Corporate Report to the community FISCAL YEAR ENDING DEC. 31, 2010 • BUDGET YEAR 2011
Inside
PAGE 2
• Buying Quality Services • Tax Rate Comparison • Dividing Your Dollar • Finance Awards
PAGE 3 • Operating Revenue Sources • Expenditures by Fund • The General Fund
PAGE 4 • Capital Improvements • Community Development
Truth in Taxation Hearing Dec. 8
The Truth in Taxation for the 2012 budget is scheduled for Thursday, Dec. 8 at 8 p.m. in the Blaine City Hall Council Chambers.
View Financial Reports Online
City of Blaine financial information is posted online. The 2011 Annual Budget, 2010 Comprehensive Annual Financial Report and an electronic copy of this Corporate Report to the Community are available at www.ci.blaine.mn.us by searching keyword finance . Budget information for 2012 will be posted online as it becomes available.
LEADING THROUGH A DOWNTURN Mayor Tom Ryan
W
ith the economic downturn we have experienced over the last few years, most local governments have seen severe declines in property values and development. However, despite this downturn, Blaine is one of the few cities in Minnesota that has experienced substantial growth continuous growth throughout the last decade, and by some measures was the fastest growing city in the metropolitan area. According to census figures, Blaine grew over 27% and now has a population of 57,186. It is a challenging leadership scenario for the Council; population is growing, yet development continues and service requests are increasing while market values are declining. With the new growth, Blaine has continued to maintain and meet existing services and address new needs such as a sixth patrol district, a new athletic complex, the lakeside commons beach, and others. The City has not reduced existing services, yet for the third year in a row the tax levy be reduced with the projected 2012 levy about $900,000 less than the 2011 levy leading to a corresponding reduction in expenditures. Since the downturn, the City reduced its staffing level by 15 positions. The monthly cost of City services to Blaine residents has dropped from $49.75 in 2008 to $40.73 in 2011. In addition to lowering the tax levy and reducing the budget and staffing, the City has invested in several areas to increase productivity. Examples include a new city finance software package, a software system to automate the agenda creation process, police and fire records software, and investment in three new fire trucks and other equipment. In addition to productivity measures, the city has been investing in its infrastructure by implementing a Pavement Management program. The City will annually invest in improving City streets with sealcoat, mill, and overlay, and major reconstruction projects. This year Blaine improved 9.7 miles of road at a cost of 3.3 million dollars. This annual program will eventually affect every street in Blaine, and provides a long-range commitment to our 250 miles of streets. Additional investments include squad car cameras, a police training facility, and a cold storage building for public works equipment. Once again in the area of road reconstruction projects, the City benefited from a strong partnership with Anoka County. The County completed Radisson Road improvements, and finalized plans for Lexington Ave. north of 125th Ave. Other projects under construction by Anoka County are 125th Ave. from Hwy. 65 to University Ave., and Naples north of Lake Dr. The City has implemented new productivity measures and made capital investment choices with an eye to the future. Blaine’s growth is projected to continue and these investments will prepare Blaine to meet the future service needs of our residents. At the time of this writing for 2011, Blaine is leading the metro in new housing starts and we expect to end the year with 350 new homes. In addition, we have continued to see retail development with more on the horizon. Looking forward, we have met the challenges to date and have plans in place to move the City forward in spite of the economic challenges. Until property values stabilize, the Council and I will work with staff to continue to ensure that the City uses taxpayers’ dollars wisely and efficiently in order to provide quality city services to the residents of Blaine.
CITY OF BLAINE The Median-Valued B laine Home
The $40.73 amount used throughout this report as the average monthly cost of city services was determined using a median-valued home in Blaine with an Anoka County assessor’s market value, payable in 2011, of $170,100.
City Earns Financial Awards
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Blaine for its Comprehensive Annual Financial Report for the year ended Dec. 31, 2009, the 26th consecutive year the city has received this prestigious award. In order to be awarded a Certificate of Achievement, the city published an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfied both generally accepted accounting principles and applicable legal requirements. A certificate of achievement is valid for a one-year period. The city believes its current Comprehensive Annual Financial Report meets the program’s requirements and is awaiting word from the GFOA about earning a 27th consecutive certificate. In 2011, the City of Blaine’s bond rating improved to Aa1 after recalibration by Moody’s Investors Service. The rating indicates wellmanaged financial operations and healthy reserves as key strengths of the city. December 31,2010
Minnesota state law, Chapter 156 of the Session Laws of 2005, requires that “a city or county with a population of more than 15,000 must annually notify its residents of the positions and base salaries of its three highest-paid employees.” For the City of Blaine, names, titles and salaries are: Clark Arneson, city manager – $139,728; Joseph Huss, finance director – $119,483; and Bryan Schafer, planning and economic development director – $118,572.
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Tax Dollars Buy Quality S ervices
The City of Blaine continues to provide quality services to residents at an affordable price. The checkbook graphic at left shows that the owner of a median-priced Blaine home paid $40.73 monthly for city services like police, fire and streets and parks maintenance in 2011. That number was determined by using the net property tax cost, which is calculated by subtracting all revenue sources other than property tax from departmental expenditures. Water and sewer utilities are fee-based. The average Blaine homeowner uses 8,000 gallons per month; the average monthly cost for all utility services – water, sewer, stormwater and solid waste – is $40.
Note: Utility bills are mailed quarterly and average $120 per bill. The numbers used are averages; individual households will vary.
Blaine’s Low Tax Rate Compares Favorably in Anoka County A comparison of the 2011 property Columbia Heights East Bethel tax rate of Anoka County cities with Anoka populations greater than 10,000 Lino Lakes residents shows Blaine among the Ramsey lowest. The low 32.7% property tax Coon Rapids rate on a median-valued Blaine home Andover pays $40.73 monthly for city services. Fridley Blaine A breakdown of the services purchased Ham Lake from property taxes is displayed in the 0% checkbook example above.
10%
20% 30% 40% city property tax rate
50%
Dividing Your 2011 Tax Dollar
The graphic at left shows the division of a dollar in property taxes paid by the typical Blaine homeowner; for each dollar paid, 32 40¢ Anoka County cents go to city services. 32¢ City of Blaine The dollar amount of taxes owed is 23¢ Anoka-Hennepin School District determined by market value, tax law and 5¢ Other agencies the levy. The tax levy for local governmental entities is distributed across properties within each entity’s boundary using tax capacity, a function of assessed property value and property type. A Blaine homeowner with a median-valued home pays $1,550.09 annually in property taxes, of which $488.74 ($40.73 monthly) goes toward city services. The remaining $1,061.35 goes to Anoka County, the school district and other taxing districts.
C O R P O R AT E R E P O RT
2011
Operating Revenue Sources
Blaine is able to keep its property tax rate low by maximizing other sources of funding. In diversifying revenue, the city is in a strong position to withstand varying economic conditions.
2011 Budgeted Expenditures by Fund
Property Taxes $16,912,060 Fees & Charges 15,902,640 Licenses & Permits 1,511,900 Intergovernmental 1,071,500 Interest Earnings 822,000 Interfund Transfers 660,000 Fines & Forfeits 308,000 Franchise Fees 179,300 Other Financing Sources 87,000 Sale of Fixed Assets 75,000 Charitable Gambling 35,000 Miscellaneous 5,000 total revenues
These funds represent $23,619,998 the city’s budgeted General Fund Utility Enterprise Fund 17,269,050 expenditures. General Fund Capital Equipment Fund 706,470 is detailed below. Utility Special Revenue Funds 206,000 Fund revenue comes from user fees and pays for total expenditures $41,801,518* operational maintenance and capital improvements. Capital Equipment Fund supplies the fixed assets of general city operations. Special Revenue Funds are from charitable gambling proceeds and cable television franchise fees. Charitable gambling proceeds support various non-profit groups.
$37,569,400*
*The difference between 2011 revenues and expenditures is for planned expenditure of reserves in funds other than the general fund.
General Fund
General Fund
Totaling $23,619,998 or approximately 57% of the total 2011 budget, the General Fund is the primary fund of the city’s day-to-day operations and is funded primarily by property taxes, fees and licenses and charges for services.
Utility Enterprise Funds
Capital Equipment Fund Special Revenue Funds
2010 EXPENDITURES $8,759,594
Safety Services Public Services Finance SBM Fire Department Community Development Administration Legislative
2011 BUDGET $9,093,808
NET PROPERTY TAX* $15.87
Safety Services ensures public safety in Blaine through the efforts of the Police Department and Community Standards. 1 Legislative
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
$7,743,786
$8,050,519
$11.47
Public Services includes all Public Works, Engineering, Geographic Information Services and Parks and Recreation functions, essentially managing and maintaining Blaine’s infrastructure and parkland while fostering recreational and educational opportunities for residents.
1 Legislative
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
$2,117,132
$2,071,708
$2.33
Finance encompasses the city’s financial management and billing services in addition to information services.
1 Legislative
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
$1,364,474
$1,389,323
$3.01
The City of Blaine partners with two communities to form the Spring Lake Park-BlaineMounds View Fire Department, which provides emergency response as well as fire prevention and education services.
1 Legislative
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
$1,570,634
$1,343,274
$1.23
Community Development ensures quality development is achieved in Blaine through professional planning and inspection services. 1 Legislative
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
$1.72
$484,246
$540,067
$1.06
Legislative includes the City Council, advisory commissions and legal services. Blaine is governed by six elected council members and a mayor. City Council appoints residents to advisory commissions. Legal advises city departments, City Council and advisory commissions.
1 Legislative
2 Administration
3 Finance
4 Safety Services (net SBM Fire)
5 SBM Fire
6 Public Services
7 Community Development
8 Unallocated
9 Capital & other financing uses
$1,131,299
Administration includes the offices of the City Manager and City Clerk, as well as Human Resources and Communications.
1 Legislative
Unallocated Capital & Other Financing Uses
$1,159,146
$0
$0
$0
This is an unbudgeted expense that tpyically comes from excess year-end reserves generated in the General Fund that is transferred to fund capital purchases. In 2010, captial expenses were funded through the sale of capital notes, therefore no transfer was made. * Net property tax is the portion of the levy allocated to these services each month.
Corporate Report to the community Capital Projects
As part of its commitment to providing quality services to residents, the City of Blaine has identified significant capital projects to provide the infrastructure necessary to meet current and future service demands. Details of some major projects from 2011 are provided.
FIRE SERVICES Along with Spring Lake Park and Mounds View; Blaine continues to contract with the Spring Lake Park – Blaine – Mounds View Fire Department for fire protection services. This approach continues our commitment to obtaining the most efficient, highest quality services available. The department is recognized at the local, state, and national level as a leader in prevention, efficiency, and innovation. The per capita cost ranks amongst the lowest in the region for similar size populations protected. Next year the department will be replacing/upgrading three of the departments main line engines as well as its trucks. Consistent with their efficiency and innovation, they are specifying a smaller, more agile, but adequately equipped engine with a price tag close to half of what other departments are spending! On the prevention front, the department recently was awarded a $150,000 federal grant to augment and expand fire prevention efforts. This represents the single largest fire prevention grant ever awarded in the State of Minnesota.
SAFETY SERVICES DEPARTMENT TECHNOLOGY UPGRADES The Blaine Safety Services department uses evolving technology to serve our community better. All Police Patrol response vehicles now have video cameras installed in them. These cameras help with officer training and enhance officer safety as well as the safety of public we serve. Additionally, public safety (police, fire, dispatch, and jail) throughout Anoka County is in the process of identifying a Countywide Records and Dispatch system. Anoka County public safety departments have a long history of collaborating with each other to achieve our region-wide safety goals as efficiently as possible. All of Anoka County will benefit from these shared resources and economy of scale.
Community Development
New home construction across the country has slowed considerably in the past 4-5 years. Blaine however has fared much better than most communities in term of housing permit activity and units constructed. Since the beginning of 2006 thru 2010 Blaine has issued permits for 1,554 new homes, an average of 310 new homes per year. In 2010 the city was third in the metro area with 331 new housing starts. Through the first nine months of 2011 Blaine remains near the top of metro communities with 275 new housing starts. Clearly Blaine remains in high demand when looking for a place to live. Commercial/industrial growth has been even more impacted by the national economy with very few new projects starting in the past 2-3 years. Nevertheless, Blaine has issued building permits in 2011 for approximately 200,000 square feet of new or expanded retail/industrial space. Tenant relocation to existing space has also resulted in several new businesses in 2011. The City views itself as extremely well suited in terms of available land and amenities for a quick surge in development when the national and regional economies improve.
About this Report
The City Council presents this report to display the performance of Blaine’s city government.
MAYOR Tom Ryan 763-757-3390 tryan@ci.blaine.mn.us COUNCILMEMBERS
Mike Bourke 763-784-1986 mbourke@ci.blaine.mn.us Dave Clark 763-754-7643 dclark@ci.blaine.mn.us Russ Herbst 763-784-6143 rherbst@ci.blaine.mn.us Wes Hovland 763-228-1117 whovland@ci.blaine.mn.us Kathy Kolb 763-757-6887 kkolb@ci.blaine.mn.us Dick Swanson 763-370-2557 dswanson@ci.blaine.mn.us
CITY MANAGER
Clark Arneson 763-785-6120 carneson@ci.blaine.mn.us
The City of Blaine reports yearly its financial position and activity in a Comprehensive Annual Financial Report (CAFR), which is prepared in accordance with generally accepted accounting principles. The Corporate Report to the Community summarizes the most important and relevant information from the 2010 CAFR and 2011 Annual Budget. The City of Blaine Corporate Report to the Community is not audited. This is the fourth year financial information has been presented to residents in this format.
Feedback
Suggestions and comments can be directed to City Manager Clark Arneson at carneson@ci.blaine.mn.us or 763-785-6120.