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CITY of DULUTH 2020 Adopted Annual Budget

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CITY of DULUTH 2020 Adopted Annual Budget CITY OF DULUTH 2020 Adopted Annual Budget MAYOR Emily Larson CITY COUNCILORS Gary Anderson Joel Sipress Roz Randorf Renee Van Nett Janet Kennedy Zack Filipovich Arik Forsman Derek Medved Barb Russ CHIEF ADMINISTRATIVE OFFICER Noah Schuchman Table of Contents City of Duluth, Minnesota - 2020 Approved Budget Page Section One - INTRODUCTION 169 Public Works & Utilities This section contains information about the entire city's 186 Transfers and Other Functions approved budget and describes the process. 1 Transmittal Letter Special Revenue Funds 4 Profile of Duluth 187 Statement of Revenues, Expenses, 5 Listing of Duluth Officials and Changes in Fund Balance 6 City Organization Chart and Personnel 188 Lake Superior Zoological Gardens 11 Strengths, Challenges, and Opportunities 189 Parks 19 Budget Highlights 193 Special Projects 23 Total Approved Budget 194 Police Grant Programs 25 Total Approved Revenue Comparison 195 Capital Equipment 27 Total Approved Expense Comparison 196 Economic Development 28 Major Revenue Source Analysis 197 Community Investment Fund 32 City Fund Structure 198 Energy Management 33 Approved Budget by Fund Detail 199 Tourism Taxes 35 Highlights Narrative by Fund 201 Home Investment Partnerships Program 42 Budget Award Announcement 202 Community Development 44 Financial Polices 203 Community Development Administration 53 Priority Based Budgeting 204 Workforce Development 206 Senior Employment Section Two - APPROPRIATIONS 207 Other Postemployment Benefits This section contains summary information of each specific 208 DECC Revenue fund and detail on specific departments and divisions. This 209 Street System Maintenance Utility includes revenue estimates, personnel, capital needs, and approved operating expenses. 210 Street Improvement Sales Tax 211 Street Lighting Fund General Fund 57 General Fund Summary Debt Service Funds 58 General Fund Revenues 212 Statement of Revenues, Expenses, 59 Revenue Estimates by Source and Changes in Fund Balance 64 General Fund Expenses 213 Debt Service Funds Narrative 66 Expenses by Division and Category 215 Debt Service Funds Detail by Fund 68 General Fund Personnel Summary Departmental Budgets Capital Projects Funds 71 Legislative & Executive 220 Statement of Revenues, Expenses, 84 Property, Parks, and Libraries Department and Changes in Fund Balance 103 Administrative Services Department 221 Special Assessment 119 Finance Department 222 Permanent Improvement 134 Planning and Economic Development 223 Street Improvement Program 147 Fire Department 224 Capital Improvement 160 Police Department 225 Tourism & Recreational Projects Table of Contents continued City of Duluth, Minnesota - 2020 Approved Budget Enterprise Funds 226 Golf Fund 232 Parking Fund 243 Priley Drive Parking Facility 247 Public Works & Utilities Summary 253 Water Fund 268 Gas Fund 283 Sewer Fund 299 Clean Water Surcharge Fund 303 Stormwater Fund 316 Steam Utility Fund Internal Service Funds 327 Statement of Revenues, Expenses, and Changes in Fund Balance 328 Self Insurance - Workers' Compensation 329 Self Insurance - Liabilities 330 Medical Health Fund 331 Dental Health Fund 332 Fleet Services Section Three - CAPITAL BUDGET This section contains the city's capital budget. 339 Capital Improvement Plan 392 Capital Equipment Plan Section Four - APPENDIX This section contains supplemental information. 427 Ordinances & Resolutions 446 Demographic & Economic Statistics 447 Principal Employers 448 Total Estimated Market Values 449 Operating Indicators 451 Capital Assets by Function 452 Glossary INTRODUCTION January 1, 2020 Members of the Duluth City Council And Other Interested Parties Dear Reader, The City of Duluth budget process is a disciplined practice which uses the strengths of highly skilled leaders to seek strategic financial solutions and opportunities to achieve City priorities. The 2020 budget was completed in accordance with the City’s budget policies, city charter and the State of Minnesota’s truth in taxation laws. The budget process began with Mayor Emily Larson presenting the proposed general fund budget and tax levy to the City Council on September 9, 2019. The City Council approved the proposed maximum tax levy on September 23, 2019. Finance committee meetings were held September through December where City departments and authorities presented their budgets as well as strengths, opportunities, and future challenges. On December 9, 2019 a truth in taxation hearing was held in the Duluth City Council Chambers at 7:00 pm to allow citizens time for public comment and questions. The final 2020 budgets, budget appropriations, tax levies, capital improvement plan, and bonding intent and plan were approved by Council on December 16, 2019. The 2020 budget is a budget focused on alignment of funding with the values of the City. This budget pairs the strategies and policy recommendations from Imagine Duluth 2035, the City of Duluth’s recently adopted comprehensive plan, with the time intensive, staff-driven and community- influenced budgeting process called Priority Based Budgeting. Priority Based Budgeting is a unique and innovative budgeting approach used to match available resources with community priorities. Priority Based Budgeting helps to define what the priorities of the citizens are, what programs and services the City offers, how much the programs and services cost to provide, and what value the services and programs offer our citizens. Using the public process of Imagine Duluth 2035, the priorities of the City of Duluth were identified: infrastructure, livable neighborhoods and affordable housing, green space and energy conservation, dynamic and diverse economy, culture and recreation, and safe and secure community. 2020 Budget Highlights: Increased property tax levy 8.46% Complete phase-out of the street light fee 1 Increased Local Government Aid (LGA) $578,600 Increase in street improvement budget of $7 million due to dedicated sales tax for streets Decrease in library fine revenue due to fine free library system Partnership with the Duluth Library Foundation for school-readiness program Increased staffing for Sustainability Coordinator Collaborative funding with Housing and Redevelopment Authority for full-time Housing Developer Budget Drivers: State Budget Considerations LGA Levy limits Employee Expenses Collective bargaining agreement wage increases Health insurance premiums Retiree insurance Economy Expanding tax base Sales tax Framework Goals and Assumptions: Increased property tax levy of 8.46% which includes an increase of 1.46% for the final phase-out of the street light fee. Increased property value growth of 6.51% LGA Street Sales Tax Library Fine Free Partnership with Library Foundation for school readiness program Increased staffing for sustainability officer Collaborative funding with HRA for housing developer An increase of 10% in health care rates. The 2020 budget focuses on the areas of transportation infrastructure, parks and libraries, energy and sustainability, and housing and affordability. Transportation: With legislative authorization in effect, we began collecting our fully dedicated sales tax for streets in October 2019. In 2020, we are proposing 17 miles of street work. In recognition of our community's investment in roads through the sales tax, the City of Duluth is in the process of phasing out mandatory assessments for street repairs. The 2020 Budget also funds our Transportation Planner, hired in 2019, a position that is already providing critical expertise and insight for our planning and engineering teams, and value for the community. 2 Parks and Libraries: Parks and Libraries provide universal access and service to all city residents. In 2020, we are expanding our reach in both areas. The City library system is now a fine free library system. This means that late fines have been removed from all accounts and 7,651 previously blocked cardholders now have library access renewed. We are forgoing the $68,000 in annual fine revenue. We are also taking our commitment to early learning one step further by launching a financial partnership with the Duluth Library Foundation to improve school- readiness for children in Duluth. In 2020 the City will continue its investment in the AmeriCorps partnership for citywide year-round Parks recreation staff, additional programming for seniors, janitorial support for community centers, and support of neighborhood- focused programming by community nonprofits. Energy & Sustainability The 2020 budget includes funding for a full-time Sustainability Coordinator whose focus will be on the City’s energy plan, staff efforts, and our Energy Plan Commission. The position will leverage our internal and external utilities, identify cost and energy savings, and generally place us and this community at the forefront of action. Housing & Affordability The 2020 budget includes collaborative funding with the Housing and Redevelopment Authority for a full- time Housing Developer to lead a City of Duluth housing team. This is the first time this level of funding and staff support has been invested in housing. The 2020 budget includes continued investment in the Tenant Landlord Connection as well as continued funding for the warming center model this upcoming winter. The City continues to prioritize making debt payments to ensure the City remains in excellent standing with bond rating agencies which allows the City to leverage other investments and benefits The 2020 budget approvals were endorsed by the City Council, led by Council President Noah
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