12-05-05 Council Special Minutes

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MINUTES CITY COUNCIL DECEMBER 5, 2005 and 2007 were expected to be extreme, the Legislature rolled back and extended the phase-out program, spreading valuation increases out to 2010. The Finance Director noted that LitCle Canada residential properties saw valuation increases in 2005 of 0% to ] 0% for 81% of properties, 10% to 20% for 14% of properties, and over 20°lo valuation increases for 5°Io of residential properties. The limited market valuation phase out for 2006 pushes more properties (67%) into the 10% to 20% increase range. This should hold true for the next few years. The Director reviewed 2005 City Tax Rankings, noting that of the Ramsey County cities, LitCle Canada is the 9`h lowest of 19 cities. Based on the proposed 2006 Budget, Little Canada is 7`h lowest of the 19 Ramsey County cites. The Director reviewed a graph comparing the 2006 City Tax Rankings, noting that Little Canada is in a pretty tighC group of cities at the low end of the graph. She also noted that 15 of the 19 Ramsey County cities have tax rates that are going down in 2006. The Director also noted thaC Little Canada's tax capacity is increasing by 16% for pay 2006 taxes; and its tax rate will decrease from 23.681 to 21.380, a 9.72% reduction. The Director compared 2005 and 2006 tax levies, noting an increase in the Gross Levy for 2006 of 2.32% and in the Net Levy of 4.32%. The Director reviewed the various components of the City's tax levy, and noted that total levy for 2005 was $2,102,880 and proposed 2006 is $2,185,498. She also noted that the General Fund is up primarily due to the continued cut in Market Value Homestead Credit that was supposed to be restored in 2005, but was cut again by the State to deal with the State's budget deficit. The City's Infrastructure Fund absorbed a portion of this cut by using the franchise fee collection. The Director then reviewed a graph which depicts the City's tax levy history from 1.995 through 2006, noting that levies had remained generally flat prior to 2002. Most recent years' increases are attributable to Property Tax Reform, and more specifically the State's elimination of HACA to cities in 2002. The State then used these dollars for education funding. The Director noted that in 2003/2004 the State reduced Local Government Aid and Market Value Homestead Credit, and these reductions are still in place today. The Director reviewed 2006 General Fund revenue highlights, noting that revenues are up by 5.4%, property taxes are up 11.65%, there was a cut of $92,800 in MVHC, the loss of LGA continues ($94,686), and MSA Funds were transferred to the General Fund ($45,000). The Director noted that an 11.65% increase in taxes equals $200,642, and helps to offset the