HomeMy WebLinkAbout7A - Truth In Taxation Hearing
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
ALTERNATIVES:
RECOMMENDED
MOTION:
CITY COUNCIL AGENDA REPORT
DECEMBER 5, 2005
7A
Ralph Teschner, Finance Director
TRUTH IN TAXATION PUBLIC HEARING FOR PROPOSED 2006 CITY
BUDGETS (PUBLIC HEARING)
Introduction
The purpose for the public hearing tonight is to provide information to the
public regarding the city's proposed 2006 Operating Budgets and the amount
of property taxes that the City proposes to collect in 2006. Also, it is important
to give the residents the opportunity to express their opinions on the budget
and those services that are important to the taxpayers. A Powerpoint
presentation will be provided, the Council will have an opportunity to ask
questions and then the Truth-in-Taxation hearing should be opened.
Any written comments submitted previous to the hearing are to be entered into
the official record. Staff will provide a short presentation with respect to the
proposed 2006 general fund budget and enterprise fund budgets that were
previously adopted by the City Council in September. Under Truth-in-Taxation
guidelines the City Council adopted the preliminary budgets and tax levies on
September 6, 2005.
The City Council CANNOT TAKE ANY ACTION with respect to adopting the
2006 budgets this evening. If all public concerns cannot be addressed tonight,
the Truth-in-Taxation hearing could be continued until 7:00 P.M. Monday,
December 12, 2005 at the Fire Station. This meeting would be a special
council meeting to conclude the public comment period.
The final budgets and property tax levy would then be considered for approval
by the City Council at its last regularly scheduled meeting of the year on
Monday, December 19, 2005. By Minnesota Statute the final property tax levy
amount must be certified to the Scott County Auditor's Office no later than 5
working days after December 20th (December 28,2005).
The following alternatives are available to the City Council:
1. If all questions have been answered, close the public hearing and direct
the Staff to place this item on the December 19, 2005 City Council
agenda for final action.
2. Continue the public hearing until December 12, 2005 at 7:00 P.M. if
there are questions that cannot be answered on December 5th.
Motion to either close the public hearing or continue the hearing to 7:00 P.M.,
Monday December 12, 2005. If the hearing is adjourned then the date, time
and place for the levy adoption meeting (Monday 7:00 p.m. December tfjh)
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245
must be announced.
Reviewed by:
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You may be eligible for a property tax refund
Minnesota has two property tax refunds: the regular refund, and
the special property tax refund. You may be eligible for one or both, depending
on your income and the size of your property tax bill.
The regular property tax refund is for people who own and reside in their home on
January 2, 2006.* You are eligible if your household income is under these limits:
For households with no dependents, the limit is $ 87,780. The income limit increases
with family size, up to $106,980 for households with five or more dependents.
Senior or disabled homeowners: up to $110,180 for households with five or more
dependents.
How much can you get? The size of your refund will depend on your household income, the
number of dependents, and how much property tax you paid. The maximum anyone can
receive is $1,640.
The special property tax refund is for people who own and reside in their home on both
January 2,2005 and January 2,2006. There is no limit on household income in this program.
Your 2006 property taxes must have increased by more than 12 percent and be at least $100
over your 2005 taxes. The increase must not be attributable to new improvements.
How much can you get? The maximum refund anyone can receive is $1,000. The refund is 60
percent of your property tax increase in excess of the greater of 12 percent or $100.
How to apply
To apply for either or both of these refunds, use Minnesota property tax refund form MIPR.
Forms and instructions will be available after January 1. You will find them (after January 1) on
the Minnesota Revenue website: www.taxes.state.mn.us. Or, call the department's 24-hour
forms order service: 651-296-4444.
Filing deadline Is August 15, 2006. Returns can be filed up to a year after the due date.
When to expect your refund: You'll receive your refund by the end of September if you file
by August 1, or 60 days after you file, whichever is later. If you file electronically, your refund
will be issued at the end of August.
For more information, see the 2005 Minnesota Property Tax Refund instruction booklet,
available on the Minnesota Revenue website: www.taxes.state.mn.us. Or, call the department's
24-hour forms order service: 651-296-4444.
>I- If the home is not "homesteaded," your homestead application must be made before December 15, 2006.
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TRUTH IN TAXATION
PUBLIC INFORMATION HEARING
DECEMBER 5, 2005
Truth in Taxation
Public Information Hearing
DECEMBER 5, 2005
ASA TAXPA~ AT~TTXME
OF THE YEAR DO I DO '-VHAT?
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BUDGET PROCESS TO DATE
. City Council and staff have conducted
two work sessions on the proposed
budget for 2006.
. City Council adopted a preliminary
budget and levy in September.
. Truth-in-Taxation notices were mailed to
all city property owners last month.
1
BUDGET PROCESS TO DATE
Truth-in- Taxation HearinQ Purpose
. Discuss budget - in percentages & dollars
. Discuss tax levy - In percentages & dollars
. Explain the increases
BUDGET PROCESS TO DATE
. TONIGHT: Truth-in-Taxation hearing
. MONDAY, DEC. 12: Continuation of
Truth-in-Taxation hearing (if necessary)
. MONDAY, DEC. 19: Budget and levy
must be adopted by City Council
A REMINDER
......T...DloWIoI
....
-:'c:-'
Tonight we discuss the city's share of your total 2006 tax bill.
For 2006, It's 28 cents of each tax dollar - down from 32 In 2005.
2
OUR OBJECTIVE
What our 2030 Vision
says about fiscal
management.. .
'Prior Lake maintains a sound financial
position while providing high-value
and top-quality services to residents.'
WE INVEST IN OUR COM MUNITYI
THE BIG PICTURE
A look back at trends set by the City Council
PROPERTY TAX TREND"
-T.. a."............ YMIed.. ~.3OD
Despite 20 percent Inflation, city taxes have been stable.
THE BIGGER PICTURE
Comparison to other growing communi es...
. Prior Lake's property tax levy has
risen considerably less than those of
other developing communities under
the current City Council.
Prior Lake
Shakopee
Savage
2002 LEVY
$5.520 million
$6.625 million
$6.915 million
2006 LEVY
$8.086 million
$11.060 million
$12.036 million
3
THE BIGGER PICTURE
Comparison to other growing communi es...
Property Tax Dollar Trend Comparison
(2002-05)
Savage
Shakopee
Prior Lake
2002
$883
$504
$707
2005
$1,028
$703
$768
% CHANGE {ANNUAL}
50% 17%
39"1. 13%
8"1. 3%
THE BIGGER PICTURE
Comparison to all other cities in county...
. Prior lake's 2005 tax capacity rate
ranked SECOND lOWEST of the eight
cities in countyl
1. Elko 59.133
2. New Prague 57.299
3. Jordan 55.530
4. Belle Plalne 50.142
5. Savage 46.385
6. New Market 33.343
7. PRIOR LAKE 32.469
8. Shakope. 31.125
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THE BIGGEST PICTURE
In the Citizen's league of Minnesota's
ranklngs of metro city tax rates, Prior
lake has FAllEN for past 3 years.
In 2003, Prior Lake ranked... 25th
In 2004, Prior lake ranked... 37th
In 2005, Prior Lake ranked... 45th
AND THE TREND SHOULD CONTINUE IN 2006
4
THE BIGGEST PICTURE
How does Prior Lake's proposed tax
increase compare to other metro
cities?
StarTribune.com
Mi n ,""li : . to, !/;~11! t.J1!'\;e'" t~"\
FACT: Only 25 of 82 metro cities
surveyed for Dec. 4, 2005 report are
proposing SMALLER tax increases
than the City of Prior Lake.
Proposed General Fund
Budget & Tax Levy
Truth-in-Taxation Hearing
DECEMBER 5, 2005
CONTRIBUTING FACTORS
IN200.BUDGET~AXLEVY
EXTERNAL (beyond our control)
. Increasing energy costs
. State mandates (pension)
. Insurance costs
INTERNAL (within our control)
. New and existing multi-year labor agreements
already in place
. 2030 Vision & Strategic Plan
. SCALE/SMSC cooperative ventures
5
TAX REDUcnON EFFORTS
Taken from the new 2030 Vision:
City Financial Resources Vision Elements:
. Identify appropriate balance between
residential and commercial tax base
(comprehensive plan)
. Identify additional revenue sources
(franchise fees)
. Enhance development fee system
(comprehensive plan)
. Establish more partnerships (SCALE/SMSC)
NEW SPENDIN. PROPOSED
IN 2008 CI.F. BUDGET
Debt service for new facilitles.............$539,000
Hiring street maintenance employee....$60,000
Increasing energy costs.........................$80,000
Pension reform............... ...... ......... .........$32.000
TOTAL.................................... $711,000
These four Items account for 81 percent
of the $874,701 bUdget increase.
2008 BY THE NUMBERS
6
BUDGET BOnOM LINE
Percentage-wise, the 2006 budget increase
would be 8.7 percent.
But excluding debt service on police station
and city hall, the increase in the General
Fund budget would be 3 percent.
2008 BUDGET BY AcnVITY
--
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1.1.01" ",421
.14.21" . $2.000
7.41" $24,114
",074 S....337 ....." S4,213
U.S20 S15..58 UI.15" $10.036
$1.20,141 $125,6H 4.11% $5,017
............ $UI,311 $112,'51 1....... $23,210
-- S14.750 S17.1O. 15.13'" ""50
-. *,2,10. "2,100 l1.2S" ""00
I.- S.....OOO S211,'" 7.20" SiI.OOD
- Sl7.'" SI1,471 41."" SS1,471
-- S11I,i4e S12I,131 ...." S....5
-.- $117,13' 1331,251 4.12" *15.320
7
BUDGET CHANGES FOR 2008
'015 _ '06 Pro "
BUDGET CHANGES FOR 2008
'015 Bud
TAXPAYER IMPACT
AssuminG 10% market value increase...
Owner of a $275,000 home in Prior
Lake would see a 5.62% increase in
the city's share of total tax bill.
In dollars, that's $49.14 for year!
8
TAXPAYER IMPACT
OTHER HOME VALUES & IMPACTS
$220,000 Property 6.10% or $41
$330,000 Property 5.32% or $57
$385,000 Property 5.11 % or $65
$440,000 Property 4.49% or $66
Payable 2006 Median Value Home: $234,800
Payable 2006 Average Value Home: $278,300
Proposed Enterprise
Fund Budgets
Truth-in-Taxation Hearing
DECEMBER 5, 2005
ENTERPRISE FUND BUDGET
What are they?
Enterprise funds...
. Provide a product or service
. Supported primarily by user fees
. Are run like a business
There are four enterprise funds in Prior Lake...
. Water Utility
. Sewer Utility
· Water Quality Utility
. Transit Services
9
ENTERPRISE FUND BUDGET
HIGHLIGHTS FOR 2008
Water Utility
. Rates have been crafted to allow construction
of water treatment plant to begin in 2006 - with
24-36 months needed to complete.
. Rates will also pennit replacement of aged
water pipes as part of street reconstructions.
Sewer Utility
. Despite plans to rebuild additional lift stations,
reduction is proposed for 2006 because no
reconstruction projects are planned for 2006.
ENTERPRISE FUND BUDGET
CHANGES FOR 2006
Water Quality Utility
. Water quality structures are required for County
Road 82 reconstruction. Also, city participating
in outlet box and channel improvement project.
Transit Services
. Intergovernmental transfer from Met Council,
funds are eannarked for Park & Ride, new
buses and additional services.
10
CONCLUSION
DECEMBER 5, 2005
Truth-in-Taxation Hearing
THINGS TO CONSIDER
Standlna Dat or movlna forward?
The proposed budget and tax levy
for 2006 will enable the city to take
yet another step toward its 2030
Vision.
Developing communities require investment...
and Prior Lake Is no exceptlonl
THINGS TO CONSIDER
What is the citv's fiscal health?
Ask Moody's Investor Service,
which in '05 upgraded the city's
bond rating to Aa3 - good for the
97th percentile. Only 24 of 856 cities
in the state have better ratings.
How do today's taxes comDare with those of
8 years aao? As the following graph shows, the
owner of a $247,000 house is paying ABOUT
THE SAME as he or she did eight years ago.
11
PROPERTY TAX TREND"
or.x ChI.. for Home VIIuId II 1247,300
l-
a-
i-
L $710
B
..S700
I S74D
S72lI
NEXT STEPS
. TONIGHT:
. Questions from council members
. Open public hearing and receive input
. Close public hearing or continue
. FUTURE:
. MONDA Y, DEC. 12: Continuation of Truth-in-
Taxation hearing (if necessary)
. MONDA Y, DEC. 19: Budget and levy must be
adopted by City Council
Truth in Taxation
Thank you for your attention!
Public Information Hearing
DECEMBER 5, 2005
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