2B, 2013 Proposed Final Budget & Tax Levy

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Memo - City Council 2013 Proposed Final Budget and Tax Levy 4 RECAP OF RAMSEY COUNTY FINANCE DIRECTORS MEETING On August 15, 2012, Ramsey County held a meeting with its Finance Directors from all taxing districts. At this meeting it was noted that rising levy rates helped to offset some of the decreased fiscal disparities for various districts. In our case this will helps the county, school district, and city portions of your tax payer's bill. The Assessor is optimistic that Pay 2012 values can hold steady this next year. As previously stated, while this year's loss has been the largest loss in residential values, the markets are now stabilizing and foreclosures are lower in percent than they have been in many years. There has been a significant recovery in the commercial markets since the 2009 low. The biggest value loss county-wide was seen in Apartments which is why Arden Hills has not been affected as much as other cities. TAKING A LOOK AT ARDEN HILLS LEVY HISTORY The State of Minnesota has granted local municipalities the authority to levy taxes to fund operations and debt payments. The City's entire tax levy goes for General Fund expenditures. For the City of Arden Hills, the property tax levy accounts for approximately 78% of the General Fund revenues. Historically, the City does not use reserves to balance the City's budget, however, due to the current economic environment $41,201 was used to balance the budget for 2010 and $20,000 was used in 2011. No reserves were used in 2012. The following table provides a historical view of the City's property tax levies: Year Tax Lew Change Tax Rate Change 2002 $2,201,002 - 25.092% - 2003 $2,265,712 2.94% 23.930% -4.63% 2004 $2,333,337 2.98% 23.367% -2.35% 2005 $2,440,453 4.59% 21.299% -8.85% 2006 $2,537,520 3.98% 20.191% -5.20% 2007 $2,688,944 5.97% 20.206% 0.07% 2008 $2,797,348 4.03% 19.585% -3.07% 2009 $2,948,646 5.41% 20.520% 4.77% 2010 $3,016,465 2.30% 22.647% 10.37% 2011 $3,040,964 0.81% 24.180% 6.77% 2012 $3,096,994 1.84% 25.544% 5.64% 2009 saw the start of the LJFD duty crew implementation,while 2010 and 2011 saw the unallotment of the MVHC to cities. We have been very conservative in our budgeting and have reduced department budgets or used reserves to deal with the increased costs of our contracted services while still maintaining services the last few years. -6-