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CONSENT AGENDA #: 4 (C)
PREPARED BY: RALPH TESCHNER FINANCE DIRECTOR
SUBJECT: CONSIDER ORDINANCE 96-06 REPEALING PRIOR LAKE CITY
CODE TITLE 1, CHAPTER 10 URBAN AND RURAL SERVICE TAX
DISTRICTS FOR MUNICIPAL PROPERTY TAXES
DATE: MARCH 4, 1996
INTRODUCTION:
BACKGROUND:
DISCUSSION:
This agenda item requests the City Council to repeal Title 1, Chapter 10 of
the Prior Lake City Code which divides the city into Urban and Rural
Service Tax Districts for purposes of municipal property taxes.
The City Council approved Resolution 96-18 on February 20, 1996 which
reclassified certain tax parcels from the Rural Service Tax District to the
Urban Service Tax District for payable 1996 property taxes. At the
conclusion of the discussion relating to this item, the City Council directed
Staff to draft an ordinance which would repeal Title 1, Chapter 10 of the
Prior Lake City Code. Also, Staff was to provide specific information with
respect to number and size of the parcels within the existing Rural Service
Tax Districts.
It appears that the present ordinance provision of giving rural classified
parcels a 30% tax reduction for the City share only of property taxes is
outdated and unnecessarily repetitive. This property tax relief was granted
some 25 years ago and since then the agricultural class rate for property
taxes was established by the State of Minnesota which basically allows for
a 50% reduction in land tax capacity valuation. The difference in property
tax rates between residential and agricultural land are indicated below:
Residential Class Rate
Agricultural Class Rate
1 st $72,000 (M. V.)
Over $72,000 (M.V.)
(M.V. - Land Market Value)
1.000/0
2.00%
1st $115,000 (M.V.) 0.45%
Over $115,000 (M.V.) 1.00%
There are 67 parcels remaining within the Rural Service Tax District.
Average size of these parcels is slightly more than 34 acres per PIN
(property identification number) description. Eliminating such district
distinction would seem to provide uniformity and a more equitable
property tax distribution since the open land values are already taxed at a
reduced property tax rate under the agricultural class rate.
If it is the concensus of the City Council to repeal this section of the City
Code, it would become effective beginning in 1997 and would not affect
the property tax status of those rural service tax district properties for
1996.
16200 Eagle Creek Ave. S.E.. Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQl'AL OPPORTUNITY EMPLOYER
ALTERNATIVES:
There are the following two options available to the Council.
1. Approve Ordinance 96-06 Repealing Prior Lake City Code
Title 1, Chapter 10 Urban and Rural Service Tax Districts for
Municipal Property Taxes.
2. Continue the ordinance in its current state.
RECOMMENDATION: Staff would recommend Ordinance 96-06 be approved thereby repealing
the existing urban/rural tax districts. Prior Lake and Shakopee are the
only two cities within Scott County that have established rural and urban
tax service districts and Shakopee is presently considering a similar repeal.
In addition the Scott County Auditors' Office is not aware of this
application within other counties in the seven county area.
ACTION REQUIRED:
REVIEWED BY:
A96114. WRT
CITY of PRIOR LAKE
ORDINANCE NO. 96-06
AN ORDINANCE REPEALING PRIOR LAKE CITY CODE TITLE 1, CHAPTER 10
The City Council of the City of Prior Lake does hereby ordain:
1.
The entire Chapter 10 under Title 1 of the Prior Lake City Code referencing Urban and Rural
Service Districts for Municipal Property Taxes is hereby repealed.
This ordinance shall become effective from and after its passage and publication.
Passed by the City Council of the City of Prior Lake this _ day of
1996.
ATTEST:
City Manager
Mayor
Published in the Prior Lake American on the _day of
, 1996
. A96()4. WRT
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