City Council Minutes 01-14-2013 SpecialMINUTES
SPECIAL MEETING — MONTICELLO CITY COUNCIL
Monday, January 14, 2013 - 5:30 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Mayor: Clint Herbst
Council Members: Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Others: Jeff O'Neill, Wayne Oberg, Bob Paschke, Bret Weiss, Ann Eckman, Tom
Moores, Steve Joerg, Ron Hackenmueller, Angela Schumann, Tracy Ergen,
Matt Theisen, Kitty Baltos
1. Call to Order
Mayor Herbst called the special meeting to order at 5:30 p.m.
2. Purpose of Workshop
a) Financial planning and management setting for 2013 -2016
b) Establishment of Time Sensitive Acquisitions Committee
c) Workshop Schedule and Goal- setting process for 2013
Jeff O'Neill explained the purpose of the special meeting and summarized above items.
He said the financial planning topic is a preliminary look at 2014 budget preparations.
3. Review and discuss financial planning and management setting for 2013 -2016
Wayne Oberg provided a printout from the League of MN Cities called "Property Tax
101" for council members. He went through a presentation highlighting various items
related to property taxes. He noted the relationship between the property tax capacity
value and rates. He showed a graph of the property tax levy over the last 10 or so years.
Wayne Oberg showed the relationship between tax rates in 2012 and 2013 and pointed
out that, if the tax rate had been kept the same, the city would have generated quite a bit
more revenue from property taxes. Wayne Oberg touched again on some of the
challenges that the city will be facing in coming years: MCC debt service, unpaid special
assessments, water access fund, sanitary sewer access fund, and financing of new
projects.
Wayne Oberg talked about the debt service levy from 2011 -2022 and noted that the city
will need additional funds through 2016 for debt payments and then the debt levels off.
Those lower levels, however, may be offset by new debt depending on what projects the
city undertakes in the next few years. Wayne Oberg went through some of the future
major projects that are on the list for future years such as Fallon Avenue Overpass, street
reconstruction improvements, Trunk Hwy 25 improvements, Bertram Chain of Lakes
acquisitions, and fire truck. Wayne Oberg pointed out that the city is at least $30M under
their debt limit at this time.
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Wayne Oberg summarized by stating that staff will be looking to Council for direction
for the levy for next year and going forward. Jeff O'Neill added comments to Council in
this regard to see what Council would consider in future levy increases.
Brian Stumpf asked staff to comment about the water and sewer funds that are depleted.
Bret Weiss and Wayne Oberg pointed out that the Water Access Charge and Sewer
Access Charge funds are running out of fiords because of the lack of development. When
development comes back, those funds would be refreshed for future infrastructure.
Wayne Oberg pointed out that as long as development turns around, the city should be
fine. If not, there may be some funds needed for debt service. Brian Stumpf asked about
the additional tax capacity from commercial development. Jeff O'Neill pointed out that
the levy was decreased and, therefore, the city won't realize as much additional revenue
from the increased values. Lloyd Hilgart asked about the current amount that is collected
for Water Access Charge and Sewer Access Charge fees. Ron Hackenmueller noted the
Sewer Access Charge collection on a new residential permit is $4000 and the Water
Access Charge fee is $850. Lloyd Hilgart asked about the situation that will be faced in
2016. Wayne Oberg explained that there is a large increase in debt service payments due
at that time. Prior to 2016, the city should be able to cover debt service from current
funds.
Brian Stumpf brought up the CIP and projects that are scheduled to be done in the next
few years such as Area 5 reconstruction and Fallon Avenue Bridge. Brian Stumpf
wondered why not wait until 2014 to raise the levy instead of this next year. Jeff O'Neill
pointed out a number of other items that will be coming up in 2 to 5 years including
transportation improvements, fire truck, and Bertram Chain of Lakes. Clint Herbst asked
why the State would not be providing assistance on Hwy 25; Bruce Westby and Bret
Weiss stated that the State is not allocating funds for addressing congestion. They are
focusing on preservation; that's why they did an overlay on Hwy 25 last year. There was
some discussion about state aid dollars and how the city can utilize those funds. Glen
Posusta commented that the interest rates are so low right now that it would probably be
in the best interest of the city to bond for these projects. Wayne Oberg pointed out that
the cost for bond debt would only cost about $500,000 annually on a $6 million bond.
Brian Stumpf asked Jeff O'Neill to explain what staff is looking for in terms of budgeting
for next year. Jeff O'Neill explained that the taxpayers saw quite a savings in their
property taxes this year. He would like Council to come up with a figure or percentage
that they would be comfortable with for some kind of an increase. Clint Herbst stated
that he feels government should come up with the number that they feel is needed.
Wayne Oberg pointed out an example where a 4% increase would generate about
$300,000 in taxes. Clint Herbst would like to see staff come up with a scenario to
generate funds over the next few years to meet debt obligations and other needs. Lloyd
Hilgart asked how much is actually needed in 2016 to fill the gap; Wayne Oberg said the
gap would be around $600,000 and he would propose raising the levy slightly over the
next few years to cover that.
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Glen Posusta commented that he would like to tie any increase to the time when Mills
Fleet Farm builds in Monticello. That would generate a lot of traffic and increased value.
4. Consideration of establishing a Time Sensitive Acquisitions Committee and
appointing representatives to the committee
Jeff O'Neill introduced this item and asked Council to consider approving such a
committee and appointing several council members to the committee. Jeff O'Neill talked
about the recommended guidelines that would guide the committee. Glen Posusta asked
how the committee would function if someone had a request. Would the group meet in
person or could they discuss via phone or email? Jeff O'Neill thought it could work
either way. Clint Herbst suggested that the committee could first go through a list of
items that they would possibly consider. The committee could also consider other items
that come up unexpectedly. Tom Perrault asked about the note regarding the audit
requirements; this referred to the provision to report all authorized purchases to the full
Council in order to fulfill audit requirements.
Brian Stumpf and Glen Posusta volunteered to serve on the committee.
LLOYD HILGART MOVED FOR ALTERNATIVE #1 TO ESTABLISH A TIME
SENSITIVE ACQUISITIONS COMMITTEE (TSAC), ASSIGN THE CITY
ADMINISTRATOR AND FINANCE DIRECTOR TO THE COMMITTEE, AND
APPOINT BRIAN STUMPF AND GLEN POSUSTA TO SERVE AS COUNCIL
REPRESENTATIVES; SUBJECT TO THE FOLLOWING CONDITIONS. TOM
PERRAULT SECONDED THE MOTION. MOTION CARRIED 5 -0.
1. Review by the TSAC shall not be used to sidestep standard purchasing policies. TSAC
shall be convened only when an opportunity occurs for malting an offer or purchase on
short notice, which cannot be accommodated under the normal approval process.
Opportunities would apply to equipment, products or services that have been included in
the budget, would serve a necessary purpose, or are needed due to an emergency
situation.
2. For items in the budget, TSAC can authorize up to $30, 000 toward bidding or purchase.
3. For items not in the budget, TSAC can authorize up to $15, 000 far bidding or purchase.
4. Any items authorized for purchase through the TSAC system, shall be reported to and
confirmed by the full Council at its next regular meeting.
5. Review upcoming Workshop Schedule and proposed goal- setting process for 2013
Jeff O'Neill explained that he has been working with Angela Schumann and Bruce
Westby on a Council and EDA workshop schedule for special meetings that are coming
up in the near future. Jeff O'Neill noted this includes WWTF Improvements, EDA work
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plan discussions, discussion of economic development direction, and management of TIF
1 -22 (downtown). Jeff O'Neill went through some of the proposed dates for the various
special meetings /workshops. Jeff O'Neill noted they should also schedule a meeting to
talk about capital equipment/projects that could be funded through an equipment note. It
was suggested to hold this meeting at Public Works on Wednesday, Jan 23rd at 4:30 pm.
Tom Perrault asked when they would be updated on FiberNet; Jeff O'Neill noted they are
meeting with bondholders later this month so Council would be updated following that.
6. Adiourn
GLEN POSUSTA MOVED TO ADJOURN AT 6:27 P.M. BRIAN STUMPF
SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Catherine M. ShumanCW
Approved: February 11, 2013
Attest: Q
inistrator
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