2018.09.06 CC Minutes - Midyear Budget Review

Home

ra CITY OF Minutes HUGO CITY COUNCIL MEETING MIDYEAR BUDGET WORKSHOP EST.1906 HUGO CITY HALL wwwdhugonn.us00 14669 Fitzgerald Avenue North•Hugo,MN 55038 TUESDAY, SEPTEMBER 6, 2018—3 P.M. Mayor Weidt called the meeting to order at 3:00 p.m. PRESENT: Haas, Klein, Miron, Petryk, Weidt ABSENT: None STAFF PRESENT: City Administrator Bryan Bear, Finance Director Ron Otkin, Fire Chief Kevin Colvard, Deputy Chief Jim Compton Jr., Assist Chief David Jensen, City Clerk Michele Lindau Ron reviewed the 2018 revenues and expenses and said he estimated a General Fund surplus of $491,979. He suggested$218,476 of it be transferred to the Building Maintenance Fund. Ron reviewed the budget technique of conservatively estimating revenues and the practice of contingency budgeting for expenditures. He explained that this usually leads to a budget surplus, and he recommended the City continue to use this technique. He talked about the increase in the taxable market value to 6.5%, resulting in an increase in the tax capacity of$1,103,924 for pay 2019. Ron suggested Council adopt a resolution removing the last remaining parcel in the TIF District, Northern Pallet Company, which would add $86,497 to the tax capacity, resulting in a 7.13% increase. He reviewed the components of the 2019 proposed tax levy and explained the Debt Service Levy drops considerably in 2020, and the money can be then be levied for street projects. He talked about the Capital Improvement Fund and the Equipment Fund, with $1,000,000 being applied towards the purchase of an aerial truck for the Fire Department. The Storm Water Levy and the Park Improvement Levy would remain the same. There was no change in the employees deductibles for health insurance; however, premiums increased by $56,504 due to employee age and the cost of health care. He reviewed what was in the 2019 General Fund Budget, which included $200,000 earmarked for flat tax rate stabilization. With fiscal disparities approaching 10 percent of the total levy, the tax impact will result in a$37.63 increase for a median value home. Ron concluded by saying the budget is balanced with no transfers in, and the proposed tax levy keeps the urban tax rate the same. He recommended Council direct staff to prepare a preliminary tax levy resolution for the September 17, 2018, in the amount of$7,083,393. The Truth in Taxation hearing is scheduled for December 3, 2018. Discussion on Aerial Truck The Council discussed the purchase of an aerial truck for the Fire Department. Comments were made regarding the staging issue and the number of pumper trucks available, and it made sense to replace the department's aging pumper truck with an aerial truck. Safety was also a critical concern because climbing buildings the way they are constructed today was not safe. Cost was the biggest issue, and the Council generally agreed that it made sense to purchase a used vehicle, but it needed to be a good vehicle. The Council talked about the need to form a committee, and City Administrator Bryan Bear stated he will come back with a recommendation to do so.