1. Call to Order. The workshop session of the Council of the City of Rogers was called to order by Mayor Grimm on Tuesday, May 10, 2011 at 6:00 p.m. at the Rogers Community Room, 21201 Memorial Drive, Rogers, MN, 55374. Council present: Rob Bell, Jay Bunting, Jason Grimm, Rick Ihli, and Maureen Stanley.
Staff present: Jeff Carson, City Attorney; Stacy Doboszenski, Assistant City Administrator/Clerk; Shelly Eldrige; Ehlers & Associates, Brad Feist, Fire Chief; Rose Lorsung, City Planner; John Seifert, Public Works Supt., Steve Stahmer, City Administrator; Lisa Wieland, Finance Director; and Bret Weiss, City Engineer.
2. BackgroundAdministrator Stahmer addressed the Council on the staff’s activity since the last joint meeting. Stahmer stated that phasing in the tax rate, we are actually phasing in a levy, since a levy is what is certified to the County; not a tax rate being certified.
At the Rogers only meetings we discussed commercial/industrial properties of Hassan being treated the same as commercial/industrial properties of Rogers. If a tax rate phase in occurs, we are talking about the residential and agricultural properties; not the commercial/industrial properties.
In terms of what was focused on in discussions with Administrator Craig and Attorney Ruppe was a three year and six year phase in. Four and five years are included in the information, however they won’t be discussed unless the Council requests.
Hassan is to levy an equal amount in 2012 as they did in 2011 without reducing their reserve.
The three year and six year options posed a question from Hassan; what is the impact on the average residential property in Hassan? Staff is not sure if their intent was to have the phase in against all properties or just the residential and agricultural properties.
3. Staff Assumptions/Discussion Points:The following are some staff assumptions: • July 1, 2012 annexation • Not negotiating services and service levels/values • 2011 tax rate as a known number • Translating the tax rate into a levy number • Assuming no valuation changes when discussing the phase in • Assuming Hennepin County can implement the agreement by tax type
Bell asked if we have asked the County if they are able to apply the different rates; Hennepin County hasn’t dealt with it in the past, but Carver County would be willing to assist them. Wieland stated by translating tax rate to a dollar amount it secures the differential between the decrease in values and the impact to the City.
Staff then discussed tying the date (July 1) with the tax rate phase-in; whatever date we agree on will remain, but up to August 1st we could eliminate the phasing as a safety net to the City.
Attorney Carson discussed incorporating it into the orderly annexation agreement so that it becomes part of the deal; including the part where we back away if they don’t adhere to their end.
Grimm asked the soonest we could merge if they didn’t live up to the agreement. Staff stated it would probably still be July 1st; pulling the phasing would be penalty enough.
Carson stated the orderly annexation agreement is a contract that we are discussing amending; the unveiled threat is a challenge being brought forth by Hassan. What we are really talking about now is an accommodation; we are accommodating for them which should throw out any future challenges.
Stahmer stated the last statement made by Hassan is they are asking for the City to not entrench into a position tonight. Hassan staff has asked the Rogers Council to keep an open mind in reviewing the material tonight. Hassan was also encouraging Rogers to lead the meeting as the host location.
Stahmer then reviewed the worksheets handed out to Council. Stahmer stated there are 13 percentage points between the two rates in 2011. Wieland stated the difference is $367,382 over three years to do the phasing.
The three year phase-in model was reviewed with Council.
Bell questioned the assumptions; the $367,382 is an amount we could have had. Wieland stated it is an amount that would be needed today to balance the budget.
Bell asked if it would be fair to say additional expenses are being incurred in 2012 that would need additional tax revenue. Wieland stated if they levy the same amount, we understand there may be some cost savings, but that gives Rogers some financial protection for the last 6 months of 2012.
Bell commented on the FMP did so with the assumption that their tax rate would equal ours in the first year, therefore the expenses could live within those means. Staff stated yes.
Stahmer stated the total that would be foregone is $367,892 if the Council chooses to move forward with a three year phase-in.
Stahmer then reviewed the six year phase-in with Council; smaller jumps in between the tax rates/years with a total impact of $919,730. We did tell Hassan that the Rogers staff would recommend that we could probably accommodate a three year phase-in but not a six year.
Staff believed this is the remaining key item; the other items may not be as big of an issue for the town board.
Wieland again explained the benefit of using a levy amount as a phase-in tool rather than a set tax rate.
Carson stated the Council should not worry about what challenges they may bring; as the Council is considering an accommodation.
Grimm offered doing a four year phase-in and holding to a January 1, 2012 annexation. Grimm stated there is no reason to not bring in commercial/industrial immediately.
Bell expressed concerns over applying the phase-in only to residential and agricultural properties.
Continued discussion on applying the different tax levy over a three year period.
Bunting agrees with a three year phase-in and commented on if the Hassan resident will even realize the savings over a potential tax increase. Bunting sees this as a tool to bring the two communities together.
Wieland stated the concern she posed to the Hassan attorney is if we can get their board to not expect the Rogers staff to address the requests raised by Hassan residents.
Carson thinks Hassan is positively surprised by the numbers presented.
4. Staff DirectionDiscussed were parameters in going back to the Hassan staff.
Bell stated he is not necessarily a fan of any of it, but does see the soft benefits of “playing nice”. If it has to be something, then three years would be the limit of what he wants to see.
Grimm suggested having a discussion with former Council members who knew that these challenges and requests were going to come forward.
Bell also added that anything we are going to do needs to have a realistic and appropriate justification that meets the law; not hobble something together to “fake it”. As long as we could look ourselves in the mirror and know it was reasonable to accommodate the three year phase-in.
Stahmer prepared Council with if we come back with three years, and they come back with four or five; then the Council will be dealing with the Board at the May 25th meeting to come to an agreement.
Bunting stated we can show an effort in offering the three year phase-in.
Carson stated this subject is not specifically addressed in the OAA.
Wieland reviewed the staff’s assumptions; Council concurred with the assumptions presented.
Stahmer stated one of the reasons Shelly from Ehlers has been working with staff with her knowledge and experience in working with various Counties on the annexation issues.
5. CalendarNothing discussed.
6. Adjourn. Bell moved, Stanley seconded a motion to adjourn at 6:50 p.m.
Respectfully submitted,Stacy DoboszenskiAssistant City Administrator/Clerk