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lt <br /> EN HILLS <br /> MEMORANDUM <br /> DATE: September 10, 2012 <br /> TO: Honorable Mayor and City Council, <br /> FROM: Patrick Klaers, City Administrato 4)14— <br /> Sue Iverson, Director of Finance and Administrative Services <br /> SUBJECT: 2013 Proposed Preliminary Budget and Tax Levy <br /> INTRODUCTION <br /> In preparation for adoption of the preliminary tax levy, this memo addresses the following <br /> information: preliminary tax levy as prepared by staff, residential property values, operating <br /> budget, salary and benefit changes, and preliminary fund balance projections. <br /> RESIDENTIAL PROPERTY VALUES <br /> According to information provided by Ramsey County in May of this year, the median home <br /> value in Arden Hills will decrease from $272,800 for 2012 taxes, to $257,400 for 2013 taxes <br /> which is a 5.6% drop in value compared to the county average decrease of 7.6%. According to <br /> Ramsey County, assessed value has now declined for five consecutive assessments; this has <br /> primarily been the result of the recession and loss of financing liquidity and has been fueled by <br /> pessimistic buyer expectation. The loss in value this period has been the largest loss in value of <br /> residential property. However, there are now encouraging signs that the markets have stabilized, <br /> or are stabilizing; we are now experiencing a flattening in the decline of residential values, rising <br /> apartment values, and the commercial markets are also showing promise of appreciation (from <br /> Ramsey County Assessor Stephen Baker). Foreclosures are at a lower percentage than they have <br /> been in many years. <br /> In order to evaluate the true impact to the residential property owner, you need to take into <br /> account the decrease in fiscal disparities (decrease of 8.2%) and the change in the taxable value <br /> (decrease of 4.4% after exclusions). To help illustrate this, the following table shows the impact <br /> to the residential property owner due to the reduction in fiscal disparity dollars and changes in <br /> the assessed market value. This results in a net Tax Rate increase of 5.4% before any levy <br /> changes are made.made. <br />