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08/12/2020 - City Council SpecialSPECIAL CITY COUNCIL MEETING WEDNESDAY AUGUST 12, 2020 5:30 P.M. EAGAN MUNICIPAL BUILDING AGENDA I. ROLL CALL AND ADOPTION OF THE AGENDA II. VISITORS TO BE HEARD III. DAKOTA COUNTY LIBRARY UPDATE IV. DIFFLEY ROAD SCHOOL AREA IMPROVEMENTS V. PROPOSED 2021 GENERAL FUND BUDGET VI. EAGAN CARES SMALL BUSINESS ASSISTANCE GRANTS PROGRAM VII. OTHER BUSINESS VIII. ADJOURNMENT Agenda Information Memo August 12, 2020 Special City Council Workshop III.DAKOTA COUNTY LIBRARY UPDATE Action to be Considered: No formal action is needed. This item is informational. Facts: ➢Amanda Feist, Branch Manager for Dakota County’s Wescott Library, will provide an update to the City Council about the library, including service changes in response to the COVID -19 pandemic. Attachments: (1) III-1 Power Point, Library Update Wescott Library 1340 Wescott Road, Eagan (651) 450-2900 Amanda Feist, Branch Manager Staff Assistance 1,013 3,746 5,094 0 1000 2000 3000 4000 5000 6000 Aug. 2019 April 2020 May 2020 Number of Phone Calls Circulation Statistics 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 May 12,671 June 31,417 July 44,964 Number of Items Checked Out (2020) Open for Express Services Express Library Services Other library services Looking Ahead Agenda Information Memo August 12, 2020 Special City Council Workshop IV. Diffley Road (CSAH 30) School Area Improvements - Update Direction For Consideration: Receive an update from staff on the status of the project design and related ancillary items. Facts:  Dakota County has been partnering with the City of Eagan and ISD 196 to consider public safety improvements for Diffley Road (CSAH 30) near the Northview Elementary, Dakota Hills Middle, and Eagan High School campuses (campus) in Eagan. This effort is intended to improve pedestrian and bicycle safety and overall transportation systems mobility adjacent to the school campuses.  On February 4, 2020, the City Council authorized amending the Joint Powers Agreement with Dakota County for the Diffley Road/ Braddock Trail intersection project (Project 1339) to retain consultant services from Bolton & Menk Inc. (BMI), to facilitate public and agency engagement, develop project goals, define improvement options and pursue a project concept for the school area improvements.  The County, City, and ISD 196 held a series of public meetings from December 2019 through February 2020. A public meeting to share CSAH 30, Braddock Trail, and school campus concepts was held on February 27, 2020. Additional public discussions were held in March with students and teachers at Dakota Hills Middle and Eagan High Schools. A virtual open house was held April 24 – May 11, 2020, to share analysis work, respond to questions, and receive feedback on proposed project options. Walking discussions along Diffley Road were also held over a two-week period in May to further address questions and describe improvement options.  On July 7, the City Council approved a Joint Powers Agreement between Dakota County, the City of Eagan and Independent School District (ISD) 196 for the engineering design of Diffley Road (CSAH 30) School Area Improvements.  Improvement options include school parking lot drop-off and circulation modifications, a new access roadway from CSAH 30 to the south parking lot of the campus, CSAH 30 lane reduction to a two-lane divided section, new traffic control at the intersections of Daniel Drive and Braddock Trail (possibly roundabouts), pedestrian crossing enhancements, and corridor street lighting.  Improvements are recommended to be constructed in 2021. Dakota County would be the lead agency. To maintain such an aggressive schedule, as well as consistent approach to agency and public engagement, design efforts are currently under way.  Dakota County, along with City of Eagan and ISD 196 support, has submitted a State bond request for an estimated construction cost of $4,620,000. No financing was provided by the end of the regular session or in two special sessions. A third special session is currently anticipated in August due to the Governor’s extension of the Peacetime Emergency Declaration.  Staff would like to provide an update on the proposed improvements and the status of related ancillary items to the Council. Attachments: (0) DIFFLEY ROAD (COUNTY ROAD 30) PUBLIC QUESTION & COMMENT RESPONSE DIFFLEY ROAD (COUNTY ROAD 30) INTERACTIVE MAPPING TOOL SUMMARY Interactive Mapping Tool Summary DIFFLEY ROAD (COUNTY ROAD 30) SCHOOL AREA IMPROVEMENTS PUBLIC WALKING TOURS SUMMARY DIFFLEY ROAD (COUNTY ROAD 30) SCHOOL AREA IMPROVEMENTS TRAFFIC ANALYSIS SUMMARY Traffic Analysis Pedestrian Crossing Assessment Existing Pedestrian Crossing at Daniel Dr vs Proposed Pedestrian Crossing at Daniel Dr Existing Pedestrian Crossing at Braddock Trl vs Proposed Pedestrian Crossing at Braddock Trl Calculated Average Wait Time during Morning Peak Hour to Cross Diffley Rd Traffic Queuing Analysis Existing Traffic Queuing vs Proposed Concept Traffic Queuing The preferred project concept has been identified, with technical analysis, for its ability to address all of the following key project objectives: • Increase pedestrian safety and connections • Increase awareness of the school area • Provide safe facilities • Lower vehicles speeds • Reduce pedestrian and vehicle conflict points • Reduce congestion and improve circulation Improvement Options Review Summary DIFFLEY ROAD (COUNTY ROAD 30) SCHOOL AREA IMPROVEMENTS ROUNDABOUT INTERSECTION CONTROLS •Mid September, likely Wednesday (no school) •Late afternoon/early evening •Middle school parking lot, bus corral, near building •30 min time slots –Online sign up •Agency Reps •Welcome Station o COVID-19 safety o Card stock o QR Code w/ smart phone o Waiting area •Online survey link Public Information Meeting Website •Virtual Engagement –mid September thru ongoing •Online Survey –during September •Public Information Meeting Displays on Website (Dakota County) •Mapping Comment Tool •3rd Special Legislative Session -Today •No Bonding Bill to date •Not in any agency budgets or CIP Funding Design / Construction Schedule •60% design completion •Determine ROW acquisition needs •Determine whether construction can happen in ‘21 or ‘22 October BRADDOCK TRAIL DRIVEWAY IMPROVEMENTS FINAL DESIGN PUBLIC FEEDBACK SUMMARY Update •Online Engagement Summary –65 responses o Prioritize pedestrian & bicycle safety o Desire for driver education o Support for enhanced pedestrian crossings & parking lot circulation •Construction will not occur in 2020 (tentative ’21) •Replacing programmable flashing beacon on Braddock Trail •www.cityofeagan.com/braddock-trail-improvements •Link to improvements –Dakota Co website (forthcoming) Braddock Trail Driveway Improvements Agenda Information Memo August 12, 2020 Special City Council Meeting V. PROPOSED 2021 GENERAL FUND BUDGET Direction to be Considered: To provide direction to staff regarding the proposed 2021 General Fund budget and preliminary tax levy. Facts: A 2021 General Fund budget was prepared a year ago as the second year of the City’s two-year operating budget process. As a result of COVID and its effect on the economy, some amendments to the budget proposed a year ago have been made, including a downward revision in certain revenues and a reduction of travel expenditures. As proposed, the 2021 property tax levy is the same amount presented a year ago, which would be a 5.4% increase over 2020. Because the severity of the economic impact of COVID is uncertain, revenues are difficult to predict. If revenue projections for 2020 and 2021 change over the next few months, amendments to the budget as presented may be appropriate before final adoption in December. The budget team—City Administrator Osberg, Assistant City Administrator Miller, Finance Director Pepper, and Assistant Finance Director Feldman—has met with each of the departments as part of the process to bring the City Administrator’s recommended 2021 budget to its current state. The general narrative is laid out in a fashion similar to previous years. The budget team and department directors will be present at the meeting to respond to any questions the City Council may have about the proposed budget. The 2021 General Fund budget and tax levy are next scheduled to be considered at the regular City Council meeting on September 1. Staff will walk through the budget memo information a with PowerPoint presentation for the viewing public. Attachments: (2) V-1 Budget Memo from City Administrator Osberg V-2 PowerPoint presentation TO: Honorable Mayor and City Councilmembers FROM: Dave Osberg, City Administrator DATE: August 7, 2020 SUBJECT: Proposed 2021 General Fund Operating Budget and Preliminary Levy Introduction The City is required by State Law to certify the preliminary 2021 property tax levy to Dakota County before the end of September 2020. Staff intends to ask the City Council to approve the 2021 preliminary property tax levy and budget at the regular meeting on Tuesday, September 15, 2020. The final property tax levy and budget will be presented for City Council approval at one of the two regular meetings in December 2020. Past practice has been for the City Council to review and comment on the proposed preliminary budget and levy at the August workshop as a precursor to approval in September. That same intent will be met as staff presents the preliminary levy and budget at the August 12, 2020 City Council workshop. Background Needless to say, this may be one of the more unique and challenging budget processes due to the fact the City of has been in a State of Emergency since March 17, 2020 because of the COVID-19 pandemic. However, much of the groundwork for the 2021 budget was completed nearly one year ago, as the foresight of the City Council granted staff the opportunity several years ago to prepare and consider a two-year budget cycle. The 2021 budget is the second year of the current two-year budget cycle, and as noted, much of the work was completed last year. Yet, the COVID-19 pandemic brings a different set of challenges, in particular the challenge of the “unknown.” At the June 9, 2020 City Council Meeting, staff shared a variety of updates to the City Council, including:  The City has experienced increased costs for personal protective equipment (PPE) acquisition and other safety measures to improve the interaction with the public, making City Hall and other facilities safe for the public and staff. All of these costs are expected to be reimbursed by FEMA and/or CARES Act funding.  Lower revenues due to development slowdown were projected back in June, yet, those have picked up in the last several weeks.  City recreation programs have been cancelled, included the closing of Cascade Bay.  Staff projected in June, property tax delinquencies of $1 million in both 2020 and 2021. There was uncertainty at that time on the amount of (if any) funding from the Federal and State Governments to assist with pandemic recovery.  Based on projections at that time, the 2020 budget anticipated a $991,000 deficit and the 2021 budget anticipated a $592,000 deficit.  Staff shared budget saving measures that could include hiring freezes, a travel ban, and a freeze on certain capital and equipment acquisitions.  Absent adjustments to the 2021 budget and levy as previously presented, the projected 2021 property tax levy increase would be 5.4%.  While recognizing the fluid nature of the of the 2020 Budget process, in general the City Council did not object to the proposed 5.4% property tax levy increase, possible adjustments to the 2021 Budget and the impact on the general fund balance. Update Since June 9 City Council Meeting The Budget Team, which includes myself, Finance Director Tom Pepper, Assistant City Administrator Dianne Miller, and Assistant Finance Director Josh Feldman conducted individual meetings with the Senior Management Team since the June workshop. Each member of the SMT was advised of the potential hiring freeze for new positions proposed in 2021 along with possible cuts in training, conferences and schools. All were understanding of the situation and recognized the importance of not asking for any amendments to the 2021 from what was presented in August 2019. Recent reporting from the Community Development Department shows the reduction in development revenues predicted in June has not occurred. Rather, the City’s development revenues for 2020 remain on budget. First half collections of property taxes in 2020 are very similar to 2019, but the County suggested that if delinquencies are a problem due to an economic downturn, they will likely occur with second half collections, which are remitted to the City in early-December. Non-tax revenues will be watched carefully for the balance of the year. August 12 Budget Update While briefing the City Council since the start of the pandemic, the one consistent message staff has tried to share is the need to remain flexible, as there have been many unknowns since mid- March, and said unknowns remain today. We do know that on September 15, 2020 the City Council will be asked to approve the preliminary 2021 property tax levy and the preliminary budget. Furthermore, the final versions of the 2021 levy and budget will be need approval in December 2020. As we know, the U.S. economy contracted 33% in the second quarter, more than any quarter ever. It remains to be seen how severe and long the downturn will be, but it will almost certainly impact 2021. The 2021 General Fund budget as presented today:  Reflects the $196,700 reduction in out-of-town travel for conferences and training as presented at the June 9 Council workshop.  Includes the new positions identified on June 9 as potentially “frozen.” If later in the year, circumstances are such that the Council feels these positions should remain frozen and not filled, they could be removed from the budget upon final adoption in December.  Reflects the $1,805,000 reductions to revenue estimates as outlined on June 9.  Reflects an $84,600 net reduction in other expenditures, primarily due to a decrease in health insurance costs from the original estimate.  Maintains the same 5.4% levy increase for 2021 that was presented a year ago. As a result, a gap between revenues and expenditures of $1,523,700 exists. The City’s fund balance, which exists for the purpose of easing financial emergency situations such as this, will absorb the funding gap for 2021. We will continue to monitor the development fee revenue and property tax payments throughout the next several months. By the time the City Council is scheduled to approve the final 2021 budget and property tax levy, more data should be available. As always, in December, the property tax levy cannot be increased from the amount set in September, but it could be lowered. Even after approval of the final budget and levy, circumstances may be such that a continued freeze on the hiring of new positions, along with other possible budget reductions, may be warranted. Executive Summary:  General Fund budget of $44,598,600 represents a 4.1% increase over 2020.  Property tax levy of $41,448,498 represents a 5.4% increase over 2020. This is the same 2021 levy amount presented in budget meetings a year ago.  Total market value increased 5.9% to $10.0 billion; 0.8% of the increase was due to new construction.  Total tax capacity increased 6.6%.  Market value of the average Eagan home increased 3.8% from $312,661 to $324,634 for payable 2021 taxes.  Preliminary calculations indicate tax capacity rate will increase from .35227 to .36081, or 2.4% over last year.  City portion of taxes on the average value home are estimated at $1,142, an increase of $35 over 2020, or about $3 per month.  New positions included in the 2021 budget as presented a year ago, at a total cost of $532,900, are: o Deputy Public Works Director o Public Works Project Coordinator o IT Specialist o Human Resources Assistant General Fund Budget The 2021 General Fund budget is proposed to be $44,598,600, a decrease of $281,300 from the 2021 budget proposal presented in December 2019. It represents an increase of 4.1% over the 2020 budget. Revenue Estimates The City has traditionally been conservative in its estimates of revenues within a realistic range. Again, we feel the 2021 estimates shown below are conservative, but recognize there is a greater level of uncertainty this year under the circumstances. Total 2021 revenues are now estimated at $43,074,900, a reduction of $1,805,000 from our original estimates of a year ago. It is expected that $1,523,700 of fund balance will be utilized to cover the budget deficit. Here is a detail accounting of the downward adjustments: Allowance for uncollectible and abated property taxes $ (1,000,000) Development-related fees (400,000) Recreation program fees (200,000) Interest income (100,000) Liquor licenses (50,000) Fines & forfeitures (30,000) Lodging tax admin fee (25,000) Total $ (1,805,000) Comparative Summary – General Fund Revenues General Fund Revenues 2020 2021 $% Property Taxes 33,002,900 34,857,500 1,854,600 5.6% Uncollectible Taxes 0 (1,000,000)(1,000,000)N/A Licenses and Permits 1,472,400 1,007,400 (465,000)-31.6% Inter-gov't Rev.2,691,800 2,655,000 (36,800)-1.4% Charges for Services 2,447,600 2,333,900 (113,700)-4.6% Program and Other Revenues 921,300 824,500 (96,800)-10.5% Fund Balance 0 1,523,700 1,523,700 N/A Transfers In 2,286,100 2,396,600 110,500 4.8% 42,822,100 44,598,600 1,776,500 4.1% ∆ Expenditures Personnel costs account for 79% of the City’s total General Fund budget. Traditionally, for preliminary budgeting purposes, we have included a 3% cost-of-living adjustment for staff wages, and have done so again this year. The City’s six collective bargaining agreements are not yet settled for 2021. Negotiations will begin soon. 2021 is the final year of a five-year health insurance contract with Blue Cross. A 12% cap on premiums was built into the contract for 2021, but with the elimination of the ACA tax this year, the City’s consultant was able to negotiate the actual increase down to 10%. As noted in the Executive Summary, four new positions were originally budgeted for 2021. For now, those positions remain in the budget, but can be removed before final budget adoption in December. Additionally, two new positions budgeted in 2020 have been frozen and not filled: a police administrative sergeant and a website developer. These expenditure line items have changed since the 2021 budget was presented a year ago: Conferences/training – eliminate out-of-town travel $ (196,700) Health insurance adjustment – remove 2% ACA tax (66,800) Health insurance – reflecting actual employee elections (115,800) PERA rate adjustment – Police/Fire 98,000 Total $ (281,300) Property Taxes 75.9% Licenses and Permits 2.3% Intergovernmental 6.0% Charges for Services 5.2% Program and Other Revenues 1.8% Fund Balance 3.4% Transfers In 5.4% 2021 General Fund Revenues $44,598,600 Comparative Summary – General Fund Expenditures General Fund Expenditures 2020 2021 $% Personal Services 33,320,000$ 35,220,500$ 1,900,500$ 5.7% Parts & Supplies 2,159,800 2,047,800 (112,000) -5.2% Services & Other Charges 6,982,100 6,998,600 16,500 0.2% Capital Outlay 279,600 247,300 (32,300) -11.6% Contingency 80,600 84,400 3,800 4.7% 42,822,100$ 44,598,600$ 1,776,500$ 4.15% ∆ 0.5%1.3% 2.9% 4.4%3.8% 2.8% 4.48% 7.1% 5.5% 12.8% 4.1% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 % Increase -General Fund Budget 2011-2021 2020 2021 FINAL Proposed Existing Personnel Budget Budget $% Regular Employees Salaries/wages/overtime 20,944,000$ 21,835,600$ 891,600$ 4.1% Temporary/Seasonal 1,281,000 1,183,000 (98,000) -8.3% Contractual Overtime 118,100 118,100 - 0.0% PERA 2,483,300 2,751,200 267,900 9.7% FICA 1,052,600 1,089,000 36,400 3.3% Health/Life/LTD insurance 3,433,900 3,747,500 313,600 8.4% Workers' compensation 966,100 1,007,800 41,700 4.1% Part-time firefighters compensation 260,000 215,000 (45,000) -20.9% Fire Relief Association (pension)315,000 240,000 (75,000) -31.3% Unemployment compensation 26,000 26,000 - 0.0% 30,880,000 32,213,200 1,333,200 4.1% 2020 2021 Proposed Additions FTE FTE Fire Captains - 2020 6 768,600 790,000 21,400 Firefighters - 2020 12 1,298,800 1,321,200 22,400 Police Sergeant - 2020 1 118,500 125,500 7,000 Police Cadet - 2020 1 30,500 32,700 2,200 Deputy Public Works Director - 2021 1 - 149,800 149,800 Streets Maintenance Worker - 2020 1 98,000 106,800 8,800 Project Coordinator - 2021 1 - 127,000 127,000 Web/Application Developer - 2020 1 125,600 131,100 5,500 IT Specialist (support) - 2021 1 - 123,600 123,600 Human Resources Asst - 2021 1 - 99,600 99,600 22 4 2,440,000 3,007,300 567,300 Total Personnel 33,320,000$ 35,220,500$ 1,900,500$ 5.4% Δ General Fund Personnel Summary 2020-2021 Proposed New Positions Deputy Public Works Director How will public service be improved if the Deputy Public Works Director is hired? • Some of the work of Public Works is either not getting completed or is completed ineffectively. The position will enable appropriate prioritization of work and improve operations efficiency • Working with the new Asset Management Coordinator, the position will enable the evaluation and coordination of the maintenance and improvement of City infrastructure assets. • The position will enable an enhanced safety program, improving efficiency and reducing lost time and workers compensation costs. Engineering Project Coordinator How will public service be improved if the Engineering Project Coordinator is hired? • Internal and external customer service and project delivery—for developers, consulting engineers, builders, and other City departments—will be improved by performing more timely and comprehensive coordination of infrastructure projects. • Adding this position will avoid inefficiencies in project management and thereby reduce customer costs and improve project timelines. IT Specialist How will public service be improved if the IT Specialist is hired? • Information Technology is rarely a public facing department. The IT department is a support-oriented department for many internal diverse staff members. The service impacts would typically not directly affect the public, apart from public wireless service. • Typically, IT service impacts would indirectly affect the public. For an example, if a customer is waiting to get checked in at the Community Center and someone’s computer is slow, the network is offline or the application that they use is not working properly this IT related issue can make it appear as if the Community Center employee is responding slowly and/or not providing good customer service. Occasionally, this can result in lost sales if credit card terminals are offline or the network in general is offline. • By filling this position, IT can reduce the time it takes to update and replace aging equipment, resolve IT hardware/software issues more efficiently and thus indirectly improving employee productivity by reducing citizen’s wait times. HR Specialist How will public service be improved if the HR Assistant is hired? • Daily functions of the HR department will be fulfilled in a more cost-effective manner by having a lower classification position performing duties that do not require a higher level of skills. General Fund Balance Per policy, the City Council’s target range for the General Fund balance is 40-45% of the following year’s expenditure budget. At the end of 2019, fund balance was strong at 52%. A year ago, the Council consented to a plan utilizing $2,250,000 (5%) of fund balance to reduce the capital portion of the property tax levy over the five-year period 2020-2024. The 2020 apportioned amount of $750,000 was authorized by the Council in February 2020. If staff’s preliminary projections of a $1.1 million revenue shortfall for 2020 are realized, the fund balance based on operations alone would drop to 42% by the end of 2020, and perhaps 37% by the end of 2021. The CARES funding, however, would restore the fund balance back to the target range. If roughly $2.0 million of the total $5.1 million CARES funding is used to reimburse General Fund expenses, that would replenish the fund balance at the end of 2021 to 41% as shown below. 52.5% 46.3% 41.4% 25% 30% 35% 40% 45% 50% 55% YE 2019 Projected YE 2020 Projected YE 2021 General Fund Fund Balance Target Range Market Value and Tax Capacity Total market value in the City increased 5.9% to $10.0 billion. Commercial/industrial value increased 8.7%, while residential value increased 5.0%. Total new construction value was $84.7 million, which represents about 0.8% of the total increase. Tax capacity was similarly up 6.6%. C/I tax capacity was up 8.8% and residential tax capacity was up 5.3% Final Proposed Payable 2020 Payable 2021 Dollars % Taxable Market Value 9,471,701,205 10,029,136,347 557,435,142 5.9% Tax Capacity: Gross Tax Capacity 119,358,668 127,271,979 7,913,311 6.6% Fiscal Disparities Contribution (15,753,256) (17,393,314) (1,640,058) -10.4% Tax Increment Value (4,235,138) (4,222,508) 12,630 0.3% Net Local Tax Capacity 99,370,274 105,656,157 6,285,883 6.3% Taxable Market Value and Tax Capacity Change Property Tax Levy Now that the Community Center bonds will be paid in full in February 2021, the City’s entire tax levy will be tax-capacity based. There is no levy required for the Community Center bonds. The City’s 2021 proposed gross levy is $41,448,398, an increase of $2,116,020 or 5.4% over last year. Proposed 2021 Change % General Fund 33,002,900$ 34,857,500$ 1,854,600$ 5.6% Special Revenue - Parking Ramp 81,000 83,000 2,000 2.5% General Facilities R & R 240,000 245,000 5,000 2.1% Equipment Revolving Fund 811,000 992,000 181,000 22.3% Major Streets Fund - A 1,981,000 2,021,000 40,000 2.0% Major Streets Fund - B (Overpasses)550,000 590,000 40,000 7.3% Fire Apparatus - Debt 207,861 213,176 5,315 2.6% - Revolving 152,139 146,824 (5,315) -3.5% Park Systems Development & R & R 508,000 518,000 10,000 2.0% DataBank Abatement 15,000 15,500 500 3.3% Debt Service - 2016 Bonds 500,349 543,214 42,865 8.6% Debt Service - 2018 Bonds 163,829 1,223,184 1,059,355 646.6% Fund Totals 38,213,078 41,448,398 3,235,320 8.5% Market Value Debt Service Levy 1,119,300 - (1,119,300) -100.0% Grand Total Levy 39,332,378$ 41,448,398$ 2,116,020$ 5.4% Final 2020 Allocation of Property Tax Levy Final 2020 Amount Difference % Operating Levy 37,341,039$ 39,468,824$ 2,127,785$ Debt Service Levy 872,039 1,979,574 1,107,535 Total Tax Capacity Levy 38,213,078 41,448,398 3,235,320 F D Distribution (3,173,245) (3,326,615) (153,370) Net Local Tax Capacity-based Levy 35,039,833 38,121,783 3,081,950 Market Value-based levy 1,119,300 - (1,119,300) Total net levy 36,159,133 38,121,783 1,962,650 5.4% Tax Cap Rate calculation:35,039,833 38,121,783 99,370,274 105,656,157 Tax Capacity Rate:0.35262 0.36081 0.00819 2.3% Tax Capacity Levy & Tax Capacity Rates Preliminary 2021 Tax Impact The total levy increase of 5.4% drives the tax impact on the average homeowner. The market value of the average home in Eagan increased 3.8% for 2021 to $324,634. City taxes on a $324,634 home for 2021 are estimated at $1,142. In 2020, taxes on the average value home of $312,661 were $1,107. The increase of $35 is roughly $3 per month. Projected 2017 2018 2019 2020 2021 Tax Capacity Rate 0.37385 0.36378 0.35227 0.35262 0.36081 Market Value Rate 0.0001451 0.0001359 0.0001235 0.0001159 0.0000000 Market Value 150,000$ 494 480 463 463 456 155,744 478 200,000 705 685 661 661 652 207,659 682 312,661 Pay 2020 Average Eagan House Mkt Value 1,107 324,634 Pay 2021 Average Eagan House Mkt Value 1,142 400,000 1,549 1,505 1,454 1,452 1,439 415,318 1,499 500,000 1,942 1,887 1,823 1,821 1,804 519,147 1,890 Eagan Property Tax History City Portion 2020 average value:312,661$ 2020 city tax:1,107$ 2021 average value:324,634 2021 city tax:1,142 Increase 11,973$ Increase 35$ % increase 3.8%% increase 3.2% City Taxes on Average Market Value House in Eagan Proposed Next Steps • Staff incorporates City Council direction from this meeting into the budget and levy. • City Council approves the preliminary levy at the first or second regular meeting in September. • The preliminary levy is certified to Dakota County by September 30. • The Truth-in-Taxation hearing is held at the December 1 regular City Council meeting with the opportunity to adopt the 2021 budget and levy then. If not adopted at the December 4 meeting, the Council take action on December 15. • The final levy is certified to Dakota County by December 28. Public Policy Issues • Is the City Council satisfied with the proposed levy? • There are uncertainties in the proposed budget due to COVID and its impact on the economy. Is the City Council comfortable with delaying some final decisions until December, and in some circumstances, until 2021? • Is the City Council accepting of the proposed new FTEs included in the budget, recognizing they would not be hired until more financial certainty is established? • Does the City Council agree with the current plan to eliminate out-of-state travel for training and conferences in 2021? 2020 2021 Budget Budget $% General Property Taxes 33,002,900 34,857,500 1,854,600 5.6% Uncollectible Taxes - (1,000,000) (1,000,000) N/A Licenses 330,200 282,200 (48,000) -14.5% Permits 1,142,200 725,200 (417,000) -36.5% Intergovernmental Rev 2,691,800 2,655,000 (36,800) -1.4% Charges for Services 1,475,800 1,522,800 47,000 3.2% Recreation Charges 971,800 811,100 (160,700) -16.5% Fines & Forfeits 263,200 233,200 (30,000) -11.4% Other Revenues 391,800 294,600 (97,200) -24.8% Program Revenues 266,300 296,700 30,400 11.4% Transfers 2,286,100 2,396,600 110,500 4.8% TOTAL GENERAL FUND 42,822,100$ 43,074,900$ 252,800 0.6% ∆ 2020 vs. 2021 General Fund 2021 Budget COMPARATIVE SUMMARY OF REVENUES Acct20172018201920202021No. DESCRIPTION ActualBudgetBudgetBudgetBudgetTAXES:4020AD VALOREM TAXES - CURRENT23,988,359$ 25,263,646$ 26,897,000$ 29,829,700$ 31,530,900$ 2,932,700 10.9%1,701,200 5.4%4021AD VALOREM TAXES - DELINQUENT(86,479) (4,684) - - - - N/A- N/A4030FISCAL DISPARITIES2,340,161 2,509,730 3,040,700 3,173,200 3,326,600 132,500 4.4%153,400 4.6%4031PENALTIES AND INTEREST11,494 14,913 - - - - N/A- N/A4032FORFEITED TAX SALES1,664 - - - - - N/A- N/A TOTAL26,255,199$ 27,783,605$ 29,937,700$ 33,002,900$ 34,857,500$ 3,065,200 10.2%1,854,600 5.3%UNCOLLECTIBLE TAXES- - - - (1,000,000) - N/A(1,000,000) 100.0%LICENSES:4055LIQUOR283,547$ 281,879$ 270,000$ 282,000$ 232,000$ 12,000 4.4%(50,000) -21.6%4056BEER- - - - - - N/A- N/A4057TOBACCO10,433 10,117 9,000 10,000 10,000 1,000 11.1%- 0.0%4058TREE MTN CONTRACTOR 1,525 1,400 1,400 1,400 1,400 - 0.0%- 0.0%4059GARB/RUBBISH HAULING9,460 3,520 8,600 8,000 8,000 (600) -7.0%- 0.0%4060KENNEL50 50 - 100 100 100 N/A- 0.0%4061DOG22,130 19,858 26,700 20,000 22,000 (6,700) -25.1%2,000 9.1%4063PET SHOP LICENSE400 350 200 200 200 - 0.0%- 0.0%4064MASSAGE THERAPIST8,075 9,025 7,500 8,500 8,500 1,000 13.3%- 0.0% TOTAL335,620$ 326,199$ 323,400$ 330,200$ 282,200$ 6,800 2.1%(48,000) -17.0%PERMITS:4085BUILDING2,275,766$ 897,028$ 1,047,000$ 850,000$ 520,000$ (197,000) -18.8%(330,000) -63.5%4087PLUMBING241,762 133,387 110,000 110,000 55,000 - 0.0%(55,000) -100.0%4088MECHANICAL337,408 203,608 130,000 130,000 75,000 - 0.0%(55,000) -73.3%4089SIGN50,027 73,069 20,000 20,000 20,000 - 0.0%- 0.0%4091WELL/PRIVATE SEPTIC- - 100 - - (100) -100.0%- N/A4093DEMOLITION/MOVING- 59 - - - - N/A- N/A4094EXCAVATING8,000 3,900 2,500 2,500 2,500 - 0.0%- 0.0%4095CONDITIONAL/SPECIAL USE7,450 2,050 5,000 5,000 5,000 - 0.0%- 0.0%4096FIRE SUPPRESSION PERMITS41,270 48,553 20,000 20,000 20,000 - 0.0%- 0.0%4097FIREWORKS PERMITS1,368 1,752 1,400 1,500 1,500 100 7.1%- 0.0%4098SPECIAL EVENT PERMITS550 1,250 400 500 500 100 25.0%- 0.0%4100UTILITY99,541 77,407 27,500 200 23,200 (27,300) -99.3%23,000 99.1%4102PUBLIC ROW CONST2,109 320 800 800 800 - 0.0%- 0.0%4116CHICKEN PERMIT800 400 600 400 400 (200) -33.3%- 0.0%4118BEEKEEPING PERMIT360 280 300 300 300 - 0.0%- 0.0%4120OTHER960 2,275 100 1,000 1,000 900 900.0%- 0.0% TOTAL3,067,371$ 1,445,338$ 1,365,700$ 1,142,200$ 725,200$ (223,500) -16.4%(417,000) -57.5%GENERAL FUNDREVENUES BY LINE ITEM ∆2019 to 2020 % ∆2020 to 2021 % Acct20172018201920202021No. DESCRIPTION ActualActualBudgetBudgetBudgetINTER-GOV'T REV:4135FEDERAL GRANTS93,614$ 96,768$ 34,500$ 1,437,300$ 1,437,500$ 1,402,800 4066.1%200 0.0%4140STATE GRANTS83,309 66,422 38,100 77,000 40,000 38,900 102.1%(37,000) -92.5%4151LOCAL PERFORMANCE AID9,551 - 9,400 9,400 9,400 - 0.0%- 0.0%4153MVHC839 202 - - - - N/A- N/A4155MSA - MAINTENANCE71,970 71,970 76,000 72,000 72,000 (4,000) -5.3%- 0.0%4158POLICE TOWN AID583,612 597,407 544,700 590,000 590,000 45,300 8.3%- 0.0%4159POLICE TRAINING AID21,301 65,076 22,600 65,000 65,000 42,400 187.6%- 0.0%4160STATE PERA AID33,114 33,114 33,100 33,100 33,100 - 0.0%- 0.0%4161FIRE STATE AID408,026 419,693 394,800 408,000 408,000 13,200 3.3%- 0.0%4175COUNTY GRANTS- - - - - - N/A- N/A4177OTHER GRANTS AND AIDS- - 19,500 - - (19,500) -100.0%- N/A TOTAL1,305,336 1,350,652 1,172,700 2,691,800 2,655,000 1,519,100 129.5%(36,800) -1.4%CHARGES FOR SERVICES:4205VARIANCE FEES3,900$ 2,700$ 2,000$ 2,000$ 2,000$ - 0.0%- 0.0%4206PLATTING FEES13,772 12,575 8,000 8,000 8,000 - 0.0%- 0.0%4207REZONING FEES8,250 8,157 5,000 5,000 5,000 - 0.0%- 0.0%4210RETURNED CHECK FEE1,694 1,522 800 1,300 1,300 500 62.5%- 0.0%4212DOG IMPOUND/KENNEL FEE5,130 4,040 5,000 4,500 4,500 (500) -10.0%- 0.0%4214BURGLAR ALARM FEES16,865 14,600 20,000 15,000 15,000 (5,000) -25.0%- 0.0%4215REPEAT NUISANCE CALL FEE248 100 500 200 200 (300) -60.0%- 0.0%4216DAYCARE INSPECTION FEES586 968 500 600 600 100 20.0%- 0.0%4220VACATION PROCEEDINGS2,400 3,045 3,000 2,800 2,800 (200) -6.7%- 0.0%4221PUBLIC SAFETY FEES- 89 1,200 100 100 (1,100) -91.7%- 0.0%4222PLAN CHECKS1,284,064 467,949 400,000 400,000 380,000 - 0.0%(20,000) -5.3%4226DEV ESCROW REIMBURS254,318 215,959 100,000 100,000 100,000 - 0.0%- 0.0%4227ENGINEERING SERVICES372,115 511,292 493,500 440,000 529,000 (53,500) -10.8%89,000 16.8%4228ENG/FINANCIAL ADMINISTRATION5,641 9,893 6,200 6,200 6,200 - 0.0%- 0.0%4229BUSINESS ASSIST APPLICATION FEE5,000 - - - - - N/A- N/A4230PRINT MATERIAL/OTHER FEES5,095 4,314 4,300 4,500 4,500 200 4.7%- 0.0%4231RESEARCH OF CITY RECORDS- 205 - - - - N/A- N/A4233TOBACCO NON-COMPL. PENALTY- - - - - - N/A- N/A4234CONTR SERVICES - SECURITY/EMS113,148 235,348 157,100 200,000 200,000 42,900 27.3%- 0.0%4236POL SVCES TO SCHOOL DIST78,410 80,097 79,400 81,800 84,200 2,400 3.0%2,400 2.9%4239INVESTIGATION FOR LICENSING20,150 18,625 20,000 20,000 20,000 - 0.0%- 0.0%4241ALCOHOL NON-COMPL. PENALTY1,000 - - - - - N/A- N/A4242MAINT EQUIP & PERS CHG10,484 31,623 13,700 10,000 10,000 (3,700) -27.0%- 0.0%4245PERMIT SURCHARGE2,183 1,241 900 1,300 1,300 400 44.4%- 0.0%4246ADMN FEE ON SAC23,657 11,801 5,600 11,800 11,800 6,200 110.7%- 0.0%4247ROOM TAX ADMIN FEE49,282 53,411 48,000 53,000 28,000 5,000 10.4%(25,000) -89.3%4260INVESTMENT MGMT FEE16,853 25,460 26,700 27,000 27,000 300 1.1%- 0.0%47XXACCESSEAGAN FEES- - - 80,700 81,300 80,700 N/A600 0.7%OTHER- 20 - - - - N/A- N/A TOTAL2,294,245 1,715,034 1,401,400 1,475,800 1,522,800 74,400 5.3%47,000 3.1%GENERAL FUNDREVENUES BY LINE ITEM ∆2019 to 2020 %% ∆2020 to 2021 Acct20172018201920202021No. DESCRIPTION ActualActualBudgetBudgetBudgetINTER-GOV'T REV:4135FEDERAL GRANTS93,614$ 96,768$ 34,500$ 1,437,300$ 1,437,500$ 1,402,800 4066.1%200 0.0%4140STATE GRANTS83,309 66,422 38,100 77,000 40,000 38,900 102.1%(37,000) -92.5%4151LOCAL PERFORMANCE AID9,551 - 9,400 9,400 9,400 - 0.0%- 0.0%4153MVHC839 202 - - - - N/A- N/A4155MSA - MAINTENANCE71,970 71,970 76,000 72,000 72,000 (4,000) -5.3%- 0.0%4158POLICE TOWN AID583,612 597,407 544,700 590,000 590,000 45,300 8.3%- 0.0%4159POLICE TRAINING AID21,301 65,076 22,600 65,000 65,000 42,400 187.6%- 0.0%4160STATE PERA AID33,114 33,114 33,100 33,100 33,100 - 0.0%- 0.0%4161FIRE STATE AID408,026 419,693 394,800 408,000 408,000 13,200 3.3%- 0.0%4175COUNTY GRANTS- - - - - - N/A- N/A4177OTHER GRANTS AND AIDS- - 19,500 - - (19,500) -100.0%- N/A TOTAL1,305,336 1,350,652 1,172,700 2,691,800 2,655,000 1,519,100 129.5%(36,800) -1.4%CHARGES FOR SERVICES:4205VARIANCE FEES3,900$ 2,700$ 2,000$ 2,000$ 2,000$ - 0.0%- 0.0%4206PLATTING FEES13,772 12,575 8,000 8,000 8,000 - 0.0%- 0.0%4207REZONING FEES8,250 8,157 5,000 5,000 5,000 - 0.0%- 0.0%4210RETURNED CHECK FEE1,694 1,522 800 1,300 1,300 500 62.5%- 0.0%4212DOG IMPOUND/KENNEL FEE5,130 4,040 5,000 4,500 4,500 (500) -10.0%- 0.0%4214BURGLAR ALARM FEES16,865 14,600 20,000 15,000 15,000 (5,000) -25.0%- 0.0%4215REPEAT NUISANCE CALL FEE248 100 500 200 200 (300) -60.0%- 0.0%4216DAYCARE INSPECTION FEES586 968 500 600 600 100 20.0%- 0.0%4220VACATION PROCEEDINGS2,400 3,045 3,000 2,800 2,800 (200) -6.7%- 0.0%4221PUBLIC SAFETY FEES- 89 1,200 100 100 (1,100) -91.7%- 0.0%4222PLAN CHECKS1,284,064 467,949 400,000 400,000 380,000 - 0.0%(20,000) -5.3%4226DEV ESCROW REIMBURS254,318 215,959 100,000 100,000 100,000 - 0.0%- 0.0%4227ENGINEERING SERVICES372,115 511,292 493,500 440,000 529,000 (53,500) -10.8%89,000 16.8%4228ENG/FINANCIAL ADMINISTRATION5,641 9,893 6,200 6,200 6,200 - 0.0%- 0.0%4229BUSINESS ASSIST APPLICATION FEE5,000 - - - - - N/A- N/A4230PRINT MATERIAL/OTHER FEES5,095 4,314 4,300 4,500 4,500 200 4.7%- 0.0%4231RESEARCH OF CITY RECORDS- 205 - - - - N/A- N/A4233TOBACCO NON-COMPL. PENALTY- - - - - - N/A- N/A4234CONTR SERVICES - SECURITY/EMS113,148 235,348 157,100 200,000 200,000 42,900 27.3%- 0.0%4236POL SVCES TO SCHOOL DIST78,410 80,097 79,400 81,800 84,200 2,400 3.0%2,400 2.9%4239INVESTIGATION FOR LICENSING20,150 18,625 20,000 20,000 20,000 - 0.0%- 0.0%4241ALCOHOL NON-COMPL. PENALTY1,000 - - - - - N/A- N/A4242MAINT EQUIP & PERS CHG10,484 31,623 13,700 10,000 10,000 (3,700) -27.0%- 0.0%4245PERMIT SURCHARGE2,183 1,241 900 1,300 1,300 400 44.4%- 0.0%4246ADMN FEE ON SAC23,657 11,801 5,600 11,800 11,800 6,200 110.7%- 0.0%4247ROOM TAX ADMIN FEE49,282 53,411 48,000 53,000 28,000 5,000 10.4%(25,000) -89.3%4260INVESTMENT MGMT FEE16,853 25,460 26,700 27,000 27,000 300 1.1%- 0.0%47XXACCESSEAGAN FEES- - - 80,700 81,300 80,700 N/A600 0.7%OTHER- 20 - - - - N/A- N/A TOTAL2,294,245 1,715,034 1,401,400 1,475,800 1,522,800 74,400 5.3%47,000 3.1%GENERAL FUNDREVENUES BY LINE ITEM ∆2019 to 2020 %% ∆2020 to 2021 Acct20172018201920202021No. DESCRIPTION ActualActualBudgetBudgetBudgetINTER-GOV'T REV:4135FEDERAL GRANTS93,614$ 96,768$ 34,500$ 1,437,300$ 1,437,500$ 1,402,800 4066.1%200 0.0%4140STATE GRANTS83,309 66,422 38,100 77,000 40,000 38,900 102.1%(37,000) -92.5%4151LOCAL PERFORMANCE AID9,551 - 9,400 9,400 9,400 - 0.0%- 0.0%4153MVHC839 202 - - - - N/A- N/A4155MSA - MAINTENANCE71,970 71,970 76,000 72,000 72,000 (4,000) -5.3%- 0.0%4158POLICE TOWN AID583,612 597,407 544,700 590,000 590,000 45,300 8.3%- 0.0%4159POLICE TRAINING AID21,301 65,076 22,600 65,000 65,000 42,400 187.6%- 0.0%4160STATE PERA AID33,114 33,114 33,100 33,100 33,100 - 0.0%- 0.0%4161FIRE STATE AID408,026 419,693 394,800 408,000 408,000 13,200 3.3%- 0.0%4175COUNTY GRANTS- - - - - - N/A- N/A4177OTHER GRANTS AND AIDS- - 19,500 - - (19,500) -100.0%- N/A TOTAL1,305,336 1,350,652 1,172,700 2,691,800 2,655,000 1,519,100 129.5%(36,800) -1.4%CHARGES FOR SERVICES:4205VARIANCE FEES3,900$ 2,700$ 2,000$ 2,000$ 2,000$ - 0.0%- 0.0%4206PLATTING FEES13,772 12,575 8,000 8,000 8,000 - 0.0%- 0.0%4207REZONING FEES8,250 8,157 5,000 5,000 5,000 - 0.0%- 0.0%4210RETURNED CHECK FEE1,694 1,522 800 1,300 1,300 500 62.5%- 0.0%4212DOG IMPOUND/KENNEL FEE5,130 4,040 5,000 4,500 4,500 (500) -10.0%- 0.0%4214BURGLAR ALARM FEES16,865 14,600 20,000 15,000 15,000 (5,000) -25.0%- 0.0%4215REPEAT NUISANCE CALL FEE248 100 500 200 200 (300) -60.0%- 0.0%4216DAYCARE INSPECTION FEES586 968 500 600 600 100 20.0%- 0.0%4220VACATION PROCEEDINGS2,400 3,045 3,000 2,800 2,800 (200) -6.7%- 0.0%4221PUBLIC SAFETY FEES- 89 1,200 100 100 (1,100) -91.7%- 0.0%4222PLAN CHECKS1,284,064 467,949 400,000 400,000 380,000 - 0.0%(20,000) -5.3%4226DEV ESCROW REIMBURS254,318 215,959 100,000 100,000 100,000 - 0.0%- 0.0%4227ENGINEERING SERVICES372,115 511,292 493,500 440,000 529,000 (53,500) -10.8%89,000 16.8%4228ENG/FINANCIAL ADMINISTRATION5,641 9,893 6,200 6,200 6,200 - 0.0%- 0.0%4229BUSINESS ASSIST APPLICATION FEE5,000 - - - - - N/A- N/A4230PRINT MATERIAL/OTHER FEES5,095 4,314 4,300 4,500 4,500 200 4.7%- 0.0%4231RESEARCH OF CITY RECORDS- 205 - - - - N/A- N/A4233TOBACCO NON-COMPL. PENALTY- - - - - - N/A- N/A4234CONTR SERVICES - SECURITY/EMS113,148 235,348 157,100 200,000 200,000 42,900 27.3%- 0.0%4236POL SVCES TO SCHOOL DIST78,410 80,097 79,400 81,800 84,200 2,400 3.0%2,400 2.9%4239INVESTIGATION FOR LICENSING20,150 18,625 20,000 20,000 20,000 - 0.0%- 0.0%4241ALCOHOL NON-COMPL. PENALTY1,000 - - - - - N/A- N/A4242MAINT EQUIP & PERS CHG10,484 31,623 13,700 10,000 10,000 (3,700) -27.0%- 0.0%4245PERMIT SURCHARGE2,183 1,241 900 1,300 1,300 400 44.4%- 0.0%4246ADMN FEE ON SAC23,657 11,801 5,600 11,800 11,800 6,200 110.7%- 0.0%4247ROOM TAX ADMIN FEE49,282 53,411 48,000 53,000 28,000 5,000 10.4%(25,000) -89.3%4260INVESTMENT MGMT FEE16,853 25,460 26,700 27,000 27,000 300 1.1%- 0.0%47XXACCESSEAGAN FEES- - - 80,700 81,300 80,700 N/A600 0.7%OTHER- 20 - - - - N/A- N/A TOTAL2,294,245 1,715,034 1,401,400 1,475,800 1,522,800 74,400 5.3%47,000 3.1%GENERAL FUNDREVENUES BY LINE ITEM ∆2019 to 2020 %% ∆2020 to 2021 201920202021 BudgetBudget$%Budget$%GENERAL GOVERNMENT01Mayor & Council155,100$ 167,100$ 12,000$ 7.7%161,700$ (5,400)$ -3.2%02Administration629,100 669,300 40,200 6.4%681,100 11,800 1.8%03Information Technologies1,858,000 2,335,200 477,200 25.7%2,564,400 229,200 9.8%04City Clerk304,300 503,200 198,900 65.4%394,800 (108,400) -21.5%05Finance992,500 996,800 4,300 0.4%1,039,200 42,400 4.3%06Legal404,900 440,500 35,600 8.8%464,800 24,300 5.5%07Comm Dev--Planning1,157,400 1,211,600 54,200 4.7%1,255,800 44,200 3.6%08Comm Dev--Inspections1,412,600 1,659,500 246,900 17.5%1,708,100 48,600 2.9%09Communications652,600 673,400 20,800 3.2%687,300 13,900 2.1%10Human Resources567,900 616,300 48,400 8.5%738,000 121,700 19.7%Gen Govt Total8,134,400 9,272,900 1,138,500 14.0%9,695,200 422,300 4.6%PUBLIC SAFETY 11Police 14,700,400 15,542,800 842,400 5.7%16,221,300 678,500 4.4% 12Fire4,288,100 6,165,500 1,877,400 43.8%6,217,400 51,900 0.8%Public Safety Total18,988,500 21,708,300 2,719,800 14.3%22,438,700 730,400 3.4%PUBLIC WORKS 21Public Works/Engineering1,417,700 1,505,800 88,100 6.2%1,794,200 288,400 19.2% 22Streets & Highways2,227,800 2,447,000 219,200 9.8%2,508,200 61,200 2.5% 24Central Svces. Maint.847,900 1,007,100 159,200 18.8%1,077,100 70,000 7.0%Public Works Total4,493,400 4,959,900 466,500 10.4%5,379,500 419,600 8.5%PARKS & RECREATION30Recreation2,410,600 2,682,600 272,000 11.3%2,760,500 77,900 2.9%31Parks2,386,600 2,528,400 141,800 5.9%2,588,900 60,500 2.4%32Tree Conservation710,400 777,800 67,400 9.5%812,100 34,300 4.4%Parks & Rec Total5,507,600 5,988,800 481,200 8.7%6,161,500 172,700 2.9%GENL GOVT BLDG MAINT33Government Buildings800,400 811,600 11,200 1.4%839,300 27,700 3.4% Subtotal37,924,300 42,741,500 4,817,200 12.7%44,514,200 1,772,700 4.1%41Contingency--Undesignated38,700 80,600 41,900 108.3%84,400 41,900 52.0%General Fund Total37,963,000$ 42,822,100$ 4,859,100$ 12.8%44,598,600$ 1,776,500$ 4.1%DifferenceDifference2020-2021Comparative Summary of ExpendituresGeneral Fund Budget Meeting Purpose August 12, 2020 City Council Workshop •2021 General Fund budget and levy: –Review preliminary operating budget –Review proposed 2021 property tax levy –Provide direction to staff Executive Summary 2 Budget increase of 4.1%Levy increase of 5.4% Average Eagan home value increased 3.8% to $324,634 City portion of taxes on avg home = $1,142 •$35 increase over 2020, or $3/month New positions, as presented a year ago: •Deputy Public Works Director •Public Works Project Coordinator •IT Specialist •Human Resources Assistant 0.5% 1.3% 2.9% 4.4%3.8% 2.8% 4.48% 7.1% 5.5% 12.8% 4.1% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 % Increase -General Fund Budget 2011-2021 Property Taxes 75.9% Licenses and Permits 2.3% Intergovernmental 6.0% Charges for Services 5.2% Program and Other Revenues 1.8% Fund Balance 3.4% Transfers In 5.4% 2021 General Fund Revenues $44,598,600 Personal Services 79.0% Parts & Supplies 4.6% Services & Other Charges 15.7% Capital Outlay 0.6% Contingency 0.2% 2021 General Fund Expenditures $44,598,600 Expenditure Summary by Major Classifications ($ in 000s) 2020 2021 Δ % of total % of total Personal Services $33,320 77.8%$35,221 79.0%$1,901 Parts and Supplies 2,160 5.0%2,048 4.6%(112) Services & Other Charges 6,982 16.3%6,999 15.7%17 Capital Outlay 280 0.7%247 0.6%(32) Contingency 80 0.2%84 0.2%4 TOTAL $42,822 100.0%$44,599 100.0%$1,777 4.1% General Fund Personnel Summary 2020 2021 FTE Budget Impact FTE Budget Impact Proposed Additions Firefighters 12 1,298,800 Fire Captains 6 768,600 Police Sergeant 1 118,500 Police Cadet 1 30,500 Web/Application Developer 1 84,500 Streets Maintenance Worker 1 98,000 Project Coordinator 1 127,000 Deputy Public Works Director 1 149,800 IT Specialist 1 123,600 Human Resources Assistant 1 99,600 Total Personnel Impact 22 2,398,900 4 500,000 52.5% 46.3% 41.4% 25% 30% 35% 40% 45% 50% 55% YE 2019 Projected YE 2020 Projected YE 2021 General Fund Fund Balance Target Range $- $2,000,000,000 $4,000,000,000 $6,000,000,000 $8,000,000,000 $10,000,000,000 $12,000,000,000 2015 2016 2017 2018 2019 2020 2021 Eagan Market Value Market Value and Tax Capacity ($ in 000s) Final Payable 2020 Preliminary Payable 2021 Change in $Change in % Market Value $9,471,701 $10,029,136 $557,435 5.9% Gross Tax Capacity 119,359 127,272 7,913 6.6% Fiscal Disparity (15,753)(17,393)(1,640)(10.4)% TIF (4,235)(4,222)(13)(0.3)% Net Local Tax Capacity 99,370 105,656 6,286 6.3% Tax Capacity-based Levy & Tax Capacity Rates ($ in 000s) Final 2020 Prelim 2021 $ change % change Total tax capacity-based levy $38,213 $41,448 $3,235 Fiscal disparities distribution (3,173)(3,326)(153) Net tax capacity-based levy 35,040 38,122 3,082 Market value-based levy 1,119 0 (1,119) Total levy 36,159 38,122 1,963 5.4% Tax Cap Rate-City 35,040 99,370 38,122 105,656 0.35262 0.36081 .00819 2.3% Eagan Property Tax History: City Taxes Only 2017 2018 2019 2020 Projected 2021 Tax Capacity Rate .37385 .36378 .35227 .35262 .36081 Market Value Rate 0.0001451 0.0001359 0.0001235 0.0001159 N/A Market Value $ 150,000 494 480 463 463 456 155,744 478 200,000 705 685 661 661 652 207,659 682 312,661 Pay 2020 Average Eagan House Mkt Value 1,107 324,634 Pay 2021 Average Eagan House Mkt Value 1,142 400,000 1,549 1,505 1,454 1,452 1,439 415,318 1,499 500,000 1,942 1,887 1,823 1,821 1,804 519,147 1,890 Public Policy Issues •Is Council OK with proposed levy? •Amid uncertainties of COVID/economy, is Council OK with delaying final decisions until December, or in some cases, until 2021? •Is Council OK with proposed new FTEs, recognizing they would not be hired until more financial certainty is established? •Is Council OK with eliminating out-of- state travel? Agenda Information Memo August 12, 2020 Special City Council Meeting VI. EAGAN CARES SMALL BUSINESS ASSISTANCE GRANT PROGRAM Direction to be Considered: To provide direction on a small business assistance grant program. Facts: The City has received $5.1 million of federal CARES Act funding. Most of this funding will be used to reimburse the City for costs related to COVID-19. Dakota County has designated $10 million of its CARES allocation for a small business assistance grant program. The application process opened Monday, July 27 and will close Friday, August 14. The Dakota County CDA has contracted with NextStage to administer the County’s grant program. NextStage will o Provide an on-line application platform; o Review eligibility documentation and retain private financial documents; o Produce grant agreements and conduct virtual closings; and o Audit a percentage of grant recipients to determine and document use of funds consistent with federal requirements. NextStage is administering CARES grant programs in Hennepin and Scott Counties and understands federal requirements for documentation of eligibility and expenditures. If applications exceed funding, a randomization process (lottery) will be used to determine grant recipients. Municipalities may choose to participate in Dakota County’s program by designating City-specific funding. If cities choose to participate in the Dakota County program, they must notify the Dakota County CDA by August 21, 2020. If cities choose to participate in the County program, they must accept program terms and eligibility requirements “as is”. If the City chooses to participate in the Dakota County program, any Eagan applicants that did not receive funding through the County program, would be included in a second round of selection for Eagan CARES funds. Eagan CARES funds would be disbursed by the City with direct communication to the business. Any excess grant funds would be retained by the City. Advantages of participating in Dakota County’s small business assistance grant program include: o Applicants need to follow only one set of program guidelines and application process; o Administrative and marketing support through the Dakota County CDA and its consultant, NextStage; o Low administrative costs of approximately 3.44% of grant funds; o Third party review and storage of private financial documents by NextStage; and o Program timeline that meets November 15, 2020 expenditure requirements. The advantage of the City designing and administering an Eagan-only program is that the City could define program terms including size of businesses, amount of award, eligibility, and selection process. Dakota County Small Business Assistance Grant Program Businesses may apply one time for an emergency grant up to $10,000, based on economic hardship from COVID-19. Funds shall be exclusively for the following eligible expenses: o Up to three months of operating expenses, including payroll, rent/lease payments, mortgage payments, utilities, payments to suppliers, or other critical business expenses as approved by the Program Administrator. Eligible Businesses must meet all of the following criteria as of March 1, 2020: o Have 50 full-time (or equivalent) or fewer employees; o Be locally owned and operated for-profit organization with a physical location, whether owned and leased, located in Dakota County; o Be majority owned by permanent resident of Minnesota; o Be in good standing with the Minnesota Secretary of State and the Minnesota Department of Revenue; o Be in good standing with Dakota County and the city in which the business is located; o Demonstrate the business was adversely affected by Executive Orders related to COVID-19 business restrictions; and o Demonstrate financial hardship as a result of the COVID-19 outbreak. Ineligible businesses include: o Businesses that do not have a physical address in Dakota County; o Home based businesses (except for licensed childcare providers); o Non-profit organizations; o Businesses that derive income from adult-oriented uses, passive investments, speculative activities, lending, pyramid sales, gambling, and unlawful activities; and o Businesses in default conditions prior to February 29, 2020. Policy Questions: 1.Should Eagan designate $500,000 of its federal CARES funding to a small business assistance grant program? 2.If so, should the City participate in the Dakota County program or should the City design and administer its own grant program? Attachments: (2) SPCCVI-1 Dakota County: Small Business Relief Grant Program Guidelines SPCCVI-2 Draft Resolution of Support 1 DAKOTA COUNTY: SMALL BUSINESS RELIEF GRANT PROGRAM GUIDELINES July 27, 2020 The purpose of the Dakota County Small Business Relief Grant Program (“Program”) is to provide temporary financial support to small businesses in Dakota County adversely impacted by the COVID- 19 pandemic and the COVID-19 peacetime emergency. The goal of the Program is to help businesses through the current economic crisis and prevent blight in neighborhoods that may result from disinvestment. Terms • Businesses may apply one time for an emergency grant up to $10,000, based on economic hardship from COVID-19. • Funds shall be used exclusively for the following eligible expenses: o Up to three months of operating expenses, including payroll, rent/lease payments, mortgage payments, utilities, payments to suppliers, or other critical business expenses as approved by the Program Administrator. Eligible Businesses Businesses must meet all the following criteria as of March 1, 2020 to be eligible: • Have equivalent of 50 full-time (or equivalent) or fewer employees • Be locally owned and operated for-profit organization with a physical, location, whether owned or leased, located in Dakota County • Be majority owned by a permanent resident of Minnesota • Be in good standing with the Minnesota Secretary of State and the Minnesota Department of Revenue • Be in good standing with Dakota County and the city in which the business is located • Demonstrate the business was adversely affected by Executive Orders related to COVID-19 business restrictions • Demonstrate financial hardship as a result of the COVID-19 outbreak Ineligible Businesses • Businesses that do not have a physical address in Dakota County • Home based businesses (except for licensed childcare providers) • Non-profit organizations • Businesses that derive any income from adult-oriented uses 2 • Businesses in default conditions prior to February 29, 2020 • Businesses deriving income from passive investments without operational ties to operating businesses • Businesses primarily focusing on speculative activities based on fluctuations in price rather than the normal course of trade • Businesses earning more than half of its annual net revenue from lending • Businesses engaging in pyramid sales, where a participant's primary incentive is based on the sales of an ever-increasing number of participants • Businesses engaging in activities prohibited by federal law or applicable law in the local jurisdiction of the business • Businesses engaging in gambling enterprises, unless the business earns less than 50% of its annual net revenue from lottery sales Businesses that have applied for and/or were awarded any COVID-related federal funding, such as the Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) or Paycheck Protection Program (PPP) are eligible for this grant. However, to serve as many businesses as possible, duplication of state and local COVID-related emergency funds is not allowed. Businesses that have been awarded or have received COVID- related emergency funds through the State of Minnesota from either the Small Business Emergency Loan (SBEL) or DEED Small Business Relief Grant Program are ineligible for this grant. Application Process • Applications will be accepted beginning Monday, July 27th through Friday, August 14th • Application link can be found at: https://www.dakotacda.org/community-development/small- business-relief-grants/ • If applications exceed available funding, a randomization process will be used to determine final grant recipients. • All applicants will be notified by email on or before Wednesday, August 26. • Upon notice of an approved application, the following documentation must be provided to the Program Administrator within five business days: o Revenue verification. 2019 Federal Business Tax return or appropriate business tax schedule – based on entity type.  Businesses that have not yet completed a 2019 Federal Return are eligible to apply and substitute other documentation of revenue, and will need to provide their 2019 Federal Return when completed o Impact and loss of revenue verification. Evidence of negative impact and loss of revenue due to COVID-19 pandemic and peacetime emergency. Applicant should submit documentation that best demonstrates the impact and is deemed acceptable to Program Administrator. 3  Examples of acceptable documentation include: Sales Tax Reporting; monthly profit and loss statements; comparable point of sales, cash register reports, merchant statements or other sales records o Employee verification. Evidence of employment prior to March 1, 2020. Acceptable documentation may include: company’s 2019 federal form W3; period reporting from a 3rd party payroll processor; applicant’s Federal Form 941/Employer’s Quarterly Federal Tax Return; or other State or Federal payroll-related filing. o Evidence of grant eligible expenses that occurred in past three months, (e.g. rent/lease agreement, utility statements, supplier invoices, payroll, tax payments, payments to suppliers, etc.). Provide documentation that expenses total or exceed the amount requested in grant application • Failure to submit required documentation will result in forfeiture of grant award. • Upon notice review and acceptance of additional documentation, the business will enter into a grant agreement with Dakota County. • Terms will be included in the grant agreement, including the reporting requirement to provide information to the CDA 90 days after execution of grant on status of business and actual use of grant funds. Note: Dakota County and Dakota County CDA reserve the right to revise these guidelines as needed to best address the impact of the current pandemic. Resolution No._______ City of Eagan RESOLUTION OF SUPPORT FOR CITY PARTICIPATION IN THE DAKOTA COUNTY SMALL BUSINESS RELIEF GRANT PROGRAM WHEREAS, the City of Eagan has received $5.1 million of federal CARES funds to mitigate financial hardships related to the COVID-19 pandemic; and WHEREAS, the City intends to designate $500,000 for grants to support small, local businesses that have been adversely impacted by the pandemic; and WHEREAS, Dakota County has approved a $10 million Small Business Relief Grant Program and is accepting applications until August 14, 2020; and WHEREAS, Dakota County will use a randomization process to select grant recipients if applications exceed available funding; and WHEREAS, Dakota County has notified the City that it may participate in the County’s grant program and provide additional funds to provide grants to businesses that were not awarded funds through the County’s program; and WHEREAS, if the City chooses to participate in Dakota County’s grant program, the City may utilize the application and administration process established by the Dakota County CDA; and WHEREAS, the City understands and accepts the terms and grant requirements of Dakota County’s grant program; NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Eagan hereby supports participation in the Dakota County Small Business Relief Grant Program in an amount up to $500,000 and directs staff to prepare related documents for approval by the City Council. CITY OF EAGAN CITY COUNCIL BY: _________________________ Its Mayor Attest: _______________________ Its Clerk Motion by: Seconded by: Those in Favor: Those Against: Date August ____, 2020 CERTIFICATION I, Christina M. Scipioni, Clerk of the City of Eagan, Dakota County, Minnesota, do hereby certify that the foregoing resolution was duly passed and adopted by the City Council of the City of Eagan, Dakota County, Minnesota, in a regular meeting thereof assembled this ____ day of August, 2020. ____________________________ City Clerk Eagan CARES Small Business Assistance Grant Program August 12, 2020 CARES Act Federal CARES Act •Funding to states, counties and cities •Mitigate economic distress caused by the COVID-19 pandemic Eagan CARES •$5.1 million •Reimburse COVID-related City costs •Provide relief to small business impacted by COVID-19 •Participate in Dakota County Small Business Relief Grant Program •Establish a separate program specifically for Eagan Small Business Relief Grant Program •Applications accepted July 27 –August 14 •Grants up to $10,000 •Lottery process to select recipients •Funds may be used for up to 3 months operating expenses oPayroll oRent or lease payments oMortgage payments oUtilities oPayments to suppliers Small Business Relief Grant Program Eligible businesses must: •Be a for-profit business with physical location in Dakota County •Have 50 or fewer FTE •Be majority-owned by permanent resident of Minnesota •Be in good standing with State, County, and City •Demonstrate adverse impact from COVID-19 business restrictions •Demonstrate financial hardship as result of pandemic •May have received funds through SBA Economic Injury Disaster Loans or Paycheck Protection Program (PPP) Small Business Relief Grant Program Ineligible businesses include: •Home-based businesses (except for licensed childcare providers) •Non-profit organizations •Businesses that derive income from adult-oriented uses, passive investments, speculative activities, lending, pyramid sales, gambling, and unlawful activities •Businesses in default prior to February 29, 2020 •Businesses that have received State funding through Small Business Emergency Loan (SBEL) or DEED Small Business Relief Grant Program Small Business Relief Grant Program County grants administered by NextStage •Provide an on-line application platform •Review eligibility documentation •Retain private financial documents •Produce grant agreements and conduct virtual closings •Audit a percentage of grant recipients •Administering grant programs in Hennepin and Scott counties Eagan CARES •Eagan may participate in Dakota County program •Provide written notification by August 21, 2020 •Accept terms and eligibility requirements “as is” •Second selection round for Eagan-specific funds •Eagan CARES funds disbursed by the City Eagan CARES Advantages of participation in County program •Applicants have one application process •Administration and marketing support •Low administrative costs of 3.44%of grants •Third party review and storage of financial documents •Schedule meets expenditure requirements •Hastings,Inver Grove Heights, Mendota Heights and Farmington will participate in County program Eagan CARES Advantage of an Eagan-only program •City could define terms for size of businesses,amount of award, eligibility and selection process •Burnsville, Lakeville, Apple Valley and Rosemount have approved city- only programs Eagan CARES Policy Questions: 1.Should Eagan designate $500,000 of its federal CARES funding to a small business assistance grant program? 2.If so, should the City participate in the Dakota County program or should the City design and administer its own grant program?