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I I I Budget Hearing Minutes December 7, 1995 Page 2 Bud~et Hearin~. continued Services in the General Fund rely on property taxes to a greater degree for financing. By comparison, 30 % of these services were t1nanced by taxes in 1995 while 31 % of costs will be paid by taxes in 1996. This greater need for taxes is the result of decreases in two non-tax revenues (building and engineering fees) which are budgeted at $100,000 less than last year. However, this decrease is offset by two revenue sources provided by the Police Department: the cooperative effort for School Liaison Officer position between the cities of New Brighton and Mounds View and the Mounds View School District, and the Federal COPS Grant contribution of $25,000. Increases in service costs for these funds are occurring at the same time that non-tax revenues are declining. A shift toward the use of property taxes results from such a situation. One change which occurred between 1993 and 1994 was the addition of the FSC bonds. In 1994 and 1995, the City was able to push taxes down due to increased building permit activity. The 1996 Tax Levy will be 4% larger than 1995, and that amount is equal to $106,300. The Truth in Taxation Notices were based on projections performed in September when the maximum levy was projected at 8 %; but now the proposed budget will show a 4 % change in taxes. Egan noted tax levy changes for the following communities: Arden Hills - 2.94%; Blaine - 7.20%; Roseville - .2%; and Shoreview - 3.4% Egan showed an example of tax changes for a home valued at $105,000 in 1995. She noted that such a property would have received a valuation increase in 1996 of $6,100 which causes a significant change in the base value. If that home had remained at $105,000 in 1996, annual taxes would have increased $1.05. However, the increased valuation to $111 ,100 reflects an 8.1 % change or an additional $18.74 in annual taxes. Benke asked if this example would be considered a median home value in New Brighton. Egan verified that this example is an actual Truth in Taxation notice as close to the City's median value as possible. A similar valued home in neighboring communities would see the following changes from their 1995 tax bill: Arden Hills - $5 decrease or annual rate of $239; Roseville - $13 decrease or annual rate of $238; and Shoreview would see no dollar change with an annual rate of $270. Larson noted that this example relates to about $.66 per day for City services. The City is one of four public agencies that rely on taxes to fmance services. Allocations among these public agencies are: school district - 47%; City - 14%; County - 34 %; and other jurisdictions such as Watershed District, Regional Transit Authority and the Mosquito control district - 5 %. Benke said the ongoing budget process includes much detail information which is available for review by the public at the City Hall or area libraries. James Buckman, 1568 Long Lake Road, asked what amount of cash reserves does the City have available. Egan said the City has appropriately $16 million in reserves, and half of that amount was received from the Army water settlement. Buckman noted that water rates were increased when the water contamination was discovered, however, now that the settlement is complete when will these rates decrease. Egan noted that the water rates have come down $.25 per 1,000 gallons. Benke said settlement proceeds wereeused to buy down current user rates in a gradual payback mode. The buy down will be used up in a few years, and then the City will determine its next course of action. Public Hearin2" Truth in Taxation Report 95-229