2020.12.07 CC Minutes - Laserfiche WebLink

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Hugo City Council Meeting Minutes for December 7, 2020 Page 5 of 7 Weidt made motion, Klein seconded, to approve RESOLUTION 2020-67 APPROVING AN INTERIM USE PERMIT TO ALLOW FOR THE OPERATION OF A LANDSCAPING AND EXCAVATION BUSINESS ON PROPERTY LOCATED AT 5725 165TH STREET NORTH. Roll call vote – all ayes. Motion carried. Public Hearing on 2021 City Budget and Tax Levy State statutes require the City Council to hold a public hearing on the proposed budget and tax levy for the 2021 fiscal year. Finance Director Ron Otkin presented the budget and tax levy to the Council prior to taking public comment. Otkin began by talking about Local Government Aid (LGA) that was given to cities and towns to help fund their operating budgets and lower their tax levies. Out of a distribution of over $560 million the City of Hugo was one of 93 cities that received none. He explained the factors that went into determining distribution amounts and said the formula penalizes cities that keep their tax rates low. Hugo’s tax rate is 39.186% while the statewide average is 43.556%. Otkin provided details regarding the proposed tax levy for bond payments, street improvements, equipment purchasing, storm water, neighborhood parks, fire relief, future improvements to Lions Park and for general operating purposes. He recommended the City continue its ongoing practice of contingency budgeting coupled with conservatively estimating revenues. Otkin reviewed factors in the General Fund that include personnel and health insurance expenses. He recommended Council use a one-time COVID credit on health insurance premiums to credit employees’ health savings accounts to offset higher deductibles. The 2021 General Fund budget was up $352,000 as a result of wage adjustments, higher law enforcement costs, the re-budgeting of a City Planner position, and in increase in street department materials. The budget also contained $200,000 for the third consecutive year to be set aside for budget stabilization. He reviewed other revenue sources stating he projected most at the 2020 level. The vast majority of the General Fund budget would come from property taxes and fiscal disparities. The proposed levy the Council adopted in September was designed to keep a flat tax rate but the latest calculations show a decline in the urban tax rate. He provided information on two state tax refund programs available to residents and provided information on how residents can apply. Mayor Weidt opened the public hearing. After receiving no questions or comments, Weidt closed the public hearing. Council stated their appreciation for the work of staff and for their forward thinking in the budgeting process. They appreciated the techniques used by the Finance Department that allow for the continuing improvements in the city while maintaining a low tax rate.