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HomeMy WebLinkAboutDecember 3, 2007 T&TOFFICIAL PROCEEDINGS CITY OF COLUMBIA HEIGHTS CITY COUNCIL BUDGET HEARING DECEMBER 3, 2007 The following are the minutes for the Truth in Taxation Hearing of the City Council held at 7:00 p.m. on Monday, December 3, 2007 in the City Council Chambers, City Hall, 590 40th Avenue N.E., Columbia Heights, Minnesota. Call Truth in Taxation Hearing to Order -Roll Call Present: Mayor Peterson, Councilmember Williams, Councilmember Nawrocki, Councilmember Diehm, Councilmember Kelzenberg Pledge of Alle ig'ance -recited Presentation of 2008 Budget and Tax Levy Information Nawrocki asked why this meeting was not noticed on cable TV. Peterson indicated because of the lack of staff and that the Special Project Coordinator position has not been filled. A. Walt Fehst, City Manager -present budget overview information. Fehst indicated the General Fund, by virtue of the Ad Valorem property tax, is $9,134,957 as initially presented. That is an increase of $427,221 over the 2007 budget or 4.9%, due to cost of living increases, wages and benefits. The largest increases were in the Police and Fire Departments. The EDA budget went down 44%. The City Manager proposed the use of $150,000 in fund balance, which left a balance of $346,000 to be made up by property taxes. Last year we had an increase of $200,000, for the first time since 2003, in local government aid and this year we received a $21,000 increase, which left a property tax increase of $324,728 or 5.33%. In the initial proposal we did not anticipate the grant for the 26th police officer, but the Council requested to add two officers. They also suggested adding back $70,000 in contingencies, bringing the proposed levy increase to 6.4%. Of that amount, $19,000 was added for two part time helpers at the library. We are into a ten year street rehab program and this was the first time we asked for funding in the amount of $128,000 for the street infrastructure program. If you add that amount, you are at 8.8%. That does not include property value increases. One district of our city received a large property value increase this year, but had a decrease last year. Fehst stated that he has met twice with the County Assessor on these issues. He stated the time to protest the increase of tax is in the spring at the Board of Review meeting. B. William J. Elrite, Finance Director, gave a Power Point budget presentation including: Elrite stated that this presentation deals with the entire budget in overview. • All Budgetary Funds Revenue by Source -Intergovernmental Revenue has gone down significantly in the last several years • All Budgetary Funds Expenditures by Functional Area -the largest are Public Works and Public Safety • Sources of General Fund, Library Fund and EDA Revenue - supported by the property tax levy. • General Fund, Library and EDA Expenditures by Classification -personnel services are about 70% of the total. • General Fund by Percent of Total -the largest area is the Police Department at 33%, Public Works at 24%, and Fire at 12.93%. • History of Local Government Aid -there has been a large drop, switching to tax supported aid. The LGA we lost from 2003 to 2008 was $7,767,786. Most of the loss has been made up through an increase in property tax. City expenditures significantly decreased. • Property Taxes 2003 to 2008 -property tax structure. • Where your property taxes go from 2007 to 2008 - 40% go to support city services. Years ago it was the school that received the largest portion of taxes. • Property Tax History from 1998 to 2008 on five selected properties - in a long range funding plan the increase is less than $100 a year over a ten year period. • Tax levies payable 2003-2008 • Tax levies payable 2007-2008 -there was a significant shift in who pays more, based on how much a resident's property value increased. Elrite explained that an increase in taxes does not mean that the city receives more. It depends on the increase of your property value in relation to the total city's property value. • Cumulative LGA Lost - we have lost well over 50% of our local government aid. • LGA and Tax Levy History - in 2007 the amount is more for the first tune since 2003. One of the reasons was adding a 27`h officer. Fehst stated that this is the first time we will have a 27`h officer. • Total Tax Supported budgets -General Fund, Library Fund, and EDA Fund. -five years later the amount has only grown by $300,000. • Cost savings from 2003 to 2008 • What will $60 a month buy -the average household monthly tax bill would be $60. C. Presentation by staff on department needs Bill Roddy, Acting Chief of Police, gave a power point presentation including: • Personal services - in 2008 the increase is 2.1 percent. There have been additions to the Police Department, including an Evidence Technician to increase CSO time on the street. Second is the addition of a 27`h officer and a federal grant fora 26`'' officer to be placed in the middle school and used for summer patrol. The 27`h officer should help with attrition. We have been running the department with 22 officers, which is very difficult. Roddy stated that his short term goal is to bring the staff to the full level. • Anoka-Hennepin Narcotics and Violent Crimes Task Force 2007 3rd quarter statistics. The number of cases is less in 2007 than 2006 because of placing a new officer in this position. • Drug Task Force Activity in Columbia Heights (2005-2007) -the number of cases were relatively the same, but the search warrants have increased, as have the amount of drugs that are seized. • Drug Seizures/Buys in Columbia Heights (2005-2007) -the amount of drugs seized had increased. • Highlighted the Grids within the City - by percentage of crime. • Supplies - an increase of 8.9% - in the last two budgets there have been no increases. This includes $3,000 to begin a replacement program of radios, $1,500 for outfitting of the 27`" officer, and $5,000 for gas and oil. • Other Services and Charges -minimal increase; includes the acquisition of the police reserve into the police department budget. Civil defense items were moved to the Fire Department in 2008. Also includes $500 for educational reimbursement and $1,500 decrease in telephone/telegraph line. 2006 Crime Statistic Data -Comparison of cities of similar size and composition. In 2006 Columbia Heights had 1,508 arrests and West St. Paul had 1,099. Roddy also listed part 1 crimes and part 2 crimes. Our clearance rate in 2006 was 46% compared to 43% in 2005. These are significant clearance rates. He stated that the officers in this department give more than 100%. Roddy indicated his appreciation for the Council's support of the department in the last few years to get back into the pro-active anode. He stated he would like to reintroduce Community Oriented Policing. Nawrocki requested a copy of the material presented. D. Becky Loader, Library Director Loader stated the Library has been in existence since 1928, responding to the needs of the community. As the population grew, needs and services changed including residents accessing materials to learn to speak English and computer use has become significant. Over the past three years, the gate count has increased 14.77%. The average attendance at a Vikings game can be multiplied by five times to get the number of people that go through the library doors. Loader referred to the significant use of free programs and our free internet. Circulation of our materials went down by 4.5% between 2005 and 2006, but this does not include the reference resources used. Internet use increased by 106% from 2005 to 2006. We went from two to six internet stations available for public use. In 2006 we reintroduced programming for adults and families. There is no place for teens to gather and they are looking for a place to meet. Staffing levels changed in 1998 when the part time library clerk's hours were increased. Proposed in 2002 and eliminated from the budget in 2003 were 922 hours of part time help in the Page category. The current staff is five full time and 15 part time people, and covers 60 open -public hours in a week, on two floors. Random counts register over 50 patrons at any one trine. Based on the increased volume of patrons, the Library Board has recommended the addition of two part time positions for a total of $19,190. Loader thanked this Council and Council's of the past for their support of the library. E. Walt Fehst, City Manager Budget Presentation. Summation Fehst complimented the staff, indicating their work on the budget. He stated his alarm at the assessed market value increase in one area of town. The assessed market value for some commercial property has increased by 50%. This will benefit the community. F. Public Comments Ron. Cadieux, 667 45t" Avenue NE, stated that Fridley lowered their taxes by 7% and Columbia Heights is raising their's by 16%. He stated that he was here in April for the Board of Review. They were going to send someone out to reevaluate his property and they never did. Fehst stated that value was from October 2004 to 2005. Fehst stated that we contract with the County Assessor and Fridley has an assessor on staff. Fehst stated that he would pass the information on to the County and ask them to see him. Cadieux stated he has lived here for 40 years and the taxes keep going up. Fehst indicated that the County Assessor has State mandates that they must include when determining value. The City Clerk referred to the 2007 April Board of Review meeting minutes, indicating that Mr. Cadieux was to contact the County and snake an appoinhnent for review. Williams indicated that residents who do not agree with their property value should come to the April Board of Review meeting. Nawrocki stated this meeting is a presentation of the budget, but it is a long way from achieving this. Information presented would indicate the budget follows a downward trend, but police and fire have increased since 2003. It dwells on the loss of Local Government Aid. If LGA is increased in the future, it will be interesting to see if taxes will be reduced. Lost LGA and tax increases are relatively equal. If this is adopted, the increases will be about 12 percent. The amount discussed does not include the HRA Levy, the County EDA Levy (with the County keeping 15%), and are not itemized on the tax statement. Other increases include the five year Sanitary Sewer, Storm Sewer and Water rates, plus the increase adopted this year, and street improvement program. Also, $3.9 million in funds were committed for a proposed activity center. Everything in the budget should be discussed. The Fund Balance should be used to decrease the taxes for the coming year. Fehst questioned if the LGA was part of the MN Miracle. Nawrocki indicated that was during the Anderson era. Fehst stated that aid has been given for 35 years and we had grown dependent on it to provide the services that other cities have. Fehst stated that 75 percent of our budget is for Police, Fire and Public Works. Fehst stated that the County HRA Levy would to be used to remove blighted property in the city and build new homes in our town. Fehst stated that the Council has been remarkable in staying the course on their External Goals. You can not lose $7 million in aid and not raise property taxes. The majority of this is social manipulation at the State level. We do have different demographics than we had in the 1950's. Our new housing will increase our tax base by about 10 to 12 percent and that is a major factor to keep our taxes down. Nawrocki stated that $208,436 is the County HRA levy and our HRA levy is almost $200,000. The County EDA Levy is $14,815. He stated that most cities are not joining that program, only the little cities with no Community Development staff. Property taxes for Columbia Heights residents are going up 12%. Nawrocki stated that the dollar amount in the newspaper notice was different than that given tonight. Elrite indicated that the State sets what amount must be published. Nawrocki asked what is required to be included. Elrite stated it includes the total general fund budget, the library, and the EDA amounts. Elrite stated that he would provide a detailed account of what the State requires. This is set by the State for consistency and comparability. Nawrocki stated that we did not talk about the $27 million for the public safety center and activity center. The activity center should be subject to a referendum vote. Rod Brannon, 1622 Innsbruck. Parkway, asked if the amount you could increase taxes was set by the Legislature. Fehst stated that the area he lives in was the area of the city where values increased by 40%. Elrite stated that there is a limited property value set by the State of 15% or 1/3 of the difference in the increase from the prior year. 15% applies to most homes in Columbia Heights and the increase is under that limit. Brannon asked if the amount was turned over by the Legislature. Elrite stated that it is in effect through 2008. It has increased over the years from 10%. Fehst stated that they wanted to keep the property tax lower for the lower and middle class, but ultimately it had the opposite effect. Brannon asked if we have budget problems, why we are building three different stadiums. Fehst stated that the football stadium would not be considered. Fehst suggested that Mr. Brannon call the County Assessor in April to question the increase in his assessed market value. Lee Stauch, 1155 Khyber Lane, questioned where the revenue from the Liquor Stores was in the budget. He requested to see information on the liquor stores funds. Fehst stated that we average about $400,000 each year and $200,000 the last two years. We are building because our leases would have increased by triple on 37`" Avenue and twice as much on Central Avenue. This will give us buildings to gain equity in and is a long term investment. We will be able to pay the bond amount with the amount that was paid for leases, and still generate funds for the general fund. Stauch stated concern on the proposal to sell liquor in grocery stores. Scott Rouch, 2211 40t" Avenue NE, questioned with the tax increase why we would build an activity center. Why are we doing all these activities at the same time? Diehm stated that we are not building an activity center yet. We have only talked about plans and a committee has been looking at the possibilities for the last couple of years. We have discussed. this with the YMCA who would contribute and it would be similar to a Lifetime Fitness. That has not been decided nor has a referendum. The public should be aware that nothing has been decided. Those that advocate the center state that we need to invest in our community in order to maintain the value in our homes. Your home is the biggest value you have and we want to protect that investment. We will be extremely cautious. Rouch stated his feeling that there should be a referendum and he indicated that there are already a lot of facilities around. Fees should be adequate to cover all operating costs. Peterson indicated that we do need gymnasiums. Our recreation department was removed from a scheduled gym today. We do have a need for this. We will meet on December 17`" and everyone is welcome to attend. The committee that has studied it for two years and the architect will be at this meeting. Nawrocki encouraged him to make noise about his feelings. Nawrocki stated that he supports adding a second gym to the-high school gyrn that is being built. Williams stated that talk of a referendum is premature, as we want to talk to the YMCA. They would pay operating costs. Using lease revenue bonds would save taxpayers money. This is premature and will not happen tomorrow. Unfortunately, there is very poor attendance at the meetings discussing an activity center. It is easy after the fact to disagree. He stated that if this goes to a referendum it would cost 10% more to residential taxpayers. Williams encouraged residents to be involved. Nawrocki disagreed with YMCA comments, as it would be like the City of Elk River where the city paid for the facility and the YMCA has control of the entire building except the gyro. Residents will also have to pay membership fees. Peterson indicated that after the bond is paid, the City of Elk River will own the building. Fehst stated that if our financial consultant would find it viable to borrow against a lease that the EDA would have, based on the YMCA projection of $2,000,000 in revenue, it could be a lease purchase. Peterson agreed that this is premature and we do not have all of the information. There is still time to attend the December 17 meeting where there will be a lot of information available. Nawrocki asked how much time the Mayor would allow to get the information out to the people. Peterson stated that if someone is interested, as the process has been going on for two years, they should have attended the meetings. There is no guess at how the Council will react at that meeting. If we are going to do something, we should get going. If we are not going to do it, we should move on. Diehm asked what amount of time Councilmember Nawrocki thought should be given. Nawrocki stated 30 days to have information available and placed on cable TV. Diehin stated that there would be 30 days until the next meeting and she stated her belief that the newspaper would do an excellent job of covering this. Adjourmnent of Truth in Taxation Hearing Mayor Peterson adjourned the meeting at 8:45 p.m. ,~/°~°~` ~, ,~ ~ ;_. .. ~ `Patricia Muscovitz CMC ` City Clerk ~