CCP 10-11-2011 - Laserfiche WebLink

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With the changes created by the State's Homestead Market Value Exclusion (HMVE) legislation, the City could potentially receive its full general operating levy of$7,395,708 in 2012. In previous years, the City had reduced its property tax revenues by $280,400 to offset the loss of Market Value Homestead Credit, which was not being reimbursed back to local governments by the State of Minnesota. The City of New Brighton's tax base will also be benefiting from TIF District decertifications that are scheduled to occur over the next few years. City Manager Lotter recommended to the Council that the additional $280,400 in revenues from the tax levy be placed in the capital funds as part of the financing strategy for the fleet/non-fleet and pavement management program. This would allow the City to minimize future debt issues. If the City did not issue equipment certificates over the next few years, the City could potentially save $644,000 in debt issuance costs and interest payments over the next 16 years. City Manager Lotter reminded the City Council that on September 13th a maximum levy will need to be adopted by the Council. Once the maximum levy for 2012 is adopted by the City Council it cannot be raised. Council could look at other levy options, if we are going to stay consistent with their initial directives, mainly maintaining the integrity of our Fleet and Non-Fleet Capital Replacement Program. The original plan included issuance of short term debt which would forego the savings of interests and issuance costs. The City could issue debt for a number of years it would put the adopted levy at $7,287,300. This would result in a property tax levy reduction and still fund the Fleet and Non-Fleet Pavement Management Programs. The City would not receive any financial savings in issuance costs but we would be making an adjustment for the impact of the Homestead Market Value Exclusion (HMVE). Staff provided the Council with a proposed financial plan to fund our future Fleet Non-Fleet plan and debt service. The City would continue to use equipment certificates as part of this proposal. Council Member Phillips asked if everything remains the same (value wise) and if we decertify TIF District#5 and#6, which would've given the City to as much as $120,000 in revenue, would this have been a part of our $280,000.00 added to the projected levy of$7,395,708? City Manager Lotter suggested that Council look at the global levy strategy spreadsheet. It incorporates both of these scenarios. Mayor Jacobsen stated that he does not have enough information or options to make a decision to make a final tax levy decision. He agreed with Council Member Phillips' suggestion that Council should look at TIF District decertification and consider that revenue in the levy; also he would like to see other options. City Manager Lotter stated that if Council wants to maintain and keep the capital fund financially fluid, the Council would have to pick one of the proposed scenarios. He 3