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HomeMy WebLinkAbout04/19/1999 Council Minutes• • COUNCIL FINANCE WORK SESSION APRIL 19, 1999 CITY OF LINO LAKES MINUTES DATE April 19, 1999 TIME STARTED 5:35 p.m. TIME ENDED 8:27 p.m. MEMBERS PRESENT Council Members Bergeson, Dahl, Neal and Mayor Sullivan MEMBERS ABSENT Council Member Lyden Staff members present: City Administrator, Linda Waite -Smith; Administration Director, Dan Tesch; City Engineer, John Powell; Public Services Director, Rick DeGardner; Public Safety Director, Dave Pecchia; Community Development Direc an Wessel and Clerk -Treasurer Marilyn Anderson. The purpose of the meeting was to discuss updated financialthe Council. The format of this meeting will be the same assed last ear. The staff will present the information and ask Council what other information the Council needs to make good decisions. Staff expects that Council 11 wart someone from Springsted, Inc. to come and talk about bonding and someon from Ehler's and Associates, Inc. to come and talk about TIF. At the end of thisrn tang, Co1 will be asked to provide direction as to what they would like to have for the second, more detailed financial update meeting. The Council will also be as E �f � y have specific guidelines for preparing the budget for next year such as s" Co w' <il have definite feelings regarding increasing the levy rate. The Counci 'gt€ en a packet compiled from different sources. STATUS OF VARIOUS FUNDS Pages 1-5 Area and Unit Fund. This Fund is a permanent improvement revolving fund which finances trunk/system wide sewer and water improvements. The funds come from new connections to the system. A presentation has been prepared based on five (5) assumptions and the projections are based on three (3) different housing growth scenarios as outlined in the Comp Plan. The amount of commercial and industrial growth scenarios are the same for each year. The cash balance of this fund is important and was a concern last year because a portion of the balance was used to pay the debt to the City of Shoreview for utility connections. The cash balance as of 12/31/98 indicates that the fund nearly recovered all of the debt that was paid to Shoreview. PAGE 1 COUNCIL FINANCE WORK SESSION APRIL 19,1999 Staff answered questions from the Council about Pages 1 and 2 of the packet. One question involved the Area and Unit Fund financing land acquisition for the athletic complex. Previously, staff was authorized to negotiate a land purchase with the property owner on the southeast corner of Birch Street and Centerville. If the City did indeed buy the land, the cost of the land purchase would be funded by the Area and Unit Fund. The City would place a referendum on the November, 2000 election ballot. If the referendum failed, the property would still be prime property and the City would be able to sell the land and recover the costs or determine some other method of financing the acquisition. Pages 6-8 Tax Increment Financing (TIF) A letter dated 10/7/98 from Ehlers & Associates, Inc. titled Tax Increment Financing Overview, Mitigating the LGA/HACA Penalty was included in the packet and marked Page 6. The letter indicated that the TIF penalty for 1999 was expected to be $157,000. Staff has contacted Ehler's letting them kn ha that Mr. Sulander is no longer employed by the City and that the City will be relying on: them to prepare the TIF report for this year. Staff also will seek theirassistance in detertnining how the City should fashion its local contributions and how the Ci#y might find ways to reduce the penalty. The expected penalty for the year 2000 is $225,001 s of yeti this penalty is not funded. The Council will consider using a portion ofthe 1998 General Fund Excess Balance to fund the penalty. Staff stressed the importance o meeting to speak to spec a repsentative from Ehler's at the next finance It was noted that becaa sethe C incurred the TIF penalties, the City lost its Local Government id (L FUTURE Pit. POWELL CTS AND PROJECTED FUNDING SOURCES, JOHN Page 9 Engineering Capital Improvement Program Summary, 1999 - 2003 A summary of capital improvement projects that may occur during the period beginning in 1999 through 2003 was presented. A color coded map indicated the location of the projects. There will be no street reconstruction projects in 1999, however a feasibility study is planned to more accurately identify projects for the next three (3) years. An updated presentation more accurately reflecting the current status of the 1999 projects in process will be prepared for Council review. Mr. Powell explained that each proposed project is tested to determine if the project generates adequate Area and Unit Funds to pay the cost of extending services to the PAGE 2 • • COUNCIL FINANCE WORK SESSION APRIL 19, 1999 • proposed project. If it does not generate adequate Area and Unit Funds, the project is denied. • • Council expressed concern in that some of the financing of the Capital Improvement Program depends on bonding. It appears that although there will be no increase in the coming budgets, bonding will be needed to finance some of the improvements. Staff noted assessments will fund some of the projects but interim financing will be required. The Area and Unit Fund has given the City flexibility in funding sewer and water projects. Unfortunately, the City does not have this flexibility for street improvement projects. Consideration should be given to this idea. It was noted that the Charter Commission wants the City Council to develop a plan to pay for road reconstruction. The meeting was recessed to the Council chambers at 6:35 p.m. to conduct i annual Board of Review. The Council finance work session was reconvened at 7:261p Page 10 - Economic Development Projects T e Village T evelopment/Phase I - Land summarywas brieflyrecapped spec ific noting projects pp� g ��. land purchases from Mr. Glenn Rehbein and Mr. Funkhouser and the balloon payment of $841,226 on those two (2) purchases due in the year 2002..Also noted as a major portion of the Village to be developed for a hotel. The sale of s property would more than pay the balloon payment and the services needed to supp t t r hote'' Phase I - Land S ., a t o d currently available for sale within the Village. The value of these pro : w ' as o ined. A summary of the Lino Lakes Economic Developmc , .tus'gi `inning in 1991 and projected through the year 2000 was outlined and a s 4 ercial projects was presented. It was noted t the City does not have architectural guidelines in place for development near and around the I-35E/Main Street intersection. Staff explained modified guidelines of the I-35W/Lake Drive intersection will be used. ATHLETIC COMPLEX, RICK DEGARDNER Internal funding is planned for the acquisition of land for the athletic complex. Then in the future, probably 2003, a $4,000,000 bond referendum will be placed on the election ballot. If the referendum passes, the internal loan will be repaid and the development of the complex will be started. At that time, there will be further discussion about pursuing additional development of the trail system. If the citizens do not approve the referendum, the land will be sold. PAGE 3 COUNCIL FINANCE WORK SESSION APRIL 19, 1999 Currently staff has outlined a proposal to purchase property for the complex by paying the landowner a down payment of $100,000 and paying the balance in three (3) installments. Staff is proposing to located the athletic complex near the intersection of Centerville Road and Main Street. The landowner is currently the Charter Commission Chairman and a member of the Park Board. Council expressed concern about the public perception of conflict of interest. Staff was instructed to prepare a plan to make sure the public understands that there is no other good location for this facility. The City Attorney has already prepared a written opinion on the conflict of interest matter and Mr. Jeff Schoenbauer, City parks consultant has also prepared a professional opinion about the location. Once the City Council has approved the purchase of the property, public meetings will be conducted to let the public know about the land purchase and what is planned for the site. Behm's Century Farm Park - Staff is considering selling a strip Lane and Palomino Lane to the developer of Behm's Century Farm develop the park for this subdivision. The developer uncle' ate. this land, the City is not guaranteeing him MUSA or aper BONDING CAPACITY, LINDA WAITE,S On March 3, 1999, Jerry Shannon, S structuring a bond so that the City co provide financing for the at etie was provided as a re • id off (*Mustang et S 1 dollars to City sells him 'elopment plan. ;steel, In:c. talked to the City Council about rovide`financial assistance to the YMCA and ex. Two (2) pages from Mr. Shannon's handout EXCESS REVS re : NDAVAITE-SMITH Projected 8+' tl• lance - A draft resolution designating the General Fund excess fund balanceQ the year ended December 31, 1998 has been prepared. According to City Policy, certaindevels of various reserves have to be maintained. This is outlined in the draft resolution. In addition, the Council has already reserved some of the 1998 excess fund balance to pay for some discretionary items. The total amount of the 1998 discretionary reserve has not been spent. The balance of the 1998 discretionary excess fund balance is also outlined in the draft resolution. The total amount of the undesignated or unreserved excess fund balance that must now be designated is $273,430.00. HACA Penalty - There was discussion regarding why there was such a large excess fund balance and the need to reserve some of the excess fund balance to pay the LGA/HACA penalty for next year. List of Staff Recommendations - Staff prepared a list of recommendations for the use of the excess 1998 fund balance. It was noted that the list was not prioritized but listed in PAGE 4 • • • COUNCIL FINANCE WORK SESSION APRIL 19, 1999 alphabetical order. Council discussed the recommendations and directed staff to prepare a map indicating where the unrefunded SAC properties are located. Each Council member was asked to prepare their recommendation for use of the excess fund balance. These lists will be discussed at the May 4, 1999 work session. The work session scheduled for May 5, 1999 was rescheduled for May 4, 1999. COUNCIL GUIDELINES FOR PREPARING YEAR 2000 BUDGET 1999 Calendar - Staff explained that the City Auditor will present the 1998 audit to the Council probably at the first Council meeting in May. Staff was told that if the audit is "clean", the Auditor would not have to make a presentation at the work session prior to the meeting. Staff asked if Council wanted follow-up presentations from either Ehler's. Council said no. C. or Council was given a copy of the 1998 Budget Schedhue. Staff vi ibe updating this schedule. Tonight is the finance work session wit e Council. Staff will be coming to Council in May with the department objectives for the five (5) year financial plan and asking for Council approval. Work papers for the 2000 budget will be distributed to staff shortly. Currently the 2000 Budget is n yy hedule. Theresignation of the Financial Analysis has caused some inconve ado ver staff is confident that there will not be any substantial delays, th schedule. The Finan Council ab osition has not been advertised. Staff will be talking with ng this position at the May 4, 1999 work session. Service Lev ,- Levy Amount and Priorities for Determining Tradeoffs to Balance the Budget - Staff asked Council to be specific if they wish to change service levels, or the amount of the levy. Staff also asked if there are any priorities for determining tradeoffs to balance the budget. For example, if staff has to make cuts, does Public Safety always supersede Administration? Is there something that the City should be doing and not doing to change service levels? Mayor Sullivan requested staff prepare a paper to be given to the Council at Wednesday's work session that describes service levels, levy amount and priorities for determining tradeoffs to balance the budget. She noted that with the goals that have been established for the City Administrator, Council has already setup some priorities. As the departmental requests come in, staff should make recommendations in terms of what the City wants to do in considering the vision for the City. PAGE 5 COUNCIL FINANCE WORK SESSION APRIL 19, 1999 There was discussion regarding another school referendum. It was noted that Superintendent McClellan has activated a task force to study the Centennial School District building needs. Mr. Mark Lindblad is the Lino Lakes representative on the task force. Council Member Bergeson noted that in the recent past, Lino Lakes has been "living on its growth". If in the future the City has to increase taxes to "keep the lights on", there should be thought given to the timing of the increase so that the City is not doing it in the same year as the school districts are planning referendums or the park or street referendum is coming on the taxes. No one wants to increase taxes but if it is needed, it should be done when nothing else is happening. The meeting was adjourned at 8:27 p.m. These minutes were considered, corrected and approved at ular on May 10, 1999. eeting held PkW.tr, Marilyn G. Anderson, Clerk -Treasurer PAGE 6 Ivan, ayor •