HomeMy WebLinkAboutCity Tax Base April 1991 VOTO, TAUTGES, REDPATH & CO., LTD.
TA 1
CERTIFIED PUBLIC ACCOUNTANTS \
Birch Lake Processional Building e 1310 E. Hwy. 96 ® White Bear Lake, NAN 55110 ® Fax (612) 426 -5004 \
® Phone (612) 426 -3263
April 30, 1991
ROBERT J. VOTO, CPA
ROBERT G. TAUTGES, CPA
JAMES S. REDPATH, CPA
D KENNETH GEORGE, CPA
DAVID J. MOE, CPA
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
14168 N 57th St
Stillwater, MN 55082
RE: CITY TAX BASE - 1990/1991
I have just completed my updated review of the St. Croix Mall TIF Project. In conjunction
therewith, I have updated my records on the City's tax base. You may recall that this data
was first analyzed when we were analyzing the effect of this project on the City's overall tax
base. You will note the following:
MARKET VALUES
The total market value of the City's tax base was $195,807,600 for 1990/91 representing a
$707,600 or 0.4% decrease. This decrease was caused by two factors.
1. Public Utility Property:
The market value of public utility property decreased by $6,776,800 or 7.6 %. This
market value is set by the State Department of Revenue rather than by your local assessor.
According to the State, the decrease was caused by a change in methodology used by the
State rather than by any actual market value decline. Also according to the State, future
market values (for public utility property) should remain fairly constant. Accordingly,
the City should not expect a continued decline for this property classification.
2. Apartment Property:
The market value of apartment property decreased by $441,200 or 3.8 %. This property
classification includes rental property subject to the National Housing Act and other
rental property. The National Housing Act property classification has remained
relatively constant (or increasing) over the past three years. Other rental property
generally consists of apartment complexes of four or more units.
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To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
April 30, 1991
Page 2
The market value of apartment complexes has decreased by $1,3 17, 100 over the past two
years, as follows:
TAX MARKET
YEAR VALUE CHANGE %
1984/85 $3,529,000
1985/86 4,874,000 $1,345,000 38.1%
1986/87 5,022,900 148,900 3.1%
1987/88 8 3,468,800 69.1%
1988/89 8 33,900 0.4%
1989/90 7,831,400 (694,200) (8.1%)
1990/91 7,208,800 (622,900) (8.0 %)
As shown above, the market value of apartments within the city has decreased by 8% over
each of the past two years. We have been in contact with the County Assessor's Office to
determine the cause for this decrease. The attached Schedule 4 presents a detailed listing of
such property for the past two years plus preliminary values for 1991/92.
Substantially all of the above decrease for the past two years was the result of assessment
appeals /court stipulations on an apartment complex. The Oak Ridge apartment complex was
valued at $3,779,300 for 1988/89 property taxes. This value was decreased to $3,200,000 for
1989/90 (representing a $579,300 or 15% decrease) and further decreased to $2,300,000 for
1990/91 (representing a $900,000 or 28% additional decrease). According to the Washington
County Assessor's Office, both of these decreases were the result of court stipulations. The
Oak Ridge apartment complex represented approximately 44% of the total apartment property
in the City for 1988/89. Accordingly, these decreases had a major effect upon the total.
The preliminary market values for 1991/92 reflects another decrease of $164,500. However,
this is misleading. A single new apartment added to the tax rolls in 1990/91 was erroneously
valued at $300,700. This was corrected to $135,400 for 1991/92. Accordingly, the City
should not expect continued future declines in the market value of apartment property with the
City.
The market value of all other City property increased by $6,510,400 or 6.8 %.
Industrial /Commercial property increased by $2,713,000 or 11.5 %. However, $1,479,800 of
this increase (55 %) was the result of the St. Croix Mall TIF parcels. Residential property
increased by $3,804,400 or 5.3 %.
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
April 30, 1991
Page 3
Since 1984/85, the market values of the City's tax base has shifted away from public utility
towards other property classifications as follows:
1984/85 1990/91
PROPERTY CLASS FMV % FMV %
_..
Public Utility $91,116,007 56.5% $82,080,500 41.9%
Industrial /Commercial 13,467,500 8.4% 26,393,400 13.5%
Residential 49,59700 30.8% 76,121,000 38.9%
Apartments 6,917,300 4.3% 11,148,700 5.7%
Other 122,900 0.0% 64,000 0.0%
Totals $161,221,307 100.0% $195,807,600 100.0%
As clearly shown above, the relative mix of the City's tax base (at fair market value) has
changed considerably over the past six years. Public Utility property has decreased from
56.5 % of the total to 41.9 %. Alternately, Industrial /Commercial property increased from
8.4 % of the total to 13.5 % and Residential property increased from 30.8 % of the total to
38.9 %.
ASSESSED/TAX CAPACITY VALUES
The City's actual tax base is measured by assessed /tax capacity values rather than market
values. These values (under the current tax capacity rules) are determined differently for each
separate property classification. For instance, public utility property has a tax capacity factor
of 4.95 % of market. Alternately, homestead property has a three -tier factor formula as
follows:
RATE/
_TIER/MARKET VALUE FACT
1st $68,000 1.00%
$68,000 to $110,000 2.00%
Over $110,000 3.00%
The above tax capacity factors are designed to limit property taxes on selected property
classifications (i.e. homestead, farm, etc.). Homestead property (valued $68,000 or less) is
given the lowest tax capacity factor of 1 %. This means (in theory) that homestead property
will pay annual property taxes equal to 1 % of its market value.
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To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
April 30, 1991
Page 4
Alternatively, public utility property and industrial /commercial property is given the highest
tax capacity factor of 4.95 %. Accordingly (in theory) public utility property and
industrial /commercial property will pay annual property taxes equal to 4.95 % of its market
value.
It should be noted that this methodology of applying different tax capacity factors to different
property classifications is a State - controller) methodology. The City has no control over this
process.
The attached Schedule 2 summarizes the City's tax base for the years 1988/89 through
1990/91. The total market value of the City's tax base decreased by $707,600 for 1990/91
representing a 0.4 % decrease. The causes for this decrease were explained previously in this
report. More important, tax capacity values decreased by $318,548 for 1990/91 representing
a 4.5 % decrease. This decrease was the result of two factors:
1. Market value decreases
2. Tax capacity rate changes /decreases.
The attached Schedule 3 summarizes the City's tax capacity values in terms of
"actual- composite" tax capacity rates /factors. This schedule clearly shows the primary cause
for the 1990/91 decrease in the City's tax capacity values. The State (in its attempt to limit
tax increases for various property classifications) reduced tax capacity factors /rates for most
property classifications in the City. The following table summarizes the 1990/91 decrease by
cause:
MARKET RATE/
VALUE FACTOR
PROPERTY CLASS CHANGES CHANGES TOTAL
Public Utility ($342,600) ($87,100) ($429,700)
Industrial /Commercial 127,600 (19,300) 108,300
Residential 59,500 (34,900) 24,600
Apartments (14,300) (7,200) (21,500)
Other (100) _. (100) (200) .
City Total ($169,900) ($148,600) ($318,500)
PERCENT (53.3 %) (46.7 %) (100.0 %)
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To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights
April 30, 1991
Page 5
As clearly shown above, almost half (i.e. 46.7 %) of the 1990 /91 tax capacity value decrease
was the result of State methodology rather than property values. In effect, State methodology
is decreasing /deminishing the City's tax bases.
FISCAL DISPARITY /T.I.F.
There is another factor which has a negative impact on the City's tax base -- fiscal disparities.
The attached Schedule 2 shows this impact. The City of Oak Park Heights is a net -loser
under the fiscal disparities program. More important, the negative impact of fiscal disparities
is increasing as follows:
FISCAL % OF CITY
TAX YEAR DISPARITY- TAX BASE
NET
1988/89 $(170,101) (2.3) %
1989/90 $(297,342) (4.2) %
1990/91 $(481,065) (7.1) %
The 1990/91 tax year was the first tax increment financing collection year for the City's St.
Croix Mall -TIF Project. This TIF project decreased the City's 1990/91 tax base by $56,853
representing a 0.8% decrease. Current projections indicate that this adjustment will increase
to $216,800 for 1991/92 and diminish thereafter.
The above (and attached) information was used (by my office) for other analytical purposes. I
thought the information would be of interest to the City Council. We will be available to
discuss this report with the City Council at a future date. If you have any questions, please
don't hesitate to call.
Yours very truly,
VOTO, TAUTGES, REDPATH & CO., LTD.
Robert J. Voto, CPA
Attachments
TAkBASE LS,
CITY OF OAK PARIS HEIGHTS
CITY TAX BABE -OLD BASIS- ASSESSED VALUES SCHEDULE 1
198411985 198511986 1986 1987 1987 1988
AMOUNT % AMOUNT % AMOUNT % AMOUNT %
MARKET +VALUES.
IJ;,UT 91,116 007 56.5; 84,033,078 52.1 i0 87 416 000 51.6`;; 88 2`I 000 43.3;10
IND l`:TYt_OM. 13,467,500 8.4% 17,234,100 10.7% 18,557,400 11.0% 19,722,500 11.0;5
RES1DENT1AL 43,531,600 30.81 51581,600 32.0% 54,207,700 32.0% 59,221,800 33.1°;
APART.- NAT'L. HOUSE. ACCT 3,388,300 2.1% 3,529,700 2.2% 3,943,400 2.3% 3,466,500 1.9%
APART. -OTHER 3,529,000 2.21 4,374,000 3.0% 5,022,300 3.0% 8,491,700 4.7%
OTHER 1 i2 ?Ci0 0.1% 122,900 0.1% 135,200 0.1% 1 1.a 1 XV
TOTALS 161,221,307 100.0% 161,375,378100.0% 169,282,600100.0% 179,127,500 100.0%
ASSESSED VALUES:
UTIUTY 32,1 { 54,792 64.4% 29,707,157 59.5 30,800,234 59.0"/ 31,017,497 56.9%
INDUSTYC�C:M. 5 ,430,57.7 10.9 6,986,047 14.0:) 7,554,022 14.5% 8,066,094 14.8%
R.EEIDENTIAL 10,376 20.8% 10,767,il00 21.6`/ 11,274,534 21.6:4 11,836,358 21.7%
APART: NAT'L HOUSE. ACT 710,504 1.q% 747,548 1.5% 854,382 1.6% 737,092 1.4';.
APART.-OTHER, 1,199,860 2.4% 1,657,160 3.3% 1,707,786 3.3% 2,887,178 5.3%
OTHER 23,351 0.011 22,122 0.0% 24.336 0.0% 0 0.0%
TOTALS 49,903,582 100.0 49,887,034 100.0% 52,215,294 100.0% 54,544,219 100.0%
F. D. CONTRIBUTION:
IND1C:Olk+L YEAR 34,989,064 37 533,365 36,584,622 38,195,443
INDAI_ fO 1-BAuE 29,702,339 -29,702,333 - 29,702,339 - 29,702,339
Ih'��.REA, E 5 "�� +'25 ,391,046 6 3x21 „lo3 8,433,104
L'. V,
?NTRIBUTION � J 40`% 2,114,690 3,156,410 2,752,913 3,397 24c
IND. -THIS YEAR :'7,593,365 36,686,850 38,349,522 39,077,454
F. D. FACTOR 5.6252% 8.6037% 7.1785% 8.6936%
CITY TAX BASE -NET.
ASSESSED VALUES-
PER ABOVE 49,903,582 100.0% 49,887,034 100.0% 52,215 294 100.0% 54,544,219 100.0%
FISCAL DISPAR P(:
C,ON T RIBUTiON - 2,114,690 -4.2% - 3,156,410 -6.3% -2,752,913 -5.3% - 3,397,242 -6.2%
DISTRIBUTION 1,105,582 2.2% 1,188,305 2.4% 1,490,130 2.9% 1,822,244 3.3%
T. I. F. VALUE 0 0 0 0
CITY TAX BASE -NET 48,894,474 98.0% 47,918,929 96.1% 50,952,511 97.6% 52,969,221 97.1%
INCREASE 1- DECREASE - 975,545 -2.0% 3,033,582 6.3% 2,016,711 4.0%
TAX- BASE:,'!L S
CITY OF OAK PARK HEIGHTS
CIT Y TAX SASE -NBV BASIS -TAX CAPACITY VALUES SCHEDULE 2
1088 i 1000 1080 i 1990 1990 i 1991 INCREASE / - DECREASE
AMOUNT % AMOUNT % AMOUNT % AMOUNT %
MARKET VALUES:
0712 1 87,`42,100 46.9% 88857,300 45.2;0 82,080,500 41.9% -33,776,800 -7.0
i J M. " 0 ,311"900 12.0.,, 23,680,400 12.135 26,39:3,400 13.5;; 2,713,000 11.5'0
RESIDENTIAL 64,251,600 34.6% 72,316,600 36.8`io 76,121,000 38.9% x,804.400 5.3'%0
APART.-NATL HOUSE. ACT 3,466,500 1.9'% 3,758,500 1.9% 3,940,200 2.0% 181,700 4.8%
APART. -OTHER 8,525,600 4.6'% 77,831,400 4.0% 7,2118,500 3.7% - 622,300 40 �
OTHER. 93,000 0.1% 71,000 0.0% 64,000 0.0;0 -7,000 - 9.93x5
TOTALS 185,913,700 100.0% 196,515,200 100.0% 195,807,600100.0% - 707,600 -0.40
TAX CAPACITY VALUES:
UTILITY 4,119,653 56.6! 4,492,661 63.1% 4,062,983 59.3 - 429,678 -9.6%
INDUST.iCOM. 1,093,834 15.11% 1,113,477 15.6% 1,221,737 18.0.5 108,260 9.7%
RESIDENTIAL 1,619,412 22.3% 1,131,944 15.9% 1,156,506 17.0% 24,562 2.2`'•4
APART.41ATL HOUSE. ACT 91,668 1.3:0 93,868 13% 94,785 1.4% 917 1.0;0
APART- 43THER 349,551 4.8% 281,931 4.0% 259,506 3.8% -2'? 425 -8.0%
OTHER. 2,093 0.0% 1,208 0.0% 1,024 0.0% -184 - 15.2:0
TOTALS 7,276,261 100.0% 7,115,089 100.0% 6,796,541 100.0% - 318,548 - 4.5` %5
F. D. CONTRIBUTION:
INDt1=�OM -LAST YEAR. 38,982,308 5,214,482 5,602,682
IND/C ;M -BASE - 23,702,339 -3,627 -3,496,490
INCR.EASlE 9, 79 1,586,664
CONTRIBUTION @ 40`. %4 3,711,988 634,666 no 4 2 j 77
ADJ. TO TAX CARINET 452,862 611,697 824,162
S YEAR 5,213,537 5,606,138 5;2'84,404
IhdO /COI11 THI
F. D. FACTOR 8.6863% 10.9112% 15.5961%
CITY TAX BASE-NET
TAX CAPACITY VALUES -
PER ABOVE 7 276 261 100.0% 7,115 089 100.a% 6,796,541 100.0 % X 13 548 4.5;5
FISCAL DISPARITY:
CONTRIBUTION - 452,862 -6.2% - 611,697 463% - 824,162 - 12.1% - 212,465 34.7..
DISTRIBIJfION 282,761 3.9% 314,355 4.4% 343,097 5.0% 28,742 9.1
T. I. F. VALUE 0 0.0% 0 0.0% - 5F; 853 - 0.8`'l0 - 561,853
CITY TAX BASE -NET 7,106,160 97.7% 6,817,747 95.8% 6,258,623 92.1 - 569,124 -8.2%
INCREASE/-DECREASE N /A - 559,124 -8.2% i
uaria `l `
Tr kB A SE.Y1 33
CITY OF OAK PARK HEIGHTS
CITY TAX BASE -NEW BASIS -TAX CAPACITY RATES SCHEDULE 3
INCREASE I - DECREASE
TAX CAPACITY RATES 195811989 198911990 1990/1991 PERC. PTS. %
UTILITY PROPERTY:
ATTAGI-IEDMACHINERv' 4.60% 5.06% 4.95'%
LAND 8c BUILDINDS 5.251 5.06% 4.95Xo
CITY ACTUAL - COMPOSITE 4.72% 5.06% 4.95% -0.11% - 2.10%
INDUST.ICOMMERCIAL:
1ST. $100,000 330I;¢ 3.x10% :1.20%
OVER $100,000 5.25% 5.061} 4.351,
CITY ACTUAL - COMPOSITE 4.90% 4.701 4.63% -0.07% - 1.561
HOMESTEAD:
!SST. TIER 2.1730 1.00'.'•'0 1.00%
2ND. TIER 1.50% 2.00% 2.00%
3RD. TIER 3330'x, 3.003 3.011%
CITY ACTUAL - COMPOSITE 2.52,% 1.57% 1.52% -0.05% -2.94%
APARTMENTS:
CITY ACTUAL - COMPOSITE:
NAT'L_ HOUSING ACT 2.64% 2.50% 2.41% - 0.09 % -3.68%
OTHER 4.10% 3.60% 3.60% 0.00% 0.00%
TOTAL CITY:
CITY ACTUAL - COMPOSITE 3.91% 3.62% 3.47% -0.15% -4.13%
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TA:{ -BAS S.E.XLS
CITY OF OAK PARK HEIGHTS
CITY TAX SASE - APARTMENT PROPERTY SCHEDULE 4
MARKET VALUES
( PRELIMINARY Z
PARCEL NO. 190911990 1990/1991 1991/1992
60004 -2050 990,000 930,000 990,000 COURT S T IRJLATiON
�)U�U� LUSH 1,02 1 aL 1 X00 1 uL 13 U
60955 -2110 1 33,300 133,300 1 , 4 300
61100 -2000 3,200,000 2,300,000 2 COL PT S iiPULATION
F6124.5 2025 300,300 300,300 330,300
61333 -2650 142,600 119,000 117,000
61343 -2550 116,700 116,700 119,500
61440 -2100 139,300 109,300 189,300
60140 -2 139,500 139,500 1: =9,500
60375 -6150 115,700 115,700 115
61095 -3100 0 300,700 0 NEW IN 1996
61095-3115 0 0 135,400 CORRECTION IN 1991/1932
61095 -4900 300,000 300,000 300,000
61095 -4950 150,000 150,000 150,000
61095 -1960 152, 152,000 152,000
TOTALS 7,831 400 7,208,500 7,044,000
DECREASE - 694,200 - 622,900 - 164,500
CAUSES FOR DE ORE ASE:
A PPE ALS-- GR.EENBPJEP, - 133,400
A,PPcA,LS- -OAK RIDGE -- 379,300 -900,000
A PPE AL 'S- CITHER 0 - 23,500
NEVV PROPERTY 0 300,700 - 165,300
ALL 0THER4 -IET 18,500 0 800
TOTALS -694,200 - 622,900 - 164,500