HomeMy WebLinkAboutDecember 4, 2006 Truth in Taxation
CITY 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
Mavor
Gary L. Peterson
Coullcilmembers
Rohert A. Williams
Bruce Nalvrocki
Tammera Ericson
Bruce Kelzenberg
Citv lviunuller
Walter R. Fehst
ADMINISTRA nON
The following is the agenda for the Truth in Taxation Hearing of the City Council to be held at 7:00 p.m. on
Monday, December 4,2006 in the City Council Chambers, City Hall, 590 40th Avenue N.E., Columbia
Heights, Minnesota.
The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or
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 alTangements. (TDD/706-3692 for deaf or hearing impaired only)
1. Call Truth in Taxation Hearing to Order - Roll Call
2. Pledge of Allegiance
3. Presentation of2007 Budget and Tax Levy Information
a. Walt Fehst, City Manager, will present budget overview information.
b. William 1. Elrite, Finance Director, will graphic budget information using Power Point
c. Presentation by staff on department needs (10 minutes each)
i. Tom Johnson, Chief of Police
ii. Bob Streetar, Community Development
d. Walt Fehst, City Manager Budget Presentation Summation
e. Public Comments
4. Adjournment of Truth in Taxation Hearing
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 2007 Proposed Budget
and Property Taxes
December 4, 2006
TRUTH IN TAXATION HEARING
ON THE 2007 PROPOSED BUDGET
AND PROPERTY TAXES
Table of Contents
2007 Budget Message…………………………………………………1
2007 Revenue by Source………………………………………………2
2007 All Budgetary Funds Expenditures By Functional Area……….3
2007 Sources of General Fund, Library Fund, and EDA Revenue…4
2007 General , Library, and EDA Expenditures by Classification….5
General Fund Percent of Fund by Department……………………….6
History of LGA…………………………………………………………..7
Property Taxes 2003 to 2007………………………………………….8
Where Your Property Taxes Go………………………………………..9
Property Tax History from 1998 to 2007………………………………10
Tax Levies Payable…………………………………………………….11
Cumulative LGA Lost…………………………………………………..12
LGA and Tax Levy History……………………………………………13
Total Tax Supported Budgets………………………………………….14
Cost Savings 2003 to 2007……………………………………………15
What will $55 a Month Buy?……………………………………………16
CITY OF COLUMBIA HEIGHTS
2007 BUDGET MESSAGE
The budget message and document have been put together to comply with the City
Charter and state statute requirements for providing budget information and adopting a
proposed budget and proposed tax levy. Under state statutes the City of Columbia
Heights must adopt a proposed budget and a proposed tax levy and certify it to the
County Auditor’s office prior to September 15. The City then has until December 28 to
adopt and certify a final budget and levy to the County Auditor’s office. The final levy
can be less than the proposed levy but it cannot be greater than the proposed levy.
Based on this, staff traditionally recommends establishing a proposed levy that is
adequate to cover budgetary needs with the understanding that as the budget process
is finalized, the City Council has the opportunity to reduce the final property tax levy.
Budget Format
The City of Columbia Heights budget is prepared and distributed in a format that
includes useful narrative information that highlights department activities, objectives,
and budget summary. This format is designed to 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 narrative budget
message for each of these areas. When the City Council meets with the various
departments, a detailed budget workbook will be distributed to the council for each of
the functional areas. The workbook is intended for utilization during the work session to
provide more detail for each individual budget. At the end of the City Council budget
review process, a summary of the budget will be assembled for distribution to the public
at the City’s Truth in Taxation hearing, which is generally held one week prior to the
adoption of the budget.
Budget Overview
Budget Highlights
The budget has followed a steady downward trend for several years and has not kept
up with inflation due to cutbacks in local government aid (LGA). With no significant new
revenue sources, it has been difficult for the City of Columbia Heights to maintain cost
of living increases within the budget and impossible to increase the budget to provide
expanded services to residents. Some services have actually been reduced due to
decreased revenue and inflation. The current situation began in 2003 when the state
reduced LGA to cities to offset the state budget deficit. As is reflected in the following
chart, this reduction in LGA continued through the year 2006 with a total annual loss to
the City of Columbia Heights of $1,623,512. The year 2007 is actually the first year
since 2001 where the City of Columbia Heights will see an increase in state aid. The
city’s LGA will increase by $210,107 in 2007.
1-1
City of Columbia Heights, Minnesota
History of Local Government Aid
CertifiedIncreased
LGA Lost LGA Loss to LGA
Original Aid Certified for
Columbia Heights 20032,651,999 0
Aid After 2003 Legislative Reductions 20031,955,299 696,700 696,700
20041,603,203 1,048,796 352,096
20051,058,477 1,593,522 544,726
20061,028,487 1,623,512 29,990
20071,238,594 1,413,405 (210,107)
Total LGA lost in 5 years 6,375,935
Property Taxes
Since 2003 and as a direct result of the large reduction in LGA, it was necessary to
increase property taxes. As part of the 2004 budget process, the City Manager
developed a three-year strategy that involved sizeable property tax increases in 2004
and 2005 followed by much smaller property tax increases in 2006 and 2007. As you
can see from the following chart, in 2004 the city’s property tax levy increased by
$629,276. This was followed by a property tax increase of $655,277 in 2005. In 2006
the increase dropped significantly to $245,000. In 2007, due to the slight increase the
city is receiving in LGA, our property tax increase will be $153,076 or an increase in our
levy of 2.41%. However, it should be noted that the effect on individual property tax bills
will vary greatly. One of the main factors for this is how each property value increased
or decreased in comparison to the total property value increase for the city. As property
values fluctuate, some residents will actually see a reduction in property taxes in 2007
while other individual’s bills will go up proportionately if their property has seen an
increase in value. The following chart shows the city’s property tax levies for the last
five years for the Library, EDA and General Fund and the total decrease or increase in
the property tax levy for these years.
1-2
Property Taxes 2003 - 2007
Property Taxes 2003 2004 2005 2006 2007
Adopted Adopted Adopted Adopted Proposed
Library 433,585 433,585 438,835 478,319 504,748
EDA 140,569 84,965 84,965 84,965 140,898
General Fund 4,243,830 4,928,710 5,578,737 5,784,253 5,854,967
Total Levy 4,817,984 5,447,260 6,102,537 6,347,537 6,500,613
Levy Change from
Prior Year (6,146)629,276 655,277 245,000 153,076
Computation of Property Taxes
The State of Minnesota has established a very complex formula for how property tax
levies are distributed to residential and commercial properties. The formula involves
several factors, from homestead credits to an area-wide tax on commercial property that
is shared and distributed to communities that have a limited commercial base.
However, from community to community the single most important factor in the
distribution of property tax levies to individual properties is the ratio of the value of your
property compared to the total value of the property in your taxing district. For example,
in Columbia Heights the portion of the city’s levy that appears on each individual
property tax statement is in direct relationship to the value of that property compared to
the total value of property in the City of Columbia Heights. This factor makes it virtually
impossible to compare taxes on properties of the same value from community to
community as you need to factor in the total value of all property in each community. It
should be quite clear that a $200,000 home in Columbia Heights would not have the
same ratio to the total community value as a $200,000 home in Blaine or Coon Rapids.
Subsequently, the distribution of the city tax levy for a $200,000 home in Columbia
Heights would be different than the distribution of the tax levy for a $200,000 home in
Blaine or Coon Rapids. In addition to this, the appraised value of homes in Columbia
Heights is different. A home in Columbia Heights that is appraised at $200,000 would
very likely have a very different appraisal value in Blaine or Coon Rapids. The bottom
line is that it is impossible to compare taxes from one community to another on the
exact value of a home. A much more accurate method is to compare what the taxes
are on an average-value home in each community. When this type of tax comparison is
utilized, Columbia Heights consistently comes out as being one of the lowest taxed
communities in the metropolitan area.
1-3
Major Revenue Sources
The two major revenue sources for the City of Columbia Heights are LGA and our
property tax levy. The following chart reflects the shifting that has occurred with the
reduction in state LGA over the past years making the city more reliant on our property
tax levy for revenue. As you can see from the chart, in 2003 the City of Columbia
Heights was certified to receive $2,651,999 in LGA and our property tax levy was
$4,817,984 for a total of $7,469,983. For the next three years, 2004, 2005 and 2006,
LGA continued to decline and the levy portion of our revenue continued to increase.
However, even for 2006 our total combined revenue from these two sources was less
than it was in 2003. As you can see from the chart, 2007 is the first year where our
combined LGA and property tax levy exceeded where we were at in 2003. This has
necessitated the City of Columbia Heights to operate under a very tight budget the last
three years and absorb all inflation into these smaller budgets.
1-4
Significant Highlights on Expenditures
The following chart shows what the City Council and staff have actually accomplished in
reducing the budget over the last four years. As you can see from this chart, the budget
for tax-supported funds, the General Fund, Library Fund, and EDA Fund, in 2003 was
$9,719,781. The budget saw a major reduction to $8,948,853 in 2004. Since 2004
there have been additions made to the Police and Fire departments and other
inflationary factors that bring us to a budget of $9,508,549 in 2007, which is still over
$200,000 less than the budget for 2003. Considering the inflation rate over the last four
years, this has been a major accomplishment--to maintain services to residents, absorb
all inflationary costs, and maintain a budget at a lower level than it was four years ago.
Conclusion
The above narrative should provide an overview of the most salient changes and
assumptions included in the budget. The minor property tax increase for 2007 is the
smallest increase since 2003 and clearly indicates that the City of Columbia Heights is
well on the road to recovery from the significant losses in state aid.
1-5
WHAT WILL $55 A MONTH BUY?
(Based on 2007 Property Tax)
$55 a Month Buys Quality and Quantity
in the City of Columbia Heights
Telephone
Dinner for four
Two Twins TicketsStandard Cable TV
Columbia Heights City Services
ParksStreets PoliceFireLibrary
The average home ($185,300) in Columbia Heights pays $55 per month in city real estate taxes. The average Columbia Heights
resident will spend $55 every month on various services and pleasures, such as dinner and pop for four at a local
restaurant, standard 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 $55 of your monthly property taxes will buy!
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, Proposed
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" 2003 2004 2005 2006 2007
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; $1,855,532 $1,769,786 $1,769,749 $1,846,702 $2,020,953
, SALARY
FRINGE $476,252 $450,282 $450,495 $483,399 $542,142
TOTAL $2,331,784 $2,220,068 $2,290,256 $2,314,281 $2,563,094
+4.60/0 -4.80/0 +3% +10/0 +7.8Oh
City of Occurrence New Cases Arrests Search Warrants
Andover 5 5 2
Anoka 12 8 3
Blaine 41 44 5
Brooklyn Center 15 8 0
Brooklyn Park 36 43 11
Burns 2 1 0
Champlin 11 14 0
Circle Pines/Lexington 6 6 2
Columbia Heights 23 14 3
Columbus 2 1 0
Coon Rapids 44 45 8
Crystal 1 1 1
East Bethel 7 5 1
Fridley 14 14 3
Ham Lake 4 5 1
Isanti 1 2 0
Uno Lakes 4 8 0
Maple Grove 14 11 3
Minneapolis 8 7 3
Moundsview 2 2 0
Oak Grove 4 3 0
Ramsey 7 11 2
Spring Lake Park 11 12 4
St. Francis 4 3 0
St. Paul 4 1 1
Stacy 1 0 0
Anoka- Hennepin
Narcotics & Violent
Crimes Task Force
2006 - 3rd Quarter Statistics
Anoka-Hennepin Narcotics & Violent Crimes Task Force
2006 - 3rd Quarter Statistics
Quarter New Cases Arrests Search Warrants
3rd Quarter, 2006 283 274 53
2nd Quarter, 2006 245 249 50
1st Quarter, 2006 239 292 45
4th Quarter, 2005 245 221 39
3rd Quarter, 2005 284 316 34
2nd Quarter, 2005 247 274 35
1 st Quarter, 2005 236 267 48
OArea where cases are being worked by the DTF
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Other Services and Charges
2003
2004
2005
Proposed
2006 I 2007
$228,063 1$221,144 1$219,401 1$215,031 1$219,131
+11.3% 1-3%
-0.80/0
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2005
Population # of Sworn Arrests # of Part # of Part % of Crime
Officers 1 Crimes 2 Crimes Cleared
Columbia Heights 18,579 24 1.24/1000 1,299 1,200 1,788 43% CH
(Hilltop) 792 (Authorized) 173 125 188 51% HT
19,371 23 1.21/1,000 1,472 1,325 1,976
(actual)
Anoka 18,005 27 1.5/1,000 649 844 908 32%
Crystal 22,441 27 1.23/1,000 876 913 878 50%
Hastings 19,867 25 1.25/1,000 624 569 790 46%
Hopkins 17,268 26 1.52/1,000 717 664 932 43%
New Brighton 21,930 28 1.32/1,000 601 673 702 36%
New Hope 20,484 27 1.35/1,000 890 776 1,174 40%
South St Paul 19,861 25 1.25/1,000 770 784 1,210 31%
West St Paul 19,628 25 1.27/1,000 978 1,315 1,217 36%
Brooklyn Center 28,595 42 1.47/1,000 1,380 2,109 2,063 41%
Richfield 34,359 43 1.26/1,000 1,388 1,585 1,829 44%
White Bear lake 24,588 26 1.05/1,000 808 902 867 38%
Shoreview 27,328 Contract with 213 401 375 40%
Ramsey County
GRID %
1 3.7
2 3.1
3 3.3
4 1.5
5 0.8
6 3.3
7 2.3
8 14.1
9 1.1
10 4.7
11 4.3
12 3.8
13 3.4
14 5.5
15 2.8
16 6.33
17 2.7
18 2.6
19 22
20 9
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City of Columbia Heights
Budget Cuts and Add Backs
Prepared 11/29/2006
Summary of add backs
Libra
To allow attendance at MLA annual conference for one person
$500. Three memberships in Minnesota Library Association;
one membershi in American Libra Assoc $535
1,035
Police De artment
Specialist pay for the Drug Task Force Officer per Union
Contract $1620. This was a grievance settlement with LELS.
Overtime for full ear olice resence in Grid 8 $45,000
46,620
Public Works
Capital Equipment Replacement in Water fund for generator
replacement at pump station #2 $26,000.
Capital improvement in Parks for the replacement of the picnic
shelter at Silver Lake Beach $30,000 56,000
Total Add Backs 103,655
Cleanup item:
In the budget preparation Clerical expense (13,547) for Civil
Defense and CSO services (6,928) for Murzyn Hall were
incuded in both the dept budgets and in the Police dept budget.
To correct this we are removing the duplicate expense from the
Police Dept Budqet. (20,475)
Net add backs 83,180