09-29-1987 CC MIN - SPECIAL
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SPECIAL ELK RIVER CITY COUNCIL BUDGET MEETING
HELD AT ELK RIVER CITY HALL
SEPTEMBER 29. 1987
Members present: Mayor Estelle Gunkel, Councilmembers Schuldt, Holmgren.
Tralle, Dobel.
Staff present:
Pat Klaers, City Administrator, Lori Johnson, Finance
Director
Pursuant to due call and notice thereof. the meeting was called to order at
6:10 p.m. by Mayor Gunkel.
The purpose of this special City Council meeting was for a preliminary review
of different financial options that are possible for the 1988 City Budget.
Mayor Gunkel requested the staff to distribute the revenue options and
expenditure proposals for 1988 and requested the staff to lead the discussion
in explaining the figures and how they were determined.
General Fund Revenue Option #1. which calls for revenues in the amount of
$1,531,400 was discussed. This option showed GENERAL PROPERTY TAX and
INTERGOVERNMENTAL REVENUES in the amount of $1,040,550. This amount
represented a $75.050 increase over 1987 budgeted figures. It was noted that
this increase in these two categories represented all but approximately $2,000
of the total increase over 1987 adopted figures. Revenue Option #1 showed an
increase of $76,900 over the adopted 1987 revenues. The changes in the
revenue projections of the remaining categories were indicated as follows.
CHARGES FOR SERVICES showed an approximately $20,000 increase in 1988. based
on administrative project fees increasing by $10.000 due to the administrative
charges for the Main Street and Jackson Avenue projects that are planned in
1988. Also, Plan Check Fees were estimated to increase by approximately $9,000
based on actual year end projections for revenues in 1987. THE FINES AND
FORFEITS category was projected to increase $6,600 and this projection was
based on actual year end estimates for 1987. LICENSES AND PERMITS were
projected to increase by $700. OTHER REVENUES was projected to decrease
$2.500, based on the City no longer exchanging checks with the Electric
Utility Department for street lighting which was in the amount of $22,000 in
1987. This decrease is offset by the City adding $20,000 as a revenue for HRA
contributions. TRANSFERS was down $23,000, based on not using Recreation
Reserve Funds and decreasing the Liquor Store contribution by $10,000. It was
noted by the staff that this is the very minimum that can be expected for
revenues in 1988, and that realistically more revenues are anticipated.
General Fund Revenue Option #2 calls for an increase over revenue option #1
in the amount of $136.000. This would make the 1988 proposed revenue in the
amount of $1.667,400. This represents $212,900 increase over the 1987 adopted
budget. This is an approximately 14.6% increase in revenues. The $136,000 of
extra revenues were located in the following areas. 1.)The City successfully
receiving a levy limit appeal in the amount of $64,000 ($12,800 would be added
to the Homestead Credit category and $51,200 would be added to the General
Property Tax category). 2.)Under Public Safety. the school lias on program
shows a $19.000 increase, based on School District participation in the
financing of a second juvenile officer and the receiving of a $5,000 grant to
help pay for this position. 3.)Payment in Lieu of Taxes shows a $43.000
increase. This is the money the City receives from the Electric Utilities and
was projected to increase from $12.000 in Option #1 to $55.000 in Option #2.
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City Council Budget Meeting
September 29. 1987
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This figure was used in Option #2 based on the conversation that took place at
the last Utility Board Meeting and figures provided to the Utility Board by
its General Manager. 4.)The Liquor Store revenue was projected to increase
$10.000 over Option #1 to equal the amount received in 1987. It was noted by
the staff that this Option #2 is deemed to be the most realistic that the City
can expect in 1988. It was further noted by the staff that this amount of
money will still not finance all of the needs for services. The need for
additional contributions from the Electric Utility to the City's General Fund
to pay for municipal services was highlighted.
General Fund Revenue Option #3 was presented to the Council with the caution
that this option is a very last resort and some of the revenueS are not viewed
as being realistic. It was noted that in doing municipal budgets a sound
practice is to be conservative in estimating revenues and that Option #3 does
not represent a conservative approach to revenue estimates. Three areas were
noted for potential revenue increases under revenue Option #3. These three
increases included an increase in administrative project fee in the amount of
$15.000. due to the staff administrative charge increasing to 2.5% from the
previously used 1.5%. Other potential increases included $5.000 additional
monies under Refunds and Reimbursements due to the renting of the Old City
Hall facility. plus an extra $10.000 under HRA Contributions. These increases
raised the General Fund Revenue for option #3 to $1.697.400. Again the staff
stressed that this projection is not the most realistic of the three that have
been provided.
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The City Administrator discussed the Appropriation Summary page with the
Council. It was noted that this appropriation request had already been
refined through discussions between the department heads and the City
Administrator. The proposed appropriations total amounted to $1.764.300.
This reflected a 21.2% increase over the adopted 1987 City Budget. This
amount compared to Revenue Option #2 shows a gap of $96.900. The
Administrator indicated that there are other potential reductions in some of
the expenditure departments. that when totaled could approach the $45.000
level. The Council then requested a review of each of the departmental
budget requests.
The MAYOR AND COUNCIL budget showed a $6.550 increase over 1987. This
increase was due mainly to Cable T.V. franchise fees going up. along with
the salary increase authorized by the Council in 1987. plus additional funds
being allocated for conferences and schools as the League of Cities annual
conference is in the Twin Cities in 1988.
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City Council Budget Meeting
September 29. 1987
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The ECONOMIC DEVELOPMENT department budget called for expenditures in the
amount of $56.050. It was noted that this budget had undergone a major
change caused by the pending additional Community Development Coordinator
Staff position. and the related expenditures needed for this position under
the Capital Outlay and Conferences and Schools. Also. the miscellaneous
category under Contractural Services continued to provide funds for needed
Chamber of Commerce events. The Professional Services and Printing and
Publishing expenditures under Contractural Services have mainly been shifted
to the Economic Development Authority Special Levy budget. Also within this
Economic Development Authority Special Levy budget. is the funds that are
needed for the consultant.
The ELECTION budget calls for expenditures in the amount of $8.800. This is
an increase from the 1986 actual election expenses because a national
election being held in 1988 and more Election Judges being required for this
election. It was noted that $1900 was planned to be spent under the
Equipment Certificates Special Levy category for new voting booths.
The ADMINISTRATION/FINANCE budget calls for a increase of approximately 12%
over the 1987 adopted budget. This budget is up $24.850 from 1987. The
total expenditure request in 1988 is in the amount of $233.400. Almost the
entire increase in this budget is located under the personal services
category based on increases due to the Comparable Worth law and based on the
pay plan for department heads that has been approved by the Council.
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The
are
AUDIT
again
budget is once
located as a
again. zero. It was noted that the Audit expenses
line item within the Administration/Finance budget.
The LEGAL budget calls for an increase of $9.000 over the 1987 adopted budget.
This budget calls for expenditures in the amount of $32.000. This projection
was based on year end estimates for 1987 and actual expenditures in 1986. It
was noted that the Attorney Retainer Contract is projected to increase 10%
from $1500/month to $1650/month based on additional services being supplied
the City. The remaining expenditures under this category are for special
projects that are not included within the retainer such as work on the City
Personnel Ordinance or work with the City Capital Improvement Program.
The BUILDING AND ZONING departmental budget calls for expenditures in the
amount of $148.750. This is an increase of $18.500 over the adopted 1987
City budget. Almost the entire increase in this budget is located in the
personal services categories. This increase is needed because of compliance
to the Comparable Worth Law. It was also noted that $2500 is included under
the Conferences and Schools category for two Planning Commission members to
attend a national conference.
The DATA PROCESSING budget is proposed to increase $3.100 to the amount of
$15.500. The entire increase in this budget is under the Capital Outlay
Reserve Category based on the need for future software when the computer
system needs to be changed in 1989.
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City Council Budget Meeting
September 29. 1987
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The PLANNING budget calls for expenditures
$11.000 of this budget is for work related to
$4.000 is for miscellaneous Planning work
developers or projects.
in the amount of $15.000.
the Growth Management Plan and
that can not be charged out to
The ENGINEERING budget calls for expenditures in the amount of $12.000 This
figure was arrived at based on 1987 year end projections. This budget is for
engineering services that can not be charged out to developers and projects.
such as work for the City on the Capital Improvement Program in 1988.
The GOVERNMENT BUILDINGS budget has undergo~e a significant change from the
1987 adopted budget. Expenditures in 1988 are proposed to be in the amount
of $53.500. This is a $14.700 increase over the adopted 1987 budget. It was
noted that the 1987 budget was prepared based on the assumption that the City
would be renting the Mason Lodge facility. This budget in 1988 includes the
yearly expenditure for the current City Hall facility. It was noted that
under Capital Outlay. funds were planned to be spent in the amount of $3500
for a lease purchase agreement on a new copy machine. This amount will be
removed from the budget if the Council agrees to purchase the copy machine at
one time through use of the Equipment Certificate Special Levy in 1988.
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The POLICE budget calls for expenditures in the amount of $610.250. This is
an increase of $112.850 over the 1987 adopted budget. This is an
approximately 22.5% increase over the adopted 1987 budget. It was noted that
all but $6.500 of this increase is in the personal services category. based on
the hiring of an additional police officer to work in the juvenile area.
comparable worth increases. budgeting for the full time secretary/receptionist
position that was hired in 1987 and general increases based on the union
contract. The Capital Outlay category included expenditures for a CRT
and printer. typewriter, transcriber and some items that are more minor in
nature. It was also noted that other Capital Outlay items (Police Vehicle and
assecories) are planned to be purchased under the Equipment Certificate
Special Levy.
The FIRE budget calls for an increase of $22.550 over the adopted 1987 budget.
Total expenditures are proposed to amount to $102.950. The most significant
increase in this budget is under personal services. based on the Fire Chief
going to a one half time status. The Capital Outlay items requested within
this budget include $7.200 for one half of the cost to rebuild an old tanker
and $1.400 for radio work at the fire station. Also it was noted that
additional expenditures for Capital Outlay items are planned under the
Equipment Certificate Special Levy. It was further noted that other
retirement benefits calls for expenditures in the amount of $15.000 for the
fire department retirement fund. This is an increase from the $11.000
allocated the past two years. The Administrator requested a motion or
concensus from the Council on annually allocating expenditures for the fire
department retirement benefits in the amount of 50% of the state. funding.
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City Council Budget Meeting
September 29. 1987
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~~I~N ~y ~~UNClt~MDER TRALtE TO ANNUALLY PROVIDE CITY APPROPRIATIONS TO THE
ELK RIVER VOLUNTEER FIRE DEPARTMENT RETIREMENT BENEFIT FUND IN THE AMOUNT OF
50% OF THE PRIOR YEARS STATE CONTRIBUTION TO THIS RETIREMENT BENEFIT FUND.
COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION PASSED 5-0.
The POLICE RESERVES budget is proposed to increase $1.600 to the amount of
$5.850. The increase in this budget is due to having officers attend a First
Responders training course. It was also noted that funds are planned to be
spent under the Equipment Certificate Special Levy for a new radio.
The CIVIL DEFENSE budget calls for expenditures in the amount of $2.500. This
is the identical amount as the 1987 adopted budget.
The STREETS budget calls for expenditures in the amount of $203.450. This
represents a $31.450 increase over the adopted 1987 budget. The main reason
for the increase is because in 1987 the total street crew time allocated to
the streets budget was 40% and in 1988 this percent is proposed to increase
to 46%. It was noted that increased funds are being provided in the 1988
budget for a street replacement sign program and for a DNR required report on
the study for the dam structure. Capital Outlay category calls for the
purchase of radios. pagers. and a forklift. It was further noted that
additional Capital Outlay expenditures are planned under the Equipment
Certificate Special Levy.
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The EQUIPMENT REPAIR AND MAINTENANCE budget is proposed to decrease in 1988.
This budget calls for expenditures in the amount of $43.700. The reason for
this decrease is that only 10% of the street crew time is planned to be spent
under this category and in 1987 20% of the street crew time was planned
to be used for equipment repair and maintenance. The Capital Outlay
category calls for expenditures in the amount of $7,000 for a hoist to assist
in equipment repair and an oil dispenser.
The SNOW REMOVAL department budget calls for an increase of $1.800 over the
adopted 1987 budget. Expenditures are proposed to be in the amount of $48.250
in 1988. The entire increase is within the personal services categories due
to typical wage increases.
The STREET LIGHTING budget has undergone a significant change in 1988. The
City and Electric Utility are no longer doing the "paper shuffle" for the
financing of the street lights. Previously the Utilities would give the City
$22.000 for the street lighting and the City in turn would pay this $22.000
back to the Utilities. The $12.000 that are planned to be spent in 1988 are
for an expense that in past years was located within the street budget. This
is for the electrical power to operate the street signals.
The PARKS budget calls for expenditures in the amount of $52.300. This is a
$11.100 increase over the adopted 1987 budget. The major increase in this
budget is under personal services. as the total amount of street crew time
planned to be spent in parks is 15% in 1988 versus the 11% projected in the
1987 budget. It was also noted that $5.000 is planned to be spent for part of
e the "Wilderness Park" purchase.
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City Council Budget Meeting
September 29. 1987
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The RECREATION budget calls for expenditures in the amount of $32.000. The
expenditures are planned to be $27.850 to the Community Ed department for
recreational programs. plus $3.000 for ice hockey expenditures and
approximately $1.000 for miscellaneous expense.
The CONTINGENCY budget calls for expenditures in the amount of $40.000 in
1988. These expenditures are completely under the City Council control and
are for any unseen expenditures in 1988.
It was noted
above reaches
include:
by the Administrator that the total of the budgets described
$1.764.300. Possible reductions in the $45-$50.000 range
Mayor & Council-$1.000 from the Conference & Schools and Printing &
Publishing line items.
Economic Development-$6.500 from the Chamber. Capital Outlay. Personal
Services and Conferences categories.
Administration/Finance-$5.000 from the Personal Services. Contractural
Services. Capital Outlay categories.
Building & Zoning-$4.500 from the Personal Services and Conferences and
Schools categories.
~ Data Processing-$4.000 from the Capital Outlay category.
Planning-$2.000
Engineering-$1.000
Governmental Buildings-$4.000 from
Professional Services categories.
the
Capital
Outlay
&
Other
Police-$3.500 from the Supplies. Contractural Services. Other Charges and
Capital Outlay categories.
Fire-$2.500 from a general reduction of all five budget categories.
Streets-$3.000 from Contractural Services for a reduction
sealcoating program.
in
the
Equipment Repair & Maintenance-$2.000 under Capital Outlay category.
Snow Removal-$500 from the Equipment Repair & Maintenance line item.
Street Lighting-$2.000 based on a high estimate of charges from the
Utilities department.
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City Council Budget Meeting
September 29. 1987
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Parks-$1.500 from a reduction in the Supplies and Contractural Service
categories.
Recreation-$500 from miscellaneous expenditures.
Contingency-$5.000
TOTAL - $48.500
The Council and Administrator concurred that all of the possible reductions
listed above are not likely to take place. and that even if they did. there
would still be about a $50.000 gap between expenditures and Revenue Option #2.
The Council again discussed the need for the additional revenues from the
Electric Utility to help finance needed public services including the
additional time required by the Fire Chief and additional police
services.
The Administrator and Finance Director then reviewed the previously classified
Special Levies with the City Council. It was noted that most of these special
levy budgets have been wrapped into the City's general tax levy in 1988. but
that the method of levying may revert back to the 1987 format in the future
years. Therefore. these budget areas are kept separate from the standard
general fund expenditure budget.
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The PUBLIC LIBRARY budget calls for expenditures of $40.050. This is a
reduction from the 1987 adopted budget because of the large expenditure in
1987 for new carpeting. It was noted that 1% of the City street crew time is
again allocated to the library in 1988. The Capital Outlay expenditures calls
for $3.000 to be placed in reserve for self insurance purposes. plus the
purchase of a 16 millimeter projector. smoke detectors and general furniture
and fixture items.
The DUTCH ELM budget calls for expenditures in the amount of $18.200. This is
a $3.050. increase over the 1987 adopted budget. The main increase in this
budget is for the purchase of trees for a replanting program throughout the
community. It was noted that the City will only be levying for $10.000 for
Dutch Elm activities and that $8.200 for financing this budget will be taken
from the Dutch Elm reserves. It was further noted that if additional Dutch
Elm funds are to be used in helping to finance the Main Street improvement
beautification project in 1988 an additional amount can be levied in 1989 to
balance any deficit due to additional 1988 expenditures.
The INFRASTRUCTURE REPLACEMENT budget calls for expenditures in the amount of
$95.000. The street crew has 10% of its total time allocated to this
department. The major expenditure for Infrastructure Replacement is for an
overlay project on Orono Road and for other smaller infrastructure replacement
projects. It was noted that a policy on the use of Infrastructure Replacement
funds for certain types of projects will be presented to the Council during
the winter months.
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City Council Budget Meeting
September 29. 1987
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The EQUIPMENT CERTIFICATES calls for expenditures in the amount of $108.100.
The breakdown for the proposed expenditures is as follows:
ADMINISTRATION:
Copy Machine
Election Voting Booths
Recording System
$15.000
1.900
2.000
$18.900
POLICE AND RESERVES:
Police Vehicle
Radio
Mobile Radio
Radar
Misc. Vehicle Requirements
13.000
2.000
1.300
1.500
2.800
20.600
FIRE DEPARTMENT:
Air Masks
4.000
4.000
CIVIL DEFENSE:
2 Sirens
18.000
18.000
STREET DEPARTMENT:
Street Truck
Grader Payment
Fuel System
10.500
12.000
24.100
46.600
$108.100
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The Council concurred with these expenditures and that this amount for
Equipment Purchases under Equipment Certificates would be acceptable to them
when the total levy request came before them on October 5. 1987.
The SANITARY LANDFILL budget calls for an increase in revenues due to the City
receiving $.25 per cubic yard versus the $.15 per cubic yard previously
received. Expenditures were guesstimated at $30.000 in 1988 for various legal
and consulting services relating to an ongoing effort to have the landfill
comply to the City's solid waste ordinance.
The HOUSING AND REDEVELOPMENT AUTHORITY calls for expenditures in the amount
of $20,000. The one third mill for revenues will generate approximately
$16.000, and the Authority would be using reserve funds to finance projects in
1988. The expenditures call for $5.000 to be spent on the City Growth
Management Plan and $15.000 to be spent on Economic Development activities.
It was further noted that approximately $10,000 is being held in reserve and
that HRA may amend their budget and spend these funds on activities related to
the beautification of the Main Street that are included within the 1988 Main
Street improvement project.
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City Council Budget Meeting
September 29. 1987
~ The ECONOMIC DEVELOPMENT AUTHORITY budget calls for a levy of three fourths of
a mill which would generate approximately $37.500. All of these funds would
be used to pay for consulting services and different parts of the City
marketing plan.
The Administrator noted to the Council that with uncertainties about different
revenues being available for the City in 1988. that a request to certify the
City's tax levy would be done prior to the official budget being approved.
These levy requests to the City would be done on October 5. 1987. and on
October 7. 1987. following the Economic Development Authority Meeting.
The Staff then requested the Council to authorize the purchase of the fuel
system listed under the 1988 Equipment Certificates Special Levy as it was
desired to have this system in place before winter. Finance Director noted
that such a purchase in 1987 using 1988 funds was possible.
COUNCILMEMBER TRALLE MOVED TO APPROVE EXPENDITURES IN THE AMOUNT OF $26,700.00
FOR THE PURCHASE AND INSTALLATION OF A CITY WIDE FUEL SYSTEM AND THAT 1988
EQUIPMENT CERTIFICATE FUNDS BE USED TO FINANCE PART OF THIS PURCHASE, AS
ELIGIBLE BY STATE LAW. COUNCILMEMBER SCHULDT SECONDED THE MOTION. MOTION
PASSED 4-0.
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It was noted that the actual tanks for this fuel system would be $11.628.60.
This amount is known because of the low quote that was acceptable to the
Council from the Hale Company. The remaining expenditures included
approximately $6.000 for the installation of the tanks. $4.000 for the card
identification system. and $5.000 for concrete. electrical connections.
dispensers and supplies. It was further noted that only the legally
acceptable items of this fuel storage system would be purchased through the
Equipment Certificates. It was anticipated that this amount to be financed
through Equipment Certificates would be approximately $24.100.
The Finance Director requested the Council to approve a motion authorizing the
City to exceed the scheduled levy for Bond repayments based on additional
funds being needed for improvement projects that have fallen behind
schedule.
COUNCILMEMBER DOBEL MOVED TO AUTHORIZE THE CITY TO EXCEED ITS BOND REPAYMENT
SCHEDULED LEVY IN THE AMOUNT OF $5.000 FOR THE 1982 SEWER EQUIPMENT BOND AND
$19,510 FOR 1980 IMPROVEMENT BOND. COUNCILMEMBER SCHULDT SECONDED
THE MOTION. THE MOTION PASSED 4-0.
It was the consensus of the Council that at the 10-5-87 Council Meeting it
would review the City levy request that needs to be approved and sent to the
County by October 9. 1987. This levy request would include the needed funds
for the 1988 Equipment Certificate purchases. the maximum allowed by the state
for general fund activities and the required amounts for bond repayment
according to the schedules on file at City Hall.
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City Council Budget Meeting
September 29. 1987
COUNCILMEMBER SCHULDT MOVED TO ADJOURN THE MEETING. COUNCILMEMBER TRALLE
SECONDED THE MOTION. THE MOTION PASSED 5-0.
The meeting was adjourned at 10:15 p.m.
Respectfully submitted.
?p dauo/
Patrick Klaers