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09-10-1998 CC MINSPECIAL MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL THURSDAY, SEPTEMBER 10, 1998 Members Present: Members Absent: Staff Present: Mayor Duitsman, Councilmembers Dietz and Thompson Councilmembers Farber and Holmgren Lori Johnson, Assistant City Administrator and Pat Klaers, City Administrator Call Meetinq To Order Pursuant to due call and notice thereof, the special meeting of the Elk River was called to order at 6:00 p.m. by Mayor Duitsman. Consider 9/10/98 A.qenda If was the consensus of the Council that the agenda was acceptable as presented. 1999 Bud.qet Worksession The City Administrator noted that as of 8/31/98, the proposed budget had a gap between available revenues and proposed expenditures of .$$479,150. Since the August 31 worksession, staff has increased revenue projections by $111,800 and reduced expenditure requests by $223,450. These changes have resulted in a September 10, 1998, budget gap of $143,900. The current budget proposal shows expenditures at $5,339,450 and revenues at $5,195,550. Staff discussed with the City Council a handout which outlined the budget changes since August 31 which have resulted in this reduced budget gap of ,$143,900. Assistant City Administrator, Lori Johnson, reviewed with the City Council some preliminary 1999 tax levy information, the 1999 preliminary levy estimate, some 1999 city tax estimates as applied against homesteaded property and commercial/industrial property, and reviewed the education homestead credit changes for 1999. Additionally, the information that will show up in the truth in taxation notice that is published in the paper was reviewed. Based on current budget proposals, this notice will show that the budget is proposed to go up 9.9 percent and the tax levy is proposed to go up 11.63 percent. These figures assume that the City Council will certify a proposed maximum levy which includes the amount discussed on August 31, plus ,$150,000 in additional tax levy revenue. This extra $150,000 will cover the September 10 budget gap. The September revenue projections were reviewed and compared to 1997 actual revenues and the 1998 adopted budget. Concern was expressed about the city being dependent on its growth related revenues and what type of problems this will cause when the city's growth slows down. It was the general consensus of the Council that the revenues were projected sufficiently high for 1999. Special City Council Minutes September 10, 1998 Page 2 A great deal of discussion took place regarding proposed expenditures for 1999, and these figures were compared to the 1997 actuals and the 1998 adopted budget. Personnel changes were reviewed and it was noted the only staff additions proposed for 1999 are the part time Senior Citizen help, the part time Recreation programming help, and the Police records clerk that was recently authorized. The Economic Development assistant is proposed to be financed outside of the General Fund and will be the responsibility of the EDA and HRA. General discussion took place regarding Park and Recreation needs, the expansion of the Police Department, the desire to do the codification program in 1999, and 1999 equipment requests that can either be delayed or purchased in 1998. The capital outlay page was distributed and reviewed. The City Council discussed other budget balancing possibilities including: Reducing the Council Contingency Fund even further by way of providing less than 3 percent cost of living increases to employees Shifting all of the Economic Development Director's wages out of the General Fund and into the EDA/HRA budgets Not hiring any new employees in 1999 Reducing the Development Fund tax levy and shitting these funds to the general city budget Reducing the Lake Orono tax levy and shifting these funds to the general city budget Assessing out the city seal coating project and therefore, taking this expenditure out of the budget Increasing fees for services Using additional reserves as revenues Delaying some equipment purchases which would reduce the equipment certificate levy and allow some more tax revenues to be moved into the general city budget Although this would not help in 1999, a gas utility franchise fee similar to the one in Ramsey, North St. Paul, and Moundsview was discussed. The Council noted that this fee still comes from the citizens and in many respects could be considered a tax. No Council support was indicated for a franchise fee approach to increasing revenues. The City Administrator reviewed action needed by the City Council on September 14, 1998. It was the consensus of the City Council to present the budget on 9/14/98 showing the $143,900 budget gap and the tax levy resolution should include the August 31 amount, plus $150,000 of additional tax revenue. Other Business 4.1. Pool Update The City Administrator distributed a September 9 letter which authorized the architect to proceed with the 3D Rendering. The amount of the rendering is $2,200. The rendering is needed in order to promote the pool component of the bond referendum. Special City Council Minutes September 10, 1998 Page 3 The Administrator reviewed the results of the September 2 bond referendum worksession with the aquatics consultant. The preliminary report showed that the outdoor aquatics center was estimated to cost 2.8355 million dollars. It was the consensus of everyone in attendance to pursue a 3.95 million dollar bond referendum and to present the public with the opportunity for a complete, high quality outdoor aquatic center. Discussion took place regarding management of the pool and whether or not the city was getting closer to needing a full time Park and Recreation director and support staff. It was noted that there is limited additional office space available at City Hall and that this could cause a problem in hiring additional staff. Discussion took place regarding the city's role in the Community Recreation organization and the future of this organization if the city hired its own Park and Recreation staff. The City Council was informed that the referendum question will be presented on September 14 and needs to be approved at that meeting so that it can be sent to the County by September 18. 4.2. Library Landscapin.q Proposal The City Administrator distributed a handout which showed the Library landscape estimates. It was recommended to approve the quote from Better Yards in the amount of approximately $10,556. COUNCILMEMBER THOMPSON MOVED TO APPROVE THE BE'ri'ER YARDS LANDSCAPING QUOTE OF APPROXIMATELY $10,556. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 3-0. 5. Adjournment There being no further business, Mayor Duitsman adjourned the Council meeting at 8:30 p.m. Respectfully submitted, Patrick D. Klaers City Administrator