City Council Agenda Packet 08-31-2009 SpecialAGENDA
SPECIAL MEETING – MONTICELLO CITY COUNCIL
August 31, 2009 – 5:00 p.m.
Mayor: Clint Herbst
Council Members: Tom Perrault, Glen Posusta, Brian Stumpf, Susie Wojchouski
1. Call to Order.
2. 2010 Budget Workshop.
3. Consideration of authorizing Edmonson Avenue Pathway Improvements, City Project No.
09C007.
4. Consideration of alternative heat system for FiberNet Monticello Garage, City Project No.
09C006.
5. Approval of Check Register for 8-31-09.
6. Adjourn.
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2010 PRELIMINARY BUDGET & TAX LEVY
Attached are the City’s preliminary budget sheets and the resulting preliminary tax levy
for 2010. The proposed preliminary levy is $8,321,865 $7,758,267, which is a 7.38%
0.11% increase over the 2009 levy of $7,750,000. The City’s property tax levy is still
restricted by levy limits for 2010, but the City can levy outside its limit for any debt
levies and for loss of State Aids in 2008 and 2009. It should be noted that this is the
preliminary levy and that the City can adopt a final levy in December that is lower than
the preliminary levy, but can not levy a final levy above the preliminary levy.
It should also be noted that, despite the proposed slight increase in the levy, there is no
impact on the residential or commercial net tax for 2010. This is shown on page 2 of the
worksheets.
As in years past, a significant effort was made by the Department Heads, Finance
Director and Department Heads to uncover ways to maintain a flat or reduced
expenditure budget without reductions in service.
The reason for the tax levy increase despite the decrease in expenditure budgets is due to
a decrease in the utility transition aid and a decrease in building permit revenues. The
City’s Utility Transition Aid for 2010 is $67,767 compared to $355,729 in 2009. The
decrease is due to increased market value at the utility plants around the State. However
this does shift $287,962 back into the City’s property tax levy in order to generate the
same revenues as in 2009.
Another factor for 2010 is that the City’s estimated tax capacity decreased to 16,548,236
$16,733,909, however the EDA approved decertifying three TIF districts for pay 2010
which will add about $73,489 in tax capacity. So the City’s 2010 estimated tax capacity
is 16,648,236 $16,807,398, which is down up from 16,783,843 for 2009.
The tax capacity and proposed preliminary tax levy would generate a City tax rate of
49.986% 46.160% compared to the 2009 rate of 46.191%. Below is how the staff arrived
at the tax levy.
Staff is proposing to decrease the debt levy slightly and to use reserves from the
Consolidated Bond Fund for the City’s 2010 debt payments. The levies and reserves
required are as follows:
Tax Levy Reserves Used
2008 Sewer Refunding $446,368 396,368 $0
2002 Improvement Bond 24,798 50,000
2005 Improvement Bond 173,587 75,137
2007 Improvement Bond 183,780 231,000
Total Levy $828,533 778,533 $356,137
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The City lost State Aid in the form of market value homestead credit in the amounts of
$247,566 in 2009 and $133,528 in 2008. Staff does not propose levying for the past loss
of State Aid in 2010. It should also be noted the City’s market value homestead credit
will be reduced by $257,815 for 2010. So what ever the City levies for property taxes in
2010, the State will reduce that by $257,815. However in 2011 the City could levy
property taxes for that amount outside its levy limit for 2011.
The funds that levy property taxes that are within the levy limit include the General Fund,
Library Fund, Shade Tree Fund, Street Reconstruction Fund, and Community Center
Fund.
An expenditure the affects various funds are wages and benefits. For 2010 the only wage
increase used in the budget are the step increases due to employees who are not on step 8
of their pay range. We used a zero percent increase for cost of living for 2010. Also for
benefits we used a 10% increase in cost with no change to employee/City share
allocation.
Library Fund:
The Library Fund expenditure budget is proposed at $37,343, which is a 2.31% decrease
from the 2009 budget. The decrease was the result of minor adjustment to various line
items (either up or down) to reflect past expenditure levels. On the revenue side, staff is
proposing to decrease the property tax levy required to support the library by $1,617, but
this will require a transfer of liquor store reserves of $10,000 to balance the fund and
provide the fund with some cash reserves.
Shade Tree Fund:
The Shade Tree Fund expenditure budget is proposed at $80,157 47,157, which is an
increase decrease from the 2009 expenditure budget of $50,134. The largest reason for
the increase is for the replacement of the City’s brush chipper at an estimated cost of
$30,000. The other expenditure increase is for miscellaneous professional services,
which is for tree removal services which may be needed to fight the ash bore issue the
Metro area is experiencing. On the revenue side the property tax levy is proposed to
decrease $807 2,298 which results in the use of $40,158 8,649 reserves to balance the
budget. Of course one of the reasons to build up reserves is so when large equipment
purchases are required, the City has funds available, but this would leave just over
$10,000 42,000 of reserves being used for operations.
Street Reconstruction Fund:
The budget for the Street Reconstruction Fund is based on the City’s five-year CIP for
street projects. For 2010 the only street project projected to be funded from this fund is
the extension of 7th Street at an estimated cost of $700,000. However, the City has tried
to maintain a revenue budget of around $500,000 or more each year in order to build
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reserves for future street projects. The 2010 revenue budget includes a property tax levy
proposed at $247,987, which is a decrease of $38,847 from 2009 and an operating
transfer from the Liquor Fund of $200,000, which is an increase of $50,000 from 2009.
There are no projects budgeted for the Street Reconstruction Fund for 2010. In the past
the City has tried to maintain revenues of $500,000 through transfers from the Liquor
Fund, interest earnings and property tax levy. Since there are no projects for 2010, staff
is proposing that we do not levy a property tax for this fund. We are proposing to
increase the transfer from the Liquor Fund to $250,000, which will give the Fund a 2010
revenue budget of $368,636.
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Community Center Fund:
The Community Center budget for expenditures increased 1.92 1.57% with the largest
increase for part-time wages due to the increase in the minimum wage. There are also
increases to repair maintenance items as the MCC is now 10 years old and needs more
repairs then in the past. In addition there are funds to replace the pool heater, energy
management software, which will result in reduced energy costs in the future, some funds
for roof repairs, and replacement of partitions in the women’s locker room and restrooms.
Revenues for the MCC are decreased for 2010 due to a decrease in room rentals (due to
City use). Along with the tax levy decrease of $11,633 147,152, results in the MCC
using $73,004 200,000 of MCC Fund reserves, which pays for some of the capital
equipment purchases.
General Fund:
General Fund budget is proposed to decrease 1.55 3.27% to $7,046,395 for 2010.
However the tax levy to support General Fund expenditures is proposed to increase 12.02
9.57% to $5,889,171 5,760,570.
The following adjustments were made to the General Fund expenditures:
One item that affects a number of activity budgets is a new line item for city equipment
rental fee. Currently the City when it comes to equipment needs places the estimated cost
of the equipment into the current year’s budget, or in cases of large equipment, staff
places it in the budget several years. This can create wide budget swings both up and
down. Also when equipment is budget over several years it appears that staff under spent
the budget in the year the equipment wasn’t purchased and over spent the budget in the
year the equipment is purchased. Also in years like 2010, it is difficult to include
equipment purchases when funds are so tight.
The equipment rental fee is designed to smooth out these budget fluctuations and make it
easier to budget for equipment. The rental fee is based on the depreciation of that
activities equipment plus 5%. This money is then transferred to the Capital Revolving
Fund to be used when the equipment is approved for replacement. The depreciation is a
more stable figure from year to year and the added 5% should cover any inflation and/or
any new pieces of equipment that could be need in the future. Equipment still must be
approved by council and still would only be replaced when needed. Used equipment
could still be purchased. So it would not affect the purchasing process, but just the way
the City set funds aside for equipment (making it more manageable from a budget and tax
levy perspective).
City Council budget increased 0.18% due to PERA increase.
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Administration decreased 20.50% due to no equipment being purchased compared to
2009 and not filling the city clerk position.
Elections increase due to holding an election in 2010 compared to not holding one in
2009.
Finance decreased part-time wages due to payroll clerk being moved to full-time in 2009
and shifting some of the accounting clerk’s time to the Water and Sewer Funds for her
activities being performed there. Also the project coordinator’s time was moved out of
Finance Activity since she is taking over city clerk duties and will no longer work in the
finance area. Also decrease conference and schools based on past expenditure levels.
One item added is $2,500 for an intern which would only be hired if we are awarded a
matching grant from GFOA. The intern would help finance with several tasks but main
function would be to help with the audit so that we can bring the report document in-
house saving the City around $1,500 per year. This position would only be filled if the
City received the grant. Removed.
Audit activity increased 1.69% based on current contract.
Assessing activity decreased 2.10% based on the fact of little new development and
contract with the county.
Legal activity decreased 9.52% based on current level of expenditures and decreased
membership cost to Coalition of Utility Cities.
Human Resources increased 46.70% or $25,959. This is due to two factors. First there is
the mandatory OSHA training estimated at $5,000 and second calculating the HR
manager’s wages as a full-time employee.
Planning and zoning decreased due to no administrative assistant, which was budgeted in
2009 but not in 2010. Also decreased professional services and other line items based on
projected needs.
Data Processing budget increased $4,755 due to more of project coordinator’s time being
allocated to this activity.
City hall budget increased 3.73% due to moving expenses for the garage/storage building
to this activity from the building inspection activity. Decreased the number of
newsletters produced and mailed from 3 down to 2.
Law enforcement activity increased 2.81% based on 18,980 hours of service at $57.50
per hour and some costs for use of the speed trailer.
The fire department budget is decreased 0.07% and includes an increase for custodial
services from $920 to $1,200. This is the first increase in at least four years plus she pays
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the sales tax which eats into her earnings. The big decrease is for motor vehicles where
in 2009 the City had funds for the fire truck and a duty vehicle, where as 2010 there is
only the balance of the duty vehicle. Other equipment purchases include $14,000 to
retrofit scba packs and $12,500 for 5 more 800 MHz portable radios.
Fire Relief Contribution (offset by Fire State Aid) reduced to $80,000 based on
projections.
Building inspection activity decreased 12.06% for adjustment to various line items and
removal of the licenses & permits which was the payment of state surcharges. This was
recorded as revenue and then shown as an expense here. Beginning in 2009 the revenue
and expense will be netted and no longer shown as a revenue or expenditure. Finally, the
budget amount for vehicle replacement was dropped from $18,000 to $5,000 based on
funds already available for the vehicle replacement.
Civil defense decrease due to the 2009 budget having $3,500 budgeted for furniture,
which is not being budgeted in 2010.
Animal control and National Guard activities adjusted based on current expenditures.
PW Administration decreased 2.16% due to various line time adjustments and the wages
of the new public works director.
PW Engineering decreased to reflect a decrease in consulting engineering time and other
outside consultants. Also there is a decrease in the purchase of software as the City
Engineer has pushed some of the purchases out into future years.
PW Inspections was increased due to the equipment rental charges.
PW Streets and alleys was decreased $4,265 39,950 which is in part due to the equipment
purchases scheduled between 2009 and 2010. Purchases in 2010 include a ditch mower,
mid-size tractor/loader, an air compressor, and sign lab (sign making machine and
software) for making street signs and other City signs. Some of the funding for the
equipment will come from reserves.
PW Ice and snow decreased 4.96% due to reduction of equipment purchases. However
the cost of sand and salt has increased significantly over the past year.
PW Shop and garage increased $10,114 for the remodeling of the shop and garage area to
comply with OSHA regulations and to make the area more efficient.
The budgets for PW Parking lots and street lights were decreased 0.36% and 0.59%
respectively.
PW Parks administration is decreased 8.16% which is due to the delaying of equipment
purchases. Some of the equipment will be needed for the new Bertram Chain of Lakes
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Park so it is not needed at this time. Equipment purchase pushed out include a truck and
large mower. In addition the parks department is recommending that the City wait until
2012 to install an irrigation system at Groveland Park, which not only saves the expense
of installing the system, but could save on time spent mowing the park. Equipment left in
the budget is a mule utility vehicle and trailer for the skid loader for the parks
department.
Park improvements for 2010 include the construction of shelter at Sunset Ponds Park, a
band shell at Pioneer Park, playground equipment replacement, a portable gazebo,
lighting improvements on Front Street, some improvements to Bertram Park and some
grave stone restoration at Hillside Cemetery. Items in red strikeout were pushed into
future years.
The NSP ball field was decreased slightly, but does include the purchase of ATV type
machine to groom the fields. This purchase will add to efficiency of operation.
The refuse collection budget was increased for the purchase of replacement bins for
recycling and a small adjustment for contract costs.
Community celebrations adjusted down to reflect past expenditures.
The budgets for the Senior Center, Community Education, Y.M.C.A., Transit – River
Rider, Swan River, and Community Ice Arena left unchanged form 2009 for the most
part. The $12,740, which was budgeted for Community Education was removed from the
2010 budget.
Economic development activity increased for additional marketing and providing more
public information.
Finally, the insurance – unallocated was increased to reflect insurance coverage on all
City property. One of the issues the City had with the hail storm in 2008 was when staff
and the insurance adjuster reviewed the damage to building and property, it was
discovered that some of the building had never been added to the insurance coverage.
The insurance company still covered the repairs and now that the property is covered the
premiums now reflect the additional buildings.
Some other line items in department budgets adjusted slightly to achieve a flat levy for
tax payers.
On the revenue side of things, staff is decreasing the revenues for building permits to a
more realistic $230,000 compared to $525,000 in 2009. Other development related fees
such as engineering and developer reimbursements are also being decreased. Then there
is the decrease to the utility valuation aid discussed earlier.
This results in a preliminary levy for the General Fund of $5,889,171 5,760,570, which is
a 12.02 9.57% increase. Other options to decrease the levy further would be to use a
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portion of the electric surcharge fees on hand (Approx $400,000) pay for the street
lighting expenses ($168,500). In addition, grant funds can be used to supplement the
electric surcharge fees if shifted to cover street lighting expnses. Other items, delay the
zoning code update ($25,000), delay more equipment purchases or not construct some of
the various improvements. Reduce salaries or require employee furloughs (saves about
$11,877 per day) or have employees contribute more towards benefits.
Other Funds without a tax levy:
DMV Fund:
The largest change to the DMV Fund is the addition of the third full-time position and the
need to purchase two computers and possibly credit card processing equipment. These
three items increase the expenditures of the DMV by 21.93%. Revenues for the DMV
are expected to exceed expenditures by $2,263 for 2010.
Water Fund:
The water fund expenditures include the replacement of 425 residential water meters to
the new radio read meters. The City has been changing meters over the last few years to
the radio reads to save staff time of reading meters. If the City is able to change out these
425 meters it will allow the City to reallocate (eliminate) one of the utility employees
time from reading meters each quarter. Currently takes three employees about three days
to read meters. Once all meter have been changed to the radio reads it will take one
employee less than a day to read all meters.
Once again to support the expenditures of the water fund staff would recommend a 5%
increase to the water rates. This would mean the City is not funding about $151,000 of
the depreciation of assets in the water fund.
Sewer Fund:
The sewer fund expenditures are proposed to decrease for 2010 which is due to $104,200
being transfer to pay off bonds in 2009. This transfer is not required in 2010.
Similar to the water fund, staff is recommending a 5% rate increase for the sewer fund
which would leave $217,443 of depreciation uncovered by rates.
Liquor Fund:
Expenditures for the liquor fund also increased but the increase is due to the need to
purchase more products (due to increased demand) and the increased transfer to other
funds to lower the property tax levy. Liquor Fund should still show a profit for 2010.
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Conclusion:
Based on the proposed 2010 budgets the City’s property tax levy would increase by
$575,865 8,267 and the City would use over $600,000 824,786 in City reserves including
liquor fund transfers to balance the budget. At current tax capacity estimates the City
would have a 2010 tax rate of 50.343 46.160% compared to 46.191% in 2009. The actual
impact of the change in tax rate on the bottom line will be greater for the utility company
that other properties because the utility company value represents a greater percentage of
the tax capacity in 2010. It is hoped that the impact of this shift on the average household
can be quantified soon to assist you in your decision making. The tables and charts on
the next two pages shows the tax levy, tax capacity, tax rate, and the effects it has on
residential and commercial values compared to prior years.
Council Agenda: 8/31/09
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3. Consideration of authorizing Edmonson Avenue Pathway Improvements, City
Project No. 09C007. (BW, BP)
INFORMATION ON THIS ITEM WILL BE PRESENTED AT THE MEETING.
City Council: 08/31/2009
4. Consideration of alternate heat system for Fibernet Monticello Garage Facility, City
Project No. 09C006. (BP, DP, GA)
A. REFERENCE AND BACKGROUND:
Efficiency of heating systems for the FiberNet garage project was a topic of discussion
after bids were prepared and released. Two systems were originally discussed; forced air
and infrared, with infrared being what was originally specified. Infloor boiler heat was
an option that was requested to be researched. Presently all heating systems on the
FiberNet campus are electric. Efficiency of an electric boiler is very close to a gas boiler.
However, we do not have service to the site for natural gas so we have researched electric
boilers.
Centerpoint Energy has a natural gas main to the water tower cul-du-sac and would
install service up to 100’ for the cost of directional boring and permits providing the
demand of the structure was more than 75,000 BTU’s. The time line would be an
additional 1 ½ months for this service. For an electric system, we have received two (2)
quotes: one from Purcell Plumbing and Heating for $5211.00, and the other from Custom
Sheet Metal for $5192.00; both are two-zone systems. These bids include a temperature
regulator to modulate the boiler temperature. Both of these vendors are Monticello
businesses. There would be a deduct from Olson Plumbing to remove the infrared units
and associated wiring, and an addition of wiring to the boiler for a total deduct of
$2,750.00. This would bring the total to an additional $2,461.00 or $2,442.00 (depending
on the respective bid chosen) to the project.
A1. Budget Impact: Additional $2,461.00 to $2,442.00 (depending on respective bid
chosen).
A2. Staff Workload Impact: Minimal coordination of subcontractors; 1 to 2 hours.
B. ALTERNATIVE ACTIONS:
1. The first alternative would be to award the bid to Custom Sheet Metal with the
lower quote at $5,192.00.
2. The second alternative would be to award the bid to Purcell Plumbing for
$5,211.00.
3. The third alternative would be to not alter the original specified heating system.
C. STAFF RECOMMENDATION:
It is the recommendation of Staff to approve Alternative #1 and award the bid to Custom
Sheet Metal as the low bidder. A note to Council: Purcell Plumbing is the subcontractor
awarded the plumbing bid on the garage project.
City Council: 08/31/2009
D. SUPPORTING DATA:
Bids from Purcell Plumbing &Heating and Custom Sheet Metal
(If not available when agenda is printed, they will be brought to the meeting on Monday.)