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Home My WebLink About1999-12-06 MINUTESSPEC/AL MEETING � COTTAGE GROVE CITY COUNCIL December 6, 1999 CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota, held a special meeting an Monday, December 6, 1999, at the Cottage Grove City Hafl, 7516 80` Street South. Mayor Denzer called the meeting to order at 7:30 p.m. ROLL CALL Present: Mayor John Denzer Council Member Pat Rice Council Member Sandy Shiely Council Member Jim Wolcott Absent: Council Member Cheryl Kohls Also Present: Ryan Schroeder, City Administrator Caron Stransky, City Clerk Elizabeth Johnson, Finance Director Mayor Denzer presided over the meeting. • Mayor Denzer opened the Truth-in-Taxation public hearing and invited those in the audience to address the Council. Finance Director Elizabeth Johnson gave a brief overview of the 2000 budget. She commented the tax rate has gone down and property taxes payab(e 2000 should be about the same as 1999 despite market value increases. The City had a significant increase in the tax capacity from 1999 to 2000. One major reason for the increase attributed to the fact that Tax Increment District #1-7 (Target) decertified in 1999. Johnson then highlighted the City's growth from 1990 to 1998, revenues and expenditures, the tax levy and tax capacity. There being no comments from those in the audience, Mayor Denzer closed the hearing. A copy of a handout prepared by the Finance Director is attached to and made a part of the original minutes. MOTION BY WOLCOTT, SECONDED BY SHIELY, TO ADJOURN THE MEETING AT 7:35 P.M. MOTION CARRIED. 4-0. Respectfully submitted, �� • Caron M. Stransky City Clerk CMC Attachment � � • AGENDA TRUTH IN TAXATION HEARING DECEMBER 6, 1999 7:30 P.M. CITY HALL C4UNCIL CHAMBERS 1. Call to Order 2. Roll Call 3. Public Hearing Staff presentation • 4. Questions 5. Adjourn . H w� o You R � ._ o . _ _ A� � �F��PEI��Y IS �ETEF�M I N ED -► City spending — Local Government Aid — Other Revenue Sources — Homestead and Agriculture Aid = N et Tax Levy — Fiscal Disparities Receipts = Spread Levy Spread Levy/ Tax Base = Tax Rate � Your Tax Capacity Value x City Tax Rate = Equals City Tax on Your Property e � e a What are Homestead Class � � Rates . ✓ Homestead Pro ert p Y — First $76,000 ...............1.00% — Value over $76,000......1.65% Exam le ✓ 125, 000 home has a tax ca acit of 1, 568.50 p Y 0 76, 000 X 1% + 49 000 X1.65% =$1 568.50 , , � e � What are Non-Homestead C I ass Rates? � ✓ Non-Homestead Home.......1.65% changed from 1.7% from prior year ✓ Apartments ..........................2.4% changed from 2.5% from prior year ✓ Commercial/Industriaf ..........3.4% � changed from 3.5% from prior year ✓ Many other classes such as cabins, farms, resorts, public utility Where our tax dollars � go _ _ _ __ ___ __ ______________ __ ____ Estimate of Total Taxes Paid 2000 � -- -- - -- -- - -- ---- - - - - - S C itY ---- _._�___ 472.50- ------- -------- --- --------�-- : --- ---- C o_u n ty__ __ 459.90 ----------__—:_-- .School , 913.50 � �Other � 146.00 � ---- --- -------- ^ -- - T o ta I .1,991.90 ; -- ----------; ---- �-------- 0 the 7% s�r 46% C Ity 24� o �� ■ county ❑ School ❑ Other inty 23% � � � How Property Taxes are Determined Property taxes are paid to different taxing jurisdictions. In Cottage Grove, property taxes are paid to the City, School District 833 and 916, Washington County and special districts (such as HRA, Met Council and Met Transit). Property taxes are an important source of revenue for the City. The tax that a property owner pays is based on that properties' market value. Each type of property has a class rate, depending on use. An example of a property class is `Residential Homestead', `Agricultural Homestead', and 'Commercial-Industrial'. The class rate is set by the State and is applied to a properties market value to determine it's tax capacity. The tax class rates have been consistently reduced, or compressed, which decreases tax capacity if market value remains the same. The following tables shows the changes in residential homestead tax class rates Residentia{ Homestead 1997 1998 1999 2000 First $76,000 market value 1.0% 1.0% 1.0% 1.0% Over $76,000 market value 2.0% 1.85% 1.7% 1.65% The tax capacity of a property is determined by multiplying the class rate by the tiers on the property's market value as divided above. The total tax capacity is multiplied by the taxing jurisdiction's tax rate to determine property taxes paid. The following table shows an example property and it's property taxes from 1998 to proposed 2000. The taxes are for the City only. • 1998 Market Value Tax Capacity 1999 Market Value Tax Capacity 2000 Market Value Tax Capacity $110,000 (76,000".01) 760.00 (34,000*.0185) 629.00 Total tax capacity 1,389.00 Tax Rate .26496 City Taxes 368.03 $113,300 (a 3% increase) (76,000*.01) 760.00 (37,300*.017) 634.10 Total tax capacity 1.394.10 Tax Rate .2966 City Taxes 413.50 $118,965 (a 5% increase) (76,000*.01) 760.00 (42,965*.0165) 708.93 Total tax capacity 1,468.93 Tax rate .27702 City Taxes 406.93 This example property would have had a total 2000 tax capacity of $1,554.86 if the 1998 tax • classes would not have changed. The city property taxes would have been $420.13. • Impact of Outside Forces on Funding and Spending Limits Funding Limits A large proportion of the General Fund operations is funded by property taxes. Property taxes are levied to the County Auditor in one year for collection in the subsequent year. Property tax levies are split into two types of levies. One is a general levy and the other is a special levy. The bulk of the general levy is used to fund General Fund operations. Special levies are mainly used to repay certain kinds of bonded debt. The State of Minnesota enacted Levy Limit laws that went into effect for the 1998 budget year. A levy limit is an absolute dollar limit. Cities cannot levy above this amount. The levy limit does not apply to special levies. The original law was supposed to have "sunset" after two years, but has been e�ended for the 2000 budget. The levy limit calculatian performed by the Minnesota Department of Revenue is a complex formufa that factors in household growth, Local Government Aid, Homestead and Agricultural Credit Aid and the market value of new commercial and industrial market value. Spending Mandates A spending mandate is a requirement by an outside organization, such as the State or the • Federal Govemment, that requires cities to perform certain tasks, thereby incurring costs, without reimbursing the cities for these tasks. This is known as an unfunded mandate. Unfunded mandates can include the requirement to hold public elections, POST licensure, training, records retention, vaccinations, equipment inspections, and various reporting and advertising requirements. � � � Breakdown of Taxes Paid Tax Levy 1998 1899 % Inc 2000 % Incr Generai 4,442,039 4,746,617 6.86% 4,975,333 4.82% Debt 375,761 528,083 40.54% 562,598 6.54% Total 4,817,800 5,274,700 9.48% 5,537,931 4.99% Tax rate 0.2649 0.29664 0.27702 -6.61 % Market value $110,000 Total city taxes tax capacity city taxes City tax breakdown 110,000.00 113,300.00 1,389.00 1,394.10 367.95 413.55 1998 1999 % Inc 45.67 47.76 4.58% 149.33 162.23 8.63% 96.27 104.53 8.58% 11.07 11.81 6.67% 13.86 15.04 8.52% 2.08 4.66 124.36% 14.73 15.78. 7.15% 7.84 25.62 226.70% 27.10 26.12 -3.62% 367.95 413.55 12.39% 118,965.00 5.00% General Admin Pub Safety Pub Works Com Dev Rec Econ Dev Debt-Other Debt-Pvmt Other Total 1:1996U D1[taxespaid.�ds]S hcetl 1,468.92 5.37% 406.92 -1.60% 2000 % Inc 48.17 0.85% 161.34 -0.55% 104.09 -0.42% 11.80 -0.04% 14.29 -4.95% 4.38 -6.08% 21.20 34.32% 20.14 -21.39% 21.51 -17.64% 406.92 -1.60% � • GOOD NEWS FOR T��PAYERS ! � � � • Snapshot of City Growth from 1990 to 1998 1. Population increase of 37% � 2. Full time staff increase of 16% 3. 23% more street miles 4. 9.6% increase in acres of parks 5. 253.6% increase in miles of sidewalks 6. 39.4% increase in miles of curb and g utter 7. 103 miles of sanitary sewer mains and laterals in 1998 compares to 83 in 1990 8. 2,101 more connections to the municipal water system 9. 75% increase in the taxable market value 10. 29.6% increase in tax capaci REVE N U E Continuation of levy limits City levied 95.85% of levy limit compared to 93.89% in 1998 Major State Revenue increased by 3.92% . Local Government Aid decreased by 1.04% :�ry EXPENDITURES The General Fund budget saw many staffing decreases from the 1998 to the 1999 budget. Some of the following are minor staffing increases: 1. Police Sergeant (promotion of existing staff � 2. Half time Mechanic � � 2000 PROPERTY TAX LEVY DESCRIPTION General Fund Economic Development Computer Expansion-Police Economic Development Auth Computer Expansion-M1S Grey Cloud Bridge CGTAP-Grove Plaza TOTAL LEVY LIMIT Ice Arena Capital Notes - 1991 Capital Notes - 1993 Capital Notes - 1994 Capital Notes - 1995 Corporate Purpose 1978 Refunding D Computer Expansion-Police Computer Expansion-MIS Grey Cloud Bridge Pavement Management-96 Pavement Management-98 Fire Stations Pavement Management-95 1990 Improvement Bonds TOTAL DEBT LEVY GROSS NET GROSS NET 1999 1999 2000 2000 LEVY LEVY LEVY LEVY 5,788,480 4,589,096 6,173,480 4,924,813 45,000 35,676 45,000 35,898 42,200 33,456 42,200 33,665 30,000 23,784 30,000 23,932 41,000 32,505 41,000 32,707 11,600 9,254 32,100 32,100 32,100 32,100 5,978,780 4,746,617 6,375,380 5,092,369 0 0 0 0 0 0 0 0 0 0 99,700 79,042 0 115,700 91,727 153,400 122,373 0 0 0 0 0 0 0 0 0 12,200 9,672 0 122,400 97,038 182,200 145,348 289,800 229,753 162,800 129,872 0 75,000 59,830 96,800 77,221 26,300 20,851 26,300 20,980 666,100 528,083 696,500 555,624 TOTAL PROPERTY TAX LEYY 6,644,880 5,274,700 7,071,880 5,647,993 r L_J � _. �x _-� or�e � . - n in �._. �� ? 1999 �� 2000 �� C h a n m e � g } E � ' [ , G e n e ra I F u n d�� .Y ._, � ._ 748, 200 Y ,� .� 9,180, 200 ., ., _ ,�5% ;� Ec o n o mic De v e lo p Le v y C 45, 000 45, 000 0% `��: �___�__,__ . ____.F....�_ .�._�.,.___r..m� __..w .�_�._ _. .. . ._...�.z,.__._ . . ._ �.�_._ .� - Ec o n o m De v e lo p A u th 30, 000 30, 000 0% �=; . ___u�� _� _-_- �� ..�._...��..� __ �.�.�r��.��,r. .�,�_�� =�_��z�=_ .�.�..,�.��__ -, a� De bt Lev y � 666,100 � 696, 500 5% ?:� :�._�._��-=.r_ ,.�_ ..,...��. �_��. ��._�__:�� -�-.- _z.-- .� _y��_�_, . .-__�__. .�_��a_��. _ _ �Y.�,�.� .�__�.�.._��m.�____.� __ _ . , .. _. y � 4 , � � k :� f n,�,.«H��,..-,..._.>,...��s,_...-..��-�,,,..�..�,..-��_,-�o-_.,,-,.-,�.��,.-<s�,�,�...,....-.�_,1-�,...�,: ,..,._.4..,.-:..m,��.,:..=�.:.._.�,>,-_. . ,.,._.�_� _ _ ,� .. a _ „_ - . . .# ,:s TOTA L � 9,489,300 9,951,700� 5% 3�_�� ...�..�-....,_y<-w.�.....-.-,.-�-«� ma��+-�-wu.revamwin.�w..�r..�.at�s..c�.�. . a:v.__.....-.an-.rrv�m.�x _�nw,.,_we.-sa_n-- .�.+-....�-. �,..... �_. ._.-.a�wm ac!c.=._-.n. 4 � ` } � _.w�mx �ti�ax�a.�m�-a.amz.� ! ��ar.•an .cw.�u'+aea�xurs�xxxvmavr— .s--.M" L _ � • State — Water content disclosure � approximately $15,000 -- Well head protection � approximately $35,000 — Police Department g approximately $160,000 — Fire training e approximately $26,600 -- Sales tax • approximately $115,000 City wide • Federal — Fire training � approximately $157,500 � � �enerai Fund Revenues Property Taxes Licenses/Permits HACA LGA Intergovernmental Charge for service Court fines { nterest Other Tota I 1999 4, 589,100 619,100 1,199,400 1, 085, 300 464,500 447,100 160, 000 140,000 43, 700 8,748,200 Z000 4, 924, 800 652,100 1,248,700 1,074,000 473, 500 448,300 170,000 150,000 38,800 9,180 �200 • General Fund Revenues 1999 2000 Property Taxes 4,589,100 4,924,800 State Aid 2,284,700 2,322,700 intergov't 464,500 473,500 Other 1,409,900 1,459,200 Total 8,748,200 9,180,200 1999 General Fund Revenues U Other 16% Intergov't 5% State Aid 26% Property - Taxes ��: 53% ; ��. .. - � - � 0 Property - Taxes � ' ■ State Aid : `,_ . D lntergov't D Other 2000 General Fund Revenues Other Pro ert 16% — � ! P Y � �,;, -;� Taxes ;_::;,�`_ .� . 54% Intergov't 5% �'Y?.�-.-4�._ ` ' ._ . _:-/ 0 Property Taxes ■ State Aid O Intergov't State Aid 25% i EXPENDITURE SUMMARY GENERAL FUND � DIV � NO DIVISION 01 02 03 04 04 05 06 07 08 09 10 11 13 15 21 23 26 31 32 34 35 + 36 41 51 52 61 MAYOR & COUNCIL ADMINISTRATION PROF SERVICES CITY CLERK ELECTIONS FINANCE PERSONNEL MIS COMMUNITY PROGRAMS CITY HALL/BUILDING COM DEVEL/PLANNING HISTORIC PRESERVATION PROTECTIVE INSPECTION EMERGENCY PREPARE POLICE PROTECTION ANIMAL CONTROL FIRE DEPARTMENT STREET MAINTENANCE STREET SIGNS SNOW REMOVAL PUBLIC WORKS ADMIN FORESTRY PARKS MAINTENANCE RECREATION PROGRAMS POOL/REC CENTER FUND BALANCE RESERVE CONTINGENCY TRANSFERS TOTAL GENERAL FUND Fund Balance Estimated Revenues Expenditures (Over)Under Revenue 1998 1999 2000 % Actual Adopted Request Change 52,094 149,845 255,059 154,959 249,678 104, 698 116, 748 46,370 229,829 236,901 10,335 236,106 188,989 2,985,123 46,248 671,604 773,158 111,912 181,044 264,943 82,588 486,218 241,706 58,734 419,629 79,600 172,100 265,000 136,200 3,700 310,900 79,000 161,800 40,100 250,700 252,700 7,200 205,000 33,100 3,023,100 51, 200 729,200 930,600 151, 200 232,300 246,800 118,600 530,900 280,100 77,100 79,000 301,000 76,600 161,800 303,000 128,700 30,600 323,200 96, 200 131,800 39,700 252,700 270,900 7,300 212,700 34,000 3,161,800 57, 900 775,500 913,000 157,800 211,500 324,100 118,400 607,000 240,100 77,800 83,000 74,000 309,100 -3.8 % -6.0 % 14.3% -5.5% 727.0% 4.0% 21.8% -18.5% -1 .0% 0.8 % 7.2% 1 .4% 3.8 % 2.7 % 4.6% 13.1 % 6.3 % -1.9% 4.4 °to - 9.0% 31.3% -0.2 % 14.3% -14.3% 0.9 % 5.1 % 2.7 % 8,354,518 8,748,200 9,180,200 4.9% 9,180, 200 � , Summary of Speciai Revenue Funds Reve n u es Equipment Replace 292,300 Special Recreation 100,000 Ice Arena 401,500 Forfeiture 10,000 Charitable Gambling 32,000 Recycl i ng 65, 000 Economic Development118,000 Econ Dev Authority 38,000 Community Watch 14,000 Surface Water 2,500 Expenditures 120,400 110, 000 444, 600 11,500 28, 500 75,100 108, 900 44,200 15, 700 15, 000 t� �� •Tax Ca acit I ncreased �s p Y � b 15.9% or $2,258,�91 4� Y tF� •Cit Pro ert Tax Rate is Y p Y Decreasin b 6.62% g Y •Generai Fund S endin p g Increasin b 4.9% g Y •General Lev is 96% of y the Allowable Levy •23% of Tax Capacity Increase was due to TIF District 1-7-or $514,707 s� � GOOD NEWS F�R TAXPAYERS ! � � ��