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HomeMy WebLinkAbout11.09.15 Work Session Minutes City Council Work Session Minutes November 9, 2015 Mayor Larson called the work session to order at 6:30 p.m. Present: Larson,Bonar, Donnelly,Pitcher Absent: Bartholomay MOTION by Bonar, second by Pitcher to approve the agenda. APIF,MOTION CARRIED. Final Recommended 2016 Operating Budgets and Tax Levy On September 8,2015, Council approved a property tax levy of$9,613,254 which is a 4.9% increase over the 2015 property tax levy. Since then there have been some line item reallocations,but the levy amount remains the same. The final budget will be brought to the December 7, 2015, Council meeting for approval. Line item changes are as follows: Decrease in human resources budget per council direction ($22,000) Increase in elections budget—equipment $22,000 Increase in police budget—radio fees/warranty $ 5,000 Increase in fire budget—human resource costs—training $15,000 Decrease in permit revenues $14,702 Decrease in administrative reserve ($34,702) Increase in community development(2015 project carryover) $10,000 Increase in misc.revenue(comm. dev.carryover,fund balance) ($10,000) The 2016 budget provides for union contracts, benefits arrangements,the wage study plan, retirement contributions and estimated worker's compensation benefits. It also provides for debt repayment obligations, invests in deferred equipment for the fire department, spends LGA to bridge deferred vehicle needs in the fire CIP and the general equipment fund. It also continues long-term funding for the streets CIP, fire relief association, seal coating,trail and building maintenance. The changes in the 2016 net tax levy from the 2015 net tax levy include: Decrease in fiscal disparities revenue $133,173 1.46% Decrease in permit revenue $114,702 1.26% Increase in transfers out, primarily fire CIP $110,700 1.21% Increase in fire-SCBA,turnout gear,Toughbook computers $ 96,545 1.05% Increase in technology costs, excluding fire $46,278 .50% Increase in police radio subscriber fees&warranty $ 15,039 .16% Increase in human resource costs—fire training $ 15,000 .16% Decrease in the debt levy(MSA$'s) ($88,880) (.97%) All other remaining line items combined $ 6,589 .07% Council Work Session Minutes November 9,2015 Page 2 The tax impact on an average residential home of$212,787 would be an annual tax increase of $45.81 or$3.82 per month. The market value for residential properties declined; commercial, industrial, apartments and rural vacant remained the same; and utility,railroads and personal property increased. Councilmember Pitcher noted the motion to approve the preliminary budget included a to-be- determined position. This is reflected as the$22,000 human resources reduction. He felt the $22,000 was minimal and recalled previously there was a$75,000 amount. City Administrator McKnight stated the motion was to cut a position and that has not been announced. The$75,000 was getting from a 4.9%to 3.99%tax increase. This will be the third position cut for 2016. Mayor Larson asked when we get to the point of diminishing return with cutting people or are we there. Soon it will be costing us money to save money. Regarding 2017, Councilmember Bonar stated the cost of debt will be approximately$450,000 which would equate to a 3.35%levy increase in 2017. He asked about the fixed cost for human resources and the increase in that for 2017. These are things we have agreed to. Everything else is optional. Staff stated the debt is approximately a 4%increase and you could add 2%to 3%for people which would come to a 6%to 7%tax increase. Staff will work on 2017 in early 2016. Councilmember Bonar wanted to lay the ground floor because unless we tend to default on our debt or written agreements with others we know that to not be at 6%or 7%means we will have to cut to reduce that number. Each percent is about$100,000. Staff's approach to the budget is to put everything on the table and then sort out what is most important. Council reached a consensus that this budget meets Council's intent. The basic elements of this budget are due to a lack of revenue from permits, a lack of revenue from fiscal disparities and an increased investment in the fire department. That gets us to 4.9%. City Logo Discussion Based on the survey results,the design team prepared some revised logos for Council review. Council asked what the arch is supposed to represent. Some people see a bridge, or two bridges, the top of a barn, fields and water. Council appreciated seeing the logo examples on various items. Comments were they had no problem with the current logo,the new design paints elements of the existing logo differently and they did not understand the purpose of the pine trees. Some cities have just the name and not a logo with it. It was determined to redesign the website with the current logo. City Administrator McKnight received a logo design from a resident and presented it to Council. It contains a barn and silo because Farmington's name is not changing.You cannot take the farm out of Farmington. The sunrise color in the top background represents the future of the town. The grass in the bottom half represents our growth. The Farmington in the arch represents the bridge. The resident would allow up to three changes and prepare the design at minimal cost. There is no reason for Council to make a decision right away. City Administrator McKnight suggested a change to minimize the barn and silo and make it an outline and put a city in the background. Councilmembers did like this design. Staff felt at this point it made sense to move forward with the website redesign with the current logo and revisit this at a later time. Council agreed. Council Work Session Minutes November 9,2015 Page 3 Authorizing 195th Street Reconstruction Project Internal Loan from the Storm Water Trunk Fund to the General Fund The 195th Street reconstruction project will be paid through three sources, a construction draw through MSA dollars in the amount of$1 million,bond proceeds from the 2015A bond sale and an internally funded loan. The loan amount is not known. Staff proposes to adopt a loan with a not to exceed amount of$1,641,250. The county has estimated the project cost will be$900,000 over the original contract amount which is within the 10%contingency. The city cost was estimated at$5.8 million. With the$900,000 increase we are within 5%to 6%of that. Our share of the increased amount is$405,000. The source of the loan will be the storm water trunk fund and MSA dollars will be used to repay the loan. Council will have to levy sufficient funds to repay the loan as part of the 2029 debt levy so the loan is repaid in full on or before February 1, 2030. Council agreed. Early Redemption of the Remaining Series 2005C Bonds An internal fund from the storm water trunk fund would be used to refund these bonds. These bonds were issued to finance fire station 2. The amount of the loan would be$1,385,000 and the city would save$189,000 in interest. Council agreed. Utility Billing The city presently uses eUtility Billing to provide an electronic interface for utility billing customers. They can look at their account balance online, register for electronic bills, and if previously registered they can view their invoice online. They are not able to see any history. The city also provides for electronic payment options by debit/credit card either online or by phone which is provided through Paymentus. The eUtility Billing software has limited features and is very expensive. LOGIS and member cities interviewed five vendors and two have been selected. The city has to choose one of the two vendors as LOGIS will no longer support the current arrangement after December 2016. The two vendors selected are InvoiceCloud and Paymentus. Staff recommends using InvoiceCloud. This vendor provides many features for the customer and would save staff time. A summary of the features are each customer can set up a courtesy e-mail for the landlord-tenant account,their ID is their e-mail address,they do not have to register to make a payment and can make one-time payments. Customers can also receive e-mail alerts when their bill is due. It also provides a much more efficient process for third party checks. The cost is$.25 per check. InvoiceCloud will match what we currently pay. Paymentus proposes a reduction. The current Paymentus contract expires June 18,2016, and it requires six months' notice. We would not be able to transition fully until next June,but staff would like to start the third party checks process as soon as possible. Finance staff feels with this software they would be able to handle an increase in accounts in the future without having to add staff. Council agreed to use InvoiceCloud. Staff asked Council for consideration on the delinquent date for utility bills. Right now the ordinance states a customer has three additional business days after the due date before the bill is considered delinquent. There are several ways bills can be paid, so staff proposes changing the Council Work Session Minutes November 9,2015 Page 4 definition of delinquent to the day after the bill is due. This will require an ordinance change. Council consensus was to make the delinquent date the day after the due date. Staff will begin to notify residents and make the change effective in June. Another issue is we currently certify accounts once a year. Staff asked if Council would be open to certifying more than once a year those accounts that exceed a certain dollar amount. There are some customers with multiple properties and they do not pay any of them. If they were to file bankruptcy,the city is more exposed to loss. Staff suggested anytime an account is over$2,000 the certification process would start on that account. The traditional certification process would also be done. This will require an amendment to the fee schedule. Council agreed. Fund Balances—Committed In April Council approved an updated fund balance policy. One of the GASB rules is if we are going to commit funds it has to be done before year end. Staff provided a list of funds to be committed and the purpose. Council agreed to the classifications. Other Items • Councilmember Pitcher noted Council received an e-mail regarding the current pet ordinance allowing just two dogs. A resident would like to have it increased to three dogs with a maximum aggregate of five between cats and dogs. Cats are currently not licensed. Council consensus was to leave the ordinance as is. MOTION by Pitcher, second by Bonar to adjourn at 8:20 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant