4.a) Staff Report-Certify Maximum Tax Levy L �
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SCANDIA
Staff Report
Date of Meeting: September 10, 2013
To: City Council
From: Kristina Handt, Administrator
Re: Certify Maximum Tax Levy
Agenda Item #: 4.a)
Background:
The preliminary levy for taxes payable in 2014 must be certified to Washington County and the
date of the public hearing must be set no later than September l6. The recommended property
tax levy would be preliminary, to be used for the property tax notices that will be sent in
November. The Council may make additional changes to the budget prior to its adoption in
December, but the tax levy may not be increased.
The Council has held budget work sessions in August and began the review of Capital
Improvement needs in May.
Issue:
What amount should the Council certify for the preliminary levy for taxes payable in 2014?
Proposal Details:
There are four draft resolutions included in your packet.
Resolution 09-10-13-01 A is the result of the discussion at the August 27, 2013 budget work
session. It would provide for an increase in the levy of$10,000 or 0.46%.
If the Council desires to have no levy increase for 2014 the following three options should be
considered.
Resolution 09-]0-13-01 B reduces the general fund levy by an additional $10,000 to account for
the EDA/HRA levies. If this resolution is adopted the Council would have to determine where
the $10,000 cut would come from in the draft budget documents.
Resolution 09-10-13-01C reduces the general fund levy by $5,000 and the HRA levy is
eliminated. If this resolution is adopted the Council would have to determine where the $5,000
cut would come from in the draft budget documents. As explained below, if the EDA ends up
needing more than $5,000 next year the Council and EDA could agree to an interfund loan.
Resolution 09-10-13-01 D eliminates any levy for the EDA/HRA purposes. Since the last
meeting 1 have consulted with City Attorney Andy Pratt about funding for the EDA. It would be
possible that is the Council did not include a levy in 2014 for the EDA but the EDA needed
funds that an interfund loan could occur. This would reyuire the EDA and the City Council to
pass resolutions agreeing to the interfund loan transfer. The loan would then be repaid by the
EDA in 2015 with tax levy dollars. Since the EDA does not have specific plans for expenditures
yet in 2014 but is concerned projects may be stalled if they don't ask for a levy this year, this
may be one compromise that could meet both the goal of not levying funds for the EDA without
knowing the use and also not delaying EDA efforts if it is determined funds are needed a few
months from now. EDA Commissioner Greg Isaacson had asked what happens if the EDA needs
money next year but doesn't seek a tax levy. At the time of the meeting 1 didn't know the
answer but consulted with Attorney Pratt afterwards.
August's Questions of the Month on the website were about the EDA. The first question asked
what the top priority of the EDA should be. Three votes (23%) said attracting new businesses to
Scandia, 8 (62%) said assist in the retention and expansion of existing businesses and 2 (15%)
said other. Tourism and housing issues received no votes.
The second question was about a levy for the EDA. Two votes (14%) said yes for EDA
purposes, four votes (29%) yes for EDA and HRA purposes and 8 (57%) said no levy.
Fiscal Impact:
If Resolution 09-10-13-01A is adopted the levy could increase by $10,000 in 2014.
If any of the last three resolutions are adopted, the levy would not increase in 2014.
As mentioned previously, the impact of the lax levy on an individual property owner is impacted
by a number of things. Preliminary information from Washington County shows a 9.8%
decrease in the market value from 2013 to 2014. Assuming a property value decreased by 9.8%,
their portion of the tax bill attributable to the City would decrease by 0.4-4.9% depending on the
property value if the City adopted a $10,000 levy increase. Under those same circumstances, if
there was no levy increase,the property owner could see a decrease in the City portion of the
taxes of 0.9-5.4%. Copies of the Tax impact Worksheets are provided in your packet.
RESOLUTION NO. 09-10-13-01A
CITY OF SCANDIA, MINNESOTA
RESOLUTION CERTIFYING MAXIMUM
PROPERTY TAX LEVY PAYABLE IN 2014
WHEREAS,the City of Scandia has prepared a draft budget for the fiscal year
commencing January l, 2014; and
WHEREAS, the budget requires money to be raised from property taxes on taxable
property in the City of Scandia;
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL
OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that the
following sums of money are the maximum amounts to be raised by property tax payable in
2014:
2014 Property
General Purpose Tax Levy
General Fund $1,649,168
Debt Service Funds $327,506
Capital Improvement Fund $194,400
EDA Purposes $5,000
HRA Purposes $5,000
Total Property Tax Levy $2,181,074
FURTHER BE IT RESOLVED, that said maximum property tax levy shall be certified
to the County Auditor of Washington County.
Adopted by the Scandia City Council this l Oth day of September, 2013.
Randall Simonson, Mayor
ATTEST:
Kristina Handt, Administrator/Clerk
RESOLUTION NO. 09-10-13-01B
CITY OF SCANDIA, MINNESOTA
RESOLUTION CERTIFYING MAXIMUM
PROPERTY TAX LEVY PAYABLE IN 2014
WHEREAS, the City of Scandia has prepared a draft budget for the fiscal year
commencing January 1, 2014; and
WHEREAS, the budget requires money to be raised from property taxes on taxable
property in the City of Scandia;
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL
OF THE CITY OF SCANDIA, WASHINGTON COUNTY,MINNESOTA, that the
following sums of money are the maximum amounts to be raised by property tax payable in
2014:
2014 Pronerty
General Purpose Tax Levy
General Fund $1.639,168
Debt Service Funds $327,506
Capital Improvement Fund $194,400
EDA Purposes $5,000
HRA Purposes $5,000
Total Property Tax Levy $2,171,074
FURTHER BE IT RESOLVED, that said maximum property tax levy shall be certified
to the County Auditor of Washington County.
Adopted by the Scandia City Council this l Oth day of September, 20l 3.
Randall Simonson, Mayor
ATTEST:
Kristina Handt, Administrator/Clerk
RESOLUTION NO. 09-10-13-01C
CITY OF SCANDIA, MINNESOTA
RESOLUTION CERTIFYING MAXIMUM
PROPERTY TAX LEVY PAYABLE IN 2014
WHEREAS,the City of Scandia has prepared a draft budget for the fiscal year
commencing January 1, 2014; and
WHEREAS, the budget requires money to be raised from property taxes on taxable
property in the City of Scandia;
NOW,THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL
OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that the
following sums of money are the maximum amounts to be raised by property tax payable in
2014:
2014 Property
General Purpose Tax Levy
General Fund $1,644,168
Debt Service Funds $327,506
Capital Improvement Fund $194,400
EDA Purposes $5,000
Total Property Tax Levy $2,171,074
FURTHER BE IT RESOLVED, that said maximum property tax levy shall be certified
to the County Auditor of Washington County.
Adopted by the Scandia City Council this l Oth day of September, 2013.
Randall Simonson, Mayor
ATTEST:
Kristina Handt, Administrator/Clerk
RESOLUTION NO. 09-10-13-01D
CITY OF SCANDIA, MINNESOTA
RESOLUTION CERTIFYING MAXIMUM
PROPERTY TAX LEVY PAYABLE IN 2014
WHEREAS, the City of Scandia has prepared a draft budget for the fiscal year
commencing January 1, 2014; and
WHEREAS, the budget requires money to be raised from property taxes on taxable
property in the City of Scandia;
NOW,THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL
OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that the
following sums of money are the maximum amounts to be raised by property tax payable in
2014:
2014 Property
General Purpose Tax Levy
General Fund $1,649,168
Debt Service Funds $327,506
Capital Improvement Fund $194,400
Total Property Tax Levy $2,171,074
FURTHER BE IT RESOLVED, that said maximum property tax levy shall be certified
to the County Auditor of Washington County.
Adopted by the Scandia City Council this 1 Oth day of September, 2013.
Randall Simonson, Mayor
ATTEST:
Kristina Handt, Administrator/Clerk
Proposed Pay 2014 Property Tax Impact Worksheet
Taxing District: 0400 Scandia
STEP 1 - Calculate the Taxing DistricYs Tax Rate:
Actual Proposed %
Item Pay 2013 Pay 2014 Change
A B C
1. Lev before reduction for state aids $2,171,074 $2,181,074 0.5%
2. State Aids - $0 $0 0.0%
3. Certifed Pro ert Tax Le = $2,171,074 $2,181,074 0.5%
4. Fiscal Disparity Portion of Levy - $98,030 $108,152 10.3%
5. Local Portion of Le = $2,073,044 $2,072,922 -0.0%
6. �ocal Taxable Value 2014 is an ESTIMATE + 5,558,582 5,020,487 -9.7%
7. Local Tax Rate = 37.294% 41.289°/ 10.7°/
8. Market Value Referenda Le $0 $0 0.0%
g, Fiscal Disparity Portion of Levy(SD only) - $0 $0 0.0%
10. Local Portion of Le = $0 $0 0.0%
11. Referenda Market Value P014 is an ESTIMATE • O 0 0.0%
12. Market Value Referenda Rate = 0.00000°/a 0.00000°/ 0.0°/
STEP 2 - Calculate the Impact of the Taxing DistricYs Rate on Residential Homestead Taxes:
13. Assumes a 9 8% change in market value from 2013 to 2014,which is the city median change.
D E F G H
Market Homestead Taxing
Value Market Taxable District
Before Value Market Tax Portion of
Exclusion Exclusion Value Ca aci Tax
Actual Pa 2013
Pay 2013 76,000 @40°/a 500,000@1.0% (A7 x G)+
MV -rem 9% (D • E rem 1.25% A72 X D
14. 272,900 12,700 260,200 2,602 $970.39
15. 110,900 27,300 83,600 836 $311.78
16. 166,300 22,300 144,000 1,440 $537.03
17. 277,200 12,300 264,900 2,649 $987.92
18. 443,500 0 443,500 4,435 $1,653.99
Pro osed Pa 2014
Pay 2014 MV 76,000 @40% 500,000@1.0% (67 x G)+
X 0.902 -rem 9% D -(E rem �.25°k 612 x D
19. 246,200 15,100 231,100 2,311 $954.19
20. 100,000 28,200 71,800 718 $296.46
21. 150,000 23,700 126,300 1,263 $521.48
22. 250,000 14,700 235,300 2,353 $971.53
23. 400:000 1,200 398,800 3,988 $1,646.61
Percenta e Chan e from 2013 to 2014
24. -9.8% 18.9% -11.2% -11.2% -1 7%
25. -9.8% 3.3% -14.1% -14.1% -4.9%
26. -9.8% 6.3% -12.3% -12.3% -2.9%
27. -9.8% 19.5% -11.2% -11.2% -1.7%
28. -9.8% 0.0% -10.1% -10.1% -0.4%
Proposed Pay 2014 Property Tax impact Worksheet
Taxing District: 0400 Scandia
STEP 1 -Calculate the Taxing District's Tax Rate:
Actual Proposed %
Item Pay 2013 Pay 2014 Change
A B C
1. Le before reduction for state aids $2,171,074 $2,171,074 0.0%
2. State Aids - $0 $0 0.0%
3. Certifed Pro ert Tax Lev = $2,171,074 $2,171,074 0.0%
4. Fiscal Disparit Portion of Le - $98,030 $108,152 10.3%
5. Local Portion of Le = $2,073,044 $2,062,922 -0.5%
6. Local Taxable Value 2011 is an fSTlMATE 5,558,582 5,020,487 -9 7%
7. Local Tax Rate = 37.294% 41.090°/ 10.2°/
8. Market Value Referenda Le �0 $0 0.0%
9. Fiscal Disparity Portion of Levy(SD only) - $0 $0 0.0%
10. Local Portion of Le = $0 $0 0.0%
11. Referenda Market Value 2011 is an ESTIMA7E r 0 0 0.0%
12. Market Value Refere�da Rate = 0.00000% 0.00000°/ 0.0�
STEP 2 - Calculate the Impact of the Taxing District's Rate on Residential Homestead Taxes:
13. Assumes a -9 8% change in market value from 2013 to 2014,which is the city median change.
D E F G H
Market Homestead Taxing
Value Market Taxable District
Before Value Market Tax Portion of
Exclusion Exclusion Value Ca acit Tax
Actual Pa 2013
Pay 2013 76,000 @40% 500,000�1.0% (A7 x G)+
MV -rem 9% D -(E rem 1.25% (Al2 X D
74. 272 900 12,700 260,200 2,602 $970.39
15. 110,900 27,300 83,600 836 $311.78
16. 166,300 22,300 144,000 1,440 $537.03
17. 277,200 12,3Q0 264,900 2,649 $987.92
18. 443,500 0 443,500 4,435 $1653.99
Pro osed Pa 2014
Pay 2014 MV 76,0�0 @40% 500,000(�1.0'Yo (87 x G)�
X 0.902 -rem 9°k D - E rem 1.25Mo 612 x D
19. 246,200 15,100 231,100 2,311 $949.59
20. 100,000 28,200 71,800 718 $295.03
21. 150,000 23,700 126,300 1,263 $518.97
22. 250,000 14,700 235,300 2,353 $966.85
23. 400,000 1,200 398,800 3,988 $1,638.67
Percenta e Chan e from 2013 to 2014
24. -9_8% 18.9% -11.2% -11.2% -2.1%
25. -9.8% 3.3% -14.1% -14.1% -5.4%
26. -9.8% 6.3% -12.3% -12.3% -3.4%
27. -9.8% 19.5% -112% -112% -2.1%
28. -9.8% 0.0% -10.1% -10.1% -0.9%
instructions for Calculating a Residential Homestead Property Tax:
D. Market Value of Residential Homestead
Assumes that the Pay 2014 market value changed from Pay 2013 by-9.8%.
Countywide,the median change in market value from Pay 2013 to Pay 2014 is 2.4%.
E. Calculate the Homestead Market Value Exclusion
40%of the first 76,000 of market value(D),reduced by 9%on the market value over 76,000
The exclusion decreases as the market value over 76,000 increases, until a 414,000 home receives 0 exclusion.
F. Calculate Taxable Market Value
Market Value before Exc�usion(D)-Homestead Market Value Exclusion(E).
G. Calculate the Net Tax Caaacitv of a Residential Homestead
Pay 2013: 1 st 500,000 of(F)Taxable Market Value @ 1.00%, remainder @ 1.25%
Pay 2014: 1 st 500,000 of(F)Taxable Market Value @ 1.00%, remainder @ 1.25%
H. Calculate the Taxin4 DistricYs nortion of the Tax
Pay 2013: multiply the Pay 2013 net tax capacity(G)by the Pay 2013 tax capacity local tax rate(A7),plus
multiply the Pay 2013 market value before exclusion(D)by the Pay 2013 market value tax rate(Al2)
Pay 2014: multiply the Pay 2014 net tax capacity(G)by the Pay 2014 tax capacity local tax rate(B7), plus
multiply the Pay 2014 market value before exclusion(D)by the Pay 2014 market value tax rate(B12)
19-23. Line 19 will default to the median residential homestead value for the taxing authority for taxes payable in 2014.
24-28. Calculate the%increase/decrease from 2013 to 2014
(2014-2013)/2013
There is no longer a homestead credit. The market vaiue homestead credit was eliminated starting with taxes payable in
2012 and was replaced with a market value exclusion for homestead property.