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HomeMy WebLinkAbout2007-12-03 - Council Minutes - Truth in Taxation Hearing CITY OF CORCORAN TRUTH IN TAXATION HEARING December 03, 2007 The Corcoran City Council met on December 3, 2007, at city hall in Corcoran, Call to Order Minnesota for the purpose of conducting the Truth in Taxation Hearing. Present were Mayor Guenthner, Councilor Grabowski, Councilor Jacobs, Councilor Roll Call Hudok, and Councilor Thomas. Also present were Administrator Vergin, Police Chief Gormley, and City Clerk Larson. Mayor Guenthner called the meeting to Pledge of Allegiance order at 7:00 p.m., followed by the Pledge of Allegiance to the flag. Agenda Approval Agenda Approval MOTION by Thomas, seconded by Jacobs, to approve the agenda as presented. Voting Aye: Guenthner, Grabowski, Jacobs, Hudok, and Thomas. (Motion carried 5:0) Introduction by Mayor Guenthner Mayor Guenthner explained the purpose of the Truth in Taxation hearing is to Introduction by Mayor discuss the City of Corcoran’s 2008 proposed budget and levy. That the purpose of Guenthner this hearing is not to address the valuations on properties as that is done in April at the Local Board of Review. Guenthner noted that several workshops were held by the Council, beginning in July by addressing the goals and objectives of the City Council. A preliminary budget was then set in September, which sets the tax rate. The Council must adopt the final budget at the December 13 council meeting. Guenthner went on to explain that the budget has already been reduced by approximately $150,000 since the adoption of the preliminary budget. The City can make reductions, but cannot increase the levy over what was approved in September. He stated Administrator Vergin’s slides will show more detail. Staff Presentation Staff Presentation Administrator Vergin used a PowerPoint presentation to review the proposed 2008 budget and levy. Vergin explained that a budget is a comprehensive plan for the city, that identifies the activities that the will be undertaken, level of services to be provided, the cost to provide those services and the available revenue sources to pay for those services. The original budget set in September was an increase of 14.4% over the 2007 budget, but since has been reduced to approximately 9% over the 2007 budget. The presentation went on to identify revenue sources and their history, services provided by the City and the cost to provide those services. Also shown were expenditure trends and comparables to neighboring communities. By comparing Corcoran to some of the neighboring communities it showed that commercial tax base is important to retain a lower tax rate, lessening the burden to residential properties. A cost per capita comparison identified Corcoran as the second lowest. Vergin also pointed out the need for the city to retain an adequate reserve fund balance to cover expenditures in between the receipt of tax revenues. Council Comments Council Comments Before opening questions up to the residents, Mayor Guenthner asked for council comments. Councilor Grabowski expressed his desire from an earlier meeting that he wished to hold the budget to a 3% increase. He is concerned with increases while our population hasn’t grown. Councilor Jacobs stated that the growth of the police department budget has almost doubled since a few years back when the police went to 24/7 policing. He is concerned that the reserve fund balance dived around that time also. He commented that we have the same gravel roads, Corcoran hasn’t significantly changed, and what kind of overhead do we need he asked. He also mentioned that the State has removed some support in past years. Page -1- CITY OF CORCORAN TRUTH IN TAXATION HEARING December 03, 2007 Mayor Guenthner commented that the Council needs to work with staff, and that to set a 3% cap is arbitrary. Concerned that a member of the Council missed some of the budget meetings. That no answers or alternatives have been provided by other council members as to how to reduce the budget. Police services are very costly, but the community came out and supported the decision in 2004/2005 to provide a 24/7 Police Department. Councilor Thomas said the budget process was started in July and we should have been discussing the Police Department. then. Also he stated building inspection fees are higher due to Council approving a new building inspector. We need to know where to cut as we are running out of time. We’ve had 3 workshops and several council meetings but no hard proposals have been proposed. Thomas said he was disappointed in the whole budget process. Councilor Grabowski stated he had suggested a 3% budget increase and had made that suggestion quite a while ago. He wants to hold taxes down for the citizens in the community he said. Councilor Hudok added that the issue isn’t who attended what budget meeting(s) or not. The objective is to make cuts at every opportunity. Councilor Jacobs added the public should be aware that the 3% in September was directed to staff, council feels that cuts should be made by staff, and now it is up to the council. . Mayor Guenthner then asked for the resident’s comments. Public Comments Public Comments The following residents raised questions and provided comments: Bill Haverstadt – 6420 Old Settlers Road, Tom Anderson – 22385 Rush Creek Drive, Tom Gardner – 22703 Winchester Trail, Dan Cedar – 7766 Palisades Ave NE in Otsego (owns Corcoran land), Tom Strodthoff – 6528 Hunter Road, Hazel Lutz – 22385 Rush Creek Drive, Don Loukusa – 10650 Hidden Valley Drive, Tom Cossette – 9200 Shannon, Pat Hank – 9425 Trail Haven Road, Dorothy Theis - 9530 Cain Road, and Dennis Stieg – 19320 Stieg Road. Comments and questions included: The population has not increased, but yet taxes have. Many cities have sewer/water but we do not, taxes are 4.5 times what they were 11 years ago, this is not a way to run a city. A positive comment was made about the presentation by Vergin and she was thanked by a resident for the good handouts. The Council needs to get along better. City staff should be complimented for their outstanding service. City needs to watch the budget, but also needs to seize opportunities that are available now as they can pay off in big dividends later. Concerns with the increases to taxes and to the valuations of properties. Owns property in Corcoran but doesn’t live here –stated he can’t afford taxes anymore – highest increase ever – are green acres or ag preserve options available to him? Police department going 24/7 has been a big step for City but why the 9-10% increases every year. Is there any relief of increases beyond 2008? What is the State’s contribution over the past years? The State seems to be cutting their portion of taxes but “dumping” responsibilities onto the local city Page -2- CITY OF CORCORAN TRUTH IN TAXATION HEARING December 03, 2007 governments instead. Would like to see this explained in more detail in a city newsletter. Salaries aren’t going up and taxpayers will revolt. Building inspection fees went up but not seeing new building – what’s happening? What are other revenue sources? Large landowners can’t divide properties, but if allowed to would generate more tax revenue for the City. Taxes keep going up, no water and sewer services and we live on gravel roads. City ran a deficit for a while when Police Department switched to 24/7 service due to the need for part-time personnel and new hires to fill in. PD works with minimum staff and their costs should level off hopefully after next year and then stay about the same with only COLA (about 3%) raises. In 2005 we didn’t budget enough for gravel but the gravel situation is getting better, but still only half the gravel roads are up to standard. Gravel is one item that isn’t noticed. Too hard to pick a 3% budget increase out of the air. Administration fees have been pretty flat – have only gone up 4% over the past several years and are reasonable. City should try to “split the difference”. Are squad cars included in police expenditures or are they capital items? 3% does mean something as it’s “our money” – we all live within a budget. The general public does not understand the limited market value impacts; this should be explained in a future newsletter. Can we demand that Hennepin County provide police protection and how many building permits were issued this year? During the Comp Plan process several years ago there was a strong resistance by residents for sewer/water coming in to bring more businesses to Corcoran. Statistics show that commercial properties pay $2 for each $1 a residential property pays, but the higher burden on services is from residential development. Corcoran goes backwards by not having commercial. Graco in Rogers pays taxes as much as 100 residential units do. This will hurt us not have more commercial business. Council Responses included: Council Responses The capital equipment purchases are not part of the general operating budget. The city has established a long-term capital equipment plan that is working well to replace equipment and retain a consistent level of financing, which has reduced maintenance costs and has eliminated huge expenditures when equipment needs to be replaced. There are three primary sources of revenues – taxes; permits and fees; and State Aid. Sources of revenues have gone down. One major source being permits, and fees, due to the lack of construction activity. So the City has to make up the difference. Most state aid went away in about 2003. We do receive some state aid for local city roads, Municipal State Aid, but it has to be applied to roads designated as State Aid roads. Hennepin County Sheriff approached the City in 2002 to provide police protection, but in 2004/2005 the community choose to have their own 24/7 police protection. Corcoran is mostly farmland with some residential with very little commercial tax base. We need to improve our net tax capacity, which we are trying to do with the development of the Corcoran Business Park in the southwest district of Corcoran. The police budget is predicted to flatten starting next year. There have been challenges with insufficient staff in both the Police and the Public Works departments. Explained the Board of Review process. The assessed value notices come out in March. In April the city holds the hearing at which time residents can contest their assessed values and/or meet with the City Assessor. City Council can change valuation after agreement is reached by assessor/owner. The City created a Pavement Management Committee to look at roads and possibly Page -3- CITY OF CORCORAN TRUTH IN TAXATION HEARING December 03, 2007 raise funds through the granting of additional development rights, this is still under consideration. Corcoran has looked into having a Hennepin County Service Center here but the city hall location is too close to Maple Grove. The Corcoran Business Park may be a good location. The development of the Corcoran Business Park will help. In 2004 the Comp Plan downzoned some properties limiting development within the Ag holding zone until we have city sewer/water. It’s hard to develop small parcels so we need to depend on large developers. New home construction is way down over the past years. Goals need to be set in workshops. We need to become more business friendly and then the revenue will come. United Properties, once developed will bring in approximately a half a million dollars in tax revenues, which will reduce the burden to the taxpayers. Mayor Guenthner announced the council will approve the final budget at their th December 13 meeting at 7:00 p.m. and encourages residents to attend. Adjournment Adjournment MOTION by Thomas, seconded by Hudok, to adjourn the meeting at 8:45 p.m. Voting Aye: Guenthner, Grabowski, Hudok, Jacobs, and Thomas. (Motion carried 5:0) ______________________________ Barb Larson, City Clerk Page -4-