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HomeMy WebLinkAbout2007-08-28 CC MINCITY OF STILLWATER SPECIAL CITY COUNCIL MEETING - 07-20 BUDGET WORKSHOP AUGUST 28, 2007 SPECIAL MEETING 4:30 P.M. Present: Councilmembers Gag, Milbrandt, Nyberg, Polehna and Mayor Harycki Staff: City Administrator Hansen _ _ Finance Director Harrison City Attorney Magnuson Mayor Harycki called the meeting to order at 4:30 p.m. He suggested looking at possible resources of revenue before addressing specific departmental budget requests. Finance Director Harrison stated the City's tax capacity rose about 2.1 percent, so if the Council were to keep the tax levy at the same rate as 2007, that would generate an additional $271,000 in property taxes. City Administrator Hansen reviewed possible revenue sources including: fire code enforcement inspections; an increase in the engineering services fee; starting the billing for development projects immediately; an increase in right-of-way fees; and raising the storm sewer rates from $4.50 a quarter to $7 a quarter. Fire Chief Glaser explained various methods for establishing fire inspection/code enforcement fees, ranging from a flat fee to fees based on building square footage. Mayor Harycki asked if the Council could choose from the various fees; Chief Glaser responded in the affirmative. Chief Glaser also outlined various options for charging for false-alarm calls. It was agreed to use a figure of $50,000 in revenue from the fire inspection/code enforcement fees in proceeding with the budget considerations. Mayor Harycki suggested that the other revenue sources identified by Mr. Hansen seemed reasonable. Councilmember Nyberg questioned the amount of the potential revenue for development projects. Regarding the increase in the storm sewer fee, it was noted that the Council had previously indicated it would like to see that fee increased to $10 per quarter, rather than $7. City Attorney Magnuson explained a suggestion to write traffic tickets as administrative citations, thereby enabling the City to recover 100 percent of the fine amount instead of the current situation where the City only receives about $25 of a $180 traffic ticket. City Administrator Hansen noted he had not included this potential revenue in his figures as the numbers hadn't been validated, but said he would pursue the idea further if the Council so desired. Mr. Hansen noted that if there were agreement on his memo regarding additional revenue, the Council would be facing a shortfall of about $959,000 or a levy increase of about 15 percent. He said freezing the library's budget at 2007 level would cut the shortfall by $137,000 and a 13.5 percent increase. Councilmembers Polehna and Nyberg asked about the possibility of refinancing the bonds for the Rec Center as a way of generating revenue or saving some money; City Administrator Hansen said that idea had been explored with the City bond consultant who does not recommend the idea. Ms. Harrison briefly spoke of the risk involved in refinancing. Councilmember Gag spoke in favor of at some of the possible Community Development fees/fee increases. Mayor Harycki suggested looking at liquor fees, speaking of the cost of having officers downtown at bar closing. Page 1 of 5 City Administrator Hansen said if the Council agreed with his recommendations, it would result in a tax increase of $581,116, a 4.7 percent increase in the tax rate, resulting in a tax increase of $21.77 on a $100,000 home, $32.66 on a home valued at $150,000, $54.32 on a home valued at $250,000. Finance Director Harrison briefly explained fiscal disparities fund and debt service levies. There was discussion of special requests. Regarding the request from the Greater Chamber of Commerce, it was consensus that much of the requested assistance could be accommodated in-house, rather than a direct allocation of $11,250 as requested. _ _ Regarding the Washington County Historical Society's request for $10,000, it was noted Stillwater was the only City in the County that was asked for a budget contribution, and that request was not approved. Regarding expenditure for cleanup of the Myrtle Street dumpsite, it was agreed to prepare a plan before arbitrarily designating budget expenditure. There was discussion of a proposed tree inventory; Councilmember Polehna suggested using an intern to do that project. Regarding a proposed $15,000 increase in the City's contribution for 4th of July fireworks, it was noted this was tied to the long-term agreement with Lumberjack Days sponsors. It was consensus to increase the contribution for fireworks by $25,000, with the increase not tied to an agreement with the Lumberjack Days organizers. Also discussed was a request fora $20,000 contribution to the Lucy Winton Bell complex. Several members felt Stillwater has been paying a disproportionate share for the complex and felt any money should be spent on athletic fields in Stillwater, while others noted a high percentage of participants using the complex are Stillwater residents. It was also noted Stillwater lacks the space to locate a quality complex such as Lucy Winton Bell. Councilmember Nyberg spoke in favor of a $10,000 donation to Lucy Winton Bell and $10,000 to the Park Board for improvements at local fields; there was consensus on Councilmember Nyberg's suggestion. It was decided to delay discussion of membership dues for the Association of Metropolitan Communities until a decision was made on lobbying services. Regarding contributions to the Youth Service Bureau and Community Volunteer Services, Councilmember Milbrandt suggested the City receives a great deal in return for its support of those agencies. Mayor Harycki spoke about park maintenance issues and the current organizational structure. Councilmember Polehna suggested referring the issue to the Parks Board for a recommendation. Mayor Harycki said his other main budget issue was a $237,000 signing and lighting matter. There was discussion of the library budget request. Regarding his recommendation to freeze the library's budget at the 2007 level, City Administrator Hansen noted that money could be spent any way the Library Board determines is most appropriate. Mayor Harycki asked if freezing the budget at the 2007 level would be treating the library on the same footing as all other departments. Director of Administration Knauss noted that the library has a three percent increase in contracted salaries in 2008. Councilmember Milbrandt pointed out the library has revenue-generating opportunities that other departments do not have. It was proposed to put an additional $18,000 in the library budget (to fund the contract salary increase) on the table pending the outcome of the consideration of other departments. New positions -Mayor Harycki asked if it had been determined whether the requested new position in the Police Department could be funded entirely with drug seizure money. City Administrator Hansen stated the position is in the budget and is being partially offset with the Page 2 of 5 $40,000 grant. Also in the budget are two fire positions, also partially paid for by grants, at a net cost of $65,342. Mr. Hansen noted that the City custodian would be replaced with a contract employee. There was discussion about the housing market concerning the building inspector position, and it was consensus to eliminate one building inspector position. There was discussion about the police and fire positions and the fact that the grants terminate at the end of five years, at which time the City is wholly responsible for the salaries. Councilmember Gag spoke in favor of accepting the grants. Fire Chief Glaser spoke of revenues and savings in overtime on-call costs that will offset the cost of the positions, and he noted the grant is a one- time opportunity. Councilmember Milbrandt spoke of requiring the chiefs to cut an amount needed to fund the positions from their operating budgets. Director of Administration Knauss _ _ spoke of potential morale issues in adding positions in one department and cutting positions in other departments. City Administrator Hansen pointed out that the City will be losing even more LGA next year. City Administrator Hansen reviewed the implications of going to personnel level 2 - a reduction in administrative secretarial time, adjusting both positions to .75 time at a savings of $26,930; adjusting the engineering/parks secretary to .50 time at a savings of $27,830; and eliminating the engineering intern position at a savings of $9,463 and Community Development intern at a savings of $6,537. Councilmember Nyberg said he would not be comfortable with going to Level 2, with the exception of the intern positions. Councilmember Milbrandt spoke in favor of reducing the cost for lobbying services by $20,000. It was noted lobbying for the levee project is ending and the state will have more influence in lobbying for the new bridge. City Administrator Hansen expressed a concern about the timing of reducing lobbying efforts at this time. Mayor Harycki noted 2008 is the year for the federal highway bill and spoke perhaps of reducing the lobbying budget by $10,000, rather than $20,000. It was consensus to reduce the budget by $12,500. Councilmember Milbrandt questioned the budgeting of $20,000 for administrative services. City Administrator Hansen explained that for example, a consultant might be used to assist in matters of arbitration/mediation or contract settlements. Finance Director Harrison said that amount also includes safety training and actuarial services. MIS -Mayor Harycki questioned the three-year. cycle for computer replacement. Ms. Knauss pointed out that it is actually five to seven years before a computer actually is replaced. Mr. Hansen said in 2008, the schedule calls for the replacement of one three-year-old computer, eight four-year-old computers, 3five-year-old computers, and five six-year-old computers. Councilmember Milbrandt pointed out that this department budget proposal calls for just a .3 percent increase. Finance -Mayor Harycki questioned dedicating .33 FTE to payroll. With 95 employees, he suggested that function could be outsourced for about $6,000. Ms. Harrison noted the employee in question also is responsible for HR benefits, sick leave accruals, etc. Community Development -Councilmember Milbrandt questioned budgeting $67,000 for "other professional services." City Administrator Hansen noted that represents the second year of the comprehensive plan and $7,000 for the CLG grant already approved by the Council. There was discussion about fuel for take-home vehicles. It was noted that was part of the job agreement, as well as past practice for the police and fire chiefs, who have to be available 24-hours a day. Page 3 of 5 Engineering -Mayor Harycki asked if the budget reflected the proposal to do consulting for other communities. City Administrator Hansen said that was not included, as any revenues are an unknown at this time. There was discussion about moving the cost of a portion of one of the engineering technicians to the sewer fund. There was discussion about whether the Council wished to maintain the same level of services as currently offered or whether the desire was to reduce those services, and where to make any additional budget cuts. There was discussion of contracting out for some services. There was discussion as to what portion of any increase in spending is due to an increase in the number of residences. Ms. Harrison pointed out that a part of the "increase" in spending is due to a _ _ $540,000 reduction in revenues. Ms. Harrison stated eliminating the $540,000 from the equation indicates a 2.2 percent increase in spending. There was discussion about going to the Level 2 personnel staffing. Councilmember Polehna noted those people represent the face of the services the City offers; he asked about any carry- overs that might be available. Councilmember Milbrandt raised the possibility of going to the Level 2 staffing and taking the $18,600 (for contracted pay raises) out of the library budget. Councilmember Nyberg suggested going back to the department heads and telling them to make a certain percent decrease in their budget. City Administrator Hansen pointed out that an across-the-board cut affects departments in very different ways. City Administrator Hansen suggested that if the City went to a higher deductible on its workers' comp insurance, it could result in a savings of as much as $15,730, about half of which would have to be set aside in a reserve against possible claims. On the capital side of the books, Mr. Hansen suggested the City could delay the fire department's connection with the County at $13,000 and the firehouse mobile for $17,000, and perhaps delay the trash room roof at the library at $15,000. Council reviewed the capital budget requests -Mayor Harycki asked about the impact of removing one computer from each department scheduled for replacement. Ms. Knauss stated MIS has requested that if the capital budget is to be reduced, they be informed of the dollar amount so they can prioritize their own budget, as computers are switched between departments. There was discussion about the Recreation Center debt service. Ms. Harrison explained that if the City increases the transfer from the Rec Center to the debt service, it would reduce the City's requirement for debt service. Ms. Harrison'said the Council could take the entire $192,000 for debt service from the Rec Center's fund balance. While that would not help the operating levy, Ms. Harrison explained that it would reduce the overall levy. City Administrator Hansen warned that doing that would be a one-time deal - it couldn`t be done again next year. Ms. Harrison said if the Council opted to transfer the $192,000 to debt service, it would reduce the overall total levy increase to 5.4 percent. Councilmember Milbrandt asked what the total levy increase would ae doing the Rec Center transfer and keeping the administrative secretarial positions at current levels. Ms. Harrison said that would result in a 6.0 overall tax levy increase; that figure includes the reduction of the $18,000 for the library's contractual pay increases. Putting the $18,000 for the library back in the budget results in an overall tax levy increase of 6.2 percent, Ms. Harrison stated. Mayor Harycki stated he was still stuck on the general fund increase. Councilmember Polehna suggested that the Mayor was forgetting the loss of revenue in his position. Councilmember Nyberg also noted that the City has experienced growth in the number of households and the need for services. Councilmember Milbrandt noted that they had absorbed an $800,000+ cut and had been able to accomplish that with a 6.2 levy increase. Mayor Harycki said he thought Page 4 of 5 the Council should challenge every department head to look at their personnel and reinvent how they operate, mentioning engineering, parks and streets as areas where changes might be made. CouncilmAmbers Polehna and Milbrandt noted that the budget could always be reduced from this point; it just cannot go up once the preliminary levy/budget is adopted in September - the Council could direct City Administrator Hansen to look at possible personnel reorganizations for the next six months if so desired. However, it was noted a decision was needed at this time to pass the necessary resolutions on Sept. 4. Motion by Councilmember Milbrandt, seconded by Councilmember Polehna to adopt the overall levy increase of 6.2 percent with the reductions and additions discussed during the workshop. Motion to adopt the budget/levy passed 4-1, with Mayor Harycki voting no. Councilmember Nyberg said he would chal department heads in preparation for next year. Wally Mil ATTEST: Larry D. H sen, City Administrator Page 5 of 5 Mayor