Coon Rapids’ proposed property tax levy for 2014 is less than it is this year.
The Coon Rapids City Council Tuesday approved a preliminary tax levy and budget for next year.
The council also set Tuesday, Dec. 3 for a public hearing on the 2014 budget and tax levy before it takes action to give final approval to both the levy and budget.
Under state law the tax levy cannot be increased from the preliminary levy; it can be decreased or remain the same.
At a budget work session Aug. 21, the council directed staff to cut the general fund budget to reduce the proposed increase in spending from 3.9 percent to under 3 percent.
The staff proposal accepted by the council on a 6-0 vote Tuesday – Councilmember Denise Klint was not at the meeting – trimmed $275,000 from the budget for a 2.9 percent spending increase.
That translated into a reduction in the general fund tax levy from a proposed $18,302,200 to $18,097,916.
Before the budget cuts, the general fund tax levy would have shown a $35,716 increase over 2013.
When the levy for capital projects, debt service and the annual payment on the bonds sold for the Coon Rapids Ice Center are added in, the 2014 citywide levy is $22,338,110 compared with $22,416,578 this year.
And when the payment the city receives from the annual metrowide fiscal disparities distribution is figured in ($4,791,222), the preliminary citywide tax levy will be $17,546,888 for 2014; the total is $17,913,870 this year.
According to Dianne Nelson, advance accounting technician, the amount of value that the city’s commercial and industrial properties contribute to the metrowide fiscal disparities pool is considered the city’s contribution.
The fiscal disparities distribution is calculated by using the value that the city gets from the pool multiplied by the prior year’s tax rate, Nelson wrote in a report to the council.
The levy is down 2 percent from 2013 without fiscal disparities and 5 percent less when fiscal disparities are factored in, according to City Manager Steve Gatlin.
The infusion of state Local Government Aid for the first time since 2004 was an important factor in this year’s budget, he said.
The city will receive $934,354.
“It made the budget preparation much easier,” Gatlin said.
This means that the city’s share of property taxes on six benchmark single-family homes that the city has tracked for decades for property tax purposes will drop in five cases, including a high of 8.5 percent.
• 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 $237.
• Single-family home maintaining its $129,700 value from 2013 to 2014, the city tax drops from $508 to $486.
• Single-family home declining in value from $165,700 to $164,200 from 2013 to 2014, the city tax goes down from $699 to $662.
• Single-family home increasing in value from $180,400 in 2013 to $187,000 in 2014, the city tax rises $1 from $777 to $778. This property had a 3.7 percent taxable market value increase from 2013 to 2014 for tax purposes.
• Single-family home increasing in value from $243,100 to $245,600 in 2014, the city tax declines from $1,111 to $1,076.
• 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 $1,523.
Three benchmark commercial/industrial properties will also see decreases in the city’s share of property taxes under the approved preliminary levy.
The cuts proposed by staff and approved by the council included eliminating two new community oriented police officers, which the department hoped to primarily pay for, 75 percent, through a three-year federal grant for which it has applied.
The city is expected to hear this month where the grant application has been successful, but Gatlin said getting the federal funding for both positions was remote and a small possibility for one.
According to Gatlin, the city’s matching funds have been set aside in general fund balance and can be allocated should the federal grant be approved for one or two new officers.
In addition, a proposed new part-time code enforcement position has been eliminated from the budget and $65,081 cut from capital outlay funds.
Capital outlay dollars pay for small equipment purchases by city departments, Gatlin said.
As well, a vacant position that was partially funded out of the street department and the storm drainage fund was taken out of the street department account, which receives it revenues from the general fund, and if filled will be paid for from the storm drainage fund, which derives its revenues from the quarterly utility bills, he said.
Before filling the vacancy in the spring of 2014, staff will determine whether or not the position is needed, Gatlin said.
These actions reduced the tax levy by $120,000 and another $120,000 was shifted from the general fund to the sidewalk fund following discussion by the council at the workshop, according to Gatlin.
This will add to the $313,927 already set aside in the 2014 for park and sidewalk improvements.
The council also approved a 2014 preliminary tax of $700,000 for the Coon Rapids Housing and Redevelopment Authority. That’s $28,796 less than the 2013 levy.
Mayor Tim Howe thanked staff for their “great work” putting together the 2014 budget.
Peter Bodley is at [email protected]