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Hugo City Council Meeting Minutes for July 19, 2021 Page 11 of 12 At the June 21, 2021, City Council meeting, Council also called for a public hearing on tax abatement to be held this evening in preparation for considering the sale of Tax Abatement Bonds to pay for the Lions Park and related public improvements. Mikaela Huot from Baker Tilly presented information to the Council regarding the use of tax abatement financing. She explained this was a tool that communities use for different types of projects including parks and community centers. The proposal in front of the Council was to provide the City with the authority to finance up to nine million dollars in bonds. The City would abate the property taxes for the taxes levied by the City on the properties included in the tax abatement area. The revenues would be used to pay debt service on General Obligation Tax Abatement Bonds. She explained this was not an actual abatement. Each of the property owners would pay all their taxes, and a portion of the tax revenues would be redirected for project expenses. This would be done through an annual levy. Each taxing entity could choose to participate in the abatement on their share of the property taxes. Maximum duration of abatement would be 20 years if there were two or fewer participants. The school district declined their participation. To use tax abatement, the City must hold a public hearing and adopt a resolution establishing the tax abatement area. Approval did not require the property owner consent. Council would then set the sale date and terms at their August 2, 2021, meeting, consider award of the bonds at their September 7, 2021, meeting, and receive proceeds on October 7, 2021. Petryk asked Hout to clarify for the public to understand that this would impact their taxes. Weidt opened the public hearing. There was no one in attendance, so he closed the public hearing. Miron made motion, Klein seconded, to approve RSOLUTION 2021-52 RESOLUTION APPROVING PROPERTY TAX ABATEMENTS. Roll call vote-all ayes. Motion carried. Update on Drought Conditions and Water Use City Administrator Bryan added this to the agenda to provide the Council on the drought situation and the latest DNR update. He displayed a map showing drought warning phases throughout the state. Southern Hugo was in the moderate drought category, and northern Hugo was in the severe drought category. This drought warning phase triggers items in the City’s Water Supply Plan. During the warning phase, water suppliers were encouraged to implement restrictions with a goal of reducing water use to 50% of January’s water use levels, which was 19,931,000 gallons of water. June’s water use was 70,452,000 gallons. In an exceptional drought, Bear expected the governor to ban all nonessential uses of water. To meet the DNR requirements, Hugo had to implement water use reduction actions with the goal of reducing water by 30 million gallons. The City had an ordinance and could adopt emergency water use regulations by resolution. The City already had odd/even water restrictions.