HomeMy WebLinkAbout08/30/2005 Council Minutes2
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SPECIAL COUNCIL WORK SESSION
APPROVED
DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
MEMBERS ABSENT
CITY OF LINO LAKES
MINUTES
AUGUST 30, 2005
: August 30, 2005
. 5:08 p.m.
. 8:35 p.m.
: Council Members Carlson, Dahl,
Reinert, Stoltz and Mayor Bergeson
: None
Staff members present: City Administrator, Gordon Heitke; Community Development
Director, Mike Grochala; Director of Administration, Dan Tesch; Finance Director, Al
Rolek; Public Services Director, Rick DeGardner; and Chief of Police, Dave Pecchia
Mayor Bergeson advised the purpose of the meeting is to discuss the proposed 2006
Budget. The Council had determined at the last work session that approximately
$380,000 should be cut from the budget. There is one more work session before the City
must certify the levy.
Finance Director Rolek stated as directed by the City Council, staff has reviewed the
2006 proposed budget and has identified areas that may be adjusted to maintain a tax rate
consistent with 2005. The amount necessary to adjust the budget to maintain a level tax
rate is estimated to be $388,000. The Council directed that staff identify at least
$500,000 in adjustments.
Finance Director Rolek stated in approaching these adjustments staff would like the
Council to consider the following comments. Staff had initially proposed to adjust the
levy in the form of an "overlevy" to backfill funding due to state aid cuts. Other cities
that are affected by these state aid losses have taken a similar approach of increasing their
levy to ensure city services are maintained. State aid payments, Local Government Aid,
(LGA) and Market Value Homestead Credit (MVHC), to Lino Lakes have been
suspended or eliminated for the past four years. In doing so, the state has essentially
redefined how services are funded, and shifted the burden of funding certain services
from the state to the local level. This is unlikely to change in the future given the
condition of state finances. Therefore, staff is viewing these cuts as permanent.
Additionally, the reimplementation of levy limits in the future is a real possibility. As
such, staff is approaching the adjustments as permanent and the possibility of `levying up'
to add these cuts back into the budget in the future is doubtful. Finally, the City's tax
base has been growing, but the growth has slowed recently. Any new developments on
the horizon will not have an impact on the tax base until after 2008, possibly impacting
the City's ability to maintain service level funding in the near term.
Finance Director Rolek stated staff had identified $122,053 as potential adjustments in
the initial budget discussion, which staff refers to as "Tier 1" adjustments. Further
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SPECIAL COUNCIL WORK SESSION AUGUST 30, 2005
APPROVED
1 potential adjustments have been identified in both the revenue and expenditure areas.
2 These have been divided into additional "tiers". Tier II adjustments bring the budget to a
3 level that maintains a level tax rate. Tier III adjustments bring the total adjustments to the
4 Council directed $500,000 level.
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6 Finance Director Rolek advised the intention in identifying potential adjustments is to
7 avoid "quick fix" measures such as shifting expenditures from one period to the next, and
8 to prioritize cuts to preserve the highest service levels possible. Some services will be
9 impacted in the near and, potentially, longer term as a result of the adjustments. Some
10 initiatives and acquisitions have been put off indefinitely due to these adjustments.
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12 Finance Director Rolek stated the handout holds the potential adjustments identified by
13 staff, including amounts and service level impacts. As stated earlier, they are prioritized
14 by "tier". No cuts to existing staff level have been affected.
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16 Finance Director Rolek reviewed the revenue potion of the handout noting they are only
17 projections. Staff does not know if the revenues will increase or decrease in 2006.
18 Revenues will have to be monitored closely throughout the year.
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20 Council determined the projected revenues would stay as proposed within the 2006
21 Budget.
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23 Finance Director Rolek reviewed the expenditure portion of the handout, including Tier I
24 and Tier II, noting staff is really perceiving the cuts as permanent cuts. The cuts would
25 continue into the future unless the state takes a different approach with funding.
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27 Finance Director Rolek also advised that the City's tax rate has gone down in the past few
28 years. Because of a shift in state aid funding, the City has to make budget reductions or
29 increase the levy. Staff believes the City will not see the market value credit come back
30 to the City.
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32 Council determined the proposed $35,000 for professional services and the $18,870 for
33 contractual services should not be cut from the 2006 budget.
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35 After much discussion, the Council agreed the Economical Development Professional
36 Services in the amount of $5,000 and $12,000 would be cut from the budget. Note this
37 was included in the prior number.
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39 The majority of the Council indicated strong support for keeping $50,000 for Park Capital
40 Outlay (trail extensions) within the 2006 budget.
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42 Staff identified the proposed cuts that the Council wanted to remain in the budget, which
43 totaled approximately $104,000. Finance Director Rolek reviewed possible budget cuts
44 from the Tier III list noting it is possible for the City to reach cuts in the amount of
45 $104,000 from that list.
SPECIAL COUNCIL WORK SESSION AUGUST 30, 2005
APPROVED
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2 Finance Director Rolek emphasized the fact that staff is not advocating the suggested
3 budget cuts. Staff put together a list of cuts per Council direction. Other cities are facing
4 the same problem and some are raising levy levels to make up for the state aid cuts. Staff
5 is assuming the cuts are permanent and will not be recovered next year or the year after.
6 The Legislature may also put a limit on levy increases so the City can't ever recover the
7 funds. If the levy were increased this year the City would be in a much better position for
8 the next several years in terms of the budget process.
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10 City Administrator Heitke added that staff is trying to realign things and the cuts will be
11 permanent. Staff is not deferring things to next year or the year after. He emphasized
12 again the cuts will be permanent.
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14 After much discussion, it was determined that over $104,000 of additional cuts need to be
15 made within the 2006 budget.
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17 Councilmember Carlson indicated she is not supportive of cutting just the Tier III
18 expenditures. She stated she would research the City's past year's budgets.
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20 The Council determined each of them would identify their own cuts and provide that
21 information to the City Administrator no later than noon on Tuesday, September 6, 2005.
22 Staff will then compile those cuts and distribute to the Council Tuesday evening.
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24 The Council also determined the regular Council work session on Wednesday, September
25 7 would begin at 4:00 p.m. to continue work on the 2006 budget. Staff would also post
26 an additional budget meeting Thursday, September 8, 6:00 p.m.
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28 The meeting was adjourned at 8:35 p.m.
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30 These minutes were considered, corrected and approved at the regular Council meeting held on
31 September 26, 2005
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40 Transcribed by:
41 Kim Points
42 TimeSaver Off Site Secretarial, Inc.
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Jean Vieputy Clerk
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Jo Bergeson, Mayor