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City Council Minutes 11-16-2000 WorkshopMINUTES WORKSHOP MEETING - MONTICELLO CITY COUNCIL Thursday, November 16, 2000 - 5:30 p.m. Members Present: Roger Belsaas, Roger Carlson, Clint Herbst, Brian Stumpf and Bruce Thielen. Members Absent: None Staff Present: City Administrator, Rick Wolfsteller; Deputy City Administrator, Jeff O'Neill; Public Works Director, John Simola; City Engineer, Bret Weiss, Community Center Director, Kitty Baltos Mayor Belsaas called the workshop meeting to order at 5:45 p.m. and declared a quorum present. The purpose of the meeting was to review and finalize the 2001 budget and tax levy and to discuss and formulate an assessment policy for street reconstruction. City Administrator, Rick Wolfsteller summarized the changes made in the budget since the last budget workshop. The primary revision was to include $29,200 which would allow for adding four more hours of police coverage starting in July. The other area of change was to reallocate the expenses and revenues from the Monticello Community Center operating budget to the city hall, senior citizen center and National Guard portions of the building. The reallocation did not change any tax levy requirements. He noted that the proposed levy of $5,067,342 would be an increase of $328,000 or 6.9% over what was collected in 2000. Rick Wolfsteller indicated that based on information he had received from the Wright County Assessor's office, there is an increase in tax capacity value from $13,085,763 to $13,641,431. The Council looked at the following areas as possible changes to the budget: Law Enforcement - The preliminary budget was increased by $29,200 to allow for an additional four hours of police coverage to be added mid -year. The Council indicated that the additional $29,200 would remain in the budget. Community Education - The preliminary budget did not include funding the $17,500 contribution to the community education program. Duane Gates from Monticello Community Education was present and explained to the Council that funding for their summer programs comes solely from the City and the school district and fees collected from the programs. The Council felt that the programs offered by community education were available to residents in the entire school district which is comprised of all or parts of the cities of Monticello and Otsego and Monticello, Maple Lake and Silver Creek Townships and that all the entities should participate in the funding of the programs. When the City initially contributed to the funding, the City did not have other programs and facilities for youth that they were supporting. The City now funds the parks and trails system and the community center. The Council indicated that they were in support of the program but felt that it should be supported by all the Council Minutes - 11/16/00 entities who utilized it. The Council encouraged Mr. Gates to go before the other entities and request funding. The consensus of the Council was that the City would commit to funding at least 50% of the requested $17,500. The Council also stated that if a formula was arrived at by all the entities involved that would split the funding based on market value, population or some other proportionate basis, the City would fund their portion. YMCA Detached Worker Program - The $7,500 contribution request was not funded in the preliminary budget. Karen Trondsen and Brian Burns representing the YMCA were present and requested the Council to consider continued funding of the detached worker program. They explained the program and the people it serves. The Council noted that this request was similar to that of the community education program in that it was for a program that served residents from a number of communities but was receiving financial support only from the City of Monticello. The Council encouraged the YMCA to go to the other communities that also participate in the program and request their financial support. The Council determined that the City would budget funds to cover 50% of the budget request of $7,500. Central Minnesota Initiative Fund - Representatives from the Central Minnesota Initiative Fund had spoken earlier to the Council about support for the program which provides grants and loans to various businesses in Wright County. The Central Minnesota Initiative Fund was requesting the city to consider a contribution of $2,000. The Council determined not to include this request in the 2001 budget. Rivers of Hope - This agency provides services for victims of domestic violence and was requesting a contribution of $3,378 which was based on the number of individuals served in Monticello. The Council decided not to fund this request. Bike Park/Ramps - Kitty Baltos indicated that in preliminary discussions with Tru -Ride the cost for a small bike park would be approximately $55,000 for the ramp only. In addition there would be the cost of a 4'x 6' concrete pad over the entire ramp area and fencing for the ramp area. The fencing should be compatible with that of the skate park. Kitty Baltos noted that a cheaper but probably less desirable option would be a dirt track on the vacant lot adjacent to the Eisele property. The price estimate for the larger bike park was $64,000. The Council discussed the possibility of getting grant funds, approaching local organization and groups having charitable gambling fiends and establishing other types of fiend raisers to come up with some of the cost for constructing a bike park. The Council felt they should fund approximately $40,000 with the idea that the balance could be raised by other sources. If the City would proceed with this it would be the only facility like it in this area. Based on the use and revenue generated by the skate park, the feeling was that this type of facility should be self-supporting. MCP Contribution - Rick Wolfsteller indicated that there is $15,000 in the budget for funding the MCP. Last year in the budget deliberations the Council indicated that they would be reducing the annual contribution to the MCP. The 2000 budget allotted $25,000 for the MCP and the 2001 budget dropped this to $15,000. There was discussion on how long to continue funding for the MCP and the 2 Council Minutes - 11/16/00 future of the group. The Council decided to leave the $15,000 budgeted and review funding again next year. Rick Wolfsteller suggested that $90,000 in the capital outlay fund for funding the acquisition of industrial park land could be used as a possible source of funding for some of the items discussed. There was discussion on the amount of fiends that HRA had and whether any of those could be used. Roger Carlson indicated that based on preliminary information, it may be possible that a proposal would come up where the HRA would need all their funding sources to support the development and Roger Carlson didn't feel the city should be looking at using the HRA funds. Rick Wolfsteller cautioned the Council on the reserve funds. He stated the perception is that there is money in the reserve fund. However, a good portion of the money is committed for specific uses and the balance of the reserve fund is needed to fund operations until the city receives state aid and tax settlements in July. Clint Herbst suggested that the EDA money since it is designated for revolving fund loans is unallocated and should be considered. It was also pointed out that initially transfers from the liquor store were made to the EDA and the EDA could be paying some of the transfer back. The Council tabled further discussion of the budget to consider the assessment policy. City Engineer, Bret Weiss presented information which outlined the city's current assessment policies and summarized assessment policies used by other communities. Clint Herbst stated his position that any new construction should be fully assessed but any replacement of existing bituminous or curb and gutter should be funded through general taxes. The City Engineer submitted in map form a street inventory which designated the ages of the streets within the city. There is approximately 39.90 miles of city streets and 15.96 miles of these streets are 20 years or older. Streets that are 20 years or older are at the end of their design life and would need to be reconstructed within the near future. Bret Weiss provided examples of street design and costs. If the City is going to fund street maintenance through the ad valorem taxes an estimate of the cost for the replacement and maintenance of the streets would have to be determined. In initial estimates, the City Engineer projected that to reconstruct existing streets with curb and gutter would be approximately $7,516,800. To reconstruct streets that currently do not have curb and gutter would be $3,177,050. This would be a total of $10,693,850 for reconstruction. In addition overlay and sealcoat costs for streets would be an additional $10000+. If the city was going to embark on a program where the reconstruction work for just the core streets would be spread out over seven years, based on the engineer's preliminary estimates, the city would have to generate approximately $1,300,000 each year in taxes to cover the cost of the work.. Rick Wolfsteller presented some information that showed what the impact would be on a residence with a market value of $115,000 and a business with a market value of $100,000 if the city would levy for the streets. In the past the city has normally bonded for street improvements and assessed back the cost to the benefitting property owners. If the city would go to a tax levy, they may not be able to bond for these improvements since bond regulations require that 20% of the cost to be assessed. If the city cannot Council Minutes - 11/16/00 bond for the street improvements, then a reserve would need to be set up so that funds would be in place to cover the construction costs as they occur. If the city would go the route of levying for street improvements through ad valorem taxes, the first year the levy could appear on the taxes would be the year 2002. In addition to reconstruction of existing city streets, the City Engineer and Public Works Director also presented cost estimates for new street projects such as Fallon Avenue, CSAR 18 interchange and 7t" Street improvements. The Council also has to consider how to fund the city's share of the proposed project to improve CSAH 75 from Washington Street to Otter Creek. The Council discussed at length how much revenue would need to be generated in 2002 to cover the city's expenditures for street improvements. The Council discussed whether to begin with a smaller levy amount and build up to an amount that would equal the $1,300,000 needed to fiend the annual estimated street construction cost or to initially levy the full amount needed. The Council also discussed whether some of the street projects could even be delayed until the city would be able to levy for the improvement. Rick Wolfsteller stated that at the present time there are no levy limits and it is possible that this could change. If that happens then the city's ability to levy the necessary amounts needed for the street construction would be hampered. The Mayor asked about the bonded indebtedness of the city and whether as bond issues are retired if there would be funds the city could utilize for the street construction program. Rick Wolfsteller responded that most of the smaller bond issues would be retired within five year or so but the two remaining issues were large ones covering the wastewater treatment plant and the community center and run around 18 years. Mayor Belsaas asked that John Simola provide a list of the street projects and their estimated cost to be included in the next agenda packet. The City Administrator was requested to provide information on the outstanding bonded indebtedness. The Council felt that there needs to be an education process for the residents as far as the city's proposal to levy for street improvements rather than assessing them and the general feeling of the Council was that the first year's levy amount should generate at least $600,000. The Council then addressed the projects that were considered at the November 13" meeting, specifically the CSAR 75 Improvement, Project No. 98-17C. In reviewing the project, the Council determined that there were three properties that were affected. These properties which initially were proposed to receive an assessment should not be charged since it was not new construction but replacement. The Council went back to the budget discussion. The Council directed that in making final budget changes, no further use of the reserves should be made and that liquor store funds, or other sources should be considered. BRIAN STUMPF MOVED TO ADJOURN AT 8:30. ROGER CARLSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. ,s , w Recording Secretary 4