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2014-08-04 CC Minutes Budget WorkshopIle &null Town LM". aY CkN Ufs. CITY COUNCIL WORKSHOP CITY HALL - COUNCIL CHAMBERS Monday, August 4, 2014 APPROVED MINUTES 1. CALL TO ORDER The meeting was called to order at 6:17 p.m. Present: Mayor Hendrickson and Council members Olson, Sorensen, Wagner, and Vetsch Others Present: City Administrator -PWD Adam Nafstad, Finance Director Tina Lannes, City Clerk Kimberly Olson, Fire Chief Tate Mills, and Public Works Supervisor Tim Guimont 2. LONG TERM CIP PRESENTATION BY ABDO Andrew Berg and Kevin Knopik from Abdo, Eick, & Meyers, LLP were present at the meeting. Knopik reviewed the assumptions they used for the CIP such as no growth in the City, general fund balance of 40 %, and conservative revenue and expense increases. They showed a comparison of tax capacity rates. Knopick reviewed the cost of the upcoming levy on homeowners based on home values. Sorensen stated that those were not static numbers as it depends on the real estate market; some homes would see less of an impact and some a higher impact. Lannes stated the chart was intended to give an estimated average amount. Knopik reviewed outstanding bonds and that they assumed no future bonds to be issued. Lannes stated they conducted a review of the outstanding bonds and have created a solid repayment plan. Berg briefly reviewed the enterprise funds. Nafstad stated that a utility rate study was recommended in the future. 3. FIRE RELIEF PENSION PRESENTATION BY ASSOCIATION Brad Lawinger and Eric Bullen from the Fire Relief Association were present at the meeting. Bullen explained how the Fire Relief pension works and how members are defined as eligible, not eligible, and vested. He stated their vesting percentage is currently 143.87% and the State vesting percentage was at 101 % (the State operates as if the members are drawing pensions). Bullen explained that the higher the relief's vesting percentage is, the more it means they are not giving back to the members and suggested they get to about 120 %. Lawinger explained when the association meets and Bullen stated the association recommended attending a quarterly Council meeting to keep the Council informed of the Fire Relief status. Page 1 Nafstad stated the Association had done a comparison study of Fire Relief Association pensions of similar sized and nearby communities and the study did show the Albertville Fire Relief Association to be under the current market. The Association is asking for $2,400 per year of service for all members based on their years of service as active Fire Department members. Lannes described how the City sets funds aside if the pension fund falls below 80% and the City is required to fund it. She stated the Association's request would have no impact on the budget and she is comfortable with the amount the Association is asking for. Nafstad inquired when the last time the pension amount was increased and Lannes replied that it was in 2008. Vetsch stated he was concerned with public perception, especially as they discussed other needs throughout the City. Hendrickson stated that she was in favor of the increase and asked if any Council members were opposed to a formal resolution coming to the next Council meeting on the consent agenda approving the increase. None stated they were opposed. Council directed staff to draft the resolution. 4. BUDGET DISCUSSION Lannes reviewed the budget history since 2008. She stated that to maintain services as they currently are, the levy increase would be approximately 3.19 percent. She explained the Debt Service Levy increase was 5.30% and the General Levy increase was 2.38, making the total levy 3.19% Lannes reviewed the increases and decreases in both the revenues and expenses. Staff has identified several unfunded items for Council to review such as: Public Works full -time employee, full -time Fire Chief, increase street maintenance funding, add funds for replacement fire capital, increase trails capital, and increase general capital reserves. Council discussed both the full -time Public Works and Fire Chief positions and possibly staggering one or both of them to happen midyear to reduce the impact on the budget. Nafstad reported the Fire membership will be discussing the Fire Chief position at their next meeting on Thursday. Council agreed they needed to wait to see if the majority of the Fire membership are in favor of the full -time Fire Chief position. Lannes also mentioned another unfunded item would be a change in Council salary and stated that she needed to inform them if they wish to have a change, it must be done prior to the November election. Council agreed they did not want to increase their salaries. Lannes also mentioned there are no levy limits this year. Olson stated that all the items are justified but all cannot be funded at one time and simply is too much of a percentage increase. Nafstad stated they need to begin funding these items or will need to bond for such items. Vetsch stated this is just the City portion of the taxes and the other entities will most likely have increases and he wants to make sure Albertville is a place businesses and citizens wish reside in. City Council Meeting Minutes Page 2 Workshop Meeting of August 4, 2014 Lannes explained that to add one of the larger unfunded items and keep the levy increase at 3 %, they would need to cut capital and staff cannot make that recommendation. She asked for each member's top three unfunded items they would like to see included and the top percentage each member is willing to increase the levy. Council gave a variety of the items to fund and the range to increase the levy was from 3.4% to 6.0% among the members. Council discussed certain items that could be reduced or no longer provided, such as the City newsletter. Sorensen inquired about the recycling fund and if it could be used to have an additional clean-up day. Lannes replied it certainly is an option or they could use it when they renew the contract in 2015 to reduce the recycling cost to residents. Nafstad stated they will come to the next workshop with a base budget and several different options for the unfunded items. 5. ADJOURNMENT Motioned by Vetsch, seconded by Sorensen, to adjourn the meeting at 9:07 p.m. Ayes: Hendrickson, Olson, Sorensen, Vetsch, and Wagner. Nays: None. Absent. None. MOTION DECLARED CARRIED. submitted, Olson, City Clerk City Council Meeting Minutes Page 3 Workshop Meeting of August 4, 2014