The Coon Rapids City Council adopted a preliminary tax levy Tuesday that is 4.5 percent higher than 2012.
The council also set the Tuesday, Dec. 4 meeting for a public hearing on and adoption of both the final tax levy and the budget.
The preliminary levy cannot be increased at the time the final action is taken, but it can be reduced.
The proposed budget and levy were presented to the council at a work session in early August, but no changes were made prior to the preliminary levy resolution going before the council Tuesday.
The proposed general fund levy is $18,302,200 with a capital projects levy of $1,990,800, debt service levy of $1,146,900 and ice arena bond debt levy of $986,678 for a total citywide levy of $22,426,578.
For all funds, this is an increase of $957,225 or 4.5 percent over the citywide 2012 levy of $21,469,353, while the proposed general fund levy is proposed to jump $463,144 from $17,839,056, according to Finance Director Sharon Legg.
In her budget/levy presentation to the council, Legg said the levy increase is needed to “continue the highest possible levels” of existing services.
The city’s estimated market value for tax purposes is estimated to drop 13 percent from the previous year, which will push the preliminary tax rate from 42.824 in 2012 to 49.164 for taxes payable in 2013, she said.
According to Legg, the Legislature did decrease market values for lower values homes to compensate for the loss of market value homestead tax credit, which went into effect with 2012 taxes.
Estimated property tax impact of the proposed 2013 levy on six benchmark residential homes that the city has tracked for several decades were provided to the council by Legg.
They show the city’s share of the tax levy dropping for three of the homes, including two of the lower valued properties, while increasing for the other three.
• On a home declining in value from $109,900 to $83,000, the city’s tax share will dip from $353 to $262.
• On a home dropping in value from $147,200 to $129,700, the city’s tax share will dip from $528 to $512.
• On a home declining in value from $180,000 to $165,700, the city’s tax share will increase from $681 to $705.
• On a home dropping in value from $203,500 to $180,400, the city’s tax share will drop from $790 to $784.
• On a home declining in value from $270,600 to $243,100, the city’s tax share will jump from $1,104 to $1,119.
• On a home declining in value from $358,200 to $342,300, the city’s tax share will go up from $1,513 to $1,651.
Under the proposed budget, general fund expenditures are projected to be 2.3 percent higher than the 2012 budget from $25,435,833 to $26,024,678, or $588,845, primarily due to an increase in personal services, according Legg.
Funds have been increased in the 2013 budget to begin to address potential pay increases as a result of a compensation study which was part of the 2012 budget and is now in progress to meet the challenges of being in compliance with state comparable worth regulations, Legg wrote in her budget message to council.
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 primarily to an increase in a $463,144 increase in property taxes to cover expenditures and maintain fund balance, Legg wrote.
Highlights of the proposed budget include:
• Reconstruction of five miles of city state aid streets instead of 1.5 to 2.5 miles that were typically done prior to 2012.
• Continue the seal coating and street overlay program totaling $850,000.
• The budget has $100,000 for miscellaneous park improvements and $100,000 for trail development.
• Continuation of the neighborhood reinvestment program at its current levels.
• No increase in the number of full-time employees, 226, from 2012, but one full-time position is proposed and one eliminated.
• Increase in the capital equipment levy of $100,000 to pay for equipment certificates for a fire ladder truck purchased in 2012 as well as other required vehicle replacements.
In addition, the council adopted as part of the levy resolution an $850,000 levy for its housing and redevelopment authority, a $25,000 increase over 2012.
Legg’s budget message to the council also addresses water, sewer and storm drain utility rates, because they are not part of the levy, but are paid through quarterly utility bills sent to property owners.
The 2013 budget anticipates a 5 percent increase in sewer rates, a 3 percent hike in water rates and no increase in the storm drain rates, according to Legg.
Peter Bodley is at [email protected]