HomeMy WebLinkAboutItem 04.c-iiMemorandum
To: Mayor and City Council
From: Steven C. Mielke, City Administrator
Dennis Feller, Finance Director
Date: 14 November 2013
Subject: Analysis of Tax Levy and Per Capita Spending
Purpose
To provide an analysis of the City of Lakeville's tax levy changes compared to other
metropolitan cities over the last few years.
In order to provide a comprehensive comparison, the reader should also take into
consideration tax efficiencies and factors affecting taxes.
Discussion
The City of Lakeville's preliminary tax levy for 2014 was $23,984,269 which is a $905,804
increase over 2013. However, looking back over the last few years, Lakeville's tax levy has
actually decreased ($52,383) from what it was in 2011. The following information was
obtained from the Minnesota Department of Revenue using 20 of the closest comparable
metro cities shown on the attached exhibits:
20 Comparable
Lakeville Metro Cities
LEVY
2014 $ 23, 984, 269 $ 485, 499, 424
2013 $ 23, 079,185 $ 472,162, 435
2012 $ 23,126, 960 $ 459, 266, 737
2011 $ 24, 036, 652 $ 459, 794, 004
ANNUAL INCREASE /(DECREASE) PERCENTAGE
2014
2013
2012
3 -Year Increase /(Decrease)
2 -Year Increase /(Decrease)
[Refer to Exhibit A for details]
3.9%
- 0.2%
- 3.8%
2.8%
2.8%
-1.0%
- 0.2% 5.6%
3.7% 5.7%
ITEM 4 -c.ii
City of Lakeville
Finance
Factors to consider: There are numerous factors to consider when comparing taxes and /or
tax increases, including but not limited to the following.
• State Aid. The legislature has expanded the LGA program for many cities; hence other
cities have been able to mitigate tax levy increases. Lakeville does not receive LGA for
property tax relief.
• Growth. The overwhelming majority of cities in the data comparison do not have to
adjust tax levies to pay for services related to growth.
• Street Reconstruction. Most cities have been reconstructing aging streets for decades;
hence, they are not subject to significant annual increases for street reconstruction
projects. However, Lakeville is in the early stages of a multi -year street reconstruction
program.
Tax Efficiencies: A tax increase /decrease percentage is a comparison of one year to the
next; however, the percentage does not communicate efficiencies. Hence, a comparison
with other Cities is presented in order to provide perspective on efficiencies. In addition to
the tax levy analysis, a review of the per capita spending of the 55 largest cities in the state
shows the City of Lakeville to be one of the lowest.
PER CAPITA SPENDING (20 COMPARABLE METRO CITIES)
20 Comparable
Lakeville Metro Cities
Per Capita Spending $361.33 $ 532.48
Highest Spending
Lowest Spending
Source: Office of the State Auditor
[Refer to Exhibit B and C for more details]
$ 812.33
$ 361.33 $ 361.33
It should be noted that according to the Minnesota Office of State Auditor...Lakeville ranks 54
out of 55 metro area cities in per capita spending.
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