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HomeMy WebLinkAbout06.03.13 Work Session Minutes City Council Budget Workshop Minutes June 3,2013 Mayor Larson called the workshop to order at 5:02 p.m. Present: Larson, Bartholomay, Bonar,Fogarty(arrived 5:37 p.m.) Absent: Donnelly Also Present: David McKnight, City Administrator;Robin Hanson, Finance Director;Brian Lindquist, Police Chief;Randy Distad, Parks and Recreation Director;Kevin Schorzman, City Engineer;Todd Reiten, Municipal Services Director;Brenda Wendlandt,Human Resources Director;Tim Pietsch,Fire Chief;Cynthia Muller, Executive Assistant The purpose of the workshop was to discuss the 2014—2015 budget. The City will be receiving LGA for 2014 amounting to $245,592. LGA funds will be used for one-time purchases. Levy limits have been set at 3%and the City is waiting for further details. Effective for 2014,there will be no sales tax charged for County and City purchases, amounting to approximately$60,000 in savings. Councilmembers agreed that LGA is one-time money and should be used for one-time purchases. Councilmember Bonar would like to have further discussion on the disbursements. The current draft budget shows a 5.19%levy increase. The Administration budget is down and the Human Resources budget is up due to moving an employee from Administration to Human Resources. Also,the half-time receptionist position will be moved from Administration to Finance. The Finance budget is up $60,000 or 11.64%over 2013, due to an increase in personnel costs of$20,000 for a position reclassification, and movement through the step system by one employee. Costs associated with the audit amount to $8,000, and LOGIS is increasing by $4,000 to match actual expenses from previous years. Premiums for risk management insurance have increased by$24,000. The Police budget is up$187,000 or 4.64%over 2013. The Police Patrol budget has increased$11,000 due to not being able to transfer equipment from the old squads to the new squads. Workers comp and holiday overtime compensation costs are now included in full in the budget amounting to $53,000. The Investigations budget includes an increase in supplies of$15,000 as purchases have been delayed for a number of years. The Fire budget is up $311,000 or 38.71%. Workers compensation costs for volunteer firefighters have been charged to the City for years, but not assigned to the fire department budget and were spread out over other budgets. For 2014,this is an increase of$24,000. Uniforms have increased by$8,000. Training has increased by$23,000 due to increased training and loss of state reimbursements for annual training. The building repair budget has increased by$61,000, vehicles by$125,000 and machinery equipment by$45,000. Engineering, Municipal Services, and Parks and Recreation are all stable from 2013. The transfers budget includes annual costs for seal coating, trail maintenance,EDA operations, and building maintenance fund. This budget increased$30,000 or 6.9%because of moving the cost of trail maintenance from the Parks and Recreation budget to transfers. All union contracts expire at the end of 2013. There are no 21 Council Workshop Minutes June 3,2013 Page 2 personnel additions in the budget. The amount of the debt levy has been increased by$80,000. The CIP is included in the budget at a cost of$125,000. This is the first of seven years for a $125,000 increase/year to fund the City's street and equipment CIP. A$20,000 ice arena levy has been included to cover any loses at the arena. In 2014, $14,000 will be used to purchase skates for rentals during open skate. In past years, we have not levied enough, and now we need to catch up. Revenues are budgeted at$1.7 million. Half of the funding for an SRO is included in the budget, but this depends on school district approval. Building permits are up slightly based on the past two years, but we are still being very conservative. The net levy is$9.06 million, up 5.78%or $503,041. In 2013 the City received fiscal disparities amounting to $2,195,874 and we are waiting for the 2014 amount. Residential property values are going up, along with commercial and ag land. Industrial land values are down. The major change to revenues for 2014 is receiving Local Government Aid(LGA). We are scheduled to receive $245,592. This money will be used for one-time purchases that are non- operational. Such as: Police Department-$10,000 exercise room equipment; $750 sandbags Building Maintenance Fund- $20,000 building maintenance projects Streets- $2,500 street signs Fire Department- $45,000 Chiefs vehicle; $60,000 brush truck and skid unit; $25,000 blast recoat floor at station one; $21,000 concrete apron at station one;and$16,500 fire bay painting at station one. Fire Department items will be discussed further at a July workshop. Councilmember Bonar mentioned the City's health insurance offers a health club discount. He suggested using the $10,000 for police exercise equipment on new carpeting in the police station instead. There are places within the community for exercising. Police Chief Lindquist noted the weight room is open to all employees. It is very important for officers to keep in shape and it has reduced workers comp and sick time. If there is an emergency, the officers can quickly respond from the police station. The equipment is 12 years old and it is imperative to keep the equipment. Councilmember Bonar stated they will have to agree to disagree, as this activity is available on the open market. Mayor Larson stated LGA money will be used, it is a one-time purchase,we have the room and it is a great benefit to employees. Human Resources Director Wendlandt added the wellness program is great and this is a piece of it. It reduces insurance premiums and is a benefit to the organization. Councilmember Bartholomay previously felt this is a want versus need. At first it appeared as a want,but staff says it is beneficial so he will support it. City Administrator McKnight stated there is still$45,000 of LGA left to assign. Councilmember Bonar stated we have a 3% levy limit, and our levy now is at 5.8%. We have to try to gain the greatest long term value with LGA money. (Member Fogarty arrived at 5:37 p.m) Mayor Larson stated we have to get down to a 3%levy increase. Councilmember Bartholomay noted inflation is up 1.9%next year. We should increase the levy by that amount to keep up and with the CIP at 1.46%,we are over 3%. Councilmember Bonar suggested a three-prong approach and asked staff to come back with a 1 —2—3% levy increase and what that will 22 Council Workshop Minutes June 3,2013 Page 3 include. City Engineer Schorzman stated with a 1%increase the CIP is out. Councilmember Bonar stated the CIP would not go away, but may be a smaller CIP. Mayor Larson stated we are finally seeing proper fmancing. The CIP as been on the list and discussed for five years. We can't do 5%, but will be at 3%. He noted all Councilmembers wanted the CIP at previous workshops. Councilmember Fogarty was frustrated with the state controlling local budgets. Until we have solid numbers,we can't prioritize items. She cannot see anything less than 3%. City Administrator McKnight will prepare options for 1 —2—3% levy increases and see what Council supports. The Fire Department workshop in July will include a discussion on equipment, building maintenance, clothing, and retirement. Parks and Recreation Director Distad reviewed a report on the Rambling River Center. The net operating loss has decreased from 2009—2013. In 2009 they moved into the new building. Currently, 20—25%of the budget is recovered in fees. He will contact other cities with a cost recovery survey. During open skate, customers are turned away because we do not have skate rental. Staff is proposing to buy rental skates and rent them for$3/pair. It is estimated 500 pair will be rented per year. As other cities also do this, Councilmember Bonar saw an opportunity for joint purchasing. Other funds will be brought to Council after July. MOTION by Bartholomay, second by Fogarty to adjourn at 6:03 p.m. APIF,MOTION CARRIED. Respectfully submitted Cynthia Muller Executive Assistant 23