CC TRUTH IN TAXATION MINUTES 12161998

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Truth in Taxation Hearing Minutes December 16, 1998 Page 3 1. needs to be paid off as well.. Ranallo commented that it would look.good on his resume when he 2 runs for office if he could indicate that he voted against a tax increase. However,when he came 3 onto the Council there were problems with Apache Plaza which was blighted,the old City Hall, 4 the old fire truck which needed to be replaced, a desire for a senior condo, and streets that needed 5 many repairs but there was no money to address those issues and the City had no bond rating. At 6 that time, since there was no reserve or bond rating,the City had to make changes which took 7 three years and the forming of the HRA. Ranallo stated that he had hoped the $50,000 from 8 Hennepin County would be put toward the-shopping center. He explained that since the budget 9 was redesigned to the current process,many projects have been successfully completed. He 10 stated that by setting up the reserve basis the City has been able to save over$1 million in 11 interest which would have to be paid on the bonds. Ranallo explained that these reserves have 12 been used in many places and he remembers Cavanaugh previously asking why the City does not 13 raise taxes to the levy limit because the City should do that. But, now Cavanaugh is saying the 14 budget should be reduced. 15 Ranallo noted that due to the current budget process and reserve,the City had the ability.to hire 16 an engineering.firm and go the Legislature to,get$2 million for the storm water project. He noted that at one time the State was holding the funds that were to go to the cities and wanted to T8 use that money to cover their shortfall but St. Anthony had money in reserves and was able to 19 pay their employee salaries without seeking a loan. The City has also built up a very good bond 20 rating to get the levy limits down. Ranallo stated that for these reasons he cannot support the 21 motion to amend even if it would look good on his resume to say he had voted down a tax raise. 22 Cavanaugh stated that he also amended the general fund budget by$175,000 which would result 23 in budget increase of 5.8%over the budget of 1998. With inflation at almost 0%he believes a 24 5.8% increase is a good increase. He noted the proposed reduction also eliminates the need to 25 use reserve to support the budget of only$90,700. He stated that the proposed increase is totally 26 unacceptable and the Council should not use reserves outside the Operating Budget. He stated_ 27 that he is not making this amendment as looking back at his history of what he had previously 28 said at a meeting but in looking at the facts that are in the.budget now. He stated the City is 29 running surpluses in the budget every year,has$12 million in investments,plus money in 30 reserves, and the tax payer is stepping up to pay increased taxes. He stated he believes a 31 reduction of$50,000 is just a small thank you for being here when we needed you and getting the 32 budget under control is why he was elected and two years ago. Cavanaugh stated that what he 33 said at the podium has no relevance with this discussion. 34 Thuesen stated that comments have been made about the benefit of building the reserves such a 35 improving the bond rating and getting funds from the State Legislature which are all positives but he would never vote yes on something like this if he felt it would harm the City's short-term 0 or long-term ability to do those activities or to lower reserves to a point of jeopardizing the City's 38 bond rating. He stated the Council needs to look at the City's needs and if they can get by with