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City Council Minutes 11-24-2014 SpecialMINUTES SPECIAL MEETING — MONTICELLO CITY COUNCIL Monday, November 24, 2014 — 5:00 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 The special meeting was called to order by Mayor Clint Herbst at 5:32 p.m. 2. Purpose of Meeting: • Review 2015 Fee Schedule proposed changes • Present 2015 proposed budget and discuss final levy to be adopted December 8th Clint Herbst explained the purpose of the meeting and asked Jeff O'Neill to lead it off. 3. 2015 Fee Schedule Jeff O'Neill explained that the proposed fee schedule will be presented to Council at the first meeting in December for approval. He reviewed a few of the changes on the list: MCC current members will see a 10% increase in member fees and there will be a 5% fee increase for sewer and water rates. He noted that staff will be meeting with Cargill to discuss the proposed increase in rates. Ron Hackenmueller asked if Cargill is aware of the proposal as they were very opposed to an increase a few years ago. Jeff O'Neill explained the opposition was due to the way the formula worked, which has been adjusted. Glen Posusta asked for an explanation about the 10% increase on current MCC membership fees. Clint Herbst and Ditty Baltos explained that there are a variety of fees that members are paying depending on when they started their membership. As new members have joined at higher rates, the gap between rates is widening. This increase will help close the gap. Glen Posusta hopes that members understand that the city's costs have gone up and the increase will help to catch up. Wayne Oberg offered an explanation on the water and sewer rate increase. The 5% proposed increase has been included in the proposed budget for 2015. He has briefed Cargill and they requested the city consider waiting until midyear to increase the industrial rates. Council members felt that Cargill could be charged the higher increase as they have not had an increase for over a year. Tom Perrault felt that an increase to all rates should be held until midyear if industrial rates are held. Wayne Oberg explained that he is okay with holding just the industrial rates because of the way the bills are calculated. Clint Herbst suggested that either the city should wait until midyear for all Special City Council Budget Workshop Minutes — November 24, 2014 Page 1 rates, but increase rates by 10 %, or just hold off on the industrial rates until midyear. Jeff O'Neill stated that staff will adjust the fee schedule to reflect that the industrial rate increase will be held until midyear. Shibani Bisson explained that a 4% increase is being proposed for trunk fees and SAC and WAC fees to keep up with construction cost increases as we look at future capital projects with development. The last time these fees were increased was in 2007. 4. 2015 Proposed Budget & Levy Wayne Oberg gave a presentation about the 2015 property tax levy and budget being proposed. On September 22nd, Council adopted a preliminary levy and will adopt the final levy on December 8a`. Wayne Oberg presented figures comparing the CPI index and the tax levy over the past 13 years. Wayne Oberg compared the tax capacity value, which increased for 2015, with the tax capacity rate, which will decrease. This change reflects the large increase in value on the Monticello Nuclear Generating Plant. Wayne Oberg thinks that the value for the MNGP may decrease slightly next year. Wayne Oberg discussed the change in percentage of levy comparing the school district, county, and city. For 2015, the City of Monticello has the lowest tax capacity rate in Wright County. The City will have a tax levy rate lower than the County's tax rate. Wayne Oberg pointed out that the county is actually collecting over $1 million more than the city on the property tax for parcels in Monticello. Jeff O'Neill asked if the city might want to contact the County to ask why they are looking at taking this share of taxes. Clint Herbst suggested it might be good to let them know we are aware of this and ask the county to consider what they are putting back into the city compared to what they are taking in taxes. There was some discussion of the school district levy change and Glen Posusta explained what he had found out about the "other local levies" line item listed on tax statements. Wayne Oberg showed several slides on the change in residential and commercial taxes. Wayne Oberg showed a proposed tax levy calculation totaling the adopted preliminary tax levy of $8,535,000. Wayne Oberg presented several other slides showing various figures and percentages for the 2015 budget proposal for the general fund and community center fund. Wayne Oberg reviewed the CIP for 2015 -2019, pointing out the items proposed in different departments for the coming year. Wayne Oberg noted that some of expenses are preliminary with added costs in future years. He discussed some of the revenue sources to be used for some of the projects. Brian Stumpf stated that he had talked to Glen Posusta, and they would like to see the ag land, that has been used for WWTF biosolids, put up for sale. When sold, the proceeds should be returned to the water and sewer funds to be used toward some of the larger projects. Wayne Oberg concurred that a one -time revenue should go toward one -time expenditures. Special City Council Budget Workshop Minutes — November 24, 2014 Page 2 Wayne Oberg discussed some possible changes that could be incorporated into the 2015 budget, particularly in place of the four additional hours for law enforcement. Jeff O'Neill mentioned some of the specific items (security cameras in parks, banner replacement, a dog park, freeway interchange study for the west end of the city, and a trail connection between Spirit Hills and Wildwood Way) that were discussed by staff and could be incorporated into the 2015 budget if the law enforcement hours are not added. Jeff O'Neill suggested that Council may want to make a decision first on the law enforcement hours. Clint Herbst suggested that perhaps a dog park could be funded by increasing license fees for dogs. It was noted that there are probably a large number of dog owners that may not have licensed their dogs. If they want to support a dog park, they could purchase a license. Clint Herbst mentioned that he would like to see some education done about the impact of the power plant on the city not only in terms of taxes but also on the community. Jeff O'Neill shared some results of a survey done on statewide utilities and the utility cities. It doesn't appear that there will be any sweeping changes to the taxing system, but it gave a look at the impact of power plants on communities. Brian Stumpf noted that he is not interested in removing the added hours out of the police budget. Clint Herbst commented that he does not feel that the additional hours are needed in 2015. Jeff O'Neill stated that he thinks the freeway interchange study will be important for 2015 as the state is backing improvements on I -94 and we want to be ready when the State asks for this information. Clint Herbst asked Shibani Bisson how long such a study would take. She felt it would take at least a few months and would result in a planning document, not a feasibility study. Clint Herbst recommended that Council members review the budget proposal over the next two weeks and look at what they want to do in terms of the police hours or other budget items. 5. Adjournment TOM PERRAULT MOVED TO A.D JO? TRN THE SPECIAL MEETING AT 6:41 P.M. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 =0. Recorder: Catherine M. Shuman 64W Approved: December S, 2014 Attest: CitfMgkinistrator Special City Council Budget Workshop Minutes — November 24, 2014 Page 3