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City Council Minutes 09-08-2008 Budget WorkshopCouncil Minutes: 9/8/08 Budget Workshop MINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Monday September 9, 2008 - 5:30 p.m. Members Present: Clint Herbst, Wayne Mayer, Tom Perrault, Brian Stumpf and Susie Wojchouski. Members Absent: None 1. Call to Order. The meeting was called to order at 5:30 p.m. The purpose of the workshop was to review and discuss the proposed 2009 budget and tax levy. 2. Budget and Tax Lew for 2009. Jeff O'Neill summarized changes made to the budget since the Council's last budget workshop. He felt staff did a good job in getting the budget as lean as it could be. Any further cuts would result in a reduction of services. The goal was to have a tax levy of $7,750,000. The following are the proposed changes: Fire Department: The full-time fire chief position was removed and the motor vehicles budget was reduced from $175,000 to $161,000. Building Department: $15,000 for temporary employee was eliminated. Public Works: The Public Works Director's time was split out with 20% going to sewer and 10% going to water and 70% to public works. The Assistant Public Works Director position was removed. The City Engineer's time was also split out with 3% going to sewer and 3% going to water. The time charged to sewer and water will be picked up the utility rates. The utility rates will increase by 5%. Although currently the rates cover maintenance and operation it does not take care of depreciation. Tom Perrault asked if the new Public Works Director's time would be split in the same manner. Tom Kelly responded that even though the new person may come in at a lower step than the current Public Works Director, the time split would be the same. Jeff O'Neill indicated that some of the duties of the Public Works Director have been distributed among the Street Department, Sewer and Water Department and Engineering. Streets/Alleys: Fuel amount was reduced by $10,000 and the sealcoating budget was reduced $20,000 by reducing the area that would be sealcoated in 2009. Senior Center: The amount was set back at 2008 levels. Library: Remained at $38,000 which is the same as it was in 2008. Council Minutes: 9/8/08 Budget Workshop Street Reconstruction: The tax levy was reduced from $350,000 to $300,000. At this time a reconstruction project for 2009 has not been defined. In previous years the City had levied $500,000 for this fund. It was noted that with assessments (approximately $91,000); a transfer from the liquor funds ($150,000) and the tax levy of $300,000 there would be $541,104 in the street reconstruction fund. Community Center: By reducing some capital outlays the tax levy would amount to $1,356,116 which is about a 5.75% decrease from the 2008 amount. With the changes noted above the levy would be $7,981,291 which is $231,291 above the Council's recommended $7,750,000. By paying of the 1999B bonds the City could reduce their levy by an additional $149,100 making the overall levy $7,3 82,191. Tom Kelly presented a number of possibilities for further reducing the levy by the $82,191 to make the $7,750,000 levy desired by Council. Possibilities include using reserves, reducing services, increasing fees or any combination of the options listed. Clint Herbst felt being down to $82,000 over the proposed levy was more palatable than the levy proposed originally. He asked how much the MCC had as unspent reserves. Tom Kelly indicated that as of 12/31/07 the balance was $506,000. Clint Herbst stated that departments that are frugal with their money should not lose out. Brian Stumpf said the $80,000 that is proposed to come from reserves means the reserves won't be available to handle other things that come up. Jeff O'Neill said in the past the City has had liberal budgets which allowed the City to accumulate reserves and pay for things as they come up. Susie Wojchouski asked about the $39,000 for the Shade Tree fund and what that covered. Tom Kelly responded it was for replacement of trees on City property, inspection for Dutch elm disease, removal of diseased trees and the tree planting program. Tom Pawelk, Parks Superintendent explained the tree planting program and what portion of that cost the City picks up. He also explained the process for replacement of diseased trees and the City's cost participation in that program. Tom Pawelk noted it is difficult to budget for the Dutch elm disease program because it is not known until after the inspection work how many trees will have to be removed and replaced. Wayne Mayer questioned items related to the Xcel ballfields. He noted on page 37 there is $10,000 listed under improvements and asked what that covered. Tom Pawelk indicated it was for the roof and siding on the shelter and the new roof for the concession stand. Wayne Mayer said he would like to see these line items broken out in a little more detail. Council asked what was covered by Building Repair Supplies. Wayne Mayer said from his perspective it looks like the $10,000 for improvements is covered in other line items. He emphasized the need to break it down better. John Simola, Public Works Director responded that the budget worksheets contain more detail. Susie Wojchouski asked about the $4,500 under electric. Tom Pawelk explained it for the lights and the cost of bringing the lights to the new shed. Wayne Mayer felt when one line item is 30% of the budget it should be broken down in more detail. Wayne Mayer asked about the marketing budget for the IEDC and why that wasn't included. Tom Kelly replied that the EDA budget did not affect the tax levy and for that reason was not 2 Council Minutes: 9/8/08 Budget Workshop included in the budget information. Clint Herbst commented on the cost to have a billboard located by Rogers when the City has billboards in Monticello that could be used. It was noted that the EDA has a marketing budget as does Economic Development and there was some discussion on what these were used for. These are two separate funds and two separate activities. Clint Herbst felt one time expenses were an appropriate use of reserve funds. .Brian Stumpf stated in the future there will be a number of buildings the City will need to construct and he questioned whether the City would use reserves for that. Tom Kelly reviewed which funds had adequate reserves. He noted the debt fund may have more monies than what is needed because of assessments coming in from old bond funds that have been paid off. These funds could be used for whatever purpose the City deems necessary. Tom Kelly felt these funds could be used for one time expense. Construction funds are in the hole because of the interchange. The fund is about $500,000 short. The liquor store had a high reserve which is being used to fund the fiber optics until the revenue bonds can be released. Susie Wojchouski asked what happens if the City gets some unexpected large expense. Where does the City get the money if it is not budgeted? Tom Kelly said some cities set aside a contingency fund from 1 % to 5% for unexpected things. Brian Stumpf said the City should be setting money aside for the big ticket items that they know they need to take care of. Wayne Mayer said if it is in the plan to expand the DMV building then something should be set aside in the budget this year. Tom Kelly stated that he is trying to work on an RFP for the project between other duties and Bruce Westby is getting a site plan drawn up. Tom Kelly stated that the previous finance director had budgeted for capital items but did not earmark them so the City had reserves but they weren't designated Jeff O'Neill updated the Council on the YMCA acquisition. A task force of City and County officials and staff has been working to get the necessary funding for this acquisition. The concern was that if the City and County did not utilize the match funds from LCCMR in a timely manner the funds may not be available their use in the future. The focus is to try to acquire property equaling $3,600,000 and come up with a plan to purchase additional acreage in the future. The YMCA has indicated they are willing to work out an arrangement for the purchase of the property in increments. One plan being discussed is to have the County put up the matching funds of $2,400,000 with the City to repay their share to the County over a period of three years. Starting in 2009 the City would be paying $400,000 to the County. The first year's payment would come from Park Dedication funds. For subsequent years the City would have to levy the funds. Jeff O'Neill stated the LCCMR grant requires the area purchased to be on the water or be environmentally sensitive. The City's goal in looking at this area was to put in ballfields. Brian Kirk suggested a long term lease over the portion of the property the City needs for ballfield use. The YMCA Board would have to approve any kind of lease agreement. The City could segment the development of the ballfields into smaller projects. The state might be more amenable to including match funds over a period of years. Tom Kelly said there is $1,276,000 in park dedication funds, consolidated bond funds are available in the amount of $2,629,000 making a total of $3,900.00. Tom Kelly also talked about the capital revolving fund which currently has a balance of $2,200,000. This would take the City through a couple of years of payments. Clint Herbst felt the YMCA was a one time opportunity. Susie Wojchouski said this information about the YMCA was new to her and she thought this should have been discussed in a workshop. Council Minutes: 9/8/08 Budget Workshop The YMCA's continued use of a portion of the facilities was discussed. The YMCA would have a dedicated space for their use and could have access to other areas. Their designated space is their current day camp site. The use of the facility by the YMCA as well as the City and County could be considered a selling point. The County's participation requires that YMCA remain a park. Susie Wojchouski asked if the City purchases the land how are they going to provide for the infrastructure needed for development. Clint Herbst noted when the lawsuit is settled the City will have access to the funds that were used for the lawsuit and could possibly use them for the YMCA. The first improvement to the property will be the most expensive because the City will need to have wells on the site. Clint Herbst suggested plaques for donations made for improvements or land acquisition While Susie Wojchouski felt the City should move forward with the YMCA there are other things more pressing such as the DMV building, Public Works expansion and the fire hall on the south side. She questioned the wisdom of adding an amenity when there are other areas that are hurting. She asked if the City had anything to sell. Brian Stumpf said if the City had property to sell now is not a good time to market it. Park dedication funds can be used for park acquisition but not park development. Susie Wojchouski said she does not want it in the contract that there is a time frame for when the ballfield development will be done. It was suggested going with the preliminary tax levy of $7,750,000 with the difference coming from reserves. Tom Perrault asked what the tax capacity value was. Tom Kelly said there is a problem with the program the County has from the state and that information is not available. Monticello has had a fair amount of commercial growth but that is offset by the decreased value for the Xcel property and a lower residential growth. It was felt the tax rate would be fairly flat. Tom Kelly estimated the rate at 47.867. Tom Perrault felt there should be no tax increase. Susie Wojchouski asked about the state pulling their aid money. Tom Kelly said in 2009 there is $355,000 in the transportation aid. When the state faces a budget shortfall they generally cut LGA and other aids. Brian Stumpf asked if a decision needed to be made on the YMCA. Tom Kelly said they were only looking for direction. 3. Closing. The meeting closed at 6:55 p.m. ~J ~ ~5 ~~ Recording Secretary 4