HomeMy WebLinkAbout2018.09.06 CC Minutes - Midyear Budget Review ra
CITY OF Minutes
HUGO CITY COUNCIL MEETING
MIDYEAR BUDGET WORKSHOP
EST.1906 HUGO CITY HALL
wwwdhugonn.us00
14669 Fitzgerald Avenue North•Hugo,MN 55038 TUESDAY, SEPTEMBER 6, 2018—3 P.M.
Mayor Weidt called the meeting to order at 3:00 p.m.
PRESENT: Haas, Klein, Miron, Petryk, Weidt
ABSENT: None
STAFF PRESENT: City Administrator Bryan Bear, Finance Director Ron Otkin, Fire Chief
Kevin Colvard, Deputy Chief Jim Compton Jr., Assist Chief David Jensen, City Clerk Michele
Lindau
Ron reviewed the 2018 revenues and expenses and said he estimated a General Fund surplus of
$491,979. He suggested$218,476 of it be transferred to the Building Maintenance Fund. Ron
reviewed the budget technique of conservatively estimating revenues and the practice of
contingency budgeting for expenditures. He explained that this usually leads to a budget surplus,
and he recommended the City continue to use this technique.
He talked about the increase in the taxable market value to 6.5%, resulting in an increase in the
tax capacity of$1,103,924 for pay 2019. Ron suggested Council adopt a resolution removing the
last remaining parcel in the TIF District, Northern Pallet Company, which would add $86,497 to
the tax capacity, resulting in a 7.13% increase.
He reviewed the components of the 2019 proposed tax levy and explained the Debt Service Levy
drops considerably in 2020, and the money can be then be levied for street projects. He talked
about the Capital Improvement Fund and the Equipment Fund, with $1,000,000 being applied
towards the purchase of an aerial truck for the Fire Department. The Storm Water Levy and the
Park Improvement Levy would remain the same. There was no change in the employees
deductibles for health insurance; however, premiums increased by $56,504 due to employee age
and the cost of health care. He reviewed what was in the 2019 General Fund Budget, which
included $200,000 earmarked for flat tax rate stabilization. With fiscal disparities approaching 10
percent of the total levy, the tax impact will result in a$37.63 increase for a median value home.
Ron concluded by saying the budget is balanced with no transfers in, and the proposed tax levy
keeps the urban tax rate the same. He recommended Council direct staff to prepare a preliminary
tax levy resolution for the September 17, 2018, in the amount of$7,083,393. The Truth in
Taxation hearing is scheduled for December 3, 2018.
Discussion on Aerial Truck
The Council discussed the purchase of an aerial truck for the Fire Department. Comments were
made regarding the staging issue and the number of pumper trucks available, and it made sense to
replace the department's aging pumper truck with an aerial truck. Safety was also a critical
concern because climbing buildings the way they are constructed today was not safe. Cost was
the biggest issue, and the Council generally agreed that it made sense to purchase a used vehicle,
but it needed to be a good vehicle. The Council talked about the need to form a committee, and
City Administrator Bryan Bear stated he will come back with a recommendation to do so.
Hugo City Council Meeting Minutes for September 6,2018,Midyear Budget Review
Page 2 of 2
Miron made motion, Klein seconded, to adjourn at 4:05 p.m.
Respectfully Submitted,
Michele Lindau
City Clerk