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V~Y4~. c.N.. v. 1~~~~~ Memo To: Mayor and City Council Bill Malinen, City Manager From: Chris Miller, Finance Director Date: March 17, 2008 Re: Update on Estimated 2009 Property Values Introduction On Friday, March 14, 2008 City Staff received a packet of information from Ramsey County which provided some insight on the City's estimated 2009 property values. Bear in mind that these values represent the assessed market value for tax purposes. They do not necessarily represent the price a property owner might receive if they went to market. Based on this information: • The 2009 median home value in Roseville is $237,400; up $4,400 or 1.9% from 2008 • 49% of all homes had either no value increase or a decrease • 33% of all homes had a value increase of 1-10% (most were on the lower end) • 18% of all homes had a value increase in excess of 10% (most due to new construction) • In the aggregate, residential values increased by approximately 0.3% • In the aggregate, commercial/retail values increased by approximately 11.5% Generally speaking, for 2009 Roseville's housing market is expected to maintain its value. However, on an individual basis there are many homes that are expected to realize small valuation declines. For 2009, commerciaUretail property valuations are expected to increase substantially, reversing a recent trend. Commercial/retail property represents approximately 45% of the City's tax base and as a result of the valuation increases; it will offset the sluggish growth in housing values. Budget Impacts Overall, in 2009 the City's tax base is expected to grow by approximately 4-5%. This is primarily due to new construction and commercial valuation increases. This does not mean that the City will collect 4-5% more taxes next year. The City gets what it levies for and nothing more. The growth in the tax base simply means that the tax burden will be distributed differently. For 2009, the property tax burden will shift slightly from residential to commercial. In the event the Council determines that the 2009 maximum levy increase ought to be tied to the growth in the tax base, the City could effectively increase the levy by approximately $500,000 or 4%, and keep the local tax rate the same. At that level, homeowners that experience no property valuation increase would pay the same as they do now.