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9.b Preliminary 2017 property tax levy - resolution 09 20 16 04nq-� €-, SCANDIA Staff Report Date of Meeting: September 20, 2016 To: City Council From: Neil Soltis, Administrator Re: Certify Maximum Tax Levy Background: The preliminary levy for taxes payable in 2017 must be certified to Washington County and the date of the public hearing must be set no later than September 30th. 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 discussed the budget at the August and September work sessions. The recommendation from the September work session was to certify the preliminary levy at the same amount as the 2016 levy in order to provide the option to lower the levy amount after future discussions on the 2017 budget. Issue: Should the Council certify for the preliminary levy for taxes payable in 2017 at the same amount as 2016? Proposal Details: The resolution in your packet provides the tax levy breakdown by fund. The total levy would be $2,257,871, the same amount as the 2016 levy. A copy of the Proposed Pay 2017 Property Tax Impact Worksheet in on the following page. The Impact Worksheet shows an estimate of the taxes that would be payable based on various level of market value for residential homes. Fiscal Impact: The charts below show the impact of a 1.3% levy decrease for a number of different home values. The first chart shows the 2016 values and taxes. The second chart assumes a 1.2% decrease in market value and shows the tax impact of a 1.3% levy decrease. Market Homestead Pay 2016 MV 76,000 @40% - rem @ 9% Taxing Value Market Taxable 277,100 District Before Value Market Tax Portion of Exclusion Exclusion Value Capacity Tax Actual Pay 2016 Proposed Pay 2017 Pay 2016 MV 76,000 @40% - rem @ 9% (D) - (E) 500,000@1.0% (A7 x G) + rem @ 1.25% (Al2 X D) 288,400 11,300 277,100 2,771 $1,017.57 101,200 28,100 73,100 731 $268.44 151,800 23,600 128,200 1,282 $470.78 253,000 14,500 238,500 2,385 $875.82 404,900 800 1 404,100 4,041 1 $1,483.94 Tax Increase (Decrease) ($33.77) Options: 1) Approve Resolution 9-20-16-xx to certify the preliminary levy at $2,227,507 2) Amend and then Approve Resolution 9-20-16-xx to certify the preliminary levy at a different amount. Recommendation: Option 1. The Council can continue to work on the budget between now and final adoption in December. The levy could still decrease from the proposed preliminary amount; however, it could not increase. Proposed Pay 2017 Pay 2017 MV X 0.988 76,000 @40% - rem @ 9% (D) - (E) 500,000@1.0% rem @ 1.25% (B7 x G) + (B12 x D) 284,900 11,600 273,300 2,733 $983.80 100,000 28,200 71,800 718 $258.46 150,000 23,700 126,300 1,263 $454.64 250,000 14,700 235,300 2,353 $847.01 400,000 1,200 398,800 3,988 $1,435.56 Tax Increase (Decrease) ($33.77) Options: 1) Approve Resolution 9-20-16-xx to certify the preliminary levy at $2,227,507 2) Amend and then Approve Resolution 9-20-16-xx to certify the preliminary levy at a different amount. Recommendation: Option 1. The Council can continue to work on the budget between now and final adoption in December. The levy could still decrease from the proposed preliminary amount; however, it could not increase. RESOLUTION NO. 09-20-16-04 CITY OF SCANDIA, MINNESOTA RESOLUTION CERTIFYING MAXIMUM PROPERTY TAX LEVY PAYABLE IN 2017 WHEREAS, the City of Scandia has prepared a draft budget for the fiscal year commencing January 1, 2017; 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 2017: 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 20th day of September, 2016. Randall Simonson, Mayor ATTEST: Brenda Eklund, Deputy Clerk 2017 Property General Purpose Tax Levy General Fund $1,551,768 Debt Service Funds $116,739 Capital Improvement Fund $30,000 Local road Improvement Fund 554.364 EDA Purposes $5,000 Total Property Tax Levy $2,257,871 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 20th day of September, 2016. Randall Simonson, Mayor ATTEST: Brenda Eklund, Deputy Clerk Proposed Pay 2017 Property Tax Impact Worksheet Taxing District: 0400 Scandia STEP 1 - Calculate the Taxing District's Tax Rate: STEP 2 - Calculate the Impact of the Taxing District's Rate on Residential Homestead Taxes: 13. Assumes a -1.2% change in market value from 2016 to 2017, which is the city median change. Irn IF) IF► Ir.1 I1-11 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Market Item Actual Proposed Pay 2016 Pay 2017 A B % Change (C) 1. Levy before reduction for state aids $2,257,871 $2,257,871 0.0% 2. State Aids - $0 $0 0.0% 3. Certifed Property Tax Levy $2,257,871 $2,257,871 0.000% 4. Fiscal Disparity Portion of Levy - $100,980 $112,010 10.9% 5. Local Portion of Levy = $2,156,891 $2,145,861 -0.5% 6. Local Taxable Value 2017 is an ESTIMATE - 5,873,543 5,876,838 0.1% 7. Local Tax Rate = 8. Market Value Referenda Levy 36.722% 36.514% $0 $0 -0.6% 0.0% 9, Fiscal Disparity Portion of Levy (SD only) - $0 $0 0.0% 10. Local Portion of Levy = $0 $0 0.0% 11. Referenda Market Value 2017 is an ESTIMATE - 517,588,600 514,446,800 -0.6% 12. Market Value Referenda Rate =11 0.00000%1 0.00000% 0.0% STEP 2 - Calculate the Impact of the Taxing District's Rate on Residential Homestead Taxes: 13. Assumes a -1.2% change in market value from 2016 to 2017, which is the city median change. Irn IF) IF► Ir.1 I1-11 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Market Homestead Actual Pay 2016 Taxing Value Market Taxable (A7 x G) + (Al2 X D) District Before Value Market Tax Portion of Exclusion Exclusion Value Capacity Tax Percentage Change from 2016 to 2017 24. -1.2% 2.7% -1.4% -1.4% -1.9% 25. -1.2% 0.4% -1.8% -1.8% -2.3% 26. -1.2% 0.4% -1.5% -1.5% -2.0% 27. -1.2% 1.4% -1.3% -1.3% -1.9% 28. IL -1.2% 50.0% -1.3% -1.3% -1.9% Tax Increase (Decrease) ($19.64) Proposed Pay 2017 Actual Pay 2016 Pay 2017 MV 1 X 0.988 Pay 2016 MV 76,000 @40% rem @ 9% 500,000@1.0% (D) - (E) rem @ 1.25% I (A7 x G) + (Al2 X D) 288,400 11,300 277,100 2,771 $1,017.57 101,200 28,100 73,100 731 $268.44 151,800 23,600 128,200 1,282 $470.78 253,000 14,500 238,500 2,385 $875.82 404,900 800 404,100 4,041 $1,483.94 Percentage Change from 2016 to 2017 24. -1.2% 2.7% -1.4% -1.4% -1.9% 25. -1.2% 0.4% -1.8% -1.8% -2.3% 26. -1.2% 0.4% -1.5% -1.5% -2.0% 27. -1.2% 1.4% -1.3% -1.3% -1.9% 28. IL -1.2% 50.0% -1.3% -1.3% -1.9% Tax Increase (Decrease) ($19.64) Proposed Pay 2017 Pay 2017 MV 1 X 0.988 76,000 @40% - rem @ 9% 500,000@1.0% (D) - (E) rem @ 1.25% (B7 x G) + (B12 x D) 284,900 11,600 273,300 2,733 $997.93 100,000 28,200 71,800 718 $262.17 150,000 23,700 126,300 1,263 $461.17 250,000 14,700 235,300 2,353 $859.17 400,000 1,200 398,800 3,988 $1,456.18 Percentage Change from 2016 to 2017 24. -1.2% 2.7% -1.4% -1.4% -1.9% 25. -1.2% 0.4% -1.8% -1.8% -2.3% 26. -1.2% 0.4% -1.5% -1.5% -2.0% 27. -1.2% 1.4% -1.3% -1.3% -1.9% 28. IL -1.2% 50.0% -1.3% -1.3% -1.9% Tax Increase (Decrease) ($19.64)