2009 City of Savage Truth in Taxation presentation

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City of SavageCity of Savage

Public HearingPublic HearingProposed Property Tax Levy & Proposed Property Tax Levy &

Budget for 2009Budget for 2009 December 1, 2008December 1, 2008

7:00 p.m. 7:00 p.m.

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Purpose of tonight’s public Purpose of tonight’s public hearing:hearing:

Solicit public input on the Solicit public input on the CityCity’s proposed ’s proposed tax levy and budget for next year;tax levy and budget for next year;

Requirement of State Law;Requirement of State Law;

Held after property owners receive their Held after property owners receive their proposed property tax statements for 2009 proposed property tax statements for 2009 (based upon the preliminary budget and tax (based upon the preliminary budget and tax levy approved in September)levy approved in September)

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Other Public Hearings:Other Public Hearings:

Scott County – December 4Scott County – December 4thth, 7pm, 7pm

Prior Lake - Savage Schools (ISD 719) –Prior Lake - Savage Schools (ISD 719) –

December 2December 2ndnd, 7pm, 7pm

Burnsville – Eagan – Savage (ISD 191) –Burnsville – Eagan – Savage (ISD 191) –

December 11December 11thth, 6pm, 6pm

Metropolitan Council – No Meeting Required Metropolitan Council – No Meeting Required

State of Minnesota – No Meeting Required (State’s State of Minnesota – No Meeting Required (State’s general property tax affects seasonal / recreational general property tax affects seasonal / recreational and commercial / industrial properties)and commercial / industrial properties)

44

Property Assessment Calendar for Property Assessment Calendar for Taxes Payable in 2009Taxes Payable in 2009

March 2008 – County sends out Notice of Valuation March 2008 – County sends out Notice of Valuation (for following year’s taxes); (for following year’s taxes);

May 2008 – Local Board of Review meets to consider May 2008 – Local Board of Review meets to consider appeals from property owners;appeals from property owners;

June 2008 – County Board of Equalization meets to June 2008 – County Board of Equalization meets to consider appeals from property ownersconsider appeals from property owners

June 2008 – March 2009 – Tax Court petitions must June 2008 – March 2009 – Tax Court petitions must be filed by subsequent March to appeal 2008 property be filed by subsequent March to appeal 2008 property assessment.assessment.

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Three Major Components to Your Three Major Components to Your Total Proposed TaxesTotal Proposed Taxes

Scott County – Minimal tax rate increase Scott County – Minimal tax rate increase

City of Savage – Tax rate decreaseCity of Savage – Tax rate decrease

School District School District

ISD 191 – Burnsville – Minimal tax rate ISD 191 – Burnsville – Minimal tax rate increaseincrease

OrOr

ISD 719 – Prior Lake – Minimal tax rate ISD 719 – Prior Lake – Minimal tax rate decreasedecrease

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Market Market

ValueValue

Expired Expired

2008 Levy2008 Levy

New New

20092009

LevyLevy

Net Net

ChangeChange

$200,000$200,000 -$286-$286 $359$359 $73$73

$250,000$250,000 -$358-$358 $449$449 $91$91

$300,000$300,000 -$429-$429 $538$538 $109$109

$350,000$350,000 -$501-$501 $628$628 $127$127

$400,000$400,000 -$572-$572 $718$718 $146$146

$450,000$450,000 -$644-$644 $808$808 $164$164

$500,000$500,000 -$715-$715 $897$897 $182$182

Prior Lake – Savage School District (ISD 719) November Referendum Not Reflected On Proposed

Property Tax Statements – Add In New 2009 Levy $$

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Final Action on the 2009 General Fund Final Action on the 2009 General Fund Budget and Tax LevyBudget and Tax Levy

Public Hearing – December 1, 2008 as part of Public Hearing – December 1, 2008 as part of the regular Council meetingthe regular Council meeting

Final Adoption – December 15, 2008 as part Final Adoption – December 15, 2008 as part of the regular Council meetingof the regular Council meeting

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2009 Property Taxes2009 Property Taxes

The total property taxes needed by the The total property taxes needed by the City of Savage for 2009 is $15,588,520.City of Savage for 2009 is $15,588,520.

This is a total increase of $766,691 over This is a total increase of $766,691 over the 2008 property taxes.the 2008 property taxes.

This is an increase of 5.17%This is an increase of 5.17%

99

Property Tax HistoryProperty Tax History

6,596

0

4,520

7,704

80

4,252

8,658

80

4,752

9,571

0

4,823

10,200

0

4,986

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Thousands

2005 2006 2007 2008 2009

Operating Other Debt Service

1010

Tax LevyTax Levy and Tax Rate and Tax Rate

2009 proposed tax levy increases by $766,691 which is 5.17% over the 2008 levy amount and the tax rate decreases by 2.35%.

$11.1$12.0

$13.5$14.4

$15.2

46.4%46.4%

50.2%

48.4%

46.0%

$0

$2

$4

$6

$8

$10

$12

$14

$16

2005 2006 2007 2008 2009

Year

Lev

y (i

n m

illi

on

s)

43.0%

44.0%

45.0%

46.0%

47.0%

48.0%

49.0%

50.0%

51.0%

Tax

Rat

e

Levy Tax Rate

1111

2009 Proposed Tax Rate2009 Proposed Tax Rate

2008 Tax Rate 48.356%2008 Tax Rate 48.356%

2009 Proposed Tax Rate 46.005%2009 Proposed Tax Rate 46.005%

2009 Proposed Tax Rate Decrease2009 Proposed Tax Rate Decrease

2.351%2.351%

1212

Savage’s Tax Rate HistorySavage’s Tax Rate History

The proposed tax rate for 2009 is 46.005%, this is the second consecutive year with a rate decrease. Since 2007 the total decrease is 4.15%.

27.386 26.566

42.741

46.527

51.404

46.385 46.385

50.155 48.369

46.005

0.00

10.00

20.00

30.00

40.00

50.00

60.00

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Property Tax Levy Rate ComparisonProperty Tax Levy Rate ComparisonScott County CitiesScott County Cities

60.037

56.239 55.93

46.005

38.073

32.665

27.913

0

10

20

30

40

50

60

70

Jordan New Prague Belle Plaine Savage Elko/New Market Shakopee Prior Lake

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2009 Limited Market Value Taxable2009 Limited Market Value Taxable(Provided by Scott County)(Provided by Scott County)

Scott County overall average (including Cities Scott County overall average (including Cities and Townships) in Market Value was a decrease and Townships) in Market Value was a decrease of one tenth of 1%.of one tenth of 1%.City of Savage overall average increase in City of Savage overall average increase in Market Value was 1.17%.Market Value was 1.17%.Individual homes all experience different Individual homes all experience different increase rates or no increase at all.increase rates or no increase at all.You may be eligible for a State property tax You may be eligible for a State property tax refund – There is an information sheet provided refund – There is an information sheet provided by the Department of Revenue available at the by the Department of Revenue available at the table in the back and on their website.table in the back and on their website.

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City of Savage Average Taxable City of Savage Average Taxable Home Value 2005 - 2009Home Value 2005 - 2009

$239,300

$250,800

$264,200

$272,800

$275,992

$220,000

$230,000

$240,000

$250,000

$260,000

$270,000

$280,000

2005 2006 2007 2008 2009

Payable Year

Ave

rag

e T

axab

le H

om

e V

alu

e

Average Value

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Impact on the HomeownerImpact on the Homeowner

The City’s tax base continues to grow, increasing by 1.17% for 2009.

The chart above represents the City tax change before the market value increase.The chart below represents the City tax change with the average market value increase.

Assessed Value City Taxes2008 2009 Change 2008 2009 Change

$ % $ % $ per mo.390,000 390,000 - 0% 1,939 1,841 (98) -5% (8) 350,000 350,000 - 0% 1,728 1,640 (88) -5% (7) 300,000 300,000 - 0% 1,463 1,389 (74) -5% (6) 250,000 250,000 - 0% 1,198 1,138 (60) -5% (5)

Assessed Value City Taxes2008 2009 Change 2008 2009 Change

$ % $ % $ per mo.390,000 394,563 4,563 1.17% 1,939 1,864 (75) -4% (6) 350,000 354,095 4,095 1.17% 1,728 1,661 (67) -4% (6) 300,000 303,510 3,510 1.17% 1,463 1,407 (56) -4% (5) 250,000 252,925 2,925 1.17% 1,198 1,152 (46) -4% (4)

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City’s Tax and Taxable Home City’s Tax and Taxable Home Value – an ExampleValue – an Example

$235,000

$240,000

$245,000

$250,000

$255,000

$260,000

$265,000

$270,000

$275,000

$280,000

$1,050

$1,100

$1,150

$1,200

$1,250

$1,300

$1,350

Value $250,800 $264,200 $272,800 $275,992

Tax $1,162 $1,324 $1,326 $1,268

2006 2007 2008 2009

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2009 Homeowner Impact2009 Homeowner Impact

Homeowners with no change in taxable Homeowners with no change in taxable Market Value will have approximately 5% Market Value will have approximately 5% tax decrease.tax decrease.

Homeowners with the City of Savage Homeowners with the City of Savage average Market Value increase of average Market Value increase of approximately 1.17% will have approximately 1.17% will have approximately 3.8% tax decrease.approximately 3.8% tax decrease.

Each Homeowners tax impact is unique.Each Homeowners tax impact is unique.

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Property Taxes – Property Taxes – Two Major ComponentsTwo Major Components

Debt Levy – Supports payments for City Debt Levy – Supports payments for City borrowing for structures, infrastructure, borrowing for structures, infrastructure, equipment.equipment.

General Fund Operating Budget – General Fund Operating Budget – Supports City operations and staff.Supports City operations and staff.

2020

City’s Debt Levy HistoryCity’s Debt Levy History

4,520,120

4,252,262

4,823,269

4,985,850

4,752,272

4,560,556

3,800,000

4,000,000

4,200,000

4,400,000

4,600,000

4,800,000

5,000,000

5,200,000

2004 2005 2006 2007 2008 2009

2121

2009 Operating Levy – Key Elements 2009 Operating Levy – Key Elements of the Budget Development Processof the Budget Development Process

A decline in development-related revenues (Building A decline in development-related revenues (Building Permits and Plan Review Charges) to reflect current Permits and Plan Review Charges) to reflect current housing slowdown and to reduce City’s reliance on housing slowdown and to reduce City’s reliance on discretionary revenues.discretionary revenues.Market Value Homestead Credit (MVHC) Aid not Market Value Homestead Credit (MVHC) Aid not included as a Revenue.included as a Revenue.Development budget strategy to remain within State Development budget strategy to remain within State mandated levy limits.mandated levy limits.Pursue budget planning and principles that will avoid Pursue budget planning and principles that will avoid spikes in City Tax Rate moving forward.spikes in City Tax Rate moving forward.Continue to provide quality service levels residents have Continue to provide quality service levels residents have become accustomed to.become accustomed to.

2222

2009 Operating Levy2009 Operating Levy Items currently in Budget Items currently in Budget

$100,000 allocation to CR 27 special project fund.$100,000 allocation to CR 27 special project fund.$50,000 allocation to cover unfunded liabilities for $50,000 allocation to cover unfunded liabilities for sick/vacation leave.sick/vacation leave.$50,000 general fund contingency.$50,000 general fund contingency.$75,000 special projects contingency.$75,000 special projects contingency.¼ percent mandated increase in City PERA contribution.¼ percent mandated increase in City PERA contribution.Reduction in Building Permit and related Revenues of Reduction in Building Permit and related Revenues of $110,000.$110,000.Reduction in Plan Review Revenue of $30,000Reduction in Plan Review Revenue of $30,000..

$75,000 additional funds for sealcoat and overlay.$75,000 additional funds for sealcoat and overlay.$50,000 additional funds for street and landscape $50,000 additional funds for street and landscape supplies.supplies.

2323

2009 Proposed General Fund Budget 2009 Proposed General Fund Budget HighlightsHighlights

Proposed general fund budget increases by $667,745 Proposed general fund budget increases by $667,745 or 5.7% over 2008.or 5.7% over 2008.Projected wage and benefit increases associated with Projected wage and benefit increases associated with the City’s labor contracts and non-union personnel the City’s labor contracts and non-union personnel account for the single largest increase in operating account for the single largest increase in operating costs.costs.Includes $25,000 to continue participation in SCALE Includes $25,000 to continue participation in SCALE Transportation Study and Lobbying efforts.Transportation Study and Lobbying efforts.Includes fuel impacted category projected increases – Includes fuel impacted category projected increases – gasoline 10%, refuse collection 10%, natural gas gasoline 10%, refuse collection 10%, natural gas 25%, electricity 5%.25%, electricity 5%.

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2009 Proposed General Fund Budget 2009 Proposed General Fund Budget Highlights (continued)Highlights (continued)

Discretionary Division budget increases in most cases Discretionary Division budget increases in most cases has been limited to fuel cost increases.has been limited to fuel cost increases.Staff additions withheld to Police Division (two patrol, Staff additions withheld to Police Division (two patrol, one Community Services Officer (CSO), and one support one Community Services Officer (CSO), and one support staff phased in throughout year).staff phased in throughout year).Elimination of Human Resources Manager position.Elimination of Human Resources Manager position.Elimination of Administrative Assistant position.Elimination of Administrative Assistant position.Reallocate Communication Coordinator costs from Cable Reallocate Communication Coordinator costs from Cable Fund to General Fund and increase from .8 FTE to Full Fund to General Fund and increase from .8 FTE to Full Time.Time.2009 Budget does NOT include Bi-Annual Community 2009 Budget does NOT include Bi-Annual Community Survey, elimination of $20,000 expense.Survey, elimination of $20,000 expense.

2004-2009 Staffing History2004-2009 Staffing History

0

20

40

60

80

100

120

2004 2005 2006 2007 2008 2009

Non-union AFSCME Police Supervisors Police Patrol

2626

Proposed 2009 General Fund BudgetProposed 2009 General Fund BudgetRevenues by Major SourceRevenues by Major Source

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2005 2006 2007 2008 2009

Taxes Licenses & Permits Intergovernmental Charges for Services

Fines & Forfeits Other Income Transfers In

2727

Proposed 2009 General Fund BudgetProposed 2009 General Fund BudgetExpenditures by Major FunctionExpenditures by Major Function

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2005 2006 2007 2008 2009

General Government Community Development Police Fire Public Works Parks & Recreation Transfers Out Contingency

2828

Proposed 2009 General Fund Expenditure Proposed 2009 General Fund Expenditure Increases by Major FunctionIncreases by Major Function

Police accounts for 65% of the 2009 budget increase.

Police, 65%Fire, -2%

Public Works, 27%

Parks & Recreation, 5%

Community Development,

2%

General Government, 3%

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ContactsContacts

Market Value QuestionsMarket Value Questions? ?

Contact Scott County Contact Scott County (952) 496-8150(952) 496-8150

Questions about the City’s budget and tax levyQuestions about the City’s budget and tax levy? ?

City of Savage Finance Director, Shelly KollingCity of Savage Finance Director, Shelly Kolling

(952) 882-2645(952) 882-2645

[email protected]@ci.savage.mn.us