2012-08-20 CC Minutes WorkshopV
Albertville
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ALBERTVILLE CITY COUNCIL WORKSHOP
Monday, August 20, 2012
APPROVED MINUTES
ALBERTVILLE CITY HALL
ROLL CALL
7:57 P.M.
Present: Mayor Mark Meehan and Council members Jillian Hendrickson, Larry Sorensen, John
Vetsch and Dan Wagner
Absent: None
Others Present: Interim City Administrator Thistle, Finance Director Tina Lannes, Public
Works Director/City Engineer Adam Nafstad, Public Works Supervisor Tim Guimont, Admin.
Asst./Accounting Clerk Bridget Miller, City Clerk Kimberly Olson, Fire Chief Tate Mills, James
Krutzig and Samara Postuma
BUDGET WORKSHOP DISCUSSION
Lannes reported the debt service levy is 2.18% or $68,822 while the general levy increase
proposed is 2.58% or $80,847, to bring the revised proposed levy to 4.76%.
Lannes presented an overview of the proposed budget including:
• Important dates and deadlines for budget adoption
• Historical levy information
• Description of Salary Adjustments for Building Official, City Clerk, and Admin.
Asst./Accounting Clerk
• Fixed Costs
• Cost of Living Increases and Salary Steps
• Ice Arena Capital Improvement Needs
Lannes identified the major increases in the proposed budget are the $100,000 Reimbursement
Administrator costs, Fire Department back pay for $32,000, insurance increases, miscellaneous
professional services, seal coat, cost of living and salary steps.
Lannes stated there are several ways to reduce the budget and it would be to spread the cost of
the City Administrator Reimbursement costs and Fire Department back pay over two to three
years. However, the Council must affirm those costs for the following two to three years.
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City Council Workshop Minutes
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Lannes stated the Arena Board has requested the three entities that own the building begin
budgeting $10,000 a year for capital improvements. Sorensen stated the Board is asking for the
funds should a major repair be needed for the building, such as Zamboni, compressors, coolers,
and piping under the ice. He clarified that it would not go towards a second sheet of ice. Lannes
stated that if funds are not started for these improvements and a major repair or replacement is
needed, each entity will need to fund that entire repair or replacement upfront.
Lannes reported the insurance assumption went from 10% to 6%.
Lannes provided a comprehensive handout that showed all unfunded capital projects. Meehan
inquired if this was new and Lannes reported staff has spent a significant amount of time to list
all capital projects through 2024, so Council can get a good idea of what is ahead. Thistle stated
that Council will need to begin making some decisions on what is needed on the list and what
can pushed back, then develop a financial plan for those projects.
Nafstad reviewed the building services provided by St. Michael to date and the processes that are
kept in house. Staff developed a formula to calculate payment for building services from St.
Michael. He stated they looked at other samples such as the library and the senior center to
create the formula. The formula is based on population and commercial property values. Vetsch
had concerns about basing the formula on the commercial value and Nafstad replied there may
be times where development is higher in one city over the other and the contract can be
terminated at any time. Nafstad spoke about the level of service provided by consultants versus
a contract with St. Michael. Thistle stated they could monitor the services quarterly and provide
feedback to the Council. Nafstad recommended an annual contract to coincide with the budget
process.
Thistle reported they are working on the fire contract with Otsego and it is important to maintain
the relationship with them.
Lannes showed the debt service as well as average annual bond payments. Vetsch stated they
have the highest tax rate in the county. Lannes reported that most of the bonds have been
refunded. Thistle stated that in order to level out the debt and keep the levy consistent, they can
look in 2017 at scheduling the debt.
Vetsch felt the goal is to get to a lower tax rate. Lannes provided samples of the levy impact for
residential and commercial properties.
Meehan stated that he liked the presentation style this year showing the long term projects and
bonds.
Lannes stated that if Council wishes to reduce the levy from the proposed 4.76%, staff
recommends one of the following options:
• Spread the Administration Reimbursement of $100,000 over two years which would
bring the levy to 3.17%
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Spread the Administration Reimbursement of $100,000 over three years to bring the levy
to 2.64%
Spread the Administration Reimbursement and Fire Department back pay over three
years to bring the levy to 2.26%
Sorensen stated they will get questions from the public on why employees would get cost of
living increases again this year if they got one last year. He wanted to know how much would be
saved if they did not include the cost of living. Lannes replied that if they did not include cost of
living and steps for both city and fire employees, it would be about $25,000. Hendrickson stated
this was a hard decision for her because she knows that steps are important. Lannes explained it
is difficult for employees, and hard on morale, if only steps are given as some employees will
receive them and others will not since some have already reached the top step.
Thistle stated that cities have only three things to rely on which are time, dollars, and employees.
He stated time or dollars cannot be changed, but a positive work environment can be created for
employees in the hopes of retaining skilled and motivated employees. He stated there are not a
lot of employees left and to bring in new employees would include training and time to learn.
Sorensen stated this is the one of the hardest decisions they have to make. Hendrickson stated it
is difficult in this economy. Meehan stated that when you are a smaller city, the loss of one
employee is significant.
Thistle cautioned Council not to bring the levy too low in September as some things could
change before December and the levy can only be lowered after September.
Vetsch stated that a two percent levy doesn't seem like much, but property values are still
continuing to drop. He wants less than a one percent levy. Meehan stated the need to keep the
value of the city up. Vetsch replied that he appreciates that too, but many people are out looking
for jobs and it is a fine line. Meehan believes staff has done the best they can to bring the budget
down.
Wagner feels they should pay for the $100,000 Administration Reimbursement up front. He felt
it was not responsible to spread out the payment.
Thistle stated staff needs a consensus on a percentage that the Council is comfortable with. Once
they get the percentage, staff can come back with adjustments to get to that percentage.
Vetsch suggested pushing out the seal coat and overlay until some of the bonds are paid off.
Hendrickson, Meehan and Sorensen were comfortable with a two percent levy increase if they
can do the Administration Reimbursement over two years.
Lannes stated her professional opinion would be to approve the 4.76% levy, so they will have
$132,000 in future budgets for capital projects.
Sorensen felt there are ways they can get the levy down responsibly.
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City Council Workshop Minutes
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Thistle stated there may be some ways they can improve on services to reduce costs. Thistle
stated that he is hearing a two percent levy with spreading the Administration Reimbursement
over two years. Lannes stated she needs direction on cost of living. Several members inquired if
the cost of living percentage could be reduced. Guimont stated that if there is a choice between
cost of living and steps, he personally would prefer cost of living, because steps will still be there
but cost of living cannot be regained.
Hendrickson and Sorensen felt the cost of living could be included if staff can still maintain a
two percent levy. Staff will present a revised budget and levy at the Special City Council
meeting on August 28.
ADJOURNMENT
The meeting was adjourned at 10:12 p.m.
Respectful
ly submitted,
Y,
j)
Kimberly �A. Olson, City Clerk
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