2024-12-11 CC Packet - Revised - Laserfiche WebLink

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The challenge for this year is that revenue sources have changed dramatically. We lost over $196,000 in revenue from the combination of a one-time public safety grant of $171,186 and the loss of $25,315 in Local Government Aid. Staff is recommending that all funds from the closed bond fund for 309 - Police Station Construction, currently anticipated to be more than $65,000 at year end, be transferred in as a revenue source to offset part of this loss. To cover the remaining loss and the expenditure increase the General Fund property tax levy must go up by $286,238 to balance the budget. The following chart identifies revenue changes of $4,000 or more in the General Fund budget. Account Description $ Incr/(Decr) Reason Revenues Use of Fund Balance (171,186) One-time state grant Local Government Aid (25,315) Growth took us off the aid formula Transfers from Other Funds 65,000 Police Bond Fund is closed Fire Relief Aid (65,000) Duty transferred to Circle Pines Antenna Leases 4,000 Match recent experience Other Misc Rev Changes (100) Non-Tax Revenue (192,601) Non-Tax Revenue Change Tax Levy Increase 286,238 Levy Needed to Balance Budget Total Revenue Change 93,637 2.8% Total Revenue Increase The other thing the City Council did in 2023 in anticipation of this scenario was to modify the debt levy. The debt service levy decreased only slightly for 2024. That created a larger reduction for the 2025 budget. Staff proposed a reduction of $53,488 in the debt service levy for 2025 to which council agreed. This drops the total 2025 levy increase down to $232,720 or a 7.7% increase over 2024. Even at that level, Centerville is still in the bottom half of Anoka County cities. We are also below the statewide average levy increase of 8.8% as calculated by the Minnesota Department of Revenue. But that does not mean the average property owner will see 7.7% as their tax increase. The levy increase is offset by a substantial increase in the cityÓs tax capacity due to recent commercial and industrial construction including Amazon, Kwik Trip, and Sutton Transport. The median increase in home value for Centerville is 3.36%. The change in Market Value Homestead Credit for 2025 provides for a larger credit for all homes valued below $517,200. The effect of these changes mean that the theoretical average home valued at $351,550 in 2023 that increased to $363,350 (a 3.36% increase) will only see an increase of about 1.4% or about $19 more in city taxes.