12-04-06 Council Special Minutes

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MINUTES CITY COUNCIL DECEMBER 4, 2006 commercial properties. The Legislature's solution was to phase out the limited market value and reverse the Cax shift back to residential acrd vacation properties. This resulted in significant increases in the values of these properties. Given that valuation increases for 2006 and 2007 were expected to be exCreme, the Legislature rolled back and extended the phase-out program, spreading valuation increases ouC Co 2010. The Finance Director noted that the extension of the phase-out proved to be very helpful to cities where many homes still had significant gaps between Che market values of their homes and limited market values. This extension has helped Co continue to shelter many taxpayers from incurring Che full tax impact of the increased values of their property. The Director reported that in 2006, 63% of Little Canada homes were limited to a 15% increase in value. Without the extension of the phase-out program, many of these homes would have seen a market value increase of over 15%. The County has indicated that for 2007 48% of homes will see a 0-15°l0 increase in market value, 47% will see a 15% increase, and 5% will see an over 15% increase. This would indicate that the gap between estimated markeC value and limited markeC value is shrinking. The Director then used three LitCle Canada residential properties as examples showing the impacts of Che phase-out of the limited market value program. The Director next reviewed 2006 City Tax Rankings, noting that of the Ramsey County cities, Little Canada is the 7°' lowest of 19 cities. Based on the proposed 2007 Budget, Little Canada is 8'h lowest of the 19 Ramsey County cites. It was pointed out that Little Canada reversed rankings with the City of North SC. Paul, which receives approximately $1.5 million in Local Govermnent Aid (LGA), including a $250,000 increase for 2007, while Little Canada receives none. The City Administrator reported that LGA awards are based on a formula. Most suburban Ramsey County cities receive no LGA. The Administrator felt Chat given the State's projected budget surplus and the potential to increase aid Co cities, LitCle Canada should be concerned abouC how this aid will be allocated. Blesener noted that the $1.5 million in LGA thaC North St. Paul receives is about 75% of Little Canada's levy. The Director reported ChaC the City's 2007 tax rate ranking will decrease from 21.373 to 21.155, a 1.02% decrease. The Director compared 2006 and 2007 tax levies, noting an increase in the Gross Levy for 2007 of 3.03% and in the Net Levy of 2.86°l0. It was noted that Fiscal Disparities increases for 2007 to $245,820, reversing a three year trend of decreases. The Director also pointed ouC that this proposed levy includes the Council's directive to use $30,000 of the 2006 surplus to