Prior to setting their property tax levies and budgets for the coming year, local governments are required to conduct a Truth in Taxation public hearing that offers citizens an opportunity to ask questions about their cities’ proposed budgets. The City of Maple Lake conducted that hearing at the city council’s most recent meeting, Tuesday, December 2.
The hearing was unattended by local residents, but for the benefit of the record and the edification of those who view the meetings on cable television, Mayor Lynn Kissock read through the details of a presentation as prepared by City Clerk LeeAnn Yager.
Maple Lake’s property taxes are distributed among three entities, Kissock explained, with 43 percent going to the city, 30 percent going to Wright County and 27 percent going to School District 881.
A breakdown of the proposed 2015 property tax levy as compared to the levy imposed for 2014 showed that this year’s General Fund levy was $369,575, with an increase to $406,979 proposed for 2015. The cost of fire protection will remain the same in the coming year, at $51,000, as will the Sewer and the Storm Sewer improvement levies, at $238,000 and $12,000, respectively. Bond levies, which are used for street improvement projects, will increase from $90,000 to $143,100. The total Maple Lake property tax levy will increase from $830,575 to $896,079, for a total change of $65,504.
Property taxes, at $449,235, will account for just 37 percent of General Fund revenues in 2015. Local government aid (LGA) from the State of Minnesota accounts for the lion’s share (42 percent) of those revenues, and Kissock noted that a recent increase in LGA has helped the city to lower the ceiling on its property taxes. She also pointed out that the city has customarily transferred profits from Maple Lake Wine and Spirits to the General Fund, but that those transfers have been suspended of late, as efforts to accelerate payments on the store’s new building will lead to significant savings on interest payments. Charges for services, at $183,427, will cover 19 percent of the city’s revenues, and other grants, amounting to $18,618, will pay for two percent.
A pie chart of General Fund expenditures and other property tax-funded activities depicted the city’s spending by proportion, with highway, streets and roads leading the way at 27 percent, or $311,845. That amount was slightly increased in both 2014 in 2015, Kissock said, “because we want to continue to maintain and invest in our infrastructure so we don’t need to do major projects every few years.” Sewer costs followed, at 21 percent, or $238,000. Public safety, at $193,440, will account for 17 percent of expenditures, while debt service, at $143,100, will account for 13 percent, and public works, at $107,945, will account for 10 percent. Smaller slices of the pie include fire protection and capital improvement, each at four percent, general government costs at three percent, and storm sewer at one percent.
A sample proposed residential tax statement for a home valued at $139,800 showed that the 2014 actual tax of $1,644 will increase by $112 to $1,756 in 2015. For the same home, the 2014 actual city tax was $603, which in 2015 will increase by $78 to $681. A similar sample for a commercial property valued at $98,800 showed that the 2014 actual tax of $3,182 will decrease in 2015 by $276 to $2,906. For the same property, the 2014 actual city tax was $825, which will decrease in 2015 by $223 to $602. Whether commercial or residential, Kissock explained, a property’s tax is determined by its estimated market value.
Turning to a comparison chart of tax rates in Maple Lake and other Wright County cities, the mayor said, “I know we talk a lot about trying to keep Maple Lake in the running for lower property tax rates. We do that to try to attract more businesses and more homeowners to the city. But we also want to pay the bills and be forward-thinking. So, we’re pretty much right in the middle of the pack when it comes to a lot of the surrounding communities in Wright County. We want to keep close to where we are. We have increased slightly, but the reason that Buffalo and Delano are able to keep theirs a little lower is because they have a larger tax base, they have more commercial properties, and they get more taxes in.”
Councilmember John Northenscold pointed out that Buffalo and Delano have their own power stations for generating electricity, which also assists in keeping their tax rates lower.
At a rate of 59.139 percent, Maple Lake compares closely to neighbors Rockford and Montrose, whose rates are 57.335 and 57.218. In Wright County, Hanover has the lowest rate at 48.207, with Buffalo next at 52.456, and Delano at 54.081. South Haven has the highest rate at 130.381, followed by Waverly at 87.064, Cokato at 80.426, Clearwater at 75.294, Howard Lake at 72.093, and Annandale at 69.012.
Services paid for by city tax dollars include police patrol, crime lab and other police services; criminal prosecution; fire and emergency medical response; street maintenance and improvement; parks, trails, and recreation; single-sort curbside recycling; planning and zoning administration and code enforcement; city council, planning commission and park board; and numerous miscellaneous items that include elections, assessing, newsletters, city buildings, dog control, streetlights, compost, holiday decorations, cleanup day, emergency sirens, business incentive programs, tax abatement, low interest business loans and emergency management services.
Delving into an explanation of how our property tax system works, Kissock said that it begins with the county assessor, who sets proposed property values as of January 1 for the following year’s taxes. Values are based on comparable sales. These values are sent to the county auditor, who then sends property-specific notices to property owners, notifying them of any value change. Included in the notice is information about the Board of Review meeting, which the city council in April of each year, at which residents can question or challenge their proposed values. Once those values have been adopted, they can be changed only through tax court. Values are then finalized and set for calculating taxes. The city and other jurisdictions adopt their levies and budgets in December. Tax rates are calculated by the county, based on the levies adopted by each jurisdiction.
Factors that influence the total tax levy include property market value, tax capacity, property class rates, state aid, county budget and tax levy, school district voter-approved debt obligation, city budget and tax levy, and special state laws such as sales tax exemption.
Following the hearing, the council adopted a resolution approving the final 2015 tax levy of $869,079 and General Fund budget of $1,613,415.
In other business, the council:
· Heard a report on plans for the city’s 125th anniversary celebration from Councilmember Deb Geyen, who said a committee of local residents has come up with a number of ideas, including a self-guided history walk through the city, a school meet-and-greet and tour, a brewfest and beer garden, a dance, and fireworks. More ideas are currently being floated for children’s activities, and Geyen urged anyone who is interested to join in on the planning. For more information, contact Geyen, Northenscold, Yager, Denise Blizil, Steve Mooney or Sue Sylvester. The celebration date has been set for June 6, to coincide with the all-city garage sale.
· Adopted resolutions granting a temporary on-sale liquor license and gambling permit to the Maple Lake Property Owners Association for the annual fishing derby to be held January 31, 2015.
· In the interest of alleviating traffic congestion, directed Public Works to order and place “no parking” signs along the north side of Sixth Street Northwest between Spruce Avenue and a point 800 feet east of Spruce Avenue.
· Approved a consent agenda that included acceptance of a $25 donation to the Fire Department from Myrtle Marquette.
· Heard a reminder from Kissock that homeowners are required to clear their sidewalks of snow and ice after each snowfall, and that it is illegal to push snow from driveways into the street.
· Passed a resolution for consent to the corporate restructuring of Charter Communications. Charter is entering a merger with Time Warner and Comcast, and because of a franchise agreement the city has with Charter, a resolution was required for the city’s consent to the restructuring.
· Approved amendments to city employee policy regarding sick leave, parental leave and military pay, as required by changes in state law.
These actions were made in the absence of Councilmember Shar Dircks.
The council’s next meeting is Tuesday, December 16 at 7 p.m.
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