase reflects the
reallocation of wages within Recreation and Culture. Other budget items are expected to remain
close to prior year levels.
156
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
SHADE TREE Actual Actual Actual Budget Projected Budget Change
Personnel Services 48,099$84,012$64,959$43,906$43,906$54,908$25.1%
Supplies 19,907 8,976 8,514 16,125 16,125 15,500 -3.9%
Other Services & Charges 885 12,002 2,327 5,395 5,395 4,642 -14.0%
Capital Outlay ---------
TOTAL EXPENDITURES 68,891$104,990$75,800$65,426$65,426$75,050$14.7%
157
LIBRARY
DEPARTMENT: Recreation and Culture
SUPERVISOR: City Administrator
FUND #:101
ACTIVITY #: 45501
ACTIVITY SCOPE:
Library services are contracted through the Great River Regional Library System. The city owns and
maintains the library building and provides programs through the library to residents.
OBJECTIVES:
1.Provide residents with quality programs and life-long learning opportunities.
2.Provide access to global information resources.
ISSUES:
1.Maintaining a relevant role in the community.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Checkedout items 199,182 195,235 190,433 182,986 175,000
Numberof requests placed 11,168 9,792 8,033 8,037 8,000
Summer readingparticipants 808 823 744 589 525
Winterreadingparticipants --257 149 150
Patrons usingwireless 3,021 3,582 4,071 3,963 3,900
Patrons usinginternet stations 9,002 8,396 7,487 7,304 7,200
Programs offered 169 167 212 290 250
Programattendance 3,788 3,919 4,306 5,336 4,500
BUDGET COMMENTARY:
The city contracts with Great River Regional Library System for information sources and operating
personnel. The city owns and maintains the library building and funds a number of programs. The
2018 budget includes an increase for contracted custodial services. By statute, the city must annually
expend at least $35,160 for the library.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
LIBRARY Actual Actual Actual Budget Projected Budget Change
Personnel Services 4,618$8,479$5,425$8,561$8,561$-$-100.0%
Supplies 2,583 2,587 2,205 1,550 1,550 2,000 29.0%
Other Services & Charges 29,563 25,110 37,193 27,889 27,889 43,288 55.2%
Capital Outlay ---------
TOTAL EXPENDITURES 36,764$36,176$44,823$38,000$38,000$45,288$19.2%
158
INSURANCE
DEPARTMENT: Other
SUPERVISOR: Finance Director
FUND #:101
ACTIVITY #: 49240
ACTIVITY SCOPE:
This activity accounts for a variety of undistributed General Fund insurances costs.
OBJECTIVES:
1.To accurately distribute insurance costs to all activities by fund.
ISSUES:
1.Purchasing the proper level of insurance coverage with the appropriate deductibles at the
lowest possible costs.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Not Applicable
BUDGET COMMENTARY:
In 2014, other services and charges decreased significantly from the redistribution of insurance costs
throughout the various budget units in the General Fund. An effective safety program administered
by the human resource manager has resulted in a decline of workers compensation insurance costs.
Additionally, liability insurance decreased slightly and property insurance increased slightly.
BUDGET:
GENERAL FUND 2014 2015 2016 2017 2017 2018 %
INSURANCE Actual Actual Actual Budget Projected Budget Change
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 12,584 8,082 7,226 8,512 8,512 6,379 -25.1%
Capital Outlay ---------
TOTAL EXPENDITURES 12,584$8,082$7,226$8,512$8,512$6,379$-25.1%
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160
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
SPECIAL
REVENUE
FUNDS
SPECIAL REVENUE FUNDS - SUMMARY
DESCRIPTION
Thecitycurrentlyhasfouractivespecialrevenuefunds.Specialrevenuefundsareusedtoaccountforthe
proceedsofspecificrevenuesourcesthatarerestricted,committed,orassignedtoexpendituresforspecific
purposesotherthandebtserviceorcapitalprojects.UnliketheGeneralFund,thebudgetsofspecialrevenue
fundsdonotalwaysbalance--revenuesequalexpenditures.Specialrevenuefundsusethemodifiedaccrual
basisofaccountingforbothfinancialreportingandbudgetingpurposes.
BUDGETISSUES
Eachspecialrevenuefundhasspecificchallengesthatwillbeaddressedinthenarrativeforeachfund.
BUDGETSUMMARY
SPECIAL REVENUE FUNDS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 1,388,404$1,363,000$643,421$652,000$652,000$710,000$8.9%
Tax Increments 836,750 727,617 668,352 653,564 653,564 635,678 -2.7%
Licenses & Permits ---------
Intergovernmental Revenues -11,875 -------
Charges for Services 1,350,290 1,422,357 1,408,472 1,496,725 1,496,725 1,434,500 -4.2%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 400,096 250,270 517,578 162,250 162,250 137,850 -15.0%
Operating Transfers 143,000 94,900 -------
Debt Proceeds ---------
TOTAL REVENUES 4,118,540$3,870,019$3,237,823$2,964,539$2,964,539$2,918,028$-1.6%
EXPENDITURES
Personnel Services 972,801$1,022,382$1,131,101$1,223,132$1,223,132$1,279,434$4.6%
Supplies 183,038 174,943 215,057 198,635 198,635 183,435 -7.7%
Other Services & Charges 1,181,247 780,611 666,808 800,904 800,904 770,400 -3.8%
Capital Outlay 487,306 1,056,591 257,980 276,919 416,919 577,070 108.4%
Operating Transfers 1,258,353 1,029,046 188,500 200,000 200,000 200,000 0.0%
TOTAL EXPENDITURES 4,082,745$4,063,573$2,459,446$2,699,590$2,839,590$3,010,339$11.5%
FUND BALANCE - JANUARY 1 8,453,436$8,489,231$8,295,677$9,074,054$9,074,054$9,199,003$
Excess (Deficiency) of
Revenues over Expenditures 35,795 (193,554)778,377 264,949 124,949 (92,311)
FUND BALANCE - DECEMBER 31 8,489,231$8,295,677$9,074,054$9,339,003$9,199,003$9,106,692$
161
ECONOMIC DEVELOPMENT AUTHORITY FUND
DEPARTMENT: Economic Development
SUPERVISOR: Community Development Director
FUND #:213
ACTIVITY #: 46301
ACTIVITY SCOPE:
The Monticello Economic Development Authority (EDA) is responsible for the on-going
redevelopment efforts within the city. This consists of housing and businesses, including all related
public improvements and land acquisitions. These programs are administered, based on direction of
the EDA board, by the Director of Economic Development. In addition, all tax increment financing
districts are initiated and administered by the EDA. There are currently 9 active tax increment
districts. The EDA also administers loans to city businesses, based on local, state, and federal criteria.
Businesses who will generate higher paying jobs in the community are prime candidates for these
loans.
OBJECTIVES:
1.Explore medical manufacturing, food-related, and data center facilities for Monticello.
2.Promote city's fiber optics network to attract and retain businesses.
3.Implement short, intermediate, and long-term objectives outlined in the TIF Analysis and
Management Plan.
4.Implement Embracing Downtown Plan.
5.Continue to purchase land that makes sense for redevelopment purposes.
6.Continue to market the Monticello business center.
7.Implement training/education program for existing businesses and future workforce.
8.Utilize Jobz Bill to initiate private development/redevelopment.
9.Work with community development department and developers to create upper-end
housing in Monticello to attract CEOs
10.Explore options to generate additional electrical supply to industrial areas.
11.Explore options to relocate electrical substation from Cargill's downtown site to create
expansion opportunities.
12.Implement recommendations from consultants regarding uses of funds available in TIF
District 1-22.
13.Engage in the Greater MSP organization.
14.Implement monitoring/tracking methods for EDA programs.
15.Continue to build a more robust website and marketing brand.
ISSUES:
1.Consistent administration of city policies, plans, ordinances, guidelines, statutes, etc.
2.Need for higher wage jobs in the community.
3.Promotion of city's fiber optic network.
162
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Tax increments collected 728,618$729,577$668,352$647,826$640,000$
Loans outstanding 1 0 0 1 1
Active TIF districts 12 10 10 9 8
BUDGET COMMENTARY:
This budget represents the Monticello Economic Development Authority programs and general
administration activities. The detail of each individual tax increment financing district is included in
the appendix of this document. The main revenue source for the EDA Fund is tax increments from
the various districts. Under Section 469.033, subd. 6, of the HRA Act, the city levied $280,000
special benefit tax for collection in 2016 and 2017 and $323,000 for collection in 2018. This levy
against all taxable real property supports redevelopment activities. The special benefit levy is
limited to .0185% of the taxable market value. Expenditures include administrative costs, pay-as-
you-go payments to various development projects, and a transfer to debt service funds for its share
of the 2005 (refunded in 2011) improvement bond, which financed an interchange project in tax
increment district 1-34. Without any new TIF districts, tax increments will decline as the result of
decertification of entire districts or individual parcels within a district. Much of the fund balance is
non-spendable (land held for resale) or restricted to specific activities such as development in tax
increment districts and loans to qualifying businesses.
BUDGET:
EDA FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$279,421$280,000$280,000$323,000$15.4%
Tax Increments 836,750 727,617 668,352 653,564 653,564 635,678 -2.7%
Licenses & Permits ---------
Intergovernmental Revenues -11,875 -------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 330,833 197,745 470,349 117,250 117,250 115,250 -1.7%
Operating Transfers 93,000 94,900 -------
TOTAL REVENUES 1,260,583$1,032,137$1,418,122$1,050,814$1,050,814$1,073,928$2.2%
EXPENDITURES
Personnel Services 5,932$10,545$68,957$104,216$104,216$110,670$6.2%
Supplies 36 65 81 --100 ---
Other Services & Charges 752,594 364,429 272,448 271,730 271,730 261,276 -3.8%
Capital Outlay 487,306 1,056,591 257,980 229,919 229,919 331,070 44.0%
Operating Transfers 218,353 -188,500 200,000 200,000 200,000 0.0%
TOTAL EXPENDITURES 1,464,221$1,431,630$787,966$805,865$805,865$903,116$12.1%
FUND BALANCE - JANUARY 1 7,115,305$6,911,667$6,512,174$7,142,330$7,142,330$7,387,279$
Excess (Deficiency) of
Revenues over Expenditures (203,638)(399,493)630,156 244,949 244,949 170,812
FUND BALANCE - DECEMBER 31 6,911,667$6,512,174$7,142,330$7,387,279$7,387,279$7,558,091$
163
CEMETERY FUND
DEPARTMENT: Recreation and Culture
SUPERVISOR: Parks Superintendent
FUND #:651
ACTIVITY #: 49010
ACTIVITY SCOPE:
The Cemetery Fund sustains itself with revenues from plot sales and from services, such as
excavations, staking for monuments, memorial programs, and perpetual care. The city maintains
two cemeteries: Riverside and Hillside. Staff assists customers/visitors with memorials and perpetual
care for both. Hillside cemetery is no longer open to burial and expenditures are recorded through
park operations in the General Fund.
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 2014 2015 2016 2017 2018
Plot occupied 3,470 3,497 3,514 3,535 3,555
Plots reserved 765 753 745 743 735
Plots available for sale 1,048 1,029 1,020 1,106 1,080
Number of plots sold 19 17 11 20 20
Number of internments 36 29 18 26 25
Number of markers staked 27 21 14 13 15
BUDGET COMMENTARY:
In 2018, expenditures are estimated at prior year levels. Charges for services is conservatively
estimated to reflect annual changes in demand. Other service and charges were modestly increased
for 2018.
164
BUDGET:
CEMETERY 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 37,465 26,394 14,517 26,325 26,325 18,000 -31.6%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 1,258 465 596 1,000 1,000 600 -40.0%
Contributed Capital ---------
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 38,723$26,859$15,113$27,325$27,325$18,600$-31.9%
EXPENDITURES
Personnel Services 3,089$3,975$1,070$4,072$4,072$3,803$-6.6%
Supplies 96 1,509 474 1,135 1,135 1,135 0.0%
Other Services & Charges 19,200 19,771 15,494 22,118 22,118 22,785 3.0%
Capital Outlay ---------
Operating Transfers ---------
TOTAL EXPENDITURES 22,385$25,255$17,038$27,325$27,325$27,723$1.5%
FUND BALANCE - JANUARY 1 15,709$32,047$33,651$31,726$31,726$31,726$
Excess (Deficiency) of
Revenues over Expenditures 16,338 1,604 (1,925)--(9,123)
FUND BALANCE - DECEMBER 31 32,047$33,651$31,726$31,726$31,726$22,603$
165
MINNESOTA INVESTMENT FUND
DEPARTMENT: Minnesota Investment Fund
SUPERVISOR: Community Development Director
FUND #:221
ACTIVITY #: 46526-46528
ACTIVITY SCOPE:
Following state and federal guidelines, the Minnesota Investment 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:
Measurement 2014 2015 2016 2017 2018
Loans outstanding 0 0 0 0 0
BUDGET COMMENTARY:
Interest earned on investments, not repayment of loans, is the only activity anticipated in 2018.
Effective July 1, 2017, cities with uncommitted money received from repayment of funds may choose
to give 20% of the funds back to the state general fund before June 30, 2018. The remaining 80% of
the uncommitted funds can then be used for any lawful expenditure. The city has not determined
whether it will give back the uncommitted money. Investment earnings are the only source of
miscellaneous revenues.
166
BUDGET:
MINN INVESTMENT FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 53,471 15,715 17,760 20,000 20,000 15,000 -25.0%
Operating Transfers ---------
TOTAL REVENUES 53,471$15,715$17,760$20,000$20,000$15,000$-25.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers ---------
TOTAL EXPENDITURES -$-$-$-$-$-$---
FUND BALANCE - JANUARY 1 1,051,218$1,104,689$1,120,404$1,138,164$1,138,164$1,158,164$
Excess (Deficiency) of
Revenues over Expenditures 53,471 15,715 17,760 20,000 20,000 15,000
FUND BALANCE - DECEMBER 31 1,104,689$1,120,404$1,138,164$1,158,164$1,158,164$1,173,164$
167
COMMUNITY CENTER FUND
DEPARTMENT: Community Center
SUPERVISOR: Community Center Director
FUND #:226
ACTIVITY #: 45XXX
ACTIVITY SCOPE:
The Monticello Community Center provides space for a variety of recreational, professional, and
educational opportunities. Expenditures for the community center are divided into six activities:
administration, rentals and events, aquatics, guest services and concessions, maintenance, and
programming.
OBJECTIVES:
1.Develop a plan for the future use of the area which was used as a wheel park (skateboard,
bike, and rollerblade) including design, financing, construction, and marketing.
2.Develop an on-line registration system for program and membership sign up.
3.Provide facility improvements to increase customers.
4.Maintain the community garden.
5.Improve financial controls and budget management.
ISSUES:
1.Staff turnover and vacancies.
2.Limitations to facility size, space availability, and parking availability.
3.Competition from other fitness facilities.
4.Segregation of revenues and expenditures to various community center activities.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Customer visits,number of 168,459 190,475 190,000
Gross program sales 199,189$149,821$200,000$
Annual memberships 486 408 500
Monthly memberships 8,921 8,548 9,000
Three-monthmemberships 472 928 500
Ratio of annual memberships
to other memberships 0.56 0.43 0.57
Rental revenue 200,964$204,938$198,471$190,342$200,000$
168
BUDGET COMMENTARY:
Starting in 2017, community center revenues are divided by activity. The largest revenue sources for
2018 are memberships ($945,000) and property taxes ($387,000). The 2016 decline in property taxes
is offset by the decline in transfers out to support debt service. Other revenues include concession
sales, room rentals, and program fees. The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage increase. With exception to
capital outlays, other budget items are expected to remain close to prior year levels. HVAC capital
outlays will result in deficit spending in 2018.
Future budgets will segregate revenues and costs to various activities: administration, rentals and
events, aquatics, guest services and concessions, maintenance, and programming.
BUDGET:
COMMUNITY CENTER 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 1,388,404$1,363,000$364,000$372,000$372,000$387,000$4.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 1,312,825 1,395,963 1,393,955 1,470,400 1,470,400 1,416,500 -3.7%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 14,534 36,345 28,873 24,000 24,000 7,000 -70.8%
Operating Transfers 50,000 --------
TOTAL REVENUES 2,765,763$2,795,308$1,786,828$1,866,400$1,866,400$1,810,500$-3.0%
EXPENDITURES
Personnel Services 963,780$1,007,862$1,061,074$1,114,844$1,114,844$1,164,961$4.5%
Supplies 182,906 173,369 214,502 197,500 197,500 182,200 -7.7%
Other Services & Charges 409,453 396,411 378,866 507,056 507,056 486,339 -4.1%
Capital Outlay ---47,000 187,000 246,000 423.4%
Operating Transfers 1,040,000 1,029,046 -------
TOTAL EXPENDITURES 2,596,139$2,606,688$1,654,442$1,866,400$2,006,400$2,079,500$11.4%
FUND BALANCE - JANUARY 1 271,204$440,828$629,448$761,834$761,834$621,834$
Excess (Deficiency) of
Revenues over Expenditures 169,624 188,620 132,386 -(140,000)(269,000)
FUND BALANCE - DECEMBER 31 440,828$629,448$761,834$761,834$621,834$352,834$
169
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170
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
DEBT
SERVICE
FUNDS
DEBT SERVICE FUNDS - SUMMARY
DESCRIPTION
Debtservicesfundsareusedtoaccountfortheaccumulationofresourcesforthepaymentofgenerallong-
termdebt,excludingdebtissuedfor,andservicedby,anenterprisefund.Debtservicefundsusethemodified
accrualbasisofaccountingforbothfinancialreportingandbudgetingpurposes.Thecityhassixactivedebt
service(sub)funds.The(sub)fundsarecombinedintoonedebtservicefundforfinancialreportingpurposes.
BUDGETISSUES
Thecity'sbondratingwasdowngradedfromAa3toA2in2012byMoody'sInvestorServices.Thisratingwas
affirmedwiththesaleofthecity’ssoledebtissuein2017.This$5,000,000G.O.issuehadtwocomponents:
$2,040,000improvementbondportionand$2,960,000abatementbondportion.In2016,thecityissued
$4,900,000inG.O.bondsforstreetreconstructionandassessableimprovements.Seeindividual(sub)fundsfor
thebudgetissuesfacingeachdebtservice(sub)fund.Fundbalancesinsome(sub)fundsdeclinedwithearly
bondredemptions.Additionally,thelastlargepaymentononeserialbondreducedtheneedtoaccumulate
cashintheprioryearforthenextFebruarypayment.NewbondissuesarestructuredtohaveDecember,rather
thanFebruary,principalpayments.
BUDGETSUMMARY
DEBT SERVICE FUNDS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 1,262,234$1,290,000$2,084,000$2,437,000$2,437,000$1,787,000$-26.7%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 1,489,274 2,233,404 812,545 480,466 560,466 293,446 -38.9%
Miscellaneous 296,686 238,318 244,326 215,900 215,900 3,000 -98.6%
Operating Transfers 3,906,885 3,306,045 1,439,136 599,362 599,362 244,899 -59.1%
Debt Proceeds 5,952,106 --------
TOTAL REVENUES 12,907,185$7,067,767$4,580,007$3,732,728$3,812,728$2,328,345$-37.6%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 334 225 208 ------
Capital Outlay ---------
Debt Service 5,953,964 5,598,694 6,211,361 4,396,961 4,396,961 2,807,160 -36.2%
Operating Transfers 5,783,732 5,872 --53,200 ----
TOTAL EXPENDITURES 11,738,030$5,604,791$6,211,569$4,396,961$4,450,161$2,807,160$-36.2%
FUND BALANCE - JANUARY 1 2,747,513$3,916,668$5,379,644$3,748,082$3,748,082$3,110,649$
Excess (Deficiency) of
Revenues over Expenditures 1,169,155 1,462,976 (1,631,562)(664,233)(637,433)(478,815)
FUND BALANCE - DECEMBER 31 3,916,668$5,379,644$3,748,082$3,083,849$3,110,649$2,631,834$
171
2010A G.O. IMPROVEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:317
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2010A G.O. Improvement and Refinancing Bonds financed capital projects approved and started
in 2010 and refinanced the 2002 G.O. Improvement Bonds. The debt service schedule calls for semi-
annual payments in February (principal and interest) and August (interest only). The average interest
rate is 2.0047%. The revenue sources include a combination of existing city funds, property taxes,
and special assessments. The bonds can be called on February 1, 2019.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Certify or collect deferred special assessments when development occurs.
3.Redeem or refund when feasible.
ISSUES:
1.Maintaining sufficient fund balance for early redemption in 2019.
2.City-imposed property tax levy limitations.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Assessment balance $269,829 $216,508 $159,154 $113,579 $80,770
Delinquent balance $12,743 $9,093 $6,607 $320 $0
Prepaidassessments $4,637 $10,000 $16,815 $9,241 $0
Assessment rolls 6 6 6 5 5
Assessedparcels 161 155 149 139 139
BUDGET COMMENTARY:
The city issued the $3,255,000 2010 G.O. Improvement and Refunding Bond to finance the
reconstruction of West River Street, intersection improvements on the northeast corners of Highway
25 and Broadway and East River Streets, and to refinance the G.O. Improvement Bonds of 2002.
The 2010A G.O. Improvement Bond revenue sources are a combination of existing city funds: Water
Fund, Sewage Fund and Economic Development Authority Fund. Property taxes and special
assessments also support debt service payments. Expenditures consist solely of debt principal and
interest payments.
172
BUDGET:
2010A GO IMPROVEMENT BOND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$40,000$40,000$40,000$40,000$40,000$0.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 61,310 70,257 68,483 48,019 113,900 42,715 -11.0%
Miscellaneous 26,613 5,775 7,799 ------
Operating Transfers 239,595 246,783 565,636 130,986 130,986 44,899 -65.7%
Debt Proceeds ---------
TOTAL REVENUES 327,518$362,815$681,918$219,005$219,005$127,614$-41.7%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service 360,767 303,074 304,708 305,117 305,117 300,074 -1.7%
Operating Transfers ---------
TOTAL EXPENDITURES 360,767$303,074$304,708$305,117$305,117$300,074$-1.7%
FUND BALANCE - JANUARY 1 619,760$586,511$646,252$1,023,462$1,023,462$937,350$
Excess (Deficiency) of
Revenues over Expenditures (33,249)59,741 377,210 (86,112)(86,112)(172,460)
FUND BALANCE - DECEMBER 31 586,511$646,252$1,023,462$937,350$937,350$764,890$
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
2/1/2018 275,000$13,571$2.05%288,571$
8/1/2018 10,753 10,753
2/1/2019 280,000 10,753 2.25%290,753
8/1/2019 7,603 7,603
2/1/2020 290,000 7,603 2.45%297,603
8/1/2020 4,050 4,050
2/1/2021 300,000 4,050 2.70%304,050
Total 1,145,000$58,381$1,203,381$
GO Improvement and Refunding Bonds, Series 2010A
173
2011A G.O. REFUNDING BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:312
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2011A G.O.Refunding Bonds refinanced the 2005A G.O.Improvement Bonds. The debt service
schedule calls for semi-annual payments in February (principal and interest) and August (interest
only). The average interest rate is 1.6112%. The revenue sources include a combination of impact
fees, property taxes, special assessments, and tax increments. The 2011A bonds can be called on
February 1, 2020.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Certify or collect deferred special assessments when development occurs.
3.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Assessment balance $3,409,881 $2,386,963 $1,927,740 $2,093,333 $2,085,200
Delinquent balance $1,433,896 $149,230 $117 $0 $0
Prepaidassessments $429,256 $1,489,775 $0 $0 $0
Assessment rolls 11 8 6 3 3
Assessedparcels 121 67 66 6 6
BUDGET COMMENTARY:
The city issued $10,735,000 in 2011 G.O. Refunding Bonds to advance refund the 2005A G.O.
Improvement Bonds. The 2005A issue was redeemed on February 1, 2013.
The 2011A G.O. Refunding Bond's revenue source is a combination of existing city funds, including
transfers from three utility access funds and the Economic Development Fund, a property tax levy,
and special assessments. Prior year 2005A G.O. revenues and expenditures are included in the
schedule presented in the budget section. Escrow payments made in 2013 to redeem the 2005A G.O.
Bonds are excluded. The debt is structured to reflect the nature of underlying projects and
assessment policy. Consequently, there is large drop in 2017 debt service for this sub fund.
174
BUDGET:
2011A G.O. BOND FUND (2005A)2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 222,865$330,000$330,000$139,783$139,783$148,061$5.9%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 1,049,370 2,042,331 336,960 162,359 162,359 46,314 -71.5%
Miscellaneous 251,357 220,210 212,695 208,900 208,900 1,000 -99.5%
Operating Transfers 1,769,953 964,508 188,500 468,376 468,376 200,000 -57.3%
Debt Proceeds ---------
TOTAL REVENUES 3,293,545$3,557,049$1,068,155$979,418$979,418$395,375$-59.6%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service 2,880,767 2,461,375 2,427,008 784,150 784,150 780,100 -0.5%
Operating Transfers ---------
TOTAL EXPENDITURES 2,880,767$2,461,375$2,427,008$784,150$784,150$780,100$-0.5%
FUND BALANCE - JANUARY 1 1,317,306$1,730,084$2,825,758$1,466,905$1,466,905$1,662,173$
Excess (Deficiency) of
Revenues over Expenditures 412,778 1,095,674 (1,358,853)195,268 195,268 (384,725)
FUND BALANCE - DECEMBER 31 1,730,084$2,825,758$1,466,905$1,662,173$1,662,173$1,277,448$
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
2/1/2018 720,000 33,275 2.00%753,275
8/1/2018 26,075 26,075
2/1/2019 380,000 26,075 2.00%406,075
8/1/2019 22,275 22,275
2/1/2020 390,000 22,275 2.00%412,275
8/1/2020 18,375 18,375
2/1/2021 395,000 18,375 3.00%413,375
8/1/2021 12,450 12,450
2/1/2022 410,000 12,450 3.00%422,450
8/1/2022 6,300 6,300
2/1/2023 420,000 6,300 3.00%426,300
Total 2,715,000$204,225$2,919,225$
GO Refunding Bonds, Series 2011A
175
2014A G.O. JUDGMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:318
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2014A G.O. Judgment Bonds financed the settlement with telecommunications bondholders.
The $5,750,000 settlement essentially relieves the city of liability for the $26,445,000 in revenue
bonds used to finance its telecommunications utility. The judgment portion of the 2014A bonds
totaled $6,080,000. The city borrowed (capitalized interest) the 2015 interest only payments.
Thereafter, the city added the annual principal and interest debt service payments to its tax levy.
The average interest rate is 3.0696%. The bonds are eligible for ordinary redemption in 2021.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Maintain adherence to bond covenants and awareness of arbitrage limitations.
2.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Not Applicable
BUDGET COMMENTARY:
The $6,595,000 2014A G.O. bond issue had two components: $6,080,000 judgment portions and
$515,000 capital equipment portion. The capital equipment portion is accounted for in the Central
Equipment Fund. Beginning in 2016, annual debt service payments were added to the property tax
levy. The 2015 interest only payments were added to the bond issue. The final payment on the bonds
is in December 2030. The bonds are redeemable in 2021. However, an extraordinary optional
redemption provision allows the city to redeem the bonds at any time for 101% of par if the fiber
optics system is sold or leased. The settlement proceeds were distributed directly to the trustee for
the bondholders.
176
BUDGET:
2014A G.O. JUDGMENT BONDS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$544,000$536,929$536,929$537,586$0.1%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 778 2,077 689 1,000 1,000 1,000 0.0%
Operating Transfers ---------
Debt Proceeds 5,952,106 --------
TOTAL REVENUES 5,952,884$2,077$544,689$537,929$537,929$538,586$0.1%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service -163,879 515,520 511,862 511,862 512,736 0.2%
Operating Transfers 5,783,732 --------
TOTAL EXPENDITURES 5,783,732$163,879$515,520$511,862$511,862$512,736$0.2%
FUND BALANCE - JANUARY 1 -$169,152$7,350$36,519$36,519$62,586$
Excess (Deficiency) of
Revenues over Expenditures 169,152 (161,802)29,169 26,067 26,067 25,850
FUND BALANCE - DECEMBER 31 169,152$7,350$36,519$62,586$62,586$88,436$
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2018 -78,493 78,493
12/15/2018 355,000 78,493 1.50%433,493
6/15/2019 -75,831 75,831
12/15/2019 360,000 75,831 1.85%435,831
6/15/2020 -72,501 72,501
12/15/2020 365,000 72,501 2.20%437,501
6/15/2021 -68,486 68,486
12/15/2021 375,000 68,486 2.50%443,486
6/15/2022 -63,798 63,798
12/15/2022 385,000 63,798 2.75%448,798
6/15/2023 -58,504 58,504
12/15/2023 395,000 58,504 2.90%453,504
6/15/2024 -52,777 52,777
12/15/2024 405,000 52,777 3.05%457,777
6/15/2025 -46,600 46,600
12/15/2025 420,000 46,600 3.20%466,600
6/15/2026 -39,881 39,881
12/15/2026 435,000 39,881 3.35%474,881
6/15/2027 -32,594 32,594
12/15/2027 445,000 32,594 3.40%477,594
6/15/2028 -25,029 25,029
12/15/2028 465,000 25,029 3.38%490,029
6/15/2029 -17,182 17,182
12/15/2029 480,000 17,182 3.55%497,182
6/15/2030 -8,663 8,663
12/15/2030 495,000 8,663 3.50%503,663
Total 5,380,000 1,280,678 6,660,678$
GO Bonds, Series 2014A (Judgment Portion)
177
2015B G.O. STREET RECONSTRUCTION-IMPROVEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:319
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2015B G.O. Street Reconstruction and Improvement Bonds provided financing for School
Boulevard, Fallon Avenue, and 85th Street improvements. This issue also provided financing for
street and other infrastructure improvements in the area east of Highway 25 and north of Interstate
94. The $2,605,000 bond issue allocated $1,885,000 for street reconstruction and $720,000 for
improvements. The school district was assessed $172,000 for School Boulevard. The city levies for
the gap between annual debt service payments and annual assessment collections. The bonds have
an average interest rate of 2.5856% and are redeemable in December of 2022.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Assessment balance $370,350 $154,754 $137,560 $120,365
Delinquent balance $0 $0 $0 $0
Prepaid assessments $0 $0 $0 $0
Assessment rolls 2 1 1 1
Assessed parcels 4 3 3 3
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 plus property taxes. Property taxes will be levied for the gap between assessment
revenue and debt service payments. The 2016 $250,000 levy exceeded the bond covenant required
levy by $50,000.
178
BUDGET:
2015B G.O. Bonds 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$250,000$195,288$195,288$203,425$4.2%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments --27,855 26,000 26,000 24,417 -6.1%
Miscellaneous -665 520 1,000 1,000 1,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES -$665$278,375$222,288$222,288$228,842$2.9%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service --212,626 208,000 208,000 216,000 3.8%
Operating Transfers ---------
TOTAL EXPENDITURES -$-$212,626$208,000$208,000$216,000$3.8%
FUND BALANCE - JANUARY 1 -$-$665$66,414$66,414$80,702$
Excess (Deficiency) of
Revenues over Expenditures -665 65,749 14,288 14,288 12,842
FUND BALANCE - DECEMBER 31 -$665$66,414$80,702$80,702$93,544$
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2018 -$27,625$27,625$
12/15/2018 160,000 27,625 1.50%187,625
6/15/2019 -26,426 26,426
12/15/2019 160,000 26,426 1.50%186,426
6/15/2020 -25,225 25,225
12/15/2020 160,000 25,225 1.50%185,225
6/15/2021 -24,024 24,024
12/15/2021 165,000 24,024 2.00%189,024
6/15/2022 -22,376 22,376
12/15/2022 165,000 22,376 2.00%187,376
6/15/2023 -20,724 20,724
12/15/2023 170,000 20,724 2.50%190,724
6/15/2024 -18,600 18,600
12/15/2024 175,000 18,600 2.50%193,600
6/15/2025 -16,413 16,413
12/15/2025 180,000 16,413 2.50%196,413
6/15/2026 -14,162 14,162
12/15/2026 185,000 14,162 2.50%199,162
6/15/2027 -11,850 11,850
12/15/2027 185,000 11,850 3.00%196,850
6/15/2028 -9,075 9,075
12/15/2028 195,000 9,075 3.00%204,075
6/15/2029 -6,150 6,150
12/15/2029 200,000 6,150 3.00%206,150
6/15/2030 -3,150 3,150
12/15/2030 210,000 3,150 3.00%213,150
Total 2,310,000$451,600$2,761,600$
GO Bonds, Series 2015B
179
2016A G.O. STREET RECONSTRUCTION-IMPROVEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:320
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2016A G.O. Street Reconstruction and Improvement Bonds financed improvements included in
the 2016 core street project and at the intersection of Highway 25 and 7th Street. The $4,900,000
bond issue allocated $770,000 for street reconstruction and $4,130,000 for improvements. The city
levies for the gap between annual debt service payments and annual assessment collections. The
bonds have an average interest rate of 2.1034% and are redeemable in December of 2022.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
2.Investment earnings on assessment prepayments will be less than assessed interest rates.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Assessment balance $818,044 $712,355 $632,735
Delinquent balance $0 $176 $0
Prepaid assessments $263,182 $53,682 $0
Assessment rolls 1 2 2
Assessed parcels 102 95 95
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 will be levied for the gap between assessment revenue and debt
service payments. The bond issue resolution requires a $407,769 property tax levy for collection year
2018. Future levies will be adjusted to reflect assessment prepayments and the interest earned on
prepayments.
180
BUDGET:
2016A G.O. Bonds 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$415,000$415,000$407,769$-1.7%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments --263,182 140,000 140,000 110,000 -21.4%
Miscellaneous --456 ------
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES -$-$263,638$555,000$555,000$517,769$-6.7%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Debt Service --800 530,000 530,000 527,900 -0.4%
Operating Transfers ---------
TOTAL EXPENDITURES -$-$800$530,000$530,000$527,900$-0.4%
FUND BALANCE - JANUARY 1 -$-$-$262,838$262,838$287,838$
Excess (Deficiency) of
Revenues over Expenditures --262,838 25,000 25,000 (10,131)
FUND BALANCE - DECEMBER 31 -$-$262,838$287,838$287,838$277,707$
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2018 -$46,075$46,075$
12/15/2018 435,000 46,075 2.00%481,075
6/15/2019 -41,725 41,725
12/15/2019 445,000 41,725 2.00%486,725
6/15/2020 -37,275 37,275
12/15/2020 450,000 37,275 2.00%487,275
6/15/2021 -32,775 32,775
12/15/2021 460,000 32,775 2.00%492,775
6/15/2022 -28,175 28,175
12/15/2022 470,000 28,175 2.00%498,175
6/15/2023 -23,475 23,475
12/15/2023 480,000 23,475 2.00%503,475
6/15/2024 -18,675 18,675
12/15/2024 490,000 18,675 2.00%508,675
6/15/2025 -13,775 13,775
12/15/2025 500,000 13,775 2.00%513,775
6/15/2026 -8,775 8,775
12/15/2026 510,000 8,775 2.00%518,775
6/15/2027 -3,675 3,675
12/15/2027 60,000 3,675 3.00%63,675
6/15/2028 -2,775 2,775
12/15/2028 60,000 2,775 3.00%62,775
6/15/2029 -1,875 1,875
12/15/2029 60,000 1,875 3.00%61,875
6/15/2030 -975 975
12/15/2030 65,000 975 3.00%65,975
Total 4,485,000$520,050$5,005,050$
GO Bonds, Series 2016A
181
2017A G.O. IMPROVEMENT-ABATEMENT BOND SUB-FUND
DEPARTMENT: Debt Service
SUPERVISOR: Finance Director
FUND #:321
ACTIVITY #: 47000
ACTIVITY SCOPE:
The 2017A G.O. Improvement and Abatement Bonds financed improvements to rural outlying roads
and various other city street projects. Additionally, the issue provided funding for Fallon Avenue
overpass right-of-way acquisition, engineering, and construction. The $5,000,000 bond issue
allocated $2,040,000 for street improvements and $2,960,000 for the overpass (Abatement). The
city levies for the gap between annual debt service payments and annual assessment collections.
The bonds have an average interest rate of 2.443% and are redeemable in December of 2026.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
2.Investment earnings on assessment prepayments will be less than assessed interest rates.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Assessment balance $434,759 $391,563
Delinquent balance $0 $0
Prepaid assessments $102,235 $0
Assessment rolls 2 2
Assessedparcels 72 72
BUDGET COMMENTARY:
The $5,000,000 2017A G.O. bond issue has two components: $2,040,000 improvement portion and
$2,960,000 abatement portion. Property taxes and assessments support the improvement portion of
the debt issue. The abatement portion is supported by abatement tax levy for principal and a debt
service levy for interest. Property taxes will be levied for any gap between assessment revenue and
debt service payments. The bond issue resolution requires the following 2018 collection year
property tax levy: $175,136 for improvements, $92,410 for abatement interest, and $160,000 for
abatement principal. Future levies will be adjusted to reflect assessment prepayments and the
interest earned on prepayments.
182
BUDGET:
2017A G.O. Bonds 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
PROPERTY TAXES -$-$-$-$-$$450,159 ---
LICENSES & PERMITS ---------
INTERGOVERNMENTAL REVENUES ---------
CHARGES FOR SERVICES ---------
FINES & FORFEITS ---------
SPECIAL ASSESSMENTS ----80,000 70,000 ---
MISCELLANEOUS ---------
OPERATING TRANSFERS ---------
BOND PROCEEDS ---------
TOTAL REVENUES -$-$-$-$80,000$520,159$---
EXPENDITURES
PERSONNEL SERVICES -$-$-$-$-$-$---
SUPPIES ---------
OTHER SERVICES & CHARGES ---------
CAPITAL OUTLAY ---------
DEBT SERVICE -----470,350 ---
OPERATING TRANSFERS ---------
TOTAL EXPENDITURES -$-$-$-$-$470,350$---
FUND BALANCE - JANUARY 1 -$-$-$-$-$80,000$
Excess (Deficiency) of
Revenues over Expenditures ----80,000 49,809
FUND BALANCE - DECEMBER 31 -$-$-$-$80,000$129,809$
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2018 -$72,791$72,791$
12/15/2018 340,000 56,721 2.00%396,721
6/15/2019 -53,319 53,319
12/15/2019 365,000 53,319 2.00%418,319
6/15/2020 -49,671 49,671
12/15/2020 370,000 49,671 2.00%419,671
6/15/2021 -45,969 45,969
12/15/2021 380,000 45,969 2.00%425,969
6/15/2022 -42,171 42,171
12/15/2022 385,000 42,171 2.00%427,171
6/15/2023 -38,320 38,320
12/15/2023 390,000 38,320 2.00%428,320
6/15/2024 -34,420 34,420
12/15/2024 400,000 34,420 2.00%434,420
6/15/2025 -30,420 30,420
12/15/2025 410,000 30,420 2.00%440,420
6/15/2026 -26,320 26,320
12/15/2026 420,000 26,320 2.50%446,320
6/15/2027 -21,069 21,069
12/15/2027 430,000 21,069 2.50%451,069
6/15/2028 -15,695 15,695
12/15/2028 210,000 15,695 2.50%225,695
6/15/2029 -13,070 13,070
12/15/2029 215,000 13,070 2.60%228,070
6/15/2030 -10,275 10,275
12/15/2030 220,000 10,275 3.00%230,275
6/15/2031 -6,975 6,975
12/15/2031 230,000 6,975 3.00%236,975
6/15/2030 -3,525 3,525
12/15/2030 235,000 3,525 3.00%238,525
Total 5,000,000$911,950$5,911,950$
GO Bonds, Series 2017A
183
CLOSED DEBT SERVICE FUNDS
CLOSED FUNDS INCLUDED IN SUMMARY TOTAL:
2007A G.O. Improvement Bond Fund
2008A G.O. Revenue Refunding Bond Fund
2008B G.O. Sewer Revenue Refunding Bond Fund
CLOSED FUNDS SUMMARY TOTAL:
CLOSED DEBT SERVICE FUNDS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 1,039,369$920,000$920,000$1,110,000$1,110,000$-$ -100.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 378,594 120,816 116,065 104,088 104,088 --100.0%
Miscellaneous 17,938 9,591 22,167 5,000 5,000 --100.0%
Operating Transfers 1,897,337 2,094,754 685,000 ------
Debt Proceeds ---------
TOTAL REVENUES 3,333,238$3,145,161$1,743,232$1,219,088$1,219,088$-$ -100.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 334 225 208 ------
Capital Outlay ---------
Debt Service 2,712,430 2,670,366 2,750,699 2,057,832 2,057,832 --100.0%
Operating Transfers -5,872 --53,200 ----
TOTAL EXPENDITURES 2,712,764$2,676,463$2,750,907$2,057,832$2,111,032$-$ -100.0%
FUND BALANCE - JANUARY 1 810,447$1,430,921$1,899,619$891,944$891,944$-$
Excess (Deficiency) of
Revenues over Expenditures 620,474 468,698 (1,007,675)(838,744)(891,944)-
FUND BALANCE - DECEMBER 31 1,430,921$1,899,619$891,944$53,200$-$-$
184
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
CAPITAL
PROJECT
FUNDS
BUDGET:
CLOSED BOND FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 241,810 695,738 130,932 65,900 65,900 54,000 -18.1%
Miscellaneous 67,631 16,933 15,308 5,000 5,000 5,000 0.0%
Operating Transfers -5,872 --53,200 ----
Debt Proceeds ---------
TOTAL REVENUES 309,441$718,543$146,240$70,900$124,100$59,000$-16.8%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers 664,500 855,000 753,500 -80,000 ----
TOTAL EXPENDITURES 664,500$855,000$753,500$-$80,000$-$---
FUND BALANCE - JANUARY 1 1,373,823$1,018,764$882,307$275,047$275,047$319,147$
Excess (Deficiency) of
Revenues over Expenditures (355,059)(136,457)(607,260)70,900 44,100 59,000
FUND BALANCE - DECEMBER 31 1,018,764$882,307$275,047$345,947$319,147$378,147$
189
CAPITAL PROJECT FUNDS - SUMMARY
DESCRIPTION
Capitalprojectfundsareusedtoaccountforfinancialresourcesthatarerestricted,committed,orassignedto
expenditureforcapitaloutlaysincludingtheacquisitionorconstructionofcapitalfacilitiesandothercapital
assets—excludingcapitalassetsfinancedbyproprietaryfunds(enterpriseorinternalservice).Capitalproject
fundsusethemodifiedaccrualbasisofaccountingforbothfinancialreportingandbudgetingpurposes.Thecity
currentlyhassixactivecapitalprojectfunds.
BUDGETISSUES
Financingcapitalassetadditionsorreplacementshasbeenanongoingchallenge,especiallyinanenvironment
wherethefocusisonmaintainingalow,stablepropertytaxlevy,andothertraditionalresources(LiquorFund
transfers)aredivertedtootherneeds.Seetheindividualfundsforthebudgetissuesfacingeachcapitalproject
fund.
BUDGETSUMMARY
TOTAL CAPITAL PROJECT 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 229,030$79,146$364,132$50,000$50,000$783,000$1466.0%
Tax Increments ---------
Franchise & Other Taxes $97,553 $116,984 $148,317 $116,000 $116,000 $116,000 0.0%
Licenses & Permits ---------
Intergovernmental Revenues 411,675 1,045,756 1,652,358 250,000 250,000 --100.0%
Charges for Services 38,494 393,180 285,251 50,000 50,000 50,000 0.0%
Fines & Forfeits ---------
Special Assessments 400,848 1,084,169 171,602 65,900 65,900 54,000 -18.1%
Miscellaneous 333,390 92,863 149,128 57,000 57,000 52,000 -8.8%
Operating Transfers 864,500 860,872 799,108 -433,200 1,000,000 ---
Debt Proceeds -2,651,898 4,997,503 5,000,000 5,000,000 5,000,000 0.0%
TOTAL REVENUES 2,375,490$6,324,868$8,567,399$5,588,900$6,022,100$7,055,000$26.2%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies 18,262 7,135 -------
Other Services & Charges 55,446 145,429 193,695 ------
Capital Outlay 2,147,894 2,238,364 6,350,430 7,163,000 7,123,000 10,620,000 48.3%
Operating Transfers 990,800 855,000 1,034,675 314,069 394,069 44,899 -85.7%
TOTAL EXPENDITURES 3,212,402$3,245,928$7,578,800$7,477,069$7,517,069$10,664,899$42.6%
FUND BALANCE - JANUARY 1 6,231,409$5,394,497$8,473,437$9,462,036$9,462,036$7,967,067$
Excess (Deficiency) of
Revenues over Expenditures (836,912)3,078,940 988,599 (1,888,169)(1,494,969)(3,609,899)
FUND BALANCE - DECEMBER 31 5,394,497$8,473,437$9,462,036$7,573,867$7,967,067$4,357,168$
185
CAPITAL PROJECT FUND
DEPARTMENT: Capital Project Fund
SUPERVISOR: City Engineer
FUND #:400
ACTIVITY #: 43300
ACTIVITY SCOPE:
The Capital Project Fund is a generic fund of the same type used to account for on-going capital
asset additions and replacements. Capital assets acquired through this fund include street
improvements or other infrastructure and buildings.
OBJECTIVES:
1.Improve city infrastructure.
2.Extend city infrastructure to new developments.
ISSUES:
1.Finding adequate resources for various projects while maintaining a low, stable property
tax levy.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Projects supported 3 4 4 5 5
BUDGET COMMENTARY:
For 2018, notable projects include: Fallon Avenue overpass - $5,950,000; Chelsea from Fallon to
Edmonson - $2,200,000. Funding sources include: debt proceeds - $5,000,000; fund balance -
$3,200,000 (debt proceeds and other revenues from prior years). Reimbursement resolutions have
been passed by council on these projects. These resolutions allow the city to reimburse itself with
debt issuance proceeds. The 2018 property tax levy reduces the need for future debt and stabilizes
the overall levy to accommodate future debt.
186
BUDGET:
CAPITAL PROJECT FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 228,854$79,146$364,132$50,000$50,000$783,000$1466.0%
Franchise & Other Taxes 53,933 36,865 70,527 36,000 36,000 36,000 0.0%
Intergovernmental Revenues 41,962 945,756 1,652,358 250,000 250,000 --100.0%
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments 159,038 276,023 40,670 ------
Miscellaneous 21,523 8,176 44,476 ------
Operating Transfers 200,000 ---300,000 600,000 ---
Debt Proceeds -2,651,898 4,997,503 5,000,000 5,000,000 5,000,000 0.0%
TOTAL REVENUES 705,310$3,997,864$7,169,666$5,336,000$5,636,000$6,419,000$20.3%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies 9,497 135 -------
Other Services & Charges 16,615 96,400 112,400 ------
Capital Outlay 893,015 1,268,277 4,957,987 6,800,000 6,800,000 9,650,000 41.9%
Operating Transfers ---------
TOTAL EXPENDITURES 919,127$1,364,812$5,070,387$6,800,000$6,800,000$9,650,000$41.9%
FUND BALANCE - JANUARY 1 303,583$89,766$2,722,818$4,822,097$4,822,097$3,658,097$
Excess (Deficiency) of
Revenues over Expenditures (213,817)2,633,052 2,099,279 (1,464,000)(1,164,000)(3,231,000)
FUND BALANCE - DECEMBER 31 89,766$2,722,818$4,822,097$3,358,097$3,658,097$427,097$
187
CLOSED BOND FUND
DEPARTMENT: Closed Bond Fund
SUPERVISOR: Finance Director
FUND #:300
ACTIVITY #: 47000
ACTIVITY SCOPE:
The Closed Bond Fund, formerly accounted for in the debt service section, is the combination of
multiple closed debt service funds. The fund has no debt obligation. However, special assessments
supporting past debt service continue to provide funding for city projects.
OBJECTIVES:
1.Provide funding for various city projects, including Bertram Chain of Lakes improvements.
2.Certifyorcollectdeferredspecialassessmentswhendevelopmentoccursafterrelateddebt
has been fully amortized.
ISSUES:
1.Declining assessment collections on retired debt.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Not Applicable
BUDGET COMMENTARY:
In 2018, special assessments collected from projects with retired debt will provide funding for
Bertram Chain of Lakes, pathway, and park improvements. A transfer to the Park & Pathway
Dedication Fund at the end of 2017 provided money for such purposes. Similarly, a supplemental
transfer may occur in 2018 to finance 2019 projects. Future assessment collections for 2018 and
beyond are estimated at $375,000.
188
PARK & PATHWAY DEDICATION FUND
DEPARTMENT: Recreation & Culture
SUPERVISOR: Parks Superintendent
FUND #:229
ACTIVITY #: 45202
ACTIVITY SCOPE:
Activities of the Park and Pathway Dedication Fund include updating and maintaining the city's
pathway system, as well as designating funds for future city parks and pathways.
OBJECTIVES:
1.Improve pathways and parks systems.
2.Continue the improvement of Bertram Chain of Lakes (formerly the Y.M.C.A.) property.
ISSUES:
1.Economic impact on new development and home construction.
2.Time constraints of other projects.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
LandAcquisition 1,163,248$609,614$1,083,500$-$-$
Projects supported 3 2 4 4 4
Dedicationfees -$ 107,929$-$-$-$
BUDGET COMMENTARY:
The fund’s major revenue source is normally park dedication fees. However, due to the economic
conditions and lack of new development, dedication fees have been an unreliable source.
Consequently, the city typically finances projects with transfers from other funds, which are made in
the year prior to expenditure.
The 2018 budgeted expenditures include the Spirit Hills pathway connection ($150,000), Feather
Stone shelter and equipment ($80,000), Bertram Chain of Lakes plans & specifications ($400,000),
and Rolling Woods sidewalk ($40,000). Land acquisition at Bertram Chain of Lakes concluded in 2016.
190
BUDGET:
PARK & PATHWAY DEDICATION 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues 369,713 100,000 -------
Charges for Services -107,929 -------
Fines & Forfeits ---------
Special Assessments -112,408 -------
Miscellaneous 32,870 15,225 36,439 2,000 2,000 2,000 0.0%
Operating Transfers 664,500 855,000 753,500 -80,000 400,000 ---
TOTAL REVENUES 1,067,083$1,190,562$789,939$2,000$82,000$402,000$20000.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies 8,765 7,000 -------
Other Services & Charges 38,539 48,707 62,755 ------
Capital Outlay 1,254,879 636,528 1,342,983 288,000 248,000 670,000 132.6%
Operating Transfers ---------
TOTAL EXPENDITURES 1,302,183$692,235$1,405,738$288,000$248,000$670,000$132.6%
FUND BALANCE - JANUARY 1 973,433$738,333$1,236,660$620,861$620,861$454,861$
Excess (Deficiency) of
Revenues over Expenditures (235,100)498,327 (615,799)(286,000)(166,000)(268,000)
FUND BALANCE - DECEMBER 31 738,333$1,236,660$620,861$334,861$454,861$186,861$
191
STORMWATER ACCESS FUND
DEPARTMENT: Public Works
SUPERVISOR: City Engineer/Public Works Director
FUND #:263
ACTIVITY #: 49201
ACTIVITY SCOPE:
The Stormwater Access Fund provides resources for major improvements to the storm sewer
system. Impact fees are collected on building permits for new construction and lot development.
These fees are also used to retire debt service related to improvements to the sanitary sewer
system.
OBJECTIVES:
1.Maintain and upgrade storm sewer system.
2.Meet changing ponding rules.
3.Retire debt service related to system improvements in a timely manner.
ISSUES:
1.Building permits for residential and commercial development are increasing.
2.The economy is recovering.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Not Applicable
BUDGET COMMENTARY:
The main revenue sources are storm sewer access and trunk fees on new construction or special
assessments of past access and trunk fees. The operating transfers are to the 2011A (formerly 2005A)
Refunding Improvement Bond--part of the interchange project, and to the 2010A Improvement and
Refinancing Bond--its share of the 2010 storm sewer project. For 2016 and beyond, funding for
routine pond improvements will come from the General Fund. There are no planned capital outlays
for non-routine pond improvements in 2018. Past transfers have supported debt service. No such
support is required in 2018.
192
BUDGET:
STORMWATER ACCESS FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 38,494 285,251 285,251 50,000 50,000 50,000 0.0%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 39,638 15,399 15,399 15,000 15,000 15,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 78,132$300,650$300,650$65,000$65,000$65,000$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges 292 322 18,540 ------
Capital Outlay ---------
Operating Transfers 326,300 -235,567 268,376 268,376 --100.0%
TOTAL EXPENDITURES 326,592$322$254,107$268,376$268,376$-$ -100.0%
FUND BALANCE - JANUARY 1 1,122,181$873,721$1,174,049$1,220,592$1,220,592$1,017,216$
Excess (Deficiency) of
Revenues over Expenditures (248,460)300,328 46,543 (203,376)(203,376)65,000
FUND BALANCE - DECEMBER 31 873,721$1,174,049$1,220,592$1,017,216$1,017,216$1,082,216$
193
STREET LIGHTING IMPROVEMENT FUND
DEPARTMENT: Public Works
SUPERVISOR: City Engineer/Public Works Director
FUND #:245
ACTIVITY #: 43162
ACTIVITY SCOPE:
The Street Lighting Improvement Fund provides resources for improvements to the street lighting
system. Electric franchise fees are the fund’s primary revenue sources.
OBJECTIVES:
1.Upgrade traditional lights to colonial style lights.
2.Collaborate with MNDOT to add battery back-up to signals on TH25.
3.Replace and modify lighting system in the downtown area.
4.Add lighting for pathways and other high use areas.
ISSUES:
1.Project scope and timing.
2.Develop a light replacement program with Wright Hennepin and Xcel Energy.
3.Verify lamp and fixture maintenance by utility companies.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Projects supported 0 2 0 1 3
BUDGET COMMENTARY:
Electric franchise fees provide resources for lighting projects, often in conjunction with other street
improvement projects. Capital outlays for 2018 include $150,000 for downtown re-lighting projects
and $150,000 for various currently unspecified projects.
194
BUDGET:
STREET LIGHT IMPROVEMENTS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Franchise & Other Taxes 43,620 80,119 77,790 80,000 80,000 80,000 0.0%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 86,976 12,220 9,329 10,000 10,000 10,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 130,596$92,339$87,119$90,000$90,000$90,000$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay -333,559 49,460 75,000 75,000 300,000 300.0%
Operating Transfers ---------
TOTAL EXPENDITURES $0 $333,559 $49,460 $75,000 $75,000 $300,000 300.0%
FUND BALANCE - JANUARY 1 792,284$922,880$681,660$719,319$719,319$734,319$
Excess (Deficiency) of
Revenues over Expenditures 130,596 (241,220)37,659 15,000 15,000 (210,000)
FUND BALANCE - DECEMBER 31 922,880$681,660$719,319$734,319$734,319$524,319$
195
STREET RECONSTRUCTION FUND
DEPARTMENT: Public Works
SUPERVISOR: City Engineer/Public Works Director
FUND #:212
ACTIVITY #: 43121
ACTIVITY SCOPE:
The Street Reconstruction Fund was established to track annual improvements to city infrastructure.
Improvements are based on an annual reconstruction schedule.
OBJECTIVES:
1.Improve city streets in the capital improvement plan.
ISSUES:
1.City no longer levies for this fund.
2.Other traditional resources have been diverted to other needs.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Not Applicable
BUDGET COMMENTARY:
Past revenue sources have included property taxes and operating transfers from the Liquor Fund.
Neither the tax nor transfer has been budgeted for 2018. Reimbursement resolutions have been
passed by council on various projects that could be supported by the Street Reconstruction Fund.
These resolutions allow the city to reimburse itself with debt proceeds. Staff has not made a final
determination of the mix of funding sources for 2018 projects.
196
BUDGET:
STREET RECONSTRUCTION 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes 176$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 84,752 24,910 28,177 25,000 25,000 20,000 -20.0%
Operating Transfers --45,608 ------
Debt Proceeds ---------
TOTAL REVENUES 84,928$24,910$73,785$25,000$25,000$20,000$-20.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers --45,608 45,693 45,693 44,899 -1.7%
TOTAL EXPENDITURES -$-$45,608$45,693$45,693$44,899$-1.7%
FUND BALANCE - JANUARY 1 1,666,105$1,751,033$1,775,943$1,804,120$1,804,120$1,783,427$
Excess (Deficiency) of
Revenues over Expenditures 84,928 24,910 28,177 (20,693)(20,693)(24,899)
FUND BALANCE - DECEMBER 31 1,751,033$1,775,943$1,804,120$1,783,427$1,783,427$1,758,528$
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198
ENTERPRISE
FUNDS
Adopted 2018
ENTERPRISE
FUNDS
ENTERPRISE FUNDS - SUMMARY
DESCRIPTION
Enterprisefundsareusedtoreportanactivityforwhichafeeischargedtoexternalusersforgoodsorservices.
Unlikegovernmentalfunds,enterprisefundsfocusonthedeterminationofoperatingincome,changesinnet
position(orcostrecovery),financialposition,andcashflows.Enterprisefundsuseanaccrualbasisofaccounting
forfinancialreportingpurposes.Amodifiedaccrualbasiswillbeusedforbudgetingpurposesinthisreport.
Consequently,thebottomlineforeachenterprisefundislabeledfundbalanceratherthannetposition,which
includescapitalassets,long-termdebtandothernoncurrentitems.Fundbalanceinenterprisefundsisroughly
thesameasworkingcapital. Thecitycurrentlyhasfiveactiveenterprisefunds:Water,Sewage,Liquor(Hi-Way
Liquors),DeputyRegistrar(DMV),andFiberOptics(FiberNet).
BUDGETISSUES
Eachenterprisefundhasspecificchallengesthatwillbeaddressedinthenarrativeforeachfund.
BUDGETSUMMARY
TOTAL ENTERPRISE FUNDS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Sale of Goods 5,165,737 5,489,430 5,448,584 5,435,194 5,635,194 5,770,784 6.2%
Licenses & Permits 2,735 4,635 3,000 200 200 2,000 900.0%
Intergovernmental Revenues ---------
Charges for Services 5,240,839 5,270,527 5,515,535 5,414,861 5,393,291 5,670,207 4.7%
Fines & Forfeits ---------
Special Assessments 40,440 12,998 494 30,000 30,000 38,000 26.7%
Miscellaneous 424,869 213,930 602,792 165,297 236,867 124,200 -24.9%
Contributed Capital 966,494 1,435,870 1,993,232 140,450 140,450 140,450 0.0%
Operating Transfers 6,383,732 450,000 350,000 230,000 180,000 130,000 -43.5%
Debt Proceeds --1,413,065 700,000 700,000 --100.0%
TOTAL REVENUES 18,224,846$12,877,390$15,326,702$12,116,002$12,316,002$11,875,641$-2.0%
EXPENDITURES
Personnel Services 1,621,367$1,830,153$1,754,735$1,555,441$1,577,341$1,683,446$8.2%
Supplies 4,204,556 4,320,133 4,406,720 4,414,130 4,562,084 4,710,245 6.7%
Other Services & Charges 3,506,438 3,059,414 3,179,969 3,422,406 3,561,643 3,694,978 8.0%
Capital Outlay 139,513 548,298 3,865,726 1,760,900 1,601,809 1,146,000 -34.9%
Debt Service 6,054,285 358,072 642,045 373,574 373,574 373,574 0.0%
Operating Transfers 2,972,232 2,751,045 549,327 315,293 265,293 1,130,000 258.4%
TOTAL EXPENDITURES 18,498,391$12,867,115$14,398,522$11,841,744$11,941,744$12,738,243$7.6%
FUND BALANCE - JANUARY 1 9,253,580$8,980,035$8,990,310$9,918,490$9,918,490$10,292,748$
Excess (Deficiency) of
Revenues over Expenditures (273,545)10,275 928,180 274,258 374,258 (862,602)
FUND BALANCE - DECEMBER 31 8,980,035$8,990,310$9,918,490$10,192,748$10,292,748$9,430,146$
199
WATER FUND
DEPARTMENT: Public Works
SUPERVISOR: Utilities Superintendent
FUND #:601
ACTIVITY #: 49440
ACTIVITY SCOPE:
The Water Fund is a self-sustaining city utility fund. The water department manages the water
utility, providing a continuous supply of high-quality water to customers at a reasonable cost. The
water system is maintained at proper pressure levels, and it is bacteria-free. Further, metering
equipment is maintained to account for accurate usage and billing.
OBJECTIVES:
1.Continue to add GPS data point to GIS system.
2.Improve well head protection program.
3.Advance installation of radio reading devices on water meters.
ISSUES:
1.Additional state and federal regulations.
2.Aging water control system (SCADA).
3.Project demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Water customers 4,112 4,148 4,225 4,270 4,350
Meters read*16,099 16,520 16,800 51,240 52,200
Meters replaced 47 44 57 84 125
New meters installed 79 49 57 55 60
Water locates 300 300 300 300 300
Gallons pumped (MG)511 514 519 577 530
Valves maintained 242 436 400 400 400
Hydrants maintained 201 450 400 400 400
Times mains flushed 2 2 2 2 2
Mains/wells rebuilt 1 0 0 0 1
Water towers inspections 2 1 2 2 2
Reservoir inspections 1 0 0 1 1
Water samples to sent 250 250 250 250 250
Radio units installed 0 650 650 650 650
GPS water system 1/8 city 1/8 city 1/8 city 1/8 city 1/8 city
Service shut-offs 150 150 150 150 150
* Monthly utility billing started at the beginning of 2017.
200
BUDGET COMMENTARY:
The Water Fund’s main source of revenue is user charges. In 2013 and 2015, water customer user
rates were increased by 10% and 5%, respectively. Since 2015, rates have increase annually between
3% and 5%.
Capital outlays in 2016 were largely attributable to a core street project. Outlays will decline with
fewer projects with water components. The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage adjustment increase. In 2016, one
new full-time operator position was split between the Water Fund and Sewage Fund. The 2018
transfers out will be used acquire land for the next public works building site. Other budget items are
expected to remain close to prior year levels.
BUDGET:
WATER FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits 2,735 4,635 3,000 200 200 2,000 900.0%
Intergovernmental Revenues ---------
Charges for Services 1,042,343 1,093,984 1,130,260 1,122,299 1,122,299 1,170,841 4.3%
Fines & Forfeits ---------
Special Assessments 40,440 12,998 494 30,000 30,000 38,000 26.7%
Miscellaneous 230,817 84,307 108,524 51,000 51,000 55,500 8.8%
Contributed Capital 81,362 256,163 187,358 80,000 80,000 80,000 0.0%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 1,397,697$1,452,087$1,429,636$1,283,499$1,283,499$1,346,341$4.9%
EXPENDITURES
Personnel Services 188,151$181,810$258,068$327,954$327,954$320,444$-2.3%
Supplies 160,665 152,257 181,391 178,150 178,150 199,150 11.8%
Other Services & Charges 221,750 256,740 230,153 314,150 314,150 334,579 6.5%
Capital Outlay 11,656 35,916 949,832 426,000 426,000 172,500 -59.5%
Operating Transfers 631,560 790,958 199,327 --600,000 ---
TOTAL EXPENDITURES 1,213,782$1,417,681$1,818,771$1,246,254$1,246,254$1,626,673$30.5%
FUND BALANCE - JANUARY 1 4,567,498$4,751,413$4,785,819$4,396,684$4,396,684$4,433,929$
Excess (Deficiency) of
Revenues over Expenditures 183,915 34,406 (389,135)37,245 37,245 (280,332)
FUND BALANCE - DECEMBER 31 4,751,413$4,785,819$4,396,684$4,433,929$4,433,929$4,153,597$
201
SEWAGE FUND
DEPARTMENT: Public Works
SUPERVISOR: Utilities Superintendent
FUND #:602
ACTIVITY #: 49480
ACTIVITY SCOPE:
The Sewage Fund is a self-sustaining city utility fund. The Sewage Fund has two divisions: sanitary
sewer collection operations and treatment plant operations. The water department manages the
sanitary sewer system and a private vendor provides treatment plant services.
OBJECTIVES:
1.Continue to add GPS data points to GIS system.
2.Research alternative waste disposal options, including costs.
3.Advance long-range planning regarding plant capacity and expansion.
4.Monitor infiltration of ground water in to the sanitary sewer system.
ISSUES:
1.Treatment plant is nearing capacity.
2.Aging of control system (SCADA) and other assets.
3.Ground water infiltration.
4.Cost of treatment alternatives.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Collection
Sewer mains maintained 17 miles 28 miles 28 miles 26 miles 20 miles
Liftstations 7 7 7 7 7
Sewer mainlocates 300 300 300 300 300
GPS sewer system 1/8 city 1/8 city 1/8 city 1/8 city 1/8 city
Manholes maintained 356 716 716 716 500
New service hookups 76 51 68 55 60
Sewer services televised 1/8 city 26 Miles 26 Miles 15 Miles 20 miles
Treatment
Screw press influent flow (gals) 5,345,933 5,117,130 4,430,130 4,420,272 4,425,000
Thickened sludge (wet tons)1,924 1,549 1,449 1,578 1,500
Thickened sludge (dry tons)264 236 216 229 225
Dry ton % of wet ton 13.7%15.2%14.9%14.5%15.0%
Raw influent flow (MG)425 417 432 445 450
MG= million gallons
202
BUDGET COMMENTARY:
The Sewage Fund’s main source of revenue is user charges. In 2013 and 2015, sewage customer user
rates were increased by 10% and 5%, respectively. Since 2015, rates have increased annually
between 3% and 5%.
Treatment plant capital outlays in 2016 included $2,333,000 for digester cover replacement and
phosphorous reduction. The funding mix for these plant upgrades included a loan from the
Minnesota Public Facilities Authority.
The 2018 personnel services budget includes a full step increase and a 3% (2% in January and 1% in
July) market rate wage adjustment increase. In 2016, a new full-time operator position was split
between the Water Fund and Sewage Fund. Operating transfers out were budgeted to retire debt
service for system improvements. The city renewed its contract with a third-party provider of
wastewater treatment plant management services for five years starting in 2018. Other budget items
are expected to remain close to prior year levels.
BUDGET:
SEWAGE FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 2,047,789 2,052,311 2,203,729 2,095,892 2,095,892 2,276,066 8.6%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 195,867 61,340 62,168 62,000 62,000 50,000 -19.4%
Contributed Capital 885,132 1,179,707 1,805,874 60,450 60,450 60,450 0.0%
Operating Transfers ---------
Debt Proceeds --1,413,065 700,000 700,000 --100.0%
TOTAL REVENUES 3,128,788$3,293,358$5,484,836$2,918,342$2,918,342$2,386,516$-18.2%
EXPENDITURES
Personnel Services 242,621$280,801$347,720$332,762$332,762$350,137$5.2%
Supplies 22,132 15,597 17,831 23,150 23,150 26,550 14.7%
Other Services & Charges 1,305,025 1,229,082 1,116,983 1,230,463 1,230,463 1,237,442 0.6%
Capital Outlay 127,857 401,069 2,915,894 1,000,000 1,000,000 872,500 -12.8%
Debt Service 364,963 358,072 642,045 373,574 373,574 373,574 0.0%
Operating Transfers 1,690,672 1,510,087 -85,293 85,293 --100.0%
TOTAL EXPENDITURES 3,753,270$3,794,708$5,040,473$3,045,242$3,045,242$2,860,203$-6.1%
FUND BALANCE - JANUARY 1 3,767,385$3,142,903$2,641,553$3,085,916$3,085,916$2,959,016$
Excess (Deficiency) of
Revenues over Expenditures (624,482)(501,350)444,363 (126,900)(126,900)(473,687)
FUND BALANCE - DECEMBER 31 3,142,903$2,641,553$3,085,916$2,959,016$2,959,016$2,485,329$
203
CONTRACTED WASTEWATER TREATMENT PLANT SERVICES:
Schedule of Non-Reimbursables (O&M Services)
Year Service Change $Change %
2011 522,281.04$
2012 544,788.96$22,507.92$4.3%
2013 562,361.04$17,572.08$3.2%
2014 585,096.00$22,734.96$4.0%
2015 582,360.00$(2,736.00)$-0.5%
2016 582,360.00$-$0.0%
2017 593,196.00$10,836.00$1.9%
2018 563,394.00$(29,802.00)$-5.0%
2019 577,479.00$14,085.00$2.5%
2020 591,916.00$14,437.00$2.5%
2021 606,714.00$14,798.00$2.5%
2022 621,882.00$15,168.00$2.5%
Schedule of Reimbursable Costs
Year R&M Polymer Hauling Landfill Electricity Gas Total
2011 89,899.16$11,427.06$-$-$154,982.64$44,604.29$300,913.15$
2012 91,406.38 16,303.76 --145,043.48 36,722.51 289,476.13
2013 89,620.47 17,453.23 --170,537.98 46,497.96 324,109.64
2014 57,883.83 62,735.70 32,949.54 33,237.11 160,825.74 68,416.61 416,048.53
2015 50,239.23 35,090.95 25,807.56 28,373.57 145,833.19 44,092.79 329,437.29
2016 52,872.08 32,395.63 20,875.73 30,784.18 --136,927.62
2017 50,004.00 47,028.00 23,856.00 24,492.00 --145,380.00
2018 50,004.00 -23,856.00 24,492.00 --98,352.00
The city will start directly paying for chemicals (polymer) in 2018. Electricity and gas charges were
assumed by the city in 2016. The waste disposal biosolids site was abandoned in 2014 when new
screw press technology was installed.
R&M R&M R&M R&M R&M R&M R&M R&M
Electricity Electricity Electricity
Electricity
Electricity
Gas Gas Gas
Gas
Gas
$-
$100,000
$200,000
$300,000
$400,000
$500,000
2011 2012 2013 2014 2015 2016 2017 2018
Reimbursable Expenses 2011-2018
R&M Polymer Hauling Landfill Electricity Gas
204
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/1/2018 29,899 29,899
12/1/2018 185,000 29,899 2.00%214,899
6/1/2019 28,049 28,049
12/1/2019 185,000 28,049 2.00%213,049
6/1/2020 26,199 26,199
12/1/2020 190,000 26,199 2.00%216,199
6/1/2021 24,299 24,299
12/1/2021 195,000 24,299 2.15%219,299
6/1/2022 22,203 22,203
12/1/2022 200,000 22,203 2.35%222,203
6/1/2023 19,853 19,853
12/1/2023 205,000 19,853 2.60%224,853
6/1/2024 17,188 17,188
12/1/2024 210,000 17,188 2.75%227,188
6/1/2025 14,300 14,300
12/1/2025 215,000 14,300 3.00%229,300
6/1/2026 11,075 11,075
12/1/2026 225,000 11,075 3.00%236,075
6/1/2027 7,700 7,700
12/1/2027 230,000 7,700 3.20%237,700
6/1/2028 4,020 4,020
12/1/2028 240,000 4,020 3.35%244,020
Total 2,280,000$409,565$2,689,565$
GO Wastewater Treatment Bonds, Series 2013B
The optional redemption date on these bonds is December 1, 2021.
205
LIQUOR FUND
DEPARTMENT: Liquor Fund
SUPERVISOR: Liquor Store Manager/Finance Director
FUND #:609
ACTIVITY #: 49750
ACTIVITY SCOPE:
The Liquor Fund provides customers with the opportunity to purchase alcohol and other related
products. Profits from store operations are used to support other city funds and activities.
OBJECTIVES:
1.Improve product selection.
2.Enhance alcohol training program for all liquor store employees.
3.Elevate store attractiveness through customer focused improvements.
4.Boost sales to existing customer.
5.Increase sales per transaction.
6.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.Traffic disruption caused by road construction.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Gross profit 1,289,040$1,519,843$1,407,360$1,498,816$1,450,000$
Gross profit % of sales 25%27%26%26%26%
Sales per square foot $587 $624 $624 $654 $644
Wine tastingtickets sold 400 300 252 238 200
Total number of sales 229,375 237,535 235,901 248,044 245,000
Staff hours worked 19,385 19,811 20,104 21,173 21,500
Sales per hour worked 11.8 12.0 11.7 11.7 11.4
Average sale (includingtax) $24.60 $25.24 $25.25 $25.39 $26.00
206
BUDGET COMMENTARY:
Hi-Way Liquors has continued to be a self-supporting city enterprise fund, with profits directed
toward special projects or other needs. Consequently, this helps keep property taxes lower.
Revenues are generated by the sale of alcoholic beverages and merchandise related to the liquor
industry. In 2018, the Liquor Fund is slated to transfer $400,000 to the Park & Pathway Fund and
$130,000 to the Fiber Optics Fund. Additionally, the bulk of the operating transfers from 2013
through 2016 went to the Fiber Optics Fund. The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage increase. Additionally, the 2018
increase in personnel services includes the extra staffing for Sunday sales, which began in July 2017.
Capital outlay for 2018 includes a new advertising sign. Budgeted revenues are conservatively
estimated.
BUDGET:
LIQUOR FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Sale of Goods 5,165,737$5,489,430$5,448,584$5,435,194$5,635,194$5,770,784$6.2%
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services ---------
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 13,709 7,503 14,713 5,000 5,000 5,000 0.0%
Contributed Capital ---------
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 5,179,446$5,496,933$5,463,297$5,440,194$5,640,194$5,775,784$6.2%
EXPENDITURES
Personnel Services 455,647$506,042$537,220$570,584$570,584$637,390$11.7%
Supplies 3,865,883 4,043,820 4,042,321 4,094,774 4,244,774 4,340,245 6.0%
Other Services & Charges 202,811 202,271 197,572 238,245 238,245 235,543 -1.1%
Capital Outlay ---75,000 75,000 75,000 0.0%
Operating Transfers 600,000 450,000 350,000 230,000 180,000 530,000 130.4%
TOTAL EXPENDITURES 5,124,341$5,202,133$5,127,113$5,208,603$5,308,603$5,818,178$11.7%
FUND BALANCE - JANUARY 1 667,538$722,643$1,017,443$1,353,627$1,353,627$1,685,218$
Excess (Deficiency) of
Revenues over Expenditures 55,105 294,800 336,184 231,591 331,591 (42,394)$
FUND BALANCE - DECEMBER 31 722,643$1,017,443$1,353,627$1,585,218$1,685,218$1,642,824$
207
DEPUTY REGISTRAR FUND
DEPARTMENT: Deputy Registrar (DMV)
SUPERVISOR: Finance Director
FUND #:217
ACTIVITY #: 41990
ACTIVITY SCOPE:
The Deputy Registrar (DMV) is a city-based service entity, which assists customers with the purchase
of vehicle license plates/tabs, DNR licenses, and other licenses as required by Minnesota state
agencies. The DMV is one of four limited driver’s license agents in Wright County. A limited agent
can process change of address and lost license applications for driver’s licenses.
OBJECTIVES:
1.Market DMV services to public and dealerships.
2.Expand and improve customer service.
3.Update employee training and certifications.
ISSUES:
1.Changes to state licensing regulations.
2.Availability/limitations of state portal for license processing (MNLARS).
3.Providing services with little or no revenue.
4.Competition with other customer options: Other DMVs, on-line, and mail-in.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Motor vehicle transactions 60,051 64,927 67,508 70,605 70,000
DNR transactions 5,949 5,914 6,318 5,873 6,500
Game & Fishtransactions 433 387 600 647 600
Driver's license transactions 1,462 1,294 1,465 1,390 1,500
Total transactions 67,895 72,522 75,891 78,515 78,600
Staff hours 11,606 10,834 9,878 10,931 10,000
Transactions per hour 5.8 6.7 7.7 7.2 7.9
Dealerships serviced 19 19 21 27 27
208
BUDGET COMMENTARY:
The main revenue source for the DMV is the fees charged for the issuance of various licenses. In
2009, the DMV began partial driver’s license services. The 2014 operating transfers represented a
contribution to community center projects. The 2018 personnel services budget includes a full step
increase and a 3% (2% in January and 1% in July) market rate wage adjustment increase. This fund
was accounted for as a special revenue fund until 2013. Revenue by service type: DNR licenses = $2-
$7; game & fish licenses = $1; driver’s licenses = $8; motor vehicle transactions = $6-$10. Revenues
are always estimated conservatively.
BUDGET:
DEPUTY REGISTRAR 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 497,709 531,408 561,775 475,100 475,100 525,300 10.6%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 10,825 11,201 10,385 1,000 1,000 1,100 10.0%
Operating Transfers ---------
TOTAL REVENUES 508,534$542,609$572,160$476,100$476,100$526,400$10.6%
EXPENDITURES
Personnel Services 254,363$293,179$301,567$324,141$324,141$353,575$9.1%
Supplies 10,572 4,294 4,342 16,550 16,010 9,300 -43.8%
Other Services & Charges 34,587 33,263 34,889 43,245 43,785 40,714 -5.9%
Capital Outlay -----26,000 ---
Operating Transfers 50,000 --------
TOTAL EXPENDITURES 349,522$330,736$340,798$383,936$383,936$429,589$11.9%
FUND BALANCE - JANUARY 1 174,102$333,114$544,987$776,349$776,349$868,513$
Excess (Deficiency) of
Revenues over Expenditures 159,012 211,873 231,362 92,164 92,164 96,811
FUND BALANCE - DECEMBER 31 333,114$544,987$776,349$868,513$868,513$965,324$
209
FIBER OPTICS FUND
DEPARTMENT: Fiber Optics Fund
SUPERVISOR: City Administrator
FUND #:656
ACTIVITY #: 49870-49877
ACTIVITY SCOPE:
As with all enterprise funds, the goal of the Fiber Optics Fund is to become a self-sustaining
enterprise. Fiber Optics delivers high speed 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:
Measurement 2014 2015 2016 2017 2018
Internet subscibers 1,360 1,424 1,487 1,554 1,560
Phone subscribers*582 518 461 431 400
Cable TV subscribers 813 714 641 543 500
BUDGET COMMENTARY:
The Fiber Optics Fund began operations in 2009, and construction of the fiber optic network was
completed in 2010. Revenues come from charges to subscribers, and expenditures are incurred as a
result of operating the system and new customer service installations. The city defaulted on the
revenue bonds used to finance construction of the system. Judgment bonds were issued to finance
the settlement with revenue bondholders. Property taxes are levied to support debt service on
judgment bonds. There is no current debt service recorded in the Fiber Optics Fund.
210
In 2012, the city transferred $4,450,000 to the fund, eliminating the interfund loan balance. In 2013,
the Liquor Fund and other city funds transferred $860,000 into the Fiber Optics Fund. In years 2014
through 2017, the Liquor Fund provided $1,580,000 for Fiber Optics operations. The 2014 transfer
included $5,783,732 from debt proceeds, which was used to settle a class action lawsuit related to
the default on revenue bonds. The 2018 budget includes a $130,000 transfer from the Liquor Fund.
Personnel services (employee costs) were eliminated in July of 2016 with the outsourcing of
operations to a third party. However, custodial employees still allocate a minimal amount of time to
the fund for cleaning. The 2018 budget includes $140,000 in other services and charges for moving
existing fiber lines to accommodate construction of the Fallon Avenue overpass.
BUDGET:
FIBER OPTICS 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 1,652,998 1,592,824 1,619,771 1,721,570 1,700,000 1,698,000 -1.4%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous (26,349)49,579 407,002 46,297 117,867 12,600 -72.8%
Contributed Capital ---------
Operating Transfers 6,383,732 450,000 350,000 230,000 180,000 130,000 -43.5%
Debt Proceeds ---------
TOTAL REVENUES 8,010,381$2,092,403$2,376,773$1,997,867$1,997,867$1,840,600$-7.9%
EXPENDITURES
Personnel Services 480,585$568,321$310,160$-$21,900$21,900$---
Supplies 145,304 104,165 160,835 101,506 100,000 135,000 33.0%
Other Services & Charges 1,742,265 1,338,058 1,600,372 1,596,303 1,735,000 1,846,700 15.7%
Capital Outlay -111,313 -259,900 100,809 --100.0%
Operating Transfers 5,689,322 --------
TOTAL EXPENDITURES 8,057,476$2,121,857$2,071,367$1,957,709$1,957,709$2,003,600$2.3%
FUND BALANCE - JANUARY 1 77,057$29,962$508$305,914$305,914$346,072$
Excess (Deficiency) of
Revenues over Expenditures (47,095)(29,454)305,406 40,158 40,158 (163,000)
FUND BALANCE - DECEMBER 31 29,962$508$305,914$346,072$346,072$183,072$
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ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
INTERNAL
SERVICE
FUNDS
INTERNAL SERVICE FUNDS - SUMMARY
DESCRIPTION
Internalservicefundsareaproprietaryfundtypethatmaybeusedtoreportanyactivitythatprovidesgoodsor
servicetootherfunds,departments,oragenciesoftheprimarygovernmentanditscomponentunits,orto
othergovernments,onacost-reimbursementbasis.Internalservicefundsuseanaccrualbasisofaccountingfor
financialreportingpurposes.Amodifiedaccrualbasiswillbeusedforbudgetingpurposesinthisreport.
Consequently,thebottomlineforeachinternalservicefundislabeledfundbalanceratherthannetposition,
whichincludescapitalassets,long-termdebtandothernoncurrentitems.Fundbalanceinaninternalservice
fundisroughlythesameasworkingcapital. Thecitycurrentlyhasthreeactiveinternalservicefunds:IT
Services,CentralEquipment,andBenefitAccrual.TheBenefitAccrualFundwasstartedinDecember2015.
BUDGETISSUES
Eachinternalservicefundhasspecificchallengesthatwillbeaddressedinthenarrativeforeachfund.
BUDGETSUMMARY
TOTAL INTERNAL SERVICE 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 364,608 420,900 530,842 504,024 504,024 542,688 7.7%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 45,391 16,609 13,975 8,153 8,153 6,112 -25.0%
Operating Transfers -226,158 -------
Debt Proceeds 515,000 --------
TOTAL REVENUES 924,999$663,667$544,817$512,177$512,177$548,800$7.2%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies 22,803 21,985 57,096 32,200 32,200 35,000 8.7%
Other Services & Charges 195,917 196,834 153,460 256,780 256,780 225,400 -12.2%
Capital Outlay 589,853 239,463 138,236 386,000 360,000 323,000 -16.3%
Debt Service 66,992 76,193 131,260 135,050 135,050 128,100 -5.1%
Operating Transfers ---------
TOTAL EXPENDITURES 875,565$534,475$480,052$810,030$784,030$711,500$-12.2%
FUND BALANCE - JANUARY 1 920,570$970,004$1,099,196$1,163,961$1,163,961$892,108$
Excess (Deficiency) of
Revenues over Expenditures 49,434 129,192 64,765 (297,853)(271,853)(162,700)
FUND BALANCE - DECEMBER 31 970,004$1,099,196$1,163,961$866,108$892,108$729,408$
213
IT SERVICES FUND
DEPARTMENT: Finance
SUPERVISOR: Finance Director
FUND #:702
ACTIVITY #: XXXXX
ACTIVITY SCOPE:
The IT (Information Technology) Services Fund is a self-sustaining internal service fund. The finance
department manages the network of servers and peripheral equipment to provide continuity and
accountability for IT related services. The fund’s revenues are derived from service charges to each
budget unit receiving IT services. Service charges are adjusted annually to cover all current costs plus
a portion of capital outlays.
OBJECTIVES:
1.Centralize provision of information technology services into one fund.
2.Improve management of IT resources.
3.Distribute capital costs over multiple annual reporting periods.
4.Provide financial management stability to each budget unit.
ISSUES:
1.Appropriate costs distribution.
2.Coordination of service delivery to multiple departments and budget units.
3.Demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Network uptime 99%99%99%99%99%
Work Load:
Number of clients/users 70 102 83 85 85
Number of PC, servers, and
network devices 131 145 167 170 170
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BUDGET COMMENTARY:
The IT Services Fund’s main source of revenue is internal user charges. Except for point-of-sale
software and hardware, the IT Services Fund accounts for the all activity supporting the city’s
information technology infrastructure, including servers, routers, PCs, printers, copiers, phones, and
professional services.
BUDGET:
IT SERVICES 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 252,708 278,100 298,981 276,324 276,324 276,388 0.0%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 2,864 1,252 1,850 153 153 112 -26.8%
Operating Transfers ---------
Debt Proceeds ---------
TOTAL REVENUES 255,572$279,352$300,831$276,477$276,477$276,500$0.0%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies 22,803 21,985 57,096 32,200 32,200 35,000 8.7%
Other Services & Charges 195,917 196,834 153,460 256,780 256,780 225,400 -12.2%
Capital Outlay ---10,000 10,000 12,500 25.0%
Operating Transfers ---------
TOTAL EXPENDITURES 218,720$218,819$210,556$298,980$298,980$272,900$-8.7%
FUND BALANCE - JANUARY 1 21,962$58,814$119,347$209,622$209,622$187,119$
Excess (Deficiency) of
Revenues over Expenditures 36,852 60,533 90,275 (22,503)(22,503)3,600
FUND BALANCE - DECEMBER 31 58,814$119,347$209,622$187,119$187,119$190,719$
215
CENTRAL EQUIPMENT FUND
DEPARTMENT: Finance
SUPERVISOR: Finance Director
FUND #:703
ACTIVITY #: XXXXX
ACTIVITY SCOPE:
The Central Equipment Fund is a self-sustaining internal service fund. The finance department
participates along with various department directors and division leaders in the acquisition of capital
assets. The acquired capital asset is charged back against the benefitting budget unit through rental
charges over a predetermined number of years. The rental charge reflects depreciation plus
inflation. Service charges for each asset are fixed for the duration of rental payments.
OBJECTIVES:
1.Build mechanism for replacing capital assets into annual budgets.
2.Improve management of capital assets.
3.Distribute capital costs over multiple annual reporting periods.
4.Provide financial management stability to each budget unit.
ISSUES:
1.Appropriate cost distribution over multiple accounting periods.
2.Efficient coordination of asset replacement activities.
3.Adequate start-up resources.
4.Demands on staff.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Annual cost recovery 111,900$142,800$204,600$210,700$249,800$
Total costs of assets acquired 656,491$822,619$960,855$1,467,515$1,778,015$
Efficiency:
Cost recovery as % of
acquired assets.17%17%21%14%14%
Work Load:
Number of fund assets 9 12 17 24 30
216
BUDGET COMMENTARY:
The Central Equipment Fund’s main source of revenue is internal rental charges. The fund was
initiated near the beginning of 2013 with the sale of $500,000 in certificates of indebtedness. The city
also issued $515,000 in G.O. bonds in 2014 to finance the acquisition of a fire tender and a plow
truck. In 2014, the operating transfer resulted from closing the Capital Outlay Revolving Fund. The
2018 budgeted equipment acquisitions: [public works equipment] rubber melter - $60,000; blacktop
hot box - $95,000; skid steer - $65,000; [recreation equipment] aerator - $30,000; utility mule -
$15,000; tractor - $45,500.
BUDGET:
CENTRAL EQUIPMENT FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services 111,900 142,800 193,800 210,700 210,700 249,800 18.6%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous 42,527 15,357 12,125 5,000 5,000 3,000 -40.0%
Operating Transfers ---------
Debt Proceeds 515,000 --------
TOTAL REVENUES 669,427$158,157$205,925$215,700$215,700$252,800$17.2%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay 589,853 239,463 138,236 376,000 350,000 310,500 -17.4%
Debt Service 66,992 76,193 131,260 135,050 135,050 128,100 -5.1%
Operating Transfers ---------
TOTAL EXPENDITURES 656,845$315,656$269,496$511,050$485,050$438,600$-14.2%
FUND BALANCE - JANUARY 1 898,608$911,190$753,691$690,120$690,120$420,770$
Excess (Deficiency) of
Revenues over Expenditures 12,582 (157,499)(63,571)(295,350)(269,350)(185,800)
FUND BALANCE - DECEMBER 31 911,190$753,691$690,120$394,770$420,770$234,970$
217
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
12/1/2018 65,000$3,713$1.60%68,713$
12/1/2019 65,000 2,673 1.85%67,673
12/1/2020 70,000 1,470 2.10%71,470
Total 200,000$7,855$207,855$
GO Certificates of Indebtedness, Series 2013A
The early redemption date on these certificates is December 1, 2018.
Payable Principal Interest Rate Total
6/15/2018 -4,886 4,886
12/15/2018 55,000 4,886 1.50%59,886
6/15/2019 -4,474 4,474
12/15/2019 55,000 4,474 1.85%59,474
6/15/2020 -3,965 3,965
12/15/2020 55,000 3,965 2.20%58,965
6/15/2021 -3,360 3,360
12/15/2021 60,000 3,360 2.50%63,360
6/15/2022 -2,610 2,610
12/15/2022 60,000 2,610 2.75%62,610
6/15/2023 -1,785 1,785
12/15/2023 60,000 1,785 2.90%61,785
6/15/2024 -915 915
12/15/2024 60,000 915 3.05%60,915
Total 405,000$43,990$448,990$
GO Bonds, Series 2014A (Equipment Portion)
The early redemption date on these bonds is December 15, 2021.
218
BENEFIT ACCRUAL FUND
DEPARTMENT: Finance
SUPERVISOR: Finance Director
FUND #:704
ACTIVITY #: XXXXX
ACTIVITY SCOPE:
The Benefit Accrual Fund is a self-sustaining internal service fund. The finance department
participates with various department directors, division leaders and the human resources manager
in managing vacation, sick leave, and paid-time-off (PTO) benefit. The non-enterprise fund liability
for this benefit is recorded in the Benefit Accrual Fund. Enterprise funds (Liquor, DMV, Water &
Sewer) maintain the liability for employees involved in enterprise operations. Expenditures in each
governmental fund budget unit are adjusted annually to reflect changes to the liability caused by the
employees of that budget unit.
OBJECTIVES:
1.Build mechanism for recording governmental fund liability for paid leaves.
2.Improve management of vacation, sick, and PTO leave.
3.Distribute accumulating paid leave costs to budget units.
4.Provide financial management stability to each budget unit.
ISSUES:
1.Increasing cost of paid leave benefits.
2.Stability of liability based accumulation of additional leave.
MEASURABLE WORKLOAD DATA:
Measurement 2014 2015 2016 2017 2018
Outcome/Effectiveness:
Accured PTO hours ------6,966 8,677 9,875
Accrued vacation hours 6,765 6,846 2,180 1,409 528
Accrued sick leave hours 5,261 5,302 1,443 910 289
Efficiency:
Hours accrued per employee:
PTO ------145 155 198
Vacation 101 104 136 94 176
Sick leave 84 87 90 61 96
Work Load:
Employees accruing hours:
PTO employees ------48 56 50
Vacation employees 67 66 16 15 3
Sick leave employees 63 61 16 15 3
City implemented a PTO system in 2016 for non-union employees with fewer than 25 years.
Union employees joined the PTO system in July 2017.
219
BUDGET COMMENTARY:
The Benefit Accrual Fund’s main source of revenue is internal charges to personnel services in the
city’s two main governmental funds: General Fund and Monticello Community Center Fund.
Personnel services expenditures in each governmental fund budget unit will be adjusted up or down
based on the change in liability caused by each unit. The liability is based on the number of hours
accrued multiplied by the hourly compensation for each individual. Employees are allowed to carry-
over 320 hours of accrued PTO. This fund was initiated with a $226,158 transfer at the end of 2015.
BUDGET:
BENEFIT ACCRUAL FUND 2014 2015 2016 2017 2017 2018 %
REVENUES ACTUAL ACTUAL ACTUAL BUDGET PROJECTED BUDGET CHANGE
Property Taxes -$-$-$-$-$-$---
Licenses & Permits ---------
Intergovernmental Revenues ---------
Charges for Services --38,061 17,000 17,000 16,500 -2.9%
Fines & Forfeits ---------
Special Assessments ---------
Miscellaneous ---3,000 3,000 3,000 0.0%
Operating Transfers -226,158 -------
Debt Proceeds ---------
TOTAL REVENUES -$226,158$38,061$20,000$20,000$19,500$-2.5%
EXPENDITURES
Personnel Services -$-$-$-$-$-$---
Supplies ---------
Other Services & Charges ---------
Capital Outlay ---------
Operating Transfers ---------
TOTAL EXPENDITURES -$-$-$-$-$-$---
FUND BALANCE - JANUARY 1 -$-$226,158$264,219$264,219$284,219$
Excess (Deficiency) of
Revenues over Expenditures -226,158 38,061 20,000 20,000 19,500
FUND BALANCE - DECEMBER 31 -$226,158$264,219$284,219$284,219$303,719$
220
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
CAPITAL
IMPROVEMENT
PROGRAM
CAPITAL IMPROVEMENT PROGRAM
INTRODUCTION
The capital improvements presented in this section comprise the 2018-2022 Capital Improvements
Program (CIP). The Monticello CIP integrates capital and major noncapital expenditures into a
comprehensive plan for forecasting needed future resources for acquiring and maintaining assets
used in municipal operations. By integrating major noncapital expenditures, such as maintenance
items or asset purchases not meeting specific dollar thresholds, the city can better plan and prepare
for future financial challenges.
The Monticello integrative CIP has four expenditure categories: capital improvements, vehicles and
equipment (Garage), major repair and maintenance items (First Aid Kit), and small tools and
equipment (Tool Box).
The Capital Improvements category primarily deals with projects that carry high price tags. In the
simplest of terms, capital improvements are expansions of, or improvements to, the city's physical
structures such as buildings, streets, sidewalks, parking facilities, open space, and utility systems
(infrastructure).
The Garage category contains capital outlays for vehicles and equipment essential to accomplishing
work. Generally, these assets have shorter useful lives and must be replaced on a regularly
scheduled basis.
The First Aid Kit category includes noncapital repair and maintenance expenditures related to the
preservation of existing assets, such as painting a water tank. Additionally, expenditures on projects
that do not meet certain capitalization thresholds are considered repairs and maintenance.
The Tool Box category is comprised of major noncapital small tool and equipment purchases. For
example, the purchase of multiple similar items that individually do not exceed the capitalization
threshold would be included in this section.
Q&A
WHAT IS A CAPITAL IMPROVEMENT PROGRAM?
A capital improvement program is a five-year plan for the evaluation of the city's facility, equipment,
and infrastructure needs. It serves as a guide for construction, development, and maintenance of the
city's infrastructure assets--as well as other less expensive assets--in the most cost-efficient manner
possible. It is the result of systematic review of each project, as it relates to the city council goals and
the established priority scheme, to maximize the use of all financial resources.
221
While the program serves as a long range plan, it is reviewed annually and revised based on current
circumstances and opportunities. Priorities may be changed due to grant opportunities or
circumstances that caused a more rapid deterioration of an asset resulting in a liability issue. Projects
may be revised for significant costing variances.
WHAT ARE THE OBJECTIVES OF A CAPITAL IMPROVEMENT PROGRAM?
· To forecast public facilities and improvements that will be needed in the near future.
· To anticipate and project financing needs in order to maximize available federal, state, and county
funds.
· To promote sound financial planning in order to enhance and protect future bond ratings and
bonding capacity.
· To focus attention on and assist in the implementation of established city council objectives goals as
outlined in the “Purpose and Mission”.
· To serve as a guide for local officials in making budgetary decisions.
· To balance the needs of new development with existing development.
· To promote and enhance the economic development of the city of Monticello.
· To strike a balance between needed public improvements and the present financial capability of the
city to provide for these improvements.
· To provide an opportunity for citizens and interest groups to voice opinions on development of city
facilities and infrastructure.
· To provide for improvements in a timely and systematic manner.
Changes have been made to improve the reliability of the capital improvement project estimates and
the focus of the funding. Previously the funding effort was focused primarily on the budget year. The
new process is intended to change that focus to funding over five years. This will enable decision
makers to identify opportunity costs of shifting priorities. It creates a better understanding of the
balancing act that is required to allocate scarce resources to the capital improvement effort.
WHAT IS THE CAPITAL IMPROVEMENT PROGRAM DEVELOPMENT PROCESS?
Assign Project Titles
· Make the title descriptive of the work.
· TIP: Title the project based on the problem to be solved at a location, rather than titling based on
the solution.
· Group projects in a meaningful way for your department. A project title of Boomerang
Improvements won’t work if it includes everything from the kitchen sink replacement to the cart
path overlay. It is a judgment decision.
Formulate Project Descriptions
· Include the target activities to be completed each year on the project. This should be a brief
statement of the work that will be performed and its location.
222
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 in order to avoid
harmful or otherwise undesirable consequences.
_ Corrects a condition dangerous to public health or safety
_ Satisfies a legal obligation (law, regulation, court order, contract)
_ Alleviates an emergency service disruption or deficiency
_ Prevents irreparable damage to a valuable public facility
Priority II: Essential (SHOULD-DO)-Projects that address clearly demonstrated needs or objectives.
_ Rehabilitates or replaces an obsolete public facility or attachment thereto
_ Stimulates economic growth and private capital investment
_ Reduces future operating and maintenance costs
_ Leverages available State or Federal funding
Priority III: Important (COULD-DO)-Projects that benefit the community but may be delayed
without detrimental effects to basic services.
_ Provides a new or expanded level of service
_ Promotes intergovernmental cooperation
_ Reduces energy consumption
_ Enhances cultural or natural resources
Document Project Justifications
The following things should be considered:
· Reason the project is necessary
· Related projects (timing issues)
· Coordination efforts required with other agencies (timing issues)
· Mandates and deadlines for compliance
· Service impact (number of participants impacted)
· New fees that could be generated as a result of the completion of the project (community center
usage fees, program fees)
· Community goal references (refer to your budget document)
· Safety requirements
223
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 some kind of operating impact.
Note Unfunded Projects
· All projects not funded are placed on an unfunded list.
Present product to the city council for review and final consideration
· Five-year funded capital improvements
· Ranked list of unfunded needs
HOW DOES THE CAPITAL IMPROVEMENT PROGRAM IMPACT THE OPERATING BUDGET?
All capital improvement projects are required to show the operating budget impact at the time the
projects are submitted for consideration in the Capital Improvement Program. This includes the
number of full time equivalent positions that would be needed or could be eliminated and the cost or
savings for salaries/benefits, supplies/services, and equipment. It would not be prudent to make
funding decisions in favor of a project the city could not afford to maintain, staff, or provide
equipment for.
Capital improvements can impact the budget by increasing or decreasing revenues and expenditures.
Revenues could be increased if the improvement attracts new businesses (building permits, sales tax,
or property tax). The improvement could also increase expenditures. Perhaps an expansion requires
new employees, additional maintenance services, or additional utility costs. Construction of a new
street may require additional costs for police patrol services, snow and ice removal, or street light
utility costs. Perhaps new technology could make the operation of a plant more efficient resulting in
a reduction in power costs, utility costs, and personnel costs (reduction in overtime or man-hours).
Many projects are associated with prevention of future excessive costs that are difficult to measure.
The cost of the maintenance should not exceed the benefit of the asset. The projects may have
maintenance costs, but the existing maintenance budgets are sufficient. The priority for available
capital project funds has been maintenance of existing facilities and infrastructure. Most of
Monticello’s projects fall into this category.
224
HOW IS CITIZEN INPUT INCORPORATED IN THE CIP DEVELOPMENT PROCESS?
The citizens are involved in the capital improvements plan through participation at council meetings,
and through citizen boards, commissions, and participation in public meetings, work sessions, and
public hearings.
Participation in Citizen Boards and Commissions
Several disciplines within the city have a citizen board or commission that helps to identify and
prioritize needs within their scope of interest. These priorities are reflected in the department head
numeric ranking when the project is initially submitted for consideration. The citizen boards and
commissions are particularly influential with regard to the addition of a project to the plan and the
priority it has within the scope of needs for the community.
Participation in Public Meetings
Each year in the spring, a workshop is held to inform the city council and all interested citizens about
the proposed budget for the year. A session within this workshop is devoted to capital
improvements. Since annual appropriations are required by statute, one required public hearing is
held in conjunction with the operating budget each year. Capital improvements typically represent
20% of the total budget and are considered carefully.
Beyond participation in boards and public meetings, the city makes a considerable effort to inform
the citizens through various publications, news releases, and the website.
HOW IS THE CAPITAL IMPROVEMENT PROGRAM FORMULATED?
The following time line is a specific listing of the steps used to develop the Capital Improvement Plan:
June: The finance department distributes “CIP Budget Request Instructions” along with prior year
submissions.
December: Existing projects roll forward one year. There is also dialogue reminding departments
about the general philosophies mentioned earlier in this discussion. Each project is evaluated by the
department head. New projects are then submitted to the Finance Department and entered into the
database along with updates or changes to existing projects.
April: The budget staff finalizes the plan by shifting funding priorities as necessary and incorporating
new projects, particularly in year five. The city administrator determines the overall budget
recommendation.
October: Work sessions are held to consider budget issues (for operating and for capital
improvements).
December: The first and second public hearings are held, and the budget is appropriated.
225
HOW IS THE CAPITAL IMPROVEMENT PROGRAM FINANCED?
In analyzing the financial viability of the capital improvements in the 2018-2022 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, and service charges are current
revenues used to finance relatively small capital outlays.
An internal service fund (Central Equipment Fund) has been established to accumulate resources for
regularly planned equipment purchases through rental charges to various divisions within benefitting
funds. This will reduce the impact of large equipment purchases on annual budget unit expenditures
by essentially amortizing the cost of such equipment to the division through rental charges. The
rental charges include a small inflation factor to provide for the future replacement of that item. This
fund replaced the Capital Outlay Revolving Fund. Similarly, a hybrid of the aforementioned fund has
been established for IT Services, which will also include IT-related equipment purchases.
Enterprise fund revenues, which are derived from user charges, are used to finance capital
improvements and equipment necessary for delivering a specific service. Additionally, accumulated
revenues in enterprise funds can be transferred to other funds to provide financing for capital asset
acquisitions.
Debt issuance is used to finance large capital improvements. General obligation improvement bonds
and general obligation revenue bonds are used to finance improvements to the city’s infrastructure.
Many of the items identifying the Capital Project Fund as funding source will need some level of debt
issuance to come to fruition.
Federal and state grants provide funding for various capital improvement projects. Currently, the
Fallon Avenue overpass is eligible for post-project federal funding of $2.1 million in 2021. Other
sources include grants, donations, reserves, and other governmental units that share boundaries.
226
Items listed on the following pages are typically labeled with prefixes VEQ- for vehicles and
equipment, MNC- (major non-capital) repairs & maintenance, STE- for small tools and equipment. All
other label prefixes represent capital improvements. The below graph and table provides a
breakdown of expenditures within the CIP:
$-
$4
$8
$12
$16
$20
$24
$28
2018 2019 2020 2021 2022MillionsExpenditures- IntegratedCIPfor FY 2018- 2022
Capital Improvements Garage (Capital Equipment)First Aid Kit (Repairs and Maintenance)Tool Box (Small Tools and Equipment)
Expenditure Category 2018 2019 2020 2021 2022
Capital Improvements 10,587,200$24,376,200$14,681,200$7,551,200$4,856,200$
Garage (Capital Equipment)1,006,000 1,246,000 3,667,600 1,100,000 300,000
First Aid Kit (Repairs and Maintenance)725,800 423,000 235,500 350,000 275,500
Tool Box (Small Tools and Equipment)134,000 144,400 54,400 227,600 59,800
12,453,000$26,189,600$18,638,700$9,228,800$5,491,500$
227
Capital Improvement Plan
City of Monticello, Minnesota
FUNDING SOURCE SUMMARY
2018 thru 2022
TotalSource20182019202020212022
Capital Equipment Fund 2,589,000265,000 747,000 922,000 400,000 255,000
Capital Project Fund 18,455,0003,600,000 3,990,000 6,215,000 2,850,000 1,800,000
Cemetery Fund 40,00040,000
Community Center Fund 1,108,500375,300 318,700 355,000 44,500 15,000
Debt Proceeds 34,665,0006,650,000 17,450,000 6,565,000 2,850,000 1,150,000
DMV Fund 26,00026,000
General Fund 2,040,500451,700 428,700 345,700 493,700 320,700
IT Services Fund 152,00030,000 30,200 30,400 30,600 30,800
Municipal Liquor Fund 1,770,00075,000 25,000 1,575,000 95,000
Parks & Pathways Fund 810,000195,000 165,000 200,000 250,000
Private Development 135,000135,000
Sewage Fund 4,710,600325,000 675,000 3,050,600 385,000 275,000
State Aid 200,000200,000
Stormwater Access Fund 1,750,00050,000 1,050,000 550,000 50,000 50,000
Street Construction Fund 250,000250,000
Street Lighting Fund 1,110,000150,000 510,000 150,000 150,000 150,000
Water Fund 2,190,000260,000 215,000 215,000 150,000 1,350,000
12,453,000 26,189,600 18,638,700 9,228,800 5,491,500 72,001,600GRAND TOTAL
Produced Using the Plan-It Capital Planning Software
228
Capital Improvement Plan
City of Monticello, Minnesota
PROJECTS & FUNDING SOURCES BY DEPARTMENT
2018 2022thru
Total20182019202020212022DepartmentProject # Priority
Community Center
1,108,500375,300 318,700 355,000 44,500 15,000Community Center Fund
1,108,500375,300 318,700 355,000 44,500 15,000Community Center Total
MCC-13-001 40,00040,000Movable Walls 3
MCC-13-003 20,00020,000City Council Diaz 3
MCC-13-004 100,000100,000Concession Counter Improvements 3
MCC-13-006 15,00015,000Carpet and Terrazo 2
MCC-17-003 30,00030,000Bathroom Accessible Doors 3
MCC-18-001 200,000200,000New Patio - Replaces Skate Park 3
MCC-18-002 35,00035,000Mississippi Room Lighting 3
MCC-18-003 14,00014,000Card Access Reader 3
MNC-13-007 12,00012,000Wood Floor - Mississippi Room 3
MNC-13-008 150,000150,000Water Slide Replacement 2
MNC-13-010 10,00010,000Vanity and Partition Replacement 3
MNC-13-011 5,0002,500 2,500Facility Door Replacement 2
MNC-13-014 246,000246,000Mechanical Improvements 2
MNC-18-001 48,00048,000Pool Deck Tile Restoration 3
MNC-18-002 26,30026,300Locker Room Floor Tile Restoration 3
MNC-18-003 5,0005,000Main Sign Replacement 3
MNC-18-004 5,0005,000Kitchen Flipping Doors 3
STE-13-013 55,00015,000 10,000 10,000 10,000 10,000Recreation Equipment 3
STE-13-014 4,0004,000Table Covers 3
STE-13-015 10,0005,000 5,000Tables3
STE-15-001 63,20063,200Survelliance Camera Upgrade 3
VEQ-13-045 5,0005,000Dishwasher2
VEQ-18-001 10,00010,000Recreation Software 3
1,108,500375,300 318,700 355,000 44,500 15,000Community Center Total
DMV - Deputy Registrar
26,00026,000DMV Fund
26,00026,000DMV - Deputy Registrar Total
VEQ-13-047 26,00026,000DMV Vehicle 2
26,00026,000DMV - Deputy Registrar Total
Fire & Rescue
Produced Using the Plan-It Capital Planning Software
229
Total20182019202020212022DepartmentProject # Priority
5,800,0004,000,000 1,100,000 700,000Debt Proceeds
309,00051,000 50,000 7,000 187,000 14,000General Fund
6,109,00051,000 4,050,000 1,107,000 887,000 14,000Fire & Rescue Total
FRD-13-002 4,000,0004,000,000New Fire Station 2
STE-13-006 180,000180,000SCBA Packs 2
STE-16-002 79,00051,000 7,000 7,000 14,000Turnout Gear 1
VEQ-13-006 1,100,0001,100,000Fire Ladder Truck 2
VEQ-18-004 50,00050,000SUV - Fire Command Response Vehicle 3
VEQ-18-005 700,000700,000Engine 1 - Replacement 1
6,109,00051,000 4,050,000 1,107,000 887,000 14,000Fire & Rescue Total
IT Services
152,00030,000 30,200 30,400 30,600 30,800IT Services Fund
152,00030,000 30,200 30,400 30,600 30,800IT Services Total
STE-13-001 78,00015,600 15,600 15,600 15,600 15,600Personal Computers 2
STE-13-005 15,0003,000 3,000 3,000 3,000 3,000Laptops2
STE-13-007 40,0008,000 8,000 8,000 8,000 8,000GIS Hardware and Software 2
STE-13-008 19,0003,400 3,600 3,800 4,000 4,200Pavement Management Software 2
152,00030,000 30,200 30,400 30,600 30,800IT Services Total
Municipal Liquor
1,770,00075,000 25,000 1,575,000 95,000Municipal Liquor Fund
1,770,00075,000 25,000 1,575,000 95,000Municipal Liquor Total
LIQ-13-002 75,00075,000Parking Lot Improvements 2
LIQ-13-003 1,500,0001,500,000Liquor Store - #2 3
LIQ-13-046 50,00025,000 25,000Liquor Store Coolers 2
LIQ-18-001 50,00050,000Roof1
LIQ-18-002 75,00075,000Electronic Sign Replacement 2
VEQ-13-046 20,00020,000Point of Sale Software 2
1,770,00075,000 25,000 1,575,000 95,000Municipal Liquor Total
Public Works
MNC-15-004 80,00040,000 40,000Stop Light Painting 3
MNC-15-005 30,00030,000Street Banners 4
PWK-13-001 14,000,00011,000,000 3,000,000Public Works Facility 3
PWK-13-002 600,000600,000PW Facility Land Acquisition 3
STE-13-011 7,0007,000Generator2
VEQ-13-013 65,00065,000One-Ton Truck 2
VEQ-13-014 35,00035,000Truck - Pickup 4X4 2
VEQ-13-015 130,000130,000Bucket Truck 2
Produced Using the Plan-It Capital Planning Software
230
Total20182019202020212022DepartmentProject # Priority
2,044,000220,000 367,000 802,000 400,000 255,000Capital Equipment Fund
600,000600,000Capital Project Fund
14,000,00011,000,000 3,000,000Debt Proceeds
117,00070,000 40,000 7,000General Fund
16,761,000890,000 11,407,000 3,809,000 400,000 255,000Public Works Total
VEQ-13-016 80,00080,000Blacktop Paver 2
VEQ-13-019 20,00020,000Concrete Saw 2
VEQ-13-021 95,00095,000Backhoe2
VEQ-13-022 495,000240,000 255,000Plow Truck 2
VEQ-13-023 65,00065,000One-Ton Truck and Plow 2
VEQ-13-025 142,000142,000Snow Go Snow Blower 2
VEQ-13-026 65,00065,000Skid Steere Loader 2
VEQ-13-027 35,00035,000Sign Lab System 2
VEQ-13-028 20,00020,000Paver Trailer 2
VEQ-14-001 235,000235,000Wheel Loader - 3 yd.3
VEQ-14-003 95,00095,000Blacktop Hot Box 3
VEQ-16-004 60,00060,000Hot Rubber Melter - Crack Sealer 2
VEQ-16-005 20,00020,000Mini Tank Tack Trailer 3
VEQ-16-006 70,00070,000Mid Size Loader 2
VEQ-16-007 300,000300,000Grader3
VEQ-18-003 17,00017,000Brush Grapple Hooks 3
16,761,000890,000 11,407,000 3,809,000 400,000 255,000Public Works Total
Recreation & Culture
MCC-13-002 300,000300,000Splash Park 3
MNC-14-007 206,00041,200 41,200 41,200 41,200 41,200Pathway Maintenance (Annual)2
MNC-17-001 17,5003,500 3,500 3,500 3,500 3,500Planters3
MNC-17-002 10,0002,000 2,000 2,000 2,000 2,000Bike Racks 3
PAR-13-002 80,00080,000Featherstone Park Development 3
PAR-13-003 15,00015,000Sunset Ponds Shelter 3
PAR-13-004 90,00090,000Pioneer Park - Band Shell 3
PAR-13-006 5,0005,000Monti Hill Park Development 2
PAR-13-012 4,600,000400,000 2,100,000 700,000 700,000 700,000BCOL Ball Fields 3
PAR-13-013 250,000250,000Ellison Park Log Shelter 3
PAR-13-014 60,00060,000CSAH 75 Pathway Lighting 3
PAR-15-003 150,000150,000Spirit Hill - Wildwood Pathway Connection 3
PAR-15-004 450,000200,000 250,000Fenning Avenue Pathway Connection 3
PAR-15-006 10,00010,000Park Shop Addition 3
PAR-16-001 6,0006,000Ellison Park Memorial Project 3
PAR-17-005 40,00040,000Rolling Woods Sidewalk 3
PAR-17-006 40,00040,000Riverside Cemetery Columbarium 3
PAR-17-007 25,00025,000Front Street Pier 3
STE-18-001 30,00030,000Aerator3
STE-18-002 32,00032,000Boarding Dock for Ellison 3
STE-18-003 3,0003,000Used ATV 3
Produced Using the Plan-It Capital Planning Software
231
Total20182019202020212022DepartmentProject # Priority
545,00045,000 380,000 120,000Capital Equipment Fund
5,035,000480,000 2,190,000 965,000 700,000 700,000Capital Project Fund
40,00040,000Cemetery Fund
314,50070,700 78,700 71,700 46,700 46,700General Fund
810,000195,000 165,000 200,000 250,000Parks & Pathways Fund
135,000135,000Private Development
60,00060,000Street Lighting Fund
6,939,500790,700 3,008,700 1,396,700 996,700 746,700Recreation & Culture Total
STE-18-004 5,0005,000Enclosed Trailer 3
VEQ-13-031 60,00060,000Park Mowers 2
VEQ-13-032 135,00065,000 70,000Trucks2
VEQ-13-033 140,000140,000MT Trackless Sidewalk Machine 2
VEQ-13-037 30,00030,000Cushman Truckster 2
VEQ-13-038 50,00050,000Tractor2
VEQ-13-039 65,00065,000Skid Loader 2
VEQ-13-041 20,00020,000Toro Infield Pro 5040 2
VEQ-15-001 15,00015,000Mule - Kawaski replacement 2
6,939,500790,700 3,008,700 1,396,700 996,700 746,700Recreation & Culture Total
Stormwater\Drainage
200,00040,000 40,000 40,000 40,000 40,000General Fund
1,750,00050,000 1,050,000 550,000 50,000 50,000Stormwater Access Fund
1,950,00090,000 1,090,000 590,000 90,000 90,000Stormwater\Drainage Total
SWD-13-001 200,00040,000 40,000 40,000 40,000 40,000Stormwater Pond Restoration 2
SWD-13-002 1,000,0001,000,000Stormwater Liftstation (TH 25 Pond)2
SWD-13-004 250,00050,000 50,000 50,000 50,000 50,000Boulevard Drainage Tile 2
SWD-17-001 500,000500,000Fallon Avenue Pond Expansion 3
1,950,00090,000 1,090,000 590,000 90,000 90,000Stormwater\Drainage Total
Streets
MNC-13-001 200,00040,000 40,000 40,000 40,000 40,000City Street Signs 2
MNC-14-001 900,000180,000 180,000 180,000 180,000 180,000Annual Chip Seal 2
MNC-18-005 10,00010,000Bridge Underpass Pedestrian Improvement 3
MNC-18-006 15,00015,000Sidewalk on 6th Street 3
MNC-18-007 30,00030,000Public Art 3
MNC-18-008 50,00050,000Wayfinding Signage 3
STR-13-001 450,000450,000School Blvd/Cedar Street Signal System 2
STR-13-004 600,000600,000Overlay Rural Outlying Streets 2
STR-13-006 6,600,0005,950,000 650,000Fallon Avenue Overpass 3
STR-13-008 1,500,00050,000 1,300,000 150,000Street Reconstruction - Area 6 3
STR-13-009 1,500,00050,000 1,300,000 150,000Street Reconstruction - Area 7B 2
STR-13-010 750,000150,000 150,000 150,000 150,000 150,000Street Light Improvements 2
STR-15-003 150,000150,000Elm Street Sidewalk - 3rd St Pedestrian Blinker 2
Produced Using the Plan-It Capital Planning Software
232
Total20182019202020212022DepartmentProject # Priority
12,820,0002,520,000 1,800,000 5,250,000 2,150,000 1,100,000Capital Project Fund
8,900,0005,950,000 650,000 1,100,000 50,000 1,150,000Debt Proceeds
1,100,000220,000 220,000 220,000 220,000 220,000General Fund
200,000200,000State Aid
250,000250,000Street Construction Fund
1,050,000150,000 450,000 150,000 150,000 150,000Street Lighting Fund
24,320,0008,840,000 3,570,000 6,720,000 2,570,000 2,620,000Streets Total
STR-15-004 500,000100,000 100,000 100,000 100,000 100,000Sidewalk Gap Improvement Project (TBD)2
STR-16-001 1,200,00050,000 1,150,000Extension of 95th Street w/o Noise Wall 3
STR-16-002 300,000300,000Flashing Yellow Arrow Signal 3
STR-17-001 250,000250,000CR 39/Gillard Ave Intersection 3
STR-17-002 1,700,000150,000 1,400,000 150,000Fallon Ave & Trail - Chelsea to School Bvld 3
STR-17-003 1,800,0001,600,000 200,000Chelsea Road Reconst - Fallon to Edmonson 3
STR-17-004 650,000650,0007th St Mill & Overlay & Cedar St Improvements 3
STR-17-005 500,000500,000Collector Road Mill & Overlay 3
STR-17-006 2,000,000500,000 500,000 500,000 500,000Residential Street Mill and Overlay 3
STR-17-007 2,000,000500,000 500,000 500,000 500,000Residential Street Reconstruction Improvements 3
STR-18-001 500,00050,000 450,000TH25/4th Street Signal 3
STR-18-002 115,00015,000 100,000Walnut Street Extention to River Street 3
STR18-003 50,00050,000Walnut Street/CSAH 75 Pedestrian Improvements 2
24,320,0008,840,000 3,570,000 6,720,000 2,570,000 2,620,000Streets Total
Utility - Sewage
5,965,000700,000 1,800,000 1,365,000 2,100,000Debt Proceeds
4,710,600325,000 675,000 3,050,600 385,000 275,000Sewage Fund
10,675,6001,025,000 2,475,000 4,415,600 2,485,000 275,000Utility - Sewage Total
MNC-17-005 110,000110,000Demo Obsolete WWTP Equipmnet 4
UTS-13-001 750,000150,000 150,000 150,000 150,000 150,000Annnual Sewage Trunk Improvements 2
UTS-13-002 275,600275,600Liftstation - Marvin Road 2
UTS-13-005 1,365,0001,365,000WWTP Solids Handling Improvements 2
UTS-13-006 1,800,0001,800,000WWTP Phase 2 Improvements 3
UTS-16-001 625,000125,000 125,000 125,000 125,000 125,000Annual WWTP Upgrades 2
UTS-17-001 2,100,0002,100,000WWTP Headworks Improvements 3
UTS-17-002 2,550,00050,000 2,500,000Fallon Avenue Trunk Line Extension 3
VEQ-13-001 400,000400,000Sewer Jetter 2
VEQ-13-004 700,000700,000SCADA System - Sewage 2
10,675,6001,025,000 2,475,000 4,415,600 2,485,000 275,000Utility - Sewage Total
Utility - Water
UTW-13-001 750,000150,000 150,000 150,000 150,000 150,000Annual Water System Improvements 3
UTW-13-003 1,200,0001,200,000Well #6 3
UTW-15-001 195,00065,000 65,000 65,000Water Meter MXUs - System Upgrade 2
VEQ-13-002 45,00045,000Truck - Regular Cab 4X Chasis+Accessories 2
Produced Using the Plan-It Capital Planning Software
233
Total20182019202020212022DepartmentProject # Priority
2,190,000260,000 215,000 215,000 150,000 1,350,000Water Fund
2,190,000260,000 215,000 215,000 150,000 1,350,000Utility - Water Total
2,190,000260,000 215,000 215,000 150,000 1,350,000Utility - Water Total
72,001,60012,453,000 26,189,600 18,638,700 9,228,800 5,491,500Grand Total
Produced Using the Plan-It Capital Planning Software
234
CIP PROJECT – FALLON AVENUE OVERPASS (BRIDGE)
235
CIP PROJECT – CHELSEA ROAD
236
CIP PROJECT – AERATOR AND ASPHALT HOTBOX
237
CIP PROJECT – FEATHERSTONE PARK
238
CIP PROJECT – BERTRAM CHAIN OF LAKES
239
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240
ENTERPRISE
FUNDS
For Fiscal Year 2013
Adopted 2018
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 ascribed 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 at the end of this item.)
[parcel market value] * [class rate] = [parcel tax capacity]
The next step in calculating the tax burden for a parcel involves the determination of each local unit
of government’s property tax levy. The city, county, school district, and any special property taxing
authorities must establish their levy by December 28 of the year preceding the year in which the levy
will be paid by taxpayers. The property tax levy is set after the consideration of all other revenues
including state aids such as LGA.
[city budget] - [all non-property tax revenues] = [city levy]
Local tax rates
Local governments do not directly set a tax rate. Instead, the tax rate is a function of the levy and the
total tax base. To compute the local tax rate, a county must determine the total tax capacity to be
used for spreading the levies. The total tax capacity is computed by first aggregating the tax
capacities of all parcels within the city. Several adjustments to this total must be made because not
all tax capacity is available for general tax purposes. The result of this calculation produces taxable
tax capacity. Taxable tax capacity is used to determine the local tax rates.
[city levy] / [taxable tax capacity] = [city tax rate]
Parcel tax calculations
The property tax bill for each parcel of property is determined by multiplying the parcel’s tax capacity
by the total local tax rate. The tax statement for each individual parcel itemizes the taxes for the
county, municipality, school district, and any special taxing authorities.
[parcel tax capacity] * [total local tax rate] = [tax capacity tax bill]
241
Terms Defined
Class rates - The percent of market value set by state law that establishes the property’s tax capacity
subject to the property tax. See table below for a sample list of class rates.
Local tax rate - The rate used to compute taxes for each parcel of property. Local tax rate is
computed by dividing the certified levy (after reduction for fiscal disparities distribution levy and
disparity reduction) by the taxable tax capacity.
Market value - An assessor’s estimate of what property would be worth on the open market if sold.
The market value is set on January 2 of the year before taxes are payable.
Homestead Market Value Exclusion (HMVE)– Starting with taxes payable in 2012, eligible
homesteads will pay property taxes on only a portion of the value of their homes. The maximum
exclusion, 40% of value, occurs at home value of $76,000 and phases out as home value grows
Property class - The classification assigned to each parcel of property based on the use of the
property. For example, owner-occupied residential property is classified as homestead.
Property tax levy - The tax imposed by a local unit of government. The tax is established on or around
December 28 of the year preceding the year the levy will be paid by taxpayers.
Tax capacity - The valuation of property based on market value and statutory class rates. The
property tax for each parcel is based on its tax capacity.
Total tax capacity - The amount computed by first totaling the tax capacities of all parcels of property
within a city. Adjustments for fiscal disparities, tax increment, and a portion of the powerline value
are made to this total since not all tax capacity is available for general tax purposes.
Truth-in-Taxation - The “taxation and notification law” which requires local governments to set
estimated levies, inform taxpayers about the impacts, and announce which of their regularly
scheduled council meetings will include a discussion of the budget and levy. Taxpayer input is taken
at that meeting.
Property Class Local Taxes
Payable 2018
State Tax Payable
2018
Residential Homestead:
1st $500,000 1.00%No state tax
>$500,000 1.25%
Non-homestead Residential:
Single unit:
1st $500,000 1.00%>$500,000 1.25%No state tax
2-3 unit buildings 1.25%
Market-rate Apartments:1.25%No state tax
Commercial/Industrial:Subject to state
1st $150,000 1.50%levy (commercial-
>$150,000 2.00%industrial rate)
Seasonal Recreational Subject to state1st $500,000 1.00%levy (seasonal-
>$500,000 1.25%recreational rate)
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TRUTH-IN-TAXATION
TNT Summary Chart for Taxes Payable 2018
Date Action
On or Before
Sept. 30
All cities and special taxing districts (EDAs, HRAs, port authorities, etc.) must
adopt any proposed property tax levy and certify the proposed levy to the
county auditor.
On or Before
Sept. 30
At one meeting, the city council adopts the proposed property tax levy and
announces the time and place of a future city council meeting at which the
budget and levy will be discussed and public input allowed, prior to final
budget and levy determination. This public input meeting must occur after
Nov. 24 and must start at or after 6 p.m. The time and place of the public
input meeting must be included in the minutes but newspaper publication of
the minutes is not required.
On or before
Sept. 30
Cities must provide the county auditor with the following information:
The time and place of the meeting at which the budget and levy will be
discussed and public input allowed. (Again, meeting must occur after Nov. 24
and must not start before 6 p.m.)
A phone number that city tax payers 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.
Nov. 11 to
Nov. 24
County auditor prepares and sends parcels specific notices.
Nov. 25 to
Dec.28
City councils hold meeting to discuss the budget and property tax levy and,
before a final determination, allows public input.
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.
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DEBT GUIDE
EquipmentCertificates/CapitalNotes
A statutory city may issue certificates of indebtedness or capital notes (Section 412.301)to purchase:
Public safety equipment, ambulance, and other medical equipment; road construction and main-
tenance equipment; and other capital equipment.
Computer hardware and software, whether bundled with machinery or equipment or unbundled,
together with application development services and training related to the use of the computer
hardware or software.
The statute does not define “other capital equipment”. Cities seeking to borrow for equipment not
specifically listed should work with bond counsel to determine eligibility.
The term of the Certificates/Notes cannot exceed 10 years from the dated date of the obligations. This
limitation may affect the timing of principal and interest payments.This debt issubjectto thedebtlimit.
A reverse referendum provision applies if the amount of the borrowing exceeds 0.25% of the estimated
market value of taxable property within the city. An election is required if a petition signed by voters equal
to 10% of the voters in the last regular municipal election is submitted to the city clerk within 10 days after
publication of the resolution authorizing the issuance of the Certificates/Notes.
Different statutory authority exists for home rule charter cities (Section 410.32).Capital Notes issued by
charter cities are subject to the same statutory requirements as statutory cities with the following ex-
ceptions:
The total principal amount of the capital notes issued in a fiscal year shall not exceed 0.03% of the
estimated market value of taxable property in the city.
No reverse referendum provision applies, but issuance must be approved by a two-thirds vote of the
city council.
Unlessprohibitedbythecharter,thesecitiesmayalsoissueCapitalNotesundertheauthoritygranted
to statutory cities.
Tax Abatement Bonds
Tax Abatement Bonds (Section 469.1814)may be used to finance a variety of development activities and
public improvements. The statute allows proceeds of Tax Abatement Bonds be used to (1) pay for public
improvements that benefit the property, (2) to acquire and convey land or other property, as provided
under this section, (3) to reimburse the property owner for the cost of improvements made to the
property, or (4) to pay the costs of issuance of the bonds.
Tax Abatement Bonds are often used to facilitate economic development in ways not allowed by tax
increment financing. They have also evolved into a tool for financing community recreation and cultural
facilities. The statutory authority creates an abatement levy based on the property value of parcels
subject to the abatement. The authority to use tax abatement applies separately to each taxing
jurisdiction. If other jurisdictions (county and school district) approve an abatement, this revenue may be
pledged to bonds issued by the city.
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The principal amount of the bonds may not exceed the sum of the authorized abatements. A debt
service levymaybe 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.
StreetReconstructionBonds
Street Reconstruction Bonds are an example of debt issuing authority found in unusual places. The statu-
toryprovisionsforStreetReconstructionBondsappearintheportionofChapter475dealingwithelection
requirements for debt issuance (Section 475.58, Subd. 3b).
Street Reconstruction Bonds can be used to finance the reconstruction and bituminous overlay of existing
city streets. Eligible improvements may include turn lanes and other improvements having a substantial
public safety function, realignments, other modifications to intersect with state and county roads, and the
local share of state and county road projects. Except in the case of turn lanes, safety improvements, re-
alignments, intersection modifications, and the local share of state and county road projects, street recon-
structionandbituminousoverlaysdoesnotincludethe portionofprojectcostallocableto wideningastreet
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
mustdescribethestreetreconstructionoroverlaytobefinanced,theestimatedcosts,andanyplanned
reconstructionoroverlayofotherstreetsinthemunicipalityoverthenextfiveyears
The city must hold a public hearing on the proposed plan and the related issuance of bonds.
The plan and the issuance of bonds must be approved by the city council by a vote of all of the
members of the governing body present at the meeting.
Theissuanceofbondsissubjecttoareversereferendum.Anelectionisrequiredifvotersequalto5%
ofthevotescastinthelastmunicipalgeneralelectionfileapetitionwiththecityclerkwithin30days
ofthepublichearing.Ifthecitydecidesnottoundertakeanelection,itmaynotproposetheissuance
ofStreetReconstructionBondsforthesamepurposeandinthesameamountforaperiodof365days
from the date of receipt of the petition. If the question of issuing the bonds is submitted and not
approvedbythevoters,the provisionsofsection475.58,subdivision1a,shallapply(noresubmission
forsamepurpose/amountfor180days).
Street Reconstruction Bonds are subject to the debt limit.
Revenue Bonds
One exception to the previous statement is the issuance of Revenue Bonds. Chapter 475 authorizes
borrowingfor“anyutilityorotherpublicconveniencefrom whicharevenueisormaybederived”.This
authorityissufficientwhenthesolesecurityisthepledgeofrevenuefromapublicenterprise.Although
thisdebtismostfrequentlyassociatedwithmunicipalutilities,any“publicconvenience” withapledge-
ablesourceofrevenuemayusethisauthority.MinnesotacitiesdonotfrequentlyissueRevenueBonds.
Most borrowing needs have separate statutory authority that allows a general obligation pledge. The
most common Revenue Bonds are for electric utilities, sales taxes, and liquor stores.
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Improvement Bonds
One of the most commonly used tools is General Obligation (G.O.) Improvement Bonds issued pursuant
to Chapter 429. Improvement Bonds can be issued for a wide range of public improvements.
Eligible Improvements
The types of improvements specifically authorized in Chapter 429 can be found in Section 429.021.It is
important to read and understand the specific statutory provisions. Some provisions are broader than
the basic improvement. For example, a “street improvement” may also include streetscape (beauti-
fication), storm sewers and utility connection lines. Other provisions may contain important expansions
orlimitationsontheauthority.Sanitaryandstormsewerimprovementsmaybemadeoutsideofthecity
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
andincludingstormsewersorotherstreetdrainageandconnectionsfromsewer,water,orsimilar
mains to curb lines.
2.Acquire, develop, construct, reconstruct, extend, and maintain storm and sanitary sewers and sys-
tems, including outlets, holding areas and ponds, treatment plants, pumps, lift stations, service
connections,andotherappurtenancesofasewersystem,withinandwithoutthecorporatelimits.
3.Construct, reconstruct, extend, and maintain steam heating mains.
4.Install, replace, extend, and maintain street lights and street lighting systems and special lighting
systems.
5.Acquire, improve, construct, reconstruct, extend, and maintain water works systems, including
mains,valves,hydrants,serviceconnections,wells,pumps,reservoirs,tanks,treatmentplants,and
other appurtenances of a water works system, within and without the corporate limits.
6.Acquire, improve and equip parks, open space areas, playgrounds, and recreational facilities
within or without the corporate limits.
7.Plant trees on streets and provide for their trimming, care, and removal.
8.Abate nuisancesand drainswamps,marshes, and ponds on publicorprivate property,and fillthe
same.
9.Construct, reconstruct, extend, and maintain dikes and other flood control works.
10.Construct, reconstruct, extend, and maintain retaining walls and area walls.
11.Acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and promote a pe-
destrian skyway system. Such improvement may be made upon a petition pursuant to section
429.031, subdivision 3.
12.Acquire, construct, reconstruct, extend, operate, maintain, and promote underground pedestrian
concourses.
13.Acquire, construct, improve, alter, extend, operate, maintain, and promote public malls, plazas or
courtyards.
14.Construct, reconstruct, extend, and maintain district heating systems.
15.Construct, reconstruct, alter, extend, operate, maintain, and promote fire protection systems in
existing buildings, but only upon a petition pursuant to section 429.031, subdivision 3.
16.Acquire, construct, reconstruct, improve, alter, extend, and maintain highway sound barriers.
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17.Improve,construct,reconstruct,extend,andmaintaingasandelectricdistributionfacilitiesownedby
a municipal gas or electric utility.
18.Purchase,install,andmaintainsigns,posts,andothermarkersforaddressingrelatedto theoperation
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,
authorizedimprovementswithina HousingImprovement Areamaybepaidwithspecialassessments.
Minimum Assessment
General Obligation Improvement Bonds require a minimum 20% assessment. It is important to under-
stand the method for determining the minimum assessment. A common assumption is that assessments
must equal or exceed 20% of the amount to be borrowed. While this calculation works for Tax Increment
Bonds, the 20% calculation for Improvement Bonds is different:
1.The assessment calculation is based on the cost of theimprovement to the city. This cost may or may
not equal the amount of the Improvement Bonds.
2.Thecostoftheimprovementdoesnotincludeactivitiesthatwillnotbeassessedtobenefittedproperty
owners and not financed with G.O. Improvement Bonds. These improvements can be made without
following the procedures of Chapter 429. This exclusion typically applies to utility (sanitary sewer,
watermain, and storm sewer) improvements paid from reserves or bonds issued under Minnesota
Statutes, Chapter 444.
3.The cost to the city excludes all monies contributed by other units of government to pay for the
improvement.
4.The up-front use of city non-utility reserves (both General Fund and capital improvement) does not
reduce the cost to the city.
Oneexceptiontothis20%requirementisimprovementsforautomobileparkingfacilities (Section459.14).
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
exceedtheincreaseinmarketvalueofthepropertyasaresultoftheimprovement.Thereisno requirement
tomakethisfindingaspartoftheimprovementprocess.Theissuecomesinto playprimarilyinprojectswith
larger assessments and greater risk of appeal.
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Assessments are also constrained by the notice of hearing for the improvement. The total amount assessed
cannotexceedtheamountstated inthenotice.Thearea assessedcannotbelarger,butcanbesmaller,than
theareareceivingnoticeoftheHearing.
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
ofChapter429.Section429.021, Subd.2 allowsforanimprovementontwoormorestreets,ortwo ormore
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
separatelymay besubsequentlycombinedundertheauthorityof Section435.56.
Revenues to pay debt service on the portion that is not assessed may come from any legally available
source including a property tax levy.
Bond Issues
Planning for the issuance of Improvement Bonds requires a clear understanding of the special assess-
ments. In addition to the total amount assessed, several other factors are important:
What is the term of repayment? First levy year payable? Total number of years payable?
Will the assessments be repaid with level annual installmentsof principalor levelannual 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
issuedanytimeafterthecitycouncilconductsthe improvement hearingandauthorizestheimprovements.
No improvement hearing is needed if the parties that petition for the improvement will be assessed 100%
ofthecost.Each pointintime hasdifferent implications forissuingbonds:
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.
Bondsmaybeissuedaftercompletionoftheassessmentprocess.Thisallowsthefinanceplantobebased
onfinalconstructioncostsand actualassessments.Thisapproachcanalso considertheamountofinitial
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
oftax-exempt bonds.
Forcontroversialprojectswithahigherriskofassessmentappeals,citieswillconducttheassessmentprocess
duringtheperiodbetweenthereceiptandawardofconstructionbids.Thisapproachallowsthecitytoknow
the appeal risk before committing to undertake the improvement. Improvement Bonds are not subject to
the statutory debt limit.
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UtilityRevenue Bonds
MinnesotacitiesrarelyissuepureRevenueBondstofinancesanitarysewer,water,andstormsewerutility
improvements.StateLawallowscitiestoadditsgeneralobligationtothepledgeofnetutilityrevenuesfor
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”. Theyare secured by both utility revenues andthe
city’s generalobligation. The bonds may be secured by a single utilityor by combined utility funds. Debt
service on Utility Revenue Bonds is paid from the net revenues of the utilities pledged to secure the
bonds. Special assessments may also be levied and pledged to the bonds. Unlike Improvement Bonds,
property taxes cannot be a permanent and ongoing source of revenue to pay debt service. Property
taxes should only be used on a temporary basis when the other revenues are insufficient to meet the
obligations.
It is important to understand the nature of the revenues that will be used to support the bonds.
Howmuchoftherevenuecomesfromconnectionchargesandotherfeesassociatedwithgrowth?
Are rate increases needed? If so, are there any procedural issues (such as a public hearing or ap-
proval by the utilities commission)?
Are there any large users that constitute a significant portion of the revenue base?
Are there special agreements with large users?
There are no special procedural requirements for the issuance of Utility Revenue Bonds.
Capital Improvement PlanBonds
CitiesmayissueCapitalImprovementPlan(CIP)Bondstofinancetheconstructionandmaintenanceofcity
hall, town hall, library, public safety facility, and public works facility (Section 475.521).These bonds may
not be used to finance any other type of facility or improvement. Expenditures for eligible capital im-
provements incurred before adoption of the capital improvement plan are allowed if included in a plan
approved at or prior to thepublic hearing on the issuance of bonds.
Theprojectsto befinancedmustbeincludedinacapital improvementsplan(CIP)thatmeetsthecriteriaof
thestatute.Theplanmustcoveratleastafive-yearperiodbeginningwiththedateofitsadoption.Theplan
mustsetforththeestimatedschedule,timing,anddetailsofspecificcapitalimprovementsbyyear,together
withtheestimatedcost,theneedfortheimprovement,andsourcesofrevenuetopayfortheimprovement.
The CIP should also include information about the factors required by the statute to be considered by the
citycouncil.Thesefactorsare:
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;
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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 municipali-
ties or local government units.
The required CIP may be a document prepared specifically for authorizing the issuance of bonds or it
may be incorporated into other capital improvement planning by the city.
The maximum amount of CIP Bonds is limited. The maximum principal and interest payable in any year
for all outstanding CIP Bonds cannot exceed 0.16% of the estimatedmarket value of taxable property in
the city. This calculation is made using the estimated market value for the taxes payable year in which
thebondsareissuedandsold.
The bonds are subject to the debt limit for cities with a population of 2,500 or more. Bothapprovalof
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 bya three-fifths voteof afive-membercity council.
If the city council has morethan 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
bondsifapetitionsignedby votersequalto5%ofthevotescastinthecityinthelastmunicipalgeneral
electionisfiledwiththecityclerkwithin30daysafterthepublic hearing.Ifthecitydoesnotsubmitthe
questiontothevoters,itmaynotproposetheissuanceofbondsunderthissectionforthesamepurpose
andinthesameamountforaperiodof365daysfromthedateofreceiptofthepetition.Ifthequestion
of issuing the bonds is submitted and not approved by the voters, the city must wait 180 days before
voting on the samequestion again.
Lease RevenueBonds
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
likelyto not appropriateand walkawayfrom anessential 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,andtheEDAisapoliticalsubdivision.Leviestomakeleasepaymentsdonotcurrentlyqualify
as a special levy and, therefore, are subject to levy limits. The taxing power of the EDA may also be
pledged to Lease RevenueBonds.
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Other Debt Terms
BankQualified
Issuersthatreasonablyexpectto issue$10,000,000orlessintax-exemptbondsduringacalendaryear
may designate bondsas“bank qualified”.The name refersto the fact that banksmay deducta 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
subjectto thesmallissueror thespenddownexceptions.
Thesmallissuerexceptionapplieswhenthetotalprincipalamountoftaxexempt,non-privateactivity
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-monthexception -grossproceedsandinterestearningsareallocatedto expendituresforgovern-
mental or qualified purposes that are incurred within 6 months after the date of issuance.
2.18-month exception - gross proceeds and interest earnings are spent within the following schedule
from date of issuance: (1) 15% within 6 months; (2) 60% within 12 months; and (3) 100% within 18
months(with a5%reasonableretainagecarryoveramountforanadditional12month period).
3. 2-year spending exception – issue is a “construction issue” (75% of issue is actually spent on
construction)andgrossproceedsandinterestearningsarespentwithinthefollowingschedulefrom
dateofissuance:(1)10%within6months;(2)45%within12months;(3)75%within18months;and
4) 100% within 24months.
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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.
For taxes payable in 1989, the county auditor shall compute the gross tax capacity for each parcel
according to the class rates specified in section 273.13. The gross tax capacity will be the
appropriate class rate multiplied by the parcel's market value. For taxes payable in 1990 and
subsequent years, the county auditor shall compute the net tax capacity for each parcel according
to the class rates specified in section 273.13. The net tax capacity will be the appropriate class rate
multiplied by the parcel's market value.
Subd. 1b. Computation of tax rates.
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, any
qualification to receive state aid based on market value, or any state aid amount based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean the total taxable market value of 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," "taxable 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. 21a. Class rate.
In this section, wherever the "class rate" of a class of property is specified without qualification as
to whether it is the property's "net class rate" or its "gross class rate," the "net class rate" and
"gross class rate" of that property are the same as its "class rate."
Subd. 21b. Tax capacity.
(a) Gross tax capacity means the product of the appropriate gross class rates in this section and
market values.
(b) Net tax capacity means the product of the appropriate net class rates in this section and 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 class rate of one percent of its
market value; and the market value of class 1a property that exceeds $500,000 has a class 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 blind person and the blind person's
spouse;
(2) any person who is permanently and totally disabled or by the disabled person and the disabled
person's spouse; or
(3) the surviving spouse of a permanently and totally disabled veteran homesteading a property
classified under this paragraph for taxes payable in 2008.
Etc.
HOUSING AND REDEVELOPMENT AUTHORITY TAX LEVY
469.033 PUBLIC REDEVELOPMENT COST; PROCEEDS; FINANCING.
Subd. 6. Operation area as taxing district, special tax.
All of the territory included within the area of operation of any authority shall constitute a taxing
district for the purpose of levying and collecting special benefit taxes as provided in this subdivision.
All of the taxable property, both real and personal, within that taxing district shall be deemed to be
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benefited by projects to the extent of the special taxes levied under this subdivision. Subject to the
consent by resolution of the governing body of the city in and for which it was created, an authority
may levy a tax upon all taxable property within that taxing district. The tax shall be extended,
spread, and included with and as a part of the general taxes for state, county, and municipal
purposes by the county auditor, to be collected and enforced therewith, together with the penalty,
interest, and costs. As the tax, including any penalties, interest, and costs, is collected by the county
treasurer it shall be accumulated and kept in a separate fund to be known as the "housing and
redevelopment project fund." The money in the fund shall be turned over to the authority at the
same time and in the same manner that the tax collections for the city are turned over to the city,
and shall be expended only for the purposes of sections 469.001 to 469.047. It shall be paid out
upon vouchers signed by the chair of the authority or an authorized representative. The amount of
the levy shall be an amount approved by the governing body of the city, but shall not exceed 0.0185
percent of estimated market value. The authority shall each year formulate and file a budget in
accordance with the budget procedure of the city in the same manner as required of executive
departments of the city or, if no budgets are required to be filed, by August 1. The amount of the
tax levy for the following year shall be based on that budget.
469.001 PURPOSES.
The purposes of sections 469.001 to 469.047 are:
(1) to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to protect the
health, safety, morals, and welfare of the citizens of this state;
(2) to clear and redevelop blighted areas;
(3) to perform those duties according to comprehensive plans;
(4) to remedy the shortage of housing for low and moderate income residents, and to redevelop
blighted areas, in situations in which private enterprise would not act without government
participation or subsidies; and
(5) in cities of the first class, to provide housing for persons of all incomes.
Public participation in activities intended to meet the purposes of sections 469.001 to 469.047 and
the exercise of powers confined by sections 469.001 to 469.047 are public uses and purposes for
which private property may be acquired and public money spent.
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UTILITY RATES
Residential Water: 10, 12, 16, 17
0 - 1,000 gallons $6.95
1,001 - 10,000 gallons (9,000 gallons)1.70/1,000 gallons
10,001 - 33,000 gallons (23,000 gallons)1.97/1,000 gallons
33,001 gallons and over 2.15/1,000 gallons
Commercial Water: 11, 11NT & 11TX, 13, 90
0 - 1,000 gallons $6.95
1,001 - 10,000 gallons (9,000 gallons)1.70/1,000 gallons
10,001 - 33,000 gallons (23,000 gallons)1.97/1,000 gallons
33,001 gallons and over 2.15/1,000 gallons
Sprinklers - Res Twnhm & Commercial: 30, 31, 31NT, 32, 32NT, 91, 91NT
0 - 1,000 gallons $6.95
1,001 - 10,000 gallons (9,000 gallons)1.70/1,000 gallons
10,001 - 33,000 gallons (23,000 gallons)1.97/1,000 gallons
33,001 gallons and over 2.15/1,000 gallons
Industrial Water: 14
All Water Usage 2.05/1,000 gallons
Sewer Rates - Residential & Commercial: 20, 25, 26
0 - 1,000 gallons $8.75
1,001 gallons and over 5.63/1,000 gallons
Sewer Special Cases: SW21, SW22
Has well $10 per person
Industrial Sewer Rates: 24
All Sewer Usage 3.397/1,000 gallons
BOD5 (Biochemical Oxygen Demand)0.366/lb.
TSS (Total Suspended Solids)0.504/lb.
Testing Actual cost + 10%
Sewer Discharge Fee:2%
Water On/Off Charge:
ON $25 & OFF $25
Water Availability Charge:
$40.25/year
Final Bill Processing Fee:
$20.00
Manual Meter Reading Charge:
$20.00
Residential Refuse Charges
1st Individual Residential Cart $3.00
2nd Individual Residential Cart $13.00
Rates for 2018 Utility Billing
Increasing Block Rates
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CAPITALIZATION THRESHOLDS
Class of
Asset Details
Useful
Life Threshold
Land/land improvements N/A Land - $1, Improvements - $50,000
Building/building improvements:$20,000
Floor cover
Construction Interior and Roof Cover
Heating Ventilation AC and Lighting
Electrical
Elevators, Fire, Piping and Plumbing
Site Preparation
Walls Exterior
Floor structure, foundation, roof
structure, steel frame
Primary Infrastructure and Utility $75,000
Paving Systems
Water, Sanitary and Storm Sewer
Secondary Infrastructure $25,000
Sidewalk, Boardwalk, Pathways
Street lights, Signage
Equipment $10,000
Vehicles
Machinery
Equipment
Software and
non-tangible $10,000
Purchased and Internally developed
Construction Work In Progress Upon completion, per above class
Equipment expenditures for items between $500 and $10,000 are recorded as small tools and
equipment, which is a supply account. Building and improvement expenditures below the thresholds
are recorded as repairs and maintenance. Current revenues finance expenditures for supplies and
repairs and maintenance.
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TAX CAPACITY, TAX LEVY, & TAX RATE HISTORY
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USEFUL TERMS (GLOSSARY)
ACCOUNT:An organizational or budgetary breakdown found within city funds. A term used to
identify an individual asset, liability, expenditure (and other uses), revenue (and other sources), or
fund balance.
ACCOUNTS PAYABLE:Amounts owed to others for goods or services received.
ACCOUNTS RECEIVABLE:Amounts due from others for goods furnished or services rendered.
ACCOUNTING SYSTEM:The total set of records and procedures which are used to record, classify,
and report information on financial status and operations of an entity.
ACCRUAL BASIS OF ACCOUNTING:The method of accounting under which revenues are recorded
when they are earned and expenditures are recorded when goods and services are received.
ACTIVITY:A specific and distinguishable line of work performed by one or more organizational
components of a governmental unit for the purpose of accomplishing a function for which the
governmental unit is responsible. For example, "Ice & Snow Removal” is an activity performed as
part of the "Public Works" function.
ADOPTION:Formal action taken by the City Council to authorize or approve the budget.
AD VALOREM:In proportion to value. The basis for levying taxes on property.
AGENCY FUND:A fiduciary fund used to account for situations where the government’s role is
purely custodial.
APPROPRIATION:An authorization granted by a legislative body to make expenditures and to incur
obligations for specific purposes. An appropriation is limited in amount to the time it may be
expended.
ASSESSED VALUATION:Value placed upon real estate or other property as a basis for levying taxes.
ASSESSMENTS:Charges made upon parties for actual services or benefits received.
ASSETS:Property owned by a governmental unit, which has a monetary value.
ASSIGNED FUND BALANCE:Resources the government intends to use for specific purposes, but are
neither restricted nor committed.
AUDIT:The examination of documents, records, reports, systems of internal control, accounting
and financial procedures, and other evidence for one or more of the following purposes: a) To
attest to whether the statements prepared from the accounts present fairly the financial position
and the results of financial operations of the constituent funds and balanced account groups of the
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governmental unit in accordance with generally accepted accounting principles applicable to
governmental units and on a basis consistent with that of the preceding year; b) To determine the
propriety, legality, and mathematical accuracy of a governmental unit's financial transactions; c) To
ascertain whether all financial transactions have been properly recorded; d) To evaluate the
stewardship of public officials who handle and are responsible for the financial resources of a
governmental unit.
BALANCED BUDGET:A budget in which estimated revenues and other sources equals estimated
expenditures and other uses. A balanced budget does not use reserves or retained earnings to fund
expenditures.
BOND:A written promise, generally under seal, to pay a specified sum of money, called the face
value or principal amount, at a fixed time in the future, called the date of maturity, and carrying
interest at a fixed rate, usually payable periodically.
BONDED INDEBTEDNESS:Outstanding debt by issues of bonds, which are repaid by ad valorem
taxes or other revenue.
BUDGET:A plan of financial operation embodying an estimate of proposed expenditures for a
given period and the proposed means of financing them.
BUDGET DOCUMENT:The official written statement prepared by the city’s Finance Department
and adopted by the City Council.
BUDGET MESSAGE:A general discussion of the proposed budget presented in writing as a part of
the budget document. The budget message explains principal budget issues against the
background of financial experience in recent years and presents recommendations made by city
staff.
BUDGET CALENDAR:The schedule of key dates, which a government follows in the preparation
and adoption of the budget.
BUDGETARY CONTROL:The control or management of a governmental unit or enterprise in
accordance with an approved budget for the purpose of keeping expenditures within the limitation
of available appropriations and available revenues.
CAPITAL ASSETS:Assets with historical acquisition costs (value if donated) above the capitalization
threshold, typically $10,000 or more, and a useful life of more than one reporting period. Capital
assetsareusedinoperationsandhaveinitialusefullivesextendingbeyondasinglereportingperiod.These
assetsmustalsomeetcapitalizationthresholds,whichvarybyassetclassification.Land,improvementsto
land,vehicles,machinery,equipment,infrastructure,andothertangibleandintangibleassetsusedin
operationsareexamplesofcapitalassetclassifications.
CAPITAL EXPENDITURES:Acapitalexpenditure occurswhenacapitalassetispurchased.Expenditures
thatdonotbenefitmorethanonereportingperiodormeetthecapitalizationthresholdsareclassifiedas
currentexpenditures.
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CAPITAL IMPROVEMENT BUDGET:A plan of proposed capital expenditures and a means of
financing them. The capital improvement budget is enacted as part of the complete annual budget.
CAPITAL PROGRAM:A plan for capital expenditures to be incurred each year over a fixed period
of years to meet capital needs arising from the long-term work program or otherwise. It sets forth
each project or other contemplated expenditure in which the government is to have a part and
specifies the full resources estimated to be available to finance the projected expenditures.
CAPITAL PROJECTS FUNDS:A governmental fund type used to account for financial resources to be
expended for the acquisition or construction of major capital assets.
CAPITALIZATION THRESHOLD:The level at which an item is considered either a current
expenditure or a capital expenditure. The threshold for equipment is $10,000.
CASH BASIS:The method of accounting under which revenues are recorded when received in cash
and expenditures are recorded when paid.
CHARGES FOR SERVICES:Charges for current services rendered to customers.
CHART OF ACCOUNTS:The classification system used by a government entity to organize the
accounting for various funds and departments.
COMMITTED FUND BALANCE:Resources used for specific purposes pursuant to constraints
imposed by formal action of the government’s highest level of decision-making authority (i.e. City
Council).
CONSUMER PRICE INDEX (CPI):A statistical description of price levels provided by the U.S.
Department of Labor. The index is used as a measure of the increase in the cost of living (i.e.,
economic inflation).
CONTINGENCY:Budget for expenditures which cannot be placed in departmental budgets,
primarily due to uncertainty about the level or timing of expenditures when the budget is adopted.
The contingency also serves as a hedge against shortfalls in revenues or unexpected expenditures.
CURRENT:A term applied to budgeting and accounting, designating the operations of the present
fiscal period as opposed to past or future periods.
DEBT:An obligation resulting from borrowing money or purchasing goods and services.
DEBT LIMIT:The maximum amount of gross or net debt, which is legally permitted.
DEBT MARGIN:The amount of available debt, which may be issued by a governmental unit before
reaching its debt limit.
DEBT SERVICE FUND:A governmental fund type used to account for the accumulation of
resources for the payment of general long-term debt principal and interest. Proprietary fund type
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debt is accounted for in the enterprise fund or internal service fund receiving the debt issue
proceeds.
DEPARTMENT:Basic organizational unit of government, responsible for carrying out related
functions. Each department serves a specific function as a distinct organizational unit of
government within the given fund. Its primary purpose is to facilitate organizational and budgetary
accountability.
DEPRECIATION:Expiration in the service life of capital assets attributable to wear and tear,
deterioration, action of the physical elements, inadequacy, or obsolescence.
DEPUTY REGISTRAR (DMV):City service of processing state-issued licenses for motor vehicles and
equipment, such as license plates and tabs for cars, trucks, trailers, and recreational vehicles.
DISTINGUISHED BUDGET PRESENTATION AWARDS PROGRAM:A voluntary awards program
administered by the Government Finance Officers Association to encourage governments to
prepare effective budget documents.
ENTERPRISE FUND:A proprietary fund type used to report an activity for which a fee is charged to
external users for goods or services. In theory, these funds operate in a manner similar to private
business enterprises, where the intent of the governing body is to recover the cost of delivering
services through user fees or charges (Water, Sewage, Liquor, Deputy Registrar, and Fiber Optic
funds).
ESTIMATED MARKET VALUE:Represents the selling price of a property if it were on the market.
Estimated market value is converted to tax capacity before property taxes are levied.
EXPENDITURE:For accounts kept on the accrual or modified accrual basis of accounting, the cost of
goods received or services rendered whether cash payment have been made or not. Where
accounts are kept on a cash basis, expenditures are recognized only when the cash payments for
the above purposes are made.
FIBERNET MONTICELLO (FNM):The name of the city-owned fiber optic network, which provides
internet, phone, and cable television to residents and businesses of Monticello.
FIDUCIARY FUND:A fund classification used to report assets held in a trustee or agency capacity for
others and therefore cannot be used in the government’s own programs.
FINES:Revenues from penalties imposed for violation of laws or regulations.
FISCAL POLICY:A government’s policies with respect to revenues, spending, and debt management
as these relate to government services, programs, and capital investment. Fiscal Policy provides an
agreed-upon set of principles for the planning and programming of budgets and their funding.
FISCAL YEAR:The budget and accounting year that begins on the first day of January and ends on
the last day of December of each year.
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FULL TIME EQUIVALENT (FTE):The number of employee hours (2,080) needed to be equal to one
full time employee. Several part time employees may be combined to make one FTE.
FUNCTION:A group of related activities aimed at accomplishing a major service or regulatory
program for which the government unit is responsible.
FUND:A fiscally independent accounting entity with a self-balancing set of accounts recording cash
and/or other resources together with all related liabilities, obligations, and reserves, which are
segregated for the purpose of carrying on specific activities or attaining certain objectives.
FUND BALANCE:Governmental fund assets minus liabilities.
GENERAL FUND:Accounts for the general operation of the city and all financial resources except
those to be accounted for in another fund.
GENERAL GOVERNMENT:A set of accounts, to which the expenditures for operating the city are
charged.
GENERAL OBLIGATION BONDS:Bonds for which the government pledges its full faith and credit to
the repayment of the bonds principal, including interest.
GOAL:A statement of broad direction, purpose, or intent based on the need of a community. A
goal is general and timeless; that is, it is not concerned with a specific achievement in a given
period.
GOVERNMENTAL ACCOUNTING:The composite of analyzing, recording, summarizing, reporting,
and interpreting the financial transactions of governmental units and agencies.
GOVERNMENTAL FUND TYPES:Funds generally used for tax-supported activities. Under current
GAAP, there are five governmental fund types in this: general, special revenue, debt service, capital
projects, and permanent funds. The city has no permanent funds.
GRANT:A contribution of assets by one governmental unit or other organization to another.
Grants are usually made for specified purposes.
HOMESTEAD AND AGRICULTURAL CREDIT (HACA):A form of state-paid property tax relief for
farm property and owner-occupied homes.
HOUSING AND REDEVELOPMENT ACT – SPECIAL BENEFIT LEVY:Property tax levied against the
city’s taxable market value. The HRA levy limit is .0185% of the taxable market value and must be
used solely for redevelopment purposes.
IMPROVEMENT BONDS:Bonds payable from the proceeds of special assessments from properties
benefiting from an improvement.
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IMPROVEMENTS:Buildings, structures, and other attachments or annexations to land which are
intended to remain so attached or annexed, such as sidewalks, trees, drains, and sewers.
INFRASTRUCTURE:The basic physical and organizational structures and facilities (e.g., buildings,
roads, bridges) needed for the operation of the city. Infrastructure thus consists of improvements
with significant cost to develop or install that return an important value over time to the city.
INTERFUND TRANSFERS:See operating transfers.
INTERGOVERNMENTAL REVENUES:Revenues from other governments in the form of grants,
entitlement, or shared revenues.
INTERNAL SERVICE FUNDS:A proprietary fund type used to report activity that provides goods or
services to other funds, departments, or agencies of the primary government and its component
units, or to other governments, on a cost-reimbursement basis.
INVESTMENTS:Securities held for the production of income in the form of interest.
LEVY:(Verb) To impose taxes, special assessments, or service charges for the support of
governmental activities. (Noun) Taxes, special assessments, or service charges imposed by a
governmental unit.
LEVY LIMIT:The city’s maximum property tax levy without special authorization as defined by
Minnesota State Statue.
LICENSE REVENUES:Revenues received from the sale of business and non-business licenses.
LINE ITEM:A specific item or group of similar items defined by detail in a unique account in the
financial records.
LOCAL GOVERNMENT AID (LGA):Intergovernmental revenue from the state to municipalities to
help fund general expenditures.
LONG-TERM DEBT:Debt with a maturity of more than one year after the date of issuance.
MAINTENANCE:The upkeep (repairs and maintenance) of physical properties in condition for use
or occupancy.
MARKET VALUE:The value a property is worth.
MARKET VALUE HOMESTEAD CREDIT (MVHC):State paid property tax reduction on owner
occupied homes based on the property’s market value.
MARKET VALUE EXCLUSION (MVE):Provision in the state property tax system which exempts or
removes a portion of a property’s market value from property taxes.
264
MISCELLANEOUS:Revenues or expenditures not classified in any other revenue or expenditure
category.
MODIFIED ACCRUAL BASIS:The basis of accounting under which expenditures other than accrued
interest on general long-term debt are recorded at the time liabilities are incurred and revenues are
recorded when received in cash except for material and/or available revenues, which should be
accrued to reflect properly the tax levied and revenue earned.
NONSPENDABLE FUND BALANCE:Amounts that cannot be spent because they are either (a) not in
spendable form or (b) legally or contractually required to be maintained intact. Nonspendable fund
balances typically include inventory, prepaid items, and land held for resale.
OBJECT OF EXPENDITURE:Expenditure classifications based upon the types or categories of goods
and services purchased.
OBJECTIVE:Desired output-oriented accomplishments, which can be measured and achieved
within a given time frame.
OPERATING BUDGET:A financial plan that estimates revenues and expenditures for a specified
period.
OPERATING EXPENSE:The cost for personnel, materials, and equipment required for a department
to function.
OPERATING REVENUE:Monies received from ongoing operations. Operating revenues are used to
pay for day-to-day services.
OPERATING TRANSFERS:Amounts transferred from one fund to another, shown as an expenditure
in the originating fund and a revenue in the receiving fund.
ORDINANCE:A formal legislative enactment by the City Council.
PAY-AS-YOU-GO BASIS:A term used to describe a financial policy by which capital outlays are
financed from current revenues rather than through borrowing.
PERFORMANCE MEASURE:See Service Levels.
PERSONNEL SERVICES:Expenditures for salaries, wages, and fringe benefits of employees.
PROGRAM:A group of related activities performed by one or more organizational units for the
purpose of accomplishing a function for which the governmental unit is responsible.
PROJECT:A plan of work, job assignment, or task.
PROPRIETARY FUNDS:Funds focusing on the determination of operating income, changes in net
position (or cost recovery), financial position, and cash flows. There are two types of proprietary
265
funds: enterprise funds and internal service funds. For this report, these funds have the same
budgetary basis as governmental funds.
PUBLIC SAFETY:Expenditures related to the protection of persons and property.
PUBLIC WORKS:Expenditures for the maintenance of city property and infrastructure.
PURPOSE:A broad statement of the goals, in terms of meeting public service needs, that a
department is organized to accomplish.
REFUNDING BONDS:Bonds issued to redeem outstanding (unpaid) debt.
REIMBURSEMENT:Cash or other assets received as a repayment of the cost of work or services
performed or of other expenditures made for or on behalf of another governmental unit or
department or for an individual, firm, or corporation.
RESERVE:An account which records a portion of the fund balance which must be segregated for
some future use and which is, therefore, not available for further appropriation or expenditure.
RESOLUTION:A special or temporary order of a legislative body; an order of a legislative body
requiring less legal formality than an ordinance or statute.
RESOURCES:The actual assets of a governmental unit, such as cash, plus contingent assets such
as estimated revenues applying to the current fiscal year not accrued or collected, and bonds
authorized and not issued.
RESTRICTED FUND BALANCE:Fund balance should be reported as restricted when constraints
placed on the use of resources are either: a) externally imposed by creditors (such as through debt
covenants), grantors, contributors, or laws or regulations of other governments; or b) imposed by
law through constitutional provisions or enabling legislation.
REVENUE:The term designates an increase to a fund's assets which: 1) does not increase a liability;
2) does not represent a repayment of an expenditure already made; 3) does not represent a
cancellation of certain liabilities; and 4) does not represent an increase in contributed capital.
REVENUE BOND:A bond that is backed by a particular revenue source such as water user fees,
typically accounted for in proprietary fund types.
SERVICE LEVELS:Data to determine how effective/efficient a program is in achieving its objective.
SPECIAL ASSESSMENT:A compulsory levy made by a local government against certain properties
to defray part or all of the cost of a specific improvement or service which is presumed to be of
general benefit to the public and of special benefit to such properties.
SPECIAL REVENUE FUND:A governmental fund type used to account for revenue derived from
specific revenue sources that are legally restricted or committed for specific purposes.
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TAX CAPACITY:The valuation of property based on market value and statutory class rates. The
property tax for each parcel is based on its tax capacity. The total tax capacity of all individual
parcels is the basis for determining the tax capacity rate.
TAX CAPACITY RATE:Tax rate applied to tax capacity to generate property tax revenue. The rate
is obtained by dividing the property tax levy by the available tax capacity.
TAX INCREMENT FINANCING (TIF):Financing tool originally intended to combat severe blight in
areas, which would not be redeveloped without government subsidies derived from locally
generated property tax revenues.
TAX LEVY:The total amount to be raised by general property taxes for the purpose stated in the
resolution certified to the county auditor. See levy also.
TAXABLE MARKET VALUE:The market value of a property less the market value exclusion. This is
the value used to calculate property taxes on a property.
TAXES:Compulsory charges levied by a governmental unit for the purpose of financing services
performed for the common benefit.
TOTAL TAX CAPACITY:The amount computed by first totaling the tax capacities of all parcels of
property within a city. Adjustments for fiscal disparities, tax increment, and a portion of the
powerline value are made to this total since not all tax capacity is available for general tax purposes.
TRUST FUND:A fund consisting of resources received and held by the governmental unit as
trustee, which is to be expended or invested in accordance with the conditions of the trust.
UNASSIGNED FUND BALANCE:This is the residual classification for the General Fund. This is fund
balance that has not been reported in any other classification. The General Fund is the only fund
that can report a positive unassigned fund balance. Other governmental funds would report deficit
fund balances as unassigned.
UNBALANCED BUDGET:A budget in which undesignated fund balance or reserves are used or
increased, in order to balance estimated revenues to estimated expenditures or expenses.
UNRESTRICTED FUND BALANCE:The portion of a fund’s balance that is not restricted for a specific
purpose and is available for general appropriation.
USER FEE:The service charge for delivering a specific service to one benefiting party.
WORKLOAD DATA:A unit of work to be done.
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ACRONYMS
CAFR Comprehensive Annual Financial Report
CD Certificate of Deposit
CIP Capital Improvement Plan
CP Commercial Paper
CPI Consumer Price Index
DMV Department of Motor Vehicle or Deputy Registrar
EDA Economic Development Authority
MVE Market Value Exclusion
EMV Estimated Market Value
FHLB Federal Home Loan Bank
FNM FiberNet Monticello
FNMA Federal National Mortgage Association
FTE Full Time Equivalent
GAAP Generally Accepted Accounting Principles
GASB Governmental Accounting Standards Board
GFOA Government Finance Officers Association
GO General Obligation
HACA Homestead and Agricultural Credit Aid
HRA Housing and Redevelopment Authority
HVAC Heating, ventilation, and air conditioning
LGA Local Government Aid
MCC Monticello Community Center
MPFA Minnesota Public Facilities Authority
MVHC Market Value Homestead Credit
SAC Sewer Availability Charge
SY Square Yard
TIF Tax Increment Financing
WAC Water Availability Charge
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