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1 2004 Preliminary Tax LevyCITYOF CHANHASSEN 7700 Market BC;LJlevard PO Box 147 Ohaphassen BF~ 553!7 Administration Phone: 952 2271100 Fax 952 227 1110 Building Inspections Ph:,ne 952227 1i80 [~× 952 227 1!90 Engineering P'~or e 9522271160 Fax 952 2271170 Finance P~')ne 952227 1140 Fax 952 227 1110 Park & Recreation Phi,r,.' 952227 1120 Fax 952 227 !!!0 Recre}t oi Center 2310 Codite Boulevard Photo 9522271400 Fax 9522271404 Planning & Natural Resources P '. n(~: 952227 1130 Fax 952227 1110 Public Works 1591 Park Road Phone 952.227 1300 tax 952¢2 1310 Senior Center Phor c: 952227 1125 Fax 952227 1110 Web Site www ei ;I~ai~haSS~ll ~1'~l us MEMORANDUM TO: FROM: DATE: SUB J: Mayor City Council Bruce M. DeJong, Finance Director September 12, 2003 2004 Preliminary Tax Levy Staff has reviewed the preliminary information given to the City Council last week with our consultants. There have been some considerable revisions made to those estimates, but the net result is very positive. It now looks like the city can be in a positive net balance at the end of 2004 between available cash resources and the now more clearly identified commitment amounts. With the reasonable assurance given by this analysis, staff recommends that the City Council adopt a tax levy of $6,657,060 for the General Fund and a levy of $2,215,607 for debt service. The levy for 2004 will be $233,500 higher than the total levy made for 2003, which is equal to the approximate amount of real growth provided by new construction, remodeling, and additions. There was considerable discussion with our consultants that should be kept in mind as you consider the schedules that are attached. The dollars in the Bond fund financial position have been updated to reflect the cash transfers from the General Fund as tax levies. This is why one of the funds turned positive from a deficit and three other deficits were lowered. The Downtown TIF district looks as if it will be in deficit as of the end of the year. This is a result of the non-qualified debts that must be included in the district. Staff also needs to review the district expenditure reports to make sure that non-TIF revenues have not been mistakenly included. That could be in the form of interest income that is not supposed to be commingled with actual increment for a pre-'79 district. Staff is planning to have a joint meeting with all of our TIF consultants to verify these items prior to year end. The Available Cash vs. Potential Commitments has changed fairly dramatically. Several positive debt service balances were overlooked or underestimated. The TIF #1 deficit was reduced because several of the non-qualified issues were double-counted - included both in the deficit of the whole district and as their own fund. This allowed us to eliminate the anticipated refunding bonds from the calculation. However, we still have the option of refinancing the 96D issue The City of Chanhassen * A {irci'¢/rig community 'with clean lakes, quaiit¥ schools a channing do~vnto~vn lhriv ng Bt~slr/esses. winding trails and beautiful parks A great [ lace, to vi ~,, ~< a d p ay CITYOF PQ Box 147 Cra~ Passeq BH 55317 Administration Phone 952227 !!00 Fax 952 227i110 BuilJing Inspections Pngre 952 227 1!80 Fax 952 227 !190 Pisone~ 952 227i 160 Cox: 952 227' 1170 Finance Raqe 952 227 1140 Fax 952 227 11 I0 Park & Recreation Phoq,s 9522271120 Fa'< 952227 1~ ~0 Reareation Center 2310 Coulter Boulevard Phone: 9522271400 Fax 952 227 1404 Planning & Natural Resources ?hi?- 952227 1130 F~x 952227 1110 Public Works Phor ~ 952 227 1300 Fax 952227 13~0 Senior Center Phxe 952 227 1125 F,i~ }52 227 1110 Web Site ,'~t.;,ei h~f!ias.~l rnL5 for our county road agreement if necessary. That issue will be funded through excess increment whether refinanced or paid in full in 2004. The amount of the tax levy will still show a slight increase on an average value home even with the levy increase just offsetting growth in tax base. This is because the proportional share of taxes paid by residential property increases when the commercial/industrial sector experiences valuation decreases like this year. The relative mix of our debt service is also changing to be more heavily weighted toward market value debt rather than tax capacity. With tax capacity levies, an average residential property has a tax capacity based on 1% of its market value, whereas a commercial property is based on 2%. In market value referenda, a dollar of value for residential property is equal to a dollar of commercial property. Staff feels quite confident that the city's financial position will be adequately protected even while lowering the levy to an amount equal to growth in the tax base. We can recommend this tax levy without hesitation. Manager Comments: I want to assure the City Council that staff is not playing games with these numbers. This is a very complicated issue with complex interactions between many funds. As always, we want to provide the City Council with the most accurate information available. Last week we spent a good part of the week and weekend finalizing the numbers but did not have an opportunity to review these reports with our financial consultants. With their input and additional staff review, I believe the modifications reflect the most accurate information available. I think the information we are providing is excellent news, but I want to make sure the City Council understands the complexity of the issue. The City of Chanhassen · 3, qrow~g commuruty with clean iakes qnaJity schools a sharrning dc,,a, nt,:,¢,u th%'in9 [)L, sinesses wind ng trails and beautiful parks A great place to live w',)rk ~n¢! p~a¥ CITY OF CHANHASSEN TAX CAPACITY, TAX LEVY, AND TAX RATE 2003 Budget TAX CAPACITY BASED TAX LEVY General Fund Special Assessment Debt General Obligation Debt Fund TOTAL TAX CAPACITY BASED TAX LEVIES 2003 Levy $6,465,535 1,008,182 146,300 $7,620,017 2004 Levy $6,657,060 743,210 147,000 $7,547,270 Percent Increase 2.96% -26.28% 0.48% -0.95% MARKET VALUE TAX LEVY Park Referendum Library Referendum TOTAL MARKET VALUE TAX LEVY TOTAL TAX LEVY Dollar Increase 540,950 478,200 $1,019,150 $8,639,167 841,397 484,000 $1,325,397 $8,872,667 $233,500 55.54% 1.21% 30.05% 2.70% HOMESTEAD PROPERTY TAXES Assumed 10.5% Market Value Increase Property Value 2003 2004 150,000 165,750 200,000 221,000 250,000 276,250 300,000 331,500 350,000 386,750 400,000 442,000 450,000 497,250 500,000 552,500 Assumptions: 39.039 35.109 0.05104 0.05487 Tax Capacity Tax Capacity Rate Market Value Rate Total Estimated Tax Dollar Percent 2003 2004 2003 2004 Est 2003 2004 Est 2003 2004 Incr Incr 1,500 1,658 586 582 77 91 662 673 11 1.83% 2,000 2,210 781 776 102 121 883 897 14 1.83% 2,500 2,763 976 970 128 152 1,104 1,121 18 1.83% 3,000 3,315 1,171 1,164 153 182 1,324 1,346 21 1.83% 3,500 3,868 1,366 1,358 179 212 1,545 1,570 25 1.83% 4,000 4,420 1,562 1,552 204 243 1,766 1,794 29 1.83% 4,500 4,973 1,757 1,746 230 273 1,986 2,019 32 1.83% 5,000 5,656 1,952 1,986 255 303 2,207 2,289 82 4.19% 10.5% increase in property value Tax capacity rate and market value tax rates based on preliminary estimates from Hennepin and Carver Counties which may change. Rough estimates of tax rates calculated by staff are on a gross tax capacity basis which is less accurate that the calculations on Truth in Taxation statements. ~ ~mo~m~mooooooo~oooooo ~ ~ ~X ~o~°~mm oooooooo 8 ~ ~ oooooooo ~ ~ § ~ 00000000 oooooooo oooooooo § ~ ~ .......... o ...... 08888 ''88888888 ~ 8888888888888888888 ooo ooo 8 ofi~. ooooooooooooo 088888oO8o© 8 For Discussion Purposes Only City of Chanhassen, MN Tax increment District No. 1 Statement of Revenues and Expenses Calendar Year New Estimate as of 9/11/03 Revenues: Tax Increment Delinquent Taxes County Agreement Special Assessments Interest Sale of Property - W 79th St. HRA Note Other Intergovernmental Total Revenue 2001 2002 2003 2004 5,7131380 3,421,074 4,132,031 4,132,031 7,082 217 124,246 109,718 12,815 3O,865 5,720,679 3,698,718 4,132,031 4,132,031 Expenditures: Current: Personal Services Materials/Supplies Interfund Interest Expenditure Contractual Services Capital Outlay Debt Service Principal Interest Paying Agent Fees Payment to Defeasance Escrow Special Assessment Payments Interfund Loan Repayment Other Total Expenditures Revenues over (under) expenditures Operating transfers to Debt Service Fund Bond Proceeds Total other funding sources Increase (decrease) in fund Balance Fund Balance (deficit) at stad of year Fund Balance (deficit) at end of year 189,316 77,182 3,616 3,472 3,730,000 1,665,000 1,485,000 296,676 87,521 27,165 364 374 374 51,815 19,437 16,380 40,234 4,288,167 1,873,783 1,512,539 1,432,512 1,824,935 2,619,492 4,132,031 (948,170) (669,41 O) 2,708,253 1,760,083 (669,410) 3,192,595 1,155,525 2,619,492 4,132,031 (6,555,028) (3,362,433) (2,206,908) (3,362,433) (2,206,908) 412,584 4,132,031 Excess TIF Proceeds + -28% City Share + -37% County Share 2,685,820 Non-Qualified Debt (from Totals page) Principal Interest Total Intedund Interest Expense Cumulative Effect 35,000 35,000 35,000 2,745,000 65,874 123,063 121,383 60,834 100,874 158,063 156,383 2,805,834 6,323 14,757 113,478 (100,874) (265,260) (436,400) (3,355,712) Prepared by Bruce DeJong 9/12/2003 ~00~/~ ~/6 DUI '$~e!00SS¥ ~ S~@lq] ~q p~Jed~Jd ~9'90g'~ ~8'09 O00'9VL'~ 9~9'~99'L @¢g'8~ ~O0'O$~;L 966'6L9'~ G66'25D - 000'~G8'$ V~'~09'$ ~g8'09 O00'§VZ'~ g8g'9~L 29g'~L 000'~6 g90'g~; 890'~ L# GIL ~o lqaG pepunLuR lelOl ' ' lelO/ leloiqns =~866 [ 'spuo9 luecueJou/xeJ. 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