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Home My WebLink About2003-12-09 MINUTESSPECIAL MEETING COTTAGE GROVE CITY COUNCIL DECEMBER 9, 2003 CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota held a special meeting on Tuesday, December 9, 2003, at the Cottage Grove City Hall, 7516 80 Street South. Mayor Shiely called the meeting to order at 7:00 p.m. ROLL CALL Present: Mayor Sandy Shiely Council Member Mark Grossklaus Council Member Pat Rice Also Present: Ryan Schroeder, City Administrator Ron Hedberg, Finance Director Not Present: Council Member Cheryl Kohls Council Member Jim Wolcott Mayor Shiely presided over the meeting. TRUTH IN TAXATION PUBLIC HEARING Finance and Administrative Services Director Hedberg made a presentation regarding 2004 budget proposals. No public comments were made. ADJOURNMENT MOTION BY RICE, SECONDED BY GROSSKLAUS, TO ADJOURN THE MEETING AT 7:36 PM. MOTION CARRIED. 3 -0. Respectfully submitted Ryan R. Schroeder City Administrator City of Cottage Grove 2004 Truth in Taxation Hearing A V 0 Property Valuation 2 Year Process • January 15 property valued by assessor • May - Property Value notices sent to owners • June - Board of Equalization meets to hear valuation objections • Nov - Value used for preparing parcel specific notices for taxes of next yr How Your Local Property Tax Dollars are Determined ITUr vra oam vows x umaa Stale Class sates . amea nropery mx nm (Tax CaWity Hahn =equate Budget process • June /July - dept. budget requests • July - Admin reviews budget requests • August - Council reviews Admin Rec. Budget • Sept 15 - prelim. levy adopted • Nov - Parcel specific notices sent • Dec -Truth in Taxation Hearing held • Dec - Final Levy adopted How the Tax Rate is Determined Told RCrofai ary Assessors Martel s am. a X arses All SMIe MaMatM �. a cbas sates . Sb1e AW flauenum •1. 1 ronp�mpe�Mx & lase A¢ nu b Om L -squab Heal o - mmm b Taal rt� cagaeay Equeb NH SpreM tliv�by: =4 Qamway a¢aessal L v�owry• nn.r Residential Limited Market Value - phase out • For increase in the taxable market value residential property has been limited • 2002 it was 8.5% or 15% of difference •2003 is 10% or 15% of diff •20041si2% or 20% of Jiff • 2005 is 15% or 25% of diff •2006 is 15% or 33% of diff • 2007 is 15% or 50% of diff • 2008 LMV is phased out Commercial Property Values • Commercial property values increased dramatically for pay 2003 (LAST YEAR) - changes in commercial were minimal - offset by reductions to industrial for'04 • This increase for pay 2003 in commercial values had reduced our fiscal disparity collection for pay 2004, What are the Non Homestead Class Rates Asmt (>$150k) New for 2002 Many other classes exist such as courts terms, notion, public utility City Tax Rate Comparison TAX RATE 2002 2003 2004 47.550 42.077 43.712 Homestead Class Rate Comparison 2003 2003 2004 Non - Homestead Home 1.0% 1.0% 1.0% Apartments 1.8% 1.5% 1.25% Commercial / Industrial 2.0% 2.0 2.0 (>$150k) First$ 150,000 times l% 1,500 1,500 Comm. / Industrial State 2.0 2.0 2.0 Asmt (>$150k) New for 2002 Many other classes exist such as courts terms, notion, public utility City Tax Rate Comparison TAX RATE 2002 2003 2004 47.550 42.077 43.712 Homestead Class Rate Comparison TAX CAPACITY 2002 2003 2004 $15,001,320 $19,248,157 $ 21,431,800 The increase for'03 to '04 is due to existing residential property appreciation (26% of increase is new construction) TAXABLE MARKET VALUE 2002 2003 2004 $1,464,647,000 $1,717,460,500 $1,946,706,200 The IK,e... for '03 m w. doe to a. ar ,— intnmi p,o epprec.aoo 125% of b . My of oe« noortionl 2002 & 03 2004 First $ 500,000 1.0% 1.0% Over $500,000 1.25% 1.25 Ex ample Jurlsdletion Amount Total Amount $150,000 home's tax capacity for: City $ 565 293% $ 667 2002 &'03 2004 First$ 150,000 times l% 1,500 1,500 $ above 500k - - Total 1,500 1,500 TAX CAPACITY 2002 2003 2004 $15,001,320 $19,248,157 $ 21,431,800 The increase for'03 to '04 is due to existing residential property appreciation (26% of increase is new construction) TAXABLE MARKET VALUE 2002 2003 2004 $1,464,647,000 $1,717,460,500 $1,946,706,200 The IK,e... for '03 m w. doe to a. ar ,— intnmi p,o epprec.aoo 125% of b . My of oe« noortionl Whore your tax dollars go - (Home valued at 171,900 wt 12% increase In TMV) Taxing 2003 % of 2004 % of Jurlsdletion Amount Total Amount total City $ 565 293% $ 667 3305 County 449 233% 480 23.71 School 782 40.65 743 36.8` Other 131 6.8% 132 65` Total S 1,926 100.0% $ 2.022 101 Ce Breakdown of Taxes Paid Dbtrilaudon of Co City Texas an— oEamnk ePm.a wo aPWC ,<% wawa ,� o o Pwk s% oeYry a�x History of Sample Property 2,500 Tax Dollars Paid Past 8yeears -.._ _ 2.000 (Average Increase of 2.58 %) 1.500 1,000 500 0 n on m o 0 0 0 ° o on on Ce ° 0 0 0 0 0 —Qty Tax —Total Taxes IV Sample Property - City portion of Tax Bill Tax Dollars Paid - Differing Values Total taxes peb (all judsdbeons) -- aesklenealTaxable Market Value% Increase (assume 12% increase In market Value) - -- 14M - - ',.(net of Ibmeabad credit) 1 0 16% es% 65% 30 % Change -Tara ;' 3 03m ;es% par zoo3 Pay 2004 to V4 ' 03 m ro4 oe 'of� nry Taxable M 4 Taxable MV _ 6or, 1996 t999 2000 2001 = 200] 20004 � %MCreaee in ia�alle MV 133,900 0 5 1.631 1 150 1, $ 1 16 4% 1.1 % 156300. 1.961 175,000 2,056 056 69 455% 1.2 %f 116,600 2.300 200.000 2,403 : 103 45% 1.2 %. 223,200 �. 2.968 250.000 3,096 [ 128 43% ' 12%'.. 10% Breakdown of Taxes Paid Dbtrilaudon of Co City Texas an— oEamnk ePm.a wo aPWC ,<% wawa ,� o o Pwk s% oeYry a�x History of Sample Property 2,500 Tax Dollars Paid Past 8yeears -.._ _ 2.000 (Average Increase of 2.58 %) 1.500 1,000 500 0 n on m o 0 0 0 ° o on on Ce ° 0 0 0 0 0 —Qty Tax —Total Taxes IV Sample Property - City portion of Tax Bill f City% Portion of Total Bill aesklenealTaxable Market Value% Increase 35% - -- 14M - - 1 0 16% es% 65% 30 % e % 25% 0% 60% 20% 2m 3Y Ch 0 = t 6or, 1996 t999 2000 2001 = 200] 20004 � %MCreaee in ia�alle MV 20% — Breakdown of Taxes Paid Dbtrilaudon of Co City Texas an— oEamnk ePm.a wo aPWC ,<% wawa ,� o o Pwk s% oeYry a�x History of Sample Property 2,500 Tax Dollars Paid Past 8yeears -.._ _ 2.000 (Average Increase of 2.58 %) 1.500 1,000 500 0 n on m o 0 0 0 ° o on on Ce ° 0 0 0 0 0 —Qty Tax —Total Taxes IV Major Themes a "Continued shifting to local level" • Elimination of Local Government Aid (LGA) for '04 — ($965,000 for '04) • Minimal changes to state -wide property tax system • Levy limits continue • Settling out of the Commercial / Industrial increase of 2003 Sample Property - City portion of Tax Bill f City% Portion of Total Bill 35% - -- 30 % 25% -- - 20% — 15% 10% 5% 0% 1997 1998 1999 2000 2001 2002 2003 2004 Major Themes a "Continued shifting to local level" • Elimination of Local Government Aid (LGA) for '04 — ($965,000 for '04) • Minimal changes to state -wide property tax system • Levy limits continue • Settling out of the Commercial / Industrial increase of 2003 Major Themes (cont'd) • A MV Homestead Credit was created in '02 to be applied directly on property tax bills. • Beginning with 2002, the State of Minnesota has a property tax levy for Commercial / Industrial property and Cabins. • Tax rate of 54% (vs 43.7% for City) 2004 Preliminary Levy (in 1000's) 2003 2003 Final 2004 Prelim Charge General Fund $ 7,440 $8,182 '.General Fund - 10,741'. Equipment Fund 50 -0- 3/ .Ice Arena (direct EDA Fund 125 90 Grey Cloud Bridge 10 9 236 24 CGTAP -Grove Plaza 32 32 Econom Develop Debt Reduction -0- 135 'Auth Levy Ice Arena 236 24 90 -39 Subtotal "general levy" $ 7,893 $ 8,472 1,145' 1306 Levy Limits for 2004 • General Levy increase limited to 60% of the State Aid lost for 2004 — $965,000 x 60% = $ 579,000 —Plus increase in Debt Service $161,000 • No increase allowed for growth or inflation m 2004 Preliminary Levy (in 1000's) 2003 Debt Service 2003 Final 2004 Prelim Charge Pavement Mgmt 886 $ 1,041 '.General Fund - 10,741'. EDA Public Project 259 265 3/ .Ice Arena (direct Subtotal Debt $ 1,145 $ 1,306 Service 236 24 Total Levy $ 9,038 $ 9,778 Econom Develop Tax Supported City Spending TOTAL 12,247 12,474 2% 2003 2004 Charge '.General Fund - 10,741'. 11,054 3/ .Ice Arena (direct tax levy amt only) 236 24 - 883 %' Econom Develop 'Auth Levy 125'.. 90 -39 !Debt Levy 1,145' 1306 12%. TOTAL 12,247 12,474 2% Significant Budget items • The current Budget / Levy includes amounts for: • Continued Levy Support of the Ica Arena 24,000 • Continued Support of Econ Devel. 90,000 • Total pavement mgmt Debt levy 1,041,000 • Increase in Pavement Mgmt D/S 160,900 • Purchase of Capital Equipment 1,137,060 • Addition of one new Police Officer 59,520 • Upgrade Building Inspector to full-time • Playground Eq. replacement 100,000 • Support for Senior Center- reallocated 2,000 Equipment Funded in Equip Fund • Funding in the Equipment Revolving Fund includes: General Fund Revenues • Large loader (streets) 2003 2004 Progeny Tares 7,340,500 8,181,000 MenseWPermits 782,900 &30,050 Franchise Fee 0 230,000 LGA 965,440 0 ntsrgevernmernfi 5a1,850 587.500 Charge for service 705.300 968.150 Coun fines 180,000 175,000 Interest 175,000 75,000 OIM1er 30200 �� Tolel 1010 ]0119Q 11 727 1,980 1,955 Significant Budget items • The current Budget / Levy includes amounts for: • Continued Levy Support of the Ica Arena 24,000 • Continued Support of Econ Devel. 90,000 • Total pavement mgmt Debt levy 1,041,000 • Increase in Pavement Mgmt D/S 160,900 • Purchase of Capital Equipment 1,137,060 • Addition of one new Police Officer 59,520 • Upgrade Building Inspector to full-time • Playground Eq. replacement 100,000 • Support for Senior Center- reallocated 2,000 Equipment Funded in Equip Fund • Funding in the Equipment Revolving Fund includes: 583,000 • Large loader (streets) 115,000 • Utility tractor (streets) 80,000 • Singe axle dump truck (streets) 55,000 • 3 /4 ton pickup (fire) 38,000 • 4X4 grass rig (fire) 36,000 • SUV (fire) 34,000 • 11 foot mower (parks) 40,000 i summery o1 Specl•I Revenue Funtls Revenues Expenditures Equipment 598,000 583,000 General Fund Budget Exp Summary • Small loader (streets) 2003 2004 Admin /Finance 1,053 1,057 Prof. Services 295 293 City HaIV Community Frog 326 401 Community Development 631 626 Police 3,847 3,939 Fire 678 776 Puuic Works 1,980 1,955 Park Maint, Park 8 me 1,241 1,183 Transfers, Other 690 843 10 741 11 07 2. summery o1 Specl•I Revenue Funtls Revenues Expenditures Equipment 598,000 583,000 Replacement • Small loader (streets) 16,000 Ice Arena 373,700 353,350 Forfeiture 35,000 28,500 Charitable Gambling 30,000 54,000 Celebration Fund 9,000 9,000 Recycling 41,000 64,000 Econ. Devel. Authority 154,700 154290 Future Economic 30,000 430,000 Development Community Watch 6,050 6,050 I Equipment funded in Equip Fund tevrdt • Pickup (inspections) 17,000 • Admin. Car (police) 30,000 • Small loader (streets) 16,000 • Trailer (streets) 7,500 • 1 /2 ton pickup (PW Admin) 24,000 • 1 ton dump truck (parks) 26,000 • Small loader (parks) 18,000 • Cushman truckster utility vehicle (parks) 17,000 • Trailer (parks) 7,500 • Van (recreation) 22.000 Action This Evening • Conduct the Truth in Taxation Hearing • Consider adopting Final Levy & Budget at December 17, 2003 Meeting Ongoing Challenges • Projected State Deficit— Local Impact • Recent State Deficit - $185 million • Next projection in February UTILITY RATES woo x002 =3 6 WMinimvn CMp SISU] $p.50 $0.50 Vu q b IbW3 115 1x5 U. 10pPob03,OW 1.10 1.15 125 um... 100.0[4 10.5 150 1. W uw >ICO.WO les Ilo IBO ER LMga E21.W 59.00 U. W 1. . 1. U. lo.1 2.xO 2 W xy lo' U. lo,000m lWOW z M zo zxo z.3o u¢a >IW.WO 2.10 zG0 ]50 STREET U.X . R.ueembl..P 0xn s1eW $11. $11W RsµynlblGMOVmtl IOW low tI CO CMy Oxie0 VI11y Clp. 250 250 250 Action This Evening • Conduct the Truth in Taxation Hearing • Consider adopting Final Levy & Budget at December 17, 2003 Meeting Ongoing Challenges • Projected State Deficit— Local Impact • Recent State Deficit - $185 million • Next projection in February