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DRAFT ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 6, 1999 4 '~ Mr. Caldwell requested an explanation of the Fiscal Disparities adjustments. Mr. Post explained .- that the concept of the Fiscal Disparities pool was that, just because one community benefits .- from being close to existing infrastructure, that community should not be able to reap all the rewards of development activity. The requirement is that the community share 40 percent of its new commercial/industrial tax capacity with the entire metropolitan area since the metropolitan area was also providing resources for the development growth. Therefore, when a new building goes up in a community, 40 percent of the building's tax capacity goes into the Fiscal Disparities pool. There are more net city receivers from the pool than there are net city contributors to the pool, and the City of Arden Hills is one of the few net contributors to the pool. Mayor Probst noted that the City of Richfield received approximately $1,000,000 from the Fiscal Disparities program. Mr. Wilson asked what the basis was for receiving money from the Fiscal Disparities pool. Mr. Post stated that the distribution of funds was formula driven. Slide #4, Median Market Value of Homes in Ramsey County by City, Payable 1999 to Proposed Payable 2000, provided information regarding what the neighboring cities proposed city tax rates were and the median valuation of their residential properties. In the case of Arden Hills, the percentage increase in City tax on the median value home would be 6.64 percent. The change in tax percentage of the neighboring cities ranged from 14.30 percent for White Bear Township to a negative 4.45 percent for Little Canada. The City of Little Canada had a bond levy that had been paid off and the levy dropped accordingly. Overall, the average increase in the city portion of the tax for the II neighboring cities was six percent. e Slide #5, Components of Total Proposed 2000 Rates, explained the portions of the property tax bill from each of the jurisdictions. The City of Arden Hills' portion was 16 percent of the total property tax bill. Ramsey County represented 39 percent and the School District #621 represented another 40 percent of the total bill. Special Independent School District #916 was a small component which represented less than one percent of the tax bill. Prior to the adoption of the Educational Credit given to residents, School District #621 had traditionally been operating at approximately 55 percent. Therefore, with the Educational Credit, the School District had essentially bought down approximately IS percent of their portion of the property tax bill. Slide #6, City of Arden HillsINeighboring Cities Analysis of 1999 State Aid to Cities, presented the distribution of State Aid for North Metro cities. The HACA and Local Government Aid may be used as a dollar-for-dollar reduction in need for property tax levy. The City of Arden Hills has historically been a significantly less than average recipient of State Aid funds. Arden Hills receives approximately $9 per capita in State Aid which was substantially lower compared to the amount of such aid received by neighboring cities. Mr. Caldwell asked why the amount of State Aid received by the City of Arden Hills was lower than the surrounding communities. Mr. Post explained that when the State of Minnesota was experiencing financial difficulties in the 1980's, the State removed the Local Government Aid from the City of Arden Hills. The State of Minnesota also made a permanent reduction in the amount of HAC A aid being received by Arden Hills. Mr. Caldwell asked if anything could be done about these reductions in State Aid. Mr. Post stated that Legislative action or a Minnesota Department of Revenue policy change would have to occur. e