09-14-2015 Council Work Session Minutes

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COUNCIL SPECIAL WORK SESSION September 14, 2015 APPROVED CITY OF LINO LAKES MINUTES DATE : September 14, 2015 TIME STARTED : 7:45 p.m. TIME ENDED : 9:00 p.m. MEMBERS PRESENT : Council Member Stoesz, Kusterman, Roeser and Mayor Reinert MEMBERS ABSENT : Council Member Rafferty Staff members present: City Administrator Jeff Karlson; Finance Director Sarah Cotton; Community Development Director Michael Grochala; Public Safety Director John Swenson; Public Services Director Rick DeGardner; City Clerk Julie Bartell 2016 Budget Discussion -The council had received a budget in draft form and an analysis sheet indicating budget gaps (updated from the last work session) for discussion. Finance Director Cotton noted that the information includes the change to $62,000 from $110,000 for the fire pension contribution; the closed bond fund contribution and use of 2015 reserves that was discussed is also reflected. Mayor Reinert suggested starting with a goal of not raising the levy percentage. Council Member Roeser called for a discussion about closed bond funds. The council elected to utilize some of those funds for the previous budget for one-time expenses. He pointed out that those (reserve) funds generate very little in interest and can actually lose value so it makes sense to utilize them to a certain extent. He sees the fund is over a million dollars again. When the city has startup costs for something like the fire operation, that could be a smart source. The council has been watchful of the fund reserve level but has also consciously spent down some reserve funds that have grown through efficiencies so they are in effect going back to the taxpayers. The mayor added that the closed bond funds are actually left over from completed projects paid for by the taxpayers so utilizing the funds to keep the budget down is in effect returning the money to the residents. The council discussed future positive budget impacts including development planned for the Legacy area and the city hall facility bonds that will be paid off in 2017. Administrator Karlson explained where capital items are included in the budget (staff is preparing an update) and noted possible capital expenses on the horizon. Council Member Kusterman asked about the possibility of using closed bond funds to zero out the entire gap. Is staff stating the use of those funds (as a onetime source) would leave funding gaps for the next budget? He has also heard of positive impacts coming in the future. Administrator Karlson noted the $323,000 identified in additional revenue and/or savings in 2015; utilizing those funds will result in essentially no increase to the fund reserve from this year. Council Member Roeser noted that new development will 1