HomeMy WebLinkAbout9F - MVTA 2000 Tax Levy
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"'INNESO'\~
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
JUNE 7, 1999
9F
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF MVTA 2000 TAX LEVY REQUEST
The Minnesota Valley 1;ransit Authority is once again requesting
that the City of Prior Lake certify the maximum allowable transit
property tax levy for payable 2000 on behalf of the transit authority.
This agenda item requests that the council act upon this issue. The
City received the Department of Revenue in formation on May 21,
1999. Council must take action on this item, because the City needs
to notify the State by 6/30/99 of our intentions regarding the transit
levy.
Hivtory
On June 17, 1996 the City Council approved Resolution 96-66
which authorized the City of Prior Lake to levy the transit tax levy
in lieu of the Metropolitan Council. Statutory language was
amended to allow opt-out communities to select this option.
Previously the MVT A basically received up to 90% of the maximum
levy allowed from the Metropolitan Council. The problem became
that the Metropolitan Council treated this levy as a sort of
discretionary financial assistance whereby the MVT A had to
continually submit requests to receive these dollars. The financial
advantages were basically that if the opt-out cities would levy
directly, the MYTA would be assured of these dollars in their full
amount and would receive them on a regularly scheduled basis.
Current Circumstances
A requirement of Minnesota Statutes 473.388 subd. 7 is that the City
either notify the Commissioner of Revenue by June 30th if it intends
to levy the tax or defer the transit levy authority to the Metropolitan
Council. This year the transit services levy limitation has increased
to an amount of $424,949 which is nearly II % or $45,000 higher
than the $379,950 amount that the City has levied on behalf of the
MVTAin 1999.
Outlined below is a history of the transit levies which the City of
Prior Lake has levied on behalf of the MVT A transit authority over
the past three years:
Payable Year
1997
1998
Levy Amount
$301,171.00
$301,171.00
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
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AN EQUAL OPPORTUNITY EMPLOYER
ISSUES:
ALTERNATIVES:
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1999 $379,950.00
Of the 6 cities within the Minnesota Valley Transit Authority, only
Prior Lake and Savage levied the maximum allowed for 1999 while
Rosemount decided to let the Metropolitan Council levy and the
rernaining cities levied a lesser amount. Listed below is a table
indicating the levy level each of the MVTA cities were at for
payable 1999:
MVTA Member City
Levy Percentage of Maximum
Apple Valley
Burnsville
Eagan
Prior Lake
Rosemount
Savage
94%
98%
97%
100%
Levy deferred to Met Council
100%
In discussion with Rich Gardner of the State of Minnesota Revenue
Department, it was clarified that the citizens in any of the opt out
communities could be taxed the full amount of the maxirnum levy
allowed because the Metropolitan Council has the option to levy the
difference if a city chooses to levy less than the maximum allowable
transit levy.
The preference of the MVT A is for the City to levy the full amount
of the transit levy. The downside to continuing the MVTA levy in
the city's levy is that it will distort the tax comparisons between
Prior Lake and other cities who do not have the transit levy
incorporated in their local levy. By removing the transit levy from
the city's total levy it will lower the city portion of the property tax.
Also if the city levies the maximum MVTA levy it will reduce the
amount available to fund city programs under the city's general
overall levy limitation.
Because of these reasons it appears that the City should defer the
levy to the Metropolitan Council. It should not be automatically
assumed that the Metropolitan Council will levy the maximum as
indicated in the attached Transit Service Levy Limitation
calculation. However, if the City Council does intend to levy the
transit tax, Staff would recommend that we continue funding the
Minnesota Valley Transit Authority at the current level of $379,950
which would be 89% of the maximurn and not increase the levy
amount for property taxes payable in 2000.
The following alternatives are available to the City Council:
1. Defer the transit levy authority to the Metropolitan Council by
not exercising the transit services local levy option for the taxes
payable year 2000.
RECOMMENDED
MOTION:
REVIEWED BY:
Attachments:
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2. Approve the property tax levy request by the Minnesota Valley
Transit Authority in the maximum amount of $424,949.00 to be
included in the City of Prior Lake's local levy for the taxes payable
year 2000.
3. Approve a transit property tax levy In the same amount of
$379,950.00 as in 1999.
4. Approve a transit property tax levy somewhere between this
year's levy of $379,950 and the maximum allowable levy of
$424,949.
From Staffs perspective Alternative #1 should be the course of
action. We see no reason to insulate the Metropolitan Council from
its accountability for its total levy. The only disadvantage of this
option is that the MVT A will have to request its appropriation
funding through the Metropolitan Council as opposed to
automatically receiving its 0 installments from the City.
1. Payable 1999 Levy Limit * $ 379,950
2. Payable 1998 Total Taxable Market Value ** $ 679,006,100
3. Payable 1999 Total Taxable Market Value ** $ 759,424,400
4. Payable 1999/Payable 1998 City Market Value Ratio (3/2) 1.118435
5. Payable 2000 Levy Limit (1 x 4) * $ 424,949
* Before HACA reduction.
* * Includes tax increment values, fiscal disparity values, and powerline credit values.
However, the amounts shown are after (1) limited rnarket value adjustments and (2)
rnarket value exclusions for improvements made to qualifying homestead property
("This Old House" exclusions).
Prepared by: Minnesota Department of Revenue
Property Tax Division
May 19, 1999