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SPECIAL COUNCIL WORK SESSION SEPTEMBER 8, 2005
APPROVED
DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
MEMBERS ABSENT
CITY OF LINO LAKES
MINUTES
: September 8, 2005
. 6:00 p.m.
. 11:55 p.m.
: Councilmember Carlson, Dahl,
Reinert, Stoltz, and Mayor Bergeson
: None
Staff members present: City Administrator, Gordon Heitke; Community Development
Director, Mike Grochala; Finance Director, Al Rolek; Director of Administration, Dan
Tesch; Public Services Director, Rick DeGardner; and Chief of Police, Dave Pecchia
Mayor Bergeson advised the meeting is a continuation of the budget meeting of August
30, 2005. At that meeting, the majority of the Council did not want to increase the tax
rate so the proposed budget needs to be reduced by $389,000. Each Councilmember was
to prepare a list of possible reductions to discuss this evening. Mayor Bergeson stated
that he; Councilmember Reinert and Councilmember Stoltz submitted a list. Mayor
Bergeson suggested the Council review each list.
Finance Director Rolek advised, per Council directive, at the budget work session held on
August 30, staff submitted adjustments in three tiers that totaled $500,900. The
adjustments were proposed in revenue areas as well as in expenditure areas. The first and
second tiers adjusted the budget by $389,258, which would lower the tax levy sufficiently
to achieve a level tax rate from 2005 to 2006. The third tier added adjustments of
$111,642. After reviewing the staff proposed adjustments, the Council withdrew the
following proposals:
Total staff adjustments
For level tax rate
Visioning Process
Secretarial Services
Trails
Total Withdrawn
Revised Tier I & II
Tier I
$122,053
(35,000)
(18,870)
(10,000)
(63,870)
$ 58,183
Tier II Tier III
$267,205 $389,258
(35,000)
(18,870)
(40,000) (50,000)
(40,000) (103,870)
$227,205 $285,388
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SPECIAL COUNCIL WORK SESSION SEPTEMBER 8, 2005
APPROVED
1 Finance Director Rolek stated it was decided that each Councilmember would review the
2 budget and submit further recommendation for adjustments to get to a level or reduced
3 tax rate by noon on Tuesday, September 6, and that the recommendation would be
4 emailed to all Councilmembers. The following is a recap of staff's interpretation of the
5 Council submissions for additional budget adjustments:
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7 Mayor Bergeson
8 Visioning $10,000 — Tier I
9 Secretarial Services 18,870 — Tier I
10 Trails 25,000 — Tier II
11 Police Capital Outlay 14,800 — Tier III
12 Personal Svc Recreation 39,000 — Tier III
13 Total Adjustments $107,670
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15 Councilmember Stoltz
16 Visioning $10,000 — Tier I
17 Secretarial Services 18,870 — Tier I
18 Trails 25,000 — Tier H
19 Personal Svc Recreation 24,000 — Tier III
20 Contingency — to — 0- 25,000 — New
21 Total Adjustments $102,870
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23 Councilmember Reinert
24 Visioning $10,000 — Tier I
25 Time Savers 18,870 — Tier I
26 All Tier III Except
27 Recreation 72,642 — Tier III
28 Council Salaries 3,000 — New
29 Total Adjustments $104,512
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31 Finance Director Rolek noted staff received no adjustment list from Councilmember
32 Carlson. Councilmember Dahl indicated she still had too many unanswered questions
33 since the budget work session to submit a list of adjustments.
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35 Councilmember Reinert suggested that the three submitted budget recommendations be
36 compared, noting areas of agreement and areas of differences discussed for possible
37 compromise.
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39 Council discussed possible alternative budget reductions in detail. Finance Director
40 Rolek provided additional information on fund balance history, tax capacity, rate history
41 and the Comprehensive Plan policy regarding the future tax rate as requested by
42 Councilmember Carlson.
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44 Councilmember Carlson referred to the Comprehensive Plan provision that the City's tax
45 rate should be reduced by 20% by the year 2020. Finance Director Rolek stated that was
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SPECIAL COUNCIL WORK SESSION SEPTEMBER 8, 2005
APPROVED
1 probably an unrealistic goal as the Comprehensive Plan was written in the late 1990's and
2 adopted by the City Council in 2001. The tax rate at the time the Comprehensive Plan
3 was adopted was approximately 35.9%. The next year the state legislature shifted class
4 rates and state aid payments and assumed funding responsibility for general education.
5 As a result, the school district tax rate was reduced significantly and the City tax rate
6 increased to 53.1%. The result on property owners was a tax reduction for that tax year.
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8 Councilmember Stoltz inquired about a comparable rate for the Comprehensive Plan,
9 given the shift of funds by the legislature. Finance Director Rolek advised that under the
10 funding and class rate shifts, a tax rate of about 36% would be comparable to the 20%
11 stated in the Comprehensive Plan. Under the new scenario, the City would need to
12 decrease the tax rate about 1% per year to achieve a 36% tax rate in 2020 (53% - 36% =
13 17%, over an 18 year period).
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15 Finance Director Rolek noted the City's tax rate for 2005 was 42.223%, which was well
16 below the projected rate of 49% to achieve a 36% rate by 2020 (2005-2001 = 4 years.
17 53%-4%=49%).
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19 Council discussed the differences in the three recommendations further resulting in a
20 compromised budget plan. Major differences in the two plans including the funding
21 levels for contracted secretarial services, street maintenance and the construction of new
22 trails. A detailed discussion was held on spending approximately $20,000 per year for
23 contracted meeting minutes and the need for detailed or verbatim minutes.
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25 Council determined that the costs for contracted minutes for advisory boards would be
26 eliminated, as existing staff will record the minutes. Council meeting minutes would
27 continue to be contracted out. The minutes taken by staff would be in detail for public
28 hearings and if any Councilmember is not satisfied with the detail of public hearing
29 minutes it would be discussed by the Council.
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31 After further discussion, a compromised budget from the two alternative budget plans
32 was proposed. This proposal consisted of the following cuts:
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34 Roads $ 47,500
35 Secretarial Services $ 7,200
36 Tier III Parks $ 24,000
37 Contingency Fund $ 14,000
38 Capital Equipment $ 27,000
39 Trails $ 20,000
40 Total Additional Adjustment $139,700
41 First Adjustments $285,388
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43 TOTAL ADJUSTMENTS $425,088
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SPECIAL COUNCIL WORK SESSION SEPTEMBER 8, 2005
APPROVED
Given the total adjustments, the tax rate would be reduced from the 2005 rate of 42.223%
to an estimated rate of 42.00%.
All Councilmembers agreed to support the compromise budget at the regular Council
meeting on September 12, 2005, 6:30 p.m.
The meeting was adjourned at 11:55 p.m.
These minutes were considered, corrected and approved at the regular Council meeting held on
October 10, 2005.
15 ity lerk
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19 Transcribed by:
20 Kim Points
21 TimeSaver Off Site Secretarial, Inc.
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