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1991-09-03 Special City Council Minutes MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL Eagan, Minnesota September 3, 1991 A special meeting of the Eagan City Council was held in Conference Rooms A and B of the Eagan Municipal Center building on Tuesday, September 3, 1991 beginning at 5:30 p.m. Present were Mayor Egan, Councilmembers Gustafson, McCrea, Pawlenty and Wachter. Also present were Assistant to the City Administrator Hohenstein, Director of Finance VanOverbeke and City Administrator Hedges. The purpose of the meeting was to review further a draft of the 1992 general fund operating budget, consider the proposed 1992 ad valorem tax levy and consider dates for the 1992 trtth4n-taxation hearings. PROPOSED 1992 GENERAL FUND OPERATING BUDGET City Administrator Hedges presented the draft 1992 general fund operating budget stating that the budget, as presented, is $11,664,640. He briefly reviewed an introductory memo prepared for the draft 1992 budget stating that the level of spending represents an increase of approximately 5% over the original 1991 budget. The City Administrator further stated that the recommended budget as presented is based on a maximum ad valorem tax levy per levy limits. He stated that due to a freeze in the amount of the levy limit for the City in 1992, that the same dollar amount is certified collectible in 1991. There is little increase in revenues projected for calendar 1992. However, as explained by the City Administrator, the City has employee contracts that were previously settled at a 4% increase for 1992, continued growth is causing additional service demands and the general rate of inflation for ail of their charges and services is increasing at a rate of approximately 4% causing a need to increase the general operating budget unless general government services are reduced. City Administrator Hedges provided further explanation on why the budget has been increased by approximately $555,480 commenting that most of the cost is for personal services, an increase of $340,000, new police officer positions at $138,000 and the remaining $70,000 is inflationary adjustments for parts and supplies, services and other charges and capital outlay. Mayor Egan thanked the City Administrator for the brief overview of the proposed 1992 general fund budget and informed the City Council that additional review of the entire budget will occur at the September 10, 1991 special city council meeting. AD VALOREM PROPERTY TAX Director of Finance VanOverbeke stated that the official date for certification of a proposed tax levy for payable 1992 is September 3, 1991, an action that is scheduled for the regular City Council meeting later on this same date. He then presented a detailed analysis of the proposed ad valorem tax levy stating that, despite a freeze in the total levy certification payable 1992, the City's projected tax capacity rate will increase. Director of Finance VanOverbeke stated that the City's gross tax capacity has actually declined because of the classification rate changes in spite of continued growth. He further explained that fiscal disparities contribution has increased by 31% from $9,133,075 to $12,008,719. He commented further that the dollar distribution of fiscal disparities back to the City has declined and that HACA distribution used in the same comparison was also reduced. Director of Finance VanOverbeke further commented that the impact to the City is an increase of approximately $286,908, which is proposed as a net levy to be raised locally while the net taxable valuation has been reduced by $4,574,453. City Councilmembers expressed their frustration that the City's portion of property taxes will increase for many single family residential properties despite the fact the City is receiving no new property tax revenue for operating the general fund. Mayor Egan summarized the problem, stating that a change in property classes and class rates along with a radical adjustment in the fiscal disparities contribution, both which are legislative actions, is causing the City a dilemma as it prepares a tax levy certification for purposes of funding the general fund operation. The City Council reluctantly expressed a consensus to support Page 21EAGAN SPECIAL CITY COUNCIL MINUTES September 3, 1991 continuation of levying the maximum payable 1992 which Is the same amount of revenue collected payable 1991 for general government funding purposes. City Administrator Hedges stated that this Item will appear as a formal agenda item at the regular meeting held later on this date. TRUTH-IN-TAXATION HEARING DATES Director of Finance VanOverbeke explained that on or before November 8, 1991, the County Auditor prepares and the County Treasurer will deliver, a notice by first class mail to each taxpayer at the address listed on the County's current year assessment role, a public hearing notice to consider a property tax certification for 1992. He further reported that Dakota County has chosen to implement parcel specific notices for 1991 one year in advance of the legal requirement. Director of Finance VanOverbeke stated that dates left for the City of Eagan to consider as hearing dates for truth-in-taxation include December 3, 10 and 17. City Councilmembers concluded that the original public hearing should be scheduled for the regular Council meeting on December 3 with the optional meeting date of December 17, if necessary. OTHER BUSINESS There were no other items to be considered as Other Business. ADJOURNMENT The meeting was adjourned at 6:20 p.m. TLH September 3, 1991 h %AL-fila Date City Clerk