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City Council Minutes 08-23-2004 Special MINU ,ES BUDGET W RKSHOP Monday, August 23, 2004 - 5:30 p.m. Members Present: Roger Carlson, Glen Posusta, rian Stumpf and Bruce Thielen. Members Absent: Robbie Smith 1. Call to order. Mayor Thielen called the budget workshop to order at 5:30 p.m. 2. Ie . City Administrator, Rick Wolfsteller provide the background information on the preliminary 2005 budget. He noted that this year the City is not restricted by levy limits. In 2004, the City levied $6,900,000 but only collected $6,600, 00. The difference being the homestead credit in 2004 was retained by the state. In 2005 t City should receive the approximate $280,000 of homestead credit. The proposed tax levy is 1 lf2 % more than last year and the levy amount is $104,000 more than in 2004. Ric Wolfsteller indicated he tried to keep the increase to 1 1/2% which means that no Trot in Taxation hearing would be required. He added that with the increase in market values and allowing for inflation, property taxes would be lower even though the levy increased by 1 1/2%. The City's total market value is estimated to increase by $800,000 to approxi ately $11,900,000. Rick Wolfsteller added that the 1-94/CSAH 18 interchange project was n t included in the budget nor was the acquisition of right-of-way from Denny Hecker in order 0 extend Chelsea Road to County Road 39. Bruce Thielen asked about the bond fund. 'ck Wolfsteller indicated he had reduced the bond levy by $700,000. There were five bon funds that were paid off that had accumulated surplus funds. These surplus funds, however can only be used against other bonded debt. He added that he did not recommend that all he bond fund surplus be used. He also added that there would be some revenue from the s Ie of the Jefferson Commons (Remmele) property that could be used for bonded debt ayments.. Rick Wolfsteller addressed the approximate 27,000,000 in reserves noting that most ofthe reserves were allotted for a specific use. The Council reviewed the trunk fund summary sheet. It was noted there is not sufficient monies in the trunk funds to cover the projects budgeted for construction that would need to utilize t nk funds. Rick W olfsteller pointed out that the trunk fees have increased about 4% annually 0 reflect cost of living increases. However, as noted in the recent comprehensive water stu , the overall rates need to be reviewed and adjusted, if necessary, in order to be able to roperly fund trunk improvements. John Simola provided information on the current water raes and indicated that the City would be looking at these rates as well as rates for sprinkling u e when they looked at increasing the fees. Rick Wolfsteller indicated there was approxi ately $5,000,000 in trunk fund reserves, 1 Budget Workshop Minutes - 8/23/04 $8,000,000-$9,000,000 bond fund reserves d approximately $6,000,000 in general fund reserves. He pointed out since the City does ot collect any tax revenue until July the reserve in the general fund is used to operate the City until they receive the tax settlement. The Council reviewed the worksheets for the arious departments. Rick W olfsteller stated that engineer and legal costs incurred are bei g charged back to the developments. Glen Posusta asked about the law enforcement bud et. Rick W olfsteller responded that there was no increase of hours proposed for 2005 but th hourly rate set by the Sheriffs Department accounted for the budget increase. He also n ted that funds were included to cover the strategic planning study the Council was pro osing and partial funding for election equipment to fulfill the HA V A requirements for the 200 election. Rick W olfsteller informed the Council that because of the new GASB 34 re ulation, depreciation figures were being shown in the budget. Brian Stumpf asked about what is all covered under the civil defense budget. Rick Wolfstel1er replied that includes 15% ofGa Anderson's (Civil Defense Director) salary and benefits, cost of sirens and training. Brian S umpf asked specifically about the City's civil defense plan and suggested the City look at u dating the plan. In the review ofthe Public Works budget, it as noted that $15,000 was budgeted for code enforcement. Bruce Thielen asked about the Yz person that was budgeted for 2004. Rick W olfsteller responded that the Building Dep' ment had an intern in place. Brian Stumpf questioned the budgeting for a otor grader. John Simola stated that the present one is 22 years old and should be replaced. He added that the grader's use is somewhat limited and even though they have had some major repairs it could probably go another year or two. If a different grader was urchased it would most likely be a used one as is the current grader. 95% of the grader hos is for snow removal. John Simola stated that the 1988 Fort plow truck is proposed to be re laced. This vehicle is 15 years old. One of the snow plows has been converted to a hook tru k which makes it a multi-purpose vehicle since it can be used with a number of different truc bodies. Bruce Thielen suggested rather than budget for all of the truck in one year they sh uld split over a number of years. This would be similar to how the fire department trucks are udgeted. The Council recommended that the grader be removed from the budget and that t e hook truck should be budgeted in 2005 for 1/3 of$185,000. Glen Posusta questioned the number of skid 1 aders that were being purchased. John Simola stated that the skid loader was being shared b tween the Parks Department and Street Department. The other skid loader that is pr posed for replacement is being sent to the WWTP. There was discussion on whether it ouldn't be more cost effective to contract the work. There was also a question on the num er of trucks being budgeted. John Simola stated they are budgeting for two new trucks and on replacement truck. Brian Stumpf asked how many trucks the City currently has and was i formed that there are 12 trucks. It was pointed 2 Budget Workshop Minutes - 8/23/04 out that the City has the potential to eventual} expand by 8,000 acres as a result of the annexation agreement and that the City will ave to add personnel and equipment to handle this. John Simola stated that the City has ge erally replaced large trucks after 15 years and pickup trucks after 10 years. Brian Stumpf a ked ifthe 1994 truck would have to be replaced this year. John Simola stated it could probab y go another 1-2 years. Bruce Thielen felt staff should look at the bu get with the idea of cutting $300,000-$500,000. John Simola said the Council has looked mo e closely at the proposed equipment expenditures than they did the $29,000,000 i terchange project. Glen Posusta asked about the Ellison Park re trooms budgeted at $50,000. Bruce Thielen agreed and suggested the City should look at other options such as portable units. Glen Posusta also felt for the limited amount ofti, e the restrooms were open, it would be more practical to have portable units. Glen Posus a felt the Parks should look at whether it was feasible to have restroom shelters at small n ighborhood parks such as Groveland. Bruce Thielen suggested the Council set the levy the same as 2004 and have staff work at cutting $500,000 from the proposed budget. Rick Wolfsteller stated that the Council had recommended a number of equipment cuts d wanted to know ifthe Council was comfortable with the additional employees roposed. Glen Posusta stated on the upcoming agend for the regular Council meeting there was a proposal amending the park dedication fees. He questioned the establishment of small neighborhood parks and felt the focus shoul be on larger community parks. Bruce Thielen stated the City's Comprehensive Park plan Bowed for neighborhood parks as well as community parks. Jeff O'Neill stated that 5Yo ofthe park dedication is to go toward neighborhood parks and 5% toward comm ity parks. Rick Wolfsteller stated that a lot ofthe ite s that are being cut are coming out of the capital outlay fund but not that much of that is co ing from tax levy. Rick W olfsteller asked if the staff cuts $500,000 from the budget and ift e City keeps the levy the same as last year how would they want the excess designated. B ce Thielen felt it should be set aside for the interchange project or other projects that m y come up. Glen posusta questioned the $3500 in sign proposed in the MCC budget. Rick Wolfsteller stated that only the A list of items requeste by the MCC had been included in the proposed budget. Bruce Thielen felt rather than the Council oing over individual items, the staff could do additional budget cutting including the foll wing: 1. No motor grader 2. 1/3 of the hook truck cost. 3 3. Restrooms at the parks. 4. Remaining cuts to be made by staff. Budget Workshop Minutes - 8/23/04 Rick W olfsteller asked about the budget amo nt for the library expansion which was estimated at $800,000. Bruce Thielen felt $ 00,000 could be cut. There was additional discussion on the library expansion and what he ultimate cost would be. Glen Posusta asked about the air handler bud eted for the MCC at $125,000. He felt this should have been covered by the original con ract. Rick W olfsteller presented information from he League of Minnesota Cities. He stated when comparing one city's taxes to another you ne d to look at all the factors. He cited that the City of Monticello provides garbage service to its esidents, it supports the Community Center and unlike many other cities, Monticello receives ery little in the way of state aids. He emphasized the need to look at all the factors that go into the City's tax structure. The Council directed that preliminary levy be' the same as in 2004 and that the staff bring the revised budget back to the Council at a futur meeting. The budget workshop closed at 6:45 p.m. \ c~"" .~s Recording Secretary 4