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Mounds View Planning Commission July 5, 2006 Regular Meeting Page 15 ________________________________________________________________________ The net effect to a property owner with a median valued home in the City would be a reduction of $55 annually. Commissioner Hegland asked what budget they are basing this on. He stated the budget has something to do with this and does not understand why the budget numbers are not represented here. Director Ericson replied that there are too many variables to try to factor what could happen. They are looking at what would happen, based on today’s budget all things being equal. This is strictly speaking today’s dollars. It gives a comparative understanding of what the impact would be. The City Council has indicated their preference is not to increase the budget or the levy so theoretically these are good numbers for a number of years, or at least solid when compared against other scenarios. Commissioner Hegland stated this is not an adequate way of doing this. Director Ericson stated it is not intended to predict what the revenues will be in ten years but rather a means to decide which option to consider. He further stated that the City’s tax portion is only one- third of the tax statement. The City has no control over the other taxing jurisdictions. Commissioner Hegland expressed this all needs to be taken into consideration. Director Ericson explained that the other thing to keep in mind is if the increment is decreased, the general fund levy may be increased to cover the costs of the projects that could have been covered through TIF dollars. Commission Hegland asked if the tax increment collected for the districts is a fixed increment that cannot change or is it based on property values. Director Ericson reiterated it is based on property value. This is a snapshot in time for 2006. It should be constant in terms of the relationship between the various options. The dollar amount would vary, but not between the different options. The spreadsheets are tools. Commissioner Hegland indicated that he understands what Director Ericson is trying to do and why, but he does not agree with the outcome because increase in budget and increase in property values are unrelated and can skew the outcome in either direction. Director Ericson went on to explain that scenario four, decertification and FD election, combines the effects of the two previous scenarios. This scenario would reduce in today’s dollars the amount of increment collected to about $6.9 million. The net effect to a property owner with a median valued home in the City would be a reduction of $73 annually. Director Ericson explained in scenario five, examines the impact of reducing TIF revenue by ten percent. The reduction would likely occur by selective parcel decertification within the districts. This approach would reduce the amount of revenue collected by less than $1.5 million. The median valued homeowner would see a $16 savings from the City’s portion of the tax bill.