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HomeMy WebLinkAboutCC TRUTH IN TAXATION MINUTES 12161998 Meeting Sheet IIIIII VIII VIII VIII VIII VIII IIII IIII ioosss Box: 19 Folder: CC MINUTES AND AGENDAS 1998 Document: CC MINUTES 12161998 1 CITY OF ST. ANTHONY TRUTH IN TAXATION HEARING 3 DECEMBER 16; 1998 4 I. CALL TO ORDER. 5 The meeting was called to order at 7:00 P.M. followed by the Pledge of Allegiance led by 6 Mayor Ranallo. 7 H. ROLL CALL. 8 Councilmembers present: Ranallo,Marks, Faust, Cavanaugh, and Thuesen. 9 Councilmembers absent: None. 10 Also present: City Manager Mike Mornson. 11 M. APPROVAL OF DECEMBER 7, 1998 TRUTH IN TAXATION PUBLIC HEARING 12 MINUTES. 13 Motion by Marks, second by Faust to approve the December 7, 1998 Truth in Taxation Public 14 Hearing Meeting Minutes as presented. 15 Motion carried unanimously. IV. RESOLUTION 98-082,RE: ADOPTION OF 1999 TAX LEVY AND 1999 CITY 18 BUDGET. . 19 Motion by Marks, second by Faust to adopt Resolution 98-082, Certifying the City of St. 20 Anthony 1999 Tax Levy and Budget in compliance with the Truth in Taxation Act. 21 Cavanaugh asked if anyone was going to speak in.favor of it and explained that he would like to 22 amend it. 23 Motion by Cavanaugh, second by Thuesen,to amend the motion adopt Resolution 98-082, 24 Certifying the City of St. Anthony 1999 Tax Levy and Budget in compliance with the Truth in 25 Taxation Act with a reduction in the General Fund levy from$1,616,147 to $1,566,737, a 26 reduction of$49,410, and amend the General Fund Budget from$3,362,300 to $3,187,300, a 27 reduction of$175,000. 28 Cavanaugh stated the operating budget would be reduced to $5,998,725. 29 Marks inquired regarding the rationale for these reductions. 30 With regard to the proposed reduction of$49,410, Cavanaugh stated that with the entire 31 budgeting process he has not been presented with a justification for the increase and the reduction is a reflection of return of property taxes from a closed TIF District of$55,000. He 462 stated that returning the TIF in the form of an offset would be justified. Cavanaugh noted that 34 since 1994 a budget surplus has been run. He reviewed the budget overruns for each year and 35 stated that in view of those overruns, a reduction of$49,410 is not asking too much. He stated Truth in Taxation Hearing Minutes December 16, 1998 Page 2 1 that reserves are at a maximum level and the City has no debt,but residents have seen a dramatic 2 increase in fees to resolve the flooding problem, and there has been a street.assessment increase. 3 He stated that he believes the City has a means to hold the line and a reduction of$49,410 is a 4 gesture to the community that the Council recognizes and takes advantage of reducing the levy 5 when the opportunity presents itself. 6 Thuesen stated he understands.this reduction is being raised at the last moment but he 7 understands the logic behind Cavanaugh's motion to amend. He stated that he does not advocate 8 reducing reserves since they are important but he believes there are currently adequate reserves. 9 With regard to the debt and TIF money coming back,he asked where it will go if the budget is 10 not reduced. Thuesen stated that the excess of the past years has to be redesignated eventually 11 and the Council either needs to be more exact to set up a fund with the parks or look at reducing 12 the budget. He stated that he believes the properyt tax levy can be reduced without putting the 13 "hurt" on citizens and keeping taxes and the budget more under control. Thuesen stated that this 14 motion makes sense and he supports it. 15 Marks noted that this is a substantial change and this is the last minute to consider such a change. He stated he understands the desire.to save.money for each resident but he also knows.that when 17 it comes to levy limits,the City has found that when they have cut back it has caused a bind in 18 the following years. He stated that he wished this option had been presented sooner to allow 19 more time for thought by the Council and the ability for staff to review the issues and make a 20 recommendation. Marks stated he is not sympathetic to the substitute motion due to those 21 reasons. 22 Cavanaugh stated he asked the Mayor about the budget process and the Council remains in that 23 process. He agreed that it is the day of the vote but that does not exclude the ability to make 24 changes. He stated that he suggested these changes knowing there would be a vote. He noted 25 there never was a "window" to make this change previously so he is taking that opportunity at 26 this time. 27 Faust stated that the Council started the budget process in August and has been discussing these . 28 issues and had ample time to either convince themselves or the public of both sides of the issue. 29 He stated he is concerned because he sees needs that arise and the past practice of good 30 stewardship of these funds has allowed the City to do what was needed. Because of the City's 31 predecessors and process followed,they were able to save the taxpayers money so when 32 problems arose they were able to utilize those funds.. Faust stated that he sees problems on the 33 horizon and does not support the motion to amend. Ranallo stated that Cavanaugh, in his comments, indicated the City has no debt but that is not q35 true since the City has about$3 million debt on the roads alone. He noted these costs were 36 bonded for and payments need to be made each year. With TIF there is a$4 million debt which 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 Truth in Taxation Hearing Minutes December 16, 1998 Page 4 i reducing a little bit they should do so. 2 Marks stated there are more projects going on that need TIF than the City had two decades ago, 3 improvements to parks will continue to cost money,the flood relief program is being partially 4 paid by the State and other agencies but also involves City costs, and there is redevelopment 5 work to be done so he thinks this money will be well used for public purposes in the long run and 6 the City would be better off keeping these funds in the budget. 7 Voting on the motion to amend: Cavanaugh and Thuesen voted aye. Ranallo,Marks,and Faust voted 8 nay. 9 Motion failed. to Voting on the original motion: Ranallo, Marks, and Faust voted aye. Cavanaugh and Thuesen voted 11 nay. Motion carried. 13 V. ADJOURNMENT. 14 Motion by Faust, second by Marks to adjourn the meeting at 7:25 P.M. 15 Motion carried unanimously. 16 Respectfully submitted, 17 Carla Wirth 18 TimeSaver Off'Site Secretarial, Inc.