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19.77% increase over the 2001 levy. <br />TAX CAPACITY AND TAX CAPACITY RATE. AINP IMPACT OF TAX LEVY ON <br />PROPERTY OWNERS <br />The 2001 legislature, as part of the lux reform package, substantially compressed property class ta.x <br />rates. The tax rates for commercial/industriul property and for homes valued bet\«'een $ 100,000 and <br />S500,000 were reduced significantly. The Ulx rate reductions will substantially reduce the city's tax <br />capacity, which is the tax base across which the property tax IcNy is spread. TIk city's tax capacity <br />is estimated to be $13,842,339. This is a reduction of S3.773.I58 or 21.42% from the 2001 lax <br />capacity. The tax rate compression also shiAs the tax burden from commercial/industrial propert) <br />and the mid-lo-upper value homes to lower valued homes. <br />Due to the reduction in tax capacity, even with qs increase in txLX levy, the city's ta* opacity rale <br />wrould increase from 13.7% to 17.44%. The proposed levy excluding the HACA replacement levy <br />wrould result in a tax capacity rate of 18.71 %. The proposed levy including HACA replacement levy <br />results in a tax capacity rate of 20.%%. <br />It is important to keep in mind that, in terms of the impact on property taxes, the large increase in <br />the tax capacity rate will be significantly offset by the reduction in Ulx capacity for those properties <br />for which the property class uix rotes were substantially reduced. For comparison purposes, <br />assuming no change in property value, the tax levy would result in the City's share of the property <br />tax bill on a home valu^ at S100.000 increasing by SSI or 33%. For a home valued at $250,000. <br />the City's shore of the property Uix bill would increase by $27 or 6%. For a home valued at <br />$500,000, the City’s share of the property lax bill would be reduced by $ 15 or 1.4?o. <br />SEWER AND WATER FEE INCREASES <br />As called for by the City's plan for funding long-term repair and replacement of the City's w alcr and <br />sewer infrastructure, the proposed budget reflects a 3.2% increo.se in water rates and a 2.8®.o increa.se <br />in sew-er rates. <br />COUNCIL ACTION REQUESTED: <br />Motion to adopt the following resolutions: <br />1. Resolution Adopting the Final 2001 Tax Levy Collectible in 2002 <br />2. Resolution to Adopt the 2002 General Fund Budget <br />3. Resolution to Adopt the 2002 Special Revenue Funds Budget