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Home My WebLink About09-09-97 • CITY OF LAKEVILLE SPECIAL COUNCIL MEETING SEPTEMBER 9, 1997 The meeting was called to order at 7:00 p.m. by Mayor Zaun. Roll call was taken. Present: Councilmembers Johnson, Sindt, Mulvihill, Holberg and Mayor Zaun. Also present: B. Erickson, City Administrator; D. Feller, Finance Director; B. Kempa, Accountant; C. Friedges, City Clerk. City Administrator Bob Erickson presented the City of Lakeville proposed 1998/99 budget message entitled, "Well Positioned for the millennium and beyond", (See attached memo dated September 5, 1997) Councilmember Holberg asked about funding toward the DARE. and School Resource Officer (SRO) programs and asked that this matter be discussed by the Council at a future work session. She stated she wants to make sure that all Lakeville residents are getting their fair share of the program funding, given the fact that there are three different school districts within the City, and the fact that 60% of the land area in District 194 is located outside the limits of Lakeville. Mr. Erickson ex lamed that over the ast several ears the Cit has p p Y ~ Y contributed 10% of its net liquor profits to chemical prevention programs in all three school districts, each district receiving the same per capita amount. However, the 1998/99 budget proposes that the 10% net liquor profits be utilized to offset the .direct cost of DARE and SRO programs. Councilmember Johnson asked if Lakeville's growth rate were to accelerate within the next year, .would it still be necessary to increase the levy for 1999. Mr. Erickson explained that it would be necessary because of the growth limitation in the levy of 2.2%. He explained that staff has identified the lowest number of single family building permits in 14 years in next year's revenue stream, and if there were to be an increase in building permit revenue in 1998, that could help offset some of the increase in levy for 1999. Mayor Zaun asked if school district ofFcials are aware that they will not be receiving the 10% net liquor profits from the City for their chemical prevention programs in 1998 and 1999. Mr. Erickson stated he contacted Superintendent Wahlstrom who indicated that it is clear to him that those funds will be pledged toward the DARE program and. the continuation of the City's share of the SRO program. CITY OF LAKEVILLE SPECIAL COUNCIL MEETING SEPTEMBER 9, 1997 PAGE 2 • Finance Director Dennis Feller provided an overview of the City's major revenue sources as follows: • Taxes (47.4% • State Aid (22.7%) • Charges for Services (11.7%) • Licenses and Permits (8.3%) • Intergovernmental (6.0%) • Other (3.8%) Mr. Feller explained that the 1997 Legislature made numerous changes to the property tax system; the most onerous action with respect to long-term local government fiscal policy was the re-imposition of levy limits. The levy limit is based on the 1997 tax levy and is adjusted based on inflation (2.2%) and growth in the number of households. For the past 25 years, the City has received 22% of its General Fund revenue from state aids for property tax relief. The allocation formula, however, has been changed numerous times over the years. Lakeville will receive only an 8/100 of 1 % increase in state aids for property tax relief in 1998, while residential growth and inflation grew at a combined rate of 7.5%. The tax levy for debt service continues to • decline as the City pursues its goal of becoming debt free. Unfortunately, the re-imposition. of levy limits necessitates the City issuing Certificates of Indebtedness to purchase equipment. Mr. Feller stated that according to the Minnesota Taxpayers Association, Lakeville's taxes are among the lowest in the metropolitan area. Despite the Legislature's re-imposition of levy limits, inequitable state aids for property tax relief and shifts in property classification rates, it is our expectation that Lakeville will continue to have one of the lowest tax rates in the metro area. - If the City Council adopts the tax levy as proposed, taxpayers will receive parcel-specific notices on or about November 15th informing them of their estimated taxes and of the December Truth in Taxation public hearing. The City Council has the ability to adopt a final tax levy in December that is equal to or less than the preliminary tax levy approved in September. It may not, however, adopt a final tax levy that is greater than the preliminary tax levy.. Staff is recommending Monday, December 15th, for the Truth in Taxation public hearing. Councilmember Johnson asked if staff has any expectations that the LGA formula, at some point, may be reversed and more rationally applied than it is • presently. CITY OF LAKEVILLE SPECIAL COUNCIL MEETING SEPTEMBER 9, 1997 PAGE 3 • Mr. Erickson explained that the City has been pursuing a level playing field in regard to the distribution of LGA and had, atone time, advocated a total elimination of LGA for all cities in order to create that level playing field. He stated he feels that following the next census and the redistricting that will immediately follow, there should be a shift in the State Legislature with regard to control from outstate to the metropolitan area. Until that time, there is not expected to be a change in the formula for LGA. Mayor Zaun asked if the anticipated tax capacity is less because of the tax classification rate changes on commercial and industrial property. Mr. Feller indicated that if property classification changes had not taken place, all taxpayers would have seen a decrease in the tax capacity rate. 97.161 Motion was made by Mulvihill, seconded by Holberg to approve the following preliminary. budget resolutions: • Resolution No. 97-197 adopting the preliminary 1998 General Fund Budget • Resolution No. 97-198 adopting the preliminary 1998 Cable N Fund Budget • Resolution No. 97-199 adopting the preliminary 1998 Environmental Recycling Fund . Budget • Resolution No. 97-200 adopting the preliminary 1998 Drug Enforcement Fund Budget • Resolution No. 97-201 adopting the preliminary 1998 Employee Benefit Fund Budget • Resolution No. 97-202 adopting the preliminary 1998 GIS Fund Budget • Resolution No. 97-203 adopting the preliminary 1998 Motor Vehicle Fund Budget • Resolution No. 97-204 adopting the preliminary 1998 Storm Water Utility Fund Budget • Resolution No. 97-205 adopting the preliminary 1998 Oak Wilt Suppression Fund Budget • Resolution No. 97-206 adopting the preliminary 1998 E-911 Fund Budget • Resolution No. 97-207 adopting the preliminary 1998 Economic Development Revolving Loan Fund Budget • Resolution No. 97-208 adopting the preliminary 1998 Municipal Reserves Fund Budget • Resolution No. 97-209 adopting the preliminary 1998 Equipment Fund Budget • Resolution No. 97-210 adopting the preliminary 1998 Building Fund Budget Roll call was taken on the motion.. Ayes, Johnson, Zaun, Sindt, Mulvihill, Holberg. 97.162 Motion was made by Johnson, seconded by Sindt to approve Resolution No. 97-211 approving the preliminary 1998 payable tax levy. Roll call was taken on the motion. Ayes, Zaun, Sindt, Mulvihill, Holberg, Johnson. • 97.163 Motion was made by Sindt, seconded by Holberg to approve Resolution No. 97-212 setting the budget (Truth in Taxation) public hearing dates. CITY OF LAKEVILLE SPECIAL COUNCIL MEETING SEPTEMBER 9, 1997 PAGE 4 • Roll call was. taken on the motion. Ayes, Sindt, Mulvihill, Holberg, Johnson, Zaun. Councilmembers decided. to set the budget work session dates at their. next regular City Council meeting on October 6, 1997. Mayor Zaun adjourned the meeting at 8:00 p.m. Respectfully submitted, 1, Charlene Friedges, City erk buane Zaun, May