By Bill Morgan, Staff Writer

 

In 2016, the city commissioned Abdo, Eick, & Meyers to complete a long range financial plan for the City of Becker. 

 

Staff worked with Abdo, Eick, & Meyers to give information on the current financial  status and to help forecast future assumptions to form a plan that will guide the city in the future. 

 

Brad Falteysek of AE&M was at Tuesday’s meeting and gave his overview for council and the public.

 

This plan is intended to give an overview of the financial status of each fund and how forecasted  assumptions will change things in five years.

 

Falteysek said normal operating revenues and expenses will increase by a three percent inflation rate from amounts budgeted in 2018. Water and sewer fund user fee revenue projections were adjusted to match the previously adopted utility rate study.

 

Salary expenditures will increase at a rate of three percent for the next five-to-six years. The city is operating under the assumption that total employees are expected to increase approximately one full-time employee per year but due to employment gaps and wage scales, the three percent is conservatively used to capture these new employees.

 

The general fund levy is an amount needed to balance the budget for operational revenues and expenditures with an additional amount added in consideration of keeping a consistent fund balance as a percentage of the future years budgeted expenditures. The additional levy was added at $50,000 per year. The city has formally adopted a fund balance policy for the general fund which is to maintain a minimum unrestricted fund balance of 40% of the next year's budgeted expenditures for cash-flow timing needs.

 

Falteysek said the fire department, community center and EDA levies are set at the amount needed to balance the budget for operational revenues and expenditures. This however, does not include any funding for future capital purchases and capital purchases are excluded from the calculation. 

 

The golf course levy is set to an amount with the goal of positive cash in 2021 and building reserves in future years with consistent amounts.

 

An additional levy is necessary to fund the Revolving Capital fund (400) for the next five-to-six years. The amount is estimated and included in attempt to keep a consistent levy with approximately a three percent yearly increase overall.

 

Falteysek said the city has a number of significant capital purchases scheduled in future years. The capital purchases are all assumed to be paid for using cash reserves. There are also projects listed on the city capital plan that currently have no payment or purchase date scheduled.

 

In calculating tax capacity data, Falteysek said  tax capacity growth rate is estimated at three percent. The city also estimates conservatively 10 new homes per year at the current average new home value. 

Falteysek says the city should continue to monitor potential changes to the large industrial and commercial developments ongoing within the City.