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HomeMy WebLinkAboutItem 04.aMemorandum To: Mayor and City Council From: Steve Mielke, City Administrator Dennis Feller, Finance Director Date: November 12, 2013 Subject: Preliminary Tax Levy- Proposed Revisions ITEM 4.a City of Lakeville The City Council expressed interest at the September 9 work session and the September 16 Council meeting in reviewing potential further reductions in the preliminary 2014 tax levy. Staff is providing the following list of tax levy revisions for Council consideration. A summary of the revisions is shown at the end of the memorandum. A. Contingency (health insurance). The City Council, at its November 4 meeting, approved the 2014 employee health insurance rates. As such, the General Fund Contingency account can be reduced by ($39,760). B. Police Department: Lexipol risk management program. The proposed 2014 budget include appropriations ($8,950) for the Lexipol risk management program to assist with training police officers and identification of risk management issues. The Police Department has implemented a regular in -house risk management training initiatives and therefore is recommending removal of the Lexipol program. C. Liability Insurance premiums. The preliminary budget provided $83,463 of appropriations in anticipation of liability insurance premium increases. LMCIT 2014 unanticipated rebates ($21,808) can be appropriated to reduction of the premium increases. D. Heritage Center - capital outlay. The preliminary 2014 General Fund budget included appropriations ($24,263) for capital outlay items to enhance the revenue opportunities for the facility. The dishwasher will be replaced in 2013 and financed with increased operating revenues in order to efficiently comply with Minnesota Department of Health regulations. Based on the experiences of the first full year of operation, 50 chairs and 15 tables are needed to accommodate facility rental opportunities; therefore the acquisition will be financed from the decreased expenditures and increased revenues. All other capital items will either not be purchased or financed with donations. E. Heritage Center - operations (net). Revenues from facility rentals, memberships and punch cards continue to exceed budget estimates. The preliminary budget for Recreation and Heritage Center as well as the tax levy can be reduced by $3,565. An overview of Recreation and Heritage Center programs is discussed in the attached memorandum (Exhibit A) F. Street Department: round -about landscaping. Staff is recommending the budget be amended to provide appropriations for contract landscape maintenance of the newly constructed round -about at Dodd Blvd /Highview Avenue and 205th /Kenrick Avenue. The financing would be derived from the tax levy reductions shown above. G. Parks Maintenance. The proposed budget and tax levy included appropriations for Tree Trust labor ($1,500), materials for Tree Trust and Eagle Scout projects ($10,000), floor replacements at the Parkview warming house ($5,700) and tree plantings ($12,000). Staff is recommending these items be added back to the budget and financed with expenditure reductions noted above. A discussion of the community benefits of each of these projects is provided in the attached memo (Exhibit B) from John Hennen. H. Transfer from Communications Fund. Authorize the transfer of $55,000 from the Communications Fund to finance the 2014 election process. This is a one -time tax levy reduction as there are no elections in 2015. A summary of revisions to be considered is shown below; a list of tax priorities is attached as Exhibit C Total Expenditure reductions A Contingency (health insurance) (39,760) B Police - Lexipol risk management (8,950) C Insurance premium increase (21,808) D Heritage Center - capital outlay (delete) (24,263) E Heritage Center - operations (net) (3,565) (98,346) Expenditure additions F Street Dept: Round -about landscaping 1,870 G Parks - Tree Trust /Eagle Scout projects materials 10,000 G Parks - Tree Trust labor 1,500 G Parks - floor replacements 5,700 G Tree Plantings 12,000 31,070 Revenue Enhancements H Transfer from the Communications Fund (55,000) Net changes in tax levy (122,276) Preliminary 2014Tax Levy $ 23,984,269 Proposed Revised Tax Levy $ 23,861,993 Memorandum EXHIBIT A City of Lakeville Parks & Recreation To: Honorable Mayor and Members of the City Council Steve C. Mielke, City Administrator Brett Altergott, Parks & Recreation Director Dennis Feller, Finance Director From: John Hennen, Park Maintenance & Operations Mgr Copy: Mark Kruse, Parks Supervisor Date: October 31, 2013 Subject: Park Major Maintenance items removed from 2014 -15 Budget The City Council, at its September 16th meeting, approved a $23.9 million dollar preliminary 2014 tax levy. As part of the approval, there was a list of programs as part of the budget proposal which were considered but not added to the budget which included 14 Park Maintenance line item projects. Staff realizes it is a challenge for the Mayor and City Council to determine which programs shall be considered as part of the budget and which shall not. However, staff felt it was necessary to share with you the ramifications of a few of the Park Major Maintenance items noted below that did not get approved as part of the preliminary 2014 tax levy. 1. Tree Trust / Eagle Scout projects - $10,000 Since 2007, 45 park related projects have been completed by individual Boy Scouts to fulfill obligations to achieve the status of becoming an Eagle Scout. Some examples of the projects the scouts completed are as follows: • Paint /staining of buildings and shelters throughout the system • Construction of volleyball courts including installation of timber borders • Relocation of horseshoe pits including installation of timber borders • Installation of modular block planter beds around park identification signs • Construction and installation of portable restroom enclosures • Removal of Buckthorn • Construction of concrete slab for motorcycle parking • Construction of concrete slab extensions at dugouts • Tear off and re- shingling of shelters • Concrete installation of sleeves at disc golf course • Construction of planting gardens at Veterans Memorial site • Reconditioning of warming houses • Removal of undesirable vegetation /installation of wood chips on nature trails • Installation of a tree nursery including planting of 150 trees at the CMF Since 1986, the City has contracted with Tree Trust to complete projects such as modular block wall construction, Land of Amazement (playground) staining, replacement of deteriorating block wall and capstone, renovation of exterior of warming house and construction of boardwalk over wetland to name a few. These types of projects, along with numerous others, provide significant improvements and enhancements to the park system with minimal labor costs that would not have been completed at all or in a timely fashion by staff without the work of the scouts and Tree Trust. 2. Tree Trust Contract Labor - $1,500 As noted above, Tree Trust completes meaningful projects in our Parks system. $1,500 would provide a crew to work 4.5 weeks on a project during the summer. 3. Parkview Warming House Replacement - $5,700 As part of the $12,700 line item, repairs are proposed for the Parkview warming house to repair the sunken floor on the north side of the building, along with the installation of new carpet at a total cost of $5,700. Staff believes the sunken floor is a potential safety hazard. 4. Tree Plantings - $12,000 Drought conditions have occurred over the last three summers which resulted in the death of numerous trees in our system which necessitates the need for tree replacement. Also a storm last summer destroyed approximately 85 trees many of which still need replacement. Staff would also like to systematically remove and replace poor Ash trees in our system in preparation for the presence of the Emerald Ash Borer. Sentence to Service (STS) Contract Labor The Mayor and Council also indicated that there are additional budget line items which they may consider deleting from the tax levy prioritization list to further reduce the 2014 tax levy. The next item on the priority list as presented is the Sentence to Service (STS) agreement at a cost of $20,000. Since 1992, the City has utilized STS work crews annually through a contract with Dakota County. During 2012 alone, STS contract crews worked 49 days, averaged nine crew members per day and logged 2,647 work hours which equated to $6.75 per work hour. These crews complete a variety of park and City projects such as: • Installation of drain tile in playground areas • Kenwood Trail Disc Golf Course clearing /grubbing /construction • Push mowing athletic decks during excessive wet periods • Re- fluffing of all fibar in playgrounds to meet ADA requirements • Pick up of debris /trash throughout the entire park system • Scraping and painting of ice rink hockey boards • Raking and maintaining tee boxes at disc golf course • Beach retaining wall repairs • Fibar installation in playground areas • Weed -whip and spread wood chips on nature trails • Weed -whip in parks and on boulevards Because of the cost effectiveness of Sentence to Serve labor, staff does not recommend reductions in the program. Overview Staff has provided you examples of essential services and projects that the STS crews, Eagle Scouts and Tree Trust provides that our department does not have the time or personnel dollars to complete. The cost of labor for the City for these groups is minimal to nothing compared to what the City receives for their efforts. Eliminating these line items from the budget will be noticeable in our park system and will create service level impacts for the users that all parties need to be aware of. JLH:j1 • Complete planting projects • Paint soccer goal posts • Power wash all beach buoys • Weeding and maintenance of rain gardens • Buckthorn and Willow removal • Landscape bed maintenance (mulch installation and weeding) Memorandum To: Honorable Mayor and Members of the City Council Steve C. Mielke, City Administrator From: Brett Altergott, Parks & Recreation Director Dennis Feller, Finance Director Date: October 24, 2013 Subject: Heritage Center Operations Financing Capital Outlay - reductions Operations (net) Subsidy. EXHIBIT B City of Lakeville Parks & Recreation The preliminary 2014 General Fund budget included appropriations ($24,263) for capital outlay items to enhance the revenue opportunities for the facility. The existing dishwasher at the Heritage Center was from the former Senior Center facility. The dishwasher must maintain certain temperature levels in order to comply with Minnesota Department of Health regulations. The existing equipment must be run 5 -6 times in order to meet health regulations. Staff considered various repair options such installing a booster heater. Therefore, in order to meet health regulations and cost effectively manage facility operations, the equipment will be replaced in 2013 with financed provided from increased operating revenues. There have been several events at the Heritage Center where the number of attendees has required the transporting of tables and chairs from other facilities. The proposed acquisition of 50 chairs and 15 tables will enable the facility to more efficiently accommodate large events and are needed to accommodate facility rental opportunities; therefore the acquisition will be financed from the increased 2013 revenues and reduced operating expenses. All other capital items proposed in preliminary budget, such as coffee maker, will either not be purchased or financed with donations. When the City Council approved the Heritage Center project in the spring of 2012, it was with the understanding there would be no increase in tax payer subsidy. As such the 2013 budget included a net operating subsidy - for Heritage Center, Senior Programming, Historical Society and Yellow Ribbon combined - of $183,520 consistent with previous budgets and council directives. In order to achieve the net operating subsidy objective, fund raising was required of approximately $4,000. The net proceeds of the Metro Dining Cards fund raising effort are adequate and sufficient to meet that objective. All other fund raising activities (i.e. waffle breakfast, golf outing, bazaar) is therefore committed to reducing the construction project financing obligations. Revenues from facility rentals, memberships and punch cards continue to exceed budget estimates. The preliminary budget Heritage Center as well as the tax levy can be reduced by $3,565. 2014 Budget Preliminary Adjust Revised Revenues Rentals 8,150 1,565 9,715 Punchcards 5,300 200 5,500 Memberships 19,000 1,800 20,800 The 2014 operating subsidy remains at approximately $183,520 consistent with previous years and council directives.