Administration’s Recommended 2018 Proposed Budget August 8, 2017

Agenda Principles Budget Drivers Key Initiatives Revenue Expenditures Comparisons Levy Impact Internal Services County Fiscal Position Budget Schedule

Guiding Principles (Examples) Operating and capital budget decisions should support and reflect the county’s vision, mission and goals Make strategic investments in our human resources to attract and retain a qualified workforce The budget should address the county’s current needs and position the county to meet the future needs of a growing, aging and diversifying population Consider changes in the county’s tax base, potential change in tax rate, tax impact on property owners, population, inflation, service delivery changes and economic trends affecting county property taxpayers when adopting the property tax levy Adhere to fund balance, debt service and other financial policies to ensure the ongoing financial health of the county and protection of the county’s AAA bond rating

2018 Budget Drivers Cost of employee wages and benefits Rapid growth in some unfunded mandates Debt service funding Service demands from growing population Staffing and funding support for preventative building maintenance and timely delivery of new projects Improvements to ensure efficient operations and security of technology infrastructure Land and Water Legacy Program (LWLP) costs Return of the Lake Elmo Library

2018 Key Initiatives Public Safety New Positions : 2.0 Legal Assistants (one is special project); 1.0 Juvenile Attorney I; 1.0 Dispatcher Additional resources to fund increase caseloads in child protection and mandated state court costs Continuation of County Attorney’s Major Crimes Prosecution Section/Sex Trafficking Unit Update to County Attorney records management system (LENS 9) Utilize increased Community Corrections Act subsidy aid to fund support for service delivery & levy reduction Continuation of Dosage Probation project Complete implementation of the Sheriff’s Office public safety records management system Continue efforts to address the challenges of medical and mental health issues in the county jail Added dispatcher position to ensure adequate service and safety of officers; mitigates increasing overtime costs Increased funding for overtime in the Sheriff’s Office to more closely reflect actual costs Reduced jail bed revenue due to new Chisago County jail Public safety radio system infrastructure/antennas

2018 Key Initiatives Public Health & Community Services New Positions: 1.0 Case Aide; 2.5 MNChoice Social Workers; 1.0 MNChoice Supervisor; .50 Planner II; 1.0 Policy Analyst Transportation; 1.0 Social Worker DD; 1.0 DD Supervisor; 1.0 Office Support; 1.0 Family Service Worker Continued support for child protection services including staffing and effective management of child placement costs stemming from child protection changes Increased staffing for MnChoices reassessments and new assessments for safety net clients and funding cost shift Increased staffing to address rising developmental disability caseloads On-going management of Recycling and Energy Facility and implementation of waste designation Support for healthy aging for older adults Completion of mandated community health assessment Implementation of improvements in yard waste and composting services Completion of countywide assessment of subsurface sewage treatment systems (SSTS) Modest increase in support for MN Extension

2018 Key Initiatives Public Works New Positions: 1.0 Building Services Project Specialist; 1.0 Fleet Technician; 1.0 Building Services Technician; 1.0 Custodian Increase project delivery capacity to ensure preventative maintenance and timely delivery of new projects Funding for continued road construction and maintenance costs Continued investment in roads, transit, and county fleet Support additional county space for Lake Elmo Branch Library and fully fund rent for North Shop Increase support for county fleet to ensure efficient and cost effective operations Complete park building facility condition review

2018 Key Initiatives Internal Services New Positions: 1.0 Senior Application System Analyst Developer; 2.0 System Administrators; 1.0 Business Analyst; 1.0 Senior Security Analyst Implementation of Human Resources Information System Investments in security of data and computer systems Increased support for enterprise-wide software solutions Negotiation of new contracts with the county’s bargaining units that expire at year end of 2018 Upgrade to county’s financial management system (E1) Support move toward mobile access to county systems Continued focus on leadership development/succession planning Continued implementation of comprehensive plan; updated strategic plans related to communications and economic development

2018 Key Initiatives Library & Property Records and Taxpayer Services New Positions: 1.5 Librarians Lake Elmo; 1.0 Library Service Assistants Lake Elmo; .60 Teen Librarian; .50 Librarian Oakdale; 1.0 Appraiser I; 2.0 Special Project Taxpayer Technicians Addition of Lake Elmo branch library and improve space at Valley branch library Implementation of library strategic plan and plan for facility improvements Investment in library collection, equipment, and core staffing Funding to pilot Sunday hours at the Oakdale branch library Administration of 2018 elections and increased absentee voting location; possible addition of electronic poll books Replacement of Image Storage system for recorded property documents Improve homestead application workflow and add on-line submittal

Major Non-Levy Revenue Impacts for 2018 REVENUE SOURCE TOTAL CHANGE Intergovernmental Revenues $65,912,200 $6,123,600 Fees for Services $15,701,600 $446,800 County Program Aid $10,104,300 $990,900 Licenses & Permits $4,945,700 $144,200 Investment Earnings* $1,990,300 $586,700 *Largely due to a recent accounting change requiring the county to budget the investment earnings related to the county’s Other Post Employment Benefits (OPEB).

County Program Aid

County Program Aid (CPA) Compared to Levy Funding

New County Program Aid (CPA) Used Towards Mandates New CPA Available in 2018: $990,900 *Significant 2018 Mandated Cost Increases: Out-of-home placements of children $284,900 MNChoices cost shift estimate $260,500 Child Protection (includes court-appointed attorney increases) $231,100 Regional Treatment Centers Cost Share $205,500 State Public Radio System Upgrade $ 87,500 Chemical Dependency Treatment $ 85,100 TOTAL $1,154,600 Estimated shortage: <$163,700> * Additionally, the 2017 Legislative Agenda describes more than $8.4 million in unfunded mandates that have been shifted to Washington County in recent years.

County Imposed Fees/Contracts Departments review fees annually Determine if fees cover the costs of providing certain services Budget includes the following county-determined fee increases: County Assessor Assessment Agreements (+2%) Public Health regulatory fees (+2%) Revenue increases from increased activity levels

Major Intergovernmental Revenue Impacts for 2018 DEPARTMENT TOTAL CHANGE Community Services $24,615,900 $1,725,400 Road & Bridge Capital $23,970,800 $3,010,600 Public Works $5,883,100 $244,300 Public Safety $4,690,600 $456,300 Public Health $4,682,500 $597,300

2018 General Highlights County Net Tax Levy $102.7 million Increase 6.9% County Tax Rate (Net Tax Capacity) 30.153% Decrease 1.0% County Tax Impact (Median Valued home) $32 Increase 4.6% LWLP Tax Impact (Median Valued Home) $3 Increase 33.3% Non-Levy Revenues $109.8 million Increase 7.2% Operating Expenditures (excludes capital and debt) $176.3 million Increase 6.7% Capital Expenditures $31.9 million Increase 12.8%

Major Operating Expenditure Impacts for 2018 EXPENDITURE TYPE TOTAL CHANGE Personnel Services $116,601,800 $9,255,200 Services & Charges $26,244,100 $650,900 Client/Citizen Related Support $19,010,000 $582,700 Utilities/Repair & Maintenance $6,509,100 $6,100 Materials & Supplies $6,080,000 $219,300 Minor Equipment $1,845,500 $301,400

Operating Costs History (without Personnel Costs)

Employee Compensation All contracts are settled through 2018 2.5% General Adjustment; range adjustments Health Insurance renewal quote @ 8.87% County contribution toward Health insurance needs to be bargained for 2018

Debt Service Thoughtful, guided process of issuing debt and increasing debt service levy Planned debt service increases has allowed large cost items to be built without property tax spikes Use of debt has allowed the cost of long-term capital items to be paid for by the residents that benefit from the asset (roads, buildings, technology, etc.) 5% increase = $687,500 Reviewing possibility of refinancing existing 2007 and 2011 issuances to reduce costs Planning 2019 capital improvement bond issue

Lake Elmo Library January 1, 2018 Lake Elmo Library will re-join the county library system In 2012, when city pulled out of the county system, the library levy was reduced by the amount of county library being paid by residents of Lake Elmo 2018 recommended budget includes a levy increase for libraries equal to amount that was cut in 2012 times the percentage increase in the county library levy since 2013 Agreement in place that provides for the operation of the library

Lake Elmo Library Return $335,000 REVENUE/EXPENDITURE TYPE 2018 PROPOSED AMOUNT REVENUES: Levy $335,000 EXPENDITURES: Staff - 2.5 Full-Time Equivalent (FTE) $154,800 Internal Rent $ 94,300 Collection, Programming, etc. $ 55,500 Technology (Phones, Licenses, Computers, Communication Lines, etc.) $ 23,200 Office Equipment & Supplies $ 7,200 TOTAL EXPENDITURES:

Capital Projects Capital Repair Fund provides for the upkeep of existing county facilities to those areas that pay rent to Building Services County fleet in Sheriff’s Office, Public Works Robust Pavement Preservation program Funding for traffic signals/countywide traffic capacity and safety improvements Park facility improvements including St. Croix Bluffs Maintenance building

Capital Road & Bridge Projects Summary Over $5 million to improve pavements Over $17 million for reconstruction Designing and developing the projects of the future Construction County 15 and County 14 (Old Trunk Highway (TH 5) Realignment (Lake Elmo/Baytown Township) County 21 from County 14 to south of 30th Street (Bayport/Baytown Township) County 3 from County 4 to North County Line (May Township/Scandia) County 6 from Century Avenue to Grenada Ave (Oakdale) In Design in 2018 County 12 – Trunk Highway (TH) 244 to County 9 – developing strategic plan for corridor –for construction in 2019 (Grant/Mahtomedi/Willernie) County 13 Pedestrian Bridge over I-94 – for construction in 2019 (Lake Elmo/Oakdale/Woodbury) County 13 and County 22 Intersection Improvement – Roundabout – for Construction in 2018 (Cottage Grove) County 18 from County 38 to County 13 – Roundabout and 4-lane expansion – for construction in 2020 (Woodbury) County 19 from Tamarack to I-94 – Full Reconstruct – for Construction in 2020 (Woodbury)

Countywide Mission Directed Budget (MDB) In accordance with Policy #2202, the recommended MDB-funded projects assist the county in supporting the county’s vision, mission, and goals Priority funding is given to those projects that have a countywide or multi-departmental benefit Projects meet criteria of program Allows for funding of certain one-time projects without impacting levy Board Workshop for final approval in September DEPARTMENT PROJECT AMOUNT Community Corrections Probation System Review $50,000 Library Digital Literacy Area $45,000 Strategic Planning Equipment $15,000 Information Technology Auditing Tool $62,000 Sheriff Field Radio Technology $52,000 TOTAL: $224,000

2018 Special Project Position Conversions Department FTE Title Public Health 1.0 Environmental Specialist Human Resources Administrative Assistant Attorney Attorney II These positions are included in the 2018 Proposed Budget and do not require additional funding.

2018 Recommended New Positions (Levy Funded) Department FTE Title Cost Attorney 2.0 Legal Assistants (one will be Special Project) $120,000 1.0 Attorney I – Juvenile $90,000 Information Technology Senor Applications System Analyst Developer $103,900 Systems Administrator $167,200 Business Analyst $88,200 Senior Security Analyst $98,400

2018 Recommended New Positions (Levy Funded) Department FTE Title Cost Library – Lake Elmo 1.5 Librarian I $109,400 1.0 Library Services Assistant $45,400 Library 1.1 Librarian I (.60 Teen and .50 Oakdale) $79,900 Property Records & Taxpayer Services Appraiser I (mid-year hire) $34,400 2.0 Taxpayer Services Technician (1-year Special Project positions for Elections) $94,700 Sheriff Dispatcher $72,300 TOTAL 15.6 (100% Levy funded positions) $1,103,800

2018 Recommended New Positions (Partial or No Levy Funding) Department FTE Title Cost Levy Funding Community Services .50 Planner II $40,700 $8,500 1.0 Case Aide – Child Protection $65,400 $52,400 2.5 Social Workers - MNCHOICE $209,300 $16,200 Supervisor - MNCHOICE $101,600 $8,000 Policy Analyst - Transportation $101,100 $20,200 Social Worker – Developmentally Disabled $82,500 $0 Sr. Social Worker – Developmentally Disabled $91,300 Office Support $50,800 $35,600 Family Services Worker – Child Protection (mid-year hire) $35,800 $28,700

2018 Recommended New Positions (Partial or No Levy Funding) Department FTE Title Cost Levy Funding Public Works 1.0 Fleet Technician $72,700 $0 Building Services Project Specialist $62,300 Building Services Technician I Custodian $46,500 TOTAL 14.0 Partial or No Levy Funding $1,022,300 $169,600

Voter-Approved Land and Water Legacy Program (LWLP) Recommended issuance of $5 million in bonds $9 million spent to date Warner/Wilder Project – expected closing late August/early September 452 acres protected $14 million in non-county funds leveraged (state, Met Council, landowner donation, etc.)

2016* Population Estimates 253,102 5-co. Avg. 434,818 7-co. Avg. 100k 200k 300k 400k 500k 600k 1.2M 1.3M 100,617 Carver 142,436 Scott 252,845 Washington 348,652 Anoka 418,432 Dakota 540,653 Ramsey 1,237,560 Hennepin *Most recent estimate available from Met Council for all counties

Estimated Market Value for Taxes Payable in 2017 5-co. Avg. $546.1M 7-co. Avg. $300M $400M $500M $600M $700M $1,700M $100M $200M $1,800M $133.9M Carver $196.7M Scott $253.6M Washington $300.7M Anoka $545.5M Dakota $619.4M Ramsey $1,772.7M Hennepin

Employees Per 1,000 Capita

New Position History (includes mid-year hires)

2017 Employees Per 1,000 Capita Ranges 5.34 5-co. Avg. 5.8 7-co. Avg. 6.0 7.0 8.0 4.0 5.0 4.4 Dakota 4.8 Washington 5.1 Scott 5.3 Anoka 6.8 Hennepin 7.1 Carver 7.3 Ramsey Washington County 2018 = 4.8

Net County Levy* Increase History *Excludes Regional Rail, Land & Water Legacy, and County Program Aid.

2017 Statewide County Levy Increases -6.0% 0.0% 6.0% 12.0% 18.0% -5.85% State Low 3.49% Washington 4.00% State Average 17.99% State High

Net Levy* Per Capita *Excludes Regional Rail , Land & Water Legacy, and County Program Aid

2017 Net Levy* Per Capita Ranges $404 5-co. Avg. $453 7-co. Avg. $500 $600 $700 $300 $400 $317 Dakota $364 Anoka $376 Washington $447 Scott $513 Carver $541 Ramsey $614 Hennepin Washington County 2018 = $398

Operating Costs Per Capita

2017 Operating Costs Per Capita Ranges $688 5-co. Avg. $784 7-co. Avg. $500 $600 $700 $800 $900 $1,000 $575 Dakota $647 Washington $677 Anoka $687 Scott $847 Carver $998 Ramsey $1,056 Hennepin Washington County 2018 = $683

Net Levy* & Tax Base Growth *Excludes Regional Rail and Land & Water Legacy levies

Net Levy* & New Construction *Excludes Regional Rail and Land & Water Legacy levies

County Tax Rates

2017 Tax Rate Ranges 34.09% 38.62% 5-co. Avg. 7-co. Avg. 28.00% 30.45% 26% 28% 32% 34% 36% 38% 40% 42% 44% 46% 54% 56% 28.00% Dakota 30.45% Washington 35.90% Scott 37.27% Anoka 38.85% Carver 44.09% Hennepin 55.85% Ramsey Washington County 2018 = 30.15%

2017 Average County Tax on $245,000 home $785 5-co. Avg. $889 7-co. Avg. $600 $700 $800 $900 $1,000 $1,000 $1,200 $1,300 $644 Dakota $709 Washington $825 Scott $857 Anoka $893 Carver $1,013 Hennepin $1,283 Ramsey

Cumulative Population, Inflation, and Levy Growth since 2010

Estimated Impact of Levy Increase Residential Homestead Taxpayers Home Valued at $257,000 for Pay 2018 (assuming a 4.9% value increase from 2017 to 2018) 2018 Net Levy Change Actual Pay 2017 Estimated Pay 2017 - 2018 General LWLP Total 6.9% 33.3% $700 $ 9 $709 $732 $ 12 $744 $ 32 $ 3 $ 35 (+4.9%)

Tax Base Changes – Pay 2018 Countywide estimated market value change 2017 to 2018: +6.9% 2017 up 3.0% 2016 up 2.8% 2015 up 12.1% Value of new construction: $426.7 million (+17.5%) 2017 total $363.0 million 2016 total $303.2 million 2015 total $332.8 million Median value change in residential homes: 4.9% 2017 change equaled +1.1% 2016 change equaled +1%

INTERNAL SERVICE DEPARTMENTS 2018 Proposed Budget Full-Time Equivalents (FTE) Administration $1,894,800 15.0 Accounting & Finance $2,148,900 17.5 Human Resources $1,807,500 14.0 Information Technology $7,575,200 50.0

ADMINISTRATION Initiatives & Challenges Transition/Support for countywide budget analyst Continued implementation of recommendations from Strategic plan, Communications plan, and Economic Development plan Leading 2040 comprehensive planning update Implementation of Records Management program Delivery of 3rd Employee Engagement Survey Coordination of the Land & Water Legacy Program

ACCOUNTING & FINANCE Initiatives & Challenges Key role in Human Resources Information System (HRIS) implementation and Point of Sale project Countywide financial management system (E1) upgrade Expanding use of technology to make business transactions more efficient and secure Bond issue for Land and Water Legacy Program; potential refinance to reduce interest costs Coordinating financial oversight of Metro Gold Line Project

HUMAN RESOURCES Initiatives & Challenges Conversion of human resources special project position to regular status Negotiations of contracts with all employee groups for contracts beginning in 2019 Human Resources Information System (HRIS) implementation Development of recruitment strategies to ensure county workforce that is prepared to serve county residents Effective management of liability and workers compensation claims

INFORMATION TECHNOLOGY Initiatives & Challenges New Position: 1.0 FTE Senior Application Systems Analyst Developer Support for countywide financial management system (E1) Replaces need for consultant funding Management of interfaces between modules and other county systems New Position: 1.0 FTE System Administrator (Configuration) Management of all county technology devices (desktops, monitors, laptops, mobile devices) Responsible for securing from potential threats and vulnerabilities New Position: 1.0 FTE System Administrator (Communications) Management of growing need for remote/mobile access of county workers Increasing need with new Sheriff’s records management system mobile capabilities Ensuring accessibility of data without jeopardizing functionality and security

INFORMATION TECHNOLOGY Initiatives & Challenges New Position: 1.0 FTE Business Analyst Immediate need to support of E1 upgrade project; adding staff support able to reduce project costs by $100,000 Support of new Human Resources Information System Assistance to departments defining needs, gathering requirements and identifying potential technology solutions New Position: 1.0 FTE Senior Security Analyst Develop policies to mitigate risk in our technology environment Currently only have one individual assigned to this task Lead the security team and initiatives across various disciplines in the Information Technology Department Funding: Next Gen 911 Address Point Project Need to assign address points for multi-unit properties to ensure public safety responders have good data Position supported by County Sheriff

INFORMATION TECHNOLOGY Initiatives & Challenges Key role in HRIS system implementation, point of sale project, Financial Management System (E1) upgrade, and Sheriff’s Records Management System Implementation of enhanced technology allocation fund Budget continues transition to more stable funding; replaces one-time sources to fund maintenance cost increases on technology systems Additional funds for system and data security Support for mobile workers and in field workforce

GENERAL OPERATIONS Countywide Revenues Property tax levy, delinquent property taxes Penalty and interest on late and delinquent taxes Mobile home property taxes Property taxes paid on distribution lines State and federal grants – indirect costs Interest earnings MN Counties Intergovernmental Trust dividend Public Employees Retirement Association (PERA) aid

GENERAL OPERATIONS Significant Expenditures Supports Legislative activities Funds county contributions to Health Savings Accounts and associated fees Countywide newsletter issued three times per year Funds internal auditor and records management functions Base contingency level remains the same as 2017 Supports MN Extension activities Funding included for mandated State court costs Other Post Employment Benefit (OPEB) costs Worker’s compensation, property/casualty insurance, employee severance costs

COMMISSIONERS Very little change from 2017 Includes a travel and training budget which anticipates costs for 2018 attendance; flat from 2017 Salaries are required to be set each year; budget includes a general adjustment at beginning of year (2.5%)

County Fiscal Position Balanced budgets Multi-year winner of Government Finance Officers Association (Budget & Comprehensive Annual Financial Report - CAFR) Fund balance that meets county policy Significant progress on funding our retiree health care obligations Significant progress on improving condition of roads Stable levy and operating costs per capita Continued response to growing service demands from a growing, developing county

2018 Budget Schedule April 4 Budget workshop with County Board April - June Departments complete budget estimates July Budget hearings with Administration August 8 Present proposed 2018 budget August - September *Departmental budget workshops September 26 Set 2018 preliminary levy October 10 Capital Improvement Plan (CIP) workshop November 14 December 5 Public Budget Hearing (after 6 p.m.) December 12 Adopt 2018 final levy, budget, and CIP *Public is welcome to attend all departmental budget workshops