2020-12-09 CC WS, CC & Closed Exec. Meeting Minutes - Approved

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City of Centerville Council Meeting Minutes December 9, 2020 of MN Cities Insurance Trust $7,000, Economic Development ($22,500) and Equipment/Capital Imp./Street Reconstruction and EDA Fund Transfer of 34,200. Finance Director DeJong stated that budget for 2020 and 2021 were both balanced where revenues were sufficient to meet the anticipated expenditures. He stated that the total budget was increasing approximately 3%. He reported that the levy would be increasing by .87% due in part for the debt service levy going down. He stated that the total tax levy increase is less than 1%. Finance Director DeJong stated that 85% of the City’s total revenue Graphic representation contained in spreadsheet shows dependent on property taxes to fund general operations and looking at expenditures with Public Safety being 48% of total expenditures. He reviewed the debt service levy and stated that the City levied for three (3) bonds last year and that one (1) bond would be paid off by the end of 2020 which was the police station. He stated that the implications for that bond being paid off were a savings of approximately $79,000. He reported that Council has been cautious and used cash on hand to reduce debt service levy and stated that he anticipated that a continued drop in 2024 and a much larger drop in 2025 due to the street funds being paid off. Finance Director DeJong reviewed the levy trends. He stated that in 2017 the increase was 5.7% with 2019 and 2020 being less than 1% increase. He also stated that Council has been frugal and cautious with money being spent. Finance Director DeJong reviewed the property tax processes involved with the items that make up the property tax system. He stated that in October, 2018-September, 2019 sales of existing properties. He said that the City Assessor determines the trends that are happening with them and sets individual property tax values for January 2 the next year. He stated that the Assessor arrives at the assessed value by comparing similar properties with each individual home that have sold. He stated that then the County lays out the property’s Valuation Notice. He reviewed that the Board of Equalization and Appeal process happens in April or May of each year where Council acts as the Board and residents are given an opportunity to discuss/appeal their property’s valuation. He stated that all properties in town must be valued and then a preliminary budget is determined by Council commencing in July and August with an adopted Preliminary Budget and Tax Levy by September 30 which is forwarded to the County. He stated that the County then takes information from other jurisdictions such as the City, County, School District, Watershed District, and smaller taxing jurisdictions to determine the property’s Tax Statement. He said that the City certifies to the County its final budget and tax levy for the upcoming year. He stated that this commences the process of individual property tax statements for the upcoming year being forward to individual property owners. He reported that the first half property tax is due May 15. He stated that this finalizes the process and also starts the process over for the upcoming year’s Valuation Notices. He explained that property owners’ taxes for 2021 were based on what happened with sales of homes from years 2018 and 2019 which has a large lead time in the process. Finance Director DeJong reviewed the formula on how the property tax rate is determined and effects on an individual home. He stated that from the City Assessor’s report at the Board of Equalization, the median home value was $263,000 in 2020 and $273,000 in 2021 about a 3.7% increase. He explained that the net tax capacity is anticipated to increase slightly because of loss of some homestead credit up until you hit a little over $400,000 in value and calculate City property tax by multiplying your net tax capacity times the tax capacity rate. So that the estimated tax on a Page 6 of 19