City Council Minutes 09-11-2006 SpecialMINUTES
SPECIAL MEETING — MONTICELLO CITY COUNCIL
Monday September 11, 2006 — 5:30 p.m.
Members Present: Clint Herbst, Wayne Mayer, Tom Perrault, Glen Posusta and Brian Stumpf.
Members Absent: None
1. Call to Order
Mayor Herbst called the meeting to order at 5:30 p.m. and declared a quorum
present.
2. Consideration of preliminary 2007 Budget and Tax Levy.
City Administrator, Rick Wolfsteller reviewed the budget and what changes had been made
since the first budget workshop. These changes included repayment of funds by the EDA of
$80,891 which will be used to reduce the tax levy.
Publication costs were reduced by $25,000 on the assumption that the City would continue to
publish the minutes. Wayne Mayer felt the publication of minutes/notices should be put out
for bids. It was noted that approved minutes are on the City's website. A suggestion was
made that copies of the minutes in larger print be sent to the senior center and the library. It
was also discussed whether approved bills need to be published. Clint Herbst suggested that
the City not publish the approved minutes and bills on a trial basis.
$2,000 had been budgeted to MEADA. Wayne Mayer questioned the $2,000 amount stating
that rental of the MCC facilities for one or two events would use all the funds. He felt an
appropriation of $4,000 would be more suitable.
With the changes to the budget, the levy amount would be below the amount requiring the
City to hold a Truth in Taxation meeting.
Rick Wolfsteller provided the Council with a budget comparison between the City of
Monticello and the City of Buffalo. If the City wanted to increase revenues without
increasing the tax levy, they would need to look at increasing the amount of the fees they
charged for services or add new fees.
Establishing a franchise fee with Xcel Energy is one possibility. It is estimated that a 3%
franchise fee would generate $275,000 annually which could be used to fund new street
lighting projects, a light replacement program, maintenance and operating costs. Wayne
Mayer questioned the $850,000 for franchise fees in the Buffalo budget and Rick Wolfsteller
informed the Council that Buffalo owns and operates their own electric utility. If a franchise
fee is established it would have to be determined whether it would be based on usage or a flat
rate. Rick Wolfsteller pointed out that the City is currently looking at a number of street
lighting projects that the City will have to fund. If a franchise fee was in place those funds
could be used for that purpose. Although Xcel Energy would prefer to have a franchise fee
based on some method other than actual usage, it is an issue that could be negotiated. The
proposed budget includes $275,000 in revenue from franchise fees. If the City determines not
to pursue a franchise agreement, other sources of revenue would be needed to replace the
$275,000 or budget cuts would have to be made. Glen Posusta didn't feel the people would
object too much to a small user fee.
The City can increase the revenues need to operate by either increasing the tax levy, or
increase and/or add new user fees or some combination of the two or cut expenditures. Rick
Wolfsteller stated initially the driving force to use the tax levy as the main revenue source was
that Xcel Energy was 75% of the tax base and the Council at that time felt it made sense to
collect through taxes because a large portion of the levy was paid by Xcel. If the Council
wanted to shift from increasing the tax levy to generating more revenue from user fees that
could be done. In addition to the franchise fee, other fees discussed included assessing a
higher portion of the costs on improvement and reconstruction projects and charging the
residents for garbage collection. The Council also felt sewer and water rates should be looked
at.
011ie Koropchak, Economic Development Director asked about funding for future industrial
park land. Clint Herbst felt there may be willing sellers of land for a future industrial park.
He stated, if the Council agreed, that funding for land acquisition is something that should be
set up. Glen Posusta felt the industrial park would fill up faster if the tax levy was lower.
Glen Posusta felt the City should shift where it is getting its revenue from. Franchise fees
and sewer and water rates were fees the Council felt could be looked at. Clint Herbst noted
staff is billing their time back on various projects. Rick Wolfsteller stated the street lighting
projects being proposed would cost about $550,000. To take care of this cost the City could
tax for it, establish a franchise fee or assess it. Glen Posusta felt there should be a sunset
clause in any franchise fee. A dollar amount would be established and when the reserves
from the franchise fee reaches that amount the franchise fee, would cease. The Council
questioned how long it would take to get a franchise fee in place. It was felt that it would take
60-90 days for this to be accomplished.
Clint Herbst would like to see the levy set at $6.5 million stating that if the City continues to
grow, the levy can be increased. For 2006 the City had levied $6.75 million but only received
$6.5 million and the Council questioned if they set the levy at $6.5 million would that be
what was actually received.
GLEN POSUSTA MOVED TO SET THE LEVY FOR 2007 AT $6,500,000. WAYNE
MAYER SECONDED THE MOTION. MOTION CARRIED WITH TOM PERRAULT
AND BRIAN STUMPF VOTING IN OPPOSITION. TOM PERRAULT NOTED HIS
OPPOSITION WAS BECAUSE HE DIDN'T BELIEVE IN THE CONCEPT OF A
FRANCHISE FEE FOR THE STREET LIGHTS.
3. Tour of Fire Department.
The Council adjourned the meeting at 6:15 p.m. to tour the Fire Department facilities.
Recording Secretary