12-9-2024 CC Agenda Packet - Laserfiche WebLink

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Date: December 9, 2024 Item: 9 Presenter: Maggie Jin, Finance Director Section: Consent Agenda Title: Adopt 2025 General Fund Budget and Tax Levy - Resolutions 7536, 7537 1.Purpose: The purpose of this agenda item is to adopt the 2025 General Fund Budget and Tax Levy. 2.Background: Staff has been working on the 2025 General Fund budget since May. As part of the budget process, there have been meetings with the Budget Committee and updates to the whole council at work sessions. The preliminary budget and tax levy was approved by the Council on September 23rd. Prior to the adoption of the 2025 budget and tax levy, the City is required to hold a public hearing to allow public input. By law, this hearing must occur between November 25th and December 28th. The public hearing was held on November 25, 2024 at 6 pm. A. Tax Levy. The total tax levy required to fund the 2025 draft budget is $9,631,000. This is an increase of $215,900 or 2.29% over the 2024 levy of $9,415,100. The increase of $300,900 in the General Fund represents the largest increase in the levy. The increase is primarily for the need to cover a budgeted 3% increase in union employee wages and a market adjustment with 3% cost-of- living increase for non-union employee wages. Other levy increases include $25,000 increase for the Fire Facilities Fund. The 2014A bond levy was reduced one-time in 2024 and will return to the original amount of $300,000, an increase of $240,000. The Parks levy is stable to continue the Council’s commitment to adequately fund park infrastructure and better maintain current facilities. Similarly, with Pavement Management levy, the levy remains stable to adequately fund street projects. The levy for Facilities Fund is being reduced by $150,000, with additional amounts to the fund coming from the Enterprise funds for future facility needs. The levy for Community Investment Fund is zeroed as the fund has adequate funding for future needs until further consideration. B. Tax Capacity Rate and the Impact of the Tax Levy on Property Owners. The County Assessor provides an annual calculation of the City’s tax capacity based on the annual property revaluation. As of August, the City’s taxable market value is $5,014,564,174 with an adjusted net tax capacity of $58,907,542. When compared to last year, taxable market value has increased by 2.1% and the adjusted net tax capacity increased by 2.3%. For 2025, it is anticipated that the tax rate can remain the same as 2024 at 16.35%; one of the lowest rates in both Hennepin County, and the State of Minnesota. Using this tax rate and assuming no change in a property’s value, the City’s share of the property tax bill would remain the same compared to 2024. The actual tax impact on any particular property will depend on how the property’s taxable value changed in relation to the rest of the City. The AGENDA ITEM 138