Minutes - Council - 07/22/2003 - Laserfiche WebLink

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Councilmember Elvig explained that he owns a small business in Anoka and went through the school levy last year and storm water fees initiated by Anoka and he has about $8,000 down the ladder in additional fees on his business than he did before. He did not think any one of the Councilmembers wanted to add additional fees. The City has a way to earn their way out of a situation that the State has given them, but they may have to make cuts for the next couple of years. Mr. Hanson stated that he wants to make sure that they don't take the $100,000 from reserves to balance the budget and then still come back and implement the franchise fee. Councilmember Cook stated that implementing the franchise fees is something that needed to be done. City staff and the City Council have looked at the budget and they are trying to work their way out of a situation that the State put them in. The City has a fixed income because there are levy limits and they can only see a certain amount of money coming in. The City's income does not increase as they grow because of the levy limits. The right thing to do is pass the fee to keep the employees they have so they can run the City. He did not feel that there was any way to continue running the City as it currently is without implementing the franchise fee. The Council is facing a lot of pressure and that is the reason the action is being tabled. There are misconceptions out there that general fund money is going to the Town Center, which is not true. The general fund is used to pay employees and to provide basic services. The State took the money away from the City and they have no choice to keep employees when the City is growing. People keep comparing the City's budget to their own income and if they were told that they were going to lose $400,000 they would have to go out and find other ways to raise that money to pay bills. The City has to have employees, and certain services need to be provided. Without franchise fees the next option is to cut employees and he questioned if the residents wanted them to cut fire fighters or police. The City already reduced the amount of mowing they were doing of the parks and the City received complaints that first week. Mr. Hunt questioned why the City's revenue did not increase with more people. Last year his real estate taxes went down and then back up again this year, did the City not receive any of that additional money. Councilmember Elvig replied no. Mayor Gamec stated that he wanted people to understand the situation they are in. The City received $726,558 in LGA and Market Value credit this year, which will be cut to approximately $248,000. In addition the State froze the growth rate, which means that the City loses $300,000 to $400,000. The State also did a cut on commercial taxes. The City could have absorbed the cuts if they could have received the valuation increase. They City would have received about $400,000 fi'om the valuation increase without raising taxes and the State froze that as well. The City has been very economical and now the State has stole from the City what they have worked for to provide the services. If the City starts borrowing from other funds, the City's bond rating drops and the City's interest rates go up. He would prefer to see money stay in the City. The change has impacted the outer cities the most because they are in the process of growing. The City Council/July 22, 2003 Page 9 of 33