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HomeMy WebLinkAboutDecember 1, 2008 Truth in TaxationOFFICIAL PROCEEDINGS CITY OF COLUMBIA HEIGHTS TRUTH IN TAXATION MEETING DECEMBER 1, 2008 The following are the minutes for the City Council Truth in Taxation Hearing held at 7:00 p.m. on Monday, December 1, 2008 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 2009 Budget and Tax Levy Information a. Walt Fehst, City Manager, stated that Department Heads submitted their budgets with increases, from which he removed $400,000 or about a six percent increase. The City Council then cut $210,000, so the increase in the General Fund levy that was submitted to the County Board as the Certified Levy increase went from $6,916,000 to $7,214,000; a $297,000 increase, amounting to a 4.30 increase in the operational levy. He reminded the City Council that they have voted on an increase to the capital levy of 5.03 percent, for the public safety building that will be on the books until the $10,000,000 bond is paid in 30 years. That will be reduced this year and next by the closing of a TIF District, which means the net result for the average house in town will be about $38 this year and $54-56 next year. Fehst stated there are not major increases in any one area. We have had significant state aid decreases since 2003. They are looking at another $4 billion deficit next year. This will likely affect our local government aid. We will probably have to cut back. We had approximately 12 positions that we did not fill as people left. In 2004 Council did add back some positions. Fehst indicated that our levy in 2008 topped $9 million. We are talking a nine percent increase, of which six percent has already been voted upon. There is confusion in certain areas of the city that had significant increases in their property values. There is no way to predict what the County Assessor does. This will appear as a larger increase in our operational levy. Fehst stated that we have added a 27t" police officer and a crime specialist at three-quarters the cost of an officer. We have removed the housing specialist from Community Development, allowed for two additional part time people at library, and eliminated one full time CSO, and replaced the CSO with two part time CSO's. b. William J. Elrite, Finance Director, directed the City Council through a budget power point presentation. He indicated this is summary information and select property tax examples. It also explains changes in revenue sources, i.e. local government aid. Elrite described the following information: Expenditures by functional area Revenue by sources -intergovernmental resources have decreased. Expenditures by classification of general fund, library, and EDA - Revemie sources of general fund, library fund and EDA. Elrite stated that over $7 million. comes from property taxes. He described the decrease of intergovernmental revenue. - General fund by percent of total. He indicated that the largest portion is police and second is public works. - History of local goveriunent aid. Elrite reviewed revenue from the state that they distribute back to the city, showing the decrease from 2003. Increased property taxes were necessary to maintain our budget. - Property taxes for 2003 to 2009 -with the total levy increase 9.33 percent for 2009. - Where your property taxes go. He stated there is a slight increase in school district taxes. - Property tax history from '98 to '09 on five selected properties. The County estimates Columbia Heights average home value at $176,000, resulting in a $98 increase this year. Elrite explained that the city does not receive more if your property value goes up. This year there has been a real shifting of the property tax base. - Cumulative LGA lost -Elrite described how state aid has decreased. - LGA and tax levy history. - Total tax supported budgets -general fund, library fund and EDA fund. He explained the cut backs from 2004 to the present. - Cost savings from 2003 to 2009 - What will $60 a month buy? This is what the average home pays in city property taxes per month. c. Presentation by staff on department needs -Scott Nadeau, Chief of Police, narrated a power point presentation on 2008 goals and objectives for the Police Department: 1. Adopt a more proactive crime fighting model -with problem oriented and community oriented policing initiatives, mapping and trend analysis, and information sharing with other agencies and community partners. 2. Establish new strategic partnerships to address crime and livability issues. 3. Strengthen and capitalize on existing strategic partnerships 4. Reduce crime and the fear of crime in Columbia Heights and Hilltop. 5. Engage the public as an important partner in addressing community crime and livability issues. Nadeau stated that this is an area that is not as progressive as we would like. Therefore, we have asked for more staff. 2009 goals and objectives 1. Continue to expand proactive efforts 2. Improve "community engagement and connection 3. Continue to realign department to maximize efficiency and focus on "Core Mission" of reducing crime and promoting safety. Nadeau described the non-sworn position request for a crime prevention specialist. Fehst referred to the readjustment of the department and reinitiating landlord meetings. The landlords agree with the one-strike policy for drug related issues. Nadeau refereed to helping landlords and partnering with local groups and businesses. He described the 27t" police officer position and the work done on proactive initiatives. d. Walt Fehst, City Manager Budget Presentation Summation Fehst stated that we have 420 homes that are sitting empty. This creates problems for police and fire personnel. We increased the HRA levy by $70,000. One place to cut is our SAACC 2 program. Fehst referred to our intent to work an the housing issue. Our operational levy is 4.03 percent. The social security increases are 5.7 percent. e. Public Comments Peterson indicated that this forum is not to question the valuation of property. That meeting is held in April. We are here to discuss the City's portion of the property tax. Dwayne Morrell, 4212 Reservoir, asked if there is an officer dedicated to white collar crime. Nadeau stated that we do not have a dedicated officer for that, however, Anoka County does and they work with us. Morrell asked if our police officers interact with school bus drivers, and referred to an incident. Nadeau stated that we do work with them, and they do report violations. Lee Stanch, 1155 Khyber Lane, stated he debated his taxes at the April. meeting. His value was increased and his tax increased by 19.48 percent, with. a city increase of 11.46 percent. Matt Lupkes, 3714 Van Buren, asked the affect of foreclosures on the property tax calculation. Fehst stated that the taxes will still be paid by the owner, be that the bank or mortgage company. Diehm indicated that when vacant property values drop it will affect other residents. Fehst referred to tax base increases from the two latest property developments. Following the TIF, they will add 12 percent to the tax base. Fehst indicated that the assessed market value on his home had gone up, but then was corrected. Lupkes stated his appreciation, as a new home owner, for all the services we receive. Brian Oats, 1820 Fairway, questioned the amount of increase because of the Public Safety building. Fehst stated that the city portion of the tax increase was 9 percent, and with the HRA levy it is close to 10 percent. Nawrocki referred to the "Other" portion on the tax statement including the HRA Levy that goes to the County, making it a double digit levy. The city approved bonding for the Public Safety building of $10 million, but that is probably just the first stage with an indication of a possible additional $1.5 million next year. The payments this year could have been paid from reserves, but were not. The work done by the architect emphasized the operational problems in the current facility. Dale Fodstad, 4249 Madison, asked if there are no changes to a home, what do they look at when considering the value. Fehst stated that they look at similar properties that have sold. Fodstad indicated that a lot of our alleys have potholes. Fehst stated that we fix the alleys with our machines, and indicated that concrete alleys would have been. better. Fehst stated we will try to improve this, just let us know where they are. Laura Palmer, 1202 40t~' Avenue, asked if there a line item budget available on line for review. Elrite stated that we could look at doing at this, but there is a summary budget on line with item classifications. Palmer asked if we have an emergency fund. Elrite stated that we carry, at different levels, contingency funds and fund balances and most are within the described limits of the State Auditor's office. We try to maintain a reserve of 45 percent of our budget, for cash flow, as our state aid and taxes come to us in the last six months of the year. Rahhal Hamimdune, 659 46 I/2 Avenue, asked how property values could decrease, but taxes went up. Fehst explained the process. He referred to the tax increase in business and rental property. Diehm stated her property value decreased significantly and the increase in taxes was small. He asked how the city can ask for increases in this economy. Fehst stated 3 that about one-half of the budget is police and fire, and one-quarter is public works. We may have to forestall public improvements. Janis Delins, 4459 Benjamin, stated his street was resurfaced, and asked how that factors into the budget. Fehst stated that was a special assessment. Diehm stated that streets are repaired once every seven years, if necessary. Delins commented on the length of time the Silver Lake renovation took. Peterson stated that bad soil was found and had to be dealt with. Morrell questioned the budget regarding operation of the liquor stores. Elrite stated that the operating expenses are on the expenditure chart. Elrite spoke to liquor store profits and the history of our stores, with the goal to increase profits. Last year profits were $200,000 and the goal is to get back to a net income of $500,000. All net income goes back to the city to fund projects and reduce taxes. Elrite stated that one store is at the expected level and the other is above that. Nawrocki stated that we ran liquor store ads indicating a property tax relief amount, which were incorrect. Elrite stated that the number in the ad was based on the year we had a $500,000 profit and 6,000 homes. Nawrocki stated his flyer was mailed to 7,800 homes in the community. Diehm stated that may have included another community with our zip code. Elrite stated that may have included apartments. Nawrocki read a comment on his dissatisfaction with. this meeting. Peterson commented that Councilmember Nawrocki must have pre-determined his dissatisfaction before the meeting, as he was reading the comment. Nawrocki expressed his dissatisfaction with the entire budget process and indicated that he had read all the information and done his homework prior to the meeting. He continued, including comments on the HRA levy and County HRA levy. The information should include utility charges, use of fund balances, liquor store revenues, fiscal disparities and LGA. Property taxes have increased roughly $14 million since 2003. He questioned what happens when you use up fund balances and need them in the future. He pointed out operating costs that were added into the budget after the Manager's budget submittal. Nawrocki stated there will be a double digit increase this next year, which he will vote against. These are tough times. He referred to the projected state budget deficit. This may reduce LGA. He referred to the Tautges Redpath newsletter. Nawrocki stated the Police Chief should be commended for his planning, partnership and use of personnel, which have brought about significant changes in the community. Nawrocki stated that we sent the Assistant Finance Director to a conference on time management, which we should look to implement. We need to make reductions in the budget to what the community can afford. We probably have next to the lowest average household income. We keep dipping in to funds, which we should have a plan for. Williams explained local government aid to the audience. Things are not as gloomy as Councilmember Nawrocki indicates. We have good things happening. We are all hurting. He referred to the amount received in aid and the amount of aid lost, $8,900,000, from the State. We have to manage and watch our money and we do so very well. We have an old city with decaying infrastructure. Our police and fire departments did not meet the building codes. We voted, far you, to build a new public safety building. We know the areas there are drug dealings and the Chief has cracked down on this. These people complained, but our Chief kept after them. We need to update a lot of things. We are working on updating our infrastructure such as water lines, and other utilities. 4 Diehm stated there would be more discussion at the next meeting, and was glad we received local. comments. There has been a shift in how cities receive money, and that has hurt us, We are doing the best we can to be fiscally responsible and maintain home values. Nawrocki gave his history in the community. This is a great place to live. Peterson referred to the tax. statements and the county's tax portion. He is not sure where the county money goes. He can. see where the city money goes. He referred to charitable gambling that was suppose to help reduce property taxes and the state lottery that was to fund environmental things, but residents just voted in a .38 percent increase for this again. Why does everyone expect the city to do everything, when we are only a percentage of the tax amount? There are other tax jurisdictions that are also responsible. Peterson stated his pride in our city and stated he does not have a problem paying the city portion. We are doing the best job we can. Adjournment of Truth in Taxation Hearin Mayor Peterson adjourned the meeting at 9:00 p.m. ~ r r ~, r l _~ Patricia Muscovitz, CMC <- City Clerk