Introduction: St. Michael is required toconduct a Truth in Taxation Hearing prior tosetting the budget and property tax. The Citymust discuss the proposed property tax levyand proposed budget. The public must begiven a reasonable amount of time to askquestions.Positive comments are allowed!

This Meeting Summarized….What it is…

A hearing about the proposed 2021 City of St. Michael property tax levy and proposed budget, including the EDA levy.

What is it not…A hearing about property tax valuation. This is the Board of Appeal hearing which is typically in late April and property owners receive separate notice of this hearing typically around March. As such our 2020 board of appeal was held on April 28, 2020 for 2021 property tax values.

A hearing about current or proposed taxes for the…- Federal Government - State Government- County- School District

The City Budget - a Year-round Process In July:

Staff begins to formulate with Department Heads Administrator requests Council input on priorities for next year which in

summary is to maintain a low tax rate while properly funding debt, infrastructure, equipment and supporting a highly efficient/effective staff.

In June - Staff Prepares first budget & presents draft “needs based” budget to City Council. By September 30 - Council adopts preliminary levy and budget and sets Truth in Taxation Meeting – Info is sent to County Auditor.

Once the preliminary levy is set, it can not be increased. Auditor sends out notices to all property owners notifying of the proposed taxes. Budget is refined up to the TNT Meeting, based on current year budget info. In December Council conducts TNT Meeting & takes input from residents on

budget and levy. Later in December the Budget and Levy are adopted. Throughout the year the budget is monitored; and quarterly reports given to the

City Council.

Top Priority Goals1. Town Center Park – fundraising/sponsorships (16)2. Develop actionable plan for attracting commercial/industrial development (20)3. Develop long-term park and funding plan (33)4. Continue I-94 Expansion (36)5. Town Center Development – commercial/residential (36)6. Continue efforts on retaining quality staff/keep responsive services high (37)7. Website refresh (42)8. Residential PUDs – set the guidelines and amend the ordinance by July (43)

How Property Tax System Works: Assessor sets proposed values as of January 1 for the

following year taxes. Values are based on comparable sales.

These values are sent to County Auditor. Auditor then sends property-specific notices to all property owners notifying of the value change. Also on the notice is the information about the Board of Review Meeting

Council conducts Board of Review in April; this is when residents can question the proposed value.

Values are then finalized and set for calculating taxes based on State of Minnesota Property Tax Laws.

How Property Tax System Works: Property is not taxed on actual value, but on TAX

CAPACITY. Different property types have different tax capacities. For example, Commercial/Industrial property generally has higher tax capacity.

Property Taxes support three levels of Government: St. Michael Average Home Value of $312,100*:

1. City w/EDA ($1,106/yr, $92/mo, or 26% of total taxes); 2. County ($1,324/yr, $110/mo, or 31%) and 3. **School District ($1,816/yr, $151/mo, or 43% (STMA)*Homestead Credit brings taxable value down to $302,900.**Elk River and Buffalo School Districts Homes will vary.

T EMV % 2020-2021 2020-2021Parcel Classification C 2019 2020 Change City Tax 2020 Total Tax 2020 City Tax 2021 Total Tax 2021 % Total chg City % chg114.021.002030 Res. Hmstd 180,000 200,300 11.28% 665.31 2628 744.68 2932 11.6% 11.9%114.101.001040 Res. Non-Hms 179,600 197,800 10.13% 655.39 2590 696.71 2746 6.0% 6.3%114.108.005090 Res. Hmstd 321,800 329,800 2.49% 1183.67 4634 1191.85 4662 0.6% 0.7%114.500.144300 Res. Hmstd 629,400 687,200 9.18% 2771.81 10712 2830.86 10932 2.1% 2.1%114.500.261402 Res. Hmstd 369,100 396,000 7.29% 1448.91 5660 1481.84 5784 2.2% 2.3%114.029.001010 Res. Hmstd 122,400 135,200 10.46% 404.47 1620 425.33 1698 4.8% 5.2%114.083.002280 Res. Hmstd 371,300 392,000 5.58% 1432.74 5598 1484.35 5794 3.5% 3.6%114.230.001020 Res. Hmstd 286,900 281,000 -2.06% 988.23 3878 1033.96 4052 4.5% 4.6%114.090.002110 Res. Hmstd 268,500 291,000 8.38% 1028.27 4032 1075.13 4210 4.4% 4.6%114.176.001130 Res. Hmstd 313,000 326,300 4.25% 1169.71 4580 1175.02 4596 0.3% 0.5%114.214.001020 Res. Hmstd 260,900 299,600 -1.21% 1062.8 4166 1072.27 4200 0.8% 0.9%114.067.001070 Res. Hmstd 298,000 304,800 2.28% 1083.74 4248 1108.43 4340 2.2% 2.3%114.177.002040 Res. Hmstd 321,000 325,500 1.40% 1166.77 4568 1172.87 4588 0.4% 0.5%114.220.001010 Res. Hmstd 358,800 372,700 3.87% 1355.96 5300 1449.26 5656 6.7% 6.9%114.010.006020 Commercial 159,600 165,700 3.82% 941.94 3946 975.96 4098 3.9% 3.6%114.277.001010 Commercial 5,625,000 5,625,000 0.00% 41053.6 194266 40008.74 187332 -3.6% -2.5%114.500.092100 Ag. Hmstd 301,900 301,700 -0.07% 271.02 728 261.05 682 -6.3% -3.7%114.108.002030 Res Hmstd 361,100 369,000 2.19% 1340.9 5242 1349.74 5272 0.6% 0.7%114.176.005140 Res Hmstd 302,000 318,000 5.30% 1136.64 4452 1147.1 4488 0.8% 0.9%114.265.002070 Res Hmstd 409,900 406,200 -0.90% 1489.69 5818 1494.02 5830 0.2% 0.3%114.328.001010 Commercial 564,400 531,300 -5.86% 3628.15 16690 3563.73 16246 -2.7% -1.8%114.500.133302 Res Hmstd 219,100 227,700 3.93% 775.15 3054 777.98 3062 0.3% 0.4%114.800.083401 Res Hmstd 240,400 272,100 13.19% 952.59 3740 1020 3998 6.9% 7.1%114-043-001070 Res-Hmstd 144,000 161,900 12.43% 512.11 2036 545.98 2164 6.3% 6.6%114-177-001090 Res-Hmstd 302,200 308,300 2.02% 1097.90 4302 1092.32 4276 -0.6% -0.5%114-333-004090 Res-Hmstd 670,300 748,600 11.68% 2974.91 11668 3014.17 11784 1.0% 1.3%

Estimated Market Valu

New Construction Value increase for 2021 = $46,004,900

Existing Value increase for 2021 = $90,758,100

Residential home values increased 5% for the 2020 assessment, taxes payable 2021. Similar value increases based on sales are expected in 2022. Lower valued homes and large lot homes are increasing at an even higher rate. If a residential home’s value didn’t increase, their City taxes would decrease but the average valued home did increase by 5%. Apartments had a 10% increase with very low vacancy rates.

Commercial (4%) / Industrial (3%) property values increased for the 2020 assessment, taxes payable 2021, as we saw a good year of growth in this sector and our vacancy rate continues to be low.

Agricultural land market values decreased 1% for the 2020 assessment, taxes payable 2021. Agricultural land with potential development increased based on actual sales for the developments we’ve recently seen in St. Michael.

What do you get for your City Tax Dollar? Police - Patrol, Crime Lab, Recreation Patrol, Canine and other police services withWright County including Court Services and Criminal Prosecution (+31K in 2017) Fire & Emergency Medical Response City Street Maintenance and Improvement, including Sweeping, Asphalt repair,pavement management (crack seal, sealcoating, overlays) etc. Snowplowing Parks & Trails/Sidewalks FYCC/Recreation Senior Center Library (staffing/books funded by GRRL) City Council & Boards (Planning & EDA) Planning, Zoning & Code Enforcement Emergency Sirens/Other Emergency Management Services Misc: Elections, Assessing, Newsletters, City Buildings, Etc.

• Council and Administration• Elections• Planning• Assessing• General Government and Buildings

General Government

$ .14

• Police• Fire• Inspections

Public Safety $ .20

• Street Maintenance• Snow Removal• Curb, Gutters, Sidewalks, Storm System• Equipment Maintenance and fuel• Street Lighting

Public Works $ .29

• Senior Citizen Programs• Park Maintenance• Ballfields, Soccer fields, BMX, Ice Rinks• Trail Maintenance• Lake Maintenance

Culture & Recreation $ .10

• Equipment such as loaders and snow plows• Major building expenses• Street reconstruction projects

Capital Expenses $ .10

• Economic Development AuthoritySpecial Taxing District $ .02

• Bond PaymentsCapital Debt Service $ .15

Nine Factors that Influence the Total Tax levy:1. Market Value2. Tax Capacity3. Property Class Rates4. State Aids 5. County Budget/Tax Levy6. School Operating Levy 7. School District voter Approved Debt Obligations8. City Budget and Tax Levies (only item totally controlled

by City even though City often gets blame/credit for all) 9. Special State Laws; for 2013 Market Value Homestead

Credit and Market Value Home Exclusion

Monticello’s nuclear plant expansion added the tax base value of 2000 homes in 2015 to reduce their tax rate from 44.672 in 2014 to 35.732 in 2015. Otsego’s residential and industrial growth has outpaced St. Michael’s in recent years.

Culture Customer service driven organization Focus on long term plans, big picture decision making, and goal achievement Needs based spending and good financial oversight without micro-management

Collaboration All levels of government (Cities, County, School, State, and Federal) Businesses (Shop STMA, I-94 Chamber) Civic Groups (Seniors, Library, FYCC, Youth, Sports Associations)

Continuity Businesses Residents Council Staff

Explanation of Proposed 2021 Property Tax LevyThe proposed 2021 tax levy of $7,700,000 is $340,620 (4.63%) greater than the 2020 levy of $ 7,359,380. The following is a breakdown of the levy:

2020 2021 General Fund Levy: $6,320,000 $6,420,815 Tax Abatement $119,897 Bond Levy $889,380 $1,009,288 Economic Development Auth. (EDA) $150,000 $150,000

Total $7,359,380 $7,700,000

Major increases in the budget consist of the following: Public Works Equipment Replacement Town Center Park Street Reconstruction Projects Wright County Sheriff Patrol costs Benefit and Wage adjustments to retain small and efficient staff with

multiple roles. The City started to receive Local Government Aid (LGA) in 2014. Since LGA

was not received for a number of years, LGA funds are used for capital purchases, such as equipment, and not general operations. In 2021, LGA funds will be used primarily for equipment purchases and aren’t anticipated for 2022.

Increases in expenditures are partly offset by an increase in revenue from building permits. New Home Permits are expected to continue above 150.

Doing more with less is great in St. Michael. - Staff with multiple jobs, Public Works, Public Safety, etc.

Doing less with less is ok if desired and understood.

- Less Maintenance, Less Staff, etc. Doing less with more is what we need to avoid.

- Bond Rating, Turnover of good staff, etc.

Overall St. Michael has a great story to telland is a well regarded City by our currentand future residents. We strive to providehigh value services at the lowest possiblecost while making sure the needs of the Cityare met which this budget will continue toallow for. Property values are increasing andpeople desire to live here!

Questions on the 2021 Budget and Property Tax Levy?

Proposed 2021 Property Tax Levy and 2021 Budget Adoption: December 22, 2020