11-24-2004 Council Agenda - Laserfiche WebLink

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cee j Y4 i1 a/yL a' 515 Little Canada Road, Little Canada, MN 551174600 (651) 766 -4020 / FAX: (651) 766 -4048 www.cilittle- canada.mn.us MEMORANDUM TO: Mayor Fahey and Members of the City Council FROM: Joel Hanson, City Administrator Shelly Rueckert, Accounting Supervisor DATE: November 19, 2004 RE: 2005 Levy iV[AYOR Michael 1. Fahey COUNCIL Jim LaVatle Matt Anderson Rick Montour Bill Dlesener ADMINISTRATOR Joel R. Hanson As you know, the 2005 proposed levy is currently $1,864,775. This represents a 1.65% increase over 2004. If the Fire Relief Association contribution remains at $15,000, the levy would stand at $1,849,391 or .82% increase over 2004. To attain a 0% levy increase for 2005, we would need to cut expenses or raise revenues by some combination totaling $29,590. With the 2005 TNT hearing coming up on Monday, December 6`I', staff would like the City Council to establish the levy to be used for presentation purposes. I have attached the TNT slides we will be using for the City's tax calculation. To assist in evaluating the impact of a reduction from the current levy to a zero percent net levy, we have prepared slides showing a 0% value increase at the two tax rates. You will note that a zero percent net levy saves the owner of a $250,000 home $9.68. The owner of a $375,000 home would save $14.51. It is important to remember that a zero percent valuation increase on a residential property is extremely unlikely given valuation increases and more importantly, due to the phase out of limited market value. This phase out continues the implementation of the shift in tax burden to single family residential from other classes of property. (See attached article from the Star Tribune.) With the phasing out of limited market values, many properties in the City will see valuation increases in the 15% to 25% range. Even with a negative levy it would be difficult to avoid tax increases in these situations. It should also be noted that to obtain our current levy, the Infrastructure Fund levy was reduced by $31,642. Without that reduction the levy would currently be $1,897,229,