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City Council Minutes 06-23-2014 SpecialMINUTES SPECIAL WORKSHOP MEETING — MONTICELLO CITE' COUNCIL Monday, June 23, 2014 — 6:15 p.m. Mississippi Room, Monticello Community Center Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf Absent: None Others: Wayne Oberg, Jeff O'Neill 1. Call to Order Mayor Herbst called the special meeting to order at 6:15 p.m. 2. Purpose of Workshop: Review of proposed 2015 Tax Lew and Budget Jeff O'Neill introduced the budget workshop and turned it over to Wayne Oberg who prepared a presentation showing financial and budget information. Wayne Oberg explained the purposes of a budget. He provided a list of important dates and a schedule associated with the 2015 budget process. "What's New" included no levy limits and a minimum wage increase to be incorporated into the 2015 budget. Glen Posusta asked how many employees that would effect. Kitty Baltos explained that the minimum wage increase will affect a portion of their adult workers this coming year and eventually could affect student workers. Glen Posusta asked if there was a plan for accommodating that. Kitty Baltos stated that they have discussed some ideas but have not made any decisions yet. Wayne Oberg reviewed the tax levy summary from 1999 through 2014, which was set at $8.15 million. The levy has been relatively constant since 2009. Next, Wayne Oberg showed the comparison between tax capacity values and rates for the City. He also compared tax rates among Wright County cities. The tax levy spread is about 37% county, 24% school and 38% city. In 2014, the tax levy incorporated debt service, general fund, and MCC operations. Most of the increase in the tax levy went to debt service to accommodate additional debt service expenditures in 2014. Wayne Oberg reviewed three rules for budgeting: spend your most restrictive money first, offset recurring expenditures with recurring revenues, and estimate revenue conservatively while estimating expenditures liberally. Wayne Oberg pointed out some key issues the city faces: dependency on property taxes (81% of general fund revenues), tax base changes (nuclear plant value is higher), personnel services (40% of the budget), low impact fees, and some large delinquent assessments. Wayne Oberg reviewed some of the personnel services trends with actual costs decreasing in 2013. In regard to the debt service levy, Wayne would recommend using the tax levy to manage the payments for the years when the payments are higher. Wayne Oberg talked about the model for budget preparation with department heads preparing their requests, which are then recommended and discussed prior to adoption by City Council Special Meeting Minutes —June 23, 2014 Page 1 Council. Wayne Oberg presented a recommendation of a 2.1 % levy increase which is equal to the cost of living increase. Wayne Oberg discussed the potential large increase in value on the nuclear plant which would help absorb a tax levy increase. Wayne Oberg noted that the 2014 budget included 1 % wage increase and 5% benefit increase. Council will be asked for input on 2015 wage and benefit amounts, and once those are determined the remainder of the budget falls into place. Glen Posusta asked why the MCC operations shows an increase in expenditures. Wayne Oberg explained that he is now accounting for IT /copier /printer services and several other expenditures in the MCC fund instead of in the general fund. Glen Posusta asked if any of the MCC improvements have resulted in cost savings, and Kitty Baltos noted that the electrical bills have leveled off. Jeff O'Neill talked about the potential for doing some capital improvement planning for future years when the debt service levels decrease after 2016. Glen Posusta suggested that the street reconstruction project should be looked at again, especially for the areas that have been delayed. Wayne Oberg noted that his recommendation of 2.1 % tax levy would be adequate if the police service hours stay at their current level. He suggested an increase to 3% if the city reinstates the police contract hours back to 2013 levels. 3. Adiournment TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:56 P.M. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 5 -0. Recorder: Catherine M. Shuman Approved: July 14, 2014 Attest: oerae cq/� Cfa yOMministrator City Council Special Meeting Minutes —June 23, 2014 Page 2