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HomeMy WebLinkAbout10.08.12 Work Session Minutes Council Workshop Minutes October 8,2012 Mayor Larson called the workshop to order at 6:30 p.m. Present: Larson, Bartholomay, Fogarty, Donnelly(arrived 6:39 p.m.),May(arrived 6:42 p.m.) Also Present: David McKnight, City Administrator;Robin Hanson, Finance Director;Brian Lindquist, Police Chief; Kevin Schorzman, City Engineer;Randy Distad, Parks and Recreation Director;Todd Reiten, Municipal Services Director Audience: Doug Bonar,Michelle Leonard, Laura Adelmann MOTION by Fogarty, second by Bartholomay to approve the agenda. APIF,MOTION CARRIED. Police Chief Lindquist spoke to Council regarding filling an administrative half time position in the Police Department. They current have 25 police officers and 3 full time administrative staff. They no longer have a CSO and at the first of the year, one administrative position will go to half time, which means they will have 2.5 administrative employees which is not enough to do the work. They have obligations to various agencies that are time sensitive and require a lot of computer work. Along with other duties, it is necessary to fill the half time administrative position. This is included in the 2013 budget. Mayor Larson trusted the Police Chief will not over staff as Council is watching all departments. City Administrator McKnight stated the increase in the preliminary levy was 2.84%. That has been reduced by$74,000, so the proposed tax increase now is 1.97%. The majority of the reduction was moving a Fire Chief's vehicle to 2014. In the past, staff in municipal services and engineering has been divided into as many as six budgets. Staff is doing more work in engineering and less in other funds this year. Employees have now been assigned to one home business unit. They have been moved out of the water, sewer, and storm water funds and placed into the general fund, which increases the general fund budget. To offset the increase we have taken the appropriate amount from those funds and transferred it into the general fund. This change is tax levy neutral. It is making our work easier and the budget more transparent. Sewer Operations—Revenues are expected to exceed expenditures so there will not be an increase to the fees. Water—Revenues are expected to exceed expenditures for 2013 and 2014. More chemicals were added to the water this year because of more usage, also the cost of chemicals have gone up. Storm Water—Revenues will not exceed expenditures without a fee increase. The current fee is$9/quarter and has been at this amount since 2008. There are two situations with this fund. We have an obligation to make sure the storm water ponds are functioning properly which requires periodic maintenance, which includes dredging out material from the ponds. The 8 Council Workshop Minutes October 8,2012 Page 2 second item is the concept of chemicals attributable to coal tar sealant. A discussion followed on using coal tar sealant and if an ordinance should be developed to prohibit its use. Councilmember May asked if staff was proposing a budget for testing and dredging. Staff explained in 2014 there is $450,000 in capital outlay which is$250,000 for pond dredging and $200,000 for a street sweeper. In 2013 there is an increase in professional services to cover the testing. The$1 fee increase is to cover the testing and the dredging. This provides for an extra $170,000 in the fund. Staff recommended dredging ponds every seven to ten years. Councilmember Bartholomay asked if grants are available. Staff stated we would have to pass an ordinance to ban coal tar sealants. Mayor Larson stated staff needs to check if we are running out of storage capacity in the storm water ponds. If they are full,they need to be dredged and we need to test the sediment. Councilmember May asked if the current fee covers the cost of professional services to keep revenues exceeding expenditures. City Engineer Schorzman stated the 2012 budget included a loss of$80,000 at the current fee level. At the beginning of 2012 the fund included$560,000. By the end of August it shows a loss of$11,000. Staff would like to plan the work and carry two years worth of balance. Councilmember May noted we could keep the fee where it is and cover the testing. Staff noted we would lose$156,000 in 2013 at the current fee. If you combine the anticipated income or loss after transfers in 2013 and 2014 even with the fee increase,we plan on losing$400,000 of the fund balance. Councilmember Fogarty stated we do not want this fund to lose money and we are working towards two year budgeting so we need some kind of a fee increase and the goal is to not dip into the fund balance to cover current costs;we want it to break even. For 2013 she suggested increasing it to make it break even, and get some testing done to see what has to be done. Councilmember May asked that the cash balance and fund balance be added to the budget worksheets. Any past due utility bills are owed to the storm water fund. The EDA loan came from the trunk storm water fund. Councilmember Bartholomay noted IT services jump all over. City Administrator McKnight explained in 2013 and 2014 we are trying to get more accurate estimates of IT costs. This is shifting back to the general fund from the other funds. Mayor Larson noted staff is asking about the increase for dredging. Councilmember Fogarty wanted the increase to make the fund break even. In 2013 we could do the survey and testing. Councilmember May was concerned with increasing the storm water fee by$3 when we have $500,000 in the fund. $1/month increase would add$170,000 to the fund. Councilmember Bartholomay asked about the life expectancy of the street sweeper. The current ones are 1999 and 2002, and they are on a 12-year replacement. They cost $200,000. Councilmember May noted we are asking for a levy increase and there are increases all over in fees. We have to be careful, as small increases add up. Councilmember Bartholomay cautioned if we raise a fee, it will not come back down. Mayor Larson stated we should do the surveys and 9 Council Workshop Minutes October 8,2012 Page 3 testing to determine the amount of dredging needed in 2014. City Engineer Schorzman stated if we have$1.50 increase that will cover what we discussed and leave enough for a street sweeper. Council agreed with$1.50/month increase. City Administrator McKnight asked what staff should do about grants. Councilmember Fogarty was not interested in developing an ordinance. Councilmember May felt an ordinance would reduce the amount of contaminants. Staff will not have the time to check what people are putting on their driveway. Mayor Larson noted with an ordinance we would be able to apply for grants. Staff can put this information in public education material. Solid Waste—Revenues are not expected to cover expenditures without a fee increase for 2013 and 2014. Recycling rates have gone up$.39/year. This will be$1.71 increase/quarter that we have not added to our fees. Currently the City has made$20,000 on recycling with the majority coming from cardboard. As a community we are required to have recycling. The City collects cardboard separately so we make money off of it. If it was collected by Dick's Sanitation and they did not make money on recycling,the City would not get that cardboard recycling revenue. Councilmember May wanted to know how much staff time is involved in collecting cardboard and how much would we save if Dick's Sanitation collected the cardboard. Some years we have made$50,000 on cardboard recycling, and some years we have not made anything. Regarding garbage rates,the 30 gallon will not increase, 60 gallon will increase by$2, and the 90 gallon will increase by$3. The increase would make$60,000 - $65,000 in revenue. Right now we are close to breaking even. The 2013 budget includes a new truck for$220,000. We would still lose$154,000 in 2013. Last year we put off purchasing a truck to build up the fund. The fund balance as of January 2012 was$346,000. Year-to-date we have-$11,000. The last revenue for the year is received the end of March. Council asked about the number of customers for each size of container; 1,146 have 30 gallon,2,818 have 60 gallon, and 1,839 have 90 gallon. Councilmember May asked if we would go out for RFP for garbage service if a truck costs $220,000. Staff explained the benefits residents receive and the special services. If the City did not have the$220,000 revenue from solid waste,taxes would have to increase to cover that amount. Councilmember May noted if providing garbage service is such a great thing,why aren't other cities doing it. If we have to increase fees to cover costs,then some of the argument is lost. An RFP would give us an opportunity to see the difference. Staff noted residents are getting a lot for their money in special services. Residents would have to pay for those services, plus pay for garbage pickup. Councilmember May asked about personnel costs. In 2013, personnel costs amount to $437,000. Councilmember Donnelly stated residents will still have to pay if we outsource it. Councilmember May asked about the age of the garbage truck. Staff noted trucks are replaced every ten years. The current fund balance is$346,000. Councilmember May noted we have been adding to that fund balance and the purpose of that is to buy equipment, so why increase the fee. Staff stated right now with recycling we are not making money. With the increase we would make $65,000/year for equipment purchases. Council agreed with the increase. Streetlight Utility—There will be a positive balance. 10 Council Workshop Minutes October 8,2012 Page 4 EDA—The 2013 budget has $2,200 in revenue and$11,600 in expenditures which includes the $5,000 participation in the MCCD program. Council has been asking about the significant negative fund balance issue which we have had for many years. A number of projects have gotten us there including the industrial park, and the Library. There was a separation of TIF and HRA funds which brought the fund balance down significantly. The EDA decided to use one time money to get this fund to a positive number. By the end of 2012,there will be$800 in the fund. There is also a loan repayment to the trunk storm sewer fund of$33,500 that has to be made for six years. This was due to the Library project. Repayment started in the 2011 budget. The Library project was paid for out of a TIF fund,which should not have been done, so the City loaned money from the trunk storm sewer fund to repay the TIF fund, and now the EDA has to repay the trunk storm sewer fund. This project occurred when the grocery store moved to City Center and the Library moved to its current location in 1996. Councilmember Fogarty wanted to use fiscal disparity money in 2013 to wipe out the loan. City Administrator McKnight stated we did not use fiscal disparity dollars,we used tax dollars. Councilmember May asked if Council could see a summary of all funds and what is borrowed against what. Ice Arena—The arena is scheduled to make$3,900 in 2013. Staff is proposing a$5/hour increase in ice fees. Liquor Store—In 2012, revenues are $105,000. In 2013 revenues are expected to be$134,000. The credit card system at the downtown store needs to be replaced at a cost of$113,000. The liquor store has been transferring$20,000 to the pool. Now that the pool is in the general fund, Council suggested using that transfer to pay off the EDA loan. City Administrator Update—Work on the former senior center building will be completed on October 9,2012. An agreement to use realtor Janie Tutewohl to sell the building will be brought to the October 15,2012, Council meeting. MOTION by Fogarty, second by Bartholomay to adjourn at 8:45 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 11