HomeMy WebLinkAboutCCMin_05Dec05Falcon Heights City Council
Truth in Taxation Hearing
December 6, 2005
Mayor Gehrz called the Truth in Taxation Hearing to order at 7:00 p.m.
PRESENT: Mayor Sue Gehrz, Council members Laura Kuettel, Robert Lamb, Peter
Lindstrom, and Richard Talbot. Also present: City Administrator Heather Worthington,
Finance Director Roland Olson, Councilmember-elect Pam Harris, and Jane Fandrey.
COMMUNITY FORUM: There was no commentary from the audience.
PRESENTATIONS: None Scheduled
PUBLIC HEARINGS:
Truth in Taxation Hearing
Mayor Gehrz began by explaining the meeting is the annual Truth in Taxation Hearing to present the proposed budget and levy for 2006. It also provides an opportunity to present some
information about the impact on proposed taxes and what some of the other impacts are that affect people’s proposed taxes. She explained the staff report by Administrator Worthington
will start off the meeting, which will be followed by a public hearing. She noted there will be no council action at the meeting, but action will be taken at the Dec. 14 meeting.
Administrator Worthington began the item with a presentation and by thanking Finance Director Olson for his hard work in preparing the budget. She explained the budgeting process began
in June.
Next she explained the goals of the City which are: to protect public health and safety; to sustain and promote the assets of the city’s unique neighborhoods and tax base; to expand
opportunities for the interaction and involvement of citizens of all ages; and to provide a responsive and effective city government. For 2006, she noted an added goal of the City’s
website becoming an effective and useable tool for citizens 24-7.
Administrator Worthington utilized the LCD projector to present information about the 0.0% increase in the Falcon Heights’ levy for 2006, the proposed general operating budget of $1,652,499,
and the Special Revenue Fund Budgets for the year 2005 totaling $88,680.
The Truth in Taxation Hearing was opened to the audience for questions and commentary.
Jim DeLeo, 1365 Idaho Ave W, questioned about the legislative changes shifting the tax burden away from the state to local governments. He asked how much of a burden Falcon Heights
has to shoulder. Mayor Gehrz stated that Falcon Heights has taken a hit due to LGA, HACA, and MVHC losses. Administrator Worthington noted that although there was a significant dip
in these dollars the last several years, there was a slight increase this year. She answered the impact was mostly on property owners. She also noted the HACA dollars will probably
never be gotten back.
Councilmember Lindstrom added that the unfunded mandates from not only the state, but the federal government as well are burdens on cities.
Councilmember Lamb explained how the city portion of levy was not raised, but property owners will see the city portion has risen. He stated that the increase was blamed on market value
increases – 4 categories of property: tax exempt (U of M, State Fair, schools, churches), business/commercial (not a lot in FH), multi-tenant housing/apartments, and individual residences.
He stated that three categories are eligible for the tax burden. Years ago the formula was set for how much tax could be taken from each category, and about 3 years ago the State significantly
changed the formula. The legislature decided that commercial and apartments were taxed too high and residential was taxed too low. Now the distribution has changed and is collected
differently between the 3 categories. Secondly, the market value of businesses and apartments has not risen as fast as residences. The shift from the businesses and apartments onto
residences explains why the tax has gone up for residential homes. Due to the reserve fund, the City was able to smooth out some of the tax raises by using some reserves and being fiscally
conservative. With the current formula, individual homes will continue to rise as compared to businesses and apartments; he stated the City will be looking at a continued shift to residential
for the tax burden.
Mr. DeLeo thanked Councilmember Lamb for his explanation. He stated that Ramsey County has their hearing next week, and asked when the State changes rules what happens to the County
and what happens to them? Do they pass it on to us? Councilmember Lamb answered that Ramsey County uses the same property classification and formula the City does. He answered the
same phenomena applies to the County.
Mayor Gehrz added the Ramsey County portion of the increases can be attributed to the light rail initiative and law enforcement.
The public hearing was closed.
A brief Council discussion followed.
The Truth in Taxation Hearing was adjourned at 8:06 PM.
Respectfully submitted,
Stacey Kreuser