Champlin approves budget, proposes lower tax rate

Champlin homeowners should see a decrease in the City portion of their tax bill due to a 0.08 percent decrease in Champlin’s tax rate for 2014.

Preliminary information provided by Hennepin County indicates the tax capacity for the City of Champlin will decrease by approximately 2.41 percent for payable 2014.

As required by state law, the council approved a preliminary levy in September, which became the maximum amount the city could levy. Staff and council continued to meet to finalize a 2014 budget.

After months of budget presentations and discussion, the city council approved the final budget and levy following the state-required Truth in Taxation hearing Dec. 9.

 

PROPERTY TAXES 

The city’s total 2014 property tax levy is $8,322,029. That’s a decrease of about $1,300, or 0.02 percent, compared to 2013.

City staff along with the Mayor and City Council view 2014 as a “bridge year” as the economy shifts from declining property values to an economy showing signs of recovery and development once again stabilizing the long-term budget picture. The 0.08 percent tax rate decrease will assist property owners as this transition is made.

The city’s finance director, June Johnston, estimated the average homeowner whose value dropped 2.41 percent — for example, from $166,000 in 2012 to $162,000 in 2013 — would experience a decrease in city property taxes of approximately $18. Johnston also detailed that homes that experienced a decrease in value higher than 2.41% would experience a greater decrease in the City portion of their taxes and homes that experienced a lesser decrease in value could experience a lesser decrease or even an increase in the City portion of their taxes.

In 2013 approximately 86% of homeowners in Champlin saw a reduction in the City portion of their property tax bill. In 2014, that percentage is projected to be even higher. These estimates only include the city portion of property taxes — school district and county levies are calculated separately but still affect overall tax statements.

 

GENERAL FUND

The general fund is the city’s largest fund and pays for most of the day-to-day operations of the city. The 2014 general fund budget is $10,236,889. That’s up about $95,817 or 0.94 percent, compared to 2013.

Since 2007, there has been a significant shift in revenue sources from intergovernmental — state aids — to property taxes.

License and permit revenue is projected to decrease by $11,437 (4.12%). Charges for service, miscellaneous revenues, intergovernmental revenues and other financing sources add an additional $107,254 in revenue for the General Fund. The remaining revenue stream will be the dollars generated from property taxes.

More than 43.3 percent of the general fund expenditures go towards public safety with the police department taking the lion’s share of that. The top five departmental expenditures for the general fund include:

1. Police — $3.48 million (34.05 percent)

2. Public Works and Maintenance — $1.71 million (16.74 percent)

3. Park and Recreation — $564,753 (5.52 percent)

4. Fire — $503,501 (4.92 percent)

5. Government Services, which includes personnel such as the receptionist and city clerk, office supplies and services for general government departments and supplies and services to operate and maintain the city hall and public safety buildings  — $374,378 (3.66 percent)

Additionally, there is more than $1.94 million of expenditures that the city identifies in the category of “Other.” Johnston said this category includes operating transfers to infrastructure funds of $1.72 million, property and liability insurance, and council contingency.

In addition to the general fund the city has several additional funds including:

• Enterprise Fund: Pays for water, sewer, refuse and recycling ($7.35 million)

• Capital Projects Fund: Pays for street lighting, storm sewer, municipal state aid, park reserve fund and capital equipment fund ($3.66 million)

• Special Revenue Funds: Pays for DARE education, technology, Economic Development Authority, EDA, Real Estate Mill Pond Gables and the Ice Forum ($1.47 million)

• Internal Service Fund: Pays for insurance management and geographic information services ($382.666)

This brings the city’s overall budget to $23,103,388 for 2014.

 

PERSONNEL

Nearly 81 percent of the general fund expenditure increase is due to personnel costs for 2014. The budget includes a 2.0 percent cost of living adjustment for personnel and an increase in the City’s contribution to the Public Employer’s Retirement Association (PERA). The overall increase in personnel costs for 2014 is $77,675.

 

EDA

The council also approved a $310,439 levy for the Economic Development Authority, which is a 1.32 percent increase over 2013. The EDA is classified as a special taxing district; therefore, has a separately approved tax levy.

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