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• <br />• <br />1 <br />2 <br />3 <br />4 <br />5 <br />6 <br />7 <br />8 <br />9 <br />10 <br />11 <br />12 <br />13 <br />14 <br />15 <br />16 <br />17 <br />18 <br />19 <br />20 <br />21 <br />22 <br />23 <br />24 <br />25 <br />26 <br />27 <br />28 <br />29 <br />30 <br />31 <br />32 <br />33 <br />34 <br />35 <br />36 <br />37 <br />38 <br />39 <br />40 <br />41 <br />42 <br />43 <br />44 <br />45 <br />CITY COUNCIL BUDGET WORK SESSION August 22, 2011 <br />DRAFT <br />DATE <br />TIME STARTED <br />TIME ENDED <br />MEMBERS PRESENT <br />MEMBERS ABSENT <br />CITY OF LINO LAKES <br />MINUTES <br />: August 22, 2011 <br />. 7:05 p.m. <br />. 8:50 p.m. <br />: Councilmember Gallup, O'Donnell, <br />Rafferty, Roeser and Mayor Reinert <br />: None <br />Staff members present: City Administrator Jeff Karison; Finance Director Al Rolek; <br />Public Services Director Rick DeGardner; Public Safety Director John Swenson; <br />Community Development Director Mike Grochala; Director of Administration Dan <br />Tesch; City Clerk Julie Bartell <br />Explanation of Revenues — In response to the council's request, Finance Director Rolek <br />reviewed the revenues section of the 2012 budget book. Basically a city's tax levy fills <br />the gap after the city collects revenue. He explained the tax rate, the tax levy and fiscal <br />disparities. He explained that the tax rate is a formula that comes from the tax levy and <br />also the rate is used to compare with other cities (council requested that information). <br />The mayor noted that the tax rate ultimately impacts the amount paid by property owners; <br />it has a real effect on payers and that needs to be acknowledged. A council member <br />remarked that it may make more sense to think in terms of charging for the cost of <br />services; the Finance Director explained that the cost of services is presented in the form <br />of the city budget. A council member noted concern that he experienced a decrease in the <br />value of his home last year but yet his taxes went up; that doesn't make any sense. A <br />member noted that the cost of services didn't go down, giving the example that it costs <br />the same to plow the snow in front of a $90,000 home as it does a $100,000 home. It was <br />acknowledged that the city has no control over other levying such as by the school district <br />and county. There was discussion about fines as revenue as well as forfeiture revenue. <br />Homestead Exclusion Program — Finance Director Rolek distributed written <br />information from a recent Webinar sponsored by the League of Minnesota Cities (LMC). <br />He reviewed the information on the conversion of the State's Market Value Homestead <br />Credit (MVHC) Program to a new exclusion program. The program will exclude a <br />portion of the property value from taxation rather than giving a credit as in the past. The <br />result to the city is that it will lower values and thus increase the tax rate. It will have an <br />impact on the tax rate in 2012 and represents an additional $220,000 in the budget and <br />would require that amount to mitigate. <br />The council then discussed the updated budget gap information that was provided. The <br />ECFE lease of a portion of the city facility remains uncertain and staff is assuming a <br />$60,000 levy reduction as a worst case scenario. Administrator Karlson suggested that <br />renegotiating the lease is a possibility also; he will inform the council as soon as <br />P27 <br />