Loading...
HomeMy WebLinkAboutCC 12-04-1997 MINUTES CITY OF ARDEN HILLS, MINNESOTA . TRUTH-IN- T AXA TION PUBLIC HEARING - 1998 BUDGET THURSDAY, DECEMBER 4, 1997 7:30 P,M, - ARMY RESERVE CENTER CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof; Mayor Dennis Probst called to order the Truth-In- Taxation Public Hearing at 7:30 p,m, Present: Mayor Dennis Probst; Councilmembers Paul Malone, Beverly ApIikowski and Dale Hicks. Absent: Councilmember Susan Keirn, Also present were: City Administrator, Brian Fritsinger; Parks and Recreation Director, Cindy Walsh; City Accountant, Terrance Post; Community Development Director, Kevin Ringwald; Public Works Superintendent, Duane Staflord; and Recording Secretary, Ruth McLaurin, ADOPT AGENDA . MOTION: Councilmember ApIikowski moved and Councilmember Hicks seconded a motion to adopt the agenda for the December 4, 1997 Truth-In- Taxation Public Hearing - 1998 Budget as presented. The motion carried unanimously (4-0), MAYOR - MEETING OVERVIEW AND PROCEDURES Explanation of the Truth-In- Taxation process and timetable Mayor Probst briefly described the process of the Truth-In-Taxation process and publications that are provided to the public by the State, He pointed out the agenda for the meeting would begin with some overall comments by himself, a summary of the proposed budget by the City Accountant, and then an opportunity would be available for public comments, Mayor Probst noted the intent of the hearing was to clarify any questions residents might have regarding the proposed 1998 Budget for the City of Arden Hills. He noted each homeowner should have received notices in November regarding the amount of property taxes that are proposed for the year 1998, The hearing is the next to the last step for the budgeting process for 1998 which actually began in May with staff and discussions of the budgeting needs. In September, a preliminary budget was adopted. The Truth-In-Taxation hearing is being held tonight and, at the December 15, 1997 meeting, the Council will adopt a final budget for 1998, . Mayor Probst explained if anyone present had concerns regarding market valuations, that they are done by the County Assessor. The County has given directions for the process should anyone want to appeal their property's market valuation, ARDEN HILLS TRUTH-IN- TAXATION - DECEMBER 4, 1997 2 . Mayor Probst explained that City Accountant Terrance Post would present an overview of the proposed taxes, income, and expenditures for the 1998 Budget of the City of Arden Hills. Upon completion of the summary, the City Council would entertain questions or comments from the audience, Review 1997 Accomplishments Mayor Probst noted a few of the accomplishments which have occurred over the past year: a new staff position of Building Inspector was created, the first Town Hall meeting was held; a successful endeavor was held with the Parks and Recreation Department for a Day in the Park; the process was begun to replace non-residential water meters; and attempts made to improve City Hall facilities by retaining an architect. SUMMARY PRESENTATION BY TERRANCE POST. CITY ACCOUNTANT Mr. Post noted there will be a total of 15 slides in his presentation and each member ofthe audience received a copy to follow during the presentation, Making Sense of Property Taxes Mr. Post indicated who determines property taxes. It is a combined effort of the State Legislature, . the Taxing Jurisdictions, and the County Assessor. Mr. Post noted the State Legislature establishes property classes and class rates, determines the level of State aid, and also creates mandates to local governments, The County Assessor determines property market value and assigns a property class, Finally, the Taxing Jurisdiction or the City determines the levy amount based on guidelines. Mr. Post explained, with the usc of a flow chart, the process by which a City property tax is determined, He used an examplc of a median priced home in Arden Hills which is $140,300, where the City taxes would be $372.97 or $31.08 per month, Mr. Post noted a historical review of City market values from 1992 to 1998 for the City of Arden Hills. He pointed out in the early 1990's, the market values on commercial properties decreased but, in payable 1995, slowly started on the upswing and now has increased to approximately $30 million dollars higher than in 1992, But the tax capacity hasn't changed, This has a lot to do with recent actions the State has taken in regard to class rates, Mr. Post noted the comparison of taxable market value changes for homes from 1996 through 1998 in Ramsey County. He indicated for payable 1998, 66% of the homes in Arden Hills will have an increase of between 5% and 10% oftaxable market value. Cost of City Services in Perspective . Mr. Post reviewed what the resident's tax dollar buys in the City of Arden Hills, He noted for every dollar the resident pays, 15 cents will fund the City of Arden Hills' operations, He also noted Ramsey County retains 39% (or 39 cents), S.LS,D, virtually 0%, School District #621 receives 41 % (41 cents) and Miscellaneous is 5% (5 cents), ARDEN HILLS TRUTH-TN-TAXATION - DECEMBER 4. 1997 3 . ML Post went on to show a comparison of neighboring cities and the State Aid dollars they receive, The average for eight of the neighboring cities is $50 per capita total aid, where Arden Hills receives only $10 per capita aid, Mr. Post stated, based on the median example for a $140,300 home, residents would receive City services for $31.08 per month, The services include police protection, administration of the City, street maintenance, park maintenance, fire protection, Capital Funds & Recreation transfer, and protective inspections, He noted residents receive quality services for about the price of monthly cable television service, ML Post noted another comparison of Arden Hills with seven metro area cities with populations from 5,000 to 10,000, He noted Arden Hills, compared to its peers, spends approximately 80% of those in similar population ranges and receives only about 30% of State Aid compared to that of its peers, Discussion of Proposed City Budget ML Post indicated how the proposed 1998 Budget impacts the City taxes, He pointed out the impact of changes in property class rates, noting that residential taxes are increasing and commerciallindustrial taxes are decreasing, . Mr. Post indicated the General Fund revenues are proposed at $2,521,620, of which 72% is property taxes of $1 ,825,710, charges for service 1 %, intergovernmental of] 3%, miscellaneous of 5%, license and pem1its of 8%, and fines and forfeits of 1 %, Mr, Post indicated the proposed General Fund expentitures budget for ]998 is broken down into General Operations of 21 %, Police Protection of 23%, Fire Protection of 12%, Protective Inspections of3%, Street Maintenance of2l%, Parks and Recreation of ]2%, and other Financing uses of 7%, ML Post noted the City is looking at a net increase of only 1.91 % in the City levy for 1998, This is below the levy limit maximum set by the State Department of Revenue. ML Post indicated there are no major changes in scope of services that were provided in previous years. Major proposed capital items include: Construction of City Hall Facility ($1,450,000) Pavement Management Funding ($192,000 in the General Fund) Replacement of Plow Truck No, 10] ($92,000) Trails Expansion - County Road F by CPI ($65,000) He pointed out that funding for the City Hall facility costs are expected to come from the following sources: . Cable TV Fund ($150,000) Advance Refunding Fund ($900,000) Municipal Land & Building Fund ($400,000) ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 4. 1997 4 . Mr. Post noted the final slide in his presentation identified all City operating budgets, He also included in the last page of information a glossary for residents to reference in looking at the information, Mayor Probst stated the City is pleased to note a levy increase of only 1,91 'Yo, and not the maximum levy limit allowed, Mayor Probst also indicated the Council was proud with the track record of their predecessors and the fact that Arden Hills is one of very few cities which will be able to build a City facility without a referendum for an additional levy for funding, PUBLIC COMMENTS Mayor Probst invited the audience to address the Council with any matters of concern relating to the proposed 1998 Budget. Tom Lynch, 2221 Hamline Avenue, inquired as to who is responsible for the maintenance of berms, street lights, etc. on roads which are inherited from the County, He was concerned where the money comes from to maintain these acquired roadways, Mayor Probst noted the short answer is the money comes from the taxpayer. He noted there was an agreement that the County would return the roadways to the City in a condition of a level 90. Municipal State Aid (MSA) funds are used in combination with other funds to repair the . roadways. Roger Aiken, 4360 Hamline Avenue, presented the Secretary with a summary of his questions and concerns, Roger Aiken questioned ifMSA funds are identified separately in the revenues. Mayor Probst indicated all information is tracked and identified in the City records, Councilmember Malone explained for the audience that Municipal State Aid is the money residents pay in gas tax and that money goes into the State, so there is a finite amount available, which is dependent upon how much is received in gas tax, The funds are received by cities which meet a certain criteria for a one-time opportunity and used to help repair roadways to a level referred to as 90 or an "acceptable" level. In answer to the question, "Will the funds be able to support the cost of maintenance of the roads forever?", the answer would be, "No," The responsibilities will eventually change and, in the future, the cost will come back to the full responsibility of the City, Council member Aplikowski inquired of staff about some of the property turned back by the State and County. Mr. Brian Fritsinger, City Administrator, noted the City has looked at all the areas and has turned to the residents to maintain the berms and grass areas along the roadways, The City is taking inventory of those larger grass areas between the roadways and, as the process moves . forward and more property is turned back to the City, the City is looking at funding for more equipment to support the maintenance of the those larger areas. Lois Rem, 1670 GIenview Court, inquired if the Gateway project would have an effect on Tax Increment Financing (TIF) , ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 4, 1997 5 . Mayor Probst noted it should have no short-term effect. Longer term, there would be a positive effect because when the bonds are paid, the full tax collections percent will go to the School District and County, Roger Aiken, 4360 Hamline Avenue, inquired as to what the incremental amount would be, ML Post pointed out that numbcr is speculative at this time, because it would be dependent upon many factors such as the market value of the property, the tax capacity, etc. The projections are currently $500,000, but that would be shared by all the jurisdictions, 15% of which would be Arden Hills. ML Fritsinger noted when it was decided to use TIF, the City projections were based on a class rate of3,5%, so it was designed to minimize the risk to the City, Mr. Aiken expressed concern regarding the use ofTIF, Mr. Aiken noted perhaps there could be a return on investment for current residents, rather than to wait "down the road" when the Council and residents have changed, Mr, Aiken complimented the Staff and Council for all their hard work. He stated he did want to raise concern about the expense for the Gateway development. He wanted to know ifthe residents would see a return for this investment. . Mayor Probst indicated he was unsure ofML Aiken's questioning, He noted the fundamental logic was, once public improvements were in, it would set up the City for development of the remaining land so projects that come on board would have reduced additional costs for streets, etL to the City, ML Aiken continued to express concern regarding the annual increase of City property levies, when the City didn't seem to need it, and perhaps should have given the citizens a break. Although he did note that if no increase was given now, residents would complain in the following years when an increase was necessary, Mayor Probst stated he didn't believe the City would consider rebates as the answer. He noted the City has received the benefit of previous Councils who have set aside funds so the City is in the position to build facilities without additional levies or bond issues. Mayor Probst also noted as thc tax capacity is increased, everyone's taxes should start to come down. Mr. Aiken inquired as to street maintenance, how much is the actual increase and how much is just different allocations. Mr. Post pointed out from the operation standpoint there are no changes, but there are greater capital expenses. ML Aiken inquired if there was a tracking of the Gateway development. He noted again he was wondering if the citizens would see a return on their investment. Mayor Probst noted all funds . are identified in the City records and available for anyone to review, ML Aiken inquired if there was a concrete dollar amount expected on the investment for the Gateway development. Mayor Probst noted there is no such guaranteed amount and the City is doing everything possible to safeguard the City's investment. ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 4, 1997 6 . Mr. Fritsinger noted the size of the bond issuance proposed to be undertaken for the Gateway development and the reimbursement to the City was based on very conservative assumptions, The majority of the cost is covered, The items not identified, such as Stafftime and the acquisition of the Kern Milling site, are shown in the General and other funds. Also, a portion is to be paid by the developer. Mr. Aiken pointed out there is a history of TIF financing where the property is not returned to regular taxing but, rather, it is re-circulated. Mayor Probst noted Arden Hills has always been very conservative and, in its history, this is only the second project where TIP has been used. The Staff has been very rigorous to make sure TIP has been used properly, He explained there are limited funds and once those are repaid, the funds coming in will go to the General Fund or regular taxing revenues made available to all jurisdictions, Councilmember Malone offered a brief explanation of TIP, When there is a portion of land which is declared by a government body as a District available for TIP funds, a developer can request assistance by the City to develop that land. The City then spends the money to develop the land and retains 100% of thc tax revenues until that investment for development is paid back, In order to receive the ability to do this, the City has to pass a test to prove the necessity for the District Also, developers have played city against city to obtain this subsidy, COUNCIL/ADMINISTRATOR COMMENTS . Mayor Probst and the Council thanked all those in attendance. ADJOURN MOTION: Councilmember Malone moved and Councilmember Hicks seconded a motion to i adjourn the meeting at 8:50 p.m, The motion carried unanimously (4-0). I ~ 1/ - f _ Brian fits City Adminis rator .