Rogers proposes 6.88% General Fund budget increase

The Rogers City Council will review the proposed budget at the regular City Council Meeting (formerly called Truth-in-Taxation hearing) Tuesday, Dec. 11, at 7 p.m. at the Rogers Community Room.

Public testimony will be allowed and the final levy and budget will be discussed.

The city’s total 2013 taxable market value is estimated at a 35.83% increase from 2012, with a total tax capacity increase of 33.26%, which includes the full annexation of Hassan Township tax capacity coming in. The city said it has strived to continue to maintain stable tax conditions on existing homes and businesses through continuing tough economic times. The City is maintaining its financial stability through a healthy fund balance, conservative budgeting practices and long-range financial planning.

The majority of the total property tax bill for Rogers taxpayers, 69-74% goes to Hennepin County, to School Districts #728, #279 & #877, and other special taxing districts. The preliminary proposed total levy was set by the City Council on September 11th at $5,923,447, which includes a General Fund levy of $3,991,605, Special Revenue Fund levy of $375,000, Capital Project Sinking Fund levies of $583,600, and an interfund loan repayment levy of $110,000 which totals $5,060,205 for the General Levy plus special/debt levies of $863,242.

Since Sept. 11, the City Council has had numerous additional budget workshops discussing the current proposed budget and levy. Per State Statutes, the final general levy may decrease from the September preliminary levy when certified in December, but it cannot increase beyond that figure.

The city said its proposed budget is, as always, cognizant of the impact on taxpayers within the community while striving to maintain high-quality, existing services.

 

Major Budget/

Levy Impacts

The city tax rate proposed on the Hennepin County parcel specific notices for 2013 was 38.264% per the preliminary proposed levy. The final tax rate for 2012 was 41.183% that equates to a 7.08% rate reduction for 2013.

 

The following are significant impacts on the budget/tax rate:

• Metropolitan Area Fiscal Disparities Program which is a State Legislature mandated program in an attempt to equalize tax bases within the 7 County Metropolitan area, causes an increase in Rogers tax rate

• Declining but stabilizing market values

• Complete annexation of Hassan Township

• Significant spend down of previous Hassan Township fund balance for 2012 Hassan related operational expenses in light of the zero levy certified by Hassan Township in 2011 for 2012 taxes.

• Zero use of Rogers fund balance for ongoing operations

• Increased levy by $110,000 to begin repayment of the Public Works Building interfund loan debt

• Creation of $583,600 in capital improvement sinking funds for long range General Fund related capital planning needs (buildings, paved & unpaved roads, equipment, technology and parks) to reduce future borrowing costs

• Increases in residential building permits and development increasing total market values

 

Expenditures

The current proposed 2013 General Fund budgeted operating expenditures for Rogers amount to $6,153,413, or a 6.88% increase over the conservatively amended 2012 budget due to annexation, or a 21.07% increase over the 2011 actual budget.

Current Rogers Fund Balance is not anticipated to be spent down outside of budgeted carryovers from 2012 related to street maintenance. While there was a necessary spend down of previous Hassan reserves in 2012, it will NOT be necessary for the City to rebuild reserve funds as part of future tax levies for the combined City due to healthy reserves and City fund balance policy.

There is no reserve “catch up” being done with the tax levy. All Rogers residents are taxed at the same City tax rate. In addition, for 2013, sufficient assessments have been collected on the two former Hassan bonds to eliminate the need to special levy final Phase III Hassan properties for that debt. This will be monitored annually until the debt has been paid off.

 

Total Net Levy

The proposed total net levy is increasing 27.75% from 2012 adopted City levy, which did not include Hassan Township tax capacity/operating costs.

Please note that the large increase in the Rogers total levy is attributable almost entirely to the factors of a larger combined service area and population, with consolidation savings incorporated and capital sinking funds.

 

Impact to Taxpayers

Despite the necessary levy increase due to the combined communities, minimal increases in operating expenses and offsetting additions to total tax capacity help to reduce the tax rate with the vast majority of residential property taxpayers likely to see an overall reduction in their City tax bills in 2013 if their valuations remained flat.

One important note, however, most properties in the final annexation area will see the expected increases to the City portion of their property tax bill as they move from zero City taxes paid in 2012 (due to the zero levy a 0% tax rate was applied) to a tax rate of 38.264%. The Hassan Township 2011 final tax rate was 27.886% compared to Rogers preliminary tax rate for Pay 2013 at 38.264%.

The final result of tax rate differential between 2011 Hassan taxes and 2013 Rogers taxes is a 37% increase which is less than originally anticipated during the planning phases of the annexation.

City services were provided to the final annexation area by Rogers for all of 2012 with the use of Hassan reserves and without the Rogers tax rate being applied nor tax revenues received by Rogers. Per City staff, Rogers proposed 2013 tax rate is the lowest of any neighboring city.

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