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HomeMy WebLinkAbout5.F.2. Approve Minutes: December 04, 2006 OFFICIAL PROCEEDINGS OF THE CITY COUNCIL ADJ. REGULAR SESSION SHAKOPEE,M~SOTA DECEMBER 4, 2006 Mayor John Schmitt called the meeting to order at,7:00p.m. with Council members Steve Clay, Terry Joos, Steye Menden, and Matt Lehman present. Also present were Mark McNeill, City Administrator; Gregg Voxland, Finance Director; Judith S. Cox, City Clerk; Kris Wilson, Assistant City Administrator; Michael Leek, Community Development Director; and Bruce Loney, Public Works Director/City Engineer; Mark Themig, Parks Recreation and Facilities Director; and Dan Hughes, Chief of Police. Joos/Clay moved to approve the agenda presented. Motion carried 5-0. Mayor Schmitt stated that the only item on the agenda is the Truth in Taxation Hearing. JooslMenden moved to open the Truth in Taxation hearing. Motion carried 5-0. Gregg Voxland, Finance Director, presented to Council that due to the increase in the tax levy, the City is required to hold a Truth in Taxation public hearing. Mr. V oxland then presented Council with a DVD from the School Board Association, The League of Minnesota Cities, and the Association of Minnesota Counties of Fourteen Reason Why Property Taxes Increase and Decrease. After the DVD presentation, Mr. V oxland did a presentation which summarized the 2007 City of Shakopee Property Tax. Mr. V oxland stated that the County Assessor values all houses and properties in Shakopee. Residents can appeal what the Assessor values property typically in June. The value rate that the County 1\ssessor assigns to each property is for taxes payable the following year. Mr. Voxland stated that this meeting is to focus on the City of Shako pee's share of property taxes. Mr. Voxland said the State Legislator assigns a tax capacity rate which is 1% of the market value for residential property. The City then sets a dollar tax levy to be collected and the County Auditor spreads the Levy to every parcel in the City. Mr. Voxland said that in 2006 the average value of a house in Shakopee had an Estimated Market Value (EMV) of$223,000. In2007 the average house value is $237,000. Mr. Voxland then showed a pie chart as to where the tax money goes to. The school gets 29%, the County gets 36% and the City receives 32% percent and 3% to Other. Mr. Voxland stated thatthe Tax Capacity Rate in 2006 was 30.922 and in 2007 is 31.961. Mr. Voxland said the rate is up 3.2%. Mr. Voxland said that a house in Shakopee valued at $234,053 times the 2007 tax capacity rate. of .31961 including a homestead credit the total amount is $713.00. The breakdown of the $713 city tax is approximately $2 per day. Mr. V oxland also showed Shakopee's tax rate in comparison to five surrounding cities. Shakopee has the second lowest tax rate of the five cities. Official Proceedings of the December 4, 2006 Shakopee City Council Page -2- Mr. Voxland discussed the General Fund budget summary. The operation of the City consumes approximately 91 % of the budget while 7% is for debt service and 2% is for the Fire Referendum Debt. Mr. V oxland explained that the general fund revenues are collected by taxes, licenses & permits, inter-governmental, services, fines, and from the Shakopee Public Utilities Commission. Expenditures are grouped in broad categories of Po liceIF ire (48%), Engineering/Street/Shop (16%), General Government (19%), ParklRecreation (16%), and Unallocated(l%). Mayor Schmitt asked if there were any questions. Cncl. Lehman asked what the City's financial responsibility is for the Scott County Public Library. Mr. V oxland said that the City maintains the building and pays for the utilities. The County staff's the library.and its contents. Mayor Schmitt asked if there was anyone in the audience who wanted to comment on the 2006/2007 budget presentation. Don McNeil, 1101 Naumkeag St., said the City brings in approximately $275,000 for the relationship with Comcast who proYides cable to the citizen's of Shako pee. Mr. McNeil said that the money goes into the Telecommunication's fund. Mr. McNeil feels that the Telecommunication's Commission is having a hard time spending the money each year. Mr. McNeil feels that the money collected from Comcast should be shifted to the general fund soit is monitored. Mr. McNeil also suggested that the money could be used for the fire departti1ent. Mr. McNeil stated he's also concerned about the senior citizen's'who live on a fixed income and their ability to pay the tax rate mcreases. Jim Hofer, 1958 Omega Drive, feels that the tax process and the explanation of the process does not make any sense to a layman. Mr. Hofer asked the Council to.find ways and be creative in keeping a check on taxes. Mr. Hofer also asked the Council to continue the hearing to December 11, 2006 so that other people in the community would have an opportunity to voice their opinion. Cncl. Joos explained that on the tax statements there are also other Truth and Taxation hearing dates for the School Board and the County. Tom Trudel, 977 Vista Ridge Lane, addressed Council with concerns he has with his property taxes. Mr. Trudel provided each of the Council members with his tax statement for 2007. Mr. Trudel stated that he lives in a part of the city that does not have city sewer and water; however, he has been paying for storm drainage and other city services that he does not get because of where he lives. Mr. Trudel stated that his property tax yalue went up 16.5% :from 2004 to 2005. From 2005 to 2006 Mr. Trudel's tax value went up 15.3% and 20% tax value increase from 2006 to 2007. Mr. Trudel stated that in a three year period his property tax value has increased approximately 50 percent. Mr. Trudel asked the Council to review his statement to see if this was normal. Mr. Joos stated that in looking at Mr. Trudel's statement he sees that his house valuation increases every year which plays a significant roll in determining taxes. Mr. Jaos said that the City does not determine house valuations because it is done by the County. Mr. Joos suggested to Mr. Trudel that in 2007 when he receives his property valuation from the County he has the opportunity to appeal. Official Proceedings of the December 4, 2006 Shakopee City Council Page -3- Mr. Trudel said that there should be a cap as to how much of a tax increase can be on each property so it's much more manageable. Cnc1. Lehman said that if the value of his property did not change, the increase would be 3.2% for the City portion of his property taxes. Cnc1. Lehman said that because Mr. Trudel's house value has increased significantly he is seeing higher property taxes and that he needs to pursue the increase through the County. Don McNeil, 1101 Naumkeag St, asked the City Council if the City charges homeowner's for fire calls. Mayor Schmitt stated that the City does not charge homeowners for fire calls. Mayor Schmitt said that the Council is in the process of studying charging homeowners for fire calls. Mr. McNeil also discussed with Council the importance of cable access for the citizen's of Shakopee. Mr.. McNeil stated that the Truth and Taxation Hearing was not advertised on cable access. Mr. McNeil felt that the Council needs to utilize the public access channel by advertising the Truth and Taxation meeting and other events and meetings the City holds and feels that public access is under utilized. Mayor Schmitt explained that everyone received a notice. of this hearing. il notice on cable would only serve as a reminder. Troy Ryan, 3465 West Ridge Dr., asked what the Council is going to do next year when home values are falling because they can not be sold. Mr. Ryan said that he has neighbors who have had their houses on the market for months and are unable to sell them. Mr. Ryan feels that there isn't a house in Shakopee that should be paying $6,000a year in property taxes. Mayor Schmitt pointed out that Shakopee is the second lowest in the County for property taxes. Mayor Schmitt also stated that the City of Shako pee does not receive Local Government Aide (LGA) or Fiscal Disparities. Mayor Schmitt also said that a big reason for the tax increase is because of home sales in the community. Mr. Leek stated that before Highway 169 was built residential permits were about 100 to 150 a year. Since Highway 169 was built permits were in the range 1100 permits a year. This year there were approximately 300 issued. An unnamed person in the audience asked how many building permits were issued in 2005. Mr. Leek stated there were approximately 600 residential permits issued. The unnamed person said he read that Scott County and Shakopee were the fastest growing communities in the nation. He was also wondering where those houses were as coming online paying taxes. Mayor Schmitt stated that he believed that Scott County was named 15th in the nation for growth. Mr. Leek said that there are approximately 1500 lots in inventory and they are not moving. Mayor Schmitt explained that when a new residence is built the homeowner only pays a lot tax the first year. It takes approximately18 months before a homeowner is billed a full property tax. Cncl. Menden asked Mr. V oxland what happens if the market value goes down in the next year. Mr. Voxland said it is dependent on the assessment process for the following year's taxes. Cncl. Lehman stated that the City's 3.2% tax increase is not that. significant. Cnc1. Lehman said the real issue is property value that the County controls. Official Proceedings of the December 4, 2006 Shakopee City Council Page -4- William Stegeman, 1254 Tyler St., addressed the Council with his concerns that the numbers do not add up with regard to his property tax increase. Mr. Stegeman did state that he appreciates the good services he receives in the city. LehmanlMenden moved to continue the public hearing to Monday, December 11,2006 at 7:00 p.m. Discussion followed. Cncl. Menden would like to know if the Telecommunication's fund can be incorporated into the General Fund. Mr. McNeill explained that the City's practice is not to put those dollars into the General Fund. Mr. McNeill stated that the Telecommunication's fund has been used to support other General Fund purposes in terms of technology. Mr. McNeill said some of those dollars have funded computers in police vehicles, to assist in funding server purchases, and security systems. Mr. McNeill said that there has been significant discussion in Congress to go to a national franchising that would eliminate telecommunication fees. If that's the case, thenthe City does not have a hole in the budget. Cncl. Menden asked Mr. McNeill if he could provide him with what the projected Telecommunications dollars would be for next year and what the money is slated for the next year. Cncl. Menden also discussed an issue that came up during the hearing, what is the building rental fee total for the year? Mayor Schmitt wanted to explain to the audience what the building rental fee is. Mayor Schmitt said that it's a government term. In the corporate world it's called reserve for depreciation. The cost is amortized as depreciation so a reserve is built up so that it can be replaced. Mr. Voxland stated that in the Building Fund there is $864,000 in rental charges coming out of the operating budget with a total of $894,000 with interest income. On the expenditure side it's estimated that $1,280,000 will be spent on building maintenance and a future fire station. Of the $1,280,000, $470,000 is being transferred out for debt service instead of levying on the taxes. Mayor Schmitt asked for a vote on the motion. Motion carried 3-2 with Schmitt and Clay dissenting. Joos/Menden moved to adjourn to Tuesday, December 5,2006 at 7:00p.m. The Council meeting ended at 9:00 p.m. JJtJ.~ a~th S. Cox ity Clerk Kim Weckman Recording Secretary