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HomeMy WebLinkAbout12/01/2008 TIT Meeting CITY OF APPLE VALLEY Dakota County, Minnesota December 1, 2008 Minutes of the special meeting of the City Council of Apple Valley, Dakota County, Minnesota, held December 1, 2008, at 7:00 o'clock p.m., at Apple Valley Municipal Center. PRESENT: Councilmembers Bergman, Goodwin, Grendahl, and LaComb. ABSENT: Mayor Hamann-Roland. City staff members present were: City Administrator Lawell, City Clerk Gackstetter, Finance Director Ballenger, Public Works Director Blomstrom, Assistant Finance Director Broughten, Parks and Recreation Director Johnson, Police Chief Johnson, Community Development Director Nordquist, Human Resources Manager Strauss, Liquor Operations Director Swanson, and Acting Fire Chief Thompson. Acting Mayor Goodwin called the meeting to order at 7:00 p.m. Everyone took part in the pledge of allegiance to the flag. Acting Mayor Goodwin announced that the purpose of the meeting is to hold a public hearing on the City's budget and on the amount of property taxes proposed to be collected to pay for the costs of services the City will provide in 2009. Mr. Lawell reviewed the budget preparation process and the requirements prescribed by State law. All properties in the City received mailed notice of the hearing that included proposed property taxes for 2009 based on preliminary budgets and tax levies approved in September. The hearing notification was published as prescribed by law. The final budget is scheduled for adoption on December 11, 2008, and the amount must be certified to Dakota County by December 29, 2008. Mr. Lawell then reviewed the budget assumptions, including the State implemented levy limits for taxes payable in 2009 through 2011, the park bond debt service commitment of $660,000 for 2009, and lack of State Aid in 2009. He gave an overview of the proposed budget. The total 2009 City budget is $49,041,552. The 2009 General Fund Revenues and Expenses are $25,732,437, which is an increase of 5.73% from 2008. The proposed City levy for 2009 is $22,627,731, which is an increase of 7.45% from 2008. Operations went up $909,119 or 4.32% and debt service on the park bond referendum equals $660,000 or 3.13%. A portion of the increase in Operations is also for costs associated with the park bond referendum. Mr. Lawell then reviewed the budget highlights and described impacts and costs associated with the park bond referendum improvements, quarterly utility billing, neighborhood preservation efforts, quality rental housing, consolidated dispatch, staffing, infrastructure preservation program, and energy. He then summarized changes since August and refinements to the budget. Mr. Ballenger presented statistics regarding the percentage of change in values of resident properties. The majority of homes saw a 2% to 3% decrease in value. Approximately 96% of the residential CITY OF APPLE VALLEY Dakota County, Minnesota December 1, 2008 Page 2 properties received a 1% or greater decrease in their property value, 3% received no increase, and 1% received an increase. He then presented tax calculations on a median valued home of $240,000 with a zero and 2.81% decrease in property value. The Tax Capacity Rate is 37.083. Mr. Ballenger said no written comments have been received but he did receive 12 phone calls. Six individuals called about market value, two called to request name changes on their statement, and one called to request homestead credit. Those individuals were referred to the County. Of the remaining three callers, one wanted to know when they could pay the bill, one just wanted to call the number on the statement, and one called to contest a statement on the insert regarding the escalating cost of petroleum-based products. Mr. Ballenger described two property tax relief programs. Mr. Ballenger said the Council can take questions on the budget and tax levy tonight, but cannot act on it. Acting Mayor Goodwin noted that only six years ago 16% of the City budget came from the State. Today it is zero. In addition, approximately 40% of the increase residents will receive in 2009 is due to the park bond referendum. The Acting Mayor then asked for questions or comments from the public. Mr. Jim Koskan, 477 Reflection Road, commented about the percentage his property taxes and property valuation increased the last two years. He stated he has not made any improvements and asked where he could go to find out how the calculations were done. He feels he is paying an unfair amount. Mr. Ballenger said the Dakota County Assessor sets the values and recommended Mr. Koskan contact the Assessor for an explanation. However, based on the information presented, he suspects Mr. Koskan’s property was sheltered under the Limited Market Value program. Mr. Ballenger described how the program works. The phase out will end in 2009 and all home values should reflect their full valuation in 2009. Mr. Koskan asked if there is a provision to graduate the increase in valuation. Acting Mayor Goodwin encouraged Mr. Koskan to speak to the Dakota County Assessor. He suggested residents ask themselves if they would be willing to sell their property for the assessed amount. If not, perhaps the property is assessed for less than it should be. Mr. Ballenger said homeowners were receiving a break during the time their property was covered under the Limited Market Value program. The Legislature provided a graduated increase during the phase out. CITY OF APPLE VALLEY Dakota County, Minnesota December 1, 2008 Page 3 Mr. Lawell added that the phase out was a legislative directive, and he is doubtful there is a provision to appeal the impact of the program going away. He encouraged Mr. Koskan to investigate the property tax relief programs presented earlier. Mr. Harvey Henjum, 481 Reflection Road, said his proposed taxes are going up 18.3%. The Assessor was at his home this summer. Mr. Henjum called the Assessor’s office after receiving his statement from the County and was told the assessed valuation was already established and there is nothing he can do about it. He asked if it is possible to discuss his valuation with the Assessor. Mr. Lawell said absolutely. He added that there is lag time in setting the assessed value. Perhaps it is too late to change the valuation for 2009, but if an error is discovered it could be corrected for future years. He encouraged Mr. Henjum to contact the Assessor. Councilmember Grendahl suggested Mr. Henjum contact the specific Assessor who valued his home. Mr. Lawell offered to help Mr. Henjum make the connection with the Assessor. Ms. Ursula Sailer, 13796 Guild Avenue, stated she is a realtor. She commented about the property values in Apple Valley, stating they are down 16% from October 2007 to October 2008. She said she could not sell her home for the assessed value. She said her value went down 3%, but believes it should have gone down more. She would like the County to reflect more accurate market values. Councilmember Bergman asked if Ms. Sailer could also provide Mr. Ballenger with property value comparisons for Dakota County. Ms. Sailer said she would. Mr. Charles Hall, 469 Reflection Road, stated he received a 24% increase in his Apple Valley property taxes. He said property owners on Reflection Road seem to be paying a disproportionate share of the increases. He questioned if there may be some sort of technical error in the calculations. Acting Mayor Goodwin recommended Mr. Hall contact the Dakota County Assessor’s Office for clarification. Councilmember Grendahl asked if the three properties on Reflection Road lived on the lake. Mr. Hall affirmed. Mr. Fred Bergacker, 4978 150th Street West, stated his taxes went up 18%. He voiced concern with his assessed value. He added that the Assessor increased the footprint of his house by 10 feet, even though he has not added on to it since the time it was built. CITY OF APPLE VALLEY Dakota County, Minnesota December 1, 2008 Page 4 Councilmember Bergman suggested Mr. Bergacker meet with the Assessor to have him explain the criteria used, and if necessary ask the Assessor to come back to his property to measure his home. Councilmember Grendahl noted that there is a continuous theme this evening regarding the difficulty of communicating with County. She asked if a representative from the Assessor’s Office should be present at future meetings. Acting Mayor Goodwin suggested the Council contact County Commissioner Branning regarding the concern with communications at the County. Councilmember Bergman said the County will be holding their budget meeting on December 4, 2008, in Hastings. He suggested the residents attend that meeting as well to voice their concerns. Mr. Mike Mesarchik, 13545 Elkwood Drive, asked for an explanation as to how some cities can spend less in these times while others are spending more. He noted Rosemount is decreasing its taxes by 3%. Councilmember Grendahl said Rosemount taxes have been much higher than Apple Valley’s taxes in the past. Mr. Mesarchik indicated Rosemount made a decision to hold the line or reduce it, while Apple Valley is increasing its spending. Most people are going to have to cut back on their personal budgets, and he expects the City to do the same thing. Councilmember Bergman said the City cannot hedge fuel and energy costs, medical costs have gone up, and the park bond referendum also played a significant role in the 2009 budget. He added that the Council looks at all of the items in the budget and does its very best job for the citizens. Acting Mayor Goodwin said he is 95% certain that taxes would be less for the same house in Apple Valley versus one in Rosemount. The amount of taxes a citizen pays has a lot to do with the type of city they are in. He added that property taxes are less on residential properties in cities that have a higher percentage of their total tax base in commercial, industrial, and apartments. He added that on- going costs for improvements from the park bond referendum also come out of the General Fund budget. Councilmember LaComb noted Apple Valley’s population is approximately 50,000 and there are 12 citizens present this evening to comment on the budget. It may be reflective of the citizenry in that they understand the balance. They understand that if they want service, they are going to have to pay for it. She believes the budget reflects that balance. CITY OF APPLE VALLEY Dakota County, Minnesota December 1, 2008 Page 5 Councilmember Grendahl said she is thrilled to see so many people here this evening. The most she has seen in the past is two people. Mr. Mesarchik believes people get used to small increases along the way. At some point, the public cannot go along anymore. Councilmember Bergman said the Council goes line item by line item through the budget. He said the Council is very aware of the economic situation and are also affected by it. Councilmember Grendahl said the Council may go through the budget line item by line item, but the staff recommended budget is not cut. Councilmember Goodwin recalled how the City used to receive 16% of its budget from the State and now receives nothing. He then relayed the impact on the budget of the recently settled arbitration of two City labor unions. Mr. Mesarchik said the concern is that there are not any cuts, there are simply smaller increases. He thanked the Council for the discussion. Mr. Chris Ockwig, 13007 Hamburg Court, said he appreciates the work Council and staff have done on the budget. However, he did not get a 5.7% raise this year to cover the proposed increase in his taxes, and his employer dropped health insurance benefits. He asked the Council to take another look at the line items in the budget. Mr. Joe Shirk, 160 Hayes Road, said he is not complaining about his taxes. He inquired about the $60,000 increase for Code Enforcement. He said it seems like a large amount to be adding at a late moment. Councilmember Goodwin said during times of economic downturns, it is not uncommon for properties to begin to look bad, which results in increased calls to the City for resolution. Mr. Shirk asked if the dollar increase was relative to the increase in calls for service. Mr. Lawell said it is not a direct correlation. The additional funds are to assist during peak periods. The details of the assistance are not finalized. These additional dollars are important in order to maintain property values and keep the quality of living in Apple Valley. In addition to Code Enforcement, the City is enlisting the help of other Departments. Councilmember Bergman said he spends a lot of time with Code Enforcement personnel driving around the community. He said people would be alarmed at the condition of some of the properties. It is important to maintain the properties. CITY OF APPLE VALLEY Dakota County, Minnesota December 1, 2008 Page 6 Mr. Shirk asked if the City absorbs the cost if it has to mow a property. Councilmember Bergman said the actual cost of mowing is assessed to the property, but there are other associated charges the City incurs. Acting Mayor Goodwin said as the economy declines there is more need to monitor properties and the added dollars will help to do that. He then asked for other questions or comments. There were none and the hearing was declared closed. MOTION: of Grendahl, seconded by LaComb, to adjourn. Ayes - 4 - Nays - 0. The meeting was adjourned at 8:42 o’clock p.m. Respectfully Submitted, /s/ Pamela J. Gackstetter Pamela J. Gackstetter, City Clerk Approved by the Apple Valley City Council on 12-8-08 .