Minutes - Council - 12/04/2006 - Truth in Taxation

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Finance Officer Lund explained that the total proposed levy for 2007 is $8,634,981, which is a reduction of $41 0,829 since it was preliminary adopted in September. That would be an increase in property taxes of 21.15% over 2006. Ms. Lund explained that the reason for increase is the EDA budget was increased $50,000 to clean up blighted properties within the City, new debt for the Ramsey Municipal Center, reduction of building permits received by the City due to the slow down in the housing market, additional staffing needs, necessary equipment purchases including a new fire truck, and increasing health insurance costs. Overall the tax capacity is relatively the same as last year. Ms. Lund noted that the rumors regarding the City being bankrupt and being in debt $60 million dollars from Ramsey Town Center is not true. There was no City financing related to Ramsey Town Center. Mayor Gamec called for public comment at 6:30 p.m. Owner of Lano Equipment stated that he is a business and commercial landowner in the City of Ramsey and was trying to get a handle on a few things. He stated that he understands how taxes work and realizes growth in the area is slowing down, but now they are seeing an increase of levies just to do business in the City. As growth is slowing the City receives less revenue because there are fewer building permits being issued and yet the City still has to find a way to pay for infrastructure so property owners are left to pick up the slack. Ms. Lund replied that it is not infrastructure that the levy would pay for, but the cost of maintaining existing services. The levy covers general operating expenditures; infrastructure is funded by other funds. The problem is the City anticipated higher revenue from building permits in 2006 and because those funds did not come in the City now needs to levy for those funds. The owner of Lano inquired how the additional debt service for the Municipal Center will impact the City's bond rating. Ms. Lund explained that the City maintained an Al bond rating when they structured the debt for the building because of the anticipated growth in the area. Obviously now that growth has slowed significantly. The owner ofLano inquired as to what they anticipate the City's bond rating to be because of the slow down. Ms. Lund replied that their bond rating would depend on what the City issues bonds for the next time around. The City did not issue any bonds in 2006; the bonds for the Municipal Center were issued in 2005. She noted that the Ramsey Crossing development is putting together a letter of credit for the total cost of the project. Councilmember Elvig stated that he anticipates the City maintaining the bond rating of Al because if that changes it affects the interest rates on all of the City's debt structure. That is an issue that the Council is very aware of and will work very hard to maintain. City Council Truth in Taxation/December 4, 2006 Page 2 of9