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HomeMy WebLinkAbout7. Approval of Minutes: December 01, 2003 OFFICIAL PROCEEDINGS OF THE CITY COUNCIL ADJ. REGULAR SESSION SHAKOPEE,MINNESOTA DECEMBER 1, 2003 Mayor Mars called the meeting to order at 7:08 p.m. with Council members Lehman, Joos and Helkamp present and Cncl. Link absent. Also present were: Mark McNeill, City Administrator; Judith S. Cox, City Clerk, Bruce Loney, Public Works Director/City Engineer; R. Michael Leek, Community Development Director Gregg Voxland, Finance Director, Dan Hughes, Chief of Police, and Mark Themig, Facilities and Recreation Director. Also present were: Mayor-Elect John Schmitt and Councilor-Elect Steve Menden. Joos/Helkamp moved to approve the Agenda as written. Motion carried 4-0. Mayor Mars opened the Truth and Taxation public hearing for 2003/2004. Mr. Voxland gave a tax levy/budget presentation. Mr. Voxland noted that the budget being talked about tonight was the operating budget (mainly the General Fund) for the City of Shakopee. The General Fund funded the public safety components ofthe City (Police, Fire, Building Inspections), Administrative functions, Mayor and Council, Public Works/Engineering, Park maintenance, Legal, Elections and a transfer to the Recreation Enterprise Fund. There were a number of other funds that the City has that are not impacted by taxes Le. Utility Fund, Sanitary Sewer Fund, Storm Drainage Fund, Recreation Fund, Internal Service Funds, Debt Service Funds to name a few. The City share of the 2003 tax dollar was about 33%. The School's share was 24%, the County's share was 38% and others were 6%. The City Council had directed Mr. Voxland to reduce the tax levy for 2004 from the original proposed amount; the reduced tax levy would result in a rate of 32.1. This resulted in the City having a rate of 32.1 from the tax levy, a rate of 21.3 for the School District, a rate of 36.6 for the County and other taxing entities would see a rate of 5.1. Mr. V oxland presented the proposed taxing rate of other neighboring jurisdictions for 2004. The City of Shakopee's taxing rate for 2004 was the lowest out of New Prague, Jordan, Savage, Prior Lake, Belle Plaine and New Market. Mr. V oxland noted the process for determining what the property taxes would be for a particular parcel. He noted that the State Legislature determined the formulas to set the Tax Capacity. The City Council set the dollar amount of the Tax Levy and the tax levy was then spread over the total amount of the tax capacity of the City and a rate was determined. Mr. Voxland noted that the increase in estimate market value from a home in 2002 to 2003 was about 12% across the board. He noted there was a higher tax capacity rate for commercial; thus there was a higher tax capacity. He noted how the City's tax burden on a parcel was determined. Mr. Voxland did a comparison on the tax rate for a sample parcel for 2003 and 2004. The City tax for 2003 was $577.64 and the City tax for 2004 was $644.00 using the new tax rate for 2004. Official Proceedings of the December 1, 2003 Shakopee City Council Page -2- Mr. V oxland stated the new Fire Station Tax Levy referendum is based on Market Value. Because this is a residential parcel there is a market value credit given by the state. The State says rather than paying the credit to the taxpayer they will pay the City instead; however the State is not going to pay the City the whole amount. In fact the City of Shakopee will not get a thing for 2004 (market value credit). This property had to pay $529.00 in tax for 2002 payable in 2003 and the taxes for 2003 payable in 2004 would be $597.00. If all the taxing jurisdictions levied the maximum they proposed in their proposed amounts this property would see an increase of 7.5% in their proposed taxes. Mayor Mars stated that homeowners were seeing a reduction in their taxes due to the market value credit on their tax statements but the State was not giving those dollars to the City. Mr. V oxland stated the limited market value was being phased out by the State during the next few years and the tax capacity would rise. Mr. V oxland noted over the years the property values in the City of Shakopee have risen. Mr. V oxland stated the General Fund Operating levy had also seen a large increase over the last few years. The City increased their property taxes when the State took over most of the funding for the schools. Mr. V oxland noted the tax capacity rate of a commercial building was about twice the rate of a residential building. It was valuable to a City to have a strong commercial/industrial base. Mr. Voxland stated the total gross tax capacity for the City in 2003 was $25 million dollars and the gross tax capacity payable in 2004 is now $28.5 million dollars. The net tax capacity was $21 million payable in 2003 and $24 million payable 2004. Mr. V oxland stated that the commercial/industrial share ofthe total net tax capacity decreased in 2004 from 2003 but the residential share increased. The General Fund budget adopted for 2003 was $10.8 million and the General Fund budget estimated for 2004 is $11.9 million. Mr. Voxland noted that Shakopee Public Utilities normally transferred to the City on an annual basis some money from their electric/water utilities. This transfer was in lieu of taxes so to speak. The transfer in 2003 was $1.1 million. The transfer from Shakopee Public Utilities for 2004 plus a transfer from the Storm Drainage Fund of $156,000 will be in the area of$1,331,000. Other activity in this fund would be a $946,000 transfer to the recreation fund in 2004 from the General Fund. Mr. V oxland stated the operating budget for 2004 showed a decrease in fund balance from 2003 of $519,000. Mr. Voxland stated the operating budget for 2003 used 95% of the tax dollar. The total Tax Levy dollars for 2004 would be increased by 9.4%. Mr. Voxland noted that the City Council considered public safety (police, fire and building inspections) to be a major function of the City and public safety was proposed to take 44% out of each dollar in the City's General Fund budget. The percentages for the use of the dollar in the General Fund remained pretty stable from 2003 to Official Proceedings of the December 1, 2003 Shakopee City Council Page -3- 2004. The cost per capita remained relatively the same but the individual costs (expenses) themselves went up because of the growth of the City. The number of households that an employee should service was discussed. Mayor Mars called for public participation. There was no response. Lehman/loos moved to close the public hearing. Motion carried 4-0. Joos/Lehman moved to adopt the tax levy and budget at the public hearing to held on Tuesday, December 16,2003 at 7:00 p.m. Mr. Voxland stated that from the notices that were sent out to what Council is proposing to adopt, the increase in taxes would be about half of what is showing on the tax notices sent out by the County. The increase on a average home of about $190,000 was around $50.00 and Mayor Mars thought the residents received a lot for this increase. Motion carried 4-0. Lehman!Helkamp moved to adjourn to Tuesday December 2,2003 at 7:00 p.m. Motion carried 4-0. The meeting adjourned at 7:40 p.m. Motion carried 4-0. ~~o~. 0/ City Clerk Carole Hedlund Recording Secretary