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HomeMy WebLinkAbout03.25.13 Work Session Minutes Council Workshop Minutes March 25,2013 Mayor Larson called the workshop to order at 5:00 p.m. Present: Larson, Bartholomay(arrived 5:05 p.m.),Bonar, Donnelly, Fogarty(by phone 5:25 p.m.) Also Present: David McKnight, City Administrator;Robin Hanson, Finance Director;Cynthia Muller,Executive Assistant MOTION by Donnelly, second by Bonar to approve the agenda. APIF,MOTION CARRIED. Ms. Ruthe Batulis, President, Dakota County Regional Chamber,was present to give an update on her replacement process and highlights of what the Chamber did in 2012. Strategic Plan/2014 Budget City Administrator McKnight has grouped the strategic plan items into similar topics and proposed a timeline for the plan. He also presented a rough draft of the 2014 budget which includes operational costs and a capital improvement plan. The five items included in the strategic plan are: 1. Ensure the long term financial health of the City 2. Position the City for future economic development 3. Review the use and efficiency of City facilities 4. Maintain the long term viability of City liquor operations 5. Communication with residents Council reviewed the specific topics under each of these items. Regarding the business incentive plan for 2013,Mayor Larson assumed the business attraction team will be put together soon. He hoped there would be a plan in place by the end of 2013. He didn't want to have a plan in place and put it on the shelf for a year waiting for funding. City Administrator McKnight stated the EDA has some money this year and there will be more when tax money is received. He felt there would be enough money in 2014 to start the plan. The EDA has to talk about what kind of businesses they want to attract to Farmington. Mayor Larson stated when we put the plan in place he wants to be able to move forward with it. Councilmember Donnelly noted there are a lot of items in 2013. City Administrator McKnight noted some of the items need to be done every year and we can make adjustments along the way. Councilmember Bonar asked how we will measure the progress and will we break the items down into quarters. City Administrator McKnight stated if these are approved, we will start tomorrow,but he would not break them down into quarters yet. Regarding moving forward with Vermillion River Crossing, Councilmember Bonar stated the goal according to the plan is to meet with brokers and get their view of the development. Mayor Larson suggested this be ongoing every year. Regarding the assessments, Mayor Larson recalled we decided to be negotiable and were going to talk to the broker. This item is included in the list. Mayor Larson would like to know when staff contacts the broker and what is said. City Administrator McKnight will develop a broader goal for this topic. Councilmember Fogarty 18 Council Workshop Minutes March 25,2013 Page 2 stated all we can control is the message that is sent. Councilmember Bonar felt we need to continue to grease the wheels. Mayor Larson wants to let them know we are still here. City Administrator McKnight will bring these goals/strategic plan to the April 1, 2013, Council meeting for approval. Ice for Tigers—There is some confusion among Council as to the consensus from a previous workshop in terms of a dollar amount. Mayor Larson has let the Ice for Tigers group know that the City was willing to participate at the same level as the school district. Now, all Councilmembers do not agree. Councilmember Bonar felt we had consensus on the number, it was the timing of the notification. He didn't know Council was prepared to present that to the group. Councilmember Bartholomay agreed we set the number, but wanted to see the impact on the overall budget. Councilmember Donnelly stated we are not ready to write a check. The Ice for Tigers has said they would like x amount from the City. Mayor Larson communicated to them that the City cannot provide anything right now,but would be willing to look at it. Councilmember Bartholomay preferred communications with that group go through City Administrator McKnight. Councilmembers Bartholomay and Bonar attend meetings with the Ice for Tigers. City Administrator McKnight understood giving the group a general idea of what to expect from the City would help them with their funding process. Whatever Council votes on has to fit into the budget. When Ice for Tigers has a certain percentage of funds in hand,then they should talk to the City. Councilmember Bonar asked how this affects this budget and upcoming years. Councilmember Bartholomay suggested Ice for Tigers gives City Administrator McKnight an update once a month on their progress. 2014 Budget—The 2013 general fund budget is$10.56 million. City Administrator McKnight increased personnel costs by what contracts might come in at. The supplies, other services, and supplies line items have not been increased. There will be some big requests related to equipment, but for now those budgets are the same as 2013. The estimated 2014 budget is$10.7 million. It is a$205,000 increase over 2013. Revenues decreased by almost $41,000 for two reasons. Council used the$30,000 profit from selling the old senior center building to settle this year's budget reductions. City Administrator McKnight reduced the anticipated interest income by$10,000. The $125,000 first year CIP costs have been included. This means an estimated tax levy of$8.994 million which is 5%. Staff is not proposing this; it is only for review. Fiscal disparities was kept at the same level. Any LGA to be received is not on the table. Mayor Larson asked about HR being up 32.84%. Finance Director Hanson stated it is because of moving one staff person from Administration to HR. Councilmember Bonar asked about the increase in the fire budget. Staff explained the reason has to do with workers compensation and the type of work done. Workers compensation costs for volunteer fire fighters is based on population. Population was not considered in any payroll estimates in previous years,which means about$30,000 was not being budgeted for each year. It was paid for out of the employee expense fund. The workers comp costs are taken out of all the budgets and put into that fund and the bills are then paid out of there. Dividends also go in this fund. So the$30,000 was being paid for out of either dividends, or unspent costs from other departments over the years. Mayor Larson noted this is similar to what was done over the years with overtime pay. City Administrator McKnight pointed out when we talk about Ice for Tigers or economic development,there is nothing in the budget. There is nothing for additional economic development. The$50,000 the EDA has,they can choose do to what they want with it 19 Council Workshop Minutes March 25,2013 Page 3 or leave it in there, but there is no more. The 195th Street project will occur in 2015. We will bond for that project in 2015 and make payments in 2016. The median value home increase is 2.4%in Farmington. Commercial is stable in 2013 and 2014. So taxes set for next year will swing back to residential. The tax capacity for residential is going up 4.7%. The tax capacity for agriculture is going up 20%. For the first time since 2005, commercial will go down. For the first time since 2006 residential will increase. So even if you don't increase the levy next year,homeowners will see an increase. The fire pension number will be available mid-summer. Staff increased it a little from last year in the estimated budget. Councilmember Bonar asked if City Administrator McKnight will breakout the chart into goals and tasks. City Administrator McKnight would not break it down further for Council or the public. He will work with individual departments to determine what needs to be done to accomplish the goals. City Administrator McKnight will bring the goals to Council on April 1, 2013, for approval. Regarding the budget, Councilmember Fogarty felt anymore work on the budget before mid-June is just extra work. There could be changes from the legislature this summer. Council decided to start budget workshops in June and have it on a 90-day calendar. Council would like to see the 6-page draft budget in June. The goals set will be taken into consideration. In order to prepare the budget,the legislature should be done in May,we will know the LGA questions by June,we won't know the fiscal disparities number, we may know something from Ice for Tigers,we might have an estimated fire pension number. Private Capital Projects/Operating Transfer—A Private Capital Projects fund was set up to track administrative fees for developments. The fees would come in, the City would pay them, and in turn invoice the developer. It has also been a source where we have collected cash from a developer when we cashed a letter of credit or have had a settlement with a development and spent cash on the development upfront. As of December 31, 2012,we have an outstanding liability of$253,000,which is money we owe to three developments. We have$200,000 in cash and$50,000 in receivables. We should have$253,000 in cash and then receivables are beyond that. Over time the account revolved with development. Now we are down to the end of the receivables and a mismatch has appeared. Finance Director Hanson would like to transfer money from the general fund into the private capital projects fund to ensure the cash equals the accounts payable balance and as the receivables are collected over time, it can be brought back to Council to determine what to do with it. The 2012 revenues exceeded expenditures due to the collection of delinquent taxes and operating expenses being less than budgeted. The money is payable to three developments;Hometown, VRC,and Swanson Acres. The City cashed two letters of credit and had a settlement agreement with another development where they paid the City cash in exchange for releasing some liability. We need to spend the money specifically on these three developments. This will be brought to the April 1,2013, Council meeting for approval. MOTION by Bartholomay, second by Fogarty to adjourn at 6:27 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 20