HomeMy WebLinkAboutCC TRUTH IN TAXATION MINUTES 12061995 Meeting Sheet
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Box: 19
Folder: CC MINUTES AND AGENDAS 1995
Document: CC MINUTES 12061995
I CITY OF ST. ANTHONY
'82 CITY COUNCIL TRUTH IN TAXATION
3 HEARING MEETING MINUTES
4 DECEMBER 6, 1995
5 I. CALL TO ORDER/ROLL CALL.
6 The meeting was called to order at 7:00 P.M.
7 II. ROLL CALL.
8 Councilmembers Present: Ranallo, Enrooth, Wagner, and Fleming.
9 Also Present: City Manager Michael Mornson;Finance Director Roger Larson, Management-
10 Assistant Kim Moore-Sykes, Public Works Director Larry Hamer, Police Chief Richard
11 Engstrom, Fire Chief Richard Johnson, Liquor Operations Manager Don Perry and
12 Councilmember Elect Faust.
13 Councilmembers Absent: Marks.
14 III. OPEN TRUTH IN TAXATION PUBLIC HEARING.
15 Motion by Wagner, second by Enrooth to open the Truth in Taxation Hearing at 7:02 P.M.
Motion carried unanimously.
17 Mayor Ranallo indicated all Department.Heads were present at the meeting to answer any
18 specific questions from residents. He noted a work session had been held on October 3, 1995 to
19 receive input in regard to the budget from residents. Only three residents had attended that
20 meeting. Mayor Ranallo stated the proposed budget for the City of St. Anthony had increased
21 from $2,812,370 in 1995 to $2,923,325 in 1996. This results in a 4.02% increase. 72% of the
22 budget is made up of salaries. He noted salary negotiations had just been completed for Police,
23 Fire and Public Works Departments with a 3% increase. Mayor-Ranallo stated some of the
24 factors affecting the increase in the budget included state mandates for the comprehensive plan
25 update, upgrading of the police data entry clerk, and a decrease in local government aid. Mayor
26 Ranallo stated there would be no increase in sewer or water charges for the year of 1996. He
27 stated the dollar increase in taxes paid for the average $100,000 home in St. Anthony for the year
28 of 1996 would be $362.46.
29 IV. PRESENTATION OF THE 1996 CITY BUDGET AND TAX LEVY BY CITY
30 MANAGER AND FINANCE DIRECTOR.
31 City Manager Mornson outlined the budget calendar for 1996. He re-emphasized the October 3,
32 1995 work session which was held to receive input from residents in regard to the budget. He
33 noted this work session was not required by law but was conducted by the City Council to
14 receive information from residents before the mandated public hearing.
35 Morrison outlined the 1996 budget request justification for each department. He noted the first
36 major expenses in each category were salaries, pensions, and insurance. He explained the Cable
City Council Truth in Taxation Hearing Meeting Minutes
• December 6, 1995
Page 2
1 Franchise category was required to be included in the budget but is self supporting. The City
2 actually has no expense in this category, as they receive a check from the Cable Company for
3 $26,000, spend $17,000 to fund the cable franchise and distribute $9,000 to fund cable
4 expenditures. He noted the major expense in the Finance,Assessing category was the Hennepin
5 County contract for assessing services. He noted the Engineering, Planning/Zoning category had
6 increased due to state mandate that all cities in the metro area utilize consulting/contracting
7 services and $5,000 to redo the comprehensive plan. Mornson explained the Inspection,
8 Building/Plumbing/Heating/Health was similar to the Cable Franchise category in that the
9 building permits, plumbing permits, etc..funded the expenses of this category. The Public Works
10 category included an increase of$1,200 due to state mandated CDL drug and alcohol testing for
11 public works employees.
12 Mornson explained the State Legislature determines resident's property tax by establishing
13 property classes and class rates, determining the level of state aide the City receives, and
14 imposing unfunded mandates to local government. The tax jurisdiction determines resident's
15 taxes by determining the levy and the amount. The County assessor determines resident's taxes
16 by determining market value of homes and assigning a property class.
�7 Mornson explained some of the factors affecting taxes include changes in the tax levy made by
�g the city, county, school and special taxes, changes to the.market value of your property., changes
19 in the market value of the area or a particular type of property. Also legislative changes to class
20 rate, legislative changes to state aide, and new taxes approved by the referendum.
21 Finance Director Larson outlined the major revenues for the City of St. Anthony for 1996. Total
22 revenues for the year 1996 are $2,923,325. They.include 4.5%LGA, 5.6%Liquor, 52.9%
23 certified levy, 11.3% HACA, 14.9% Contracts, and 10.8% other. The composition of the 1996
24 tax base is 12.4% commercial, 12.0% apartments, 73.9%residential, and 1.7% other. The
25 composition of the tax rate is 76.033% school, 38.099% county, 28.055%city, and 6.799%
26 other. The increase in tax rates from 1995 to 1996 is 10.243% school, .645% county, 2.286%
27 city, and .180%other. The increase in the tax rate is due to $96,295 budget increase, $13,595
28 loss of LGA, and $45,478 road levy and a slight increase in total local tax capacity. The increase
29 in 1996 is only $82,596. In comparison,the increase in 1995 was $409,045. Finance Director
30 Larson illustrated based on a$100,000 home with no increase in valuation, city taxes would
31 increase by $29.26. Larson explained the Fiscal Disparities Contribution was up 20%from last
32 year. This contributed to the slight increase in total local tax capacity. Apartment valuations
33 dropped. This decrease also contributed to the slight increase in total local tax capacities.
34 Larson explained in a fully developed community when the valuations of commercial and
35 apartment properties decrease, the burden is shifted to the residential properties.
�6 Mr. Stan Nelson, 3504 Maplewood Drive, stated over the five year period from 1992 to 1996, his
�j taxes have increased at a yearly rate of 10.1%. Even if no increase is assumed for 1996, the
38 yearly increase would be 5.4%. He stated he felt this was still too high. He stated he suspected
39 most people in the City were experiencing similar increases. Mr. Nelson commended the
City Council Truth in Taxation Hearing Meeting Minutes
• December 6, 1995
Page 3
1 Finance Director for his presentation. He suggested the City become pro-active in the mandate
2 issue.
3 Mayor Ranallo noted the City was pro-active. This is the reason they belong to the League of
4 Minnesota Cities and Association of Metropolitan Municipalities. He explained residents needed
5 to contact their legislators in regard to these issues.
6 Mr. Nelson asked if the City made a profit by providing police assistance to Falcon Heights and
7 Lauderdale.
8 Mayor Ranallo indicated the City did. From those funds the City was able to increase their own
9 police protection. The revenues pay for three cars needed to cover the City of St. Anthony each
10 year.
11 Mr. Raymond Olson, 3412 Skycroft Drive, stated his taxes had increased by 17%. His market
12 value had increased from $129,000 in 1995 to $136,000 in 1996. This is an increase of 7%. Mr.
13 Olson stated he had contacted the County in regard to his valuation and they had sent out a
14 young lady. He felt she did not hear a word he said. He questioned why the Mayor/City
�5 Council budget increased by $13,000 from 1994-1995.
16 Finance Director Larson explained line items had been transferred to clarify the cable issue.
17 There was not an increase in expenditures but a redirection of numbers. .
18 Mr. Olson stated his market value had been increased because the assessor thought this was a hot
19 area. His market value was $136,000 but even if his house sold for that amount, how much
20 would go for the salesperson's commission.
21 Mayor Ranallo stated that was not the way the assessor determined the market values. The
22 assessors are receiving a lot of pressure to assess values within 93-100% of the selling prices of
23 homes.
24 Mr. Frank Budnecki, 3124 Wilson Street N.E., stated he lived in a home valued at only $80,000.
25 Last year his market value increased by $5,000 and this year by $4,000. He questioned how this
26 could be.
27 Mayor Ranallo noted this did not relate to the budget. He explained the assessor only comes to
28 your every four years. The other years an average is determined and values are raised according
29 to that average.
4 0 Mr. Budnecki stated his city taxes had increased by 18.8%. He questioned why his were so high
1 and why the rates of increase aren't the same for everyone.
City Council Truth in Taxation Hearing Meeting Minutes
• December 6, 1995
Page 4
1 Finance Director Larson explained the home is assigned a tax capacity. That number is taken
2 times the market value to give the amount of increase. He offered any residents with concern
3 over their valuation a brochure which explained the process for appeal. The first step would be
4 to read the brochure and contact the Hennepin County Appraiser. Then in April attend the Board
5 of Review meeting. He cautioned that if the home was re-appraised, the valuation may be
6 increased.
7 Mayor Ranallo stated no one is happy when taxes increase but the only way to reduce taxes is to
8 reduce services.
9 Mr. Robert Brown, 3304 Wendhurst, stated he has experienced an increase as high as everyone
10 else. He noted he would like to see a chart which illustrated several years tax capacity and
11 changes with further study of the tax capacity broken down into homestead, non-homestead and
12 commercial.
13 Finance Director Larson explained this had been illustrated at the October 3, 1995 work session.
14 Each time the market value decreases, the tax capacity increases.
Mr. Brown stated the increase in market value of the home was not the only reason taxes
06 increased.
17 Mr. Peter Leba, 3316 Edward St.N.E., stated he has lived in St. Anthony for 41 years. He noted
18 the School Board estimated their portion of taxes would raise $50.00 to $150.00 per household if
19 the referendum passed. He questioned why the City couldn't estimate their increase like the
20 School Board.
21 Councilmember Fleming stated she agreed with Mr. Leba but that the City was unable to predict
22 these figures as they did not know how much property valuations would change.
23 Mr. Anthony Kazor, 3008-33rd Avenue N.E., stated he agreed with the City Council that if this
24 many people attend other meetings, there may be some changes made. He indicated he had
25 moved to St. Anthony six months ago and was proud to say he lived here. He noted the
26 commercial portion of the City is too small and that accounts for the increase to residents. He
27 encouraged more business in the City. He commended the City Council for the new business in
28 the American Monarch building.
29 Mayor Ranallo noted fifteen years ago when the Kenzington project was started, residents were
30 not happy with the use of tax increment financing. This is, however, an excellent way to get
31 businesses started. He noted tax increment financing was used with the American Monarch
2 building and the Arbors redevelopment. If these things had been done 20-25 years ago, the City
would be much better off financially in 5 to 10 years.
City Council Truth in Taxation Hearing Meeting Minutes
• December 6, 1995
Page 5
1 Morrison noted the Arbors project will contribute $45,000 in real estate taxes when fully
2 developed.
3 Mr. Stephen Rekuski, 3215 Silver Lake Road, stated he was a painting contractor. He asked if
4 apartment taxation was down so much,why didn't the City better balance the amount of
5 commercial and apartment properties. He noted other communities eliminate old residential
6 areas and replace them with strip malls.
7 Councilmember Enrooth noted the City has tried to do this but the residents react
8 overwhelmingly that they-do not want this.
9 Mayor Ranallo stated the City has tried desperately to get CUB Foods into Apache Mall. At first
10 residents wanted Apache torn down and houses located on that property. It has been a battle to
11 keep that property commercial. Ranallo reported he and City Manager had met with Opus
.12 Company last week and they continue to work with CUB Foods. They are having difficulty
13 attracting other retailers to Apache Mall because of the close proximity to Rosedale Mall.
14 Mr. Rekuski stated his taxes have doubled in the last five years and the City has nothing to
�5 provide except school, fire and police. In this same period his valuation had increased from
6 $119,200 to $154,000. He felt this put too much stress on a person trying to raise a family of
17 five. Mr. Rekuski stated he tries to help the community by coaching football, baseball, and
18 soccer. He feels he is doing everything he can but the City is not pushing hard enough to help
19 the residents in return.
20 Mayor Ranallo asked Mr. Rekuski what he suggested the City do. Mr. Rekuski suggested the
21 City do some housekeeping. He asked why the City searches outside help.
22 Finance Director Larson stated the City doesn't have the staff qualified to provide some services
23 that they are required to provide and they are forced to seek outside contractors.
24 Mayor Ranallo noted the City Council.had looked at each line item in the budget and tried to
25 identify ways to reduce costs. He noted the City is trying to do things to increase the tax base,
26 such as the project on Fordham. At completion of that project, the taxes will increase from
27 $4,000 to $35,000.
28 Morrison noted the State Legislature has reduced state aide every year since 1988. In 1990
29 Apache Plaza's valuation was $14 million. It is now down to $4 million. He noted the Council
30 has delayed the street project one year in an effort to reduce costs.
Mr. Rekuski asked when the City intends to improve the park systems. He noted Central Park
41k improvements have been planned as long as he canxemember. He felt the City needs to give
33 something back to the residents.
City Council Truth in Taxation Hearing Meeting Minutes
iDecember 6, 1995
Page 6
1 Jim Olson, 3213 Hilldale Avenue N.E., stated he has lived in the City for 40 years and has never
2 seen such an increase. He felt it did not appear there is any relief in sight. He noted last night at
3 the School Board meeting, they announced a school tax that will be with the residents for the
4 next 20 years. He felt this was a serious situation. Mr. Olson stated his frustration with
5 unfunded mandates. He reported last night it was suggested that State Legislators be-present at
6 the taxation meetings and face the questions the City Council faces in areas of unfunded
7 mandates.
8 Mayor Ranallo noted that the State Legislators do attend meetings at the City but the residents
9 don't attend those meetings.
10 Mr. Olson suggested the City look at their expense sheet and find ways to save pennies. He
11 suggested only allowing increases as high as the cost of living increase of 2.5%. He stated he felt
12 if the City succeeds in getting CUB Foods into Apache with tax increment financing, it will not
13 help the City at all as CUB will not be on the tax roll.
14 Mayor Ranallo acknowledged CUB would not be on the tax roll for 12 to 14 years. He also
15 noted, however, there are other properties which will be coming onto the tax roll soon and the
�6 City will benefit.
17 Finance Director Larson noted there are some properties scheduled to come on the tax roll in the
18 years 2000 to 2005.
19 Mr. Ralph Johnson, 2504-36th Avenue N.E., recounted his experience with dog control in the
20 City and stated in his opinion, the City did not have any animal control. He objected to the
21 federal government bragging about the fact that the next seven years they will continue to plunge
22 the country into deeper debt at which time they will admit they can't spend money they don't
23 have. He noted how difficult raised valuations can be for unemployed and senior citizens on
24 fixed incomes.
25 Jim Wiehoff, 3508 Coolidge Street N.E., stated he had built his house in 1960 and was proud to
26 live in the Village. He indicated since Mayor Sundland passed away, his taxes have doubled. He
27 stated he feels the Police Department spends too much time writing traffic tickets. He noted he
28 likes police protection but he has had one car stolen and one broken into in front of his house in
29 the last six months. He stated he firmly believed that the people who run the City, should live in
30 the City. Mr. Wiehoff stated in 1990 the budget for police and fire protection was less than $1
31 million. He complimented the Fire Department for not "going wild" with their budget. He felt
32 employees, like Fire Chief Johnson, who lived in the Village have more interest in the residents.
33 He stated the current City Hall could probably withstand another tornado and asked if the new
64 building would be able to. He suggested cutting the fat in the budget and getting rid of it quick.
5 He stated he felt the taxes were ridiculous. He asked if Apache Mall was closing this month.
City Council Truth in Taxation Hearing Meeting Minutes
December 6, 1995
Page 7
1 Mayor Ranallo stated he was not aware of Apache Mall closing. There were a number of
2 businesses located there.
3 Mr. Wiehoff asked if the City had approached other food chains besides Super Valu, such as Hy-
4 Vee.
5 Mayor Ranallo indicated the City has approached all the major food chains and other businesses
6 such as Mills Fleet Farm. K-Mart, and Wa1Mart. He noted the residents had been polled and
7 there was no interest in a Hy-Vee store in Apache Mall.
8 Mr. Wiehoff stated he was mad at the whole thing.
9 Mayor Ranallo noted the tax on a$100,000 home was $362 per year. He stated there are'seven
10 major lawn services licensed in the City of St. Anthony. Residents pay these services an average
11 of$610 per year to care for their lawn and plow their snow. In comparison$362 isn't a bad price
12 to pay for the services delivered by the Police Department, Fire Department and Public Work
13 Department.
4 Mr. Wiehoff asked how many full-time City employees lived in the City of St. Anthony.
15 Finance Director Larson stated it was a small percentage but he would calculate and have that
16 information available for Mr. Wiehoff.
17 Mayor Ranallo noted that would have to be discussed with the City Attorney as that,is private
18 information. He noted his own daughter would love to live in-St. Anthony but cannot afford to
19 because of the cost of houses in the City.
20 Stan Nelson asked if the budget in the City was determined by the "bottom up" or the "top down"
21 method. He suggested giving the employees 0% in salary increase this year.
22 Mayor Ranallo indicated all the other cities were giving 3-6% increases in salaries. He felt the
23 City was doing well by holding the increase to 3%. Mayor Ranallo stated the budget was
24 determined with the "bottom up" method.
25 Mr. Nelson stated in his experience in the commercial area of large companies, the "bottom up"
26 method is no longer being used in companies who are successful. The "top down" method is
27 used and limits are set. He felt the $113,000 increase in the budget could be eliminated without
28 affecting services. He recommended that in a good faith effort to help the people of St. Anthony,
29 the increase be removed from the budget or be taken from the $814,000 set aside in the City's
O0 account.
31 Councilmember Fleming noted that may be possible if all things were equal on the state and
32 federal government level. But they are not.
City Council Truth in Taxation Hearing Meeting Minutes
December 6, 1995
Page 8
1 Mornson noted the state has cut the funds to local government. The City either has to reduce
2 services or increase taxes as they receive less revenue each year.
3 Fire Chief Johnson stated he has been the Chief since 1990. The first year the departments
4 were to cut their budget by 5%. The second year the budgets were to be cut by 5%. Taxes still
5 increased. Even when a stand-in-place budget is followed,taxes go up.
6 Mr. Nelson stated this is his suggestion for short term relief.
7 Mayor Ranallo noted this was not sensible and if done services would have to be cut.
8 Mr. Nelson stated he did not believe that. He stated if the City didn't think it was possible,then
9 they should "kick in" the $113,000 from the excess $814,000.
10 Councilmember Wagner noted the $814,000 was necessary as the City only gets paid twice per
11 year to replace funds.
12 V. CLOSE PUBLIC HEARING.
13 Motion by Enrooth, second by Wagner to close the Truth in Taxation public hearing at 9:23
Is4 P.M.
15 Motion carried unanimously.
16 VI. SET ADOPTION MEETING FOR WEDNESDAY,DECEMBER 20, 1995 AT 7:00 P.M.
17 Motion by Wagner, second by Fleming to continue budget discussions at the Truth in Taxation
18 Adoption Meeting, Wednesday, December 20, 1995 at 7:00 P.M.
19 Motion carried unanimously.
20 VII. OTHER BUSINESS -None.
21 VIII. ADJOURNMENT.
22 Motion by Fleming, second by Enrooth to adjourn the meeting at 9:26 P.M.
23 Motion carried unanimously.
24 Respectfully submitted,
25 Lorri Kopischke
26 TimeSaver Off Site Secretarial
�27
8 Mayor
29 ATTEST:
30 City Clerk