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CC PACKET 09102002
Meeting Sheet IIIIIIVIIIVIIIVIIIVIIIVIIIIIIIIIII 102974 Box: 29 Folder: CC PACKETS 2001-2004 Document: CC PACKET 09102002 CITY OF ST. ANTHONY Our mission is to be a progressive and livable community, a walkable village, which is safe and secure. CITY COUNCIL MEETING AGENDA September 10, 2002 8:00 PM Council Chambers Call to Order. Pledge of Allegiance. Roll Call. Consideration, Discussion, and Possible Action on All of the Following Items: I. Approval of September 10, 2002 City Council Meeting Agenda. Action requested. II. Proclamations and Recognitions. Ill. Community Forum. Individuals may address the City Council about any item not included on the regular agenda. Speakers are requested to come to the podium, state their name and address for the Clerk's record and limit their remarks to five minutes. Generally, the City Council will not take official action on items discussed at this time, but may typically refer the matter to staff for a future report or direct that the matter be scheduled on an upcoming agenda. IV. Consent Agenda. These items are considered routine and will be enacted by one motion. There will be no separate discussion of these items unless a Councilmember or citizen so requests, in which event the item will be removed from the Consent Agenda and placed elsewhere on the agenda. A. Consider August 27, 2002 Council meeting minutes. (pp. 1 - 5) B. Consider licenses and permits. (p. 6) C. Consider payment of claims. (pp. 7 - 10) D. Resolution 02-065, re: Consider approval of settlement agreement with Barbarossa and Sons, Inc. (pp. 11 - 14) V. Public Hearings - None. 1 T Page 2 VI. Reports From Commissions and Staff. A. Update on the City's Parks. Parks Commission Chair.Carol Jindra will be present. B. Update on Apache Plaza redevelopment. C. Update on Financial Strategies. Jim Prosser, Ehlers & Associates, will be present. (pp. 15 - 16) VII. General Policy Business of the Council. A. Consider resolution 02-064, re: Adopt proposed 2003 tax levy and budget. Action requested. (pp. 17 - 26) VIII. Reports From City Manager and Councilmembers. (p. 27) IX. Information and Announcements. X. Miscellaneous Informational Documents. XI. Adjournment. 1 1 CITY OF ST. ANTHONY 2 3 CITY COUNCIL REGULAR MEETING MINUTES 4 5 AUGUST 27, 2002 6 7 CALL TO ORDER 8 Mayor Hodson called the meeting to order at 7:00 p.m. 9 10 PLEDGE OF ALLEGIANCE. 11 Mayor Hodson invited the Council and audience to join him in the Pledge of Allegiance. 12 13 ROLL CALL. 14 Present: Mayor Hodson; Councilmembers Horst, Sparks, Thuesen, and Faust. 15 Absent: None. 16 Also Present: City Manager Mike Mornson. 17 18 CONSIDERATION, DISCUSSION,AND POSSIBLE ACTION ON ALL OF THE FOLLOWING 19 ITEMS. 20 21 I. APPROVAL OF AUGUST 27,2002 CITY COUNCIL MEETING AGENDA. 22 Motion by Councilmember Sparks to approve the City Council Meeting Agenda of August 27, 23 2002. 24 25 Motion carried unanimously. 26 27 II. PROCLAMATIONS AND RECOGNITIONS. 28 None. 29 30 III. COMMUNITY FORUM. 31 Mayor Hodson invited residents to come forward at this time and address the Council on items 32 that are not on the regular agenda. 33 34 Hearing none, Mayor Hodson moved forward with the agenda. 35 36 IV. CONSENT AGENDA. 37 38 1. Consider August 13, 2002 Council meeting minutes. 39 2. Consider licenses and permits. 40 3. Consider payment of claims. 41 4. Resolution 02-063 re: Amend Resolution 02-062 to approve additional members to the 42 Facility Task Force. 43 44 Motion by Councilmember Sparks to approve the Consent Agenda as presented. 45 46 Motion carried unanimously. 47 48 V. PUBLIC HEARINGS. 2 City Council Regular Meeting Minutes August 27, 2002 Page 2 1 None. 2 VI. REPORTS FROM COMMISSIONS AND STAFF. 3 A. Planning Commission - August 20, 2002. 4 5 1. Ordinance 2002-002, re: Amendment to City Ordinance relating to the definition 6 of"garage" and"accessory building"and to regulate the size of para eg s in 7 residential districts. 3'd reading. 8 Planning Commissioner Chris Melsha reviewed the details of the Ordinance request with 9 the Council. He noted the Planning Commission focused on the past garage and 10 accessory building ordinance functions and the potential for a Design Review Board as 11 two separate issues. Mr. Melcher indicated a comprehensive survey was completed of 12 20-25 different cities to gain further information on these issues. He noted lot coverage, 13 building height and setbacks are the main issues with respect to accessory structures 14 without using FAR(Floor Area Ratio). 15 16 Mr. Melcher indicated the survey also revealed that with respect to garage size, it was 17 consistent that other cities regulate it to 1,000 square feet. He noted the Commission 18 recommends Council go ahead and approve the 3'd reading of the Ordinance as presented. 19 20 Councilmember Thuesen questioned if the height standard was discussed by the Planning 21 Commission and the effect that would have on building mass. Mr. Melcher noted there 22 was a height standard set within the Ordinance. Councilmember Faust stated the height 23 standard was set at 25 feet. 24 25 Mayor Hodson stated with regard to mass of buildings, he would like the City to be open 26 to some type of design review if it was larger than stated within the Ordinance. Mr. 27 Melcher stated this was the case and that all structures larger than stated within the 28 Ordinance would go through a variance process before the Planning Commission. 29 30 Motion by Faust to adopt Ordinance 2002-002, re: Amendment to City Ordinance 31 relating to the definition of"garage"and"accessory building" and to regulate the size of 32 garages in residential districts, 3'd and Final Reading. 33 34 Motion carried unanimously. 35 36 Mayor Hodson asked if the Planning Commission recommended a design review board at 37 this time. Mr. Melcher noted there is not a design review board at this time, as structures 38 not in compliance with the Ordinance would fall under a variance. He stated the Council 39 could address the issue of a Design Review Board and who should be members of such a 40 board. 41 42 Councilmember Sparks asked how the Planning Commission feels about a Design 43 Review Board. Mr. Melcher stated the Planning Commission feels the Council would 44 need to decide on this issue. 45 . City Council Regular Meeting Minutes August 27, 2002 Page 3 1 Councilmember Sparks indicated there are going to be many issues that go beyond the 2 variance level requiring a design review board discussion. She stated a height average,of 3 the houses within 300 feet is used in another community,with regard to height, which 4 may be a compromise in these situations. Councilmember Sparks noted this would keep 5 the neighborhoods in line with each other without large, eyesore structures. 6 7 Mayor Hodson indicated some cities use this type review board and some don't. He 8 asked for the Councilmembers comments. 9 10 Mr. Melcher indicated he hears it may be interesting to address other cities ways to 11 address building mass,but as far as design review, that would require more direction. He 12 noted the Planning Commission could approach other cities for their methods,but would 13 require more direction from the Council before a design review was established. 14 15 Councilmember Horst stated he felt it was premature to give the Planning Commission 16 direction at this time. He noted he would like to provide the Commission specific 17 direction after a work session meeting and further Council discussion. 18 19 Councilmember Faust asked that the Council discuss this at a future goal-setting meeting. 20 Mayor Hodsen thought that was a good place to start. 21 22 Councilmember Thuesen agreed and thought this should be discussed further at a work 23 session meeting to gather direction for the Planning Commission. Councilmember Faust 24 agreed stating the Council did not have a clear direction at this time. 25 26 VII. GENERAL POLICY BUSINESS OF THE COUNCIL. 27 A. Presentation by Northwest Youth&Family Services. 28 Kay Andrews of the Northwest Youth and Family Services (NYFS) addressed the 29 Council and reviewed the services provided to the residents in this community along with 30 the quarterly and annual report. She brought to the Council's attention the new website 31 of the organization and asked the Councilmembers to check it out. 32 33 Ms. Andrews noted NYFS was a non-profit social service agency serving the northern 34 suburbs of Ramsey County. She reviewed the services provided by this agency were for 35 clients from all backgrounds and circumstances. Ms. Andrews noted over 5,000 clients 36 are served each year. 37 38 Perry Loftgren, agency staff member,noted he was present to stress the importance of 39 the annual city contract funding and its importance in leveraging additional funding for 40 the agency. Mr. Loftgren indicated the agency focuses services on mental health, 41 diversion services, senior chore programs, and youth employment. 42 43 Mr. Loftgren explained the youth employment program teaches youth soft skills, 44 responsibility and allows them to repay restitution through a 14-week youth run business 45 called Penny Pinchers. He reviewed the contracted services with the market value of the 46 services provided to the St. Anthony residents being over$35,000 for the price of$3,500. City Council Regular Meeting Minutes 4 August 27, 2002 Page 4 1 Ms. Andrews reviewed where the funding is allotted throughout the agency, with 68%.of 2 the funding going to programs, 15%to the building, 9%to development and 8% to 3 administrative services. She noted the funding provided by the cities is only a small 4 portion of the agency's budget as it also receives grants and donations from local 5 organizations as well. 6 7 Ms. Andrews stated the agency is seeking a representative from the City of St. Anthony 8 for the agency board meetings,which are held at 7:00 a.m. on the second Tuesday of 9 each month. She thanked the Council for their time and asked for questions and 10 comments. 11 12 Councilmember Sparks asked how the agency received youth for the employment 13 program. Mr. Loftgren stated this was handled through the local police departments. 14 15 VIII. REPORTS FROM CITY MANAGER AND COUNCILMEMBERS. 16 Mr. Morrison reviewed the referendum issue with the Council and noted the Council could not 17 take a stance on this issue one way or the other within the chambers. He informed the 18 Councilmembers of the first Public Facilities Task Force meeting was to be held on September 19 3, 2002. 20 21 Mr. Morrison noted the budget handouts address the revised expenditures within the budget, 22 which will be addressed at a future meeting. He explained there would also be a cut in the 23 police/fire budget and an increase in the HRA budget due to the Tires Plus lease. 24 25 Mr. Morrison stated CTV was going to now provide video streaming services, which would 26 allow residents to watch public meetings on the Internet. Mayor Hodson indicated he was happy 27 with this new service. 28 29 Councilmember Sparks noted the Community Forum did not address the events that will take 30 place at Apache Plaza on September 14, 2002 from 10:00 a.m. to 10:00 p.m. Barry Tedland 31 handed out a flyer to the Councilmembers.and noted the event was called Revisit the Village. He 32 noted there would be live bands, a bon fire, magic shows, a petting zoo, dunk tank, moonwalk 33 and a street dance. Mr. Tedland noted there were some good anchors in the shopping center 34 again and encouraged the residents to attend the event to learn of things yet to come. 35 36 Councilmember Faust noted on August 16, 2002 he attended a committee meeting at the LMC 37 where they addressed a 10%cut across the board for city services in 2003. He noted this would 38 affect the City next year with Council representation needed at the legislative sessions next 39 January, February and March. 40 41 Councilmember Faust noted he, the mayor and Mr. Mornson met with Congressman Sabo to 42 discuss Apache Plaza. He noted they spent a full hour with him and proved to be very 43 beneficial. 44 45 Mayor Hodson agreed stating this was an excellent-meeting to bring Congressman Sabo up to 46 speed with the NW quadrant redevelopment. He indicated Congressman Sabo was informed of City Council Regular Meeting Minutes August 27, 2002 Page 5 1 the funding issues and stated a great amount of commitment was shown by him taking the time 2 to meet with the City. 3 4 Mayor Hodson encouraged the residents to attend the September 14, 2002 events at Apache 5 Plaza. 6 7 Mr. Mornson reminded the Council that the September 10, 2002 Council Meeting would be held 8 at 8:00 p.m. due to the primaries. 9 10 IX. INFORMATION AND ANNOUNCEMENTS. 11 None. 12 13 X. MISCELLANEOUS INFORMATIONAL DOCUMENTS. 14 None. 15 16 XI. ADJOURNMENT. 17 Motion by Sparks to adjourn the meeting at 7:51 p.m. 18 19 Motion carried unanimously. 20 21 Respectfully submitted, 22 23 24 Heidi Guenther 25 TimeSaver Off Site Secretarial, Inc. 26 27 Mayor 28 ATTEST: 29 City Clerk 30 6 Saint Anthony Village DATE: September 10, 2002 Approved: TO: Mayor and Councilmembers FROM: Judy Monson, License Clerk ITEM: License and Permits for Approval: Heating Contractors License: Advantage Air, Inc., Shakopee, MN NS/I Mechanical Contracting Company, St. Paul, MN St. Marie Sheet Metal Inc., Spring Lake Park, MN Massage Therapy Business License: Center For Stress Reduction, 2500 Highway 88, St. Anthony, MN 7 BRC FINANCIAL SYSTEM ST. ANTHONY VILLAGE - Q9l03l2002 .14 C'krgc P^ � a r GL,54QR-V 6� .40 PAGE I a �s SANK . VENE?OR .. . '° t k# IXF� E. AMOUNT FIRS BREMER BANK NA _ 0485,E i -AT&T-WIREl� B z 1842 f�9/11�Os 178.25 0004,30 FR7GL-LTE3{ R E T€ C ]S3�r3 S391l:itQ 139.01 _ 003714FR< ':.'a. _ 3�rr° ?111 18.48 + .00001 CAHILL/SHAWN 18345 09/11/02 15.00 008916 CANADA GOOSE PROGRAM 18346 09/11/02.. 1 ,255.00 007386 CASTLE INSPECTION SERVIC 18347 09/11/02 4,936.95 008918 GOi M04 T Y E kF ' 1. �e8 :13911;1/Qc� 1 ,`451 :00 000785 LF f � M s #834 .f?9 t l'/02 ,. 241 .23 0008.17 X27. 18 00 _ -- 0820 DORSEY & WHITNEY 18351 09/11/02 1 , 752.75 .00006 EL-ARABY/SAMA 18352 09/11/02 50.00 _ 008604 EMERGENCY APPARATUS 18353 09/11/02 371 .73 .g58b83 = EXEX M fE]1+FF � . ZB. 4 Q9/it/Q 18. 00? .00002 FE R tI E�� r t 33 5 9�1 �t 2 300.00 _ C*8647 b$.00 001025- G & K SERVICES 18357 09/11/02 67. ] 001030 G & K SERVICES INC 18358 09/11/02 438. 15 008709 HALL/SUSAN M.H. 18359 09/11/02 38._88 - --- :00003 L-1AL � � Y36Q Q9f1/02 50.©0. 001 X20 €-f 4 F � T R NeXT & `.f19",�1 f 2 ;: ;536.98 s� r pax r _005417 I 1 1 = � 1 "Y RE O :. = i `€ 9��# C 4.03._8_6 -� 008252 HOME DEPOT-GECF 18363 09/11/02 113.99 001545 HOOVER WHEEL ALIGNMENT 18364 09/11/02 34.95 008658 INSTRUMENTAL RESEARCH, I 18365 09/11/02 69.30 423.56 -- CX4B26f3 007835 �METROCALL 18369 09/11/02 187.4 002240 METROPOLITAN COUNCIL_ 18370 09/11/02 31 ,000. 10 .00008 MICRO WAREHOUSE 18371 09/11/02 54.00 Gk05$ 5 SLI + 372 Q9/1 /02 270.Oo' 008424 € x v � � 50.00 21 .30 ^�0 159 APA AUTO PARTS 18375 09/11/02 7. 1 .00004 NEWMAN/JENNIFER 18376 09/11/02 99. 10 008820 NORTHERN TRAFFIC SUPPLY, 18377 09/11/02 2,955.64• OOB8.:1..1 11401' 2..,166.00 O�bb y PARTS MIDWEST, INC. 18381 09/11/02 54.0? 008631 PARTS PLUS ROSEVILLE 18382 09/11/02 25.53 007057 PRAXAIR 18383 09/11/02 55.48 09/.11/02' 38.45 .. .00007 Ralf €. k M 1L f 3, 09/Y.1/02`. 174.84 _ 000876 8 1' .;� L Cir S.. S�] tS,� l�fC '. 1B.3r' 6` Q9`/1, /.OP. 3_44,082.69 ANTHONY FIRE RELIEF A 18387 09/11/02 249.08 003150 ST ANTHONY MUNICIPAL LIQ 18388 09/11/02 274.00 007181 SUBURBAN PROPANE 18389 09/11/02 21 .01 8 ESRC FINANCIAL SYSTEM ST. ANTHONY _VILLAGE 09/03f20E02 14a':< 4 t cFc Re; isLe�. . GL540R=VOb:40 PAGE c FLANK VEN r CfEK# fIATE AMOUNT FIRS BREMER BANK NA y 008817 F L E f T .39Q gL}o OQ.._ 008840 Tf�K€]!!# t �LPLtS� .'GtcG1 .O<9l11l02 135.C}C? _. d 00045 'FIS S f ,�� ��� �� � �$�9"'� D$/1.f l�lr� 50 00 007337 TIMESAVER OFF SITE SECRE 18393 09/11/02 394.25 007365 TOLL GAS & WELDING SUPPL 18394 09/11/02 13.67 _ 003560 TRACY PRINTING 18395 09/11/02 394.80 00869`5,„ TWT C; .TTE1 X7.75 0088:59;. _ 00.341 008264 URS BRW 18399 09/11/02 31500.00 003710 VAN 0 LITE INC 18400 09/11/02 64.01 008227 VERIZON WIRELESS, BELLEV 18401 09/11/02 355.45 _.._- 0037 5 ML E �rG �'f�. Il E �t k�pN.Y 0 09!1 L ftJ 2 008919 � ��� "�I RE . x'',403 Q08 7 $I c I � `•,. 4'.-:491.Y C4c �2 43.2..55 003840 ZEP MFG COMPANY 18405 09/11/02 431 .62 BREMER BANK NA 441 ,547.01 s' _.__� 3'x3e ,yc N ✓ 4 -kC""1`^3` � ew 'a, R. y -. 9 , .r _... ... _ - ;� . .v�.. M...':`E... ..t��,r�.....R�.,. iR ��§1s/'.+%'�`"5. �aw.� Y�3°`� -.P°`'•�;�., 'a.,,a. •.X'r,„ N NR.C_ FINANCIAL SYSTEM 09/0k/2002 :ft8 ;C ec.k. R:egiste.r GL540A-V06.40 PAGE i. FLANK VEI�f10R. CHEO,K# DATE AMOUNT LIAR LIQUOR CHECKING ACCOUNT -- OOf3216 A T k- ` T VFX REL'E=SS SER�PI`CE 21.077: 09/1 1/02 b4:74 -- .00001 AA EC`:UI E?1 fENI' COr4PANY 21078,.,,09/.11102. 590 a 10 _ 00401.5'. RI"lERI.PRZ.l7E. LINEN; 21f}79 49/11/02 419.94 008794 ARCTIC GLACIER INC . 21080 09/11/02 1 ,673.42 008692 AT&T BROADBAND 21081 09/11/02 151 .62 004.293 BELLBOY CORP. 21082 09/11/02 3,209.67 008555: RIFF E''� �h1G. /a.2 341 ..87 2�C?83 �09/11' 008827:' LACEEEY d BAKERY 21C}84 ,09t 11/02 187.35 t _ LP:REI3E .,MI1VlEAPOI,IS : .,LNC 2iQE35' 09%'11/02.` 358=.91s _ .aoa42 . . .00003 BRINORTHWESTER GLASS CO 21086 09/11./02 303.24 004080 CHISAGO LAKES DIST. CO. , 21087 09/7. 1/02 2,201 .80 004095 COCA COLA BOTTLING 21088 09/11/02 1 ,903. 14• .048910 T?-T'Mr IIS'E : B�i1'FIG 2iC?89 0�`i/11lCfr B2.,68 , 004120 .EAGE EZ. W 1�lE CCk ;r 21090 .09:/1 1742 11,576.87 fK. 404125. EAST SIDE ESE ERf�GEE CQ:: 27:491-0941 1/42 51 ,335.30 004130 ECOLAB 21092 09/11/02 592.39 001030 G & K SERVICES INC 21093 09/11/02 458.48 008706 GCS SERVICE, INC 21094 09/11/02 1 ,471 .33 00415:7. ' ":C ET ht NA j 'tF?C'1SEl F IMG:' 211 95 `09f i'1/02 65.75 6f34172.': G�AE�'E ' BEEGIENIltifGS, wINC 1°C9644 11 102 / 73...00 - 604.175 �' EZ u�x , :f:E3Q00 G( : 1`�IE,:; . . ,: c'rI'C1 t7. Q9/11'/Oc.._ . 6;1.22: 3; 004201 HEGGIES PIZZA 21098 09/11/02 122.55 004207 HOHENSTEIN 'S, INC 21099 09/ 11/02 4,540.35 408438 INSIGNIA SYSTEMS, INC . 21100 09/11/02 554.82 OQEi861Cr �C3EkK: 217:01 0g/i 3X02 1:65y E3 . TELECOMM 004220 lt7F th� t�hhi6tf1THE RS ,LIQlIf}R z X17:02 ;0:9/it02 2C<}087.40 KUEIH <aIS .RIBUT ;NG: C E k x a 21 x;03..Q9/ 1.?0C 4 9, 1'13 \`C'2 008229 LOFFLER BUSINESS SYSTEMS 21104 09/11/02 33.93 004265 MARK VII SALES INC 21105 09/11/02 322,290.63 008263 MCLEOD USA, . INC. 21106 09/11./02 675.52 005137 :, t4URPH n ;SERVICE : ENTER21x,07 A 11i'fQc ,25.45 008883 Eu+EZF�t FR k��CE W REE C(]MPANY 21, ;CSB /1 i t02 93'0'a :. 0.44334 ;:;.NOE fHErASTE E 'w; _:'. .'= 2.1109 '.091 i.l`!QG? 523.9.0 000045 OFFICE DEPOT 21110 09/11/02 36.38 004345 OLD DUTCH FOODS INC 21111 09/11/02 52.32 004354 PAUSTIS & SONS 21112 09/11/02 2,505.36 664355 PEPSI TQC Re-COMPANY 2t1Z3 09/1. :102: 417 a0:` 004360 PH�E_ IPS rt INE SE?TRIFS 21114 0,9/1 1/02 8;3t,Te.92 . 004361 EINI�tAGLE,:` 18" 21_f 15 49/f 1:102: 3' 840;69 .. . . 008770 PORTER/WILLIAM 21116 09/11/02 67.00 004376 PRIOR WINE CO 21117 09/ 11/02 3,463.2.1 004385 QUALITY WINE CO 21118 09/11/02 12,254.76 . 008597 -EIC. , INC- ; . F-l1.9 09/J. UO2 303.25 008880 STkKT`EEiI; Et3UIG�MEC�ET.` 21 i.20 0ck/'1 1/02 94.47 0044.75 _ TRI TECIR4-'-t3ISPENSIN-'G2t 1: I 0, t1 1/0c 297.86- 008875- TRIO SUPPLY COMPANY 21122 09/11/02 415.48 008507 US FOODSERVICE 21123 09/11/02 4,023. 18 008888 VALPAK OF MINNEAPOLIS-ST 217.24 09/11/02 100.00 008316 ^WINE C0MPANY/THE, '. 211.25. 09/i i/0�? ---- 121 .35 004449 WORLD CLASS WINES, .INC. 21126: 09411/02 121 .00 LIQUOR CHECKING ACCOUNT 218,651 .68 10 BRC FINANCIAL SYSTEM ST. ANTHONY VILLAGE. 09!03/2002 15a Check ,:Reg.iste.r: GL540R-•VO6.40. PAGE i. EiANKVENDOR Cf=(EGK# DATE AMOUNT LIAR LIQUOR CHECKING ACCOUNT 008800 E+FiEMEFd �1i�iEC t+tA 22662 0-8/31/02 15,000.00 Q0880o BREMER BARII{ :NA 22663 :02/3.1/02 10,000..00 008716 .-SCENE/THF. , 22b6.4 08/31!02 _ 130.00 00-4-250 LUNDGREN/MATTHEW H. 22665 08!31/02 180.00 —� 004400 ST ANTHONY LIQUOR #1 22666 08/31/02 210.39 008770 PORTER/WILLIAM 22667 08/31/02 _67.00_ _ —008800. -BREMERF NK., IIIA -"22668 :08/31 l4 c? 12,OOO.00 ---- 008800 . Bt2Et"(ER BA.�tI{ �iA 2c'a66.9'. :08'13.1/02 15;000.00 _ 008716 SCENE,ITt-tE.: 2670 4.8./31;10 130.00, 004250 LUNDGREN/MATTHEW H. 22.671 08/31/02 110.00 008716 SCENE/THE 22672 08/31/02 130.00 .00001 RADECKI/DAN 22673 08/31/02 _ 2,000.00 r000Q2 LOLL MS4PETE 2267 08/21l02 200.00 — v.> , 004250: L`VLEIDGREPFfIYtATTE-IEI+J H 2E675 08!:31/02 180 a QL7 00$7:16: ,SOEftIE;/THE. y � 22576 08/3.1.%Oa _ 13th,00 - "`008800 BREMER BANK NA 22677 08/31/02 15,000.00 008800 BREMER BANK NA 22678 08/31/02 10,000.00 008800 BREMER BANK NA 22679 08/31/02 81000.00 BREMER LtK ;NF1' 22680 08/31./0 151000.00 --- 008716 `SCENTE r 22681 .x81.31/02 x.30 a:C?0 _ _. :LU��EE���EF�fIt�tATTHEI� `C-E 22681 QB !`3110�: _ OQ4250 .` 2 " 006800 BREMER BANK NA 22683 08/31/02 10,000.00 008800 BREMER BANK NA 22684 08/31/02 15,000.00 008716 SCENIE/THE 22685 08/31/02 130.00 QC74250: L: N13GE3EI�k 1faT FiE H`. 22b8b 02/31!02 ' 1'80 :oa - LIQU R CkEECKI [G ;�GGQCII kT 'r !29,C?.87.29--- . CITY OF ST. ANTHONY VILLAGE RESOLUTION 02 - 065 A RESOLUTION APPROVING A SETTLEMENT AGREEMENT AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENT WHEREAS, the City of St. Anthony and other agencies have been involved in a dispute with Barbarossa& Sons, Inc.; and WHEREAS, it has been recommended that the City Council approve the draft Settlement Agreement and Release attached hereto. NOW,THEREFORE, BE IT RESOLVED, that the City Council of the City of St. Anthony hereby approves the Settlement Agreement and Release pertaining to the Barbarossa& Sons, Inc. lawsuit and authorizes the City Manager to execute said agreement on behalf of the City of St. Anthony. Adopted this day of ) 2002. Mayor ATTEST: City Clerk Reviewed for Administration: City Manager 12 (Contract) DISTRICT COURT FOURTH JUDICIAL,DISTRICT No. 01-15060 SETTLEMENT AGREEMENT AND RELEASE The parties to this lawsuit and WSB Engineering, Inc., agree that: 1. Barbarossa and Sons, Inc., sued the City of St. Anthony to recover extra compensation arising out of the City's 2000 Street and Utility Improvements project. The City denies liability and named Qwest and Reliant Energy as third parties. To settle all disputes over Barbarossa's claim, the City will pay Barbarossa a total of$240,000 ("the Settlement Amount"). Qwest, Reliant Energy and WSB Engineering, Inc. contributed to the Settlement Amount by making payments for previously agreed sums directly to the City. The Settlement Amount includes $93,000.00 owed to Barbarossa by the City for work performed pursuant to a contract between Barbarossa and the City. On August 13, 2002, the City approved a $34,325.16 payment to Barbarossa. On August 27,2002, the City approved a $59,607.00 payment to 2249344v1 13 Barbarossa. Accordingly, pursuant to paragraph two of this agreement, the City will issue,.a: $146,067.84 check to Barbarossa in full and final payment of the Settlement Amount. The City agrees that Barbarossa's contractual, post-acceptance warranty has expired. 2. The Settlement Amount shall be paid by the end of business on September 20, 2002. Late payments shall bear interest at the rate of 18% per year. 3. Upon payment of the Settlement Amount to Barbarossa, the parties to this agreement will be deemed mutually released from all claims previously asserted in this lawsuit or against WSB and all other claims arising out of the City's 2000 Street and Utility Improvements project, with the sole exception of claims for indemnity or contribution from claims for personal injury and property damage asserted by persons or entities who are not parties.to this agreement. This release also extends to the parties' officers, agents, employees, and insurers. 4. Upon payment of the Settlement Amount, the parties will stipulate to this lawsuit's dismissal with prejudice. 5. The parties will absorb their own attorneys' fees and other costs related to this lawsuit. 6. As the compromise of disputed claims, this settlement is not an admission against the interest of any person or entity. BARBAROSSA AND SONS, INC. CITY OF ST. ANTHONY VILLAGE By By Paul Flykt, Vice President Its Dated: August_, 2002 Dated: August_, 2002 2249344vl . 14 QW-EST CORPORATION RELIANT ENERGY RESOURCES CORPORATION By By Its Its Dated: August_, 2002 Dated: August , 2002 WSB ENGINEERING By Its Dated: August 2002 2249344vl 15 EHLER5 & ASSOCIATES INC ® To: Mike Mornson,City of St. Anthony Village From: Jim Prosser, Ehlers & Associates W Date: August 29,2002 Subject: Final KFS Report Please find attached the KFS strategy report summary. Suggestions for implementation of these strategies include the following: • The strategies should be review and updated prior to the annual budget process,possibly as part of the City annual goal setting process. • A special effort should be made to balance "input"(revenue) issues with"outcome" (programs and services) issues. • St. Anthony, like many other comparable communities, is at a stage requiring significant reinvestment in its physical facilities. Developing and carefully implementing a plan to stage this reinvestment is key to avoiding overloading tax impacts. On behalf of Ehlers&Associates I want to thank you and your staff for their dedication and hard work in preparing this strategic report. I especially want to thank your Finance Director, Roger Larson, who provided much support and insight in the preparation of this plan. It was evident throughout this process that St. Anthony is well served by your Management Team. LEADERS IN PUBLIC FINANCE 3060 Centre Pointe Drive Phone: 651-697-8503 Fax: 651-697-8555 Roseville, MN 55113-1105 Email: jim@ehlers-inc.com St. Anthony Village Key Financial Strategies 16 Summary Community Goals/Initiatives and Local Tax Base Considerations Al. Monitor Apache Redevelopment A2. PW and Fire Station option analysis A3. Prepare facility needs study A4. Housing options study Financial Position B I. Review Fund Balance Policy B2. Prepare Debt study B3. Prepare alternative revenue analysis City Owned Infrastructure C 1. Update vehicle/equipment replacement program and funding sources. C2. Annual CIP C3. Prepare non-annual recurring maintenance schedule. C4. Revise assessment policy to address pavement management activities. Consider increasing assessed portions and interest rate. Competitiveness D 1. Property tax need review D2. Review budget option analysis as part of budget process D3. Prepare three year budget forecasts D4. Identify a limited number (1-3) of selected services for competitive pricing on annual basis Credit Position El. Accept Key Financial Strategies E2. Adopt debt policies as outlined in Credit section of report. Enterprise Funds Fl. Revise fee structures annual to reflect changes in cost of services. F2. Complete evaluation of on-sale liquor sale operation 27 CITY OF ST. ANTHONY PUBLIC WORKS/FIRE FACILITY TASK FORCE MEETING SCHEDULE DATE DAY BEGIN TIME TOPICS TO DISCUSS September 3, 2002 Tuesday 7:00 pm Introductions; review need to explore the need for a facility September 28, 2002 Saturday 9:00 am Tour of buildings October 1, 2002 Tuesday 7:00 pm Review tour and record observations November 5, 2002 Tuesday 8:00 pm (Elections) Review options December 3, 2002 Tuesday 7:00 pm Review options, design &cost; the need December 10, 2002 Tuesday 7:00 pm Open house to review the need and review options January 7, 2003 Tuesday 7:00 pm Review options and financing February 4, 2003 Tuesday 7:00 pm Select option February 18 Tuesday 7:00 pm Open house on option recommended February 25 Tuesday 7:00 pm Presentation to City Council • 1 September 4, 2002 ilia a FUTURE COUNCIL AGENDA ITEMS Meeting Date Meeting Type Staff Present Items/Issues September 10 Regular Begin at 8:00 pm-Primary Election Res. Adopt 2003 levy Update on Apache Plaza redevelopment Update on financial strategies-Prosser present Parks update by C. Jindra September 24 Regular Presentation re: NE Diagonal Land Use&Transfer Study October 8 Work Session 5:30 pm October 8 Regular October 22 Regular Planning Commission report- 10/15 November 12 Regular Canvass 11/5 special election November 26 Regular Planning Commission- 11/19 December 9 Regular Truth in taxation (possibly last meeting of the year) December 19 (if needed) Continuation of Truth in taxation General Fund Budget to Actual Report: August 2002 Expenditures: Mean Average 67% 08/31/2002 Percentage Remaining Budget Y-T-D Balance Spent Budget Mayor/Council $56,300.00 $30,115.60 $26,184.40 53% 47% Intergovernmental Relations $20,100.00 $14,589.90 $5,510.10 73% 27% Cable Franchise $19,900.00 $16,837.32 $3,062.68 85% 15% General Management $86,600.00 $67,165.32 $19,434.68 78% 22% Elections $24,400.00 $8,357.70 $16,042.30 34% 66% Finance/Insurance $208,200.00 $144,805.43 $63,394.57 70% 30% Finance/Assessing $39,100.00 $37,202.62 $1,897.38 95% 5% Legal $69,800.00 $47,800.73 $21,999.27 68% 32% Engineering/Planning/Zoning $2,500.00 $903.95 $1,596.05 36% 64% City Buildings $112,500.00 $60,461.06 $52,038.94 54% 46% Civil Defense $43,700.00 $28,290.42 $15,409.58 65% 35% Police Protection $1,061,200.00 $701,496.83 $359,703.17 66% 34% Lauderdale/Falcon Heights $519,200.00 $350,222.55 $168,977.45 67% 33% Fire Protection $555,900.00 $356,514.17 $199,385.83 64% 36% Inspections/Building Permits $75,900.00 $36,990.14 $38,909.86 49% 51% Animal Control $3,600.00 $1,565.40 $2,034.60 43% 57% Public Works $395,200.00 $259,931.34 $135,268.66 66% 34% Public Works/Maintenance & Repair $121,200.00 $62,714.84 $58,485.16 52% 48% Tree and Weed Care $27,000.00 $16,214.26 $10,785.74 60% 40% Parks $109,200.00 $81,783.17 $27,416.83 75% 25% Transfers to other Funds $75,000.00 $37,500.00 $37,500.00 50% 50% Budget Reserves/Non Budgeted $0.00 $0.00 $0.00 0% 0% Total Expenditures $3,626,500.00 $2,361,462.75 $1,265,037.25 65% 35% Central Park Improvement Project Appropriation: $2,7049100.00 Hard Costs: 08/31/2002 Expenditures Balance Central Park Construction-Veit $1,661,762.13 $1,047,012.10 $614,750.03 City Hall Irrigation $28,100.00 $0.00 $28,100.00 Park Building-Thompson Homes $453,096.90 $40,807.25 $412,289.65 Central Park-Contingency $34,000.00 $0.00 $34,000.00 Park Building Contingency $25,000.00 $0.00 $25,000.00 Total $2,201,959.03 $1,114,139.68 Silver Point Park Building/Engineering Soft Costs: URS-Planning&Design $269,050.00 $215,690.00 $53,360.00 Budget Expenditures Balance SEH-Engineering/Planning $55,000.00 $52,169.35 $2,830.65. $25,700.00 $25,700.00 $0.00 Total $324,050.00 $56,190.65 Additional Hard Costs: Common Excavation $9,520.00 $0.00 $9,520.00 Common Borrow $36,988.00 $0.00 $36,988.00 Contaminated Soil/Disposal $25,153.58 $0.00 $25,153.58 Soccer Goal Posts $3,000.00 $0.00 $3,000.00 Erosion Control Fence $4,674.25 $0.00 $4,674.25 Lab,Testing-Soils Analysis $1,500.00 $0.00 $1,500.00 Environmental Field Supplies $295.00 $0.00 $295.00 Lead/Oil Drum Disposal $3,500.00 $0.00 $3,500.00 Additional Lighting Foundation $30,000.00 $0.00 $30,000.00 Practice Soccer Field $10,000.00 $0.00 $10,000.00 Total $124,630.83 $124,630.83 Additional.Soft Costs: STS Consultants-Soil Borings $6,646.00 $6,646.00 $0.00 STS-Construction Testing $5,000.00 $2,520.00 $2,480.00 URS-Environmental Services $13,500.00 $0.00 $13,500.00 Bond Issuance $23,881.54 $30,786.54 ($6,905.00) Pollution Control $2,362.50 $2,362.50 $0.00 Advertisement for Bids $390.10 $641.40 ($251.30) Maurice Anderson $1,680.00 $1,680.00 $0.00 Total $53,460.14 $8,823.70 Central Park Project-Totals $2,704,100.00 $1,400,315.14 $1,303,784.86 Stormwater Fund - Cash on Hand 08/31/2002 Projeted Revenues: Funding Source Revenues-to-Date Street Improvement Bonds $1,700,000.00 $3,016,610.63 MSA Bonds $950,000.00 $935,008.45 DNR $4,000,000.00 $4,587,318.03 FEMA $700,000.00 $700,000.00 Hennepin County $150,000.00 $150,000.00 Storm Water Utility Charges $500,000.00 $509,645.42 Storrs Sewer City Bonds $1.610.000.00 $1.594.271.55 Total Project Budget $9,610,000.00 $11,492,854.08 Other Proiect Activity: Reserves/Transfer from Revolving Fund $175,000.00 $175,000.00 State of Minnesota-Reimbursements $0.00 $18,755.27 Homeowner Portion-Grant Agreement $0.00 $5,060.75 HRA-Streetscape Transfer $0.00 $155,100.00 Met Council $20,000.00 $10,000.00 Stormwater Fees-Purchase 2809-30th Avenue NE $106,000.00 $106,000.00 Interest Earnings(Non DNR Funds) $0.00 $126,495.42 Sale of Pahl Avenue Homes(2700&2704) $0.00 $11,200.00 29th Avenue-Water Connection Fees $26,000.00 $26,400.00 Misc.-Homeowner/Reimburse for Extra Construction Work $0.00 $38.877.50 Total Revenues $9,937,000.00 $12,165,743.02 0813112002 Expenditures: Expenditures-to-Date WSB-Engineering Services $383,600.22 Barr-Engineering Services $2,709.35 Dorsey&Whitney-Legal Services $36,911.64 Rice Creek Watershed District-Water Study $2,025.00 Purchase of Flood Homes $939,516.64 Pahl Avenue Ponding $110,938.57 Flood Relief Grant Program $65,159.32 Private Homes-Dumpsters/Service Master $17,371.44 Sump Pump $246.64 1999 Street Improvement Project $1,113,866.58 2000 Street Improvement Project $2,872,722.83 2001 Street Improvement Project $2,011,557.26 2002 Street Improvement Project $808,232.64 2003 Street Improvement Project $10,503.63 Harding Street Holding Ponds $895,634.63 Richard Knutson,Inc-Silver Point Park $1.559.720.30 Total Expenditures $10,830,716.69 Project Balance $1,335,026.33 Stormwater Fees Non-Desiganted $183,178.70 Total Cash on Hand $1,518,205.03 EXPENDITURE REPORT 08/31/2002 • WSB: Flood Relief Grant Program: 2001 Street Improvement Project - Project Description: Expenditures Project Description: Exoonditures Project Description: Water Resource Management Plan $12,191.50 Dennis/Penny Gault $10,000.00 WSB-Engineering Services $248,946.97 t Water Management Plan $10,531.50 James/Susan Kozarek $10,000.00 Lillie Suburban Newspapers $38.75 Stormwater Task Force $29,243.00 Thomas/Susan Hoban $800.00 Hage Concrete Works $2,356.53 Stormwater Engineering $54,748.23 Julie Sexton $1,004.53 Olson's Plumbing $221.90 Flood Problem Analysis $31,497.23 Village Properties-2801 37th Avenue NE $5,280.00 Dickson Electric $453.00 MCES Grant Application $1,724.25 Castle Building&Remodeling-3301 Edward St. $10,000.00 Sandness Construction $4,650.00 DNR/FEMA Grants $19,386.23 L.N.Soding-3460 Penrod Lane $600.00 Bond Issuance $21,183.48 Sump Pump Inspection Program $5,083.43 J&D Landscaping-3460 Penrod Lane $1,300.00 Park Construction $1.733.706.63 Park Design $156,447.10 St.Anthony Health Center-3700 Foss Road $3,301.00 Total 2001 Street Project $2,011,557.26 III Study $31.765.50 RiteWay Waterproofing-2929 Crestview Avenue $390.00 Flood Grant-1998/1999/2000/2001 $30,982.25 Pine Cone Nursery-3460 Penrod Lane $9,222.80 2002 Street Improvement Project Total WSB $383,600.22 Lamere Concrete-Flood Proofing Improvement $4,412.00 Project Description: McCaren Designs,Inc. $703.99 WSB-Engineering Services $139,254.00 Bart Engineering: Minnehaha Falls Landscaping $5,587.50 Dorsey&Whitney $5,220.89 Project Description: Elgard Excavating Company $1,245.00 Construction Bulletin $215.16 District N6 Watershed Study $2,709.35 Twin Cities Glass Block S1.312.50 Moody s Investors Service $3,250.00 Total Ban Engineering $2,709.35 Total Flood Relief Program $65,159.32 Springsted,Inc. $13,217.86 Pipe Services Corp. $5,851.20 Dorsey&Whitney: Private Homes-Dumpsters/Service Master S.M.Hentges&Sons $641.223.53 Project Description: Project Description: Total 2002 Street Project $808,232.64 Legal Services for Flooding Issues $17,911.16 Waste Management $391.65 Legal Services-Comdenabon of Homes $16,120.25 Service Master $13,782.29 2003 Street Improvement Project Legal Services-Pahl Avenue $2,880.23 Nancy Myhran $259.50 Project Description: Total Dorsey&Whitney $36,911.64 Linda Gomer $198.00 WSB-Engineering Services $3,114.25 Susan Kozarek $925.00 STS Consultants $2,998.00 Water Quality Study: Elaine Nelson $1.065.00 Pipe Services Corp. $4,391.38 Silver Lake: Sue Wenker $250.00 Total 2003 Street Project $10,503.63 Rice Creek Watershed District $2,025.00 Berkley Risk/Insuance Claim-Payment $500.00 Total Dumpsters $17,371.44 Harding Street Holding Ponds Purchase of Homes: Project Description: Expenditures Project Description: Sump Pump WSB-Engineering Services $105.888.05 Network Title,Inc. $255.00 Project Description: Bettendorf Rohrer $30,075.00 Purchase of 2716 Sl.Anthony Boulevard $134,928.90 Mcleod USA-Sump Pump Line $131.00 Second Nature Lawn $241,974.07 Demolition $9,156.00 Lillie Suburban News-Advertisement $116.64 Residential Easements $432,183.78 Taxes $839.61 Total Sump Pump/Misc. $246.64 Dorsey&Whitney/Legal $31,400.27 Legal Services-Dorsey&Whitney $225.00 STS Consultants $3,235.00 Check for Asbestos-Abatement Services $365.00 1999 Street Improvement Project Evergreen Land Services $19,519.66 Seal&Cap Well $1,450.00 Project Description: Construction Bulliten $358.48 Purchase of 2713 St.Anthony Boulevard $147,676.13 WSB-Engineering Services $174,398.02 Albrecht Inc. $20,215.22 Demolition $11,258.00 Springsted,Inc.-Bond Services $8,835.85 Comdemnation Commissioners $8,455.10 Legal Services-Attorney Fees for Seller $6,845.00 Northdale Construction $916,385.88 Old Republic-Abstract Fees $2,330.00 Recording Deed/Taxes $2,506.98 Treemendous $460.00 Total Harding Street Holding Ponds $895,634.63 Title Insurance $946.00 Dorsey&Whitney $2,911.55 Seal&Cap Well $1,420.00 Bond Issuance Expense $10,875.28 Silver Point Park/Constructlon Purchase of 2809-30th Avenue NE $108,067.10 Total 1999 Street Project $1,113,866.58 Project Description: Purchase of 2700/2704-Pahl Avenue $301,411.45 Richard Knutson,Inc, $1,466,031.72 Purchase of 2713-Pahl Avenue $208,072.00 2000 Street Improvement Project Sandness Construction $15,478.00 First American Title $375.00 Project Description: Muska Electric $40,196.39 Forsythe Appraisals/Kozarek $350.00 WSB-Engineering Services $314,566.93 Construction Bulletin $160.89 Evergreen Land Services $3,369.47 Barbarossa&Sons,Inc. $2,293,303.47 SEH,Inc-Silver Point Park Building $25,700.00 Total Purchase of Homes $939,516.64 E-CEL Energy $155,100.00 WSB,Inc-Silver Point Park Building $672.00 Buchen Environmental Services $2,248.99 Twin City Hydro Seeding $1,298.20 Pahl Avenue Ponding: Berkley Risk Services $10,000.00 Trillium Park $10,183.10 Project Description: AIIState Insurance Company $312.78 Total Silver Point Park $1,559,720.30 WSB-Engineering Services $20,967.16 St.Paul Companies $16,884.96 G&L Construction $69,998.42 Lillie Suburan Newspaper/Construction Bulletin $232.93 Treemendous $14,460.90 Albrecht Inc. $891.75 Pipe Services $3,859.20 Fabyanske&Westra-Legal Cost/Litigation $40,037.79 Construction Bulliten $1,432.20 Bond Issuance Expense $39.143.23 Lillie Suburban News-Advertisement $220.69 Total 2000 Street Project $2,872,722.83 Total Pahl Avenue Ponding $110,938.57 P 17 CITY OF ST ANTHONY RESOLUTION 02-064 A RESOLUTION SETTING THE CITY OF ST. ANTHONY PROPOSED 2003 TAX LEVY AND BUDGET IN COMPLIANCE WITH THE TRUTH IN TAXATION ACT WHEREAS, State Law requires that the City of St. Anthony provide Hennepin and Ramsey Counties with a proposed certified 2003 tax levy and budget; and WHEREAS, the City Council reviewed the proposed 2003 budget at its August 5,2002, work session; and WHEREAS, the St Legislature has mandated levy limits on all City Governments; and WHEREAS, the. furnishing of this proposed tax levy and budget is made contingent upon any revisions being allowed if the current law is modified. WHEREAS, the information required for the City Council to determine a definitive tax levy will be determined when the City of St. Anthony holds its public hearing on December 9, 2002; and NOW,THEREFORE, BE IT RESOLVED that: 1) The collectible 2003 proposed property tax levy is: Property Tax Levy Limit $2,168,627 Road Improvement Levy $ 470,921_ Housing&Redevelopment Authority Levy $ 55,500 Tax Abatement Levy -Central Park Bonds $ 28,993 PERA Rate Increase Levy $ 7,500 Total 2003 Proposed Tax Levy $2,731,541 2) The 2003 General Fund Proposed Budget totals$3,824,600 Adopted this day of , 2002. Mayor ATTEST: City Clerk Reviewed for Administration: City Manager r t 18 2.003 TAX LEVY: Levy: 2442. 2003 Change Budget $21199,967 $2, 168,627* ($ 31,340) Roads $ 342,757 $ 470,921 $128,164 Tax Abatement $ 299642 $ 285993 ($ 649) PERA Levy x_7,500 7,500 - 0 - $2,579,866 $256765041 $ 965175 HRA $ 55,500 55.500 - 0 - Total $2,6353366 $217315541 $ 969175 *Levy Limit — Set by State of Minnesota Tnerease/Deerease Percentage General Fund Levy = ($315340) (1 .44%) Roads. Levy = $ 128,164 3.74% Tax Abatement = ($ 649) (2.23%) PERA Levy = $ - 0 - 0% Total $ Levy Increase = $965175 Percentage = 3.64% 19 MEMORANDUM DATE: August 21, 2002 TO: Mayor and Councilmembers FROM: Michael Morrison, City Manager SUBJECT: GENERAL FUND LEVY State mandated levy limits set the City's 2003 levy at$2,168,627, which is ($31,340) less than 2002. When the proposed 2003 budget/levy estimation was put together in July, staff anticipated a$66,000increase based on conversations with the Department of Revenue. As a result of the decrease, the City has $97,000 less revenue available for the 2003 budget. To balance the budget, staff is proposing the following solution: 1) Reduce the Police budget by$20,000. 2) Reduce the Fire Budget by$10,000. 3) Reduce the P/W budgets by$10,000. 4) The remaining$57,000 could come from revenue received from the 2002 Tires Plus lease payments 20 MEMORANDUM DATE: August 26, 2002 TO: Mayor and Councilmembers FROM: Michael Mornson, City Manager SUBJECT: CAPITAL EQUIPMENT PURCHASES.FOR 2003 Staff has revised their capital equipment expenditures for 2003 to $633,200(down$200,000 from the original request of$833,200). Line items that appeared in the first draft of the Capital Equipment budget were deferred to future years. The following expenditures are recommended for 2003: Police $ 76,300 Fire $330,000 Public Works $212,000 Administration 14,900 Total $633,200 Revenue to fund the 2003 Capital Equipment will come from the following funds: Lauderdale/Falcon Heights contracts $ 30,000 Water/Sewer equipment transfer $ 56,200 Trade/Sale of existing equipment $ 10,000 Interest earnings $ 2,000 Water filtration fund balance transfer $ 60,000 2002 Liquor profits $150,000 Tires Plus (HRA Transfer) $325,000 Total $633,200 r 21 Lmc- 145 University Avenue West,St.Paul,MN 55103-2044 League of Minnesota Cities Phone: (651)281-1200, (800) 925-1122 Cities promoting ewJence TDD(651)281-1290 LMC Fax: (651) 281-1299 LMCIT Fax: (651)281-1298 . Web Site: http://www.hnne.org MEMORANDUM To: Mayors, City Managers, Administrators, and Clerks From: Jim Miller, Executive Director Re: 2003 City Budgets Date: Friday, August 16, 2002 Volatility in the state's budget over the past year is now translating into uncertainty for local budgets. Although the magnitude of the state budget deficit will not be officially revised until late November or early December, the Commissioner of Finance has recently suggested that the . deficit could be as high as $2.7 billion for the 2004-2005 biennium. With the additional. pessimistic economic news that has been released over the past several weeks,this fall's budget forecast could even exceed the Commissioner's gloomy figures. In recent weeks, the League has received numerous inquiries from member cities seeking advice on how to prepare for the uncertain state budget situation and the potential for state aid reductions. The situation for larger cities is further complicated by levy limits, which will be significantly more stringent due to a remarkably low inflation adjustment(0.76%)for 2003 levies.For many cities, levy limits will trim the list of policy alternatives available to address possible 2003 state aid cuts. To make matters more difficult, your city is undoubtedly facing other budget pressures such as rising employee health insurance costs, potential volunteer relief association contribution increases, lower investment earnings, and possible additional security costs in light of the September terrorist attacks. The purpose of this memo is to provide you with insights into this uncertainty based upon conversations we have had with key state decision-makers and information available to us at this time. The state budget situation is fluid and will undoubtedly change before the Legislature convenes in January. Although the League will be working with legislators to reduce the size of any proposed state aid or credit reimbursement reductions,it is important for your city to begin preparing now for the possible effects of a cut in state aids. 22 State Deficit: How we got here Last fall, the state announced a $2 billion budget deficit for the remainder of the 2002-2003 biennium. In February, the deficit estimate was increased to nearly$2.5 billion. The 2002 legislative actions to address this deficit arguably tapped most of the easy solutions, including the use of state reserves and the elimination of automatic inflation assumptions for many state programs. The budget solution also included the elimination of the TIF grant pool, delays in school aid payments, and some cuts in state agency budgets. Now, the state is facing an additional deficit for the 2004-2005 biennium. Given that many of the easy solutions have been employed,the problem confronting the 2003 Legislature will almost certainly be more difficult to address. State agencies are already being asked to prepare preliminary budget proposals at a 90 percent funding level. This 10 percent planning reduction reflects the approximate across-the-board cut necessaryin state spending to address a deficit in the $2.7 billion range. If a 10 percent cut is extended to general city aid programs, cities would collectively lose approximately$59 million of local government aid (LGA) and approximately$10 to$15 million of market value homestead credit (MVHC) reimbursement. Remember, even if your city does not receive LGA, the state effectively pays a portion of your property tax levy through the MVHC reimbursement. The State could reduce this payment to the city,thereby reducing the amount of property tax levy you expected when the levy was originally certified. If the Legislature ultimately decides to make cuts in state aid and credit programs, it will have to decide how to distribute the impact to cities and counties. If potential future cuts are computed in a manner similar to past state aid reductions, every city would likely lose a similar percentage of their revenue base (defined as the city's certified levy plus its certified LGA). A cut on this basis could be between 4 percent and 5 percent of each city's revenue base. Again, that cut could conceivably come from LGA, the MVHC, or both. There are other.state aid and revenue sharing programs that could potentially be cut, such as police and fire aids, certain transportation aid programs including the Municipal State Aid (MSA)program, and police training reimbursement aid. Likewise, further cuts in state agency budgets could have a trickle-down impact on city budgets—either through higher agency fees and assessments or through reduced services that.must be picked up in local budgets. Of course, there is no way to determine the size of the state deficit before the forecast is updated in November, nor is there any way to predict how the Legislature might implement appropriation reductions. Given that city aid programs were largely spared from the 2002-2003 budget cuts, we suspect there may be political pressure to "share" the state's 2004-2005 budget woes with cities. This uncertainty clearly makes financial planning for 2003 extremely difficult. We should know more in late November or early December when the next state budget forecast is released. However, you are already preparing your 2003 budget and you must set your preliminary property tax levies long before the state budget forecast will be announced. 2 23 Other Factors Cuts yet this year? Although most of the current focus on the state budget is on the 2004-05 biennium, there is still an outside chance that the 2002 December distributions of LGA and the MVHC reimbursement could occur IF the November 2002 state budget forecast shows a state deficit by the end of the current biennium that exceeds the current$300 million state rainy day fund and IF the governor decides to address the deficit through unallotment. Through "unallotment, the governor effectively has the power to reduce legislative appropriations to address a state deficit that exceeds its reserves. Given that the state's biennium ends on June 30, 2003, the December 2002 LGA and MVHC payments would be the last distributions to cities this biennium. LGA reform Reform of the LGA system may be a topic of legislative focus during the upcoming session. The current formula uses statistical data from the decennial U.S. Census that has now been compiled and released. The Department of Revenue initially used one updated statistic from the 2000 Census to compute.the 2003 LGA distribution. The use of that statistic produced.large, unexpected variations in the distribution of state aids and, upon review, the Census data appeared to have unexplainable results. Essentially, the department will use the existing 1990 data for one more year. At a minimum, the Legislature will likely have to address this piece of the LGA formula during the 2003 legislative session. We also know that some legislators have indicated an interest in a total review of the formula and the funding level—especially given the State's current fiscal predicament. This could lead to an extensive effort to reform the system. However, unlike possible cuts to balance the state's budget, which could be implemented immediately, any reform of the system would not likely be effective until 2004. Other property tax pressures Many school districts across the state are struggling to address their own financial needs. The state takeover of the majority of school funding coupled with the state's financial troubles means that schools will not likely find sufficient new state resources. Many school districts have already announced they are "going to the voters"to approve new or expanded operating referendum levies. This will place pressure on taxpayers and may result in less acceptance of city tax increases. Likewise, the state could tap its property tax as a potential way to address its budget problem. Although the nearly$600 million state property tax levy is automatically indexed for inflation each year, the state could decide to raise its levy even further to balance the budget. Again, this. could place pressure on commercial, industrial, and cabin taxpayers and make city tax increases more difficult. Additionally, the state could expand the base of the state property tax to include homesteads and other additional types of property. 3 24 Strategies for Cities For city officials who remember previous state budget shortfalls and subsequent city aid cuts, much of this situation and the strategies that follow may sound familiar. Below are several considerations that may help you weigh the pros and cons of revenue enhancements, expenditure reductions, and use of reserves as you consider setting a budget for 2003. Ultimately, you will have to make decisions that best reflect the needs of your community. L Consider increasing your property tax levy to cover or at least partially offset potential state aid reductions. If aid reductions do not materialize,you can adjust your 2004 property tax levy accordingly. A.)For cities over 2,500 population, levy limits are in place for taxes payable in 2003. Due to an extremely low inflation adjustment for this year's levy limits, cities affected by levy limits might not have sufficient levy authority to cover even normal budgetary pressures. Levy limits are due to expire,but they could certainly be extended by the 2003 legislature. B.)Increasing your property tax levy could potentially result in a larger state aid reduction. Last January, the Governor unveiled a new proposal that based a portion of each city's aid reduction on the size of each city's increase in property tax levy plus state aids. In other words, the larger the city's revenue, the greater the reduction in state aids. Although the Governor's concept was not adopted by the Legislature,this proposal could always resurface in the 2003 legislative session. C.)Although property tax increases could be implemented to offset potential budget cuts, the property tax increases of cities could be viewed as municipal preparation for state aid cuts and legislators could rationalize cuts because cities are financially"prepared" for the reduction. D.)Increasing property taxes to cover a speculative state aid cut could be criticized or misunderstood by your citizens and business owners. You may want to consider enhanced discussions with your citizens, businesses, and legislators_about the difficulties facing the city and setting a 2003 budget. E.) Consider the implications of tax reform on any tax increment financing (TIF) districts within your city. Past tax reform efforts, including the major changes enacted in 2001, may have severely impacted the revenue stream of TIF districts and the city may already be committed to property tax increases to cover TIF obligations. F.) Given the magnitude of the state budget deficit, other local units of government may also be considering increases in their property tax. With the new state property tax, legislators might be considering their own property tax increase to address the shortfall. You might want to consider the combined impact of these potential increases for your taxpayers. 4 .. . � . 25 II. Consider other revenue enhancements where appropriate. A.)Do you have fees that are set substantially lower than the cost of the service provided? Now may be a good time to adjust fees to more closely relate to the cost of the service, thereby reducing the current subsidy from other revenue sources. Also, there may be certain property tax supported services for which fees could instead be charged. B.) If your city makes significant capital or maintenance expenditures for storm water control, you may wish to consider creating a storm water utility and removing these costs from the general fund. III. Consider developing a plan to reduce appropriations or delay future financial obligations as a strategy to cover the potential loss of state aid payments. If aid reductions do not materialize,you could make later adjustments in your budget. A.)Any state aid or credit cuts might not be enacted into law until the session ends, which will likely be in late May. The cuts would likely be applied to the July and December 2003 LGA distributions and to the October and December 2003 MVHC reimbursement payments. Cities will already be nearly five full months into the fiscal year, which means that spending.reductions would have to be applied to the remaining seven months of expenditures. B.) You may want to consider budgeting for one-time expenditures that replace long-term ongoing costs, such as technology investments that might replace a staff position or consultant contract. C.) Consider delaying any hiring decisions until the Legislature crafts its budget during the 2003 session. D.)Consider delaying major purchases, as well as delaying new or expanded program initiatives. IV. Consider drawing down reserves to cover the loss of state aid. A.)Carefully consider the periodic cash flow needs of the city before deciding to draw down reserves. City fund balances are generally measured on December 31 of each year. This is a"high water mark"for city budgets given the structure of state aid payments and property tax distributions. An analysis of necessary reserves on a daily or weekly basis would provide a more accurate picture of the city's cash flow needs. B.) State aid and credit cuts could be permanent and, ultimately, the city would have to increase taxes or reduce spending to avoid a long-term city deficit. C.)Drawing down reserves could potentially affect your city's credit rating and possibly increase the cost of future borrowing for the city. 5 26 For more information The.2003 budget year promises to be a wild ride. Keep your eye on the Cities Bulletin and visit the LMC web site (www.Imnc.org) for the latest information about developments with city aids and the state budget. If you have any questions,please contact Gary Carlson, Eric Willette or Jenn O'Rourke at (651)281-1200. 6