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HomeMy WebLinkAboutTT December 8, 1994 CITY of ANDOVER Special City Council Meeting Truth in Taxation Hearing December 8, 1994 Call to Order - 7:00 p.m. 1. Public Hearing/1995 proposed Tax Levy and General Fund Budget 2. Announce Adoption Date 3. Adjournment . -.. ~ -.. -- .. 4tt]j."·.. CITY of ANDOVER ,\\ ...."\., 1685 CROSSTOWN BOULEVARD NW. . ANDOVER, MINNESOTA 55304. (612) 755-5100 ,", ,..," "',,- ' 'c"~_,.-;":· SPECIAL CITY COUNCIL MEETING - DECEMBER 8, 1994 MINUTES A Special Meeting of the Andover City Council was called to order by Mayor Jack McKelvey on December 8, 1994, 7:00 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota, to hold the Truth in Taxation Hearing. Councilmembers present: Dalien, Jacobson, Knight, Perry 0 Councilmembers absent: None Also present: City Finance Director, Daryl Sulander City Administrator, Richard Fursman Others Mr. Fursman explained the percentage increase shown on the tax statements Andover residents received has about a 5 1/2 percent error; so whatever their statements read, the City's share shows more than it is supposed to be. He then gave a presentation explaining tax class rates, where the taxes go and how Andover compares with other communities. About 87 percent of Andover's tax base is residential. Individual taxes can rise faster than the City's levy because of an increase in property values, which is not controlled by the City, and legislative changes. For each dollar of property tax paid, Andover only receives about 19 cents. Because of the state formula, Andover receives the lowest amount of state aid per resident in the north metro area; but it also levies the second lowest tax rate in that area. Several residents complained about the rapid increase overall in their taxes, that house values have tripled in the last nine years, that the large number of houses built in the City should help keep things stable, questioned what services they receive for their 12+ percent increase, and asked if the City is doing anything to see that the state aid formula is changed and what is being done to draw more industry into the City. Mayor Mckelvey stated the City is unable to do anything, though the City does belong to the North Metro Mayors' Association, which has been working very hard to get some equity in the formula. He also explained the difficulty of attracting business because there is no thoroughfare through the City. Nine new businesses have come into the City this past year, and steps are being taken to provide additional industrial land to attract businesses. Mr. Fursman noted the money is available to purchase the property in the junkyard area, though negotiations with the property owners have not yet been completed. The property owners are asking for considerably more than what the assessor has said the properties are worth. Mr. Sulander then compared the 1994 budget with the proposed 1995 budget. The 23 percent increase in 1995 reflects a 15 percent overall growth in the City's tax base and about an 8 percent growth in taxes of the residents. When the county calculated the City's tax rate on the tax statements received by the residents, they did not subtract the local government aid amount, which is the reason the tax rates were ../)'i\~ ~ CY.>...~~""" I~~ q: -- - - ~- -. .-- - - ~ Special City Council Meeting Minutes - December 8, 1994 Page 2 overstated by 5 1/2 percent. If no changes are made to the proposed 1995 budget, the county will automatically reduce the City's portion for each property owner. Mr. Sulander then explained how the state taxing formula affects properties valued at $99,000 versus $138,500, and he summarized the General Fund budget comparing 1994 with the proposed 1995 budget for revenues and expenditures. The major increase in the General Government Operations is the proposal to hire a full-time City Engineer as a separate position. Prior to 1995 the City Administrator and Engineer was one position. Also the City has contracted with Anoka Electric to provide utility billing services starting in 1995. Someone asked about the City Clerk expenditure. Mr. Sulander reviewed the functions of the Department and the number of employees. The $92,605 reflects approximately $50,000 in salaries and $40,000 to operate the Department. It has been placed into a separate budget for the first time in 1995. Another resident commented the Fire Department budget is 10 percent higher than 1993, and he understood that the Department simply spends money at the end of the year or get cut the following year. He asked if there are checks to see that this isn't done. Mr. Sulander stated that practice is not approved. They are charged with responsible management of the money. One of the increases in the Fire Department for 1995 is to combine the part-time fire chief and part-time fire marshall into one full-time position of Chief/Fire Marshal. A woman pursued the budgeted amounts for City Administrator and City Engineer. Mr. Sulander explained the City also contracts with a consulting engineering firm, though only three to four percent of those costs are actually borne by the tax base; the remaining costs are paid for by development. The woman observed the increased level of professional services. In looking at the 1994 Administrative and Engineering budget, then adding the Clerk Administration budget for 1995, the increase is about $20,000 for two additional Staff. She applauded the City for its fiscal responsibility. A gentleman noted the Public Safety portion of the budget is increasing. Isn't it time to look at law enforcement protection to "get a better bang for the dollar?" He pointed out other cities that have more officers on similar budgets. Mayor McKelvey stated he is looking at issue. Andover pays six full-time deputies who work four full-time shifts seven days a week for $433,934 per year. His research indicates in order for Andover to have its own full-time police department, it would cost each homeowner approximately $120 per year. Since people are already complaining about taxes, the Council doesn't wish to add that much more. He has spoken to the new County Sheriff-elect, and he was hopeful that some improvements in the contract could be agreed to. He is also checking into starting a City police department with another City who would do the administrative part to keep the costs down. Another resident stated the article in the Star Tribune sounded like Andover has only one officer. Mayor McKelvey stated he did speak to the author of that article prior the publication; but most of his comments - -. - -.- - - .-- ---. -- -- Special City Council Meeting Minutes - December 8, 1994 Page 3 were cut. He also spoke to the author after the paper came out to complain, but nothing was done. But he assured those present that the City is exploring ways to improve law enforcement service in the City; and if some changes cannot be agreed to with the new Sheriff after the first of the year, the Mayor thought definite action would be taken toward a City police department. Two other residents related incidents of police officers responding to calls in a very timely manner. They were impressed with the service. Mr. Sulander went on tQ ~~lain the major impact to the budget has been an increase in Public ~g~ y, specifically to street maintenance and to Q~'~8~-pãrks. Street maintenance includes the need to develop and maintain a ' ~~Gr~ crack sealing and sealcoating program, exploration of controlling salt pollution and additional equipment. The Park and Recreation Department will be expanding and enhancing maintenance for neighborhood parks and has budgeted an additional full-time person for three-fourths of the year 1995. He also reviewed the change in Economic Development, which is now under the Economic Development Authority, and reviewed the unallocated and other financing uses. Residents commented on the number of parks, that there are so many but that only a small number of people use them. Mayor McKelvey stated the tendency has been to accept cash in lieu of land in the recent developments and to concentrate the athletic facilities in the park complex. In response to comments from the audience, the Mayor stated the City is looking at the problem of private parties by young adults in the parks at night, that the cash taken for park dedication is used to develop new parks and to buy new and replacement equipment, as well as increased maintenance of the parks. Responding to questions and comments, Mr. Sulander reviewed the number of employees in the various Public Works Departments. A property owner complained that basically his $200 tax increase pays for the upkeep of roads, yet it still takes 12 to 14 hours to get plowed , out after a snow fall. This is a continual problem that he hoped the Council would look into. Mayor McKelvey hoped the service is improving. Newer equipment is being purchased. Another person saw a 12 percent tax increase and agreed with the need to increase spending in Public Works, but he did not think he was getting his money's worth for the increase. He asked how does the City compares with Ham Lake and when will they stop increasing the values. Mayor McKelvey stated the two cities are fairly close. Other Councilmembers explained the property values are based on comparable sales in the area which is a State mandate to spread the taxes equitably among the people. If anyone feels there is a problem with their property valuation, they should contact the county assessor. As long as inflation continues, there isn't going to be an end to increases in property values. Another person stated his market value increased 4 percent, but his tax increased 21.6 percent. Even with the error, it is still a 16 percent increase, which he felt is unacceptable. Another person stated his land was homesteaded, then he build a house on it and his taxes went up 600 Special City Council Meeting Minutes - December 8, 1994 Page 4 percent. Still another complained he's lived in his house 28 years, and the value has gone up $4,000 each year for the last two years; yet he has done nothing to it. The Council explained the inflation factor reflects in the market values, especially the increase in land values in Andover. A member of the audience asked about the Rum River watershed levy. Mr. Sulander explained the levy generates $17,000 for the water management organization and pointed out the general watershed area. It was also noted that the remainder of the City is under the Coon Creek watershed area whose funding is included in the county tax. Someone had realized the 1995 budget was already adopted but asked the feeling of the Council in trying to slow down the rate of tax increases. The Council explained the 1995 budget is not yet finalized and reviewed the process and cuts they have already gone through to get to this point. Councilmernber Perry felt the budget is a bare bones budget. Increases were made to the newsletter because the residents have said they want more communication. She also felt it is important to maintain the City's road maintenance because the replacement of roads is more costly than maintenance. Also, because of the cut in State aids in recent years, the Park and Recreation budget has been cut to almost nothing to balance the budget for several years. Another resident stated on his homestead of $142,000, he pays the city $424 in taxes. That means he is getting $35 per month worth of police, fire, road and parks. He thought that was a good deal. In comparison to what it costs him for schools and the county, the City has a very small portion of the taxes and stated he thought the City has done a good job. There was a question from the audience as to why all the new houses aren't assessed the costs for the new services needed. Mayor McKelvey explained under the State law, the first year the City does not receive taxes from the new homes; the second year it receives only a portion; and it isn't until the third year that the City receives the full taxes on the house. That leaves the City behind in paying for its expenses. In response to other questions and comments, councilmember Perry explained the residents are not only getting street maintenance for their taxes, but fire and police protection, park needs, recycling, etc. Mr. Sulander again explained that the increase in the City's tax base makes up two-thirds of the increased costs of operations. The Mayor also explained the City is taking steps to slow down development, to control the number of new houses being built each year so the services can be provided along with the new growth. A resident asked if the construction of a new City Hall will be voted on by the citizens. The Council explained the process of researching the City's needs for the next ten years, and those results have not yet been received. They explained as information is made available and options are considered, public hearings will be held for public input. - -~ .- -,- ---,-- Special City Council Meeting Minutes - December 8, 1994 Page 5 One citizen stated he came this evening with a concern that the property value increased 3 to 4 percent, but the tax statement reflected a 21- percent increase, though the error brings it to 16 percent. He was pleased with the good government and good service but didn't think he or anyone else could sustain 15- to l6-percent tax increases every year. The Council again explained the increase in the budget to the taxpayers was about 8 percent. The remaining increase reflects the increase in market value on the property. Someone stated the taxes in Ham Lake went up approximately 5 percent and not one person showed up at their hearing last night. He stated people will accept a 5 percent increase, but not a 19. 2-percent increase. Another agreed the City has done a super job in holding the taxes down; but the fact that the tax now has gone up at this rate tells him something has changed in the way Andover is running. He thought the City needs to be careful that this amount of increase does not continue year after year. Mayor McKelvey agreed, and noted the City is trying to keep taxes down. The Anoka Union comparison of tax increases reflects the correct amount for Andover; and only Ham Lake had a lower tax increase than Andover. There was also some discussion on the concerns of continually increased market values, with the Council again noting those values are based on sales. So much of this is coming from the State level. Councilmember Perry didn't think the City would continue to increase the tax rate at this rate. But there are many associated costs with a growing community, and she felt there is nothing more that can be cut from this proposed budget. The City has been very conservative; but in good conscience, she did not feel the City could allow the streets to deteriorate, plus adequate park and recreational facilities are needed. Several residents stated they are getting good service for the amount of taxes but were scared that this high percentage increase will continue. They didn't know how to change that other than bring in more commercial, which they felt should be addressed. It may also mean the City must stop growth until it and the school district catch up. The Council explained steps are being discussed to control growth, plus costs have been added to the building permits and plan assessments to help pay for the Staff. Someone asked if the City gets the fines that people must pay. Mayor McKelvey stated the City gets a portion of them. The response was if the City is paying an official to write the tags, the City should be getting the fines. That should be negotiated with the new Sheriff. Mayor Mckelvey stated he has discussed more vigorous enforcement of speed limits rather than concentrating on parking violations. Councilmember Perry also noted the budget process starts in July and invited interested residents to be a part of that process. Mr. Sulander announced the adoption of the levy and budget will take place at the December 20, 1994, regular Council meeting. MOTION by Perry, Seconded by Dalien, to adjourn. Motion carried unanimously. The meeting adjourned at 9:20 p.m. ~:tfullY su~ ~I ~,~~~cretarY -_.- ._~,,- .._----._~-_.._-_.- ----