City Council

10801 Town Square Drive City of Blaine Blaine MN 55449 Anoka County, Minnesota Minutes - Final City Council Thursday, December 11, 2014 8:00 PM Council Chambers Truth in Taxation Hearing Meeting Number 14-68 1. CALL TO ORDER BY THE MAYOR The meeting was called to order by Mayor Ryan at 8:00 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Quorum Present. ALSO PRESENT: Joe Huss, Finance Director; Ward Brown, Budget/Fiscal Analyst; Bryan Schafer, Community Development Director; Bob Therres, Public Services Manager; Chris Olson, Safety Service Manager/Police Chief; Roark Haver, Communications Technician; Catherine Sorensen, City Clerk; Councilmember Elect Jason King and Recording Secretary Linda Dahlquist. Present: 8 - Tom Ryan, Councilmember Hovland, Councilmember Swanson, Councilmember Bourke, Councilmember Clark, Councilmember Kolb, Councilmember Herbst and Councilmember Clark Absent: 1 - Councilmember Hovland 4. ADOPTION OF AGENDA 5. 8:00 P.M. - PUBLIC HEARING AND ITEMS SET FOR A CERTAIN TIME City of Blaine Page 1 City Council Minutes - Final December 11, 2014 Com 14-03 2015 TRUTH-IN-TAXATION HEARING Sponsors: Huss Mayor Ryan opened the public hearing at 8:00 p.m. Finance Director Huss stated the Truth in Taxation Public Hearing tonight is to take input from the public on the proposed budget and tax levy for 2015. He stated the Council has held monthly discussions about the proposed budget and tax levy since May. Finance Director Huss provided a presentation on the 2015 Proposed Budget and Tax Levy. Councilmember Clark left the meeting at 8:03 p.m. and returned at 8:04 p.m. Finance Director Huss stated the Council’s direction is to increase the tax levy for 2015. He stated the proposed 2015 Tax Levy is 36.700%. He noted Blaine has the third lowest tax rate in Anoka County. He stated the tax levy is 71.4% of the total revenue budget. He stated the majority of the general fund expenditures are for public services and safety services. He noted Blaine continues to grow in population and the expenditures per capita and per household will increase slightly and that administrative staffing is equal to 1/3 staff member per 1000 residents. Finance Director Huss stated the City continues to maintain an AA+ Bond rating from S&P. Jack Purkis, 2851 Aspen Lake Drive, stated the Council has $5 billion in extended tax base and a 13.5% increase is too much. He stated he does not think the budget should be restored all in one year. He noted that he is an assessor for Anoka County. Gary Ramacher, 12816 Monroe Street NE, stated the City’s budget is going up 4.4%, Anoka County’s increase is 2.8% and Hennepin’s School District increase is 3%. He stated his property taxes are going up a total of 15%. John Erar, 2543 Tournament Players Court S, stated the City’s tax capacity rate is talked about instead of expenses. He noted the City will collect $2.8 million more in 2015. He noted that the City’s residential is increasing by $700,000. He stated the Council needs to control spending and not focus on the tax rate. He questioned where the property tax for commercial is going. City Manager Arneson replied the new Walmart will pay property tax next year and the Walmart under construction will not have property tax until 2016. Councilmember Herbst asked if the $700,000 draw is included in the reserve draw. Finance Director Huss replied yes, $776,000 is included in the $2.8 million. City of Blaine Page 2 City Council Minutes - Final December 11, 2014 Mr. Erar asked what the City auditor recommends for the reserve. Finance Director Huss replied the City’s policy is 30% of cash flow needs and an additional 3-4% for contingency reserves. Councilmember Herbst calculated the addition of $767,000 unrestricted funds and $400,000 wages. Finance Director Huss replied the levy is higher due to the removal of the reserve draw. He noted expenses are the EDA, Debt Service, PMP and wage increase. Mr. Erar stated the City cannot increase property taxes by 21% in one year. Mayor Ryan stated in the past the City needed to use reserves in order to buffer the residents. Mr. Erar stated the City needs to reduce spending. Mayor Ryan stated the cost of equipment, supplies and services has gone up greatly. Mr. Erar asked the Council to lower the tax rate and lower City spending. Mayor Ryan commented the City has lost some commercial. Pat Schroedl, 782 125th Lane NE, stated her property taxes went up 40%. She noted a 4.4% wage increase is too much. She suggested contracting City services. As no one further wished to appear, Mayor Ryan closed the public hearing at 9:14 p.m. Mayor Ryan commented the past few years the City did not receive any local government aid. He noted that the City has cut back as much as possible. He noted cutting services has been looked at as well like cutting grass one time per week in the parks and not snow plowing on the weekends. Councilmember Herbst stated the union wage increase is set, so any cuts would have to be done to the public works position, finance position, new police officer position, and to the Pavement Management Program. Finance Director Huss replied if the new positions are eliminated the City could save $150,000. Councilmember Bourke commented that the Council had to put on hold several items this year. He stated the City has good Pavement Management Program, waste disposal program, and road infrastructure. He stated the Council watches the budget very closely and the past years were very difficult. Councilmember Clark stated the 2015 budget has a lot to cover all at once. Councilmember Swanson commented the Pavement Management Program includes seal coating. City of Blaine Page 3 City Council Minutes - Final December 11, 2014 City Manager Arneson stated staff estimates there will be approximately $250,000 remaining in the general fund at 2014 year end. Councilmember Bourke requested the total dollar amount budgeted for the EDA levy. Finance Director Huss replied $342,150. City Manager Arneson stated staff received a purchase agreement from Lang Nelson to purchase the two senior buildings. He noted a sale is expected in February. Councilmember Swanson stated the EDA needs to have ongoing funding source. He noted that Kmart and Rainbow have closed and the EDA is important for those redevelopment projects. Councilmember Herbst asked if the gas budget can be reduced due to the lower prices. Finance Director Huss replied the City has a gas contract. Councilmember Herbst suggested reducing the EDA and Pavement Management Program, and use unrestricted funds for seal coating. Councilmember Swanson stated he supports removing $250,000 from the Pavement Management Program. He stated he would like to see neighboring cities’ city portion taxes and expenses. Councilmember Clark suggested a property tax reduction goal of 1%. Councilmember Bourke suggested all budgeted funding for EDA be postponed. He noted that funds from the sale of the two buildings would be the only funds for the EDA in 2015. Mayor Ryan commented that the City does not levy for the EDA every year. He asked for a status on Oak Park Shopping Center. City Manager Arneson stated a letter of intent is expected next week. 6. OTHER BUSINESS Action 14-396 Moved by Councilmember Swanson, seconded by Mayor Ryan for the Council to hold a Closed Session on December 18, 2014. Motion adopted unanimously. Motion City of Blaine Page 4 City Council Minutes - Final December 11, 2014 7. ADJOURNMENT Moved by Councilmember Herbst, seconded by Councilmember Bourke, to adjourn the meeting at 9:57 p.m. Adjourned City of Blaine Page 5