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11-30-1994 Truth in Taxation MinutesCNOV2894.WPS CITY OF OTSEGO SPECIAL COUNCIL MEETING FOR TRUTH IN TAXATION HEARING, IN THE CITY OF OTSEGO, COUNTY OF WRIGHT, STATE OF MINNESOTA. SPECIAL COUNCIL TRUTH IN TAXATION HEARING NOVEMBER 30, 1994 - 7PM ►/: I t 6.1 tu\ I I .1 : tl, 1 1t1 t Mayor Norman F Freske called the meeting to order at 7:05PM. Mayor Freske gave a short explanation and welcomed the residents. He then turned the meeting over to Larry Fournier. ROLL CALL: Norman F Freske, Mayor, Doug Lindenfelser, Ron Black, Larry Fournier Council were present. Floyd Roden, Council Member was absent due to surgery. Also present from Staff were Jerome Perrault, Clerk, Elaine Beatty, Deputy Clerk/Zoning Adm. and Judy Hudson, Secretary. 2 DISCUSSION OF INCREASES OR DECREASES OF THE TOTAL BUDGET, INCLUDING 1/1' 1 . t l :►1 i ►1 Y :►1 .1 :011 .1 t INDEPENDENT CONTRACTORS FOR THE PRIOR YEAR, CURRENT YEAR, AND THE PROPOSED BUDGET FOR 1995 AND OTHER INFORMATION: Larry Fournier welcomed the people and showed a chart we received from the County , 70.5% Residential, 19.4% Farms ,Apartments 5.7% , and 1.9% Commercial/Ind. He explained that is basically where the dollars come from. City Revenues for 1994. Certified portion, is the biggest portion. State Aid, LGA is another place where we get monies, which is good, because we all pay State taxes. He explained further. Another thing the State has done is, two years ago, they made the cities pay sales tax. We had to include that in our levy. He showed a bar graph showing that 62% goes to the School, the County gets 32%, and Otsego's portion is 28.2%. The other 2.7% is for Monticello -Big Lake Comm. Hospital. This is were we get our revenues from. Meeting was turned back to Mayor Freske. Mayor Norman F Freske introduced the Council and said Floyd Roden had surgery and could not make the meeting tonight. He showed the proposed Budget. Personnel has a 3% increase from 1993. He explained the different items in the Administration Budget (See Attached Sheets). $683,000.00 combined Administrative Budget. Public Works Budget is $89,500.00. He went over the items on the budget and amounts. (See attached sheets). Total Public Works Budget $369,025.00 Mayor Freske explained the Income (See attached sheet) Total Income $458,000.00 On part of the budget we lost money because we were made to pay Sales Tax. $60,000.00 was spent for sales tax. We lost $60,000.00 in interest because rates are lower now. We did get $80,000.00, now we get $18,000.00 in interest. $28,000.00 was budgeted for Parks. This meeting is for Budget purposes, not evaluations. Mayor Freske talked about the change in classification. (20 acres or less from Ag to Residential) People got a big hit in taxes m that way. Ron Black took over. He gave a handout. He said it is nice to see people here. 1 QUESTIONS FROM RESIDENTS TAKEN: Mr Tolks suggested we have copies of all the overheads next time. One resident said they should have last years budget, compared to this years budget so they have a comparison. CITY OF OTSEGO SPECIAL TRUTH IN TAXATION HEARING MINUTES OF 11/30/94 PAGE 2 Ron Black showed the average market value on a graph. He also talked about the School Districts, which we have three. Ron explained. (See attached information from Douglas M Grouber. A resident said his house went up $7,100.00 in value. He wanted to know who is doing the valuation. Ron explained the City Assessor values properties. He has a clearly defined set of criteria they can use. He asked where the Assessor was tonight. They felt he should be up there. Pete Merges, City Assessor, said this meeting is about budget, not property values. Ron said shortly after the first of the year you will be receiving a notice of Est. Value to use for property taxes. April or May the Board of Review will be held. People can come in and say it is over or under valued. We have asked the Assessor to go back out and look at properties again, in the past. Last May we reduced a lot of the values. A resident asked how do we get the assessor to come out? Ron said come see us by next Spring. Ron said the valuation of the property for this year in January is for the taxes payable next year. There is nothing we can do about valuations now. There is one year off -set. We can address valuations in the Spring. A resident asked if we deal with the change in classification of properties. Ron said the State sets many of the rules that the CO or City Assessor has to abide by. If the City Assessor ignores it, the State will come in and do it. We are required to have properties valued at 95 to 100% of the market. He explained further. A resident asked, "How come the City is not working on getting some industry to lower the taxes? " Ron said we are. We have been working with the DNR for 5 years. Everyone perceives the boarder on 101 to be developed commercially. One person at DNR has been holding it up for five years. Another attempt was the Third Industrial Site. That was shot down, the neighbors did not want it. The City appointed a committee to come up with another site. A resident said Correct me if I am wrong, but the City Council voted down the pole building type of construction. Some of the hindrances are constructive. He said the two Council Members that are leaving wanted pole building construction. Commercial operations in Otsego are receiving the benefit of Homestead Taxes. That is part of our problem, said Ron. A resident said shouldn't our Assessor be taking care of this problem? Ron said no, it is not our Assessors Problem. They are housing a business. Ron said on our next Agenda there is a Home Extended Business on the Agenda. When we force them to comply, we are accused of putting them out of business. Another resident said in a larger City they shut you down. I live on Page Avenue and I don't want a lot of pole buildings going up. Another resident said it is a problem a lot of Cities have. Ron said just a guess, they came up with over 50 businesses that are located at residences. A resident asked is there a compromise between asking them to move to an Industrial Park and can't you zone them different and tax them accordingly? Ron said there are serious problems with that. A resident said the DNR and W & S River District, the Planner planned the Commercial in the Wild and Scenic area. Ron said no. The Wild and Scenic Act came into play 1969. Boundary lines were drawn on property lines, not physical characteristics. Until the 1990's it was relatively easy to get exemption from DNR on strict application of the rules. There was a change in St Paul. More discussion was had. Ron said 101 is the most obvious Commercial area. The Town Board tried to resolve the Commercial W & S conflict with the DNR. CITY OF OTSEGO SPECIAL TRUTH IN TAXATION HEARING MINUTES OF 11/30/94 PAGE 3 Ron said the Council does not feel it is in the best interest of Otsego to allow the DNR to take out our Commercial area. It has taken a year and a half to get it through St Paul. A resident asked about property tax relief or supplementing the budget with the CD's. Ron said there is no consideration. The City receives its money from the state in July and December. In the interim you have to have cash reserves to pay the bills. The big checks come in and the funds are invested and are drawn down as bills come. There is $800,000.00 m the bank now. Another way of looking at it is reserves have been spent, in lieu of increasing taxes. If we borrow, we have to pay interest. A resident asked to compare the City's portion, increase or decrease compared to the County. The County's portion went down on all of them and City's portion went up on all of them. As a taxpayer the leaders in the Co have figured how to live within their means and the City has not. There is another way of looking at it, they may be paying off some bounds. Less for debt service, said Ron. Doug Lindenfelser said we were to see 2 or 3% increase. Why did that happen? Norm Freske explained we pay for recycling out of our budget at $30,000.00 a yr. Co mandates we recycle. A resident asked about the large 95 or so percent increase. It was explained that the properties were reclassified. Norm Freske explained. 600 parcels were changed from Ag to Residential classification. Not Darlene Solberg said her taxes went up 26%. Who is the "they" person? Who do we talk to? Ron said in the next session of the legislature when you read about property tax reform, that is when you look at it and pay attention. Ron Black explained further. In Minnesota, Education and Health and Human Services Budgets are out of control. As individuals we are getting nailed and as local units of government we are getting nailed. Neil Goarder asked who at the State do you talk to? I have talked to the State and who is that? 19.4% is off of farm income. Is Industrial and Commercial taxed at a higher rate? You bet, was answered. The farm gets a lower tax rate then I do. I was rezoned from Ag to residential and my taxes went up 101%. Ron explained further. If we had more businesses in Otsego, it would be larger. Talk about services was had. Mark Straghter asked what part of the budget could you see being cut? Judy Roden said it seems we are getting big enough to have a City Administrator and integrate some jobs and illeminate some jobs. A resident asked about cutting the planner out. Bernie Roden said he is getting $60,000.00 ( the Planner). Mayor Freske explained $25,000.00 is being reimbursed. We have a person coming on board that will lower the bills. He explained further. Mark Straghter asked if the Streets in Mississippi Shores could be delayed another couple of zoning. years? Ron said that is being looked at. At this point there has been no commitment to repair. Can people that live in Mississippi Shores be assessed for repairs needed? Ron said it is being looked at. The City is looking at major repairs being assessed out. Selecting will be paid by the City for Residential. A resident asked about the bike trail. Norm said $28,000.00 is budgeted for Parks and Recs. He talked about ISTEA funds. A resident asked if we need all these parks? Norm explained. A resident said in Elk River they heard allot about schools. Bottom line is when you add these all up, I don't have the services. We don't have enough people in this community to fill the Parks. He talked about roads, tractors, sand and graders, etc. Norm explained that we got calls on salt and sand, etc. CITY OF OTSEGO SPECIAL TRUTH IN TAXATION HEARING MINUTES 11/30/94 PAGE 4 The resident said a lot of things are all different. They are all adding up, and we put it on a small handful of people. Mayor Freske explained on the Sheriffs budget. A resident said clean up day $7,000.00, why do I have to pay for someone else's garbage? Doug said he agrees. What about $17,000.00 for street lights. I don't want to pay for someone else's. A resident questioned on Oday, approximately 200 new homes being built. Norm said homes do not pay for themselves. I have a gravel road, nothing has changed for 12 years and I have nothing. More discussion of services. A resident talking moved in over a year ago. Ron explained when he moved here he has done nothing to his house. He does not receive one more service. A resident said he is debating his taxes are at a level where his parents live in Plymouth and pay the same. A resident said he does not have a problem with evaluation. In two years his City taxes have gone up 53%.. Ron said his taxes have not gone up. Discussion of the equipment for the City. Ron explained the equipment and the need for new equipment. More discussion on services. Services are not justifying increases. Doug said the cost of maintenance has gone wild in the last few years. The resident asked how much comparison shopping do you do. Norm said quite a bit. A resident talked about services and parks. Darlene Solberg spoke about the Parks and explained what they are doing. A lot of things are volunteer help. We are trying to do a City Park out here. She said come to the Park and Rec. Meetings. Another resident said let the people vote on it. Talk about the paper (Star News) and not receiving it in Island View. Norm asked what we should cut. A resident asked about heating, electric and maintenance from City Hall. Jerry Perrault explained what that was for. Neil Goarder said his taxes went up 102%. Larry Fournier said you want us to rethink our budget and cut it. What do you suggest? Ron said the tax statements are made up of a lot of different factors. We asked the Auditor for total dollars we could increase for a certain number. Ron explained further what we tried to do. Increased valuation, plus additional spending, we asked what the total Levy would be. In answer to Mark Straghter's question Ron explained Sales Tax, etc has caused larger amounts to be paid. Norm Freske introduced the two new Council Members, Vern Heidner and Suzanne Ackerman. Vern said he checked with Elk River. They have double the population of us. They do have the Commercial and Industrial development. We raise 1.1 million, but Elk River raise over 7 million dollars. The bedroom community is the problem. He explained further. More discussion. Recycling was brought up. Ron said we can expect to see activity here when MN/DOT is committed to 101 road. More explanation of 101 development. Ron explained further. Discussion of Commercial and Industrial Larry Fournier said we will address your concerns. Suggestion for next year is give them last years budgeted amount so they have something to compare. Jerry Perrault explained. Norm said we are hearing the residents concerns and we will cut the budget, he guarantees. Ron said Street Maintenance, Clean up Days, Law enforcement, etc. What do you want to cut? A resident said this is the increases, this is what we lost in revenues, etc. We don't know what you spent last year. Ron said what he needs to know is what services do you want cut? More discussion. December 14, 1994 would be the next Meeting for Truth in Taxation. CITY OF OTSEGO SPECIAL TRUTH IN TAXATION HEARING OF 11/30/94 PAGE 5 LARRY FOURNIER MOTIONED TO CONTINUE THE TRUTH IN TAXATION HEARING TO DECEMBER 14,1994 AT 7PM. NORMAN F FRESKE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. 4. ANY OTHER COUNCIL BUSINESS: Council agreed to set an Emergency Meeting for Litigation and a meeting to go over the Truth In Taxation Budget figures for MONDAY, DECEMBER 5, 1994 AT 7:30PM 5. ADJOURN MEETING: n motion, and second the Meeting was continued to December 14, 1994, at 7PM. NORMA 1 F FRESKE, COUNCIL LARRY F' IER, COU CIL ATrTEST: ELAINE BEATTTY, DEPUTY CLERK/ZONING A M. (CITY SEAL) EB 00 ' O, CIL RONALD BLACK, CO NCIL