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12-09-1993 Truth in Taxation MinutesSTATE OF MINNESOTA The City Council of the City of COUNTY OF WRIGHT Otsego held a Truth In Taxation CITY OF OTSEGO Hearing this 9TH day of December, 1993 at 7:30PM. Mayor Norman F Freske called the meeting to order, Doug Lindenfelser, Floyd Roden, Larry Fournier and Ron Black, Council Members were present. Also present were Elaine Beatty, Deputy Clerk/Zoning Administrator, Judy Hudson, Secretary and Pete Merges, City Assessor. Mayor Norman F Freske read the information on the Hearing from the legislature. He explained the structure and where the money derived from taxes goes and how it is proportioned. (See sheet attached) Mr Merges explained that some of the figures on the Truth In Taxation form that was mailed out for this meeting would probably change when the tax statement is mailed from the County. The figures have not been adjusted on this Truth In Taxation Notice. He explained the percent of value that is used to tax $72,000.00 is 1%. After $72,000.00 of value, anything above that is taxed 2%. He also stated that the amount of tax dollars that was reduced for Ag (farm land) would be made up by the residential properties. This is a change from the legislature and the commercial properties also had a reduced rate. He stated commercial had been taking a heavy load of the tax and a reduction probably was needed. Larry Fournier explained the issues we need to address in this Truth in Taxation Meeting. Mr Fournier explained the 1994 projection for: City Administration for three Employees: Salaries $92,000.00 Benefits $15,000.00 Total $107,000.00 Street Department for three Employees: Salaries $89,670.00 Benefits $15,000.00 Total $104,670.00 City Administration and Street Department projected for 1994: TOTAL $111,670.00 Total Levy for 1994 is $605,220.00 Street Department's total budget including Wages, Benefits, Motor fuel & oil, uniforms, repairs and maintenance, sand and gravel, etc., chemicals, culverts, street signs, garage electric, garage telephone is $194,870.00 Contracted service for Street Department: Engineering $20,000.00 Attorney 6,000.00 Street upkeep 70,000.00 TOTAL $ 96,000.00 CITY OF OTSEGO TRUTH IN TAXATION MEETING OF DECEMBER 9, 1993 AT 7:30PM - PAGE 2 - Capital expenses for Street Dept: Shouldering sander Truck Trade for a new grader Total Exp. The total Administration Personnel Benefits Supplies Telephone Electric Heating Recording Fees Misc. TOTAL ADM BUDGET Contracted Services for Attorney Engineer Planner Bldg Insp. Sheriff Dept Recycling Street Lights -Sig Dues & Conf. Newsletter Garbage Audit TOTAL Administration: Assessor Planning Comm. Council Clerk Treasurer Capital Exp Budget for 1994 $ 92,000.00 $ 15,000.00 $ 10,000.00 $ 4,000.00 $ 6,000.00 $ 5,000.00 $ 600.00 $ 31,000.00 $163,600.00 Administration: $ 33,000.00 $ 40,000.00 $ 60,000.00 $ 35,000.00 $ 90,000.00 $ 28,000.00 $ 6,000.00 $ 5,000.00 $ 2,150.00 $ 800.00 $ 4,650.00 $304,600.00 $ 12,000.00 $ 3,600.00 $ 36,000.00 $ 28,000.00 $ 5,000.00 $ 8,000.00 TOTAL $ 92,600.00 $ 6,000.00 25,000.00 50,000.00 $ 81,000.00 is as follows: The Council's Budget is 11% increase from 1993. The Net tax capacity for 1993 was $16,933,000.00,in 1992 it was $14,760,000.00. The net tax capacity was increased by 14.5%. With those figures we should have -0- increase in the City Tax. Norman F Freske explained the amounts and how the Council came to those figures. Ron Black stated that the Council has spent a lot of time on the budget trying to make sure that there would be no increase in taxes. When his valuation came out it showed his CITY OF OTSEGO TRUTH IN TAXATION MEETING OF DECEMBER 9, 1993 AT 7:30PM - PAGE 3 - contribution to the City of Otsego is 15%. Mr Black stated that he found out that for residential purposes, for $72,000.00 value, 1% is applied. Over the $72,000.00, 2% is applied. He explained how his increase in value, increased his property taxes. Floyd Roden said that thanks to the State and Federal government, we have mandates added to the total budget and gave figures as follows: *Recycling 1% *Sales tax on Equip 2% *Wetlands Act, City is LGU - costs extra money *Comparable worth increased the budget *Increase in Sheriff's protection 6% - Last year we paid $54,000.00. This year it will be $90,000.00, at a rate of $30.50 per hr. Pat Bomaster - A resident of Otsego asked about the levy and budget not increasing. Larry Fournier - said there is an 11% levy increase and 14.5% net tax capacity for 1994. Mr Bomaster asked if he is understanding that revenues are greater than our needs? Floyd Roden answered no, we won't be able to keep up with the roads with this amount. The tax laws changed so your tax amount increased. Mayor Norman F Freske explained that his taxes went up 30 some percent. The percentage is a dollar amount, not the tax amount. Ron Black said the City's rate of spending is not exceeding the rate of growth in the City. An increase in taxes is due to a greater rate of tax in the City. I am paying more taxes because my value went up. Earl Cook - A resident of Otsego said he had $68,900.00 valuation last year and his taxes went up $244.00 for 1994. His value went up to $79,500.00, or a 29.5% increase. The City portion went up 28%. Pete Merges said it can only increase 10% on limited market value according to a new bill passed by the legislature. He feels they are getting these figures out of his field book that he uses to assess. The County has to go thru there books and change the figures. Ron Black - If I asked for fair market value for 1994 from the County, would they have it? Pete merges said no they wouldn't. Mike Snyder - A resident of Island View Estates Addition said he challenges anyone to build a $70,000.00 home. $100,000.00 is the average home price. His tax for 1994 is $1,800.00. Larry Fournier said that this City Council is working to keep the Budget under control. Looking at the size of the crowd, we must be doing a pretty good job. Ron Black said we would like a list of the names of the CITY OF OTSEGO TRUTH IN TAXATION MEETING OF DECEMBER 9, 1993 AT 7:30PM - PAGE 4 people here so. we can let you know when people are asking for an increase in services. Floyd Roden said we called the County Auditors office prior to setting the budget amount so we didn't have to raise taxes. Mr Cook said that we get no money back from the tickets that the Sheriff's office writes. We should get that money. Mr Bomaster said that $90,000.00 for law enforbement is cheap. Ron Black asked Mr Cook if he wanted to serve on a law enforcement sub -committee? Mr Cook said he did. Ron Black explained that he has been gathering information on law enforcement costs. He started this action when the Sheriff's Department went over $30.00 an hour. Mayor Norman F Freske explained that we have been looking at other alternatives for law enforcement. Doug Lindenfelser motioned to set the 1994 Levy at $605,220.00. Ron Black seconded the motion. Motion carried unanimously. Ron Black motioned to adjourn the meeting. Floyd Roden seconded the motion. Motion carried unanimously. ot,,,t,)0_ NORMAN F FRESKE, MAYOR FLOYD G. D UG LENFELSER, COUNCIL RON = •CK, OUNCI Elaine Beatty, Deputy Clerk/Zoning A . EB IER, COUNCIL League o nnes©ta Cites for immediate release November 24, 1993 3490 Lexington Avenue North St. Paul, MN 55126 (612) 490-5600 Contact: Jean Mehle Goad or Sarah Hackett (612) 490-5600 Who's responsible for property tax increases? By now most of us have gotten our property tax notices from the county. These notices, called truth in taxation notices, tell us how much property tax we paid this year and how much we may be paying next year. Property taxes are often the most significant revenue for cities, counties, schools, and special taxing districts such as watershed districts. Statewide, schools are responsible for about 48 percent of the total property tax levy, counties --29 percent, cities --20 percent, and special districts --3 percent. These percentages vary in each taxing area, but the figures show that no single local government is the sole user of property tax revenues. Even the portion of the property tax attributed to a certain local unit may not totally reflect the decisions of the elected officials in that local unit. Four factors contribute to increases in property tax estimates: structural changes in the property tax, state and federal mandates, tax and budget estimates, and local spending decisions. ► Structural changes in local property valuations and changes in property tax class rates shift tax burdens. In many parts of Minnesota, the assessed value of property, especially commercial property, has gone down, sometimes dramatically. This shifts a greater portion of the total tax burden onto other properties, particularly homes and apartments. - more - League of Minnesota Cities Who's responsible for property tax increases? Add 1 Another structural change is in property class rates. Different types of property (farms, homes, businesses) pay a different proportion of the property tax. Unless the state provides additional revenues when it makes changes to these class rates, the property tax burden shifts from one type of property to another. In some areas of the state there has been a shift from farms to other properties. ► The second factor that leads to increases in property taxes is state and federal mandates. The federal and state governments require cities, counties, and schools to spend large amounts of money and time to comply with federal and state laws. This causes spending to increase without the local governing body making deliberate decisions to spend more on services. These new laws may, or may not, be responding to local priorities. ► By September 15 of the current year, local governments need to estimate their budgets and the tax revenues they will need for the upcoming calendar year. The estimates show up on the truth in taxation notice. Local governments emphasize that these are estimates and not the final decisions. Some parts of the estimate may change between September 15 and December because of changes in revenue projections such as state aid, fees and fines, and interest earnings. Because the law prohibits local governments from increasing the amount of the proposed levy, some local officials believe it's better to err on the side of over estimating revenue needs. ► Although these factors make up a significant portion of the increase many citizens see on their property tax bill, increased spending is also a factor. Some local units are proposing increases in spending or increases in the proportion of revenue that comes from the property tax. Local officials in cities, counties, and schools will answer your questions about the changes - more - League of Minnesota Cities Who's responsible for property tax increases? Add 2 during the budget hearings they hold throughout the year and at your truth in taxation hearings. The dates and times of these hearings are on your truth in taxation notice. Please attend. - 30 - Portion of property tax going to each local government :?W^N'6: i.:fi}}}};{;x{.;n;{{::}y,:i:•x'F.{{•},v,;}}}}}:i;.}}:{}u}}.x}:r:ry:Fi}{{•`.22Gv: N+if.54'f�'i'.•YiY�J%4:StitivX :v4YiGl JFF%iyJ ������ 3% 20% Special City 29 % County 48 % School Ts C o •V c. . U 4.4 . • al vyE 'i. w CO A ao to) v ti • U a o a N �'' 000 •v oo 0 o v o 0 0 • o H 0 0 Q▪ , �, 0 0 O C^o .• fir .fir M M(NI C h• Ca O 00C • U O p O :8)ss; °ds N6. oa L oov U co -o 0`�74 E ti o • v s9 cA aa-, ss 0 4.1 > a ? .° N ss o, c H 0 z v 4.1 o o tc o h 0 0 o ',I- N O O 0 0 O N i .0 N N 0 N 0 0 0 0 O t� M 4 O O o 0 O 0 • 0 O O t� C et 1 1. w b • V) v N a 4., MI .oo,�_'' 0000 ° o 4) ''" w O O a .tom' 0 0 0 0 h C w O O 0 O ✓ 'v 0 0 0 0 0 Cr E v:a �,ds >,o o ,OO . 0 E E. 4 ; c bs s9 s9 O .0 vs M d z Real Property Description Com) z Real Property Description CC U Residential homestead Residential homestead ea so N N c c c o '4 O O O O O .-', ..-, N o ho o o 00 00 O O .--i cV N 0 0 0 •w "Ci co d L. 0 c''V w o , o E0 .0 d d i a c�o C%' Oo ano 0 .cdon 0ooC N 0 o pQ y o Eo ea ' odcd N N ea ti. c-,1 V N .0 11 •" aM M .E,s 69 y„ �? v N u o Cd "7 v� 6. O 0 • i.tlO q c.0 x O 0 . o 0 0 0 0 \ O 00 'f O O O .-+ O O N 0 C7 0 o 0 N N O O 05 C O r d L 61 L "C Uw 8 cE a5 cdv 0 N° c .a v, = o ,. a) lo o o a'on F h 0 o , iii S 0 O 04 AO Z O 0 0 w bn -o Ooal H o O.a p O L N U N • "O ._ 0CN1 CNC .' 69 bA 5 v -+ O Et-- L. V) CPS� itiV i+ t, t. 'C n N 0, ti pto t.0 O4 tTO tla. "0¢O td Q over 320 acres STM3 pa3EQ d 0 O rtb CL H m x w a. rt 1/44 tr n M N. 0 V w v a. w o rh W -35w a. W cn W rt O M O9aSIO 3O XLIO H U= aozeilsTuTUIPV/A.aIO £4TO ` 1 I) Ln po co N 1/40 43,825 N N W a 242,768 N CO 0 N 2.608 14.445 10.249 Proposed 1994 Tax Rate H Ort rt wm N . Bonds - Revenue onds Revenue' Streets .(A) 1993/94 BUDGET REQUIREMENT (C) Tax Aids BACA (D) * Other Resources 1 $458,829 W CO N Ul $242,768 $172,236 (E) (E = A -B -C -D) CERTIFIED LEVY o 0 M p (Drt w04 V H raPS M OO avis 30 C:7 H (D O. m CD �s tr 1/44 'I n rt 1-4 rh x rt rt co (D r rt o 0. 0 (D 0 o 1+ HI wH oar) 0' can El 0 0 14 - rt rt r1 0 rt rh 0 0 v''rt (D W K va o W fil (o rtw Cn rt 0 W0 Ort O O rh 1-h w H W 1, n rt rt v dv 0 rt m H cn :(q pauargaa as oZ £661 `8Z zagmaaaQ uoT4a3TYPIa0 Snarl