1. The City of Arden Hills Truth-In-Taxation Hearing: December 14, 2015 Mayor David Grant Council Members Brenda Holden, Fran Holmes, and Dave McClung City Vision Arden Hills is a strong community that values our unique environment setting, strong residential neighborhoods, vital business community, well maintained infrastructure, fiscal soundness, and our long-standing tradition as a desirable City in which to live, work, and play.

2. Why Your Property Tax Bill Varies from Year to Year  Market value changes  Budgets and levies of various jurisdictions  Special Assessments  Voter approved referendums  Changes in Federal and State mandates  Changes in aid and revenue from State and Federal governments  State Legislative changes

3. Statutory Formulae Conversion of Estimated Market Value (EMV) to Net Tax Capacity for Major Property Classifications General Classification Net Tax Capacity Levy Year 1999 Net Tax Capacity Levy Year 2000-2001 Net Tax Capacity Levy Year 2002-2014 ResidentialFirst $75,000 of EMV at 1%. EMV excess of $75,000 at 1.7% First $76,000 of EMV at 1%. EMV in excess of $76,000 at 1.65% First $500,000 of EMV at 1%. Over $500,000 at 1.25% Residential Non-Homestead 2.5% of EMV2.4% of EMV1.8% of EMV Agricultural Land:First $115,000 of EMV on first 320 acres at.35%. EMV in excess of $115,000 on first 320 acres at.8%. EMV in excess of $115,000 over 320 acres at 1.25% First $115,000 of EMV on first 320 acres at.35%. EMV in excess of $115,000 on first 320 acres at.8%. EMV in excess of $115,000 over 320 acres at.80%. First $600,000 of EMV at.55%. Over $600,000 at 1%. Non-Homestead1.25% of EMV1.20% of EMV1% of EMV Commercial/ Industrial First $150,000 of EMV at 2.45%. EMV in excess of $150,000 at 3.5% First $150,000 of EMV at 2.4%. EMV in excess of $250,000 at 3.4%. First $150,000 of EMV at 1.5%. EMV in excess of $150,000 at 2%. Market value is set in spring by assessor and approved at the Board of Appeal and Equalization (April – May)

4. Changes in market values for 2016  Market values of your and other properties in your taxing district may change, shifting taxes from one property or class to another.  The median market value on a single family home in Arden Hills increased by 1.8% from Pay 2015 to Pay 2016. ($295,100 to $300,300)

5. Problems with your Estimated Market Value? The time to protest your Estimated Market Value was in Spring of 2015 for taxes payable in 2016. In 2015, the assessor determines the value for taxes payable in 2017 and the hearings will be held in the Spring of 2016. You will receive Valuation Notices in March with details on how to appeal any concerns you have with those values.

6. Programs that may Reduce Your Property Taxes Please note these are samples from a previous year

7. The effect of No Change to City Levy on your taxes

8. The effect of adding a 3.5% City levy increase on your taxes

9. Effect of Changes to Parcels in Arden Hills Compared to Surrounding Cities

10. Average Yearly Change in Property Taxes from 2002 - 2016 City Levy Taxes by Property Type Averaged

11. Who collects your tax dollars? Your total property tax based on levies and tax rate is divided as illustrated below Your total property tax bill in 2016 without referendums is divided as illustrated below Arden Hills represents 22 Arden Hills represents 22¢ on the dollar Ramsey Co 49¢ School District 22¢ Other Agencies 7¢ This is before Market Referendums

12. Looking at your Property Tax Notice  Property is valued at $300,200 and tax rate is 1.20252 (120.252% of tax capacity)  Classification is : Residential Homestead  Market Value Exclusion is calculated by taking 40% of the first $76,000 of the taxable market value  $76,000 x 40% = $30,400  The credit is then reduced by 9% of taxable market value over $76,000  $300,200 - $76,000 = $224,200  $224,200 x 9% = $20,200  Total exclusion is $30,400 - $20,200 = $10,200  Taxable Market Value is $300,200 - $10,200 = $290,000 Arden Hills Taxpayer Property ID No. This property value increased 6.6 % over 2015 Arden Hills Taxpayer

13. Calculating you Property Tax  The Taxable Market Value is $290,000 and tax rate is 1.20252 (120.252% of tax capacity)  Classification is : Residential Homestead  Classification Rate is 1.00  Tax Capacity is $290,000 x.01 = $2,900  Property tax on tax capacity is $2,900 x 1.20252 = $3,492  Voter approved levy rate is.0022211716 (0.22211716% of market value)  Property tax on voter approved levies is 290,000 x.0022211716 = $662  Total Property tax is $3,492 + $662 = $4,154  This is excluding special assessments. Arden Hills Taxpayer Property ID No. This property value increased 6.6 % over 2015 Arden Hills Taxpayer

14. What makes up my Tax Rate?  As previously stated, the Tax Rate is 120.252%.  As discussed in previous slides, the City’s tax rate is 26.822%  In this example the taxable capacity of $ 2,900 x.26822 = $765  The other components of the total tax rate are:  School District  #621 26.304%  #623 20.989%  County 58.562%  Misc 9.004%  All districts added together comprise the total tax rate.  You must also take into account any referendums which are based on the market rates of:  #6210.22212%  #6230.21017% Arden Hills Taxpayer Property ID No. This property value increased 6.6 % over 2014 Arden Hills Taxpayer

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16. Proposed 2016 Taxes  The Proposed Levy increase of 3.5% is primarily made up of:  Public Safety Cost Increases1.6%  COLA at 3.0%1.6%  Other costs0.3% 3.5%Total

18. Tax Rate Comparison  In comparing the “Effective Tax Rate” of cities in Ramsey County, Arden Hills ranks 14 out of 19  The “Effective Tax Rate” is the rate combined from all taxing authorities  Note these are the adopted Preliminary Rates that were set in September

19. City Tax Rate Comparison  In comparing the “City Tax Rate” of cities in Ramsey County, Arden Hills ranks 15 out of 19  The “City Tax Rate” is the local portion of the levy after state aids.  Note these are the adopted Preliminary Rates that were set in September

20. 2016 Proposed City Tax Levy Changes: Comparison By Surrounding Cities (As of Preliminary Levies)

21. Arden Hills History of Levy Changes Legislative changes to the MVHC program effected 2010 and 2011, the majority of the increases in recent years have been due to Public Safety.

22. Levy Changes – Neighboring Cities  Shoreview – Up 3.90%  New Brighton – Up 3.90%  Mounds View – Up 3.80%  Roseville - Up 4.20%  Arden Hills – Up 3.50% Tax Rate 34.95 Tax Rate 43.01 Tax Rate 40.10 Tax Rate 39.21 Tax Rate 43.01 Tax Rate 40.10 Tax Rate 39.21 Tax Rate 26.38

23. Check Register Description of Transaction Balance Public Safety$27.20 Community Services$16.51 Parks and Recreation$10.18 Public Works$7.23 Capital (transfers)$2.88 Contingency Reserves$0.00 January 1, 2016 City Of Arden Hills64.00 Fifty-nine and zero cents Homeowner MONTHLY police, fire, street maintenance, parks, programs etc. The average median household will contribute $767 per year for City services. This translates to $64 per month or $2.10 per day. In 2015, $65 was contributed per month and $2.14 per day.

24. 2016 Key Budget Elements  Revenues have been evaluated based on current economic conditions and past trends but this estimate has been conservative as the City is primarily “built-out” and has some redevelopment and expansion, but cannot be estimated.  Revenues are basically expected to relatively remain the same except with some minor adjustments which include:  Intergovernmental revenue from Police Aid passed on from the County is expected to slightly increase.  Antenna rental revenues are projected to increase passed on new contracts.  There are minor reductions in Fine and Forfeit revenue.

25. Key Budget Elements (continued)  General Fund revenues are estimated to be $4,150,291 which is 3.66% over the 2015 final budget and primarily due to the levy increase of 3.5% or $119,000.  Utility revenues will increase 2.2% for Water, 1.7% for Sewer, and 3.4% for Surface Water Management. These increases reflect the increases in rates of 2% for Water, 2% for Sewer, and 3% for Surface Water Management.  These revenues are not expected to fully fund operating and maintenance costs in these funds immediately but have been projected to over time while being sensitive to the increase to our users.

26. Key Budget Elements (continued)  Levy increase is proposed at 3.5%.  Salary adjustments as part of COLA/steps budgeted at 3.0%.  The proposed budget for Fire Protection has increased by 7.8%.  The proposed budget for Police Protection and Animal Control has increased by 1.8%.  The proposed budget for 911 Dispatch services has decreased by 2.4%.

27. Key Budget Elements (continued)  The proposed budget has kept operating costs relatively flat or slightly decreased unless there have been contract services which have increased.  The proposed budget includes transfers of:  $100,000 to the Permanent Improvement Revolving (PIR) Fund, $60,000 to the EDA General Fund and $50,000 for capital reserves to be used for equipment replacement.  This proposal does not contain a contingency amount but uses $160,326 in reserves to balance the budget.

28. Key Budget Elements (continued)  General Fund expenditures are estimated to be $4,670,617.  The General Fund expenditures are primarily due to the increases in salaries and benefits by $56,614, increases in the Public Safety contracts by $54,039, City Hall maintenance expenses by $10,000, and the EDA transfer was increased by $30,000 and a transfer as previously mentioned of $100,000 to the PIR Fund was reestablished.

29. Key Budget Elements (continued)  Overall, the City’s total proposed budget has decreased by $961,569 from the final 2015 budget mainly due to less construction projects in 2016; General Fund budget has increased by 6.5% as compared to the final amended 2015 budget.  Total Staff in the 2016 budget are 31 FTEs which is a 0.75 FTE decrease as the internship positions were cut in 2016.

30. Key Budget Elements (continued)  Salaries and benefits are expected to increase slightly; a new compensation system was implemented in 2015 and the increase per month per employee for benefits is expected to grow from $699.61 to $728.62 or $29.01 as medical insurance rates rose by 6.5% and dental increased by 2.9%. Employees share 50% of the cost increase.

31. Key Budget Elements (continued)  Capital Improvement projects budgeted in 2016 include:  Gateway Signs  Playground Structure Replacement  Forestry Implementation Plan  Lake Johanna Fire Dept Equipment  Reconstruct Lift Stations 11  Regulatory Street Sign Replacement  Lexington Ave Improvement  Highway 96 and County Road F Sidewalk Improvement  MnDOT Bridge Projects  Concrete Curb and Gutter Replacement  Storm Water BMP Study  Springbrook Software Upgrades  Technology and Office Equipment  Communications Equipment  New Voting System  Audio Visual Equipment  Valve Replacement Program

32. 2016 Proposed Revenues $12,159,444

33. 2016 Proposed Expenditures $11,102,350

34. 2016 Proposed General Fund Revenue Property Taxes$3,508,875 Licenses & Permits$265,530 Intergovernmental Revenue$141,659 Charges for Services$476,302 Fines & Forfeits$34,569 Special Assessments$3,000 Miscellaneous Receipts$80,355 Total Proposed Revenue$4,510,291

35. 2016 Proposed General Fund Expenditures MAYOR & COUNCIL$67,070 ELECTIONS$23,000 ADMINISTRATION$293,870 FINANCE & ADMIN SERV$180,530 TCAAP$173,858 PLANNING & ZONING$217,788 GOVT. BUILDINGS$235,134 POLICE & ANIMAL CONTROL$1,107,562 DISPATCH$67,780 FIRE PROTECTION$495,216 EMERGENCY MGMT$13,638 PROTECTIVE INSPECTION$312,087 STREET MAINTENANCE$530,443 PARK MAINTENANCE$453,895 RECREATION$288,745 CELEBRATING ARDEN HILLS$0 CONTINGENCY $0 OPERATING TRANSFERS OUT$210,000 Total General Fund Expenditures$4,670,616

36. City of Arden Hills Expenditures 2013-2016 2013 Actual$4,086,632 2014 Actual$4,324,508 2015 Budget Amended$4,386,276 2016 Proposed$4,670,617 All Funds General Fund 2013 Actual$13,129,602 2014 Actual$12,579,034 2015 Budget Amended$17,776,285 2016 Proposed$11,102,349

37. General Fund Expenditure Comparison 2013 – 2016

38. Questions? Thank you for attending!