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City Council Minutes 11-08-1999 SpecialMINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Monday, November 8, 1999 - S p.m. Members Present: Roger Belsaas, Roger Carlson, Clint Herbst, Brian Stumpf and Bruce Thielen Members Absent: None Mayor Belsaas called the meeting to order at 5 p.m. and declared a quorum present. 2. Discussion of Communi Center Debt Refinancin O tions and Existin Debt Schedule - Mark Ruff -Ehlers & Associates. Representatives from Ehlers and Associates came before the Council to discuss options available to the City for refinancing the short term debt on the Community Center. The short term debt is due in February, 2001 but the bonds can be called without penalty an February, 2000. When the Council initially discussed long term financing they were looking at 20 years. The information submitted to the Council had terms of 1 ~ or 15 years. Since the Community Center refinancing bond would not be a genera] obligation bond the interest rate would be slightly higher. Mark Ruff talked about wrapping the debt and noted the advantages and disadvantages of that option. It was noted that the bonds that have been issued over the last 5-6 years are all doing well as far as cash flows. It was the recommendation of Ehlers and Associates that if the City decides to issue a bond it should be done in the early part of the year since bond sales were generally better then. Bruce "Chielen asked about the time frame for issuing the bond. Mark Ruff indicated that they would need 3-4 weeks lead time and suggested that if the Council could make the decision on whether or not to issue a bond by the end of January it would still give the them sufficient time to do so. The Council directed staff to continue to work on the debt refinancing and possible bond issue and schedule it for the first meeting in January. 3. Discussion of Year 2000 Bud et and Tax Lev . Rick Wolfsteller noted that the preliminary tax levy of $4,848,611 that was approved by the Council was set at 5% more than the 1999 levy. At the time of the preliminary levy the City's property valuation was unknown. Because of depreciation of the power plant and dropped values of other property classifications, the City's valuation dropped by $38,000. The Council discussed the levy amount, mill rate and valuation and how they would be impacted by the City's proposed budget. If the Council's goal is not to increase the amount of the City's share of real estate taxes that the property owner pays, then the Council needs to give some direction as to where the City should cut back. It was anticipated that $125,000 of the proposed preliminary levy increase of $230,886 would go towards the capitalized interest and other costs associated with the bond issue that was being proposed. Special Meeting Minutes - 1 ] /8/99 One area the Council suggested trimming was t11e contributions to other entities. These contributions are as follows: - Central Minnesota Initiative Fund - $6500 ^ YMCA - $7500 • MCF - $10,000 (Reduce funding from $35,000 to $25,000) - Community Education - $17,000-$17,500 - Walnut Street -Elimination of the paver block far the crosswalks - $11,000 - Senior Citizens - $3,000 (Reduce funding from $37,000 to $34,000 ifthe $37,000 was allocated to the seniors rather than for utilities) - Riverfest - $2,000 In discussing these cuts, the Council noted that because funding was reduced or eliminated did not mean that the Council did not feel that these programs had merit but rather it was one of the few areas where the Council could make reductions. They noted that even though funding may be eliminated or reduced for the 2000 budget, the Council could in future years restore these budget cuts. If the entities whose contributions were cut ar eliminated wanted to submit something in writing to the Council documenting their need for the funding, the Council would consider that information for future City budgets. Barb Esse from the MCF spoke to the Council on the work that MCP does and what it has achieved aver the past years. She urged the Council not to reduce the MCF budget contribution. Brian Stumpfnoted that the City's budget contribution to the MCP was originally far a three period which has expired. The fact the City reduced and did not eliminate the MCP contribution validates the Council's support for the work the MCP does for the community. Whether to include the paver block for the crosswalks in the Walnut Street Improvement Project was reviewed. .iohn Simola pointed nut that this was an extremely good price for the paver block and it was unlikely that the City would get that price again if they would decide at some later date to include the paver block. Bruce Thielen felt the black should be retained as part of the contract as it complemented the development in the area. It was argued that the paver block was an amenity and not a necessity and therefore could be cut. Jahn Simola was directed to find out if the City eliminated the paver block from the contract how much of the $11,000 cost savings would the City realize. Rick Walfsteller noted that $7,600 relating to the lease far the fitness equipment for the Community Center needed to be added to the budget. The direction of the Council was that levy should be set at $130,000 more than 1999's levy with reductions made as noted above and inclusion of $7,600 for the fitness equipment. 4. Discussion of Five Year CIP Budget Rick Wolfsteller noted that a thorough review and discussion of the five year CIP budget would 2 Special Meeting Minutes - 11/8/99 probably require more time than was available at this meeting. The elements of the five year CIF budget were briefly reviewed and it was noted that adoption of the CIF was not required as part of year 2000 budget process. Rick Wolfsteller noted that many of the capital outlays items that were removed from 2000 CIF budget were rolled over to the 2001 CIF budget. Rick Wolfsteller had prepared three schedules as part of the CIP budget document. Schedule A showed the funding needed if the cost of the capital outlays were paid for in one year. Schedule B showed the funding needed if the cost of the capital outlays was spread out over 10 years and Schedule C showed the cost spread out over ] 5 years. Rick Wolfsteller felt that Schedule C was more realistic but noted that even with spreading the cost over 1 S years the City could still expect a healthy increase over what was levied this year. It was estimated that this would be a 15%-20% increase and would not include any increase in the general fund operations. Rick Wolfsteller noted that this is a worst case scenario in that it assumed no change in the City's valuation. One of the CIP expenditures the Council discussed was the improvement to the City's core streets. John Simola explained what area made up the care streets and why the improvement was needed. It was pointed out that the CIF budget document assumed the property owners would be assessed for 50% of the cost instead of the 2U% that was assessed when the work was done in 1977. Rick Wolfsteller stated that the CIF budget document should reflect what the Council would actually be willing to spend for improvements. If the CIF budget was not realistic and the Council was not comfortable with the proposed expenditures, the Council should target a number that they felt they could live with. The Council indicated that the CIP budget document merited another meeting. BRUCE THIELEN MOVED TO ADJOURN AT 6: ~0 F.M. ROGER BELSAAS SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. Recording Secretary -~ 3