Agenda - Council Work Session - 02/23/2016

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From 2005 to 2014, the inflation factor for state and local governments increased by 29.3%, while Council levies have increased by only 13.3%. Metro Council Levies Compared with Inflation Factor, 2005-2014 30% 1111111111 Pay Pay Pay Pay Pay Pay Pay Pay Pay Pay 05 06 07 08 09 10 11 12 13 14 Source: US Bureau of Economic Analysis, National Income and Product Accounts Table 1.1.9, dated July 31, 2014. The Council's statutory limit for general purposes and other non -debt service levies is $34.7 million for taxes payable in 2015, compared to the levy of $30.8 million (about 13% below the levy cap). Levies for debt service are not directly limited, but the levy for Parks and Transit are essentially restricted to bonding authority (that is, the dollar amount of bonds we can issue) as defined in statute. DEBT SERVICE AND BONDS Nearly 62% of the total property tax levy is dedicated to paying debt service on bonds issued to support preserving and investing in capital assets for Transit and Parks. The Council's total general obligation debt outstanding as of December 31, 2014, is $1.7 billion. General obligation debt is backed by the full faith and taxing authority of the Metropolitan Council. Approximately 76% ($1.3 billion) of this debt is for wastewater assets and is paid for by fees collected from wastewater services. The Council's bonds receive the highest possible ratings from Moody's and Standard and Poor's credit ratings agencies. The Council's top ratings reflect the sound financial management of the Council and allow us to borrow money at the lowest market interest 11 rates. 2015 Operating Budget - Uses by Division: $936 Million Community 0% - Regional Administration $4 * Development $107 Environmental Services $250 12% 27% 61% $49 million prior to interdivisional allocation Transportation $575 SPENDING BY DIVISION COUNCIL FUND ACCOUNTING Revenue collected by the Council is directed into separate funds. These funds allow the Council to manage spending by directing the revenue dedicated to specific activities or objectives to a group of related accounts. By maintaining separate funds, the Council is able to comply with laws that require funds to be spent for a specific purpose. For example, the Council may not raise transit fares to pay for wastewater services. About 98% of the Council's revenue and other sources is dedicated for a specific use and is directed to a corresponding fund. The General Fund is used to account for administration functions of the Council's Regional Administration and Community Development Divisions. The Council has the most discretion in the use of General Fund dollars. The General Fund comprises about 6% of the Council budget and is primarily funded by the general purpose property tax levy and interdivisional allocations.