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December 2002 1 YOUR CITY HUGOREPORT+-r1 r...gy .�"• 33" .y"` ..;s3'.n "SS�'° - i HUGO CITY HALL, 14669 FITZGERALD AVENUE NORTH HUGO, MN 55038 (651) 762-6300 CITY BUDGET UPDATE HUGO PUBLIC WORKS DECREASED HOUSING ACTIVITY AND POTENTIAL LOSS OF DEPARTMENT STATE AID VYILL EFFECT THE CITY BUDGET � GROWING For the second consecutive year,building permit revenues in the City of Hugo have been flat or declining. With the State of Minnesota facing a tremendous budget Rapid growth in the City of Hugo deficit, the City does not anticipate receiving any state aid next year. Low interest and a need to provide road mainte- rates will cut investment earnings in half. As a result, the City must rely heavily nance services formerly performed by on property taxes to balance the budget. Property taxes account for approximate- ly 82%of general fund revenues, up from 80%the previous year and 52%in 2001. '�, Washington County have resulted in the tremendous growth of the City's The total property tax levy proposed for 2003 is $2,406,690, which is $502,273 Public Works department over the higher than the previous year. Of this increase, $242,481 is needed to pay the past three years. "When I started principal and interest on bonds. The remaining $259,792 of the increase is need- with the City in 1999, we had one ed for general operating purposes, including the purchase of snow plowing equip- part-time employee besides myself," ment. Although the dollar amount of taxes has increased,the tax rate has increased explains Public Works Director Chris only 5%.This is the first time the City has increased the tax rate in the past seven Petree. "As far as equipment, we had years. one pick-up truck and a few hand tools. We didn't even have a push Total general fund expenditures are expected to increase 13.5%, with the largest mower." increases occurring in the public works and public safety departments. Hugo's Public Works department Washington County has been phasing out the road maintenance services it pro- I now has four full-time and two sea- vides to the City. Two additional staffing positions and major equipment pur- chases are necessary to maintain adequate levels of snow removal and street main- '� sonal summer employees and expects tenance services. The budget contains an appropriation of $100,000 to buy an to hire two more full-time employees additional snow plow truck for the 2003-2004 winter season. by the summer of 2003. Their list of equipment includes two large single- In the area of public safety, the fire department budget has increased 29% to pro- axle snow plowing trucks, a motor vide training and safety gear to the volunteers. The City is also taking an aggres- grader for maintaining the nearly 33 sive approach to replace antiquated trucks and equipment. Law enforcement miles of gravel roads in Hugo, five expenses will also increase as federal COPS grant funding expires. Another factor small trucks, a skid steer loader, a driving up the City's budget is a 30% increase in the outlay to retire the firefight- large air compressor, a large ers pension deficit resulting from a weak stock market. mower/snow blower, and a trailer mounted 150 Kw In looking forward, City officials anticipate a continued strong reliance on proper- GROWING ty taxes in 2004, unless future housing construction projects are developed. Continued on Page 2