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City Council - 12/05/2005 - Truth in Taxation APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL TRUTH-IN-TAXATION HEARING MONDAY, DECEMBER 5, 2005 7:30 PM, CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher, Ron Case, and Philip Young CITY STAFF: City Manager Scott Neal, Parks & Recreation Director Bob Lambert, Public Works Director Eugene Dietz, City Planner Michael Franzen, Community Development Director Janet Jeremiah, City Attorney Ric Rosow, Finance Manager Sue Kotchevar and Council Recorder Deb Sweeney I. CALL THE MEETING TO ORDER Mayor Tyra-Lukens called the meeting to order at 7:31 p.m. The purpose of the Hearing is for citizens to hear firsthand about the budget and to have an opportunity to address the Council. She invited further calls or emails right up to the vote on December 13. All input is considered equally with speaking at the Hearing. The budget is based on current service levels plus a few new items suggested by Staff or Councilmembers. II. PUBLIC HEARING A. OVERVIEW OF 2006 PROPOSED BUDGET AND TAX LEVY Finance Manager Sue Kotchevar presented the proposed budget outcomes and tax impacts. Outcomes include maintaining service levels and competitive wage and benefit programs and providing for increases in utilities and fuel costs. Other major items include budgeting for Fire Station #4, updating the Comprehensive Plan, funding the Capital Improvement Plan, maintaining and replacing the fleet, and implementing a new rental housing inspection program. The plan would allow the City to maintain reasonable debt levels. According to the Truth-in-Taxation notices sent out to citizens, the levy would have increased about $2.2 million over 2005, an 8.6% increase. Subsequent changes to the budget, including the decision to defer building the fire station, reduced the proposed levy increase to 4.8%. The passage of the parks referendum puts the new proposed increase at 9.0% altogether. There are differential impacts on residential, apartments, and commercial properties. The tax burden shifts between groups from year to year based on value increases in these different classes of property. However, the intent is to distribute the burden equitably. TRUTH-IN-TAXATION HEARING MINUTES December 5, 2005 Page 2 Neal explained the City portion of property tax is about 25%, with 33% going to schools, 34% to the county, and 8% to other taxing authorities. The median home, valued at $339,200, will see an increase of$388, $36 of which is generated by the city. The rest is outside City control. Case noted that getting rid of the City's increase would only lower tax bills by 1% while requiring major cuts. Young said Council should listen to residents and not comment at this time. Kotchevar then reviewed general fund expenditures. The largest increases are in the Office of the City Manager (general election costs and utility increases), Community Development (half of which is for the update of the Comprehensive Plan), and the fire department, which includes the new building inspection program and operating costs for the new fire station. II. DISCUSSION A. John Mallo, 14000 Forest Hills Road Mallo spoke in favor of the budget. He moved here because of the schools and the quality of life. Residents have indicated by their passage of the school and parks referendums and their lobbying for the Bent Creek golf course acquisition that they are willing to pay for quality of life. The City should maintain the budget as proposed. B. Tom Briant, 15560 Boulder Pointe Road Briant said he had sent$1 million in line item cuts to all Councilmembers two weeks ago, including reduced raises for City staff,reductions in the legal budget, reductions in travel and conference spending, eliminating the heritage preservation staff position, eliminating the social/immigrant services position, reducing contracted services, doing the Comprehensive Plan update with in-house staff, eliminating the risk management award, taking down the contingency fund, plowing the City lot in-house,reducing the amounts allocated for fuel, and applying $980,000 in budget stabilization funds. In particular, Briant said legal costs for prosecution are excessive and could be reduced by putting the contract out to bid or hiring two in-house attorneys. He stated no other city has a heritage preservation staff person and said a volunteer should do it. Briant said his proposed cuts would have little effect on quality of life. Police, fire, parks, and trails would all be as before. Instead of focusing on saving each resident $3/month, Council should focus on saving all residents $1 million. He requested copies of the City Manager's reports to Council on budget options. C. Paul Wendorf, 8590 Revere Court Wendorf explained he and Briant founded the Eden Prairie Taxpayers Alliance to address high spending and tax rates. He said hundreds of people have contacted this non-politically-affiliated group and the group is here to stay. Wendorf TRUTH-IN-TAXATION HEARING MINUTES December 5, 2005 Page 3 characterized some of the Staff and Council as having a"cavalier" attitude. He noted the City Center has new carpeting and said that staffing is top-heavy. He requested a copy of the organizational chart. Wendorf expressed dissatisfaction with the previous meeting on the budget. Instead of being a workshop, it should have been in the Council chamber and been taped. Councilmembers are fear-mongering by talking about police, fire, and streets. He stated some Councilmembers have a conflict of interest regarding historic preservation. Wendorff said the City Manager is too all-controlling and warned Council that voters will vote. D. Larry Piumbroeck, 6255 Wessel Court Piumbroeck objected to people trying to slash the budget at the last minute. The property tax increase this year was foreseeable and predictable. Voters should call their legislators with complaints. The City is prudent and the least of taxpayers' worries. As chair of the Human Rights and Diversity Commission, Piumbroeck encouraged Council to retain the immigrant human services position. Cutting a $57,000 position in a$32 million budget would be penny wise and pound foolish. Piumbroeck said all of us have been helped sometime and many families have immigrant pasts. He called for civility in the discussion and said Eden Prairie is still a great city. E. Norbert Gernes, 6900 Alpine Trail Gernes said he was willing to pay for quality of life. When he moved here in 1973, the city had no police department. Water and sewer were just beginning to be put in. Over the years, the City has developed great schools and a great park system. Gernes said today's citizens owe it to future citizens not to be selfish but to continue to think about the future. He said that he had seen few kids from Eden Prairie during his 30-year career in corrections and attributed that to community programs to encourage strong families and the availability of healthy, positive activities. Gernes said cutting some would be okay,but the Council should maintain quality of life. F. Linda Draves, 19111 Alpine Trail Draves said she would not be able to afford Eden Prairie's quality of life if taxes continue to rise. Her wages will rise 3%,but her tax bill on her modest$200,000 home will go up 19%. Growth is not good if it is at the expense of some residents, and increases in many different sectors all add up. Draves expressed a desire to learn more about the City's stance on global warming and its post 9-11 disaster plan. She favored quality of life but not at the expense of those on limited incomes. Tyra-Lukens invited Draves to contact her about the areas she was interested in. TRUTH-IN-TAXATION HEARING MINUTES December 5, 2005 Page 4 G. Verna O'Brien, 15785 Cedar Ride Road O'Brien asked why the tax increase is not the same for all residences. The amount of taxes varies based on the value of the property,but the rate should stay the same. Snell explained the rate is constant,but the percentage increase varies based on differing value changes. The City assesses the market value of 25% of its residences each year. If the City just re-assessed the property, the value could jump that year and the increase versus last year would be more. There is also a homestead credit to reduce taxes that phases out at$414,000 which can make tax rates higher from one home to the next. The main reason the percent increase varies from home to home is differing changes in the value versus last year. H. Al Krause, 15911 Cedar Ride Road Krause said Council has a difficult job but needs to remember those like himself on fixed incomes with no pension. He said $54,000 is not"nothing." Little things add up to a lot and Council will never find a single $1,000,000 cut. Instead of trying to find things to cut, Council should tell Neal what his budget is and let him decide how to spend it. Krause opposed surveys and suggested using a referendum timed for a general election instead. He also questioned "competitive" wages and benefits for City Staff and said these should not be automatic,but limited to the rate of inflation. I. Nancy Arieta, 10785 Valley View Road#207 Arieta expressed dissatisfaction with Councilmember Case's response to her email regarding the budget. She asserted her right to speak negatively about the budget. Arieta said the heritage preservation position should be eliminated and the human service position also eliminated, or covered by another grant. Parks should be covered by new development fees. Arieta said her resources are finite and little things add up to a lot. She asked for a public apology. Tyra-Lukens explained park development fees are typically for new parks only. Arieta said she was told they don't necessarily go to that location. Tyra-Lukens said that could be true if a developed area is being filled in and already has a neighborhood park. J. Jeff Strate, 15210 Summerhill Circle Strate noted that even five years ago, Truth-in-Taxation hearings were virtually unattended. He applauded the Taxpayers Alliance for increasing interest and bringing ideas to the table. He also applauded the City for the openness of its process. Everything is very available on the website and on paper. He noted Council workshops are not set up for public comment and are designed to get things done in a limited amount of time. The public has its chance tonight and can also still call and email. TRUTH-IN-TAXATION HEARING MINUTES December 5, 2005 Page 5 Strate said he supported the budget by and large and said eliminating the social service position would be very foolish. The City has a remarkable record of working with immigrants. The County might be a better provider,but the position should be kept this year while this is discussed. The second language in Eden Prairie is Somali so the services are needed. J. Mr. Chuck Bye, 15184 Village Woods Drive Bye said he favored the budget, including the heritage position. He wondered about the Risk Management Award. Bye said residents have voted twice to spend money to improve the city. He favored acquiring the Bent Creek golf course. K. Marcus Johnson, 7017 Kinston Drive Johnson expressed appreciation to Council for looking out for residents' best interests. He said the Taxpayers Alliance did not represent him or the people he associated with. Johnson saw no evidence the process was anything but deliberate and thoughtful. Johnson said he had voted for the parks and schools referendums because they make the city desirable. He said the record shows the City is well run, and Council is accessible. They take phone calls and there is the website. He asked Council to respect those on fixed incomes,but not to cut at the expense of those less fortunate or in ways that don't make sense overall. L. Michael McGraw, 15640 Pioneer Trail McGraw said his taxes has increased greatly over the years, but blamed himself for not being more involved. He expressed concerns about development and requested bike trails around Eden Prairie Center. The City could cut taxes but it would have a tough job ahead to protect and beautify the area. III. CLOSE OR CONTINUE PUBLIC HEARING MOTION: Butcher moved, seconded by Young, to close the public hearing, adjourn the Truth-in-Taxation Meeting, and reopen the Council meeting. Motion carried 5-0. IV. ADJOURNMENT The meeting adjourned at 8:53 p.m.