Presentation City of Hopkins - Truth in TaxationTRUTH IN TAXATION
PUBLIC HEARING AGENDA
Monday, December 8, 2008
6:30 PM
1. Video on Property Taxes 101
2. Power point presentation
a. Additional minor changes may be made before the meeting on
Monday. A final version will be handed out before the meeting.
3. Questions from council
4. Open Public Hearing
5. Questions from public
6. Close /continue public hearing
Attachments:
1. Power Point Slides
2. "Who Does What? A Guide to MN's Property Tax System"
3. "Fourteen Reasons Why Property Taxes Vary From Year to Year"
I �
Purpose of Taxation Hearing
i
+r To discuss the City's budget
; To discuss how the city budget impacts
x " the city portion of your taxes
♦ The focus of the hearing is on the
budget and levy, not property valuations
r Property valuation discussions are held
each spring
Taxation Process
♦ Preliminary Levy was set in September
k, # Truth in Taxation notices mailed
r Public hearing for final proposed levy
and general fund budget.
*Continuation hearing set for Tuesday,
December 16th (if needed).
# Final adoption of budget and levy is set
for December 16th council meeting.
How Your Property Taxes
Are Determined
Step 1 — Determine Levy
Total proposed local budget
Less: Non - property tax revenue
Equals: Property tax levy
How Your Property Taxes
Are Determined
Step 2 — Determine Tax Capacity of
Individual Properties
Market value of individual property
Multiplied by: State mandated class rate
Equals: Tax capacity of individual
properties
How Your Property Taxes
Are Determined
Step 3 — Determine Property Tax Rate
Total tax capacity of all property
Divided by: Total city property tax levy
Equals: Property tax rate for Hopkins
How Your Property Taxes
%6
Are Determined
Step 4 — Calculate Property Taxes
Tax capacity of Your property
Multiplied by: Hopkins property tax rate
Equals: Hopkins portion or your taxes
How Your City and County Property
Taxes Are Determined
Total
PfOposed Local i As sossor's 3
Budget M.,W VM—
� a times
al Ron-Property ; state
T Revenue Mandated
[ s Cle.. Rate■
. equal. • equals
Property lea Total
pac y
Revenue Needed divided by a` s0 "T�a. Ce it
(Levy)
= equals
� r
Property
Tea Rate g
Wit` -o
Tax Shift
$12,000
- -- --
$10,000
—
�i
y $6,000
— -
22005
€€`
02006
$6,000
E`' - - j� - --
02007
$4,000
i
■ 2008
S:
02009
$2,000
—
$o
i
Residential Comm/Indus Apartments
Tax Capacity Values
Tax Capacity Comparison
i
Su LN/N
"F
k '.. , ._.,.,. ...
Ai 70N IiA AN NN Ail A,i IDN
T - w
TAX HISTORY ON HOMESTEAD RESIDENTIAL HOME
WITH A CONSTANT VALUE OF $225,000
$1.400 .............. ._............. ......
.... .
i
$1,300 --
$1200 - ----- - -._.. --- - -'--- ---
$1.100
$1,000 - -
$900 -------- -- - - -- - -- -.
$800
2003 2004 2005 2008 2007 2008 2009
4
= RESIDENTIAL PROPERTIES
TAX CHANGES FROM 2008
+10.0% -14.9% '15.0% -19.9%
1.1 % of 0.71 % of -20% and over
a homeowners homeowners - O.29% of
homeowners
*5.0% - 9.9%
7,08% of
homeowners
i
Decrease
54.88% of
t0.4 %- 4.91.6 homeowners
35 94% of
homeowners L!
i
2009 Proposed Tax Lev
2009
" L.v7
Purpeu _ 2007 2009 P, ,"-d
Oenenl Opentbrr
G...1 Fwd S 7,516,943 5 7,825,565 S 8.160.614
Caplal levy 50,000 75.000 S 100
S 7.344,943 S 7,900,565 S 8
Bp.d.1 L-l..:
PE RA Le, 11,815 11,815 35.500
HRA Lwy 20,00
Bubta.l &j d.1 L..I.. • Oth . S 81,815 $ 11,815 f 55
Oebt Levlee:
18990 rm GO Pe Impr R—Nwg Bond. 26,000 26,000 26,000
2001 00 Refundmp Bonde - Imprw Rev 82.000 -
2001 GO R.fundnp Benda - Park a R.c 175.000 160.000 130,000
20028 GO lmpmv R.vdnnq Bonds 59.000 59,000 59,000
202 HRA Ra v.nw Banda 650.000 -
2003 HRA Re,
w Bono. 235.000 230.000 225,000
207B GO lm prow P—M.p Bprge 175.000 175,000
2007 Cap Improvement Bon.. &12,000 642 000
qWd W.1 -D.bt L..b. 51,207,000 51,282,900 S 1,257,000
Bubtot.l Special L.vi.. S 1,288,815 S 1,29] 815 S 1.292 S00
TOTAL LEV IEB S 8,605,156 S 9,194.]80 S 9,55],114
1— ....v.r Pl., 7..r S 361.660 S ]86,622 S 356134
P .... rd.9a lm, (D.c4 -Totel 4.36% 4.41%
Tax Levy Changes
General Levy Increase $360,049
Special Levy Increase 23,685
Debt Levy Decrease 25
Total Levy Change $358,737
2009 Proposed
General Fund Budget and Levy
t
General Fund Budget 2009 Levy
N; $9,553,114
$10,075,492
This is an increase
This is an increase over the current year's
from the 2008 budget levy of $358,734 or
of 5.26 %. 3.9% and no change
from the preliminary
certified levy.
General Fund Budget
Impact on Levy
General Fund Budget Increase $503,325
Funded by levy 358,734
Funded by other revenues 144.591
Total GF Budget Increase $503,325
Other revenues include:
Licenses & permits
Fees for services
11
Expenditure Budget
2008
2009
Budget %
General Fund
Budget
Budget
Incrl(Decr)
')
City Council
$ 80,382 $
78,072
- 2.87%
Administrative Services
423,565
452,071
6.73%
Finance
171,342
184,303
7.56%
Legal
126,625
131,625
3.95%
-
Municipal Building
301,837
308,809
2.31%
Receptionist
40,288
45,893
13.91%
Assessing
142,881
167,288
17.08%
City Clerk
127,191
97,819
- 23.09%
Inspections
513,354
592,917
15.50%
Police
4,096,410
4,331,919
5.75%
Fire
757,337
810,921
7.08%
Public Works
2,017,671
2,139,947
6.06%
Recreation
216,799
214,973
-0.84%
Activity Center
310,240
328,409
5.86%
Planning & Zoning
112,132
102,006
-9.03%
Other Financing Uses
134,113
88,520
- 34.00%
Total Expenditures
$ 9,572,167 $ 10,075,492
5.26%
General Fund Budget
Impact on Levy
General Fund Budget Increase $503,325
Funded by levy 358,734
Funded by other revenues 144.591
Total GF Budget Increase $503,325
Other revenues include:
Licenses & permits
Fees for services
11
Savings & Efficiencies
F
*Police Department
• Implemented police vehicle fuel monitoring
program to save on fuel costs
�► $582,294 in total savings over last 4 years
• $394,329 in grants received to offset program and
capital expenses
• $23,309 in donations received to offset program
expenses
. $164,656 savings realized by using local vendors,
" omitting capital purchases and reworking cell
phone program
Savings & Efficiencies
*Fire Department
I • Daytime rescue standby program
.' • Responded to over 100 calls since inception of
program
I �< •
?, • Frees up police allowing them more street time
• Reduced cost in number of firefighters responding
to rescue calls
• Faster response to medical emergencies
r $10,000 savings in payroll costs
• $2,000 savings in building maintenance costs
Savings & Efficiencies
* Public Works
a Refuse containers in CBD allow for servicing with
automated refuse truck — manpower savings
# City Hall HVAC Upgrade — replacement of old
chiller with efficient rooftop units
• Savings of $20,000 /yr — 5 yr payback
* In -house Utility Rate Study — savings of $10,000
r In -house Pavement Management Inspections
• Savings on annual consultant fees
♦ Fire Alarm Central Reporting System
• Fire, boiler & intrusion alarms routed to dispatch
• Savings on annual service contract of $2,500
7
Savings & Efficiencies
*Public Works — cont.
;, • Restructured PW Department
• Combined three depts., re- organized staff and eliminated
one superintendent
• Savings of $50,000 per year
• HC Sentencing to Service Work Force Program
• Low risk offenders with Co. Supervisor perform litter
control, landscape area maintenance and grass cutting
• Cost savings of $7 per hour over PW seasonal staff
• Diseased Elm Tree Removal
• Combined PW depts. resulting in larger workforce
• Reduced need for contractual services
Savings & Efficiencies
} *Other Departments
t'. • Administration
• Since 2005, received 1153 hrs donated for clerical
service, a savings of over $20,000
• Assessing contract with Hennepin Co saves $74,000 /yr
• Scanning of documents into digital storage
+ Planning & Zoning
• Utilizing current staff to do in -house GIs mapping
Finance
• Implemented mandatory direct deposit for employee
payroll
• Fully integrated finance software
Budget Challenges
Health care costs
► PERA rate increase — state mandated
• Inflation
• Energy costs
• Fuel & fuel related projects
• Property & liability insurance
• Personnel
8
Long -Range Planning
"► Capital Improvement Plan
.,
�► Equipment Replacement Plan
5
Both are 20 year plans for major expenditures
. Focus is on next 5 years
• Allows us to plan for funding of major
projects and equipment purchases
Looking Ahead
2009 -2010
+r Look for additional savings & efficiencies
► Evaluate programs
► Evaluate services
Evaluate projects
A
9
Revenue Budget
V,
2008
2009
%
,-
General Fund
Budget
Budget
Incr /(Deer)
Property Taxes
$ 7,869,380
$ 8,229,114
4.57%
Intergo\emmental Reeenue
438,510
448,010
2.17%
Licenses, Permits & Fees
646,670
804,985
24.48%
Charges for Seruce
204,500
176,600
- 13.64%
Miscellaneous Rewnue
305,200
311,000
1.90%
Interest Earnings
107,907
105,783
-1.97%
Total Revenues
$ 9,572,167
$ 10,075,492
5.26%
9
Current Levy Proposal
No change to proposed levy
♦ City tax on a home valued at
$225,000 increases by approximately
4.0% or $43
Equates to about $3.50 per month
Analysis of Median Valued Home
+ 2009 Home Valued at = $225,000
*Assuming constant market value
.2008 City Taxes $1,021
.2009 Proposed City Taxes $1,064
. Increase of $43 from 2008
A .2009 Revised City Taxes $1,064
. No change from preliminary levy
10
Where My Taxes Go
7
17%
o Schools
® City
35%
O County
a�.
> ® Special
Districts
41%
Tax Rate Comparison
x 3.
° "► Current city tax rate = 45.401 %
* TNT 2009 proposed tax = 47.306%
* 2009 final tax rate = 47.306%
a
*Tax rate increase = 1.905%
Property Tax Breakdown
on Home Valued at
$225,000
e ..
*City $1,064
*County $ 909
*School District $ 454
*Special Districts 195
Total Taxes $2,622
This does not include referendum market
value taxes levied by the school district(s)
Where My Taxes Go
7
17%
o Schools
® City
35%
O County
a�.
> ® Special
Districts
41%
Tax Rate Comparison
x 3.
° "► Current city tax rate = 45.401 %
* TNT 2009 proposed tax = 47.306%
* 2009 final tax rate = 47.306%
a
*Tax rate increase = 1.905%
r` Property Tax Levy Changes
Overall Increase in levy
$358,734
Increased General Levy $360,049
*Decreased Special Levies $ 1,315
How much will we pay?
* $89 a month in property taxes for city
's services.
* $1- $2 a month in franchise fees.
* $25 a month in refuse & recycling charges
* $37 for water distribution and collection
charges.
12
Compare the Value
Monthly Costs
$160 ....
$140 .
Taxes as Compared to Other Services
_ _. ._
i . $120
z
$100
I
Sao
560
-
—
..
$40
—
..
q•�S�! Ca1,1er
phone
Gas Ebchk Ca01e N Aulo Day F.mri Nghl City
S—ic S—ica Servka haurance COff_eI out S.
S—k.
z z
Wfaa Hopkm
Shop Raeleur-1
6 kbv e
How much will we pay?
* $89 a month in property taxes for city
's services.
* $1- $2 a month in franchise fees.
* $25 a month in refuse & recycling charges
* $37 for water distribution and collection
charges.
12
sF :
What do we get?
r 24 -Hour Police and Fire Protection
r Emergency medical treatment and management services
r Well Maintained Streets, Trails, and Sidewalks
r Refuse and Recycling Services
r Utility Services- Water, Sanitary Sewer and Storm Sewer
r Boulevard Tree and Forestry Program
r Beautiful Parks and Open Space
r High Quality Recreation programs
r Hopkins Activity Center and Hopkins Depot
r Hopkins Center for the Arts
r Community and Economic Development
r Housing Services and Programs
r Building Inspections, Licensing, and Code Enforcement
r Elections
1�