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i e e e DRAFT 3 ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 6,1999 property taxes, each of the jurisdictions have created a budget which was translated to a levy for the needs of the budget which are supported by property taxes. This levy amount was compared against the total tax capacity for the jurisdiction and a percentage yielded. In the case of Arden Hills, the local City levy proposed for 2000 would be 18.985 percent. This percentage, multiplied by the tax capacity of$2,110.53, would result in a local city tax of$400.68. When this was added to the other jurisdictions' levy rates, the total proposed 2000 property tax payable for a $157,850 home would be $2,487.79. Slide #2A listed a number of Legislative changes in class. The Legislature has made a deliberate effort over the past four years to compress the class rates. The class rates for CommerciallIndustrial have changed from a maximum of 4.60 percent in 1997 to a maximum of 3.40 percent in 2000. There was a substantially lesser amount of compression for the residential homestead rates, changing from a maximum of2.00 percent in 1997 to a maximum of 1.65 percent in 2000. Over the last three years, property tax burden has been shifted from one class to another. Mr. Craig Wilson, 1677 Lake Valentine Road, asked how the shifting of property taxes from one class to another affects the City of Arden Hills. Mr. Post stated that this would affect the City of Arden Hills more than, for example, the City of Shoreview, since Arden Hills has a relatively higher commercial and industrial tax base than Shoreview does. Therefore, the residents of Arden Hills will experience a greater degree of tax burden shift than will the residents of Shoreview. Mr. Elwood Caldwell, 1457 Arden View Drive, confirmed that the term compression was referring to the fact that the class rates for CommerciallIndustrial were moving closer to the Residential class rates. Mr. Post stated that this was correct. Since the majority of the class rates were decreasing for the year 2000 from previous years, Councilmember Larson asked if the effect of this was that the actual tax rate would have to go up since the tax capacity for all classes of property was increasing. Mr. Post explained that market valuation is impacting tax capacity more than rate compression such that tax rates generally should be decreasing rather than increasing. Slide #3, Market Valuation, Tax Capacity and Levy Data Payable 1993 to Payable 2000, was a historical look at the City's valuation, tax capacity and tax levies since payable year 1993. The City of Arden Hills as a community experienced a reduction in market valuation for several years in the early 1990's. Towards the end of the 1990's the market valuation began to stabilize and has begun to pick up. The market valuation for 2000 was up 8.49 percent over 1999. Throughout most of the 1990's the tax capacity had been decreasing, however, the tax capacity has begun to pick up in the last couple of years. With regard to the Fiscal Disparities pool, the City of Arden Hills is a net contributor to this pool. Of the total tax capacity of $11,991,914 for the year 2000, the City of Arden Hills will contribute $2,005,653 to the Fiscal Disparities pool. The City will receive back from this pool $908,726. Therefore, the City of Arden Hills is a net contributor to this pool of $1,096,927 or 9.2% of total tax capacity.