5.6. SR 08-08-2005
Itell1 5.6.
MEMORANDUM
TO:
Mayor and City Council
FROM:
Pat Klaers, City Admir~rt~!~~, i/
C~fj 1\ ,,' ',oS' J {,,-JJI
;1 t/.~,.! .". . .{~"\~ '\..~ ...........'.
August I, 2005
DA TE:
SUBJECT:
2006 B'udget
Introduction
i\t the .L\ugust 8, 2005 City Council worksession, I \vould like to pro'vide dle City Council
\vith a preliminary and general o\rervie\v of dle 2006 budget and recei~le feedback froln tlle
City Council on some budget issues. The most important issues to discuss are staff additions,
capital outlay items, and tax re\renues. This feedback \vill help staff in putting togetller
material for a special City Council budget worksession that I would like to schedule for
eitller .L~ugust 22 or .L~ugust 29.
2005 Bud~et Status
Before beginning a discussion on the 2006 budget a brief re-vie\v of \'There \ve are at \vidl tlle
2005 budget is in order.
Regarding 2005 re,renues, \ve are going to be ,rerr close to hitting our $9,284,100 budget.
One concern is grO\vth related re'ienues. Tllese grO\vth related re-venues are building permits,
plumbing/heating permits, and plan check fees. Building acti\Tit:y has slo\ved do\vn from
\\rhat \ve experienced the past t\vo years and the budgeted amounts for these rev-enues are at
the higllest le,rel ever. \Y/ e may reach our budget for these re'Tenues, but it \vill be close.
On the expenditure side of tile budget it appears that \ve \vill be at or belo\v the budget.
~Addit:ionally~, v.ery little of dle Council Contingency has been spent so far.
O,rerall the 2005 budget is in fine shape. HO\Ve\Ter, in previous years \\le have generally had a
revenue sUlplus (due to a higher than expected level of grO\vth and de\Telopment activities)
and tllerefore \ve llad some flexibility to consider end of the year expenditures. This is not
\vhat I anticipated to l1appen this year.
2006 Budget
August 8) 2005
2
Budget Goals
This past April, during a Capital Improvement Program (elP) meeting, a presentation \vas
made by representati.\res of Ehlers and Associates, Inc. This presentation \vas an update of
tl1e city Financial IvIanagement Plan. One of the operating expense assumptions that \vas
discussed at this meeting and that \vas supported by the Council related to equipment
certificates. The goal that \"vas discussed is to mo,re the city a\vay from d1.e use of equipment
certificates and gradually have all of the annual capital equipment expenditures be in the city
general fund budget. .t\chieving this goal will be a major challenge over the next fe\v years.
.i\n informal budget goal that the city has al\vays tried to achieve is to keep the tax rate
reasonable \vhile continuing to provide quality services and programs.
2006 Revenues
With the exception of tax re,renues in the general fund, all of the odler re,Tenues are
projected to be very similar in 2006 as to \vhat \vas in the adopted 2005 budget. The Local
Go\'ernment .L~d (LG_A.) alnount is identical and the growth related re\renues actually may
ha,Te to go do\vn slighrly. This is quite different than \vhat \ve experienced last year \vhen
LG.i\ \vent up $393,650 and the grO\vth related re,renues went up $226,400. Not ha'Ting this
type of additional re,Tenue a\Tailable in 2006 \vill make balancing the budget a significant
challenge.
Tax re,Tenues in the general fund are anticipated to increase substantially in 2006 without a
tax rate change. Last year dle city Net Tax Capacity (NTC) increased by 16.1 % and dus
increase \vas based mainly on ne\v building activities in 2003. The 2006 increase \vill be based
on 2004 acti'Tities and 2004 \vas another high grO\vth year for us. At this time the budget
proposal sho\vs a 1 O~/O increase in NTC and all R\railable additional tax monies that are not
required for debt payments ha-ve been put into the general fund. This equates to
approximately $850,000 \vorth of additional tax re,renue for general fund activities \vithout a
tax rate change. If \ve use equipment certificates then this additional tax amount tllat is
available for general fund acti,rities will decrease; but then, also, some expenditures \vill be
remo\red from the general fund budget. I belie\Te that this 100/0 projection is conservati,Te
and that the actual increase \vill be in the 140/0 range. This additional re,Tenue \'vill be 'Tery
mucll needed in order to balance the 2006 budget.
Last year general fund re\Tenues \vent up ahnost 180/0. In 2006 \ve'll be fortunate to go up
100/0. This 1 O~/O figure nearly matches the city grO\vth rate and inflation combined.
2006 Expenditures
In keeping \vith Council direction from last year, there ha,Te been \7ery fe\v changes made in
the expenditure requests as submitted by dle department and division heads. At this time the
proposed expenditures for 2006 are showing an approximately 200/0 increase. i\hnost all of
the requested capital outlay items are in the budget and about t\\ro-thirds of the requested
staff additions are included in the budget.
Attached for your re\rie\v is d1e personnel additions page. This page identifies the positions
that are included in tl1e draft budget and \vhich ones I have excluded. This list reflects ffi}T
s: \ Council\Pat\Budget\2006 \ 080805 CC F eebackdoc
2006 Budget
August 8, 2005
3
priority ranking and I need to ha\re Council input on these positions prior to proceeding
onto the budget worksession later in August.
..A.ttached for your information is the requested 2006 capital outlay page. This page SllO\VS
requested expenditures exceeding $900,000 \vith a vast majority of these being included in
the general fund. This is in stark contrast to the 2005 budget when expenditures \vere
projected in the $700,000 range with only $56,600 in the general fund. (With the changes in
the composting program, the actual capital outlay budget in 2005 is closer to $600,000.)
I dUnk it is fairly certain that the total amount of capital outlay in the general fund can
increase in the 2006 budget as compared to 2005; however, it will be virtually impossible for
the city to finance all of the requested 2006 items \vithin the general fund without a
significant increase in the city tax rate. Some capital items \villlikely ha\Te to be funded \vith
equipment reserves and we likely \vill ha,re to consider use of equipment certificates again in
2006. Some items identified in tlle 2006 capital outlay page can be cut or delayed, but then
they often turn up as requested items in future years. There may be a fe\v items listed that are
"nice to ha,re" \rersus needed items. Additionally, the Council should note that there are
some monies (approximately $80,000) a,railable for capital outlay items per City Council
action \vhen the 2004 audit \vas revie\ved.
Requested Council Action
There are a number of capital ouday requests dlat I \vould like for the City Council to
consider at this August 8 meeting or at the special meeting in later August. Some of dle
requests relate to the use of the $80,000 for capital equipment that the Council approved in
i\.pril. T\vo of the requests relate to use of the Go,rernment Buildings Reserve.
Regarding tile $80,000 a,railable for capital equipment, I \vould like for the City Council to
consider purchasing the black and \vhite "e" size copier no\v, along 'With a few items that are
not on the attached capital outlay page. These items include $16,000 for a smart board for
the Upper To\vn conference room. (We may ha,re a slight cllance that the cable commission
\vill fund tllls purchase but I am not optimistic.) .Also, the mo\ving of the grass areas in the
medians has been transferred to the Street Department and in order to accomplish this \vork
without taking needed equipment a\vay from the Parks Department approximately $16,000 is
requested for an additional mower and trailer.
Regarding use of dle Go\rernment Building Reserve fund, I \vould like for the City Council
to consider a request to construct the long o\Terdue arena manager office at the Ice .L\rena.
This office is especially needed as \ve enter into the concessions business, \ve add some
clerical staff, and for holding Ice Arena staff meetings. This is estimated to be a $50,000
expenditure. The other Go,rernment Buildings Reserve expenditure is about $10,000 for
impro\rements at the Emporium. Both the outside and inside of the Emporium need some
impro\Tements in order for it to remain functional for recreation programs and to pro\ride a
more appropriate appearance to the public.
Engineering Department Update
As time allows I \vould like for Terry IvIaurer to discuss \vith the City Council the
engineering techs that are in the budget and the plan for using of these employees (see
s: \ Council \ Pat \ Budget \2006 \ 080805 C C F eebackdoc
2006 Budget
August 8, 2005
4
attachment). This step "vill be the start up of the Engineering Department that has been
identified as a high priority by the City Council.
Conclusion
Right no\v, in \Tery rougll round numbers, it appears that revenues and expenditures for 2006
are just O'Ter $1 million apart from being balanced. With not too much work or luck \ve
should be able to cut that figure in half by \vay of a larger than projected increase in the
NTC and by shifting some capital outlay items out of the general fund budget. Nonetheless,
the balancing of the 2006 budget is going to be extremely difficult, especially as compared to
the "easier than normal" budget that we had last year.
_About t\Vo-thirds of the budget is direcdy related to personnel. .i\ccordingly, if \ve ha've a $10
million budget, then there is about $3.5 million in non-personnel expenses. Cutting $500,000
out of $3.5 million is difficult.
Once again not too many firm details are a'Tailable at this ti.rr1e. I'm just trying to gi,re the
Council a fla,ror as to what the budget looks like, \vhat I am recommending for staff
additions, and how dle capital outlay requests look. Please bring your calendar to the Council
meeting so that \~le can set our budget worksession for either August 22, or August 29, 2005.
s: \ Council\Pat\Budget\2006 \ 080805 CC F eeback.doc
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01
2006 CAPITAL OUTLAY
Funding Source
Requested General Equipment Equipment Other Department 2005
Department Item Amount Fund Certificate Reserve Fund Total Amendment
Cable TV Smartboard $16,000 $ 16,000
Information Tech E-mail server 7,000 7,000
PD Records Management Server 18,000 18,000
Microsoft Office 2003 10,550 10,550
Develop web interface to Police Records 10,000 10,000
45,550
Planning Black & white e-sized copier 9,000 9,000
City Hall Scrubber 5,000 5,000
5,000
Police Unmarked squad 24,000 24,000
3 marked squads 87,000 87,000
CSO pickup truck 25,000 25,000
CSO vehlice (New CSQ) 22,000 22,000
Bar Code System for Evidence 25,000 25,000
Mobile video cameras (3) 15,000 15,000
Mobile data computers (3) 15,000 15,000
213,000
Fire Grass fire unit 45,000 45,000
45,000
Emergency Mgmt. Outdoor warning siren 14,700 14,700
14,700
Engineering Vehicle for Engineering Tech 20,000 20,000
AutoCADD - 2 licenses 10,000 10,000
StormCADD 5,000 5,000
ICON Pavement Management softvvare 5,000 5,000
40,000
Streets Single-axle truck w/plow equipment 146,000 146,000
Tandem-axle truck w/plow equipment 165.000 165,000
One-ton dump truck 36,000 36,000
Grapple bucket 13,500 13,500
Transmission upgrade 30,000 30,000
390,500
Equipment Services In-ground truck hoist 31 ,000 31,000
Sound deadening for shop 10,000 10,000
Toolbox 6,000 6,000
47,000
Park Mainenance Snowmobile 8,000 8,000
Trimming Mower 12,000 12,000
Wide Area Mower 90,000 90,000
Trailer 5,000 5,000
Bucket 81600 8,600
123,600
Subtotal General Fund Departments 949,350 900,850 23,500 924,350 25,000
libraI)' Parking Lot Expansion 35,000 35,000
35,000
Ice Arena Office 50,000 50,000
Total $1,034,350 $900,850 $0 $0 $58,500 $959,350 $75,000
8/5/2005
MEMORANDUM
TO: Pat Klaers, City Administrator
FROM: Terry Maurer, City Engineer~
DATE: August 3, 2005
SUBJECT: Engineering Department
This memo is intended to layout my thoughts regarding the development of an internal
Engineering Department. Based on conversations with you and the City Council in the past,
I foresee the following actions:
A 2006 - Two Engineering Technicians
As you are aware, I proposed in my budget for 2006 that two engineering technicians be
added during the year. I have suggested that one of these be a more experienced
Engineering Technician II added to City staff in April 2006; and the second one be a
less experienced Engineering Technician I added in June of 2006. Based on these two
budget positions, I have prepared the attached estimate of hours these two technicians
would spend on various projects for Lori Johnson's budgeting purposes. The spread
sheet assumes the start dates of April and June with a 90 percent utilization. As you can
see from this attached sheet, I expect that approximately 50 percent of both Technicians'
time will be spent on various public improvement projects. This would include
construction inspection activities on currently initiated projects, along with layout and
design on future public improvement projects such as the 2007 reconstruction project.
Approximately 25 percent of their time in 2006 would be spent on projects that have
been waiting for someone to work on. The two main projects here would be
construction of a City storm sewer map and construction of a computerized pavement
management system. As you are aware, the City purchased stereo photos of all the
streets within the City in 2004, anticipating they would be used for both of these
projects. Approximately 25 percent of the time would be utilized for ongoing items such
as maintaining the City's Municipal State Aid System, updating of City maps, NPDES
inspections, annual inspections of storm sewer outlets, and management of the GIS
System. All of these items listed on the estimated work list for 2006, other than the
storm sewer map and pavement management system, would be items that currently the
Engineering Department Memo
A~oust 3, 2005
Page 2
City is paying a consultant perform. Therefore, there would be a direct reduction in
consultant fees.
In years beyond 2006, I would anticipate a similar type of workload where approximately
50 percent of the Technicians' time, depending upon the year, would be spent on various
phases of public improvement projects. Approximately 25 - 35 percent of their time
would be spent on ongoing work items and approximately 15 - 25 percent of their time
would be spent on special projects that year or engineering work for other departments.
B. 2007 /2008 Assistant City Engineer
I would suggest that in the 2007 /2008 time frame the City plan to add an engineer to City
staff in the role of Assistant City Engineer. This person's function would be primarily
made up of leading the design team on public improvement projects, coordinating
review and inspection of developer-initiated projects, responding to citizen concerns and
questions, and managing the Engineering Technicians. These are functions that are
generally performed by engineering consultants at this time.
C. 2007/2008 Engineering Administrative Assistant
I believe that in this timeframe it would be appropriate to evaluate the administrative
assistant needs for the Engineering Department. It is doubtful that the Engineering
Department would generate enough administrative assistant work to require a full-time
staff member, but more likely a shared staff member with another department.
D. 2008/2009 Public Works Director
It would be my recommendation that in the 2008/2009 timeframe, the City consider
adding a Public Works Director (PWD) staff position. This person could also hold the
title of City Engineer or it could be passed immediately to the staff member previously
hired as the Assistant City Engineer. The PWD would coordinate activities in the
Engineering Department, Wastewater Treatment Plant/ Sanitary Sewer Department, and
Street Department. By 2008/2009 I would anticipate that the continued growth of the
City would lend itself to much more demand for interaction with citizens, answering
concerns and complaints, and interaction with the other departments dealing with
existing infrastructure maintenance and rehabilitation. Also in this timeframe, the City
may well be looking at major expansions of the City infrastructure into areas such as the
gravel mining property north along Trunk Highway 169 and/or continued major
transportatlon unprovements.
E. Consultant Work Beyond 2009
With the addition of a PWD the City's Engineering Department would be fully staffed.
There would still be on-going needs for consultant services. These consultant services
would include the following:
1. Survey Crew for preliminary topography and construction staking.
S:\Engineer\2005 Memos \08 03 05 Engr Dept PK.doc
Engineering Department Memo
August 3, 2005
Page 3
2. Construction Inspectors for work beyond what the City Technicians can handle.
This would primarily be developer projects paid for by the developer but performed
under the direction of a City staff member.
3. Design work at the Wastewater Treatment Plant.
4. Assistance with overflow and/or complicated municipal designs such as traffic
signals or lift stations.
S:\Engineer\200S Memos\08 03 05 Engr Dept PK.doc
2006
WORK ITEM TECH II TECH I
Public Improvement Projects
Completion of .05 Sheets (Construction) 160
Completion of Northstar Business Park (Construction) 200
06 Assessable Overlay (Construction) 40 60
Dodge Avenue (Construction) 200
07 Street Reconstruction Project 220 160
- Feasibility Public Improvement, Design
Waco Street & Utilities (Construction) 40 120
Gateway Business Park (Design) 100
Highland Avenue
2006 Seal Coat Program 8 24
193rd Corridor Study
SUBTOTAL ESTIMATED ANNUAL HOURS 768 564
Special Projects
Build Storm Sewer Map 40 160
Create Computerized PM System 320 80
Work For Other Departments 60
SUBTOTAL ESTIMATED ANNUAL HOURS 420 240
On-Going Work
Annual MSA Updates 40
Update of System Maps 20 60
Developer Information into GIS System 40 40
NPDES Inspections 160
Annual Inspection of Outlets (NPDES) 120
GIS Management 120
SUBTOTAL ESTIMATED ANNUAL HOURS 220 380
ANNUAL HOURS TOTAL 1 ,408 1,184