Planning the City’s 2024 Budget Underway

Important Dates for Community Involvement Announced

The development of the City of Owatonna’s budget is influenced by multiple internal and external controls. State law requires municipal budgets to be balanced as cities are not allowed to deficit spend. The City of Owatonna’s 2024 budget process is underway as needs are being assessed and projects are being prioritized.

City staff utilize a rigorous process for developing the coming year budget that provides opportunities to evaluate revenue and expenditure forecasts so adjustments can be made as the budget plan evolves. It also includes multiple opportunities to share information publicly and invite input from the community.

Although some information is not yet available, the annual budget process began in June with department directors preparing initial Operating and Capital Improvement Plan (CIP) budget requests, refining them with the City Administrator and Finance Director and determining whether they align with the City’s priorities. The following four Key Focus Areas developed by the City Council and staff help prioritize work and allocate resources: Economic Vitality, Infrastructure, Quality of Life and Efficient, Effective Government.

A high-level overview of the proposed 2024 budget was presented to the City Council at its August 15 Study Session. It includes projected revenues and expenditures as well as the proposed 2024 property tax levy. The proposed options include the following:

• Utilizing the increase to local government aid and a small portion of a levy increase, the City is making a large investment in its unaddressed capital needs. These projects will include necessary mechanical and electrical improvements at Merrill Hall, Law Enforcement Center improvements, a generator replacement, tuckpointing, new pavement in some parks and renovations at the Brooktree Clubhouse among other projects.
• An eight percent increase in the Operating Budget would include wages for an Assistant City Administrator, Police Officer, Equipment Maintenance Technician and increasing the part-time Information Technology Specialist to full-time to cover video production for City Council meetings. This also includes funding to conduct a community survey.

Combined, these budget additions would result in a nine percent overall levy increase. Information from the Steele County Assessor’s Office regarding tax capacity will be available in September and will provide insight on how to balance the potential levy increase options to minimize any increase on taxpayers.

In the coming weeks, City staff will meet with the City Council and Mayor to refine 2024 Operating and CIP budget requests. At the September 19 City Council meeting, Finance Director Rhonda Moen will present the proposed 2024 CIP and Operating Budget request for approval. Moen will also provide a budget summary showing a comparison to this year’s budget. While adjustments can continue after this point to lower the levy, it cannot be increased past this point. The City Council must adopt a preliminary levy for the following year and the Finance Director must certify the proposed levy through Steele County prior to September 30.

Additional data points that influence the City’s annual budget include tax capacity fluctuations, Local Government Aid allocations, union contracts that determine employee wages, property valuations determined by the County and the cost of employee benefits. This information is finalized annually by November and helps shape the budget. “We need to not only consider the current year budget, but also must include the City’s long-term financial planning in our budget process and decisions,” Moen said. Such long-term planning sets aside funding for capital assets. There are two City Council Study Sessions tentatively scheduled for additional budget discussions on October 3 and November 7.

City staff maintain a 10-year facility needs assessment that guides forecasting for expenditures and levy increases required to maintain capital investments. A comprehensive analysis of City-owned buildings was completed earlier this year and is helping determine the improvements that are needed and how these buildings may be used differently in the future to continue serving the community’s needs. For ongoing updates regarding the capital improvements being considered, visit Imagine Owatonna: Long Range Asset Preservation Plan | Owatonna, MN.

As the end of the year approaches, so will the City’s budgeting process. The City Council will hold the annual Truth in Taxation Hearing December 5 at 6 p.m. The goal of this meeting is to present a summary of the proposed 2024 budget to the community. Public input is encouraged at the hearing and throughout the entire budget process. The City Council is expected to take action to adopt next year’s final budget and levy December 19. For additional information about City budgets, visit Finance | Owatonna, MN.

IMAGINE OWATONNA: Long Range Asset Preservation Plan

Envisioning the future: planning…growing…investing

The City of Owatonna is taking a long-term approach to planning and prioritizing facilities improvements. Local residents, community leaders and City staff will guide decisions on how to plan, grow and invest in Owatonna’s future.

The City owns more than 90 buildings and structures which support a broad spectrum of services provided to the community such as police, fire, recreation, streets and utilities. These facilities require maintenance and long-term investments to preserve their value so they can continue serving the community. “As good stewards of the City’s aging buildings, we need to address deferred maintenance and ensure they can be utilized in ways that best address community needs,” said Jenna Tuma, Director of the Parks, Recreation & Facilities Department.

Since 2019, City staff and technical experts from ICS have been working to identify the maintenance needs of existing City-owned buildings. Earlier this year, the City Council approved a $45,000 contract with ICS to prioritize facilities needs to guide the development of a Long Range Asset Preservation Plan. The basis for the plan is a facilities condition assessment completed last year which identified deferred and upcoming maintenance of existing buildings. 

The plan will provide estimated costs for maintaining current facilities. It will also cover projected costs to build any new facilities that are identified by community members and City officials as being needed. The project team is meeting with Owatonna Public Utilities regarding the use of contributed services and energy-saving rebates as part of a funding strategy that will support the deferred maintenance and needed improvements.

ICS held a focus group with the City Council August 15 to gather feedback about long-term buildings and facilities needs. Community feedback and meaningful public engagement is essential to developing the plan so it accurately reflects the priorities of community members while also using tax dollars effectively and efficiently. Input from community members being gathered through the 2050 Comprehensive Plan focus groups will help inform the Long Range Asset Preservation Plan. A compilation of findings from all the focus groups is expected to be presented at the September 5 City Council 5 meeting.

The project will include visionary community discussions about new buildings and facilities for the City to consider investing in. Specific community engagement opportunities will be planned as the project evolves. Please visit Owatonna.gov for additional information about the Long Range Asset Preservation Plan and for ongoing updates.

Riverfront Development Groundbreaking

City staff and elected officials joined representatives from the Owatonna Area Chamber of Commerce, Mohs Construction and Red Line Development for a groundbreaking event August 14 to commemorate the beginning of a year-long project to renovate Owatonna’s riverfront.

The $27 million project will revitalize an area in the heart of Owatonna that covers more than four acres along the Straight River. Redeveloping this important part of the community was identified as a priority in the City of Owatonna’s Strategic Plan.

Several buildings were demolished to make way for the new development which will include new construction for the Ascend market-rate apartments, Mineral Springs Brewery, West Bank and Olmsted Medical Center. Construction has begun and is expected to be completed next year.

One of the project’s goals is to increase use of the trail and riverfront area as a recreational asset. It includes plans for a new trail extension from the Straight River to downtown and a trail spur to create dedicated bicycle access into the downtown area. These trail improvements will complement the City of Owatonna’s overall commitment to providing recreational assets throughout the community.

Replacing the underutilized spaces in this area with Owatonna’s first mixed-use development will bring new life to the area and accentuate Owatonna’s riverfront as a focal point for the downtown area.

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