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HomeMy WebLinkAbout10.26.05 Work Session Minutes COUNCIL WORKSHOP MINUTES October 26, 2005 1. CALL TO ORDER Mayor Soderberg called the meeting to order at 6:01 p.m. Present: Soderberg, Fogarty, McKnight, Pritzlaff, Wilson Also Present: Robin Roland, Acting City Administrator/Finance Director; Kevin Carroll, Community Development Director; Randy Distad, Parks and Recreation Director; Lee Mann, Public Works Director/City Engineer; Brenda Wendlandt, Human Resources Director; Lisa Shadick, Administrative Services Director; Ken Kuchera, Fire Chief; Jay Clinkscales and Tom Hemish, Cataract Fire Relief Association; Rosemary Swedin, Accountant; Cynthia Muller, Executive Assistant 2. APPROVE AGENDA Acting City Administrator Roland noted one ofthe Councilmembers wanted to discuss the next steps after the Council/Planning Commission Workshop last week and scheduling future meetings. This was added to the agenda. MOTION by Fogarty, second by McKnight to approve the agenda. APIF, MOTION CARRIED. 3. 2005 BUDGET REVISIONS Finance Director Roland presented revisions to the 2005 budget. As there is a revenue shortfall in building permits, staff chose to cut the budget by the amount ofthat shortfall of$333,000. The City received increased amounts in Police and Fire aid. There is an increase in charges for services of $68,500 due to the School District requesting a second liaison Police Officer. The total reduction of revenues is $217,434. Staffhas made reductions in every department. In Administration, the elections were in the budget, but as an election was not needed there has been a reduction of$9,695. This does not include the additional payout of three months salary which would be the first three months of 2006. That will need to be adjusted along with compensated absences. In Human Resources/IT there is a savings in the area of training. The Human Resources Director did not attend a national conference that had been budgeted. There are also reductions due to not hiring the IT Specialist until March. Finance cut some data processing costs and there is the potential to reallocate the cost of insurance. Community Development offered $11,000 in cuts in professional services and supplies. They also did not hire a % time Building Inspector which is a savings of$4l,309 in salary and benefits. There was also an adjustment for personnel who left and some who were hired. The total cut for Community Development was $66,772. The Police Department has committed to $35,000 in cuts. Every department has told their employees no overtime and no comp time with the exception of snow plowing. The Police Department is also not letting officers take vacation. The Fire Department did cut their budget $10,000, however they received an additional $20,000 more than what was budgeted in revenue. This is the Fire Relief money. There was $86,000 budgeted for 2005 as far as revenue and it came in at $107,000. Public Works has committed to $47,645 in cuts. Parks and Recreation has Council Workshop October 26, 2005 Page 2 reduced expenditures $57,281. $41,000 is due to the Parks position that was not hired in 2005 and there were also savings in the areas of professional services and supplies. In the transfers line Recreation operating has been reduced by $13,000. Staff anticipates it will be more. The swimming pool made money this year. Councilmember Wilson felt there was value in national conferences for training and development for staff. He hoped we can make that work for the Human Resources Director for next year. He then mentioned about re-evaluating the budget during the year and asked if there is ever a general discussion about potentially coming short and to start preparing for potential cuts in October/November. Finance Director Roland replied this has been discussed all year and they knew there was the possibility of a shortfall. Staff hoped the building permits would come in the beginning of September rather than October. Staffhas been holding back on certain line items. The two positions not hired was a conscious decision from the beginning of the year. Staff did not want to hire them until there was the revenue to support them. Mayor Soderberg noted the expenditures each month are right on target or lagging behind so everyone has been holding the line. Finance Director Roland noted there are a couple line items on the books as pre-paid expenses. One is the study for the facilities which cost $14,000 for Wold Architects. This is to be split between the Ice Arena, the Liquor Store and other different funds. This should have no impact on the General Fund. There are also the legal bills for the EQB powerline situation. So far this amounts to $30,000. Councilmember Pritzlaff asked about the cuts and it being so late in the year where most of the budget should be spent, how did the department heads come up with this many deductions. Finance Director Roland replied you are not looking at cutting from what is actually happening. You are looking at cutting from the adopted budget. When the 2005 budget was adopted we thought Administration would cost $604,000. Of that amount, there was an additional expenditure of$10,000 for an election. Now, we know we will not spend that $10,000 so it can show up as a reduction in the budget. We will still spend all but the $10,000, but we knew we were not going to spend the $10,000 to begin with. That is budgeting conservatively. We over estimate expenses and under estimate revenues. City Engineer Mann noted there were some areas where we decided to stop blacktopping. There were some areas where we did not need as much gravel, such as Flagstaff. Public Works did not do any training for GIS. Finance Director Roland stated as far as Community Development, there is a salary for a % time Building Inspector who was not hired. Therefore, the entire budgeted amount for this position can be seen as a reduction in expenditures which amounts to $41,000. There are also professional services in Building Inspections and Planning where if those services are not used, that money is not spent and that is also part of the reductions. There is also the choice departments made of no overtime. Reductions for positions not hired in 2005 total $80,000. These positions are in the 2006 budget. In June if building permits had picked up, we might have needed the Building Inspector position so it might have been a savings of 3-4 months in salary and benefits rather than the full year. The department heads are responsible to make sure the numbers do not exceed the bottom line at the end of the year. Finance Director Roland also noted part of the Police Department's $35,000 cut was there was one additional position left to hire in 2005. This has been postponed to 2006. Council Workshop October 26, 2005 Page 3 Councilmember Fogarty was concerned about no overtime in the Police Department. Human Resources Director Wendlandt explained that some of the officers may not be going to extra meetings because they would be paid overtime for it. Councilmember McKnight asked ifthe school paid for the School Resource Officer in one lump sum. Finance Director Roland replied it is billed on a quarterly basis. He then asked about the three months salary she mentioned earlier. Finance Director Roland stated when the City Administrator left there was six months salary paid out. Three months is budgeted for 2005 and three months is budgeted for 2006. We will need to adjust the numbers to include that additional three months salary. There are also compensated absence adjustments that need to be made at year end. He was carrying a large quantity of vacation that was also paid out. When the budget is presented to Council in December for them to vote on, it will have a revised budget number that should be close for that particular area. Councilmember McKnight stated ofthe changes that have been made for this year, a large amount will be back in the budget January 1 for next year. Finance Director Roland stated that is correct, except for the changes Council will see for 2006. Councilmember McKnight then asked about the licenses and permits being cut to $791,000 and through September of this year we had a total of $446,000, so we have $350,000 to go. Finance Director Roland stated between October 1 and October 15 we increased the number of permits by 33%. We went from 100 permits at the end of September to 133 permits by October 15. We have 14 permits in the wings and will be recorded with additional cash by the end of this week. We will not make the number of permits, but we believe we will hit the dollar figure. Approximately $45,000 year to date has been paid in building permits for commerciaVindustrial which was not budgeted for. Staff anticipates R&L will be bringing in their commercial/industrial building permit for the third phase of the industrial park yet this year. That is a 100,000 sq. ft. building. Mayor Soderberg asked if any building permits are anticipated from Vermillion River Crossing. Finance Director Roland replied they are not counting on anything. Community Development Director Carroll stated to encourage builders and developers to come in with building permits sooner they sent a letter to all the developers and builders indicating they could help even out the busy time ifthey apply for building permits by November 30 for any buildings they plan to construct later this year or early next year. Permits could be completed within two weeks. This would shift some of the January- March permit applications into November and December so there would be that additional revenue this year. They would be paying 2005 permit fee rates. Councilmember McKnight asked what that will do to the number for next year. Finance Director Roland did not know if this will reduce the number of building permits for 2006. That revenue has already been reduced to 300 permits. Community Development Director Carroll felt the impact will be less in the dollar amount than other things the Council has control over. Finance Director Roland noted if there are special assessments for lots in new developments, staff receives phone calls from closers asking for the amount. Mystic Meadows closed on a number of lots and those building permits are expected soon. Council Workshop October 26, 2005 Page 4 4. 2006 BUDGET REVISIONS a) Discuss Itemized Revisions Council had asked staff to reduce the number of building permits expected for 2006, therefore the 2006 budget had to be cut by $125,000. Finance Director Roland presented the amounts cut by each department. There is an increase in general property taxes of $2,500. This is in anticipation of the Fire Relieflevy going to $62,500 instead of $60,000 in the original budget. The tax levy would then be reduced by $2,500 in the area of capital acquisition because the Fire Department has received a grant which will pay for a number of capital outlay items, none of which are in 2006, but they are in 2007. In 2006 there was $23,000 for sirens. Used sirens were purchased for less money this year, therefore this reduces the amount needed in the 2006 budget to $172,500 for capital acquisitions. The $125,000 in cuts was achieved by staffing shifts. New positions for 2006 were delayed by a few months from the anticipated hiring date. Other items cut were line items in different departments. There is a $60,975 savings in personnel for 2006. Councilmember Pritzlaff noted we have discussed having our own fuel tanks at the Maintenance Facility. Finance Director Roland stated the original plan was a 6,000 gallon tank for regular and a 6,000 gallon tank for diesel. Right now we are buying 10,000 gallons of gas in a month. So the size of the tanks would need to increase. The payback is not a quick payback. Councilmember Pritzlaff felt by waiting the savings gets pushed back. City Engineer Mann stated the cost for both tanks is approximately $150,000. The question is when do we have the money to do it. Mayor Soderberg asked if we had our own tanks if there was a state bid to purchase fuel. Finance Director Roland will research this issue. Mayor Soderberg suggested putting this in the CIP sooner rather than later. Finance Director Roland provided Council with information on the impact of the tax rate on different home values. Ifthe value of the home stayed the same in 2006 as it was in 2005, the City property taxes would go down. If there is an increase in someone's taxes it is due to the increase in the value ofthe property. Mayor Soderberg felt this showed the City is doing its part in holding taxes down. b) Cataract Fire Relief Discussion Finance Director Roland polled the Council as to what they wanted to see. The consensus was to split the difference. So rather than a $65,000 increase for 2006, it was split between $60,000 and $65,000 at $62,500 and the City would increase the benefit to $3,350. The City's contribution would be an increase of$2,500 per year, so this would be $5,000 over two years instead of $5,000 over three years. It was assumed there would be no retirements this year, but starting in 2006 the highest person would be paid out over time. Mr. Jay Clinkscales stated the Cataract Relief Association had proposed to stay at $60,000 and staying with the $3,500 pension benefit. In the past, the Cataract has made significant jumps in their pension due to gains on their investments. The request this year to go to $3,500 was in line with previous years. They did not get Council Workshop October 26, 2005 Page 5 involved in the budget process soon enough, so they proposed to stay at $60,000 rather than asking for an increase, but the gains in investment should be awarded to the members. Councilmember Wilson asked why they felt the $3,500 was more important than the contribution. Mr. Clinkscales replied the contribution level is what was budgeted, they got into the budget process late, everyone is making cuts so for them to ask for an increase did not seem right. Mr. Tom Hemish stated they are 94% vested. Councilmember Pritzlaff stated he spoke with Mr. Bill Sauber who at the last meeting wanted the numbers to be at $3,500 and $65,000. Councilmember Pritzlaff suggested splitting the numbers to $3,350 and $62,500 because there are a number of members close to 20 years of service. He wanted to do something for them, but he also wanted to show the newer members the City was also doing something for them. Mr. Clinkscales noted where the benefits are paid out over the next few years, that does not hurt the projected percentage funding. By 2008, the funding level is at 99%. Finance Director Roland noted it will reflect negatively if next year instead of the top person going you have two people who go. The top two people would cost over $220,000 ifthey both went in the same year. That will affect the funding ratio more so than any contribution by the City. Councilmember McKnight agreed with supporting both ends by increasing the City's contribution by $2500 and increasing the benefit level by $150. Councilmember Fogarty agreed with splitting the difference. Mr. Clinkscales noted just in the liability with the people they are adding next year it is over $8,000. He asked if the City is prepared to increase the dollars to make up those differences. Finance Director Roland stated you are not fully vested until you are there ten years. Mr. Hemish asked ifthe increase in the pension is a 3% increase. Finance Director Roland replied the benefit level is a 5% increase. Councilmember Wilson supported the split as it reflects treatment of the Cataract Association as consistently as possible with other City employees. Mr. Clinkscales stated in the past when they have had the funding to take the increases available to them, it has never come into play. He did not recall one not being approved on the consent agenda. He was trying to understand what the difference is now from then. Mr. Hemish stated they are more funded now than in years past. Mayor Soderberg stated the goal was to stay around 95%-100%. We want to make sure the fund is able to perform. If the numbers peak, the benefit level goes up to reflect that. The assumptions show 2006 at a 96% funding level. Mr. Hemish stated if that is the way we are going, he felt it was a good approach to have a set mark to go by for an increase. Mr. Clinkscales stated the goal is to stay above 90% funding. Mayor Soderberg felt Council was comfortable with doing these increases. Staff will bring to Council a resolution that adopts the level of benefit. The Cataract Relief Association will re-submit their request for the November 7 Council agenda. Councilmember Wilson asked Mr. Clinkscales ifhe felt Council listened to their concerns and how the process went. Mr. Clinkscales replied it was good to be more involved in the workshop. Getting involved earlier next year will be a benefit. He does not agree with the outcome. They have worked hard to get to the funding they are at and believes the members deserve the rewards for the work that has been done. Council Workshop October 26, 2005 Page 6 5. 2006-201 0 CIP City Engineer Mann reviewed the CIP. City building projects include a new City Hall in 2007, 1 st Street garage/storage facility in 2006, and a CMF expansion in 2008. The estimate for new City Hall was $7,630,000. Staff will look at the bids for other City Halls to obtain an updated estimate. The 1 st Street garage is needed because with a new City Hall, the Blaha building would no longer be available for storage. Regarding Public Works projects, there is the annual sealcoat project, Well No.8 and pumphouse has been ordered by the Water Board and is a Water Board expenditure. Also for 2006 is the sidewalk and curb replacement program and an annual mill and overlay project for the Sunnyside Addition. The Spruce Street bridge and utility/street extension is estimated to be $3,200,000. Regarding the 208th Street extension to Pilot Knob, in an agreement with R&L Carriers, the City agreed to pay up to $200,000 of state aid dollars to help fund this extension. There will also be a utility/street reconstruction in the Hill Dee area. The 19Sth Street construction to hwy 3 is estimated to be $14,000,000. A certain amount the County has agreed to fund. The remainder would be funded by the developer. The City may be participating in some aspects of the construction. The goal is to bring the final report to Council the second meeting in November for Council to order the proj ect. The developer is asking for some options which may push the report out further. This may be a two-phase project in 2006 and 2007. Acting City Administrator Roland stated the developer has assured her that the only parts of their land they are in the process of selling is Riverbend and the commercial property on Charleswood Crossing. Staff has received the annexation petition from Newland. This is for Rl and half ofR2 on the MUSA map. Other projects include a bike trail around the pond in the southeast trunk project near Castle Rock Bank and a Fairhills Pond bank stabilization project south of 190th Street. The Hill Dee project is a full reconstruction which are hard to plan for. City Engineer Mann asked for a consensus that Council would not be opposed to staff starting a preliminary survey to enable getting the project done next year. The project could be ordered in February. Mayor Soderberg noted some ofthe projects the City will have to bond for and asked how this will impact the debt ratio. He did not want the debt levy to surpass the 25%. Finance Director Roland stated they have not done the analysis for 2006 for new projects. When it was done last year, they were within the 25%. Mayor Soderberg's other concern was the number oflarge projects for Engineering. 1 95th Street is a big goal, Hill Dee will be a significant project and also Spruce Street. City Engineer Mann replied Spruce Street is already designed. There will be minor items to finalize. He agreed Hill Dee will be a big project. For 195th Street, they have the ability to expand staff. It is more up to the developer. Council was not opposed to staff doing the preliminary survey work for Hill Dee if staff can handle all the projects. Councilmember Fogarty stated in the Community Center discussions it has been discussed combining the City Hall and the Community Center and moving it. She realized there was a committee that studied a new City Hall and they were adamant about it being downtown. There could be a cost savings. Mayor Soderberg noted this would be a tough sell to the community. Before this was brought to Council, the Facilities Task Council Workshop October 26, 2005 Page 7 Force would be brought back to discuss this with them. The proposed location is the Town and Country development along hwy 50 in the Spruce Street development. Finance Director Roland stated if it is a proj ect for 2007, they would want to take bids in March 2007 assuming it does not go with the Community Center. Staff would have to work on design elements in mid-2006. City Engineer Mann brought up the Henderson storm sewer project. This would extend storm sewer from East Farmington to the west, down Hickory Street, behind Farmington Mall, and pick up the wetland pond next to hwy 3, go across hwy 3 to handle the ditch drainage and pick up Hickory Street which has a low point that needs to be pumped when it rains. He asked if Council would like to see this as a project or at least update the feasibility report. The cost was approximately $600,000. Mayor Soderberg suggested looking at this for 2006. Councilmember Fogarty left at 7:59 p.m. Parks and Recreation Director Distad outlined the park projects. For 2006 work is scheduled to be done on Silver Springs Park, Vermillion Grove Park, Mystic Meadows Park, Seed Genstar Park and Meadow Creek Park, Evergreen Knoll, Depot Way Arts Park, Dakota County Estates Park, Daisy Knoll Park and Westview Park. There are also a number of boardwalk projects. Soil borings will be done in the next couple weeks and construct the boardwalks in February depending on the costs. Councilmember Wilson asked about the trail system. Parks and Recreation Director Distad stated in the operating budget they requested to do maintenance for crack filling. They do not do sealcoating. An overlay would be done in 10-12 years. The total amount for park proj ects is $548,500. This entire amount is covered through park development and cash-in-lieu fees. 6. NEXT STEPS Acting City Administrator Roland asked for clarification from Council as to what they want to see as the next step after last week's Joint Council/Planning Commission Workshop. Another workshop could be scheduled in November. In December Council will be interviewing City Administrator candidates and might not want to have a workshop in December. There was also a discussion of having an economic development workshop. Staffwanted to know where Council wanted to go next and when. Acting City Administrator Roland asked for direction for workshops for the next three months. Mayor Soderberg stated the Planning Commission wants some direction for the east side. In addition to the Perkins property, Community Development Director Carroll noted the concept plans for the Devney and Winkler property have been received. Mayor Soderberg felt the Planning Commission wanted guidance similar to what a Comp Plan would be. He did not know if they have the time to do a full Comp Plan which would take 12-18 months. He suggested doing comprehensive planning in a regional fashion. He envisioned saving some property along hwy 50 for commercial or retail, but he saw the bulk of it being residential. The Comp Plan for the whole City would have to be done in 2008. There are people that want to annex and get development going now. He did not want to push them off for 2-3 years. Councilmember McKnight would rather spend the time and look at the entire City as a whole and include an economic development plan. Mayor Soderberg suggested looking at the area to the east where they expect development to occur. Councilmember McKnight did not want to do this piece meal. Council Workshop October 26, 2005 Page 8 Mayor Soderberg noted for areas on the edges we need the system plans update. Councilmember McKnight wanted the economic development plan to be part ofthis. Councilmember Wilson felt the meeting with the Planning Commission was very productive. He left feeling swamped with good information, but needing more information. Hiring the Economic Specialist should help in completing the economic development plan. Mayor Soderberg felt the Council would need to meet with the EDA on the economic development plan. Community Development Director Carroll suggested if there is another meeting with the Planning Commission, they could plan on how to do the planning. The long term planning and economic development plan will take a long time to do right. There are some things smaller in nature that staffhas an opportunity to address right away. At the next meeting they could discuss if they want to put a line on the map and say everything to the west are smaller properties and the system plans do not need to be updated in order to discuss what to do with them. This would include the Perkins property, the Regan property, properties north of the Legion that are still in the township, and the Corinthian Cemetery property. The next part is what do we do east of the line. There should not be any long-term planning for these properties until the system plans are done. Mayor Soderberg and Councilmember Wilson agreed. Councilmember Pritzlaff stated his vision of the meeting with the Planning Commission had good information, but it was not what he envisioned. He thought they were actually going to do some planning. He would like to have a map of the City with the eastern properties and the total number of acres, give it to the Council and the Planning Commission, and on their own time each person write down on the map what they want to see for each property. The maps could be brought to the next meeting for review. Acting City Administrator Roland stated this would be valuable when they revise the Comprehensive Plan. Everyone had different expectations for the meeting. She felt it would be productive to have a meeting to plan how to plan. Councilmember Pritzlaff stated when the Perkins property was brought to the Planning Commission and they said to wait until we know what we want to do in that area, we needed this plan a month ago. We had a meeting in October, now another one in November, we do not want to do one in December and then we are in January. We are four months from getting this accomplished. Mayor Soderberg stated this is comprehensive planning and why he suggested doing it in sections. Comprehensive planning takes time. Councilmember Pritzlaff agreed the economic development plan should be included. Community Development Director Carroll stated the housing goals are what they will have to deal with the most. They need to discuss the policy level decisions that they need the Council and Planning Commission to weigh in on verses the day to day decisions. Weare hovering at 3 units/acre. If the Councilor Planning Commission said they want an area to be all low density residential, that decision alone could pull us below 3 units/acre overall. The Met Council would not approve this. There is a threshold policy level for different types of housing. This would establish the framework and should be discussed at the next joint meeting with the Planning Commission. Staffwill contact Council and the Planning Commission to set a date for the next workshop. Council Workshop October 26, 2005 Page 9 7. ADJOURN MOTION by McKnight, second by Pritzlaffto adjourn at 8:38 p.m. APIF, MOTION CARRIED. Respectfully submitted, r;;/Vdw;r;~~ Cynthia Muller Executive Assistant