HomeMy WebLinkAbout10.24.11 Work Session Packet
City of Farmington
430 Third Street
Farmington, MN 55024
Mission Statement
Through teamwork and cooperation,
the City of Farmington provides quality
services that preserve our proud past and
foster a promisingfuture.
AGENDA
CITY COUNCIL WORKSHOP
October 24, 2011
Following 6:30 p.m. EDA Meeting
1. CALL TO ORDER
2. APPROVE AGENDA
3. FISCAL DISPARITIES AND 2012 BUDGET
4. CITY ADMINISTRATOR UPDATE
5. ADJOURN
PUBLIC INFORMATION STATEMENT
Council workshops are conducted as an iriformal work session. all discussions shall be consideredfact-finding, hypothetical and unofficial
critical thinking exercises, which do not reflect an official public position.
Council work session outcomes should not be construed by the attending public and/or reporting media as the articulation of aformal City policy
position. Only official Council action normally taken at a regularly scheduled Council meeting should be considered as aformal expression of
the City's position on any given matter.
City of Farmington
430 Third Street
Farmington, Minnesota
651.280.6800 . Fax 651.280.6899
www.ci.farmington.mn.us
TO:
FROM:
Mayor, Councilmembers
David McKnight, City Administrator
Teresa Walters, Finance Director
SUBJECT:
2012 Budget
DATE:
October 24,2011
BACKGROUND
Local government units within the Twin Cities metropolitan area (comprised of the seven metro
counties), have participated in a property tax base sharing program known as Metropolitan Fiscal
Disparities since 1975. Under this program, a portion of the growth in commercial, industrial,
and public utility property value of each community is contributed to a tax base sharing pool.
Each community receives a distribution of property value from the pool based on the market
value and population of each city.
For the 2011 budget, the City of Farmington's fiscal disparity distribution increased by $233,973
over the 2010 budget. In anticipation of a Fiscal Disparity decrease in 2012, we decided to
budget conservatively by budgeting the same amount we budgeted in 2010. The actual amount
we anticipate receiving in 2012 is $712,258 higher than 2010.
Council requested staff to distribute $175,000 of this amount to cover the EDA deficit. This
leaves a balance of $537,258. Council will now need to determine how to allocate the funds.
Fiscal Disparity distribution amounts may be affected by changes due to the Market Value
exclusion; however, changes will not occur for at least one year (in 2013). This means there
could be a large reduction in Fiscal Disparity revenue next year. It is recommended the funds
only be used on one-time expenditures since the possibility of receiving the additional amount
next year is uncertain.
OPTIONS
Staffhas prepared the following options for Council to consider:
1. Eliminate the defICit ($120,000) in the Recreation Special Revenue funds (Rambling
River Center, Senior Center, and Pool) funds and move them to the General fund.
At the end of201O, the Senior Center operations had a deficit amount of $33,076. The
Rambling River Center renovations had a deficit in the amount of$159,586. The pool
had a positive balance in the amount of $58,278. The recreation funds went from a
negative $134,384 in 2010 to a negative $116,706 as of September 20 11. We would like
the Council to allocate $120,000 towards eliminating the deficit.
2. Eliminate the defICit in the Arena ($350,000). In 2009, the Ice Arena had a deficit in
the amount of$178,985. In 2010, the deficit grew by $77,918 to a negative $256,903.
As of September 2011, the deficit is now $343,090, an increase of$86,187. We cannot
continue to maintain a deficit balance in the Arena fund. We will need approximately
$350,000 to cover the deficit. If Council decides to eliminate the deficit in the Arena
fund, council should also designate a revenue source to fund opemtions in the future so
we do not continue to have deficit balances in this fund. The Arena is not a self
supporting fund. It needs financial assistance.
3. Transfer funds to the Equipment Replacementfund to contribute towards a Fire Truck
($537,258): If Council chooses this option, they could put all or a portion of the
remaining fiscal disparities toward the truck. The current Engine/Pumper we are using is
a 1993 model Luveme. It has a pumping capacity of 1250 GPM. This truck could be used
in a reserve (stand-by) capacity for several years since it would not have to respond to
every call. The new truck would replace a 1986 Ford 8000 Rescue truck. This truck is on
its last leg. The engine is shot and the back door flies open when driving down the road
(safety hazard). The equipment from this truck would be transferred to the new truck.
In addition, a new RescuelPumper could be enough of a push to put us over on our ISO
mting. This could lower insurance premiums for the businesses along with the
homeowners. The average saving per household could be $20-30 per year. The new truck
would be located and respond to all calls out of Station 2. We currently have 2 pumpers,
one at each station. By having an additional pumper, we would not lose a station every
time a pumper is down. Our current pumper is slated for replacement in 2013. We have a
committee that has put together the specs on the proposed truck. Copies will be available
at the meeting. A fully loaded truck is estimated to cost approximately $579,000.00.
4. Equipment Replacement Plan ($250,000): As part of the Equipment Replacement plan,
staffwould like council to designate $250,000 from fiscal disparities in 2012. The plan
also shows funding from Fiscal disparities as shown below:
, Fiscal
Year Disparities.
2012 250,000
2013 250,000
2014 250,000
2015 75,000
2016 75,000
2017 75,000
2018 75,000
2019 75,000
2020 75,000
2021 65,500
Total $1..265,500
In order to keep all vehicle equipment purchases grouped together, the equipment
(vehicle) replacement plan in its current form includes costs to replace all vehicles in the
City's fleet including fire vehicles. Because of the large cost associated with fire
equipment and the timing of those purchases, the levy included in the 2012 preliminary
budget will not be sufficient to cover the equipment replacement cost when fire vehicles
are included. A contribution of $250,000 from the additional fiscal disparities that we
receive in 2012 would provide adequate funding for the plan in 2012. It should be noted
that the same amount in 2013 and 2014, with reduced amounts from 2015 through 2021
will be necessary to adequately fund the equipment replacement plan.
If Council funds the Equipment replacement plan, the Fire Truck is scheduled to be
replaced in 2014. If Council decides to choose option 3, this would eliminate the need to
contribute $250,000 from Fiscal Disparities in 2012 and 2013; however, we would still
need the contributions from 2014 to 2021.
5. Purchase a Salt Storage shed ($100,000): The City currently has a joint powers
agreement with the County to store salt. Should Dakota County not be able to meet the
needs of the City of Farmington for de-icing materials, the City of Farmington would be
responsible for obtaining de-icing material from other sources. The County has had a
shortage of salt in the past resulting from a regional shortage. A situation like this in the
future could create a liability for the City in meeting the intent of the Snow Removal and
De-icing Policy. Also, if the County decided to move their facility outside of Farmington
in the future, which has been discussed in the past, it would be inconvenient for us to
transport salt. The County currently charges their purchase price plus handling and
overhead fees. It may be more efficient and cost effective for the City to purchase the
salt directly through the State contract. An investment of $100,000 to build a salt storage
shed would ensure the City's future de-icing needs.
6. Keep the money in the budget as a contingency ($50,000 - $100,000). As you recall, the
2011 budget had a contingency of $45,840. During the year, there are several occasions
where we find ourselves needing additional funds for an emergency or unplanned event.
We utilized the entire contingency at the beginning of2011; however, the plan was to
have it go into the fund balance if it was not used. Council could designate a portion of
the fiscal disparities towards a contingency. The fund balance is currently below the
State Auditor's recommended 35-50%. We recommend $50,000 - $100,000.
7. EDA operationsfunding ($10,000) or elimination of the inter-fund loan ($50,000).
Please see the memo from the EDA meeting held prior to this meeting.
OTHER DISCUSSION ITEMS (Revenue Reductions):
a. Police Services ISD 192 Liason: We currently budget $205,377 for Police Liason
revenue in Charges for services. This is for three officers. The School has cut
one police officer effective June 2011. Therefore, we will only receive $171,148
or $34,229 less than the current budget. If we keep the position, we will need to
cut this revenue from the budget. A revenue reduction will also need a
corresponding reduction in expenditures in order to balance the budget.
b. Miscellaneous Revenue: Our 2012 budget is $65,300. In 2009 we received
$108,653 due mostly to ALF revenue ($83,278). In 2010 we received $55,646.
Some of this was an ALF payment and another portion was service charges for
recreation rentals. This year we have received approximately $29,000. We no
longer receive ALF payments. The 2011 budget amount is $69,000.
Miscellaneous revenue includes NSF fees, sale of assets, advertising, and other
unplanned and unpredictable revenue. In 2012, the budget was increased by
$3,300 to include the Farmers Market Revenue. The 2012 budget amount is
$72,300. This is not realistic. Staffwould like to reduce it to $35,000 or a
reduction of $37,300. Some of the savings from Insurance, the newsletter, and
the audit could help off-set this reduction in revenue.
RECOMMENDATION:
Staff recommends council provide direction on how to allocate the Fiscal Disparity revenue.
Staff also recommends council authorize staff to reduce the revenue line items (listed above)
approved in the preliminary budget.
i.
Page 1 of2
Tim Pietsch
--------,--.---.~~--.- ._-~ -----~ ---_._-_._----~.-.-:- --~-------_.!-._----'-_._--_._-- -.-. -.-.-------..
. l
From: Justin Elvestad
Sent: Tuesday, October 18,2011 7:05 M
To: Tim Pietsch
Subject: FW: Pierce Truck Information
Justin Elvestad
Fire Captain #1
City of Farmington
21625 Denmark Ave, MN 55024
if (direct) 651-248-1931
From: Adam Fischer
Sent: Saturday, July 3D, 2011 10:03 AM
To: Justin Elvestadi Jason Greiner
Cc: Tim Pietsch
Subject: FW: Pierce Truck Information
From: jaydarey@dareys.com [jaydarey@c reys.com]
Sent: Thursday, July 28,201111:05 AM
To: Adam Fischer
Cc: gibyakesh@dareys.com
Subject: Pierce Truck Information
Adam,
I was able to finish up my work on your truc configuration ~ d have attached a truck;component list for
your review... Basically the component list i a "line item" ve sion of the features, whiCh have been
included on the truck... The best way to 100 at this, is that It is preliminary in nature and a starting point
from where revisions can take place... Once you have had t e opportunity to share this information with
the committee, I would like to get together ith everyone to: view the truck and start,the revision
process... Please let me know when you wo Id like to get tc;> ether... The truck configiJration at this point
is pretty complete and includes everything t at we discuss~ with the exception of the the hand held
radio/headset, as I didn't know what you utilzed... Additional y, all of the items listed on your "discussion"
list have been included (CAFS, Light Tower etc)... The pric of the truck, as currently configured would
be approximately $ 579,000.00 dollars, whi h include a little ver 18k in loose equipment items... My hope
is that you are pleased with this preliminary onfiguration an find it a good starting ppint... Once again,
please let me know when you would like to et together and discuss this project further...
Jay Clarey
Clarey's Safety Equipment, Inc.
Safety is our Business
Toll Free: 800-558-8009
Phone: 507/289-6749
Fax: 507/289-5213
Cell: 507/269-1089
[]
www.c1arevs.com
10/24/2011
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NOTE
DII'IENSIONS SHOIlN ARE APPROX[KATE
AND ARE SUBJECT TO MINOR OEVIATlONS
AS ltAy OCCUR OR BE NECESSARY IN
CONSTRUCTION.
NINOR OETAILS NOT SHOIIN.
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