2019-03-27 CC Packet - Laserfiche WebLink

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Page 2 "Wastewater infrastructure upgrading from a 1991 project will require more expense. We are hoping to stretch out more of the expense until 2024 when our PFA loan is paid off. " (city of 1000) Look by city size: • Overall, small cities (under 2,500 in population) were less likely to say they are better to meet needs in 2018 than in the previous year(65 percent compared to 72 percent for all cities). • NLC also found that the smallest cities were least likely to report being better able to meet needs • Looking to the future, 61 percent of small cities expressed optimism about meeting needs in their communities. Just 45 percent of big cities had a positive outlook while 45 percent of them said things would be about the same. Revenues The survey asked city officials whether they'd seen shortfalls in their various sources of revenue. Shortfalls in property tax revenues and in fees/charges/license revenues were cited most often. About a third of cities said that revenues from those two sources were either slightly less than expected or more than 10 percent less than expected. The NLC fiscal conditions report highlighted a slowing of growth in property tax revenue among its member cities. Trends to note: • The share of Minnesota cities reporting property tax revenue shortfalls is steady at 33%. • The most recent survey reveals a decrease in the share of cities reporting a shortfall in fee revenues (28 percent this year compared to 35 percent last year). • While only 3 percent reported shortfalls in state revenue last year, 12 percent of city respondents experienced this in 2018. • There is a similar uptick in the rate at which cities experienced shortfalls in federal revenue: About eight percent of cities in 2018 vs. 1 percent in 2017. Look by city size: • The biggest difference between small and large cities was found in the share reporting property tax shortfalls (37 percent for small and 26 percent for large). • The table below shows a summary of findings related to revenue shortfalls. Share of cities seeing shortfalls in expected revenues 2018 Property Fees/charges/ Lodging/restaurant State Federal taxes licenses revenues revenues Cities overall 33% 28% 5% 12% 8% Cities under 37% 29% 2% 14% 9% 2,500 Cities over 26% 25% 8% 8% 7% 2,500 Budget factors City budgets are affected by a wide range of factors. Some create strain on budgets while others can have a positive impact on budgets. In 2018, the most frequently identified budget factors that 98