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ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 12, 2011 4 B. Motion to Approve Resolution 2011 -041: Adopting the Special Assessment Roll for the Lexington Avenue Sidewalk Improvements. Councilmember Holden explained that she pulled this item so she would have the opportunity to explain that the business community is sharing the cost of this project which will provide a sidewalk from the railroad to Shannon Square. MOTION: Councilmember Holden moved and Councilmember Holmes seconded a motion to Approve Resolution 2011 -041: Adopting the Special Assessment Roll for the Lexington Avenue Sidewalk Improvements. Motion carried unanimously (5 -0). 7. NEW BUSINESS A. 2011 Operating Levy Payable 2012 and 2011 Truth -in- Taxation Hearing Date Director of Finance and Administrative Services Iverson explained that the figures presented this evening are based on the Council's direction at their August 29th Work Session. The 2012 proposal shows an increase of 3% or $91,300 over the 2011 levy. She stated that the median home value in Arden Hills decreased 1.16% from $276,000 to $272,800 and the County wide average decreased 4.01%. The Market Value Homestead Credit (MHVC) was replaced with the Market Value Exclusion (MVE) program by the State Legislature and this has reduced the overall taxable value of the City. The preliminary levy is proposed at a 3% increase and public safety contract costs account for 1.9% of that levy increase. Of the proposed 2012 increase of $31.63 on the median valued home, $24.01 or 73.9% of the increase is related to public safety contracts. She stated the City is required to schedule and announce a regular meeting to discuss the budget and levy. The budget and final levy may be adopted during that meeting after the public hearing. That meeting must be held between November 24 and December 26 after 6:00 p.m. The County will mail parcel - specific hearing notices between November 10 and 22. She presented two options for the Council's consideration with regards to the Truth in Taxation hearing; one being December 5 at 6:00 p.m. and the other being December 12 during the regularly scheduled Council meeting. The Council is also being asked to approve Resolution 2011 -045 setting the preliminary levy for taxes payable in 2012 in the amount of $3,132,264. Mayor Grant explained that the 3% is a preliminary figure which can be lowered but not increased when the final levy is set. He also commented that currently the City reserves are at 48% which is not in compliance with the City policy of 50 %. He stated that he hopes the 3% levy rate can come down somewhat but stressed that we must have sufficient funds for the increasing public safety costs. Councilmember Holmes asked about the chart on the first page of the memo. She questioned how the 3% levy increase over 2011 results in a 7% tax rate increase. Director of Finance and Administrative Services Iverson reviewed the Minnesota property tax statute and how the calculations are made using Arden Hill's data.