08-25-14 Special WS - Laserfiche WebLink

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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUST 25, 2014 7 City Administrator Klaers explained that in preparation for adoption of the preliminary tax levy at the last meeting in September, the staff memo in the agenda packet addresses the following information: residential property values, discussion on preliminary levy, salary assumptions being used to prepare the preliminary budget, a discussion on EDA funding, and structural changes the Council made last year. City Administrator Klaers stated that according to information provided by Ramsey County in May of this year, the median home value in Arden Hills will increase from $264,700 for 2014 taxes, to $295,100 for 2015 taxes which is an 11.5% increase in value compared to the county average increase of 9.4%. In order to evaluate the tax impact to the residential property owner, two things need to be taken into account: the decrease in fiscal disparities (decrease of 2.4%) and the change in the taxable value (increase of 6.4% after exclusions). A table illustrating the impact to the residential property owner due to the decrease in fiscal disparity dollars and changes in the assessed market value was included in the agenda packet. Assuming no City levy change, the home owner that has a median valued home (value going from $264,700 to $295,100) will see their City taxes going up by$46.33 or 6.6%. City Administrator Klaers reported that the City's share of Fiscal Disparities has decreased, and the City's Tax Capacity has increased, which results in a 5.8% decrease in the tax rate. City Administrator Klaers indicated that the City's entire tax levy goes for General Fund expenditures. For the City of Arden Hills, the property tax levy accounts for approximately 79% of the General Fund revenues. Staff reviewed the City's property tax levies history. City Administrator Klaers stated that the 2015 preliminary budget is currently being prepared assuming a 2% wage adjustment for non-union staff and a 1.5% wage adjustment for union staff. In surveying surrounding communities, most have included a 1.5% - 3.0% COLA increase in their preliminary estimates. This assumption has a total effect on the General Fund of$21,167. City Administrator Klaers commented that Public Safety costs are set to increase by 6.54% for Fire and 4.5% for the Sheriff's contract. This alone would amount to a $77,002 increase in the budget or a levy increase of 2.4%. In 2014 the City Council made a structural change to put Park and Street maintenance items in the General Fund operating budget for those departments and discontinue the transfer of $200,000 from the General fund to the PIR. Capital Funds were discussed at the June meeting during the Capital Improvement Plan(CIP)review. Director of Finance and Administrative Services Iverson stated the City has had previous discussion about the EDA Fund. Staff recommends that a funding source be found for this fund in the future as the current funding source from the TIF District and the conduit debt fees will not be ongoing. Staff recommends that the Council consider recommending that the EDA establish a levy to fund this activity. This would be shown on the property tax statements as a special taxing district; however a preliminary levy would have to be certified by September 15, 2014, to the County as it is a special taxing district. Staff has prepared a number of tax levy scenarios for discussion in evaluating setting a levy. She reviewed these scenarios in detail with the Council.