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HomeMy WebLinkAbout08-23-04 WS`r In attendance: Mayor Robert Johnson and Council Members David Luick, Laurie Rieb, Mark Bellows, and Wendy Wulff. Also in attendance: City Administrator Steve Mielke, Assistant to City Administrator Brian J. Anderson, Finance Director Dennis Feller, and Senior Accountant Brian Kempa. Item #1 Review 2005 Proposed Budget and Tax Levy Mr. Mielke gave a brief introduction to the City Council describing the process staff has taken to arrive with the 2005 proposed budget. Mr. Feller informed the City Council that the State of Minnesota has projected an approximate $150-400 million deficit in the coming biennium. To make up for this deficit, the State could further cut MVHC from cities. However, the 2004 state legislature did remove levy limits for payable 2005, but is expected to be re-imposed for. taxes payable 2006. Mr. Feller presented the preliminary 2005 budget to the City Council as outlined in the attached 2005 budget proposal. The following are discussion items that arose during the presentation: General Fund Pg.3) Mr. Feller informed the City Council that in 2003 and prior years the fireworks display was financed from the liquor fund. In 2004, the fireworks were financed with donations from community businesses. The City Council stated they would prefer not to pay for fireworks out of the general fund, but would rather seek donations to fund the 2005 fireworks. Pg.3) Mr. Feller stated that staff is recommending warming house attendants be reinstated at all nine locations. However, the lifeguards would not be reinstated at the beaches for a savings of $51,000. The City Council questioned whether all the warming houses needed to be opened due to the low attendance records previously stated. Parks and Rec. Director Steve Michaud stated that more neighborhoods have been developed in those lower use areas which would generate more use than in previous years. He then discussed the maintenance complaints he has received throughout the year regarding the beaches and their restrooms. Although the restrooms are checked and maintained several times. a day, it is impossible to maintain them hourly. It was then suggested that another seasonal employee could be designated solely for beach and restroom maintenance. Staff will . analyze various maintenance options. • Pg.6.h.b) Police Chief Steve Strachan informed the City Council that a police officer is currently assigned to the high school as a School Resource Officer (RSO). A second RSO is assigned to the three junior high schools. Three options for accommodating the new high school are the following: 1. Place one RSO at each of the two high schools and none at the junior highs. 2. Place a third full-time RSO at the new high school in addition to the current schedule. 3. Place one RSO at each of the two high schools along with one at the junior highs for two days a week, staffing approximately 2 %2 RSO's total. City Council stated they would be interested in option #2 but felt the funding should come from ISD 194 and not the Lakeville tax payers just as the funding for the current RS0's has come from. City Council stated there are two additional school districts in Lakeville that wouldn't receive the service and the townships located outside Lakeville would receive the service without having to pay for it. Chief Strachan stated that he and Mr. Mielke will pursue discussions with ISD 194 to discuss option #2 and it's funding source. Pg.7.h.d) Chief Strachan informed the City Council that the County is considering consolidation of dispatch operations amongst jurisdictions, which. can be very cost-effective. Construction and operation of a consolidated dispatch center is envisioned within the next 3- 5years and it is recommended that the City become an active participant with the County and other jurisdictions in pursuit of this project. Mr. Mielke stated that no money has been set aside for a dispatch study at this time, but funds may be needed in the future for such a study. The City Council agreed that Lakeville should be a leader in the preliminary stages of • this project in order to establish and receive a desired outcome for Lakeville residents. Pg.8.j.c) Mr. Feller stated the budget provides appropriations for implementation of salt-only ice control on all City streets being the three experimental salt-only routes were so successful. To offset the price of salt-only ice control, there will be a significant decrease in street sweeping costs and the elimination of sand acquisition. City Council agreed to expand the salt-only ice control to all City routes. Pg.9 j.g) Due to the destruction by the dutch elm disease in recent years, staff has identified more than 200 trees in City parks and boulevards that need to be removed in the near future. Cost of the diseased tree removal is estimated to exceed $30,000 in 2004 and 2005. Pg.11.m.a) Mr. Mielke described the need for department directors to have PDA's within the organization. He stated they would be replacing the Franklin Planners and be more efficient due to their ability to correspond with their computer and store more data than the traditional paper planners. The City Council inquired about the price and model of the PDA's. Mr. Mielke stated he was not looking for a high end PDA and was anticipating spending approximately $400 apiece. Each director would probably receive the same model, but due to the changes in technology, he wasn't sure what model supervisors would receive in 2006. The City Council agreed with the need and use of the PDA's by selected staff. Pg.11.m.b) Mr. Feller stated the City practice and policy, prior to 2003, was to allow department heads to attend National Conferences every other year. However, due to sat-aid and budget reductions, no out of state travel was permitted in 2003-04. Staff is recommending that the City Council resume the pre-2003 policy of authorizing department • heads to attend national conferences every other year. The City Council agreed to reinstate the pre-2003 travel policy. -2- • Special Revenue Funds No discussion took place over the items outlined in this fund. Internal Service Fund -Municipal Reserves (Insurance) No discussion took place over the items outlined in this fund. Capital Project Funds Pg.17) Mr. Meilke explained to the City Council that certificated of indebtedness are expensive in that they have issuance and interest cost associated with them. He proposed to reduce and eventually eliminate them by implementing the following options: 1. Reduce the term from 5 years to 3 or 4 years. 2. Increase the 2005 tax levy. 3. Transfer from the 2004 General Fund Balance. The City Council was interested in reducing the amount borrowed by certificates of indebtedness and would provide their feedback to staff later in the week. .Enterprise Funds • Pg.19) Mr. Meilke reminded the City Council that in 2004 they transferred part of the liquor. fund to the general fund instead of using the liquor fund revenue towards capital expenditures. Mr. Mielke recommended not transferring any of the liquor fund to the general fund in 2005, thus using. the liquor fund revenue strictly for capital expenditures. The City Council agreed with Mr. Mielke's recommendation as they felt it was a fiscally responsible recommendation. Pg.21) A SCADA system is proposed to be installed ($58,000) at the three well monitoring sites. This will allow the Utility Department to become more efficient at recording more accurate and real-time data, which the DNR requests on a regular basis. The City Council agreed SCADA was needed being it had a seven year payback. Property Taxes Pg.24) Mr. Feller informed the City Council that levy limits are not applicable for taxes payable 2005; the proposed budget and tax levy is based on the premise as if levy limits were in place 2005. As such, the tax capacity rate is estimated to remain nearly unchanged even though the tax levy increased by 16.4%. This is primarily due to new construction of commercial and residential properties and an approximate 7% increase in appraised mark value of homes. According to the Dakota County Assessor's Office, the median market value for residential properties increase by approximately 7% from $220,000 for taxes payable 2004 to $239,000 for taxes payable 2005. The 2005 taxes for a median value home will increase $56 as shown below: r~ U -3- + i ~ 1 . • • d,akeville vu u'r.~~k Sessi~',>rr Taxes payable 2004 (based on $224,000 Market Value) Taxes payable 2005 (based on $229,000 Market Value) Total increase Increase due to: Market Value Homestead Credit loss of LGA Capital Improvement Bonds 2003 -Central Maint. Facility Levy for operations Total increase ~a~;ust23"~, 2Qf}4 $ 627 683 $ 56 $ 5 0.8% 27 4.3% 44 7.0% 56 8.9 Most other local government officials believe that levy limits will be reinstated for payable 2006. Since this may be the last year of levy limits, the City Council may wish to consider the following before establishing the final levy: 1. It's projected that the State will have a $150-500 million budget shortfall in the coming year. Therefore, it is a possibility that Lakeville could loose some or all of its estimated $700,000 of market value homestead credit if the State chooses to balance the budget with State-aids to cities. 2. The City Council may wish to consider levying all or part of the $700,000 in 2005 and appropriating the levy to the 2006 equipment acquisition, which would normally be financed with certificated of indebtedness and future tax levies. If the legislature does eliminate or reduce MVHC, the tax levy can be reappropriated to the General Fund to offset the loss. However, if the legislature does not eliminate or reduce the MVHC, future tax levies for equipment. will be less. The $700,000 levy would cost the average tax residential property owner approximately $38. Council Member Luick inquired about only levying for $350,000 versus the proposed $700,000. Mr. Feller stated that is also an option and would raise property taxes only $19. However, if the State legislature reinstates the tax levy for 2006, Lakeville would more than likely be able to levy back a portion of the 2005 levy. City Council stated they would provide their individual response to staff by Wednesday evening. Adjourn The meeting adjourned at 8:00 p.m. Respectively submitted, Brian J. A derson Assistant to City Administrator -4-