CC 2011 12 05
CHANHASSEN CITY COUNCIL
SPECIAL MEETING
DECEMBER 5, 2011
Mayor Furlong called the meeting to order at 7:00 p.m. The meeting was opened with the Pledge to
the Flag.
COUNCIL MEMBERS PRESENT:
Mayor Furlong, Councilman McDonald, Councilwoman
Tjornhom, Councilwoman Ernst, and Councilman Laufenburger
STAFF PRESENT:
Todd Gerhardt, Laurie Hokkanen and Greg Sticha
PUBLIC PRESENT:
Rollie Neve 7635 Nicholas Way
Rick Dorsey 14215 Green View Court, Eden Prairie
Jeff Fox 5270 Howards Point Road, Excelsior
PUBLIC BUDGET MEETING FOR TAXES PAYABLE IN 2012.
Mayor Furlong: Thank you and welcome to those here in the council chambers with us and those
watching at home. We’re glad you joined us this evening. This is a special meeting of the Chanhassen
City Council. The primary purpose is to receive a presentation from staff regarding the proposed budget
for 2012 and opportunity for council to ask questions if they wish but most importantly to have, give the
council an opportunity to listen to those residents that wish to provide comments with regard to the
budget. Proposed budget so to start with this evening, again just for clarification. There will be no
decisions made this evening or votes taken by the council other than to adjourn at the appropriate time.
Again the sole purpose here is to take public comment and to provide information to residents about the
budget. There will be, to the extent that there are questions raised by members of the public, we’ll try to
provide answers this evening if we have them. If not, then we’ll try to get those answers back. The
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council will be considering the 2012 budget tax levy at our meeting next Monday, December 12 at our
regularly scheduled meeting and so it’s at that time that we anticipate the council will be voting on next
year’s budget and levy. So with that let’s go ahead Mr. Sticha, start with a staff report and presentation
on the proposed budget. We’ll follow that with questions from council, if any and then proceed with the
public hearing.
Greg Sticha: Thank you Mayor. Mayor and fellow City Council members, I’m going to go over a semi-
brief power point that breaks down the budget process that we went through this year in coming up with a
preliminary budget in September. As the Mayor said, the final levy will be set next week at Monday
evening’s City Council meeting. I’m going to start from the beginning of the slide show and if there are
any questions by City Council as I’m going through you certainly can stop me but otherwise I’ll keep
moving along.
Mayor Furlong: Okay. Thank you.
Greg Sticha: As I indicated the budget process starts a lot earlier than even September or October. We
begin our processes early as June. I think the first meeting we have at City Council on some preliminary
ideas about the budget was last meeting in June. Preliminary budgets were submitted by the department
directors in early July. They were then reviewed by myself and the city manager in late July where we
come up with a detailed budget for the City Council to review in August. The detailed budget meeting
was held in the second meeting in August I believe. The first meeting in September we held a
City Council Special Meeting – December 5, 2011
preliminary levy hearing and passed a preliminary levy that was used to produce the Truth in Taxation
statements that our residents got a couple weeks ago, or just over a week ago, and then this evening we
are having our public budget meeting. This is not a required meeting but the City of Chanhassen has
chosen the last few years to go ahead and hold the meeting even though we did not increase our levy by
an amount that would make it a required hearing so, and that’s been consistent with each of the last
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several years. And then next week again we will be adopting a final budget on December 12. All the
numbers that you see in tonight’s presentation again are based on the preliminary levy that we set in
September and for those of you that are not aware, the final levy can only be set lower than the
preliminary levy. The City Council cannot set a levy higher than what the preliminary levy was set at.
The first slide and the first couple slides are the general fund expenditures and revenues which the
preliminary levy was based on earlier this September. All the line items in all 5 major categories are
pretty close to the previous year’s budget item. Budget line item for that department. Total budget
increase in the preliminary budget of .4% or just over $40,000. The one change in the law enforcement,
which resulted in a decrease, was a change in the contractual services with Carver County and some of
the assignments of the officers for that contract. That resulted in some savings that resulted in that .5%
decrease in the law enforcement fire line. On the revenue side, for the most part all items again were
relatively flat from the previous year. Couple of items to note here. The licenses and permits line item is
about $30,000 lower than the previous year. The items for rental licensing and licensing of animals were
removed for the 2012 budget. Those amounted to around $30,000. Those programs have been, are
planned on being discontinued for 2012 and under other revenue interest income and one of our rental,
cell tower rentals is being discontinued for next year. Those two amounts make up for the decrease in the
other revenue line items. We did keep license, or permit revenue flat from the previous year. Although
we are trending positively so far this year staff felt it was important to take a conservative approach and
keep that line item in line with the previous year’s budget. The 2011 budget.
Councilman McDonald: Excuse me Mr. Sticha before you go on, could I ask a question?
Mayor Furlong: Go ahead.
Councilman McDonald: One of the things I’m looking at is on property taxes. I know that there’s been a
lot of things that are going on there to affect that but how can I look at that and tell what the growth is? I
mean from 2011 to 2012 we definitely increase as far as households and those types of things. Out of that
1.6, what would new growth be as part of that?
Greg Sticha: New growth for 2012 was 1 point I believe 06 percent so the bulk of that increase would be
from new growth and that was what we set with the preliminary levy. If you recall from the preliminary
levy we had two factors that we considered when setting the preliminary levy. One was new growth and
new growth was $119,000 which we calculated. In other words new homes that were needing to be
serviced within the city of Chanhassen. That was an amount that we added to the levy. The preliminary
levy and then we deducted $150,000 for the change in the market value homestead credit program. The
net result was a $31,000 decrease in the levy from the previous year. So those two items kind of offset
each other a little bit but the net result was a lower levy. The preliminary levy was set lower than the
final levy of the previous year by $31,000.
Councilman McDonald: Okay. Okay, thank you.
Mayor Furlong: I guess to follow up on that then, to the extent that the preliminary levy was set lower
than the prior year levy, this line item for property taxes is going up greater than the real growth rate.
That would tell somebody that other elements, and maybe you’ll get to this in your slide, other
components of the total levy have gone down.
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City Council Special Meeting – December 5, 2011
Greg Sticha: That’s correct. One of the offsetting factors is we accounted for the market value
homestead credit in the budget under allowance for delinquent accounts and this would have that
accounted for within it so.
Mayor Furlong: So by taking out that, we never budgeted or planned to received that, the market value
homestead credit amount so that’s part of this, this number.
Greg Sticha: The number, the next number I show you later on property taxes will look a little better. It’s
the actual amount that we’re going to be levying. This amount is the net, after delinquents and accounting
for that and then the next number will show you the actual levy as compared to the actual levy for the
general fund for the previous year so we’ll get to that number in just a second.
Mayor Furlong: Thank you.
Greg Sticha: Here’s a look at the general fund expenditure history. Again this is based on the
preliminary levy we set in September. A .4% increase in total spending, just over $41,000 as compared to
the previous year. And what factors changed the budget for 2012? Like we noted earlier most line items
did remain flat for 2012. General fund expenditures increased by .4% or $41,700. There is a wage
increase of 1-1/2% included in the budget. Budgeted permit revenue, as I mentioned earlier, remain the
same as the previous year and we did find some additional funding for the fire department needed for
training and on call pay of $20,000. Here’s a comparison of our key financial strategy cities and the
known or proposed wage increases for each of their city’s employees that we polled our key financial
strategy cities earlier this fall and the information we received back from them. Here it takes a look at all
of the levies by levy type as compared to the previous year, and this is the slide I was referring to earlier.
The first item is the general fund levy. The previous year levy was $7,508,200 as compared to
$7,477,200 which is the $31,000 that I was talking about earlier. The next effect of adding $119,000 in
new growth and subtracting $150,000 for the change in the market value homestead credit program. Item
number two is the capital replacement equipment levy which at the preliminary levy we left the same as
the previous year. Sealcoating levy of $200,000 remain the same. The general obligation debt levy was
relatively the same as the previous year. The Audubon Road improvement levy did increase for 2012.
This is an item that was fit into our debt levy schedule when we issued the debt for Audubon. The reason
for the increase was this is the amount that fit into the debt levy schedule at the times we issued the bonds.
Next year that levy actually goes down to about $140,000 I believe and then the following year it actually
goes back up to $440,000 and the year after that in 2015 there’s a small portion, I believe right around
$50,000 or $60,000 that is left to levy to repay that. That Audubon Road improvements. The public
works facility bond pretty similar to the previous year. The EDA debt comes off in 2012. That levy is no
longer needed. We had a planned fire station levy for a number of years scheduled for 2012. The first
year scheduled for implementation so net tax capacity levies increased 1.2%, and there’s a distinction
there between tax capacity levies and market value levies which have an impact on the homeowner’s
property tax statements and we’ll get into that in a little bit but the net, the tax capacity levies have an
effect on all properties whereas market value levies only have an impact on residential or homesteaded
properties. That also impacts the market value homestead credit program which takes this into account
and we’ll talk about that here in a little bit as well but all businesses and homes will be paying on the tax
capacity levies and only homes would be essentially paying on the market value levies. The property
taxes related to those levies. The library referendum levy went down by $140,000. That was due to a
refunding or refinancing of that debt in the prior year. That saved about $140,000 in that levy. Total levy
was a decrease of .3%. We talked about that amount earlier. There’s the $31,000 showing the .3%
decrease. Taking a look at total levy versus new growth. Since 2006 new growth is the green bar. Total
levy is the purple shaded bar. It’s been this council’s goal and we’ve attempted to keep any increase in
the levy at or near the amount of new growth for the City, and Jerry brought that up. Councilman
McDonald brought that up earlier this evening. The new growth was 1.16%. I’m sorry I said 1.06. It’s
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City Council Special Meeting – December 5, 2011
1.16. 1.06 was the previous year and the preliminary levy was set .3% lower than the previous year for
2012. The one year that isn’t consistent with that principle is 2008 and in that year we added a full time
police officer I believe. 1 and 1.25 police officer FTE’s in 2008. The next tax levy effects of the
preliminary levy, the general fund levy is a decrease of .4%. Total tax levy decrease of $31,000 or .3%.
The change in the market value homestead credit program for taxes payable in 2012 is certainly
something that’s on a lot of people’s minds. The City did reduce it’s levy by $150,000 to help offset that
impact to the change in this program. The impact of that levy can be felt to property owners depending
on the change in their property values from the previous years. Part of the impact was again market value
referendum levies are treated differently than tax capacity based levies so because our market value levy
went down in 2012 and our tax capacity levies went up in 2012 but our total levy went down, that had
some impact on how the allocation of the property taxes went because of the market value homestead
credit change in program. And to best kind of illustrate that program change, we did find one helpful,
useful tool. There’s a video that was put together by Minnesota Public Radio and we viewed the video
last week and it’s a little bit simplistic but it does give a good idea, a good base of how the market value
homestead credit program exclusion program now works as compared to the market value homestead
credit previously had worked and we’re going to share that with our audience tonight. Listen to that
video and hopefully that can answer some of the viewers at home or in the audience tonight, their
questions about why is this happening and exactly what impact will this have on my property.
The video produced by Minnesota Public Radio regarding the market value homestead credit
program was shown at this point.
Greg Sticha: Again a very simplistic video but it holds true to form in what is actually happening with
the change in the two programs. It’s very I guess real life kind of scenario as to what is impacting, not
just the City of Chanhassen. The county and the school district and all other cities and counties and
school districts are undergoing the same changes in the program and seeing some of the same impacts that
we have seen at some of our property tax statements that came out earlier this year. So let’s take a look at
some of those tax statements that we were able to sample and this is for City of Chanhassen property
taxes only. There’s 6 parcels listed on this slide and with varying values from $182,000 all the way up to
$845,000. Tried to pick a varied amount of increases or decreases in property value for a couple purposes
to kind of show the impact that the change in the value from the previous year will have on your property
tax bill. The average home in Chanhassen dropped in value by about 4% so you’ll see that item, that
Parcel number 2, 3, 4 and 5 I selected all homes that dropped close to 4% in value from the previous year.
Before the impact of market value homestead exclusion was taken into account. In the column marked
percent changed, the amount that is in parenthesis is the amount, the value of the home either increased or
decreased before the change due to the market value exclusion program. The amount not in parenthesis is
the amount change in the property value after the exclusion program.
Councilman Laufenburger: Mr. Sticha.
Greg Sticha: Yep.
Councilman Laufenburger: These are real properties in Chanhassen, is that correct?
Greg Sticha: That’s correct. This is 6 actual parcels in the city of Chanhassen.
Councilman Laufenburger: So, and isn’t it also, I’m asking you to just comment to the citizens, not
everybody’s home who last year was valued at $182,600 went down to a property value of $162,000, is
that correct?
Greg Sticha: That is correct. This is one particular home in the city.
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City Council Special Meeting – December 5, 2011
Councilman Laufenburger: Alright. Thank you for that clarification.
Greg Sticha: And you can see the impact of the levy that the City set for a preliminary levy and the
market value exclusion. We tried to, I actually took a look at another 10 probably parcels aside from
these 6 and there isn’t, to say that there was an exact reasoning or rationale for every single property that I
could make sense of, I can’t. Certainly the market value exclusion program change had an impact on that.
You see some consistency a little bit if your home was decreased in value by about 4%, there’s a little bit
of consistency but not in all cases. If you looked at parcel number 2 versus parcel number 5 for example,
which dropped 4.2% as compared to 3.9%, one of them decreased by almost a percent in it’s property tax
bill and the other increased by a percent so it’s hard to make complete sense of exactly what happened
and I don’t think that necessarily we try to do that but giving as many examples on here I guess is helpful
to kind of see that it is all over the place.
Mayor Furlong: Mr. Sticha a question, maybe to follow up on Councilman Laufenburger’s question.
Using example of number 1. Well not every home that was $182,600 in assessed value last year is
necessarily at $162,000 this year. Is it?
Greg Sticha: On parcel number 1, just to be clear. That parcel actually only saw a drop in value of a
couple hundred dollars before the exclusion program. The bulk of that 11.3% drop was because of the
exclusion.
Mayor Furlong: Of the exclusion program itself.
Greg Sticha: Yep.
Mayor Furlong: So I guess the question I have is, well not every property would have changed in value,
either taxable value or market value the same, and maybe I’ll paraphrase by saying generally, if not for all
situations a property that has a taxable value of $162,000 this year will pay the same tax as another
property with the same taxable capacity.
Greg Sticha: Yes.
Mayor Furlong: Aside from any special assessments or anything else.
Greg Sticha: That would be a correct statement.
Mayor Furlong: Okay. So that, there is consistency there for every home that has a taxable value of
$162,000 will be paying the same.
Greg Sticha: Value of $162,000. Whether you pay the same as the increase or decrease.
Mayor Furlong: What your change is is a function of where you started last year.
Greg Sticha: Yep, exactly.
Mayor Furlong: Okay, thank you.
Greg Sticha: Taking a look at an actual property tax statement from School District 112. This is an
actual home in Chanhassen and where all the property taxes go for that parcel. 20.4% of it is for the
City’s levy or city’s needs. 43.7% would be the school district and 30.4 the county and 5.5 are the other
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City Council Special Meeting – December 5, 2011
districts. The Metropolitan Mosquito Control District and the water districts. We’ve included some
comparison statistical information of our key financial strategy comparable cities that list a number of
different statistics that we kind of keep track from year to year on. The first slide is budgeted
expenditures as compared from 2010 through 2011. All this data was gotten off the Minnesota State
Auditor’s Office website. This is not data that we picked or we got from that city’s website. It was from
the state auditor’s office website and this particular slide takes a look at the budget expenditures from
2010 through 2011. The change in those. 2012 would not be available yet for any of the cities at this
point. Second slide shows similar data but for Carver County cities and how Chanhassen compares in
2010 budget expenditures to 2011 budget expenditures, as compared to other Carver County cities. This
slide is per capita spending comparison of all of our kfs cities and how the City of Chanhassen compares
to each of the other kfs 10 cities. The average being $451.
Mayor Furlong: Mr. Sticha, could you define for people or explain a little bit what kfs stands for and why
these cities were selected.
Greg Sticha: Sure. Kfs stands for key financial strategies. These cities were selected I believe about 8
years ago. 8 or 9 years ago as a part of the City Council’s strategic goal of measuring itself against other
communities. These communities were selected based on their size, their growing trend and another of
other variables, and maybe Mr. Gerhardt can, was here at the time and maybe would have a few idea of
what some of those were but.
Todd Gerhardt: Yeah Mayor, Council. Most of these cities are outer ring suburbs. They’re older
established communities but that are still growing. They have new development and when you have new
development you have costs associated with infrastructure. Putting in new wells, water towers, sanitary
sewer and water lines associated with that so we have similar expenditures. Similar revenues to most of
these communities.
Greg Sticha: So that’s how the cities for these comparable purposes were generated or created. We
measure ourselves against these cities for a whole number of other factors aside from the ones that you’re
seeing tonight as well.
Councilman McDonald: Can I ask a question before you go on from that. I understand at the time that
we did all of this it was comparable to us but where I’m having a hard time getting my arms around this
is, is you know this change this year. Before the State was providing the subsidy as the video showed.
You know that was the extra amount of money. Well now they go and to try to keep the impact of not
providing the subsidy hitting the homes, they go and they create this new formula for determining the
value of the home. If we’re going to look at similar communities, don’t we have to get toward now
what’s similar as far as housing stock and value and those things because couldn’t this vary significantly
depending upon the value of your homes? I mean for example if Chanhassen has an over abundance of
homes above $350,000 versus Chaska with homes below $250,000, isn’t there a disparity there in trying
to compare because now under the new rules the numbers aren’t the same. You have to take into account
the value of the property within the city.
Greg Sticha: In terms of comparing a comparable tax bill, that would be true. However in terms of
comparing comparable services and the types of services that we provide, we would be very comparable
to these cities.
Councilman McDonald: Okay well the point I guess I was getting to is what you said in the beginning is
the tax bill because most residents are going to look at their tax bill. They know people in these other
communities and let’s say those communities similarly you know the taxes go down. Well it’s not just
the value of your home. Now the entire community kind of fits into the equation whereas before that
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City Council Special Meeting – December 5, 2011
wasn’t necessarily the case. And I guess what I’m trying to get at is that it just seems as though your
taxes should be going down if again what we’re looking at are the value of the homes going down, you
would think intuitively that that’s going to translate to my property tax bill but the things that are missing
is because they’ve changed the formula and again the way we have to make up the money, that’s going to
change our calculation also. Am I making sense? I’m trying to get this to where again intuitively it
seems like if I look at these slides and the values going down, why aren’t my taxes going down?
Todd Gerhardt: Mayor, council, probably the best way to answer that is, you know we can do a
comparison of average home values for each of these communities but when you’re looking at the big
picture, everybody’s home value went down. If it was only a select few that saw values go down, that
would be probably a true statement but when everybody’s value goes down that means you’ve got a
smaller piece of the pie to spread that over so, and with the exclusion calculation giving credit to lower
end valued homes, they’re going to see more of a benefit than the higher end homes so what really plays
into determining the total tax is what your total expenditures are going to be. What is that total levy
doing? So you know this year we’re in the preliminary levy we’re showing minus $31,000 over last year
so some people are going to see a decrease but some people are going to see an increase depending on
how much of that value has gone down.
Councilman McDonald: Right, and that’s the point I guess I’m trying to get across is that you know
before, I mean it would make perfect sense that if we lower the levy you know your taxes should go
down. Under the new rules, the way they’ve set this up that’s not necessarily the case and so it’s going to
be difficult to do comparisons. My house here versus a similar house in another community because there
are those other factors. That’s what I guess I’m trying to get across is that just because you get your tax
bill and it goes up or down, it’s not that we’re doing anything any different. I mean we’ve got a levy
that’s going down. It’s just the way we have to calculate things has changed.
Todd Gerhardt: That’s correct. And it would have been fine if the State would have just stuck to the
market value homestead credit program but they also added that they wanted to give a break to lower
valued homes, as the video mentioned and so it’s really two things that the State tried to accomplish.
They wanted to give a break to lower valued homes but also to retain the market value homestead credit
at the State level of the $260 million.
Greg Sticha: One thing to keep in mind is this is going to be a transition year and because the program is
different from the previous year, it’s going to be more difficult to explain why your bill went up or down
as to the previous year. Next year, assuming they keep the exclusion program in place like they have it
and don’t make any further changes to that program, it’ll be more of an apples to apples comparison from
year to year and so the numbers should make more sense next year. When we lower the levy, if your
home dropped in value by the average, your property tax bill should go down. It’ll be a lot easier, more
easy to compare it to the previous year. Like in our previous year’s Truth in Taxation hearings we were
able to hone in on about where the levy that the City Council set, what impact that would have on the
average home. This year it’s significantly more difficult and this transition year is going to be difficult to
try to get to that. To hone in on exactly where that mark is. If the program stays the same like I said, next
year should be much more easy to do that.
Councilman McDonald: Okay, thank you.
Greg Sticha: Just finishing up these last few slides that show some comparable data to the other
communities. Here’s Carver County cities and their per capita spending. Again all this data is from the
state auditor’s website. For 2011 this is per capita spending for Carver County cities. And this data
actually is for Carver County tax rates, for communities within Carver County only. The proposed 2000
levy column or tax rate column is for the tax rate that all of the communities in Carver County set in
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City Council Special Meeting – December 5, 2011
September so this is their proposed rate. This is not their final rate for the year. They’re having similar
meetings just like we are this evening and they’ll be setting a final levy just like we are sometime next
week. This just shows the proposed levies and the percent increase or decrease from the previous year.
Now one.
Mayor Furlong: For tax rates.
Greg Sticha: For the tax rate. One key important thing to note here is the tax rate is a computation of the
value of your properties within your community and the levy that your community is asking for in tax
dollars. If either of those variables change, it’s going to impact the tax rate. Now some of these
communities, if you take a look at Norwood-Young America or Hamburg, their tax rate is 42 or 43
percent higher than the previous year. Probably the most significant variable that’s impacting that is the
values in those communities are probably dropping more so than the values have in Chanhassen and that
directly has an impact on your tax rate.
Mayor Furlong: And Mr. Sticha when you say the values are dropping, aren’t there two components
there? One is market value adjustment and the other is this exclusion component.
Greg Sticha: Yep.
Mayor Furlong: Doesn’t that exclusion of basically taking any values and now saying it’s not there for
tax purposes so, if that’s in the denominator that would tend to push the rate up.
Greg Sticha: Yeah, that’s…
Mayor Furlong: Well again on a transition year.
Greg Sticha: In a transition year it will impact the rate. It will be a little more comparable next year. The
other problem that some of these communities might be facing, if the majority of your homes are all part
of the exclusion program, there’s nowhere else to shove the property tax burden so in some of these
communities the majority of the homes are under $414,000 and they have very little commercial or
industrial base to offset some of that. Therefore in some of these communities the intention was to give a
benefit to those lower value homes, as you saw in the video, and that was the State legislature’s intention
but because they have nowhere else to shift that burden it’s all going to come right back to those lower
end homes so that even further complicates it and I wouldn’t even want to begin to try to explain that to a
resident if I was the finance director for Norwood-Young America because that makes it even that much
more difficult to try to explain the change in the program. This slide takes a look at debt per capita and
how Chanhassen compares to it’s other kfs cities. The data on this was not on the state auditor’s website.
Rather we had to get this from their financial reports from each of the entities. And then discussion points
that will impact the final levy when we adopt the final levy next week and that we’ll be discussing with
the City Council in next week’s work session and the final adoption next week. The capital equipment
replacement levy is still something that we will be discussing with the City Council. Is that at the
appropriate amount? Reviewing any other areas that we can look for contractual service savings. What
to do with the fire station number 3 levy. And again staff will be meeting with the City Council next
week to determine and set the final budget. All of the information, I just want to repeat one more time,
was based on the preliminary levy set in September and what the City Council does at their meeting next
week again can only go down from that preliminary levy. It cannot go up.
Mayor Furlong: Thank you. Appreciate the report. Any other questions for staff at this time before we
open the public hearing? Okay. Let’s go ahead and open the public hearing and invite any interested
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City Council Special Meeting – December 5, 2011
parties to come forward and address the council on the item before us, which is the proposed 2012 tax
levy and budget. Anyone this evening? Okay.
Rollie Neve: I’m Rollie Neve and live in Chanhassen.
Mayor Furlong: Could you state your address please Mr. Neve.
Rollie Neve: Pardon?
Mayor Furlong: Could you state your address too please for the record.
Rollie Neve: Oh, okay. 7635 Nicholas Way.
Mayor Furlong: Thank you.
Rollie Neve: 55317.
Mayor Furlong: That’s fine.
Rollie Neve: I noticed that there’s an increase in salaries for personnel. Something like what, 1 1/2%.
Mayor Furlong: That’s being proposed, yes sir.
Rollie Neve: How much is that?
Greg Sticha: That’s $52,000 to the general fund.
Rollie Neve: Okay. And you’re increasing the budget by some $40,000 so if you took away the tax
increase there would be a zero increase in the budget. Is that correct?
Greg Sticha: That would be correct, yeah.
Rollie Neve: I think I’m a little opposed to a salary increase with the economy the way it is. I think most
people would find it difficult to justify in this economy and I think if we take that away that you wouldn’t
have an increase in the budget. I didn’t see anything in here about, well I have another question I guess
about federal mandates and the federal government has a habit of requiring communities and cities to
spend money that, by direction from Washington D.C. that has to be funded by the local community and
in my opinion that’s unconstitutional. That the federal government cannot mandate the cities’
expenditures that they don’t come down and fund. In other words they pass a law that says that you have
to increase your taxes to meet this mandate and I’m wondering if we have any of those.
Todd Gerhardt: Mayor, council, probably the biggest impact would be stormwater management. Clean
Water Act and maintaining our stormwater ponds and runoff and maintaining lake quality, rivers, creeks.
Rollie Neve: That smacks to me of Agenda 21. Are you familiar with Agenda 21?
Todd Gerhardt: No.
Rollie Neve: Well Agenda 21 is placing this kind of a burden on the local communities, which I don’t
think has Constitutional authority for it and so for the federal government to intrude on water quality in
Chanhassen is violating I think separation of powers if nothing else but it basically, in my opinion is
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City Council Special Meeting – December 5, 2011
violating the Constitutional authority. In other words the federal government does not have that authority
and there has been Supreme Courts that have sustained that. They can’t dictate to you mandates that they
don’t fund. And so I think that’s something that you probably take a look and you might have a very
significant decrease in the budget.
Greg Sticha: Just to clarify on the stormwater, those would impact the utility rates and not the actual tax
levy but it would have an impact on utility rates most certainly.
Rollie Neve: Well I think I would be of the, of the motion to, with all due respect to the federal
government, I’m sorry you don’t have the Constitutional authority to do it so we’re not going to honor
those mandates and we’ll save the money.
Mayor Furlong: Thank you. Anyone else that wishes to speak this evening? No? Okay. Last call. If
nobody else wants to speak then without objection we’ll close the public hearing. I’m sorry.
Councilman Laufenburger: No, that’s fine.
Mayor Furlong: Without objection we’ll close the public hearing and bring it back to council. Any
follow up questions at this point for staff?
Councilman Laufenburger: I have one. Mr. Sticha, is it possible, the video that you showed that was
over the internet, is that correct?
Greg Sticha: Yep.
Councilman Laufenburger: I’m assuming the Public Radio site. Can you link that to the City’s website?
Greg Sticha: It already is.
Councilman Laufenburger: Is it there? Okay, great.
Greg Sticha: It’s on the City’s website and on the City’s Facebook page.
Councilman Laufenburger: Wonderful.
Greg Sticha: It is available on Minnesota Public Radio’s website and if for some reason you can’t find it
on their website you can certainly email or call me and I can send you a link directly to the actual video if
they’re having a hard time finding the video.
Mayor Furlong: Okay. Any other questions for staff this evening?
Councilwoman Ernst: I have a question.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: Greg, could you send us a copy of the presentation?
Greg Sticha: Sure.
Councilwoman Ernst: With the video in there. That’d be pretty cool.
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City Council Special Meeting – December 5, 2011
Greg Sticha: Absolutely. I’ll email out a copy to all of you.
Councilwoman Ernst: Thanks.
Mayor Furlong: Any other questions? If not, is there a motion to adjourn?
Councilwoman Tjornhom: So moved.
Mayor Furlong: Is there a second?
Councilwoman Ernst: Second.
Councilwoman Tjornhom moved, Councilwoman Ernst seconded to adjourn the meeting. All voted
in favor and the motion carried unanimously with a vote of 5 to 0. The City Council speak meeting
was adjourned at 7:50 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim
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