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HomeMy WebLinkAbout12/01/1993 Council Minutes1 1 1 TRUTH IN TAXATION PUBLIC HEARING CITY OF LINO LAKES COUNCIL MINUTES DECEMBER 1, 1993 DATE TIME STARTED •• TIME ENDED. MEMBERS'PRESENT: MEMBERS: ABSENT.: December 1,;•1993 6:30 PM. 7.:18 PM. Reinert;, Neal, Elliott, Kuether Bergeson Staff members present: City Accountant, Paula Schloer; Finance Director, Mary Vaske; City Administrator, Randy Schumacher and Clerk -Treasurer Marilyn Anderson. Mayor Reinert explained that this is a public hearing required by the State of Minnesota to allow the public to give input into the 1994 Lino Lakes Operating Budget and 1993 levy collectable with the 1994 property taxes. He noted that a parcel specific property tax form had been mailed by Anoka County to all property owners providing tax information for each parcel based on the preliminary 1994 Operating Budget and preliminary 1993 levy collectable with the 1994 property taxes. During this public hearing, only the City portion of the property taxes and 1994 Operating Budget will be discussed. Information regarding the school district or county levy and/or taxes will be given during the public hearings for those different entities. Mayor Reinert further explained that the City Administrator will be giving a presentation of the 1994 Operating Budget and the 1993 levy collectable with the 1994 property taxes. Following that presentation, questions and comments will be received from the audience. Mayor Reinert noted that the City Council will not take final action on either the 1994 Operating Budget or the 1993 levy collectable with the 1994 property -taxes at this time but will probably adopt both items at the December 13, 1993 regular Council meeting. Mr. Schumacher used the overhead projector to give an introduction to the Truth In Taxation law and to illustrate the 1994 Operating Budget and the 1993 levy collectable in 1994. He began by giving a brief history of why this public hearing is necessary. He then explained that the City Council adopted a PAGE 1 3? ' 32k TRUTH IN TAXATION PUBLIC HEARING DECEMBER 1, 1993 preliminary 1994 Operating Budget and a preliminary 1993 tax levy collectable in 1994 in August, 1993. These preliminary figures were the best guesses that could be made at that time and were used by Anoka County to prepare the parcel specific property tax information that was mailed to each property owner. The property tax statement showed the impact of the preliminary figures on the property taxes. Since that time the City Council has been refining the budget and has reduced the preliminary levy by $80,000.00. Mr. Schumacher explained that the recommended levy is $1,955,862.00 which is $179,493.00 more than the 1993 levy. Other levies to pay City indebtedness bring the total recommended levy to $2,268,950.00. The total increase in the levy is expected to be $194,963.00. Mr. Schumacher outlined examples of where this additional levy will be spent. He noted that the recommended levy will result in no property tax increase for landowners in the City unless the property owner has had an increase in the value of the property. Mr. Schumacher continued his presentation by giving an estimate by percentage of where each property tax dollar is spent. School districts take nearly one half of the tax dollar, the City takes approximately 22.2% and Anoka County takes 24.6% and the balance goes to other taxing entities. Mr. Schumacher presented a six year history of taxes on a $115,000.00 home. He noted that in the past six years, the City portion of the property taxes have increased approximately $10.00 per year. The 1994 City portion of the property taxes is not expected to be any more than in 1993. Mr. Schumacher presented the 1994 Operating Fund Expenditure Budget. He noted that Public Safety (Police and Fire) expenditures take about 33% of the total Expenditure Budget. General Government (Administration, government buildings, etc.) take about 30% of the total Expenditure Budget, Parks/Recreation/Forestry takes about 12%, Public Works takes about 17.5%, Economic Development takes about 3.3%, Solid Waste takes about 1.3% and all other areas take the balance of approximate 2.7%. Mr. Schumacher outlined specific increases in the 1994 Operating Budget Expenditure Fund. The areas of increased expenditures include Engineering/Planning, Government Buildings, Police Department, Public Works, Solid Waste Abatement, Recreation/Parks, and Economic Development. It was noted that in some areas such as Engineering/Planning, the increase in spending will be offset by additional revenues generated by the added PAGE 2 1 1 1 1 1 1 TRUTH IN TAXATION PUBLIC HEARING DECEMBER 1, 1993 personnel. Other areas show an increase in spending because the City is growing in population which require added services such as police protection and street maintenance. In the area of Economic Development, the City is planning to contract with a full time director. Currently the Director is part time. The 1994 Operating Fund Revenue Budget was outlined by Mr. Schumacher. He noted that 58.3% of the revenues needed to operate the City come from taxes. Other sources of revenues include intergovernmental revenues (State Aid), licenses and permits, fines and forfeits, investments and other miscellaneous charges for services. Mr. Schumacher noted that recently the Governor and many other state officials are saying that the State revenue forecast is very good and there is a possibility of returning some of the revenues to the tax payers. However, this bright forecast does not include the "pot" containing state aid funds for municipalities and school districts. There is a possibility the state aid for municipalities could be reduced. If this happens, Lino Lakes would be forced to take money from the Reserve Fund to balance the 1994 Operating Budget. Mr. Schumacher explained that a new requirement of "Truth in Taxation" requires that each municipality list separately all new proposed personnel and employee services. He noted that approximately 57.01% of the 1994 Operating Budget is planned for personnel services. The metropolitan area average is 64%. The City Council did not have any questions for Mr. Schumacher to answer. Mayor Reinert opened the public hearing at 7:00 P.M. He asked all persons wishing to speak to come forward to the podium, give their name and address and state their question. Mike Wells, 7200 Snow Owl Lane asked what makes up the bulk of the $1,955,862.00 recommended 1994 levy? Mr. Schumacher explained this is the General Fund levy. This makes up the. bulk of the operating funding. He referred to the Summary on Exhibit 7 which details where the revenues are spent. Mr. Wells said that nothing adds up to $1,955,862.00. Ms. Vaske explained that $3,352,449.00 is needed to operate the City for 1994.. Staff has determined the dollars that can be generated by service charges, fines, license and permits, State Aid and other sources (see Exhibit 8) and the difference ($1,955,862.00) is the amount that the City must levy on the property taxes. She also explained that the City must prepare a balanced budget whereexpenditures equal revenues. Ms. Vaske explained that it was also determined that a levy $1,955,862.00 would not increase taxes. PAGE 3 3�. 4.4 33U TRUTH IN TAXATION PUBLIC HEARING DECEMBER 1, 1993 Mayor Reinert again explained that unless there was a change on the property that would increase the value of the property, the proposed levy for 1994 will not increase the property taxes for any property owner. Mayor Reinert asked if there were any other questions. There were none. Mr. Schumacher asked if anyone was present who resides in the White Bear School District. He noted that because of a school bond referendum, property taxes on property in that school district will increase. Mayor Reinert noted that everyone hates taxes. However, if a city of similar size in the north metropolitan area is compared to Lino Lakes, the cost of services for Lino Lakes is lower than the average of those cities. He noted that taxes in Lino Lakes are high, however, the City Council is seeking a better balance of residential taxes and commercial taxes. Mayor Reinert explained that at one time, Lino Lakes was rated number three in the entire state. That meant that only two other cities had property taxes higher than Lino Lakes. Now Lino Lakes is rate 45th in the state. Mayor Reinert also emphasized that the City Council is attempting to diversify the tax base by increasing the commercial and industrial tax base. He explained several projects under construction and some that will be within the next year that will greatly affect the tax base. Mayor Reinert explained that most homes do not carry their weight in taxes. That means that not enough tax revenue is generated from residential property to pay the high cost of education, public safety and other services required by that home. The only way that the tax burden can be lessened for a home owner is to increase the industrial and commercial tax base. Mayor Reinert noted that the Economic Development Coordinator has been very busy introducing Lino Lakes to potential businesses. Three new businesses have already located or will be locating on the west side of Lino Lakes and one new business is in the construction process on the east side of the City. Mayor Reinert said that the City Council will continue to work in this area to try and lessen the tax burden for home owners. There were no other comments from the audience. Mr. Schumacher explained that the City Council will adopt the 1994 Operating Budget and 1991 levy collectable in 1994 at the December 13, 1993 regular City Council meeting. He noted that additional questions regarding the proposed 1994 Operating Budget or the proposed levy can be raised at that time. PAGE 4 1 1 1 1 1 TRUTH IN TAXATION PUBLIC HEARING DECEMBER 1, 1993 Council Member Elliott moved to close the public hearing at 7:18 P.M. Council Member Bergeson seconded the motion. Motion carried unanimously. These minutes were considered, corrected and approved at a regular City Council meeting held on January 10, 1994. 7-` 1 LL Marilyn/ G. Anderson, Vernon F. Reinert, Clerk -Treasurer Mayor PAGE 5 331