Laserfiche WebLink
MINUTES <br />City Council-Midyear Budget Review <br />Hugo City Hall <br />Wednesday, August 30, 2023 <br />5:00 p.m. <br />Mayor Weidt called the meeting to order at 5:00 p.m. <br />PRESENT: Klein, Miron, Petryk, Strub Weidt <br />ABSENT: None <br />STAFF PRESENT: City Administrator Bryan Bear, Finance Director Anna Wobse, Fire Chief <br />Jim Compton, City Clerk Michele Lindau <br />Finance Director Anna Wobse began by talking about recent changes made in the 2023 <br />legislative session that would have an impact on the budget including a one-time public safety <br />aid payment, repeal of the governor’s salary cap, changes in paid family and medical leave, and <br />two new sales taxes for transportation and metro housing. Hugo would receive a portion of the <br />housing tax that could only be used for affordable housing assistance. In the 2023 legislation <br />session, changes were also made to increase the Local Government Aid (LGA) distributions, of <br />which Hugo would still receive nothing. Another change was that detailed revenue and expense <br />information would no longer need to be included in the Truth in Taxation notices. <br />The City deviated from the flat tax rate policy last year because of the increase in residential <br />home values for 2023. The County’s estimated market value increase for 2024 was 7% for <br />residential and 21% for commercial properties. The 2024 budget was prepared using the same <br />tax rate as 2023 and would be monitored for recommendation to revert back. Wobse talked <br />about having different tax rates for rural and urban saying Council may want to discuss it more at <br />a future meeting. <br />Wobse said staff recommended Council continue contingency budgeting which ensures there <br />will either be a balanced budget or a surplus that could be put towards the Equipment Purchasing <br />Fund. This is in addition to the $200,000 budgeted for tax rate stabilization in the case of an <br />economy decline. She explained the 2024 taxable market value had increased by 12%, and to <br />remain at the lower tax rate, the proposed levy could not exceed $12,312,000. <br />The proposed levy was broken down into seven components, and Wobse provided information <br />on each beginning with debt service. The City had three outstanding bonds that equaled $962 <br />per capita, which was lower than the statewide average of $1,943 per capita. The levy for <br />bonded debt was $993,037 and would remain at that level until pay 2041. The Street Levy <br />would fund the 2024 125th Street and Heather Avenue improvement projects. She noted the <br />Council previously approved using the ARPA funds to pay for the 2023 Birch Tree Ponds <br />improvement project. Additional funds were needed to repair roads damaged by the harsh <br />winter, and in order to cash flow those projects, staff recommended adding $600,000 to the <br />current levy. She recommended Council keep the Equipment Levy at $300,000 to fund future <br />Fire Department and Public Works equipment purchases. The Stormwater Levy and Special <br />Parks Fund Levy would remain at their current levels unless increased by Council.