Minutes - Council - 12/03/2007 - Truth in Taxation

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City Administrator Ulrich stated that this is the Truth in Taxation hearing to present the budget and noted that the City Council adopted the preliminary budget on September 11, 2007. The final budget is the same that was adopted in September. He stated that the tax rate is slightly decreased moving from 39.222% to 39.072%. The total budget for 2008 is $10,049,236, which is down 4.4% from 2007. The 2008 budget includes a partial year police officer position, which is scheduled to begin July 1, 2008; there were no other new positions being added. He noted that another change reflected in the budget is the sealcoating policy. The City has changed their assessment policy from one that 50% is City responsibility and 50% is assessed to properties. He stated that the City is gradually moving to phasing out this cost share over a period of 7 years at which time the seal coating will be funded 100% from the general fund. He stated that the final adoption of the budget for 2008 is scheduled for December 11, 2007. He asked Finance Officer Lund to give a presentation on the Truth in Taxation hearing. Finance Officer Lund stated that this meeting is not to discuss the market value of property and noted that is called the Local Board of Review, which is held in April of each year. She stated that she also wanted to note that there is nothing included in the levy for the Ramsey Town Center (RTC) project. She stated that a portion of the municipal center debt for the City Hall building is included. She gave a brief review of who determines property taxes and what factors affect them. She also reviewed what a Tax Capacity Value, Tax Capacity Rate and what fiscal disparities are. She showed the breakdown of where the property tax dollar goes for residents in the Anoka School District and the Elk River School District. She noted that the Anoka School District portion may go up a few cents because of the new school levy that was just passed. Councilmember Elvig asked if a school levy was approved whether the other entities got a lesser portion of the dollar. Finance Officer Lund stated that the dollar is refocused around, but noted that Elk River levied higher than 100%. Finance Officer Lund continued that the proposed 2008 levy amount is $9,059,173 and noted that the general fund portion is the biggest portion at $7,610,338, which includes police, fire and public works. The proposed tax levy is about a 5.7% increase from 2007 and the local tax rate is a slight decrease from 2007. She showed where the City fell in a comparison of metro area cities with populations between 16,000 and 28,000 for 2007 tax capacity rates. She noted that Ramsey ranked 19th with the tax capacity rate of 39.22%. She reviewed the formula that determines property taxes which is: Market Value x Classification Rate x Tax Capacity Rate. She noted that the City has a balanced budget, so the revenues equal expenditures. She stated that the biggest portion of the City's revenue comes from property taxes, which has decreased from 81 % in 2007 to 71 % in 2008 because of the economy and a slow down in building permits. She noted that the biggest expense for the City is personnel costs at 67% and also noted the increase in services/charges because of the increase in natural gas and gasoline prices. She reviewed expenses by department for General Government, Public Safety, Public Works and Park and Recreation. She stated that this completed her presentation and she would be open to answer questions. City Council Truth in Taxation/December 3, 2007 Page 2 of5