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HomeMy WebLinkAboutSP August 3, 1994 ~ CITY of ANDOVER Special City Council Meeting August 3, 1994 Call to Order - 7:00 p.m. 1. 1995 Budget Discussion 2. 3. Adjourn ~ 0. . ..~. CITY of ANDOVER 1685 CROSSTOWN BOULEVARD NW. . ANDOVER, MINNESOTA 55304· (612) 755-5100 SPECIAL CITY COUNCIL MEETING - AUGUST 3, 1994 MINUTES A Special Meeting of the Andover City Council was called to order by Mayor Jack McKelvey on August 3, 1994, 7:07 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota, to discuss the proposed 1995 General Fund Budget. . Councilmembers present: Jacobson, Knight, Perry Councilmember absent: Dalien Also present: City Finance Director, Daryl Sulander City Administrator, Richard Fursman Others Mr. Sulander noted the proposed budget before the Council assumes a 5 percent growth in the tax capacity base and a 9 percent increase from increased taxes on each household or business. On a $99,000 house, that increase would be $20.89. That priced house is very close to the average price level of houses selling in the City now. He then gave a detailed review of the proposed changes and in the budget. The expected increases in fiscal disparity and local government aids have not been shown in the budget. He suggested the Council may wish to allocate any increases in those areas to the parks or streets departments. The budget as proposed amounts to $3,288,868 in revenues and equal expenditures. Mr. Fursman noted the Public Works Department is proposing to hire a person in the Water Department, which is covered in the Water Budget. Another individual will be hired in the Sewer Department, which is covered in the Sewer Budget; and a third individual will be hired to start in April to work in Parks. He also noted that Mr. Stone, Public Works Superintendent, has eliminated $35,000 from the budget in contracting for street sweeping. Mr. Stone negotiated an agreement with the City of Ramsey, who owns a street sweeper, to work cooperatively on street sweeping, assuming the Council will also approve the purchase of a street sweeper for Andover. Mr. Sulander explained the reduction in the Parks Department are for personnel services and maintenance supplies. The Contingency Fund includes park improvement funds that would be used if the bond referendum does not pass next year. He felt most of the items in the Parks capital budget are maintenance operations and should be done with the increased maintenance budget without having a large capital outlay request. If the park referendum does pass, the Council can designate that $30,000 in the Contingency Fund for streets. M~-. Sulander gave an overview of the Sewer and Water Funds. In order to provide the needed service for water, Staff is suggesting a $.04/ thousand gallon increase from $.97 to $1.01/thousand gallons. That is about the middle of the range of what other cities are charging. The proposal is also to increase the sewer rates from $27 to $30 per quarter in the Sewer Fund A section, and from $39 to $43 per quarter in the Sewer Fund B area. Those rates are also in the middle of the rates charged by other cities. m~ ~ d'>'\ ~11¡,1'1''f . . . . - - - - .- _. _.. M_..... _._ ..._ .. Special Andover City Council Meeting Minutes - August 3, 1994 Page 2 Mr. Sulander continued the budget includes the purchase of some tools for the mechanic so he does not have to use his own. He is also trying to build a reserve to replace equipment with newer equipment with an internal cash flow. He also explained the establishment of a Risk Management Fund to start funding the City's severance liabilities for retiring employees, etc. The severance liability is about $85,000, and it is unlikely all of that liability would be incurred at one time. One source of funding for this fund would be the League of Minnesota Cities' rebates of insurance premiums that are not necessary for the particular loss period. He would also like to undertake some programs to try to reduce the City's insurance costs, looking at Worker's Compensation losses and property liability losses in reducing insurance premiums and funding them internally. The other source of funding is from the insurance administrator for hospital/medical and general program of the flex benefit plan. The flex benefit plan saves the City approximately $35,000 a year in Social Security taxes. That money coming into this fund pays for the administration of that program and contributed about $2,000 last year in tax liability savings for the City. He would also like this fund to supply a safety program training source to reduce the City's Workers' Compensation losses, which are high for a City this size. Mr. Sulander also noted the unfunded liability for engineering fees on feasibility reports done for projects that were never ordered. He proposed paying $8,000 of that $30,000 liability in 1995. Councilmember Knight questioned the need for a full-time fire chief. Councilmember Jacobson felt one is needed because it is the largest department in the City and some one full time is needed to manage it. In talking with the Fire Chief and the amount of time spent, he felt it is too big of a job for someone to do on a part-time volunteer basis. Mr. Fursman stated most cities this size have full-time fire chiefs. Now the department is acting with a 3/4-time position, paying 1/4 of the wage and requiring full-time accountability. The job would be opened to the public, advertising for applicants. Mayor McKelvey felt a full-time chief could also reduce some expenditures, especially in the number of people responding to calls. Mr. Sulander stated the budget reflects $43,600 for a fire chief without benefits, or $52,000 in overall costs. The proposal is to eliminate the Fire Marshal position. Fire Chief Dale Mashuga noted there are about 100 more calls this year from last year. He explained there are many programs that are not set up because there is no time. The position would do the Fire Marshal work, work with the Building Official, plan reviews, attend meetings with Mutual Aid cities, etc. Most of the larger cities to the south have full-time fire chiefs. Councilmember Jacobson explained the budget before the Council has reduced personal services, that is salary increases by $30,000. This is less than what the Council originally agreed to. He asked about the increase in the Fire and Rescue budget. Mr. Sulander explained the increase in the Fire Chief position and equipment. It also includes an increase in the contribution to the retirement fund. councilmember Jacobson questioned the increase in Street Signs. Mr. Sulander explained there was a shift in the percentage of how employee Special Andover City Council Meeting Special Andover City Council Meeting Minutes - August 3, 1994 Page 3 time was budgeted for this department. In addition there is a shift of his salary out of Finances to the Risk Management fund. One source of funding for this Fund will be shifting all health and other insurance operations to Risk Management, but charge back the full value of family coverage health insurance to each Department. The difference between the full value coverage and the lesser coverage chosen by some employees will help to build a reserve balance in the fund. Councilmember Jacobson noted the Council had talked about budgeting at least $200,000 for sealcoating and cracksealing, and the proposal now shows $155,000. Is that going to be enough? Mr. Fursman hoped that any increase in revenues would be earmarked for streets. There was some discussion on various items in the budget, the proposed generator, wheel balancer, etc. Discussion then returned to the reduction of $30,000 in personal services, which amounts to a three percent rather than a four percent increase for the employees. Mr. Sulander explained the rating of the Stanton report has changed, and Andover is now included in the cities with similar populations. On that scale, the salaries of all employees ranks at or near the bottom. Even with the salary increases proposed, not much headway is being made. Councilmember Jacobson felt the City has a good group of employees; and if they are not compensated, people will start to leave. He preferred increasing the tax rate to 10 percent to receive $23,000 of that money so that the salaries can be paid. Councilmember Knight preferred to see a moratorium on hiring and give the current employees their raises. He was adamantly opposed to increasing the tax rate to 10 percent. He also wanted to see the sealcoating budget put back to $200,000. Councilmember Perry also felt the employees should be compensated according to the Council's previous recommendation. She agreed with Councilmember Jacobson about raising the levy by 10 percent to cover the increase in personnel salaries, which amounts to only $2.25 per year more for the homes valued at $99,000. She also agreed the sealcoating should be budgeted for $200,000. She suggested any revenues received from building above the budgeted amount be earmarked for sealcoating. Mayor McKelvey agreed with Councilmember Knight, that he could reluctantly accept a 9 percent increase, but no higher. The debate continued on how to fund the additional increases in salaries and sealcoating. Mr. Sulander also reviewed the number of existing and potential lots available for development in 1995, noting the potential for a negative impact on the General Fund growth past 1995 without additional MUSA expansion. It was agreed to have Staff look at the proposed budget again with the parameters given this evening, that is to restore the personal services to a four percent increase. The Council also agreed that any excesses in aids, building permits for 1994, surpluses, etc., would be earmarked for streets. The Council asked to be shown the options of remaining with the proposed 9 percent increase in tax levy or increasing the levy by 10 percent. Staff was also asked to show the affect of a 9 versus 10 percent increase on houses valued in the $100,000, $200,000 and $300,000 Special Andover City Council Meeting Minutes - August 3, 1994 Page 4 range. Councilmember Perry stated if there must be cuts to accommodate the increase in personal services, she would prefer that the dues to organizations such as North Metro Mayors' Association be cut. Mayor McKelvey disagreed, as he felt the City will need the support of that organization and that the City is getting its money's worth. Councilmember Jacobson suggested consideration be given to cutting the Council salaries. Mr. Sulander stated he will add this as a discussion item on the August 16 Council meeting; and if there is a consensus, the final budget and resolution can be prepared for acceptance at the September 6 meeting. The Council agreed. MOTION by Jacobson, Seconded by Knight, to adjourn. Motion carried on a 4-Yes, I-Absent (Dalien) vote. The meeting adjourned at 9:20 p.m. Respectfully ~d' ~~peach £:1 Recording Secretary - -------