HomeMy WebLinkAboutAgenda Packets - 2010/06/07
CITY OF MOUNDS VIEW
CITY COUNCIL WORK SESSION AGENDA
MOUNDS VIEW CITY HALL
Monday, June 7, 2010
7:00 p.m.
ROLL CALL: Flaherty, Stigney, Hull, Mueller, Gunn
PUBLIC COMMENT
Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full
name and address for the minutes. Also, please limit your comments to three minutes.
Agenda Items Discussed by Consensus
1. Presentation about Housing Revenue Bond Financing
2. Presentation by Bob Benke about the Metro Highway System Investment Study
3. City Council Priorities for the 2011 Budget.
4. Discussion about the Police Civil Service Commission
5. Metro-Inet Joint Powers Agreement
Next Work Session: Tuesday, July 6, 2010, at 7:00 p.m.
Next City Council Meeting: Monday, June 14, 2010, at 7:00 p.m.
Item No. 3.
Meeting Date: June 7, 2010
Type of Business: Work Session
City Administrator Review: ______
City of Mounds View Staff Report
To: Honorable Mayor and City Council
From: Mark Beer, Finance Director
Item Title/Subject: Discussion of Priorities for the 2011 Budget
City staff has been busy working on the details of the 2011 budget.
This item is placed on the agenda to give the City Council and residents the opportunity
to provide input to staff early in the process. Department Heads can then use this
guidance as they work on the details of their proposed budgets.
Key 20 11 Budget Issues:
The Legislature has adjourned for 2010 by balancing the budget and adopting, for the
most part, the Governor’s recommendations. The City had Local Government Aid (LGA)
withheld of $339,558 and Market Value Homestead Credit (MVHC) of $160,156 for
2010.
The state is facing a $5.5 to $6 billion shortfall for the next budget period beginning on
July 1, 2011. Estimated LGA for 2011 is $482,474 but this is before the Legislature and
Governor resolve the very large deficit. Staff is recommending that we do not include
General Fund 2010 Budget by Type
Personnel 63.1%3,583,509
Contractual services 21.8%1,238,489
Capital outlays 2.0%112,052
Supplies 4.8%271,764
Transfers 4.0%225,000
Fire debt service 2.6%147,195
Contingency 1.8%100,000
Total 100%5,678,009
General Fund 2010 Budget by Function
Police 40.9%2,320,232
Public Works 12.3%698,081
Park and Recreation 8.7%493,636
Community Development 8.6%486,119
Fire 5.8%329,202
Administration 4.5%255,442
Finance 4.4%249,270
Central Services 4.2%238,082
Legislative 1.1%61,874
Debt Service 2.6%147,195
Contingency 1.8%100,000
Misc. Contracual Service 1.3%73,876
Transfers to other funds 4.0%225,000
Total 100%5,678,009
any amounts for LGA in the budget. This will create a significant hole in the General
Fund budget for 2011.
Inflation remains low at present and the state levy cap will be 1.68% for 2011 compared
with .76% for 2010 and 3.9% for 2009. The state levy cap will be in effect thru 2011.
The City’s charter cap is more restrictive and only excludes debt service and capital
project levies from inclusion in the cap calculation. A 1% levy increase is $40,994. The
maximum the levy could increase under the City Charter is 3% – 4% depending on
inflation. ($122,982 to $163,976)
The City is presently negotiating with three of the four bargaining units for the
2010/2011 contract years. The public works bargaining unit has agreed to no wage
increase for 2010 and 2011. The 2010 budget provided for no cost of living wage
increase. State aid reductions that have been passed down to the City have negatively
impacted the General Fund. Many of our residents are suffering from the poor economy
and lack the ability to afford a significant tax increase. The Council has directed staff to
offer no cost of living for 2011.
Health insurance cost increases are not known, we will receive our rate notice in mid
August. The impact to the budget will depend on the labor contracts. The City provided
an increase of $10 per month for the public works bargaining unit and non-union
employees and has offered the same to the other bargaining units.
The employer share of PERA will increase by .25% to 7.25% in 2011 for Coordinated
plan members and .3% to 14.4% for Police which will add about $9,000 to personnel
costs. This is a result of 2010 legislation to help stabilize those pension funds. PERA
coordinated rates have increased from 5.53% in 2005 to 7.25% in 2011, police PERA
rates have increased from 9.3% in 2005 to 14.4% in 2011.
Personnel costs will increase by about $33,000 as a result of step increases, PERA rate
increases, and estimated health insurance increases which affects those with single
coverage. (10%)
The police department will have a retirement at the end of July 2010, this may be an
opportunity to review the staffing levels in the police department.
The payroll cost for 50 employees is $2,175 per hour, $17,400 per day, $87,000 per 40
hour week.
County dispatch fees will increase $11,825 or 18.1%.
Fire department costs are projected to remain flat in 2011.
Information technology costs will not increase for 2011.
Fuel prices were budgeted at $3.25 for 2010 and that should be a good rate for 2011.
Overall most revenues that are tied to economic activity will be flat. Investment income
will remain flat in 2011 as a result of interest rate cuts and a weak economy. The
franchise fee rate is at 3.79%, the revenue generated from this fee will be flat in 2011 as
a result of lower energy costs and reduced economic activity.
2009 General Fund reserves are $2,756,516 this represents 48.5% of 2010 budgeted
expenditures and transfers. Fund balance increased by $101,419 for 2009 as a result
of decisions the City Council made in an effort to off-set additional LGA cuts in 2010.
The City’s budget has been under pressure for several years due to LGA cuts at the
state level, with very little left in discretionary budget items. The Council will need to
give direction on how they would like to resolve the coming General Fund deficit. One
of the City’s goals is to develop a sustainable budget. The deficit will be $300,000 to
400,000. Some items the Council can consider are:
Reduce services/hours/personnel
Increase transfers
Increase the property tax levy
Use fund balance
Conclusion
Staff is looking for direction from the Council on priorities for the budget and property tax
levy. The above items are some of the issues that will drive the 2011 budget and are
presented for your consideration.
Respectfully Submitted,
Mark Beer