Expenditures for 2014 will increase for the city of Coon Rapids, but so will revenues, under the proposed budget presented by staff to the Coon Rapids City Council.
The council has scheduled a budget work session for 6:30 p.m. Wednesday, Aug. 21 at the Coon Rapids City Center.
Approval of the preliminary budget and tax levy will take place at the council’s Tuesday, Sept. 3 meeting with final adoption of the budget and tax levy coming in December.
But while expenditures in all city funds are proposed to increase 9.2 percent from 2013 to 2014, which includes a 4.2 percent jump in the general fund, the projected tax impact on six benchmark residential and three commercial/industrial properties is projected to be less than 2013 in all but one case.
That’s because the tax levy won’t be increasing at close to the same rate as the proposed spending.
The main reason is the return of state Local Government Aid for the first time since 2004. For budget year 2014, the city will receive $934,354 in Local Government Aid.
The Local Government Aid has helped to boost anticipated general fund revenues by 4.6 percent or $1,235,541 from 2013 to 2014, although it has been offset to some extent by a $592,106 drop in investment income because of continued low interest rates which impacted all funds, according to the budget document presented by City Manager Steve Gatlin.
General fund spending is recommended to increase from $26,024,678 in 2013 to $27,123,985 next year.
When all city funds are factored in – special revenue, debt service, capital projects, enterprise and internal service as well as the general fund – then the proposed spending jumps from $49,373,954 to $53,914,160.
According to Gatlin, the most significant increase is $1,994,064 in the capital projects fund, of which $615,831 has been earmarked for city hall improvements, such as boiler/rooftop units, remodeling of restrooms and security improvements, as well as $585,000 for a fire truck in the equipment certificate fund, an increase of $389,924 in the capital equipment fund for scheduled vehicle purchases and an increase of $313,927 for various park and sidewalk improvements.
But under the budget proposal, the general fund tax levy is projected to increase only $35,716 over the 2013 levy from $18,302,200 to $18,337,916, while the total tax levy, when other funds are included, increases from $22,426,578 to $22,458,110.
In fact, with the infusion of Local Government Aid, the city’s property tax bite will drop from 68 percent to 65 percent of general fund revenue from 2013 to 2014.
Anticipating that the estimated market value of the city for 2014 tax purposes will remain the same as the prior year, Finance Director Sharon Legg has provided the council with an estimate of the city tax impact on the benchmark properties that have been tracked by the city for tax purposes for decades.
• Single-family home valued dropping in value from $83,000 to $80,700 from 2013 to 2014, the city tax will decrease from $259 to $238.
• Single-family home maintaining its $129,700 value from 2013 to 2014, the city tax drops from $508 to $489.
• Single-family home declining in value from $165,700 to $164,200 from 2013 to 2014, the city tax goes down from $699 to $666.
• Single-family home increasing in value from $180,400 in 2013 to $187,000 in 2014, the city tax goes up from $777 to $783.
• Single-family home increasing in value from $243,100 to $245,600 in 2014, the city tax declines from $1,111 to $1,083.
• Single-family home dropping in value from $342,300 in 2013 to $333,500 in 2014, the city tax will go down from $1,638 to $1,534.
• Commercial/industrial property dipping in value from $264,000 in 2013 to $253,700 in 2014, the city tax goes down from $1,342 to $1,217.
• Commercial/industrial property declining in value from $1,264,500 in 2013 to $1,203,200 in 2014, the city tax will decrease from $7,255 to $6,564.
• Commercial/industrial property increasing in value from $9,308,700 to $9,586,900, the city tax drops from $54,819 to $53,733.
According to Legg, the commercial/industrial tax calculation uses 2013 fiscal disparity figures because the 2014 rate is not known at this time.
In addition to the city tax, the council will also levy a tax for the Coon Rapids Housing and Redevelopment Authority, which comprises the seven members of the city council.
The proposed 2014 tax levy is $700,000, which is down $28,796 from 2013.
Peter Bodley is at [email protected]