12-03-07 Council Special Minutes

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MINUTES CITY COUNCIL DECEMBER 3, 2007 these properties. The number of properties with significant gaps between market value and taxable value increased. The phase-out impact was very severe in tax years 2006 and 2007. The Finance Director reviewed the local impact of the Limited Market Value phase-out program. In 2006 69% of Little Canada residential properties received a I S% valuation increase or greater. In 2007 52% received a 15% increase or greater, and for 2008 only 19% of the City's residential properties received a 15% valuation increase or greater. By 2009 it is expected that the Limited Market Value phase-out process will be essentially complete for parcels in Little Canada. The Finance Director noted that 2,200 of the City's 2,700 residential properties had less than a 15% increase in value for 2008. She noted that the median increase in this group was only .3%. The Director noted that 20% of properties still have some remaining gap, but the phase-out program will catch them up pretty quickly within the next two years. The Director next reviewed 2007 City Tax Rankings, noting that of the Ramsey County cities, Little Canada is the 8th lowest of 19 cities. Based on the proposed 2008 Budget, Little Canada is 7th lowest of the 19 Ramsey County cites. It was pointed out that Little Canada has fallen below the City of North St. Paul The Director compared 2007 and 2008 tax levies, noting an increase in the Gross Levy for 2008 of 6.03% and in the Net Levy of 4.00%. The 2008 Gross Levy is projected at $2,387,488 and the Net Levy at $2,086,061. It was noted that Fiscal Disparities increases for 2008 to $301,427, the second year in a row that the City has benefited fi•om an increase in Fiscal Disparities. The Director reviewed the various components of the City's tax levy, and noted that total levy for 2007 was $2,251,678 and proposed 2008 is $2,387,488. The Director then reviewed a graph which depicts the City's tax levy history fi•om 1998 through 2008, 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 (MVHC). The MVHC was restored for 2007. For 2008, changes to the City's tax base and changes in other formula factors impacted the LGA calculation and produced $225,168 in aid. The formula had resulted in zero LGA for the City in the previous four years. However, changes to modify this formula have been a serious topic in the Legislature during the most recent session. Based on