A preliminary 2013 budget and tax levy presented to the Coon Rapids City Council by staff calls for an increase in general fund expenditures and the property tax levy.
General fund expenditures are projected to be 2.3 percent more than the 2012 budget from $25,435,833 to $26,024,678, or $588,845, primarily due to an increase in personal services, according to Finance Director Sharon Legg.
Revenues in the general fund are also anticipated to increase from $26,074,547 to $26,773,475 or 2.7 percent.
This is due mainly to a $463,144 increase in property taxes to cover expenditures and maintain fund balance, Legg wrote in her budget message to the council.
According to Legg, projected 2013 general fund revenues are $748,797 over expenditures and after various transfers in and out, the proposed budget will show a $224,177 increase in the fund balance.
That will bring the city’s undesignated working capital in the general fund for 2013 to $12,318,861, which is 45 percent of the estimated 2014 expenditures and transfers out, Legg told the council in her budget message.
That meets the council’s goal of having the estimated general fund balance and planned general fund expenditures at no less than 45 percent, she wrote.
It means that the city will have enough cash flow to meet anticipated expenditures without having to borrow for the first part of 2013 since the first round of property tax payments, the principal source of revenue for the city, is not received until June.
Expenditures proposed for other city funds in the 2013 budget are:
• Special revenue, $1,798,017 in 2012 and $1,746,108 in 2013, a 2.9 percent drop.
• Debt service, from $2,535,275 to $2,399,213, a 5.4 percent decline.
• Capital projects, dropping from $4,602,786 to $3,017,146, a 34.4 percent drop as a result of fewer scheduled equipment replacements.
• Enterprise, down 0.9 percent from $15,378,968 to $15,247,609.
• Internal service, up 59.7 percent from $361,700 to $939,200 largely the result of an increase in the retirement insurance fund to make the budget consistent with reporting in the annual financial statement, according to Legg.
The proposed budget maintains staff at the 2012 level of 226 full-time employees.
But it does propose adding one full-time position for 2013 – an electrical inspector instead of hiring outside contractors – and eliminating one, where the full-time assistant manager position at the ice center would be eliminated and replaced by two part-time weekend and night supervisors.
In addition, the current part-time communications/marketing position will become full-time, but an administration support position will change from full-time to part-time.
All this translates into a total 2013 property tax levy increase, including all funds, of $957,225 or 4.5 percent, over 2012 from $21,469,353 to $22,426,578.
The general fund levy is proposed to jump from $17,839,056 to $18,302,200 or $463,144.
There are increases proposed in the street reconstruction debt service of $202,030, capital projects of $42,710, capital equipment of $182,400 and ice arena lease revenue bond debt of $66,941.
According to Legg, the city’s estimated market value is anticipated to drop some 13 percent from the previous year because of the depressed housing market which is compounded by the fact that Coon Rapids is practically fully developed with little new development.
This compares with a 13 percent decline for taxes payable in 2012 and 10 percent in 2011, Legg wrote in her budget message.
In addition, action by the 2011 Minnesota Legislature eliminated the state market value homestead credit program, which went into effect with taxes payable this year.
But, according to Legg, the Legislature did decrease market values for lower values homes to compensate for the loss of the credit.
However, this had the impact of furthering lowering the city’s taxable value by some 10 percent, Legg wrote.
“Since the value went down, the tax rate went up,” she wrote.
Legg has provided the council with a rough estimate of the property tax impact of the proposed 2012 levy on six benchmark residential homes and three commercial/industrial properties that the city has tracked for several decades.
• On a home dropping in value from $109,900 to $83,000, the city’s tax share will dip from $353 to $265.
• On a home dropping in value from $147,200 to $129,700, the city’s tax share will drop from $528 to $ 518.
• On a home dropping in value from $180,000 to $165,700, the city’s tax share will increase from $681 to $714.
• On a home dropping in value from $203,500 to $180,400, the city’s tax share will inch up from $790 to $793.
• On a home declining in value from $270,600 to $243,100, the city’s tax share will jump from $1,104 to $1,133.
• On a home declining in value from $358,200 to $342,300, the city’s tax share will go up from $1,513 to $1,672.
According to Legg, the estimated tax impact on commercial industrial property does not include the 2013 fiscal disparity rate which is not yet available so the 2012 rate was used.
• A commercial/industrial property declining in value from $298,000 to $264,000 would see a city tax decrease from $1,336 to $1,164.
• A commercial/industrial property dropping in value from $1,421,000 to $1,264,500 would have the city tax drop from $7,096 to $6,293.
• A commercial/industrial property declining in value from $9,556,700 to $9,308,700 would see its city tax drop from $48,826 to $47,553.
Peter Bodley is at [email protected]