Loading...
HomeMy WebLinkAbout12/11/2002/03budhrgCITY OF APPLE VALLEY Dakota County, Minnesota December 11, 2002 Minutes of the special meeting of the City Council of Apple Valley, Dakota County, Minnesota, held December 11th, 2002, at 7:00 o'clock p.m. at Apple Valley Municipal Center. PRESENT: Mayor Hamann-Roland; Councilmembers Erickson, Goodwin, Grendahl, and Sterling. ABSENT: None. City staff members present were: City Administrator Lawell, City Clerk Mueller, City Engineer Gordon, Police Captain Anglin, Finance Director Ballenger, Assistant to the Administrator Grawe, Public Works Director Heuer, Parks & Recreation Director Johnson, Police Chief Johnson, Community Development Director Kelley, Police Captain Lohse, Human Resources Manager Strauss, and Fire Chief Wassmund. Mayor Hamann-Roland called the meeting to order at 7:00 p.m. The Mayor 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 2003. Mr. Ballenger reviewed the steps in the budget process prescribed by state law. It began with department preparation in July. After review and adjustment, the City Administrator submitted the proposed budget to the Council in August. The Council reviewed the document and approved the preliminary budget and tax levy, based on it, in September. Before adoption of the final budget, this public hearing is required. Mr. Ballenger reviewed details of the proposed 2003 budget showing a 3.48 percent increase in the General Fund from last year. Total revenue is $35,975,473, 40 percent of which comes from taxes. Expenditures are proposed at $35,840,744, an increase of 1.9 percent from 2002. The proposed tax levy is $665,185 below the State-authorized limit of $16,658,219. The major portion of the increase in General Fund expenditures is capital outlay for a fire truck and a bucket truck. He reviewed tax calculations on a sample home that had a $150,000 market value in 2002 increasing by 10 percent to $165,000 in 2003. Preliminary calculations showed a slight decrease in the City portion of taxes on this home, however the mailed notices showed a slight increase. The difference is a result of the way market value homestead credit is calculated; it decreases as the value of a home increases. Because of these value changes, the City will receive 38 percent credit in 2003 instead of the 40 percent credit in 2002. The Mayor asked for questions or comments from the public. Gary Caracofe, 15875 Garrett Path, said there are two potential lawsuits against the City and asked if the costs are covered in the budget. Councilmember Goodwin said the City carries insurance through the League of Minnesota Cities Insurance Trust to cover this and there is a statutory maximum on CITY OF APPLE VALLEY Dakota County, Minnesota December 11, 2002 Page 2 claims. Mr. Lawell said the insurance coverage is $3,000,000 in aggregate. With the statutory limit on tort claims, it is not expected that the coverage would be exceeded. Joe Taylor, 385 Cimarron Road, said a recent article showed the City with a cash fund balance of $14,000,000 and suggested the City refund the surplus or use those funds to reduce taxes. In any event, expenditures should not go up. A proposed budget amount of $383,861 for legal expenditures seems too high for outside services. He also questioned $1,585,248 paid in 2000 for engineering services and whether that could be done less expensively in-house. He asked the Council to scrutinize these costs and consider taking bids for them. Mr. Ballenger said the surplus was $14,000,000 at the start of the year and, due to budget decisions made for 2002, will be reduced to $11,000,000 by the end of this year. The amount shown as a fund balance at the end of the year is not necessarily a surplus. The City receives tax payments in two large payments in July and December. Cash shown at the end of a year is needed to fund operations for the first half of the year. Councilmember Erickson said there are a number of areas in the budget where revenue and expenditures are offsetting and reductions have no impact on taxes. Public safety, public works, and parks and recreation are 86.48 percent of the General Fund budget. The only way to reduce that is by cuts in service and if there are services to be cut, the City needs to be told of them. Councilmember Goodwin commented on the tax payment schedule that results in the appearance of large fund balances and is misleading. He also commented on Federal and State budget problems due in part because of refunds. Councilmember Sterling said the budget proposes to purchase a fire truck and bucket truck with cash rather than with equipment certificates. The same was true in 2002 when funds were used for fire station remodeling. She read a letter from Wilton Anderson, 5441 West 134th Street, commending the City for holding the line on spending while still providing an excellent level of public services. Mayor Hamann-Roland commented on engineering costs relating directly to development and growth. Mr. Lawell said General Fund engineering costs are about $100,000 to $120,000 of the total. The rest are development costs and are assessed back to the particular property. Mr. Taylor said he realizes most of the engineering costs are assessed, but suggested the City look at reducing costs perhaps with Staff engineers. The costs could still be charged to development and it could become a revenue generator for the City. As far as services people expect, there are always ways to reduce costs. One item he does not support is a new clubhouse for Valleywood Golf Course. Robin St. Ana, 346 Cimarron Road, reviewed an article from the Star Tribune comparing tax levies and showing Apple Valley at $343 per person and Eagan at $304 per person. He noted several other CITY OF APPLE VALLEY Dakota County, Minnesota December 11, 2002 Page 3 cities are lower also. The budget shows three percent salary increases while many in the private sector are seeing no increase. Health care is $550 per month for employees plus $60 in cash payments and employees should pick up a larger share of the cost. Monthly car allowances are shown for some employees. Why shouldn’t they account for the miles and actual costs paid? Mr. Lawell said those who receive car allowances are taxed on the payments unless they turn in an accounting on their income tax. The 2003 budget shows a reduction in the number of car allowances being paid. Councilmember Erickson noted that some salaries are tied to labor agreements and are the second year of the negotiated agreements. Mr. St. Ana said the City could give back money as long as it knows what its revenue is and match it to spending. David Lindroth, 8150 West 137th Street, said he is living on a fixed income and all his expenses are increasing. If taxes continue to increase, he may not be able to afford to live here. He suggested the City look at more user fees including for parks. He does not take the bus, yet is being charged for transit. Councilmember Grendahl noted that the transit levy is now part of the Metropolitan Council levy and is not a City levy. Councilmember Goodwin said park use has generally been free. Adult leagues have paid to use fields, but youth leagues have been supported by the City. As circumstances change, this may be an issue that the City will have to address. Mr. Taylor asked if there is anything in the budget that can be cut? Mayor Hamann-Roland said the budget has been reviewed and the tax levy set below the limit and she supports it as presented. She noted that a letter was received from Karl Fox, 7118 - 131st Circle, asking that the City cut spending. The Mayor asked for other questions or comments. There were none. Adoption of the tax levy and budget will be considered by the Council at its meeting on December 12th, 2002. MOTION: of Grendahl, seconded by Sterling, to adjourn and declare the hearing close d. Ayes - 5 - Nays - 0. The hearing was adjourned and declared closed at 8:24 o'clock p.m.