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I I ~ ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 5,1996 2 Mr. Post explained there are three components which determine the Property Tax Payable, The first I aspect is the market valuation which is placed on a property which is a function of the Ramsey County Assessor's Office, The second aspect of determining property taxes is the class rates which are applied to different types of property, These rates are set by statute by the legislature. These two I aspects yield the Net Tax Capacity, This Net Tax Capacity is then applied against the jurisdiction needs, The Levy need is then divided by the Total Net Capacity of the jurisdiction which yields a I fraction, This fraction times the individual Net Tax Capacity then determines the individual local Property Tax amount. Ramsey County, the School District, and other miscellaneous jurisdictions amount of taxes are then added to determine the total Property Tax Payable, I Mr. Post explained the components of the total local tax rate for 1997 Property Taxes Payable, He noted the City component is the second lowest portion of the total. Mr. Post explained the Arden I Hills City tax rate is in the lower Y, in comparison to other cities in the east metro area in terms of comparable taxes on a $120,000 horne, I Mr. Post presented a chart which illustrated the 5 year trend information regarding market valuation of property, net tax capacity, fiscal disparities and tax levies. He noted in 1992,1993,1994 and 1995, the City of Arden Hills was faced with a declining Net Tax Capacity, This was a direct Ie function of the aggressive challenges to market valuation that commercial/industrial property owners took in terms of challenging their valuation with the County Assessor in Tax Court. By and large, they were successful in reducing their valuation, This has reduced the Net Tax Capacity of the City I of Arden Hills significantly, Mr. Post noted however, that one benefit of this lower valuation is that the City now is contributing less to the Fiscal Disparities Pool, as the City has less valuation to I contribute to the Metropolitan pooL Mr. Post explained in terms of the tax levy history, there was a spike in the tax levy in Payable 1994, I For Pay 1997 proposed tax levy increase 1.95% over the levy for Pay 1996, Councilmember Aplikowski arrived at 7:40 p,m, I Mr. Post presented a chart which compared the amount of State LGA and HACA Aid relative to the net levy amount of Arden Hills to that of neighboring communities. The gross level ofthe City of I Arden Hills levy increase of $35,000 or 1.95% is smallest compared to other neighboring communities, He noted many other cities also receive general State Aid in the form of LGA and HACA The City of Arden Hills receives very little in State Aid, 95.3% of the dollars spent to I conduct the services of the community are non-LGA/HACA generated dollars, I Mr. Post then explained that property taxes will fund 72% of 1997 General Fund Revenue, This percentage has not changed a great deal in the course of the past 5 years, He noted the intergovernmental funding portion was only 13% of the 1997 general tax revenue, This is much t' lower than in most other cities, I