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HomeMy WebLinkAbout08.13.12 Work Session Minutes City Council Workshop Minutes August 13,2012 Mayor Larson called the workshop to order at 6:35 p.m. Present: Larson, Bartholomay, Donnelly Absent: Fogarty, May Also Present: David McKnight, City Administrator; Todd Reiten, Municipal Services Director MOTION by Bartholomay, second by Donnelly to approve the agenda. APIF,MOTION CARRIED. The purpose of the workshop was to discuss the 2013/2014 Municipal Services and Engineering budgets. Municipal Services Director Reiten reviewed the changes in the streets budget. There are both increases and decreases in various accounts. He noted there is a$5,000 increase in signs and striping materials. This is to fund a plan for sign replacement. Regarding salaries, City Administrator McKnight explained there is an increase because an employee was moved into the streets budget for 2013. Staff also added comp time, other pay, and the health care savings plan that were not in the budget in the past. This budget has increased due to the human resources portion. There are no changes in the snow budget. Next staff discussed parks mowers lease vs. purchase. Currently,the parks department put in $18,000, of which $6,000 is for a skidster and $12,000 is for the mowers. Due to auditing regulations now, we cannot purchase skidsters without paying upfront. In the past the $6,000 was used to lease a skidster for three or four years, and after that we would own it. The City would trade it in for another one, and do the same thing. Now, if we do that we would be owning it and the audit has to show the amount of the skidster upfront for the first year. Because of this,the City will be keeping the one we have. Tractors are allowed to have a maximum of 300 hours/year. Every year we pay$11,000 - $12,000 to lease the mowers. Each year mowers are traded and a new lease is started. Staff would like to look into purchasing mowers. It would cost$23,000 to buy them. Municipal Services would need to borrow$9,000 from another area in 2013. In 2014, staff would budget$9,000 rather than$18,000 and pay the money back. City Administrator McKnight clarified we would not be borrowing $9,000; we are putting another $9,000 into the parks budget to come from the levy. He suggested putting money in the budget to start growing the fund for 2014 and 2015. Municipal Services Director Reiten explained right now we do not get anything when turning them in after spending$12,000 on a lease. If we purchased them we would get approximately $10,000 for a trade-in. We need to have $9,000 to get this started. In following years the budget would be reduced by $9,000. Council Workshop Minutes August 13,2012 Page 2 City Administrator McKnight reviewed the Engineering budget with Council. The Planning division stays flat with a few minor increases. Regarding Building Inspections,there will be some new codes in place so new code books and training will be needed for staff to be prepared. Councilmember Bartholomay noted there was a comment to not do any projects in the near future. If that is the case, he asked if we need to evaluate the amount of engineering staff. Staff will provide more detail on the transition from Bonestroo to City staff. City Administrator McKnight noted we may need to add some dollars into the HR costs because more of the work is falling under the Engineering budget in the general fund rather than water or sewer funds. The Natural Resources budget and snow removal budget go hand in hand. If it doesn't snow,they do more tree trimming. Municipal Services Director Reiten noted in the future we may have to look at new equipment, such as a bucket truck. We are using a sanitation truck to hold the chipper. City Administrator McKnight reviewed the budget from last week. This is changing everyday. Last week,the status had a levy increase at 3.87%or$331,699. He has made the numbers for fiscal disparities consistent for 2013 and 2014 based on the 2012 number. The actual number will be obtained August 17, 2012. His plan is when the budget is brought to Council in September, it will have a preliminary proposed levy increase of 3% or lower, it depends on the fiscal disparities number. Council will see the impact on the houses we use every time so Council can see what happens to the values and the individual tax numbers. Staff will be meeting with the county to make sure we are on the same page. Mayor Larson noted the biggest items in the budget are the fire truck for$135,000,the revenues of$217,000 and the HR of $117,000. City Administrator McKnight stated the State Auditor recommends having a 40% fund balance which means you have 40%of your general fund balance in the bank at the end of the year. We have a$10 million general fund balance,which means we need$4 million at the end of the year. We were at$2.2 million at the end of last year, so we are at 22%. Three weeks from today the preliminary levy will be set. Councilmember Bartholomay asked if there are further reductions in budget they have already seen. City Administrator McKnight stated the general direction was to keep working. Staff will go through all budgets again before September. Any remaining issues will be addressed in September. Councilmembers agreed the budget is on track with what they wanted. This budget includes three eliminated full time positions,two part time positions eliminated, and one full time position going to part time. That is 4.5 people. The percentage of this will be included in the budget. The fire truck,revenue and HR corrections are$480,000. The increase in the budget today is$331,699. Councilmember Donnelly asked about what is done with fiscal disparities money. City Administrator McKnight stated his philosophy is you put the number in the budget that needs to be there. If it goes up half a million, it is not extra fiscal disparities. If that happens, we could lower the levy or start a CIP. It would go in the transfers line item. Councilmembers questioned if we needed $50,000 in the EDA each year. City Administrator McKnight stated the EDA budget had a negative fund balance. Council said to use one time money to get the balance positive, which it will be by the end of the year. The$50,000 is separate for operations. If it's not used, it stays there each year. We receive calls from people wanting to buy property where they have 80%of the funding, but need a little more. That is a potential use for that money. Mayor Larson felt that is the responsibility of the EDA to help 9 Council Workshop Minutes August 13,2012 Page 3 businesses come in. Whether it would be as a loan or a grant,needs to be determined. Staff will include this for discussion in the budget memo. Councilmember Bartholomay asked how much is left from the contingency money. City Administrator McKnight stated none of it has been spent which is approximately$141,000. If nothing happens, that money will go into the fund balance. We have over$100,000 in costs we are going to spend that was not budgeted for. That contingency would help with that issue. We have repairs that need to be done at the old senior center building in order to sell it. We could use some of that money until it gets repaid with the sale of the building. There is a$100,000 reserve in the 2013 budget. MOTION by Bartholomay, second by Donnelly to adjourn at 7:25 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 10