Loading...
HomeMy WebLinkAbout09-03-03 WSCOUNCIL WORK SESSION WEDNESDAY, SEPTEMBER 3, 2003 5:00 P.M. In attendance: Mayor Robert Johnson and Council Members Laurie Rieb, David Luick, Mark Bellows, and Wendy Wulff. Also in attendance: Robert Erickson, City Administrator: Dennis Feller, Finance Director; Keith Nelson, City Engineer; Don Volk, Director of Operations and Maintenance; Brian Anderson, Assistant to City Administrator, and Brian Kempa, Senior Accountant. General Discussion: Item No. 1 Mr. Erickson started the meeting informing the City Council that the City is in possession of 18 confiscated firearms and would like Councils direction on how to dispose of these firearms. He stated that the previous council had handguns melted down. However, other options are to have only the handguns melted down at a foundry and sell the rifles and shotguns or sell all the firearms. Council Member Luick stated that even if the City were to have them melted down at a foundry, some of the firearms may still make it out into the street because the foundry may not melt them down as contracted to do. Mayor Johnson stated that if a person wants to obtain a firearm, they will do so at places we couldn't even begin to imagine and melting down 18 guns out of the thousands out on the street won't have an impact on society and shouldn't pose a liability to the City. Council Member Bellows stated that it would be politically incorrect not to sell the firearms for the very same. reasons. Council Member Wulff was in support of selling the firearms, as she didn't see any benefit to melting them down. Council Member Rieb agreed the City should sell the firearms. Mr. Erickson then stated that the firearms could be sold with gunlocks that would be provided by the City. Council Member Luick then stated he would like to see them sold to a reputable dealer and the Council agreed. Item No. 2 Director of Operations and Maintenance Don Volk updated the Council on the water appropriations permit request and proposed water restriction ordinance and asked them to review the proposed ordinance. Mr. Volk provided the Council with a historical update on the relationship between the City and the DNR regarding the future well development within the City. Mr. Volk continued by outlining the major stipulations the DNR is requesting before they issue another well permit or increase the City's water pumping capacity. Mr. Volk stated he was. looking for Council input on the City's proposed ordinance, especially the enforcement portion and the well interference policy. City Engineer Keith Nelson mentioned that the DNR is willing to consider drilling well 17 into the Prairie DuChien Jordan aquifer while well 18 must be drilled in the deeper Franconia Ironton Galesville (FIG) aquifer, located about 800-900ft below the earths surface. Mayor Johnson inquired about the changes in the water pricing structure. Mr. Erickson stated that the DNR is requesting a tiered rate structure, but an analysis prepared by Mr. Volk of the City of Eden Prairies rate structure demonstrated its ineffectiveness. Mr. Volk went on to say that Jim Japs of the DNR will be invited to attend the Council Meeting and the Council can ask Mr. Japs questions regarding the significance of these stipulations requested by the DNR. Mr. Erickson then stated it would be beneficial for the Mayor to .send them a letter following the September 15 meeting stating how the City plans to comply with the DNR and in return would request a written response from DNR approving the appropriation permit, and drilling of well 17. Finally Mr. Erickson stated that Lakeville should follow Burnsville's 11AM - SPM watering restrictions as some of Lakeville's residents are receiving Burnsville's water. The Council agreed with the approach presented before them. Budget Discussion: Finance Director Dennis Feller provided the Council with an overview of General Fund Revenues, General Fund Expenditures, General Fund Balance, and Taxes. REVENUES (1) Mr. Erickson noted the proposed budget and tax levy would be presented at the regularly scheduled City Council meeting on Monday, September 15, 2003. The City Council also agreed to set a Council Work Session at Fire Station #2 on October 27. (2) Mr. Feller indicated residential building permit activity is projected to reach 400 single- family units and 400 town home units in 2003. Single family and town home residential unit building permits are anticipated to be 340 and 370, respectively, in 2004. The City will begin issuing electrical permits in 2004, which will result in $120,000 of estimated revenue. The revenues are anticipated to exceed expenses by approximately $25,000 per year. Mr. Erickson stated that rising mortgage rates might have an impact on the state and national economy and housing construction industry. However, due to its location and quality of life, Mr. Erickson estimates that Lakeville will continue. to exceed State and National trends in building construction activity. However, the staff and council need to closely monitor the economic conditions and be prepared to react to changing conditions, which might impact building permit revenues. Mr. Erickson also stated that the Council might wish to consider extending the townhouse moratorium. There is a significant supply of town home lots in the City of Lakeville and the region. (3) Mr. Feller explained that the South Metro Drug Task Force forfeiture revenues have fallen below estimates due to reduced staffing at the County Attorney's Office due to budget reductions. As such the South Metro Drug Task. Force is considering retaining the Drug Task Force grant to finance current operating costs rather than forwarding the funds to the member cities. (4) Mr. Erickson stated that ISD 196 had requested City Council consideration of continuing the DARE program at Parkview Elementary. The City Council unanimously reaffirmed that it will not continue the DARE program. (5) Mr. Feller explained that the ALF Ambulance -administrative charge is reimbursement for City provided finance, payroll, dispatching services, and facility space for Alf Ambulance. • (6) Mr. Feller stated Dakota Electric Association has announced plans to raise street lighting rates by 19% over atwo-year period. Mr. Feller further explained that if the City were to implement the 19% rate increase over atwo-year period, Lakeville customers would pay an additional $0.35 per quarter in each of the next two years; if the rate were implemented in one year rather over a two year period the rates would increase by $ .70/quarter. Mr. Erickson recommended the Council adopt the 8.5% increase in each of the next two years. The City Council will consider the issue prior to adopting the budget. (7) Mr. Erickson described the significant progress made by the Recreation Department in successfully managing program activities and eliminating those that have not achieved expected enrollment and corresponding revenues. The activity enrollment and overall interest in the Ritter Farm Park Environmental Learning Center. (ELC) has been on the decline for several years. As such the nature programs at the ELC have been eliminated and the utilities to the building would be disconnected. It is recommended that the ELC be closed for an annual budget savings of approximately $3,000. Mr. Erickson commented that the City of Northfield transferred their entire recreation department to the School District Community Education program. Mr. Erickson further commented that, in the event the City experiences severe budget shortfalls in future years, the City Council could pursue combining the Recreation Department and the School District Community Education Department. The transfer would eliminate the duplication of subsidized programs for both the City and School District. (8) Mr. Feller explained the operating transfer from Cable TV Fund to the General Fund is an appropriation of Cable TV franchise fees to finance the Public Communications Department. MAYOR AND COUNCIL • (9) Mr. Feller noted that the 2004 AMM .dues ($9,200) have been eliminated, and the 2004 budget provides funding. for an executive search for the City Administrator position. PUBLIC COMMUNICATIONS (10) Mr. Feller noted the 2004 budget provides funding for new Council Member photos in the Resident Guidebook to be published in 2005. The current full-time Public Communications Specialist is expected to retire in April of 2004, the proposed budget provides funding to replace this position with apart-time (30 hours per week) position. CITY CLERK (11) Mr. Feller noted the budget provides funding for the 2004 election. COMMITTEES AND COMMISSIONS (12) Mr. Erickson explained the Public Information Specialist is the Historical Society Liaison. The proposed budget provides adequate funding for the individual to continue as the liaison (6 hours per month) upon her retirement in 2004. (13) Mr. Erickson noted that Babe's Restaurant should be 100% responsible for all Police overtime related to their Saturday night dance during Pan-O-frog. There would also be significant reductions in Police officer overtime incurred during the Lions Thursday night • Beer, Brats and Bingo event. There are also reductions in Street Department overtime. Liquor Fund sponsorship of the fireworks ($13,000) is proposed to be eliminated. The community would therefore need to provide donations or sponsorships in order to finance the event. 3 GENERAL GOVERNMENT BUILDINGS (14) Mr. Feller commented that the proposed budget eliminated the Water Treatment Facility night attendants in 2004. Mr. Erickson stated that the City would send a letter to the organizations who have utilized the meeting rooms during the last two years explaining the changes in facility use. POLICE (15) Council Member Mark Bellows expressed deep concern and strong opposition to police officers working 12-hour workday schedules. Mr. Bellows further explained that working 12-hour shifts results in stress on the family/marriage and may compromise the personal safety of officers. Mr. Bellows stated from his professional experience and studies conducted that officer productivity, safety (due to sleep deprivation), and morale are adversely affected by 12-hour shifts. Mr. Erickson provided a background explaining the reason for the Police Departments implementation of 12-hour shifts (September 2003 -January 2004). The Council unanimously agreed to discontinue the police department 12-hour shift schedules and directed the City Administrator to inform the Police Chief of their position. Mr. Erickson reminded the Council that the Lakeville Police Department budget provides funding for one officer per 1,000 citizens in 2004. • (16) Mr. Feller provided the Council with a map indicating the civil defense siren coverage within the City. Mr. Feller explained a new battery backup siren is proposed to replace the existing siren at Ardmor Mobile Home Park and that existing siren will be relocated to Brackett's Park. (17) Mr. Erickson extended compliments to Police Chief Martens and Police Sergeant Strachan for their attention to detail and prudent capital outlay recommendations that resulted in an approximate $100,000 savings. Mr. Erickson stated that the savings would be available for future capital outlay expenditures. FIRE (18) Mr. Feller noted the proposed budget provides funding for afull-time permanent Fire Chief. Mr. Erickson reaffirmed the importance of establishing afull-time Chief position considering the increasing responsibility for managing personnel and facilities. ALFAMBULANCE (19) Mr. Feller informed the Council that the Alf Ambulance subsidy ($22,829) is appropriated to ALF debt service payments for Certificates of Indebtedness issued to finance equipment acquisitions and replacements. Since the subsidy is appropriated to debt service payments, it is eligible as a special levy exempt from levy limits. Mr. Erickson stated that in light of the pending state drug task force grant, it would be in the City's best interest to capture the • subsidy through a special levy. The Council unanimously agreed to increase the tax levy by $22,829. 4 STREETS (20) Mr. Feller provided information on the proposed 2004 pavement management program. The Street Department had acquired two dump truck replacements at a cost savings significantly less than budgeted due to economic conditions. As such, the savings has been appropriated to the acquisition of a new flusher truck rather than mounting of a new tanker on an old chassis. PARKS (21) In response to Mayor Johnson's question concerning renting the Ritter Farm Park facility, Mr. Erickson stated the Parks and Recreation Director might wish to consider a housing caretaker at the facility. This subject was discussed several years ago. GENERAL FUND BALANCE (22) Mr. Feller reviewed the estimated 2004 projected General Fund Balance of $7,347,657. He noted that the Commissioner of Finance has expressed concern relative to the State's future budget reserves and potential budget issues. CABLE TV FUND (23) Mr. Feller explained the operating transfer from Cable TV Fund to the General Fund is an appropriation of Cable TV franchise fees to finance the Public Communications Department. In addition, Lakeville is the only Dakota County city, which has accounted for Cable TV franchise fees in a Special Revenue Fund rather than the General Fund.. Mr. Erickson shared with the Council the expectations of the Telecommunications Commission regarding the oversight of the Public Communications Department. The City Council affirmed that the oversight and management of the Public Communications Department remain under the direction of the City Administrator. Mr. Erickson further noted that, in the event the City experiences severe budget shortfalls in 2005 or 2006, the City Council could consider reducing the hours of or eliminating one of the Video Producer positions for an approximate annual savings of $50,000. TAXES (24) Mr. Erickson stated that residential market values have been increasing at a rate exceeding 10% per year for many years. Mr. Feller stated that the homesteaded residential properties have some protection from significant tax increases due to the "limited market value" law, which states that taxable market value increases cannot exceed 10% per year for taxes payable 2003. The purpose of the limited market value is to phase in significant market value increases (and taxes) over several years. However, the Limited Market Value Law increases to 12% per year for taxes payable 2004 and 15% for taxes payable in 2005. In other words, there are a significant number of homes, which have a higher assessed market value than limited market value and as a result will experience increased property taxes. Secondly, to compound matter, the 2001 Omnibus Tax Law provided a market value homestead credit to residential properties. The credit is limited to a maximum of $304 on a $76,000 home. The market value homestead credit is phased in for homes in excess of • $76,000 at a rate of .09% of the home's value in excess of $76,000. In other words, as the home appreciates, the credit is reduced. Irrespective of the amount the City tax levy, the property owner will have an increase in property taxes because the increase in taxable market value of the home due to the limited market value law will result in a decrease in the Market Value Homestead Credit thus resulting in an .increase in property taxes. For example, even if there was no tax levy increase by any of the jurisdictions, the property owner will still have a tax increase because of the combined effects of the Limited Market Value Law and the Market Value Homestead Law. Limited Market Value Taxes Taxes levied by jurisdictions Less: Market Value Homestead Credit Net Taxes 2003 .2004 Increase $ 200,000 $ 224,000 $ 24,000 2,288 2,288 - (192) (171) 21 $ 2,096 $ 2,117 $ 21 To compound matters, the Truth in Taxation Notices does not show the property owner how much of their taxes increase is due to the Market Value Homestead Credit. Therefore, it is incumbent upon Cities to educate its residents on the tax law application. (25) Mr. Feller stated that approximately $355,000 of the City tax levy increase is due to interchange improvements. • (26) Mr. Feller reviewed the worksheet comparing the 2003 tax levy with the .2004 tax levy. Mr. Feller stated that the State has made fundamental changes in the levy limit law, which has resulted in significant loss of levy authority. • 6 s • FUTURE WORK SESSIONS ITEMS A. Review outstanding issues from September 3, 2003 Work Session. 1. Minutes: Council Budget Work Session (September 3, 2003) B. City Council and School Board Joint Meeting September 29, 2003 (7:00 P.M.) 1. Prepare a set meeting agenda C. Continue Review of 2004-2005 Proposed Budget October 27, 2003 at Fire Station #2. 1. Special Revenue Funds (Cable TV -Economic Dev. Rev. Loan) 2. Municipal Reserves Fund 3. Equipment Fund 4. Building Fund 5. Liquor Fund 6. Water Operating Fund 7. Sanitary Sewer Operating Fund 8. Review proposed adjustments to budget The meeting adjourned at 7:45 PM Respectfully submitted, ~-~--~~ ~mu...~- Brian Kempa, Senior Accountant •