12-02-02 Special
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CITY COUNCIL MINUTES
Richfield, Minnesota
Special City Council Meeting
December 2, 2002
The meeting was called to order by Mayor Kirsch at 6:30 p.m.
Members Present:
Martin Kirsch, Mayor; Susan Rosenberg; John Enger; and Sue Sandahl.
Members
Not Present:
Gertrude Ulrich.
Staff Present:
Samantha Orduno, City Manager; Steven Devich, Administrative Services
Director; Jim Topitzhofer, Recreation Services Director; Bruce Palmborg,
Community Development Director; Mike Eastling, Public Works Director;
Dan Scott, Public Safety Director; Bill Fillmore, Municipal Liquor
Operations Director; Kevin McGinty, Fire Services Director; and Cheryl
Krumholz, Recording Secretary.
M/Sandahl, S/Rosenberg to determine the absence of Council Member Ulrich as an
excused absence.
Motion carried 4-0.
Item #1
City Manager Orduno stated that while Richfield property values have continued to increase
significantly, the amount of property tax paid, as a share of City spending, has been restrained.
Ms. Orduno explained what Richfield has done to keep down taxes. She also explained the
City's levy limit and several factors impacting cities, including higher employee health costs; the
Legislature's shift of the tax burden to residential from business properties; lower interest rates;
and the Legislature's phasing out the protection from large annual tax increases due to increases
in market values.
Ms. Orduno stated property taxes alone are not enough to fund the most essential services
in the community. She added that Richfield is one of four cities out of 42 cities in all of Hennepin
County to decrease its 2003 certified levy.
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Special Council Meeting Minutes
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December 2, 2002
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Ms. Orduno stated the City is responsible only for the City portion of property taxes and is
not in control or responsible for other taxing jurisdictions' share of property tax. She said the I
property tax statement received recently does not include the approved school levy referendum.
She added that the 2003 property tax does not reflect the additional tax decrease as a result of the
Lyndale-Hub-Nicollet tax increment financing district decertification.
Administrative Services Director Devich made a presentation entitled, 2003 Proposed Tax
Levy -"Bracing for the Future". (Clerk's File No. C-388.)
. Major Issues For 2003
. Budget Preparation Philosophy
. Timetable & Key Events
. 2003 Proposed Budget
. Major Initiatives & Issues
. Equipment Certificate - Purchases
. Staff/Service Reductions - Position Cuts
. Full-Time Regular Personnel
. Gross Levy History
. General Fund History
. General Fund Fund Balance as % of Revenues
. Local Government Aid Comparison
. Homestead & Agricultural Aid Comparison
. 2003 (2002) Proposed Budget General Fund Revenues
. 2003 (2002) Proposed Budget General Fund Expenditures
. 1993/2003 Expenditure Profile
. 2003 Property Tax Impacts for $120,000-$140,000-$160,000 EMV
. 2003 Proposed Levy Estimated Impact
. Residential Tax Impact-Hennepin County
. Residential Tax Impact Comparison
. Estimated 2003 Tax Capacity Rates
Larry Wozniczka, 6744 Wentworth Avenue, asked about the City's levy increase due to
Local Government Aid (LGA) and Homestead & Agricultural Aid (HACA) cuts. He added that he
believed the tax increase for 2002 to be closer to 50% than 21 % and that the 2003 decrease
occurs because the 2002 increase is so large.
Ms. Orduno stated the increase is due to the elimination of HACA, the first time to issue
equipment certification as requested by the City Council and the State mandated inclusion of
PERA.
Mr. Devich stated the gross levy increase is 21.2% and explained the levy impact on
property. He added that if the City had not reduced the budget, there would be an increase again
in 2003.
Mr. Devich offered to meet with Mr. Wozniczka to explain the tax levy.
Council Member Enger asked if Richfield was sharing equipment with any city.
Ms. Orduno said the Fire Department has mutual aid agreements.
Mr. Wozniczka asked about the funds accumulated previously by departments prior to the
issuance of equipment certificates.
Mr. Devich explained the use of Central Garage funds and the continual maintenance costs
especially with equipment being used longer. He said the equipment certificates purchase
equipment; not fund their maintenance.
Mr. Wozniczka asked about data processing increases in the Administrative Services
budget, including LOGIS expenses. He suggested the City Council consider establishing a task
force to obtain community input to solve the need for additional data processing charges.
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Special Council Meeting Minutes
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December 2, 2002
Mr. Devich explained the reasons for the increase in the Information Technologies budget,
adding that the division is an Internal Fund, and not in the General Fund. He stated the City
Council did review and approve the change to the LOGIS system.
Mr. Wozniczka asked if Best Buy tax increment was considered in the budget.
Ms. Orduno stated the District Court had not yet made a determination so the tax increment
district is considered alive unless declared invalid.
Mr. Wozniczka commended staff for their efforts to reduce costs. He said he did not
believe the comparison with other cities is based on taxes, not the gross levy, and that the whole
picture has not been presented.
Council Member Sandahl stated only the City portion is compared. She said the gross levy
in the past did not reflect inflationary increases.
Council Member Enger stated he believed there is a misunderstanding of tax levy and
property tax.
Council Member Sandahl stated residential rates have increased because of the
compression of residential rates and an attempt to reduce commercial property tax.
M/Rosenberg, S/Enger to close the public hearinq.
Motion carried 4-0.
M/Sandahl, S/Rosenberg to schedule final action on the levy and budqet items and utility
rates for the reqular City Council meetinq of December 10, 2002.
Motion carried 4-0.
Mayor Kirsch thanked City staff for their efforts for reducing the budget as established
through the goal setting session.
Council Member Enger asked for staff to obtain from Hennepin County a copy of 2001 tax
comparisons between cities.
The meeting was adjourned by unanimous consent at 7:30 p.m.
Date Approved: January 14. 2003
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Ma . J. Kirsch/'
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Cfieryl KrumHolz
Recording Secretary