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HomeMy WebLinkAbout2010-08-24 CC MIN Budget Workshop'fillwater 111E IINTNItNGE Of NINN EIOTN CITY COUNCIL MEETING August 24, 2010 BUDGET WORKSHOP 4:30 P.M Mayor Harycki called the special meeting to order at 4:30 p.m. Present: Councilmembers Cook, Gag, Polehna, Roush and Mayor Harycki Staff present: City Administrator Hansen City Attorney Magnuson Finance Director Harrison MIS It was noted the operating budget is much the same as last year. MIS Director Holman said items in the capital budget are those required purchases such as annual licensing and that roll -over money will be used for some of those purchases. City Administrator Hansen noted that the City did not bond in 2010 and does not plan a bond issue in 2011; and that most of the purchases will be from roll -over money. Councilmember Polehna suggested a possible cost savings, noting that the County is getting rid of all personal printers in offices and going to more centralized printing locations and the County estimates it will save $30,000- $40,000 in one department alone. Ms. Holman said the City is going to that system now, with one main printer on each floor, as well as the printer in finance which is used to print all the utility bills, etc. She said the only personal printer that will be left will be City Administrator Hansen's as that is used for confidential information at times. Ms. Holman noted the budget includes only those known expenditures; and that she would likely return with requests on a case -by -case basis. Mr. Hansen said he would continue the current practice of dealing with the additional requests, with those requests coming to him first for approval and then going to the Council for final approval. There was discussion of how carry-over funds can or cannot be spent. Councilmember Cook asked about the accounting for carry-over funds not included in budget requests. Mr. Hansen explained that the finance department accounts for all capital funds and how much of those funds are not spent at year City Council Meeting — Budget Workshop August 24, 2010 end; the Council then must approve the request to roll those funds over at year- end. There was discussion of the on -going problem with heat in the server room, as well as the sprinkler, which could cause damage to the server should it go off; Ms. Holman said nothing has been done due to the budget situation. COMMUNITY DEVELOPMENT /BUILDING INSPECTION /PARKING RAMP Community Development Director Turnblad said the community development operating budget is exactly the same as last year, and the overall number is less than last year, with no capital requests. Regarding building inspections, Mr. Turnblad said there was a capital request item to replace an aging work station that has been eliminated. There were several suggestions regarding options for obtaining quality used office furniture /stations. Councilmember Roush asked about plans for the three houses on the future armory site property. Mr. Turnblad said one house in uninhabitable; two are habitable and currently being leased, and the City likely will continue to lease those two properties for the short-term. Councilmember Roush asked if cities typically act as landlords in such instances. City Attorney Magnuson stated that the City has confirmed that the National Guard will allow the City to retain the rental money until the Guard needs the property. Councilmember Roush asked if these three parcels will be needed for the armory project; City Administrator Hansen said that won't be known for several years, until the design process is started. Mr. Hansen said it is likely the City will continue to rent the two houses for as long as possible and that rental income might be available for the budget for the short -term. There were questions about two potential housing projects; Mr. Turnblad said one application has been withdrawn and that he believes the other has died due to lack of financing. Councilmember Roush asked about the financial status of one of the downtown condos; Mr. Turnblad said all three are fully developed. There was discussion of the guarantees related to the bonds and TIF, as well as occupancy rates of the three developments. Regarding the parking ramp, Mr. Turnblad stated revenues are close to covering all the expenses, but the reserve money for future maintenance is not being generated at this time. He said he is fairly confident the ramp will generate $40,000 450,000 next year. On a question by Mayor Harycki, it was noted that the free Sunday parking available to churches is part of the contractual agreement. Page 2 of 16 City Council Meeting — Budget Workshop August 24, 2010 Councilmember Roush asked about the revenue target to break even; Mr. Turnblad said $80,000 a year provides $30,000 to be set aside for long -term maintenance. On a question by Councilmember Roush, Mr. Turnblad said selling long -term permits is something that may be reconsidered at some point in the future, but not at this time. There was discussion of the status of the post office project. Overall, Mayor Harycki noted the parking ramp budget is about $4,000 shy; Mr. Turnblad explained that there is $9,000 in professional services that is related to the Lowell Inn account. There was a question about the cameras for the ramp. Mr. Turnblad said it is hoped the cameras can be installed yet this year; the cameras are a budgeted item and will be paid through the Parking Enterprise Fund. Councilmember Roush asked if there was any change in the status of boat trailer parking in the downtown lots; Mr. Turnblad said he would report on the status of a boat ramp at an upcoming Council meeting. Councilmember Roush asked whether there would still be a third -party contract to watch the Barge Terminal property now that the Cayuga is gone; it was decided to bring this back for discussion at an upcoming Council meeting. FIRE Mayor Harycki asked about the change in salaries. City Administrator Hansen said that was an unfilled, full -time position that was eliminated; and that the budget was primarily personnel, with not much else left. Mayor Harycki wondered whether there should be something in the budget for architectural services for the future armory/fire station. City Administrator Hansen said he didn't think that would be needed in 2011. Mr. Hansen told the Council the overall 2011 budget is not sustainable — after that time the Council will either have to raise taxes or make reductions. Councilmember Roush asked if the new armory/fire station would require any new communication towers; Chief Glaser felt that would not be necessary. Councilmember Polehna noted there should be carryover money from the fire station study that would be available for architectural /consulting services if needed in 2011. Chief Glaser said most of the line items in the budget are uncontrolled costs, such as the money for the 800 MHz system and fuel. There was a question about subscriptions; Chief Glaser said that is for National Fire Codes and similar professional publications. Page 3 of 16 City Council Meeting — Budget Workshop August 24, 2010 Councilmember Cook asked about the cost for response to medical calls; Chief Glaser said it depends on the type of call and that the hardest part of determining that is figuring depreciation of equipment and cost of running a truck. He said generally a call involves 20 -40 minutes of time, approximately $50 a call. Councilmember Cook asked whether fire stations ever have an ambulance to utilize, rather than responding with a fire truck. Chief Glaser noted that the fire department is not the EMS agency; EMS agencies are determined by state response area. Councilmember Cook asked whether the department could be licensed and whether there would be any cost savings; Chief Glaser said it likely would cost more and Lakeview would have to agree to surrender its licensing. City Administrator Hansen said it would be very costly for the City to have to operate an ambulance service. Regarding the capital budget, City Administrator Hansen pointed out it used to be practice to set aside money each year to fund future apparatus purchases, but that has not been possible for the last several years. Chief Glaser pointed out that currently three rigs are over 20 years old and need to be replaced. He said he is currently in the process of getting firm numbers from vendors for a new truck, with a likely purchase price of $350,000 to $400,000; $290,000 is available in carryover. He noted that in the past two years, he spent over $57,000 in maintenance costs. Mayor Harycki pointed out there is $100,000 in the seal coating fund that likely won't be spent that is a possible source of funding. Councilmember Cook asked about the disposition of the old fire trucks; Chief Glaser said because these rigs are so old, they don't have any resale value due to the changes in equipment safety standards. FINANCE Finance Director Harrison stated she had cut back on a few items, primarily supplies. Mayor Harycki spoke of the potential savings in either e- mailing utility bills or combining billing with the Water Department. Ms. Harrison said she is working on the e-mail software. She said the only way the City could save money in working with the Water Department would be to combine billings into one single bill, otherwise it would involve manually stuffing envelopes and that the Water Department has not been interested in combining the utility bills. There was discussion of previous efforts to bring the Water Department under City jurisdiction, which City Administrator Hansen said could save the City as much as $250,000 a year, an effort that was defeated in a voter referendum. Page 4 of 16 City Council Meeting — Budget Workshop MAYOR and COUNCIL August 24, 2010 City Administrator Hansen said there is very little change from last year. He said he did put $2,000 back in for contractual services; otherwise, there is next to no change. There was a question about $1,500 requested for professional services; it was noted that is for the bridge coalition. Mayor Harycki asked Ms. Harrison to check on the $2,000 for contractual services to determine if that is a duplication of the $1,500 for the bridge coalition, in which case it could be eliminated. It was agreed to eliminate Council mileage. Mayor Harycki asked about the $2,000 for miscellaneous; Ms. Harrison that is for contingencies. There were no capital items. ADMINISTRATION /CITY HALL City Administrator Hansen noted that salaries are down due to the .5 secretarial reductions. He said other professional services was cut in half from last year, and he noted that nothing of that fund has been spent in 2010 as he has negotiated all of the contracts to date himself. He informed the Council that he has been notified one bargaining unit is taking the City to arbitration so there will be a $15,000 fee for services for that. He said there is a bit of an increase in some of the maintenance agreements, and there is no capital outlay proposed. Councilmember Cook asked about the assessing fees; Mr. Hansen stated that is the County charge for assessing City properties. On a question by Councilmember Cook, it was noted other professional services is for labor - related issues such as arbitration or grievances. Regarding plant/city hall, he said most of the changes are shifts in accounts. He noted that overall the budget is down from $150,000 to $126,000. Mayor Harycki asked whether there should be some funding to deal with the noise issue from the air handling chiller. Mr. Hansen said he has been carrying over $49,000 that was originally set aside to deal with a water problem; and that he used some of that money for the recent blanket for the chiller and that might also be a source of funding if the decision is made to do something with the server room or the noise issue. Mayor Harycki suggested the City might owe it to residents to make some additional effort to reduce the noise; he suggested that staff contact the same engineer that dealt with Lakeview Hospital's rooftop units. Mr. Hansen said he is Page 5 of 16 City Council Meeting — Budget Workshop August 24, 2010 following through with that suggestion and staff will be contacting Lakeview's engineer. Councilmember Cook asked why the blanket system didn't work and whether the manufacturer had been contacted. Mr. Hansen said the blanket system worked and did lower the decibel levels, just not as much as was hoped. There was discussion about the air conditioning unit not functioning at City Hall; Mr. Hansen said it is an old, unreliable system. Mr. Hansen suggesting leaving the $45,000 in carryover funds and continuing to look at options for the chiller. Mayor Harycki said it might be worth getting bids on replacing the unit, citing possible cost - savings. Mr. Hansen said the energy audit will be conducted shortly, with the focus on City Hall. Councilmember Gag brought up the issue of the stains on the steps to City Hall; Councilmember Roush suggested the possibility of an acid wash or concrete paint. Councilmember Polehna expressed concern about the sprinkler system in the server room. Councilmember Cook asked why the carryover funds were included in this budget but not in other department budget; Mr. Hansen stated he thought it was important to identify the availability of those funds for projects such as the noise abatement or upgrades to the server room. UNALLOCATED Mr. Hansen said this fund is where everything that doesn't fit a department category is put. He said the biggest item is the insurance benefits for retirees who qualify for the lifetime, family insurance coverage. The other item, he noted is the Fire Relief Association, which is pass- through money. On a question by Mayor Harycki regarding money for garbage fees, Ms. Harrison stated the City pays the hauler the unpaid bills and then certifies the bills for collection through the next year's property taxes. SPECIAL EVENTS Mr. Hansen said this is where the City accounts for revenue from Lumberjack Days ticket sales, as well as donations for fireworks, which are pass through funds. The biggest expense is for fireworks which includes $40,000 in City funds and $15,000 in donations. Expenses also include $40,000 for external police services for Lumberjack Days. St. Croix Event reimburses the City $20,000 for police and fire services, and it was noted revenue from ticket sales is also used to offset that cost. Page 6 of 16 City Council Meeting — Budget Workshop August 24, 2010 Councilmember Cook asked if it would be possible to renegotiate those figures; Mr. Hansen said the contract doesn't expire until 2013. Councilmember Roush said he had asked City Attorney Magnuson about the possibility of reopening negotiations. Mr. Magnuson stated that if there is some kind of legitimate public safety issue involved, the City could reopen negotiations or even cancel the contract; otherwise, it would have to be a request for St. Croix Events to willingly discuss contract issues. Councilmember Roush felt that there are six items in the contract that need to be tightened up. Councilmember Cook questioned the cost of the fireworks; Mr. Hansen said if this were not a five -year contract, fireworks would be the first thing he would eliminate because of the cost. Councilmember Cook asked if the City is breaking even on Lumberjack Days or whether the taxpayers are paying some of the costs. Ms. Harrison said $18,300 is coming from the general fund. Councilmember Polehna pointed out the City is paying for tennis courts and other such amenities, and stated that the resident survey indicated 86% of the residents enjoy Lumberjack Days; he suggested that $18,000 is not a lot to pay for something that many residents enjoy. Councilmember Roush pointed out that someone else is making money from the event. Councilmember Cook also pointed out the City is paying much more than $18,000, considering the police calls and local police service not provided by other jurisdictions covered by the $20,000 reimbursement from St. Croix Events, as well as fire inspections, legal services, etc. Mayor Harycki talked about the concept of going to a contract with the City receiving a portion of ticket sales as a way of offsetting costs. Councilmember Gag said he thought the City has made great strides in getting the City cost down from $57,000 in 2008 to $18,000, although there may be some slight tweaks to the contract that could be made to get the City cost to zero. Councilmember Roush said he would like to put together a committee of interested parties to discuss the Lumberjack Days contract. Mayor Harycki pointed out the Council is scheduled for a debriefing on the event in September; Mr. Hansen stated Mr. Eckberg would be present for that discussion. In discussion, it was noted that this year's payment to the downtown beautification fund has not been made by either the marathon or bike race. Page 7 of 16 City Council Meeting — Budget Workshop August 24, 2010 WASHINGTON COUNTY RECYCLING GRANT Mr. Hansen said the City budgets what it receives from the County grant; these are simply pass- through dollars. LIBRARY Library Director Bertalmio stated the budget request has been changed from originally submitted; she reviewed the changes, which included additional revenues and reductions /savings. She said the changes still leave the budget $14,800 short; she stated she doesn't believe there are any further reductions or additional revenues that can be found. Mayor Harycki wondered whether the library was included in the City's efforts to market meeting space at Teddy Bear Park or Public Works. Councilmember Roush questioned the policy of book reservations which enable a non - resident to have priority over a resident who is paying taxes to maintain the library; Ms. Bertalmio noted the policy is first -come, first -serve and pointed out the policy also works the other way, where a Stillwater resident could have priority at reserving a book at a County library. Councilmember Roush questioned the advantage of having a city -owned library; Ms. Bertalmio said in addition to autonomy, the advantage is having nine board members who live in the community and are sensitive to the needs of the community. Mayor Harycki referred to the experience of Lake Elmo, a County branch, which was closed for a number of years and now is open just 20 hours a week. Mayor Harycki noted that Stillwater Township used to make a small donation to the Stillwater library in recognition of the fact that township residents use the library. Councilmember Polehna asked if there is any way the City might be able to get some financial assistance from surrounding communities. It was pointed out that residents of the surrounding communities are taxed for County library system. Ms. Bertalmio pointed out that the County library does all of Stillwater's cataloging and processing at no charge, as well as the on -line catalog and circulation system at no charge, services the City library would have to provide and could not afford to do so; she suggested that the relationship with the County system is beneficial to both parties. Ms. Bertalmio also pointed out that 60% of the library's patrons are Stillwater residents. Regarding the $14,800 shortfall, Mayor Harycki noted that Tuesday and Thursday hours 10 -1 p.m. are highlighted and asked whether $7,000 would be saved by eliminated those hours or shortening those hours. A library spokesperson expressed concern about eliminating those hours; Ms. Bertalmio noted that a survey of patrons indicated that the one service that they would like to see improved was more hours. Page 8 of 16 City Council Meeting — Budget Workshop August 24, 2010 Mayor Harycki referred to the $100,000 seal coating fund that likely won't be spent. Councilmember Polehna asked about salaries, noting that City employee' salaries are frozen. Ms. Bertalmio noted library employees are contract employees, with the contract providing 0% increase in 2010 and 2% increase in 2011; she pointed out that employees received no increase in 2008 and 2009. Mr. Hansen pointed out the library settled with its employees fairly early and at the time, it was a reasonable settlement based on the available information; he also noted that library salaries were frozen in 2008 when City salaries were not. Mayor Harycki suggested that the City add the additional $14,800 to the list of items to be funded. Councilmember Cook asked about utilizing volunteers; Ms. Bertalmio said there are many volunteers, but that volunteers can't do work that accesses a patron's records. Councilmember Cook asked about the possibility of being open additional hours but with limited services provided primarily by volunteers; Ms. Bertalmio and Board Member Dick Edstrom talked about some of the problems that would be encountered in that scenario. Councilmember Roush questioned the limits on volunteers, saying that as a volunteer with the Woodbury police department he was viewing juvenile records, crime scene photos, and other sensitive information, but he had to sign a release form. Ms. Bertalmio stated there is a lot of library law and she has always been told that only staff members can see people's records; but that she would check into the statute in question. Councilmember Polehna pointed out that background checks would have to be conducted on volunteers. A library spokesperson stated the library leans heavily on volunteers to take up the slack for unpaid staff leaves. She has heard loud and clear from the community that the library is very important and would be upset with closing more hours. There was discussion about the Sunday closing, and the reasons for that decision. There was discussion of the efforts of the Library Foundation at fund- raising and formation of the endowment fund. Mayor Harycki said he would like the $14,800 left as an open item, saying he did not like the idea of further reductions in hours. Page 9 of 16 City Council Meeting — Budget Workshop August 24, 2010 POLICE /CIVIL DEFENSE /PARKING /DARE It was noted there is a $39,000 reduction in police salaries. Chief Gannaway said he did not have an increase anywhere in his budget. There was discussion of maintenance costs and the three new vehicles that have been purchased but are not yet in service; Mayor Harycki noted the intent is to stretch the vehicle replacement schedule to four years and thereby eliminate one cycle of new vehicle purchase. It was noted the department is down 2 officers and 1 clerical from 10 years ago. Mayor Harycki asked about the issue of an alternative power source so vehicles don't have to be left running in order for the computers to work; Chief Gannaway said the County is experimenting with a new computer system, and he is considering going back to a stand -alone laptop system. On a question by Councilmember Polehna, Chief Gannaway said the department is in good shape regarding handguns, having just replaced those a couple of years ago. He said he has applied to receive free M16 rifles through the National Guard, with some retrofitting costs involved; there is a 3 -12 month waiting list. Councilmember Polehna asked about having the reserves downtown on weekends assisting with traffic. Chief Gannaway said they are down there periodically and that his direction to reserves has been to patrol the downtown area to have a police presence and assist with traffic as they notice problems. Councilmember Polehna asked about the problem properties; Chief Gannaway said other than the high profile problem properties that he, City Administrator Hansen and City Attorney Magnuson are dealing with, the routine problems are being handled by Officer Miller and there have been few complaints. There was brief discussion of the status of several of the problem properties. It was noted that the County now handles all the dispatching duties. Regarding parking, Chief Gannaway stated the Parking Commission is being very fiscally conscious; knowing a number of parking lots will need to be resurfaced in conjunction with the levee project. He said new upcoming expenditure will be the new security cameras for the parking ramp. Mayor Harycki brought up the issue of traffic feedback signs and that he thought they were effective for traffic calming, suggesting a possible location as County Road 5 before Olive Street; Chief Gannaway said if too many of the signs are used or if they are used too often, they become part of the landscape and are ignored. Page 10 of 16 City Council Meeting — Budget Workshop August 24, 2010 Mayor Harycki suggested buying one a year, perhaps from the forfeiture fund; Chief Gannaway said he would check into the cost. Mayor Harycki asked that purchase of a traffic feedback sign be put on the follow -up list; Ms. Harrison suggested signs and lighting fund would be an appropriate budget source. Councilmember Gag said he would rather see more people on the street as a priority. Chief Gannaway said he thought the signs are effective, as long as they are not overused and are placed in the right spots. Regarding the civil defense budget, Chief Gannaway said he just received a free siren from the City of Duluth. He said he would like to place that siren downtown depending on the cost. He said Chief Glaser thought Xcel might pay the cost of placing the siren on a power pole and that Washington County might help pay for the coding /programming through a Homeland Security grant. Mayor Harycki suggested asking Duluth for another siren to keep in reserve. There were no questions regarding the DARE budget. Mayor Harycki noted there is just one school involved. There was discussion about the appearance of the median on Manning Avenue; Councilmember Polehna said he has already made a call regarding the trees, which will be replaced under warranty. There was a question as to whether the City or the County is responsible for the median; Mr. Hansen said he would check with Public Works Director Sanders. CITY ATTORNEY City Attorney Magnuson reviewed the number of hours, 616, expended as part of his retainer. He said including all costs associated with the retainer, including benefits, the hourly rate amounts to $200, while his normal hourly rate is $225. He said he would like to propose a billable hourly rate of $225, as opposed to the rate of $250 approved by the Council several years ago, but be paid what is reflected in the adopted budget. He pointed out that he has been paid less than what was budgeted for the last several years. He talked about the number of hours expended prosecuting cases, primarily DWI - related offenses, stating that is nearly a full -time job for a City the size of Stillwater. Councilmember Polehna asked about the revenue and whether the administrative fines have made any difference. Mr. Magnuson talked about the limitations of such citations — limited to stop "line" violations and speeding less than 10 miles over the limit -- stating they are not money- makers but are more humane for the populace as the fines don't go on a person's driving record. Councilmember Cook asked about the possibility of imposing some type of tax on on -sale liquor, given the amount of time expended prosecuting DWI - related offenses and other downtown issues. Page 11 of 16 City Council Meeting — Budget Workshop August 24, 2010 Mayor Harycki asked Mr. Magnuson if there was any breakdown of how many DWI prosecutions are related to drinking at a downtown establishment or drinking elsewhere; Mr. Magnuson said that would be difficult to determine, but said DWIs are related to all types of family - related problems and 80% of the prosecutions are alcohol - related. Mr. Magnuson said the last time the City tried to increase the liquor license fees, there was a huge outcry from bar /restaurant owners; a tax, and would require special legislation. Mr. Magnuson said special taxing legislation has been limited to help cities deal with a specific project, such as sewer rehabilitation or construction of a sports facility. Mr. Magnuson agreed that all of the costs associated with downtown services, from police calls to prosecution to street cleanup, far exceed the cost of services to other neighborhoods. Mr. Hansen also spoke of the furor that erupted the last time the City tried to increase license fees. Regarding Mr. Magnuson's proposal, Mayor Harycki pointed out all other departments have been asked to have a 0% increase. Mr. Magnuson pointed out that the amount he is proposing was budgeted in 2009 and budgeted in 2010, so it is not an increase -- it's paying what was in the budget. Councilmember Cook said she considered this a salary and that she didn't understand why that amount wasn't paid. Mr. Hansen said the Council never passed a motion authorizing the increase in the retainer; he also noted that there is no contract in place, it is an implied contract. On a question by Councilmember Cook, Mr. Hansen stated Mr. Magnuson is paid by a City paycheck, accrues benefits and is in essence a City employee, except it is a retainer. Councilmember Gag said he thought there ought to be a contract; Mayor Harycki agreed that would make things clearer. Mr. Magnuson said he had prepared a contract previously, but that was never adopted. Councilmember Roush asked if the City gets billed for work beyond than that associated with the retainer. Mr. Magnuson said the agreement has been that criminal work, law suits, appearances before an administrative agencies, improvement projects, assessment appeals acquisition and easements, tax increment work, and annexations was billable; that type of work has essentially disappeared. Councilmember Roush suggested paying Mr. Magnuson the budgeted amount and making him a full -time employee with that salary; Mr. Magnuson noted that cities /counties with full -time employees also are paying overhead such as full - time secretaries, equipment, phones, vacation, etc., so the cost is much higher than the amount he is paid /proposing. Page 12 of 16 City Council Meeting — Budget Workshop August 24, 2010 Councilmember Cook pointed out that a city such as Red Wing contracts with a firm at a cost of $60,000- $80,000. Councilmember Cook suggested the current arrangement is very unique and will likely need to be changed at some point in the future. There was discussion as to Mr. Magnuson's possible retirement date and assistance with a transition period; there was discussion of hiring a large firm and situations that could arise, and Mr. Magnuson suggested it will be a challenge to find the right fit. Councilmember Cook suggested that if this was like any other department budget, the Council would be directing that ways be found to lower the budget by 10 %, perhaps by limiting staff access to Mr. Magnuson's time. Councilmember Cook pointed out that this is not just one legal cost, as the City utilizes an outside lawyer for labor issues, bond issues, etc. Mayor Harycki suggested that for 2011, the question is going with the actual or with the requested amount for the retainer. Councilmember Cook asked if there is any reduction this year; Mr. Magnuson said in 2008, all other services and charges were eliminated and prosecution was cut by $10,000. Councilmember Gag asked about the contract; Mr. Magnuson said he would distribute that for everyone to look at. Councilmember Polehna asked whether revenues would be shown. Mayor Harycki asked whether the contract would be with Magnuson Law Firm or with Mr. Magnuson, himself; Mr. Magnuson said that wouldn't matter as he is the owner. In discussion, it was noted that the requested amount has been budgeted since 2009, but never authorized by Council resolution. Councilmember Roush asked for Mr. Hansen's recommendation; Mr. Hansen said he would have no problem paying Mr. Magnuson the budgeted amount of $101,585. There was discussion as to whether the City would benefit for the lower billable rate proposed, $225 as opposed to $250, or whether developers would see most of the benefit. Mr. Magnuson said the City would benefit from the lower rate in TIF- related work, easement/condemnation and other such actions. There was discussion of what a retainer entails. Page 13 of 16 City Council Meeting — Budget Workshop August 24, 2010 Mayor Harycki said even though this would be a very modest increase, $3,000, he expressed concern that all other employee groups are being asked to accept a zero increase. Councilmember Gag suggested that the Council go through the list of remaining items before making this decision. • Bonds on the Recreation Center — Ms. Harrison said the first bond would be retired in 2018 and the other in 2020. It was noted a nearby TIF bond expires in 2013, and TIF district expires in 2012, with tax revenues coming into the City. • Park fees — Councilmember Polehna said the Parks Commission will be looking at all fees. He said currently the City is about average in its fees. City Administrator Hansen suggested that the Council /Parks Commission not make a reactionary decision at this time as any increase won't generate a lot of revenue. • Capital outlay items for parks — Councilmember Polehna stated the Parks Commission just approved all the capital equipment and park improvements using carryover funds. He said the Commission also asked staff to put together a 5 -year capital improvement/maintenance plan for parks. City Administrator Hansen noted that since the City is not selling a capital bond issue this year, this has no direct bearing on the budget; he said he will be coming back with the individual requests for purchases using carryover funds. • Beautification fund — Ms. Harrison said that request is $15,000. • $1 storm sewer rate increase — Ms. Harrison estimated that increase would generate about $40,000. Councilmember Polehna talked about the new requirements for sweeping streets that required the purchase of a new sweeper. The increased revenue, he said could be used to do a lake improvement fund. Councilmember Roush said such an increase wouldn't be a hidden fee; it would be getting reimbursed for an actual expense. He asked for the Council's support with Lake McKusick clean up and budgeting. There was discussion of possible water improvement projects that might be funded. • Traffic feedback signs • Library, seal coat and fire truck • City Attorney retainer City Administrator Hansen said since last week, he has tried to find additional funds and that he and Ms. Harrison came up with $6,100. He noted that at this point, the budget is about $36,000 below last year's budget, so if the desire is for a flat budget, there is that money. It was noted that additional money, about Page 14 of 16 City Council Meeting — Budget Workshop August 24, 2010 $2,000, had been eliminated from the mayor /council budget earlier in the meeting. Regarding the library budget, Mr. Hansen suggested certain book purchases are discretionary and suggested the library could find additional reductions other than reducing hours. Mayor Harycki noted there are $100,000 in seal coating and the potential $30,000 in rental from the houses on the armory property that isn't included in the budget yet. Excluding the fire truck and leaving the seal coat money, Mayor Harycki noted the requests for the library, and traffic feedback sign and beautification total $34,000, of which $30,000 will be available in the rental income. It was noted that rental income will be less as the City has to pay property taxes on the parcels, as well as maintenance costs, so the income will likely amount to $20,000. There was discussion about the $100,000 in seal coating and whether to leave that in the Public Works budget for future years when funding for streets will be difficult; it was consensus to leave that as is for the time being. It was noted that with the $20,000 in rental income and the additional $8,000 (Mr. Hansen's $6,000 and the $2,000 cut earlier in the meeting), there is $28,000 available. There was additional discussion regarding the library request. Mayor Harycki noted there will be about $4,000 additional revenue rental income for 2010 that is not accounted for. Mr. Hansen pointed out that the budget is predicated on the City receiving no Local Government Aid and no Market Value Homestead Credit reimbursement, but there is still the potential for $550,000 in additional state revenues that could still be cut. Mr. Hansen said between now and the end of the year, he will put together a contingency plan with additional cuts and a reorganization plan. Mr. Hansen stated that if the Council wants to fund the items in question, it should do so now, because after September 7, the budget can only go down. There was discussion of the beautification fund request. Councilmember Roush suggested reopening the Lumberjack Days contract negotiation based on public safety, citing inadequate liability insurance coverage as a reason, and eliminates funding for fireworks; it was noted that is for 4 th of July fireworks. Councilmember Roush said the contract states the funding is for both 4 th of July and Lumberjack Days. Councilmember Gag suggested getting an amount the Council is comfortable with and then see if it can be reduced. On a question by Mayor Harycki, Ms. Harrison said the levy, excluding the items in question and including the armory levy, is $10,158,367; last year's levy was Page 15 of 16 City Council Meeting — Budget Workshop August 24, 2010 $10,110,190. Mayor Harycki pointed out there is about $32,000 in reductions /revenue that is not reflected in the levy figure. Ms. Harrison pointed out there is a line item for contingency which could be used to fund the $2,000 shortfall for the extra items — $15,000 for beautification, $14,800 for the library and $5,000 for a traffic feedback sign. Mayor Harycki asked whether City crews would water the plants if the City expends the $15,000 for beautification; there was continued discussion about this fee. Councilmember Cook noted that she is opposed to the armory and voted no on the project and wondered whether she could support the budget in general but vote no because the levy includes the armory project. Councilmembers Polehna and Gag pointed out there are elements of the budget they oppose but will not vote against the overall budget. City Attorney Magnuson and Mr. Hansen suggested that Councilmember Cook could explain her vote, that she supports the overall budget but are opposed to the armory. Ms. Harrison noted the levy does not have to be adopted until September 7. She summed up the decisions made at the meeting: adopt the levy of $10,158,367 and fund the three extra items ($15,000 beautification, $14,801 for library and $5,000 for a traffic feedback sign) using $8,000 in the budget savings /reductions found since the last meeting, $20,000 in rental income in 2011 and $4,000 rental income from 2010 and $2,000 from the contingency line item. Councilmember Roush asked about tax rates and impact on property taxes and whether the adopted levy would be a tax increase or a tax decrease. Mr. Hansen suggested that if someone is writing a check for less money, it amounts to ,a tax decrease. Motion by Councilmember Gag, seconded by Councilmembe ok to adjourn the f meeting at 9:25 p.m. All in favor. _ r n Harycki, Mayor ATTEST: 44M") r� V�� / Larry D. Han , City Administrator Page 16 of 16