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HomeMy WebLinkAbout11-13-00 WS7' 3 . COUNCIL BUDGET WORK SESSION MONDAY, NOVEMBER 13, 2000 5:00 P.M. In attendance: Mayor-elect Robert Johnson, Council members Betty Sindt, Lynette Mulvihill, David Luick, Mark Bellows, and Council member-elect Laurie Rieb. Absent: Mayor Duane Zaun. Also in attendance: Robert Erickson, City Administrator, Dennis Feller, Finance Director, and Brian Kempa, Senior Accountant. Discussion: Dennis Feller provided the Council with an overview of: General Fund Revenues, General Fund Expenditures (Mayor and Council through Finance), Special Revenue Funds, Municipal Reserves Fund and the proposed 2001. tax levy. LICENSES AND PERMITS (1) Mr. Feller indicated there are no proposed fee increases pertaining to licenses. The State of • Minnesota regulates the number of on-sale liquor licenses a city may issue based on their population. Council member Sindt inquired as to what number of on-sale licenses still remain available in the City. Mr. Erickson stated that, based on State law, the City is authorized to issue up to 181icenses of which five have been approved. (2) Mr. Feller indicated there are no proposed increases in the building permit fee structure. The 2001 proposed budget is based upon issuing 550. single family building permits; this estimate is consistent with the City's trend of projecting building permits on a conservative basis when planning the budget. Mr. Erickson stated the City anticipated two large apartment dwelling projects that are currently in the concept/preliminary planning. stage. INTERGOVERNMENTAL REVENUE Mr. Feller explained the origins of Homestead and Agricultural Credit Aid (RAGA) and Local Government Aid (LGA) as they date back to the early 1970's. (3) Mr. Feller further explained the City continues year after year to receive an inequitable share of HACA and LGA as compared to out-state cities. For example, the City of Winona has less population than Lakeville yet they receive nine times the amount of state aid; the State Legislature clearly favors out-state cities. As a direct result of the Legislatures continued inequitable distribution of state aids for property tax relief, Lakeville resident's taxes are 3.4% higher than the previous year. • • CHARGES FOR SERVICES -GENERAL GOVERNMENT (4) Mr. Erickson commented that it has been the Council's long-standing policy that the City not expand its staff unless it can sustain those positions into future years. Mr. Erickson assured the Council that City staffing is very lean and the new positions proposed for 2001 are not excessive. Consequently, new development pays its way in the form of fees collected to compensate for administrative costs incurred by the City; hence, existing residents do not pay for new development. (5) Council member Luick inquired as to the reason for the decease in guidebook revenues in 2001. Mr. Feller stated the City will receive the advertising revenues in 2000 for printing a supply of guidebooks that will last 18-24 months. Further, the advertising revenue .offsets the cost of printing the guidebook. (6) Mayor Zaun provided staff with a list of budget questions to be presented on his behalf during this budget work session, one of which stated -should the City consider selling advertising on the City's web page as a way of offsetting the cost of maintaining and updating the web page? Further, is the Council in favor of seeking a legal opinion on this. matter to determine whether or not this would be in the best interest of the City? The issue will be discussed at the next budget work session. The City's contract with Shades Landing to maintain the web page is budgeted in the Public Communications Department at an annual cost of $2,700. • CHARGES FOR SERVICES -PUBLIC SAFETY (7) Mayor Zaun provided a written question as to whether the 2000 transfer from the Liquor Fund to the General Fund for DARE includes the $17,000 school district deferment. Mr. Feller stated the $17,000 deferment for school year beginning July 1, 2000 through June 30, 2001 will be paid by the school district in 2001. (8) Mr. Erickson reminded the Council that the Cities/Townships of Elko, New Market, Eureka, Credit River, and the southwest portion of Burnsville do not contribute any funds towards the City of Lakeville (including I.S.D. 194) DARE program. (9) Mr. Feller indicated that the City provides fire protection for the western half of Eureka Township and the budget provides for an approximate 7% .increase in the contract. (10) Mr. Erickson reminded members of the Council that Council member Sindt's retirement would result in a vacant seat on the ALF Ambulance Board. The Board meets once per month on the fourth Tuesday. CHARGES FOR SERVICES -PUBLIC WORKS (11) Mr. Feller indicated that the budget proposes a 4.6% increase in street lighting charges ($0..15/residential unit/quarter from the current $4.90/residential unit/quarter to the proposed $5.05/residential unit/quarter). The increase is a result of Dakota Electric raising their rates during the past year. Street lighting rates have not been raised since February 1, 1999. 2 • CHARGES FOR SERVICES -PUBLIC WORKS (continued) (12) Mayor Zaun provided a written question as to whether or not Pavement Management and Highview Avenue trail projects were included in the City's Capital Improvement Plan (CIP). Mr. Feller stated these projects are included in the CIP narrative and are itemized within the various funding sources and schedules. CHARGES FOR SERVICES -PARKS AND RECREATION (13) Mr. Feller stated that the Recreation Department is currently under a comprehensive review of their rate establishment policy. Upon completion of their review, Recreation is expected to present a new fee structure that is proposed to increase fees approximately 7.6%. This increase is consistent with neighboring cities and is required in order to pass the fair share of the program costs back to the participants. Mr. Erickson explained the philosophy that youth activities are partially subsidized by taxes and adult activities are fully funded (100%) by the participants. Mr. Erickson stated that, upon completion of the analysis, this will be the first time the City Council will adopt the recreation fee schedules in an official manner. This pending increase will be added to the proposed revenue budget as an adjustment. COURT FINES AND MISCELLANEOUS . No questions or comments. MAYOR AND COUNCIL (14) The Mayor and Council budget provides funding for monthly service to those members that desire a direct connection to the City's a-mail address system from their home computers. Information Systems Manager Danny Barth informed the Council that the City's a-mail address system is available to those Council members that have a home computer and would like to have a City of Lakeville a-mail address. Mr. Erickson commented that e-mail communication between City Hall and the Council is a very fast and efficient way of communicating. (15) Mr. Erickson explained that the budget provides individual Council members with an annual sum of $1,100 for costs related to mileage reimbursement, outside education, and expenses related to attending official city functions. The proposed budget provides funding for any member of the Council to attend a national conference once during their elected term. Also, funding is provided for Council members to receive a stipend for attending Housing and Redevelopment Authority (HRA) meetings at a rate of $25.00 per meeting. (16) Mayor Zaun submitted a written question regarding the community survey budgeted in 2001. Mayor Zaun asked Council members to consider deleting or postponing the survey unti12002. The City Council concurred that the community survey should be postponed unti12002. • PUBLIC COMMUNICATIONS (17) Mr. Erickson discussed with Council the current location. of the Messages page within the Life & Times newspaper. The City's Messages page currently appears on the back page of section two. In 2001 Life & Times wants to combine the newspaper's two. sections into one and increase their publishing rates by 20%. Mr. Erickson asked Council members to consider various options presented in a memorandum prepared by Public Information Coordinator Lea Guenther and revisit this issue at the next budget work session (see attachment). CITYADMINISTRATION (18) Mr. Erickson commented that as a graduate of the University of Virginia Senior Executive Institute (SEI) a special event has been planned in honor of his 40 years of service in 2002. Also, the International City Managers Association and the Minnesota City Managers Association both have a special event planned for Mr. Erickson at the National conference in 2002. Mr. Erickson explained that the City has a policy whereby Department Directors may only attend national conferences on an every other year basis. Mr. Erickson stated that he does not plan on attending any national conferences in 2000 or 2001. CITY CLERK No questions or comments. LEGAL (19) Mr. Erickson explained that the City has three attorneys from which the City obtains legal services. Elliot Knetsch, (prosecutorial attorney), Roger Knutson, who specializes in personnel and land uses, and Jim Walston, who specializes in real estate. These attorneys are regarded as experts within their specific area of specialty. Prosecution services are budgeted separately in the Police Department budget. COMMITTEES AND COMMISSIONS (20) The Lakeville Historical Society is located in the former rectory of the All Saints Campus. The 2001 budget provides $4,930 in funding for the replacement of the buildings external fascia. Mr. Erickson indicated this work is being completed by private donations and the $4,930 should be deleted from the budget. COMMUNITY DE i~ELOPMENT (21) Council member Sindt stated the separation of duties between Community Development and Economic Development would create a more defined list of responsibilities. Council member Luick stated that from an organizational growth perspective the separation of duties makes sense. Mr. Erickson asked Council to provide staff with a recommendation regarding these items for discussion at the next budget work session. (22) Mr. Erickson stated that if the Council desires to promote City Planner Daryl Morey to Assistant Community Development Director, this minor budget adjustment could be made prior to the budget adoption in December. Council member Mulvihill indicated that the City Planner has certainly earned this promotion. 4 COMMUNITYDEi~ELOPMENT (continued) (23) Mr. Erickson provided Council with a handout from the Economic Development Commission asking Council to amend the Budget in the amount of $10,500. This additional funding ($2,000 already budgeted) would authorize Springsted to prepare a complete Financial Incentives Study for a total of $12,500. Mr. Erickson explained that staff does not have adequate time to prepare this study or prepare it in an objective manner as an outside consultant would do. Mayor-elect Johnson requested that the Chamber of Commerce provide a written response to the City indicating support of the Financial Incentives Study to be prepared by Springsted. Mr. Erickson stated that the Financial Incentive Study will enable the City to develop fiscal policies which would enable it to be competitive with Cities such as Burnsville. ISD #196 taxpayers, for example, benefit immensely as a result of the significant tax base provided by the Burnsville Center. Burnsville Center is valued at $186 million dollars. INSPECTIONS (24) Mr. Feller indicated that the Inspection Department budget provides promotional funding for one Senior Building Inspector; Mr. Erickson asked Council to consider adjusting. this funding to include two senior positions. . GENERAL GOVERNMENT BUILDING (25) Council member Sindt informed staff that the price of a first class postage stamp will increase in 2001 by $0.01, which will result in an $1,100 increase in postage costs. (26) Mr. Feller commented that the price of natural gas is expected to increase approximately 40% this winter season, and accordingly the budget reflects this anticipated rate increase. FINANCE (27) Mayor Zaun provided a written question as to why the line item object codes are changing within the budget. Mr. Feller explained that the City has converted to a new financial ..accounting system called J.D. Edwards which requires the change in account numbers. (28) A Request for Proposal for auditing services was prepared as a result of the expiration of the current audit contract. Mr. Feller provided Council with a bid tabulation of six auditing firms with annual bids ranging from $17,175 to $25,500 per year. The City's current auditor Eide Bailly LLP provided the. lowest bid. Mr. Erickson asked Council to consider the second lowest bidder Malloy Montague K.R. since Eide Bailly has audited the City's financial records for the last six years and a change in auditors may be in the best interest of the City. FINANCE (continued) Mayor-elect Johnson asked staff to obtain a list of auditing clients served by Malloy Montague K.R. The following is a current list of clients: • City of Golden Valley • City of New Hope • City of Orono • City of Ramsey • .City of Savage SPECIAL REVENUE FUNDS (29) The City accounts for ten Special Revenue Funds; Mayor Zaun provided written questions as to whether or not the City's Independent Auditors had any particular comments regarding these funds. Mr. Feller responded that the City's Auditors did not make any comments pertaining to these Funds. CABLE TV FUND (30) Council member Mulvihill inquired if the new camera equipment budgeted in the Council Chamber will provide any new angles or perspectives during meetings. Cable Coordinator • Jeff Lueders indicated that the budget provides funding for a fifth camera to be located above the staff seating section. (31) Mr. Erickson informed the Council that the Telecommunications Commission (formerly Cable T.V. Board) will be making a recommendation to provide appropriations to the Lakeville Area Arts Center for equipment that would allow for a complete audio visual. sound system and the ability to broadcast special events on Lakeville's cable channel. The Commission is proposing to allocate approximately $100,000 from the Cable T.V. Fund budget for this purpose. Mr. Erickson indicated that this appropriation is not in the current Cable T.V. budget, and if approved by Council, the budget will need to be adjusted accordingly. ENVIRONMENTAL RECYCLING FUND (32) Mr. Feller indicated the proposed budget provides for the disposal of electronic equipment such as TVs and computer monitors. Council member Mulvihill inquired if there are special disposal requirements for cordless telephones. Recycling Coordinator John Hennen stated that cordless telephones and other electronics (i.e. VCRs, copiers, computers, TVs) can be brought to Materials Processing Corporation addressed as 2805 W. Service Road in Eagan, Monday -Friday from 7:30 a.m. to 3:45 p.m. Cost for disposal of cordless telephones are $.35/lb; fees vary for other types of electronic equipment. DRUG ENFORCEMENT FUND • (33) Mayor Zaun provided a written question as to the increase in property tax funding needed for the South Metro Drug Task Force Officer. Mr. Feller responded that personnel costs have increased and the year end Fund .Balance carry forward from 2000 is approximately $3,000 less. .~ EMPLOYEE BENEFIT FUND No questions or comments. GEOGRAPHIC INFORMATION SYSTEM FUND (GIS) (34) Mayor Zaun provided a written question regarding whether the G.LS. fee would remain the same in 2001. Mr. Feller stated the 2000 G.I.S. fee is currently $34.50 per parcel of record and proposes to increase 2.9% to $35.50 in the year 2001. The proposed budget requires an adjustment to reflect this increase. SURFACE WATER MANAGEMENT FUND (35) Mayor Zaun provided a written question as to the reduction in transfers to the General Fund for cleaning sump catch basins in 2000 as compared to 1999. Mr. Feller explained that the City bases this transfer on actual time spent by staff cleaning the sump drains. The last two years were very mild winters and accordingly the sump basins did not have a heavy accumulation of road sand. OAK WILT SUPPRESSION GRANT FUND No questions or comments. ENHANCED 911 FUND No questions or comments. ECONOMIC DEVELOPMENT REVOL VING LOAN FUND (36) Mayor Zaun inquired as to the future plans for this Fund. DOWNTOWN SPECL4L SERVICE DISTRICT FUND No questions or comments. MUNICIPAL RESERVES -INTERNAL SERVICE FUND No questions or comments. TAXES (37) Mr. Feller provided Council members with a list of 11 cities within Dakota County showing a comparison of their respective tax capacity rates for 2000 and 2001 (see table on the following page). Lakeville has had the lowest tax capacity rate for eight consecutive years; however, for taxes payable 2001 Lakeville will have the second lowest tax capacity rate at 0.20105 of which is a 3.3% increase over 2000. (38) Mr. Erickson stated that the tax increase is due primarily to the new Lakeville Area Arts Center operations and the elimination of special assessments to finance sealcoating. The Legislature's elimination of levy limits for taxes payable 2001 provided a unique opportunity for Lakeville to change its policy of financing sealcoating with taxes rather than special assessments. Mr. Feller stated that 2001 is only the second time in more than two decades that the Legislature has not imposed levy limits. If the Legislature re- imposes levy limits, the 2001 levy will be the base. If the council reduces the tax levy in order to have the lowest tax capacity rate in the County, it will be very challenging for future councils to finance programs such as sealcoating with property taxes. Mr. Feller stated that in order to have the lowest tax capacity rate, the City Council would need to adjust the budget by $92,000. Mayor-elect Johnson stated that the ranking has to be put into context of the objective of providing additional services, which results in the increased tax capacity rate. Council member Mulvihill stated the City should not jeopardize its future (tax levy capability) by reducing the 2001 tax levy by $92,000. In her opinion, the City should not have a low tax levy base when the Legislature reimposes levy limits and. thus penalizes the City. Council member Mulvihill stated she has never had a taxpayer indicate they wanted to address the City's tax capacity rate. The tax capacity rate is an important factor, but providing adequate financing for operations is a higher priority. • Tax Capacity Rates 2001 2000 Rosemount 0.36539 0.39335 -7.1% Hastings 0.33082 0.38088 -13.1% Apple Valley 0.31301 0.29019 7.9% Farmington 0.29875 0.30592 -2.3% Burnsville 0.29189 0.29075 0.4% South Saint Paul 0.28326 0.27842 1.7% West Saint Paul 0.25124 0.25012 0.4% Inver Grove Heights 0.25081 0.25215 -0.5% Eagan 0.23423 0.24458 -4.2% Lakeville 0.20105 0.19466 . 3.3% Mendota Heights 0.19779 0.20860 -5.2% • Closing: FUTURE COUNCIL BUDGET WORK SESSION Council members were reminded of the next budget work session scheduled on Monday, November 27, 2000, starting at 5:00 P.M. This work session adjourned at 8:00 P.M. 8