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CITY COUNCIL WORKSHOP
CITY HALL - COUNCIL CHAMBERS
Monday, July 20, 2015
APPROVED MINUTES
1. CALL TO ORDER
The meeting was called to order at 6:39 p.m.
Present: Mayor Hendrickson and Council members Hudson, Sorensen, and Vetsch
Absent: Council member Olson
Others Present: City Administrator -PWD Adam Nafstad, Finance Director Tina Lannes, and
City Clerk Kimberly Olson
2. LONG TERM CIP PRESENTATION BY ABDO
Kevin Knopik, from Abdo, Eick, & Meyers, LLP, was present at the meeting. Knopik reviewed
the long range assumptions they used for the CIP such as no growth in the City, general fund
balance of 50 %, and conservative revenue and expense increases. Sorensen inquired about the
50% general fund balance and what Knopik sees in other cities. Knopik stated that last year they
used 40 %, but 50% is better and a buffer for unanticipated expenditures. He stated it is not
uncommon to see 60 -70 %, but the Office of the State Auditor's minimum is 30 %. Vetsch
cautioned that just because the money shows as being available, it is budgeted for specific line
items and is not there just to spend. Knopik stated that inflation costs will slowly bring that fund
balance down over the next several years.
Knopik reported that tax capacity is a tool to analyze the City's financials. He stated the graph
showed the capacity going up from 2012 due to the I -94 project.
Knopik explained how the capital levy used to be in the general fund and their office
recommended it be pulled out of the general fund. He stated that the Council will see a clearer
picture of the general fund without the capital included.
Knopik reviewed the projected residential taxes that property owners will pay until 2020. The
projected amounts were for Albertville's portion of the taxes only.
Knopik reported the debt service levies were adjusted to make sure that each fund will have
sufficient cash to meet the bond requirements.
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Knopik reviewed the enterprise funds. He stated the sewer fund looks healthy, but there will be
a multimillion dollar Wastewater Treatment Facility upgrade needed in 2022. He stated the
water fund will be in deficit in 2020 and recommended a full utility rate study. Hendrickson
inquired about the $1.00 annual base increase the Council passed a few years ago. Nafstad
replied that projection includes those base increases. Knopik indicated a full rate study would
identify the types of utility users in the area and address tiers most used. He suggested it would
be beneficial to look at enterprise rates and gradual improvements are often preferred over on
large increase to correct the deficit. Nafstad indicated they could achieve a deficit free water
fund, but Lannes indicated that it would still not address funding for capital repairs and does not
include depreciation. Hendrickson inquired what other means are available to alleviate the future
deficit. Knopik replied he has not seen a city do a tax levy to fund water operations. He stated
Albertville has four years to take steps in order to avoid a deficit.
Hendrickson inquired if the sewer fund was doing well. Nafstad reported they are not funding
depreciation. He added the funding for the Wastewater Treatment Facility would not be cash on
hand, but would require an ability to fund debt.
3. ADJOURNMENT
The meeting was adjourned at 7:23 p.m.
Respectfully submitted,
Kimb y A. Olson, City Clerk
City Council Meeting Minutes Page 2
Workshop Meeting of July 20, 2015