12-02-19 CC TNT Minutes CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD
CITY COUNCIL SPECIAL MEETING COUNCIL CHAMBERS
MONDAY, DECEMBER 2, 2019 7:00 P.M.
MINUTES
1. CONVENE CITY COUNCIL SPECIAL MEETING
Mayor Zerby called the meeting to order at 7:01 P.M. with the Pledge of Allegiance
A. Roll Call
Present. Mayor Zerby; Councilmembers Siakel, Labadie, and Johnson; Administrator
Lerud; and Finance Director Rigdon
Absent: Councilmember Sundberg
B. Review Agenda
Siakel moved, Labadie seconded, approving the agenda. Motion passed 4/0.
2. TRUTH-IN-TAXATION HEARING
A. Staff Presentation
Finance Director Rigdon walked through the presentation for this public meeting.
The Truth-in-Taxation requirements are to present the City's 2020 General Fund Operating
Budget and 2020 property tax levy, discuss the budget and tax levy, and to take public comment.
Council will be asked to adopt a property tax levy and balanced budget during its December 9
meeting.
The City's portion of the property taxes pay for a number of services funded out of the General
Fund. There are four major main operational areas — administration (including finance, planning
and zoning, elections, and other miscellaneous services); public safety(police and fire protection,
building inspections); public works; and, parks and recreation.
The assumptions used in preparing the 2020 General Fund Operating Budget are as follows.
D A 5.9 percent tax levy increase over 2019 for General Fund operations and transfers out
to reserve funds.
D One new street inspector position and increasing the planning technician position from .8
to full time.
D Other staffing levels remain the same as 2019.
D 3.0 percent cost of living increase
The City's General Fund 2020 combined revenues and transfers total $6,566,196 reflecting an
increase of 4.7 percent compared to 2019. Property tax revenues are proposed to be$5,856,611
for 2020. The breakout of the revenues and transfers is 89 percent from property taxes, three
percent from licenses and permits, four percent from miscellaneous revenues, two percent from
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December 2,2019
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intergovernmental, one percent from fines and forfeitures, and one percent from charges for
services.
The City's General Fund 2020 expenditures are budgeted to increase 5.2 percent. Transfers out
of the General Fund to other funds are budgeted to increase 3.0 percent. Total 2020 expenditures
and transfers out amount to$6,622,581, an increase of 4.8 percent. The breakout of expenditures
and transfers out by program is 36 percent public safety, 32 percent streets, 24 percent general
government, and 8% parks and recreation. Expenditures out by type include other services and
charges at 41 percent, personal services at 29 percent, transfers out at 18 percent, and capital
outlay at 7 percent.
Reserves of $56,385 are budgeted to balance the 2020 General Fund budget, as compared to
$46,416 budgeted use of reserves for 2019.
The property tax assessment and levy timeline for property taxes payable in 2020 was as follows.
The market values were established on January 2, 2019.Valuation notices were sent out in March
2019. The Board of Review process to hear appeals on property values took place during April
2019. Council discussed the 2020 General Fund Budget and property tax levy from July through
September 2019. The City certified its maximum tax levy increase of 5.9 percent for 2020 to
Hennepin County in September 2019. The County mailed out Truth-in-Taxation notices to
property owners in November 2019. The Truth-in-Taxation hearing was being held on December
2, 2019. The City will certify its final tax levy to the County by the end of 2019.
Rigdon clarified that this presentation is about the City of Shorewood's portion of the total tax bill
which is approximately 29 percent. He highlighted some trend graphs. The taxable market value
payable in 2020 will be $1,828,461,603. Tax capacity, a derivation of market value that is
calculated by applying a class rate to the market value of a property, with the resulting number is
used in calculating tax rates and tax dollars to the property owners will be $20,371,309 for 2020.
The City local tax rate for taxes payable in 2019 was 28.539 percent. The 2020 tax rate is
proposed to increase to 28.973 percent, which is 1.5% higher than the tax rate in 2019. Rigdon
reviewed a property tax impact example for a $600,000 residential property indicating an
estimated 1.5 to 3.0 percent average increase in city property taxes.
Rigdon discussed the city's General Fund balance policy and indicated there are sufficient reserves to
balance the 2020 budget.
Rigdon noted Council will be asked to adopt the 2020 General Fund Budget and property tax levy during
its December 9, 2019 meeting. Council will also be asked to approve the 2020 Shorewood Community
and Event Center and Enterprise Fund Budgets. He said the 2020 Capital Improvement Program will be
discussed during a workshop in January and approved at a subsequent meeting.
B. Public Comment
Mayor Zerby opened the public comment portion of the hearing at 7:17 P.M.
George Greenfield, 24715 Yellowstone Trail, asked what the city was losing in revenue from the
Shorewood Landings project and the Waters Project in Excelsior and wouldn't the city be in a better
financial situation if tax increment was not approved for those projects. Rigdon said that the property tax
revenue above the original value of the property is kept in a tax increment fund and repaid to the developer
pursuant to the agreement. Lewd said that the city continues to receive the property taxes at the same
level as prior to the project being built, so there is no "loss." Greenfield said that he thought that tax
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December 2,2019
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increment was not needed in order for that project to be build. Lerud said he understands that argument,
but tax increment was approved and while there is a number of years that the city will not realize tax
revenues to the General Fund, when the district is decertified, the city will be guaranteed to receive the
revenue.
As far as the Waters project, Lerud said the city receives a payment from Excelsior equal to the amount
that the city received in property taxes before the parcel was detached to Excelsior for the project. When
that project is decertified, Lerud said the city will capture approximately 70 percent of the city property taxes
paid, even though the parcel is in Excelsior.
Greenfield said he had one more question. He said he thought the amount that employees had to pay
monthly insurance premiums was high. Councilmember Siakel said that amount represents the city
contribution to employee insurances. Greenfield thanked the council for the clarification.
Councilmember Siakel said she appreciated the detail of the presentation.
Lerud asked if there was anything additional to the information provided tonight that the council wanted
prior to the meeting next Monday. The council said the information was sufficient.
3. ADJOURN
Johnson moved, Labadie seconded, Adjourning the City Council Special Meeting of
December 2, 2019, at 7:30 P.M. Motion passed 4/0.
Scott. '•y, ay '
ATTEST:
/Y/41/1160&ndie Thone, City Clerk