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HomeMy WebLinkAbout07.09.07 Work Session Minutes Council Budget Workshop July 9, 2007 Mayor Soderberg called the meeting to order at 6:04 p.m. Present: Soderberg, Fogarty, McKnight, Pritzlaff, Wilson Also Present: Peter Herlofsky, City Administrator; Robin Roland, Finance Director; Cynthia Muller, Executive Assistant MOTION by McKnight, second by Pritzlaffto approve the agenda. APIF, MOTION CARRIED. City Administrator Herlofsky noted departments were encouraged to bring in what they felt they needed and be as thoughtful as possible. The purpose of this workshop was to get Council involved earlier in the process to receive Council's assistance with setting priorities. There is a significant gap between revenues and expenditures. Revenues are based on 180 new residential permits in 2008 and 15 new commercial/industrial/retail permits in 2008 which excludes the high school permit. The tax levy is at a 10% growth from the 2007 levy. All other revenue sources remain constant. Expenditures include 12 new or upgraded positions totaling $661,000 in employee salaries and benefits. This year the PERA expense will go to 6.5% for employees other than police and fire, and 12.9% is the cost for PERA for police and fire. This is due to PERA's difficulties in funding their shortfall of pension benefits. Capital outlay requests total $1.589 million in the general fund only. The arena has $742,000 worth of expenditures such as a new concrete floor and piping. The IT internal service fund includes normal replacement costs and requests for new computers and new and upgraded items required for service in the new City Hall. This includes voice over IP telephone service. IT services are spread among all funds, not just the general fund, so 60% of the cost for IT would be included in the general fund and the other 40% is spread among the enterprise funds and special revenue fund. The IT items for the new City Hall are not optional. Voice over IP is a significant cost and would change how phone service would be handled in all City buildings. Staff is preparing a cost benefit analysis for this service. Council received information on the computation of the tax capacity rate with a 10% levy increase, there would be a 42% tax rate up from 41.87% in 2007. This assumes fiscal disparities remain the same. The tax levy shows an increase of $350,000 in debt service between 2007 and 2008 and this is due to the new City Hall project. There is also an increase to the fire levy. Council also received a list of the City's required debt levies, including the City Hall bonds, for the next 20 years. The majority of street projects over the next 3-5 years will be driven by development and development will pay for them. Regarding the request for 12 new positions, this does not include hiring a new City Engineer, which will take place in 2008. These positions amount to $661,115. In 2006 there were 124 roofing and siding permits. All building permits in 2006 came to 760. In the first six months of2007 there are 212 roofing permits and all other permits come to 841. Council Budget Workshop July 9,2007 Page 2 Staff in the building inspections division has been reduced from 3 % people to 2 Y2 people. The licenses and permits amount proposed for 2008 is $591,000, ofthat $32,000 is licenses and the rest is building permits amounting to $560,000. Councilmember McKnight would like to see the building permit number lower, such as $390,000. With a lower levy limit, it is hard to add positions every year and keep the levy low. He agreed with the approach outlined in the May 15, 2007 memo from Finance Director Roland. Finance Director Roland clarified Council wants to take any increase in the revenues away. If we go to $390,000 in building permits that is all of the increase, so any levy put towards the general fund is completely eaten up by less building permits. Councilmember McKnight stated he does not want a number the City cannot achieve. He wants to gradually get the building permit number to zero. Councilmember Fogarty stated she was comfortable with building permit numbers last year because of the high school. If Council is not willing to raise the levy, then we do put the City in a tough crunch. She would like to go with the levy number suggested and re-evaluate closer to the end of the year. Regarding the Code Enforcement Officer, Councilmember Fogarty asked what revenue would this position generate. She asked if we are receiving enough complaints to hire someone full time. City Administrator Herlofsky stated he would never look at that position as making revenue. Councilmember Fogarty was not interested in seeing an increase in the fines. Councilmember Pritzlaff did not think we would reach 180 building permits and would like to see it lower. As far as the new positions, he was shocked to see a Code Enforcement Officer on the list when Council has not taken action as to whether they want this. Finance Director Roland noted Planning is currently handling the complaints and this position was eliminated when preparing the 2007 budget. (Councilmember Fogarty left at 6:34 p.m.). Councilmember Pritzlaff stated the positions for Engineering Administrative Assistant, Parks Maintenance Park Keeper, Park Ranger, Facilities Maintenance Worker, Recreation Administrative Support Specialist amount to $359,000. He was not comfortable with spending this money for new positions. He supported the upgrade positions. He stated we either have a specialist or an assistant for an assistant. City Administrator Herlofsky noted as far as staff assistance to department heads, this is the leanest-running outfit he has seen. This says department heads would like to have more office help. Councilmember Pritzlaff then asked what department is asking for the pickup with a topper. Staff replied IT, to carry computers to other buildings. City Administrator Herlofsky noted they have included five new laptops for the Council for the new City Hall. Councilmember McKnight did not support this. Councilmember Wilson did not have an opinion on the building permit number. He preferred to wait until after the third quarter. He understood Councilmember McKnight did not want to have to count on building permit revenue. Councilmember Wilson was concerned with the entire expenditure category, especially fire. Staff noted they want a new fire truck. Councilmember Wilson was suspect of spending money for voice over IP until they receive more information. City Administrator Herlofsky noted staffis trying to determine if we should move our existing phone system or is this the best time to make the change. Councilmember Wilson felt we did not Council Budget Workshop July 9, 2007 Page 3 need to spend money on the ice arena until the survey is completed. City Administrator Herlofsky noted after the survey is received he will suggest $200 for ice rental rates. Staffwill also work with the hockey association and the school district to increase the hours. Mayor Soderberg would like to see the tax capacity rate stay constant with last year. He was comfortable with the building permit numbers as they are. He would not go as far as getting to zero, but would like to be conservative. With those constraints on the budget, it will be tough to add positions. Council has already agreed to the City Engineer position. The money currently in the budget for the retainer for Bonestroo is on par with the cost of this position with benefits. The cost for Bonestroo as a consultant would be charged directly to projects and developers. Mayor Soderberg asked ifvoice over IP gives the City capacity for a listserv. Staff felt this was separate. Mayor Soderberg felt it would be nice to e-mail the newsletter to residents who would like that. Staff cautioned this would take a lot of time and require another support staff person. Councilmember Wilson asked if the economic development consultant would be carried over to 2008. City Administrator Herlofsky proposed to use the consultant for 18 months, 6 months in 2007 and 12 months in 2008. Councilmember Pritzlaffnoted Council took a tour of the mill and overlay project in Sunnyside and asked staffto work with Aslakson's on a price reduction because of all the patch work before the next Council meeting. There is currently $8,000 retainage. MOTION by McKnight, second by Pritzlaffto adjourn at 7:01 p.m. APIF, MOTION CARRIED. Respectfully submitted, {t~/n~ ~thia Muller Executive Assistant