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HomeMy WebLinkAboutPH November 21, 1991 ~ CITY of ANDOVER CITY COUNCIL BUDGET PUBLIC HEARING - NOVEMBER 21. 1991 MINUTES The PublIc Hearing on the 1992 Budget heJd by the Andover CIty Council was called to order by Mayor Ken Orttel on November 21, 1991. 7:30 p.rn.. at at the Andover CIty Hall. 1685 Crosstown Boulevard NW, Andover. MInnesota. CouncIJmembers present: Jacobson, McKelvey, Perry. SmI th CouncIlmembers absent: None Also present: CIty FInance DIrector. Howard KooJIck Others Mr. Koolick gave a presentation explaining the tax increase wIll not be 64.5 percent. the percentage In the notIce receIved by the residents. The City's share of every tax dollar Is about 16 cents; the remaInder goes to the county. the school district. and to other taxIng bodies. The General Levy Increase for the CIty Is $63.988; the levy for the FIre Bond Is $415.407; and there Is a decrease In levy for other debts. Mr. KoolIck aJso revIewed an example of Increase In taxes to houses of varIous values. noting the result of the latest State tax bllJ Is lower valued homes wIll see a larger Increase In taxes than the higher valued homes. The tax Increase wIlJ vary from zero to approximately 18 percent: no one w II I be lookIng at a 64.5 percent Increase. SophIe Kozlowski. 1021 Crosstown Boulevard NW - asked why her taxes double every year. As a senior citIzen. she does not have the money to pay for the taxes. She Is lIving In a 100-year-old house. and the pIpeline company took acreage. which she alJeged she Is payIng taxes on. Later In the meeting Mayor OrtteJ explained the notIce regarding thIs hearing does not refJect the amount of tax do II ars she wi] I be paying. He advised her to check the changes In her valuation on the property. She shouJd not be paying taxes on the easement taken by the plpeJIne company. Mr. KooJlck then outlined the major revenue and expendItures of the City, the changes from the previous year. and how the tax system works. He emphasIzed the Increase of approxlmateJy $64.000 Is due to the loss in State Aid revenues, whIch Is the onJy tax Increase allowed any CIty In the State. The FIre Bond was approved by the voters In July. 1990; and this Is the first year It Is beIng levied for. That amount will decrease slIghtly each of the 10-year period of the bond. A resident questioned who made the vote for the Fire StatIons. statIng most of the people did not know about It. Coon Rapids has only two stations. Someone else asked If the $64.000 In State Aid Is something the City could lIve wIthout. .-.~ CI ty Counci I Budget Public Hearing MInutes - November 21. 1991 Page 2 Mr. KoolIck stated that money Is needed In the budget: however, there was an error made In determInIng the tax levy. An additIonal $38.000 has been found which the CIty Is not choosIng to levy. Mayor Ortte I explained the tax bill passed by the State LegIslature over whIch the City has no controJ. Its Intent was to reduce the tax capacity of the higher valued houses. They wIll see that decrease thIs year and next. He advIsed the resIdents to dIscuss this wIth their State representatives. Also. the $64.000 Increase was a result of the State cutting back on their aids to the CIty. That amounts to 3 percent of next year's budget. In addItIon. the CIty's growth In housing was about 7.5 percent. approxImately 300 homes per year. which Increases demands In servIces. However. the CIty has been frozen wi th no percentage Increase aJlowed for Inflation or for the additIonal homes and servIces. The orlglnaJ Intent of the sales tax was to reduce property taxes. but the distrIbutIon Is such that Andover only gets about $45.000 whIle a neighborIng City gets over $1 mIllion. The Mayor stated the people of Andover are getting robbed with unequaJ distribution of state aIds, cuts In state aids and a frozen budget against Inflation and new growth. And now there Is the shI ft In the tax formula from the more expensive to the lower priced homes. Don RIesberq. 16200 Potawatoml - stated they paid $4.000 for theIr streets and they were only seal coated twice in the Jast ten years. He said the streets are fa I ling apart. Mayor OrtteJ stated the program was to seal coat once eveîY six years; however. seal coating has been removed from the budget and only crackseaJlng Is done. Mr. RIesberq - stated Coon RapIds has only two fire statIons for 50.000 peop]e. Andover has three statIons for 15.000. He didn't see the need for them. He asked If the tax lIabIlIties were explained to the voters. WIth onJy 400 voters, he dIdn't think the voters were Informed. Mayor Orttel stated the matter was taken to the voters in an election. He estImated about 1500 to 1800 peop]e voted. and It carried by more than 60 percent. Councllmember McKe]vey stated he worked to defeat the first Issue; and this time he also cal led many peopJe about the vote and the fact that operating expenses wouJd rIse. and he asked frIends to cal I others. He belIeved the entire matter was sore]y misrepresented by the FIre Department. Mr. RIesberq - stated he cannot affoîd a tax Increase. as his Job was elimInated two years ago. He also stated It seems that during the snow storm. the more expensive houses were p]owed out fIrst. He dIdn't get pJowed out until Sunday. He exclaimed those houses are getting a tax decrease but are gettIng plowed out fIrst. He caJled City Hall but was given no satIsfactIon. Mayor Orttel saId the City Is divided Into five zones for snow plowing. The value of the homes Is Irrelevant. Someone asked about the CDBG fundIng receIved but never budgeted. Mayor Orttel explaIned It was not In the General Fund before. It Is a grant for low-Income nelghoborhood rebuIldIng and Is not avaIlable for general use. It Is an In-out Item which does not affect taxes. - ,.---- City CouncIl Budget PublIc HearIng Minutes - November 21, 1991 Page 3 Ms. Kozlowski - explaIned the need for a commercial kitchen in the SenIor Center. Mayor Orttel explained the CDBG funds are proposed to be used to upgrade the kitchen to be able to have congregate dInIng. It has nothing to do wIth taxes. A resIdent asked If the City has to follow the tax guidelInes when distributing the CIty's share of taxes to the resIdents. Mr. KoolI ck explained the CIty tells the county the amount of taxes It Is levying. That amount Is spread to the IndIvIdual properties by the county based on the law. The same resIdent asked If that law was voted on by the voters. Mayor Orttel expJalned it was a bipartisan vote of the State representatives elected by the voters. The City has nothing to say how It Is levIed on Individual properties. Someone e1se asked how the tax levy affects businesses. Mayor Ortte I stated there will be a very mInImal change In commercial property taxes. Mr. Koollck explaIned he can estImate the taxes for anyone who wishes If they will call him at CI ty Hall durIng the day. Winslow Holasek - highlighted the changes In the property tax revisIons. Councllmember Smith stated he works In the Assessor1s office. The tax law Is a compJlcated Issue. A resIdent stated the cause of the Increase Is the new fire stations. He asked If a study was done to determIne how many fIre stations the City of Andover needs and what was the Inertia for addIng two more. Mayor Orttel and Councllmember Smith explaIned the Aldrich report prepared for the City. the location of fIre statIons determIned by population. square miles to serve. response tImes. and the amount of water that can be brought to a fIre scene. The thIrd statIon wlJI be moved to the northeastern portIon of the City In the future. The biggest need was to service the populatIon In the southern and In the northwestern parts of the City. The resident dIdn't thInk the people were advised on the amount of costs for the statlcns. He a]so asked how many Councllmembers voted for It. Mayor Orttel stated the amount of cost was specifIcally advised. The Counc II dId not vote on the Issue; It was voted on by the people. The same person felt they were getting the shaft by a special Interest group. Mayor Orttel responded by saying the ejectIon was we]1 pubJIclzed and about 1500 people dId vote. The fIrefighters are a specialized Interest group. They are on ca I J 24 hours a day as volunteer Firefighters and Rescue personneJ. Their purpose Is publIc safety. Councllmember Perry stated that Is one Issue the voters had the right to voice their opinion. They did. and the CIty acted on that vote. - . .~_. -- City Counci] Budget Pub]lc Hearing MInutes - November 21. 1991 Page 4 Carro I I Abbott. 2917 142nd Lane NW - asked those present If they ever had someone In theIr famIly burn to death. Then they wouJd have no qualms about the cost of fire protectIon. Someone responded that the probJem Is with the desIgn of the Fire StatIon and why are they so elaborate with brIck and block work. They do not ] Ive In a luxurious socIety here; why can't they look J Ike other fIre barns? They wou]d stIlI be functional wi thout lookIng elaborate. Mayor Ortte] explaIned the process of obtainIng archItecturaJ drawings. It Is also Important that the stations Jook decent because they are In resIdentIal areas. The CIty owes It to the residents not to put up pole barns. The entire process Involved a lot of pJannIng wIth citizen Input. It was a lot of money, and now the City has very top notch FIre Department faclJltIes that will last for many years to come. Another resident stated about 15 years ago he proposed puttIng In more cross streets so there can be better response times for the FIre Department. That has not been done. If It Is done. maybe that thIrd statIon won't be needed. Mayor Orttel stated the Fire Department dId propose some cross streets to facIlitate better response times. The CIty saId no because of the cost. In the ]ast 15 years over 50 mIles of streets have been added. IncJudlng Hanson Boulevard. The problem Is havIng to cross the wetlands for those streets Is too expensIve: the CIty can't afford It. PatricIa Adrlaens. 15255 Round Lake Boulevard - stated they cannot afford to keep paying more taxes. CouncIlmember SmIth explaIned everyone's property should be Inspected every four years. They are now required to value property at market value. As market value Increases. so do the taxes. In response to questions from the audience. CouncIlmember Smith expJaIned that a depreciation schedule is used based on the age of the home. Adjustments are made In land value based on the market. whIch they study and fol low closly. Councllmember Jacobson stated that whether or not those present agree wi th the FIre Department bond. on a $100.000 house. that amounts to a $74 Increase. The extra $11 reflects the Increase In the general budget for Increased pubJIc safety protection. decrease In State Ald. and Inf]atlon. Someone asked about the comment made that no additIonal revenue Is receIved from the additional 300 homes being built In Andover. Mayor Ort te J explained the City's budget Is frozen; It cannot have any growth as a resuJt of those homes. Increased services must be provided within the same budget. It resuJts I n a sh I ft In taxes so everyone else pays less. Many people have actually seen a decrease In their CIty taxes that last few years because of this. - . -.--- CI ty Counci J Budget PublIc HearIng Minutes - November 21, 1991 Page 5 Someone asked If the City can do somethIng about the fact that a neighborIng cIty gets $1 mIllIon In State Aid and Andover only gets $45,000. Mayor Orttel stated Senator Doug Johnson generally controJs that as head of the State Tax CommIttee. The CIty has done some lobbying. He also poInted out that In the November, 1991. Issue of the League of MInnesota MagazIne. of cIties with populations over 2,000, Andover has the lowest tax rate In the State. The onlY exceptIon Is North Oaks, which requires associatIon dues that are more than what the average resident pays In taxes In Andover. The CI ty Is growing and provIdIng services under very unique cIrcumstances, all wI th the lowest tax rate In the State. Someone asked If that status wIlJ remaIn the same next year. Mayor Orttel doubted It because of the addition of the Fire Bond Issue. However. the Ci ty wI J J have to functIon with the same bUdget amount only serving 900 more homes than It did last year. He also noted that because of that growth. the last FIre Bond Issue was actually paid off two years early. A resIdent asked If the CIty gets taxes from the easements of the power lines. pIpeJInes. etc. Mayor Orttel noted that publIc utlJItIes are exempt from taxes. The same person asked with the upgrading of the fIre service. can the resIdents expect a decrease In theIr fire insurance. Mayor Orttel explained normally that wouJd be the case; however. some residents may have aJready been classIfIed at the lower rate. Those would not see a change. That was not talked about during the bond election because of those exceptIons. BI I I KellY. 2690 176th CIrcle - stated the fIre Issue Is dead and there Is nothIng they can do about It. He asked If the Counc II made a good-faIth effort to go through each expenditure and cut the budget to the bone. Mayor Orttel stated that was done a number of times. In 1991. the fIxed budget was cut twice because of the State Aid cuts. He also noted the obJlgatlons placed upon the CIty without additional funding such as the Comparable Worth law and purchasing a fIlter crusher because 011 fIlters can no longer be put In the I andf II Is. CouncIlmember Jacobson pointed out the mandate to offer Hepatitis B vaccinations for the FIrefighters and Rescue personnel wI th no fundI ng provided. Mr. Kellv - asked If any of the FIre Station Items can be postponed. Or the stipend for the FIrefighters be cut back; they would volunteer for free for a period of time. Mayor Orttel explaIned the need to have Firefighters respond to the calls and the extensIve training they do. It Is a lIfe-safety Issue. He again stated they have scrutInized the bUdget. noting there Is no capital equipment purchases of any kInd. - , . CI ty Council Budget Pub]lc Hearing MInutes - November 21, 1991 Page 6 Someone asked how the Mayor can say there Is no Increase In the budget when I t Is going up, not down. He suggested cuttIng back even further. Don't spend. Reuse paper clips! Mayor Ortte] again stated they have spent hours goIng over the budget. The budget didn't go up thIs year because it was frozen by the State. The major Increase was because of the Fire Bonds. A gentleman stated he was angry because of his own stupIdity. The paper he receIved saId there Is a 64.5 percent Increase. There were graphs shown thIs evenIng that were not accurate. referrIng to the $38.000 error. He stated someone made a mIstake: can the Counc 11 look again for other mistakes? Mayor Orttel stated the Council continual ]y monitors the budget. He a]so pointed out the Staff often puts In extra hours, notl ng Mr. Koollck advised him of the error while working on a Sunday afternoon. Also many other Staff and family members vo]unteered their tIme during the snow storm -- that Is how this City operates. Another person asked about the mention of cable teJevIsIon In the City's Goals and Objectives. Mayor Orttel explaIned the City gets revenue from the cable televisIon through franchIse fees that are In turn used to broadcast meetings. Information. etc. Counc I I member Perry also exp]alned the reason for changing the newsletter to the Andover Express was to save costs. One of the major goa]s of the Counc II Is to try to keep the people Informed about what Is taking place In the City. Mr. Abbott - stated the CIty does ho]d meetings and nobody shows up. The voters were gIven an opportunity to vote on the Fire Bond. and nobody shows up. Mayor Ortte] stated It Is dI ff I cu J t to learn the tax system; however. the City stIlI likes to keep the residents Informed. A resident congratulated the Council on theIr hard work and for the newsletter. He appreciated the fact that the FIrefighters and the stations are here now. The other day a neighbor had a call for an ambulance, and they were there wIthin 3 mInutes. Ot to Pfe I ffer. 15400 Rose Street NW - stated when the FIre Bond was discussed. he was told It would Increase hIs taxes $160 per year for a certain number of years. Councl]member McKelvey stated the actual Increase to his house Is only $80 per year. The cost to the residents is less then what they were told. He stated he did oppose the bond issue. He was the only resident that attended al] the meetIngs before he was on the Counc II . They made a poInt to let the people know what was goIng on, Once It was passed. he supported It. believIng In the democratic process. He has worked to see that the money Is being spent wIsely. The CI ty will haye these FIre Stations for many years. - ,.-- Ci ty Counci I Budget PublIc HearIng MInutes - November 21. 1991 Page 7 One gentleman stated it is well and good to have the stations here 30 to 40 years from now. But a lot of people are saying this evening to maximIze the dollars spent. make sure there Isn't going to be any more taxes. They are fed up wIth It. Their funds are beIng eroded away. Andover Is a very nIce town. but they really have to start at the grass roots level In starting to cut spending. The mIddle class has less and less spendIng power. He felt the message to the Council Is the Fire Stations have been put In. but there should be no more taxes. Mr. Abbott - stated but the people are demanding more servIces. The first gentleman then complained about services, noting they were not pJowed out until 5 o'clock Sunday mornIng durIng the last snow storm. stating that Is redlcuJous. He questioned the servIce If there had been an emergency. Mayor OrtteJ explaIned many people volunteered theIr time during the snow storm. Firefighters stayed over nIght. Snow plows went ahead of the emergency vehicles. He stated it was the worst storm ever recorded and the Staff and volunteers dId an Incredible Job. A resident retorted when talkIng about servIces. thInk about hIs 71-year-old neIghbor who couldn't get out. He drives by the Fire Stations. Why are the lights on? Mayor Orttel explaIned the FIrefIghters do stay over night at the stations and respond to calls at all hours. In response to another question, the Counc I J estimated the cost of the stations to be about $1.5 mIJ1Ion with about three-quarters of a mllJlon dollars for equIpment. In response to another question. Councllmember Smith explaIned the reason a 75-foot aerIal ladder is needed Is to reach the top of roofs from the street. Another resident stated the residents are now left In the cold, demandIng that the future should hold no new taxes for them. They are hurtIng and don't need more taxes. Mayor OrtteJ repeated Andover Is the lowest taxed City In the State. Discussion returned to the mandates by the State. Mayor Orttel stated the City has been lobbying through Its association wIth the League of MInnesota CIties. Counc II again urged the residents to speak to their State representatives and/or Senator Doug Johnson on the Tax CommIttee. Another person expressed frustration. statIng she cannot pay any more taxes but felt they have no rights. Mayor Orttel agaIn poInted out that the $413.000 Increase was voted on and approved by the voters. That bond now has to be paid by the City. Mr. Holasek - asked what percent of the Increase Is for the Fire Bond and what percent Is for operatIng expenses. He read statistics that show Andover as the least taxed City when compared to the nelghobrlng cItIes. Counc II estimated the actual Increase In the General Fund amounts to a 2.5 to 3 percent Increase. - '.__0__- CIty CounclJ Budget Public Hearing Minutes - November 21, 1991 Page 8 Mr. HoJasek - stated nobody lIkes to have a big Increase. The City has done reaJ]y well. with an Increase conslderab]y I ess than the neighboring cities. except for the bond Issue that the voters approved. Mayor Ortte] pointed out the growth In the CIty is more than the Increase In the budget, whIch means In effect the spending Is the same or Jess than last year. The CIty Is provIding servIce for another 10 percent In valuatIon with no Increase In the budget. Someone thought there was a 3.9 percent Increase In popu I atlon. Mayor OrtteJ explaIned the 3.9 percent estimate Is from the Metropolitan Council. It Is the dIfference between theIr estImate and what the census saId. The CIty has the hIghest number of chIldren per household In the metropolitan area. 3.63. There are about 300 homes per year being built In Andover. and the Mayor agaIn explained the effect of the City's Inability to adjust the bUdget for that additional valuation. One person stated some of the countys have only had 4 percent rate Increases. but their chambers have been crowded as well. They are taxed to the I 1m I t, demanding the Council respond to them. He dIdn't fInd a 9 percent Increase acceptable. Mr. Holasek - agreed but noted with the Increase In growth, It Is only an Increase about 3.9 percent. Mayor Orttel stated that figure has nothIng to do with real populatIon. He also fe]t that beIng the lowest taxed cIty wIth the lowest Increase In taxes Is being responsible to the resIdents. Another preson asked how the homestead credit Is figured for their taxes. Mr. Koollck stated he spent almost an hour on the phone with the County Assessor asking that same question. The closest answer he got Is that It Is extremely complIcated. That Is determined by the State and spread to the Individual propertIes In the county along with the taxes. Councllmember Smith stated no one really knows how the homestead credit Is determIned. but he thought the change In the tax laws Is part of a plan to e] ImInate It. Councllmember Jacobson also noted that the bond Issue fo~ the School DIstrict to construct the new high school Is not on these taxes. That wIll be levIed In 1993. CounclJmember McKe]vey felt there may be another schooJ bond Issue election In the near future. Mr. KoolIck pointed out the Schoo] DIstrIct Is a separate entity. encouragIng those present to attend both the Schoo I District and county bUdget hearings. Mayor Orttel also urged the people to vote In any electIon. A gentleman stated when he voted on the Fire Bond, he didn't realIze the facIlities would be enlarged and t~aInlng would be done at the StatIon on CoRd 58. Mayor Orttel eXPlained the main station Is on Crosstown Boulevard where most of the trainIng wIll be done. He didn't think the sIze of Station No. 2 was Increased. but there wi I I be some limIted trainIng and meetings there. City CouncIJ Budget Public HearIng MInutes - November 21. 1991 Page 9 Mike KnIqht. 4622 176th Avenue NW - stated this has never been a free-spending CIty. It Isn't now. He didn't know of any way to serve the public without spendIng money. Nobody wants taxes to go up. Maybe people have suggestions on what services they want to see cut. Mayor Orttel stated If there Is some area where they are spendIng foolIshly. they would Jlke to know. He taJked of the efforts to get communIty Involvement for various programs such as tree management and the apparent lack of interest because of the low attendance at the Town MeetIng on trees. One person wondered if something could be cut In Park and RecreatIon. Mayor Orttel stated that budget has been cut drasticallY the ]ast few years. Most of theIr funds are dedication fees from developers. Counc II dIscussIon also noted the very high use of the parks. especially by the various programs In the summer. The City does not have that many developed parks. They also expressed frustration over having to fund programs mandated by the State without additional fundIng to cover them. Another resident asked about the contract for police protection. The Counc I I explaIned the cost of the contract and the hours of coverage. noting It Is more cost effective than the City having Its own pollee department. That Is monItored by the City. Other cities with theIr own departments pay consIderabJy more than Andover does. Someone asked why the startup costs for a City Police Department were not Included wIth the FIre Bond. Counc II noted the earlier outcry against the costs of the Fire Bond; that wouJd have Increased the cost even more. Mr. Abbott - asked If the Neighborhood Crime Watch wlJI be started up again. Mayor Orttel suggested he contact the newly hired Community School Coordinator, who Is aware of the program and wlJI try to get It reactivated. Ms. Kozlowski - testifIed the Crime Watch program has worked well In theIr neIghborhood. A resident then complImented the Council. statIng they have done an outstanding Job. He asked that they continue to look carefully at the budget. Mayor OrtteJ stated as long as he Is there, they will look very cJosely at the budgets. Another resident asked I f the Counc II could Inform the people vIa the Andover Express whIch State representatIves don't agree with the City's polIcy on various Issues. The Counc II felt that Is not the proper forum to dIscuss those Issues; howeyer. they encouraged the residents to keep aware and become Involved In Town Meetings. the budget process each year, the Counc II meetings. etc. , or cal I the Councllmembers with their concerns. - ,.-- ~ CI ty CouncI J Budget Public Hearing Minutes - November 21. 1991 Page 10 Paul Otto. 3910 Crosstown Drive - apprecIated the nIce Job on the street paving project last summer. He notIced the debt Is over $3 mIl lIon and wondered If some Is paying a real high Interest rate. Mayor Orttel stated munIcIpaJ bond rates are extremely low. That Is beIng paid by the affected property owners on the varIous projects. not by the cIty at large. Mr. KooJIck guessed the hIghest rate Is 7 percent; most are between 5 and 6 percent. Mr. HoJasek - stated the resIdents pay only 16.6 percent of their tax dollar to the City, whereas the county Is 30 percent and the Schoo] DIstrIct Is about 52 percent. He encouraged everyone to attend those hearings which affects more than three-fourths of theIr tax dollars. Someone asked about the CIty's bond rating. Mr. KoolIck reported It Is an A for State AId bonds: other bonds are rated by Moody's as Baal. Lyle Bradley. 15202 Seventh Avenue NW - was very comfortable wIth the quality of peop]e running the City, maInly because there Is no major confJlcts of Interest. He complImented the CouncIl. asking them to keep up the good work. There was no further publIc testimony MOTION by Sml th. Seconded by Jacobson. to close the public hearIng. MotIon carried unanImously. MOTION by Perry, Seconded by SmIth. adopt ResolutIon R189-91. establIshIng the 1992 levy to be certIfied to the County Department of Property Tax AdmInistration by the City of Andover; and Reso J uti on R190-91. a ResolutIon establIshIng the City of Andover 1992 General Fund. Debt ServIce Funds and PublIc Improvement Revolving Fund Budgets. as presented. Motion carrIed unanimously. MOTION by SmIth. Seconded by McKelvey. to adjourn. MotIon carried unanimously. The meeting was adjourned at 9:59 p.m. RespectfuJly submitted. ~CJ.J-""C\ c. ~ y-;~L Marcella A. Peach RecordIng Secretary - . -"--. .-