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

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Trudy Matilla, 7451 149th Avenue NW, Ramsey, inquired if the City is renting out the buildings they acquired at current market rates and if the tenants of these buildings are required to pay the property taxes. Mayor Gamec explained that the buildings that were acquired by the City were done so using RALF funds, which are funds designated by State. The City has the ability to lease out those properties and those leases would include an amount to cover the property taxes. Any lease revenue that is collected from those buildings is returned to the RALF fund with the exception of the administration costs. Ms. Matilla noted that the City did not collect taxes for 2006 on the NAU building. Finance Officer Lund noted that was something that should have been taken care of at closing, but was missed. Typically the property taxes are paid through the rent the City collects. Ms. Matilla inquired if the NAU building was paying property taxes. Finance Officer Lund replied that cost would be incorporated in their rent. Ms. Matilla inquired if Sharp was paying property taxes. Finance Officer Lund replied yes Ms. Matilla stated that she hoped the City would collect property taxes rather than waive that cost on the Anchors Away building. Bill Wright, 182nd Avenue NW, Ramsey, stated that he retired a few years ago and therefore his income doesn't change. He purchased his property six years ago feeling that they could afford it and handle the taxes off his retirement income, but over the last five years every time he receives his property tax statement he gets sticker shock. He is now at a point where he doesn't know how he can afford to live. When he first purchased his home, his property taxes were $2,258; now they are proposed to be $4,682. That is a 107% increase in five years. There has been a 49% increase in the City's portion of taxes in comparison to a 26% increase by the County. He stated that there are many retired folks in the community that don't know how they are going to do it. The Realtor Association just announced a 3.5 % reduction in home value so what is going to happen to the City budget with a drop in property values since house valuation is directly related to the levy. Mr. Wright stated that he was very concerned about next year, and if this keeps up, he won't be in the City in five years. Mayor Gamec replied that they have heard from the Board of Realtors that housing in this particular area should remain stable and possibly see a slight increase in value. Obviously the marketability is down which his going to keep the housing valuation down for next year. They should know better in June or July. Mr. Wright replied that house valuations will probably go down just based on what he is seeing in his own neighborhood. That being said even if house valuations remain constant what is the City Council Truth in Taxation/December 4, 2006 Page 3 of9