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Hugo City Council Meeting Minutes for December 4, 2017 <br />Page 3 of 5 <br />Approve Pay Request No.1 to Peterson Companies for the Waters Edge Stormwater Reuse <br />Proiect <br />Peterson Companies, Inc., had submitted Pay Request No. 1 for work done on the Waters Edge <br />Stormwater Reuse Project. City Engineer Mark Erichson and Senior Engineering Technician <br />Steve Duff had reviewed the Pay request and found it satisfactory for work done to date. <br />Adoption of the Consent Agenda approved the Pay Request to Peterson Companies in the <br />amount of $313,110. <br />Public Hearing on City Budget and Tax Lew <br />State statutes requires the City Council to hold a public hearing on the proposed City budget and <br />tax levy for the 2018 fiscal year. Finance Director Ron Otkin explained that the date for this <br />public hearing was chosen in September, and the date was on the notices sent out by Washington <br />County.` <br />Otkin presented a PowerPoint covering the 2018 budget and tax levy. He provided information <br />on Local Government Aid, which is distributed based on factors set by the legislature. Hugo is <br />one of 89 cities that receive no LGA due to the tax rate being too low compared to the statewide <br />average. Though Hugo received no LGA, its tax rate is still on the low end of the range. He <br />explained that market values increased in 2017, with the median home increasing 11.2%. Ron <br />explained the median market value of a home in Hugo is $229,500, and the average Minnesota <br />tax on a homestead of that value is $951.01. The tax on the same home in Hugo would be <br />$774.16, 18.6% lower than the average. He explained that the Council has operated on a flat tax <br />rate, and by keeping the rate the same at 36.294%, he proposed a tax levy of $6,589,302. This <br />rate is at the low end for cities in Washington County. Ron reviewed the items that made up the <br />2018 budget and explained contingency budgeting practices, which assure a balanced budget or <br />possible surplus, and he recommended Council continuing using it. He explained how a home in <br />Hugo can be taxed at 13 different tax rates, depending on where it is located. He talked about the <br />homestead credit refund, special property tax refund, and the senior citizen property tax deferral <br />program. Otkin concluded by saying the budget satisfies the spending and funding priorities <br />established by the City Council with the urban tax rate remaining the same. <br />Mayor Weidt opened the public hearing. <br />Diane and Dan Kirchoffner, 4395 Empress Way North, Unit 2, questioned the increase in their <br />taxes. It was explained to them the increase in the value of their home would cause their taxes to <br />increase as well, and if they did not agree with that value it could be disputed at the Board of <br />Appeals and Equalization meeting in April. In addition, City Assessor Dan Raboin can be <br />contacted to discuss home values. There was also discussion on the state rebate programs <br />available. <br />There was discussion on the Local Board of Appeals and Equalization meeting held every April <br />and the importance of attending if it was believed their market value was not realistic. <br />Washington County sends out notices in February/March that states the home value for <br />following year, and the date of the Local Board of Appeals and Equalization meeting is on that <br />notice. <br />