6.4 SR 06-06-2022 - Laserfiche WebLink

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In addition to providing general government services, the City of Elk River provides a full range of other services including police and fire protection, building safety inspections, planning and zoning, economic development, environmental services, parks and recreation, library, street maintenance, snow removal, infrastructure maintenance, and others. The city also provides municipal water, sewer, storm water, garbage, and electric services and operates two off -sale liquor stores. The annual budget serves as the foundation for the city's financial planning and control. The City Administrator must prepare estimates for an annual budget and submit them to the City Council for approval. The City Council is required to adopt a final budget by late December for the subsequent year. The budget is prepared by fund, function (e.g. public works), and department (e.g. streets). Department heads are allowed to make administrative budget amendments (excluding personal service and capital outlay) throughout the year if the total department budget does not change and the amendment is approved by the City Administrator and Finance Director. Budget amendments to the total budgeted expenditures require City Council approval. Budget to actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented as part of the basic financial statements for the governmental funds. For other governmental funds with appropriated annual budgets this comparison is presented in the governmental fund subsection of this report. Local Economy The local economy has continued to grow as indicated by the building permits with a construction value of $137,788,029 being issued in 2021. New construction accounts for $61,430,071 and additions/remodels make up the $76,357,958 balance. In 2021 residential growth increased greatly, the city issued 141 new housing permits which surpasses the 116 housing permits issued in 2020. Single family homes accounted for 140 of the new housing permits, in addition to a 60- unit multi -family apartment building. The average value home is about $278,000 compared to $267,000 in 2020. With the recent trend in the housing market, property value growth consists of both growth from valuation increases on existing properties and growth due to new construction/remodeling. There remains continued interest in both affordable and market rate multi -family housing projects, as well as protecting property values of an aging housing stock. Many of Elk River's employers reported stable employment levels during 2021 and are expected to remain stable. This is largely due to the diverse industry sectors of manufacturing, retail trade, government, and health services that drive the local economy within the region. The commercial/industrial sector has experienced modest growth and the economic outlook in this region looks promising with recent development projects that should continue to spur tax base growth and employment. Long-term Financial Planning The city has developed a financial management plan that provides a long-range forecast that brings together future expenditures, revenues, and development of the city. The Council has been diligent in maintaining a level tax rate. This plan provides the information needed to develop in a manner that will sustain city services while keeping the property taxes stable. The financial management plan is reviewed and updated annually by the City Council as part of the annual budget and Capital Improvement Plan (CIP) process. The CIP is a comprehensive five-year planning tool that forecasts the city's capital needs based on the city's long-range plans, goals, and policies. 4