For the first time in five years, Ramsey officials have reduced the city tax levy, which means owners of an average-priced home will see the city portion of their property tax bills drop by at least $22 next year.
The City Council has approved a general fund levy reduction of $933,400, or 9.8 percent less than last year's levy of $9.5 million.
The cut was made despite dropping home values, said City Administrator Kurt Ulrich. New property tax valuations received this month from Anoka County show the average home value in Ramsey dropped 6 percent from $212,600 to $199,900.
"This is the first year the property value decrease hit hard," Ulrich said. "We are trying to work within our means. We had to cut costs or the levy rate would go through the roof. The council is cognizant of keeping the rate down."
Ramsey's tax-base value had steadily increased for about 15 years as the community grew, he said.
Seven jobs have been cut since peak city employment of nearly 85 full-time jobs in 2007, Ulrich said. The cuts include a building inspector and a secretary being laid off next month. Two other building inspectors were laid off early this year, he said. That leaves one building inspector, a building code compliance official and a permit technician.
A vacant parks maintenance position also has not been filled. Seasonal help is hired as needed, although the city is not mowing grass as often along trails or in less used areas, Ulrich said.
Mayor Bob Ramsey said the building inspectors were cut because of a sharp drop in building permit applications. Ramsey said he didn't think the cuts would reduce the level of city services.
Ramsey noted that the city will save about $30,000 on its newsletter by contracting with businesses to print and mail it and solicit advertising to cover the costs. Finance officer Diana Lund said the newsletter is expected to make a small profit.
Covering the reduction
Lund said the $933,000 levy reduction was achieved by using reserve or unallocated funds and instituting other savings to reduce the amount levied for city expenses. For example:
• $305,000 in tax increment money was used to pay for street overlays in tax increment development districts.
• $230,000 set aside in the general fund was used to pay debt service on City Hall and a property bought for a future public works building.
• $225,000 from the equipment fund was used to pay for three police cars, two snow-plow pickup trucks and other capital needs.
• Instead of hiring outside firms, the city saved more than $100,000 by having its staff do engineering work and inspection of projects such as installing a water main in Alpine Park.
Lund said the levy reduction reduced the city's share of 2010 property taxes by $33 to $802 (before deducting the homestead credit) on an average valued home of $199,900.
However, the city's Housing and Redevelopment Authority (HRA) increased its 2010 levy by almost $100,000 to $410,000. That will increase taxes by $11 and lower the net tax reduction from $33 to $22 on the average-priced home, Lund said.
The HRA owns 148.5 undeveloped acres of the Town Center that the city bought from the banks that foreclosed on the development. The HRA will use some of the increased levy for consultants to create plans to market the property, said John Dehen, a council member who chairs the HRA board.
The City Council, sitting as the HRA, voted 5 -2 to approve the levy last week, with Mayor Ramsey and member Dave Elvig opposed.
Jim Adams • 612-673-7658