Review The Adopted 2021 Woodbury City Budget

Press release from the City of Woodbury:

December 10, 2020

Woodbury's city budget for 2021 was approved by City Council at the Dec. 9 meeting. The budget includes a 3.8 percent (or $41) increase in city taxes on the median value home next year. The adopted total property tax levy of $39,785,454 supports the cost of services and capital improvements in a growing community, according to City Administrator Clint Gridley.

Taxable market value

Woodbury's taxable market value grew by 5.9 percent from 2020 with the median value home increasing 4.2 percent.

With the responsible tax levy increase and strong property tax value growth, the property tax rate is estimated to fall 0.7 percent.

City taxes

Gridley estimates that city taxes on a residential home valued at $341,200 - the median value for taxes payable in 2021 - will increase from $1,065 to $1,106. See the table on the right for the estimated city tax change on homes with higher and lower values than the median.

Gridley noted that market values do not increase or decrease by the same percentage for all properties. Therefore, the estimated city tax may differ for some, particularly if there have been improvements that add value, such as refinishing a basement or adding a three-season porch. Similarly, a larger decrease in value could cause a larger decrease in taxes.

General Fund budget

Property taxes help fund city operations in the General Fund, along with the Capital Improvement Fund, Emergency Medical Services Fund, Street Reconstruction/Maintenance Fund, Debt Service Funds, and Housing and Redevelopment Authority Fund, for example.

For 2021, the General Fund budget, which is the city's main operating fund, is recommended to be $38,676,650, representing a 2.7 percent increase from 2020. The areas of new significant budget change in the General Fund compared to the current year are non-tax revenue; parks and trails maintenance; and personnel costs. Property taxes at $27.8 million account for 72 percent of the General Fund revenues. Other sources of revenue include permit fees, charges for various services, miscellaneous revenues, and transfers from other funds.

Total budget

Total city expenditures for 2021 are estimated at $95.4 million, a 4.8 percent decrease compared to the adopted 2020 budget. The total includes the General Fund and other city funds, such as the water and sewer utility, Eagle Valley Golf Course, HealthEast Sports Center, and more.

Budget Highlights

Property tax levy changes

The adopted total property tax levy is the largest and perhaps most visible source of revenue for the city, providing 42 percent of its funding needs. City taxes on the median value home of $341,200 are estimated to increase by 3.8 percent or $41. The monthly cost of property tax funded city services to a median value home for 2021 will be $92.17. A few of the more significant factors affecting the adopted 2021 budget and, in particular, the property tax amount are:

1. Service Demands of a Growing Community - The population and properties served by the city continue to grow. Simultaneously, Woodbury has experienced continued strong property value growth. Each year since 2013, the growth in the tax base has exceeded the tax levy increase and has resulted in lower tax rates. With the proposed levy, the city tax capacity rate can accordingly fall by 0.7 percent. Including the 2021 budget, the tax rate will have fallen 18.2 percent since 2013. Nevertheless, the city is challenged to carefully manage taxing expectations of the community with the growth of service demands, particularly in a pandemic and economically-challenged environment.
   
2. Personnel costs - As an organization that provides services, employee wages and benefits routinely account for at least 75 percent of the general fund annual budget. This trend will continue in 2021, with personnel costs being the largest factor affecting the budget. Historically, budgeted personnel additions have been restrained despite a growing community, and presently the employees per capita is at one of its lowest points. One of the more significant personnel changes will be in Public Safety, where they will begin cross-training paramedics to also serve as firefighters. In total, there is a proposed net increase of 1.38 full-time employees for 2021.
   
3. Flat or declining non-tax revenues - While the city's largest forms of revenue - local property tax and utility service fee revenues - are proposed to have a modest change for the coming fiscal year, the city is experiencing significant weakening of its other forms of non-tax revenues. In particular, investment income, development-related revenues, municipal state transportation aid (Capital), recreation revenues (General Fund and Enterprise Fund), ambulance billings (Special Revenue Fund) and other sources of revenue have been negatively impacted by the economy. With some of these revenue sources directly impacting the General Fund, it has resulted in a lower 2.7 percent General Fund expenditure increase despite an overall 4.9 percent property tax increase in order to accommodate for the decline in non-tax revenues.
   
4. Street reconstruction - One of the annual larger increases in the total 2021 budget is associated with supporting street reconstruction activities. Per a long-term funding plan recommended by a citizens task force that studied the city's road maintenance schedule and developed a sustainable long-term funding plan to meet the needs outlined in the maintenance plan, the annual property tax levy will grow by 5.5 percent annually, resulting in a $200,905 increase for street reconstruction in 2021.

User fee rates

The Water and Sewer Enterprise Fund is being challenged by three factors: lower water demand due to successive cool and wet lawn watering seasons; the success of our water efficiency program, and an increase in infrastructure replacement activity. Therefore, proposed water and city sewer fee increases are needed to help cover costs. If approved by the City Council, the base water rate will increase by 20 cents per thousand gallons from $1.40 to $1.60 per thousand gallons and the commercial and homeowner association (HOA) irrigation rate will increase from $2.95 to $3.18 per thousand gallons. A $2 per quarter increase in the administrative fixed fee for water also is proposed. The proposed commercial and HOA irrigation rate increase reflects the fifth step of a five-step increase plan approved by the City Council in 2016. In term of other enterprise rates, the city's portion of the sanitary sewer fixed quarterly fee is proposed to increase $1.13 per quarter.

The storm sewer rate for single-family homes/duplexes/twin homes will increase from $19.88 to $20.50 per quarter. The ambulance fee and street lighting rates are proposed to remain the same in 2021.

HRA levy

The city's Housing and Redevelopment Authority (HRA) is proposing no change to the levy to fund several loan programs for current and prospective homeowners in Woodbury who meet the income guidelines. This is separate from the city's tax levy and is included on the truth-in-taxation notice in the listing for special taxing districts. The proposed levy totals $250,000, the same as for 2020; the tax impact is an estimated $7 for the median value home and is included in the estimated tax chart on page X. The tax levy for the HRA has not changed since 2011.

Learn more

More information about the proposed 2021 city budget, including the full budget document, is available on the budget page. The full budget document also can be reviewed at the Finance Department at City Hall, 8301 Valley Creek Road, or at the R.H. Stafford Library, 8595 Central Park Place. For more information, contact the Woodbury Finance Department, 651-714-3507.

This press release was produced by the City of Woodbury. The views expressed here are the author’s own.