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HomeMy WebLinkAbout11/30/1998 Council Minutes• TRUTH IN TAXATION HEARING NOVEMBER 30,1998 TRUTH IN TAXATION HEARING MINUTES DATE November 30, 1998 TIME STARTED • 6:02 p.m. TIME ENDED • 6:43 p.m. MEMBERS PRESENT Council Members Bergeson, Dahl, Lyden, Neal, Mayor Sullivan MEMBERS ABSENT None Staff members present: Administration Director, Dan Tesch; Financial Analyst, Daryl Sulander; Accountant, Paula Schloer and Clerk -Treasurer Marilyn Anderson. Mr. Jerry Shannon from Springsted, Inc., bond consultant for the City was also present. Mayor Sullivan welcomed everyone and explained that the purpose of the hearing is to take public comment relative to the proposed 1999 General Fund budget and the proposed 1998 tax levy, collectable in 1999. She explained that this is not the meeting to talk about property values. All public comments should relate to the proposed 1999 budget and tax levy only. Mr. Tesch welcomed everyone to the hearing and introduced Mr. Sulander and Mr. Shannon. He noted that Mr. Sulander will present details of the 1999 budget and levy. He explained that the proposed budget represents a 5% increase over the 1998 budget. There are no proposed program changes in the 1999 budget, however, a Human Resources Tech position is proposed and the Recreation Coordinator position and the Police Records Clerk positions are proposed to become full time positions rather than the current part time positions. Mr. Tesch explained that individual property taxes will be affected by the budgets of all of the taxing jurisdictions in Anoka County, changes in valuation of the property and by recently enacted State Legislation which had the effect of compressing tax classifications. Mary Ann McDougal, 6116 Baldwin Lake Road, from the audience asked if she would be able to speak about the notice she recently received in the mail from Anoka County. Mayor Sullivan explained that all questions pertaining to the budget and levy would be accepted when the public hearing is opened. Mr. Sulander referred to page 5 of the audience handout and explained how the 1999 levy was prepared and how it compared to the 1998 levy. He noted that there is more than a 7% increase in the 1999 General Fund (budget) levy. In addition, the City bonded for payment of the civic complex and for a street referendum that was approved by the voters in November, 1997. The additional bond payments contributed substantially to the proposed increase in the levy. The State Legislature further compressed property tax PAGE 1 TRUTH IN TAXATION HEARING NOVEMBER 30, 1998 classifications and class rates which also had the effect of increasing the city's tax rate. Mr. Sulander noted that the State Legislature felt the high value home owners, apartment owners and commercial property owners were paying more than their fair share of property taxes. To compensate for this disparity, rates on these properties were reduced. The change in the formula resulted in a 1.3% increase in the 1999 Lino Lakes tax rate. Additional bond payments resulted in a 5% increase in the levy and additional budget requests added another 2.1% increase in the levy. Mr. Sulander explained how much of each tax dollar goes to each taxing entity noting that the school districts get approximately 45% of the dollar. He also explained how the Lino Lakes portion of the tax dollar is used in Lino Lakes. Mr. Sulander noted that the City uses Certificates of Indebtedness to purchase specific capital equipment each year. The Certificates are funded internally. Mr. Tesch explained that because Lino Lakes financial position is very good, Moody's Investors has increase the City's bond rating to A3. Mayor Sullivan explained to the audience again that Council is taking comments about the 1999 proposed budget and tax levy tonight and opened the public hearing at 6:22 p.m. She asked that persons with questions, come to the podium and state their names and address. Don Dunn, 6885 Black Duck Drive said it appears that the tax rates are close to being set. He said he was concerned about where Lino Lakes moves forward. He felt the City Council has to change. He noted staff level will not change. Mr. Dunn suggested five (5) things have to change to achieve a constant tax levy: 1. Appoint an Executive of Interest Person. Long term commercial and industrial tax base must be managed. Mr. Dunn suggested that Council Members Dahl and Lyden be appointed to this position. 2. Support Village Civic Center. Mr. Dunn noted that staff had presented a plan for the Village that would pay for itself. He asked Council to show how items fit together and show how it all comes together to pay for itself. 3. Road Improvement Plan. Mr. Dunn explained that there is no money in the 1999 budget for street improvement. He asked the Council to dedicate a portion of the 3.5 million dollar reserve to a street improvement fund. He suggested that the Council start by designating one million dollars to this fund. Mr. Dunn explained that there will always be a need for street improvement funding. Ignoring the situation creates large variances in the tax levy from year to year because each improvement project must be approved by a referendum and the entire cost is then assessed to the entire City. PAGE 2 • • • TRUTH IN TAXATION HEARING NOVEMBER 30, 1998 • 4. School District Impact on Taxes. Mr. Dunn noted that the school districts take more than 50% of each tax dollar. Everyone needs to be actively working with the school districts to reduce their level of need. Mr. Dunn suggested that Council Members Bergeson and Neal be appointed Executives of Interest for this matter. • Mr. Dunn said that he had difficulty analyzing the 1999 budget. He noted that 1997 data was used for comparison and felt that data was too old. He suggested using the actual figures through November, 1998. 5. Remember Basics of Mathematics. Mr. Dunn suggested that a larger tax base would lessen the impact of the tax need on everyone in Lino Lakes. He asked the Council to look real carefully at speeding up growth in the City. He also asked Council to "mitigate" spending. Mary Ann McDougal, 6116 Baldwin Lake Drive said that the information accompanying the notice of this meeting was not clear. She noted that the taxes she will pay the City in 1999 has risen 38%. Mr. Tesch explained that the city portion of the taxes will go up 5.7%. Ms. McDougal explained that according to her statement, her portion of City taxes will go up 38%. Mr. Sulander explained that part of her increase is due to the increase in the value of her property. He also noted that a large portion of her increase is due to the City's bonded debt which will require a large payment in 1999. Ms. McDougal asked if every tax payer in Lino Lakes is receiving a 38% increase in their taxes. Mr. Sulander said no and explained that lower value property owners will see less of an increase than the higher value property owners. Ms. McDougal said that she feels that the City is growing to much and to fast. She felt that the more people who move here the more facilities will be required to support them. She also said that a 5% increase in the City's tax capacity rate is too much. Mr. Tesch told Ms. McDougal that if she had further questions she should speak to Mr. Sulander. Ms. McDougal said that this is typical of government, "they pick your pocket and you do not know why". Tom Farm, 6209 Centerville Road asked when will revenue from the Town Center "show up". It was explained that the Centennial School District will make their first payment in 1999. Mayor Sullivan asked Mr. Shannon when he would expect to see tax benefits from new commercial and industrial projects. Mr. Shannon explained that this depends on how rapid commercial development comes to the Town Center. Typically, it takes about five (5) years before increased tax revenues are received. Something constructed in 1999 will be on the tax rolls in 2000. The first tax receipt from that construction will be received in 2001. PAGE 3 TRUTH IN TAXATION HEARING NOVEMBER 30, 1998 Mr. Farm said that it appears that the largest budget increase is in bonded debt. He suggested that 24% increase compounded is a big "bite". There being no further comments from the audience, Council Member Neal moved to close the public hearing at 6:39 p.m. Council Member Bergeson seconded the motion. Motion carried unanimously. Mayor Sullivan told the audience that the City Council will be discussing the budget at the regular work session scheduled for Wednesday, December 9, 1998. Final approval of the 1999 budget and tax levy is expected on December 14, 1998. Council Member Bergeson asked what the increase in property tax revenue is due to the increase in value of existing properties. He also asked for the increase in property tax revenue due to new residential and commercial development. Council Member Neal noted that there are three (3) schools in Lino Lakes as well as the prison and the Rice Creek Regional Park. These facilities do not pay taxes but require the services of both the Police Department and the Centennial Fire Department. He noted that the City can now tax these entities for those services. Council Member Dahl moved to adjourn at 6:43 p.m. Council Member Neal seconded the motion. Aye. These minutes were considered, corrected and approved at the regular December 21, 1998 Council meeting. (-11/ ((A\ tAW)i Marilyn G. An erson, Clerk -Treasurer PAGE 4 Sul ivan, Mayor •