CCP 08-09-1993 - Laserfiche WebLink

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. CITY OF ARDEN HILLS MEH:llANOOM DATE : August 18, 1993 ro:@ Dorothy Person, City ]ld1'niniRtrator FRCH: Terry Post, city .l\CCOUntant SUBJECT: Reduced valuation of ccmnercial and Industrial Real Property in Arden Hills - Tlnn;o"j- on 1994 B1ldr.1et Process BACKGROUND 1993 marked the beginning of a negative trend for the city of Arden Hills. Estbnated Market Valuation (EMV) for Real Property declined from 1992. The decline was $1,630,100 or .35% of the 1992 base. Preliminary Real Property Vaulation figures from the County sha;v a sharper decline ($8,705,700 or 1.87% of the 1993 base) for taxes payable in 1994. 1993 results also contained an uncommon variance item related to market . valuation. 1993 General Fund =rent property tax receipts were reduced approximately $23,000 in abatements paid out to connnerical property owners that had suo::essfully petitioned in court to have their property valuations reduced. INVESTIGATION IFINDlNGS Analysis of County Real Property Valuation records has revealed the following: - l. The 1994 decline in EMV is not evenly distributed between property classes. Residential EMV is up $3,787,000 (1.29% of 1993 base) while Commercial and Industrial is down $11,000,000 (6.87%). 2. since the highest 1994 tax capacity class rate for corrnnercialj industrial is 4.60% and the highest rate for residential is 2.00%, each $1000 lost in corrnnericaljindustrial valuation translates into $46 less tax capacity whereas $1000 less in residential valuation would result in $20 less tax capacity. 3. The decline in EMV is not evenly distributed among neighboring =rnmunities (see attached "Prelim Real Property EMV-Arden Hills Camparables" chart). It is interesting to note that Arden Hills is the only East Metro connnunity showing EMV declines in 1993 and 1994 as well as the only city with a EMV decline in 1994. .