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HomeMy WebLinkAbout1980 November� 1 By Carl Carlson Public Works Director Several services now provided by the Public Works Department probably will have to be reduced or eliminated if the tax referendum fails to be approved by Cottage Grove voters. Inspections of trees on private property would be cut and free firewood delivery would be discontinued. Trees that present a hazard in city parks would be cut down and left in the park, rather than be hauled away for disposal. Spring Cleanup Days probably would have to be eliminated. The work is done on Saturdays and the men are given a day off at another time. This comes to a total of 44 working days or a cost of approximately $3,000. This service has constituted quite a saving to the homeowners as it would cost the homeowners who use the service about $25 to have their trash man pick up their unwanted articles. In the Parks Department, we would have to discontinue some of the mowing. Our policy at the present time is now to mow 50 feet behind the homes in open, passive park areas and the entire parks where there are playground equipment and athletic areas. We would have to eliminate the open area mowing and cut back some on the developed park mowing. The number of free skating rinks would be reduced and the maintenance of the hockey rinks curtailed somewhat. Our summer help program would be reduced, thereby cutting down on the ballfield maintenance. In the Road Department, the roadside mowing would be cut to mowing the top shoulder only and that done only once a year. The seal coating program which currently calls for every street in the city to be sealcoated every five years would be extended to seal coating only once every eight years. At the present time, it takes our people about 12 hours to get everything cleaned up after a snowstorm. If we could not keep replacing our equipment when necessary and add more manpower as the city grows, it would get to a point where it would take us from 15 to 20 hours to get the plowing done. The street sweeping program r fails also would take much longer to get done if we can not purchase another sweeper. We are presently running behind with this program as we have added so many new streets and still only have one sweeper, the same as we had 15 years ago. The free manure pile and the garden plots would be other programs that probably would have to be cut- �) N N �EOo � a o • X1'1 !l l I [Rallit il ill The City Council's decision to budget $73,000 to add three police officers to the present staff was a major factor in the Council's action to put the tax referendum on the ballot. While demands on the police force have increased with the population, the police staff has been reduced in recent years. In 1976, 20,, police personnel handled 14,540 contacts. The number of contacts increased to 16,500 in 1979 and is expected to reach 17,500 this year, but the number of police personnel has been reduced to 18. In 1976, the city had three CETA- funded officers and retained only one when the federal funding ran out, resulting in a loss of two officers. Public Safety Director Bob Oszman said some reductions in police service already have been made and more will be necessary without increased personnel. He pointed out, however, that response to emergency police calls will remain at its current high level regardless of the outcome of the referendum. Oszman said the Department has discontinued its service of checking the homes of residents who are on vacation. He said some crime investigation work has been dropped because of insufficient manpower. Delays in responding to non' emergency calls will result without an increase in manpower, Oszman said. While response time was between five and 10 minutes in the past, it now ranges from 30 minutes to an hour for non - emergencies, he said. Some investigations now handled in person by police officers will be handled by telephone, Oszman added. Cottage Grove voters will decide the future level of city provided services by their votes November 4 on the local tax referendum. A yes vote will allow the city to levy up to $300 per year above the regular levy base to maintain city services at the present level and to make certain improvements. A no vote will bind the city to its regular levy and will mean reduced city services. The ballot question asks "Do you want the City Council to be able to increase the levy limit base by $16.19 per capita ?" Although this would allow the city to levy an additional $300,000 per year, the City Council has decided that $105,000 will be sufficient for 1981. That amount could increase up to the maximum of $300,000 in future years. Because the City Council was required to make its 1981 levy in October, the City Council levied $105,000 over the current levy limit has in anticipation of a positive vote on the referendum. If the referendum fails, alterations in the budget will need to be made. Cottage Grove's tax levy for 1981 is $1,751,202, including the $105,000 over levy, and is $230,260 higher than the 1980 levy of $1,520,942. The increase includes $73,000 to hire three additional police officers, $55,00 to purchase an additional street sweeper, $12,650 to purchase a tractor for the Parks Department and additional funds to pay increased personnel costs and to meet increased expenses caused by inflation. Articles printed elsewhere in this newsletter were prepared by Mayor Roger Peterson and other city officials to explain in detail what the referendum will cost individual property owners, why it is being proposed and what it will mean to city residents.0 Cottage Grove residents may be wondering just how much the proposed increase in the tax levy limit will cost the individual property owner in real estate taxes. Based on levy limitations and increased aids, including homestead credit, overall property taxes have declined on the average of $200 to $250 in 1980 and the decline will continue in 1981 for many houses. The tax increase resulting from an additional $105,000 levy is difficult to predict, according to Mayor Roger Peterson. In some cases it will mean an increase, while in other cases it will mean a smaller decrease. The following chart shows property tax increases that would result from a levy increase of $105,000. Many property tax payers will receive a further reduction from the circuit breaker refund, which is based on income. Typically, property tax payers with lower valued homes benefit more from the homestead credit, as shown on the chart. Those with higher valued homes benefit more from the circuit breaker refund, which is filed with Minnesota income tax forms. o 1961 Increase Assessed Market per year per $105,000 Homestead credit Actual Annual Actual Monthly Value levy reduction Increase Increase $40,000 $10.95 -$6.35 $4.60 $0.39 45,000 12.60 -7.31 5.29 0.44 50,000 14.25 -8.27 5.98 0.50 Average 55,000 16.35 -9.48 6.37 0.57 ,Average 60,000 18.45 - 18.45 1.54 65,000 20.55 - 20.55 1.71 70,000 22.65 - 22.65 1.89 75,000 24.25 - 24.25 2.02 Many property tax payers will receive a further reduction from the circuit breaker refund, which is based on income. Typically, property tax payers with lower valued homes benefit more from the homestead credit, as shown on the chart. Those with higher valued homes benefit more from the circuit breaker refund, which is filed with Minnesota income tax forms. o t By Mayor Roger Peterson In explaining why the city needs additional flexibility in its levy capabilities, one has to look at the history of the city in its state- controlled ability to levy taxes and the growth that has occured in that time period. Since 1971 the city has been restricted to raising its levy by 6 percent per year over the previous year's levy. The 6 percent is based on dollars levied in 1971 and has nothing to do with value The proposed levy base increase is $300,000, but the City Council only will levy an additional $105,000 in 1981. The first -year levy of $105,000 is basically to increase the police department's effectiveness. It includes hiring three additional officers, purchasing a four- wheel -drive vehicle and a noise testing machine and restoring several training and public safety programs. Future use of an increased levy base more general and cannot be outlined specifically without detailed study by the citizen advisory commissions and City Council. However, certain needs exist and can be listed in general terms. The fire department needs additional volunteers and full -time personnel and equipment to enable it to adequately provide daytime fire protection. The parks maintenance department needs additional personnel and equipment to mow and maintain the parks, ballfields, skating rinks and open space in the city. In recent years, maintenance has been decreased considerably, causing complaints from neighbors and users of the parks. Road maintenance and snow removal has nearly kept pace with expansion, but double digit inflation and difficulty in replacing old equipment soon will cause deterioration in this service. Other areas such as recreation programs, youth service, paramedic service, animal control and administration will have to be reviewed in light of whether or not the referendum is passed. Without passage, all programs will suffer and some may be eliminated. o of property. The 6 percent also is only for that part of the budget financed by property taxes, which amounts to only about 40 percent of the total revenues of the city. From 1971 through 1979theincrease in the general property tax levy of cities allowed by the state - imposed levy limitation has been 65 percent. On the cost side, the Consumer Price Index increased 88 percent. However, data compiled from a sample of 15 cities shows a city cost -of- service increase index of 108 percent. In dollars, this means that for every $100 of revenue collected through property tax in 1971, cities can now collect $165, but, for purchases costing $100 in 1971, the same quantity now costs cities $208. Expenditures The types of expenditures used to calculate the cost increases included the base salary of a policeman, firefighter, heavy equipment operator and top secretary as well as various energy needs, materials such as sand, gravel, blacktop, paper and paint, and, finally, capital expenditures for squad cars, dump trucks, pickups, typewriters and fire trucks. All of the increases were calculated on a unit basis rather than quantity needed in 1971 versus the quantity needed in 1979 and only for materials or goods that cities needed to buy to maintain a service. For example, the cost per squad car in 1971 was $2,800 and in 1979 was $6,800. Cities have been able to cope with the great difference in property tax revenue versus actual cost increases in a number of ways. Federal Revenue Sharing funds are now commonly used for the general fund rather than specific purposes. The federal government has, in the past few years, subsidized cities for the salaries of some new employees to provide jobs and training for the unemployed. Cities like Cottage Grove, with a growing population, have been able to utilize new tax dollars from new people to pay cost increases for old and current service levels. Finally, many cities have actually reduced or severely curtailed the levels of some services. Cottage Grove has used all these methods. However, the future will be much more difficult. Federal Revenue Sharing will probably remain at the same level or decrease, which means we can no longer count on those increases and the employment training programs have been discontinued. Population growth Continued population growth will help pay some current cost increases but will not provide enough revenue to increase services to handle the new growth at the current levels. Also, because of two existing tax laws, the addition of commercial or industrial growth does not provide enough new tax dollars for services these activities need, but do tend to lower property taxes for the rest of the city. To date, we have trimmed in all of our departments so that no service has been drastically affected. It takes a little longer to plow all the streets or to fix all the potholes. Not all open space is mowed and what is maintained is done less frequently. Our public safety volunteer programs have increased significantly. Our recreation programs have been decreased some and fees charged for other city functions have been increased to cover more of these costs. We have reached the limit of costs. We have about reached the limit of these kinds of cost savings. Cottage Grove's share of the total property tax paid by a business or homeowner is about 20 percent or $200 of $1000 paid. Yet, the strictest limitation for revenue growth has been imposed on cities. It is always unpopular to talk about increasing a tax, even one or two percent. But if this flexibility is not allowed in the near future, Cottage Grove will experience serious service delivery problems.❑ It t i t t I x'' per t A yes vote will mean services will remain at or above the current level. N® no El vote will mean a reduction in services. Due to strict levy limitations, the growth experienced in Cottage Grove and some increases in state provided property tax aids, the city property tax on an average house has decreased over the last few years. Along with the tax decreases have come a slow decrease in city service ability. A recent survey taken in Cottage Grove indicated that an overwhelming majority of people would be willing to pay slightly more in taxes to maintain a good level of service or, in some cases, increased service. One example of the need to upgrade service is in the police department. Occasionally, because of manpower constraints, we have only one patrolman on the streets to handle calls from our nearly 20,000 residents. This situation may have been acceptable when the city population was 12,000 or 13,000, but causes problems today. In 1976 and 1977 we had three additional police personnel funded by federal programs, but they were eliminated in 1978 and 1979. It is imperative that we take up that slack locally now to provide the necessary safety for our residents. First We can do this in various ways. First, we could drastically reduce the capability of another department by not purchasing capital equipment and By Carl Meissner Clerk /Administrator Who wants to pay more taxes? Residents of Cottage Grove will be asked to vote on the question of a tax levy at the general election November 4. A positive vote on the referendum will mean higher real estate taxes for some property owners, although others actually will have lower taxes because of the change in valuations. The question on the ballot is worded "Do you want the City Council to be able to increase the levy limit base by $16.19 per capita ?" The City Council believes it is necessary to increase spending in order to provide the services they think you, as taxpayers, want. The $16.19 per capita would mean the city could levy an additional $300,000 per year. The Council believes that the full $300,000 is not needed at this time, but would like to be able to raise it to that amount in the future if necessary. The Council already had to make its 1981 levy and decided to levy $105,OOOover the current levy limit base. This over - levy was made because the City Council believes that residents do not want less services but at least the same level of services now provided. The city cannot continue to give its residents these services within the current budget restrictions. Since 1971, the city has had to live within a 6 percent levy limit set by the state legislature. This does not mean that we can levy an additional 6 percent of the total budget year. If it did, I know we could have existed. It means that we can levy only 6 percent over the previous year's levy on real estate taxes. This amounts to 40 percent of the total city's operating budget. The remaining 60 percent of the city's operating revenue comes from sources other than real estate taxes. The over -levy of $105,000 will mean an increase of $5.67 per capita or approximately $24.25 per year on a home valued at $75.000. If you want the same level of services or somewhat better services, I would suggest that You vote in favor of the levy limit increase. If you do not want better services and want to see the services deteriorate, then vote against the referendum. o reducing employees. As an example, we could forego buying street sweepers and snowplows and hiring employees to operate them. This would further reduce our ability to maintain or plow snow from streets but could provide needed police protection. Secondly Secondly, we could borrow money by selling short term bonds to purchase capital equipment but would end up spending 30 to 40 percent more because of interest payments. This would only partially solve the problem by providing barely enough to upgrade one department while the others continued their slow decline. Finally Finally, the people could pass the referendum which would provide the flexibility for the City Council to upgrade areas in most need and maintain a high quality in others at the same time. Citizen's choice The choice is really up to the citizens. The elected representatives can either be given the flexibility to provide an adequate level of health, safety and welfare service or be given the task of juggling cuts in various services. The City Council is on record in favor of hiring three additional patrol persons for the police department. Without a positive vote on the referendum, we will be forced to utilize costly short -term financing and further downgrade another service, ❑ /i M