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HomeMy WebLinkAbout11.10.14 Work Session Minutes Council Workshop Minutes November 10,2014 Mayor Larson called the workshop to order at 6:30 p.m. Present: Larson,Bartholomay, Bonar,Donnelly, Fogarty Also Present: David McKnight, City Administrator;Robin Hanson, Finance Director;Randy Distad,Parks and Recreation Director;Kevin Schorzman, City Engineer;Adam Kienberger, Community Development Director; Tim Pietsch,Fire Chief; Cynthia Muller,Executive Assistant Audience: Tim Pitcher,Andy Rogers MOTION by Fogarty, second by Bonar to approve the agenda. APIF,MOTION CARRIED. 2014/2015 Summer Ice The city offered summer ice in 2014 for the first time since 2011. Estimated expenses were $15,210 and revenues were$14,970 for a loss of$240 for summer ice. FYHA did cancel 24 hours of time as a result of not enough registrations. Without that cancellation there would have been a few thousand dollars profit. Staff recommended offering summer ice in 2015. Council suggested looking at the cancellation policy and perhaps have a penalty for over estimating as it does affect our budget. Summer ice takes place the last three weeks in July. The arena is not being used for dry floor rentals. The ice comes out the end of March and goes in mid-September. Staff has not advertised for dry floor rentals because of competing with larger surrounding cities. In 2014 there was an increase in dasherboard ads at the arena. Arena staff is working at the pool in April and May. Dry floor rental could be added to the work plan for 2015. Council directed staff to continue to offer summer ice in 2015. 2015 Budget and Tax Levy Finance Director Hanson reviewed items covered in the 2015 budget. The proposed tax levy for 2015 is$9,164,208 which represents a 4.96%(or$433,352) increase over 2014. Staff reviewed increases and decreases to the budget since September. The impact of the increase on an average residential home is$45.45. Commercial properties would see a decrease in taxes of 3.6%to 5.8%. The most notable changes in the special revenue funds are with the arena. Projected revenues have been increased by$17,000. Of this, $11,500 relates to summer ice. The remaining$5,500 represents what is needed to break even and reflects the$10/hour increase in rates effective July 1, 2015. Council Workshop Minutes Page 2 November 10,2014 A lot of the debt is maturing in five to eight years. The capital improvement plan Council adopted last year has a six-year horizon. If the city stays on course for the next five to six years, going forward we can pay cash for things, or pay cash and debt and not have to keep borrowing. Councilmember Bonar recalled in the past our greatest expense was human resources,then debt and discretionary spending was third. The community's concern is economic development,they don't talk about CIF's or budgets,they talk about consumer opportunities. That is not reflected in this budget. The quarterly building reports tell us how we are growing as a community. Does that growth go into tax capacity? How much have we grown to help absorb the potential tax increases? The EDA has talked about plans for the future,but they have not yet materialized. We do have a concrete budget that speaks to expenditures and commitments,but we have a gray area we have some control over when it comes to commercial and industries coming here. The gray area is in marketing who we are and creating a brand for attracting commercial and industrial properties. Councilmember Fogarty noted in the budget we have created a plan which makes the city attractive to businesses. In the next five to ten years we will see that result. Businesses want predictability from government. Councilmember Bonar noted Council has discussed having a levy of 4.96%;he would not be in favor of that. He feels it is important we show growth in the community while we continue to work the CIP and increases in the tax base. He would agree with a 3.5%tax increase which would mean an additional$127,000 in cuts. Mayor Larson felt these cuts would take us a huge step backwards. Councilmember Bartholomay asked if the 4.96%reflects our strategic plan. City Administrator McKnight stated the strategic plan is broad,but it calls for solid financial policies and futuristic financial planning. The budgets go a long way towards improving our financial health and meeting the goals in the strategic plan. Councilmember Bartholomay stated the budget we have put forth follows our strategic plan. We have taken a big step forwards and a reduction would take us ten steps back. These are things we agreed upon to reach 4.96%. Councilmember Donnelly felt we have come a long way with stability and the reputation of the city. He wanted to follow through with the strategic plan. Our biggest problem is debt and we are working it out. The only change in the enterprise funds was to increase expenditures in the sewer operations fund by$120,000. This reflects the 2015 fees passed on to us by the Met Council. The budget and tax levy will be brought to the December 1,2014,Council meeting. Vermilion River Crossing Update There are a variety of assessments associated with the Spruce Street bridge project. Community Development Director Kienberger reviewed the deferred and active assessments. The hotel project is moving forward and they plan to break ground in the spring of 2015. Parties are currently working on the purchase agreement for the parcel. Council Workshop Minutes Page 3 November 10,2014 City Engineer Schorzman noted if assessments disappear in part or in total,that will need to be made up at some point as this will affect the road and bridge plan. The plan does not include MSA dollars. We have three projects between now and 2024 that will be eligible for MSA funding. In the same timeframe we will have close to$4.5 million available. That could be used on those projects to offset the$1.1 million shortfall,which he recommended doing. Any decision made on assessments would not derail the long term CIP. We have until 2047 to make any adjustments. Community Development Director Kienberger asked Council for direction on what to negotiate as far as assessments. Council directed staff to work out the best deal for the city and to get the project. Council was clear we do not want a potential business to go to another community and that we are willing to work with them. Residents are looking for convenience. 2015 Seal Coating—Flagstaff Avenue Due to the 195th Street project,Flagstaff will be closed during the project. Therefore, it would make sense to perform seal coating on Flagstaff in 2015 during construction. Council agreed with moving the seal coating on Flagstaff Avenue to 2015. Security Exchange Commissions Municipalities Continuing Disclosure Cooperation Initiative The Securities Exchange Commission believes many municipal issues have not complied with their continuing disclosure obligations. Ehlers and underwriters have done an internal review and found no discrepancies. Fire Department Structure In the strategic plan, Council asked staff to look at the structure of the Fire Department and the possibility of a full time Fire Chief/Fire Marshal position. City Administrator McKnight sent a survey to the fire fighters and received very helpful responses. He presented highlights of the responses. Fire fighters felt there were too many duties to combine the fire chief and fire marshal positions. They also asked for more administrative support. City Administrator McKnight recommended moving to a full time fire chief position effective January 1,2015,or as soon as possible after a full-scale recruitment process. Eliminate the fire marshal position at the same time. Give the new chief 6 to 12 months to analyze both the fire inspector position and administrative support needs and make a recommendation to the city administrator and city council. Allow the chief to re-organize the department structure and stress the priority items of department overview, daytime fire fighter response resolutions, and structure recommendations. Fire Chief Pietsch stated this is growing pains. He has a full time job and the fire officers already have a full load. Council agreed with the full time fire chief position. This is about where the community is going,not the past. This item will be on the November 17,2014, council agenda. Council Workshop Minutes Page 4 November 10,2014 Upcoming Calendar Items City Administrator McKnight presented a list of upcoming meetings and events for Council. Informational Items Council was provided with information on Dakota Electric's notice of public hearings for utility rate increases. MOTION by Fogarty, second by Bartholomay to adjourn at 8:05 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant