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6.0 SR 09-05-1995r ~~ ity of ~~ lk • R~ ITEM 6. MEMORANDUM V~~ TO: Mayor & City Council FROM: Pat Klaers, City Administr t DATE: September 5, 1995 SUBJECT: 1996 Budget Worksession The next City Council worksession on the 1996 budget is scheduled for Tuesday, September 5, 1995, at 5 p.m. in the Training Room. As only one "formal" business item is scheduled prior to the budget worksession, and as the worksession is scheduled to begin at 5 p.m., the Council should note that sandwiches will be provided. We ended the first worksession, on 8/28/95, in the middle of the review of city General Fund revenues. We will begin this 9/5 meeting at that point so that we can complete our review of General Fund expenditures, Special Levies, and General Fund revenues. Then, ,prior to discussing the city tax levy and the budget gap, I have requested Chief of Police Tom Zerwas to come to this meeting to visit with the City Council about some of the requested expenditures in the police department. Tom should be able to address some of the questions raised by the Council regarding the proceeds from fundraising efforts for the D.A.R.E. program, the need for ATV vehicles (in the police reserves budget), the need for an additional police part time office worker, p.c., and printer, the need for some promotions within the police department, the COPS FAST program, the need for four vehicles instead of the three which have been typically requested, and other budgetary issues related to the department. At the 8/28 meeting, the Council requested a composite financial summary of street department activities. Attached for your review is a summary page on this issue from the Assistant City Administrator Lori Johnson. The Council should note that the 1995 budget amount is lower than what the actual amount will be at the end of the year due to the 3 percent 1995 cost of living adjustment being in the Contingency Fund. On 8/28 the City Council requested additional information regarding the Council pay ordinance that was approved last year. Attached for your review is Ordinance 94-14 related to City Council pay. There was no direction in the • 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 1996 Budget Discussion September 5, 1995 Page 2 minutes related to annual review of this ordinance or an annual inflationary increase. On 8/28/95 the City Council requested additional information regarding the Community Education pool program and the city's contribution of $4,000 annually to this program. A memo from Community Education Director Charlie Blesener regarding this issue will either be included in this packet or will be handed out on Tuesday. The main purpose of this meeting on September 5, 1995, is to close the budget gap. The amount of the budget gap that needs to be closed is open to discussion by the City Council. The amount depends upon the desire of the Council to have the Truth in Taxation notices show a no tax rate change versus approving a tax levy that shows a modest increase in the tax rate, with the understanding that this is the proposed maximum levy and that this amount cannot be raised but can be reduced in December. Staff supports the modest tax rate increase approach. This approach is suggested in case the net tax capacity (NTC) growth varies from the 15.06 percent increase that has been estimated by the county auditor. For example, if the City Council approves a net levy amount based on a hold the • line approach, and, if the actual NTC growth is higher, the city tax rate goes down. On the opposite side of this situation, if the City Council approves a net levy based on a hold the line approach, and if the NTC growth is lower than 15.06 percent, the city tax rate will go up. In the later case, the Council can lower the tax levy in December, but in the first case, the Council cannot increase the tax levy in December in order to get the maximum tax revenue without a tax rate change. Another reason for approving a tax amount that would increase our tax rate slightly based on 15.06 NTC growth is because we can reasonably find $60,000 or so in budget amendments, but it is more difficult to find a total of $102,000 in adjustments. In looking at closing the budget gap, the Council is cautioned to not cut capital outlay expenditures that are programmed to be financed by equipment reserves. In this regard, the Council should refer to the capital outlay page that was distributed at the 8/28 meeting. If an item is cut from this list that is scheduled to be funded by equipment reserves, then there will be no net gain in closing the budget gap unless the Council decides to use the reserve amount for another capital outlay. On 8/28, staff presented the Council with a budget page that outlined how the additional Utilities funds (a reserve) are planned to be spent. It is now suggested that the $40,000 in General Fund equipment reserve transfers be shifted to this new equipment reserve budget page and that the related expenditures are also transferred 1996 Budget Discussion Page 3 September 5, 1995 -------------------------- • into this special levy page. This will have an overall effect of reducing the General Fund expenditures and revenues by $40,000 in the proposed 1996 budget. This organizational change will make it clearer what is being financed by annual revenues and what is being financed by various reserves. Also attached for your review is a new special levy page that is planned to be added to the budget document. This page for Surface Water Management (SWM) shows how the tax revenue is scheduled to be spent. A SWM narrative will also be developed to explain recent activities in this fund and future projects. The final attachments include two tax levy resolutions. Based on a NTC growth of 15.06 percent, one resolution shows no change in the tax rate and the other shows a 2 percent tax rate increase. Additionally, please see the Chamber letter regarding funding requests. PERSONNEL The following employee additions were discussed when the 1995 budget was reviewed and approved. These positions are included within the departmental budgets for 1996, but have yet to be authorized or approved by the City Council. • Streets/Parks Laborer - $24,450 • Police part time Office Service Worker - $13,850 • Police Executive Secretary promotion - $3,000 • Police Supervisory Promotions - $13,000 The following personnel items are not yet approved by the City Council, but are considered part of the 1996 City Council Contingency Fund. If monies are not spent on these personnel issues, then the City Council will have more flexibility in its contingency expenditures. • Rental Housing Inspector - $38,000 (net of $18,000) • Part time Fire Inspectors - $12,000 • COPS FAST #2 - $15,000 (net) • Police Officer - $58,000 Also in the City Council Contingency Fund, is funding for 1996 cost of living adjustments. The increases in insurance benefits have already been incorporated into the 1996 departmental budgets. Also, the police union wage adjustment of 3 percent is known per its contract and is included in the police budget for 1996. It is estimated that a 3 percent adjustment for the balance of the city employees will amount to a $45,000 expenditure out of the City Council Contingency Fund in 1996. 1996 Budget Discussion Page 4 September 5, 1995 POSSIBLE BUDGET AMENDMENTS We currently have a budget gap between proposed expenditures and available revenues of $51,850. Based on a NTC growth of 15.06, and a no tax rate change, the city would need to adjust the budget by an additional $52,900. The following possible adjustments are offered for your consideration: • Add $3,000 in revenues for police reserves payments for activities at the mall and the Legion. • Add $4,000 in revenues for interest income. • Add $10,000 in revenues for growth related activities in building permits, plumbing permits, and plan check fees. • Add $10,000 in revenues for an increase in Liquor Store transfers. • Cut $10,000 in expenditures from the following budgets (concentrating on the conferences and schools line item): Administration/Finance; Building and Zoning; Police; Streets; Equipment Repair Maintenance; Recreation; Fire; and Elections. • Cut $7,000 in expenditures by reducing the City Council Contingency Fund (assuming a slight delay in the hiring of some proposed new employees or reducing the wage increases for 1996). • Cut $2,000 in expenditures by reducing the Ice Arena Reserve allocation. • Cut $6,000 in expenditures for the optical scanner (elections budget). • Cut $0-$4,000 in expenditures by eliminating or reducing the pool program contribution that goes to Community Education (school district). • Cut $6,000 in expenditures in the police reserve fund by purchasing the ATV to be financed out the General Fund in 1995 (due to sufficient funds in the 1995 Police Reserve budget). The other ATV is scheduled to be financed with equipment reserves so if this ATV is cut, the revenues are also cut for no net effect on the budget gap. • Save $0-$24,400 by delaying or not hiring the street/park laborer position. • Save $0-$13,800 by delaying or not hiring the police part time office service worker. • Save $0-$3,000 by delaying or not authorizing the executive secretary promotion. • Save $0-$13,000 by delaying or not authorizing the police department internal promotions related to supervision of employees. • Save $0-$12,000 by delaying or not authorizing inspectors for the fire inspection program. • Save $0-$15,000 by delaying or not authorizing the rental housing inspection program. The above list should provide the City Council with some ideas on how to close or totally eliminate the budget gap. As the Council can see, adjusting 1996 Budget Discussion September 5, 1995 Page 5 . the budget by over $100,000 may begin to relate directly to city employees and planned additions to the staff. At the 9/5/95 meeting, the Council should consider: • A decision (motion or consensus) on moving the emergency preparedness siren out of the equipment certificates budget and into the equipment reserves budget. Both tax levy resolutions assume this decision will be approved by the City Council. • A decision (motion or consensus) to transfer the use of equipment reserves (approx. $40,000) out of the general fund revenues and expenditures and into the equipment reserves budget. • A decision (motion or consensus) to increase the fire department pumper reserve by shifting funds generated from the UPA land transaction into this account. Twenty-four thousand dollars is programmed into this account in 1996 using the additional-Utilities funds. To match this total in 1995, $14,000 would have to come from the UPA transaction and be added to the $10,000 that is in the 1995 budget. • A motion callin for the cit Truth in Taxation public hearing on • g Y the tax levy and budget for December 4, 1995, with a continuation date of December 11, 1995. • A motion to adjust the debt levies per the recommendation of the Assistant City Administrator (Lori will make a verbal presentation on these adjustments). • A motion approving the EDA tax levy resolution. • A motion approving the HRA tax levy resolution. • A motion approving the general city tax levy resolution (this resolution also approves the proposed maximum budget). At the end of the budget review and as time allows, I would like to update the City Council on the status of the project for developing additional recreation fields in the southeast corner of the city and I would like the Assistant City Administrator to update the Council on the status of the UPA utility bills. • T STREETS & RELA TED DEPARTMENTS 1993 1994 1995 1996 ACTUAL ACTUAL ADOPTED PROPOSED PERSONAL SERVICES 5340,299 5371,178 5371,150 $435,450 SUPPLIES 153,491 1 1 1,527 121,000 135,100 OTHER SERVICES & CHARGES 148,613 191,712 180,000 183,550 CAPITAL OUTLAY 22,694 13,765 13,000 19,650 TOTAL 5665,097 5688,182 5685,150 5773,750 EXPENDITURE ANALYSIS PERSONAL SERVICES Regular Pay ..................................... 5297,800 Overtime Pay ..................................... 25,700 Part Time Pay ..................................... 17,900 Employee Pensions ..................................... 35,650 Employee Insurance ..................................... 58,400 5435,450 SUPPLIES Operating Supplies Motor Fuels & Lybricants Small Tools Repair & Maintenance Supplies Street Signs Street Maintenance Supplies OTHER SERVICES & CHARGES Cleaning Contract Snow Removal Contract Telephone Postage Conferences & Schools Printing & Publishing Seal Coat Street Overlays Building Rent Equipment Rent Other Rent Uniform Allowance Utilities Insurance Dues & Subscriptions Licenses & Taxes -~ CAPITAL OUTLAY ..................................... ..................................... ..................................... ..................................... 46,500 18,500 1,200 19,200 5,500 44,200 135,100 1,000 5,900 4,100. 100 3,200 500 43,000 22,000 37,100 6,700 9,400 7,000 1 1, 200 27,800 300 750 180,050 Reserve for Future ..................................... 3,000 3,000 Equipment* ..................................... 16,650 19,650 5773,250 *See Equipment Certificate & Equipment Reserve Budgets • Note: Summary includes Streets, Equipment Repair, Snow Removal, Shade Tree & Parks ORDINANCE 94-14 • AN ORDINANCE OF THE CITY OF ELK RIVER AN ORDINANCE AMENDING SECTION 202.00 SALARIES OF MAYOR AND COUNCILMEMBERS Section 202 -Elected and appointed Officials 202.00 -Salaries of Mavor and Councilmembers 1. The salary of the Mayor of the City shall be $980- 6 900 per year, payable in 26 bi-weekly installments. 2. The salary of the Vice Mayor of the City shall be $a~ 489- 6 300 per year, payable in 26 bi-weekly installments. 3. The salary of each remaining Councilmember of the City shall be X4;389- 5,700 per year, payable in 26 bi-weekly installments. This Ordinance shall take effect and be in full force on January 1, 1995. Passed and adopted by the City Council of the City of ELk River this 26th day of September, 1994. f~ /r ~ .~ ,He A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Cl k • SURFACE WATER MANAGEMENT • Revenues 1993 ACTUAL 1994 ACTUAL 1995 ADOPTED 1996 PROPOSED GENERAL PROPERTY TAX 50 50 $ 164,550 5 196,800 INTERGOVMNTL REVENUES 0 0 45,450 44,500 CHARGES FOR SERVICES 0 27,780 0 0 OTHER REVENUES 0 8,014 0 0 TOTAL 50 5 35,794 5 210,000 5 241,300 GENERAL PROPERTY TAX Ad Valorem Tax INTERGOVNMTL REVENUES 5196,800 5 196,800 HACA EXPENDITURE ANALYSIS 44,500 44,500 241,300 1993 1994 1995 1996 ACTUAL ACTUAL ADOPTED PROPOSED • DEBT SERVICE 50 50 5119,700 5118,600 OTHER PROJECTS 41,151 30,463 90,300 72,700 TRANSFERS OUT 0 0 0 50,000 TOTAL 541,151 530,463 5210,000 5241,300 DEBT SERVICE* Principal .................................. 555,000 Interest .................................. 56,500 Fees & Other .................................. 7,100 5118,600 OTHER PROJECTS Storm Drainage Projects .................................. 72,700 72,700 TRANSFERS OUT Capital Projects Fund"" .................................. 50.000 50,000 $241,300 `Total Principal and Interest outstanding on 12/31/1995 is $1,543,465. "*This is a partial repayment of the $187,969 due to the Capital Projects fund for storm sewer improvements in Westwood and Fresno street. Note: This budget does not include bond proceeds or expenditures for bonded projects. Costs for the Western Area Phase II project are also not included. RESOLUTION 95- • A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION AUTHORIZING THE PROPOSED MAXIMUM TAX LEVY FOR CALENDAR YEAR 1996 WHEREAS, the Elk River City Council has review the City's anticipated expenditures for all funds in 1996; and, WHEREAS, The Elk River City Council has considered projected revenues for all funds in 1996; 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 of the City of Elk River that the proposed General fund Budget in the amount of is hereby adopted. BE IT FURTHER RESOLVED by the City Council of the City of Elk River that the following amounts are the maximum to be levied as property taxes payable in 1996. General Fund • Library Dam Loan SWM City Special Assessments 1989 Fire Equipment 1992 Certificate of Indebtedness 1993 Certificate of Indebtedness 1994 Certificate of Indebtedness 1995 Certificate of Indebtedness 1996 Certificate of Indebtedness HACA Gross Levy Reduction Net Levy $ 2,619,859 $ 491,358 $ 2,128,501 50,600 9,490 41,110 32,572 6,109 26,463 241,401 45,275 196,126 34,261 6,426 27,835 71,973 13,499 58,474 10,000 1,876 8,124 21,368 4,008 17,360 25,535 4,789 20,746 26,250 4,923 21,327 30,000 5,627 24,373 TOTAL $ 3,163,819 $ 593,380 $ 2,570,439 Passed and adopted by the City Council of the City of Elk River this fifth day of September, 1995. Henry A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Clerk • RESOLUTION 95- • A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION AUTHORIZING THE PROPOSED MAXIMUM TAX LEVY FOR CALENDAR YEAR 1996 WHEREAS, the Elk River City Council has review the City's anticipated expenditures for all funds in 1996; and, WHEREAS, The Elk River City Council has considered projected revenues for all funds in 1996; 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 of the City of Elk River that the proposed General fund Budget in the amount of is hereby adopted. r BE IT FURTHER RESOLVED by the City Council of the City of Elk River that the following amounts are the maximum to be levied as property taxes payable in 1996. HACA Gross Levy Reduction Net Levy General Fund $2,672,868 $ 493,037 $ 2,179,831 • Library 50,600 9,334 41,266 Dam Loan 32,572 6,008 26,564 SWM 241,301 44,530 196,771 City Special Assessments 34,261 6,320 27,941 1989 Fire Equipment 71,973 13,277 58,696 1992 Certificate of Indebtedness 10,000 1,845 8,155 1993 Certificate of Indebtedness 21,368 3,942 17,426 1994 Certificate of Indebtedness 25,535 4,710 20,825 1995 Certificate of Indebtedness 26,250 4,842 21,408 1996 Certificate of Indebtedness 30,000 5,534 24,466 TOTAL $3,216,728 $ 593,379 $ 2,623,349 Passed and adopted by the City Council of the City of Elk River this fifth day of September, 1995. Henry A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Clerk • .~ C] August 21, 1995 Pat Klaers Administrator City of Elk River P.O. Box 490 Elk River, MN 55330 Dear Pat: EIk Riner Ares Chambe~~ of Cornmeyce Per our conversation, as the City's 1996 budget is being prepared, we respectfully request consideration for funding of Chamber projects. We feel that these are mutually beneficial and hope Ghat the City would agree. ~) We would appreciate the EDA's assistance in again providing assistance for Elk River's 4th of July celebration. In 1.995, the amount was $6,000. 2) We would request $1,000-$2,000 in assistance from the City Council to help fund the 1996-97 Leadership Elk River program. You may recall $1,000 was allocated from the contingency fund in 1995. 3) It is our understanding that several light standards will be installed on Chamber property that would extend the downtown "coachlight" theme to improve this side of Highway 10. At this time, the exact number of standards has not been determined, but we request the HRA's kssistanee i:: ending the msjor r4rt of t'~is pro3ect., Dererding ~:~ what the plan calls for, the Chamber would be in the position to pay for at least one of the lights. Pat, thank you for bringing these requests to the attention of the appropriate source. If you need a clarification or have any questions, please give me a call. Sincerely, Jackie F. Schuelein ~xecutive Vice President 509 Highway 10 • Elk River, Minnesota X5330-1415 • (612) 441-3110 "Building a Better Community Together" ~NFO~MATION n u 14670 Bowers Drive, NW, Anoka, MN SS303 August 24, 1995 The Chief of Police, Police Department, City of Elk River, 13065 Orono Parkway, Elk Rive, MN SS330 Dear Sir, I would like to express my sincere thanks for the help your department gave me on Wednesday. Unfortunately I did an idiotic thing and locked my keys in my car while outside the gas station. Corporal David Hurd came promptly to my rescue and within a few minutes was able to open the door. • I apologize for taking up precious time, your department obviously has more pressing situations to deal with, but I am most grateful for the help. Would you be good enough to accept the enclosed check for one of your Police Charities, I have left the name blank so you can fill in the name of the Charity. Once again my thanks to Corporal Hurd and your department for all the help. Kind regards, ~I~~, Lynda Herst ~~aey ia~ ~~~~ ~un~ • • RESOLUTION 95 - 58 A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE HOUSING AND REDEVELOPMENT AUTHORITY 1996 TAX LEVY WHEREAS, the Housing and Redevelopment Authority in and for the City ' of Elk River has passed Resolution 95-1 authorizing a levy of .0131% of the taxable market value. of the City for various redevelopment activities; and, WHEREAS, the City Council of the City of Elk river has consented to this levy. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River that the Housing and Redevelopment Authority in and for the City of Elk River certify a levy of .0131% of the taxable market less Homestead and Agricultural Aids of $5,182.00 to the County Auditor. Passed and adopted by the City Council of the City of Elk River, Minnesota • this5th day of September, 1995. A. Duitsman, Mayor ATTEST: ~ ~~~~~ Sandra A. Thackeray, City Clem • RESOLUTION 95 - 59 A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE 1996 TAX LEVY FOR ECONOMIC DEVELOPMENT PURPOSES FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY WHEREAS,the City Council of the City of Elk River has received a request from the Economic development Authority to levy a tax for the benefit of the Authority in the amount of .01813% of taxable market value of taxable property in the City for the year of 1996. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River as follows: The City Council of the City of Elk River proposes that a tax in the amount of .OI813% of the taxable market value in the City less Homestead and Agricultural Credit Aids of $11,476.00 be levied in the year 1995 for the benefit of the City of Elk River Economic Development Authority to be used for Economic Development Authority • purposes as provided under Minnesota Statute 469.090 et. sea. Passed and adopted by the City Council of the City of Elk River, Minnesota this5~~ day of September .1995. e A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Cler • RESOLUTION 95-60 A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION AUTHORIZING THE PROPOSED MAXIMUM TAX LEVY FOR CALENDAR YEAR 1996 WHEREAS, the Elk River City Council has review the City's anticipated expenditures for all funds in 1996; and, WHEREAS, The Elk River City Council has considered projected revenues for all funds in 1996; 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 of the City of Elk River that the proposed General fund Budget in the amount of is hereby adopted. BE IT FURTHER RESOLVED by the City Council of the City of Elk River that the following amounts are the maximum to be levied as property taxes payable in 1996. General Fund Library Dam Loan S W>U City Special Assessments 1989 Fire Equipment 1992 Certificate of Indebtedness 1993 Certificate of Indebtedness 1994 Certificate of Indebtedness 1995 Certificate of Indebtedness 1996 Certificate of Indebtedness TOTAL HACA Gross Levy Reduction Net Levy 5 2,619,859 $ 491,358 ~ 2,128,501 50,600 9,490 41,110 32,572 6,109 26,463 241,401 45,275 196,126 34,261 6,426 27,835 71,973 13,499 58,474 10,000 1,876 8,124 21,368 4,008 17,360 25,535 4,789 20,746 26,250 4,923 21,327 30,000 _5,627 24,373 ~ 3,163,819 $ 593,380 ~ 2,570,439 Passed and adopted by the City Council of the City of Eik River-this fifth day of September, 1995. en . Duitsman, Mayor ATTE T: Sandra A. Thackeray, City Clerk Page 1 N ~p N ~ ~- ~ ? O ~• W ~ O • EQU/PMENT RESERVE Revenues 1993 1994 1995 1996 ACTUAL ACTUAL ADOPTED PROPOSED TRANSFER FROM UTILITIES n/a n/a n/a 5 73,000 OTHER REVENUES n/a n/a n/a - TOTAL ~ 5 - 5 - S - 5 73,000 TRANSFER IN Elk River Municipal Utilities ............................. EXPENDITURE ANALYSIS 573.000 5 73,000 73,000 1993 1994 1995 1996 ACTUAL ACTUAL ADOPTED PROPOSED GENERAL GOVERNMENT n/a n/a n/a 50 • PUBLIC SAFETY n/a n/a n/a 44,000 PUBLIC WORKS n/a n/a n/a 29,000 CULTURE & RECREATION n/a n/a n/a 0 TOTAL 50 50 50 573,000 CAPITAL OUTLAY Police Mobil Digital Computers ............................. 520,000 Fire Reserve for Pumper ............................. 24,000 Streets One Ton Dump Truck ............................. 29 000 $73 000 •