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• FALCON HEIGHTS CITY COUNCIL MINUTES -4- <br />September 8, 2004 <br />Information on Fiscal Disparities (continued) <br />Fiscal Disparities <br />• 7 County Metro approach to planning and funding infrastructure improvements <br />• Improvements are paid for by all taxpayers <br />• Specific communities would benefit from tax base enhancements provided by <br />infrastructure improvements <br />• Provides income equity in the distribution of additional Commercial/Industrial tax <br />revenue <br />• 40% of that Commercial/Industrial (C/I) tax base enhancement is pooled in the 7 County <br />Metro <br />• Falcon Heights gains from the Fiscal Disparities program because of a relative lack of C/I <br />property. In 2004, the City gained $167,057. In 2005, it is estimated that Falcon Heights <br />will receive $157,727 <br />• Each City has a portion of the pool, based on assessed valuations in January of the <br />current year. Each City's portion of the pool, multiplied by the City's tax rate (prior <br />• year), equals fiscal disparity dollars allocated to that City <br />So What? <br />• The City experiences a loss of fiscal disparities resulting from not raising the levy each <br />year, or because the local portion of the fiscal disparities pool decreases. This means that <br />the total amount of non-levy property tax revenue paid to the City decreases. <br />Options <br />1) Maintain 2003 tax levy, resulting in a $9,330 increase spread across all Falcon Heights <br />property owners (incompatible with Goa12) <br />2) Increase tax levy to prevent loss of fiscal disparities using the calculation formula <br />(incompatible with Goa12) <br />3) Reduce expenditures by $9,330 (incompatible with Goal 1) <br />4) Decrease levy by $9,330 and transfer $9,330 from reserves to make up for fiscal <br />disparities loss <br />Mayor Gehrz said it is important for everyone to know that it isn't easy to accomplish what we <br />hope to accomplish. It isn't easy to keep budget taxes level, because there are penalties and the <br />loss of fiscal disparities. She recommended that the Council have one or two workshops on this <br />subject between January-June, 2005, and asked the Council if they had questions or other <br />• options. <br />y <br />