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WORK SESSION AGENDA ITEM NO. 5- <br /> January 14, 1998 <br /> To: Steve Sarkozy <br /> City Manager <br /> From: Ed Burrell <br /> Finance Director <br /> Re: Impacts of changes 'in C/1 Rates on the City of Roseville"s Tax Increment Revenues <br /> You had inquired about the real and potential effects on the City's expected revenues from the tax <br /> increment program. I have completed a preliminary analysis based on the current statutes as well <br /> as what may happen in the coming months. <br /> The current statutory changes in /I tax classification rate results in a 13.17% decrease in <br /> assessed value for 1998 and assuming no change in the estimated market value or tax capacity <br /> rates we would see a 13,17% decrease in our Tax Increments for the coning year. <br /> That loss translates to approximately 51,000, resulting in our tax increment dropping from $6.5 <br /> million in 1997 to approximately $5.67 million in 1998. <br /> If the le stature proceeds to move to the target class rate of 3.5%, we would see another <br /> decrease in value and tax increments of 12.50% or an estimated loss in 1999 or beyond of an <br /> additional 7097000 from the districts. This would drop our net tax increment revenue to <br /> approximately $4.9 million. <br /> Excluding our debt service and our Pay-As-You- o obligations of$3.6 trillion annually, we <br /> would see our economic development available increments drop from$2.9 in 1997, to $2.1 <br /> million in 1998 and on down to $1.4 million in 1999. <br /> In summary, if ffie legislature does not snake some exceptions to the statutes as they now appear <br /> they are going to be, the City of Roseville will see a direct loss of approximately 3 million in tax <br /> increment revenue over the next three years. The ITC does not see the Legislature increasing <br />