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HomeMy WebLinkAboutItem 06.dCITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES November 19, 2013 Mayor Little called the meeting to order at 5:00 p.m. in the Marion Conference Room at City Hall. 1, Members Present: Council Members Swecker, LaB r Staff Present: Stave Mielke, City Adminktratnry E Police Chief John Kornmann; Chris Petree, PUbhc Manager; Brett ATtergott, Parks and Recreation Diri Nesseth, Senior Accountant; Judi Hawkins, Deputy 0 3. Citizen Comments There were no citizen comments Proprietary Mr. Feller introduced budget consists of four components: Proposed changes includeaii for stated that son;'and Davis, and Mayor Little -T finance Director; Tntarim :etor, Brenda Visnovec, Liquor Werner, Senior Accountant; Tom The Utility Fund and environmental resources. rates to ge rate additional revenues for the purpose of ial position w hs 'Iarted in June of 2013 is shown in the aiifenance items includes $2.4M for the watermain replacemebt program, rehabilitation of 9411 #17, wellhead protection plan, and water asset managemenf software. The Wter meter replacement program will be accelerated from 500 to 800 "meters pelryear, in order all meters to be changed on a 20 -year cycle. Installation of residential radio 6ansmitters tai utilize drive -by readings is also being proposed. Other major items in 2014 are Michaud pk water tower cleaning, construction of Wells 20 and 21, both along Dodd Blvd., and acquisition of a site for an elevated storage tank. Results of the Water Treatment Facility Expansion Study show that a second facility is not needed; however, the current facility can be expanded incrementally to increase capacity. Mr. Feller discussed remodeling of the City Hall utility billing area to include a window to the hallway to provide better customer service and security for employees. Council Member LaBeau asked if current figures are being used for calculations by the Met Council in their water and sewer projections. Mr. Petree stated that the figures are based on the City Council Budget Work Session November 19, 2013 Page -2- next five years at more conservative growth projections. Council Member Swecker asked if there is a correlation between the water meter transmitter replacements and the increase in water rates. Mr. Petree stated that the increased rates will cover the cost of the transmitters. The increase in the Sanitary Sewer budget is due to the anticipated NCES annual increases of 6% to 7 %. Capital Outlay is $290,000 which includes lift station improvements and sanitary sewer improvements in conjunction with the 2014 Streeteconstruction Program. Inflow /Infiltration mitigation is also included in this category. An4cipted rate increases from Xcel and DEA will be offset by the sales tax exemption. City -owned street lights on Kensington Blvd. fron 205 to 210 "' Street will be replaced as part st of the overlay project on that street. The utility prmfder will take over maintenance when lights are replaced. The City's policy for many years has be�at the utility companies own all lights. The Environmental Resources Fund includes,,An update ofthe stormwater pollution prevention plan, erosion control standards, recycling aad soo,waste reduction programs, and South Creek channel restoration. Mr. Feller stated that rate rncreas are beiniproposed for water and sanitary sewer in 2014, but not for surface water fees Mr .T � k Dragisi2h, xecudve VicrPresident Springsted Inc., was present to discuss the results of the,water and seder rate study. Based on historical trends it was anticrpafe l that,the mcrease<�i �n Met Council Ou1­d be approximately 4 %; however, the actual increase is fib*'known to %-`6-7%. Cash reserves'will not keep up with operating exp &rises and annual c01tal spendmg£or system maintenance and Metropolitan Council fees. Co' nmaY ,ed to other communities, Lak ille's water rates are low and would remain so, even with a moMf`iitte increase. Based on prolectfi"`s, Springsted is recommending a 4.25% increase for water and' &." increase m sever rates. Feller stated that the increase will mean approximately $20,er year ft an average household and $50 for a Large business. Council Member Strecker asked about the changing rate structure over the next several years. Mr. Dragisich respoiidedtliat a higher rate is required in the beginning to fund the necessary capital improvements and watermain replacements. Mr. Feller added that the last rate increase was in 2008, when the tier system was implemented. Council Member Anderson asked about the possibility of issuing debt on the capital outlay rather than implementing a rate increase. Mr. Feller believes MCES has deferred maintenance projects in order to keep their rates low through the years when their connection charge revenue was low. Anderson suggested a steady rate increase in order to minimize spikes in the rates; however, he does not believe $20 per year is significant, Council members for an analysis City Council Budget Work Session November 19, 2013 Page -3- at the next work session of possibly issuing debt or an interfund transfer rather than a rate increase. The 2014 budget includes land acquisition and design of the elevated tank in the amount of $500,000; land acquisition for two well sites for wells #7 and #8, which will be needed for growth in the area of the 190 Street corridor; and the two -phase water treatment facility expansion. Anderson asked how Lakeville's water connectrgnr�iar that they are among the highest rates in the mete area long -time Council policy is that new construcuot ,pays r financial burden on existing residents. Mr. Feller st4tec flows the water connection fees would also go up by 2:5 price index. Staff is recommending the required po"44 the increase implemented effective February 1, 2014. B water connection charge will increase the to* ilding Liquor: Ms. Visnovec stated that the enterprise fund, with 2014 . op philanthropic endeavors, and complimented the Liquor De! other Council Members also the on ; es compare to other cities. Feller stated but of oftlfe lowest water rates. A its ownYVay and does not create a i that`in ozder to have adequate cash Yo annually biased on the construction Baring be hela', ii December 16 and u3*s will be notified tha# the higher is the fiscally responsible and growing $1.69M. A review of accomplishments, as provided. Council Member LaBeau #!�i ements in 2013. Mayor Little and efficiencies of the department and on of liquor fundsto equipment fund, s equipment. - Council asked for a and Police of liquor 4 Budget DOcussion - Fees Vtr, AltergottYstated that the revaews nark dedication fees agenda for a :s, Recreation and Natural Resources Committee annually is recommending a 2% reduction in fees based on property discussions. Staff recommends this be put on the December 16 ✓ise park dedication rates. Mr. Feller compared t klevies in other communities and the factors that caused increases and decreases. The Metto average is 1.3% tax levy increase, but due to several factors such as state aid (LGA) and growth, it is difficult and misleading to compare. Lakeville has the lowest spending per capita in the state and is currently in the early stages of street reconstruction, when other communities have not yet reached that need. In addition, Lakeville does not receive the LGA funds which help to keep levies lower in many communities. City Council Budget Work Session November 19, 2013 Page -4- 5. Response to questions at November 12 work session New Personnel Positions: Mayor Little asked how the range of savings for the Fleet Supervisor position was calculated. Petree stated that significant efficiencies can be achieved in many areas. Industry standards show that with the use of fuel efficient technologies average fuel usage can be reduced by 5 -10 %. Mobile management on the plow trucks controls and reduces the amount of ice control chemicals that are dispensed. Dakota County has seen a savings of over $20,000 with the use of this technology. Council Member Swecker would like to see an analysis of the results'at the end of the year. Petree stated that with the position starting Iater�iu the year thelsavings will be more accurately reflected in the 2015 budget. LaBeau would like to }cave defined expectations of savings for the new position, compared to potential overtime Davis _$zees that Council needs to be good stewards of tax dollars, but does not agree with gI n the osition a p Aible end, date if cost - saving goals are not met. Mielke stated that he is ndt cotable with -year guarantee for the person who fills the role. Not all results en irrisstediately. Anderson believes this position provides an opportunity for more efficr i2 and suppIorts the leadership team and its goals. Little believes that all positions should go throb periodic analysis, similar to the private sector. Mielke believes there will be inured ate save xeflectedi in the 2014 overtime budget. Swecker stated that she believes s£n will n e the best use of all positions. Staff will analyze .< overtime and reasonable expecta ores for corlxmodity savmgs„iu 2014 and 2015 budgets. Staff suggests seducing the contiu�epcy by $198 497,uhiieh would reduce the tax levy by the same amo Fell unt. er is suggesting sh fling >$300,000 out oftlie equipment fund into debt for protection s . ancadded flexibility,be are imposed by the Legislature. This does not change`fikfe levy. LaBeau suggested that lalf of the reserves be used for this purpose. the inot comfortable using surplus for operating costs but prefers it be used for capital or p g down debf He does not wish to burden future councils with difficult fending Sweckefstated that historically spending has been below budget and staff does a good job of keeping costs at a minimum. Mielke stated contingency funds are for emergency 7 purposes. Growth will absgrb 2.2% of the 2.5% increase, leaving only a.3% increase. Council Member A 'derson believes this levy amount would demonstrate the City's fiscal responsibility to the residents. He believes the goal should be to continue to find ways to become even more efficient. Council Member Davis is supportive of the 2.5% levy and the reduction of $198,000 in the contingency fund to provide additional flexibility with legislative decisions on levy limits. He complimented previous councils for the groundwork in efficiency. City Council Budget Work Session November 19, 2013 Page -5- Little has concerns for the long term if surplus reserves are used in this way. Previous councils reduced the impacts of the difficult years by making prudent decisions and building up fund balances and reserves. Little would agree to modification of the fund balance policy if there was a commitment to building up the reserve during times of economic growth. He prefers the use of capital and debt to use of reserve funds, and believes there needs to be commitment to future taxpayers and councils to prepare for unexpected occurrences or times of slow growth. Mr. Feller stated that the 2014 budget is premised on 4,,,.4 % reserve fund; however, the objective is for reserves to be a minimum of 40 -45% in order Little suggested a fund balance policy that would-gommit to increasing the fund by 1% per year. Feller reviewed how 2013 general fund balances ar�:,bein allocated for three purposes: $1.8M in the equipment fund; $590,000 to building fund, art$,000 comtrritted to the EAB program. The $500,000 could be used to reduce taxes by brmgi}galown the tax lei; to establish a policy to gradually increase the fund balance; or to allocate it to a specific purpose, like what has been done this year to mitigate future tax increases The funds ci2�be mitigated toi,,` funds, such as the trail fund. The fund balance is, rrthe 40 range for several reasons including the uncertainty of building permits and sttainability of rowth. Council should provide direction on fund balance goals fan 2015 as oQn as possible- ,Little believes council s basic principle and commitment W6uld be = mamtatn steady Levies andspending. A policy would provide a base to allocate Orplus funds Anderson�agreesand believes rt js,the Council s duitc%13e good stewards of the tax dollars that are eafrnsted. Mr Feller stated t6i the State Auditof "fe' commends 35-50%; Lakeville's policy is 40 5✓c. Little is canceled that ope,,,ting expenses are increased, but not the levy, thereby redu�444vthe reserves. S agrees * further discussion on this topic is needed in 2014 before the 2015 budget is pre p ared. Davrsgrees with a policy of putting a certain amount of anv surplus`Into reserve in or 2r to build the fund. Mr. Teller stated�tiat Council W' ill be provided a five -year projection in the early part of 2014 which will focus ori'fund balances, general fund policies, growth projections, and long range tax levy planning. It was Co,t nil's consensus to discuss the fund balance policy at that time and to use this policy as a ttfalor making financial policy decisions. t ,r Council continued their discussion of the proposed new positions. Anderson believes new revenue is needed to support the Code Enforcement position. Mr. Mielke stated that this part - time position is intended to relieve the building inspectors who would then have more time to perform inspections and provide better customer service. Hiring this position is a less expensive option than hiring an additional inspector or a contract employee. New revenue could come from re- inspection fees. City Council Budget Work Session November 19, 2013 Page -6- An additional Police Investigator is needed to focus on increasing fraud and digital crimes. Interim Chief Kornmann stated that even though crime is going down, year -to -date calls are up about 1,000 over last year. LPD needs to be able to process cyber- crimes in an efficient manner and keep up with growth and the ability to be responsive. There are no other positions from which to draw hours to assist the only detective. This will also help the City to maintain its reputation as a safe community. The position of construction observers is recc a consultant to monitor street reconstruction I in order to utilize City staff rather than The co zs built into the project costs. Council asked staff to provide an updated overall Council. There are a few items remaining to be d Council Member LaBeau asked if a joint meeting ing changes recommended by the Nove' er 25 work session. icil and the finance Committet the Committee's role. and the process that A