12-05-05 Special
CITY COUNCIL MEETING MINUTES
Richfield, Minnesota
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Special City Council Meeting
December 5, 2005
The meeting was called to order by Mayor Kirsch at 6:32 p.m.
Members Present:
Martin Kirsch, Mayor; Susan Rosenberg; Bill Kilian; and Sue Sandahl.
Members
Not Present:
Fred Wroge.
Staff Present:
Steve Devich, City Manager; Barry Fritz, Acting Public Safety Director; Jim
Topitzhofer, Recreation Services Director; Bruce Palmborg, Community
Development Director; Brad Sveum, Fire Services Director; Bill Fillmore,
Liquor Operations Director; Chris Regis, Finance Manager; and Cheryl
Krumholz, Recording Secretary.
M/Sandahl, S/Kilian to excuse the absence of Council Member WroQe from the December
5. 2005 Special City Council MeetinQ.
Motion carried 4-0.
Item #1
City Manager Devich made a presentation entitled, 2006 Proposed Budget & Tax Levy,
Local Services Paid by Local Taxes: (Clerk's File No. C-414)
. Timetable & Key Events
. 2006 Budget Influences
. Key Issues for 2006
. History of State Aid Losses
. 2006 Proposed General Fund Budget
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December 5, 2005
. Revenue Comparisons
. LGA Comparisons
Council Member Sandahl stated the loss of local government aid (LGA) is cumulative and is
approximately 1/3 of the total General Fund Budget.
City Manager Devich referenced a recent article in the Star Tribune regarding property
taxes including a comparison chart of property taxes in the metropolitan area. Small cities with a
relatively weak tax base have a property tax increase because of the pressure on those taxes due
to reduced allocations in State aid and to school districts.
Finance Manager Regis continued the presentation including:
. Gross Tax Levy History
. Gross Tax Levy
. 2006 Proposed General Fund Budget
. 2006 (2005) Proposed Budget General Fund Revenues
. 2006 (2005) Proposed Budget General Fund Expenditures
. 2006 Proposed Budget General Fund Expenditures
. 1996/2006 Expenditure Profile
. General Fund History
. Full Time Regular Personnel
. 2006 Property Levy Estimated Impact
. 2006 Monthly Costs for Services
. 2006 Proposed Budget
. Where are we going?
Council Member Sandahl stated Richfield's property taxes are not sufficient to pay for all
the Public Safety, Fire and Public Works services.
City Manager Devich explained the General Fund is invested in basic Public Safety and
Fire Services expenditures. The basic services expected by Richfield residents is what the
General Fund covers.
City Manager Devich explained the impact on properties and taxes related to the State's
removal of limited market value by 2008. People who benefited previously may now realize the
impact.
City Manager Devich stated police vehicles are replaced on a three year schedule not two
year, and Public Works vehicles are now kept for seven to eight years.
Finance Manager Regis added that this increases maintenance costs.
Larry Wozniczka, 6744 Wentworth Avenue, addressed the City Council regarding the
factors he believed affected an increase in property taxes including valuation changes for different
property classifications and that properties are lost to redevelopment. He thanked the City Council
for reducing the tax burden and asked them to have the utility franchise fees as a tax so they can
be a tax deduction.
Mr. Wozniczka asked the City Council and staff to be continuously astute to reducing the
tax burden. He challenged the HRA to try to achieve projects that increase the City's tax capacity.
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December 5, 2005
Elizabeth Arnold, 148 East 66th Street, asked for clarification of the tax levy percentage
since slightly varying amounts were in the newspapers. She also asked the City Council to place
the franchise fees on the property tax. Sales tax is being paid on the franchise fee so it's an extra
tax on a tax.
City Manager Devich explained the City's property tax levy is 8.57%. This does not include
the school district's levy.
City Manager Devich stated there is a tax on the franchise fees. There have been State
discussions of removing some tax breaks with the State now looking at a budget surplus. He said
he hoped the State would deal with cities and school districts in a fair light with the surplus since
the State's deficit fell to those jurisdictions which have only property taxes to raise revenues. He
encouraged residents to contact their legislators regarding property tax relief.
Jim McLean, 7301 Aldrich Avenue, referenced the Truth-in-Taxation (TNT) notice and
asked for clarification on the budget increase.
Finance Manager Regis explained the State required the notice to reflect all budgeted funds
throughout the City when only the General Fund impacts property taxes. That increase is 3.4%.
City Manager Devich stated that the State's requirement to have the TNT hearing reflect all
budgeted funds is misleading and confusing. He stated he was going to discuss with the
Department of Revenue, the reporting of only the General Fund. He added that some cities use
only the General Fund so there is no consistency.
Mr. McLean questioned the tax capacity rate.
Finance Manager Regis explained the formula multiplier as it applies to home value.
City Manager Devich added that the conversion factor of market value to tax capacity is
determined by the State and it changes frequently.
M/Rosenberg, S/Kilian to close the public hearina.
Motion carried 4-0.
M/Sandahl, S/Kilian to schedule final action on the 2006 property tax levy and 2005
Revised/2006 Proposed Budaet and 2006 water. wastewater and stormsewer utility rates for the
Reaular City Council meetina on December 13. 2005.
Motion carried 4-0.
M/Sandahl, S/Kilian to cancel the December 12. 2005 TNT because a continuation is not
necessary since the public hearina was concluded toniaht.
Motion carried 4-0.
The meeting was adjourned by unanimous consent at 7:25 p.m.
Special Council Meeting Minutes
Date Approved: Januarv 10, 2006
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Cheryl K~ z ~
Recording Secretary
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December 5, 2005
en L. Devich
City Manager