Tag: Property taxes

Taxes or Tree Fund?

tree fundI’m going to go out on a limb here and assume the city’s *preliminary tax levy is not the most riveting topic of conversation at your dinner table. But what if you knew that you and your fellow Minnetrista taxpayers had socked away hundreds of thousands of dollars in an account, money that has been sitting there for years without any liabilities against it and none foreseeable, that could lower your city property taxes? Would that get your attention? It got mine.

Every year we’re given options from staff to increase the city’s budget. We are a growing city and that’s fine but increasing the city’s budget doesn’t necessarily have to translate into raising YOUR taxes. Growth should be providing the necessary dollars to keep city services humming along. This year the preliminary tax levy options from staff are a 5.87% increase or a 4.22% increase. The growth in the city’s market valuation from new construction this past year has only been 2.5%

So why, one may ask, if we’ve only grown by 2.5%, do we need to increase the city’s budget by more than that? At our Work session Monday night all council members except one indicated support for the higher 5.87% increase.

If you ask why they’ll say roads are the reason. Keep in mind we increased our roads budget 36% last year and 40% the year before. If we adopt the higher preliminary tax levy it would increase the road budget another 26% in 2020. These are extraordinary increases when our growth is in the lower single digits.

Anyone that doesn’t go along with the highest increase is accused of “kicking the can down the road” and doesn’t care about Minnetrista’s infrastructure. That’s an interesting statement given the fact our own city engineer’s report, rating Minnetrista’s roads, shows the vast majority of them are in “good-excellent” condition.

I argued we could choose the lower, 4.2% increase, which would still increase our road fund by 10.5% and add another $75K to the road fund by taking $75,000 out of the “Tree Fund,” (referenced above) which has a balance of over $367K in it, to achieve the same results to our Road Fund as the higher levy increase without placing the burden on the taxpayer. The answer was a resounding No.

Council is poised to adopt the 5.87% increase at our September 3 council meeting.

*Preliminary tax levy is set by September 30 and taxpayers are sent notices estimating next year’s taxes based on this. The actual tax levy adopted for 2020 may be lower but cannot exceed the preliminary tax levy.

Minnetrista’s magical fiscal fix

Most taxpayers would think if the Minnetrista city council reduced the increase of the 2019 tax levy it would mean they had cut spending. They would be wrong.

The final tax levy increase was reduced Monday night from 6.01% to 4.53% but it was done without cutting a dime out of the budget. So how can that happen?

magicianCities have a savings account called a “General Fund Reserve’ that functions, theoretically, as a safety net to cover unexpected costs that aren’t budgeted for. Instead of doing the responsible thing, i.e., cutting spending, to bring down the tax levy, Minnetrista just decided to take over $60K out of your city’s savings account so they could spend the same amount of money as budgeted with the 6.01% tax levy increase.

It was hard to keep a straight face when one of our council members congratulated staff on working “so hard” to bring down the tax levy increase from 6.01% to 4.53%. I’m sure it broke a sweat for everyone involved to debit the General Fund Reserve for the difference.

See the article in Governing Magazine titled “The 7 Deadly Sins of Public Finance” to learn more about local government financing. A must read for city council members.

Three Rivers Park District authorized to purchase million dollar property on Little Long Lake

Took a brief respite from blogging after the election and then missed our council meeting Retreat Drive Three Rivers AcquisitionTuesday night because of a virus. I watched the entire meeting on YouTube last night though and was disappointed only one council member, Mike Molitor, voted against Three Rivers Park District (TRPD) acquiring a 17 acre lot on Little Long Lake with a million dollar home on it (which they plan to demolish).  Whalen, Mortenson and Tschumperlin voted to pass the resolution.

TRPD will take this parcel off the city, county and school district tax roles when the sale is complete. Appears the land owner and TRPD have been negotiating this for quite some time.

This property is currently generating over $16K annually in city, county, and school district property tax revenues. $16,000/year x forever is what this decision will cost remaining taxpayers who will have to come up with the difference to cover these lost revenues.

The parcel is currently zoned Ag and can’t be subdivided into less than 10 acre parcels, so even if TRPD didn’t acquire it, it would’ve remained in its current state probably forever. Now that’s a good use of taxpayer dollars isn’t it?

Minnetrista preliminary tax increase highest of all surrounding cities

I attended the League of Women Voters city council candidate forum at Minnetrista city hall Thursday night. Once the video is available I’ll post it and give a recap. For now just wanted to post some information city council candidate Elroy Balgaard shared that night on the surrounding communities and how their preliminary tax levy changes compare to Minnetrista’s.2019 surrounding cities preliminary leviesThis information didn’t go over well with the incumbents who asserted these communities can’t be compared but it should be noted that the city of Orono is quite comparable to Minnetrista in size and growth yet their increase is 40% lower than Minnetrista’s. Yes, there’s always a chance preliminary tax levies may come down before they are adopted in December but I’d be shocked if Minnetrista’s increase came down to even Wayzata’s at 4.29%.

Minnetrista grew 2.5% last year. Why do we need a 6.01% budget increase to pay for that?

Even though there will be a public hearing on December 3, the Minnetrista final 2019 tax levy will most likely, given history, be adopted without change that same evening and the public hearing is not likely to influence that. Sort of makes one wonder what the point is of having a public hearing.

June 8, 2018

IF YOU THINK YOUR PROPERTY TAX VALUATION IS TOO HIGH you’re likely right and can do something about it…next year. I called the number on our 2019 property tax statement in March to have the assessor come out and they reduced our valuation by $80K for 2019. My neighbors who did the same received a SIX FIGURE REDUCTION! Property valuations go up AND DOWN all the time due to a variety of factors in the marketplace. Unfortunately if you don’t get an evaluation of your specific property the formula used for the entire city will apply and you’ll likely see some big increases. You can call the assessor’s office or come to the open book meeting at city hall each spring to challenge your valuation. Don’t be afraid of the tax assessor. They are generally reasonable and fair, at least in Minnetrista.

More: https://www.americanexperiment.org/2018/06/minneapolis-property-owners-winning-war-tax-assessor/

January 17, 2018

1/16/18 Council Meeting Agenda: Capital Improvement Project Discussion:
Despite the fact that 90% of Minnetrista’s roads are in good to excellent condition (road condition assessments provided by WSB Engineering in 2017) and we’ve almost doubled our budget in 2018 for road improvements, the city’s pavement management plan is calling for another 36% increase in 2019. Our road budget in this plan will go from $350K (in 2018) to $800K (in 2022) over 4 years. That’s a 128% increase over 4 years! I have a problem with that and I said so last night. If you’re a Minnetrista taxpayer and these numbers are approved by the council you can expect to see some hefty tax levy increases on your property.

We’ve been able to keep 90% of our roads in good to excellent condition in the past without resorting to these extraordinary increases. I know it costs money to maintain our roads but we need to make sure the costs we’re putting in our pavement management plan aren’t inflated and that’s impossible to do without competition in that marketplace. This is one of the primary reasons I’ve requested the council consider rebidding the city’s professional services agreement for engineering services. That contract hasn’t been rebid for over 13 years.

A couple of quick highlights from our work session Tuesday evening:

Agenda Item 1: Code Compliance/Enforcement Options.
Properties posing a nuisance to neighbors is a challenging area of the law for cities to deal with. Residents want resolution to whatever the nuisance is but often times the legal recourse to address it doesn’t exist, especially in rural areas which comprise a great deal of properties in Minnetrista. My general take in these matters is to encourage neighbors to resolve disputes themselves without involving the city unless the nuisance is an obvious environmental or safety hazard endangering the community at large.

The impetus to all of this was a complaint from neighbors about a rural property with a lot of older vehicles parked around it and the neighbors consider it an eyesore. We discussed the possibility of modifying zoning ordinances, pursuing a civil public nuisance case, and other possible solutions presented by our legal counsel but many carried a considerable cost to Minnetrista taxpayers. We settled on having our legal counsel draft a letter to the property owner detailing the actions the city requires.

Agenda Item 2: Halstead Road Update:
The city had received an email from a resident complaining about several aspects of the Halstead Road project, which, by the way, isn’t complete yet. Complaints centered around the mini-roundabout and aesthetics of the guard rails. After asking the City Administrator how many formal complaints the city has received I was told there was just one, although Council Member Thoele indicated she had spoken to others. Paul Hornby, our contract city engineer, explained the project design and reasons for the mini roundabout and guard rails. There didn’t appear to be consensus from the Council to modify the design which would require costly changes although Mayor Whalen suggested some plantings might help obscure the guard rails.