2005-12-05 Special il
PLEASE TURN OFF ALL CELL PHONES & PAGERS IN COUNCIL CHAMBERS.
lc.
AGENDA
MOUND CITY COUNCIL SPECIAL MEETING
MONDAY, DECEMBER 5, 2005 - 7:00 PM
MOUND CITY COUNCIL CHAMBERS
Open meeting - Call meeting to order
Truth in Taxation presentation and public hearing
Adjourn
***In addition to these materials, Council Members may wish to bring the packet materials from earlier budget
meetings.
NOTICE OF PROPOSED
TOTAL BUDGET AND PROPERTY TAXES
The Mound city council will hold a public hearing on its budget and on the amount of
property taxes it is proposing to collect to pay for the costs of services the city will
provide in 2006.
SPENDING: The total budget amounts below compare the city's 2005 total actual budget
with the amount the city proposes to spend in 2006.
2005 Total Proposed 2006 Change from
Actual Budget Bud.qet 2005-2006
$8,217,000 $8,812,150 7.24%
TAXES: The property tax amounts below compare that portion of the current budget
levied in property taxes in the city of Mound for 2005 with the property taxes the city
proposes to collect in 2006.
2005 Property Proposed 2006 Change from
Taxes Property Taxes 2005-2006
$3,712,920 $4,256,204 14.63%
LOCAL TAX RATE COMPARISON: The following compares the city's current local tax
rate, the city's tax rate for 2006 if no tax levy increase is adopted, and the city's proposed
tax rate for 2006.
2005 2006 Tax Rate if 2006 Proposed
Tax Rate NO Levy Increase Tax Rate
37.291% 32.477% 37.625%
Attend the Public Hearing
All Mound City residents are invited to attend the public hearing of the city council to
express their opinions on the budget and on the proposed amount of 2006 property
taxes. The hearing will be held on:
Monday, December 5, 2005, at 7:00 p.m.
Mound City Hall
.5341 Maywood Road
Mound, MN
If the discussion of the budget cannot be completed, a time and place for continuing the
discussion will be announced at the hearing. You are also invited to send your written
comments to:
City of Mound, City Manager
5341 Maywood Road
Mound, MN 55364
0 0
oo
GENERAL FUND
SUMMARY OF REVENUES AND EXPENDITURES
REVENUE
GENERAL PROPERTYTAXES
INTERGOVERNMENTAL REVENUE
LICENSES
NON-BUSINESS LICENSES &
PERMITS
GENERAL GOVT. CHARGES
OTHER REVENUE
INTERFUND TRANSFERS/BONDS
TOTALREVENUE
EXPENDITURES
CITY COUNCIL
PROMOTIONS
CABLE T,V,
CITY MANAGE~CLERK
ELECTIONS & REGISTRATION
ASSESSING
FINANCE
COMPUTER
LEGAL
POLICE
EMERGENCY PREPAREDNESS
PLANNING &INSPECTION
STREET
CITY HALL BLDG & SRVS
PARKS
CEMETERY
RECREATION
CONTINGENCIES
TRANSFERS
2003 2004 2005 2006 2006
ACTUAL ACTUAL APPROVED ~ PROPOSED
2,173,053 2,294,529 2,407,210 2,842,770 2,842,770 18.09%
520,537 380,357 375,630 342,060 342,060 -8.94%
13,595 21,645 20,950 19,550 19,550 -6.68%
350,785 278,237 365,050 285,300 285,300 -21.85%
290,294 481,179 470,700 483,000 483,000 2.61%
277,215 338,870 287,700 310,500 310,500 7.92%
11.633 493.716 281.000 297.000 297.000 5.69%
3.637.112 4.288.533 4.208.240 4.580.180 4.580.180
79,603 74,466 78,850
3,750 3,750 3,750
43,429 41,976 45,000
253,300 275,725 291,290
326 12,135 1,250
83,269 78,759 83,300
215,797 225,064 247,440
25,955 24,564 21,430
157,496 141,743 160,420
1,243,138 1,452,018 1,378,530
3,406 6,851 7,100
312,538 304,558 341,930
601,317 1,020,902 884,150
181,178 128,260 115,660
264,670 445,955 385,590
8,376 9,210 9,880
0 0 3,000
15,662 14,501 54,720
253.735 415.768 271.080
85,950
7,500
45,000
309,610
55,600
86,350
327,960
29,450
163,440
1,606,650
7,550
455,180
974,470
174,120
754,890
10,170
63,900
30,000
282.260
82,450
5,250
45,000
309,610
20,600
86,350
299,270
13,950
163,440
1,474,210
7,550
432,980
911,470
122,720
493,560
10,170
0
30,000
272.890
8.84%
4.57%
40.00%
0.00%
6.29%
69.76%
3.66%
20.95%
-34.90%
1.88%
6.94%
6.34%
26.63%
3.09%
6.10%
28.00%
2.94%
-100.00%
~45.18%
0.67%
TOTAL EXPENDITURES
INCREASE (DECREASE)
FUND BALANCE, JANUARY 1
ADJUSTMENT TO AUDIT
FUND BALANCE, DECEMBER 31
FUND BALANCE AS A PERCENTAGE
OF EXPENDITURES:
3.746.945 4.676.225 4.384.370 5.470.050 4.781.470 9.06%
(109,833) (387,692) (176,130) (889,870) (201,290) 14.29%
1,533,173 1,422,542 1,056,430 1,164,760 1,164,760 10.25%
(798) 306.039
1.422.542 1.340.889 880.300 274.890 963.470 9.45%
37.97% 28.67% 20.08% 5.03% 20.15%
NOTE: UNDESIGNATED ONLY IS PART OF FUND BALANCE.
1 1/29/2005
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City of Mound
2006 Truth in Taxation
General Fund Revenues Graph
Property Taxes
Intergovernmental
Licenses and Permits
Charges for Services
Bond Proceeds
Others
2,842,770
342,060
304,850
483,000
297,000
310,500
4,580,180
2006 General Fund Revenues
6.8%
6.5%
10.5%
6.7%
7.5%
62.1%
· Property Taxes
· Intergovernmental
· Licenses and Permits
[] Charges for Services
· Bond Proceeds
[] Others
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City of Mound
2006 Truth in Taxation
Expenditures Graph
Debt Service
Police Services
Planning and Inspections
Fire Services
Streets
Parks
Others
983,820
1,481,760
432,§80
507,930
911,470
493,560
1,461,700
6,273,220
2006 Expenditures for Selected Services
23.3%
7.9%
14.5%
8.1%
15.7%
6.9%
23.6%
· Debt Service
· Police Services
· Planning and Inspections
[] Fire Services
· Streets
[] Parks
· Others
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CITY OF MOUND
TAX LEVY RECAP
TAX LEVIES *
REVENUE - GENERAL PURPOSES
REVENUE - LEASE PAYMENTS
2001A JUDGMENT BOND
FIRE RELIEF
G.O. IMPROVEMENT 2001C
G.O. IMPROVEMENT 2003A
G.O. TAX INCREMENT 2003C
G.O. IMPROVEMENT 2004A
G.O. EQUIP. CERTIFICATES 2004C
G.O. IMPROVEMENT 2005A
G.O. EQUIP. CERTIFICATES 2005C
G.O. EQUIP. CERTIFICATES 2006
LEASE EQUIPMENT LOAN
TOTAL LEVY
2003
2,373,760
381,830
22,560
33,350
2,600
0
0
0
0
0
0
0
2,814,100
20O4
2,528,050
389,140
22,200
33,350
5,700
116,440
139,830
0
65,460
0
0
0
21,790
3,321,960
2OO5
2,717,660
368,440
21,800
33,350
71,200
136,860
143,340
28,500
142,450
0
35,000
0
14.320
3.712.920
PROPOSED
2006
3,166,074
364,060
21,400
67,890
75,000
139,067
141,494
30,600
114,500
66,700
31,000
35,000
3,420
4,256,204
16.50%
14.63%
SPECIAL TAXING DISTRICT
HOUSING & REDEVELOPMENT
AUTHORITY (SPECIAL TAXING
DISTRICT)
83,000
116.506
136.124
153.720
12.93%
2004
2O05
2006
TOTAL LEVY
CERTIFIED LEVY
FISCAL DISPARITY
NET LEVY
3,321,960
3,321,960
(259.6001
3.062.360
3,712,920
3,712,920
(278.4601
3,434,460
4,256,204
4,256,204
(285,070)
3,971,134
14.63%
15.63%
CITY PROPERTY
TAX RATE
38.467
37.295
37.625
0.88%
Property Value:
Property Value:
Property Value:
Property Value:
150,000
200,000
250,000
300,000
Tax
577.01
769.34
96t.68
1,154.01
Ta._.~x
559.43
745.90
932.38
1,118.85
Tax
564.37
752.49
940.61
1,128.74
1 1/29/2005
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HOw Your City and County Property Taxes Are Determined
Box 1
Total
Proposed Local
Budget
:;;;: ::;;;::;:;::::~;:5 :::;;~:,':;;;;::;;;;;::::;:~;;;:$;:::;::;;'~;;;;;~:' ===============================================
- minus
Assessor's
Market Value
X times
Tax Revenue, eg: lil
* State Aid Iii
-- equals
State
· Mandated
ClasS Rates
-- equals
Box 3
Property Tax
Revenue Needed
(Levy)
divided by
= equals
I Box 6
Total .
"Tax Capacity"
(Formerly Assessed
Property
Tax Iii
Rate ii
("Tax Capacity" Rate)
YOUR PROPERTY TAX EQUALS:
Your Property's Market Value X Class Rate(s) X "Tax Cap~ci.ty" R~te --
Ed. Homestead Credit (83% of K-12 genT educ. tax up to $390 in '00)
See Appendix D on page 21 for an example.
Tax Capacity Value
Year 2005 2,500.00 250,000
Year 2006 2,677.50 267,750
Homestead
Property
State Tax 0'001 0'001 0'001 I
County Tax 1,1 04.30 1,097.45 (6.85} -0.62%
City Tax 932.38 1,007.52 75. t4 8.06%
School Tax 692.68 629.5t (63.17} -9.12%
Metro Transit 40.20 41.23 1.03 2.57%
!Watershed 3 31.90 28.70 (3.201 -10.02%
Mound HRA 34.28 36.36 2.09 6.08%
Mosquito Control 14.10 14.27 0.17 1.21%
Metro Council 28.30 23.40 (4.901 -17.31%
Park Museum t9.38 18.34 (t .03~ -5.34%
HC Reg Railroad 15.90 17.48 1.58 9.96%
Solid Waste 39.88 42.84 2.97 7.44%
Hennepin Parks 66.68 76.07 9.39 14.09%
Total 3,019.95 3,033.18 13.23 0.44%
Less MVHC* 147.40 131.43
Net Total 2,872.55 2,901.75 29.20 1 1.02%I
*Market Value Homestead Credit
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County
,44.172
40.988
city
37.295
37.629
School
16.250
10.528
Metro Transit
Watershed 3
HRA
Mosquito
Metro Council
Mkt Val Rt Schl
HC Reg Railroad Auth
Park Museum
Mkt Val Rt SId Waste
Henn. Pk
Total
Education Credit
Other State
10.160 54.000
9.702 54.000
Year2006 Year2005
1.540 1.608
1.072 1.276
1.358 1.371
0.533 0.564
0.874 1.132
0.130 0.115
0.653 0.636
0.685 0.775
0.016 0.016
2.841 2.667
9.70183 10.15952
0.27353 0.27353
390.00 390.00
TaxHenn2005Final
11/29/2005
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Property Tax 101 - Property Tax Administration - House Research Page 1 of 3
Property Tax 101 - ProPerty Tax Administration
· Who doeswhat9
Who does what?
Counties are responsible for property tax administration; the Department of Revenue
provides assistance and oversight. The list below shows each county office's
responsibilities for property tax administration. In some counties these offices are
merged and one or two offices may perform the functions.
Property tax timeline
Appeal process
Assessor
· Values property
Determines proper classification
Sends valuation notices to taxpayers
Auditor
Determines each taxing jurisdiction's total tax capacity (i.e., its tax base)
Calculates proposed and final tax rates
Prepares Truth in Taxation notices (based on proposed levies)
Treasurer
· Prepares and mails out property tax statements
· Collects property tax payments
· Distributes property tax receipts to each taxing jurisdiction
The process of calculating, imposing, and collecting Minnesota property taxes for a,
actually spans two full calendar years. As shown on the reverse side, the two-year
begins with the January 2 statutory assessment date and extends all the way throug
the next calendar year until the property taxes have been paid. For example, for tax
payable in 2005, the cycle begins on January 2, 2004, and doesn't end until the fina
payment is made in October/November 2005.
If a property owner disagrees with the assessor's valuation (shown on the valuation
notice), the taxpayer can seek relief directly from the assessor. This may resolve th,
matter, so that no further action is necessary. If it does not, there are two separate
avenues of appeal:
1. A three-step appeal process, consisting of an appeal to:
· the local board of review; if not satisfied may appeal to,
· the county board of equalization; if not satisfied, may appeal to,
· the Minnesota tax court.
2. A single-step appeal to the Minnesota tax court. There are two divisions:
· The regular division, which can be used for any property. Proceedings are
formal (an attorney is recommended), and the decision may be appealed t,
Minnesota Supreme Court; or
· The small claims division, which can be used only for homesteads (regard
of value) and other property where the market value is under $300,000.
http ://www.house.leg. state.mn.us/hrd/issinfo/ssp_ 1'0 _htm 11/29/2005
HOUSE RESEARCH
Short Subjects
Steve Hinze and Karen Baker
Updated: November 2004
Property Tax 101: Property Tax Variation by Property Type
What causes
property taxes to
vary by type of
property?
The primary cause of variation in property tax burdens is Minnesota's classified
property tax system. In a classified system, each class of property is assigned one
or more class rates. The property's taxable market value is multiplied by the class
rate(s) to determine the property's tax base, technically called its net tax capacity.
Besides the class rates, variations in tax by type of property also occur because the
state general tax and certain voter-approved referendum levies~ apply to some
types of property but not to others. The table below shows class rates and the
applicability of taxes by type of property.
Class Rate Schedule for Taxes Payable in 2005
t
Subject to Subject to
Property Type Class State Referendum
Class lmaior ~roFe~r7 t~Tes only/ Rate Tax? Levies?
I II II II /Ill ll
1 a Residential hOmestead:
Up to $500,000 1.00% No Yes
Over $500,000 1.25 No Yes
2a Agricultural homestead:
House, garage & 1 acre - same as residential homestead
Agricultural land & buildings:
Up to $600,000 0.55 No No
Over $600,000 1.00 No No
2b A~ricultural non_homestead 1.00 No No
3a Commercial/Industrial/Public Utility:
Up to $150,000 1.50 Yes Yes
Over $150,000 2.00 Yes Yes
Electric ieneration attached machiner~ 2.00 No Yes
4a Market-rate apartments (4 or more units) 1.25 No Yes
4bb Residential non_homestead single unit:
Up to $500,000 1.00 No Yes
Over $500,000 1.25 No Yes
4b Residential nonhomestead 2-3 unit and undeveloped land 1.25 No Yes
4c Seasonal recreational residential (noncommercial):
Up to $500,000 1.00 Yes No
Over $500,000 1.25 Yes No
~ All voter-approved levies, except school district levies for bonded debt, are levied on referendum market value. School district
levies for bonded debt are levied on the net tax capacity of all types of property.
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PYhat other factors
cause property taxes
to vary by ~ype of
property?
What is effective tax
rate?
Variations also occur because certain types of property qualify for property tax
credits that reduce the amount of tax that would otherwise be due. The two largest
credit programs are the homestead market value credit and the agricultural market
value credit, which apply to all residential homesteads and all agricultural
homesteads. Other credits apply to property in some areas of the state but not to
others.
Local variation also occurs because tax rates are determined separately for each
taxing jurisdiction in the state, based on each jurisdiction's levy and tax base.
Effective tax rate is a measure of tax burden useful in making property tax
comparisons. It is defined as net tax divided by market value (i.e., tax as a percent
of market value). It allows comparison of tax burdens between properties of
different values, different types, and different locations.
Comparison of Property Taxes on Various Types of Property,
within the same taxing jurisdiction, each with a market value of $120,000
(Property taxes payable in 2005)
Class Net Tax Property Tax* Effective
Property Type Rate(s) Capacity Gross Net Tax Rate
Agricultural homestead** 0.55/1.0% $795 $984 $594 0.50%
Agricultural nonhomestead 1.0 1,200 1,440 1,440 1.20
Residential homestead 1.0 1,200 1,560 !,296 1.08
Seasonal recreational residential (i.e., cabin) 1.0 1,200 1,827 1,827 1.52
Residential nonhomestead (1 unit) 1.0 1,200 1,560 1,560 1.30
Residential nonhomestead (2-3 units) 1.25 1,500 1,920 1,920 1.60
Apartment 1.25 1,500 1,920 1,920 1.60
Commercial/Industrial 1.5 1,800 3,216 3,216 2.68
Commercial/Industrial ~ $1,200,000'** 1.5/2.0 23,250 41,190 41,190 3.43
* These examples assume a total local net tax capacity tax rate of 120 percent, a state tax rate of 52 percent, and
a total market value tax rate of 0.1 percent.
** The agricultural homestead is assumed to consist ora house valued at $30,000 and agricultural land and
buildings valued at $90,000.
*** This property has a market value of $1,200,000 to show a more typical effective tax rate on a
commercial/industrial property.
The Research Department of the Minnesota House of Representatives is a nonpartisan office providing legislative,
legal, and information services to the entire House.
House Research Department I 600 State Office Building I St. Paul, MN 55155 ] 651-296-6753 I www. house.mn/hrd/hrd.htm
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