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Truth in Taxation Public Hearing <br />December 1, 1997 <br />Page 2 <br /> <br />Since September 1997, a number of things have changed with the city <br />budget. These changes include a decision on the school liaison program <br />which impacted the school contribution to the program and use of D.A.R.E. <br />reserves, a fire department wage proposal was submitted, the City of Otsego <br />has threatened to withdraw from the Community Recreation organization, <br />and we have received the final revenue figure for the police relief state <br />program. <br /> <br />Additionally since September 1997, a lot of new information has become <br />available. This information includes county data on the city net tax capacity <br />(NTC) growth, county data on the total tax levy estimate for the city, and the <br />school referendum was approved by the voters... The growth in the city NTC <br />was a concern in September due to legislative changes for class rates. For <br />example, our NTC grew by 14 and 11 percent the last two years while the <br />market value increased by about 10 percent each of those years. For 1998, <br />the market value increased by 14 percent, but our NTC only increased by 4 <br />percent. This change has had a dramatic impact on the city tax rate change. <br />Even with this dramatic decrease in our growth of the city NTC, the overall <br />(city, county, school, etc.) tax rate in Elk River is proposed to decrease from <br />approximately 112.8. to 111.8. This decrease included the September 8 tax <br />levy resolution figures from the city. The major reason for the overall <br />decrease in the tax rate was also due to legislative action. This action <br />provided significant additional financial aid to schools which has caused the <br />school tax rate to go down. <br /> <br />The City Council had a budget worksession on October 27, 1997, and <br />followed this worksession up with more discussion at its November 3, 1997, <br />meeting. Based on new information being available and concerns over the <br />city tax rate growth, the City Council reached a consensus to decrease tax <br />revenues by $149,650. This adjustment would mean that the city tax rate <br />would go up approximately 3 percent instead of the estimated 7.8 percent <br />using the September 8, 1997, tax resolution information. (The city tax rate <br />increased by .3 percent in 1996 and by 2.7 percent in 1997.) Based on this <br />consensus of the City Council on 11/3/97, revised budget summary pages are <br />planned to be presented during the December 1, 1997, public hearing. <br /> <br />State law requires a Truth in Taxation public hearing on the city tax levy <br />and budget. It seems that what people really want to talk about at these <br />public hearings is their concerns over tax increase versus discussing the city <br />budget. Home and business owners generally see larger tax increases in <br />years when their property values go up. For taxes payable in 1998, the <br />county assessor, who provides assessing services for the city, increased <br /> <br /> <br />