Northern Dakota County cities set 2015 taxes

Property owners see major uptick in home values

Residential property owners will bear the brunt of tax levy increases countywide in 2015.

The budget process for northern Dakota County cities culminated in December, solidifying a jump in taxes for some homeowners, largely due to another year of climbing property values.

The Dakota County Assessor’s Office calculates property values, and those numbers are used to determine the amount of taxes levied by cities, as well as the state, school districts, the county and various special districts. Called a sign of recovery from the Great Recession, assessed property values have increased for a second year in most cities throughout the county, causing the overall amount taxed on properties to jump.

The Dakota County Board of Commissioners increased the county’s 2015 tax levy by 1 percent. The final tax levy was set at $129.66 million.

According to the county, an owner of a median-priced home will see an increase of about $15 in county taxes, about half of which resulted from home value increases and tax shifts.

It’s a similar story for South St. Paul property owners, though it’s the first year the city has marked an increase in property values over the previous year since the Great Recession.

Residential values have jumped about 17 percent, according to city documents, while other property values have remained relatively flat.

That means residents will shoulder a significant increase in property taxes in the new year, while commercial and other property owners won’t see such a jump.

“This coming year is somewhat unique,” South St. Paul city administrator Stephen King said at the Dec. 1 council meeting. “The focus is really on the change of value more than it has been in many, many years, because there’s been a real rapid appreciation of value over the last year.”

Plus, the “lion’s share,” about 80 percent, of the city’s property-tax revenue comes from residential lots, King said.

“The residential base is going to pay a bigger proportion of the tax bill,” King said.

It’s the second year Inver Grove Heights has seen an increase in market values, according to finance director Kristi Smith.

Some residents in Inver Grove Heights expressed dismay at their property-value increases at a December council meeting. Two women who live on Black Hawk Trail noted each of their assessments went up about 21 percent, with the city portion going up around $140 from 2014.

On a fixed budget, townhome owner Carole Wallace said she and the rest of her retired neighbors “can’t afford that.”

South St. Paul

South St. Paul approved a 7.33 percent increase in the amount of taxes levied, which includes 3.25 percent to support operations and 4.08 percent for voter-approved debt from the parks improvements referendum.

The approved general fund came out to $12.75 million, which includes $568,281 in new spending, half of which will cover personnel. The taxes levied to cover city expenditures is about $9.28 million in 2015.

Mayor Beth Baumann said she was excited to be able to lower the final levy from the preliminary levy set in September by 1.6 percent, the first time there’s been such a decrease in the 12 years she’s been on the council.

Inver Grove Heights

Inver Grove Heights is levying 9.38 percent more than it did in 2014, a jump of about $1.4 million, bringing the total amount levied to nearly $16.47 million.

About 82 percent of revenue comes from property taxes, according to city documents. Charges for services make up 6 percent of revenue, 5 percent comes from license and permit fees, and intergovernmental sources contribute 3 percent.

Public safety grabs 48 percent of Inver Grove Heights general fund expenditures, public works takes 21, and parks makes up 10 percent.

West St. Paul

The West St. Paul City Council approved a $914,751 increase from 2014, putting the total levy at about $11.61 million.

Nearly 1.5 percent of the 8.55 percent total increase covers rising operational costs and the other 7.13 percent of the increase, $762,189, is slated for capital reinvestment.

The renovation of Harmon Park and Robert Street make up the majority of the increase, $348,134 and $408,991, respectively.

West St. Paul shapes its budget and levy while keeping in mind its priorities, such as economic and community vitality (redevelopment, park reinvestment), a safe and vibrant community (police, fire services) and connected and thriving neighborhoods (neighborhood engagement and preservation), according to city manager Matt Fulton.

After funding from the state was pulled in the mid-2000s, cities, including West St. Paul, continue to mitigate dependence on local government aid, though the anticipated state money increased by 5.79 percent this year, according to West St. Paul finance director Joan Carlson.

Sixty-nine percent of the city’s general fund revenue comes from the property tax levy. Fulton said the city has continually focused on building up other sources of revenue, such as money from commercial property taxes, to cushion the cost of running the city for residents.

“If you can build up your property tax base, it has the impact of mitigating any property levy increases in the future,” Fulton said at the Dec. 15 council meeting.

Mendota Heights

The city of Mendota Heights adopted a nearly $7 million tax levy for 2015, a 6 percent increase from the previous year. The city’s 2015 budget comes in at about $12.3 million.

Noting this is the highest levy increase the city has ever approved, Mayor Sandra Krebsbach said,”We still have, I believe, the lowest taxes in Dakota County. We’re pleased we can still offer strong services.”

The hike, she said, can be attributed to four new city expenses: hiring an additional patrol officer, contributing $255,000 to West St. Paul for ice arena improvements, of which $65,000 is levied, increasing the annual contribution to each fire fighter’s pension by $500, and hiring one more police sergeant, for a total of four.

Regarding the impact of rising market values in the area, Mendota Heights residents may see an even bigger uptick in their overall taxes. The appraised value of single-family homes in Mendota Heights increased about 5.15 percent over last year.

For instance, a home valued at $475,500 in 2014 paid $1,726 in city taxes. That same home, in 2015, would have a value of $500,000 and pay approximately $1,823 in city taxes, an increase of $97.

Sunfish Lake

For 2015, Sunfish Lake adopted a 3.6 percent tax increase by means of a bond levy, giving the city an estimated total tax revenue of $429,889.

The city’s total 2015 revenue budget came in at $504,749. The city’s total expenditure budget totals $481,892.

City council member Mike Hovey said the additional money raised from city taxes will be absorbed into expenses in the general budget, which includes services like police and fire.

The additional bond levy of $40,300 will be primarily used to help finance a road improvement project.

While the market value of a median single-family home increased to $728,500, a 14 percent increase over last year, city property taxes stayed fairly level at a 1.71 percent increase.

“We’re trying to keep (the tax levy) as level as possible,” Hovey said. “We’re a small city. We don’t have that big of a tax bracket.”

Mendota

According to former city clerk Kim West, the city of Mendota set its 2015 tax levy at $164,592, up $10,000 from the previous year. The increase, she said, can be attributed to the fact that the city needed a sure-fire way to pay for roads that were damaged by mudslides from rainstorms that hit the city last June, including a fissure on upper D Street. 

“They’re not sure how much state aid [the city will] be getting,” she said, referring to the city’s officials, who already know that Federal Emergency Management Agency funding didn’t come through.

Mayor Brian Mielke says the city of roughly 200 residents doesn’t yet have a final estimate of road repair costs, but he anticipates the total will be in the range of $500,000.

“The state of Minnesota will be picking up 75 percent of that cost,” he said.

Lilydale

The city of Lilydale adopted a $493,524 tax levy for 2015, a 3.62 percent increase from the previous year. The additional $17,224 will primarily be used to help cover an increase in police and fire service costs, which the city obtains through a contract with Mendota Heights.

“It was the first increase we’ve had in our levy for many years,” city clerk Mary Schultz said.

Roughly $15,000 will be allocated to City Hall parking lot repair expenses.

With a population of about 700 who primarily reside in condominiums, townhomes and apartments built along the bluffs, the 2015 city budget totals $576,016.

Kaitlyn Roby can be reached at 651-748-7815 and kroby@lillienews.com. Follow her at twitter.com/KRobyNews. Erin Hinrichs can be reached at 651-748-7814 and ehinrichs@lillienews.com. Follow her at twitter.com/EHinrichsNews.


2015 tax levies at a glance

Dakota County
Total levy: $129.66 million
Increase from 2014: 1 percent

South St. Paul
Total levy: $9.28 million
Increase from 2014: 7.33 percent

Inver Grove Heights
Total levy: $16.47 million
Increase from 2014: 9.38 percent

West St. Paul
Total levy: $11.61 million
Increase from 2014: 8.55 percent

Mendota Heights
Total levy: $7 million
Increase from 2014: 6 percent

Sunfish Lake
Total levy: $429,889
Increase from 2014: 3.6 percent

Mendota
Total levy: $164,592
Increase from 2014: 6.47 percent

Lilydale
Total levy: $493,524
Increase from 2014: 3.62 percent

 

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