Medina Finance Director Erin Barnhart is not expecting any overall shortfall in the city’s 2021 General Fund budget – despite curve balls the COVID-19 pandemic has thrown at the local economy.
Barnhart brought this news to a Sept. 1 budget open house and the regular City Council meeting that followed. Both meetings took place in a virtual setting, due to state restrictions on the size of public gatherings.
Barnhart described the various parts of the proposed 2021 city property tax levy at the two meetings. At the council meeting, City Councilors approved a total preliminary city property tax levy of $4,638,145 and a preliminary General Fund Budget of $5,113,667 for 2021.
Here are highlights of Medina’s preliminary city property tax levy and General Fund Budget for next year.
GOAL IS TO MAINTAIN FLAT BUDGET
“In response to the economic uncertainties brought on by COVID-19, each department, along with consultants, has been asked to try and maintain a flat budget for 2021,” Barnhart said. She expected increases in costs for property/liability insurance, health insurance, new police mandates and Hennepin County Technology Service (assessor software).
PROPERTY TAXES: WHAT THEY DO
City property taxes for 2021 are based upon assessed market values set in spring of this year. Medina property owners had the chance to protest their proposed assessed market values this past spring at the local Board of Appeals and Adjustments.
Local property taxes pay for 80% of Medina’s General Fund Budget, as well as maintenance and replacement of city parks and trails, purchases of capital equipment and annual installments for paying off the city’s debt. Medina does not receive Local Government Aid, but it does receive a few other sources of state aid. An example is Minnesota State Highway Aid.
2021 BUDGET, TAX LEVY
State law requires Medina to certify its preliminary General Fund Budget and property tax levy for 2021 to Hennepin County by the end of September and its final General Fund budget and property tax levy to the county by the end of December. The final figures can be equal to or lower than the preliminary figures, but not higher.
In November, Medina property owners will receive from the county an estimate of their 2021 property tax bills for individual properties, based upon preliminary certified levies from the city, county, school districts, watershed districts and other local tax levying jurisdictions.
Medina is divided into four school districts, which get somewhere between 25 and 38% of each tax dollar paid by property owners. Hennepin County’s share is somewhere between 38 and 44%, depending upon the school district and watershed district in which a property owner lives. Medina’s share is between 21 and 24% depending upon the school district in which a property owner lives.
BUDGET, TAX LEVY FIGURES
The Medina City Council certified a 2021 city preliminary General Fund budget of $5,113,667, up by 6.4% from the $4,736,401 General Fund budget for 2020 (an increase of $306,544).
Also, the council certified a city property tax levy of $4,638,145, up by 5.6% from the $4,392,771 total levy for 2020 (increase of $245,374). The city property tax levy will pay for General Fund city operating expenses, installments on the city’s debt, the municipal park and trails maintenance and replacement fund and the capital equipment fund.
Police and emergency management will account for the largest share of General Fund expenditures, 36.8%. Other major expense items are general administration (17.9 %), public works (15%), fire service (8%), building inspection (6.5%), parks and recreation (4.5%), planning and zoning (4%) and facilities (2.7%).
TAX IMPACT ON PROPERTY OWNERS
Barnhart estimated that the market value of the average Medina home increased by 3% during the past year. The owner of a $700,000 home with a 3% market value increase would have an estimated 2021 city property tax bill of $1,746 (a 3.5% increase over his or her $1,687 city property tax bill).