HomeMy WebLinkAboutItem 04.bMemorandum
To: Mayor and City Council
From: Steve Mielke, City Administrator
Dennis Feller, Finance Director
Date: November 12, 2013
Subject: 2014 Preliminary Budget - proposed revisions
Staff is proposing the following changes to the preliminary 2014 budget as shown below.
General Fund
Item 4. b
City of Lakeville
A. Property Taxes. The City Council has indicated a desire to reduce the property tax
levy. A discussion of the potential property tax levy adjustments are provided in the
previous agenda item. If approved by the City Council, the tax levy would be reduced
by $122,276. The corresponding expenditure reductions and /or revenue
enhancements are shown below.
B. Transfers 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.
C. Fire Department - Target Solutions. The 2014 Fire Department provide
appropriations for Target Solutions ($4,000) which is a web based system that
provides a wide range of firefighting training such as Hazmat, pumping operations,
operating guidelines, and medical response. The objective is to increase training
hours as noted in the ISO rating while enabling the fire fighter to establish their
training schedule based on their availability. The actual cost of the training is $8,380;
the increased cost ($4,380) will be financed with revenues received from the
Minnesota Board of Firefighting Training and Education (MBFTE).
D. 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 and provided with
the previous agenda item related to property tax adjustments. The net adjustment
also takes into consideration an adjustment for fund raising with a $24,263 reduction
in revenues and a corresponding decrease of expenditures.
E. 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.
F. Liability Insurance premiums. The preliminary budget provided $83,463 of
appropriations in anticipation of liability insurance premium increases. LMCIT 2014
rebates can be appropriated to reduction ($21,808) of the premium increases.
G. 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 other expenditure reductions such as
Contingency as noted below.
H. 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.
I. 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. The 50 chairs and 15 tables are needed to
accommodate facility rental opportunities; therefore, the acquisition will be financed
from the increased 2013 revenues. All other capital items will either not be purchased
or financed with donations.
J. 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.
A summary of proposed 2014 General Fund budget adjustments as discussed above is
shown below.
General Fund
Proposed
2014
Budget
Revisions
Revenues
A Property Taxes (122,276)
B Transfer from Communication Fund 55,000
C MN Board of Firefighter Education and Training 4,380
D Heritage Center (Fundraising,rentals,advertisir (20,140)
Total revenue adjustments (83,036)
Expenditures
E Police Dept: Lexipol (delete) (8,950)
F Insurance (21,808)
G Streets Dept: Landscaping for roundabout 1,870
C Fire: Training solutions 4,380
H Parks: Tree Trust /scouts materials 10,000
H Parks: Tree Trust labor 1,500
H Parks: warming house floor replacements 5,700
H Parks: Tree plantings 12,000
D Heritage Center: operating exp (23,705)
D,I Heritage Center: Capital outlay (24,263)
J Contingency (Health) (39,760)
Total expenditure adjustments (83,036)
Net Change in Fund Balance
Communications Fund
K. Transfers from Communications Fund. Authorize the transfer of $55,000 from the
Communications Fund to finance the 2014 election process. The transfer is a one-
time tax levy reduction as there are no elections in 2015.
L. Community Survey. The Communications Fund appropriated $20,000 for the
community survey. The survey is proposed to be removed from the 2014 budget for
possible inclusion in future budgets. Refer to Exhibit A - memorandum from Allyn
Kuennen, Administrative Services Manager
Communicaitons Fund
Revenues
K. Transfers to General Fund
Capital Projects Fund
Proposed
2014
Budget
Revisions
(55, 000)
Expenditures
L. Community Survey (20,000)
Net Change in Fund Balance (35,000)
M. Equipment Fund - Servers. The Preliminary 2014 Equipment Fund budget provided
appropriations ($218,828). Recently, several of the servers scheduled for replacement
were having very significant performance issues, including those dedicated for Police
and Liquor Departments. HP assisted with the diagnostics and determined that the
systems were at high risk of failure. Due to the high importance of the servers, the
purchase was placed to replace immediately rather than risk failure in the coming
months. The actual cost was $157,817 (almost $61,000 less than budget).
N. Equipment Fund - Squad video cameras. The squad video cameras were initially
removed from the preliminary 2014 budget. The videos camera is a risk management
tool which is proposed to be re- instated with financing derived from the reduced cost
of server replacement project, elimination of the voice activated dictation system and
existing fund balances.
0. Municipal State Aid Fund - Dakota County has increased their cost estimates for
both the County Road 50/ County Road 60 improvements and round - about, and Dodd
Blvd County Road 70 to County Road 46/2. The City share of costs will be financed
with Municipal State Aid funds.
P. Improvement Construction Fund. The 2014 Street Reconstruction project has been
increased by $977,283 consistent with the feasibility report. The project costs are
financed with the issuance of general obligation improvement bonds of which 60% is
repaid with property taxes and 40% repaid with special assessments to benefitted
properties.
Q. Pavement Management. Dakota County repairs the storm sewer appurtances
adjacent to county roads. Cities are responsible for a portion of the storm sewer
repairs. The proposed budget amendment for storm sewer repairs is based on
maintenance projects contemplated by Dakota County for the coming year.
R. Water Trunk Fund. Water system improvements such as water tower construction
are proposed to be advanced one year to meet service demands. The improvements
will be financed with a Water Revenue Bond which is repaid with water connection
fees.
A summary of the proposed 2014 Capital Project Fund adjustments is as follows:
Capital Projects Funds
Proposed
2014
Budget
Revisions
Equipment Fund
Expenditures
M Server replacement (218,828)
N Police Squad video system 175,000
Municipal State Aid Fund
Revenues
O MSA Advance 943,000
Expenditures
O CSAH 50/60 Roundabout and Expansion 1,155,600
O Dodd Blvd: CSAH 70 to CSAH 46/2 13,800
Improvement Construction
Revenues
P Debt issuance 977,283
Expenditures
P 2014 Street Reconstruction 977,283
Pavement Management
Q County Road Utility Improvements 25,000
Water Trunk Fund
Revenues
R Debt Issuance
9,000,000
Expenditures
R Well site acquisition 160,000
R Water Tower Land acquisition 100,000
R Water Tower Engineering and design 300,000
R WTF Improvements - Chemical storage /feed equip 90,000
R WTF Improvements - 600 HP High Service Pump 450,000
R WTF Improvements - Backwash Pump 171,000
R WTF Improvements - Backwash Air Blower 126,000
Total expenditures 1,397,000
Park Dedication Fund
The Preliminary 2014 Budget did not include the Park Dedication Fund. Staff is
recommending City Council approval of the Park Dedication Fund as shown below:
Park Dedication Fund
Statement of Revenue, Expenditures
and Changes in Fund Balance
2014
Revenues
Park Development Fees 1,130,240
Valley Park antenna 20,260
Dakota County - Trails 80,685
Escrows 9,948
Donations /Other 50,000
Total Revenues $ 1,291,133
Expenditures
Parks
King Park
Pave parking lot
New playground
Summerlyn Park
Aronson parking lot safety netting
Veteran Memorial irrigation
Trails
Dodd: 208th to Hwy 50
Northcreek Greenway Trail
Planning and design
Developers Credit
Total Expenditures
Net Increase /(Decrease)
Fund Balance, Jan 1
Fund Balance, Dec 31
255,000
150,000
32,500
40,000
12,000
146,700
100,000
20,000
339,000
1,095,200
195,933
921,960
$ 1,117,893
Proposed park construction projects for the coming year include King Park parking lot
($225,000) and playground ($150,000) as well as Summerlyn Park ($32,500). Safety netting is
proposed for Aronson Park parking lot to reduce the risk of injury and property damage as
well as irrigation at the Veterans Memorial.
The County is anticipated to complete the trail adjacent to Dodd Boulevard from 208th Street
to Highway 50; the net cost to the City is approximately $66,000. Dakota County will use
federal funding to construct a trail adjacent to the Northcreek Greenway. In order for the
project to proceed, the City is required to finance the design ($100,000) in 2014 and
construction administration in 2015.
Enterprise Funds
S. Servers Replacement. As stated in the Equipment Fund section above, recently,
several of the servers scheduled for replacement were having very significant
performance which necessitated immediate replacement. The Utility and Liquor
Funds are each responsible for $8,400.
T. Water main replacement and sanitary sewer repairs. The water main project to be
replaced in conjunction with the 2014 Street Reconstruction project increased by
$705,803 as a result of the corrosive soils discovered at the project area. The costs will
be financed with the issuance of water revenue bonds which will be repaid with utility
fees.
Enterprise Funds
Proposed
2014
Budget
Revisions
Utility Fund
S Server replacement (8,400)
T Watermain replacement (2014 Street Reconstruction) 705,803
T Sanitary sewer rehabilitation (2014 Street Reconstruction) (90,370)
Total Utility Fund 607,033
Liquor Fund
S Server replacement in 2013 (8,400)
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30
31
Prioritization of Budget Additions Supported by Property Taxes
Proposed 2014 Tax Levy
2013 Tax Levy
As of 11/12/2013
(Subject to future review)
1
Adjust
% incr Adjust
Cumulative / (dec) For
Total of 2013 Growth
23,079,185
- 2.2%
Legislative Mandates
(30,478)
23,048,707 -0.1% -2.3%
Debt Management
23,400
23,072,107 0.0% -2.2%
Infrastructure Improvements
253,101
23,325,208 1.1% -1.1%
Other
Street Light replacement - Kenrick Avenue
Street light replacement from Street Light Fund - to be financed with a $1.34/yr.
per residential unit increase in Street light fee (2yr amortization)
(30,800) 23,294,408 0.9% -1.3%
Services Levels and growth
Revenues and other sources
Line item adjustments
Existing personnel - hired between 2008 - 2012 : step
increases
Legal Services (increase in cost)
Chaplaincy Program expenses
Active 911 (New)(Efficiency improvement)
Increase volunteer firefighter pay per call
(233,559)
(245,302)
3,170
2,550
1,237
12,927
23,060, 849
22, 815, 547
- 0.1%
- 1.1%
- 2.3%
- 3.3%
33,684 22,849,231 -1.0% -3.2%
134,820 22,984,051 -0.4% -2.6%
Existing personel - hired for partial year 2013 - full year 2014
Contractual compensation increases or increases approved
23,044,797 -0.1% -2.3%
by Resolution 60,746
JPA's (DCC, MAAG, Domestic Preparedness) 14,335 23,059,132 -0.1% -2.3%
Rookie volunteer firefighters (5)- replace those that have
resigned and /or retired
Commodity adjustments (Price & Quantity)
Motor Fuels 13,577
Salt 34,620 48,197 23,134,949 0.2% -2.0%
Miscellaneous line items
Software Agreements 18,130
Actuary Study - GASB #45 compliance 2,000
Utilities & Fiber connection 1,742
Bldg. repairs - rooftop unit /insp 7,675
Signs for developments 10,000 39,547 23,174,496 0.4% -1.8%
Compensation Benefit Allowances 456,872 23,631,368 2.4% 0.2%
Commodity Adjustment - (Streets /Police)
Motor fuels 5,247
Ammunition supplies 3,000
Shop materials and parts 7,753
Patching supplies and materials 5,322 21,322 23,652,690 2.5% 0.3%
27,620 23,086,752 0.0% -2.2%
23,655,860 2.5% 0.3%
23,658,410 2.5% 0.3%
23,659,647 2.5% 0.3%
23,672,574 2.6% 0.4%
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35
36
37
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39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
2013 Tax Levy
2
Adjust
Cumulative
Total
23,079,185
% incr Adjust
/ (dec) For
of 2013 Growth
-2.2%
Services Levels and growth
Target Training Solutions subscription fees & increased
training pay for online training courses (NEW)
NEW Position - Police Investigator (Start 7/1/2014)
Miscellaneous line items
Copy machine maintenance
Traffic /Intersection studies
Equipment parts, tires and diagnostic software
Contracted equipment repairs
Bldg. repairs - lighting /electrical
Commodity Adjustments (Parks)
Fuel and tires
Other commodities
Parks - seasonal employees (contracted due to labor
agreement)
NEW Position - Fleet Service Tech Supervisor ( Start
8/1/2014)
NEW Lexipol - Risk Mgmt. polices and resources -
subscription fee /annual cost
Parks - Major Maintenance
Field improvements (King, Quigley, Michaud)(w /LBA match)
STS Labor
8,637
5,000
11,275
5,300
4,330
4,974
7,024
43,780
34,542
5,996 10,970
38,550
30,153
8,950
10,000
20,000 30,000
23,679,598 2.6%
23,723,378 2.8%
23,757,920 2.9%
23,768,890 3.0%
23,807,440 3.2%
23,837,593 3.3%
23,846,543 3.3%
23,876,543 3.5%
0.4%
0.6%
0.7%
1.3%
Insurance
Other
83,463
23,960,006 3.8%
1.6%
Services Levels and growth
Capital outlay - Heritage Center (increase revenue potential)
PRELIMINARY TAX LEVY
24,263
23,984,269 3.9%
23,984,269
1.7%
Potential Revisions
Contingency (health insurance)
Police - Lexipol risk management
Insurance premium increase
Heritage Center - capital outlay (delete)
Heritage Center - operations (net)
Street Dept: Round -about landscaping
Parks - Tree Trust /Eagle Scout projects materials
Parks - Tree Trust labor
Parks - floor replacements
Tree Plantings
Transfer from the Communications Fund
(39,760)
(8,950)
(21,808)
(24,263)
(3,565)
1,870
10,000
1,500
5,700
12,000
(55,000)
23, 944, 509
23,935,559
23,913,751
23,889,488
23,885,923
23,887,793
23,897,793
23,899,293
23, 904, 993
23,916,993
23,861,993
3.7%
3.7%
3.6%
3.5%
3.5%
3.5%
3.5%
3.6%
3.6%
3.6%
3.4%
1.5%
1.5%
1.4%
1.3%
1.3%
1.3%
1.3%
1.4%
1.4%
1.4%
1.2%