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City Council Minutes 08-25-2008 Budget WorkshopMINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Monday August 25, 2008 - 5:30 p.m. Members Present: Clint Herbst, Wayne Mayer, Tom Perrault, Brian Stumpf and Susie Woj chouski Members Absent: None 1. Call to Order. Mayor Herbst called the meeting to order at 5:30 p.m. The purpose of the special meeting was to review the proposed 2009 budget. 2. Budget Review. City Administrator Jeff O'Neill provided some background on the proposed 2009 budget noting that staff has worked hard to keep costs as low as possible without cutting services. Tom Kelly submitted the preliminary budget which will need to be approved by the City Council at their September 8, 2008 meeting. Tom Kelly had asked staff to prepare their department budget based on need and try to come up with a 5% decrease from the 2008 budget. Tom Kelly noted various changes including: 1) A 3% cost of living increase for employees; 2) Negotiate health insurance cost. He stated that Health Partners had a 10% increase in their insurance quote but it was still considerably less than what the other firms had quoted the City; 3) Creation of a Community Development Administrative Assistant. The cost of this position would be offset by reducing the amount spent on consultant fees; 4) Hire an Assistant Public Works Director; and 5) The Fire Department's request for a full time fire chief starting in July and increasing the wages of the fire marshal. Some projects that were not funded in this budget were: 1) YMCA land acquisition; 2) New fire station; 3) Construction of Public Works facility or additional land purchase; 4) Expansion of wastewater treatment facilities; and 5) Feeding of the swans. Tom Kelly stated that another item that needs to be done is increasing the sewer and rates by 5%. The current rates cover operating costs but not depreciation. The City's levy limits for 2009 is $7,668,206 which includes a 3.9% inflationary adjustment and a 1.008824 growth factor. Deducted from this total is the utility valuation transition aid, which is new this year, in the amount of $355,729. Tom Kelly pointed out that debt service funds are outside the levy limits. Without using any City reserves the property tax levy would be $8,833,330. There are three bond funds that currently have enough funds accumulated to pay off the balance of the bonds without using a tax levy. Tom Kelly is recommending that these reserves in the amount of $240,000 be used to reduce the overall tax levy from $8,833,330 to $8,593,330. He added that tax capacity numbers will not be available from the County until September. The City's tax capacity will probably increase but not at as high a rate as in previous years. Tom Kelly was requesting clear direction as to what the Council would be comfortable with as far as a property tax levy. Clint Herbst felt any changes should be made at the point when the preliminary budget and levy are considered rather than at the time of the final levy. Wayne Mayer asked about the franchise fee with both Xcel and Wright-Hennepin Electric. John Simola responded that they are working with Wright-Hennepin Electric on this issue. John Simola suggested that the franchise fee could be used to enhance the lighting along TH 25. Susie Wojchouski felt the City may need to look at not hiring more staff. It was felt hiring additional staff was hard to justify when development has slowed, costs have increased and the City has increased their technology to make the work process more efficient. The City has brought a lot of people onboard and it was questioned when the economy picks up if the City will again be hiring more people. Wayne Mayer asked Steve Joerg about the 62% increase in the Fire Department budget. Steve Joerg said the Fire Department is behind the times now and their needs have to be met. The Fire Department needs to have full time staff as they are behind on things such as fire inspections and OSHA logs As far as the new fire station on the other side of town they had considered the new Public Works facility and getting some bays added on for the Fire Department. He stated the Fire Department's response time is going down as far as getting to the station. Steve Joerg said even though the fire hall isn't a requirement for today it will definitely be needed. Included in the Fire Department budget is $91,000 which is the balance for the fire truck that is currently being bid and $225,000 for the next truck that needs to be replaced. In addition they are budgeting $20,000 for a vehicle for the duty officer. Wayne Mayer asked about the duty officer vehicle. Steve Joerg responded referring to the requirements of NIMS (Nation Incident Management System). It was felt that another set of eyes needs to look at the incident. By supplying the duty officer with a vehicle it gives the duty officer a chance to respond first and be on the scene when the other firefighters arrive. When the duty officer pulls up to a scene he can see what hazards there are and plan properly. Susie Wojchouski asked if the vehicle is equipped with sirens, etc. Steve Joerg indicated the vehicle would have sirens and certain other equipment. Steve Joerg felt this is a big issue as far as firefighter safety. Susie Wojchouski asked if they have a pick up truck that could be used. Steve Joerg said they have backup vehicles but they are used to carry water. At the present time Marc Simpson is the only firefighter certified to do fire inspections and he puts in 20 hours a month at $13/hour and the Fire Department is asking that the price be increased to $15/hour. Steve Joerg explained the process used in conducting fire inspections. However Steve Joerg felt there was a greater need to hire a Fire Chief before a Fire Marshall. He cited Rogers and Elk River as examples of cities that recently hired a Fire Chief. Susie Wojchouski asked about the special revenue funds under the library. Tom Kelly explained that the library doesn't have any other sources of revenue other than property tax Tom Perrault asked about the 5% increase for the Senior Center. Tom Kelly responded that the increase was to cover the cost of gas and electricity; approximately $7,500 for electric and $1,500 for gas. Jeff O'Neill commented on the administrative assistant for Community Development. The idea is that this assistant position would free Angela Schumann to take over some of the work now being done by consultants. Although residential growth as slowed there is still a lot of general development activities coming up such as boulevard mowing and other lower level administrative duties that the administrative assistant could perform. This position would also help as far as getting a quicker response to citizens' problems. Jeff O'Neill pointed out with the storm related work the Community Development Department is not able to get assistance from other staff such as the receptionist and building inspections clerk. Angela Schumann said when times are tough the residents are looking to the City to resolve their concerns. This position with benefits would pay about $48,000. In turn the consultant's budget was cut from $145,000 to $70,000. Tom Kelly said if the administrative assistant position for the Community Development was cut the consultants budget would have to be increased. This position would also support the Building Department and Engineering Department. Wayne Mayer asked about the "Professional Services Engineering" fees and Bruce Westby indicated it was basically WSB & Associates engineering fees. Tom Kelly added that the City is not anticipating many projects coming up in 2009. Wayne Mayer also brought up the law enforcement contract. This budget item was based on the current contract agreement which runs through 2009. Tom Kelly added that the City did increase the contract by adding 4 hours a day in additional coverage. Susie Wojchouski felt the service the City gets from Wright County has been good and that the cost of a establishing a local department would be expensive. There was some discussion on dog complaints. Brian Stumpf stated at the last Police Commission meeting the Wright County Sheriff's Department indicated they would take the initial call on a dog complaint and Patty Salzwedel would do any follow up. Susie Wojchouski asked Tom Kelly if there were any areas that raised a red flag with him. Tom Kelly talked about the facility needs. The fact that the City is not setting money aside for these things is kind of worrisome especially since the City does not know how soon they will need them The YMCA property is another item where no funds have been set aside. Jeff O'Neill stated park dedication fees would carry part of the cost of the YMCA Tom Kelly talked about the bond funds. Those funds are restricted until the bonds are paid off. After the bond is paid off the funds can be used for other things. Tom Kelly will be looking at the recall date for upcoming bonds. Susie Wojchouski asked if he had any information that compared the city's levy with other cities. Tom Kelly said he did have the figures for 2008. Where Monticello will rank among other cities in 2009 depends on the increase in tax capacity rates and what other cities spend. The tax capacity value set in 2008 is what the 2009 budget is based on. Tom Kelly said the foreclosures in Wright County in 2006 were twice what the County had before. In 2007 the County foreclosure figure from 2006 was doubled and it is expected to double again in 2008. There was discussion on general city growth. The Fire Department staff felt they are beyond a volunteer department A full time position for the Fire Department could take on a lot other responsibilities such as doing specifications for equipment, fire inspections and other work now done on a volunteer basis. The Fire Department talked about how many hours they spend away from their families. Susie Wojchouski asked if increasing the fire inspector's hours to 32 hours would make a dent in the work load and Tom Perrault asked what it would take to qualify another individual to be a fire inspector. Tom Kelly asked for a levy amount that the Council would feel comfortable with for the September 8~' meeting approving the preliminary budge and levy. Tom Kelly suggested $8,593,330 which uses reserves of $240,000 and the transfer of $150,000 from the liquor store to the Street Reconstruction fund. Susie Wojchouski asked about the fiber optics. Tom Kelly said there is nothing in the 2009 budget for fiber optics. Tom Kelly recommended increasing the overall property tax levy by $993,000 over the 2008 levy or $8,593,330. Susie Wojchouski said this does not achieve the 5% decrease from last year's budget. Susie Wojchouski would like to see the City stay at $7,500,000. Clint Herbst said if funds are taken from reserves it should be for one time expenditure such as a vehicle or piece of equipment. A levy of $7,500,000 would require $1,333,330 out of reserves. $7,600,000 is the City's current levy. Wayne Mayer agreed that the levy should be kept the same as in 2008. Clint Herbst expressed concern that they are still going after the reserves. Jeff O'Neill asked if they would be open to adding 2.5% making the maximum levy $7,600,008. Tom Kelly recommended utilizing the $240,000 in debt service funds making a levy amount of $8,593,330. Clint Herbst suggested a levy amount of $7,800,000. Wayne Mayer recommended $7,750,000 or $150,000 more than last years levy. There was some discussion on how the City's reserves should be replenished. The budget workshop closed at 7 p.m. Recording Secretary