2019.12.02 CC Minutes - Laserfiche WebLink

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Hugo City Council Meeting Minutes for December 2, 2019 Page 3 of 5 Approve Resolution for Renewal of 2020 Licenses for Refuse Haulers The City had received applications from seven refuse haulers who provide refuse collection and recycling services to Hugo businesses and residents. Licenses would be issued to these haulers upon receipt of the $165 annual licensing fee and proof of insurance. City staff recommended Council approve the resolution issuing 2019 refuse haulers licenses to: Gene’s Disposal; SRC, Inc.; Maroney’s Sanitation; Ace Solid Waste; Walters Recycling; Republic Services; and MN Waste Management. RESOLUTION 2019-51 APPROVING 2020 REFUSE HAULERS LICENSES. Public Hearing on City Budget and Tax Levy As required by state statutes, the City Council held a public hearing on the proposed City budget and tax levy for the 2020 fiscal year. Finance Director Ron began by talking about Local Government Aid (LGA) and explained the distribution factors. It was his opinion the main reason Hugo does not receive any LGA is because Hugo’s tax rate is considerably lower than the statewide average. Hugo’s urban tax rate is 36.274% of tax capacity while the statewide average is 43.828%, putting Hugo at the low end of the range. Otkin said that the City’s market value increased 9.8% which will increases City tax collections even if we maintain a flat tax rate. Otkin explained the City has been operating on a flat tax rate for many years. To keep the urban tax rate flat the City adopted a $7,757.651 preliminary tax levy for 2020. He reviewed what made up that levy explaining the City will be paying off three of our four bond issues in February, decreasing our debt service levy which will allow the city to increase the Street CIP levy to over $1 million. Otkin reviewed the street capital improvement projects for the next five years and stated these projects can be funded as proposed with the higher Street CIP levy. Otkin recommended an equipment replacement levy of $221,000 stating that annually planning for the purchase of these items eliminates the risk of having to borrow. He proposed an increase in the storm water fund to $278,788 to pay for future water reuse projects and for future pond maintenance. The park levy fund, used to maintain neighborhood parks, was proposed to remain the same. Otkin talked about the firefighter relief levy stating there was no mandatory contribution required in 2020. Otkin explained one of the Council’s goals for 2019 was to conduct a space needs study on the Public Works facility. He proposed beginning a revenue stream for a possible bond issues. The proposed tax levy of $274,626 would support a $3,580,000 bond issue. Otkin recommended the City continue the practice of contingency budgeting for expenditures in the general fund. Otkin talked about a proposed 2020 general fund budget of $6,433,294. This is an increase of $266,363 over 2019 but includes $200,000 earmarked for budget stabilization for the second consecutive year. Property taxes provide 88% of general fund expenditures while the other 12% would come from non-property tax sources. After accounting for fiscal disparities, the tax levy adopted in September will keep the urban tax rate flat. However, $556,133 was added to the tax levy for improvements to Lions Park. This will increase the urban tax rate and will increase the tax on a median value homestead by $150. Otkin reviewed several state property tax refund programs and encouraged residents to find out if they are eligible.