10.2. SR 04-02-2018 - Laserfiche WebLink

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City Council Minutes February 8, 2018 Page 2 200,000 home would see an increase of $77 with our current Net Tax Capacity NTC). She stated the NTC has an average growth of 4.5% over the past four years and this percentage was calculated into each year. She explained how the tax impact would decrease in 2019 on a $200,000 home to $74. And how the tax impacts would decrease each year as growth happens. Ms. Ziemer further discussed the tax impacts for 2023 when the principal is included, noting the net effect would be a $100 increase on a $200,000 home and would further decrease with growth each year. Councilmember Westgaard confirmed the examples provided in the packet only takes in the current net tax capacity and does not grow it inflationary with any additional homes or business expected to be added to the tax base. Staff confirmed yes. Ms. Ziemer explained the city's total levy impact with factoring in the arena's debt levy. She stated with the county -estimated 2018 tax rate based on current NTC the tax rate should be 46.01%. She stated if inflationary increases were factored in for 2019, the tax rate would be about 48.965%, which equates to a tax impact on a 200,000 home of $53, with the $1 million levy added. Councihnember Wagner questioned how taxes would change when future needed building projects such as the fire station, Highway169, and the $9 million parks and recreation funding. She expressed concerns with Council not considering the big picture by including future projects. She stated it makes sense to consider a sales tax to help spread out the costs especially since some of the association members are not from Elk River. Mr. Portner explained how future anticipated growth will determine when the city needs a new fire station. He stated this growth will drive the fire station build out and the new growth will be beyond the 4.5 % outlined in the tax impact projection Ms. Ziemer presented earlier. He stated the Park Improvement Fund is part of the fee discussion Council had earlier in the week to determine another revenue source for offsetting operational costs. Mr. Portner stated the tax abatement line item for new construction will go away in time, tax increment financing will decertify, and it would be recommended to continue collection of that revenue to fund the Capital Reserve Fund for additional park improvement costs. He stated the city may be eligible to use Municipal State Aid (MSA) funds for portions of transportation projects. Mr. Femrite discussed the Corridors of Commerce and the various payment split options. He stated there may be funding options through MSA, the pavement fund, the county, and other local options through Region 7W for federal funding. Mayor Dietz stated a 0.5% sales tax based on 2015 sales would generate a minimum of $2 million. The city's bond payment would be about $1.7 million. He stated he asked staff to review whether the remainder of the revenue generated from the sales tax be used for park improvements and possibly for Lake Orono dredging. NATUREI