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HomeMy WebLinkAbout1995 TR&Co Report-Proposed Tax Levy P TAUTGES, REDPA TH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS City of Oak Park Heights, Minnesota City Council Presentation December 6, 1994 A. Effect of Proposed Tax Levy: • Proposed September 12, 1994 • Revised December 6, 1994 B. City Tax Base: • Tax Capacity Values • Tax Capcity Ratios/Factors C. Comparison to Other Washington County Cities 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International CITY OF OAK PA [EIGHTS , MINNESOTA PROPOSED TAX LEVY / PROPOSED ( 9/12/94) DATA-1994/95 SCHEDULE 9 ( 9/12/94 ) ACTUAL PROPOSED TAX RATES: 1993/94 1994/95 CHANGE % CITY 22.012 25.621 3.609 16.4% COUNTY 30.654 30.468 -0.186 -0.6% SCHOOL 62.686 66.766 4.080 6.5% OTHER 6.955 5.813 -1.142 -16.4% TOTAL 122.307 128.668 6.361 5.2% HOMESTEAD -S72,000 MARKET VALUE HOMESTEAD - 5100,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 158 184 26 16.4% 282 328 46 16.4% COUNTY 221 219 -1 -0.6% 392 390 -2 -0.6% SCHOOL 451 481 29 6.5% 802 855 52 6.5% OTHER 50 42 -8 -16.4% 89 74 -15 -16.4% TOTAL 881 926 46 5.2% 1,566 1,647 81 5.2% HOMESTEAD - 5125,000 MARKET VALUE HOMESTEAD - 5150,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 392 456 64 16.4% 502 584 82 16.4% - COUNTY 546 542 -3 -0.6% 699 695 -4 -0.6% SCHOOL 1,116 1,188 73 6.5% 1,429 1,522 93 6.5% OTHER 124 103 -20 -16.4% 159 133 -26 -16.4% TOTAL 2,177 2,290 113 5.2 2,789 2,934 145 5.2% COMMERCIAL - 5125,000 MARKET VALUE COMMERCIAL - 5150,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 913 1,063 150 16.4% 1,167 1,358 191 16.4% COUNTY 1,272 1,264 -8 -0.6% 1,625 1,615 -10 -0.6% SCHOOL 2,601 2,771 169 6.5% 3,322 3,539 216 6.5% OTHER 289 241 -47 -16.4% 369 308 -61 -16.4% TOTAL 5,076 5,340 264 5.2% 6,482 6,819 337 5.2% COMMERCIAL - $1,000,000 MARKET VALUE UTILITY 41,000,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 9,773 11,376 1,602 16.4% 10,126 11,786 1,660 16.4% COUNTY 13,610 13,528 -83 -0.6% 14,101 14,015 -86 -0.6% SCHOOL 27,833 29,644 1,812 6.5% 28,836 30,712 1,877 6.5% OTHER 3,088 2,581 -507 -16.4% 3,199 2,674 -525 -16.4% TOTAL 54,304 57,129 2,824 5.2% 56,261 59,187 2,926 5.2% TR Co 12/6/94 3:35 PM Page 1 LEVY- 95B.XLS CITY OF OAK PA IEIGHTS , MINNESOTA PROPOSED TAX LEVY / REVISED ( 12/6/94) DATA-1994/95 SCHEDULE 9 12/6/94 ACTUAL REVISED TAX RATES: 1993/94 1994/95 CHANGE % CITY 22.012 23.717 1.705 7.7% COUNTY 30.654 30.468 -0.186 -0.6a /a SCHOOL 62.686 66.766 4.080 6.5% OTHER 6.955 5.813 -1.142 -16.4% TOTAL 122.307 126.764 4.457 3.6 HOMESTEAD - $72,000 MARKET VALUE HOMESTEAD - 5100,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 158 171 12 7.7% 282 304 22 7.7% COUNTY 221 219 -1 -0.6% 392 390 -2 -0.6% SCHOOL 451 481 29 6.5% 802 855 52 6.5% OTHER 50 42 -8 - 16.4% 89 74 -15 - 16.4% TOTAL 881 913 32 3.6% 1,566 1,623 57 3.6% HOMESTE4D- 5125,000 MARKET VALUE HOMESTEAD - 5150,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 392 422 30 7.7% 502 541 39 7.7% COUNTY 546 542 -3 -0.6o /a 699 695 -1 -0.6% SCHOOL 1,116 1,188 73 6.5% 1,429 1,522 93 6.5% OTHER 124 103 -20 - 16.4 159 133 -26 - 16.4% TOTAL 2,177 2,256 79 3.6% 2,789 2,890 102 3.6% COMMERCIAL 4125,000 MARKET VALUE COMMERCIAL-3150,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE % 1993/94 1994/95 CHANGE % CITY 913 984 71 7.7% 1,167 1,257 90 7.7% COUNTY 1,272 1,264 -8 -0.6% 1,625 1,615 -10 -0.6% SCHOOL 2,601 2,771 169 6.5 % 3,322 3,539 216 6.5 %s OTHER 289 241 -47 - 16.4 369 308 -61 - 16.4% TOTAL 5,076 5,261 185 3.6 6,482 6,718 236 3.6 %9 COMMERCIAL 41,000,000 MARKET VALUE UTILITY - 51,000,000 MARKET VALUE ACTUAL PROPOSED ACTUAL PROPOSED PROPERTY TAXES: 1993/94 1994/95 CHANGE %9 1993/94 1994/95 CHANGE %1 CITY 9,773 10,530 757 7.7% 10,126 10,910 784 7.7% COUNTY 13,610 13,528 -83 -0.6 %9 14,101 14,015 -86 -0.6 %9 SCHOOL 27,833 29,644 1,812 6.5% 28,836 30,712 1,877 6.5% OTHER 3,088 2,581 -507 - 16.4% 3,199 2,674 -525 - 16.4% TOTAL 54,304 56,283 1,979 3.6% 56,261 58,311 2,050 3.6% TR Co 12/6/94 3:35 PM Page 1 LEVY- 95C.XLS To the Honorable Mayor anu Members of the City Council City of Oak Park Heights October 25, 1994 Page 4 TAX C APACITY VALUES The City's actual tax base is measured by 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 4.60% of market for 1994/95 representing a 9.1% reduction from a factor of 5.06% for 1989/90. Alternately, homestead property has a three -tier factor formula as follows: Ratios/Factors Tier/Market Value 1989/90 1993/94 1st $72,000 1.0% 1.0% $72,000 to $115,000 2.0% 2.0% Over $115,000 3.0% 2.0% The above tax capacity ratios /factors are designed to limit property taxes on selected property classifications (i.e. homestead, farm, etc.). Homestead property (valued $72,000 or less) is given the lowest tax capacity factor of 1 %. This means (in theory) that homestead property valued at $72,000 or less will pay annual property taxes equal to 1% of its market value. Alternatively, public utility property and industrial/commercial property is given the highest tax capacity factor of 4.60 %. Accordingly, (in theory) public utility property and industrial/commercial property will pay annual property taxes equal to 4.60% of its market value. It should be noted that this methodology of applying different tax capacity factors to different property classifications is a State - controlled methodology. The Citv has no control over this process. n To the Honorable Mayor ana Members of the City Council City of Oak Park Heights October 25, 1994 Page 5 The total tax capacity value (T.C.V.) of the City's tax base is $6,478,987 for 1994/'95 representing a $636,102 or 8.9% decrease over the past five years. The following schedule details this change by the various property classifications: Preliminary live Year 1989/90 1994/95 Increase/ (Decrease) Property Classification Amount % Amount % Amount % Utility $4,492,661 63.1% $3,622,427 55.9% ($870,234) (19A%) Commercial 1,250,376 17.6% 1,468,981 22.7% 218,605 17.590 Homestead 735,166 10.390 991,722 15.3% 256,556 34.990 Seasonal Residential 12,787 0.290 5,131 0.1% (7,656) (59.9%) Apartment - NHA 93,868 1.3% 0 0.0% (93,868) (100.0%) Apartment - (1- 3 Units) 248,300 3.5% 157,585 2A% (90,715) (36.5%) Apartment - (4+ Units) 281,931 4.0% 233 3.6% (48,790) (17.3%) Totals $7.115,089 100.0% $6,478,987 100.0% ($636,102) (8.990) A graphic illustration of the City's tax capacity value tax base over the past five years is presented in Graphic B (attached hereto) and is shown below: $7,500,000 $7,000,000 $6,500,000 — © 73 $6,000,000 $5,500,000 —©-- Total $5,000,000 —�— Utility $4,500.000 $4,000,000 $3,500,000 K; fl Commercial $3,000,000 • $2,500,000 Homestead $2 — All Other $1,500,000 ■,_, . ! r ■ ■ $1,000,000 s s �-- • $500,000 .. . .4 $0 I I I 1 1 89/90 90/91 91/92 92/93 93/94 94/95 To the Honorable Mayor and Members of the City Council City of Oak Park Heights October 25, 1994 Page 6 Tax capacity values are a product of. (1) property market values; and (2) State mandated tax capacity ratios /factors. Market value increases /decreases have corresponding effects on tax capacity values. The second (and most important) element affecting the City's tax base is the state mandated tax capacity ratios /factors. Such ratios have changed substantially over the past five years: Tax Capacity Ratios/Factors Property Classification 1989/90 1994/95 Amount % Public Utility 5.06% 4.60% (0.4690) (9.1 %) Industrial/Commerckd 1st Tier 3.30% 3.00% (0.30%) (9.1%) 2nd Tier 5.06% 4.60% (0.36 %) (9.1%) Homestead 1st Tier 1.00% 1.00% 2nd Tier 2.00% 2.00% 3rd Tier 3.00% 2.00% (1.0090) (33.3%) Apartment 1 - 3 Units 3.00% 2.30% (0.7090) (23.3%) 4+ Units 3.60% 3.40% (0.2090) (5.690) Total City - Composite 3.62% 3.11% (0.5190) (14.1 %) The above schedule of tax capacity ratios /factors for 1989/90 and 1994/95 is indicative of the major cause of decrease to the City's tax base. The State uses these tax capacity ratios /factors as a method of allocating property taxes amongst the various property classifications. Prior to 1989/90, homestead property was always "protected" from major property tax increases by relatively low assessed value /tax capacity value ratios /factors. This resulted in shifting the greater portion of tax increases toward non - homestead property. Over the years, this shift became too great and the State began a policy of reducing the tax capacity ratios /factors (i.e. tax increase) for non - homestead property. The net effect has been a re- distribution of property taxes and a depletion of the City's tax base. The City of Oak Park Heights was especially affected by this process because of its high level of public utility property. To the Honorable Mayor ana Members of the City Council City of Oak Park Heights October 25, 1994 Page 7 The net effect of this action by the State is a depletion of the City's real tax base (i.e. Tax Capacity Values) and an "erroneous" increase in the City's actual tax rate. County and School District tax rates are similarly effected by this State action. The following schedule summarizes and details the decreased Citv tax base as to market value changes and tax capacity ratios/factors changes over the past five years: Tax Capacity Values/Real Tax Base Market Value Ratio/Factor Changes Changes Totals Property Classification Amount % Amount % Amount % Utility ($507,400) (11.3%) ($362,800) (8.1 %) ($870,200) (19.4 %) Commercial 365,500 29.2% (146,900) (11.7 %) 218,600 17.5% Homestead 282,000 38.4% (25,400) (3.5 %) 256,600 34.9% Seasonal Residential (6,800) 0.0% (900) 0.0% (7,700) 0.0% Apartment - NHA (90,100) (96.0 %) (3,800) (4.0 %) (93,900) (100.0%) Apartment - (1- 3 Units) (42,700) (17.2 %) (48,000) (19.3 %) (90,700) (36.5 %) Apartment - (4+ Units) 535,100) (12.4 %) (13,700) (4.9 %) (48,800) (17.3 %) Totals ($34,600) (0.5 %) ($601300) (8.4 %) ($636,100) (8.9 %) As clearly shown above, the City's tax base (i.e. overall tax capacity value) decreased by $636,100 or 8.9% over the past five years. This decrease happened in spite of a $12,135,700 or a 6.2% increase to the market value of the City's tax base. The major cause of this decrease was actions of the Minnesota Legislature rather than changes to valuations of taxable property. Tax capacity rates/factor changes are responsible for $601,500 or 95% of the decrease to the City's tax base over the past five years as shown above. Such actions can be viewed as a depletion of the Citv's tax base. This change has the effect of increasing the City's tax rate without an actual City tax increase. Graphic illustrations of market value changes versus tax capacity value changes (by property type) are presented in Graphics C -1 through C -6 attached hereto. CITY OF OAK PARK HEIGHTS CITY TAX BASE ---TAX CAPACITY RATIOS / FACTORS SCHEDULE 3 PRELIMINARY CHANGE TYPE OF PROPERTY 1999/1990 1990/ 1991 1991 / 1992 1992 / 1993 1993 / 1994 1994 / 1995 ( S YRS. ) UTILITY PROPERTY: CITY ACTUAL COMPOSITE ! 5.06% ' ' 4.95% ' 4.75% ' 4.70% ' ! 4.60% I 4.60% ' -9.1% COMMERCIAL: 1ST. $100,000 3.30% 3.20% 3.10% 3.00 3.00% 3.00% -9.1% OVER S100,000 5.06% 4.95% 4.75% 4.70% 4.60% 4.60 -9.1% CITY ACTUAL-COMPOSITE 4.74% ' 4.66% ' 4.52% I 4.44% I 4.36% I 4.35% -8.2% HOMESTEAD: ) HOMESTEAD -1 ST. TIER 1.00% 1.00 1.00% 1.00 1.00% 1.00% 0.0% HOMESTEAD -2 ND. TIER 2.00% 2.00% 2.00% 2.00 2.00 2.00% 0.0°/6 HOMESTEAD -3 RD. TIER 3.00% 3.00°/6 2.50 2.00 2.00% 2.00% -33.3% CITYACfUAL- COMPOSITE 1.21% ' 1.22% I 1.18% ' ' 1.17% 1.19% ' ' 1.21% , -0.3% SEASONAL RESIDENTIAL: CITY ACTUAL - COMPOSITE 2.40% 2.30% ' 2.20% 2.04% ' 2.05% ' 2.08% ' -13.5% APARTMENTS ( 1-3 UNITS ): CITY ACTUAL COMPOSITE 3.00% 3.00% , 1 2.80% 2.50% 2.30% ( 2.30% ' - 23.3% APARTMENTS ( N. IL A. ): CITY ACTUAL-COMPOSITE 2.50% 2.41% APARTMENTS ( 4+ UNITS ): CITY ACTUAL - COMPOSITE 3.60% , 3.60% ' 3.50% I ! 3.40% I 3.40% I ! 3.40% ' -5.6% TOTAL CITY- CITY ACTUAL-COMPOSITE ! 3.62% ! 3.47% I 3.33% 3.24% 3.15% I 3.11% ' - 14.2% TR Co 10/25/94 3:24 PM Page 3 TAX- BASE.XLS CITY OF OAK PARK HEIGHTS TOTAL TAX LEVY / OTHER CITY TAX LEVIES SCHEDULE 7 ( OVER 2,500 POPULATION ) PROPOSED ( 12/6/94) , 1989/1990 1990/1991 1991/1992 1992/1993 1993/1994 1994/1995 DESCRIPTION AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % JURISDICTION: CITY 18.011 19.8 18.620 17.3% 19.463 17.3% 21.754 17.4% 22.012 18.0% 23.717 18.7% COUNTY 24.934 27.4% 27.313 25.4% 29.380 26.2% 30.082 24.1% 30.654 25.1% 30.468 24.0% SCHOOL 42.846 47.1% 55.441 51.6% 57.795 51.5% 66.169 53.0 62.686 51.3% 66.766 52.7% METRO TRANSIT 3.069 3.4% 3.195 3.0% 3.392 3.0% 3.694 3.0% 4.017 3.3% 4.221 3.3% OTHER 2.126 2.3% 2.849 2.7% 2.164 1.9% 3.225 2.6% 2.938 2.4% 1.592 1.3% TOTAL 90.986 100.0% 107.418 100.0% 112.194 100.0% 124.924 100.0 122.307 100.0% 126.764 100.0% INCREASE / DECREASE: CITY 0.609 3.4% 0.843 4.5% 2.291 11.8% 0.258 1.2% 1.705 7.7% COUNTY 2.379 9.5% 2.067 7.6% 0.702 2.4% 0.572 1.9 - 0.186 -0.6°% SCHOOL 12.595 29.4% 2.354 4.2% 8.374 14.5% -3.483 -5.3% 4.080 6.5% METRO TRANSIT 0.126 4.1% 0.197 6.2% 0.302 8.90% 0.323 8.7°% 0.204 5.1% OTTER 0.723 34.0 - 0.685 -24.0% 1.061 49.0 -0.287 -8.9% -1.346 -45.8% TOTAL 16.432 18.1% 4.776 4.4% 12.730 11.3% -2.617 -2.1% 4.457 3.6% OTHER COUNTY CITIES: % ( OVER 2,300 POPULATION) CHANGE AFTON 14.471 16.216 15.309 16.459 20.115 23.861 18.6% BAYPORT 25.284 26.038 26.141 35.368 42.774 42.489 -0.7 COTTAGE GROVE 23.298 23.804 24.980 26.458 27.411 27.881 1.7 FOREST LAKE 23.340 23.360 24.672 24.821 25.615 25.799 0.7 HUGO 20.600 20.307 23.442 21.132 22.132 22.992 3.9 LAKE ELMO 15.494 15.164 15.761 18.431 19.944 20.465 2.6% MAHTOMEDI 22.689 20.840 23.241 21.490 20.605 21.354 3.6% NEWPORT 23.074 25.485 22.021 29.196 22.504 33.598 49.3% OAKDALE 20.550 17.934 21.650 20.395 23.587 23.163 -1.8% OAK PARK HEIGHTS 18.011 IL620 19.463 21.754 22.012 23.717 7.7 ST. PAUL PARK 21.102 16.020 20.202 16.794 20.272 21.114 4.2°% ) STILLWATER 26.913 27.664 26.861 28.651 29.626 30.719 3.7 WOODBURY 20.778 19.425 19.993 21.428 22.474 22.273 -0.9 COUNTY AVERAGE-CITIES OVER 2,500 POPULATION 21.200 20.837 21M6 23.260 24.544 26.110 6.4% CITY OF OAK PARK HEIGHTS AS A PERCENT OF COUNTY AVERAGE 85% I 89% , ! 89% 94% I ' 90% I ! 91•% TR Co 12/6/94 3:37 PM Page 3 TAX- LEVY.XLS