HomeMy WebLinkAbout08/18/2008 Council Minutes1
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APPROVED
CITY OF LINO LAKES
MINUTES
CITY COUNCIL WORK SESSION, BUDGET REVIEW
DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
MEMBERS ABSENT
: August 18, 2008
. 5:35 p.m.
. 7:45 p.m.
: Council members Gallup, O'Donnell,
Reinert, Stoltz and Mayor Bergeson
: None
Staff members present: City Administrator, Gordon Heitke; Finance Director, Al Rolek;
Community Development Director, Mike Grochala; Director of Public Safety, Dave
Pecchia; Director of Public Services, Rick DeGardner; Director of Administration, Dan
Tesch; City Clerk, Julie Bartell
REVIEW OF PRELIMINARY 2009 BUDGET — Finance Director Rolek reported that
the budget proposed for 2009 is very lean, due in part to the advent of levy limits and
reduced revenue projections (building permits in particular). The initial challenge of a
budget gap (deficit between revenue and expenditures) was met with staff
recommendations for reductions including but not limited to not filling a planned public
service position, keeping a line on capital outlay and maintenance, and holding the line on
street maintenance and storm water budgets, as well as supplies and training. Cuts were
really in all different areas of the budget. Some areas had to be increased such as energy
costs. The end result is a smaller $72,000 deficit which could be approached through the
personnel area or, an area that hasn't been traversed before, fund. In the area of levy
limits, however, the definitive number has now come forward and it allows the city to
levy an additional $75,000, an amount that would fill the budget gap. That scenario
would still result in a tax rate reduction.
In reviewing the preliminary budget, Mr. Rolek noted that there is approximately a 3.7%
increase in tax base, some due to new construction and also to market adjustments. The
assessor is generally looking at a 5% increase in valuations.
When asked about areas of concern, Mr. Rolek responded that there are some unknowns
such as investment return and some areas of revenue. The city's investments are
conservative by law. Looking at new areas of revenue may be something the council
should consider. Labor contracts for 2009 call for a 3% increase; health insurance cost
increases have been built in as estimates. He mentioned that the Vadnais Lakes Area
Water Management Organization (VLAWMO) is now funded by a storm water utility so
that is no longer part of the levy.
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CITY COUNCIL WORK SESSION 2 August 18, 2008
APPROVED
1 There have been certain outside funding requests received and Mr. Rolek noted that none
2 of them have been included in the proposed budget. The Charter Commission has
3 submitted a request for additional funds. The city also received requests from Alexandra
4 House, Forest Lake Youth Services Bureau, Metro Cities and Anoka County Mediation
5 Services.
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7 Areas of reduction were noted as follows: Elections (2009 is a local election year,
8 requiring less funding), capital outlay, and prosecution services (due to service contract
9 change).
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11 Mr. Rolek's review of the specific budget divisions included the following:
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13 Capital Program — Public Services equipment replacement program includes some new
14 squad cars, contribution for fire department equipment, a dump truck, pick-up trucks, a
15 loader and some smaller equipment. Office equipment replacement has been scaled back
16 also. Trail extensions have been taken out completely.
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18 Contingency — has been scaled back to $40,000 (from $50,000 last year), a very thin
19 margin.
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21 Community Development and Engineering — includes funding for conclusion of the
22 comprehensive plan activities, including ordinance review costs. (The council requested
23 a comprehensive plan update in September, before board review). Engineering has been
24 scaled back due to less activity and the services themselves would remain outsourced.
25 The possibility of bringing engineering services in-house is something that will be looked
26 at more comprehensively within the five-year plan. When asked about the lower activity
27 level impact on staff, it was explained that there is a minimal change in staff work
28 because the day to day operations (resident issues, dealing with MnDOT, day to day
29 support) don't really slow down much because development related costs are handled
30 through escrows and other budgets. Storm damage is driving permit activities this year
31 but that does not produce as much cross departmental fee revenue as new homes. Staff
32 will take a look at the $100 fee for a repair permit to make sure it adequately reflects the
33 city's costs. Also noted was an increase in the funding for replacement of boulevard
34 trees.
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36 Police Department — no new positions will be added as indicated in the five year plan.
37 The department has cut back in the area of supplies, other services and capital. The
38 department feels they are at a minimum level without impacting the service level.
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40 Fire Department — the budget comes from the steering group so Administrator Heitke
41 reviewed. The twenty-five percent overall increase in costs over the last three years can
42 be attributed to making the budget more accurate — it was traditionally underfunded for
43 operations. Also this year, in consideration of the need to prioritize inspection activities,
44 the budget includes a portion of the cost of an additional fire inspector position. The
45 position would actually be partially grant funded for five years and the new fire chief
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CITY COUNCIL WORK SESSION 3
APPROVED
understands that the steering committee will revisit the matter.
of services was suggested by a council member.
August 18, 2008
Outsourcing of that type
Public Services — one new position was originally included and then taken out of the
budget. The impact of not having that position is basically response time to public
service activities. Upon, Mr. Rolek explained that snow plowing expenses are budgeted
(including presumed overtime costs) based on experience and averages. The contract for
storm water maintenance has been held level but that is really a bare minimum. The fuel
cost budget has been increased based on an estimate.
Health Care Costs — Staff will probably know by November where health care costs will
fall. The proposed twenty percent increase equates to about $8,000 per month. The
council expressed an interest in looking ahead and planning for continuing large increases
in this area, i.e. self insurance, consortium with League of Minnesota Cities, combination
of self insurance and stop -gap for catastrophes.
Government Buildings — personnel and energy costs are the only areas with an increase.
Parks — Includes utility costs (watering parks) and contracted services (maintenance and
repair of park facilities). Through research, staff has found that the seal coating of trails
is not cost effective but there is some on-going maintenance such as crack filling that
occurs.
Recreation — third and final year of the Super Rink payment. Otherwise the programs are
self-funded.
Water and Sewer — funded by fees. Staff does intend to come forward with a proposal to
adjust rates (water only) this fall. The rain sensor program is included in the budget for
2009.
On the question of the budget deficit ($72,000), staff is recommending the revision of the
levy up to the limit to cover that gap. It preserves the levy limit and preserves fund
balance (another option to cover the gap). The council concurred to consider the
preliminary budget with the levy limit change as recommended, with the understanding
that the $4,100 raised beyond the gap will be designated to the contingency fund.
The council will be asked to approve a preliminary budget and tax levy on September 8,
2008. At that same time, the Truth In Taxation date will be set. There will be an option
to make adjustments/have more discussion at the September work session before the
council meeting. After the council action, the levy cannot be increased but the
preliminary budget can be amended within the limit.
There was a final suggestion that staff explore the possibility of a request for proposals
process for engineering services.
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CITY COUNCIL WORK SESSION 4 August 18, 2008
APPROVED
1 Finance Officer Rolek and the department directors were offered thanks for their work in
2 putting together a realistic budget for council consideration.
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4 The meeting was adjourned at 7:45 p.m.
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6 These minutes were considered, corrected and approved at the regular Council meeting
7 held on September 222008
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10 Julianne B(rtell, City
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