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ARDEN HILLS CITY COUNCIL September 13, 2010 7 7.A. Adopt 2010 Operating Levy Payable in 2011 and Establish the 2010 Truth -In- Taxation Hearing Date (continued) County Auditor of the meeting date by September 15. It is anticipated the Council will adopt the final 2010 levy payable in 2011, and the 2011 budget on December 13, 2010. Councilmember Grant clarified this was setting the preliminary levy which meant the rate could not increase once it was approved but it could decrease when the final levy is approved. He also clarified the decrease in the City's commercial /industrial areas has increased the burden on residential property. The value of the City's commercial property is declining rapidly which results in less property taxes being collected by that property class. Finance Director Iverson stated this was correct. MOTION: Mayor Harpstead moved and Councilmember Holden seconded a motion to Adopt Resolution 2010 -046, a Resolution Setting the Preliminary Levy Taxes in 2011 in the Amount of $3,088,964. Councilmember McClung stated residents are asking for lower taxes and the City should prioritize their budget and make additional cuts before determining a levy. He stated he would not support anything above a flat levy and he would vote against the motion on the floor. He asked the Council and Staff to take another look at the budget and find additional areas that could be cut. Councilmember Holden stated she does not agree with Councilmember McClung's implying that the Council has not looked at the budget and made cuts. The residents want the City to remain the same and this would include not cutting City services. If the City does not collect enough to cover the costs of City services then the City will need to make a dramatic increase in taxes in the future. This would be similar to what happened with the City's water and sewer services last year. She stated during the work session the Council was in favor of the City providing TIF for Presbyterian Homes for the library. This would be money out of the pockets of the residents yet the $49.00 per year the City is potentially asking for is viewed as a hardship for the residents. She stated she is in favor of the levy. Councilmember McClung stated no one was suggesting the City not recover the costs of City services. He is just asking that the budget remain flat and the City continue to review expenses to make additional cuts. He stated this year is of particular concern for him because residents have been experiencing hard times. Councilmember Grant stated no one wants to see their taxes increase. The City needs to get the commercial office space filled in order to increase the City's tax base. Residents have been tightening their belt and the City has as well. However, the City needs to be careful not to over correct and make more cuts than they should. The tax amount recommended by Staff is too high and is a sizable increase for the residents. He recommended the City make additional cuts and approve a lower levy amount. Councilmember Holmes stated she agrees with the levy being proposed. This is a preliminary levy amount and the City may decide on a lesser amount for the final levy. The City has a couple