HomeMy WebLinkAbout10.25.89 Special Council Minutes
MINUTES
COUNCIL MEETING
SPECIAL
OCTOBER 25, 1989
1. Mayor Kuchera called the meeting to order at 7:00 P.M.
Members Present: Kuchera, Mayer, McKnight, Sprute, Galler.
Members Absent: None.
Also Present: Administrator Thompson.
2. The purpose of the meeting was to discuss the 1990 Operating Budget and
the City's Compensation Plan.
3. Finance Director Henneke updated the Council on the new tax law as outlined
in his October 23, 1989 memo. Mr. Henneke noted that the City's LGA had been
reduced approximately $103,000, but that amount was to be transferred to the
School District. Mr. Henneke stated that in theory, City taxes would go up,
but School taxes would fall and the total impact would be neutral. Mr. Henneke
noted that the major impact on the budget was instead of the budget being
$41,000 under levy limits, it was now $16,000 over levy limits. Councilmember
Mayer noted that the law was not actually revenue neutral because the City had
lost revenue raising capabilities. Mr. Henneke stated that the City had received
guidelines regarding "Truth in Taxation" and recommended setting budget hearings
for December 4, 1989 and December 13, 1989. Mr. Henneke also presented a budget
schedule for consideration. MOTION by Mayer, second by McKnight to set budget
hearings for December 4, 1989 and December 13, 1989 at 7:00 P.M. APIF, MOTION
CARRIED.
4. Mr. Henneke presented the 1990 Sanitary Sewer Operating Budget and 5 year
projections.
5. A lengthy discussion followed regarding the overall impact of the new tax law
on property taxes. Concern was expressed that the shift in State Aids would not
result in a decrease in school taxes and that the total tax bill would go up.
Administrator Thompson stated that the Council did not know that the School District
would increase taxes and that it should not be preoccupied with the School District's
intent but should instead concentrate on City spending. Finance Director Henneke
noted that regardless of what the City does with its tax levy, the major impact
on property taxes would be made by the School District. Mr. Henneke stated that
City property taxes had risen only modestly in the past 6 years and, in fact, had
fallen the previous year. Councilmember Sprute stated that even with the shift
in State Aids, he could only support an increase of 1/2 of a mill. Mr. Henneke
noted that the State had changed the tax formula from "mills" to "tax capacity
rates" the previous year and trying to calculate the actual mill rate was at best
a guess. Councilmember Sprute also noted that the $16,000 over levy limits did
not include the increases recommended during the previous budget meeting and
that the figure was probably closer to $33,000. A lengthy discussion followed
regarding the estimated impact on mill rates if the City reduced its levy to stay
within the levy limits. Mr. Henneke restated that it was difficult to estimate
actual mills but that if the City levy was set at the levy limits, the mill rate
would go up approximately 3/4 mill, but that it would probably be more than offset
by reductions in school levies. Councilmember Mayer stated that while he was
concerned about the City tax rates, he was mainly interested in seeing the total
tax bill rema~n~ng stable. Councilmember McKnight and Mayor Kuchera stated
that they were mainly interested in preserving services. The Council directed
staff to contact the School District to determine its levy intentions and to
begin researching possible cuts to stay within levy limits.
6. It was the consensus of the Council to meet on November 2, 1989 at 7:00 P.M.
to discuss the budget and compensation plan.
7. MOTION by Sprute, second by Galler to adjourn at 9:15 P.M. APIF, MOTION
CARRIED.
Respectfully submitted,
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:Carry Thompson
City Administrator
Approved
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