08-22-2005 CC MIN - SPECIAL
SPECIAL MEETING OF THE ELK RIVER CITY COUNCIL
HELD AT THE ELK RIVER CITY HALL
(UPPER TOWN CONFERENCE ROOM)
MONDAY, AUGUST 22, 2005
Members Present: Mayor Klinzing, Councilmembers Dietz, Farber, Gumphrey, and Motin
Members Absent: None
Staff Present: City Administrator Pat Klaers, Finance and Administrative Services
Director Lori Johnson, Parks and Recreation Director Bill Maertz, Police
Chief Jeff Beahen, Fire Chief Bruce West, Street Superintendent Phil Hals,
and Assistant Street Superintendent Mark Thompson
1. Call Meeting To Order
Pursuant to due call and notice thereof, the special meeting of the Elk River City Council
was called to order at 6:30 p.m. by Mayor Klinzing.
2. Budget Worksession
The city administrator provided an overview of the draft 2006 budget. At this time the draft
budget shows a gap between proposed revenues ($10,033,200) and requested expenditures
($11,189,250) in the amount of $1,156,050. It was noted that the proposed maximum tax
levy for the city needs to be certified to the county by September 15, 2005.
The city administrator stated that staff worked on the budget with the assumption that the
Council wanted no change in the tax rate. He stated that the general fund budget includes
additional tax revenues based on a 10% increase in the city Net Tax Capacity (NTC). Mr.
Klaers further stated that the budget gap could decrease significantly if the city NTC
increased more than 10%. He noted that if the NTC went up 14% instead of the 10% that is
in the draft budget, then an additional $304,950 could be raised without any change in the
city tax rate and these monies could be used to help balance the budget. Information on the
city NTC increase is not yet available and that this information is provided by Sherburne
County. The NTC information from the county is expected around Labor Day.
The city administrator stated that a budget goal is to increase the capital outlay expenditures
within the general fund; but that capital outlay is a major factor in the 2006 budget gap.
Capital outlays in the amount of $900,850 is in the general fund budget. By reducing this
amount to $250,000 the budget gap can be reduced by $650,850. This capital outlay amount
of $650,850 will either have to be funded with equipment certificates or equipment reserves
or else the expenditure will have to be cut from the budget and not funded in 2006.
The city administrator suggested that in order to help balance the budget, the fire truck
payment of $85,456 can be funded with reserves and the money identified in the preliminary
levy sample for this payment can then be put into the general fund as tax revenues.
Councilmember Farber asked for an explanation regarding the status of the Street
Department trucks and indicated his belief was the city could only afford to do one truck
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August 22, 2005
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per year and, accordingly, one of the trucks requested for 2006 should be deleted from the
budget.
Street Superintendent Phil Hals distributed a memo regarding the age of the current
snowplow trucks within the Street Department and discussed dependability and down time
concerns for the trucks that are over 20 years old. It was further noted that each additional
12-15 miles of street that is added to the city through development projects constitutes
another snowplow route and therefore another truck and employee.
Councilmember Dietz asked if the funds dedicated to capital outlay when the 2004 audit
was approved, or if equipment reserves, or the Utilities contribution could be used to fund
capital outlay requests now and have these items deleted from the 2006 budget.
Mr. Klaers stated that this year, in contrast to previous years, he hopes to use the techniques
mentioned by Councilmember Dietz to fund some of the $650,850 worth of capital outlay
items that he has proposed to be removed from the general fund budget. The Council
discussed the budget goal of getting an increased level of capital outlay expenditures into the
general fund budget.
Councilmember Farber asked if the second vehicle could be a used truck rather than a new
truck.
Street Superintendent Phil Hals indicated that this could be done but the major issue of
concern is related to obtaining a truck that has an automatic transmission as there is a
limited supply of these vehicles.
Councilmember Dietz indicated he supports the Street Department getting two trucks this
year as the growth of the community and the age of the existing vehicles demands that two
trucks be purchased in some year in the near future in order to catch up.
Councilmember Farber respectfully disagreed with Councilmember Dietz’s position and he
thought that one per year would ultimately meet the needs of the city.
Mayor Klinzing asked for a review of the long range plans for Street Department truck
purchases.
Street Superintendent Phi Hals explained the truck Capital Improvement Program for the
next nine years. For the foreseeable future, one truck per year will be needed through 2010
(after the two in 2006) and also, some heavy equipment (i.e. sweeper, grader, front end
loader) will be needed every other year or so. Mr. Hals indicated that the department
equipment needs are increasing and are not projected to decrease.
Councilmember Motin asked about the street improvement levy and the equipment
certificate amount.
Finance and Administrative Services Director Lori Johnson responded regarding the change
from 2005 to 2006 for funding the street improvement program and noted that the
equipment certificate amount in the 2006 levy was simply a general estimate at this point.
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August 22, 2005
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Councilmember Motin indicated his support for keeping the tax rate level and, furthermore,
stated the budget should reflect only a 10% increase in the NTC. In this regard, if the NTC
increased more than 10%, these funds could go into a designated reserve.
Ms. Johnson stated that the requirement by September 15 is to certify the maximum levy
and that this amount cannot be increased at a later date. The budget does not need to be
balance by September 15.
Mayor Klinzing asked for discussion on the $90,000 mower.
Parks and Recreation Director Bill Maertz reviewed with the City Council the repairs that
were required on the mowers in 2005. The proposed mower is 16’ wide versus the current
mowers that the city has, which are 11’ wide. The new mowers can mow 14 ½ acres per
hour versus the current mowers only mowing 8 acres per hour. Mr. Maertz indicated that
the proposed mower is now the new standard in the industry and identified numerous cities
that have purchased these mowers.
Councilmember Dietz asked if the new mowers would save on labor and delay the need to
add staff.
Mr. Maertz indicated a negative response to this question and that the new and better
equipment would simply allow staff to keep up with mowing all the parks during the heavy
mowing season in the early part of the year. Mr. Maertz furthermore noted that downtime of
equipment is and has been a major factor in keeping up with mowing of city parks.
The Council asked about the need for two new CSO vehicles with the understanding that
another CSO employee would be hired in 2006. Police Chief Jeff Beahen responded that he
supports the street superintendent and understands the need for a second truck in 2006 and,
furthermore in that regard, he is willing to delay the request of two CSO vehicles and the
bar code system in order to free up funds for the second snowplow truck.
Discussion continued regarding the Police Department needs and citywide needs due to the
growth and development that is taking place.
Councilmember Dietz indicated that he supported using all of the NTC increase for the
budget and having the general fund budget finance as much capital outlay as possible.
Council discussion took place regarding the Fire Department needs. Fire Chief Bruce West
responded by discussing the fact that most of the Fire Department trucks are expensive and
that all of his major vehicles are on a standard replacement schedule based on the type of
apparatus.
Councilmember Farber asked how much capital outlay could be purchased using $120,000
as an annual levy amount over a five year period. Ms. Johnson indicated that this annual levy
amount would finance over $500,000 worth of capital purchases in 2006.
Mayor Klinzing expressed her concern regarding how expensive some of the requests are
and how high the total capital outlay request is for 2006. General discussion took place
regarding the NTC increase and the level of capital needs in the city. It was noted that the
Council should focus its discussion on the city tax rate.
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August 22, 2005
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Councilmember Dietz asked about the equipment certificate structure and current interest
rates.
Ms. Johnson noted that the structure is flexible for equipment certificates depending on our
needs and further indicated that at some time in the future, levy limits could be a factor in
whether or not equipment certificates are necessary for the city to meet its capital needs.
Councilmember Dietz stated that interest payments on equipment certificates may be less
than the maintenance expense that is incurred by having older equipment.
Councilmember Farber asked whether or not the draft budget included enough funding to
cover the higher gas prices that we are seeing. Chief Beahen indicated that his projection
was based on $2.50 per gallon.
Councilmember Dietz indicated he supports the purchase of the CSO vehicles and asked for
an update of the downtown parking situation.
Chief Beahen indicated that it has been a learning process for everyone involved and that
the overall situation is improving.
Councilmember Dietz asked about the City Hall mowing contract.
Mr. Maertz responded that the level of care necessary is beyond the time available with park
employees and that the park employees and equipment are geared toward mowing large
open spaces.
Mayor Klinzing concurred that the City Hall and Library need to have a more professional
appearance.
The city administrator advised the Council that the draft budget does not include any
funding for contracted services with the Boys & Girls Club. There is $12,000 in the landfill
budget for programs provided by the Boys & Girls Club but nothing is in the general fund
in 2006. There was $24,000 for these contracted services in the 2005 budget.
The city administrator also noted that the city has received a request from Charlotte Strei,
Director of the Retired and Senior Volunteer Program for funding in 2006 and that this is
also not in the budget at this time.
The city administrator indicated that, assuming a zero city tax rate change, staff would
proceed with addressing the 2006 budget gap as follows:
1.any increase from the 10% NTC growth amount would be applied to the general
fund;
2.$650,850 worth of capital outlay would be removed from the general fund; and
3.funding for the 2005 payment for the fire truck would come from reserves so that
these tax revenues could go into the general fund.
The majority of the Council concurred with this approach. The budget will be discussed by
the City Council at the September 12, 2005 worksession and hopefully an update can be
provided at the regular meeting on September 6, 2005.
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August 22, 2005
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Parks and Recreation Director Bill Maertz reviewed with the City Council some expenditure
requests for operation of the Ice Arena concession stand. The Council concurred that these
items need to be purchased now as the city is getting into the concession business for the
upcoming 2005-06 skating season.
MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY
COUNCILMEMBER FARBER TO APPROVE THE EXPENDITURES OF
APPROXIMATELY $10,000 FROM THE CITY COUNCIL CONTINGENCY
FUND FOR EQUIPMENT RELATED TO THE ICE ARENA CONCESSIONS.
MOTION CARRIED 5-0.
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The city administrator advised the City Council that he had provided Councilmember Motin
with a city flag (for $40.00) and also a Minnesota and U.S. flag. At this time the price of
these two flags has yet been determined due to identifying the replacement cost for the city.
The city administrator noted that in hindsight it would have been better to have
Councilmember Motin contact the Legion to obtain these two flags.
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The city administrator distributed a resignation letter from Building and Environmental
Administrator Stephen Rohlf. The Council acknowledged receipt of the letter and the Mayor
requested that this item be placed on a future City Council agenda for formal action.
3. Adjournment
There being no further business, Mayor Klinzing adjourned the meeting of the Elk River
City Council at 8:28 p.m.
___________________
Pat Klaers
City Administrator