Loading...
HomeMy WebLinkAbout11.08.10 Work Session Minutes Council Budget Workshop Minutes November 8, 2010 Mayor Larson called the workshop to order at 6:43 p.m. Present: Absent: Also Present: Larson, Fogarty, May, Wilson Donnelly Peter Herlofsky, City Administrator; Teresa Walters, Finance Director; Jim Murphy, Police Sergeant; Randy Distad, Parks and Recreation Director; 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 MOTION by Wilson, second by Fogarty to approve the agenda. APIF, MOTION CARRIED. Staff provided reductions to the 2011 budget amounting to $400,000 as requested by Council. The detail of the changes was provided. At a previous meeting, Council asked that $23,494 be added back into the Parks and Recreation department, and we had to add $72,900 for the Fire pension. As far as staffmg changes, there was a retirement of Bill Weierke, Streets and Utilities Supervisor, and his position was fIlled internally by Steve Arndt. Once there is a position that needs to be filled from outside, that position will not be fIlled. There is also one voluntary layoff. These changes amount to $203,200. Staffhas also determined there is $23,594 in cable franchise fees that could be used to assist with salaries for the Administrative Services Director and Communications Specialist. This would offset the amount added back into the general fund for the Parks and Recreation department. Under additional budget reductions, staff was asked to find another $100,000. Staff is proposing to eliminate the curbside pick up portion of clean-up day. Residents would bring their items to a location. Clean-up day would not be eliminated, only the pick up service. This would save $100,000 and would reduce the fees to the residents. This service has been for Farmington residents only, but people outside the City have dropped items off. Mayor Larson felt just as many items leave the City. Other options which staff is not recommending include a furlough for every employee including Police and eliminate additional positions. Other possibilities staff is still working on include leasing space on the second floor of City Hall to the school district. The Police Officer and Sergeants contracts are settled through 2011, but both groups have agreed to discuss concessions for 2011. Staff is working on the agreements and expect them to come to fruition. Before the end of the year, Council does need to discuss franchise fees. In order to continue the seal coating program we will have to assess the properties 100% of the cost, approve franchise fees, or use another method. Councilmember Fogarty has had concerns with curbside clean-up day because it does not pay for itself. However, she has heard residents would rather pay more and keep that service. Instead of eliminating that, she would like to spend some time in 2011 evaluating whether the fee is covering the cost. This service keeps the City cleaner. She agreed a lot of items are brought into 12 Council Budget Workshop November 8, 2010 Page 2 the City, but there are also a lot of people coming into the City who pick up as much as what is brought in. Not everyone has the means to transport items across town. Staff did provide some creative ideas, but it does not sound like there is anything concrete. She would like to see revenue come from leasing space in City Hall, but until there is something concrete, it is difficult to comment. She did like staff moving in that direction. Councilmember May agreed with Councilmember Fogarty regarding clean-up day and would like to see a study of the past few years of how much we are short. Municipal Services Director Reiten stated we spend $155,000 a year for clean-up day and we came in at approximately $1,000 under that. Councilmember May did recall we were just about breaking even and would not support eliminating the curbside pick up portion. Staff stated the residents pay approximately $60,000 towards that service of the clean-up day. The rest comes from garbage fees. What people take is the valuable items and things the City would receive money for. Councilmember May understood the staff reductions presented. She did not support the furlough. She did support option 3 to eliminate additional positions. In general, when she read the information she was expecting something more in-depth. She did not support having cable franchise fees pay salaries. If there is even a suggestion that salaries are going to be paid out of franchise fees, the whole transparency issue becomes more apparent. She did not feel that was the original purpose ofthe cable franchise fee. She understood the justification was because these positions deal with communications, but did not think the purpose of the cable franchise fee was for salaries. When Council first discussed the Vermillion River Crossing payment, one of the things they clearly stated was they did not want to move money around to cover that debt. This has the same feeling that we are just using money from a different pot to pay a bill. She did not want to go down that path. If there are salary costs she wants them to be upfront and easily identified in the budget and they should be paid out of the general fund. Ifwe have funds in the cable franchise fund, then maybe we need to look at reducing the fee. City Administrator Herlofsky stated these are allowable costs. Mayor Larson asked what those funds are used for. Administrative Services Director Shadick stated we use the funds to pay for the work Mark Moore does and the cable staff that work in the control room so we are currently using the funds for salaries. We also use the funds for web streaming costs and anything associated with cable broadcasts. It is also used for maintenance of equipment. Finance Director Walters stated it is a capital acquisition fund and is in the capital projects portion. Councilmember Fogarty noted not all the money in this fund comes from franchise fees. About half comes from property taxes. Finance Director Walters stated the portion from property taxes is to pay a debt payment for equipment. Administrative Services Director Shadick stated the equipment costs have been paid and we do not owe anything for the equipment. Councilmember May recommended option 3 to eliminate additional staff positions. Leasing the space in City Hall is good news. She has brought up the suggestion as to why staff does not just occupy the first floor as it is a very large building to look at reducing cleaning and utility costs. She suggested looking at leasing the entire second floor. These are the kinds of real cost savings she is looking for. She did not support the Deputy Registrar office at this time. The Police contracts are good news. Regarding general fund revenues, she does not support increasing the number for licenses and permits. Councilmember May recalled previously the permit amount was $340,000 and now we are up to $431,000. Finance Director Walters stated in August it was $411,455. As part of the reduction process, this item was increased. Currently we are $95,000 over the 2010 budget. City Administrator Herlofsky stated the housing permits were $340,000. Initially we were not sure 13 Council Budget Workshop November 8, 2010 Page 3 about Twin Ponds and the CDA senior housing. Last week staffwas assured this housing would be built in 2011. This would amount to 100 units. Councilmember May stated we do not have a contingency plan. If there is any area that can provide us with this plan, it is permits. She would like to see us use the highest number possible and felt we need to be conservative. There was also a tax credit in place for half of2010. She wanted to take a conservative approach and now there is another $20,000 added. We have to keep in mind the foreclosure rate and unemployment. City Administrator Herlofsky stated since he has been here there have been discussions about the permit amount and staff has been accused of not taking a conservative amount, but every year the permits have come in higher. Staffhas made an attempt to provide numbers that are realistic and conservative. As of this year we have already met our numbers. This Council started in 2009 after the State reneged on a $180,000 payment in 2008. In 2008 we were short $180,000, we were short another $350,000 in 2009 and now for 2011 we will be short another $400,000 from the State. There has been $1 million the State has not provided to us and we have made up the difference in taxes and cuts. Councilmember May stated her opinion is the permit number is too high. Also the fmes number at $70,000 is too high. The last fmancial summary showed $30,000 or $40,000. She would like the Police Department to look at that. Mayor Larson felt the number should be cut in half. She has not seen any data to support the $70,000. Regarding interest income, she had suggested $180,000 and would like some information on how staff came up with $250,000. Finance Director Walters stated that was her original estimate. As interest rates continue to decline, she agreed, but the number has not been changed. She suggested it be changed to $180,000. Councilmember May stated regarding Police expenditures, we had mentioned the DOT for more discussion. Mayor Larson stated we have an investment in equipment for that operation. Ifwe were to cut a vehicle inspection unit, what would we save? Sergeant Murphy stated nothing. The officer's primary function is a patrol officer, he has other training which includes inspection of commercial vehicles. Along with that are the fmes generated from those inspections. Mayor Larson stated so the only gain would be from selling the equipment. Councilmember Fogarty stated it has more to do with the amount of time spent and what other things could be done during that time. The example brought to Council is that someone was pulled over for two hours and the fme was $100. What could have been done in those two hours? Sergeant Murphy stated there is also a safety factor. Ifthe equipment is not safe and the load is dumped, it will take MnDOT and public works to clean up the road. Sergeant Murphy noted there are different levels of inspection which can take longer. He also has the scales to weigh the vehicles. Ifvehicles are over weight, they will tear up the roads quicker. Councilmember May still disagreed and felt there were more costs to the City. She would like to see that time spent elsewhere. Regarding the IT overtime and no after hours support, that is not a big number. She noted in an earlier meeting they were going to cut only half of that amount. Under Engineering, professional services are being cut by $30,000 and asked if that was realistic. City Engineer Schorzman stated it will impact our ability to provide service to residents and internal services. When we are at this level of cutting, it has to come from somewhere. City Administrator Herlofsky stated the EDA has asked staff to get permits through within 30 days. During the year work does not come in 1/12 each month. Because of construction season, there is more activity in the summer. A consultant for Engineering means they are out on the job or doing development review. If too many things come in at the same time, then you tap those resources. If there is some flexibility we can do with less, but this is an attempt to provide the service when needed. Mayor Larson noted the statement, the impact of items that cannot be completed by staff will wait, says it all. City Engineer Schorzman stated 14 Council Budget Workshop November 8, 2010 Page 4 that is the true impact ofthis reduction. City Administrator Herlofsky stated right now the Engineering department consists of the City Engineer, two technicians, and before that we had an Assistant City Engineer and the Engineer from Bonestroo with a much larger staff in the summer. We have kept the cost down substantially over the last couple years. Councilmember Wilson stated the cost of the program for the curbside clean up is $155,000 and we are collecting about $60,000. It is $10/household. He stated the true cost of the program is $23.84/household. The Solid Waste fees are subsidizing $13.84/household. The Council has been criticized because we are charging too much for garbage. We need to put everything in the bucket where it belongs. Municipal Services Director Reiten stated with this cost and all the added service the City is getting, adds up to at least $220,000. To reduce the cost by that much, we would need a minimum of $220,000 for the general fund if we eliminated garbage and then you would need to have another service come in and residents would pay for that garbage service. We also use this staff for plow operators. Councilmember Wilson is not in favor of eliminating the curbside pick up portion of clean-up day. He also does not favor a furlough. Regarding the Deputy Registrar office, he asked ifISD192 and a Deputy Registrar could both function in this building. City Administrator Herlofsky stated until he determines how much space the School District needs, yes there is enough room. The biggest concern is for the first couple years there will not be a large amount of revenue coming from this operation. Councilmember Wilson asked if staff can offer more insight into the Police Officers contract. Human Resources Director Wendlandt stated they are specifically talking about wages for 2011. Timing was everything when they settled in 2008. Both the officers and the sergeants have a 3.5% increase for 2011. The discussion is splitting that in half for 2011 and extending the contract to 2012, making it a 1.75% increase for 2011 and 2012. City Administrator Herlofsky stated the Police Department did not have to do this. They were willing to work out a fmancial situation that was more beneficial for the City and offered an opportunity for them. Councilmember Wilson agreed with Councilmember Fogarty on foreclosures and the receipt of tax payments. Cities are looking at having a reserve for that. We are projecting a fund balance of$2.1 million. If interest comes in at $180,000 and permits come in lower than projected, and other issues come up, will we be sitting at a fund balance of $2.1 million next year? This is so tightly compact that there is no margin for error and $2.1 million is not an ideal fund balance. City Administrator Herlofsky stated over the last couple years we have had a 5% advantage. Revenues have been close, but expenditures have been 5% lower. What hurt us is the State not providing funds. We do not see the fund balance increasing for 2011. Councilmember Wilson stated ifwe have weather events that cause an expense, we will be close. He felt like Council in July recommended option 3, reducing start: to address the issue. He is not comfortable with option 3, but that is what Council suggested. Very few people are interested in paying more for taxes and would rather see the City cut back and preserve essential services. We have the ability to compensate for reductions in staff because we are seeing reductions in revenue. What he has seen for the past month or two is a lot of different minutias with the attempt to preserve a position or two. He complimented the City Administrator for wanting to do that, but we do not have the revenues to support the staffmg we have right now. The entire staff of the City is being put at risk because we are afraid to prioritize the critical positions. Everyone that is an employee is important, but there are some City functions that are more important than others. The Police is more important than forestry; Fire is more important than parks. Getting the snow cleared is 15 Council Budget Workshop November 8, 2010 Page 5 more important than some other things. One thing he has tried and not been able to do is to prioritize the budget from A-Z. Mayor Larson stated the fund balance is tightly compact and is cut down to bear bones. He asked what number for reductions Council is comfortable with. Do we want $400,000 or $500,000 or somewhere in the middle? Councilmember Wilson stated ideally he would like to see $500,000 and use the extra for a buffer. Councilmember May agreed the $500,000 reduction would provide a buffer. Councilmember Fogarty stated when she suggested setting the preliminary levy at $400,000 vs. $500,000, it was with the caveat she wanted to keep the option for the Deputy Registrar. She would be comfortable with $400,000, but wanted the Deputy Registrar in this facility in 2011. If Council is not interested in the Deputy Registrar, then she would look at $450,000 - $475,000. She would like to believe they could get $500,000, but does not know if it is possible. Councilmember Wilson was concerned with the $30,000 cut in Engineering and what that means. City Engineer Schorzman stated depending on what comes in, this would be plan review, plat review, and issues for Municipal Services. Issues would be prioritized. City Administrator Herlofsky noted Dave Sanocki is the one we are talking about for $30,000. City Engineer Schorzman is concerned with the loss of experience because he has been here a long time. Mayor Larson stated $30,000 would mean keeping Dave Sanocki. City Engineer Schorzman stated it would mean having Bonestroo down here day to day. Councilmember May stated we talked about this last year that it has to be cut eventually or bring him into the fold. Councilmember Fogarty understood loosing the history. Sometimes the knowledge of why something was done is just as important as what was actually done. City Engineer Schorzman stated ideas regenerate themselves over time. What does not regenerate is if an idea was tried and did not work. City Administrator Herlofsky stated the $30,000 is the general fund portion Dave earns when helping with day to day things. When he works with a project that can be billed, the project is billed. How can we have an engineer for $30,000? Councilmember May stated that is a small portion. She did not want residents to think that is all we spend on that service. Mayor Larson asked if we eliminate the $30,000 and something does come up, what would we spend without him here? Will this cost us money in the long run? City Engineer Schorzman stated any decision like this has that potential. The true impact will be response times. We have capable start: but it is a matter of how thin can we spread them. We would have to prioritize. Councilmember Wilson felt we need to prioritize what Council wants to do and then the money will fall into place. He does not know what the difference will be between $400,000 and $500,000; it might be the reduction of a staff person, but then how does that affect everything else. Councilmember May stated it comes down to prioritizing. If things pick up, then we would have to adjust the budget upwards, but we cannot go on paying out the kind of money we are for this extra service. If we are at that point, then we need to decide if it would be cheaper to hire another engineer. If this cut is having a detrimental affect, then staff needs to let us know. City Engineer Schorzman stated even after the $30,000 reduction, there is still $15,000 left in the budget for professional services. Mayor Larson stated therein lays the problem with all this paperwork. We do not have everything we need. Seeing a $30,000 reduction to him means this item is gone. City Engineer Schorzman stated the $30,000 eliminates the day to day interaction we have now. There are other things we do with that line item that we need to continue to do. Mayor Larson realized all the information can be found somewhere, but it would be nice if it was all right here. Councilmember May suggested having a cross reference. City Engineer Schorzman stated he would still give a set of new development 16 Council Budget Workshop November 8, 2010 Page 6 plans to Dave for a cursory review, but staff would review it first. Councilmember Fogarty recognized what an asset this service is and Council is aware what they are asking staff to cut. She was confident staff would prioritize the work. Mayor Larson stated ifwe do have a Deputy Registrar office, he wants to start small with a full time person and a couple back up people and fill positions as it builds. He stated we do have people here that he was assuming could backup this office. Mayor Larson asked again if Council was comfortable with the $400,000 in cuts staff provided as far as office supplies, no color copies, reducing professional services, no overtime in IT. We have mandated employee training in Human Resources that will be cut. Human Resources Director Wendlandt stated the professional services will be cut, but she will do as much of that training as time allows. She has found some training at no cost to the City. Mayor Larson asked if Council was okay with eliminating security training in IT. Human Resources Director Wendlandt stated we did a security audit on the system in 2010 and we were compliant. This was cut for 2011, but it will be in the budget for 2012. Councilmember May stated she said no to using cable franchise fees for salaries. She also said no to cutting after hours IT support, and she was okay with the explanation for mandated employee training. Mayor Larson noted we also lost money in interest so we have to make that up. Councilmember May asked about adding the $72,900 back in for the Fire pension. Finance Director Walters stated it was not in the budget and needs to be put back in. We have a voluntary layoff that covered that. Finance Director Walters stated we are down to $300,000 with these changes by adding $70,000 in revenue and add back in the $30,000 in expenditures you are down to $300,000 in cuts rather than $400,000. Councilmember Wilson asked ifwe were looking at $300,000 in cuts because of adding back in the $30,000 in engineering. Councilmember Fogarty replied no, that is because of the interest being at $180,000 rather than $250,000. She was comfortable with the licenses and permits and fmes numbers because ofthe two CDA projects. Councilmember Wilson stated on the interest we are going down $70,000 to $180,000. The other $23,000 is not using cable franchise fees for salaries. Councilmember Fogarty confirmed the furlough is off the table. Council agreed. Also eliminating curbside clean up is off the table. Option 3 for staff reductions is open and we are comfortable with leasing City Hall after seeing concrete numbers. Mayor Larson did not think we could get to $500,000 in reductions. He felt we could get closer to $425,000 in reductions and was in favor of option 3, reducing staff. Councilmember Fogarty stated we need to give staff direction on fmes and permits. Mayor Larson stated we know we have permits coming for the townhomes and senior housing. Right now we are at 82 permits, up from last year. Councilmember Wilson asked how much revenue will be coming in from these projects. City Administrator Herlofsky will check with the Building Official for an estimate. Mayor Larson stated we have $431,455 in licenses and permits. Councilmember Wilson was comfortable with the number, but at the same time there should be a buffer. Councilmember May suggested a compromise and take the $20,000 adjustment out. Council agreed. City Engineer Schol'Zman noted until we see plans for the senior housing, the number will be an estimate, not an accurate number. 17 Council Budget Workshop November 8, 2010 Page 7 Councilmember Fogarty asked City Administrator Herlofsky ifthere was anything he has not heard Council speak on that he will have to deal with. She wanted to make sure Council was being clear on the direction. Finance Director Walters stated she heard Council wants a more realistic number for interest and look at the number for senior housing permits. City Administrator Herlofsky asked if it was the consensus ofthe Council to not use the cable franchise fee for salaries. Mayor Larson asked what the $23,000 would not be used for, if it goes towards salaries. Administrative Services Director Shadick replied it would stay in the cable fund. The franchise fees can be dedicated to other areas. The PEG fees have to go to public education and government programming. It is best to use franchise fees for communications, whether it is equipment or salaries. As part of the Joint Powers Agreement, we are paying for the services of Mark Moore and the cable operators. We would still have enough ifwe use a portion for salaries. City Administrator Herlofsky noted we were short $23,000 for Parks and Recreation and this was a way to make up for that in the general fund. Councilmember Wilson felt the Council has an opportunity next year with this category. We pay $53,000 for web streaming. Administrative Services Director Shadick stated that is part of a Joint Powers Agreement with Apple Valley. Councilmember Wilson stated the fund is for equipment and operations. At the end of next year we will have a $250,000 fund balance. The purpose of this fund being set up was to payoff equipment and fund cable operations. Based on the fact we will pay off the principle next year, the fund could go away. Finance Director Walters stated this fund could be a special revenue fund and would not go away. Councilmember Wilson agreed we cannot fund a staff person from a capital acquisition fund. Councilmember Fogarty agreed. Councilmember Wilson recalled there is a split between Councilmembers on the Deputy Registrar. It is a huge decision not only to fund it, but ifwe reduce start: then we have to hire more staff for this. Councilmember Fogarty stated unless we can utilize current staff for this. Mayor Larson would like to do that. City Administrator Herlofsky stated ifwe are going to provide a business operation, we have to be able to respond to the needs ofthe customer immediately. Staff is looking at options and having this separate from the general fund. It is not a critical element for the 2011 budget. Unless staff is told not to we will continue to work on having a Deputy Registrar office. Councilmember May noted not for 2011. Mayor Larson would like staff to continue working on this, but does not want someone sitting here waiting for customers. Mayor Larson asked if staff understood what Council wants. Finance Director Walters stated furloughs are off the table, curbside clean-up is off the table, we should look at option 3, remove $20,000 from permits and review the number, look at the interest number, and do no fund salaries out of the franchise fees. Council agreed. City Administrator Herlofsky asked what option 3 means to Council. Is Council saying they want two more positions and do not care where they are? Councilmember Fogarty stated as difficult a task as it is, the City Administrator can fmd the positions that will be the least detrimental to City Hall. It is inappropriate for Council to tell the City Administrator where the cuts should come from. He knows Council's priorities - public safety, future commercial and industrial development are high priorities. She understood the City Administrator believes every staff position should stay, but he knows the daily functions of the office. Councilmember May stated this is not a game and she did not want to be put in a position where Council has to name a position. City Engineer Schol'Zman stated it appears the $400,000 reduction is now at $286,000. It would be helpful for a staff discussion if we knew whether we are going up from $286,000 to $400,000 or from $286, 000 to $425,000 or 18 i ___ _______..___.___..___1 Council Budget Workshop November 8, 2010 Page 8 $286,000 to $500,000. Mayor Larson stated Councilmember May wanted $500,000, Councilmember Fogarty wanted $400,000 with the Deputy Registrar and without it $450,000, Councilmember Wilson wanted $450,000 - $475,000. City Engineer Schorzman stated if you go to $500,000 you are asking staff to fmd another $214,000 worth of cuts. Councilmembers felt that is not possible. Mayor Larson stated staff should go to $425,000. Council agreed. Next Council discussed franchise fees. Councilmember Fogarty stated this came about from wanting more equality in fees for seal coating. No matter what we do, this number will double because the City can no longer subsidize 50% of the cost. How we do this is up for debate. No matter how we fund it, the taxpayers will pay. Council agreed seal coating is worthwhile. Councilmember May would keep the process the same, even ifwe have to assess the full amount. It is a way for transparency and residents can have the discussion. Mayor Larson would like to see franchise fees for seal coating, but felt we are not ready yet. Councilmember May stated ifwe could put this on a City bill, that would be different. City Engineer Schorzman stated his reason for asking for a discussion was to decide if we are going to do seal coating because this is the time of year we would start working on it for next year. Without Council understanding we need to generate 100% ofthe cost somehow, he did not want to spend time putting a project together that would not happen. He understands Council does want to do seal coating next year. How it is paid for is Council's decision. The important thing is we identify a source of revenue that covers 100% of the cost of this project on an annual basis. Finance Director Walters stated if you assess 100% we still have to pay for the cost upfront so we will need to bond for that and the assessments will go to pay for the bond. We have to make sure we assess enough to cover the interest on the bond. City Administrator Herlofsky stated in the last three years we lost State money. We are trying to fmd a revenue stream that cannot be affected by State changes in budget that will allow us to maintain our investment in our infrastructure. Councilmember May stated we do not bond now so why do we have to bond going forward. Finance Director Walters stated we are utilizing existing cash right now. When the road and bridge fund information is brought back to Council, they will see the impact of that. We are using cash that should be for another purpose. At some point that catches up with you. Whether we have to bond every year depends on how long we stretch out the assessments. City Engineer Schorzman stated they are annual assessments, but that is something Council should think about. We are talking about an average assessment over seven years of$380/REU. Will Council expect people to come up with $380 in one year? There have been projects where we have assessed $600 over 15 years. We have to determine the breaking point as to how much people can afford in a year. City Administrator Herlofsky stated ifwe go with the franchise fee and use that as the only source of revenue, we do not have to worry about assessments. City Engineer Schorzman stated as you will reach a point as to how much we can assess in a single year vs. spreading it out over multiple years, we will also reach a point where residents say how can you assess me this much. Then you pay for appraisers to justify the assessments. He has heard residents would rather just pay for it when their turn comes around, but when you get to $300 or $400 residents may ask the City to prove the value of their home went up that much. City Administrator Herlofsky stated if franchise fees are collected for a year, that would provide us with the money to pay it off and there would not be any bonding. It would be a smooth process from one year to the next and the money would remain in the seal coating fund. 19 Council Budget Workshop November 8, 2010 Page 9 Mayor Larson's concern with the franchise fee was the type of meter. Who cares what type of meter it is? He wanted to know ifwe can do something about that. City Engineer Schorzman stated he looked at how much in a seven year cycle residential pays vs. non-residential. It is an 80/20 split. Going backwards, assuming we maintain the 80/20 split, there are numerous ways to breakup the non-residential or we can say this is the number of non-residential and they all pay the same. Mayor Larson stated if we did the 100% assessment and they pay $600, but we go to franchise fee and they pay $1,000, the fairness is not there. He did not want people paying 50% more just because we go to franchise fees. He wanted to equal the amount between 100% assessment and franchise fees. City Administrator Herlofsky noted staff did provide information on this and we will provide that information again. Councilmember Wilson would be open to franchise fees if there was some sense on the business end. Staff does not have to use the formula from the utility companies. City Administrator Herlofsky stated staff told the utility companies the amount needed, and they provided the information. City Engineer Schorzman adjusted the method to get back to the pattern of payment established with the current method. The utility companies would not want to have a competitive advantage go to one utility provider. Mayor Larson asked staff to bring back numbers closer to what residents would pay if they were 100% assessed. City Engineer Schorzman will use residential and non-residential rates. Some will go up and some will go down. As far as ag land, it is not assessed now and would not be because they do not have electric or gas meters. Some have operations that do have electric and gas meters and those people would pay on those parcels. He suggested doing franchise fees with a sunset until we have the ability to do a street utility. In the meantime we have a steady revenue stream. Mayor Larson stated the $380 will be difficult for some people to come up with. He asked staff to bring back another model. Councilmember Fogarty felt there was a solid consensus to continue seal coating. Councilmember Wilson stated there could still be a small problem with not having the revenue in 2011 to cover it. City Engineer Schol'Zman stated the franchise fee will have a shorter gap and will close itself over time; assessments will not. Mayor Larson asked what seal coating cost in 2009 and 2010 and the amount of the assessment. Staff will provide this information. City Administrator Herlofsky wanted to make it clear if Council wants to continue seal coating in 2011, they need to make a decision very soon on franchise fees before the letting of bids. Council set another budget workshop for November 22, at 6:30 p.m. Staffwill advise ifwe need to set a workshop sooner. MOTION by Fogarty, second by Wilson to adjourn at 9:04 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 20