The URL can be used to link to this page

Home My WebLink About12-12-05 CITY OF LAKEVILLE SPECIAL COUNCIL MEETING TRUTH IN TAXATION PUBLIC HEARING DECEMBER 12, 2005 Mayor Johnson called the meeting to order at 7:00 p.m. Roll call was taken. Present: Council Members Bellows, WulfF, Rieb, Luick and Mayor Johnson. Also present: S. Mielke, City Administrator; D. Feller, Finance .Director; C. Friedges, City Clerk. Mayor Johnson opened the public hearing on the proposed 2006 budget and tax levy. Finance Director Dennis Feller provided an overview of the proposed budget and tax levy. Mr. Feller stated the City faces many challenges with respect to its budget. They include growth, cost of services, the Capital Improvement Plan (financing street improvements) and legislative actions related to Market Value Homestead Credit (MVHC). He explained in detail how the State's reduction in MVHC affects Lakeville residents. The City of Lakeville loses $656,230 each year as a result of reduced MVHC for 2005 and 2006. Homes valued at $76,000. receive a maximum of $304, and homes valued in excess of $414,000 will receive no MVHC. In addition, the City of Lakeville no longer receives Local Government Aid from the State of Minnesota. All Lakeville residents share in the tax levy to finance losses; however, the burden is greater far residential properties in excess of $230,000 and for commercial and industrial property. Mr. Feller provided a detailed overview of the General Fund, Special Revenue Funds, Internal Service Fund, Capital Projects Funds and Enterprise Funds. He explained that the budget proposes an increase in _ the quarterly residential utility bill. However, Lakeville's utility rates remain lower than its neighboring cities of Burnsville, Apple Valley, Farmington and Rosemount. Mr. Feller explained that the tax levy shown on the Truth in Taxation notices was based on a preliminary 2006 tax levy of $17,741,065. The tax impact on an "average home" is $89, most of which is due to the loss of Market Value Homestead Credit. The City's tax capacity rate is projected to increase by less than 1%. For more than a decade, he stated, Lakeville has had one of the lowest tax capacity rates in Dakota County for cities over 5,000 in population. • CITY OF LAKEVILLE SPECIAL COUNCIL MEETING DECEMBER 12, 2005 PAGE 2 • (An Executive Summary of the budget presentation is attached to these minutes ) The following residents addressed the City Council regarding .their truth in taxation notices: Suzanne McKinney, 16760 Edinburg Way Charles Larson, 19157 Ismay Circle Rich Storlie, 12393-205th Street West Christina Dalton, 17606 Foxboro Lane Wally Potter, 10691-202nd Street Bob Deese, 16910 Judicial Road (via email) The mayor, council members and City Administrator responded to the individual questions and concerns. Mr. Feller explained that the Dakota County Assessor's Office establishes the. assessed value of property in the spring, and the tax statement that residents receive in the fall is based on that assessed value. He encouraged residents to contact the Assessor's Office when they receive their property valuation in the spring to validate .that their homes have been valued correctly. Mr. Feller also recommended property owners visit the City's website for information and links to the city budget, Office of the State Auditor for spending comparisons with other cities, and the Minnesota Department of Revenue for property tax refunds. Also included on the website is a real estate inquiry that allows Dakota County residents to view current estimated market values, which have an impact on residential property taxes. Mayor Johnson stated adoption of the final budget and tax levy will be considered at the regularly scheduled City Council meeting of December 19, 2005. 05.110 Motion was made by Bellows, seconded by Luick to close the public hearing on the proposed 2006 budget and tax levy. Roll call was taken on the motion. Ayes, Bellows, Johnson, Wulff, Rieb, Luick. Mayor Johnson adjourned the meeting at 8:20 p.m. • Respectfully submitted, CITY OF LAKEVILLE SPECIAL COUNCIL MEETING DECEMBER 12, 2005 PAGE 3 • Charlene Friedge , City C rk Robert D. Johnso ayor • • Challenges ® x Growth x Cost of services ° ¦ Energy - PERA December 12, 2005 x Capital Improvements Plan (CIP) ¦ Financing street improvements ~ ~ Y- x Legislative Actions ~ f } ¦ Market Value Homestead Credit f f~~ Market Value Homestead Credit ~ Legislative Actions x Reduced Market Value Homestead Credit x Maximum of $304 - on a $76,000 home for 2005 and 2006 • x Decreases by $9 per $10,000 of market ¦ Lakeville loses $656,230 each year value x No Levy Limits x No MVHC for homes in excess of $414,000 x Local Government Aid ¦ Lakeville receives none. Market Value Homestead Credit ~ Proposed General Fund Legislative outcomes ' 2006 Revenues - $19,271,706 1t MVHC distribution to Cities not uniformly applied Statewide. ~t ~ }'~rax~~r i ~~i L~ Ai ~ 1t Legislative action regarding LGA is inconsistent j ~ ~ S 3;, with legislative action regarding MVHC ~ { ~ s ~ a~ t } x Tax Statement -Truth in Taxation Notice ~ ~ ¦ Provide ra discernable information regarding MVI~IC costs/credifs ~ tt Disincentive for affordable housing program w ~ . 1t All Lakeville Residents share in tax levy to ~ m ~ finance losses - however....burden is greater for ~ ~ ~4 ¦Residentialpropertiesinexcessof$23Q,000and.. ti, ¦Non-residential properties such as ' ' ' ¦ commercial/industrial property. Proposed General Fund •:2006 Expenses - $19,271,706 Proposed 2006 Budget - tt Municipal Legislative Commission dues ~ ~~r " s • x City Clerk -Records Management Consult s tt City Clerk -State Elections i~~ ~ x Community Development -Affordable Housing Study aX Inspections -Field based reporting i ~ r ; tt Police -Dakota Communication Cntr ~ . n x Streets -Grader rental -snowplowing f x Streets -Pavement Management r`.. ' x Streets -Street light cost increase #.~,.u`~T in x Streets/Parks -Central Maintenance Facility . x Parks -Two new hockey rinks Proposed 2Q06 Budget ' Eatimst~ed General Fund . (continued) Balances it Building Maintenance Coordinator tt Information Systems Technician Zoos • it Two -Police Patrol Officers Revenues $ 17,203,366 $ 19,271,706 Expenditures 17,400,101 19,271,706 Park Ranger (seasonal) Net increase/(decrease) (196,735) - 1t Canine Police Officer (add'1) Fund balance, January 1 9,089,470. 8,892,735 1K Street Maintenance position Fund balance, December 31 $ 8,892,735 $ 8,892,735 x Parks -Two mowing positions (seasonal) Fund balance as a otezpenditures 51.1°!° 46.1% = Special Revenue Funds ~ ~ 2006 Proposed Expenditures and Transfers °~U116 Proposed E . Increase/ , 2005 2006 (Decrease) .Increase) Cable TV , $ 357,936 $ 473,556 $ 115,620 2005 2006 decrease Euvironmental Recycling 41,034 52,603 11,569 LiabiGty,propertyaad Employee Benetit - - - casualty premiums $ 258,432 $ 279,107 $ 357,936 Surface Water Management 502,913 530,097 27,184 Claims and deductibles lao,ooo 56,000 (84,000) Oak Wilt Suppression 3,682 5,052 1,370 Administration 37,212 38,328 1,116 Economic Development 8,594 (8594) Total $ 435,644 $ 373,435 $ 275,052 Total 9$ 14,159 $ 1,061,308 $ 147,149 2 CsPital Projects CsPfital ~J~ Equipment Fund Bm'iding Fond 2006 2007 Expenditures 2006 Police $ 316,794 $ 830,610 Office Equipment. $ 77,733 Fire 983,393 346,323 City Hall carpet 3,094 Streets 637,391 445,830 Fire Station #3 -renovation 25,621 Parks 441,061 42,212 Fire Station #3 -windows 4,777 Issuance Cost 81,361 35,025 Public Works roof repair .12,488 Total ~ S 2,460,000 ~ $ 1,700,000 Aronson Park bldg. Renovatiol 20,000 Total Expenditures $ 143,713 Liquor Fund Liquor Fund ~ Contririb~ationbt 2005 2006 Increase! Estmrate Proposed (Decrease) ' Sales $ 11,191y90 $ u,7a2soo $ ssoslo 2006 Cost of goodssohi (8,447,605} (8,864,337) (416,732) GeneralFund $ 136,711. Gross profit 2,744,385 " 2,578,163 133,778 Bw7ding Fund 40,000 Operating expenses (1,587,548) (1,769,049) (181,501) Operating income 1,156,837 1,109,114 (47,723) Fire Station #4 debt 194,676.. Debt service (162y70) (16z,2ao) 730 Total $ 371,387 Otherrevenue 27,041 41,561 14,520 Netinrnmebeforetransfers $ 1,020908 $ 988,435 $ (32,473) Capital outlay acquisitons $ (22,663) $ (1,096,947} $ (1,074,284) . Water ~ ~ Sanitary Sewer Operating Fund ~ Operating Fund Increase/ 2005 2006 (decrease) Revenues $ 2,205,543 $ 2,453,714 $ 248,171 Increase! Expense (1,719,039) (1,790,267) (71,228) 2005 2006 (decrease) Majorprojects (152,794) (956,500) (803,706) Revenues $3,368,146 $3,531,218 $ 163,072 Interfund Transfers (111,401) (117,016) (5,615) M.C.E.S. expense (2,181,740) (2,192,969} (11,229) Capital outlay (50,572) (113,098) .(62,526) Operating expense (779,679) (726,674) 53,005 Total changes in Interfund Transfers (109,320) (114,872) (5,552) wonting capital $ 171,737 $ (523,167) $ (6949041 Capital outlay (50,572) I( 13,097) 6( 2,525) Total changes irr working capital $ 246,835 $ 383,606 $ 136,771 3 Quarterly Residential Utility _ 'Utility Rates Bill zoos zoo6 2005 2006 Quarterly Rates Basis Current Proposed Water base Account $ 2.75 $ 3.00 Water $19.55 $ 21.60 Water tier 1 30 thousand gal.) .Gallonage $ 0.84 $ 093 Sanitary sewer $ 52.00 $ 52.00 Water tier 2 (<30 thousand gal.) Gallonage $ 1.00 $ 1.11 Sanitary sewer base Account $ 330 $ 3.20 Street lights $ 5.75 $ 6.U5 Sanitary sewer usage Gallonage $ z.a4 $ z.aa Surface Water Management $ 4.75 5.00 Street lighting Account $ 5.75 $ 6.05 Surface water management Account $ 4.75 $ 5.00 State Water testing $ 1.30 $ 1.45 State water testing Account $ 130 $ 1.45 Total ~ $ 83.35 $ 86.10 ` .Quarterly Utility Bill ~I Proposed 2006 Tax Levy Compared to Neighboring Cities Zoos Increase Sanitary Surface State Street Operations $ 11,638,998 S. 12,844,549 $ IZ07,551 C~ SeSe_r Water Water Testin¢ L ¢hts Total Pavement Management 414,426 590,000 175,574 • Certificates of Indebtedness 1,058,748. 1>058.900 752 Burnsville $ 55.20 $43.80 $ 17.00 $ 1.30. $ 7.00 $ Y27.30 ParkB~ds 410,392 .412,504 2,114 Apple Valley 51.14 34.14 11.94 1.29 4.92 105.43 Capital hnprovement Bonds 719,357 735,494 14,137 Farmington 48.50 3220 8.50 - - 89.20 bnprovement Projects 990996. 1,441.384 450390 Rosemount 48.00 2930 9.12 - - 87.02 Total ta:levy before MVHC $ 15,232,317 S 17,084,835 $ 1,852,518 Lakeville 52.00 2L60 5.00 1.45 6.03 84.10 Market Value Homestead Credit $___656,2311 S_,_._656. 230 Total tax levy S 15,232,317 $ 17,741,065. $ 2508.748. :Tax Capacity Rate Market Value Rate Percentage 2005 j006 Chan><g 2006 Tax levy 14,967,152 17,328,559 15.8 % Pr s Fiscal disparities - dislribu6on 1,327,151) 1,474,703) 11.1 % Market Value $ 5,011,735,102 Net tax levy 13,640,001 15,853,856 16.2 % Tax Levy for 1994 Park Bonds 412,506 Net Tax Capacity 43,542,426 50,154,558 15.2 % Tax rate based on market value 0.0000823 Tax Capacity Rate 0.31326 0.31610 0.9 4 Tax impact on "Average Area Tax Capacity Rates Home" os Market Value (2005) $240,000 -Market Value (2006) $260,640 045 ,t Market Value Homestead Credit -2005 (156) 0•~ ~ Market Value Homestead Credk - 2006 137) 0'3 ~ _ ~ Increase due to MVHC formula 19 o.z~ ~ - cam, City Share of MVHC 35 % 0,2 i w i ~ " City increase due to MVHC formula 7 0.9 % 015 _ ~ ~ i City Levy for bss of MVHC 37 5,2 % 0.1~ _ I ' ~ ~2 TotalduetoM[~HC 44 6.1% o'er ~ ~ Operations 24 33 % o. ry- r r Park Bonds 6 0.9 % ~~~ti y`'~~~°~~~~e9 ~J`' q~3 ~~1 ~~i ~~xs~~ao Debt for Street Reconstruction IS 2.3% 4o ar~~4s~PQC,` q°~cp~ :r~~o S~~e o~s~ Total increase in City taxes 89 12.6 % ~'~~c+'A Truth In Taxation ~ and - Public Hearing. Monday -December 12, 2005 7:00 PM ~ \ \ R ~ 5