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City Council Minutes 08-24-2009 SpecialMINUTES SPECIAL MEETING — MONTICELLO CITY COUNCIL August 24, 2009 — 5:00 p.m. Members Present: Clint Herbst, Tom Perrault, Glen Posusta, Brian Stumpf, Susie Wojchouski Members Absent: None 1. Call to Order and Pledge of Allegiance Mayor Herbst called the meeting to order at 5 p.m. and declared a quorum present. 2. 2010 Budget Workshop Jeff O'Neill thanked Dept heads for putting together budget information and keeping expenditures down. He noted that Wright County had provided some invalid data that was used during the budget process to figure tax information. The numbers will need to be recalculated to arrive at a recommended levy amount for 2010. Deadline for approval of preliminary levy is September 15th. Tom Kelly noted that the good news is that most departments were able to cut back in their expenditures budgets. The general fluid is actually lower than 2009. Bad news is that, in calculating utility valuation, the County used wrong values for tax capacity, resulting in a drop of tax capacity. The original estimated tax capacity from the County of $16,648,236 would be closer to $13,394,386 resulting in a tax rate climb to 62.129 (from 49.191 for 2009). City staff just found out about the error this afternoon and is waiting for feedback from the County. Tom Kelly pointed out that Transition Aid for 2010 is $67,767 compared to $355,729 for 2009. This is quite a bit less than originally estimated when the legislature passed the law. The Coalition of Utility Cities (CUC) group plans to meet with State officials to find out why the utility transition aid is not creating the results that were expected. It is not known whether there would be any change instituted for 2010. Tom Kelly noted that we need to come up with a preliminary levy to be certified by Sept 15. I-Ie is suggesting that Council keep in mind that the figure can be adjusted lower but not increased when the final levy is approved. If there should be a change in transition aid to benefit the City, Council could decrease the final levy in December. Tom Perrault asked whether values would continue to decrease in the next years that would affect tax capacity. Tom Kelly noted that tax capacity would probably be affected negatively for a few more years. Right now there are not a lot of commercial sales to provide a goo estimated calculation of values in that area. Brian Stumpf noted that City is in better shape due to large number of city —owned properties and significant reserves. However, he does not favor using reserves to balance the budget. Susie Wojchouski suggested that perhaps the first thing would be to go back to staff and ask them to figure out what else could be curt. Special Council Minutes — August 24, 2009 Page 1 Brian Stumpf noted that the public is not educated in tax levy process. When they look at tax bill, they want to know why the City raised their taxes even when the City has lowered their share of the tax. Many do not understand how the other taxing jurisdictions play a role in their taxes. Clint Herbst suggested that City should come up with a plan to get the word out to the residents in regards to taxation. Jeff O'Neill asked if Council would want staff to back into the numbers to figure out what tax levy would be needed to hold taxes at a certain rate. This could provide some kind of benchmark for Council to look at when determining preliminary levy. Council asked if it is usual for the County to take so long to get information to the City. Tom Kelly noted that last year there was a major change in calculation methods and it is taking a lot longer to get the information from the County. Under the corrected figures, no increase in the tax rate would raise approximately $6.78 Million in tax levies. This is quite a bit lower than the current levy of $7,500,000. The proposed preliminary levy, using the invalid data from the County, was $8,321,865. Tom Kelly discussed some of the requests from Department heads: • The Shade Tree fund calls for the brush chipper to be replaced; the safety features are in really bad shape. They were considering purchasing a new or used one and selling the old one. Clint Herbst suggested that maybe it could be repaired to work another yea. Tom Moores noted that it is one of the most dangerous pieces of equipment that Public Works owns. Another consideration would be to contract out the service and cutback on staff hours or share equipment with a neighboring city (i.e. Big Lake). Glen Posusta suggested that this is a service that we might want to drop and have residents make their own arrangements. Tom Pawelk noted that they average three chippings a week to residents plus the City's use. Clint Herbst made it clear that if we take a service away, it will mean a cut in man hours. If we want to continue to use the equipment, staff needs to find a way to save money. Clint Herbst suggested we try to save money other ways rather than cut staff. • Glen Posusta suggested that City look at voluntary furloughs of staff. Perhaps there are employees willing to take time off without pay to help preserve jobs. Susie Wojchouski suggested that a formal survey could be completed prior to next meeting so Council knows exactly what the response would be. • MCC has increase in part-time staff budget due to minimum wage requirements. There is some increase in maintenance and repair due to age of building and equipment. These funds are budgeted to come from unspent funds that roll over into reserves. • Jeff O'Neill asked about the street reconstruction budget — is it possible to reallocate the amount that normally would be levied for that and move it to other areas where needed? Clint Herbst thinks that the City should not do that; it is important to not get too far behind in street improvements. Tom Kelly noted that Bruce is working on a plan for reconstruction of West River Street. Brian Stumpf noted that he is leery about putting an assessment on residential property right now. • Glen Posusta suggested that City just do an overlay on Fallon and wait a few years before doing a complete project. Special Council Minutes - August 24, 2009 Page 2 Jeff O'Neill suggested that Council look at electric surcharge revenue. This could be used to supplement general fund revenues. There are grants available that City could apply for and use that funding for street lighting capital costs. Bob noted that the grant requires that City prove that lighting will improve efficiency and save money. Clint Herbst is hesitant about changing purpose of surcharge funds. Susie Wojchouski asked about "city equipment rental fee" which appears in quite a few departments. Tom Kelly explained that departments are charged a fee equal to depreciation to build a fund to be used for replacing equipment. This evens out the budget so that the large expenditures are offset by prior years' savings and will help level out the levy over the years. Tom Kelly noted that the rental fee is based on actual cost and not necessarily replacement cost. Jeff O'Neill suggested that we look at law enforcement hours; it might be possible to cut back on some of those hours since the number of calls has decreased quite a bit. Brian Stumpf noted that he had talked to Dan Anselment and Dave Anderson about law enforcement hours. They told him that so far no other community that contracts has cut back their hours. Brian doesn't feel that City should consider cutting hours. Clint Herbst agrees that hours should not be cut; however, we should use the City's speed trailer and not pay the County to use theirs. Building Inspection activity — inspection time for building permits has gone down quite a bit. Staff has been concentrating on other components of community development such as rental housing, blight and other licensing. Gary Anderson noted there are about 1600 permits are still open from storm damage and there are still a number being issued. For 2009, there are only six new construction home permits. Majority of homes being sold are foreclosures or existing stock Clint Herbst asked how much the building department is involved with foreclosed homes. Gary Anderson noted that some of the foreclosed homes that were bought are generating inquiries to the building department based on poor work that was done to repair problems such as water damage caused by frozen pipes. They are also running into issues with repairs being attempted without pulling necessary building permits. Clint Herbst asked if Council should consider more stringent requirements to address this problem. Susie Wojchouski asked if Monticello is doing something different than other cities in keeping building inspectors occupied. For example, Big Lake is cutting back staff, but Monticello can't keep up on tasks such as rental inspections and licensing. Does Monticello need to do these extra things? Brian Stumpf noted that the reason for the difference is not that Monticello is trying to keep building department staff employed, rather that we are trying to maintain neighborhood quality. Susie Wojchouski asked how the city addresses the house problems and how much should be done by city staff. Gary Anderson explained that phone calls and inquiries received through the citizens service desk. Many of them are related to property maintenance, especially from storm damage, prior issues, poor ventilation, and rental mismanagement. Jeff O'Neill suggested that several members from Council may want to meet with Community Development staff to talk about some of the issues they are dealing with in property maintenance. • Jeff O'Neill noted that PW is looking at some improvements at the shop related to OSHA requirements. Although Ice and Snow budget is reduced, the cost of sand and salt has increased significantly. Tom Moores noted that the County has shown a cost Special Council Minutes - August 24, 2009 Page 3 savings in pre - wetting the roads with a chemical prior to snow storms to help keep roads clear. The city is preparing some equipment to try this in the city this year. Bob noted that Public Works staff has gone to DOT training related to snow removal and calibration of equipment for sand and chemical application. Jeff O'Neill summarized that staff will go back and work on further adjustments to their budgets once the City receives the correct information from the County. New information will be brought to Council at the next budget workshop tentatively set for Monday, August 31 at 5 p.m. Susie Wojchouski asked meaning of "funding source" in the CIP document. Tom Kelly explained that is the source of the funds that would be used to purchase an item. 3. Adjournment TOM PERRAULT MOVED TO ADJOURN THE MEETING AT 6:50 P.M. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. Recorder: Catherine M Shuman Approved: September 14, 2009 Attest: Cg&&4inistrator Special Council Minutes - August 24, 2009 Page 4