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HomeMy WebLinkAbout11-30-2020 Council Work Session MinutesCITY COUNCIL WORK SESSION APPROVED 1 CITY OF LINO LAKES 2 MINUTES 4 DATE : November 30, 2020 5 TIME STARTED : 6:05 p.m. 6 TIME ENDED : 8:00 p.m. 7 MEMBERS PRESENT : Council Member Stoesz, Lyden, Ruhland, 8 Cavegn and Mayor Rafferty 9 MEMBERS ABSENT None to Staff members present: City Administrator Sarah Cotton; Community Development 11 Director Michael Grochala; Director of Public Safety John Swenson; Finance Director 12 Hannah Lynch, Public Safety Director John Swenson; City Clerk Julie Bartell 13 1. 202I Budget - 14 a) Review Water and Sewer Fund Budgets —Summary of funds and budgets 15 including information on: 16 - Water Fund Revenues and Expenditures (for revenue, no rate increase included but 17 new customers anticipated; for expenditures increase identified and its use); 18 - Depreciation is included; 19 - Capital Outlay (biggest change in this fund for 2021) — replacement of vehicle and 20 smart radio reader; 2t - Sewer Fund Revenue and Expenditures (decrease due in part to lower cost of 22 Metropolitan service costs); 23 - Capital Overlay (sewer lining, one-half replacement vehicle, back up generator, 24 mixer pump). 25 26 Ms. Lynch explained that these budgets will be included in the final budget to be 27 presented on December 14th. 28 b) Capital Improvement Plan 29 Goals: 30 - flat tax rate, decreased debt (pay as you go), interest savings through internal interest 31 savings ($470,000 plus through 2030); 32 - Financial and budgetary flexibility — some annual debt is locked for 2021 and is 33 proposed to be paid for out of reserves. Flexibility is provided on an annual basis by pay 34 as you go change; 35 - Efficient Use of Cash Reserve (Payback period); 36 - Maintain Bond Rating (is reviewed every time debt is issued); Ms. Lynch read 37 excerpts from the last bond rating agency notes (on financial management and debt 38 profile) 39 40 Mayor Rafferty asked for the location of the capital improvement plan within the budget 41 book the council was provided. He also asked about the balance of the City's reserve. 42 Administrator Cotton noted Page 49 of tonight's packet and it's indication of what is CITY COUNCIL WORK SESSION APPROVED 43 proposed to be replaced (and that page supersedes page 149 of the budget book originally 44 provided). 45 46 Councilmember Stoesz asked what happens in 2024 if the economy has changed and it's 47 more feasible to lease that to purchase a vehicle; would that cost fall in the same area of 48 the budget. Ms. Lynch concurred. 49 50 Mayor Rafferty asked what is assumed to be the amount levied going forward. Ms. 51 Lynch noted paged 51 of tonight's packet that incorporates the levy that is needed going 52 forward. 53 54 Councilmember Cavegn thanked Ms. Lynch for all her work on the budget and this 55 presentation. He has gained information by talking with staff. He thinks it's a big win 56 for the City to move to pay as you go. Especially a flat rate and the flexibility it would 57 provide. 58 59 Councilmember Ruhland thanked Ms. Lynch also. His job involves mortgages and 60 interest on financing so he appreciates the idea of the City saving money on interest by 61 pay as you go. 62 63 Councilmember Lyden noted that he also supports the concept. He added, regarding 64 capital equipment (public safety vehicles) that he supports moving with the Tahoe rather 65 than the Ford because of the way it is built and what it offers. Public Safety Director 66 Swenson explained that staff evaluated both Tahoe and Explorer and the former was 67 much more expensive (that has come down somewhat); he that a transition period would 68 be required and also mentioned that the Ford has served the department well with some 69 difficulties along the way with storage (they have gotten the job done). Councilmember 70 Lyden suggested, if staying with the Fords, there should be an extended warranty 71 purchased. 72 73 Ms. Lynch explained that staff is looking for council consensus on the purchase plan and 74 the use of reserve. 75 76 The council concurred. 77 78 Administrator Cotton asked the council for clarification on the Tahoe vs. Explorer 79 discussion. Public Safety Director Swenson explained that the department has always 80 tried to come forward with the most economical recommendation regarding its fleet; the 81 question comes down to what the council directs. Director Swenson also suggested that 82 consideration should include that either auto design will include tweaks instigated by the 83 manufacturer that raise the cost of conversion to an emergency vehicle. Councilmember 84 Stoesz noted that the MPG fuel consumption is better with the Ford vehicles; he's 85 inclined to stay with that model. Mayor Rafferty suggested that the director should be in 86 a positon to decide the best vehicle all things considered. When asked, Ms. Lynch noted 87 that adding vehicle costs could be impactful especially next year when reserve is being CITY COUNCIL WORK SESSION APPROVED 88 utilized but it is feasible. Director Swenson suggested that he will have feedback from 89 his research on this matter ready for 2022 budget discussion. 90 c) Review General Fund - 91 . Contingency fund and its balance is the focus of this discussion; 92 - Currently there is $66,170 extra in the contingency (possible uses are included in the 93 staff report); 94 . Warming house staff and Blue Heron Days funding is also included in the budget but 95 may also be diverted depending on those needs for the year); 96 . Staff is looking for a discussion of the contingency funds use; of course leaving the 97 funds in place is an option especially in consideration of the pandemic situation; 98 - Administrator Cotton noted the small decrease in valuation identified by the County 99 since tax notifications have gone out. 100 101 Mayor Rafferty noted that he believes the contingency fund has been kept in the range of 102 $75,000, He's interested in discussing things like the warming house use. 103 104 Councilmember Stoesz asked what other cities are doing as far as warming houses. 105 Director DeGarder said he hasn't checked but he expects that, with the pandemic, there 106 will be little activity. 107 108 Councilmember Lyden said he's okay with leaving the funds for a rainy day. 109 m Councilmember Cavegn said he'd like to see the funds used to facilitate Blue Heron Days III and some recreational activities (opening up). 112 113 Councilmember Ruhland concurred that a vaccine is probably on the horizon and he 114 expects people will be wanting to get back into activities quickly. He's also not adverse 115 to setting funds aside. 116 117 Mayor Rafferty remarked that the City is at a six percent increase to property owners at 118 this point and, with the pandemic, some people maybe hard pressed. He supports ideas 119 he's hearing from the council but he would like to understand more. Director DeGardner 120 noted that the warming house program doesn't work without supervisory personnel and 121 Ms. Cotton noted the $40,000+ cost of a part time position noted in the budget; if the 122 council wishes, the funds could be left in contingency for a time when the pandemic 123 situation changes and the council can discuss programs at that time. Mayor Rafferty 124 asked the council to remember that people are still living with the uncertainly of 125 COVIDI9 and the extra contingency could be used to lower taxes. Mayor Rafferty added 126 that the Blue Heron Days funds ($10,000) could also be moved to lower taxes since he 127 doesn't see that event coming forward for 2021; he would like to see a contingency of 128 about $70,000, 129 130 Councilmember Stoesz asked if the rinks will still be open without a warming house. CITY COUNCIL WORK SESSION APPROVED 131 Director DeGardner said absolutely and he is looking at a lighting system that could be 132 initiated by skaters and of course benches would be available; portable toilets will remain 133 available. 134 135 On the question of recreation programming for 2021, Director DeGardner said he doesn't 136 have enough answers at this time to warrant planning for 2021 but as things evolve next 137 year, it could be individual decisions brought forward next year. 138 139 Mr. DeGardner noted the Parks and Trails Fund that has traditionally been funded and is 140 currently not funded for 2021. Recommendations on the use of those funds have come 141 from the Park Board and there were recommendations for this year that are not funded. 142 He added that currently there is not enough funding included in the budget to do a full 143 park update project; if the park and trail funding were to come forward that would have 144 an impact. 145 146 Councilmember Lyden asked if there is a downside to leaving the funds in contingency. 147 Administrator Cotton said she's been with the City for five years and for each of the 148 budgets for those years the council has utilized reserves to balance; the budget proposed 149 doesn't utilize reserve and has a tax rate reduction and that is a good position to be in. 150 Ms. Cotton noted that there is no certainly in the valuations going up each year. She feels 151 like the budget before council positions the city well going into the future; she has 152 concern about utilizing reserves once again that will have implications for the future. 153 154 Public Services Director DeGardner provided an update on the parks budget and needs 155 going forward. 156 157 Administrator Cotton noted that there are a lot of needs and normally some are deferred 158 during yearly budget discussions. She understands the desire for a flat tax rate (or 159 reduction). But if needs aren't taken care of in one budget year, they will continue 160 coming back. 161 162 Mayor Rafferty said he sees a value in figuring out the lighting for skating but not for 163 staff. He doesn't see Blue Heron Days happening; perhaps the corn roast which is a 164 good event for the community. He'd like to move the $10,000 budgeted for Blue Heron 165 Days into the contingency fund and expend funds for a lighting solution at the skating 166 rinks (cost estimate for complete change out at Sunrise Park would be $15,000 estimated 167 by staff; conversion of lighting is necessary element). Mayor Rafferty said he favors 168 allowing staff to utilize a portion as he has indicated but also bring the tax rate down 169 perhaps $100,000. Mayor Rafferty pointed out that the taxpayers generally look at the 17o bottom line of what they are paying and not the tax rate. 171 172 Mayor Rafferty asked about the use of enterprise dollars to cover personnel costs of those 173 working on fund activities. Mr. DeGardner said there is a current allocation and Ms. 174 Lynch noted that this wouldn't necessarily be a good time to expand personnel costs to 175 the funds with a rate study coming forward. CITY COUNCIL WORK SESSION APPROVED 176 177 A resident was present to support improvements at Brandywood Park. Mr. DeGardner 178 said it's a twenty year old structure and he expects the trail will bring more people; it 179 could certainly use an update. 180 181 Councilmember Cavegn noted that the council wanted a flat tax rate and staff has 182 provided that by changing requests. He now feels that the funds available could be 183 utilized for current needs. 184 185 Public Services Director DeGardner said there are many needs for parks. He noted that 186 the City has to absorb debt costs coming forward such as the West Shadow Lake Drive 187 Reconstruction project this year; that was done along with maintaining a flat tax rate. 188 189 Ms. Lynch noted that there has been much good discussion about needs and use. The 190 funds could be left in the contingency to be available for future needs discussions. Ms. 191 Cotton remarked that there is uncertainty and it makes sense to have the funds available. 192 193 Mayor Rafferty said it's the same thing every year — there are many needs and there have 194 to be choices made. 195 196 Councilmember Lyden said he sees both sides. Is there a compromise possible? 197 198 Councilmember Stoesz said he is settled on the idea that recreation will probably not be 199 possible in 2021. For the contingency amount, he can see $100,000 or $70,000. 200 201 Mayor Rafferty asked what if the parks budget was allocated $60,000. How would Mr. 202 DeGardner utilize it? Mr. DeGardner responded that it would depend on where the funds 203 were focused and that would be a city council direction. The mayor said he'd like to 204 see the contingency fund no more than $70,000 and give $77,000 to the parks. Budget is 205 $177,000 - $100,000 forward — remainder to park board with the understanding that will 206 not be enough to fully improve a single park. The council concurred. 207 208 Administrator Cotton asked if the funds would go to the parks and trails fund. Director 209 DeGardner said he'd prefer they go to the parks fund. Ms. Cotton said they should be 210 added back to the budget officially and use designated; she noted the items anticipated 211 totaling $61,000. Director DeGardner suggested that the extra could augment the first 212 year of two years trail projects. 213 214 Mayor Rafferty asked about Birch Park lighting and Mr. DeGardner said that's planned 215 for 2022. 216 217 Director Lynch asked what if $66,170 were reallocated to parks fund. The current 218 funding for the warming houses and Blue Heron Days would go to contingency to be 219 repurposed or not in 2021. .' 220 CITY COUNCIL WORK SESSION APPROVED 221 Councilmember Stoesz said his thought is that this is a shifting of funds from recreation 222 to trails, meeting people where they are at during COVID. 223 224 The council concurred. 225 226 Mayor Rafferty noted land near Fire Station No. 2 and he has asked staff about utilizing 227 current funding for any work for a "first phase of recreation area". Perhaps that matter 228 could be discussed further at the work session. It is currently budgeted money so not 229 really part of next year's budget discussion. 230 231 Meeting adjourned at 8:00 p.m. 232 These minutes were considered, corrected and approved at the regular Council meeting 233 held on December 14, 2020, 234 235 236 237 238 anne Bartell, Citj Cler' k\ 239 v Rob Rafferty, Mayor