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City Council Minutes 06-25-2012 SpecialMINUTES SPECIAL MEETING/WORKSHOP — MONTICELLO CITY COUNCIL Monday, June 25, 2012 — 6:00 p.m. Mississippi Room, Monticello Community Center Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf Absent: None Others: Tom Kelly, Jeff O'Neill, Angela Schumann, Bruce Westby, Ann Johnson, Tom Moores, Matt Theisen, Cathy Shuman, Randall Johnsen, Bob Paschke, Tracy Ergen, Kitty Baltos, Megan Barnett Livgard, Ron Hackenueller, Dan Lemm, Lynn Dahl Fleming 1. Call to Order Mayor Herbst called the Special Meeting to order at 6 p.m. 2. Purpose of Workshop: Initial discussion of 2013 Budget and Calendar Jeff O'Neill thanked Tom Kelly for preparing the budget workpapers for the 2013 budget. The worksheets provided give a general overview for preparing next year's budget, including tax levy, valuations, and a list of items that should be considered. Jeff O'Neill explained that staff would like some direction from Council in terms of a levy amount from which they can work. 3. Workshop — 2013 Budget Process and considerations Brian Stumpf stated that would be a good starting point and verified that the preliminary levy has to be approved by September 15ti', noting the amount approved at that time could be later lowered but not increased. Tom Perrault stated that he would like to stay under $8 million. Torn Kelly explained that the total of $9.1 million that he arrived at came from the list of considerations, which would be the maximum needed if all the items were included. Clint Herbst asked about the sunset of some of the debt, such as the Community Center. Clint Herbst suggested that Council may want to consider borrowing from reserves for 2013 and then starting in 2016 they will have approximately $1 million more to work with when the Community Center debt payment ends. Tom Kelly pointed out some other capital needs that will be coming up in future years such as a fire truck and station. Lloyd Hilgart concurred with establishing a levy amount to provide a starting point for staff to work with. He also reminded Council that some of the $1 million available after 2015 could be used to help pay back the FiberNet deficit. Lloyd Hilgart commented on the possible shortages for the sewer fund and how to help pay the WWTF note; he suggested that should be kept in mind. Jeff O'Neill noted that there are also some other capital projects coming up such as the Fallon Avenue Overpass and Second River Crossing. Lloyd Hilgart asked about the itern that was listed for consideration referring to the road maintenance projects falling behind. Tom Kelly explained that those projects have been funded out of the Street City Council Special Meeting /Workshop Minutes —June 25, 2012 Page 1 Reconstruction fund but that will have to be replenished eventually. Tom Kelly noted that some of those projects are partly funded through special assessments. Bruce Westby commented that the City can advance fiords from the state aid fiords to help pay for qualified street projects. Glen Posusta talked about the changes in the property tax levy over the past 6 years. He would like to see the levy stay at about $7.9 million, especially with the downgrading of some of the major banks in the United States. Tom Kelly commented on the downgrading and noted that this does not affect the city too much. This will probably allow the city to get better rates on investments and borrowing for municipal bonds, as those instruments are higher rated, compared to the major banks. Tom Kelly pointed out that the City could face an adverse affect from the rating agencies by using reserves to balance the budget rather than levying for taxes to support the budget. Jeff O'Neill pointed out that the city did not draw on reserves for 2012, except for use of the electric franchise fees for lighting projects. Clint Herbst reiterated that he is open to borrowing from reserves for 2013 and then paying it back after 2015. Brian Stumpf cautioned on borrowing with the intent to pay back, especially if there are other funds that have to be paid back such as with FiberNet. Clint Herbst asked staff to be willing to make suggestions on capital items, such as equipment and projects that should or should not be funded. There was some discussion about the housing market and possible effects on revenue for the building department. Ron Hackemnueller explained that the city is probably close to 30% ahead of last year in permits for both residential and commercial. Matt Theisen commented that the Fire Department has talked about replacing an existing ladder with a 100 ft ladder to be able to be prepared for all possible incidents. Clint Herbst noted that there are some federal sources of funding that could be applied toward a piece of equipment like this. Bob Paschke stated that Public Works continues to look at grants and rebates to help offset potential costs, such as some of the needs at Bertram Park. Clint Herbst suggested that staff weigh their needs and rate the importance of those purchases. He would like to see each department meet with Council individually to make their case for their department needs. Lloyd Hilgart talked briefly about the FiberNet situation and was wondering how that would continue to be funded. Tom Kelly suggested that the Liquor Store fund would probably carry most of the deficit. Jeff O'Neill said they expect to have a better idea of FiberNet's status by September when Gigabit Squared completes their study. Lloyd Hilgart asked about the city's approach if the 2012 budget expenditures come in less than budgeted. Torn Kelly said they would look at the fund balance and figure out where there are areas that have needs and make operating transfers to help fund deficits or City Council Special Meeting /Workshop Minutes —June 25, 2012 Page 2 future projects. Clint Herbst asked if Tom Kelly has a list of 1 -time capital expenditures to look at the amount of dollars that would be available to allocate for 2013. Tom Kelly commented that there are not really any of those type of expenditures which would free up some funds. Tom Kelly explained that the department heads have done a pretty good job of planning their budgets and keeping track of what they spend. Clint Herbst summarized by asking staff to be reasonable in their budget requests and that Council would meet with each department head along the way. All Council members concurred with that plan and Glen Posusta also noted that Council would probably be open to looking at COLA and /or STEP adjustments for 2013. The goal will be to aim for a property tax levy not to exceed $7.9 million. 4. Adjournment Mayor Herbst adjourned the Special Meeting at 6:42 p.m. Recorder: Catherine M. Shuman (imp Approved: July 9, 2012 Attest: ninistrator City Council Special Meeting /Workshop Minutes — June 25, 2012 Page 3