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HomeMy WebLinkAbout2001 12-27 CCP Special Session 4 k CITY COUNCIL SPECIAL MEETING City of Brooklyn Center December 27, 2001 AGENDA 1. Call to Order Special Meeting 2. Roll Call 3. Discussion of Levy Limit Application to Combination of General Fund and Economic Development Authority Levies and Options -Requested Council Action: - Discuss allocations of levy reduction. 4. Resolution Approving Amended Final Tax Capacity Levy for the General Fund, Debt Service Funds, Housing and Redevelopment Authority and Economic Development Authority for Fiscal Year 2002 •Requested Council Action: - Motion to adopt resolution. 5. Resolution Approving Amended Final Tax Capacity Levy for the Economic Development Authority of the City of Brooklyn Center Fiscal Year 2002 • Requested Council Action: - Motion to adopt resolution. 6. Resolution Adopting Amended 2002 General Fund Budget • Requested Council Action: - Motion to adopt resolution. 7. Resolution Adopting Amended 2002 Special Revenue Fund Budgets • Requested Council Action: - Motion to adopt resolution. 8. Adjournment Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION APPROVING AMENDED FINAL TAX CAPACITY LEVY FOR THE GENERAL FUND, DEBT SERVICE FUNDS, HOUSING AND REDEVELOPMENT AUTHORITY AND ECONOMIC DEVELOPMENT AUTHORITY FOR FISCAL YEAR 2002 WHEREAS, the City Council of the City of Brooklyn Center is the governing body of the City of Brooklyn Center; and WHEREAS, Minnesota Statutes require that the preliminary property tax levy be provided to the Hennepin County Auditor no later than December 28, 2001; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that a tax is hereby levied on all taxable real and personal property within the City of Brooklyn Center for the purpose and sums as follows: General Fund $ nn 2n�5 $ 1994 B- General Obligation Improvement Bonds $ 69,322 1995 B- General Obligation Improvement Bonds $ 70,468 1996 A- General Obligation Improvement Bonds $ 119,278 1997 A- Police and Fire Building Bonds $ 781,602 Subtotal General Fund and Debt Service $10,246,215 Economic Development Authority $ 248,423 $ Housing and Redevelopment Authority $ 197,313 Subtotal Authorities $ 445 Total Levy $1 0 9'1- $10,443,528 Date Mayor ATTEST: City Clerk The motion for adoption of the forgoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the followin g g voted against same: whereupon said resolution was declared duly passed and adopted. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION APPROVING AMENDED FINAL TAX CAPACITY LEVY FOR THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER FISCAL YEAR 2002 WHEREAS, the City Council of the City of Brooklyn Center is the governing body of the City of Brooklyn Center; and WHEREAS, the City Council has received a resolution from the Economic Development Authority of the City of Brooklyn Center establishing the final tax levy of the City of Brooklyn Center Economic Development Authority for fiscal year 2002; and WHEREAS, Minnesota Statutes require that the preliminary property tax levy be provided to the Hennepin County Auditor no later than December 28, 2001; and WHEREAS, the City Council, pursuant to the provisions of Minnesota Statutes 469.033, Subdivision 6, must certify the final property tax resolution of the Economic Development Authority of the City of Brooklyn Center. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that a special tax is hereby levied on all taxable real and personal property within the City of Brooklyn Center at the rate of 0.01813% % of the total tax capacity value of real and personal property situated within the corporate limits of the City of Brooklyn Center that is not exempted by law. BE IT FURTHER RESOLVED that the property tax levied under this resolution be used for the operations and activities of the Economic Development Authority of the City of Brooklyn Center pursuant to Minnesota Statutes Chapter 469. Date Mayor ATTEST: City Clerk The motion for adoption of the forgoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against same: whereupon said resolution was declared duly passed and adopted. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING AMENDED 2002 GENERAL FUND BUDGET WHEREAS, the City of Brooklyn Center is required by City Charter and State Law to annually adopt a budget. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that appropriations for budgeted funds for fiscal year 2002 shall be: Revenues General Fund Property Taxes $44,24 5,215 $ Less amount for uncollectable ($307,386) Sales Tax - Lodging Receipts $720,000 Licenses and Permits $565,485 Intergovernmental Revenues $2,769,840 General Government Service Charges $22,870 Recreation Fees and Charges $566,147 Public Safety Service Charges $16,250 Fines and Forfeits $190,000 Miscellaneous Revenue $365,000 Total General Fund Revenues $15,154,421 $ Appropriations General Fund Operating Divisions: General Government $1,898,411 Public Safety $6,025,888 Community Development $426,090 Convention and Tourism $342,000 Social Services $103,419 Government Facilities $542,739 Public Works $3,011,631 CARS $1,334,675 Risk Management $164,810 Central Services and Supplies $432,380 Civic Events $9,392 Reimbursement from Other Funds ($782,684) Transfer to Capital Project $125,000 Transfer to Special Assessment Construction $480,000 Transfer to Improvement Bonds Debt Service $259,068 Transfer to G.O. Building Bonds Debt Service $781,602 Total General Fund Q , � /, ^.21 $ Date Mayor ATTEST: City Clerk The motion for adoption of the forgoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against same: whereupon said resolution was declared duly passed and adopted. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING AMENDED 2002 SPECIAL REVENUE FUND BUDGETS WHEREAS, the City of Brooklyn Center is required by City Charter and State Law to annually adopt a budget. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that appropriations for budgeted funds for fiscal year 2002 shall be: Revenues Special Revenue Funds Economic Development Fund (EDA) x$463,687 Housing and Redevelopment Authority (HRA) $191,393 Community Development Block Grant (CDBG) $242,294 Police Drug Forfeiture Fund $20,000 City Initiatives Grant Fund $48,000 TIF District #2 $790,682 TIF District #3 $2,226,457 TIF District #4 $226,912 Total Special Revenue Funds $4,450,39S $4,209,425 Appropriations Appropriations Special Revenue Funds Economic Development Fund (EDA) $607,754 Housing and Redevelopment Authority (HRA) $191,393 Community Development Block Grant (CDBG) $242,294 Police Drug Forfeiture Fund $20,000 City Initiatives Grant Fund $48,000 TIF District #2 $1,420,000 TIF District 43 $725,000 TIF District #4 $181,530 Total Special Revenue Funds $3,345,971 Date Mayor ATTEST: City Clerk The motion for adoption of the forgoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against same: whereupon said resolution was declared duly passed and adopted. i City of Brooklyn Center A Millennium Community To: Mayor Kragness and Council Members Lasman, Nelson, Peppe, and Ricker From: Michael J. McCauley' - City Manager Date: December 21, 2001 Re: Levy Limit Application to General Fund and Economic Development Authority When the preliminary levy was certified to Hennepin County in September, we received the information back, as we usually do, regarding the final levy limits for the HRA and the EDA. In September, a preliminary levy is adopted for both the HRA and EDA that is based on a per cent of the taxable market value of property in the City. Hennepin County advised as to the final amount that could be levied for the HRA and EDA based on final market values and the final levies were adjusted accordingly. It was not until this Wednesday that the County advised that the 2002 levy limit for the General Fund includes the amount levied on behalf of the EDA. In the absence of levy limits this would not be an issue. Enclosed is an additional copy of the notice from the State on our levy limit for taxes payable 2002 that has previously been included in the budget materials. The EDA levy has been included in the Truth in Taxation Notice, while the HRA levy has not. The confusion on our part apparently arose out of the separateness of the EDA levy and the separate limitation on the amount of EDA levy. Mr. Sell spoke with representatives of Hennepin County earlier this week in response to their call. I spoke with Ken Rowe from Hennepin County and Rich Gardner from the State Finance Department. They confirmed that the EDA levy would have to be included in the overall levy limit calculations for taxes payable in 2002. This means that there are two limits on the EDA levy: 1) a percentage limit of the market value of taxable property; and 2) the overall levy limitation. The HRA levy is treated as a special levy and is only limited by the percentage limitation in statute and not included in the overall levy limitation. The benefit of the EDA separate levy is very limited under these circumstances. The net impact of the information is that the adopted levy is $248,423 higher than the levy limit for pay 2002. We have several options: 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 1. Do nothing on the levy: a. Our levy will be reduced by Hennepin County by $248,423, all of which would come out of the General Fund levy. 2. Adopt an amended final levy: a. Options i. Reduce EDA levy entirely 1. this leaves $237,067 in budgeted expenses against sufficient HRA transfers and interest to cover salaries and supplies ii. Reduce EDA levy by $100,000 and General Fund levy by $148,423 1. this retains an EDA levy 2. impacts the General Fund by $148,000 more than option 1 iii. Some other combination reducing total EDA and General Fund levy by $248,423 On the expenditure side, the budgets will have to be amended to reflect the levy option selected. If we do nothing, or place all the levy reductions in the General Fund, then all of the $248,423 must be found in the General Fund. In speaking with Mr. Gardner and Mr. Rowe, the elimination of the EDA levy was seen as a viable option. In speaking with Charlie LeFevere, it is always possible to transfer money to the EDA, but EDA money must be spent by the EDA for its own purposes. That is, we may wish to eliminate the EDA levy in 2002 since we can cash flow budgeted EDA expenses in 2002 with the remaining revenues. The impact is on the long term cash balance for the EDA that is created and available for development /redevelopment activities. Possible expenditure reductions in the General Fund: 1. Reduce contingency by $50,000 to $75,000 2. Eliminate Administrative Specialist position for a savings of $42,155 3. Reduce in other categories SUMMARY The total EDA and General Fund levy will be reduced by $248,423. The Council needs to chose whether all of that reduction will come from the General Fund, or will be allocated between the EDA and General Fund, or taken completely from the EDA levy. The State treats the EDA levy as a levy by the City on behalf of the EDA, but restricts its expenditure to the EDA. Taking no action will result in the entire amount coining from the General Fund. We are facing additional cuts from the Legislature in aids received in 2002 due to State budget projections of shortfalls in State revenues. If the full $248,423 is g p J taken out of the General Fund, we will face potential State reductions in 2002 in even worse shape to absorb those cuts. Since the EDA appears to be able to fund its budgeted expenses from revenues without a separate EDA levy, reducing the EDA levy is perhaps the most prudent. That will allow us to review the situation and adjust as deemed appropriate to loss of State Aids or transfers to the EDA from the General Fund (since transfers from the EDA to the General Fund would generally not be allowed). Since we are reacting to this situation with little to time to reflect prior to December 28` when the final levy must be re- certified to the County, (We certified the final levy after its adoption on December 10` which resulted in this week's call from Hennepin County {without explanation of why Hennepin County did not so advise regarding the preliminary EDA and General Fund levies).) reducing the EDA levy to zero maintains the greatest flexibility and ability to adjust the budget and prepare for 2003. The ability to reflect on how to deal with this situation and the looming State cuts is best accomplished by eliminating all or part of the EDA levy. The resolutions have blanks so that we can insert the amounts selected by the City Council for reduction based on the Council's judgment and discussion. MINNESOTA Department of Revenue Property Tax Division Mail Station 3340 St. Paul, MN 55146 -3340 Phone (651) 296 -3155 Fax (651) 297 -2166 August 21, 2001 To: Finance Officials of Cities Over 2,500 Population Re: Payable 2002 Overall Levy Limitation Enclosed is the Payable 2002 Overall Levy Limitation Notice for your city. The factors involved in the calculation of your city's payable 2002 overall levy limitation are shown on the notice. The following is an explanation of the calculation factors. (Note: Lines 1 through 7 do not apply to a city that was not subject to the overall levy limitation for the taxes payable year 2000.) Line 1 -- Adjusted Levy Limit Base for Payable 2000: This amount is from line 5 of your city's "Payable 2000 Overall Levy Limitation Notice" that you received in 1999. Line 2 — Payable 2000 Matching Funds Special Levy: This is the total amount of your city's special levy for the increases in matching fund requirements for state or federal grants that was approved by the Department of Revenue, based on your city's special levy claims on its Payable 2000 PT Form 280. This amount is added to the levy limit base since the new special levy for matching funds is based on the increase in the required local share over the payable 2001 amount. Line 3 — Beginning Levy Limit Base for Payable 2002: This is the sum of Line 1 and Line 2. Line 4 — Implicit Price Deflator Adjustment (March 2000 /March 1999): This is the ratio of the implicit price deflator for govenunent consumption expenditures and gross investment for state and local govemments prepared by the Bureau of Economic Analysis of the United States Department of Commerce for March 2000 compared to March 1999. Line 5 — Household Growth Adjustment: Line 5a is the April 1, 1998 household estimate for your city as determined by the State Demographer (for nomnetropolitan cities) or by the Metropolitan Council (for cities within the seven county metropolitan area). Line 5b is the April 1, 1999 household estimate for your city as determined by the State Demographer (for nonmetropolitan cities) or by the Metropolitan Council (for cities within the seven county metropolitan area). Line 5c is the ratio of the 1999 household estimate for your city to the 1998 household estimate for your city. If the calculated ratio for your city is less than 1.000000 it has been changed to 1.000000. Line 6 — Adjustment for Pay' 2000 Market Value of New C/I Construction: Line 6a is the payable 1999 total taxable market value of all property for your city. Line 6b is the Continued.... An equal opportunity employer TT11TDD: (651) 215 -0069 payable 2000 market value of new construction of class 3 commercial and industrial property for your city. Line 6c is 50% of Line 6b. Line 6d is 1.000000 plus the ratio of Line 6c to Line 6a. Line 7 — Levy Limit Base Adjusted for Pay' 2001 Factors: This is the Beginning Levy Limit Base for Payable 2002 (Line 3), multiplied by the Implicit Price Deflator Adjustment (Line 4), multiplied by the Household Growth Adjustment (Line 5c), and multiplied by the Adjustment for Pay' 2000 Market Value of New C/I Construction (Line 6d). Line 8 — Alternative Levy Limit Base for Payable 2001: This is your city's payable 2001 final certified property tax levy, minus payable 2001 special levies, plus 2001 property tax aids. See the section below titled "Detail of Alternative Levy Limit Base Calculation" for more information. If your city failed to submit a Certification of Payable 2001 Special Levies to the Department of Revenue, this amount is zero. Since the 2001 special levies are a deduction in the detennination of the alternative levy limit base, your city is not entitled to an alternative levy limit base unless a Certification of Payable 2001 Special Levies was submitted to the Department of Revenue. Line 9 — Effective Levy Limit Base for Payable 2001: This is the greater of Line 7 or Line 8. Line 10 — Payable 2001 Opt -Out City Transit Services Levy: For those cities within the seven county metropolitan area that levied a local transit tax under M.S. 473.388, Subd. 7 for payable 2001, this is the non -debt portion of that levy, plus the associated homestead and agricultural aid (HACA). For all other cities this line is blank. Line 11 —Levy Limit Base after Transit Services Levy Adj.: This is Line 9 minus Line 10. Line 12 — Implicit Price Deflator Adjustment (March 2001 /March 2000): This is the ratio of the implicit price deflator for government consumption expenditures and gross investment for state and local govermnents prepared by the Bureau of Economic Analysis of the United States Department of Commerce for March 2001 compared to March 2000. • The March 2001 index used is the final one reported at the end of June, 2001. Line 13 — Household row G th Adjustment: Line 13a is the April 1, 1999 household estimate for your city as determined by the State Demographer (for nonmetropolitan cities) or by the Metropolitan Council (for cities within the seven county metropolitan area). Line 13b is the April 1, 2000 household count for your city from the 2000 federal decennial census as certified by the United States Department of Commerce, Bureau of the Census. Line 13c is the ratio of the 2000 household count for your city to the 1999 household estimate for your city. If the calculated ratio for your city is less than 1.000000 it has been changed to 1.000000. Line 14 — Adjustment for Pay' 2001 Market Value of New C/I Construction: Line 14a is the payable 2000 total taxable market value of all property for your city. Line 14b is the payable 2001 market value of new construction of class 3 commercial and 2 industrial property for your city. Line 14c is 50% of Line 14b. Line 14d is 1.0 plus the ratio of Line 14c to Line 14a. Line 15 —Adjusted Levy Limit Base for Payable 2002: This is the Levy Limit Base after Transit Services Levy Adj. (Line 11), multiplied by the Implicit Price Deflator Adjustment (Line 12), multiplied by the Household Growth Adjustment (Line 13c), and multiplied by the Adjustment for Pay' 2001 Market Value of New C/I Construction (Line 14d). Line 16 — New Net Tax Capacity -Based Referendum Levies: This is the amount of your city's new net tax capacity -based referendum levies, if any, for payable 2002 including (1) those that were approved by the voters at a referendum held in 1997, 1998, or 1999, provided that a levy is authorized for the taxes payable year 2002, and (2) those approved by the voters in 2001 that are effective for the taxes payable year 2002. Under M.S. 275.73 a county or a levy limit city may choose to go to the voters for approval to levy an additional tax on net tax capacity rather than on market value. In order to be effective for levy year 2001, taxes payable year 2002, a referendum under this provision in 2001 would have to be held prior to September 1, 2001. A referendum held after this date in 2001 could not be levied until levy year 2002, taxes payable year 2003. If voter approval for the desired tax is required under another general or special law or the provisions of a city charter, the levy would have to be on market value instead of on net tax capacity. For example, if the city wants to issue new bonds and levy a property tax for them, and the city is required to hold an election on the bonds and property tax levy under the provisions of M.S. 475.58, any levy for the bonds would have to be on market value instead of on net tax capacity. If your city has a new net tax capacity -based referendum levy for payable 2002, it is to be added to your city's levy limit base since it is an authorized additional levy rather than a special levy authorized outside of your city's overall levy limitation. Line 17 — 2002 Property Tax Aids: This is the amount of your city's property tax aids for calendar year 2002. Line 17a is your city's certified amount of 2002 local govenvinent aid (LGA). Line 17b is your city's estimated amount of 2002 taconite aids, if any, under M.S. 298.28 and 298.282. Line 17c is your city's certified amount of 2002 existing low income housing aid, if any, under M.S. 477A.06. Line 17d is your city's certified amount of 2002 new construction low income housing aid, if any, under M.S. 477A.065. Line 17e is your city's 2002 transit property tax replacement aid. Line 17f is the sum of Lines 17a through 17e. The 2002 property tax aids are to be deducted from your city's adjusted levy limit base for payable 2002 since your city's overall levy limitation is to change inversely with the change in your city's property tax aids. Line 18 — Adjustment for 2001 Local Tax Rate Excess Tax Increment Taxes: M.S. 469.177, Subd. 9 provides that a tax increment (TIF) district does not get to keep the portion of tax increments that are based on an increase in the total local tax rate over the total rate that existed for the year in which the original local tax rates for the TIF district were certified. These local tax rate excess tax increment taxes are to be distributed to the county, the city, and the school district (but not special taxing districts) based on their respective percentages of the total local tax rate increase. This statute further provides 3 1 that the amount distributed to the county, the city, or the school district is to be deducted in determining its levy limitation for the next taxes payable year. The amo.unt shown is the increase (if any) in your city's local tax rate excess tax increment taxes for payable 2001 over payable 2000. It is presumed that your city's payable 2001 property tax levy was reduced by its payable 2000 local tax rate excess tax increment taxes. Line 19 — Payable 2002 Overall Levy Limitation: This is your city's Adjusted Levy Limit Base for Payable 2002 (Line 15), plus your city's New Net Tax Capacity -Based Referendum Levies, if any (Line 16), minus your city's 2002 Property Tax Aids (Line 170, and minus the Adjustment for 2001 Local Tax Rate Excess Tax Increment Taxes, if any (Line 18). This is the most that your city may levy for the taxes payable year 2002 for all purposes except special levies and special assessments. Detail of Alternative Levy Limit Base Calculation (for Line S Above): Note: For a city that was not subject to the overall levy limitation for the taxes payable year 2000, the following detail is from the city's Certification of Payable 2001 Special Levies or from the county auditor's final levy survey for payable 2001 rather than from the source cited for each line. Line 1 — Payable 2001 Total Certified Levy: This is your city's payable 2001 total certified levy reported on your city's Payable 2001 Property Tax Levy Report submitted to the Department of Revenue. Line 2 — Payable 2001 Debt Special Levies: These are the payable 2001 debt special levies (if any) reported on your city's Payable 2001 Property Tax Levy Report submitted to the Department of Revenue. Line 2a is the special levy for the principal and interest on bonded indebtedness. Line 2b is the special levy for equipment certificates of indebtedness. Line 2c is the special levy for bonds of another local unit of government. Line 2d is the special levy for the principal and interest on armory bonds. Line 2e is the sum of Lines 2a through 2d. Line 3 — Payable 2001 Market Value Based Referendum Levies: This is your city's • special levy (if any) for market value based referendum levies, whether for operating purposes or bonds, reported on the final levy survey for payable 2001 submitted by the county auditor to the Department of Revenue. Line 4 — Payable 2001 Natural Disasters Special Levies: This is your city's special levies (if any) for the unreimbursed cost of preparing for or repairing the effects of natural disasters reported on your city's Certification of Payable 2001 Special Levies. Line 5 — Pay' 2001 Levy to Correct for Errors in Pay' 2000 Cert. Levy: This is your city's special levy (if any) for payable 2001 to correct for an error in the city's levy that was certified to the county auditor for payable 2000, as reported on your city's Certification of Payable 2001 Special Levies. 4 Line 6 — Payable 2001 Economic Development Tax Abatement Levies: This is your city's special levy (if any) for economic development tax abatements under M.S. 469.1815 reported on your city's Certification of Payable 2001 Special Levies. Line 7 — Payable 2001 Levy to Repay State or Federal Loan: This is your city's special levy (if any) to repay a state or federal loan used to fund local government spending due to a state or federal transportation project or other state or federal capital proj ect, as reported on your city's Certification of Payable 2001 Special Levies. Line 8 — Total Payable 2001 Special Levies Reported: This is the sum of Line 2e and Lines 3 through 7. Line 9 — 2001 Property Tax Aids: This is the amount of your city's property tax aids for calendar year 2001. Line 9a is your city's certified amount of 2001 local government aid (LGA) before TIF aid reduction under M.S. 273.1399. Line 9b is your city's certified amount of 2001 homestead and agricultural credit aid (HACA) before TIF aid reduction under M.S. 273.1399. Line 9c is your city's 2001 taconite aids, if any, under M.S. 298.28 and 298.282. Line 9d is your city's certified amount of 2001 existing low income housing aid, if any, under M.S. 477A.06. Line 9e is your city's certified amount of 2001 new construction low income housing aid, if any, under M.S. 477A.065. Line 9f is the sum of Lines 9a through 9e. Line 10 — Alternative Levy Limit Base for Payable 2001 (1 — 8 + 9f): This is your city's Payable 2001 Total Certified Levy (Line 1) minus Total Payable 2001 Special Levies Reported (Line 8) plus 2001 Property Tax Aids (Line 9f). If you have any questions concerning this letter or the enclosed Payable 2002 Overall Levy Limitation Notice, please contact me at (651) 296 -3155 or Mike Bernard of the Department of Revenue at (615) 297 -1577. Sincerely, Richard B. Gardner Research Analyst Supervisor Senior Enclosures 5