HomeMy WebLinkAbout09-14-2015 Council Work Session MinutesCOUNCIL SPECIAL WORK SESSION September 14, 2015
APPROVED
CITY OF LINO LAKES
MINUTES
DATE : September 14, 2015
TIME STARTED : 7:45 p.m.
TIME ENDED : 9:00 p.m.
MEMBERS PRESENT : Council Member Stoesz, Kusterman,
Roeser and Mayor Reinert
MEMBERS ABSENT : Council Member Rafferty
Staff members present: City Administrator Jeff Karlson; Finance Director Sarah Cotton;
Community Development Director Michael Grochala; Public Safety Director John
Swenson; Public Services Director Rick DeGardner; City Clerk Julie Bartell
2016 Budget Discussion -The council had received a budget in draft form and an analysis
sheet indicating budget gaps (updated from the last work session) for discussion.
Finance Director Cotton noted that the information includes the change to $62,000
from $110,000 for the fire pension contribution; the closed bond fund contribution and
use of 2015 reserves that was discussed is also reflected.
Mayor Reinert suggested starting with a goal of not raising the levy percentage.
Council Member Roeser called for a discussion about closed bond funds. The council
elected to utilize some of those funds for the previous budget for one-time expenses. He
pointed out that those (reserve) funds generate very little in interest and can actually lose
value so it makes sense to utilize them to a certain extent. He sees the fund is over a
million dollars again. When the city has startup costs for something like the fire
operation, that could be a smart source. The council has been watchful of the fund
reserve level but has also consciously spent down some reserve funds that have grown
through efficiencies so they are in effect going back to the taxpayers. The mayor added
that the closed bond funds are actually left over from completed projects paid for by the
taxpayers so utilizing the funds to keep the budget down is in effect returning the money
to the residents.
The council discussed future positive budget impacts including development planned for
the Legacy area and the city hall facility bonds that will be paid off in 2017.
Administrator Karlson explained where capital items are included in the budget (staff is
preparing an update) and noted possible capital expenses on the horizon.
Council Member Kusterman asked about the possibility of using closed bond funds to
zero out the entire gap. Is staff stating the use of those funds (as a onetime source) would
leave funding gaps for the next budget? He has also heard of positive impacts coming in
the future. Administrator Karlson noted the $323,000 identified in additional revenue
and/or savings in 2015; utilizing those funds will result in essentially no increase to the
fund reserve from this year. Council Member Roeser noted that new development will
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COUNCIL SPECIAL WORK SESSION September 14, 2015
APPROVED
be bringing in new revenue and the city needs to prepare for the needed services for it
and that means spending some money up front.
The council discussed the city fund reserve level and policy. Finance Director Cotton
explained that the fund reserve percentage is tied to budget and not to the tax capacity so
it is a fixed number.
Council Member Stoesz noted an Economic Development line item and budgeted funds
of $100,000. Community Development Director Grochala explained that a portion of
that line item is the marketing tax that comes in and goes out ($57,000). Past that it
funds professional services from Springsted and Kennedy and Graven and also an intern
position. Council Member Stoesz asked if there is a measure of success for utilizing
those funds. Mr. Grochala explained that having the professional services available
means that the city is prepared when approached on a project.
Mayor Reinert discussed the Police Department budget, and specifically the increase
between years 2014 and 2016. Public Safety Director Swenson reviewed the amount of
the increase related to personnel (including reallocation of the cost of certain positions)
and positions added since 2014 (including a grant funded position). The mayor also
reviewed the Fire Division budget and received an explanation of the changes from 2015
to 2016 (fleet, personnel). There was a review of the funds anticipated from the
Centennial Fire District (capital). Staff anticipates the use of some of those funds for the
future purchase of equipment so that bonding will not be necessary. The mayor indicated
that a thorough discussion of the capital expenditures/equipment plan will be necessary.
Administrator Karlson explained that the council will need to establish a preliminary levy
number by September 28.
Council Member Roeser noted information relative to the net tax capacity and related
calculations. In order to maintain an approximate three percent increase, $800,000 in
savings or revenue need to be identified. He proposed some from the reserves and some
from the closed bond fund (to pay new bonds). Administrator Karlson noted that the use
of reserves is already included in the calculations ($323,000). Finance Director Cotton
remarked that the action required to utilize reserve to cover debt service would be for the
council to cancel the debt service levy. The mayor said he feels comfortable utilizing
$600,000 from the closed bond fund. Other reserve funds were discussed, such as office
equipment replacement and computer server replacement. Administrator Karlson
suggested caution in utilizing fund reserves since they are a one-time source and
therefore cause a gap in following years. They also can be depleted and can be difficult
to rebuild. Council Member Roeser suggested that the city is facing something of
anomaly, having grown but not seeing any increase in valuation; he does not think that
will repeat itself next year. Mayor Reinert noted that there was naturally a spike in
getting the fire service started but that will pass and the cost of the services will actually
be less and growth in the tax base is also anticipated. If there is an issue with the
following year, the council will do what it has in the past and make the necessary
adjustments based on real needs.
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COUNCIL SPECIAL WORK SESSION September 14, 2015
APPROVED
The council discussed the September 28 preliminary levy action. There will be important
funding discussions between that action and passage of a fmal budget. Items mentioned
were fleet costs, rental revenue from former city hall facility, and a storm water utility
analysis.
Administrator Karlson offered the following information: a change of $815,659 would
reduce the gap to zero. Staff will need to have the figures ready for presentation at the
meeting on September 28.
Mayor Reinert said 45.9165 is his levy goal.
Ms. Cotton noted that the taxable market value could change as far as the final number
from the county.
The council concurred to hold another work session at 5:00 p.m. before the council
meeting on the 28th
The meeting was adjourned at 9:00 p.m.
These minutes were considered, corrected and approved at the regular Council meeting
held on September 28, 2015.
Julianne Bartell, City Clerk
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