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Council adopts 2018 preliminary levy

The Farmington City Council approved the 2018 preliminary tax levy that estimates a property tax increase of 6.69 percent on an average residential home with a market value of $236,107, or $48.62 for the average residential property. Kara Hildreth / contributor

The Farmington City Council adopted a 2018 preliminary city budget and tax levy that projects a nearly 5 percent over the city's 2017 levy.

Farmington Finance Director Robin Hanson shared a detailed tax levy report at the Tuesday, Aug. 29, regular council meeting. The 2018 total preliminary tax levy increase is projected to be $497,363.

Farmington's proposed net tax levy will be $10,494,185, a 4.98 percent increase over the 2017 levy.

Local impact

The local 2018 tax levy impact on taxpayers include as estimated increase of 6.69 percent on an average residential home with a market value of $236,107. The impact of the city's proposed 2018 tax levy is a $48.62 increase for the average residential property.

Hanson said such a specific property probably does not exist, but this would be the amount if there was a property in Farmington valued at the average tax value for the city.

The city's draft budget is drawn up in May to begin the year-long budget process. The city's management team reviews and revises the budget in June and the city council provides budget direction to city staff during July and August. After the staff makes further budget revisions, the council adopts a preliminary levy in September.

In October, the council will review the proposed 2018 fees schedule and adopt the schedule in November. Dakota County mails Truth-in-Taxation notices in November and the city holds a public hearing in December to allow the public to ask questions or make comments before the council adopts the final tax levy for 2018.

Since property taxes are administered by the county in Minnesota, the tax breakdown calls for a percentage to be paid to school, city, county and other special taxing districts.

In Farmington, residents will pay 45 cents of each dollar to fund Farmington Independent School District 192, about 36 cents is directed for city services, 17 cents for county operations and 2 cents for special districts.

Farmington's city tax dollar breaks down this way: 10 percent for parks and recreation, 20 percent for public works, 20 percent for general government and 50 percent for public safety.

Funds that would be used to subsidize the city pool would be allocated in next year's budget to removing the pool, which has been permanently closed.

In 2019, Hanson said the city council can decide how to use the city pool funds that are about $75,000, Hanson said.

City staff changes

A city part-time building inspector was turned into a full-time building inspector, a decision made earlier this year.

A new administrative passion is earmarked for $70,000 as part of a mid-year start in the 2018 city budget, Hanson said that will take care of several unmet staffing needs.

Since the council has not finalized the staff position, it is not made public year as to what department the potential $70,000 position will be added or if it will be added at all, according to Farmington City Administrator David McKnight.

Fifty percent of the city's budget funds public safety. The city projects $6,364,082 will provide full-time and around-the-clock police and fire protection, along with staffing and police and fire equipment.

Expanded tax base

In 2018, the city of Farmington will realize the benefit of $19.1 million in new construction market value from 2016.

"These properties were completed in 2016, first accessed in 2017 and will be included in their full value in the 2018 property tax rolls," Hanson said. "This translates to an expanded tax base in 2018 and an additional $129,017 in estimated local property tax revenue, and this helps to reduce the impact of those property tax increases because there are more properties to spread the levy across."

Hanson told the council it is encouraging to be proactive instead of reactive in regard to financial planning.

"It isn't easy but over the past several years you have witnessed the benefits of long-term, financial planning," she said.

Hanson is retiring from city hall this month after a five-year tenure where the city earned many awards, including an excellence in financial reporting honor from the Governors Finance Officer Association in 2015.

As a Farmington resident and community member, Hanson said it has been her pleasure to work for the city she calls home. Hanson retires Sept. 22.

"It has been fabulous and I feel very blessed to have been able to work and trying to make a difference in the community in which I love; it has been a great group of people to work with," Hanson said.