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MINUTES <br /> <br />City Council-Midyear Budget Review <br />Hugo City Hall <br />Thursday, August 29, 2024 <br />6:00 p.m. <br /> <br /> <br /> <br />Mayor Weidt called the meeting to order at 6:00 p.m. <br /> <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, Public Works Director Scott Anderson, Community Development Intern Phoebe <br />Brown, City Clerk Michele Lindau <br /> <br />Finance Director Anna Wobse began by saying the City had not yet received the tax breakdown <br />from Washington County, so numbers may be slightly different from what will be reported on <br />the preliminary levy. Current numbers estimated a 2% decrease in the market value, and <br />changes to the Homestead Market Value Exclusion Program increased the maximum exclusion <br />amount, reducing taxable market values by $34,650,000 from last year. Council had been on a <br />flat tax policy but has deviated the past two years because of higher property values. Staff <br />prepared the budget using the same tax rate as last year. <br /> <br />Wobse recommended to continue using the contingency budgeting technique for expenditures. <br />Without unforeseen events, there would be a general fund surplus for the street CIP or equipment <br />purchases. The $200,000 earmarked in previous years for flat tax rate stabilization would not be <br />in the 2025 budget. Keeping the 2024 tax rate, the total levy for 2025 could not exceed <br />$11,997,855. This would be a 2.6% decrease from the 2024 levy. <br /> <br />Anna explained there were three outstanding bond issues the City totaling $15,145,000 or $889 <br />per capita, which was under the statewide average of $1,936 per capita. The non-general fund tax <br />levies totaled $1,859,964. A contribution of $500,000 was added to the Street CIP last year but <br />would not be added this year. There was a need to figure out how to fund trails, which would <br />require further discussion. The Equipment Levy was set at $300,000, Stormwater Levy at <br />$278,788, and the Parks Improvement Levy will remain at $92,000 unless otherwise directed, <br />The Firefighter’s Relief Levy was set at $29,176. <br /> <br />General fund operations made up the largest part of the levy. There were 26 regular full-time <br />employees and three vacant positions. Staff had used the League of MN Cities online salary <br />survey to compare Hugo to 13 other cities of similar population, and found that, excluding the <br />City Administrator’s wage, Hugo averaged -2% below others. A salary adjustment was included <br />in the budget for a 3% cost of living and a 2% salary matrix increase resulting in a total increase <br />of $140,500 to the General Fund. Health insurance went up 13.4%, but there was no change in <br />deductibles. 2024 was the first year with the full-time fire chief. All remaining officer positions <br />in the Fire Department were funded for as well as the continued retention program. The City <br />received $703,253 in 2024 as a one-time public safety aid payment that needed to be used for <br />public safety. This was placed in a special fund to pay for a new deputy position for five years. <br />Estimating revenues conservatively at $956,116 resulted in a General Operating Levy at