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AGENDA ITEM 1C MEMORANDUM DATE: August 25, 2014 TO: Honorable Mayor and City Council FROM: Patrick Klaers, City Administrator Sue Iverson, Director of Finance and Administrative Services SUBJECT: 2015 Proposed Preliminary Budget and Tax Levy INTRODUCTION The State Legislature has changed the certification date of the proposed maximum tax levy from September 15 to September 30. In preparation for adoption of the preliminary tax levy at the last meeting in September, this memo 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. RESIDENTIAL PROPERTY VALUES 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%. According to Ramsey County, assessed value had declined for five consecutive assessments, the markets have stabilized, and we are now experiencing an increase of residential, apartment, and commercial values. In order to evaluate the tax impact to the residential property owner, you need to take into account the decrease in fiscal disparities (decrease of 2.4%) and the change in the taxable value (increase of 6.4% after exclusions). To help illustrate this, the following table shows the impact to the residential property owner due no to the decrease in fiscal disparity dollars and changes in the assessed market value. Assuming 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%.