City Council Minutes 09-08-2014 SpecialMINUTES
SPECIAL MEETING — MONTICELLO CITY COUNCIL
Monday, September 8, 2014 — 5:30 p.m.
North Mississippi Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Absent: None
Others: Wayne Oberg, Jeff O'Neill, City Department Heads
1. Call to Order
Mayor Herbst called the special meeting to order at 5:30 p.m.
2. Purpose of Workshop: Discuss potential budget items & proposed 2015 tax levy
Jeff O'Neill explained that the preliminary 2015 levy will be set at the September 22nd
Council meeting. With tonight's discussion, Council is invited to look at potential budget
items and changes that may affect the 2015 levy.
Finance Director Wayne Oberg began the discussion with a handout and presentation.
Wayne Oberg first discussed tax levy information from prior and current years. Wayne
Oberg noted that tax changes for the coming year are based on new building permits, no
decertification of TIF districts, and an increased value for the nuclear plant. Wayne
Oberg explained that Xcel went through a recent upgrade at the plant, with a significant
impact in the market valuation and tax capacity for the city. Wright County provided the
estimated market value for 2015 and Wayne showed comparative figures for 2012
through 2015.
Wayne Oberg is recommending at least a 4.7% increase in the levy which includes
certain items that would be included in the budget: inflationary increase of 2.1 %,
additional four hours for law enforcement, pathway maintenance, stormwater
maintenance, and transit funding. The total levy amount would be $8,535,000 under this
recommendation.
Council members commented on the impact from the change in valuation for Xcel
Energy. Glen Posusta asked if the valuation for 2015 was set in stone or would Xcel be
challenging that figure. Clint Herbst commented that the figure should be fairly certain
since it is based on equipment and upgrades for producing power.
Wayne Oberg displayed the projected tax levy amounts for the general fund, community
center fund, and debt funds. He then talked about the potential impact to the tax capacity
value and rate, noting that when the value goes up the rate goes down. Based on the
estimated market value increase, Wayne Oberg estimates the tax capacity rate would drop
to 35.731 for 2015, which is a decrease of 20 %. Glen Posusta asked how the tax capacity
compares to other cities in the county. Wayne Oberg stated that he would need to do
some digging to get their tax capacity values in order to compare. Of the tax capacity
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increase, which was a change of 31%, 27.6% was based on Xcel Energy and the other
3.5% was from increases in other areas. Wayne Oberg next showed the tax capacity
value without Xcel plant values. This leaves a net value of $15.6 million which is a
slight increase over last year's; without the plant, the tax capacity rate would be at 54.752
which is roughly the same as 2014.
Wayne Oberg presented tax capacity schedules to show the impact of adding various
amounts to the property tax levy and to show impacts on residential and commercial
properties. Most scenarios demonstrated that it is unlikely that property taxes will
increase for 2015 payable.
Wayne Oberg displayed a list of additional projects and purchases that could be added to
the levy for 2015. Wayne discussed some possible changes in staffing in public works
and pointed out that adding employees would have an ongoing effect on salary and
benefits. Wayne Oberg pointed out that the city could handle increases through the debt
service levy, with the debt service levels beginning to drop next year. He suggested that
this might be a way to fund increases in capital projects.
Clint Herbst stated that he still wants to meet with individual departments to review the
additional considerations. He suggested that could take place before the next council
meeting. Clint Herbst asked Tom Moores if he could provide information on the long
term costs for maintaining and reconstructing roads in the city. Tom indicated that he
could bring that information to Council on September 22na
Jeff O'Neill mentioned that the workshop today was set up for an open discussion for
council to go through the CIP list and ask questions of the department heads. Clint
Herbst confirmed that he would prefer to meet individually with each department head.
He'd like each to present a list of items that they absolutely need and items that are a
potential need and those should have documented reasons for being included in the
budget. Council also discussed pros and cons for adding staff at public works.
Jeff O'Neill added some information about the status of trunk funds which have been
diverted for use to pay off wastewater loans. There might be good reasons for building
up those funds again to fund future water and sewer trunk lines. Clint Herbst asked him
to bring that information to the next budget workshop with documentation to support the
reasoning.
Tom Perrault asked about the potential for the value of the Xcel plant to go down in the
future. Clint Herbst commented that he thinks it is likely, but it would be good to take
advantage of the increase this year to support some of the projects that could be included
in the budget.
Glen Posusta asked Matt Theisen to comment on the consideration of a $1.1 million fire
truck. Matt Theisen explained that that this vehicle would replace the 1986 fire truck
which is aging and needs parts replaced or upgraded. Clint Herbst noted that the city
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should also include budget funding for a building or building alterations to accommodate
a fire truck of this size, if they plan to bring this forward for discussion.
Consensus of Council was to hold a special budget meeting prior to the September 22nd
regular meeting to meet with department heads.
3. Adjournment
TOM PERRAULT MOVED TO ADJOURN AT 6:17 P.M. LLOYD HILGART
SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Catherine M. Shuman
Approved: September 22, 2014
Attest:
gZVMministrator
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