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City Council Minutes 08-22-2006 SpecialMINUTES SPECIAL MEETING — MONTICELLO CITY COUNCIL Tuesday, August 22, 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. The purpose of the special meeting was to discuss the preliminary 2007 budget and review applications received for the City Administrator position. 2. Review and discussion of preliminary 2007 budget and tax levy. City Administrator, Rick Wolfsteller presented the preliminary draft of the 2007 budget and tax levy. A preliminary levy amount must be certified to the County by September 15, 2006. The final levy amount can be less than the preliminary levy amount but it cannot be more than the preliminary levy amount. The City could levy $550,000 more than last year it would still result in a reduction in the amount of property taxes. Increases in the valuation for the community are because of inflation and new commercial and industrial growth. Rick Wolfsteller noted that there was $60,000,000 in new construction added this past year which is higher than in previous years. The proposed budget could fund what was requested by the various departments and still result in property tax savings for the citizens. Rick Wolfsteller cautioned that these figures were based on no change to valuation of the property so if someone added a deck or completed an improvement that added to the value of his property, he might not see a reduction in the amount of his taxes. The budget reflects an overall increase in general operations for the City by about 3%. In 2007 the debt service amount will see an increase as a result of the bond payment for the Interchange Project and an increased amount for the Community Center bond. Rick Wolfsteller reviewed a number of items from the preliminary budget. The Council discussed the possibility of establishing a franchise fee on electric service. If the City and Xcel Energy agree to a 3% franchise fee this would generate $280,000 in revenue each year. These funds could be used to cover the cost of installation of street lights, underground wiring and maintenance costs for the street lights. If the Council determines not to pursue establishing a franchise fee, then they would need to either cut $280,000 of expenditures or look at increasing other sources of revenue. If a franchise fee is established it would need to be determined if the franchise fee would be calculated based on usage or by flat rate. It was explained at the present time there is no franchise agreement with Xcel and there are some issues that need to be resolved, such as notification of work and restoration of the boulevard once work is completed, before an agreement is signed. Brian Stumpf stated he would like to see the franchise fee come back to the Council for discussion as a separate item. Wayne Mayer asked if the City went with a franchise fee on electric service, would they be required to do so with all utilities or can they exempt certain utilities. City staff will check with the City Attorney on this issue. The Council briefly discussed the time frame needed to get a franchise fee established and whether it could be done in time to generate revenue in 2007. Public Works Director, John Simola raised the issue of establishing a stormwater fee. He noted that the City will be expending considerable funds in the future for stormwater improvements and added that many communities have a fee in place that helps fund this type of improvement. Rick Wolfsteller pointed out that the salaries and benefits for the utility billing department (approximately $50,000) was switched to the sewer/water fund. John Simola submitted to the Council a survey of other communities listing their utility charges. He felt, based on the information from the survey that the City had room to move the utility charges somewhat to generate a little more revenue. There was some discussion on what the revenue generated by user fees should be used for. The street reconstruction fund was reviewed. The City has for the past several years levied $500,000 for street reconstruction. With the 2006 reconstruction project estimated at $1,800,000 the fund balance would be depleted. Although $500,000 is proposed for 2007 that amount alone would not be sufficient for a reconstruction project of any significant size. Brian Stumpf noted the funds budgeted for proposed improvements to the Deputy Registrar Office. He questioned whether any decision had been made to relocate the office. If the office is relocated, he did not see the need to budget for improvements to the existing building. Brian Stumpf also raised the question of police protection. With a proposed budget of $994,000 for police protection, he felt staff should investigate again the pros and cons of establishing their own police force. If the cost gap between contracting police protection service and establishing the City's own force is narrowing, it might be prudent to study this issue again. Rick Wolfsteller will contact communities such as Buffalo, Big Lake and Elk River who have their own force to get information. Glen Posusta asked about the increases in the hourly contract rate and whether there was any negotiating on these rates. Rick Wolfsteller stated that the County Board sets the hourly contract rate and informs the City of that rate. The contract for police protection is a two year contract which would be up at the end of 2007 at which time the City could negotiate the next contract. There was some discussion on the services provided. Generally the Council felt there needs to be a focus on enforcement of the speed limits. The Council also discussed the Sheriff's Department policy of switching officers out of communities after a certain period of time. While the Council understood that this helped the officers be familiar with all area of the County, it took away the rapport a community establishes with the law enforcement officers in their community. Wayne Mayer stated the police chief from Big Lake would be willing to discuss police force issues with the City. Brian Stumpf asked about the sweeper for the Public Works Department. Initially funds were being budgeted over two years and now they have increased it to three years. Rick Wolfsteller brought up some budget items in the Fire Department budget such as wages for a Fire Inspector position. Steve Joerg and Marc Simpson from the Fire Department were present and discussed the Fire Department budget with the Council. Marc Simpson is certified through the state as a fire inspector. At the present time the Fire Department is doing inspections as part of an effort to document the need for a fire inspector as well as educate the businesses about the fire code. The budgeted salary is based on 20 hours per month. Clint Herbst suggested some kind of fee be placed on the units that are inspected. The Fire Department indicated that at the present time, their primary purpose is to educate about the provisions of the fire code. Marc Simpson stated that some communities will not charge for the initial inspection or the follow up inspection but if a third inspection is required then a fee is assessed. Jeff O'Neill stated the Planning Commission will be looking at the possibility of drafting an ordinance relating to rental units and could include such provisions as inspections and licensing. Wayne Mayer asked what authorization Fire Department had to do the inspections and levy fines. Steve Joerg indicated as fire chief he has authority under state statutes to handle fire code violations. Steve Joerg addressed the Council on some long term planning that the Fire Department is doing. This includes a fleet management program as well as plans for a new fire hall facility. They are looking to locate the facility on the south of side of the interstate. They also talked about upcoming equipment needs such as a pumper, which runs between $325,000-$400,000. The Fire Department again invited the Council to tour their facility and view the equipment so they better understand the needs of the Fire Department. Steve Joerg stated under their fleet management program a piece of equipment would be replaced after 15 years. The Fire Department anticipates that there will be funds budgeted every year for equipment replacement. The Council also briefly discussed cost estimates for a new fire hall. Steve Joerg reported that Rockford had recently built one which cost about $900,000. Other items that were covered were the $45,000 for a new position in the Planning Department, $27,000 for rewriting the City's zoning ordinance and $9,000 for planning software. 011ie Koropchak, Economic Development Director, stated that the $33,000 for marketing was the first request for marketing funds since 2001 and that the City needed these funds for marketing of the industrial park. Membership in the Wright County Economic Development group was discussed. The Council questioned whether the City had received any successful leads. 011ie Koropchak responded that while the City did receive some leads they did not develop into anything but added the organization does provide a good deal in the way of training and education. Publication costs were also discussed. At the present time the City is publishing a summary of the City Council minutes which has reduced the publication costs from previous years to about $25,000. The City is not obligated to publish minutes but can provide copies to those requesting them. The City also posts the approved minutes on the City's website. It was suggested getting prices from other papers such as the Wright -Way Shopper or Sherburne Tribune. The issue came up of how Monticello compares to other communities as far as spending. It was suggested that Rick Wolfsteller do an analysis of the City's budget comparing it with the City of Buffalo pointing out various factors that influence each community's budget such as state aid, enterprise activities, etc. It was noted that the City of Monticello picks up the cost of garbage collection and at least 80% of the cost of street reconstruction which is something not typically done in other communities. Glen Posusta felt that most people understand that there is a cost they must pay for improvements to the street. He stated that when the street reconstruction program was initiate, the intent was to have the City build up a reserve and then do a reconstruction project but that was not what happened. John Simola responded that if the City waited with doing a project until reserves were built up to cover the cost there would be five years between projects. Tom Perrault asked about the EDA paying back part of the money that the City had loaned to them. 011ie Koropchak indicated that approximately $80,000+ had been given back and this amount was supposed to be taken off the general tax levy. Rick Wolfsteller informed the Council that the maximum levy the City could have without going through the Truth in Taxation process was $7,183,262. Rick Wolfsteller reviewed the bonded indebtedness of the City noting that $6,000,000 of the estimated $8,000,000 cost of the biosolids drying treatment process would have to be bonded for. Wayne Mayer asked that funds be budgeted for MEADA so that when the group uses MCC facilities, they could pay the rental fee. Tom Perrault questioned why the amount budgeted for Community Celebrations doubled. Rick Wolfsteller responded the funds covered costs for banners/holiday decorations. The Council also discussed the cost for replacement of the gym floor in the MCC. Kitty Baltos, MCC Director indicated that they have a firm coming out that will be able to determine the extent of the repairs needed. She noted that the flooring is only about 6 years old and should have a longer life. However, the contractor who installed the flooring is no longer in business. Wayne Mayer brought up an increase in the wages for the Mayor and Council. He stated that an adjustment should be made because of the number of meetings and the hours of time spent by the Mayor and Council on City related business. The last pay increase for the Council was in 1994. Rick Wolfsteller stated a wage increase had to be established prior to the election but he didn't know if a per diem had to meet that same requirement. John Simola pointed out that there was nothing in the budget for the Public Works building needs. There was some discussion of whether the buildings the City would receive in the River City Lanes land exchange could be utilized for that purpose at least on a short term basis. Brian Stumpf, John Simola and Gary Anderson will tour the buildings to see if this use would be a possibility. Mayor Herbst asked if the Council had a dollar figure for the budget that staff should work to come up with. Brian Stumpf felt it should be around $7.2 million. Wayne Mayer said he would like to hold off giving direction to the staff on the budget until they have reviewed the budget comparison with the City of Buffalo. The Council will meet at 5:30 on September 11, 2006 to tour the Fire Department and come up with a budget and levy amount. 3. Applications for City Administrator position. The Council reviewed applications received for the City Administrator position. BRIAN STUMPF MOVED TO INTERVIEW THREE APPLICANTS FOR THE CITY ADMINISTRATOR POSITION WITH AN ALTERNATE APPLICANT TO BE CONSIDERED IF ANY OF THE FIRST THREE APPLICANTS DECIDE NOT TO INTERVIEW FOR THE POSITION. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. The Council will notify the City Administrator of a date for scheduling the interviews. The meeting adjourned at 8:30 pm. Recording Secretary