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HomeMy WebLinkAbout10.29.08 Work Session Minutes Council Workshop Minutes October 29, 2008 Mayor Soderberg called the workshop to order at 5:30 p.m. MOTION by Wilson, Councilmember Pritzlaff suggested moving the CIP discussion before the budget discussion, second by Pritzlaffto approve the agenda. APIF, MOTION CARRIED. Present: Also Present: Soderberg, Fogarty, McKnight, Pritzlaff, Wilson Peter Herlofsky, City Administrator; Robin Roland, Finance Director; Randy Distad, Parks and Recreation Director; Kevin Schorzman, City Engineer; Todd Reiten, Municipal Services Director; Lisa Shadick, Administrative Services Director; Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant CIP The CIP reflects the moving of projects that would have any impact on needing to bond or assess for them next year. All of the projects for 2009 would be covered by trunk funds or the road and bridge fund. Some projects need to happen in succession. The projects on Willow and Pine Streets should not occur at the same time because of traffic. If the projects are approved, staff would like to start immediately so staff can do them. If we wait until spring, a consultant would need to be brought in. Starting the projects earlier will provide better pricing. Staff time can be charged to the projects rather than to the general fund. The CIP does still include signal lights at intersections on Pilot Knob Road. Staff is waiting for a study from the county. Councilmember Wilson commented that with starting projects later we have been incurring more consultant expense. He noted we have made the decision to move away from Bonestroo, but they are still involved. City Administrator Herlofsky clarified we have not moved away from Bonestroo, but still use Bonestroo staff for projects where we need help. Finance Director Roland stated we have one Bonestroo employee on retainer, Dave Sanocki, at $2500/month which is not his full salary. He also works on developer and City projects. Other Bonestroo work is charged at the hourly rate. Staff explained Bonestroo does not affect the general fund, but how we use staff affects the general fund. The amount Bonestroo charges is comparable to staff pay. Councilmember Pritzlaff suggested bidding projects out to get the best price for the feasibility study rather than relying on Bonestroo. City Administrator Herlofsky noted this would not be a good way to use funds for continuity. It would take more staff time to develop an RFP for each project. If Council wants a different engineering firm, he suggested waiting until after the 195th Street project. Councilmember McKnight asked about the $750,000 cost for a signal at Flagstaff and CR50. Staff stated that is an estimate for a signal. It would be different for a roundabout. This will be discussed with the county. The cost is high because of having to move the power pole at the comer. Council Workshop Minutes October 29,2008 Page 2 Councilmember Fogarty stated she appreciated Councilmember Pritzlaffs concerns with contractors. Her concern is that Council is getting too far down in the management level and his suggestion was not cost effective. To replace the knowledge by engineering staff would be very expenSIve. Councilmember McKnight asked for an explanation of the Denmark trunk sanitary sewer extension. Staff explained this is to extend the trunk sanitary sewer down the west side of Denmark Avenue from Spruce Street to Ash Street. This will allow the City to remove two lift stations. Mayor Soderberg noted the projects would come from trunk funds or road and bridge funds. The annual seal coat project is an assessment project. The sidewalk and curb project comes from the general fund. The Westview Acres project will be on the CIP for 2010 and is an assessment project. Councilmember Wilson suggested doing a new street assessment and asked what the shelf life would be. City Engineer Schorzman stated a pavement management system should be updated every year. They are great for a first look, but some issues may not be evident from a surface look. Engineering staff have started working on a pavement management system to re-evaluate all the streets in the City. Councilmember McKnight asked about the dip in the seal coat project for 2010. Staffhas gone through a complete cycle of seal coats, so we have a more accurate picture of what roads will be done. The CIP will be brought to the December Council meeting. 2009 Bud2et Council was provided with an outline of 2009 revenues and expenditures. Councilmember Wilson asked staffto outline what is happening with the changes between 6.98% and 5%. Finance Director Roland stated when staff presented Council with the 5%, Council also received the changes in the budget to reach that percentage. Councilmember Pritzlaff asked from the 5% levy increase what percentage increase would it be to make it zero. Staff clarified he was asking in order to keep taxes the same, if there is no change to the value, what would the dollar amount be. The gross levy would be $9,180,366, so if the property value did not change, to keep the tax the same we would need to reduce the budget by $150,000. In order to reach this Councilmember Pritzlaff suggested doing a re- organization. He had the following options: - Hire an Assistant City Administrator with the qualifications for the Human Resources Director and the Administrative Services Director. The Human Resources Director position has been divided three times in the last 10 years. Finance Director Roland stated Human Resources now does human resources, payroll, and IT. City Administrator Herlofsky stated the Human Resources department consists of three people. Councilmember Pritzlaff stated Rob does the Council Workshop Minutes October 29, 2008 Page 3 majority of IT and Georgia does payroll. Councilmember Pritzlaff stated other cities have Assistant City Administrators doing more than that. Those salaries are at $103,000 for each of those two positions. An Assistant City Administrator is $100,000, which would cut $106,000 plus benefits amounting to $25,000. - There are not enough houses being built to warrant keeping two building inspectors. He felt Ken could take on the responsibility of any houses to be built as what he is currently inspecting will be finished. - There are not a lot of developments coming, so do we need an Assistant City Planner. - Look at an Economic Development Director for $100,000. The salaries for two people now in Economic Development amount to $116,000. We would save $16,000 plus benefits. - Not cut salt for roads from the budget. - Keep the Parks and Recreation Program Supervisor. We have incurred some costs amounting to $1100 - $1200 for attending a conference. If we were proposing this position be eliminated, why did we invest in this conference? They also paid their own airfare. Councilmember McKnight asked if it is a more appropriate discussion if we want the budget reduced by $150,000, to have staff give Council ideas. Mayor Soderberg and Councilmember Fogarty agreed. Councilmember Wilson stated there are certain categories in the budget that Council has strong opinions on that we have not properly addressed. Economic Development is one of them. Economic Development is driven by rooftops and the economy as a whole. We have made a drop in the quality of our City being prepared for economic development with the absence of Kevin Carroll. We need to let the City Administrator lead the City and retain someone to lead economic development. City Administrator Herlofsky stated staff will be meeting with the economic development staff from Lakeville tomorrow. We also have an audio conference with various other cities to see what we can do together. He stated when he was interviewed he got a strong feeling from Council that we have an excellent staff and one of the most important things he should do is support that staff. We still have an excellent staff. The type of work done by the people mentioned is very necessary. We have cut our staff to what we feel is reasonable. He would take some real concern both personally and professionally that those suggestions are not to the benefit of this organization. Councilmember Pritzlaff stated we do have good staff. There are some areas that could change. The bottom line is the dollar. He stated he was not willing to take another $10,000 off for salt and have staff come back in February asking to add it back. Economic Development is a big priority. Just for 2009 maybe we can do without the two Economic Development positions and the Assistant City Planner. Mayor Soderberg stated Council gave staff the number of 5% and that is what they have done. Council looks at the higher elevation of things. Staff prepared a budget based on a 5% levy increase and he was satisfied. Unless we want to change the dollar amount, then we need to let staff decide how to get there. Councilmember Fogarty agreed. Staff met our expectations. There is no one that would not like more economic development. When we decided to pass a preliminary levy and staff asked for an economic development levy, Council said no. She is Council Workshop Minutes October 29,2008 Page 4 tired of hearing we have not done anything with economic development. We did do a market study which told us to focus on industrial, which we are spending a great deal of time on now. Retail is driven by roof tops and when the marketers want to come. The study told us to focus on making our downtown strong. We need to continue to work on this. We have done two very different market studies. She was comfortable with the budget. If we want to talk about reductions, it is not Council's call to make reductions. Councilmember Wilson stated this budget is the most important document we work on. We should give direction to City Administrator Herlofsky and have him come back with a number. We should have a very specific goal-oriented workshop early in the year so that in October and November, that is what the budget reflects. He would support an economic development levy for an Economic Development Director. The City is not taking advantage of opportunities right now, the fact the economy is slow, potential industrial development on the west side, residential development in central Farmington. He appreciated the fact we are discussing this with Lakeville, but when he brought it up to the economic development staff about how much are we working with neighboring cities, he received a blank stare. It should be a collaborative effort. An Economic Development Director would relieve some pressures. It is not just enough to set a number; there has to be a policy with that and it is up to Council to set policy. Councilmember McKnight stated economic development is a priority for all of us. He cannot see not having the City Administrator involved in economic development. Councilmember Fogarty agreed economic development is the highest priority, but it is tough to have this budget document reflect that right now. Councilmember Wilson stated when the budget is presented in June, it should look just like the goals. Each year Council is debating a number rather than policy. If the policy of the Council does not jump off the page, it is not as effective a tool. Councilmember Pritzlaff stated he approved the 5% levy with the caveat there would be an additional workshop on this budget, which this is. He made a recommendation for a number. He did not say we have not done anything with economic development. Now he wants to do additional work. He stated we have two economic development people who are members of EDAM and Farmington was not listed on their website until he brought it up. He felt we need an Economic Development Director for more hands on. If eliminating two economic development positions and hiring an Economic Development Director does not come to $150,000, then he would leave it to staff to make the rest of the cuts. Mayor Soderberg stated he was comfortable with the current budget. Councilmember McKnight stated looking at reductions in residential properties he would not mind looking at a number and some options for Council to consider. He also appreciated Councilmember Wilson's comments about prioritization. City Administrator Herlofsky stated the biggest problem with economic development is patience. The EDA has only been in effect since early this year. Staffhas been working on what Council asked for, which was to start on the industrial park. Staff is visiting businesses on a regular basis and putting out a monthly newsletter. As far as the Farmer's Market, another thing Council asked for was to do something about downtown. Staff was trying to find a way to bring people downtown. We would inform businesses these are the days we will have a Farmer's Market and urge them to stay open during that time. Ifthe objective is to have a Target or Wal-Mart we Council Workshop Minutes October 29, 2008 Page 5 have failed miserably. If you say what have we done to make things more attractive, to enhance current businesses, to draw attention to downtown, our staff visited Faribault and surrounding cities. Weare not doing anything more or less than the rest of the cities. He would like Council to give clearer priorities. The first priority was to improve the fund balance. This is the third year in a row we have a positive fund balance. The new City Hall is a major enhancement to the downtown. One employee you say is not doing their job, spent 6 months getting something done and we have a business up there. That is an accomplishment, not doing nothing. Moving into City Hall and changing our phone system for less than what we were paying, we have new equipment and a new phone system saving $25,000 - $30,000. If there are specific priorities we need a clearer understanding of what they are. Farmington hired the same professional as Oakdale and they recommended Mr. Maus. The market study has proved helpful. Councilmember Wilson stated there have been some good ideas from Council and staff has worked on them. He is talking about the process. Every month when he gets to the EDA meeting he expects to see a 1-3 year plan for development and an update. Regarding the Exchange Bank building, within two weeks we were doing something different. He felt there was not enough collaboration in the planning process. He asked how often the EGC, EDA, the school district, and Planning staff get together. City Administrator Herlofsky noted the school district and the City meet monthly. Councilmember Wilson would like to communicate to Dr. Meeks it is not helpful to anyone when school board members are insulting Council. Councilmember Wilson stated looking at revenues for recreation program fees, they are still at $135,000. The basketball program is now with Community Ed. The number of programs are identical, there is still the same deficit with the pool. We gave a training opportunity to the Parks and Recreation Supervisor. If programs were decreasing or fees going down, he could see eliminating that position, but they are not down. Councilmember Pritzlaff stated it is not the only training provided to employees, but it is the only training for a position proposed to be eliminated. That position generates revenue. He does not support giving training when the position is proposed to be eliminated. Finance Director Roland stated you are looking to create $1200 for over $100,000. You are talking about adding over $100,000 back into the budget for salary and benefits for having spent $1200 in training. The training was approved by Council in early May prior to the budget process. Councilmember Pritzlaff stated if the situation changed, why did it not come back to Council. City Administrator Herlofsky stated it has not been determined that that employee is not here, it is a recommendation pending final Council action. Councilmember Pritzlaff noted City Administrator Herlofsky gave credit to one person for the Exchange Bank building. Some people have worked on that building for ten years. One person did not do all that work. Within two weeks we were going down two different avenues with that building. Council was not kept up to speed until after it happened. You have to look at what revenue that position is generating versus salary and benefits. Regarding economic development we have folders put together that have only gone out within the City, not outside the City. He agreed he should not have contacted Wal-Mart, but he felt we did not get the proper contact. He felt it was critical to have two members part of EDAM and find out we are not on their website. There are a lot of avenues for big boxes such as hotels, restaurants, and stores other than Target. He recommended taking $150,000 off the budget, hiring an Economic Development Director and eliminating the two economic development positions or he would not approve the budget. He Council Workshop Minutes October 29,2008 Page 6 did not want to see something cut, that staff may have to come back and ask for later. Councilmember McKnight asked if the levy goal was more important or the structure. Councilmember Pritzlaff stated he is looking at the 2008 and 2009 number being zero if property values had stayed the same. Councilmember McKnight stated so the levy is more important. Councilmember Pritzlaff replied no, economic development is more important. Councilmember McKnight stated the work that is not done is something Council has not done. Councilmember Wilson stated as talented as staff is, experience in the field is what is lacking. The City could benefit from someone who knows how to do this. Councilmember McKnight stated Council has not agreed on goals and has the most important work to set the goals. He would not make any changes to staff until this Council sets goals. We need to do a strategic plan first. He apologized for what they have done for employee morale tonight. Councilmember Wilson stated he asked a month ago regarding creating a partnership with the Y relative to the pool. He asked what staff was thinking whether to contract services out, etc. City Administrator Herlofsky stated that went away when Council said to put the pool back in the budget. He is still talking to the Y to see if they would like to do that, but right now there is no change with the pool. Finance Director Roland stated the pool is funded through a $75,000 transfer from the liquor store. In Cottage Grove, the Y took their pool which was losing $75,000 - $80,000 per year and they have a contract where the City makes a contribution, but the Y runs the pool. We do not have anything firm with the Y. City Administrator Herlofsky stated if the Y is interested, we will negotiate something and bring it back to Council. Councilmember Wilson stated if the majority of the work needs to be done by Council, there are a lot of changes relative to the Parks and Recreation Department. It is difficult to see the logic of eliminating the Parks and Recreation Supervisor position. Finance Director Roland replied because it reduces the overhead costs. The programs and the revenues that come in are independent of the overhead costs that are involved such as half of the Parks and Recreation Director's salary, the Recreation Supervisor's salary and the Recreation Specialist salary. In removing the Recreation Supervisory position, you reduce the overhead cost from $63/hour to $43/hour. The revenues we collect are more able to contribute to the bottom line of the overall City budget because there is less expenditures to balance out with that. The negative effect on actual programming is not as significant because it is more overhead costs. There is not a dollar to dollar program benefit. Councilmember Wilson stated he has an uncomfortable feeling relative to a basic service the City provides and that is Park and Rec programs. He understood the interest in collaborating, but in his opinion until he sees differently it feels like a real one sided collaboration and we are on the wrong side of that collaboration. Councilmember Pritzlaff stated when we have a position that generates revenue for the City, we need to cut the $100,000 somewhere else. Councilmember McKnight stated we have invested training in every employee. He would like to see the tax levy lower, but until we do the strategic plan, the levy we have proposed will lower taxes next year. He was comfortable with the recommendation. Councilmember Wilson supports the 5%, but would like consideration given to his comments. Mayor Soderberg stated if there is a desire to move positions around, the consensus with the 5% is supported, but depending on the results of the strategic planning there could be some re- organization. Council Workshop Minutes October 29, 2008 Page 7 V oiceover IP City Administrator Herlofsky stated in changing the phone system, an estimate of$174,000 was provided by LOGIS. That was put in the original construction budget. With due diligence by HR/IT we discovered by changing to a carrier other than Frontier, Frontier was costing us $65,000 just for the operation of the phones, someone else could provide the actual phone service for $20,000/year plus the accompanying maintenance cost for $5,000. So for $25,000 we could do what Frontier was doing for $65,000. We bought the ShoreTel phone system and for a 5-year lease there is a hardware cost of $26,000/year. So for $50,000 which includes a new phone system, we are still $10,000 - $15,000 less than previously. That has all been moved to general fund operations. The $174,000 originally in the construction budget, stayed in the construction budget. That could be part of the dollar amount left over at the end of the project. Councilmember Pritzlaff stated on July 21, it was brought to Council that the funding for the voiceover IP is included in the 2008 budget in the amount of$168,000. The cost of the lease to purchase the agreement is $117,000. There is a difference of $50,000. At a previous meeting there was discussion about the $50,000. When $168,000 is in the 2008 budget, then we could take $168,000 off the 2009 budget. Finance Director Roland stated the 2008 budget is the capital budget in the City Hall budget. It was never in the 2008 general fund budget. The $168,000 was in the capital acquisition of the City Hall budget. MOTION by Fogarty, second by McKnight to adjourn at 8:14 p.m. APIF, MOTION CARRIED. Respectfully submitted, (I ,,6~ }t--?~e'~ Cynthia Muller Executive Assistant