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120202 CC Sp Min . . . CITY OF SHOREWOOD CITY COUNCIL SPECIAL MEETING MONDAY, DECEMBER 2,2002 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 7:00 PM MINUTES 1. CONVENE SPECIAL MEETING Mayor Love called the meeting to order at 7:04 P.M. A. Roll Call Present: Mayor Love; Councilmembers, Lizee, Turgeon, and Zerby, Administrator Dawson; and Finance Director Burton Absent: Councilmember Garfunkel B. Review Agenda Without objection from the Council, Mayor Love proceeded with the Agenda. 2. TRUTH IN TAXATION PUBLIC HEARING A. Staff Presentation Administrator Dawson explained the Legislature was requiring cities to hold the mmual Proposed Budget and Tax Levy Hearing, known most commonly as the Truth in Taxation Hearing, to gain public comment about the City's proposed 2003 Budget, including the Enterprise Funds, and the tax levy necessary to support it. He further explained action was not allowed on this item by Council this evening, but would most likely take place at the Regular City Council Meeting of December 16, 2002. Administrator Dawson stated the focus of the discussion tins evening would be on the City's tax levy, which was approximately 24% of the total property tax dollar. He went on to explain the State of Minnesota made cities heavily reliant on property taxes and state aids. He noted Shorewood received very little state aids for operations, thus making it necessary to rely on property taxes. When possible, Council had set fees to recover costs for services that directly benefited the customers. The tax levy represented the subsidy necessary to balance the City's budget. The City's proposed levy was to increase by approximately $393,000, or 14% of the City's portion of the total property tax dollar. Of that amount, $88,000 was for operations, and the remainder for the new public safety facilities. The increase in the non-debt tax levy was 3%. He further noted individual owners of residential properties were generally seeing significant increases in their estimated property taxes. He explained the Legislature's decision to change the taxable rates for business and apartment properties was shifting the burden to residential homestead properties. He concluded by stating the budget had been developed by the Council and Staff to continue to provide the array and level of City services necessary to Shorewood residents and businesses. Any questions or comments were encouraged and welcomed. . . . CITY COUNCIL SPECIAL MEETING MINUTES December 2, 2002 Page 2 of 3 Finance Director Burton then presented information on the City's property tax distribution for 2003 and reviewed the budget calendar of preparation. She stated the General Fund Budget was expected to increase from $3,270,162 to approximately $3,719,072. Upon review of the proposed revenues for 2003, she stated taxes comprised approximately 85% of the revenues, along with license and pernnts, and other various revenues. Next, she reviewed the proposed expenditures for 2003. Finance Director Burton stated the tax levy increase was anticipated to be approximately $3,156,847 from $2,763,367 in 2002. She noted reasons for the increase included expenditures for the Public Safety Debt Service payments, park coordinator services, recodification of the City's Code book, computer equipment upgrades, and an increased contingency allocation. Finance Director Burton reviewed the Enterprise Funds, including Water Operations, Water Debt Service, SaI1.itary Sewer, Stormwater Management, Recycling and Liquor Operations. With regard to the Water budgets for 2003, she noted there were currently 1,200 connections to municipal water services. Expenditures included interconnection of the Woodhaven Well with Excelsior, the Badger Well Inspection and Design, and Radio Read Water Meter projects. She also noted a water rate increase was projected for 2003. The sewer budget was based on approximately 2,800 connections, and an increase of ten dollars per quarter per household was planned for 2003 due to all increase in the Metropolitan Council Environmental Services sewage treatment charges. The Sewer budget also planned for refurbishment of certain lift stations throughout tile City. The Recycling Budget included participation of 1,100 households per month, and a rate increase from $1.50 to $1.75 per household per month was anticipated due to potential funding cuts from the Hennepin County Grant Fund, as well as an increase in the costs of recycling. Finance Director Burton also went on to explain a rate increase for 2003 was projected in the Stormwater Management Budget as rates had not changed since 1993, and capital improvement projects were being identified by City Staff for 2003 as well. The proposed Liquor Operations Budget for 2003 was based on a two-store operation, as the City was no longer involved in the operation of the Tonka Bay store. She noted the Shorewood Plaza store would be impacted by the construction of the Cub Foods Store over the course of 6-8 months through the next year, and staff was researching possible alternatives for return to a three store operation. Finance Director Burton stated, in summary, total annual 2003 property taxes on a $265,000 home in Shorewood would be approximately $3,379. The City portion of that tax bill would be $823, or about 24%. For that amOl.mt of money, residents received a value in City services in the areas of police protection, fire protection, clean drinking water, snow plowing, street maintenance, parks alld trails, building inspections, and other City services. Mayor Love thanked Finance Director Burton for her exemplary presentation this evening. B. Public Hearing Mayor Love opened the Public Hearing at 7:20 P.M., and seeing no one present this evening, he closed the Public Hearing at 7:21 P.M. C. Council DeliberationlDecision to Reconvene Councilmember Zerby stated he would like to see an increase in the Mayor's salary considered for preparation in the 2004 budget, as he thought there were a greater number of issues presenting themselves in managing additional facilities and their growth over the next few years. He stated , r. .. . . . . CITY COUNCIL SPECIAL MEETING MINUTES December 2, 2002 Page 3 of 3 additional time and demands would be placed on the Mayoral position and believed an increase was warranted. Mayor Love stated he also thought expectations would grow for the position of Mayor, and requested the same consideration be given to an increase in Council salaries as increases had not been received by any of these positions in quite some time. He stated Council would also be placed in more demanding positions over the next few years as the City continued to grow and redevelop. Councilrnember Zerby also requested consideration be given in the preparation of the 2004 Budget for a philosophical discussion for Council and Staff regarding the water operations system for the City. He encouraged all parties to exanllne the system for efficiency and possible additions to the current water operations systems. Mayor Love stated he would support such a discussion as it was always important to review the merits of a current form of operation, however, he was concerned for the possibility of setting a negative trend in making certain changes to the system. Councilmember Lizee agreed the current water policies were in need of review, and Councilmember Turgeon stated she was interested in finding out if residents were interested in supporting changes to the current water system utilized. Council again thanked Finance Director Burton for her exceptional presentation, noting its time and effort in making budgetary information interesting and understandable for all. Administrator Dawson noted Council would take action on the budget and tax levy at the Regular City Council Meeting of December 16, 2002. 3. ADJOURN Lizee moved, Zerby seconded, adjourning the Special Meeting of December 2, 2002, at 7:41 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, Sally Keefe, Recording Secretary Woody Love, Mayor