HomeMy WebLinkAbout07-31-2017 Council Budget Work Session MinutesCITY COUNCIL WORK SESSION
July 31, 2017
APPROVED
1 CITY OF LINO LAKES
2 MINUTES
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4 DATE July 31, 2017
5 TIME STARTED 6#00 p.m.
6 TIME ENDED : 9:15 p.m.
7 MEMBERS PRESENT : Council Member Rafferty, Kusterman,
8 Maher, Manthey and Mayor Reinert
9 MEMBERS ABSENT None
10
11 Staff members present: City Administrator Jeff Karlson; Public Safety Director John
12 Swenson; Community Development Director Michael Grochala; Finance Director Sarah
13 Cotton; Public Services Director Rick DeGardner; City Clerk Julie Bartell.
14
15 1. 2017 Budget — Finance Director Cotton first distributed replacements for Pages 1 and
16 3 of the draft budget packet and also one new page containing information on personnel
17 levels.
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19 Mayor Reinert remarked that budget discussions have generally started with an overview
20 of the current year. It's a good idea to see where things are standing and look for
21 savings.
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23 Director Cotton noted the budgeted use of reserves in the past. This year the reserve
24 level is at 54% which equates to about $325,000 available for use in 2018 while
25 maintaining a 50% reserve. For 2017 building permit revenues are high, having met the
26 year's forecasted revenues in July. Also notable is that much of the pick up last year in
27 expenditures was due to vacancies (personnel) and there aren't any this year.
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29 Community Development Director Grochala remarked that building permit revenue in the
30 future is somewhat tied to lot availability which is low. Another factor impacting that
31 revenue line is storm damage. He doesn't expect the second half of the year revenue to
32 be as high as the first half.
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34 Police and Fire —. Mayor Reinert said Public Safety is one third the budget so he hopes
35 the Chief will check over the budget well.
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37 Public Works — Mayor Reinert remarked that the street sign budget has had savings in the
38 past. Director DeGardner said he'd watch for savings, however, they are working on old
39 sign replacement that is well needed. Mr. DeGardner added that he expects the salt and
40 sand line item will have a savings of about $10,000. Also there should be professional
41 services savings in the amount of $4,000. Mayor Reinert noted that fleet/vehicle/fuel has
42 had some savings in the past but he expects that was due to fuel costs coming down and
43 the budget for 2017 probably reflects that. Park utilities and environmental temporaries
44 were savings areas in the past; directors said they didn't see any savings in those accounts
45 this year.
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CITY COUNCIL WORK SESSION
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July 31, 2017
46
47 Ms. Cotton explained the new information. Very recently the county changed the
48 valuation numbers for the city, resulting in a decrease of about $20,000 in estimated tax
49 revenue. Ms. Cotton reviewed the 2018 estimate and current proposed budget, noting
50 that the city has utilized reserves in the past and that impact is seen. Mayor Reinert
51 remarked that he prefers to refer to the reserve funds as "surplus". Mayor Reinert also
52 remarked that surplus funds were utilized for debt service on the new fire station and now
53 that the debt service on city hall is paid, that should work out.
54
55 Ms. Cotton asked the council to keep in mind that the street reconstruction debt service
56 will come on line in 2019 and is estimated in the amount of $450,000. Director Grochala
57 added that there are certain improvements (water, sewer for example) that won't be
58 covered by the bonds but will need to be funded.
59
60 The Closed Bond Fund was discussed briefly and there was discussion about what could
61 be expected coming into the fund through retirement of bonds.
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63 Mayor Reinert said he remains interested in self -borrowing at some level. Council
64 Member Kusterman suggested that it is a good concept but works best when interest rates
65 are higher. The mayor said it would be important to understand possible impact on the
66 city's credit rating.
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68 Director Cotton, back to Page 1, noted budgeted increases for personnel costs (cost of
69 living raise) and health insurance costs. Mayor Reinert remarked that he noticed a lot of
70 reallocation; Director Cotton concurred and pointed out an example on Page 12 where
71 storm sewer maintenance is transferred out; the funding location works better with
72 scheduling and when that type of work occurs (if it runs to the next year, the budget zeros
73 out). She noted the pages that reflect increases and decreases (contingencies, police/fire
74 capital outlay). The 2018 base budget equals 2017 approved budget less capital outlay
75 plus increased personal services. Additional personnel would show up in the next
76 column, adjustments, not the base. The B4 forms that are on Pages 14 and 15 reflect
77 changes in services.
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79 Mayor Reinert suggested that the format presented is the best he's seen in his role on the
80 council; he'd like to see percentages included.
81
82 The council reviewed the net tax capacity calculation (Page 3) with the understanding that
83 the figures are subject to change based on new information to be received.
Al
85 Mayor Reinert asked for the amount of value increase related to development. Director
86 Cotton said the new construction amount for payable 2018 is $33,000,000 ($23,000,000
87 residental and the rest commercial/industrial) and she will provide the amount of city
88 taxes that generates.
89
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CITY COUNCIL WORK SESSION 3uty 31, 2017
APPROVED
90 Page 4 through Page 8— Revenues. Council Member Rafferty asked about the possibility
91 of raising park dedication fees and Director DeGardner said he has WSB looking at that
92 possibility.
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94 Mayor Reinert asked about the reduction in the ACE program. Director Swenson said
95 there are less inquiries and less completions. The CSO position for that program has not
96 been filled because the department's current staff is keeping up with the work.
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98 Mayor Reinert asked about the gas franchise. Administrator Karlson remarked that there
99 was a mild winter; it appears it was overbudgeted. Ms. Cotton added that staff is trying to
l oo true things up.
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102 The council discussed the lease of the day care facilities at city hall. The lease agreement
103 does have an escalator built in.
104
105 Expenditures —Mayor Reinert asked why the Finance Department is going up. Director
106 Cotton pointed out that the increase is mainly related to personnel services.
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108 Mayor Reinert asked about legal expenditures, suggesting that the expenses are going
109 down but the budget isn't necessarily going down as much. Administrator Karlson
i l o explained that the budget request is conservative but he feels it is important not to over
ill react at this point. Mayor Reinert suggested that there looks to be about $25,000
112 available there.
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114 Building Inspections —The council discussed with Director Grochala the temporary
115 building inspector position.
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117 Public Services —Staff explained that the pavement management budget was transferred
118 (storm drainage system maintenance) impacting this budget. Mayor Reinert recalled the
119 history of pavement management, including development of a pavement management
12o plan. Director Grochala said he believes the city needs a newer evaluation and explained
121 the importance of reaching streets before their condition becomes poor. Mayor Reinert
122 remarked that it makes sense to maintain, especially in the case of the city's facilities;
123 he'd like that discussion at the next budget meeting. Council Member Maher suggested
124 that part of the discussion needs to be who is responsible for determining maintenance
125 schedules. Mayor Reinert added that things needs to be on a cycle for maintenance and
126 replacement.
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128 Page 16, last line— Council Member Maher asked if there are more dollars expended in
129 the second half of the year than the first —the budgeted amount is so much higher than
13o what's been spent.
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132 Economic Development Budget —Mayor Reinert asked about the value of funds
133 supporting the area tourism group. Administrator Karlson sits on the board and offered
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CITY COUNCIL WORK SESSION July 31, 2017
APPROVED
134 an explanation of the group's work; the Hampton Inn in Lino Lakes is happy with the
135 benefit they receive of that group's work.
136
137 Community Development — Administrator Karlson explained that the salary for the
138 Community Development Director is below market, based on his research. He is
139 requesting a 3% market adjustment to bring that salary more in line with the market as
140 well as representing the value that the current director brings to this city. Mayor Reinert
141 recommended that the council take a look at the information presented on that topic.
142
143 Environmental — Director Grochala explained the drop in temporary help.
144
145 Solid Waste — Director Grochala first noted that the funds come from Anoka County;
146 there is a drop due to the city's drop in participation in some programs.
147
148 Forestry — Director Grochala explained that most of the increase relates to the Emerald
149 Ash Borer program. Mayor Reinert asked that Environmental Coordinator Asleson set up
150 a program for tree planting/replacement (with help from the DNR). Council Member
151 Rafferty asked that staff look ahead at helping residents through the loss of trees; Director
152 Grochala remarked that it would probably get real big, real fast.
153
154 Police Department —Chief Swenson explained that one addition reflects a grant officer
155 where the grant is ending in September 2018; in 2019 and ahead there will be no grant
156 funding for that position. He also noted that the third CSO position is included in the
157 budget but that is still under evaluation as far as need (about $25,000 cost). When asked
158 where the grant officer would be assigned, Chief Swenson said it would be based on
159 where the shift assignment is needed most. Council Member Manthey remarked that he
160 wants to review the full police budget and have more understanding on the roles,
161 including how responding to fire calls is impacting their work. Mayor Reinert
162 announced that the matter of the grant officer should be discussed further at the next
163 meeting. Mayor Reinert asked about the increase in supplies; Chief Swenson explained
164 the movement of small tools has an impact there however no decrease in the previous
165 budget was explained. Chief Swenson was also asked to explain the increase in travel
166 and tuition; it is mainly based on additional state training mandates. It was noted that
167 LMCIT insurance cost has gone up and the council discussed other options;
168 Administrator Karlson mentioned the benefits of the League's plan.
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170 Director Cotton noted the personnel information and the proposed increase of one
171 position. Director DeGardner explained that the utilities function needs an additional
172 position based on increased needs and in consideration of the amount of work they do on
173 government buildings. It would be enterprise funded and the duties are included in the
174 information before the council.
175
176 Fire Department — Chief Swenson reviewed the requests. In consideration of continuing
177 requests for additional equipment (dryer, phones), Council Member Kusterman suggested
178 it would be a good area to set up to a fund that saves for future expenses.
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CITY COUNCIL WORK SESSION
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179
180 Streets Department- Director DeGardner explained the reductions.
181
182 Fleet Management — Director DeGardner noted the transfer of funds. Insurance rose
183 somewhat, shop parts are reduced, etc.
184
185 Government Buildings — Mayor Reinert remarked that this area does need more
186 discussion based on his earlier comments about maintenance needs.
187
188 Parks — Director DeGardner noted reduction of overtime, a stipend increase for Park
189 Board members, and contract services reduced.
190
191 Mayor Reinert asked that the council be provided with an organizational chart.
192
193 Recreation Department — small reduction in printing and publishing.
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195 Mayor Reinert noted that the council will return to the decisions at the end of the budget
196 book at the next meeting for discussion.
197
198 Next meeting scheduled to follow the city council meeting on August 14, 2017.
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200 Meeting adjourned at 9:15 p.m.
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These minutes were considered, corrected and approved at the regular Council meeting held on
August 14, 2017.
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208 Ju i e Bartell, Cit Clerk
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