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HomeMy WebLinkAboutDecember 6, 2004 Truth in TaxOFFICIAL PROCEEDINGS CITY OF COLUMBIA HEIGHTS CITY COUNCIL TRUTH IN TAXATION HEARING DECEMBER 6, 2004 The following are the lninutes for the Truth in Taxation Hearing of the City Council held at 7:00 p.m. on Monday, December 6, 2004 in the City Council Chambers, City Hall, 590 40th Avenue N.E., Columbia Heights, Minnesota. Call to Order- Roll Call Mayor Wyckoff called the meeting to order. Present: Mayor Wyckoff, Councihnember Williams, Councilmember Nawrocki, Councihnember Ericson, Councihnember Kelzenberg Pledge of Allegiance - recited Presentation of 2005 Budget and Tax Levy Information Nawrocki stated that department heads have already given their budget presentations and the purpose of this meeting is for the residents to speak. The additional staffpresentations should be reduced or eliminated, so the public can ask questions. Wyckoff stated this meeting is to educate the public and that staffpresentations would give more information on budget cuts and add backs. Fehst stated the presentations are at Council's discretion, but with the budget being reduced $2 million from an $8 million dollar budget we need to talk about cuts and add backs. Walt Fehst, City Manager, bttdget overview Fehst stated that in September of 2004 he presented the City Council with a freeze on expenditures for the next two years, and a two percent increase in 2007. This would result in a 2007 budget with an expenditure level less than in 2003. Department Heads were asked to fix on a budget no gq'eater than 2002 and with reductions often percent. He reviewed each budget line item by line item. Fehst stated that this recmmnendation would maintain the same level of service, with budgets absorbing cost of living increases. The stated that we did raise back the amount lost from state aid last year, as did 80 percent of the other cities in the state. He noted that when we went out for a new bond, the rating indicated that we should have reserves of 50 percent and we are at about 45 percent. Our reserve funds have to can'y expenses for the first six months of the year, as we do not receive tax funds until the seventh month. He stated that about a year ago we received a commendation from the State Auditor for having adequate fund balances. This budget recommendation would be a three year plan. If the budget is increased the amount requested by some Councihnembers this year, it would be reco~mnended at 5.27 percent next year and 3 percent the year after that. As an alternative plan, Council could look at raising taxes 9 percent each year for the next three years, using fund balances as an offset. Fehst stated that cuts would include the Council budget and royalty and float reductions, and add backs would include a 24th police officer, one full time fire fighter, children's programs at the Library, a full time building official, an upgrade of the City Planner position, and an increase for family health insurance. If requested, in the add back would include keeping the Special Projects Coordinator (SPC) at full time for an additional $20,000. Wyckoff indicated that three Council Members have indicated they want the SPC position to stay full time. Ericson stated that is a consideration, not a final decision. Nawrocki stated that decisions cannot be made at work sessions, and any changes fi'om the August meeting need to be voted on. Fehst agreed this would still allow reduction of the budget by $150,000. City Council Minutes December 6, 2004 page 2 of 8 Fehst stated that Bill Elrite, Finance Director, would give a power point presentation of the budget. William d. Elrite, Finance Director Elrite stated that handouts to follow along with the presentation were available in the back of the room. This power point presentation is a visual summary of our budget, highlights of past years and how we arrived at the budget presented tonight. explained the power point presentation: Revenue by source - 2005 budget Expenditures by functional area Expenditures by classification - 42% is in personnel costs, which makes it difficult to make cuts without reducing personnel. General Fund, Library, and EDA Fund sources of revenue. These are tax supported funds, with $5,608,626 from the proposed tax levy. This increased significantly because of state aid reductions. General Fund, Library, and EDA Fund expenditures by classification - 67.54% is personal services. General Fund percent of fund by department - the Police Department is the largest department tax supported at 30.92 percent, next is the Public Works Department at 24.01 percent. Change in State Aid chart - 2002 adopted budget to the 2005 proposed budget. HACA was received until 2001; through the elimination we lost $800,000. In 2003 our State Aid was cut by $696,000; this continued into 2004 with a loss of $352,000 and 2005 a loss of $544,000. The major reason we need a tax increase is to make up for what we have lost in state aid. Proposed property taxes - there was a shortage of $6,146 in 2003. In 2004 we made up $629,276 and the proposed 2005 levy would make up $794,726. Where 2004 and 2005 property tax dollars go Property tax history fi'om 1997 to 2005 on five selected properties. Explained the shift of taxes and spoke of the bottom line, which indicates one home is taxed less than in 1997 and the largest increase from 1997 to 2005 is $310. Also looked at one home in more detail - an average home with a value of $160,000 would have a property tax increase of $123. Cumulative LGA lost - showed reductions since 2003. We will loss $1,931,902 in state aid this year and every year there after, which is the dilemma the City has had to face. LGA and Tax Levy History Total Tax supported Budgets-General fund, Library fund, EDA fund - shows what the City Manager proposed for budgets projecting out to 2007, which would be a fi'eeze at $8,948,853 for 2005 and 2006, with a three percent increase in 2007. What $30 a month buys in comparison to City services for that amount. This graphic has been used in the past, and the amount would now be higher. Presentation by staff on department needs Tom Johnson, Chief of Police Johnson gave the history of personnel reductions in the Police Department and the escalation in the number and severity of crimes the department handles. Programs, such as the rental property owners meetings and "Juvenile Safety Net", were discontinued due to lack of available staff. New situations that require additional staff time and resources are: Active Shooter, Road Rage, Meth labs, Significant threat, and Homeland Security. Johnson indicated the increase in the number of arrests and a comparison to other metro area cities. A 25th officer would allow the return to a full City Council Minutes December 6, 2004 Page 3 of 8 contingent. Even if additional funds were approved, it would take up to three months to get an officer on the street. Nawrocki questioned the Clinton Cop program. Johnson stated that ended in 2000. Fehst stated that at one point we had 26 officers. Kelzenberg questioned the amount of time our officers spend at our schools. Johnson indicated the high school has a 40 hour liaison and there is a joint powers agreement, whereby an additional officer is at the high school and middle school during their respective end of the day. Kelzenberg questioned if the additional officer would alleviate overtime. Johnson stated that we do everything we can to avoid overtime, by rearranging hours. This is difficult on the officers, but reduces costs. Johnson indicated that there is a grant application process for a school officer. Charlie Thomlgson, Fire Chief and dohn Larlcin, Firefighter Thompson described the need to fill the full time position that was not filled following the move of a fulltime firefighter to Assistant Chief. He asked Firefighter John Larkin to describe the loss of level of service from this reduction. Larkin indicated this position was left in the budget, but was not filled. He expressed concern that the position of the sixth fulltime firefighter would be eliminated. If this position were cut, it would lower the level of service that residents are accustomed to. Currently, on one shift out of three, calls must be answered by one fulltime firefighter and one paid on call firefighter. The paid on call do have the same training, but not near the level of experience. Firefighter are on duty for 24 hour shifts, answering fire calls, EMS calls, housing maintenance inspections, vehicle maintenance, and training. He indicated the increase of calls from 500 calls in 1971 to 2,082 in 2003. Larkin listed grants and funds that have been raised by the Fire Department to assist with their budget. He reiterated that Council and residents should be aware that if this position is not filled, there will be a lesser level of service. Wyckoff asked Captain Larkin to repeat the example given to Council members at the work session. Larkin gave an example that illustrated the need for fulltime firefighters on EMS calls, where more experience makes a difference. Nawrocki indicated that in addition to the current five fulltime firefighters, the Chief and Assistant Chief are also trained fulltime firefighters. Ericson stated that this position was budgeted for in this year's budget, but not filled because of the hiring fi'eeze, which was a cost savings. Larkin also noted that the revenue received for services completed for the City of Hilltop have increased from $19,000 to $38,000. A future revenue proposal will be consideration of commercial property inspections. Nawrocki indicated that the position referred to was utilized for one-half of the budget year. Fehst indicated that 15 persom~el have not been replaced, with nine removed permanently. If one police officer, one-half building inspector, and the maintenance person were returned, we would be down 12 people from the budget four years ago. Nawrocki indicated that our populations has also been reduced, and we now pay Anoka County to do assessing, along with upgraded equipment. Fehst agreed productivity is up because of technology. City Council Minutes December 6, 2004 Page 4 of 8 Williams stated that we should use our fund balances for one year, rather than increase taxes. Larkin stated that we are asking to fill a position that is currently budgeted. Williams suggested passing costs on to those who use special services. Larkin indicated the large amount of time spent on property re-inspections. Fehst indicated the anticipation of a request to increase re-inspection fees. Fehst indicated that the proposed fi'eeze at the current level would translate to a 15 percent increase in taxes, and would be $250,000 less than the proposed levy passed in September. Add backs could come from fund balances. He also stated that the under spent funds in our current budget, estimated at $200,000 could be used. Becky Loade~; Library Director and Marsha Tttbbs, Children's Librarian Loader gave the statistics of Library usage for Monday, November 2, 2004. She indicated the areas of concern in the 2005 budget are the children's programs, subscription reductions, and scheduled replacement of the automation system. Tubbs indicated the services provided by the library to the public and to the schools. Summer Reading programs significantly increase reading retention for school children. The 2005 Smmner Reading Program was scheduled to concentrate on the sciences. The other program in jeopardy is "Super Tuesdays" which was attended by 3,112 people last year. Nawrocki questioned the cost differential between being part of the county library system versus keeping our own library. He indicated this is not a popular concept, but must be considered. Nawrocki agree that the Library does perform good services, but we should continually look at more cost effective ways to provide services to residents. Loader stated the city per capita cost is $23.41 versus $21.90 for Anoka County. Wyckoff stated that Anoka County does not want to absorb our library. Loader agreed. Nawrocki stated he was not proposing we actually to this; it would have to be a negotiating process. Williams stated though he is appreciative of the Library, he is opposed to adding the $4,000 back into the budget. He felt the funds should be raised privately through people that care, possibly with a dinner and silent auction. Loader indicated that these are basic services, which must come fi'om the operating budget. Barb Miller, Chairperson of the Library Board, indicated that if taxed on the basis of a county library it would be slightly less, but indicated that we are not paying taxes to build library buildings in the rest of the county. She felt that all taxpayers should pay operating costs of the library, and not by randomly raising money. Miller stated that to move forward we must tax residents to compete with other cities. She indicated that her taxes have gone down for the last four years and her property value has gone up. Walt Fehst, City manager B~tdget Presentation &tmmation Fehst stated that the 15 percent tax levy would translate to a 20 percent tax increase. Budget add backs could come fi'om fund balances. Public Comments Wyckoff stated that employees who are residents also have the right to speak on this topic. Harold Hoium, 4321 5th Street, refen'ed to waste of funds, the City Manager's salary, employee's responsibility to their employer - the residents, indication that ordinances are not being enforced, disapproval of the City Attorney, and requested all Councilmembers tender their resignation. City Council Minutes December 6, 2004 Page 5 of 8 Aurora Jolmston, 3977 Polk Street, indicated disappointment in the cut of recreation funds and the recreational coordinator position. She stated that the Recreation budget includes progrmns, but also Murzyn Hall. Grants are obtained to assist this budget. She also disagreed with reductions to the children's library programs, and indicated the need for police services. Johnston suggested hiring a consultant to see if the budget has areas that can be reduced. She felt there is nothing more to cut and our City is suffering. If there are residents on severely fixed incomes, offer them a rebate. Fehst stated that add backs include one full time coordinator. Johnston stated that she volunteers whenever possible, but they are very short handed. John Sarkinen, 4446 Arthur Street, questioned if the children that use the Library programs are the children that really need it. The Library should coordinate with the schools to draw in these students. He stated that budget numbers are misleading with an eight percent loss of state aid, but a 21 percent tax increase, being $80 a month for him. Elrite stated that Minnesota has a complicated tax system and explained the percentage difference between what we pass and what the County assesses. Sarkinen stated that the Tribune shows Columbia Heights at the top for taxes paid. Elrite explained the large amount of our budget that was state aid and with this loss we are among the largest losers. Fehst referred to the past overtax burden to conunercial property, which has now been reduced and shifted to residential, and that the State has picked up more school funding. By the end of 2006 we will have lost $2 million from and $8.5 million budget. This will affect the level of service residents are used to. 47 percent of the general fund is Police and Fire. Fehst indicated that funds could come from our fund balance, through raising more revenue in housing and cmmrtercial inspections, or consideration of fi'anchise fees. Williams stated to Ms. Johnston that Council reduced their $55,000 budget by $19,000. Wyckoff stated that the reduction was for travel that was not being used. Nawrocki stated that he suggested the Manager go through every budget and make reductions like this. He suggested cutting all national organization participation for Council and all departments. Nawrocki indicated that this budget does not include the HRA budget; utility fees will increase about ten percent a year, and street assessments continue yearly. Nawrocki reviewed the refuse contract process, and stated that homeowner rates should be reduced. Fehst indicated that negotiations with refuse haulers resulted in a savings of $230,000. Wyckoff indicated that Jean Kuehn was the employee to negotiate the contract and she is one of the employees considered for reduction. Bruce Nedegaard, 402 Stinson Boulevard, asked for support to reinstate a full time building official, because of the two large housing projects that will take place in the near future in Columbia Heights. He indicated delays in plan and inspection approvals are very costly to the developers. Fehst stated that if the budget is approved on December 13th, we are prepared to hire a building official at that time. Ericson stated that if we want to attract quality development we must have qualified staff. Jerry Foss, 4412 2nd Street, Park and Recreation Co~muissioner, stated the Park Department is short two employees and residents are being asked to volunteer their time, meanwhile programs are suffering. He indicated he would support a 15 percent tax increase to maintain recreation services and have our Police Department back to full force. Foss stated that Columbia Heights has the best rescue service in the area. Foss requested that Council do their best to save what resources and programs we have. Dorinda Edlund, 4145 Jefferson, Ambassador Progran~, requested reconsideration of budget cuts to the Ambassador Program. Wyckoff stated the consideration was a $3,000 budget for the program and City Council Minutes December 6, 2004 Page 6 of 8 $1,000 for the float. Edlund stated the cost to store the float is over $2,760. Wyckoffindicated that the Council has not received clear bookkeeping records fi'om the program. Edlund asked if she could store the float somewhere other than the Public Works garage. Staff indicated she could. Edlund listed program and reception costs throughout the year. She requested that funds not be cut from the Junior Ambassador program. Fehst questioned fund raising activities for the program. Edlund stated they do some fundraising, but would not be able to support the program. She stated this program maintains the good will ambassadors for our city. Gary Mayer, 2115 Highland Place, stated that his children benefited frolll our Recreation programs in the 1990's and his desire to see the programs continue. He also stated that he has had to call 911 several times over the last few years, and highly values our emergency response teams. Dan O'Brien, 4101 Reservoir Boulevard, stated strong feels for the need to fill the two police and one firefighter positions, as these are essential services. He indicated that even with the loss of LGA, residents want the same services. Residents must step up to the plate to also save the Library and Recreation programs. It is also very important for the City of have a fulltime Building Official. Residents want a good city and it is time to start paying for it. Understanding the financial burden on the City, he stated that he would agree to more than a 15 percent tax increase. Gregory Sloat, 47731 6th Street, referred to a chart frolll the County indicating his taxes have increased 55 percent in five years. He indicated he has never had a cost of living increase. All he wants is Police/ Fire protection and clean streets. He stated that raising taxes would lower his standard of living. Sloat requested that his taxes not be increased. Kay Mayer, 2115 Highland Place, stressed the urgency to replace our Police and Firefighters, to feel safe in our cmxununity. She listed personal experience with the need for these services and her faith in our response teams. She spoke of two other neighbors that requested she pass along the same sediments. Williams stated that we need to revitalize the Neighborhood Watch Program. Lee Stauch, 1155 Khyber Lane, questioned liquor sales and if operating expenses justify keeping the stores. Elrite indicated the revenue benefits. Stauch questioned where the funds for the purchase of the Burger King property came fi'om and the mnount of money tied up in these investments. Fehst stated they were borrowed fi'om the City. Fehst indicated that the property at 40th and University is being purchased with Comlnunity Development Block Grant (CDBG) funds - not city tax money. Stauch questioned demolition costs. Wyckoff indicated that is grant money. Ericson stated that we are lucky to receive the funds and if we did not use it, some other city would. Fehst stated that CDBG funds can be used for blight control. Nawrocki stated that $75,000 for the University property and Burger King funds are from the City mhd will be paid back with interest. Fehst referred to City goals to improve housing and rehabilitate our infrastructure. John Sarkinen questioned what developers are charged. Fehst stated Park Dedication fees are $750 per unit. Peter Kocur, 1221 42nd Avenue, stated a tax increase ia'lay make it impossible for hili1 to stay in his home. He indicated his property value increased $25,000 in one year. Fehst indicated it is possible to borrow against the equity in a home and that interest rates are very Iow. Fehst stated that questions regarding property values could be answered by Anoka County. Wyckoff indicated that the Tribune shows Columbia Heights has the lowest market values of all communities, other than St. Paul. Nawrocki stated that Columbia Heights values are not low. City Council Minutes December 6, 2004 Page 7 of 8 Gary Gonuan, 5010 Johnson Street, stated that we all have problems with bills, but it comes down to quality of life. Amenities in Columbia Heights have gone away, such as warming houses and skating rinks. He stated that this community is stuck in the 1970's and 1980's. Residents need to put their own money into their community to 1Tlove it fmwvard. Columbia Heights is a first ring suburb next to a major metropolitan colmnunity. The need for Police and Fire services has increased dramatically. Our housing stock is deteriorating, and more properties have turned into rental property this year than the total in the last six or seven years. Fan~ilies with disposable income are moving to the suburbs where they have fancy amenities. Gonuan stated that we need a Council that looks to the future, and does not sit and count paper clips. We need a vision and to join the new century. The reason a city our size has such a large number of medical and police calls relate to the type of people that are drawn here. He stated that Council can get rid of employees and programs, but the needs will still be there and won't go away. Gorman stated that his city tax portion is very little, compared to other communities, for what we get in service. We are in this fix because of the State, but should have had the vision ten years ago and raised taxes then. Kelzenberg agreed with Mr. Gonrtan. Ted Landwehr, 4034 7th Street, agreed with the need for more Police and Firefighters, but we need to cut any fat from the budget. Participants should pay fees to support their programs. He requested that Council use fund balances rather than approve a double digit tax increase. Joyce Meier stated she has done a lot to improve her property, and indicated that we have too much govermnent and not enough communications. She supports continuing the Values First Progrmn. Meier referred to a problem she had with sewer repair and a document that disappeared fi'om our library. Police Captain Bill Roddy, 4025 Washington Street, addressed the Council as a resident. He spoke of the street renovation in fi'ont of his home and the improvelT~ent to the neighborhood's quality of life and water. Roddy asked consideration for employee morale and the workload the cun'ent employees are faced with. He stated that employees are burdened more now than he has ever seen in his career, which affects the quality of service of the employee. Roddy applaud steps taken for renovation, and gave his hope that the City continue to improve. City Council comments Nawrocki disagreed with comments in the Truth in Taxation booklet. He referred to the yearly tax increases, the increase in utility rates, and the cost of street assessments. Government mandates continue unrelated to the different abilities of COlnmunities to pay, relative to income. Federal and State programs are being cut. Nawrocki stated that we have put a lot of money into our colmnunity, the business district and housing of Columbia Heights. This is a great place to live and raise your kids and continues to make improvements each year. He stated it was wrong for employees to bad mouth the city. We have to learn to live within our means. We need to look at each budget with the same hard look and cuts that Council made to their budget. Skating rinks have been cut because there are less people using the facilities. We are not the lowest taxed COmlnunity and the information is presented incorrectly compared to tax rates, where we are on the high side. Our own City departments do not want to pay their own assessments, but expect residents to pay it. Nawrocki indicated his involvement in the new refuse contract. Our refuse service is second to none. It is no fun to look at ways to provide good service, and we have good people, by in large, to provide those services. Nawrocki stated he would have a lot of recommendations at the next City Council meeting for budget cuts, but indicated that the scheduled Huset Park Public Hearing should be given extra time. Ericson stated she did not hear anyone bad mouthing the city, only speaking passionately on their point of view. She stated her appreciation to those who gave their perspective, whether she agrees or not. Our City Council Minutes December 6, 2004 Page 8 of 8 colamr~unity is diverse; and some think we only need basic services, and others that we need to do more for the youth. It is the City Council's job to make the decisions to lead our City into the future. Ericson stated that she does not want to discourage residents fi'om sharing their passion and concerns. She stated that Council has spent a lot of time going over the budget, and listening to resident tonight. Ericson stated the importance of addressing the needs of those on limited incomes and those who want more for their children. The decision will not be made lightly. Williams stated that Columbia Heights is a great place to live and work and he is happy to be here. During the last four to five years the City has moved forward. We have a lot of homes coming on the market. Today there was a ribbon cutting on 37th Avenue for a furniture distributor. We have positive things going on in our town. He stated that it is difficult to weigh the issues, and does not want to drive people from our town. We need citizens that are balanced and care about our city. We need to be more creative and find ways to increase revenue. Williams encouraged everyone to keep moving fmwvard. Kelzenberg reiterated what Ericson stated. It is not easy to raise taxes, but does not feel this is mtreasonable. He stated that he continues to hear that we are cutting from the children's needs and that people should step forward to pay for use. Kelzenberg stated that parents already pay a substantial amount for their children to be in programs and volunteer 25 horn's of service. He stated that proposing a nine percent increase for three years ends up the same as the 15 percent increase next year, seven percent the following year and 5 percent the third year, at 27 percent. The 15 percent would keep our cash reserves and keep us in a better place. Kelzenberg refen'ed to suggesting the sale of Parkview Villa to save the City $600,000 and Councilmember Nawrocki's staunch refusal. Wyckoff stated that 17 people spoke tonight, and in her six years she has never see that many people participate. She indicated that when the property tax statements came out she did not receive one complaint. Wyckoff applauded Gary Gorman and agreed that things should have been done ten years ago to remove blight. We can let properties stand empty or let them be purchased by undesirable businesses, or step in and do what we want to improve the City. We have 600 townhomes planned for the industrial area and many more for the ICanart site, and questioned what mnenities we have to attract them. We have a Library where you use the basement, and no gym space. New Brighton is spending $30 million dollars on a project they started 20 years ago. What were we doing all this time? She stated that the only people moving to Columbia Heights are those who just want a good deal. Wyckoff expressed disappointment about any discussion to lay off employees. Our Special Project Coordinator has a very important job and answers many resident's questions. Adi ourmllent Mayor Wyckoff adjourned the meeting at 10:55 p.m. ( Pat~icia Muscbvitz, cMc { "Deputy City Clerk/Council Secretary