Minutes - Council - 12/05/2005 - Truth in Taxation

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value. By 2008 the taxable Limited Market Value will be phased out. Ms. Lund clarified that the class rate is set by the State of Minnesota also. A resident asked if market value is raised, how much the taxes could be raised. Ms. Lund explained that the City has no control over setting the market value. She stated that is set by the Anoka County Assessor's Office. She stated that the meeting to discuss market value changes for 2006 payable year was held in April of 2005. She reminded citizens to attend the Local Board of Review in April for taxes payable in 2007. She explained that the market value is what drives tax increases. Tax capacity rate increased about 1.3% for the 2007 tax payable year. Mr. Norman asked why the State implemented a catch up in the Limited Market Value. Ms. Lund stated that Limited Market Value actually went into place five years ago, and the legislature thought it was going to be caught up within 2006. However, because of the way the housing has increased in value over the past five years, the legislature determined that there was a need to spread it out over two years. Ms. Lund explained how sales of neighboring properties affect market valuation. Ms. Lund explained that the 2006 proposed levy is $7,145,000 compared to $6,035,000 in 2005. She stated that this represents a $1,I 10,000 increase or 18.39% increase. In 2005, the increase was 14.15%. She stated that included in the overall levy is the General Fund, EDA Levy, Debt Service Levies, and Mississippi Sub District No. 1. She noted that the reason for the levy increase is because Market Value Homestead Credit for the City has been cut by $174,000 from the State. She stated that the City needs to levy that amount, but the City doesn't collect it as property taxes. She noted that this is a difficult concept to follow, but if the City didn't levy it, the local property taxes would also be reduced by that amount. In additional staffing, She stated that the City added one police officer, a street maintenance worker, engineering tech, a current part time fire secretary who will become full time, and a building maintenance worker who will be staffed to work nights in the new municipal building beginning in October 2006. Ms. Lund explained that also included in the levy is an increase in health insurance of 8%, and the State of Minnesota mandated a PERA rate increase (the retirement fund for the City employee account). She stated the PERA account has been short funded in previous years so now the plan has to get caught up. She noted that the State increased rates from 5.53% to 6%. She explained that included all staff except for police, who increased from 9.30% to 10.50%. Ms. Lund stated there is an increase in gasoline and diesel fuel prices for City vehicles, as well as heating costs for City buildings. She stated the City has also increased the street maintenance program to include bituminous overlays, seal coating, and repair in the City by $100,000. She stated capitol improvements have been increased by approximately $353,000 above 2005. This includes squad cars, a snow plow, a paving machine, and sidewalk machine. She stated the capitol improvement increase also includes an EDA levy. She explained that the EDA levy is used for improvement of blighted properties, specifically the Gateway North area. She stated that new businesses are coming into that area and making improvements, which in turn increases the overall property revenue market value in the City. Ms. Lund referred citizens to a chart indicating the breakdown explaining where their tax dollar goes. She explained that for each dollar taxpayers pay, the City receives approximately 40 cents, the County receives approximately 35 cents, and School District receives approximately 21 cents. She compared City Council Truth in Taxation/December 5, 2005 Page 2 of 13