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HomeMy WebLinkAbout08.26.13 Work Session Minutes Council Budget Workshop Minutes August 26,2013 Mayor Larson called the workshop to order at 6:30 p.m. Present: Larson,Bartholomay, Bonar, Donnelly Absent: Fogarty Also Present: David McKnight, City Administrator;Robin Hanson, Finance Director;Kevin Schorzman, City Engineer;Cynthia Muller, Executive Assistant MOTION by Bartholomay, second by Donnelly to approve the agenda. APIF,MOTION CARRIED. Akin Park Estates East and West Project City Engineer Schorzman gave an update on the public awareness efforts of this project. Information is now available on the website and also frequently asked questions. A letter will be sent to affected residents explaining the project, a questionnaire asking about any concerns or special needs of residents, and a map of the project. A major portion of this area will be torn up during the summer next year. There are 11 seniors living in that area that will be graduating next summer. City Engineer Schorzman proposed offering to waive the fees at Rambling River Park and the Rambling River Center for them to use for their graduation parties. This would also benefit the work schedule if work has to be done on a Saturday. The rental fee is$150 for four hours plus a$100 cleaning fee, so if all 11 accepted the offer the cost would be$2,750. The reservation timeline would be from the last weekend in May through the end of July 2014 for the graduation parties. The street rehabilitation project will start when school is out and end before school begins. Council agreed with waiving the fees as suggested and this will be brought to a Council meeting for approval. The project funds could reimburse the Rambling River Center fund. 2014 Budget Discussion City Administrator McKnight stated the fiscal disparities number has been received. It is a 2.61% increase which is the lowest increase we have had since 2008. At the last workshop,the budget contained a 4.5% levy increase,the CIP was included and funded directly from the tax levy, and LGA dollars were dedicated to one-time purchases. Since then,things have changed and we do not have the 3%levy limit. The levy limit amount has been received and the difference between our number and the state's number is$222,199,which is the amount of new debt we were going to add to the budget in 2014 (CIP debt). So our numbers do match what we have proposed. The 2014 budget had to be cut by$184,233. Today the draft budget has a 3.63% increase over 2013, and a draft tax levy that stands at a 1.92% increase or$164,874 increase over 2013. The proposed changes to the 2014 budget include: 1. Increase the annual contribution from the cable franchise fees from$75,000 per year to $100,000 per year. ($25,000) 17 Council Workshop Minutes August 26,2013 Page 2 This fund will have approximately$300,000 at the end of 2014. Next year we will do an upgrade project in the Council Chambers and cable room. Purchases will be made in 2014 because of the elimination of the sales tax which will be a substantial savings. 2. Increase the estimated savings to the City from the new law eliminating sales tax for cities effective in 2014. ($10,000) Staff had taken a very conservative approach in the amount of sales tax savings. The amount of savings has been increased by$10,000 for a total savings of$30,000. Determining areas where we do not pay sales tax will be a tremendous amount of additional work for staff. 3. Move the proposed lighting project at Fire Station#1 to LGA funding. ($9,000) 4. Increase the estimated amount of revenue from the three townships for 2014. ($14,000) We have contracts with Eureka and Castle Rock and know the specific amount we will receive from them for fire services. Empire still uses the old formula. City Administrator McKnight proposed to move the revenue number for all three townships to $164,000,which is a$14,000 increase over the last draft of the budget. Some of this additional revenue will be put towards future fire department equipment purchases. 5. Increase the amount of revenue anticipated from investments. ($5,000) City Administrator McKnight has suggested slowing down the rate of getting the general fund off investment income. Even with putting$5,000 back in the budget, we are still $5,000 less than the 2013 budget. The reason for removing interest income from the general fund, is because at certain times during the year the general fund falls below zero, and therefore should not be earning interest. Staff will continue to remove this revenue from the budget but at a slower pace. 6. Eliminate one Police Officer position. ($97,000) City Administrator McKnight noted two thirds of our budget is people. Police make up 45%of our personnel costs. We have trimmed the same side of the tree for the last six years in cuts. We are not using LGA dollars on operations and that is the right decision. City Administrator McKnight and Council agreed it is a difficult decision, but has to be done. 7. Reduce the transfer to the Economic Development Authority. ($10,000) The EDA has gone from a negative$100,000 fund balance to a positive$100,000 fund balance. The old library project loan was paid off at the end of 2012. The EDA also receives almost $16,000 in excess TIF revenue. So the EDA transfer from the general fund will be $40,000,rather than$50,000. 8. Reduce the Police Department exercise equipment and use LGA dollars to help purchase squad cars. ($5,000) The request for exercise equipment has been cut in half,to $5,000. 9. Miscellaneous expenditure reductions. ($8,331) 18 Council Workshop Minutes August 26,2013 Page 3 Our gross levy is$222,199 higher from 2014 compared to 2013. We have$142,000 in new CIP debt and$80,199 in other debt increases which comes to $222,199. The gross levy of$222,199, minus the $57,325 in increased fiscal disparities, give us a net levy increase of$164,874. The levy is going up in 2014 because of the debt. The tangible asset we are getting in the CIP is the Akin Park Estates project in 2014. The $164,874 is a 1.92% levy increase. Residential property values in general are going up in 2014, but not universally. The property tax impact spread goes from a$142.14 decrease to a$94.60 increase on our example properties. The average is an increase of$9.97. Ag land will have a significant tax increase in 2014. Proposed taxes in other cities range from a 5.7%increase to a 2.5% decrease. Farmington has had a 0% increase for 2012 and 2013. Fire Department CIP City Administrator McKnight developed a CIP for Fire and the Fire Department agrees with it. It does not include a ladder truck. The Fire CIP needed to get them to 2020 or 2021 when it ties into the City's CIP that already includes fire equipment. There is a chiefs vehicle for$45,000 to be purchased in 2013. There are various vehicle purchases from 2014—2016 and an engine in 2019, with funding coming from the tax levy, LGA dollars, and township revenue. Council was concerned with purchasing two chief vehicles in 2015 when other vehicles would be available for repurposing. Council also had a concern with including LGA money in the CIP. The 2014 LGA exists, but any LGA after 2015 is maybe money. Council felt they were close to agreeing on the Fire CIP, but the concern is the chief 2 and 4 vehicles. In the revenue summary, revenue for building permits and plumbing/heating permits have been met at the end of July. Some of this is due to permits for school remodeling. City Administrator Update City Administrator McKnight explained the See Click Fix program. This is an app that allows residents to take a picture of something needing attention and send it to the City. The biggest advantage to staff will be tracking and follow-up. The first year start-up costs are$6,000 - $10,000. Council was interested in learning more about it. MOTION by Bartholomay, second by Bonar to adjourn at 7:45 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 19