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HomeMy WebLinkAbout05.10.10 Work Session Minutes City Council Budget Workshop Minutes May 10,2010 Mayor Larson called the workshop to order at 6:30 p.m. Present: Also Present: Larson, Donnelly, Fogarty, May, Wilson (arrived 6:39 p.m.) Peter Herlofsky, City Administrator; Teresa Walters, Finance Director; Brian Lindquist, Police Chief; Kevin Schorzman, City Engineer; Todd Reiten, Municipal Services Director; Lisa Shadick, Administrative Services Director; Brenda Wendlandt, Human Resources Director; Tim Pietsch, Fire Chief; Cynthia Muller, Executive Assistant David Pritzlaff, Jerry Ristow Audience: MOTION by May, second by Donnelly to approve the agenda. APIF, MOTION CARRIED. City Administrator Herlofsky asked the Council to establish guidelines in order to put the 2011 budget together. Department heads will give a brief presentation on their department from the 2010 budget. Mayor Larson stated Council will listen to the presentations, ask questions and set objectives at the end of the next meeting. Administration Administrative Services Director Shadick explained the areas of Administration including legislative, which covers the City Council activities, Heritage Preservation Commission, general Administration, Elections, and Communication. Councilmember May asked about equipment rental and repair. Staff explained that is for the postage meters and copiers. The postage meter at the Maintenance Facility is covered under Municipal Services. Councilmember May asked if staff could consider consolidating equipment. Administrative Services Director Shadick explained within the last couple years a postage meter was installed at the Maintenance Facility for efficiency so Municipal Services staff did not have to come to City Hall with large mailings. Municipal Services Director Reiten explained we have a part-time administrative assistant and if she had to come to City Hall for postage there would be no one at the desk. Elections are not included in the budget in an off-year. There is a maintenance agreement for the machines for approximately $2,000 every year. Mayor Larson noted in 2008 we budgeted $31,115 and in 2010 $23,725. Staff explained we cut costs, it is not a Presidential election, and in 2008 we added voting booths. New equipment will be purchased in 2013. Communication covers the newsletter, website, postage citywide, etc. There is also a capital projects fund for the cable commission for the Joint Powers Agreement with Apple Valley and Rosemount. This covers the cable broadcasts. The City Hall portion is responsible for cleaning of City Hall. Councilmember May asked what Professional Services covers. Administrative Services Director Shadick explained it covers the 19 Council Workshop Minutes May 10, 2010 Page 2 ROC cleaning contract, fire sprinkler inspections, and door locks. Councilmember May recalled last year it was discussed to go out for RFP for cleaning services. Administrative Services Director Shadick has contacted Lakeville and Woodbury, and one of them does use ROC. All three cities pay $.lO/sq. ft. The cleaning company also reduced the rates by 5% in November 2009, because of some of the areas that were not used. Councilmember May asked ifany cities use inhouse cleaning staff. Cities staff contacted do not and do not want to go to that. Councilmember May asked why we cannot consolidate space as it would have a cost savings. She felt we are spread out over a larger space than is necessary. The perimeter of the space is utilized, but there is a lot of unused space over a larger area than needs to be. City Administrator Herlofsky stated we do have more space than the previous facility. When the building was designed, more growth was planned. To move everything to the first floor, would cost money and we would end up with less space on the fIrst floor than we had in the last building. With the additional space, we have conference rooms we can use much more. To leave the second floor empty would not be a good business move. Councilmember Donnelly stated it would just save cleaning costs, not heat or lights. Councilmember May asked if staff will be going out for RFP for cleaning services. Administrative Services Director Shadick stated she will do that and has a list of companies we can contact. Mayor Larson suggested nailing down the square footage so we are paying for what we are getting. Councilmember Fogarty suggested we could just receive quotes. City Administrator Herlofsky suggested going through this process every three years. Council left it up to staff whether to go out for RFP or just obtain quotes. Liquor Operations also falls under Administration. This provides a revenue source for the City. There are two municipal liquor stores. Councilmember Wilson asked about the turnover in liquor operations compared to other parts ofthe City. Staff replied there is very low turnover in the liquor store. Mayor Larson asked ifwe have renegotiated the lease. Administrative Services Director Shadick replied the lease has two years left and staff has been looking at options. Mayor Larson felt the square foot lease price is a lot less now than it was a couple years ago. Councilmember Wilson would like to look at privatizing liquor operations. We are generating some revenue, but due to geographic location, and the size of the stores in Apple Valley and Lakeville are much larger. He would like staff to look into this, how a conversion would work and if there was a way to negotiate so some of the revenue would come back to the park system. This would take the expense off the books as it is not the most profitable operation. Councilmember Wilson and Mayor Larson agreed the amount given back for parks would be zero. Councilmember Wilson stated it is a philosophical discussion about whether we want to have liquor operations in the City. The revenues are coming in slower. Mayor Larson stated we need to determine what is the bottom line for the year for the liquor store; what did they actually make. Councilmember May agreed with looking at this, especially if the lease is up in two years. Councilmember Fogarty noted we would have to discuss what to do about the hole it would create. Economic Develonment City Administrator Herlofsky explained Economic Development. Staff is continuing efforts on new businesses and recently two new businesses have started or are in the process. This is managed through the Economic Development Authority. CDBG money has been given to local businesses who qualify. The EDA did receive an update on major Economic Development activities at the last meeting and found this very helpful. The Economic Update is being distributed to all homes through the newspapers. 20 Council Workshop Minutes May 10, 2010 Page 3 Councilmember Wilson asked if the Administrative Support Technician shown in the budget can provide support across more than this division. City Administrator Herlofsky explained they are. The Executive Assistant works for Economic Development, himself, and Parks and Rec. There are seven support staff and no one is assigned to just anyone person. Administrative Services Director Shadick explained how her staff is the point of contact, work on elections, work with Finance on receipting, and take Park and Rec Registrations. City Administrative Herlofsky stated the Administrative Support Technician provides support to Administrative Services, Finance, and Planning and Zoning. Councilmember Wilson suggested showing in the budget how staff is allocated across departments. City Administrator Herlofsky stated it is a balance as to whether there is a benefit to do the additional accounting to keep track of the amount. During the year, we also change things around based on our needs. Councilmember Wilson stated Council's priority is economic development, so logically the City Administrator will spend time in that area. He asked what percentage of the City Administrator's day is spent on economic development. City Administrator Herlofsky stated he meets with the Chamber and other business people, so approximately 10% of his time is spent in that area. Councilmember Wilson asked how much time the Economic Development Specialist spends outside of City Hall. City Administrator Herlofsky replied approximately 25%. Councilmember Wilson stated although there isn't money in the budget and it would have to be reallocated, having a Director level position overseeing economic development and having a sales role would be worth exploring. With benefits the cost could be $125,000. Councilmember May asked if one of the Administrative Support Technicians is allocated to Community Development. City Administrator Herlofsky stated the Executive Assistant works with Economic Development. Councilmember Fogarty stated her concern with an Economic Development Director is timing. At the right time, that would be great for the City. Mayor Larson felt the timing might be right. Councilmember Wilson noted ifwe do that, then we are adding benefits and payroll. Human Resources I IT Human Resources Director Wendlandt listed the areas Human Resources is responsible for. The HR/Payroll Specialist does payrol~ recruitment of seasonal staff, and benefits administration. Mayor Larson asked why payroll is not under Finance. Human Resources Director Wendlandt replied it can be in either area. It was moved to HR because there was more HR connection with regards to data practices and benefits. They work closely with Finance. Councilmember May asked why IT is in HR. Human Resources Director Wendlandt stated IT needed a home and she took it on. Councilmember May felt IT should be its own department or under Administration and Payroll should be in Finance. Finance Director Walters stated she has always seen payroll in Finance, but different cities do things differently. Finance and HR work together. Councilmember May felt it was an area where there could be some efficiencies. She suggested staffkeep an eye on growth and where it makes the most sense for efficiency purposes. Councilmember May stated when we start growing she did not know how one person can deal with HR matters and IT matters simultaneously. Human Resources Director Wendlandt noted there is a fulltime IT person. Being responsible for IT security data is an HR function. Councilmember May stated it is an HR need and an IT issue. When we grow we will have to look at how we separate those two tasks. City Administrator Herlofsky stated this is an example of how staffmg has never been extensive. There have been attempts to combine tasks to make sure we are working with as few people as possible and still make sure we get everything done. Human Resources Director Wendlandt stated we have someone at the Police Department who helps with the security system, card access for the doors, as well as security cameras. IT runs all , the systems in the City. Right now we have five servers. Depending on Council direction with 21 Council Workshop Minutes May 10, 2010 Page 4 listserv we would need to add a sixth server. We also have the voiceover IP phone system. Some of the IT time is billed back to various departments. Councilmember Wilson asked how the phone system is working from a cost standpoint. The initial costs are higher, but will be lower in the future. We are in the second year of a five year lease. Mayor Larson noted the telephone budget is $35,500 and equipment leasing is $26,000. Staff stated the $35,500 covers all the analog lines and phone numbers to run the phone system. The equipment leasing goes away in five years. Councilmember Wilson noted salaries over four years have gone up 15%. During the same time period, PERA has gone up 35% and employee benefits have gone up 34%. Employee benefits comprise 9.2% of total expenditures and PERA comprises 5%. Both are outpacing the largest category which is employee salaries. Human Resources Director Wendlandt stated for PERA, the legislature sets what we have to contribute to PERA every year and it is going up. As far as employee benefits, we are working on that for 2011. Councilmember Wilson asked ifwe have the ability to re-insure. Councilmember Fogarty asked if there is a way to protect ourselves with PERA. She is concerned the State will come back to cities to fund the entire amount. Staff stated it comes from the legislature. It is a state mandated program. Councilmember Wilson noted the costs in professional services have been stable. However, during budget negotiations he would like staff to look at ways to be more efficient in that category. Finance Finance Director Walters listed the items Finance is responsible for. Finance is also responsible for risk management which is property and liability insurance. Councilmember Wilson asked about the risk management payment. Staff will be meeting with the insurance agent, but it looks like it is going down. Councilmember May asked what professional services in Finance covers. Finance Director Walters replied it is for the audit and the Dakota County Truth-in- Taxation fee. As the truth-in- taxation no longer takes place, staffwill check on this fee. Councilmember May asked ifwe are doing more short term investing. Staff stated we are and since March, three or four banks have closed. These investments were at 4% and 5%. Now we cannot get anything higher than 1 %. Staffhas opened a savings account with Roundbank at 2.25%. It has dropped to 1.85%. Councilmember May asked about one year CD rates, but those are below 1 %. Councilmember May asked what the impact is to the current year because of the loss in investment interest and is it in the budget. Staff stated 2009 was $60,000 lower than anticipated. In 2010, it will be lower. Councilmember May asked if staff has estimated where we will be versus what we budgeted. Staffwill be looking into that. Councilmember May felt we need to be very conservative for 2011. Councilmember Wilson asked if 2009 actuals are in. Staff stated it is available, but the auditors are still working on it. He noted we budgeted $282,271 for investment income. He asked if Council felt we should make a mid-year budget adjustment. City Administrator Herlofsky stated we ended 2009 with $120,000 to the good. Expenditures were 5% less than revenues. Councilmember Wilson felt if we are forecasting a lower number for 2010, it would be prudent to act sooner rather than later. 22 Council Workshop Minutes May 10, 2010 Page 5 Councilmember Wilson asked about mileage reimbursement. He asked if staff has considered providing a car allowance rather than mileage. Human Resources Director Wendlandt stated the City used to have that for the City Administrator. City Administrator Herlofsky stated we encourage employees to use City vehicles to minimize the mileage reimbursement. Councilmember Wilson asked if there was a limit to food and subsistence expense. Human Resources Director Wendlandt replied we have a per diem and a certain amount per meal. Police Police Chief Lindquist explained the divisions within the Police Department which include Administration, Patro~ Investigations, and Emergency Management. Councilmember Fogarty asked about the rotation of vehicles. It is three years or 90,000 miles. There are three cars for investigations, nine patrol cars, and two for the SRO's. Mayor Larson asked about the canine vehicle. Staff converted the newest squad to the canine vehicle. They expect much more than three years service from that vehicle. Councilmember May asked if staff expects the overtime numbers to drop. Staff would like to say yes, but emergencies can create enormous amounts of overtime. Increasing bodies will not reduce overtime. It will reduce overtime in covering shifts for vacations and training. Last year overtime amounted to $50,000 - $60,000. Councilmember May asked what is covered in the uniform allowance. City Administrator Herlofsky stated you will not see that anymore. A uniform allowance will be given on a 1099 and it is their job to make sure their uniforms look good all the time. Miscellaneous items will no longer be included; only uniforms. Police Chief Lindquist stated an average top lasts 12-14 months because of rubbing against guns, seat belt, pens, etc. The allowance was $700/year per officer. The officers have given back $500/officer, so the allowance is now $200/officer. Councilmember Donnelly asked where the revenue is shown for the SRO. Finance Director Walters stated it should go back to the line item for police service charges. Councilmember Donnelly asked about the $1.8 million in 2008 for police service charges. That was for the Dakota Communications Center. Councilmember Wilson asked about workload measures and how much the officers patrol the roads. Police Chief Lindquist stated the primary corridors are patrolled a lot. A couple times during the day there is a half hour to one hour of more activity where we have two or three officers on patrol. They also cover the areas with the bus stops and residential streets with higher volumes of traffic. Councilmember Wilson stated last year there were calls with noise issues. He asked how those are handled and if there are citations. Police Chief Lindquist stated the noticeable increase last year was Hairball playing at the Legion with 18 - 19 calls in one night. He has spoken with the Legion and they have agreed to have a tent. The rental for the tent is $10,000. Staff would like to propose something to Council regarding noise regulations. Fire The Fire Department consists of Fire Services and Rescue. Fire Services has 52 paid on-call members for the City and townships. The Fire Department also provides inspections for commercia~ multi-family, and building plan review. They also investigate fIres. The Rescue Squad has 20 paid on-call members who must also be on the Fire Department. They provide service for the City and surrounding communities, and also provide support for ALF / Allina 23 Council Workshop Minutes May 10, 2010 Page 6 Ambulance Service. City Administrator Herlofsky stated the contracts for fire service with the townships are ten years old. Staffwill be meeting with the townships on how the cost is figured. Staff noted 80% of the fire cost is covered by the City and 20% from the townships. Councilmember May asked about the uniforms and is it operated the same as Police. Fire Chief Pietsch stated their policy is different. The Fire policy also covers turnout gear. The typical outfit costs $3500/person. On top of that is the dress uniform. With the recent retirements we have had to hire people and that is the reason for the increase in the uniform amount. The turnout gear lasts three to five years. Councilmember May asked how often Council receives an update on the investments. The Relief Association meets quarterly and Council has not been provided with the investment information in the past. Councilmember May would like to receive updated investment information. She asked about the contracted services. Staff replied that is for the DCC dispatching, radio, etc. Mayor Larson stated this year we received $20,000 in grant money for turnout gear. Fire Chief Pietsch stated that should be reflected in the budget. They will try to get all turnout gear updated this year so they will not need it for next year. When the 2010 budget was prepared, they were not aware of the grant. So there will be a reduction next year. Councilmember Wilson stated we receive grant money every year and asked where that is shown in the budget. Staff stated it goes into the general fund, miscellaneous revenue. Councilmember Fogarty asked ifwe want that changed. Councilmember Wilson would like to have it shown as a transfer out. Staffwill come back with a way to show this revenue. Finance Director Walters stated normally when grant money is received and they know their expenditure line item will go higher, they do a budget adjustment. You would see the increase in the expenditure and the budget adjustment in the revenue side. Councilmember May noted Fire Chief Pietsch did not say he would adjust the budget. Fire Chief Pietsch stated they will probably see a reduction next year. Councilmember May stated the Fire Chief was going to make sure everyone had turnout gear so we will be spending more money. Fire Chief Pietsch replied no; we have a grant. We wait one year until they pass certification before we buy their turnout gear. In this case, where we have FEMA grant money, we will probably buy the turnout gear in advance oftheir certification. We will buy more than anticipated with the intent, because ofthe grant, we will spend less next year. Councilmember May stated at Council meetings when we say we have grant money, staff needs to make it clear we are not spending less. Councilmember Wilson asked ifwe keep track of all the money coming in and where does it show up? Finance Director Walters stated we keep all the revenues together and that is what we use to cover the entire budget. Councilmember Wilson felt more grant money has come than what is shown. Finance Director Walters stated we have to keep grant revenue separate and it should show up in account 4404. There is also a Police special revenue account. Usually you segregate your grants especially for Fire and Police who receive grants for a specific purpose. You would set up a special revenue account specifically for grant money. This helps to determine if the grant money was spent for the specific purpose. Councilmember Wilson would be surprised if we did not have any grant money in 2008, because it shows nothing. Fire Chief Pietsch stated when we order equipment we use a purchase order with coding. Typically it is coded under 4000 and capital outlay 6940. It was done that way to track it. Finance Director Walters stated 6000 is an expense category so they have offset the expense with the revenue which is not how you should do it. Staff will look at this. Mayor Larson asked if we could make a grant page in the budget. Finance Director Walters stated all the grants will show up under intergovernmental revenue. There is nothing else in this account; only grants. Councilmember May stated the 2010 actual 24 Council Workshop Minutes May 10, 2010 Page 7 will show an extra $20,000 spent for uniforms, but the summary will not show the grant money coming in. Em!ineerine: Engineering consists of Engineering, Planning, Building Inspections, and Natural Resources. Councilmember Fogarty stated building permits picked up. She asked how much was due to rebates being offered, are we still seeing the increase now that the program is over, or was it 195th Street opening. City Engineer Schorzman felt some of it was a swing in the market. We should wait a few more months to determine that. Councilmember Fogarty asked ifhe anticipated needing more help in Inspections because of the increase. City Engineer Schorzman stated it depends on if it continues. If it does continue, we may want an additional half time person. He felt we should see what happens over the next three months. City Administrator Herlofsky noted many ofthe lot prices have been reduced. Councilmember Wilson asked about the Fairhill development and is the City liable for loan costs because we do not have homes built yet? City Engineer Schorzman stated that starts in 2012 or 2013, but that is only if the developer does not cover the costs themselves. They have paid their bills on time and are very easy to work with. The difference is the developer owns the land and they do not have an overhanging debt to payoff. The City owns the original 42 acres for parkland. Back to the Fire Department, Councilmember May asked if they will need any equipment. Fire Chief Pietsch replied it is part of the CIP. City Administrator Herlofsky stated staff is talking with Lakeville, Burnsville, Apple Valley, Rosemount and Hastings about having a study to determine what we can do together with the Fire Departments with an emphasis on training and equipment issues. Staffwill bring something to Council this fall. Municinal Services Municipal Services Director Reiten listed what the various divisions do. The divisions consist of streets, snow removal, sewer, solid waste, storm water, water utility, and fleet. All streets are plowed within 12 hours. Councilmember Wilson noted a resident has commented about the trails and overtime. Trails are handled through Parks and Recreation. Councilmember Fogarty stated that explains why the trails are sometimes done before the roads. If staff could coordinate having the roads done before the trails, it would make things easier. Councilmember Donnelly asked ifwe pay overtime for snow removal. He thought the County gives comp time. City Administrator Herlofsky stated we do that, but we give comp time up to 40 hours. Anything after 40 hours they are paid at time and a half. If comp time is not used at the end of the year, it is paid out at the current year's rate. The City will be paying it out twice a year. Councilmember May felt we would save money if they took comp time. Human Resources Director Wendlandt replied not really, because it is still time and a half. Councilmember Wilson asked if Dakota County is as responsive to our section of Pilot Knob as they are to the northern section. Staff does talk to the county if there is a problem and they respond right away. (Councilmember Fogarty left at 9:02 p.m.). Solid Waste provides collection for residential and commercial garbage, a curbside clean-up day, cardboard recycling drop off sites, and Pollution Prevention Day for Farmington schools. 25 Council Workshop Minutes May 10, 2010 Page 8 The water utility provides water to all residents. There are currently seven wells. Hydrant flushing is done twice a year. Fleet does all the maintenance and repair of all City equipment. Both employees are also on snow plow routes. Previously street lights were shown under Municipal Services, but it is no longer in the general fund. The streetlight utility is now an enterprise fund. Residents now call the City when a street light is out and the City contacts the electric company and follows up to make sure it has been taken care of. The City owns the light poles in the downtown on Elm Street, Spruce Street out to Vermillion River Crossing, and 195th Street. The rest are owned by Dakota Electric or Xcel. The fee pays for the lights and the maintenance agreement to keep the lights working. Staffhas found a cheaper, stronger plexiglass light globe as some were being vandalized. City Administrator Herlofsky stated this summer staff will try to GPS all the signs and street lights to keep track of inventory, age, and maintenance. Council will schedule the next budget workshop at the May 17, 2010, Council meeting. MOTION by Wilson, second by May to adjourn at 9:15 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~nl~ ~thia Muller Executive Assistant 26