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SHOREVIEW CITY COUNCIL - SEPTEMBER 2, 1997 Mayor Martin asked if the City is protected from state aid variables with this low rate of increase. Ms. Haapala stated that Che levy increase is at its limit and cannot be increased unless the Cour�cil plans to issue bonds or have a referendum. There is no way to predict whether the state will have a shortfall or surplus next year. Mr. Schwerm added that the City is in a strong financial position with an adequate general fund balanee in accordance with Council policy to maintain a certain balance for cash flow purposes. That balance is some protection from unexpected changes at the state level. He noted that one of the considerations of Moody's bond rating for the City is protection from unexpected expenditures or revenue shortfalls. 11 Mayor Martin stated that the Council will be revieWing the budget in detail. This is the first presentation to satisfy the state requirement to set a truth in taxation public hearing. Councilmember Landwehr stated that he is pleased to see the small increase. Costs in general rise 2.5 to 3 percent per year. If there were no increase, it would suggest that services would be cut. This budget assumes there will be no new services next year. An important message to understand is that a large part of the tax situation is beyond the City's control. State levy limits changed eyerything this year. The County is considering a 4 percent increase in the property ta7c levy which is a major portion of the individual's tax bill. The City receives approximately 15 pet�ent. One of the results of the new regulations will be an increase of property taxes on lower valued single family residential propezties. The state has decided that property owners will be paying a larger share of property taaces. Also, Shoreview receives among the lowest amounts of HACA aid per capita of all cities. He is unsure how this can be changed but would suggest letters to state representatives asking for relief. The biggest problem is the economic condition of the state. It is highly unlikely that the state will experience a revenue surplus similar to ttus year. It is reasonable to expect some distress in the state economy, and he hopes the City will have some ability to deal with it. He commended City Manager Schwerm and Finance Director Haapala for their work. Councilmember Huffman noted that the proposed heari.ng date of December 3 is on a Wednesday which is a religious night for many families. He requested the hearing to be moved to Thursday evening. - Councilmember Reiter stated that she would like to see the hearing on a Saturday at 1:00 p.m. to encourage more residents to attend. Rarely are there more than a few people present. However, as Saturday presented scheduling conflicts, the consensus of the Council was to change the heazing to Thursday,'December 4, 1997. MOTION: by Councilmember Huffman, seconded by Councilmember Landwehr to set a public hearing for 7:00 p.m. on Thursday, December 4, 1997, and a continuation hearing for 7:00 p.m. on Monday, December i5, 1997, to discuss the 1998 city budget and tax levy.