Financial Analysis & Management Considerations Report 12/31/1997

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Vilmw City of Lino Lakes, Minnesota Management Report Combined Financial Statement Analysis Property Taxes Receivable The City levies property taxes in accordance with State Statutes. The property tax process has special provisions which impact the amount of taxes received by the City and the payer of those taxes as follows: Property Tax Process City determines property tax needs through budget & public hearing processes. 1 Levy is certified to the County. The County determines property owners share of property tax through jhe statutorily defined class rate process. Total tax capacities determined by statute, for example: Residential: 1% of the 1st $75,000 of market value plus 1.85% of values in excess of $75,000 Com/1nd: 2.7% of the 1st $150,000 of market value plus 4.0% of values in excess of $150,000 1998 - $9,679,139 1997 - $8,807,254 60% of Com/1nd tax capacity values are contributed to the 7 County Metro area Fiscal Disparities Pool. The City is distributed an equalized share from the pool 1998 - Contribution: ($358,998) Distribution: $1,395,540 1997 - Contribution: ($367,350) Distribution: $1,370,726 Tax capacity values of tax increment properties which meet the captured tax capacity criteria are excluded from the valuation base. These values are taxed for the City's tax increment program. 1998 - ($555,547) 1997 - ($410,724) The remaining tax capacity values, after adjusting for the tax increment exclusion, are subject to an allocated share of the property taxes levied by the City. 1998 - $10,160,139 1997 - $9,399,906 The above illustration indicates that the City of Lino Lakes is a net "gainer" with respect to the fiscal disparities statute which spreads the benefit of commercial/industrial properties across the seven county metropolitan area. Page 8