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HomeMy WebLinkAboutSP November 1, 1989 ,0 CITY OF ANDOVER REQUEST FOR COUNCIL ACTION AGENDA SECTION NO. DATE ORIGINATING DEPARTMENT November 1, 1989 FOR ITEM NO. Finance 1. 1989 Year-to-Date Review BY: Howard Koolick Finance Director REQUEST The Andover City Council is requested to review the enclosed year-to-date data that they requested. BACKGROUND At the previous council meeting, City Council requested the potential savings if all remaining capital outlay items were not purchased. Attached to this memo is a summary showing the amounts remaining under capital outlay codes for public works departments. All other departments were reviewed and show little or no budget remaining. Based on this analysis, the total potential savings would be around $90,000. It is my belief that based on the revenue and expenditure estimates and discussion at the previous meeting, that additional measures are needed should council desire to maintain the fund balance reserve in the general fund. These measures could include issuing certificates of indebtedness in 1989 to fund the purchase of equipment and/or authorizing a transfer from another fund. These options are discussed below. At a council meeting on December 6, 1989, the City Council alluded to issuing equipment certificates to fund the purchase of a civil defense siren (see enclosed copy of minutes). A short review of the budget meeting minutes from 1988 and early 1989 showed no further discussion about this matter. Should Council desire to issue certificates, the following equipment could be funded with COUNCIL ACTION o MOTION BY TO SECOND BY Special City Council Meeting November 1, 1989 1989 Year-to-Date Review o the certificates (all of this equipment has been charged to the general fund) Civil Defense Siren - budgeted - unbudgeted 1989 Ford Dump Truck - budgeted in 1989 - unbudgeted portion 1989 Ford 350 Dump Truck - funds carried over from 1988 Fire Dept. Chevy Suburban - $10,000 $12,450 $20,000 $ 1,980 Total $23,160 $20,575 $88,165 please note that if certificates are issued, the City will need to levy taxes in 1990 for payment of principal and interest. Assuming a $90,000 principal amount and 7% interest (as recommended for estimating by Bill Hawkins), the amount needed for principal and interest in 1990 would be $24,300. o The City Council can also authorize a transfer from another fund to finance the deficit. Funds which could make such a transfer would include the water fund, sewer fund, administrative trust fund, and the fund created if the city defeases some outstanding bonds next week. o o 1989 CAPITAL BUDGET REMAINING Public Works Building 41960 530 580 $ 754.22 $ 4,408.00 $ 5,162.22 TOTAL Cold Storage Building 41980 580 $ $ 200.00 200.00 TOTAL streets & Highways 43100 530 $ 4,000.00 531 $69,274.65 0 TOTAL $73,274.65 storm Sewers 43150 580 $ 850.00 TOTAL $ 850.00 o street Signs General Money used for replacement signs Park & Recreation 45200 530 580 $14,053.48 $ 664.37 $14,717.85 TOTAL TOTAL OF ALL PUBLIC WORKS DEPARTMENTS $94,204.72 o Regular City Council Meeting December 6, 1988 - Minutes Page 12 CIVIL DEFENSE SIRENS Dave Almgren, Building Official, reviewed the bids received for two warning sirens, noting they would be placed at Hanson and Bunker Lake Boulevards and at Round Lake and Bunker Lake Boulevards. $10,000 was budgeted for one siren in the 1989 budget; however, each siren will cost $11,225 installed. He suggested the additional $12,450 be bonded for and included with an equipment bond which will be sold sometime in 1989. MOTION by Orttel, Seconded by Elling, that the Council authorize a dollar expenditure of $22,450 for the installation and purchase of two sirens to be located at approximatelY Bunker Lake Boulevard area on the east and west portions of the City; and note that $10,000 of that amount will come from budgeted funds from 1989 and the other amount, $12,450, would be included in a bond issue for equipment to be sold later on in the year. Motion carried unanimously. APPROVE OFF-SALE INTOXICATING LIQUOR LICENSES o MOTION by Orttel, Seconded by Apel, to approve the license renewals for intoxicating liquor for 1989 for G-Will Liquors and JJ's Liquor. Motion carried unanimously. NON-DISCUSSION ITEMS MOTION by Elling, Seconded by Knight, to approve Items 7a, b, c, d, e, f,and g as presented. (See the following: Approval of Development Contract/Indian Meadows, 3rd Addition R277-88: Accept Streets/Indian Meadows 3rd Addition Accept Deed/Park Dedication/Indian Meadows R278-88: Approve Final Plat/Indian Meadows 3rd Addition R279-88: Accept Grading & Streets/Deerwood Estates R280-88: Speed Limit Resolution/Fox Meadows R281-88: Local Programming Resolution) Motion carried unanimously. SCHEDULE WORK SESSION o Because it was felt the items for this work session would not be time consuming and because a year-end special session is needed before a new Council begins next year, it was agreed to hold only one work session and schedule it for December 27 MOTION by Elling, Seconded by Knight, to schedule a work session for December 27, 7:30. Motion carried unanimously. o CITY OF ANDOVER REQUEST FOR COUNCIL ACTION AGENDA SECTION NO. DATE ORIGINATING DEPARTMENT November 1, 1989 Finance ITEM NO. 2. 1990 Budget Review BY: Howard Koolick Finance Director BY: REQUEST The Andover city Council is requested to review the enclosed 1990 General Fund budget. This budget differs from the budget approved on September 20th because of the tax bill passed at the recent special session. BACKGROUND The Minnesota state legislature passed a new tax bill in late September. The following is a summary of the effects of this bill compared to the budget the City recently approved. 0 Difference Object Approved New Tax Increase Code Description Budget Bill (Decrease) 31010 Ad Valorem Taxes $792,392 $868.052 $ 75,660 33401 Local Gov't Aid $411,061 $125,173 $(285,918) 33402 Homestead Credit $245,000 $318,920 $ 73,920 34225 Equalization Aid $ -0- $ 52,181 $ 52,181 Total $ (8 4 , 1 57) The drop in local government aid is a direct result of the governors desire to transfer more state aid to schools. Under the tax bill, the local government aid formula results in the City receiving $392,151. (This differs from the approved budget due to a minor change in the formula.) Of this $392,151, the state is shifting $266,801 to the school districts. In turn, the City's levy limit was increased by the same amount. COUNCIL ACTION o MOTION BY TO SECOND BY Special City Council Meeting November 1, 1989 1990 Budget o You will notice that the ad valorem tax levy did not increase by this same amount. The reason for this is summarized below. Reason Increase/(Decrease) Local Government Aid shift to schools $ 266,801 Increase in Homestead and Agri- cultural Credit Aid (HACA)(previously known as Homestead Credit) which was due to more complete information being available from the State $ (73,920) Addition of Equalization Aid, which like HACA is a decrease of tax revenue $ (52,181) o Minor Change in Local Government Aid formula which results in a lesser amount being subtracted from tax levy limit Change in calculation of levy limit from 1988 law to new tax bill. Change is due to method used to calculate increase in population Miscellaneous rounding difference $ 18,910 Net Increase in Tax Levy Limit $ (84,137) $ 187 $ 75,660 The budget for street lighting and street lighting user fees were both increased by $30,000 to correct an error in estimating the cost and revenue from street lights we bill to our residents. This change has no effect on the amount needed to cut, since the revenue will equal the expense. Based on all of the above analysis, the City needs to trim an additional $84,157 from the budget approved on September 20, 1989. You have received a revenue printout that reflects the changes from the tax bill and the change for street lighting. It shows total revenue of $2,008,686. The expenditure printouts contain all cuts approved at the September meeting plus the increase for street lighting, and totals $2,092,823. The City Council has several options available. First would be to increase revenue estimates. I believe that estimates currently in the budget are proper. They are based on mildly conservative estimates of the trend of the past years. Increasing the revenue estimates may result in an overstatement of revenue and the City not achieving these estimates. o The second option would be to cut additional expenditures to balance the budget. In reviewing the budget, there are few areas where cuts could be made. Under elections, there is $5,000 budgeted for electronic voting machines. The City Clerk informs me that if we need to purchase these machines, the cost will be roughly $30,000, meaning we will need to find additional funding for the majority of the cost. Therefore, it makes little sense to budget for a small portion if we need to find additional financing for the majority of the cost. Special City Council Meeting November 1, 1989 1990 Budget o Another area that could be cut is the amount given to the fire relief association. The 1990 budget includes a city contribution of $10,850 to the association's pension plan. A review of their December 31, 1988 financial statements shows that their pension plan is fully funded. While financially this cut makes sense, the incentive generated by the pension plan to staff the fire department makes the cut questionable. I would recommend not cutting this contribution. I believe that it benefits the City to make this contribution, but felt that you had the right to know that it could be cut. o In addition, it appears that a portion of the public works director salary could be placed in the water and sewer fund budgets. Putting 3% of his salary in these funds would result in saving the general fund approximately $1,700. It should be noted that the water and sewer funds currently contain partial salaries of the treasurer, finance director and all public works employees other than the director. The third alternative would be to authorize a transfer from another fund. options would include the administrative trust fund, the water fund, the sewer fund, and the fund created when the city defeases bonds (should this occur). Council also requested a listing of 1990 capital needs that are not included in the general fund budget. The attached pages show those department requests that are projected for 1990 and not budgeted for. o o CITY OF ANDOVER CAPITAL OUTLAY REQUESTS GENERAL FUND BUDGET YEAR 1990 Department Elections Item Electronic Voting Equip. o o Page 1 Estimated Cost $ 20,000 PROPOSED BUDGET FOR 1990r ';~/' . ,". e Fll'€, ~fm~f LARGE EQUIPMENT COMMIT~E~ : \!:\!'t'~:f;::' .~.:. ~ Personal breathing apparatus face mask, tube, and corrective lenses if needed. Replacement turnout gear. coats, helmets, pantst boots, hoods, spanner and breathing facemask, tube, and lenses. New and replacement hose and couplings Aluminum hose covers for 4881 and 4886 10 - 5 gallons cans. of foam 10 1/2 hour air bottles for breathing apparatus !Ii a,ooo.OO; /J~'h,.l, .> !Ii /5,00.00' / F~~~,. i~!: . . !Ii 2 - 1 hour air bottles for breathing apparatus(Hazma~l 200ft booster line $ !Ii ..' 9.00.00 i . .:::i\~~A;~':'.',;, :',:_i';:: S :,000 .O()," . ' ~. :':. .-: i -: .;~, ."' - ,::1' :~ Miscellaneous Equipment Q Equipment needed for 6 x 6 truck J (:::: . 2 - Nozzles !Ii. 2,500. OO';! '. ":~;;H~J:';!~:>> . .'-.- :-;~ !Ii 2,000.00) ';';:1'~J<f;:I_::; . ....:f:~ $' 1 ,Q9q. OOE .:;::~~~:::"~'\' -:: '';:;':: . !Ii '20,0. oo:! Emergency lighting and siren 2 ~ Electric hose reels (12 volt) ----_______._l, . . 1990 Regular $ 100~00 ,;: '::1:.: .'.'. "~:'. -(. . i1~, ",. SPECIAL PURCHASES 'Po 90S I B") Y \5,., ,..rd: P-;&,.... ., 't'l2~-c6.(r'k . " ;,". . ::: ...: "'~:!':i1~"; ", ", 5 to:y~:~~n~~:;~:::d m~~i ;~r~~r:~icle with' electr~cat~$ . as ;r:~I~i~oo May 20, 1989 ,~ I Chairman: Mark G. Marshik $ 65;ioo:oo .,!~f" ;.;'-:_, Total 1990 Large Equipment Committee Mark Marshik Glenn Smith Roger Cl Bob Dillon Ritchie Larson Public. Works GENERAL FUND CAPITAL '" o 1990 PROPOSAL fLbj,,- Works; Equipment Storage Building Cement Floor Electric Door Opener TOTAL $ 5,000.00 $ 700.00 $ 5,700.00 Streets & Highways 1/4 of Backhoe 1/2 of Dumptruck 1/3 of Bobcat & Trailer TOTAL $12,500.00 $32,500.00 $11,666.00 $56,666.00 Snow & Ice Removal 1/2 Dumptruck, Plow, Wing & Sander o TOTAL $32,500.00 $32,500.00 Tree & Weed Control 1 120/160 Series Chipper TOTAL $ 8,000.00 $ 8,000.00 Parks & Recreation 1/3 of Bobcat & Trailer TOTAL $11,666.00 $11,666.00 Storm Sewer 1/3 of Bobcat & Trailer 1/4 of Backhoe TOTAL $11,666.00 $12,500.00 $24,166.00 o \ ,. GENERAL FUND CAPITAL EQUIPMENT o TOTAL $65,000.00 $50,000.00 $35,000.00 $ 8,000.00 $158,000.00 Truck, Plow, Wing, Sander Backhoe Bobcat & Trailer 120/160 Series Chipper $25,000 of above total will come from Enterprise Budget for equipment. GENERAL FUND CAPITAL IMPROVEMENTS EQUIPMENT o TOTAL $ 5,000.00 $ 700.00 $ 5,700.00 Cement Floor Electric Door Opener Total General Fund Capital Equipment and Improvement proposal is $138,700.00. o o CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA RES. NO. R -89 A RESOLUTION RESCINDING RESOLUTION NUMBER R161-89 WHICH ESTABLISHED THE PRELIMINARY TAX LEVY FOR THE CITY OF ANDOVER. WHEREAS, The City of Andover has established a preliminary tax levy in accordance with state statutes; and WHEREAS, The Minnesota state legislature, in a special session, approved increased levy limits for the City of Andover; and WHEREAS, The City of Andover intends to increase their preliminary tax levy as allowed by state statute; NOW, THEREFORE, the City Council of the City of Andover hereby resolves: Resolution Number R161-89 which was adopted on September 20, 1989 and established the preliminary 1990 levy and budget is hereby rescinded. o Adopted by the City Council of the City of Andover this 1st day of November 1989. CITY OF ANDOVER ATTEST: James E. Elling - Mayor Victoria Volk - City Clerk o o CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA RES. NO. R -89 A RESOLUTION ESTABLISHING THE PRELIMINARY 1990 LEVY AND BUDGET TO BE CERTIFIED TO THE COUNTY AUDITOR BY THE CITY OF ANDOVER. WHEREAS, The City of Andover is required under state law to certify to the County Auditor a preliminary levy prior to November 15, 1989; and WHEREAS, The City Council has approved a preliminary general fund budget for the 1990 fiscal year totaling $ ; and WHEREAS, The City has issued certificates of indebtedness in prior years whose debt service obligations are predetermined; NOW, THEREFORE, the City Council of the City of Andover hereby resolves: o The total non-bonded indebtedness preliminary levy is hereby set at $1,239,143; and the total bonded indebtedness preliminary levy is hereby set at $81,099; of which $ 20,750 for the 1985 Certificates of Indebtedness; $21,147 for the 1986 Fire Sirens Equipment Certificates of Indebtedness; and $39,202 for the 1987 Certificates of Indebtedness. Adopted by the City Council of the City of Andover this 1st day of November 1989. CITY OF ANDOVER ATTEST: James E. 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