HomeMy WebLinkAboutDecember 1, 2003 Truth in TaxCITY OF COLUMBIA HEIGHTS
590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692
Visit Our Website at: www. ci.columbia-heights.mn, us
ADMINISTRATION
Mayor
Julienne Wyckoff
Councilmembers
Robert ,~. Williams
Bruce Nawrocki
Tammera Ericson
Bruce Kelzenberg
CitF Manager
Walter R. Fehst
The following is the agenda for the Truth in Taxation Heating of the City Council to be held at 7:00 p.m. on
Monday, December 1, 2003 in the City Council Chambers, City Hall, 590 40th Avenue N.E., Columbia
Heights, Minnesota.
employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with
disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for disabled Persons are
available upon request when the request is made at least 96 hours in advance. Please call the Deputy City Clerk at 763-706-3611,
to make arrangements. (TDD/706-3692 for deaf or hearing impaired only)
Call to Order - Roll Call
Pledge of Allegiance
Presentation of 2004 Budget and Tax Levy Information
a. Walt Fehst, City Manager and William J. Elrite, Finance Director, will present information.
b. Public comments
c. City Council comments
Adjournment
Walter R. Fehst, City Manager
THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS Of DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES
EQUAL OPPORTUNITY EMPLOYER
City of Columbia Heights
Truth in Taxation Hearing
on the 2004 Proposed Budget
and Property Taxes
December 1, 2003
TRUTH IN TAXATION HEARING
ON THE 2004 PROPOSED BUDGET
AND PROPERTY TAXES
Table of Contents
2004 Budget Message .........................................................
2004 Revenue by Source ......................................................
2004 All Budgetary Funds Expenditures By Functional Area ..........
2004 All Budgetary Funds Expenditures By Classification .............
2004 Sources of General Fund, Library Fund, and EDA Revenue...
2004 General, Library, and EDA Expenditures by Classification ....
Major Expenditure Increases ..................................................
Class Rate Percentages By Real Property Type .........................
Changes in State Aid ...........................................................
Proposed Property Taxes .....................................................
Changes in Tax Levy 2002-2004 .............................................
Where Your Property Taxes Go ...............................................
Increase in Tax Revenue to City ..............................................
Property Tax History from 1997 to 2004 ....................................
Tax Levies Payable 2001 - 2004 .............................................
What will $30 a Month Buy? ...................................................
A1 - A9
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
CITY OF COLUMBIA HEIGHTS
2004 BUDGET MESSAGE
This budget message accompanies the 2004 budget document prepared for the Truth in Taxation
hearing which is distributed to the City Council and available to the public. The purpose of this
document is to touch on the highlights of the 2004 budget overall as well as each functional area
of the City.
Budget Format
The City of Columbia Heights budget is prepared and distributed in a summary format with useful
narrative information highlighting the department activities, objectives, and budget summary.
This format is designed to go beyond the normal number-crunching budget and provide the user
of the budget with a more descriptive narrative explaining the highlights of the budget. Under this
format the budget is broken down into ten functional areas and is prepared with a summary for
each of these areas along with a detailed budget workbook for the City Council to utilize during
their budget review. The summary budget book is then again summarized in a public document
that is used for the City's public budget adoption meeting and for any required Truth in Taxation
hearings. The budget message follows the format of the overall budget and provides a narrative
section summarizing each of the functional areas along with overall summary information
regarding the budget document, the total budget, property taxes, and other revenue sources.
Budget Overview
Budget Highlights
The budget has been in a steady downward trend for several years due to levy limits. With the
imposition of levy limits and no new revenue sources, it has been difficult for the City of Columbia
Heights to maintain cost of living increases in the budget and impossible to increase budgets to
provide expanded services to residents. This situation worsened in 2003 when the state reduced
state aid by $696,700. This scenario continued into the preparation of the 2004 budget. For
2004, the state reduced aid to the City by an additional $1,048,796 allowing the City to only make
up 60% of this reduction or approximately $629,276 in a property tax increase. On June 30, 2003
the City Council adopted resolution 2003-28 providing staff with guidelines for the preparation of
the 2004 budget. These guidelines directed staff to prepare a budget utilizing an additional levy
to make up the 60% reduction in state aid. The following chart reflects the effect of these budget
reductions on the tax-supported funds.
Page A-1
~CiW of Columbia Height, Minn~ota
State Aid Cu~ 2003'2004
CiW Manager's Pmp~ed 2,004 Budget Levels
· Reductions for 2004 Budget
' Adopted' Re'vi'sed ..... C'uis ' wi~. Al.lo.we.d Levy lnc.mase
Budget Budget For $ 420,000 4.51%
2003 2003 2003 Max Budge! icut'fm 2.003 ..
General Fund
Mayor-Council 211,014 200,463 (10,551) 20i,493 (9~521).
City Manager 412,706 397,796 (14,9!0) 394,085 (18,621)
Elections 8,105 8,105 0 38,105 30,000
Finance 643,973 611,774 (32.199) 614,918 (29,055)
Assessing t0i ,000 I01,000 0 t01,000
Legal Services 196,572 t 86,743 (9,829) 187,703 (8,869)
General Govt Bldgs 158,546 158,546 0 151,393 (7.153)
Police 2,786,587 2,652,306 (134,281) 2,660,860 (125,727)
Fire 916,572 870,760 (45.812) 875,217 (41,355)
Civil Defense 84,973 84,.973 0 81,139 (3;834)
Animal Control 16,150 16,150 0 15,421 (729)
Engineering 319,076 275,64t (43,435) 304,680 (14,396t
Streets 690,319 649,874 (40,445) 659,173 (31,146)
Street Lighting i26,416 126,416 0 120,712 (5.704)
Traffic Signs & Signals 73,251 73,251 0 69,946 (3,305)
Weed Control 16,428 16,428 0 15,687 (741)
Recreation Admin 224,417 172,747 (51,670) 214,292 (10,125)
Youth Athletics 19,702 19,702 0 18,813 (889)
Adult Athletics 25,328 25,328 0 24.185 (1,143)
Youth Enrichment 22,t69 22,169 0 21,169 (1.000)
Travel Athletics 22,635 22,635 0 21,614 (1,021)
Trips & Outings 38,666 38,666 0 36,921 (1,745)
Senior Citizens 78,580 78,580 0 75,035 (3',545)
Recog/Speciai Events 71,368 71,368 0 68,148 (3,220)
Murzyn Hall 249,022 249,022 0 237,786 (11,236)
Parks 751,437 734,321 (17,116) 717.533 (33,904)
Tree Maintenance- 104.500 1.01,100 (3.400) 99,785 (4,715)
Contingencies/Transfers 50,000 50,000 0 47.744 (2,256)
Budgeted Transfers 480,000 480,000 0 458,343 (21,657)
Total 8,899,512 8,495,86~4 ,(403,648)' 8~532,900 ' (366,612)
Library Fund ...............
Libra~ 679,700 645,800 (33,900) 649,033 (30,867)
I 5; i33,900) 649,033 (30,667)
Total 679,700 64 800
community DeveloPment .....
Protective Inspections 225,204 215,455 (9,749) 215,043 (10,161 )
Com Dev Admin 137,799 118,564 (19,215) 131,582 (6,217)
Economic Dev Fund 140,569 140,569 0 134,227 (6.342)
Total 503,572 474,608 (28,964) ' .480,85.1 (22,72I)
t'Grand'T°tal ' '1 10,,082,7e4'1 ,91',616,272 ,(466:,512)1" ,9,~62:784 ','(420,000)1
Page A-2
As mentioned above, the state legislature significantly reduced state aid to the City of Columbia
Heights in 2002. The following chad reflects what the City received in state aid for the years
2001 through 2003 and includes the projection for 2004.
Changes in State Aid
200t Adopted 2002 Adopted 2003 Adopted Revised 2003 2004 Proposed
, , , Budget , Budgiet Budget Bud~let Budget
HACA t ,004,368 0 0 0 0
LGA 2,385,618 2~589~420 2~651,999 1 ~955,299. 1,603,203
Total 3,389,986 2,589,420 2,651,999 !,955,299 t,603,203
Chan,~e from Prior Year 60,835 (800,566) , 62,579, , (696,700) (t~048,796)
Following the guidelines established by the state legislature and governor, the City has passed a
significant amount of the aid reductions to residents in the form of a property tax levy increase. It
should be noted that although the city and county had property tax levy increases as a result of
the state legislation in 2002, in that year there was a significant offset to this because the state
drastically increased aid to school districts and the levy reduction by school districts was greater
than the levy increase from the city and county. This is not the situation for taxes payable in
2004. For property taxes payable in 2004, the county, city and school are all experiencing aid
reductions from the state and all three entities are increasing property taxes. This will result in an
across-the-board property tax increase to all residential property in Columbia Heights. The
following chart shows property taxes for the years 2000 through 2004.
PROPERTY TAXES, 2000 - 2004
Proposed Property 2000 2001 2002 2003 2004
Taxes Adopted Adopted Adopted Adopted Proposed
Library 500,244 547,767 591,588 433,585 433,585
EDA 119,296 119,295 137,015 140,569 84,965
General Fund 2,676,416 2,958,490 4,095,527 4,243,830 4,298,710
Total Levy 3,295,956 3,625,552 4,824,130 4,817,984 5,447,260
Levy Increase from Prior
Year 57,331 329,596 1,198,578 (6,146) 629,276
Page A-3
The final remaining factor in the property tax formula is the state legislature's restructuring of
class rate percentages for real property taxes payable in 1997 through 2003. The class rate
changes made during this period of time will affect property taxes in all future years. This change
had a major effect on residential property, as it was a significant shift in tax capacity value from
commercial-industrial and residential non-homestead to residential homestead property. As you
can see from the following table, for residential homestead property there is no change in class
rate for the first $72,000 of value. There was a slight decrease in class rate for higher priced
homes. However, there was a significant decrease in class rate for commercial-industrial
property and residential non-homestead property. The net result of this is that although there was
small reduction for residential property, there was a far greater reduction for non-residential
property that, in effect, shifts a significant amount of property tax payment to residential
homestead property from other properties.
CLASS RATE PERCENTAGES BY REAL PROPERTY TYPE
TAXES PAYABLE 1997, 1998, 1999, 2000, 2001, 2002 and 2003
Real Property Payable Payable Payable Payable Payable Payable
Description 1997 1998 1999 2000 and 2001 2002 2003
Class Class Class Class Rate Class Class
Rate Rate Rate Rate Rate
Residential homestead
First $72,000 1.00%
Over $72,000 2.00%
First $75,000 1.00% 1.00%
Over $75,000 1.85% 1.70%
First $76,000 1.00% 1.00%
$76,000 - $500,000 1.65% 1.00% 1.00%
Over $500,000 1.25% 1.25%
Corn merci a l-lnd ustd al
and public utility
First $100,000
Over $100,000
First $150,000 2.70% 2.45% 2.40% 1.50% 1.50%
Over $150,000 4.00% 3.50% 3.40% 2.00% 2.00%
Residential non-homestead, I unit
First $72,000 2.30%
Over $72,000 2.30%
First $75,000 1.90% 1.25%
Over $75,000 2.10% 1.70%
First $76,000 1.20% 1.00%
$76,000 - $500,000 1.65% 1.00% 1.00%
Over $500,000 1.25% 1.25%
Residential non-homestead, 2-3
units and undeveloped land 2.30% 2.10% 1.70% .. 1.65% 1.50% 1.25%
Residential non-homestead
4 or more units 3.40% 2.90% 2.50% 2.40% 1.80% 1.50%
Low Income 1.00% 0.90% 1.00%
Page A-4
Economic Environment
As indicated in the Moody's Municipal Credit Report for the City of Columbia Heights, our
finances remain satisfactory with reasonable General Fund reserves. As a result, the City has
retained an A1 bond rating. In this rating review Moody's commended the City of Columbia
Heights for our foresight in setting up reserve capital replacement funds and restructuring our
funds to meet state auditor recommendations. Our revenue structure is somewhat vulnerable to
economic pressure since a significant amount of our General Fund revenue still comes from state
aid. As this aid and the city's property tax revenue are received in the last six months of the year,
the City has been maintaining a cash flow fund balance equal to 45% of the General Fund
operating budget. Subsequently, although it may appear that we have a significant fund balance
reserve, it is actually dedicated to cash flow purposes. Without this fund balance, it would be
necessary for the City to borrow money to operate with during the first six months of the year.
The City's primary source for increased revenue is through property tax levies. Over the past
several years, the City Council has maintained a very conservative profile in increasing taxes by
minimal percentages. To maintain the quality of services provided to the residents of Columbia
Heights, it was necessary in the 2004 budget to make a significant tax increase in the property
tax levy and pass on to the residents 60% of the reduction that the City saw in state aid for 2004.
Significant Highlights on Expenditures by Functional Area
Administration
The Administration functional area includes Mayor, City Council, City Manager, Assessing, and
the Legal budgets. The proposed 2004 budget for this functional area is $882,599. This is down
$38,693 from the adopted 2003 budget of $921,292. The most significant areas of change in the
budget are a reduction to the Mayor/Council budget of $9,892 with the major cuts being a $4,400
decrease in Expert and Professional Services, a $2,716 reduction due to lower insurance costs,
and a reduction of $1,000 in contingencies. The City Manager budget decreased by $19,919 for
2004 with the major reductions being in the form of a $7,508 cut in personnel costs due to the
elimination of an intern position and a decrease in overtime. Supplies decreased by $5,675
through a reduction in the purchase of new computer equipment. Other Services and Charges
were reduced by $6,736 with the primary cut being $4,000 to the advertising budget. The budget
for Legal Services was reduced by $8,882. The net result of the above is that this functional area
budget decreased by $38,693.
Community Development
This functional area covers all services previously provided by the Housing & Redevelopment
Authority with the exception of the management of Parkview Villa North and South. The specific
departments covered by this functional area are Building Inspections, Administration, Community
Development Block Grant, Parkview Villa North and South, the Economic Development Authority,
Housing Redevelopment Authority, multi-use redevelopment, and some miscellaneous housing
programs. This functional area of the City was created in 1996 with the establishment of the EDA
and the transfer of the previous HRA staff to the EDA as a City department. In recent years this
budget has seen several changes and modifications with the increases and decreases to the
Community Development Block Grant programs and the transfer of the Section 8 program to
Page A-5
Metro HRA. In mid-2002 a new director was hired for the Community Development Department.
Under his guidance, the primary objectives are the redevelopment of the City's industrial area and
the development of a specific budget and funding sources to cover these redevelopment projects.
Finance Department
This functional area covers Elections, Finance, Information Systems, and Utility Billing
Administration for the water, sanitary sewer, storm sewer, and refuse departments. The Finance
Department for 2004 is $614,918 compared to a 2003 budget of $643,973. This is a reduction of
$29,055. The largest expenditure in the Finance Department budget is for personnel. The
personnel portion of this budget comprises 87% of the total budget. Subsequently, it is virtually
impossible to make any large budget reductions without reducing personnel costs. Therefore, the
proposed 2004 budget, which includes a reduction of $29,055 in expense, results in a reduction
of personnel costs of $26,044. This type of reduction cannot be made without eliminating a
position as it is known now and restructuring the department. It is hopeful that this restructuring
can be done through attrition, otherwise it will be necessary to lay off one individual. The next
major item in this functional area is the Election Department budget. As the City has gone to
strictly an even year election, we did not have elections in 2003. In 2003 the only budgeted
expenditure was for the payment on our voting equipment of $8,105. Subsequently, the budget
for 2004 increases greatly as we will be having a general and primary election. This brings the
total 2004 budget to $37,859. For 2004 the IS Department budget remains status quo. This
department has two employees whose job responsibilities are to maintain all of the City's
networking, computers, and to provide staff training on general computer applications. In addition
to this, a significant amount of IS staff time is spent on program development. In 2002 the City
acquired database software called CityView. This software allows the structuring and sharing of
data under one central database. Since the purchase of this software, the IS department has
developed a Human Resources module for tracking employees from the time of hire to the time of
termination. They are also in the final stages of implementing a Special Assessment module, fire
tracking, and a building permit program under the CityView centralized database. The bottom
line is that this is a highly cost-effective way for the City to control data and computer costs.
Fire
This functional area is comprised of the Fire and Civil Defense departments. The Fire Department
budget for 2004 is $878,907 which is a decrease of $35,165 from the 2003 budget of $916,572.
This reduction was accomplished without the elimination of fire department personnel, which is a
major benefit to residents. The Fire Department provides medical care, fire suppression and
inspection services to the citizens of Columbia Heights. They also provide emergency medical
services to the city of Hilltop and maintain a fully licensed, basic life-support ambulance and have
the ability to transport patients to area hospitals. However, transportation services are not
currently provided. Due to staff turnover in the Fire Department during 2003 it is anticipated that
one firefighter position will be held vacant until July of 2004. Holding this position vacant until that
time will generate additional cost savings over and above what is projected in the proposed 2004
Fire Department budget. The other major highlight for 2004 is a grant that will provide the Fire
Department with a quint fire apparatus truck. This is a major addition to the department as it will
be the first actual ladder truck that has aerial capabilities of firefighting. The grant for this truck,
which totals $500,000 was acquired through the efforts of the Fire Chief and his staff who should
be commended for this effort in providing the city with a significant enhancement to firefighting
equipment through a grant as an alternative to utilizing City funds.
Page A-6
General Government
This functional area as a group was created new for the 1998 budget process. It is a collection of
all the departmental areas that are not specifically assigned to one division head. This functional
area includes the following departments: General Government Buildings, Recognition/Special
Events, Contingencies and Transfers, Cable Television, Refuse and Hazardous Waste funds.
Some of the notable areas under this budget are the City's float and royalty events. The City's
float and royalty appear in several parades throughout central Minnesota and western Wisconsin
bringing great recognition to the City of Columbia Heights. Another area in this functional budget
is the cable television fund. During 2003 new equipment was purchased to replace existing
broadcasting equipment. This new equipment will greatly enhance the quality of the City's cable
channels. This budget is totally funded from franchise fees that the City receives from the cable
company. In addition to funding all cable TV expenses, funds in the Cable/TV fund are used by
other departments in the City for communication related items. The final item in this area is
General Government Buildings. The budget for this department covers building maintenance for
City Hall. For 2004 we have included $20,000 to enhance security and staff safety at City Hall.
With the rapidly changing society we live in, staff security and safety has become a major issue
and priority.
Library
The City's library is located at 820 40th Avenue. The library's main goal is to provide free access
to informational and recreational materials for patrons in a pleasant environment conducive to the
acquisition of knowledge. A variety of library-related programs (e.g. storytimes, reading clubs,
filmtimes, homebound delivery, etc.) are offered for patrons of all ages from preschool through
senior citizen. As a city-supported library, Columbia Heights participates in the MELSA regional
system through a contract with the Anoka County library system, State-wide Borrowers Compact,
and METRONET. This enables Columbia Heights patrons to gain access to special services and
scholarly materials available to other participating libraries. For 2004, the proposed library budget
is $631,271. This is a decrease of $48,429 from the adopted 2003 budget of $679,700. To
accomplish this budget reduction several small areas of supplies and building improvements were
cut. One of the most noticeable patron services that is proposed to be cut is the microfilm
subscription to the Star Tribune. For many years the Columbia Heights Library has been one of
two libraries in Anoka County that has maintained the microfilm subscription of the Star Tribune.
The elimination of this service is a true sign of how steep the budget reduction has become.
Liquor
The liquor function is comprised of three liquor stores, Top Valu I, Top Valu II, and Heights
Liquor, along with a capital equipment replacement fund for each of the three stores. Top Valu I is
located at 4340 Central Avenue. This store opened in November of 1984 and was the City's first
endeavor into a large volume discount liquor operation. Since it's opening it has been very
successful. The City's second endeavor along this line was Top Valu II at 2241 37th Avenue. This
store follows the same concept as Top Valu I and opened in April of 1994. As this store is located
in a lower traffic area, its growth has been slower but very steady. Each year it shows a
progressive increase in sales and profitability. Heights Liquor is the third store and is located at
5225 University Avenue. This store was opened in 1964 and has remained a very small,
traditional municipal liquor operation. It does not operate on a high volume discount basis.
Page A-7
Markups are higher at this store, along with profitability, which is due primarily to taking
advantage of high volume purchasing discounts based on the volume purchased at Top Valu and
the lower overhead expenses of a city-owned operation. For several years, an important
discussion item regarding the liquor operation has been building a new, larger, state of the art,
liquor store on University Avenue. The current store is very small and has seen significant
deterioration over the years. Its size is inadequate to handle the high volume of customers and
traffic. Building a new store on University Avenue could be extremely profitable to the City as we,
once again, could compete with the new liquor store in Fridley and other more modern
operations. Along this line, another major concern is the store we are renting on Central Avenue.
Here the City spends approximately $150,000 each year on rent and CAM expenses. These
unnecessary expenses could be eliminated if the City owned its liquor store on Central Avenue,
which would make the operation more profitable. Currently the profits generated from the liquor
operation are equivalent to a 16% property tax reduction. With newer, more cost-effective, City-
owned stores on University and Central Avenues, the profitability could be increased with the net
income being utilized to further offset property tax levies. Subsequently, acquiring a building on
Central Avenue and constructing a building on University Avenue are major priorities for 2004.
Police
This functional area is comprised of the Police Department, Animal Control, DARE, and Capital
Equipment Replacement budgets. The most significant item in this area is personnel costs. Over
the past several years departmental staffing was increased from 22 sworn officers to 26 with the
addition of three officers by federal grants, and one additional officer over and above the grant
requirements. In 1999 all grant funding and the requirement to maintain this staffing level ended.
The City Council has annually reviewed the costs of maintaining this higher staffing level and in
the 2002 budget decided to cut back by one officer to a staffing level of 25 sworn officers. This
staffing level was again reviewed for the 2003 budget and the decision was made to maintain the
staff level at 25 sworn officers. The discussion regarding this staffing level continues with the
2004 budget and is concentrated on reducing the staffing level to 23 sworn officers which would
still be one more from the base strength of 22 sworn officers prior to the federal grants. For 2004
the proposed Police Department budget is $2,530,312, which is down $256,275 from the adopted
2003 budget of $2,766,587. This proposed budget for 2004 does include 24 sworn officer
positions.
Public Works
This functional area is comprised of several departments crossing several funds. One of the
significant advantages of the functional area budget format adopted in 1998 is that it shows the
entire Public Works function in one area. Areas covered are engineering, streets, weed control,
parks, tree programs, water utility, sanitary sewer utility, storm sewer utility, garage, and capital
equipment replacement funds for the Public Works operation. For 2004 the total Public Works
budget is $6,623,027. The primary reductions to the 2004 budget are in the area of personnel
costs. The first reduction was not filling one clerical position in the Public Works Engineering
Department. This position had been vacant for several years and was proposed to be filled in
2003. Not filling this position resulted in a savings of $11,592 in the Engineering Department. In
the Street Department, seasonal staffing was reduced. In the Parks Department there was a
decrease of $40,029, primarily in the seasonal staffing area with the intent of not opening several
ice skating rinks in 2004. These items combined with the reduction of supplies and capital outlay
has allowed Public Works to significantly reduce their budget for 2004.
Page A-8
Recreation
Recreation is comprised of severel departments including Administration, Youth Athletics, Youth
Enrichment, Adult Athletics, traveling teams, Trips and Outings, Senior Citizens, CHASE, and
Murzyn Hall management. Over the years the recreation program has seen steady growth in
their budget. One of the most notable areas is the Senior Citizen program. Over the years this
program has grown consistently and is well received by seniors. For 2004 the Recreation
Administration budget has decreased by $75,379 due to the elimination of the Youth Enrichment
Coordinator and repositioning of the salary of the Athletic Coordinator to the respective programs.
There was also a significant review of the allocation of administrative and operating costs for
Murzyn Hall. In this re-allocation the Murzyn Hall budget decreased by $64,936. This was
significantly due to space allocation to the Recreation budgets in the amount of $40,139. In
addition to that, staff is doing an in-depth evaluation of fees charged for the use of Murzyn Hall in
an effort to make Murzyn Hall more self-sustaining and less reliant on taxpayer dollars.
Conclusion
The above narrative should provide an overview of the most salient changes and assumptions
included in the budget. The budget for 2004 goes way beyond a hold-the-line budget. It makes
significant reductions to all functional area budgets. The property tax format in the state saw
significant changes in 2002 and prior years with state legislation shifting local government aid
from cities to schools. This resulted in a significant increase in the City portion of the property tax
bill. However, it also resulted in a significant decrease in the school property tax levy, which
overall for 2002 resulted in reduced property taxes. For 2004 this is not the case. For 2004 state
legislation made cuts in state aid at all levels of government. With the significant state deficit, it
can be anticipated that the state may cut back even more on aid to the city and that in future
years they will look to cities to make up this aid cutback through increased property taxes. The
City, for several years, has been at a hold-the-line budgeting concept, and each year has looked
at City staffing and wherever feasible reduced staff and services. Because of this ongoing
process of holding back on expenses, it is virtually impossible to make further budget adjustments
without increasing property taxes. Subsequently, the only alternative may be to pass the state
aid cuts on to residents in the form of property taxes to cover basic services and inflation.
The budget process is a major undertaking by City staff and the City Council that requires a great
deal of work performed by all involved to bring the process to a successful conclusion. I extend
my appreciation in this endeavor to all department directors and their staff, and a special thanks
to Barb Kelzenberg, Sue Schmidtbauer and Paul Grosse for their time in compiling the budget
and their extensive efforts to ensure the accurecy of the entire document. This is a very trying and
exhausting endeavor, and their extensive efforts are greatly appreciated.
Page A-9
2004 Revenue By Source
All Funds
Net Sales Liquor
1,620,150
Transfers in & Non
Revenue Receipts
3,109,621
Allocations
75,000
Taxes
~5,447,260
Debt Service and
HRA Taxes
952,483
Sales & Related
Charges
4,316,020
Miscellaneous
1,348,362
lCharges for Services
511,950
Fines and Forfeits
100,000
Licenses & Permits
323,100
Intergovernmental
Revenue
2,600,743
Page 1
2004 All Budgetary Funds
Expenditures By Functional Area
Public Works
6,623,027
Administration
882,599
Recreation Debt Se~ice
624,300 1,406,713
Police
2,608,635
Community
,pment
1,267,271
Finance
1,201,141
~ ~ ~ Fire
"~_General Government
~~'~ Library 2,407,919
Liquor 631,271
1,398,316
Page 2
2004 All Budgetary Funds
Expenditures by Classification
Contingencies
& Transfers
2,813,930
Capital Outlay
2,558,550
Personal Services
8,053,044
,....,
Other Services~
& Charges
3,946,412
~_ Supplies
3,862,730
Page 3
Sources of General Fund, Library Fund
and EDA Revenue
2004 Budget
Charges for
Services
504,350
Other
595,821
Transfers
491,266
Intergovernmenta
1,890,783 "-.........
Taxes
5,447,260
--- Page 4
2004 General Fund, Library Fund
and EDA Fund
Expenditures by Classification
Contingencies
& Transfers
692,736
Capital Outlay
54,105 ~~¥ ~
Other Services / ~:
&Charges ~ / X
Supplies_~
529,439
_ Personal Services
6,046,267
Page 5
Major Expenditure Changes
Decrease
, , 2003 Bud~let 2004 Bud~let from 2003
Police 2,790,643 2,530,312 (260,331 )
Transfers 480,000 338,725 (141,275)
Civil Defense 84,973 34,565 (50,408)
Recreation Admin & General 224,417 174,087 (50,330)
Library 679,700 631,271 (48,429)
Parks 751,437 711,407 (40,030)
Fire 916,572 878,907 (37,665)
Streets 690,319 656,492 (33,827)
Finance 643,973 614,918 (29,055)
Recognition/Special Events 71,368 46,4,,07 (24,961)
City Manac, ler 412,706 392,787 /19,919)
· -- Page 6
CLASS RATE PERCENTAGES BY REAL PROPERTY TYPE
TAXES PAYABLE 1997, 1998, 1999, 2000, 2001, 2002, 2003 and after
Real Property Payable Payable Payable Payable Payable Payable
!Description 1997 1998 1999 2000 and 2002 2003 and
2001 after
Class Class Class Class Class Class
Rate Rate Rate Rate Rate Rate
Residential homestead
First $72,000 1.00%
Over $72,000 2.00%
First $75,000 1.00% 1.00%
Over $75,000 1.85% 1.70%
First $76,000 1.00% 1.00%
$76,000 - $500,000 1.65% 1.00% 1.00%
Over $500,000 1.25% 1.25%
Commercial-Industrial
and Public Utility
First $100,000
Over $100,000
First $150,000 2.70% 2.45% 2.40% 1.50% 1.50%
Over $150,000 4.00% 3.50% 3.40% 2.00% 2.00%
Residential non-homestead, 1 unit
First $72,000 2.30%
Over $72,000 2.30%
First $75,000 1.90% 1.25%
Over $75,000 2.10% 1.70%
First $76,000 1.20% 1.00%
$76,000 - $500,000 1.65% 1.00% 1.00%
Over $500,000 1.25% 1.25%
Residential non-homestead, 2-3 units,
and undeveloped land 2.30% 2.10% 1.70% 1.65% 1.50% 1.25%
Residential non-homestead
4 or more units 3.40% 2.90% 2.50% 2.40% 1.80% 1.50%
Low Income 1.00% 0.90% 1.00%
Page 7
1 1 ! 1 ! ' '11 ' 1 I 1 1 ! ! ! 1 ! ! ! I
Changes in State Aid
2001 Adopted 2002 Adopted 2003 Adopted Revised 2003 2004 Proposed
Budget Budget Budget Budget Budget
!HACA 1,004,368 0 0 0 0
,LGA 2,385,618 2,589,420 2,651,999 1,955,299 1,603,203
'Total 3,389,986 2,589,420 2,651,999 1,955,299 1,603,203
Change from
'Prior Year 60,835 (800,566) 62,579 (696,700) (1,048,796)
Page 8
I 1 1 1 I ! ' 1 1 I 1 ! 1 1 i I ! I i I
Proposed Property Taxes
2001-2004
Property Taxes 2001 2002 2003 2004
Actual Actual Revised Proposed
!Library 547,767 591,588 433,585 433,585
'EDA 119,295 137,015 140,569 84,965
General Fund 2,958,490 4,095,527 4,243,830 4,928,710
Total Levy 3,625,552 4,824,130 4,817,984 5,447,260
Levy Increase from Prior
Year 329,596 1,198,578 (6,146) 629,276
Page 9
Changes in Tax Levy
$5,000,000-
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000 --
2002
2003
2004
· General Fund 4,095,527 4,243,830 4,928,710
BLibra~Fund 591,588 433,585 433,585
DEDA Fund 137,015 140,569 84,965
Page 10
WHERE YOUR PROPERTY TAXES GO
Payable 2003
Miscellaneous
7%
County ~
School
19%
City
42%
WHERE YOUR PROPERTY TAXES GO
Payable 2004
County
30%
Miscellaneous
7%
City
42%
School
21%
,-- Page 11
I I I I
City of Columbia Heights
Increase in Tax Revenue to City
Comparison of 2003 to 2004
Property Taxes
Library
EDA
General Fund
Base Levy
Levy for 60% of State Aid Reduction
Total Levy Certified to County
Actual
2003
433,585
140,569
4,243,830
4,817,984
N/A
4,817,984
Proposed
2004
433,585
140,569
4,243,83O
4,817,984
629,276
5,447,260
Amount of
Increase
0
0
0
0
629,276
629,276
Page 12
! I I
City of Columbia Heights, Minnesota
Property Tax History from 1997 to 2004
On Five Selected Properties
Est Mkt Value 2003 176,100 179,400 132,700 171,500 172,400
Est Mkt Value 2004 184,800 200,400 140,800 177,000 190,400
Taxable Value 2003 149,400 145,000 114,800 163,600 170,200
Taxable Value 2004 167,300 162,400 128,600 177,000 190,400
Property Identification Number
Year R36 ** ** 41 0042 R36 ** ** 13 0043 R25 ** ** 41 0157 R25 ** ** 22 0047 R25 ** ** 21 0097
2004 1,823.95 1,740.40 1,300.14 1,930.17 2,104.45
2003 1,587.93 1,513.69 1,128.58 1,751.27 1,835.57
2002 1,697.96 1,622.21 1,215.65 1,873.16 1,962.91
2001 1,724.55 1,648.69 1,198.27 1,957.54 2,146.22
2000 1,568.26 1,515.30 1,071.81 2,038.67 2,069.82
1999 1,619.32 1,451.44 1,007.19 1,652.56 1,955.62
1998 1,742.06 1,547.69 1,055.55 1,820.10 2,110.15
1997 2,027.80 1,798.04 1,169.61 2,041.79 2,467.61
Increase from 2003 to 2004 236.02 226.71 171.56 178.90 268.88
Increase from 2002 to 2004 125.99 118.19 84.49 57.01 141.54
(Decrease) Increase from
1997 to 2004 (203.85) (57.64) 130.53 (111.62) (363.16)
Page 13
City of Columbia Heights, Minnesota
TAX LEVIES PAYABLE 2001 - 2004
2001 2002 2003 2004 Amount
Adopted Adopted Adopted Adopted of Chan~le
General Fund 2,958,490 4,095,527 4,243,830 4,928,710 684,880
Library 547,767 591,588 433,585 433,585 0
EDA 119,295 137,015 140,569 84,965 (55,604)
Total Levy 3,625,552 4,824,130 4,817,984 5,447,260 629,276
MARKET VALUE (PAYABLE 2003)
MARKET VALUE (PAYABLE 2004)
2002 Taxes
2003 Taxes
2004 Proposed Taxes
Amountoflncrease 2003/2004
56,500
63,3OO
County I City
128 174
128 160
138 192
10 32
School
194
137
157
2Oi
Other
16
19
26
Total
512
444
513
69
MARKET VALUE (PAYABLE 2003) 92,600
MARKET VALUE (PAYABLE 2004) 103,700
County City School Other Total
2002 Taxes 221 300 330 28 879
2003 Taxes 236 297 239 37 809
2004 Proposed Taxes 267 373 285 52 977
Amount of Increase 2003/2004 31 76 46 15 168
MARKET VALUE (PAYABLE 2003) 124,900
MARKET VALUE (PAYABLE 2004) 139,900
County City School Other Total
2002 Taxes 334 454 486 41 1,315
2003 Taxes 362 456 348 55 1,221
2004 Proposed Taxes 401 559 411 77 1,448
Amount of Increase 2003/2004 39 103 63 22 227
MARKET VALUE (PAYABLE 2003) 154,200
MARKET VALUE (PAYABLE 2004) 172,700
County City , School Other Total
2002 Taxes 438 595 626 69 1,728
2003 Taxes 477 600 447 89 1,613
2004 Proposed Taxes 522 729 526 118 1,895
Amount of Increase 2003/2004 45 129 79 29 282
MARKET VALUE (PAYABLE 2003) 186,300 1
MARKET VALUE (PAYABLE 2004) 208,700
County City School Other Total
2002 Taxes 551 748 778 68 2,145
2003 Taxes 601 757 554 92 2,004
2004 Proposed Taxes 654 913 650 125 2,342
Amount of Increase 2003/2004 53 156 96 33 338
Page 14
WHAT WILL $30 A MONTH BUY?
(Based on 2004 Property Tax)
$30 a Month Buys Quality and Quantity
in the City of Columbia Heights
Telephone
Two Twins Tickets
Pizza for four
Basic Cable TV
Columbia Heights City Services
Parks
Streets Police Fire Library
The average home in Columbia Heights pays $30 per month in city real estate taxes. The average Columbia Heights
resident will spend $30 every month on various services and pleasures, such as pizza and pop for four at a local
restaurant, basic cable TV for the family, monthly phone services, etc. The best value for your money in Columbia Heights
is still all of the city services that $30 of your monthly property taxes will buy!
Page 15