9.c Staff Report - Certifying the Maximum Tax Levy for 2019 (002)
Staff Report
Date of Meeting: September 12, 2019
To: City Council
From: Neil Soltis
Re: Certify Maximum Tax Levy
Background:
The preliminary levy for taxes payable in 2020 must be certified to Washington County Auditor
and the date of the Truth in Taxation public hearing must be set no later than September 30,
2019. The maximum tax levy amount is preliminary and will be used by the County for the
property tax notices that are mailed out in November. The Council may make changes to the
2020 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. At the
September work session the Council recommended certifying the maximum levy amount as
modified to reflect based on the changes made at the September work session. The proposed
maximum levy of $2,429,946 is 7.6% greater than the previous year; however, it should be
noted that the levy amount for the years 2018 and 2019 reflected no change from the 2017
levy. The levy amounts for 2018 and 2019 were not changed based on there being an
unassigned balance in the General Fund in excess of the City’s fund balance policy. It is not
anticipated that a similar surplus will be present at December 31, 2019.
Issue:
Should the Council certify $2,429,946 as the preliminary levy for taxes payable in 2020?
Proposal Details:
The resolution in your packet provides the tax levy breakdown by fund. The total levy would be
$2,429,946. A copy of the Proposed Pay 2020 Property Tax Impact Worksheet is provided on
the following page. The Tax Impact Worksheet shows an estimate of the taxes that would be
payable based on various level of market value for residential homes and compares the taxes
paid in 2019 with the taxes that would be payable in 2020 on that property after reflecting the
average 11.7% increase in the market value of properties in Scandia.
Fiscal Impact:
The charts below show the impact of the levy increase for a number of different home values.
The first chart shows the 2019 values and taxes. The second chart uses the 2019 values as
increased by the average 10.1% increase in residential homestead market value and shows the
tax impact of the levy increase.
Market Homestead Taxing
Value Market Taxable District
Before Value Market Tax Portion of
Exclusion Exclusion Value Capacity Tax
Actual Pay 2019
Pay 2019 76,000 @40%500,000@1.0%(A7 x G) +
MV - rem @ 9%(D) - (E)rem @ 1.25%(A12 X D)
313,400 9,000 304,400 3,044 $986.14
90,800 29,100 61,700 617 $199.88
136,200 25,000 111,200 1,112 $360.25
227,100 16,800 210,300 2,103 $681.29
363,300 4,500 358,800 3,588 $1,162.38
Proposed Pay 2020
Pay 2020 MV 76,000 @40%500,000@1.0%(B7 x G) +
X 1.101 - rem @ 9%(D) - (E)rem @ 1.25%(B12 x D)
345,000 6,200 338,800 3,388 $1,052.08
100,000 28,200 71,800 718 $222.96
150,000 23,700 126,300 1,263 $392.20
250,000 14,700 235,300 2,353 $730.68
400,000 1,200 398,800 3,988 $1,238.39
Percentage Change from 2019 to 2020
10.1%-31.1%11.3%11.3%6.7%
10.1%-3.1%16.4%16.4%11.5%
10.1%-5.2%13.6%13.6%8.9%
10.1%-12.5%11.9%11.9%7.2%
10.1%-73.3%11.1%11.1%6.5%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
345,000 100,000 150,000 250,000 400,000
Comparison of Taxing District Portion of Tax
Pay 2019 vs. 2020
Pay 2019 Tax Proposed 2020 Tax
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
345,000 100,000 150,000 250,000 400,000
% Change in Taxing District Portion of Net Tax
Pay 2019 vs. 2020
2016
Actual
2017
Actual
2018
Actual
2019
Budget
2020
Budget
Estimated Market Value $622,802,50 $622,612,40 $642,093,60 $688,540,70 $769,122,20
Taxable Market Value $589,914,40 $590,055,80 $607,449,80 $655,957,10 $734,450,80
Levy Amount $2,244,336 $2,257,872 $2,257,872 $2,257,872 $2,429,946
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
$900,000,000
LEVY AMOUNTMARKET VALUECHANGES IN MARKET VALUE AND TAX LEVY
2016
Actual
2017
Actual
2018
Actual
2019
Budget
2020
Budget
Levy Amount $2,244,336 $2,257,872 $2,257,872 $2,257,872 $2,429,946
Levy / $1,000 of taxable market
valuation $3.80 $3.80 $3.67 $3.44 $3.31
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
LEVY PER $1,000 OF VALUELEVY AMOUNTTAX LEVY TOTAL AND LEVY PER $1,000 OF
TAXABLE MARKET VALUE
Options:
1) Approve Resolution 9-17-19-02 to certify the preliminary levy at $2,429,946.
2) Approve Resolution 9-17-19-02 as amended to certify the preliminary levy at a different
amount.
3) Take no action and schedule a special meeting for further discussion.
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.
2016
Actual
2017
Actual
2018
Actual
2019
Budget
2020
Budget
Economic Development Authority $-$5,000 $800 $5,000 $5,000
Local Road Improvement $581,142 $560,533 $725,050 $378,930 $381,516
Equipment Replacement $-$-$30,000 $30,000 $30,000
Park Capital Improvement $-$-$30,000
Capital Improvement Fund $30,000 $30,000 $-$-$-
Debt Service Fund $148,582 $116,739 $152,202 $501,350 $498,730
General Fund $1,484,612 $1,531,749 $1,322,274 $1,342,592 $1,484,700
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
CITY PROPERTY TAX LEVY