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HomeMy WebLinkAbout1995 03-02 FCM• MINUTES OF THE PROCEEDINGS OF THE CITY OF MARCH EARLE BROWN HERITAGE OF THE FINANCIAL COMMISSION BROOKLYN CENTER 2, 1995 CENTER, BLACKSMITH SHOP CALL TO ORDER Chair Donn Escher called the meeting to order at 7:00 P.M. in the Earle Brown Heritage Center, Blacksmith Shop. ROLL CALL Present at roll call were Chair Donn Escher, Commissioners: Lee Anderson, Ron Christensen, Ned Storla and Larry Peterson. Also present were Mayor Myrna Kragness, Council Liaison Kathleen Carmody, Councilmember Debra Hilstrom, City Manager Gerald Splinter, City Assessor Mark Parish and Finance Director Charlie Hansen. Matt Shands, Fiscal Analyst for the Tax Committee of the Minnesota House was present to represent House Majority Leader Phil Carruthers. Others present were Phil Roach, Nancy Carlson, Rod Snyder, and Phil Cohen. Meetina with Matt Shands Fiscal Analvst for the Tax Committee Mr Shands presented a letter from Phil Carruthers to the Financial Commission. The letter discussed the governor's budget proposal for $57,000,000 in cuts to local units in 1995 and another $20,000,000 in cuts in 1996. Sentiment in the legislature seems to be to moderate at least the 1995 cuts to some extent. . Discussion shifted to some of the questions which the Financial Commission had provided in advance to Representative Carruthers. 1. What is the future of L.G.A. and H.A.C.A? The Local Government Trust Fund has never worked as intended to support L.G.A. and H.A.C.A. The state has raided the fund in years when there were surpluses and propped it up in years of deficit. The entire system of state aids is being re-examined in the legislature. 2. What future revenue sources should cities count on? Cities may be turned to local sales or income taxes. This would create further disparities between "rich" and "poor" units of government. The state would then be forced into additional efforts such as fiscal disparities or the Orfield tax base sharing bill to even out the inequities. 3. Does the state intend to shift school and welfare funding away from the property tax and increase city reliance on the property tax? Such a shift did happen a couple of years ago. The state is • looking at ways to increase per pupil aid to schools and this may bring them back to another shift from the cities. It is too early in the session to predict the outcome of this issue. • 4. Can the property tax appeals process be speeded up? Commercial property owners now typically refuse to provide information to or seriously negotiate with the city assessor. They plan from the start to take the case to tax court. This process can easily take three or four years. If the tax court orders a reduction, it applies to multiple years. Our loss could be limited to one or two years if the process were speeded up. The city only collected 93 cents for each dollar of tax levied in 1993 and 1994. Discussion followed that it would be desirable to start legislation which would address this problem. Commissioner Ron Christensen moved that the staff prepare documents for the reform of the property tax appeals process to be placed before the City Council for endorsement and forwarded to the State Legislature. Commissioner Larry Peterson seconded the motion and all voted in its favor. Donn Escher asked if the City should be considering a hiring freeze or postponing bond issues in the light of state funding problems. Budget adjustments would need to be more severe if they don't start until the last six months instead of the last ten months of the budget year. Ron Christensen stated that staff should prepare some plan or process for these contingencies and present it at the next Financial Commission meeting. Jerry Splinter responded that the staff has started to examine this, but we don't want to overreact until it is known how realistic the $264,000 proposed cut is. It • . would be appropriate to resurrect the prioritization process the city went through about three years ago. Abnroval of Minutes A motion was made by Commissioner Lee Anderson to approve the minutes of the September 1, 1994 meeting. Commissioner Larry Peterson seconded the motion and all members voted in its favor. Election of Officers for 1995 Commissioner Ron Christensen nominated Donn Escher to be Financial Commission Chair. All members voted in favor of the appointment. Chair Donn Escher appointed Commissioner Ned Storla to be Vice Chair. Oraanization Evaluation Process Jerry Splinter explained that this process began two years ago and that areas 1 & 2 have been completed. We now should begin area 3. This effort will require commitment from all levels of the city or it will fail. Donn Escher asked if this has been tried before in the Police Dept. and what the commission is asked to do tonight? Jerry Splinter responded that something like this has been done on a small scale in the Public Works and Police Departments for the • past several years. The Financial Commission should develop a plan for the process and identify the resources necessary to carry it out, possibly by July 1. Discussion of 1996 Budget Calendar Jerry Splinter drew the Commission's attention to a draft of the 1996 Budget Calendar. The dates are still tentative. Donn Escher pointed out two dates that Commissioners should mark on their calendars. These were Thursday, May 4, 1995 for a preliminary discussion of the budget and Monday, August 21, 1995 for a joint meeting with the City Council. Update the Adeauate Fund Balance Formula Donn Escher asked when the Financial Commission could take up the issue of updating the Adequate Fund Balance Formula. Charlie Hansen replied that this could be on the agenda for the next meeting. Next Meetinq The next meeting will be Wednesday, April 12, 1995 at 7:00 P.M. ADJOURNMENT At 8:55 P.M. there was a motion by Commissioner Ned Storla and seconded by Commissioner Larry Peterson to adjourn the meeting. The motion passed unanimously. • 0