LEVY CHANGE TO MAINTAIN CURRENT SERVICE LEVELS – 6. 55%
Economic Development Authority (EDA)Tax Levy Component .07%
EDA Tax Levy Increase - $ 10,000 The EDA budget includes a funding increase of $10,000 to bring the EDA tax levy to $360,000. This is an incremental increase in funding primarily for property taxes and maintenance costs for 2022 planned EDA owned properties including 4662/ 4662 Dakota St SE and 16298 Main Ave SE.
Personnel Adds / New Funding – 4.94% (Public Safety funding -4.12%/ Other staff fundings - .82%) Police 2022 Impact of 2021 Mid-Year Wage
Adjustment - $ 251, 000
Incremental increase related to the 2022 salary and benefits budget for the Police Department. A compensation study was conducted and approved for 7/ 1/ 2021 market rate adjustments to the Officers and Sergeants salary schedules.
Assistant Fire Chief - $ 142, 000 In 2022, the department seeks to add an Assistant Fire Chief to assist the Fire Chief with expanding duties and responsibilit ies including administration, training, and fire inspection duties. In addition to supporting the Chief in regular operations, th e Assistant Chief would play a critical role in two areas: life safety inspections and training. Position request included in Personnel Plan presented April 5, 2021. Budget includes salary and benefits.
Police Officer - $ 100, 000 The Prior Lake Police Department is unique in that it provides services to two communities, Prior Lake and the SMSC, as well as a large gaming enterprise. The government- to- government agreement works well operationally but requires significant resources.
The immediate needs for the Police Department include the addition of three police officers ( tribal liaison, investigator and patrol officer) and one civilian FTE to run the property room and assist with investigations support work. Discussions are ongoing on how to best meet these needs while ensuring goals across the City are met and the financial impacts are managed. As a result of this process, the Personnel Plan includes the addition of one FTE for the Police Department annually from 2022- 2026. The number each year could be raised or accelerated as needs evolve and if a long- term contract with the SMSC is reached. Position request included in Personnel Plan presented April 5, 2021. Budget includes salary and benefits.
Public Safety Workers Comp Rate Increase - $ 97, 000 Premium adjustment based on updated experience modifier and rate changes from the League of MN Cities. Preliminary guidance released included expectations of a 20% rate increase for public safety classes for 2022.
Administrative Assistant ( Front Desk Receptionist) - 67, 000
The administrative assistant position was eliminated due to the closure of City Hall during the pandemic in late 2019. The City needs full- time coverage at the front desk to greet visitors and route phone calls. Additionally, many of the tasks this position once did to support communications need to be returned so the Communications Manager can focus ‘ big picture’ marketing and promotion of the City. Position request included in Personnel Plan presented April 5, 2021. Budget includes salary and benefits.
Development Services Assistant ( 0.8 FTE)- $ 50, 000 Prior Lake issues approximately 2, 600 building permits and completes about 5,000 inspections per year, each requiring process ing, scheduling, and customer support. With continued growth and large development projects on the horizon, staff proposes to covert the seasonal development services assistant into a regular part- time position to meet the demand for building services. Position request included in Personnel Plan presented April 5, 2021. Budget includes salary and benefits.
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Mandatory Items – 1. 65%
STAFFING
Wage/ COLA and Benefits - $275,000 The budget includes a proposed cost of living adjustment, city payroll taxes and health insurance premium contribution increase.
The budget also includes seasonal salaries.
Health Insurance - $46,000 The city’s current health insurance provider indicated the city may see a premium increase of 10% for the 2022 insurance renewal.
Workers Compensation - $ 16, 000 Premium adjustment based on updated experience modifier and rate changes from the League of MN Cities. Preliminary guidance released included expectations of a 10% rate increase and potential reclassification for certain employee functions for 2022.
Election Judges - $ 54, 000 An increase in election judges is needed due to an August primary election, the November general election, and ongoing early voting.
CURRENT EXPENDITURES
Maintenance Agreements – $ 43, 000 Increase in funding for maintenance agreements including general, building and equipment maintenance.
Property/ General Liability Insurance - $ 22, 000 Rate increase for property ( 10%) and general liability ( 12%) based on LMCIT guidance.
Professional Services - $ 58, 000 increase in professional service costs for legal, engineering and the city’ s assessment contract with Scott County.
Software Service Contracts – $ 15, 000 New antivirus software and an increase in the Fire department’ s timekeeping software.
Police Camera Technology Contract - $ 52, 000 Estimated contract cost for a comprehensive Police camera technology contract that includes body camera, taser and video storage. The current contract expires in 2022 and a new contract will cover a five- year period.
NONTAX REVENUE SOURCES/ OTHER
Net Revenue increase of $742, 000 offset with Levy Impact of Change in Use of Reserves from 2021 to 2022 of $ 278, 000
328, 000 2021 General Fund use of reserves for recurring items 50, 000 2022 General Fund use of reserves
278, 000 Levy impact of Change in Use of Reserves between yrs.
205k for additional building permit and plan check revenue. The city collects building permit and plan check revenue on new residential and townhome units built. The estimate for new construction for 2022 is 150 units which is more than the 2021 estimate of 125 units. As we wind down from the pandemic impacts and evaluate the property available for development, staff has adjusted the annual building permits estimate to 150/ year for the foreseeable future.
300k for additional SMSC Police Aid. The financial plan includes an incremental increase in SMSC aid for Policing which will be adjusted, as needed, based on the agreement between the SMSC Business Council and the City Council. The proposed increase for 2022 is $ 300k bringing the total SMSC police aid contribution to $ 1,000, 000 in 2022.
82k for additional Minnesota state aid for Street Maintenance, Police and Fire including an estimated increase for the 2022 police officer and assistant fire chief staff additions.
31k Fire & Rescue Services Revenue from Townships: The costs for the Assistant Fire Chief are included in the cost calculation for the Fire & Rescue Services agreement with Credit River and Spring Lake Townships.
27k for facility rent from the Prior Lake Spring Lake Watershed District ( PLSLWD) for the space they are leasing at City Hall.
278k increase in tax levy for on- going expenditures/ revenue that were funded with reserves in the prior year. The 2021 use of reserves for ongoing revenue/ expenditure items of $327, 750 is comprised of the following:
o $ 100, 000 shortfall in SMSC Police aid
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o $ 24,000 reduction in the estimate of building permit and plan check revenue o $ 63, 000 Police overtime adjustment
o $ 23, 750 Police workers compensation adjustment o $ 117,000 Police midyear wage adjustment
2022 Planned Use of Reserves is $50,000 to fund the following items:
o Community Survey – The survey is completed every three to five years and planned to be funded from reserves.
GENERAL FUND RESERVE
Background information: The city’ s comprehensive financial management plan calls for maintaining a fund balance between 40- 50%
to ensure adequate reserves for cash flow, unplanned expenditures, and to maintain the city’s credit worthiness (AA+ credit rating).
Staff recommends the use of reserves for one-time expenditures or revenue shortfall; otherwise, the fund balance could drop below the level stated in the comprehensive financial management plan over time.
The total 2021 use of reserves is $ 1,127, 704 comprised of the following items:
849, 955 of the use of reserves was for the following one- time items:
800,000 for a planned transfer of ARPA funds to the Facilities Management Fund for future projects 17, 600 for professional services for a city compensation study
32, 355 for purchase of Police field equipment
277, 750 of the use of reserves was for recurring items. In 2022, tax levy is needed to fund these items that were funded wi th reserves in 2021:
100, 000 shortfall in SMSC Police aid
24, 000 reduction in the estimate of building permit and plan check revenue 63, 000 Police overtime adjustment
23, 750 Police workers compensation adjustment 117, 000 Police midyear wage adjustment
2022 Planned Use of Reserves is $ 50, 000 to fund the following items:
Community Survey – The survey is completed every three to five years and planned to be funded from reserves.
Capital Improvement Program ( CIP) Tax Levy Components - (. 10%)
Equipment Replacement funding - $ 50, 000 The Equipment Replacement Plan ( ERP) utilizes general tax levies to support replacement of the City’ s equipment and vehicle fleet.
The ten- year annualized cost for the plan is about $ 1. 38M. The financing plan reflects a gradual increase in the tax levy until the annual levy reaches $ 1M by the year 2028. The proposed total levy for 2022 is $ 917k. Since the proposed levy increase is gradual, bonding may be required for the plan to meet our funding needs.
Park Equipment Replacement funding -$ 30, 000 The Revolving Park Plan funds capital replacement projects, park amenities, and trail, sidewalk, and boardwalk replacement. The plan proposes a phased increase in the tax levy to cover the capital projects in the plan. 2022 projects include the Northwood playground replacement and the Crystal Lake aerator.
Facilities Management Plan funding -$ 25, 000 The Facility Management Plan ( FMP) was developed to plan for major repairs, replacements, and upgrades for all city facilities on a long- term basis ( 25 years). It does not cover minor expenses for repairs and maintenance. Those will continue to be funded through the operating budgets. 2022 includes carpet and minor renovations at the Police Station, roof work at the salt building and renovations for the duty crew at Fire Station 1.