Introduction: St. Michael is required to conduct a Truth in Taxation Hearing prior to setting the budget and property tax. The City must discuss the proposed property tax levy and proposed budget. The public must be given a reasonable amount of time to ask questions. Positive comments are allowed
In July: The City Budget - a Year-round Process Staff begins to formulate with Department Heads Administrator requests Council input on priorities for next year which in summary is to maintain a low tax rate while properly funding infrastructure, equipment and supporting a highly efficient/effective staff. In August - Staff Prepares first budget & presents draft needs based budget to City Council. Paying for outstanding debt identified as a top need/priority. By September 15 - Council adopts preliminary levy and budget and sets Truth in Taxation Meeting Info is sent to County Auditor. Auditor sends out notices to all property owners notifying of the proposed taxes. Budget is refined up to the TNT Meeting, based on current year budget info. In December Council conducts TNT Meeting & takes input from residents on budget and levy. Later in December the Budget and Levy are adopted. Throughout the year the budget is monitored; and quarterly reports given to the City Council.
Get sewer access across I-94 (2014 Council Goal (CG) #1) Continue I-94 Expansion Corridor (CG #2) Long Term Budgeting For Capital Equipment (CG #3) Maintain high service/low cost focus (CG #4) Promote residential & commercial development (CG#5) Watch the budget closely (CG #6) Support the fire department (CG #7) Maintain efficient/hard working/effective staff (CG #9) Continue to support FYCC (kids activities) (CG #11) Continue fostering cooperation (CG #13)
How Property Tax System Works: Assessor sets proposed values as of January 1 for the following year taxes. Values are based on comparable sales. These values are sent to County Auditor. Auditor then sends property-specific notices to all property owners notifying of the value change. Also on the notice is the information about the Board of Review Meeting Council conducts Board of Review in May; this is when residents can question the proposed value. Values are then finalized and set for calculating taxes based on State of Minnesota Property Tax Laws.
How Property Tax System Works: Property is not taxed on actual value, but on TAX CAPACITY. Different property types have different tax capacities. For example, Commercial/Industrial property generally has higher tax capacity. Property Taxes support three levels of Government: St. Michael Average Home Value of $235,600*: 1. City w/ EDA ($859/yr, $71/mo, or 27% of total taxes); 2. County ($891/yr, $74/mo, or 28%) and 3. **School District ($1468.96/yr, $122/mo, or 45%for STMA) *Homestead Credit brings taxable value down to $219,600. **Elk River and Buffalo School Districts Homes will vary.
Notice of Proposed R 114-106-009130 2014 TAX 2015 PROP % INC+ EMV 207400 235700 14% TMV 188800 219700 16% COUNTY 819.7 891.64 9% STATE 0 0 STMICH 790 845.32 7% STMA 14% VOTER 972.87 993.42 OTHER 293.74 475.54 LID 0 0 SPECDST 13.69 14.08 3% TOTAL 2890 3220 11% Notice of Proposed R 114-119-001080 2014 TAX 2015 PROP EMV 204700 231000 13% TMV 185900 214500 15% COUNTY 806.87 871.31 8% STATE 0 0 STMICH 777.86 825.31 6% ELK RI 11% VOTER 580.06 680.14 OTHER 661.73 713.49 LID 0 0 SPECDST 13.48 13.75 2% TOTAL 2840 3104 9%
What we are seeing on Proposed Tax Statements*: Residential home values were increased 12.45% for the 2015 payable, the average value of a home in St. Michael is at $235,600. Townhome values saw a 20% increase as the market for townhomes has started coming back. There will be at least another 3% increase in values for the 2016 payable. Most residential taxpayers are seeing increases of approximately 10% in their overall taxes due to value and levy increases. Commercial Industrial property values decreased slightly (-1.69%) for the fifth year in a row. Taxes are generally down with the increased residential values picking up more of the burden this year. Agricultural land market values in Wright County increased 7% for the 2015 payable which offset the 7% decrease in 2014. The Green Acres land values were increased 16% reflecting the agricultural market values, so the agricultural properties that have green acres saw a slight increase in taxable values and taxes. As a result Agricultural Properties are seeing approximately 10% increases in 2015 taxes. * Keep in mind that tax values always lag about one year behind actual values.
What do you get for your City Tax Dollar? Police - Patrol, Crime Lab, Recreation Patrol, Canine and other police services with Wright County including Court Services and Criminal Prosecution (+23K in 2015) Fire & Emergency Medical Response City Street Maintenance and Improvement, including Sweeping, Asphalt repair, pavement management (crack seal, sealcoating, overlays) etc. Snowplowing Parks & Trails/Sidewalks FYCC/Recreation Senior Center Library (staffing/books funded by GRRL) City Council & Boards (Planning & EDA) Planning, Zoning & Code Enforcement Emergency Sirens/Other Emergency Management Services Misc: Elections, Assessing, Newsletters, City Buildings, Etc.
Nine Factors that Influence the Total Tax levy: 1. Market Value 2. Tax Capacity 3. Property Class Rates 4. State Aids (St. Michael projected to receive for the second time since 2002) 5. County Budget/Tax Levy 6. School Operating Levy 7. School District voter Approved Debt Obligations 8. City Budget and Tax Levies (only item totally controlled by City even though City often gets blame/credit for all) 9. Special State Laws; for 2013 Market Value Homestead Credit and Market Value Home Exclusion
Monticello s nuclear plant expansion added the tax base value of 2000 homes in 2015 to reduce their tax rate from 44.672 in 2014 to 35.732 in 2015.
Culture Customer service driven organization Focus on long term plans, big picture decision making, and goal achievement Needs based spending and good financial oversight without micro-management Collaboration All levels of government (Cities, County, School, State, and Federal) Businesses (Shop St. Michael, I-94 Chamber) Civic Groups (Seniors, Library, FYCC, Youth, Sports Associations) Continuity Businesses Residents Council Staff
Explanation of Proposed 2015 Property Tax Levy The proposed 2015 tax levy of $5,493,694 is $207,350 (3.92%) greater than the 2014 levy of $5,286,344. The following is a breakdown of the levy: 2014* 2015 General Fund Levy: $4,612,650 $4,770,000 TH 241 and Other Bond Levy $550,000 $600,000 Tax Abatement J&B Noise $13,694 $13,694 Tax Abatement - US Water $20,000 $20,000 Econ Development Auth. (EDA) $90,000 $90,000 Total $5,286,344 $5,493,694 *Note the 2014 Levy was a 1.73% over the 2013 Levy
The proposed tax increase is split among the following three categories: Infrastructure Debt Payments +50K Due to the lack of sustained local economic growth in recent years, the city has had to raise taxes to pay debt service payments on many of the past infrastructure projects (TH 241, One Way Pair, Town Center Civic Building,etc) Hire Public Works Worker +60K As the City s infrastructure has started to age and deteriorate the workload of Public Works increases. The last new Public Works Employee started in 2005 and the need is critical to add another employee to ensure that critical maintenance work gets done to avoid negative higher cost implications. Snow Plowing and Fuel Increases +110K The past two years winter snow seasons have significantly run over budget due to the nature of the snowfalls including, duration, frequency, amount and length of season. The increase to this years budget represents a more sustainable budget number for snow plowing and related fuel consumption. The city is also projected to receive $263,556 in Local Government Aid from the state in 2015. The council plans to use the money in capital equipment, building, and infrastructure debt payment funds to help pay for infrastructure debt payment and future equipment replacement or building repairs.
Charting St. Michael's Staff Reduction Staff FTE At Development Peak FTE Today Public Works 10.10 10.15 Reflecting eng techs & /inspectors plowing Engineering 3.00 2.30 Reflects fire chief, snowplowing & Utilities Building Dept 3.25 1.90 Reflects snowplowing & Fire Marshall time Recept/Bldg Tech 4.25 2.00 Deputy Clerk 1.00 0.00 City Clerk 1.00 1.00 Reflects Finance Asst time City Admin 1.00 0.50 Finance 2.20 1.00 Fire Admin Asst 0.75 0.30 Fire Chief 0.25 0.15 Reflects chief & fire marshall time Planning/EDA 3.00 1.60 Reflects Fire Admin. Asst. time Assessors 1.50 0.75 Reflects voluntary reduction of hours Total 31.30 21.65 * % Reduction of all staff 30.83% % Reduction of Office Staff (Includes Bldg & Engineering) 45.75% * Added reduction savings achieved but not reflected due to partnering with Albertville (Eng Insp & Shared Bldg Dept) and Hanover (Eng Insp) = almost 2 FTE s
2014 & 2015 Budgets and Projections 2014 Budget 2015 Budget Revenue $5,859,778 $5,984,583 Expense -$5,859,228 -$5,981,360 Year end Balance $550 $3223 Despite significant overages in plowing budgets, staff estimates the 2014 actuals will come in with a surplus primarily due to added partnership services revenue by the building and engineering departments and delinquent tax payments
Doing more with less is great. - Staff, Public Works, Public Safety, etc. Doing less with less is ok if desired and understood. - Less Maintenance, Less Staff, etc. Doing less with more is what we need to avoid. - Bond Rating, Turnover of good staff, etc.
Questions on the 2015 Budget and Property Tax Levy?
Proposed 2015 Property Tax Levy and 2015 Budget Adoption: December 23, 2014