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5. SR 10-24-1994 r I ~'\( ( ;; !fi<' River MEMORANDUM TO: MAYOR & CITY COUNCIL \ " fo,t FROM: PAT KLAERS, CITY ADMIN1SJ\~1'OR n, ",' \ . , /. '.;' DATE: OCTOBER 19, 1994 SUBJECT: BUDGET WORKSESSION The main purpose of this budget worksession is for the City Council to close the budget gap. Additionally, after a discussion on the budget, we will want to review other financial issues that are either directly related to the budget or which are on the immediate horizon that need City Council review and action. . Please bring to this meeting the budget revenues and expenditures pages that were reviewed on 8/29, 8/30, and 9/6. Attached for your review is my 9/1/94 memo, the 9/6/94 City Council minutes, and my 9/9/94 memo, all of which relate to the proposed 1995 budget. A review of the 9/1 memo and 9/6 minutes should remind the Council of how we got the budget gap from $339,000 down to $117,500. The only items from my 9/1 memo which were not approved by the City Council on 9/6 were the use of $20,000 from the City cash flow fund and the last $10,600 reduction in the City Council Contingency Fund. Staff will be prepared to discuss in detail how this budget gap has been reduced to $117,500, depending on the wishes of the Council. Clearly there are no easy answers left for the City Council in balancing the budget. In the past eight years, the City has never had a budget gap of over $154,700 (1992 budget) until this year and this 1995 gap was more than twice the total of the next largest budget gap. Staff has made the miscellaneous revenue increases and the smaller expenditure line item reductions, per direction on 9/6, so the City Council really needs to look at some of the bigger issues in balancing the budget. Staff has done about as much as it can at this point and needs direction from the City Council. One possible partial solution to our budget gap may be an increase in the Utilities contribution. This needs to be discussed by the Council and also by the Council and Utilities Commission at their joint meeting. . One big financial issue that could impact the 1995 budget is the City Surface Water Management (SWM) program. Staff will be prepared to discuss with the City Council the impact of the SWM levy on various classifications of P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 . properties. We will have to respond as a City to the public that attended the 7/25 Council meeting on the SWM topic. At this point, it seems like we are moving toward a city-wide levy type of solution, but we need to determine the amount to be included in the fmal 1995 tax levy. One way to help solve the budget gap is to move some of the proposed SWM levy into the General Fund. A lower SWM levy in 1995 may be easier for the public to accept and the City can increase this levy in the future as necessary. It may be difficult from a political point of view to tell taxpayers at the Truth in Taxation meeting that the entire tax increase that they will experience is due to the SWM levy which is how the proposed increase could be interpreted. Shifting some of these monies to the General Fund to pay for City services would help the budget gap and make the SWM levy smaller, at least in 1995, and may make a SWM levy more acceptable. Also, regarding the SWM program, the City Council will be requested to adopt its developer impact fee resolution. We have been charging the developers SWM fees based on City Council discussions and a consensus that was reached in July, but we need to formalize the amount by way of adoption of a resolution. . Staff needs some decisions from the City Council in the near future on the budget gap so that we can prepare documents for the Truth in Taxation public hearing on the budget and levy that is scheduled for December 5, 1994. Another financial issue that the City Council needs to review on 10/24 includes the City contribution to the Gary Street water tower. The City is scheduled to contribute approximately $429,000 into this project. This will be a tremendous benefit to the financial status of the Water Utility Department. The Finance Director is in the process of planning for a bond sale for this water tower project and we need to finalize the financial framework of this project. The Finance Director needs action on this issue at this meeting. , . Another financial item that I need direction on from the City Council is whether or not I should be pursuing the purchase of an alternative Northbound Liquor store site. Preliminary discussions have been held with the developers of the Hillside Crossing commercial project and I need to know whether or not I should finalize market rate terms and conditions for the purchase of a 1.1 acre lot in this plat. I have received feedback from the Liquor Store Manager on his preferred sites and the need for an alternative . liquor store location, but our Manager cannot attend this 10/24 meeting. Meanwhile the developer is receiving offers for this lot and the City cannot expect this site to remain available much longer. Additionally on 10/24, I will update the Council on ongoing discussions that have been taking place regarding site options for a Westbound Liquor Store. We need to get the property now, even if the construction of a Westbound does not happen for five years or so. Finally, I would like to update the Council on the appraisals that have been authorized by Panger and Benson as part of the Western Area Phase II assessment project. . . " I ~'\( ( ;; ~fi< River MEMORANDUM TO: MAYOR & CITY COUNCIL PAT KLAERS, CITY ADMINISTRfOR SEPTEMBER 1, 1994 .~ SUBJECT: 1995 BUDGET FROM: DATE: The City Council met on 8/29 and 8/30 to review the 1995 proposed budget ,expenditures and revenues and to discuss other City financial issues. At these worksessions, the City Council added $80,000 to the General Fund for new employees in 1995. The City Council also authorized bids to be obtained for the repair of the fire station roof which will be financed out of the 1994 City Council Contingency Fund. The City Council also authorized an engineering study for the east Highway 169 frontage road system. This study will have to be financed from the City Capital Projects reserve. The City Council also indicated its support of a ("3 mill") levy for surface water . management. At this point going into the 9/6 City Council budget worksession, we are looking at a General Fund budget gap of $339,000. We are also looking at a tax levy increase of $478,500 which includes additional General Fund tax revenues and tax revenues for the Surface Water Management Program. Our main point of discussion on 9/6 will relate to the $339,000 General Fund budget gap. The tax levy issue can be further discussed at the anticipated 9/12 budget worksession and later at the Truth in Taxation hearing. The tax levy can always be reduced at these Truth in Taxation hearings but cannot be increased. Regarding the budget gap, the City Council has most of its influence in the personnel and capital improvements areas. . At our recent worksessions, the City Council made some funding available for new personnel in 1995. Attached for your review is a revised list of possible new personnel. Also attached is some additional information from the City Clerk regarding some of the details of her work assignments and the overall need for more clerical support in the administration areas. The City Council can make final decisions on which personnel to add at a later date, but some general decisions regarding personnel can be made now which will affect the budget gap. All of the personnel expenses...wages for new employees, mid year comparable worth adjustments, and wage increases for 1995...are P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 . (612) 441.7420 . Fax: (612) 441.7425 el . e . . included within the City Council Contingency Fund. Some September personnel decisions may reduce the proposed 1995 Contingency budget. Ifwe do not hire a new police officer in 1995 (excluding the "mall cop"), it is believed that most of the employees listed can be hired within the $80,000 framework. The salary resolution will be considered by the City Council at a future meeting. To begin reducing the $339,000 budget gap, we should look at the capital outlay items. The attached 1995 capital outlay list includes all of the items within the proposed 1995 General Fund. This list is the same as what was distributed to the City Council during the worksessions with the addition of the administration computer. In reducing capital outlay expenditures, we also need to review the status of our City equipment reserves. Options for reducing the capital outlay expenditures in the General Fund include: financing some expenditures with the reserves; doing some purchases now within the 1994 budget; and cutting some expenditures'. Regarding the list of capital outlay expenditures, we have $30,500 worth of items scheduled to refinance with equipment reserve transfers into the General Fund revenues. It is suggested that this amount be for the following items: · Field groomer. $10,500 . Parks equipment reserves · Flail mower. $5,000 . Parks equipment reserves · Back blade. $2,600 . Parks equipment reserves · Hoist. $3,000 . Street equipment reserves . Firetruck radios. $2,100 . Fire Dept equipment reserves . Administration computer . $3,000 . Undesignated equipment reserves · Streets computer. $2,000 . Street equipment reserves . Police Reserves radios. $2,300 . Undesignated equipment reserves The designation of these expenditures does not reduce the budget gap. One item to reduce the budget gap which relates to the use of equipment reserves, is the purchase of the Building and Zoning truck out of undesignated equipment reserves in 1994. This truck could be a lease purchase if desired by the City Council. Nonetheless, this truck being obtained in 1994 will reduce the bud!ret !ran bv $17.000. , . . . If the equipment transfers are used as outlined above, and the truck is purchased now, the City reserves from a general and conservative point of view would look like the following: Before budget $70,000/undesignated $55,000/streets (minus any additional street loader expenses) $35,000/parks $ 4,1 OO/fire Expenditures $22,300/undesignated $ 5,000/streets $18,100/parks $ 2,100/fire "New" Balance $47,700/undesignated $50,000/streets $16,900/parks $ 2,000/fire Two additional "cuts" in the capital outlay list include purchasing the $2,000 worth of administration equipment now out of the 1994 budget and purchasing the $10,000 police copy machine now out ofthe 1994 City Council Contingency budget. This copy machine may end up being a leaselpurchase item. This will further reduce the bud!ret !rap bv $12.000. A big capital outlay item that needs to be reviewed is the $70,000 fire department equipment reserve request. It is suggested that this amount be reduced by $60,000 and $10,000 remain in this line item. This will reduce the bud!ret !rap bv $60,000. We can begin a fire department equipment reserve with this $10,000 plus using some of the remaining funds generated from the sale of the old City Hall site to UPA. We can begin the fire department equipment reserve with $30,000 from this reserve and then add $10,000 from the 1995 General Fund. (The remaining money from the UPA sale, approximately $25,000, has been placed in the major equipment repair reserve.) One final capital outlay item that can be deleted to reduce the bud!ret !rap bv $6.000 relates to the building and zoning computers. We should cut these items and use the $6,000 that is in the 1994 data processing budget for this expenditure. The City Council certainly will have other ideas on the use of the City equipment reserve transfers, the amount of these transfers, items that can be . purchased now, and items that should be cut. The above list is just some suggestions and is not all inclusive. However, the above CIP discussed items will reduce the budget gap by $95,000 and will leave us with a $244,000 budget gap. One of the first cuts in expenditures can be a $10,000 reduction in the City Council Contingency fund. This would bring the gap down to $234,000. Please see the following paragraphs on the City Council Contingency fund for an outline as to why the $10,000 can be reduced from this category, Two hundred twenty thousand dollars ($220,000) is in the City Council Contingency fund. From this amount, $80,000 must be removed for new employees and another $80,000 for employee wage adjustments and comparable worth adjustments in 1995. This leaves a $60,000 City Council Contingency fund balance. Ten thousand dollars needs to be cut from this amount, leaving the City Council with $50,000 to work with in 1995. This is a similar amount as to what the Council had in 1994. In 1994, the budget was $70,000, but $19,000 of this amount was designated for the Fire Relief Association. . Some anticipated uses of this $50,000 balance in the City Council Contingency Fund include... City Council w.age adjustments, part ~ime fire inspection work, other wage increases, and Theater contributions. (It is assumed the $6,000 Arts request will be reduced to $5,000 and $1,000 of that request will go to the Theater. If additional Theater contributions are appropriate, then it would have to come out of the Council Contingency fund.) With all of these possible expenditures taking place, the City Council would have about $30,000 left in its Contingency fund. This is not very much, but slightly more may be available if some of the expenditures listed above do not take place. With the above changes the gap is now $234,000 and to further reduce this budget gap, staff feels that we need to increase revenues. Overall, we can add about $30.000. This increase is spread out in the following categories: building permits, plumbing and heating permits, planning and zoning fees, plan check fees, administrative project fees, and police relief funds. Additionally, we must consider addin!r about $60.000 in additional transfers. Regrettably, this will have to come from a combination of liquor store transfers and use of the City cash flow funds. It is suggested the amount be $40,000 from the Liquor Store and $20,000 from the City cash flow fund. (The use of cash flow reserves to balance the budget on an annual basis is a concern; but $20,000 is less than what was used last year.) These revenue increases of $90,000 would leave us with a General Fund gap of $144,000. . . . . 4 Regarding potential cuts, the following items are suggested: · $ 8,000. transferring of expenses to the EDA fund (personnel, video taping expenses, and Elk River pins) · $12,000. delay hiring some of the $80,000 worth of new 1995 employees · $15,000. small cuts throughout most of the City departments · $ 5,000. by either purchasing now, cutting, or using undesignated reserves for the police vehicle VCR capital outlay request The above items equal $40.000 and further reduces the budget gap to $104,000. If the EDA transfer is to take place, this should be reviewed and accepted by the EDA at its 9/12/94 meeting. Other potential cuts include the following: · $10,600 by reducing 1995 employee wage increases...another City Council Contingency cut · $ 5,000 from the ice arena contribution request · $ 1,500 from the Fire Department retirement fund contribution (no contribution for the Chief) These cuts of $17.100 will leave the City with a budget gap of $86,900. It seems apparent that the City must generate more revenues. One important source is from the Utilities department in order to help offset general City expenses associated with our growth and development. Our City growth and development provides more revenues for the Utilities and we need more funds to manage our development. The Utilities contribution to the City General Fund in the amount of $72,000 has not changed for eight years (since the 1988 budget). A "round" number to look at for an increase would be about $36,000. This should be requested from the Utilities and we may also need to combine this increased contribution request with establishing a percentage contribution from the Utilities based on gross revenues. Until this request is authorized by the Council and accepted by the Utilities, this $36,000 reduction in the General Fund !rap should be placed in the City cash flow reserve transfers (new total of $56,000). Please note that this $36,000 should not be in the cash flow amount in the final budget and, if additional revenues are not received from the Utilities, then additional cuts in this amount need to be considered. If this additional revenue is obtained from the Utilities, the new budget gap would become $50,900. . At this point I will end the list of suggested changes in the budget to reduce the budget gap and request City Council input on these and other possible adjustments. Some items that come to mind include: · Further reductions in wage increases for employees in 1995 · A further reduction in the ice arena contribution in 1995 · A further reduction in the $10,000 Fire Department reserve for equipment · A reduction in the sealcoating program ($10,000?) · Reductions in the capital outlay purchases · Reductions in the new employees to be hired in 1995 · Additional cuts in expenditures within individual departments · Additional revenue increases throughout the budget I am sure all of the above listed items to reduce the budget gap to $50,900 will not meet with unanimous Council approval or even majority Council approval. The above items are only suggested for City Council discussion and are offered as a starting point in order to get the budget gap under control. I am sure that individual City Council members have other ideas on how to reduce expenditures and add revenues. The above narrative should give us a good starting point for our 9/6/94 worksession and shoulp. allow us to get . closer to a balanced budget for the 9/12/94 budget worksession. Regarding the overall City tax rate and growth in the net tax capacity, please see the revised sheets from Finance Director Lori Johnson. The net tax capacity growth sheet includes figures for growth up to 15 percent in 1995. This would significantly offset the effect of the tax levy increase as discussed by the City Council during the 8/29.30 worksessions. The Council should note that the City is only 20 percent of the total property tax so if our City taxes go up and other taxes from the County and School District remain the same, then the net impact on the taxpayer will be small. The City has had a very reasonable tax rate over the past few years and with an increase in the net tax capacity anticipated, it seems that it is appropriate to now consider additional expenditures to meet our growing needs. If the growth in the net tax capacity does take place, the effect on the taxpayers will be relatively mInor. . The City must certify its maximum tax levy and budget to the County by 9/15. Action is required by the City Council either on 9/6 or 9/12 on a number of City tax levy issues. Please see the attached tax levy resolutions for the General Fund, EDA, and HRA as prepared by the Finance Director. The Finance Director will also be asking for the Council to approve motions on the budget, setting the Truth in Taxation public hearing (see attachment), and adjusting some of the debt levies. . . . . , 1995 PERSONAL SERVICE ADDITIONS Position Accountant/AA Administration Secretary/Clerk/Receptionist Administration Executive Sec Administrative Sergeant & Related Promotions laborer Mechanic Patrol Officer Planner Police Executive Secretary Police Secretary TOTAL All pay rates are based on 1994 pay ranges. Hourlv Rate Total Pay & Benefits 16.83-19.71 8.00 0.00 0,00 7.50 0.00 0.00 11.00 1.30 8.00 13,750 23,215 o 10,000 21,989 o o 15,285 3,000 9,808 97,047 Planner is the continuation of the current planning intern or a Planner 1 position. The Administrative Executive Secretary will be addressed during compo worth adjustments. Per Council discussion, the Mechanic (40,379) and Patrol Officer (37,629) have been deleted. Accountant/Administrative Assistant is an increase in the pay range due to the combination of finance and human resource duties. Most of this expense is included in the proposed 1995 budget. If approved by the Council, Council pay increase and the addition of a Fire Inspector would come out of the Council Contingency. 1995 savings can be realized by delaying the promotions and hiring of the positions listed. If q 7/ DO 0 5+i 1/ f/eed'5 r~i..r.LC ecf2. !hiS ihe- -\1 V- QOIAI1CI'1 new 9/1/943:10 PM 95NEWORS.XlS aMOU"+- -fo 6e.. CiS 0-9- q I/~ J,tf 1'9) 000 , , hflS p/lf/hhf?.R 1'115. PPk: /o-('{.q<{ e.>rjJ D-j ee s 111 City Council Minutes September 6. 1994 Page 5 . Mayor Duitsman requested the City Attorney to droit more specific languoge in regord to response fime or living in the fire district. COUNCILMEMBER HOLMGREN MOVED TO APPROVE THE CONDITIONS STATED IN THE LETTER TO BRUCE WEST DATED SEPTEMBER 6, 1994. WITH THE EXCEPTION THAT THE CONDITIONS REGARDING RESPONSE TIME AND LIVING WITHIN THE FIRE DISTRICT BE DRAFTED BY THE CITY ATTORNEY SO AS TO BE MORE SPECIFIC. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0, 5. Other Business Council member Farber stated that he saw a teacher wearing an orange jacket and directing traffic on School Street. He indicated that it is dangerous for unauthorized personnel. to direct traffic. Councilmember Farber indicated that traffic should be directed by police department. , Terry Maurer, City Engineer, updated the Council on the School Street and Jackson project. He also updated the Council on the progress of the Elk Hills Drive intersection. . The City Administrator updated the Council on the damage that took place to the fire station roof. He indicated that the Building Official would be receiving bids to determine the extent of damage. COUNCILMEMBER HOLMGREN MOVED TO RECESS TO THE TRAINING ROOM TO HOLD A BUDGET WORKSESSION. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. The Council recessed at 7:50 p.m. 6. Budaet Worksession The City Council discussed the projections for growth in the net tax capacity (NTC) and how it will affect the City tax rate. It was noted that more than half of the increase in the City tax levy is due to the proposed tax levy for surface water management ISWM). Council member Farber stated that the City should consider decreasing this proposed SWM levy and consider using some fees that could be generated through the utility billing process. The Mayor concurred that this is still an option that needs to be explored, but also indicated that an annual levy amount is necessary. Councilmember Dietz indicated that he thought three points was too high of a levy in 1995 for surface water management. The Council indicated that this amount can be reduced later in the year, but not increased after an amount is certified to the County on 9115/94. . . City Council Minutes September 6. 1994 Page 6 ~--------.._-------------------- . The Council reviewed the revised 1995 personal services additions page. Administrative Secretarial duties, City Clerk duties, and the need for secretarial support for the administration staff were reviewed with the City Cierk. Councilmember Dietz outlined his goal of having only a $50,000 increase in 1995 for new personnel. Upon further discussion of the Accauntantl AA position. Councilmember Diefz stated that this information adjusts his goal to $64,000. The City Administrator noted that this revised personal services page includes more than the $80.000 goal as outlined by the City Council and that he further proposed to reduce fhis amount by $12.000 to a totai of $68.000 for 1995. Personnel issues can be decided later in 1995 or in early 1996 by the City Council as to which positions should be added and when they should be added in order to achieve the $68.000 goal. The Council reviewed the total proposed tax increase, the 9/15/94 certification requirements, and the Truth in Taxation notices. The Council indicated that they thought the growth r,ate for the NTC would be at 11 percent or more and, therefore, the impact of the increase in the general fund tax levy and SWM tax levy would be much smaller than the amount identified in the Truth in Taxation notices. . The Mayor indicated two of his areas to cut or reduce include the Fire Department reserve request and the Ice Arena reserve request. The Council concurred with a $5,000 decrease in the Ice Arena reserve request and a $60.000 decrease in the Fire Department reserve request. It was noted that the Fire Department reserve can be partially established with reserve funds that have been generated by the sale of property to UPA. The City Administrator reviewed the budget balancing options for reducing the $339.000 deficit as outlined in his 9/1/94 budget memo. The first item reviewed was the designation of the $30,500 equipment transfer for specific capital ouflay requests fram various departmenfs. The Council concurred with these designations at fhis time, but noted thaf some of these items may be cut and replaced with other capital outlay requesfs. The City Council concurred to reduce the deficit by $17,000 by purchasing the Building and Zoning inspector truck in 1994 by using undesignated equipment reserves. Additionally, the Council agreed to purchase $2.000 worth of proposed administration equipment out of the 1994 administration/finance budget. The Council agreed to purchase the police copy machine out of the 1994 City Council Contingency budget. The Council agreed to reduce the Fire Department capital outlay reserve request by $60,000 and to suppiement the remaining $10,000 in the budget with $30,000 from the reserve monies available from the UPA sale. The Council agreed to reduce the Building and Zoning capital outlay request of $6,000 for computer equipment by having this expenditure financed in 1994 from the data processing budget. It may be necessary to encumber these funds for this purchase. The Council agreed to solicit quotes for the truck, copy machine. and administration equipment. . The above budget adjustments reduce the budget gap by $95,000 and leaves a gap of $244,000. City Council Minutes September 6,1994 Poge 7 -~-----------~-------------------- . The Council ogreed to reduce its City Council Contingency fund by $10,000. The Council directed staff to increase the revenue projections for items related to growth and development in the City by $30,000. The Council agreed to increase the liquor Store transfer in to the General fund by $40,000, but indicated its desire that this not be an established amount for future budgets. and that this amount be reduced in the future. The Council disagreed and did not authorize the use of $20,000 from its cash fiow fund in order to balance the budget. This may be necessary at a future point during the budget balancing discussion, but was not acceptable at this time. The above budget adjustments further reduce the budget gap by $80,000 and leave a budget gap of $164,000, The City Council agreed to request the EDA to absorb an additional $8,000 worth of expenses for personnel, videotaping. and Eik River pins: to reduce the City Council Contingency by $12.000 by delaying the hiring of new employees in 1995 (reducing the $80,000 goal to $68,000 - as previously discussed): cut $15.000 from expenditures by directing staff to make these departmental cuts; and cut $5,000 from the capital outlay request by directing staff to purchase the police vehicle VCR camera now through the use of undesignated equipment reserves. The above items equal an additional $40,000 in cuts and further reduce the budget gap to $124,000. . The City Council agreed to reduce the Ice Arena contribution by $5,000 and to reduce the Fire Department Retirement Fund contribution by $1,500 due to no contributions being necessary for the new Fire Chief. The Council did not authorize any further reduction in its Contingency fund as suggested by reducing wage increases for 1995. The $6,500 in reductions noted above further reduce the budget gap to $117,500. The Council reviewed the need for additional revenues and discussed an increase in the Utilities contribution to the City to cover general City expenses that are associated with meeting our growth and development challenges. The City Administrator reviewed the proposed $36,000 increase in this contribution. The City Council requested a joint meeting with the Utilities to discuss an increase in its contribution and other City/Utility issues. Until an agreement is reached for an increased contribution, the budget gap remains at $117,500. The City Administrator noted other options for reducing this gap which include additional reductions in expenditures, and additional increases in revenues. Aclion necessary by the City Council on 9112/94 in order to certity information to the County by 9/15/94 was reviewed by the Finance Director and City Administrator. The Council discussed certitying its maximum tax levy and budget and options to reduce this amount later in the year. . . . . CITY OF ELK RIVER CITY COUNCIL RESOLUTION NO. 94- A RESOLUTION DIRECTING THAT TAX INCREMENT FINANCING FUNDS FROM TAX INCREMENT FINANCING DISTRICT NO. 4 BE APPLIED TO THE COSTS OF THE GARY STREET WATER TOWER WHEREAS, the City Council of the.City of Elk River, on November 30, 1987, adopted Tax Increment Financing Plan for Tax Increment Financing District No.4; and WHEREAS, the City has received certain tax increment funds from Tax Increment Financing District No.4; and WHEREAS, the Tax Increment Financing Plan for Tax Increment Financing District No. 4 indicated that tax increment generated by the Tax Increment Financing District would be used to contribute to the cost of improvements to the City'S water supply system and sanitary sewer system, including the cost of construction of an elevated water tower; and WHEREAS, Elk River Municipal Utilities will be constructing an elevated water tower on Gary Street during 1995; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, as follows: 1. All tax increment received from Tax Increment Financing District No. 4 is hereby designated to be used to contribute to the cost of constructing the Gary Street elevated water tower. 2. City staff is directed to make arrangements with Elk River Municipal Utilities to make these funds available for that purpose. Passed and adopted by the City Council of the City of Elk River this day of October, 1994. Henry A. Duitsman, Mayor ATTEST: d~.b::/ /p~~ ~ Sandra A. Thackeray, City Clerk ESTIMATED PAY 1995 NTC AND TAX RATE . lol{J.~ C/o /' #5 CHANGE IN MARKET VALUE Pay 1994 Pay 1995 % Change Limited Market Value 418,427,403 470,973,100 12.56% Net Tax Capacity 8,673,154 9,894,097 14.08% Less Captured TIF 621,742 583,834 -6.10% Taxable NTC 8,051,412 9,310,263 15.64% . CHANGE IN TAX RATE Pay 1 994 Pay 1995 % Change Urban 21.902 23.994 9.55% Rural 19.769 22.848 15.57% , . T AXRA TE2.XlS 10/24/94 APPROPRIA TIONS SUMMARY I I 1,992 ! 1993 , 1994 I 1995 I Actual I Actual I Adopted Proposed MAYOR & COUNCil I 50,093 I 50,093 I 57,550 1 67,<lGO I I 1 I ';'.3 Vc";O ECONOMIC DEVELOPMENT I 60,461 01 38,900 I 40, ~SO 1 3'1.35'0 ELECTIONS 18,339 I 01 12,700 8,000 ADMINISTRA TION & FINANCE I 281,781 337,077 I 395,100 4:?::,B56 I 'Idll frO lEGAL 33,672 01 35,000 40.000 I BUILDING & ZONING 1 231,389 239,112 198,900 1;71,D56 I I ..:lSI,S'50 DATA PROCESSING 13,523 16,174 22,550 22,150 I PLANNING COMMISSION 1,464 7,763 4,9501 4,9,,0 I I ~ jls () PLANNING I 226J 0 109,700 134,950 I I ENGINEERING 28,074 I 28,827 28,000 30,000 GOVERNMENT BUilDINGS 53,990 59,969 I 78,600 I 94,200 I 1 I .1 POLICE I 1,054,329 1,159,866 1,260,200 1 1,:l16,600 I I 1.33/L~/) FIRE I 197,772 201,806 I 230,050 I 331, 1 GCl I ,;{ (,Ii (p(Jl! POLICE RESERVES I 7,102 0 17,2001 25,000 I I I EMERGENCY PREPAREDNESS 11,711 17,672 I 10,750 I 7,450 1 I STREETS I 412,490 0 410,0001 432,050 EQUIPMENT REPAIR & MAINT. 64,109 I 73,982 I 61,950 66,600 I SNOW REMOVAL I 38,207 01 80,800 90,150 STREET LIGHTING 1,015 0 1,500 1,500 SHADE TREE 1 8,502 0 9,350 9,550 I PARKS I 82,924 100,405 1 91,900 I 91,400 I J RECREATION I 111,530 01 135,350 I 1€iii,QaQ I / (p~tJ&O SR. CITIZEN PROGRAMS I 25,052 I 01 34,050 I 32.600 I I I , CONTINGENCY I 14,934 I 13,100 I 70,000 I 1 ~Q.9QG I 1 I /9S. ,-00 TOTAL I 2,802,689 I $2,305,846 I $3,395,050 I $3,879.200 . . . .I,~~-G ~;IJ{ c /' 1fS AU6 2 9 1004 DRAFT . Department Admin./Finance Building &. Zoning Planning Police Police Reserve Fire . Streets Parks Recreation 1995 CAPITAL OUTLAY As revjsed by Council action on September 6, 1994 Item Amount Source Copy Machine Lease/Purchase 7,000 GF 2 Typewriters &. Dictaphone 1,500 Purchased in 94 Computer 3,000 Undesignated Equipment Reserve" Overhead Projector 500 Purchased in 94 Truck & Radio 17,000 Purchase in 94 from Undes. Equip. Res. Computers &. Software 13.000 GF 2 Personal Computers 6,000 Purchased in 94 from Data Processing Motorola Radio System 22,000 GF 2 Mobile Radios 4,000 GF Patrol Car Video Camera 5,000 Purchased in 94 from Self Insurance Res. 2 Portable Radios 3,000 GF Personal Compute 2,000 GF Laser Jet Printer 1,500 GF Copy Machine 10.000 Purchased in 84 from Council Contintemcy Radios &. Chargers 2,300 Undesignated Equipment Reserve" 4 Pistols & Holsters 2,000 GF Equipment Truck Payment 13,000 GF SCBA 24,000 GF Radios 2,100 Fire Equipment Reserve" Reserve for Pumper Purchase 10,000 GF Personal Computer 2,000 Undesignated Equipment Reserve. Hoist 3,000 Street Equipment Reserve* Reserve for Future 3,000 GF Back Blade 2,600 Park Equipment Reserve * Flail Mower 5,000 Park Equipment Reserve" Field Groomer 10,500 Park Equipment Reserve* Ice Arena 10,000 GF Total 185,000 .This $30,500 is included in the 1995 projected revenues in the Equipment Reserve Trensfer In. ~~ /o(,y(('1 c{ 4 (? C-- #~ ... Amount was reduced by Council action on September 6, 1994. . 10/24/943:06 PM 95NEWCO.XLS . 1995 BUDGET REVENUES Original Budget 3,620,200 Added in "growth" catagories' 30,000 Added Liquor Store Transfer In 40,000 Tax levy Shift 5,000 Revised Revenues 3,695,200 EXPENDITURES Original Budget 3,879,200 Added for Additional Employees 80,000 Subtotal 3,959,200 ~ September 6 Council Action BIZ Truck purchased in 1994 (17,0001 Police copy machine purchased in 1994 (10,0001 ;; Adminstration office equip. purchased in 1994 (2,OOO) ..r Fire truck reserve cut (60,000) BIZ Computer purchased in 1994 (6,000) . Council Contingency cut (10,OOO) Mayor and Council-cable TV funded by EDA (500) Administration-City Pins funded by EDA (1,400) Econ. Dev. Coord.-pay funded by EDA (6,100) Council Contingency-new employee cuts (12,OOO) Department cuts-various items' (15,000) Police VCR camera purchased in 1994 15,000) Rec. Ice Arena contribution cut 15,000) Fire Department retirement cut (1,500) Revised Expenditures 3,807,700 BUDGET GAP (112,500) . As determined by staff. . 10/24/94 OCT24BGT,XlS . . . 10/24/94 OCT24BGT.XlS SURFACE WATER MANAGEMENT LEVY lop Y Cc.- ~~ #s- Sample property tax due on selected parcels Market Estimated Estimated Type of Property Value NTC SWM Tax. SWM FEE" Residential 179,900 2,878 $58.14 $30.00 Residential 89,100 1,062 $ 21 .46 $30.00 Residential 73,700 754 $15,23 $30.00 Industrial 2,088,100 94,453 $1,907.95 $1,088.40 Industrial 292,500 11,855 $239.48 $483.60 Agricultural 227,900 631 $12.75 $960.00 Agricultural 17,600 18 $0.37 $480,00 .Based on Pay 1995 levy of $240,000 .. Based on the following rates: Residential - $2.50/month Industrial/Commercial - $15,00/acre/month Agricultural - $.50/acre/month . RESOLUTION 94- IOI:f:J~ #~ F'<r A RESOLUTION OF THE CITY OF ELK RIVER A RESOLUTION ESTABLISHING THE SURFACE WATER MANAGEMENT IMPACT FEE RATES WHEREAS, the City of Elk River has a need for surface water management throughout the community; and WHEREAS, the City of Elk River has completed a surface water management study; and WHEREAS, the surface water management study has assisted the City in determining which drainage improvements are necessary to help eliminate the most urgent surface water management problems; and . WHEREAS, the City has determined to fund the surface water management improvements through a variety of funding sources including a Surface Water Management Impact Fee; and WHEREAS, the City has determined that this Surface Water Management Impact Fee should be collected from the property owner at the time of platting, or in the case of existing lots, at the time of issuance of a building permit, NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Elk River Minnesota: 1. The Surface Water Management Impact Fee for all rural (non-city sewer and water) single-family residential lots shall be $60.00 in 1994. On January 1 of each succeeding year, the rate shall increase three percent (3%). 2. The Surface Water Management Impact Fee for all urban (city sewer and water) single-family residential lots shall be $120 in 1994. On January 1 of each succeeding year, the rate shall increase by three percent (3%). . 3. The Surface Water Management Impact Fee for all non- single-family residential property shall be $720 per acre FEB-2~-94 FRI 13:33 MSA ST PAUL p.02 }f~ . {1J~XEl,mG E~'GI~t;I:RS February 25, 1994 File: 230-161-75 ClWII Nc;INl !rING Mr, Pat KJaers City Administrator City of Elk River 13065 Orono Parkway Elk River, MN 55330 ENVlIONNJ MAl MUNJ(L~AI RE: STORM SEWER IMPACT FEE Dear Mr. Klaers: I'1J..NNtNG 5TRIK..!:Jrk This is a follow-up to my February 24, 1994, memo in which I summarized our findings . from a survey of several metropolitan communities. In that particular memo, I neglected to include spe:ifics on the impact fees charged by some of the metropolitan communities. As you will recall, the memo indicated that four of the communities we contacted in the metro area do have impact fees. We were able to recontact three of them and get the specifics on those. The following table lists the costs in dollars per square foot charged by the Cities of Burnsville, Lakeville, and Lino Lakes. :":.itvrYINCi 10'/1/1",: lrMI5POPr,l.,I/ON Single Family Multi-Family Churches Co m mercialllnd ustrial Rllrn<:vil1p SO.11 0.15 0.15 0.17 T "l<pviJ1~ $0.105 0.116 T ino T ,,1<,., SO.IO 0.147 0.14 As you can see from these three communities, a typical single family lot of 10,000 to 15,000 square feet would pay $1,000 to $1,500. On the other end, commercial/industrial property would pay on the order of $6,000 to $7,500 per acre. These rates are roughly 1326 Er_rgyPorl:Dr;,e ten times higher than those being contemplated by the City of Elk River. SI. Poul. MN 55108 61HIH389 It is our understanding that these communities still require the developer to build lateral facilities within the developments and the impact fees are used for trunk facilities and/or any oversizing of the internal lateral facilities. . Fox: 612.W-9't6 9800 sn.1o,d PO(\woy Minneopoli" MN 55" 1 612.S.6.0L32 F",,612.514-6398 FEB-~S-94 FRI 13:34 t~SA ST PAUL p..03 . Mr. Pat Klaers February 25, 1994 Page Two I'm sure there are other metropolitan communities that have impact fees similar to these. If you would like, we could do further research on this issue. Please let me know if additional information is needed. Sincerely, MSA, CONSULTING ENGINEERS ~~ T~aurer,~ TJM:tp 16J.2S0S.f,b . . , , , . . . Cjty Council Minutes July 11, 1994 Page 2 6. Peter Beck xplained that a ~ease agreement sent to the Chamber for eir review. He stated that the I se agreement includes a bill ot sale from the Ch a Company to the City Ik River. and that the Chamber will lease the building m the City. COUNCILM BER MOVED TO ACKNO EDGE RECEIPT OF THE BUILDING DONATED BA OF THE CHUBA COMPAN COUNCILMEMBER FARBER SECONDED THE TION. THE MOTION CARRIED -1. COUNCILMEMBER HOLMGREN ABST INED. 7. Consider Surface Water Manaaement Proaram Mayor Duitsman indicated that he would like to starf the Storm Water Impact Fee 20 percent higher than the proposed $600. with a 3 percent increase at a later date. > He stated that the City needs approximately $330.000 a year in Surface Water Management fees, in order to payoff the financing and to complete other projects, such as County ditch system improvements. Mayor Duitsman suggested the following rates: Government - $4.00/acre Commercial/Industrial - $15.00/acre Residential - $2.00/unit Multifamily - $15.00/acre Undeveloped - $1.00/acre Mayor Duitsman indicated that based on his calculations. this would generate approximately $332.250 a year. Lori Johnson explained that the government classification for city. church, school, state. etc., presently includes parks and building sites. Lori stated that the proposed ordinance excludes parks. but if parks are included. it is suggested that they billed at the undeveloped rate. along with recreation fields, Building sites would be included under the Government rate. Lori Johnson indicated that there may some property that will be deleted from the government rate. She expiained that the City would pay approximately $2.300 per month for all its properties based on a rate of $3.50 per acre. Also, the State of Minnesota property may be exempted. which totals approximately $700 per month. Lori noted that the Historical Society has property including the Kelley Farm which is included in the Government rate. City Council Minutes July 11,1994 Page 3 . Mayor Duitsman noted that if the undeveloped lands were deleted from the government rafe' at $4.00 per acre. the annual revenue may end up being only about one-half. or $30,000. Lori Johnson added that if the park land was excluded. as the ordinance states. that would take out a large portion of the 1.262 total acres in the government classification. Discussion followed regarding making exclusions on property 10 acres or more in size. or, excluding property north of of the County Road 33 boundary. Also. it was discussed whether or not to charge a surface water management fee to all the area north of County Road 33 . Lori Johnson indicated that the Utilities needs the information in within two weeks in order to process the billing for August. She stated that each month delay in billing costs approximately $25.000 to $30.000. Therefore. it is important to be ready for the August billing.She explained that there is still some cross-checking with the acreage and units on the government classification that needs to be done. Lori further explained that if the Council could agree on the residential fee. that portion could be started. . Councilmember Farber expressed his concern that he felt using County Road 33 as a boundary would place an unfair hardship on farmers south of County Road 33. . Marton Glines. Elk River resident and developer. expressed his concern that the surface water management proposal is unfair to property owners and developers who take care of their storm drainage on-site. Mayor Duitsman stated that the storm water drainage problem is a city problem and everyone should help pay for the improvements. City Engineer Terry Maurer explained that he felt it makes sense to charge a nominal fee to owners of undeveloped property now with an increase when developed. rather than excluding them now and charging a high fee when the property is developed. Terry Maurer indicated that if all property in the City was included. with the undeveloped land at $1 .00. it would add approximately 50 percent in revenues. The City Council reached the following consensus on surface water management issues: A rebate program would be set up for property owners presently receiving a county ditch assessment. An appeal board will be established. similar to the refuse collection appeal board. The proposed initial Storm Water Impact Fee will be increased by 20 percent. with a 3 percent increase at a future date. ) . . jO/p.o/ /1i I. . JJ.L4/. (]e. ~. #5 RESOLUTION 94 - 94 OLUTION FOR THE CITY OF ELK RIVER A RESOLUTION AUTHORIZING THE PROPOSED TAX LEVY FOR CALENDAR YEAR 1995 WHEREAS, the Elk River City Council has reviewed the City's anticipated expenditures for all funds in 1995; and, WHEREAS, the Elk River City Council has considered projected revenues for all funds in 1995; and, WHEREAS, revenues from sources other than property taxes are not sufficient to meet anticipated expenditures of all funds. NOW, THEREFORE, BE IT RESOLVED by the City Council ofthe City of Elk River that the proposed General Fund Budget in the amount of $3,807,700 is hereby adopted. BE IT FURTHER RESOLVED by the City Council of the City of Elk River that the following amounts be levied as property taxes . payable in 1995. General Fund Library Dam Loan 1977 G.O. Refunding Surface Water Management City Special Assessments 1989 Fire Equipment 1991 Certificate of Indebtedness 1992 Certificate of Indebtedness 1993 Certificate ofIndebtedness 1994 Certificate of Indebtedness 1995 Certificate ofIndebtedness TOTAL Gross Levy $2,256,082 50,600 32,572 29,300 240,000 38,331 69,747 18,822 23,437 24,853 25,000 29,000 $2,837,744 RACA Reduction $487,379 10,955 7,052 6,344 51,962 8,299 15,101 5,158 5,074 5,381 5,413 6,279 $614,397 Net Levy $1,768,703 39,645 25,520 22,956 188,038 30,032 54,646 13,664 18,363 19,472 19,587 22,721 $2,223,347 Passed and adopted by the City Council of the City of Elk River this 12th day of September, 1994. . Henry A. Duitsman, Mayor