City Administrator Executive Summary

Each year the city prepares a budget and property tax levy for the following year. Staff continues to analyze revenues, monitor expenditure information and outline initiatives to prepare a budget and levy for City Council consideration. This budget, along with the Capital Improvement Plan (CIP), reflects a collaborative effort between the City Council and City staff both working to thoughtfully and responsibly provide quality municipal services while planning for the future of Oakdale.

The City of Oakdale strives to provide fun recreation programs and beautiful parks, ensure safe neighborhoods, and provide high-quality services that enhance and protect people’s lives. Responsible fiscal management also builds the foundation for the City to run smoothly and provide effective, innovative programs and services while keeping in mind ways to evolve to meet future expectations and demands. Decisions are made with the future in mind to ensure our ongoing ability to provide quality services at a reasonable price.

Staff has proposed budgets with minimal impact to residents in recent years, and this continues to be a key focus during budgetary discussions. However, the city is experiencing budget pressures, most notably from increasing infrastructure construction and maintenance costs, as well as general personnel costs, neither of which are unique to Oakdale, nor to other local governments. Additionally, the City is experiencing dramatically higher costs for fuel, utilities, personal protective equipment, and other commodities the city requires to operate.

The 2023 budget and proposed tax levy reflects on the many conversations City Council has engaged in regarding the evolving needs of Oakdale’s residents and business owners. Although the formal budget process begins in the spring of each year, it truly is a year round exercise that requires flexibility in resource allocation, while at the same time ensuring prudent and responsible financial management of taxpayer dollars. This budget continues to focus on the shared commitment to developing a stronger future for Oakdale through long-term planning and strategic investments of city resources. As the budgetary planning process for 2023 began, staff was reminded to reflect on the following principles as a guide:

• Evaluate and acknowledge both the short and long-term impacts of all budgetary decisions.
• Stabilize revenues and expenditures, and eliminate unanticipated variances.
• Fund operations at a level to provide quality services at a reasonable cost.
• Preserve structural balance and appropriate fund balance levels to mitigate future risks.
• Consider additional investments when they help achieve City goals and provide a significant return to the community.
• Seek to make a connection between resources and results.

While the world continues to rebound from the economic volatility resulting from the coronavirus and international conflict, Oakdale’s commitment to strategic planning has helped us navigate this uncertainty. Conservative and nimble budgeting is a hallmark for Oakdale, and these principles have positioned us to respond to these recent challenges while continuing to deliver high level essential city services. In addition to these macro-economic factors, we anticipate the local population increasing from 28,303 – according to the most recent census, to nearly 35,000 by 2027 as a result of development projects including Willowbrooke and Bus Rapid Transit platforms located at Helmo Avenue and Greenway Avenue. This will lead to a significant increase in the city tax base, but will cause growing pains for the community as additional staff and infrastructure is required in anticipation of this development to ensure we can continue to provide the high quality city services we have provided since incorporating as a City in 1974.

This year, the development of the City Council goals aligned with the discussion of the budget to ensure both documents correspond and support one another and results can be realized. With the City Council’s direction, Staff produced a budget prioritized around the City Council’s goals of:

• Focusing on essential city services and funding these activities adequately.
• Maintaining high quality city operated Public Safety Departments.
• Investing in modern technology to improve services and increase efficiency.
• Continuing to fund annual street reconstruction/maintenance projects.
• Enhancing City parks, trails, open spaces, and facilities.
• Fostering an efficient and transparent government.
• Promoting citizen engagement.

The proposed tax levy for 2023 accomplishes the goals and principles outlined above by:

• Completes the transition to a full career modeled Fire Department through the hiring of three full-time Firefighters. Of the 725 licensed Fire Departments in the State of Minnesota, only 1.9% have achieved this goal. This staffing transition will reduce response time, provide 24/7 coverage in both fire stations, and best-in-breed service. The fully staffed department has added 9 full-time positions over the last three years and will now be fully staffed with a Fire Chief, Assistant Fire Chief, Administrative Assistant, three Fire Captains, and 18 Firefighters.

• Assessed market values are growing faster than the City Tax rate. With the preliminary information provided by Washington County Assessor’s Office, the tax rate is decreasing by approximately 2.93% for 2023 with the proposed budget. This demonstrates Council's commitment to a responsibly tax levy and focus on essential city services.

• Commitment to a City operated Police Department. The preliminary levy includes the addition of one full-time patrol officer and four new patrol squad vehicles. Additionally, a Police Department staffing study is proposed and is anticipated to be completed sometime in early 2023. As one of five cities in Washington County that doesn’t use an outside agency for police service, City Council has better control of these services.

• Investment in City facilities, equipment, and parks. The proposed budget includes the most comprehensive Capital Improvement Plan (CIP) in the Citiy's history and is focused on preserving the high quality of life our residents deserve. This plan includes the internal funding of nearly $12 million of vehicles and equipment over the next 10 years. Another $130 million of parks, utilities, streets, buildings, technology, and drainage improvements are proposed over the next five years. Specific projects include three new parks, annual replacement of existing park structures, a new Public Works Facility, and an expansion/remodel of the current Police Department Facility.

• Focus on Technological Improvements. Included in the budget is OpenGov, which has revolutionized our budgeting process and created a new environment of financial transparency. OpenGov is also being utilized to create a fully online environment for all permitting and licensing from application to approval. Also included is:
  • A web based employment and onboarding software. This will allow us to streamline the application and employee recruitment process as we attempt to recruit the best.
  • An online workflow process for creating and distributing council, board, and commission packets. This software allows content contributors to save time by entering agenda items, uploading attachments, and sending through approval workflows with a few clicks.
  • A new utility billing software. In early 2022 staff implemented a new Financial ERP, but the current utility billing software has become outdated, has limited functionality, and requires many manual steps to interface with other systems.

The 2023 budget process began in May 2022 as implementation of the OpenGov platform commenced and city departments/divisions started preparing their 2023 operating budget requests. Work continued through May, June, and July with meetings/discussions/adjustments by city staff and discussions with the Finance Director and City Administrator. The first Council Workshop was held on July 19, 2022, when the City Council was presented departmental requested budgets for the General Fund, Special Revenue Funds, and Debt Service Funds. Staff followed up with budget discussions on August 4, 2022 and August 31, 2022 to prioritize departmental requests, discuss the Capital Improvement Plan, and identify the estimated tax impacts to property owners at various levies.

Cities are required to certify their preliminary levy for 2023 to their home county by September 30, 2022. This information is then used to generate Truth-in-Taxation notices which are produced by Washington County and mailed to property owners between November 11 and November 25. Finally, Cities are required to conduct a “Truth-in-Taxation” meeting between November 25 and December 28, at which public comment is received by the Council prior to adopting the final tax levy and budgets for 2023. One key aspect of this process is that while the final levy can be decreased compared to the preliminary levy, it cannot be increased.

On September 13, the Oakdale City Council adopted the proposed 2023 property tax levy, establishing the maximum amount at $16,064,857 up 12.0% or $1,721,235 over 2022 and set December 13 at 6 p.m. as the date to conduct the truth-in-taxation meeting regarding the final levy prior to Council adoption. Again, it’s important to note the levy may decrease, but may not increase between adoption of the proposed and final levy.

Property values in Oakdale, like across the rest of the state continue to increase at record rates. According to the Washington County Assessor, the median residential value (which includes single-family, duplexes, triplexes, condos and townhomes) for taxes payable in 2023 is $315,000, a 19.2% increase from 2022. Per updated information recently received from the County, at the proposed levy amount, the median residential property in Oakdale is estimated to see the City’s share of their property tax bill increase by approximately $183.17 or 18.47% for 2022. At this same tax rate, the median valued residential property with no market value growth, valued at $264,300 would expect to see a $29.05 or 2.93% reduction in their city tax bill for 2023. Please keep in mind these figures aren’t final, as the County continues to refine values for the upcoming year.

Finally, I would like to encourage all of our constituents to view the 2023 budget which can be located within the Finance Department’s section of the City website. Thanks to the support of the City Council, along with many hours city staff has invested in this software, I am proud to present Oakdale’s first interactive online budget. Using this technology, we have been able to maintain our commitment to honest budgeting, responsible spending, and financial transparency, while enhancing access to information and increasing public engagement.

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