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2011-07-18 CC Minutes Workshop A B T uwq Me aWI ALBERTVILLE CITY COUNCIL Monday, July 18, 2011 BUDGET WORKSHOP NOTES ALBERTVILLE CITY HALL 7:10 p.m. MEMBERS PRESENT: Mayor Mark Meehan, Council members John Vetsch, Larry Sorensen, Dan Wagner, and Jillian Schommer STAFF MEMBERS PRESENT: City Planner Alan Brixius, City Attorney Mike Couri, PW Supervisor Tim Guimont, City Administrator Larry Kruse Finance Director Tina Lannes, Permit Tech Tori Leonhardt, Utilities Superintendent John Middendorf, City Clerk Bridget Miller, City Engineer Adam Nafstad, and Building Official Jon Sutherland; Fire Chief Tate Mills arrived at 7:35 p.m. Mayor Meehan called the 2011 First Budget Workshop Session to order at 7:10 p.m. City Administrator Kruse went over the background of the City of Albertville's financial history. Kruse reported this is the first session to review and go over the Preliminary Budget. The deadline to report the Preliminary Budget and set the Levy to Wright County needs to be in no later than September 15, 2011. The Preliminary Budget -Levy can be set with a small amount to work with, which means it can be reduced in December but cannot be increased. The Final Budget and Levy needs to be certified to Wright County by December 2011, which will set the property tax base for the 2012 calendar year. In November, property owners will receive notice from Wright County giving them an estimated property tax amount that can be appealed in April or May when the Local Board of Appeals and Adjustments meets. There is a Truth -in- Taxation meeting held in December; however, the Council does not have the ability to adjust the tax rate at such time. Kruse went on to explain in addition to the main Budget and Levy; the enterprise budget will be presented to the Council in October to November, which involves the Sewer Budget. Administrator Kruse proceeded to review the Financial Overview with Long -term challenges, which staff has identified six (6) main areas for the presentation. Kruse noted these areas are not in insurmountable and staff is aware that these issues need to be addressed. a Increasing the General Fund Reserves • Resolving Inter -fund Loan from the Sewer Access Charge (SAC) Fund to the Northwest Commercial Park • Develop a marketing plan for City owned Prairie Run lots with development standards • Identifying appropriate Phosphorus removal technology for the Wastewater MAPublic Data \City Council \Council Minutes\2011 Minutes\M 07 -18 -2011 workshop approved (bm).doc City of Albertville City Council Budget Workshop notes July 18, 2011 Page 2 of 5 Treatment Plant and related funding plan • Develop an Assessment Policy • Update the 1995 -96 Albertville Comprehensive Plan Increasing the General Fund Reserves is one of staff s concerns in resolving the Inter -fund Loans that have been approved to cover negative balances by borrowing from the Sewer Access Charge (SAC) Fund. The Northwest Commercial Park was one of the projects that was funded through the SAC Fund. Staff hopes the additional lots will sell to replenish the fund. Kruse commented about developing a market plan for City owned property_within the Prairie Run residential development. The outcome of the litigation has temporarily caused additional work for staff to maintain the lots. Kruse reminded the Council that the Minnesota Pollution Control Association (MPCA) has been monitoring the phosphorus levels that are reported from the sewer treatment plant. The MPCA has informed the City these levels need to be reduced; therefore, staff is dealing with phosphorus removal technology and coming up with a funding plan for the issue. Kruse reported staff is looking at developing an Assessment Policy and as previously mentioned the Comprehensive Plan is in need of updating. The Comp Plan was last updated in 1995 -1996, which it is recommended that it should be updated every ten (10) years. Kruse informed the Council that the 2012 Budget and Levy includes the I -94 Ramp Project, which depends on the size of the loan taking into account the interest rate at the time should be flat for the next five (5) years. Kruse shared what the City of Albertville's bond rating was Al in 1995 and is Aa3 in 2011. Kruse explained that Albertville is pretty comparable to Wright County's and the State's bond rating, which is prime or high grade rating. The credit worthiness of Albertville is extremely strong in the capacity to meet its financial commitments. Kruse stated the City Goals are centered about public service — to provide high quality responsive service; promote open communication; strive to be friendly and exceed residents' expectations; and, provide consistent, uniform enforcement with an effort to guide rather than penalize. Kruse went over the Transportation Improvement that includes and is not limited to; complete Phase I of the I -94 Ramp Project; maintain a five (5) year Capital Improvement Plan; and begin the plan for Phase II of the I -94 Ramp Project. Kruse reported that the City began putting funds in a Capital Outlay for the I -94 Ramp Project. Other City Goals involved the economic development area; to promote quality industrial development featuring high quality local jobs; use Tax Increment Financing (TIF); maintain an inventory of development ready sites. Staff went on to commercial development issues and the thought to maintain high quality standards, and not promote development for the sale of development (to be patient). In the area of housing, Kruse stated to continue to pursue senior living housing that would accommodate the seniors that still have the ability to go -go; then transition to the slow -go; and then reside in a facility for the no -go seniors. General residential housing is to promote high M:Tublic Data \City Council \Council Minutes \2011 Minutes\M 07 -18 -2011 workshop approved (btn).doc City of Albertville City Council Budget Workshop notes July 18, 2011 Page 3 of 5 quality single - family housing; promote programs to maintain our existing housing stock in rental inspection- housing maintenance -point of sale; and, lastly market and sell the Prairie Run Subdivision lots. Kruse expanded that intergovernmental goals staff is looking at collaborating, cooperating, and include promoting good will and a good working environment between the two (2) cities (St. Michael and Otsego); work with the STMA School District; the Wright County Government offices; and, the State of Minnesota and the Federal level of government. The City of Albertville contracts out law enforcement protection with the Wright County Sheriffs Department who provides quick, efficient, timely, coordinated, and emergency response service. Cultural and recreational goals are to work towards a second sheet of ice for the STMA Ice Arena; continue supporting FYCC and other children programs; and maintain an active senior citizen program. City Administrator Kruse states employees are viewed as the City's most valuable asset. They promote a positive work place where good work and successes are appreciated. The City offers support to employees in the areas of training and education. Albertville supports competitive market wages and benefits along with professional development of employees. There are currently twelve (12) full -time employees, one (1) part-time employee, and approximately 30 fire fighters. City Administrator Kruse turned it over to the Finance Director to give information related to the 2012 Preliminary Budget. Finance Director Lannes began with the comment that the 2011 Final Budget was set at $2,965,834. This evening staff has prepared the Pre 2012 Preliminary Budget coming in at $3,072,566, which is a little over 3.6 %. The total Pre -Levy percentage is 2.29 %. Lannes demonstrated the loss and gain in revenues, which were a loss of market value credit in the amount of $113,170; a gain in the general levy of $81,431; a gain in fire protection services contract of $5,438; and, a gain in facility rentals (5975 Main Ave. NE) in the amount of $5,800. Lannes demonstrated where there were increases in the 2012 expenditures that ranged from the Library Debt that amounted to $13,646, increase in Worker's Compensation insurance amounted to $8,000, and wage increase of $19,000 for the City Clerk and Building Official bringing them to 85 %. Lannes went on to inform the Council how the total levy percentage has come down over the years. In 2006 the total levy was 15.4 %, it went down to 13.4% in 2008. In 2009, it was single digit set at 4.6% with staff proposing a 2.3% for 2012. That means that staff has been doing what the Council has directed them, which is to decrease the operations budget. The operations budget is about as low as staff is comfortable going to in meeting the needs of the City. M APublic Data \City Council \Council Minutes\2011 Minutes\M 07 -18 -2011 workshop approved (bm).doc City of Albertville City Council Budget Workshop notes July 18, 2011 Page 4 of 5 Lannes had a graph that showed how the Albertville Budget has decreased over the years. Then Lannes reviewed the cost estimate per household with the 2.3% increase in budget/levy. The amount of increase per household valued at $200,000 will be $19.00. Council member Vetsch directed staff to prepare a cost analysis with businesses throughout Albertville. Vetsch gave examples such as how much would the proposed taxes be for Fraser Steel or a restaurant like 152 Club. Lannes responded she would take the direction and calculate what the estimated taxes would be for a few establishments in Albertville unless there are specific ones in mind. These calculations will be brought to the next Budget Workshop Session. City Administrator Kruse concluded with a few questions: Levy — is this where the Council wants to be; Are the staffing levels adequate for the services; Does the Council have new initiatives or changes in staff assumptions? Kruse stated these are just a sample of questions staff has for the Council to discuss as we continue the 2012 Budget Process. Mayor Meehan opened the discussion up to the Council and other staff members present in the audience. As Meehan went on he asked staff about the City Goals section and promoting the development of commercial or other retail /industrial areas. The comment noted on the presentation is to be patient, if the development why does it seem the City expects such a high quality product. Meehan questioned if there is too much pressure at the front line that detours the developer from completing a project. City Planner Brixius responded on the commercial aspects of the surrounding amenities and will review the article in the paper and research development throughout Albertville that are site ready. Schommer wanted to know where the inventory or list of City owned property was located. Is there something on the website; do individuals need to contact City Hall; could staff prepare a list or show where the information is located. Staff reported there are no funds in the budget to advertise or promote the industrial lots owned by the City that are site ready for development. The City in also in possession of commercial . lots in the Northwest Commercial Park off 67 Street NE; behind the Albertville Premium Outlets. Most recently are the residential lots the City acquired as a result of the Prairie Run Litigation. Staff has set up the infrastructure and completed the ground work; however, staff has not continued with figuring out where to go from here. Meehan encouraged staff to look at St. Michael as an example to discover what they have going for them. Development is shaping up and taking place. Communicate with St. Michael staff to find out what they have implemented and see if any of the information will work for Albertville. Wagner and Sorensen asked Meehan and Schommer what type of publications are being looked at or are interested in pursuing. All of this is going to cost the City to promote, advertise, or get MAPublic DataTity CouncilTouncil Minutes\2011 Minutes\M 07 -18 -2011 workshop approved (bra).doc City of Albertville City Council Budget Workshop notes July 18, 2011 Page 5 of 5 the word out there what the City has available. Staff could consider looking into bigger publications that will reach out to developers beyond here. Council recommended that staff prepare a cost comparison for the next Budget Workshop that would see the difference between five (5) residential lots that would include a number of vacant lots. Wagner challenged staff with the 3% cost of living increase inquiring `Where did staff come up with the information or the percentage for the cost of living increase?' Wagner wanted to know if other municipalities or businesses are administering increases or raises. There were other areas throughout the budget in general that Council wanted staff to prepare answers for such as `bottlenecks' or `actual staff duties' or `backups' that will give the Council a true picture as to what the City needs are. Finance Director Lannes reiterated the background as to how the finances work and how staff came up with the basics for preparing the budget. Lannes encouraged the Council to look back to prior years such as 2006 when the Levy was double digit and in recent years staff has gotten it down to a single digit. Fire Chief Mills informed the Council that the City of Otsego would like to increase the Albertville Fire Contract to increase the service area to include a portion that is in the Monticello Township. Other comments were to change the Fire Chief from an elected position to an appointed position. Mills felt the current way of the fire fighters voting or electing the Fire Chief and Assistant Fire Chief seem to work; however, the term could be longer. The current term is two (2) years, which doesn't seem long enough for a Fire Chief to get a full concept of the job duties. Mills recommended extending the term -of -office to a four (4) year length allowing enough time for the fire fighter to adjust. Council and staff summarized the first 2011 Budget Workshop a successful meeting, which staff received direction from the Council to prepare answers or draft cost comparisons with industrial, commercial, residential, and vacant property for the next budget workshop that will be held on Monday, August 1s following the regular City Council meeting. ADJOURNMENT CMs Wagner /Schommer motioned to adjourn the Monday, July 18, 2011 City Council Budget Workshop session at 8:52 p.m. Motion carried unanimously. 4� Bridget Miller,ltity Clerk (recording secretary) M:Tublic Data \City Council\Council Minutes \2011 Minutes \M 07 -18 -2011 workshop approved (bm).doc