Budget FAQs

Budget FAQs

Who takes part in the city's annual budget process?
  • The budgeting process is a collaborative effort between staff and the city council. Guidance is provided to department heads as they develop their annual budgets, taking into consideration the larger-picture of the city’s financial health and any long-range planning that is needed. The first round of review comes from the Finance Director and City Manager. Then, the city council reviews the budgets on behalf of their constituents to ensure that the proposed budget aligns with the goals and values of the community.
  • Residents are able to provide feedback on the budget directly to their councilmembers or at the annual Truth in Taxation meeting. This year’s meeting will be held virtually on November 30.
When is the city's fiscal year?
The city’s fiscal year begins on January 1, and ends on December 31.
What is the annual budget cycle timeline?

While the Richfield city budget goes into effect on January 1, the preparation of the budget begins more than six months in advance, involving every city department. The budget timeline includes: 

  • May: City staff along with the Finance Director and City Manager, work to craft a preliminary budget for the following year.
  • September: The City Council adopts a preliminary budget after multiple meetings and work sessions. The proposed city budget is used to forecast tax levy and other revenue totals. The proposed tax levy is also approved by the City Council along with the preliminary budget.
  • November: The city holds its Truth in Taxation hearing to invite residents to share their perspective on the preliminary budget.
  • December: Following the Truth in Taxation hearing the city adopts its final budget and certifies the proposed tax levy.
What opportunities do residents have to provide input on the budget?
  • Taxpayers can weigh-in by contacting their councilmembers with their feedback.
  • Finance Director Chris Regis is also available to discuss any aspect of the proposed budget by calling 612-861-9723 or emailing CRegis@richfieldmn.gov.
  • Additionally, comments can be delivered at the annual Truth in Taxation hearing. This year’s hearing will be held virtually on November 30.
What if the budget needs to be changed after it is fully approved?
The current year budget is formally revised mid-year as part of the next year’s budget process. That revised budget, typically with a 0% increase, is then processed through the same budget cycle as the proposed budget for the coming year.
What are the city's main sources of revenue?

70% of the city’s General Fund revenue comes from property taxes paid by residents and local businesses. Other sources of funding come from:

  • Intergovernmental revenue (example: state aid and grant funds)
  • Charges for services (example: recreation charges)
  • Licenses and permits
  • Transfers from other funds (example: liquor transfers).
Of the property taxes collected each year, how much does the City of Richfield receive?
  • For every dollar of property taxes collected each year, 40 percent goes to the City of Richfield or the Housing and Redevelopment Authority (HRA). The HRA funds much of the city’s housing-related work.
  • The remaining money goes to Hennepin County (who receives 30% of each property tax dollar), the Richfield Public Schools (who receive 24% of each property tax dollar), and other taxing districts (who receive 6% of each property tax dollar).
What are the city's biggest expenditures?
Of all the General Fund’s expenditures, 58% goes to the city’s Public Safety and Fire Departments to keep residents safe. An additional 17% goes to the operations of the Public Works Department which provides services like road maintenance. The remaining expenditures are spread throughout other city departments.
Beyond the basic revenues and expenditures, what else factors into the city's budget?
  • On a large scale, the economy impacts the budget through trickle-down impacts from state funds that support the city. Property taxes remain resilient in a down economy, but other city revenue streams, such as building permits and other licenses can be impacted, as well. But beyond that, the city’s budget reflects the values and priorities of the community. For example, the 2021 Proposed Budget includes funding for a new full-time staff person who will lead the city’s equity and inclusion work. This is a direct investment in the goal of being a more equitable community.
  • Additionally, the COVID-19 pandemic has required many in-person services to be transitioned to different formats. The city expects this trend to continue as the public health crisis continues, as well as after it has passed. These new technology infrastructure pressures require that the city add an additional IT staffer to ensure residents get the services they need.  
How does the city control spending or save money?
  • Fiscal responsibility is important to the City of Richfield, and one of the Council’s core values. A major factor in this effort is this ongoing budget cycle, which requires all departments to stay accountable for their revenues and spending throughout the year. Creative cost-savings solutions can be found throughout the city’s budget, from innovative staffing solutions, long-term project forecasting, and sustainability initiatives. All these efforts impact the city budget on an annual basis, as well as in the long run.
  • As a current example, since early May, the city has been under a soft hiring freeze to insulate the organization from the financial impact of the pandemic. The hiring freeze has required current staff to take on additional responsibilities, learn new skills and exhibit a high-level of flexibility in their day-to-day service to residents.
Does the budgeting process ever really end?
  • The most staff-intensive time for the budget process is May through September, when staff is preparing and presenting their preliminary budgets, and the proposed tax levy is being established. After proposed budgets are presented and ultimately approved the work for the next budget cycle begins.
  • In addition, each year some unforeseen expense or change might occur that will require staff to examine and adjust budgets. Examples include: broken equipment that needs to be replaced, shifting policies or procedures that require technology or staffing changes, or expenses related to global health pandemics like COVID-19. Changes get worked into the revised budgeting process that begins mid-year.
How does Richfield's proposed 5.5% tax levy increase for 2021 compare to other peer communities?
  • Richfield’s 2021 tax levy falls in line with our regional neighbors of Edina (5.95%) and Bloomington (5%), who are facing many of the same challenges we are.
  • It’s not an apples-to-apples comparison, because each community has a different tax base. The total levy is spread out amongst that tax base (which includes businesses, multifamily housing, commercial/industrial and residential).
  • The 2021 increase can be attributed to four primary components:
    • Pressure on the General Fund due to the hiring of an Equity and Inclusion coordinator, implementing body cameras in in the Police Department, adding an embedded social worker with the Police Department to ensure residents have access to the resources and programs they need, and the hiring of a full-time IT professional to address the city’s expanding technology needs.
    • We have also cultivated a young, high-performing group of civil servants at the City of Richfield. Just like any other organization whether it is public or private, these dedicated employees require annual costs of living salary increases and step increases.   
    • The loss of $365,000 in Local Government Aid also put pressure on the 2021 budget. This change is due to the city’s increase in tax capacity brought on by recent redevelopment projects.
    • Debt Service levy on bonds issued for the reconstruction of Lyndale Avenue.
Does the City of Richfield ever get audited?
Yes, the city is audited every year by an external accounting firm. Results of the audit are reported to the city council. This audit is required, but is also part of the transparency needed when spending residents’ tax dollars. By going through the process of the audit, and publishing the results publicly the city is offering residents proof of the stewardship that governs their tax dollars.
Does the city have a reserve fund?
Yes. Following the housing market crash in the late 2000s, Richfield leaders instructed staff to begin growing reserve funds to cover unreliable state aid. That fund has grown and now serves to help offset budget impacts from things like the pandemic. The reserve fund is also used to buy down debt for right-of-way projects and also to spread out the cost of certain general fund purchases.
How is Richfield using its $2.7M in Coronavirus Aid, Relief and Economic Security Act (CARES) funding from the federal government?
The city’s share of the federal CARES funds must be spent by November 15, 2020. It is the city’s intent to reimburse itself for costs incurred mitigating the pandemic, and also to provide additional assistance to impacted residents and local businesses.