Albert Lea, Minnesota
December 5, 2005
A special meeting of the Albert Lea City Council was called to order at 7:00 p.m. in the City Center Council Chambers by Mayor Aaron Summers.
ROLL CALL
Present were Councilors Vern Rasmussen, Randy Erdman, Jeff Fjelstad, John Severtson, Al Brooks and Mayor Aaron Summers. Also present were City Manager Victoria Simonsen, Finance Director Rhonda Krcil and Council Secretary Sandi Behrens.
INITIAL TRUTH-IN-TAXATION MEETING - PUBLIC HEARING
Mayor Summers opened a public hearing on the proposed 2006 budget and tax levy. The necessary notice for this hearing was published on November 29, 2005.
Mayor Summers asked the City Manager to explain the purpose of this meeting and proposed 2006 budget. Ms. Simonsen reported that this hearing is held to accept public input regarding the City’s proposed budget and tax levy for 2006 and is commonly called the Truth-In-Taxation initial hearing. City Manager Simonsen presented various graphs to demonstrate comparisons in tax capacity, tax capacity rates, local government aids, changes in tax assessment ratios, property taxes, proposed increases and General Fund expenditures. She explained that she had eliminated five positions including the assistant city manager, assistant fire chief, assistant police chief, assistant finance director and recreation coordinator and she had created three new positions including a human resource director, public information coordinator and accounting clerk for a net savings of $233,000.
Mary Severtson, 1905 South Shore Drive, reported that at a previous board of review meeting the assessors informed her that her taxes will not increase more than 20 percent. Ms. Simonsen responded that the levy limit is controlled by the State Legislature and that no limit had been set.
Harold Kamrath, 326 Glenn Road, questioned a proposed remodeling of the City Garage lunchroom and lavatory at a cost of $50,000, $100,000 for a turning lane, $160,000 for a pumping station, half the cost to extend utilities to Larryland, paving of the City Arena parking lot and an additional $5000 to the sesquicentennial. He noted that the City Manager makes recommendations to the Council and suggested the Council follow her suggestion. He also asked about LGA and monies left in reserve each year. Ms. Simonsen responded that the turning lane to Tiger Hills is considered a safety issue, expenditures for Tiger Hills and Larryland are economic development issues and that infrastructure needs to be repaired or replaced. She noted that Representative Dorman said that it is difficult for him to argue for additional local government aids for Albert Lea when we don’t increase property taxes. She agreed that the lunchroom/lavatory remodeling is probably not a priority but noted that the lavatory has no door and is not handicapped accessible. She also noted that we now have both men and women working at the garage and that the improvements will eventually need to be done. The improvements to the arena parking lot are probably not an absolute necessity but she regularly receives complaints when events occur there. She explained that the City is beginning to bond for capital improvements due to a need to replace infrastructure.
Edmund Brandt, 1314 South Shore Drive, complained about the valuation of his property. He built the house for $141,200 and with the latest statement his value is $196,500 for 2006. Ms. Simonsen explained that the County Assessor is responsible for valuations and that there are three methods used to change value, sales in the neighborhood, major improvements and door-to-door random valuing.
Bob Hanson, 325 Burr Oak Drive, stated that he and his wife are retired and his increasing taxes are making it more difficult to maintain the lifestyle they desire. He noted that they experienced a sewage backup in their basement in September 2004 and that it cost them approximately $20,000 to replace some of the things they lost. He noted that his value increase from $71,100 to a proposed $92,800. He suggested that there is something wrong with the assessment process.
Richard Kingstrom, 2123 Stevens Street, explained that they had done some remodeling to accommodate their quadriplegic son so they realized the value would increase somewhat but that he had experienced a 47 percent increase in market value and a 146 percent increase in taxes. Ms. Simonsen commented that there is no set limit on the levy limits and that she had received a call from the State Auditor’s Office asking about the proposed increase. When she explained that the increase without the storm water/public lighting utilities and the mosquito spraying was 11.1 percent, they had no further questions.
Dorothy Sorensen, 951 Third Avenue South, explained that she received a 23.7 percent increase this year. She questioned how much tax delinquency is caused by mortgage foreclosures. She also noted that a two percent increase at the higher salary levels is a lot more than two percent for the lower levels. Ms. Simonsen replied that she inherited many decades of doing things the same way and that she is intending to work out an evaluation system that would make increases more fairly distributed.
Harlin Elseth, 405 Ridge Road, stated that he is a majority stockholder in Green Lea Golf Course. Both his residence and the business experienced major increases in taxes. He noted that his experience has been that the largest costs are attributed to labor. He suggested the City analyze labor costs and make necessary adjustments. He also noted that the City will drive away industry and population if they don’t remain competitive with surrounding communities.
Mark Rofshus, 1505 Seath Drive, commented that the new manager is an improvement but argued that higher taxes will not result in more local government aid, that retail businesses are increasing but industry is not and the JOBZ program eliminates tax payments for a period of time and existing businesses are picking up the difference. He suggested the City asked the watershed board to consider funding the stormwater utility. He questioned employee benefits. He asked the City to control spending. Ms. Simonsen responded that the watershed board may be willing to pick up some of the stormwater utility costs in the future. She explained that the City went out for health insurance bids last year, switched companies and saved $265,000. Employee contributions increased from $750 out of pocket last year to $2500 in 2006 and prescription costs to the employee will go up in 2006. She commented that she is making a conscientious effort to watch those costs. She also commented that she is very aware that labor costs are a very large portion of the City’s budget.
Mike Murtaugh, 313 Willamor Road, commented that he felt the switch of the utility fees to the property taxes is a more honest approach, that the city manager made recommendations to the Council that were not followed and suggested that the Council be aware of increased spending. He suggested that the City shouldn’t take responsibility for improvements to new developments and that the developer should be taking these risks. He commented that the two percent salary increase for 2006 is the smallest increase in many years. He asked the City Council and staff to examine every dollar spent.
Barb Rofshus, 1608 Bridge Avenue, stated that the City share of her tax increase is 60 percent. She also commented that nothing has been done about the problems on Bridge Avenue.
Bob Sasser, 428 Garden Road, stated that his taxes increased 45.3 percent and that the City had storm sewers and street lights prior to the city manager’s arrival. He also asked why the Council hasn’t responded to complaints that the Council doesn’t heed the manager’s recommendations. Mayor Summers stated that the Council is reserving its comments until after the public comment period.
Mark Rofshus asked for clarification of the statement that the utility fees are 71 percent of the proposed increase when his was 25 percent. Ms. Simonsen replied that the utility fee was spread evenly among taxpayers and that with the change to the budget this percentage is based on valuation. If the property value is higher, the percentage will be higher.
Earl Christensen, 1008 Elmhill Drive, experienced a similar increase. He suggested the City review its snowplowing policy. Requiring vehicles to be moved to allow curb to curb plowing would reduce the time for plowing and save the City money. He also suggested the Library stop distribution of visual aids for free when they are directly competing with businesses selling or renting these same visual aids. He also suggested returning to a quarterly water and sewer bill. He commented that City employees are permitted to take banked sick leave in pay at the time they retire. He suggested the City stop this practice. He also noted that City trucks are parked at fast food places for 45 minutes and suggested that the City allow ten minute breaks which would save the City money by not hiring additional personnel.
Harold Kamrath suggested that the City Council direct the manager to reduce the budget by a specific amount. She would be responsible then to determine where the cuts would occur.
Ms. Simonsen reported that snowplowing has been studied several times by Council and staff and that the Council is reviewing the policy again. Changing water billing has been looked at also. There are as many people who like the new billing as those who don’t. She will check into the breaks again. She agreed that the City has a very generous sick leave policy and that this issue would need to be renegotiated with the unions.
Mayor Summers thanked those attending the meeting and expressed his appreciation to those who spoke.
Councilor Severtson asked whether the improvements to Tiger Hills have already been spent. Ms. Simonsen stated that the lift station is included in the bond issue and that the turning lane is not.
Councilor Erdman stated that the City hasn’t experienced a housing development of this magnitude for over 40 years. He suggested that his intent was to broaden the City’s tax base and that this lift station opened an additional 500 acres for development. He also commented that Flying J is a new development and Ms. Simonsen pointed out that they are estimating in excess of $233,000 in tax revenue the first year. Mr. Erdman also commented that the Council has previously been criticized for not taking any risks and that the investment in Tiger Hills will be a benefit for many years to come. He also noted that the City Council spent its reserves in previous years to cover the local government aid losses and in retrospect wondered if it shouldn’t have started increasing taxes at that time.
Councilor Fjelstad disagreed with a comment that Albert Lea is a dying town and noted that many of the foreclosures listed in the newspaper are the same people over and over again. He also noted that the City Council gets a list of projects to prioritize annually and that the majority of the projects on the list are fixes of older infrastructure. He also commented that the City should have extended the infrastructure to Larryland back in 1970 and that the current Council was fixing an error dating back 35 years. He noted that if all 142 lots in Tiger Hills are sold and developed, the City will experience a minimum of $300,000 in revenues per year.
Councilor Rasmussen commented that Albert Lea must continue to compete with other communities and noted that the City of Geneva is paying the entire cost for a new subdivision.
Councilor Fjelstad asked when the Council will meet as the Board of Review and suggested that those speaking at tonight’s meeting come back to discuss their market values with the assessors. Ms. Simonsen reported that a meeting for the Board of Review will be scheduled for mid-May 2006.
Councilor Erdman commented that with regard to the $20,000 given to the Sesquicentennial Committee, the City needs to support some of these celebrations. He also noted that the Council sets a limit of $50,000 for distribution to various projects and events annually. Ms. Simonsen reported that the City received requests from 25 or 26 organizations amounting to $161,000 in funding for 2006. Mr. Erdman stated that people want the City to support these events but they don’t want to provide the dollars to do this.
Ms. Simonsen announced that the City offers a senior discount for utility bills and that she is still reviewing the limits to be established for 2006. Homeowners also may apply for a tax credit from the State when filing income taxes annually. She suggested homeowners check with tax preparers to determine if they quality for these tax refunds.
Mayor Summers informed the Council that as a result of the completion of the hearing the Council will not need to conduct a continuation hearing. He reminded the Council that the budget and tax levy would need to be considered and voted on at a hearing subsequent on December 12, 2005.
ADJOURNMENT – 8:40 P.M.
With no further business coming before the City Council, Mayor Summers declared the special meeting of the Albert Lea City Council adjourned.
Filed and attested December 6, 2005.
/S/ Sandi Behrens /S/ Aaron Summers
Secretary of the Council Mayor