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<br />r I -\.( <br />( II <br />ffi'l River <br /> <br />ITEM 6.8. <br /> <br /> <br />TO: <br /> <br />MAYOR & CITY COUNCIL <br /> <br />FROM: <br /> <br />PAT KLAERS, CITY ADMINISTRATOR <br /> <br />DATE: OCTOBER 21, 1993 <br /> <br />SUBJECT: UPDATE ON 1994 ESTIMATED TAX <br />RATES AND NET TAX CAPACITY <br />INFORMATION FROM THE COUNTY <br /> <br />In September, the City Council established its proposed maximum <br />levy and budget. The Truth in Taxation meetings will be held <br />in December and, at that time, it is anticipated that the <br />Council will establish its final tax levy. During the <br />September budget meetings the valuation of the City was not <br />known and, therefore, the City Council could not adequately <br />determine the increased tax revenues affect on the tax rate. <br />Attached for your review is some information the Finance <br />Director has obtained from the County. This information shows <br />that if the City levies as proposed in September, the urban tax <br />rate will go up approximately 8.6% with the assumption that the <br />urban net tax capacity will increase approximately 2%. <br /> <br />e <br /> <br />The City has a tremendous amount of needs for new programs and <br />personnel and it will be up to the City Council to decide if <br />these needs justify the tax rate increase. It should be noted <br />that in the past, when levy limits were in place, the City's <br />tax rate went down five out of seven years due to limits put on <br />the City by the state. Also attached for your review is some <br />material from the August budget discussions where the Finance <br />Department made some estimations as to the tax rate increase if <br />the tax capacity also increased assuming the City approved the <br />$185,000 in gross levy increase. These estimations were very <br />accurate. It was simply unfortunate that we did not know at <br />that time in August what the increase in our City net tax <br />capacity would be. <br /> <br />The final attachment is a newspaper article that was previously <br />distributed that talks about property taxes in the metropolitan <br />area and in the larger outs tate communities. Also attached <br />with this article is a memo from Lori Johnson that analyzes <br />this information. Initially it was assumed that the data <br />reflected a $90,000 market value home. This is not the case <br />and the data reflects a selling price of $90,000 whereby the <br />assessed market value may be less and different from community <br />to community. Nonetheless, the City's relative position of <br />being very low is still a good statistic and something that we <br />can be proud of in this community. <br /> <br />e <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />