2019.09.16 CC Packet - Laserfiche WebLink

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14669 Fitzgerald Avenue North • Hugo, MN 55038 Minutes HUGO CITY COUNCIL MEETING MIDYEAR BUDGET WORKSHOP HUGO CITY HALL TUESDAY. SEPTEMBER 5.2019 — 7 P.M. Mayor Weidt called the meeting to order at 7:00 p.m. PRESENT: Haas, Klein, Miron, Petryk, Weidt ABSENT: None STAFF PRESENT: City Administrator Bryan Bear, Finance Director Ron Otkin, Finance Coordinator Anna Wobse, Parks Planner Shayla Syverson, City Clerk Michele Lindau Finance Director Ron Otkin began by talking about a recent news article regarding the City of Plymouth that used budget surpluses to cover the cost of a new maintenance facility. He explained this was done by conservatively budgeting revenues and contingency budgeting for expenditures. He stated that Hugo has been using this method for decades, which assures either a balanced budget or a surplus that can be used for capital items. It was his recommendation to continue using this technique. He is estimating a budget surplus of $173,556 and is recommending this be transferred to the building maintenance fund. He proposed using part of these building maintenance funds in 2020 for repairs to the parking lot, sidewalks, and exterior of the building at the fire station. Ron explained that building permit fees are a primary source of revenue. This will be a topic at the next legislative session due to a report from the Housing Affordability Institute claiming cities are overcharging permit fees, driving up the cost of new homes, and that not all cities are filing the required reports. Ron stated that Hugo has complied with reporting requirements since they began in 2002, and that cumulatively over 17 years the revenue from building permits haven't completely covered the cost of providing inspection services. Ron noted that Washington County estimates the City's market value and tax capacity will increase by 10%. To keep a flat tax rate, the proposed levy cannot exceed $7,757,651. Ron presented a proposed 2020 tax levy equaling that amount. He reviewed the City's bonded debt stating the City will be making the final payments on all but one bond issue next February leaving a gross bonded debt of $445,000. The debt service levy will drop to $63,235 in 2020. Ron reviewed the street Capital Improvement Project stating the roadways had been reviewed and the new street CIP showed Goodview Avenue needed to be done next year. He anticipated the City will be able to finance all projects under the estimated schedule. He reviewed the five year financing plans for the equipment purchasing fund and storm water fund. He explained the park levy for 2020 will remain at $92,000 unless it is increased by Council. These funds are used primarily for neighborhood parks. The fire relief levy will be banked into a separate special revenue fund and that no municipal contribution is required in 2020. Ron talked about the expansion to Public Works saying the space needs study is very preliminary. Ron stated the proposed levy includes $274,626 to begin a revenue stream for a possible bond issue to finance expansion and improvements to the facilities.