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HomeMy WebLinkAboutCity Council Minutes 12-04-1996 BOEMinutes Truth in Taxation Hearing December 4, 1996 The Truth in Taxation meeting was called to order by Mayor Tierney at 7:00 p.m., in the City Council Chambers, 3400 Plymouth Blvd., on December 4, 1996. COUNCIL PRESENT: Mayor Tierney; Councilmembers Wold, Lymangood, Preus, Black, and Granath. Councilmember Anderson arrived at 7:20 p.m. ABSENT: None STAFF PRESENT: City Manager Johnson, Assistant City Manager Lueckert, Public Works Director Moore, Community Development Director Hurlburt, Finance Director Hahn, Park Director Blank, Public Safety Director Gerdes, City Attorney Knutson, and City Clerk Ahrens. Mayor Tierney announced that the purpose of the meeting is to conduct the Truth in Taxation Hearing. City Manager Johnson presented the staff report on the proposed 1997 budget. Under the proposed tax levy for 1997, Plymouth would retain the lowest city tax rate among all Minnesota cities (78) over 10,000 population. Plymouth has the ninth highest total tax capacity per capita of the 78 cities, and contributes 6.4 percent of its tax base to other metropolitan area communities through the fiscal disparities law. Plymouth is 74`h of the 78 cities in the amount of state aid per capita. He said that Plymouth's tax levy rate was 18.04 in 1993 and has been reduced to a proposed rate of 14.48 for 1997. In 1993 the average Plymouth home paid $406.62 to the City in property taxes. In 1997 the average home would pay $404.71. This is $2 lower than five years ago, despite the average value home increasing in value. Manager Johnson said the 1997 budget would reduce the tax rate for the fourth consecutive year, establish a new Capital Improvements Fund, continue planning for Northwest Plymouth and code updates, provide new software for police allowing integrated crime reporting, include an operating budget for the new Ice Arena, enhance snow removal operations with new equipment and personnel, expand community policing programs into the junior high schools, include additional funds for reforestation, make an additional allocation to the Water Quality Fund, and continue the commitment to upgrade the City's information technology. He explained that in the past, most of the City's capital improvements have been done from special funds such as the Community Improvement Fund, tax increment funds, or street state -aid funds. A new Capital Improvement Fund is proposed in 1997. Truth in Taxation Hearing December 4, 1996 Page 2 Assistant Manager Lueckert said the average valued home in Plymouth in 1997 is 175,700 which is an increase of 4.3 percent over 1996. The estimated amount of increase/decrease for city taxes payable on an average value home is $9.10 for 1997. She explained the distribution of the property tax dollar. School districts receive approximately 53 percent, Hennepin County receives 28 percent, special districts receive 7 percent, and the City and HRA receive 12 percent. She presented property tax comparisons on residential and commercial properties from 1993 to 1997, and showed the tax burden on the average value home for 1997 in each of the four school districts. The City tax on a home valued at $175,700 was shown for various communities. Assistant Manager Lueckert reviewed the growth in market value trends from 1996 to 1997. In 1992, the tax capacity comparisons were 42 percent residential and 57 percent commercial/industrial properties. In 1996, residential comprises 50.5 percent of tax capacity and commercial/industrial comprises 49.5 percent. In 1996, Plymouth had a combined residential/commercial value of about $3.4 billion. This has increased by 10.4 percent to a total value of $3.7 billion for 1997. She explained the major operating funds and noted that the General Fund is proposed at $14.8 million for 1997. A new fund for 1997 is the ice arena. She explained the major factors that contribute to the growth in the City's tax base: City market value has increased by 10.5 percent, the residential segment has increased by 8.8 percent, the commercial segment has increased by 15.3 percent, and overall tax capacity has increased by 17 percent. This tax base growth provides flexibility to deal with potential state aid loss or declining development revenues. Overall permit revenues remained strong in 1996, and it is anticipated they will continue at a strong level in 1997. The 1997 budget projects a 11.9 percent increase in building permit revenues over the 1996 budgeted levels. The 1997 projections include a 20 percent fee increase that was approved in 1995 for the 1997 calendar year. Assistant Manager Lueckert said that in recent years, various funds have been used for capital improvements such as trail development, the ice arena and pool complex, playfields, and the city hall renovation. The capital project needs now exceed the funds available. Therefore, a new capital improvement levy is proposed as part of the general property tax levy. A "pay as you go" approach is recommended, and the levy will be used for capital projects approved in the annual Capital Improvement Program. She said that strict guidelines will govern the use of the capital improvement levy, which is proposed to be $280,000 in 1997. She described the following personnel requests for 1997: police officer, planner, senior clerk typist police, street maintenance worker, information technology coordinator, and sewer maintenance worker. Councilmember Anderson arrived at 7:20 p.m. Truth in Taxation Hearing December 4, 1996 Page 3 Assistant Manager Lueckert explained that the following capital expenditures are proposed in the 1997 budget: Continue equipment replacement program to include a 450,000 fire truck - $857,000; Dump Truck with Plow Equipment - $90,000; and Computer equipment - $175,000. She explained the 1997 General Fund budget revenue categories, and the percentage changes from 1996 to 1997. The largest category of General Fund budget expenditures is personal services which represents 62 percent of the General Fund. Public safety represents 40 percent of the General Fund, followed by Public Works at 19 percent, Parks and Recreation at 15 percent, and the remaining department budgets. Manager Johnson said the City Council has been studying the proposed 1997 budget since August, and the Council plans to take action on the proposed budget on December 18. Mayor Tierney asked what is included in personal services. She said that personal services is usually 60 percent of the budget; however, it would be 62 percent for 1997. She asked if this increase is a trend. Assistant Manager Lueckert explained that salaries and benefits are included in the personal services portion of the budget. The increase from 60 to 62 percent of the budget is primarily based on the agreements reached with the four bargaining units, which are market driven. She said it is a goal to retain about a 60 percent figure over time. Mayor Tierney opened the Truth in Taxation hearing at 7:27 p.m. Archie E. Kaukinen, 15849 27`" Avenue North, questioned the 23.1 percent increase in his 1995 tax bill. Mayor Tierney explained that the large increase was likely the result of the School District 284 bond referendum. Mr. Kaukinen was directed to meet with the Finance Director for further analysis of his 1995 tax bill. No one else appeared, and the public hearing was closed at 7:30 p.m. Manager Johnson said the City Council has the choice of closing the hearing or continuing the hearing to December 18. Councilmember Lymangood said that notice of this meeting was mailed to every property owner in the City as part of the Truth in Taxation process. He is comfortable closing the hearing. Truth in Taxation Hearing December 4, 1996 Page 4 Councilmember Lymangood presented information showing that a home valued at 160,000 located in School District 284 paid $1,499 in school taxes in 1995. The value of that home increased to $168,400 in 1996 and the school tax increased to $1,916. This increase was largely due to a school levy increase and bond referendum. He noted that from 1993 to 1997, residents experienced a net reduction of $2 in their city taxes, while taxes increased in other taxing jurisdictions. Motion was made by Councilmember Lymangood, seconded by Councilmember Preus, to adopt RESOLUTION 96-650 DIRECTING STAFF TO SEND COMPARATIVE INFORMATION ON CITY, COUNTY, AND SCHOOL DISTRICT TAXES TO SCHOOL SUPERINTENDENTS AND TO HENNEPIN COUNTY COMMISSIONERS, and to send the same material, including Plymouth Tax Facts to the State legislators representing Plymouth. Motion carried, seven ayes. Councilmember Wold said the Council had previously directed staff to solicit input from the 1997 councilmembers on benefits they intend to receive so that the 1997 budget reflects an amount for benefits that the Council will actually take. He asked if this has been done. Manager Johnson said it is being done and the budget will be updated prior to December 18 if necessary. Motion was made by Councilmember Preus, seconded by Councilmember Black, to adjourn the Truth in Taxation meeting at 7:40 p.m. Motion carried, seven ayes. City Clerk