Loading...
HomeMy WebLinkAbout08-10-2009 Council Minutes (2) SPECIAL WORK SESSION August 10, 2009 APPROVED 1 2 CITY OF LINO LAKES 3 MINUTES 4 SPECIAL WORK SESSION 5 6 DATE : August 10, 2009 7 TIME STARTED : 5:30 p.m. 8 TIME ENDED : 9:42 p.m. 9 MEMBERS PRESENT : Council Members Reinert, Stoltz, 10 Gallup, O'Donnell and Mayor Bergeson 11 MEMBERS ABSENT : none 12 13 Staff present: Acting City Administrator, Dan Tesch; Director of Finance, Al Rolek; 14 Director of Public Safety, Dave Pecchia; Director of Public Services, Rick DeGardner; 15 Director of Community Development, Michael Grochala; Kent Strege, Police Captain; 16 City Clerk, Julie Bartell 17 18 Mayor Bergeson called the meeting to order at 6:05 p.m. in the Council Workroom at 19 Lino Lakes City Hall. 20 21 Director Rolek reviewed his written report. He outlined the challenges facing the city's 22 budget including a national recession, a contracting city tax base, an ailing housing 23 market and decline in building activity and uncertain energy costs. The budget proposed N..-.. 24 is 2.1 percent lower than that adopted for 2009. The levy presented is higher(up 6.17%) 25 than the previous year, mainly due to the obligation the city has to repay debt on certain 26 general obligation bonds for which special assessment charges have not been received. 27 He pointed out that the budget presented was scrutinized by the city's management team. 28 Personnel costs are the biggest portion of the budget and no increase is proposed other 29 than in the area of insurance and staff under labor contracts as well as the city council 30 whose salary increases are already approved. The budget presented does not fulfill the 31 council's request to bring forward $1,000,000 in reductions however options for 32 consideration are included in the report. A reduction of$2,000,000 would involve a 33 monumental shift in what services the city delivers. 34 35 Acting Administrator Tesch reported on a possible retirement incentive program. Based 36 on eligibility, the incentive would involve an additional 12 weeks of severance pay(in 37 addition to regular severance) and a $10,000 deposit to a health savings account. Finance 38 Director Rolek pointed out that for the incentive to be an effective budget tool, it would 39 have to occur in 2009. Mr. Tesch will present the details to the council for consideration 40 at the next regular meeting. Police Chief Pecchia was informed that there will no doubt 41 be some type of restriction on what positions would be eligible. 42 43 A council member verified that the downward economic trends will continue to impact 44 city finances for more than just 2010 and that has to drive decisions also. Regarding fund 45 balance, the finance director verified that his opinion is that the use of fund balance down 1 SPECIAL WORK SESSION August 10, 2009 APPROVED 46 to the $500,000 amount would not adversely affect the city's credit rating; however, 47 formal approval of a fund balance policy is recommended. 48 49 A council member pointed out that the level of resources and the activity level for the city 50 don't concur. Staff was directed to bring forward reductions in that light. The options 51 presented have essentially been reviewed by the council previously. If the staff isn't 52 willing to bring forward the necessary cuts, the council will have to do that. 53 54 A council member pointed out that the area of personnel is the biggest part of the budget 55 and so is obviously the way to get the necessary reductions. To make that type of 56 decision, the council should hear about how service levels to the residents will be 57 impacted. 58 59 A citizen in the audience addressed the group. She commended the council for 60 considering reductions because that is a necessary action. It is disappointing that more 61 direct recommendations are not included in the staff report. She spoke against any 62 revenue increases. Her question about reduction of funds for street maintenance was 63 explained as no reduction by the finance officer. She recommends that since revenue 64 from building permits is down drastically, that would be an obvious area for reduction 65 since that revenue would normally fund personnel costs for the service. When fuel cost 66 increases were questioned, the finance officer explained that energy costs are volatile so 67 he doesn't recommend severe changes in budgeting. She suggests that health insurance 68 costs should also be reviewed and perhaps other health insurance options could be 69 considered. Another recommendation is to reduce engineering costs in a down economy. 70 Also, overtime costs(police department mentioned) should be reviewed because use of 71 overtime has a low value for the dollar. 72 73 A council member requested more consideration on staffing changes and pointed out 74 areas within budgets that probably have less activity because of the state of the city. 75 Collaborations for park services should be considered. 76 77 A council member noted that the council salary should also be on the table. 78 79 The meeting was recessed at 6:33 p.m. for the purpose on conducting the regular council 80 meeting. 81 82 The meeting was reconvened at 7:40 p.m. 83 84 Council members individually offered their opinion on the options listed in the staff 85 report. 86 87 A council member suggested that sharing of clerical duties should be a possibility. Also 88 suggested was outsourcing of building inspection duties,with consideration that the area 89 has shrunk by about eighty percent. Staff explained that such a change would involve 90 service considerations. The building department should generally be self-supporting with 2 SPECIAL WORK SESSION August 10, 2009 APPROVED 91 the fees they collect. Staff further explained that the nature of business being conducted 92 by the building department has changed but the level of permits is staying somewhat the 93 same. Last year was, of course, impacted by storm damage. 94 95 Public Services Director DeGardner noted the existing joint powers agreement with the 96 school district through which the city spends $50,000 to $60,000 per year in maintaining 97 some jointly used facilities. 98 99 In the administrative, finance,planning,parks and streets areas, staff was asked to explain 100 current needs. 101 102 At the request of council, the directors explained the process they used to get to this point. 103 Was there communication and opinions shared between directors? Mr. Rolek explained 104 that each director prepared a budget for their area of responsibility as they normally 105 would for the budget. There was then discussion amongst the group about how 106 reductions and how they would impact services. The directors also recognized that while 107 this is a very serious situation, at some time the economy will turn around and the city 108 needs to be in a position to move with that. They discussed and evaluated the possibly of 109 outsourcing some services. Police Chief Pecchia added that the group did identify up to 110 15 positions that could be eliminated although there was not necessarily consensus on 111 which positions. 112 113 A council member suggested that the number one job of the directors was to bring '`"- 114 forward reductions that would represent an appropriate level of resources for the current 115 activity at city hall first and then the council would look past that at other pieces that 116 could fill in the puzzle (such as revenue, retirement, furlough, etc). He recommends that 117 each director make suggestions across the entire organization perhaps even anonymously 118 and then tabulate those results to get to some real recommendations. 119 120 Connie Sutherland, Charter Commissioner, asked if the directors have discussed the 121 possibility of salary decreases across the board. Mr. Rolek explained that option could be 122 problematic since most of the city's employees are attached to labor agreements. 123 124 At the request of the council, Mr. Rolek reviewed the delinquent tax situation for the 125 special assessments associated with the general obligation bonds of 2005A. There is an 126 option to cover the debt service through internal financing for 2010. The forfeiture 127 process would begin in 2010 but it's a lengthy process; staff is in the process of analyzing 128 the options involved in that outcome including public purpose. 129 130 A council member asked if staff is actively exploring the possibility of some sharing in 131 the area of public safety services (police and fire). The Police Chief indicated those are 132 possibilities and they hold significant potential in savings. The council member also 133 asked if, in the area of fire services, could there be efficiencies in merging in additional 134 cities? The council member also asked for more information on increasing recreation 135 program fees. 3 SPECIAL WORK SESSION August 10, 2009 APPROVED 136 137 A council member pointed out the dynamic of not having a city administrator in place. 138 That makes the decision making process somewhat different. Also, as a process person, 139 he would like to see staff bring back$1,000,000 in reductions, perhaps in increments. He 140 recognizes that there is a balanced budget proposed even though it includes options not 141 approved by the council. He believes the goal of the council is to not raise the tax levy. 142 143 A council member suggested some review of the process used by Centennial Fire to save 144 funds each year for equipment purchases rather than financing. Also it may be time to 145 look at the city engineer situation also. 146 147 At the request of the Finance Director, the council reviewed the list of options and each 148 offered their opinions. 149 150 When discussing the 6.17% increase in the total levy, Mr. Rolek explained that the 151 increase is mainly due to the special assessment delinquency that was discussed 152 previously. 153 154 A council member reiterated his desire to have directors weigh in individually on 155 organization-wide options. A director expressed concern about offering opinions in 156 areas where he has little familiarity. 157 158 A council member suggested that a collective effort of directors would be preferable since �— 159 it would allow for collaboration options. 160 161 A council member suggested a moderate approach to the delinquent special assessment 162 problem. He proposes a split by handling part of the problem through internal loans and 163 part by reductions. 164 165 The council directed the directors to come to the August 25, 2009 work session with 166 specific recommendations for reductions. The directors pledged to work together and 167 bring the information the council requests; there will be no individual surveys. 168 169 A council member suggested that since there will obviously need to be some personnel 170 cuts, they should be considered in each and every area of the organization. 171 172 Acting Administrator Tesch explained that there was no list of positions included in the 173 report in part because presenting that level of information in fact sets the wheels in 174 motion and the city needs to be prepared to act accordingly. 175 176 Police Chief Pecchia noted that the Police Department has historically taken a big hit with 177 reductions. The department was down three positions in 2008. At this point,he is asking 178 that he be authorized to proceed with a proposal to fill the vacant police officer position 179 but to eliminate a CSO position at the same time. The council said they would consider 180 that request sometime in the future. 4 SPECIAL WORK SESSION August 10, 2009 APPROVED 181 182 A council member suggested that the matter of reviewing a storm water utility should be 183 put on a work session agenda soon if it is to be a viable option for the 2010 budget. Staff 184 concurred. 185 186 The council will continue the budget discussion at the special work session on August 25, 187 2009 beginning 5:30 p.m. 188 189 The council concurred with the previously discussed idea of participating in a joint 190 meeting with the charter commission. The charter commission members present asked 191 that the council be polled for possible dates that could be presented to the commission. 192 The first joint meeting would be to discuss the charter budget request. There could be 193 other meetings to maintain on-going communication. The next regular meeting of the 194 commission will be October 8 at 6:30 p.m.; if the commission agrees, the council is open 195 to that date. 196 197 The meeting was adjourned at 9:42 p.m. 198 199 These minutes were considered and approved at the regular Council meeting held on August 24, 200 2009. 201 202 203 / 45141)2142 204 205 City Cler 2, Julianne Bartell Johnrgeso , Mayor 5