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HomeMy WebLinkAbout09-09-13 WSCITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES September 9, 2013 Mayor Little called the meeting to order at 6:30 p.m. in the Marion Conference Room at City Hall. Members Present: Council Members Swecker, LaBeau, Anderson, and Davis, and Mayor Little Staff Present: Steve Mielke, City Administrator; Dennis Feller, Finance Director; David Olson, Community and Economic Development Director; Chris Petree, Public Works Director; Daryl Morey, Planning Director; Mike Meyer, Fire Chief; Tom Vonhof, Police Chief, Captain Tim Knutson; Julie Werner, Accountant; Tom Nesseth, Accountant; and Judi Hawkins, Deputy City Clerk Mayor Little asked Council members if they could plan for an earlier start time for the October work session to allow him to accept a speaking engagement. Council members agreed to begin at 5:00 p.m. on October 28, 2013. 2. Citizen Comments There were no citizen comments. 3. Foundation of Proposed Budget Steve Mielke provided an overview of the budget foundations and process and asked Council to focus on providing direction to staff with the ultimate goal of adopting a preliminary budget on September 16 Swecker asked what has changed from the 2014 proposed budget which had been adopted one year ago. Mielke stated that the proposed 2014 budget had projected a 4.7% increase. Feller indicated the estimated 2014 levy in the 2013 budget was $24,166,598 compared to the current proposed levy of $24,072,104. Dennis Feller stated that there are several management principles and policies on which the budget and tax levy are established. The State Auditor recommends a fund balance of between 35% and 50% of expenditures; this budget is premised on a 40% fund balance. The excess fund balance over 40% can be used for long term budget cuts and keeping the budget stable, with modest increases. Dropping the fund balance below 40% could have a negative effect on the City's credit rating. The long -term budget strategy is to use one -time revenues, unencumbered fund balance and the liquor fund contributions, over the projected five year City Council Work Session September 9, 2013 Page -2- period, to help maintain tax stability and avoid gyrations and significant increases. Staff will discuss long -term methods to protect the City if levy limits are re- imposed. Options for use of the unencumbered fund balance could include appropriating it to the acquisition of equipment in order to lower taxes. Liquor Fund balances could also be appropriated for equipment acquisition or could be invested in the Liquor Building Fund in preparation for Store #4. This would result in lower debt, greater debt -to- equity ratio, and greater liquor profits. Asset management: Efforts to extend the useful life of vehicles or equipment can result in costly repairs and maintenance. Staff recommends following the equipment replacement schedule to avoid repair expenses on equipment which is past is useful life. Equipment acquisition is currently financed on a pay -as- you -go method. Other options include issuing debt or leasing the equipment, neither of which staff recommends. Swecker asked if the City leases any technology equipment. Feller stated that he would recommend issuing GO debt above leasing. Staff recommends following the park playground equipment replacement schedule. LaBeau asked if the life expectancy of today's equipment is longer than equipment which was installed years ago. Major maintenance of City facilities is a recurring expenditure which is spread over the next five years. Mielke added that staff will work to establish a funding policy on financing major trail maintenance. 4. Personnel (New) At their August 28 1 work session, Council requested additional information on the new employee positions being proposed, which was provided within the materials for this meeting. New positions being requested for 2014 include a Forester, financed with environmental fees; Engineering Tech, financed through user fees; part time Code Enforcement Officer, financed with user fees; and one Police CSO (reduced from two), a Police Investigator and a Street Fleet Supervisor financed with property taxes. Proposed 2015 positions, all financed with property taxes, include a Police Officer and an Assistant Fire Chief. LaBeau believes there has been an uptick or "bubble" of building permits because of the bank mitigated properties and if inflation goes up and building slows down, there is a possibility that the Engineering Tech will no longer be needed. Mielke stated that this position will focus on the Street Reconstruction program and will be funded by the fees for those projects, and not from development projects. LaBeau asked if the Forester position City Council Work Session September 9, 2013 Page -3- could be contracted or shared with neighboring communities. Petree stated that Lakeville's neighboring communities have their own foresters and with the amount of community and urban forest in Lakeville, a forester would stay busy. The previous forester was a park maintenance employee and was not replaced after his retirement. Several hundred residents make forestry- related inquiries each year, and this will certainly increase when the Emerald Ash Borer reaches this area. Currently only trees on public or park property are taken care of by the City, and there are no site visits available for residents. Mielke suggested that additional information regarding a contracted position could be provided to Council for further discussion. Petree added that contractual forestry services are currently being utilized and funded through other projects. Anderson and Davis both indicated that they would like to be made aware of what the implications would be if the various positions are not filled. Mielke used the Engineering Tech as an example and stated that staff believes the position which is currently contracted could be done more cost effectively by a regular employee who could be available for a variety of projects. Anderson asked about funding for the Code Enforcement position. Mielke stated that although this position relieves the building inspectors of some duties, the position is actually supervised by the Planning Dept. Filling this position would free up building inspectors' time for their regular duties. Little asked what training is required for code enforcement. Morey stated that this would likely be an entry level position and the most need is spring through fall. Annual internships would lack continuity and would require further annual training. This position could also assist with some environmental duties and police issues such as long grass /weeds and junk cars. Captain Knutson stated that the police spend 10 -15 hours per week on code enforcement, so adding this position would also allow extra time for patrol and other police duties. Olson agreed that there could be a possibility of this being a part-time position, with more hours in the summer. Knutson stated that the presence of a uniformed officer at the boat launch and in Antlers Park helps alleviate crowd and traffic control issues and is more cost effective than a regular officer. Reserve officers are volunteers and are responsible for a variety of duties, and are not always available. Swecker asked about Dakota County's responsibility; Mielke stated that the Sheriffs Dept. is in control on the lake, but not at the boat launch. Little asked about the Police Investigator position. Knutson stated that there has been a workload increase of 1200% in one year due to forensics examination of digital evidence. This new position would be trained in -house over time. Anderson asked if all the officers City Council Work Session September 9, 2013 Page -4- are becoming more technologically competent. Knutson stated that they are all trained in evidence recognition and collection; however, this is very specialized training and equipment. Knutson believes the backload of cases would grow and service levels would decrease if this position is not filled. This position could be promotion of a patrol officer from within, which would create an opening for that position. A new patrol officer position is proposed in 2015. Petree discussed the addition of a Street Fleet Supervisor which would oversee maintenance and inventory of all vehicles in the City's fleet including police and fire as well as streets, parks, etc., and would increase efficiencies of the division. There are currently five mechanic positions, one of which is a lead. Fleet staff currently work 50 -55 hours per week to keep up with the work load. Davis asked if a it would be more cost effective to create an entry level position instead. Mielke stated that this could possibly be a promotion opportunity with the lower grade level being filled later. LaBeau asked if any consideration had been given to having some services contracted out, such as oil changes. Petree stated that this was analyzed at one time but was determined not to be cost effective. 5. Equipment In response to Council's request for additional information on proposed equipment acquisitions the Finance Director provided the 2014 -2018 CIP. Feller stated that equipment is financed primarily with property taxes, sale of assets, unencumbered balances, and liquor fund transfers. Slight tax levy increases each year avoid severe peaks and valleys. Staff is recommending a $100,000 transfer from the equipment fund be reapplied to the debt service for the police station. The revised budget includes police squad car video cameras but does not appropriate funds in 2014. Anderson asked what the implications are if the proposed equipment is not purchased. Feller stated that there is a higher probability of breakdowns which are more costly to repair, in addition to an important piece of equipment, such as a snowplow, not being available to provide services. Petree added that the replacement schedule was extended from 10 years to 12 years the life expectancy also depends on how many miles are put on the equipment and how it is used. There are no excess employees or equipment, so the use and maintenance is closely monitored. Petree added that reconstruction of the existing deteriorating miles of street will have a positive impact on the equipment's life. Swecker commended staff on the work that has been done in holding down requests for new and replacement equipment, working efficiently and asking only for what is needed. City Council Work Session September 9, 2013 Page -5- 6. Program Adds List Mielke stated that based on Council's direction at the last budget work session, staff took the line item descriptions and restated them as program adds. This was done to clarify and prioritize adjustments into specific program areas. Swecker stated that she is not comfortable with the Heritage Center capital outlay. Little asked for a review of employee compensation benefit allowances. Feller stated that this line allows for employees who have reached the top of their scale to receive a cost of living increase, plus a percentage for health and dental insurance premiums. LaBeau asked about a bonus system rather than a percentage across the board; Mielke stated that bonuses are not allowed in the public sector. Mielke added that the organizational structure is reviewed when there are openings to determine if adjustments could be made. 7. School District 2014 Tax Levies ISD 194 and ISD 196 will be holding levy referendums this fall. Information in the packets discusses the levy elections. 2014 regular tax levy information is not yet available until the school districts receive their final state aid allocations or levy instructions from the MN Depts. of Revenue and Education. 8. Staff Recommendations Mielke stated that with the adjustments and items removed from the budget, the proposed 5.5% has been brought down to 4.3 %, a 1.2% decrease. The 4.3% adjusts for the growth that will require additional resources, approves the new positions, and accommodates inflation. The effective increase of a 2.1% levy increase will be spread across the entire tax base, with the remainder being absorbed by new growth. Of the 2.1 %, 1.2% funds the street reconstruction costs and .9% funds general operations. Individual properties will experience various tax increases or decreases based on their market values. For a median valued home of $225,000 this will result in an increase of $35 in the City portion of the tax bill. 9. Future Agendas Council received draft agendas for September 23, 2013 and October 28, 2013 work sessions. 10. Council Direction Little reiterated that the tax levy adopted on September 16 is the preliminary tax levy and Council can continue to consider additional downward adjustments in the coming months. The Truth in Taxation public hearing will be held in mid - December and the public will have an opportunity to express their opinions at that time. Anderson commented on the amount of growth in the employee compensation and believes the total levy should be kept below City Council Work Session September 9, 2013 Page -6- 4 %. Swecker and Davis agreed that 3.9% would be more acceptable. Mielke stated that the difference between 4.3% and 3.9% is approximately $125,000. Council's consensus was to adopt a maximum 2014 preliminary tax levy and General Fund budget of no more than a 3.9% increase. Staff will prepare the necessary resolutions for the September 16, 2013 meeting. 11. Adjourn Mayor Little adjourned the meeting at 9:00 p.m. Respectfully submitted, Ju i awkins, Deputy Clerk W .Iie, Mayor I;F