City Council Minutes 08-11-2014 Special (budget2)MINUTES
SPECIAL WORKSHOP MEETING — MONTICELLO CITY COUNCIL
. Monday, August 112014 — 5:45 p.m.
Bridge Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Torn Perrault, Glen Posusta, Brian Stumpf
Absent: None
Others: Wayne Oberg, Jeff O'Neill, various department heads
1. Call to Order
The special meeting was called to order by Mayor Clint Herbst at 5:55 p.m.
2. Purpose of Workshop: Review proposed 2015 Budget & tax levy
Jeff O'Neill introduced the budget workshop pointing out that Wayne Oberg has been
working on putting together a budget document that meets the needs of the city and is
within reasonable limits. Wayne Oberg presented a slide show highlighting three
principles of finance: (1) always spend your most restrictive money first, (2) recurring
expenditures should be offset by recurring revenues, and (3) conservatively estimate
revenues and liberally estimate expenditures. Wayne Oberg noted that the preliminary
levy will be adopted by Council on September 22nd and the final levy on December 81h.
Wayne Oberg reviewed the cost of living in comparison to wages and benefits. A 3%
COLA increase is proposed with no increase in the health benefit. The COLA would also
be applied to the STEP schedule. Wayne Oberg demonstrated how the COLA and STEP
increases would impact the budget for personnel. Wayne Oberg also noted that a 2%
COLA and 9% health increase would create approximately the same impact on the levy.
Wayne Oberg reviewed what was looked at in regard to the city's health insurance, which
was negotiated to a 20% rate increase. Wayne Oberg discussed some of the staffing
changes in the past several years and noted the savings to the city.
Wayne Oberg reviewed the debt service levy and noted the potential impact of the
payment of the fiber bonds after the upcoming settlement. Wayne Oberg then reviewed
the proposed budgeted revenues and expenditures for FiberNet. For 2015, there would be
a monthly deficit of $36,968, which would require annual support of $924,000 from the
city. Jeff O'Neill talked briefly about a potential source of revenue through the state's
new broadband fund.
Wayne Oberg commented on the market value shifts expected for 2015 payable taxes.
He also pointed out the tax capacity values and tax capacity rates from 1998 to 2014.
Xcel Energy's market value is increasing again, which gives the city an additional
$234,297,900 in market value.
Wayne Oberg also discussed other sources of revenue in addition to property taxes,
which is the city's largest revenue source. Some examples: building permits anticipated
City Council Special Budget Meeting Minutes — August 11, 2014 Page 1
at $260,000, liquor store revenues are expected to continue at its current profitability, and
DMV also has been showing a continued positive cash flow.
Wayne Oberg discussed setting spending priorities, such as: increase productivity and
efficiency, decrease costs, preventive maintenance, replace existing capital assets, and
new services and assets.
Wayne Oberg proposed a levy recommendation to Council:
2014 levy
Levy increase for inflation
Law enforcement ( +4 lhrs)
Pathway maintenance
Stormwater maintenance
Transit services
TOTAL 2015 levy
$8.15 million
$ 171,000
$ 94,000
$ 40,000
$ 40,000
$ 40,000
$8.535 million
The proposed levy of $8.535 million includes debt service and would be an increase of
4.7% over 2014. Wayne Oberg suggested that Council could use this as a starting point
and determine if there are additional capital items that should be added to this list.
Clint Herbst noted that it's likely this increase would not have a negative impact on most
taxes. With the increase in market value, the tax levy could increase and the taxes could
actually drop. Brian Stumpf commented that he would like to see some of the increase
go toward setting aside money for some of the large upcoming projects. Clint Herbst
indicated that he would like to meet with department heads to discuss their concerns and
important goals. Several Council members indicated that they would like to see some
comparisons on tax impacts on various homes and businesses. Wayne Oberg reminded
Council that Truth in Taxation notices would not be going out to taxpayers until after the
November election.
Jeff O'Neill added several comments, noting that the Personnel Committee had
recommended a 3% COLA increase to help bring employee salaries closer to surrounding
communities. Jeff O'Neill also asked Council to think about the 85% goal for the
community center revenue recovery. He noted some of the difficulties in trying to reach
that such as the minimum wage increase and balancing the breakeven point between
increasing user fees and keeping your base of clients.
3. Adjournment
TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:34 P.M.
LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Catherine M. Shuman
Approved: September 8, 2014
r
Attest:
y inistrator
City Council Special Budget Meeting Minutes —August 11, 2014 Page 2