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HomeMy WebLinkAboutSP November 29, 1989 ;t'....' "".' J~ ,. :~- :' CITY of ANDOVER ': ,\, ';-'. Special city Council Meeting November 29, 1989 7:30 P.M. Call to Order l. Public Hearing: 1990 Budget and Tax Levy 2. 3. Adjourn 6 "' .-- 'c}\' CITY of ANDOVER ...L 1685 CROSSTOWN BOULEVARD NW. . ANDOVER, MINNESOTA 55304. (612) 755-5100 SPECIAL CITY COUNCIL MEETING - NOVEMBER 29. 1989 MWUTES A Special ~leeting of the Andover City Council was called to order by Mayor Jim E! ling on November 29, 1989: 7:30 p.m., at the Andover C it y Ha 11 . 1685 Crosstown Boulevard NW, Andover, Minnesota, to hold the public hearing for the proposed 1990 General Fund Budget. Councilmembers present: Jacobson, Kn i gh t , Orttel, Perry Councilmembers absent: None Also present: City Finance Director, Howard Koo lick: City Administrator/Engineer. James Schrantz: and others 1990 GENERAL FUND BUDGET PUBLIC HEARING Mayor El ling explained the format for the advertisement of the pub! Ie hearing was mandated by the State: however, the percentage of Increase is deceiving. The Legislature passed the final budget In October this year, and it passed the funding of some programs down to the local levels of government. The bi II took approximately 26 percent of the revenues the City normally gets and gave I t to the school district. The school district, in turn, by law must reduce It's tax by that same percentage. The net result should be no change to the tax bil]s of the resldents--just a shifting of who gets the funds. The Mayor noted in rea]lty the City's budget has only increased about 7.5 percent to cover the deficit spending which resulted from an accounting error of the previous two years. Mr. Koolick then summarized the revenues and expenditures and how the figure of a 34 percent Increase was determined. He pointed out that of the residents' total tax bill, the City only gets about 10 percent of it: about 30 percent goes to the county, a sma! 1 percentage to other taxing authorities, wi th the remainder and the largest percentage going to the school district. He reviewed the specific percentages for both School District No. 15 and No. 11. The numbers presented do not Inc]ude homestead credit because that formula was changed by the Legislature and no one has determined how that change wi] I affect the homeowners. Mr. Koolick also reviewed the Certificates of Indebtedness Debt Service Fund to pay the principal and interest of major purchases of equipment. Of the City's total debt of about $29 mil lion, only $270,000 Is for Certificates of Indebtedness supported by taxes. The remaining debt Is bonds paid for solely by special assessments on properties benefitted from specific projects such as street improvements, sanitary sewers, municipal water, and storm sewers. ,--- Special Ci ty Counci1 Meeting Minutes - November 29, 1989 Page 2 (1990 Genera I Fund Budget Public Hearing, Continued) Mrs. Sikora. Unlversltv Avenue - stated she lived In Andover for 40 years and feels the older people are taking the brunt of the fast growth and development In the City. There Is only one person In her household. This year her valuation when up $14,000, stat I ng she has done nothing to the house for 25 years. In 1982 she paid $878 In taxes; In 1989 she Is paying $2,205, asking how one person living on social security can afford It. She asked the assessor why the valuation went up, but he said he would have to look In his books; and he has not yet cal led her back. The Increase was on the house, not on the land. Mayor El ling noted one-fourth of the City Is re-evaluated every year and market values adjusted, so some residents may see an Increased assessed valuation of their properties. Those valuations are based on comparable properties and sales In the county. He also noted that the next City newsletter will provide Information on how the tax system works to he]p residents understand the system. Mrs. Sikora - stated she lives on the north end of town and gets no pollee patrol. It took years to get some work done on University, yet she has to pay so much In taxes. She noted references made to Andover being the "Edina of the North," but showed a newspaper article where a house of the same value pays considerably more taxes In Andover than it does in Edina. She expressed her anger at the contlnual1y rising taxes, asking that the City stop spending so much money. Sophie Kopus - stated the City gave the Senior Citizens $5,405 in 1987 to buy several items, which they greated appreciated. But since then they have not purchased anything, complaining they can't even keep things in their freezer wi thout things being taken and that they even have to buy their own coffee. So she didn't understand why the 1990 budget shows an expenditure of $10,480. She too expressed frustration of being on a fixed Income and not having enough to pay the taxes. Mr. Koollck briefly reviewed the budget for the Senior Citizens Center. Several other residents raised questions about several line items of the budget. Mr. Koollck explained the Senior Citizen Center was built with federal funds, so there Is no payment to make. Also, governmental accounting does not allow for the capitalization of investments. He also noted the two new budget Items of Economic Development and Recycling. Russ McG]vnn - asked for another explanation of how much of his tax dollar Andover gets. Mr. Koollck reviewed the overhead showing Andover gets about nine cents per dollar In District 15 and about 10 cents per dollar In District 11. Of the 35 percent Increase, 77 percent of that Is due to monies norma1 ly given to the City but have Special City Council Meet!ng Minutes - November 29, 1989 Page 3 (1990 Genera I Fund Budget Public Hearing, Continued) now been given to the school districts Instead. Only the remaining percentage Is actual Increase In the City's budget. The law provides that the City can raise taxes to cover that shortage and the school districts have to decrease taxes by that exact dollar amount. On the individual taxpayer, it should have an effect of zero. Had the State not passed this law, the City's taxes would have gone up only 7.5 percent. Councilmember Orttel noted the amount the City would collect would go up by 7.5 percent, but not all of It would be in taxes paid by the residents. A lot of the other revenues the City receives offsets that 7.5 percent because of growth. Councllmember Jacobson noted the actual do lIar amoun t In the budget decreased from 1989 to 1990 from $2,147,000 to $2,087,000. One gentleman asked why the City advertised the 34 percent increase: why couldn't it run an explanation ad next to the one mandated by the State. Mayor El ling noted the City must follow the law as set out by the Legislature, even If it Isn't necessarily correct. One of the purposes of the law was to get the residents Involved. A resident noted all the other surrounding cities had lower increases than Andover. The Counc II though t they were a II slmllar--some higher, some lower. Another resident asked what effect the homestead credit will have on the taxes. Mayor Elling again noted the City has not been able to determine that since no one at the State has looked at that yet. Mr. Koollck stated he talked with the county this afternoon anticipating that question. He was told that neither they nor the State have the foggiest Idea what effect I twill have. But the Intent of the shift of revenues between the cities and school districts should be zero. Councilmember Orttel explained the City sets out a dol Jar amount of what It needs, and that Is what the City will get. That number Is locked In. Mayor Elling explained the budgeting process and the change this year of having to start so early, which creates special problems in forecasting the City's needs. Mrs. Sikora - stated her house Is over 100 years old, yet It is st!ll going up in value. Jack McKelvv - stated he spent quite a bit of time Jooklng into this. He took the 1989 tax statement and talked to Mr. Koolick, to the county, and to the school district, and found out that before the homestead credit, next year's tax bill wlJ I be about $34 more than what his 1989 tax amount was. He called the state about 14 dl fferent times regardIng the effect of the homestead credit, talked to about 14 different people; and not one person could tell him what the homestead Specia1 Ci ty Counci I Meeting Minutes - November 29, 1989 Page 4 (1990 Genera] Fund Budget Public Hearing. Continued) credit wou1d be. So the change before homestead wl1 I be very lit t 1 e. The Counc II aJso noted that the tax will be more In School District No. 15 because of the bond Issue passed Jast year, and it wi I 1 be more in Scho01 District No. 11 In 1991 because of the bond issue passed this month. Someone asked why he Is paying $500 more this year than last. Councilmember Knight thought It may be because his valuation Increased. Ms. Sikora - stated she didn't do anything to her house. Councllmember Orttel suggested It may be because of her rental property. Ms. Sikora stated they had thought the rent wou1d be to pay for the real estate taxes, but It doesn't any more. She stated the o]der people just can't manage any more. Council encouraged her to speak with the County Assessor about her vaJuatlon. Mr. McGlvnn - appreciated the Council trying to hold back on the budget to keep things under control: but he was bothered by the constant comments that the Ci ty Is growing so fast. He asked who decides whether or not the City grows. Mayor Elling noted the Councl approves the plats. Mr. McGlvnn - stated he and a lot of others moved out here to be in a rural area, and they want to keep It a ruraJ community. He asked if there is any way to sJow down the growth so people who have land to keep horses, etc. , don't get eaten up In taxes. He was concerned that the ph I I osoph y is now that housing on 2 1/2 acre lots means a loss of taxes to the City. Mayor Elling didn't think growth and development can be stopped. Coon Rapids Is almost all developed: Andover Is the next logical area. The City cannot stop people from developing their property. Mr. McGlvnn - noted now the Watershed Board wants to make everyone pay for the pondlng In Old Colony Estates. He thought the deveJopers should be paying for It. Councllmember Orttel stated the developers do pay their way, and the newer houses do pay a very high tax rate. Mayor EJ11ng noted one of the issues the Council Is wrestling with right now Is establishing a polley of not forcing large landowners to deveJop when a majority of surrounding neighbors wants an Improvement project such as a paved street. Counci1member Orttel explained how the MUSA line is set up by the Metropolitan Council and the timing to get sanitary sewer is controJled by them. The City did route the line In the community to accommodate those who did not want to develop their land. Special CI ty Counc II Meeting Minutes - November 29, 1989 Page 5 (1990 Genera 1 Fund Budget Public Hearing, Continued) An individual asked why the City can't just limi t the number of buiJdlng permits I twill Issue a year. Counc II explained It Is not legal. Councllmember Perry noted the updating of the City's ComprehensIve Plan and recommended the citizens become involved in that process. The CI ty Is seeking resident Input, recommending they watch for notices on those meetIngs. Rosella Sonstebv - stated the revenues In the budget do not show how much the City Is going to get In State Aid next year. Mr. Kool ick noted the line item "Intergovernmental Aid-State' reflects state ald. Revenues from Municipa] State Highway Aid - Maintenance are also 1 i sted there. Ms. Sonstebv - felt everybody should know what the City does with the MSA Funds, that It shouJd be In the GeneraJ Budget. She knew that some of It was used for assessments on Crosstown Boulevard. Mayor El Jlng noted those funds are different from the GeneraJ Fund revenues. The MSA funds are a reapportionment of the vehicle tax that goes back to the City based on population. Because a Jot of the revenues given to the City are based on population, the Mayor noted It Is Important that everyone cooperate In the 1990 census. Ms. Sonstebv - asked why there was an error In the budget to result in deficit spendl ng. Mr. Koollck stated when the calcuJatlons were made for permit revenues, the estImate was hIgher than the number of permits actually Issued resulting In lower revenues. Secondly, there was an accounting error made In calcuatlng revenues. The revenues and expenditures were too hIgh. That that In no way affects what Is being budgeted for 1990. Ms. Sonstebv - asked If Interest was put Into the general fund and used for other purposes. She felt that Interest should be used for the good of everybody, thinking when It is put In the General Fund, It is used to favor certain people in an area. Councilmember Orttel explained the General Fund Is the fund that serves the entIre City. The problem came In when the estimate was made for the number of building permits, it was made six months In advance; and last year that amount was overestimated. Other than the tax levy, aJ 1 other revenues In the budget have to be estimated. Mr. McGlynn - heard the City is thinking of cutting the City newsletter down to three times a year. Mayor Elling stated It will go out four times a year. Mr. McGlynn - stated the newsletter is his only source of Informa- tion about what Is taking place In the City, thinking It would be more beneficial to have It come out once a month. It Is Important that the residents be kept Informed on what Is going on In the City. Councll- member Knight said most of the cost of the newsletter Is for postage. The newsletter was cut along with every other J Ine Item In the budget. , - Speclal Ci ty Counci I Meeting Minutes - November 29, 1989 Page 6 (1990 General Fund Budget Public Hearing, Continued) A gentleman stated he has Jived in Andover for 11 years on Tu lip Street. The street has been Improved and he has put in $14,000 worth of yard work. His market values has not Increased for nine years, yet his assessed valuation keeps going on. His point was that the City Is at the bottom of the p II e , and the spending has to stop here. He spent two hours talking to Representative Theresa Lynch, stat!ng they do not know what they passed in October. He tried to talk to the Chairman of the State Committee, but his phone cal I was not returned. He stressed the spending must be cut back, and the City must stop spending. A friend comes from England where they are paying 80 percent for taxes. He said In Minnesota the tax is 60 percent for every dOllar earned, plus there Is no business climate here. Mr. McKelvv - stated he has been to most Council meetings and didn't have a complaint on the spendl ng, feeling It has been done reasonably. Bu t on the county and state level the attitude Is that any money left over at the end of the year must be spent so It doesn't have to be given back. So his taxes keep going up because they keep spending. He agreed that somebody must stop the spending, and It has to be here. Mayor Elling noted the problem is with the those getting aids and grants, feeling that program should be overhauled and done In a more reasonable way. Mr. McGlvnn - asked If the pavement for Prairie Road was used with State Aid funds or out of the General Fund. Mayor Elling noted it was from State Aid funds that come from the motor vehicle taxes that come back to the City. A resident stated he Jived on the north end of Andover for 20 years and was concerned that because of all the growth such as the shopping center, new roads, etc. , In Coon Rapids, that Andover residents are carrying the brunt of the traffic problem. He asked how much of his tax dollars are going for the redevelopment. He felt that Andover gets the problem and Coon Rapids reaps the benefits. The same thing is true of Hanson Boulevard since most of the travelers go through the CI ty Into Oak Grove. Mayor Elling explained no tax dollars from Andover are going Into Coon Rapids, nor for the new roads. Hanson Boulevard also is a county road and was not paid for by Andover tax dollars. and It Is hoped that eventually I twill go up to St. Francis to relieve some of the traffic off Round Lake BouJevard. All maintenance on county roads Is done and paid for by the county. He also explained that in any development. the roads, sewer and water are a] I paid for by the benefitting property owners, not by general tax dollars. DiscussIon wIth the residents was agaIn on the confusIon surroundIng the tax bill and the concern of the residents that taxes continue to rise. A resident noted the Council is receptive and understanding, but the School Board is not. Counc II again pointed out that the tax burden for the City next year is $60,000 less than for th I s year. Special CI ty Counci I Meeti ng Minutes - November 29, 1989 Page 7 (1990 Genera 1 Fund Budget Public Hearing, Continued) A new resident asked if the City has a Planning and Zoning Commission. Mayor EI ling explained it Is a seven-member advisory board to the Counc i 1 which meets the second and fourth Tuesdays of the month. The City is always looking for citizen Input and also has other standing committees on which residents can serve. Discussion was again on assessed valuation of houses, with the Council explaining how that valuation is determined. Mr. Koollck stated In talking with the county this morning, It was estimated that the 1990 taxes on a $100,000 house would change by $1.25. A resident on the north end of town stated they do not receive the newsletter. Counc 11 noted sometimes there is a problem with those living In School District No. 15 and said someone would look Into It. The next newsletter will be send out In the next few weeks. Ms. Sonstebv - asked if the taxes are due In 1990. Mayor Elling stated yes. She then noted that In 1991 they wi 1 I be getting another tax Increase because of the bond issue just passed. A resident asked why the transfer of funds Into the 1990 budget is $141,000 when it was only $81,000 in 1989. Councllmember Orttel explained the transfer Is of administrative funds collected from assessments to pay for Staff's time In administering those bonds. Mr. Koolick also noted the amount was Incorrectly budgeted In 1989: the 1990 amount Is more correctly budgeted. MOTION by Orttel, Seconded by Jacobson, introducing a Resolution establishing the 1990 levy to be certified to the County Auditor by the City of Andover as prepared; the City Council of the City of Andover hereby resolves the total non-bonded Indebtedness levy Is hereby set at $1,239,143. (See Resolution R193-89) Mot!on carried unanimously. Mr. Koollck asked the Council to approve the General Fund Budget and the Debt Service Fund Budget as presented. MOTION by Knight, Seconded by Jacobson, to so move. (See Resolution RI94-89) Motion carried unanimously. MOTION by Knight to close the Public Hearing. Motion carried unanimously. The Public Hearing was closed at 9:07 p.m. Counc i I recessed at 9:07: reconvened at 9:20 p.m. Special City Council Meet! ng Minutes - November 29, 1989 Page 8 HEATING AND INSULATION OF STORAGE BUILDING/FUNDING Frank Stone, Public Works Supervisor, explained the $4,000 a110cated for heating and Insulating the storage building Is not enough. Another $6,000 will be needed to complete the project. Counc I I agreed to the need to heat the building and reviewed the recommendations from Mr. Koollck (November 27, 1989. memorandum) as to possible funding sources. A recommendation was to use some of the money that wi 11 be forthcoming when some of the bonds are called In February. After some discussion, Counc I I agreed none of those funds should be spent until specific guidelines are drawn up and agreed to as to how that money should be used. It was agreed that issue Is to be discussed at a work session sometime in the beginning of the new year. Another suggestion was to pay that budgeted amount this month and the balance out of the 1990 budget If the contractor agreeds. At this t!me Councl I agreed to authorize the additional expenditure of $6,000 so the project can be completed, with funding to come from transfers from other budgets as suggested In Item 2 In Mr. Kool ick's memo. The $4,000 budgeted In 1989 w I I I be paid this year; the remainder will be paid for out of the 1990 budget. MOTION by Orttel, Seconded by Knight, that the Counc I I authorize the additional expenditure of $3,300 for the conversion of the cold storage building Into a warm storage building and the transfer of the funds previously designated for the floor be used for heating and Insu]atlon. Motion carried unanimously. MOTION by Ort te I to adjourn. Motion carried unanimously. Meeting adjourned at 9:33 p.m. Respectfully sUbmltted~ ~~~~ Mar lla A. Peach Recording Secretary