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

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Ms. Lund clarified how the City portion of taxation goes into play with the market value. She explained that the City is levying $7,145,000, and that is what the City needed to propose to the County as the levy. She clarified that tax capacity rate is determined at that time, takes that total amount that was levied in September, divided by the total taxable value, to equal the tax capacity rate. She stated that when the City Council goes forward in December with the final adoption, that tax capacity rate cannot be increased. It can only be reduced. She explained that what if the City levied for less than what the total market valuation was in the City, the City would have to levy higher and tax capacity rate would go up even more. She explained the formula of taking the total amount of levy, divided by the total taxable value, to arrive at the tax rate, times the class rate, which equals total tax amount due to the County. She explained that the City cannot collect more tax than what they levy for. She stated that the Anoka School District and County went down, but the City is picking up the share that it went down. She stated the City was picking up the share of the County and School District's increase because the overall tax capacity rate stayed the same in Anoka County. Mr. Stanchfield asked whether spending should keep pace with growth. Mayor Gamec stated that the money that comes in comes two years later. He explained that approximately 400 new units came into the City's this year. Mayor Gamec noted that of those, almost 280 of them will not be on the tax rolls until 2007. Councilmember Cook stated that it takes three full years for new properties to come on the tax roll. Mayor Gamec stated that a lot of developers will play and work with that. Councilmember Cook stated that City spending is not as fast as the city is growing. He stated the City had almost $400,000 last year in funding, and $300,000 this year. He stated that the City can't change what is happening with market value or revenue from future growth to reduce the cost of development, but the staff and City Council is h~ying to cut expenditures in the future while the City grows. Councilmember Strommen referred citizens to a packet of information, noting area wide taxes versus the City wide taxes. Mayor Oamec stated that building permits, loss of LGA, and other funds lost amounts to $1,000,300, which almost puts the City at zero revenue. He stated that the services have to be provided a year to two years ahead of the budget. Mr. Stanchfield stated that his market value increased 13.67%, and he is seeing a 23% increase in taxation. Kevin Hartman, Ramsey resident, asked for clarification about revenues and expenditures, comparing year 2002 to 2006. He also asked what the main reason for the increase might be. Mayor Gamec stated that services include a lot of things and in one year the City increased planning staff with some help from developers. He stated that in the future, the City will pay for that without help. The increases included new employees, one large chunk because of union negotiations, some insurance changes, but generally most of it is in services to people for special assessments. He stated that special assessments have increased by approximately $80,000 to $90,000. City Council Truth in Taxation/December 5, 2005 Page 9 of 13