The city’s portion of property taxes in 2013 will remain flat or decrease for about 57 percent of Brooklyn Park homeowners, based on estimates given Dec. 3 when the city council approved its final budget and property tax levy for 2013. The total number of dollars levied and the overall budget will both increase.
The city is in the second year of its two-year budget planning cycle, which is intended to facilitate better long-term budget planning. Under this system, it adopted a budget for 2012 and 2013 at the end of 2011. This year it re-examined and adjusted the 2013 budget.
As required by state law, the council approved a preliminary levy in September, which became the maximum amount the city could levy. That marked the start of the council’s budget evaluation process.
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. 3. No residents spoke at the hearing. Outgoing Councilmember Dean Heng and recently elected Councilmember Bob Mata voted against the budget. Heng didn’t explain why he opposed the budget but seemed to want more cuts. Mata was clear that he wanted to reduce spending and opposed many of the added staff positions, with the exception of the added police officers.
Mata cast the lone vote against the levy, saying the city needed to cut more expenses so it could lower taxes.
The city’s total 2013 property tax levy is $31,782,852. That’s up about $1.5 million, or 5.1 percent, compared to 2012.
About 57 percent of residential properties will see city property taxes remain flat or decrease. About 17.9 percent will see them go up 0.1-4.9 percent. Another 24.9 percent will see them go up 5-9.9 percent.
Brooklyn Park Finance Director Cory Kampf estimated the owner of a median-value home would pay $872.11 in city property taxes in 2013. The median home value is about $156,000, down about 6.1 percent from a median value of $166,100 last year. In 2012, the owner of a median-value home paid $878.54 cents.
Kampf reminded the council that his estimates only include the city portion of property taxes — school district and county levies are calculated separately but still affect tax statements.
Kampf also pointed out that whether an individual property sees an increase or decrease depends on its change in value compared to the change in value of the rest of the properties in the city.
For example, if a home was assessed at $158,000 last year and is worth $156,000 this year, it may see a tax increase, even though it’s at the median value. That’s because the value of that home only dropped 1.3 percent, compared to the 6.1 percent drop in the median value. Because it dropped less than other properties in the city, it has a larger percentage of the total property value in the city, so its share of the tax burden goes up. This is due to the way property taxes are calculated, as dictated by state law.
The city’s property tax levy has been rising steadily over the past several years, going from about $26.3 million in 2010 to $27.4 million in 2011 and $30.2 million in 2012. In 2008 the impact on a median-value home was a 9.4 percent increase. In 2009-2011 the property taxes on a median-value home decreased, and it 2012 they increased 0.3 percent due to a last-minute change in property valuations from the county.
The total levy is expected to continue rising steadily, reaching about $35.7 million by 2016. However, the council aims to have a 0 percent impact on property taxes for median-value homes.
The general fund is the city’s largest fund and pays for most of the day-to-day operations of the city. The 2013 general fund budget is $40,803,257. That’s up about $1.8 million, or 4.7 percent, compared to 2012. It’s $735,765 more than the original 2013 budget adopted in 2011 as part of the two-year planning cycle.
Property taxes generate approximately 78 percent of the general fund’s revenue.
The increased general fund revenue is coming from the increase in the property tax levy, as well as an increase in grant money to the police and fire departments. Building permit revenue is also expected to go up, and the city anticipates more income from the Motor Vehicle License Center due to higher transaction volume.
The general fund will also receive more money from capital funds to pay for engineering services, based on project needs planned in the city’s Capital Improvement Plan.
Many of the increases in general fund expenses come from adding staff as follows:
• The police department will add three officers
• The fire department expects to add three battalion chief supervisors.
• The recreation and parks department will hire a youth services manager.
• The finance department will add two interns and increase a customer service position from part time to full time.
• The community development department will add a building inspector, a point of sail inspector and a program technician.
• The administration department will increase a human resources program assistant from part time to full time.
In addition to the changes to the program assistant position, the administration department also asked the council to eliminate the community relations coordinator position (currently vacant) and replace it with a neighborhood specialist position and two part-time cultural liaisons. According to Kampf, the positions could be absorbed in the existing budget and wouldn’t require new revenue. The administration department also asked for approval to create an organization development coordinator position.
The council denied the request for the organization development coordinator. It voted 5-2 to remove the position from the proposed budget. Council members Rich Gates and Elizabeth Knight dissented. After voting to the remove the position from the budget, the council voted to remove the cost of the position ($78,592) from the property tax levy. Councilmember Mike Trepanier dissented, saying he thought the city should collect the money and add to the reserves, which do not reach the level recommended by the state auditor.
The council agreed to consider the neighborhood specialist and cultural liaison positions, but felt it needed more discussion before approval. So the council voted to move that money into the contingency fund. The contingency fund holds money not assigned to a specific expense and is typically used for unexpected costs, such as special elections. By adding about $115,000 to the contingency fund, the council set aside the money to be able to fund those positions if it chooses. If it does not use the money, it will be rolled into the city’s fund balance at the end of the year.
Where the money goes
More than half the general fund budget (about 53.2 percent) goes toward public safety, with the police department getting 45.6 percent of the general fund’s money and the fire department getting 7.6 percent.
The next largest chunk of the budget goes to operations and maintenance, which accounts for 16.1 percent of the general fund.
In third place, the community development department has 9.2 percent of the budget. This department includes several divisions: building inspections, code enforcement and public health, economic development and planning.
The fourth-largest slice of the pie goes to the recreation and parks department, which gets 8.7 percent of the general fund.
The finance department comes in at 5.3 percent of the budget, and administration gets 4.6 percent.
Then come the legal department (1.2 percent), the contingency fund (1 percent) and the mayor and council (0.7 percent).