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Planning Commission Regular Meeting Minutes January 16, 1996 • Page 4 1 Mr. Larson indicated how critical planning is to the City, because any decrease in the $5,188,494 2 local tax capacity figure means an increase in the residential property taxes. 3 Chair Bergstrom inquired the $5,188,494 is not the total value of all the property in St. Anthony. 4 Mr. Larson agreed, that the figure only represents approximately 1/10 of the total value. 5 Mr. Larson reviewed for the Commission why if valuations increase that tax rates do not 6 decrease. Mr. Larson indicated one reason was the City's fiscal disparities contribution, which 7 increased 20 percent in 1995. He continued the City has no control over this figure. Mr. Larson 8 indicated there is a great advantage to have industrial property in the community, because the tax 9 rate is higher than residential, which allows the communities that are disadvantaged in industrial 10 to collect tax monies from a pool. Mr. Larson indicated St. Anthony has a moderate of industrial 11 properties and does receive more from the pool than it contributes. 12 Commissioner Franzese questioned if the 20 percent increase in fiscal disparities contribution was 13 high, or over a certain threshold. Mr. Larson responded that it was not, and the 20 percent 14 increase was applied to all communities. 15 Mr. Larson continued that when apartment valuations decrease, it puts pressure on the residential �6 tax base. Chair Bergstrom questioned if apartment values are not determined by the rent monies 7 collected. Mr. Larson agreed that higher valued properties can charge more for rent. 18 Mr. Larson reviewed that valuations for 1995 are used for the taxes due in 1996. He continued 19 that each year the City assesses approximately 1/4 of the homes, which means the entire City is 20 assessed approximately every four years. 21 Mr. Larson continued that the increases in residential values is responsible for most of the 22 valuation increase this year, because apartment and commercial values have declined in St. 23 Anthony. 24 25 Commissioner Gondorchin inquired how much of the valuations and levies are included in the 26 taxes. Mr. Larson responded that approximately 1/2 of the tax increase was because of the 27 referendum. 28 Mr. Larson reviewed the total local tax capacity in 1990 was $6,076,340. In 1996, the total tax 29 capacity is now $5,188,494, a decrease of $887,846. Commissioner Gondorchin inquired if a 30 large part of that decrease is due to Apache Plaza. Mr. Larson responded that it was, and 31 indicated the City Council is working hard to redevelop Apache Plaza. Chair Bergstrom indicated 32 the Planning Commission recognizes the importance of Apache Plaza as well. 103 Mr. Larson reviewed that 73.9 percent of the tax base is residential properties and they pay for 4 the majority of the tax increases.