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HomeMy WebLinkAboutWK - October 25, 2011C "..�. 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.ANDOVERMN.GOV City Council Workshop Tuesday, October 25, 2011 Conference Rooms A & B 1. Call to Order — 6:00 p.m. 2. 2011 Budget Implementation Progress, September 2011 Investment Report & Letters of Credit - Project Escrow Report -Administration 3. 2012 Budget Review - Special Revenue, Debt Service, Capital Project, Enterprise, & Internal Service Funds - Administration 4. 2012 Budget Development Discussion — Focusing on General Fund - Administration © 5. 2011 -2012 Council Goals Update - Administration 6. Other Topics 7. Adjournment E J.t _ ' . ANDOVER CITY COUNCIL WORKSHOP MEETING —OCTOBER 25, 2011 MINUTES The Workshop Meeting of the Andover City Council was called to order by Mayor Mike Gamache, October 25, 2011, 6:00 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmembers present: Sheri Bukkila (6:07 p.m.), Mike Knight, Julie Trude, and Tony Howard Councilmember absent: None Also present: City Administrator, Jim Dickinson 2011 BUDGET IMPLEMENTATION PROGRESS, SEPTEMBER 2011 INVESTMENT REPORT & LETTERS OF CREDIT - PROJECT ESCROW REPORT 1 0 City Administrator Dickinson stated the overall City of Andover 2011 Budget contains total revenues of $28,910,245 and total expenditures of $30,785,805. The $1,875,560 of expenditures over revenues is largely due to prepaying debt in order to save on interest expenditures. He reviewed the directives and departmental expectations for 2011. He explained the Council should be updated monthly at a minimum as part of the bond rating process. At this time the City is where they want to be for the 2011 budget. The increase in the license and permits and Charges for Services is due to the new building projects by the Anoka County Highway Department and Dynamic Sealing Technologies. The City received the State Fire Aid payment in September rather than October and paid this out early and this is reflected in the totals. The revenue for fines is about one month behind target. The League of Minnesota bill was received in September. He clarified that being ahead of revenue target has increased the availability of fund balance going into next year. Councilmember Bukkila asked if the reduction in revenue for fines was due to the Sheriff Department spending more time focusing on DUI's and other related problems. City Administrator Dickinson stated there may be a correlation. Councilmember Trude stated the League of Minnesota Cities bill for dues should be included in the Risk Management Budget. Our membership is primarily due to our insurance coverage. City Administrator Dickinson explained this change would be occurring in 2012. Councilmember Knight asked what the fund balance would be going into 2012. © Andover City Council Workshop Meeting Minutes — October 25, 2011 Page 2 City Administrator Dickinson stated the City working cash flow would be at approximately 45 %. Councilmember Trade stated the weather could have an impact on the City's emergency funds. City Administrator Dickinson stated the City does need to be prepared for emergency situations and if there is a lot of snow fall early in the season then this will impact the City's budget. City Administrator Dickinson discussing cash balances stated the City will have immediate expenses of closing on the Parkside at Andover Station development purchase and the Bunker Lake Boulevard redevelopment project. The City generally needs to keep $3,000,000 readily available for cash flow and emergencies. Councilmember Knight asked what the City was earning as a return with the savings accounts. City Administrator Dickinson stated the City is earning about 2 -3 %. Councilmember Trade stated the City has a better return if they borrow money to residents to pay assessments than it does with the accounts at our current rate of return. This is also a way for the City to help our residents. City Administrator Dickinson stated as long as the City is paid it is not a bad situation for the City. Mr. Dickinson stated the City has decreased the amount of investments in mortgage backed securities they have in the portfolio. Councilmember Trade asked if the City had the Certificates of Deposit spread over enough banks to be insured. City Administrator Dickinson stated the Certificates of Deposit were spread out appropriately, either insured or backed up by security pledges. City Administrator Dickinson stated the City has Letters of Credit for development activity dating back to 2004. Most of these are small amounts and are for erosion control. Village Bank is the highest exposure and when Parkside at Andover Station closes, we will release the Letter of Credits with Premier Bank. 2012 BUDGET REVIEW — SPECiAL REVENUE, DEBT SERVICE, CAPITAL PROJECT, ENTERPRISE, AND INTERNAL SERVICE FUNDS City Administrator Dickinson stated the Council has had a number of reviews of the 2012 Proposed General Fund Budget that will be supported by the 2012 Tax Levy. The Council did adopt at the September 6, 2011 regular Council meeting a Preliminary 2012 total property tax © levy of $10,856,299. The Council has the right to reduce or keep constant this levy until the final certification date of December 28, 2011. The proposed levy will result in a zero percent increase in the gross tax levy. He supplied the Council with draft budgets for all the other funds outside © Andover City Council Workshop Meeting Minutes — October 25, 2011 Page 3 of the General Fund within the City. He went through the Special Revenue Funds, the Debt Services Funds, Capital Projects Funds, the Enterprise Funds, and the Internal Service Funds. Councilmember Trade asked if the YMCA payments were included in the Community Center Special Revenue Fund. City Administrator Dickinson stated the payments from the YMCA were included under Misc. in that Special Revenue Fund for the operational side. The City pays the expenses and the YMCA reimburses the City. The City is on target to be out of the deficit fund balance for this fund by 2014. Councilmember Trade suggested the miscellaneous revenue be better identified as pertaining to the YMCA. City Administrator Dickinson suggested adding a footnote to identify this. He clarified the reason for the increase for the Lower Rum River Watershed Fund was due to problems with enforcement within another city, but the increase is still less than what the east side of the City pays to Coon Creek Watershed District. The Capital Equipment Reserve on page 19 is for long- term equipment purchases and to cover costs in the case of a natural disaster. The City has been saving money for equipment purchases so that we do not have to do large equipment bonds. Mayor Gamache asked what percent of the levy goes to equipment. City Administrator Dickinson stated about 2 %. Councilmember Trade asked if the City had made any contributions to the Alexandra House. City Administrator Dickinson stated this was done from the General Fund. Councilmember Trade asked if there was something that could be done with the funds available in the Trail Fund on page 15. City Administrator Dickinson stated these particular funds could only be used for a regional trail. The City has been looking at grant opportunities to add to the regional trail system and these funds could be used as the City's match portion. The fees received from park dedication fees could be used for City trails in parks. Councilmember Trade stated she would like to see the City move from spending funds on "Tot - Lot Playgrounds" and spend these funds on trails in the future. © City Administrator Dickinson stated the Central Equipment Fund on page 103 is used to maintain all of the City's equipment and provides fuel for the City's vehicles. The Risk Management Fund on page 105 includes all insurance premiums and severance payments that may be paid out © Andover City Council Workshop Meeting Minutes — October 25, 2011 Page 4 by the City. The City is anticipating a couple of retirements in the next few years. There will be an increase in expenses for this fund in 2012 due to transferring the League of Minnesota Cities dues bill and an increase in the City's work -comp insurance rates. Councilmember Howard asked if the City maintained a spreadsheet showing the cost impacts in anticipation of employees retiring. City Administrator Dickinson stated the City works with employees to determine when they may be retiring. The City also reviews all open positions to determine if the position needs to be filled externally or if there is the potential for an internal transfer or if the City can combine the position duties with other positions. Councilmember Trude asked for clarification on page 41, the Lease Revenue Bonds. She asked if the Community Center was the expense related to these bond payments. City Administrator Dickinson stated that was correct. The funds are received from the YMCA and the tax levy and then the debt service payments are paid out of this fund. 2012 BUDGET DEVELOPMENT DISCUSSION Councilmember Knight asked City Administrator Dickinson to explain the Market Homestead Credit program versus the Market Value Exclusion Program. City Administrator Dickinson stated the Market Homestead Credit program was the program the State use to have that gave each property owner a credit on their property taxes. This credit reduced the amount of taxes the property owner actually paid. The State was then suppose to pay the City the amount that was credited to the property owners. The problem with this program was the State did not pay the City of Andover the amount that was owed. In an effort to balance the State's budget, the State no longer has this program. The Market Value Exclusion Program is the program that was created to replace the Market Homestead Credit program. This program reduces the market value of a property that has been homesteaded. This reduction will reduce the taxable value amount of a property and the taxes paid. The State will no longer be responsible for paying the "credit" amount to the cities. The Market Value Exclusion program is for homesteaded properties only. This will have a negative impact on the City's businesses. In order for a City to maintain the same amount of money collected in previous years, the City would need to increase their tax rate. This may put the increase of property taxes on the City. Andover has collected the Market Homestead Credit in full only once since that programs inception and has done its due diligence in making sure the City does not have to increase taxes excessively to cover the impacts of the new program. He provided additional handouts to the Council. © Councilmember Trude clarified the Market Value Exclusion program was devaluing the tax base for the City and putting a larger burden on the businesses and those properties that are not © Andover City Council Workshop Meeting Minutes —October 25, 2011 Page 5 homestead and high end homes. Councilmember Bukkila requested staff to put together a spreadsheet that shows the difference between the Market Value Credit program and the Market Value Exclusion program and how this will affect individual homeowners. City Administrator Dickinson stated the City was expecting a tax rate of between 38% and 40% but in order to maintain the same amount of taxes being collected the rate needs to be increased to 43 %. The City had started internally to migrate from the Market Value Homestead Credit program. City Administrator Dickinson stated the City has been working diligently on reducing expenses and not increasing the levy any more than is needed. The City may be able to reduce the levy amount for 2012 because of cost savings including the reduction in the City's health insurance premiums and the estimated fund balance that will be available. These savings would drop the proposed levy from 43.297% to 42.878 %. If the City does not do anything with the levy and leaves it at a zero increase the tax rate will increase due to the Market Value Exclusion program. 0 Councilmember Knight asked about the money available through QCTV. City Administrator Dickinson stated the City could reduce a fund balance reserve in the amount that is at QCTV and this could lower the levy to 42.586 %. This would put Andover's tax rate under Coon Rapids. The City could also look at reducing the working cash flow designation to 44% and the levy would be reduced to 42.134 %. It would be possible to reduce the levy more but it would allow for less flexibility. Mayor Gamache stated the City should do what they can to reduce the impact on businesses and the reduction of the 2012 levy would help in doing this. Councilmember Knight asked if there was a danger of the City running to lean. City Administrator Dickinson stated the City would not be too lean if they decided to drop the levy to 42.586% and make the cuts up to the IT Fund Balance Reserve. Going more than that would require more management of the City's cash flow and may result in things not being done when they would have otherwise been done. Councilmember Trade stated the law enforcement budget was increased by $80,000 and this was taken from previous years Debt Services levy and even with this increase the City currently has a zero levy increase for 2012. © City Administrator Dickinson stated the Council did not need to make a final decision until the levy was certified in December. This will give the Council time to look at the proposed cuts and Andover City Council Workshop Meeting Minutes —October 25, 2011 Page 6 also see how much snowfall there may be for this season. City Administrator Dickinson stated the Anoka- Hennepin School District referendum that is up for vote on November 8, 2011 would also have an impact on taxes for residents. He would recommend the Council look at and consider potentially reducing the levy $225,000. Mayor Gamache stated the City should be cautious about reducing the levy too much, but he would like the City to look at reducing the impact to business properties. Councilmember Knight requested the City Administration directives and departmental expectations be included in a newsletter article to the residents so they are aware of what the City is working to accomplish. City Administrator Dickinson stated staff would look at a reduction of about 2.25% and bring forward any concerns at the next workshop. Councilmember Howard stated he would like to see the explanation of the Market Value Exclusion program televised so residents can understand it and know the City has been fiscally © responsible with keeping its spending at the same levels as previous years. Councilmember Trude suggested Councilmember Howard attend a new councilmember session sponsored by the League of Minnesota Cities because it is important. 2011 -2012 COUNCIL GOALS UPDATE City Administrator Dickinson provided the Council with the results of the last community survey that was done in 2006 and a sample result brochure that was prepared for the City of Woodbury. He would recommend if the City does a survey the results be published in a similar manner. Councilmember Trude stated the City should consider doing another community survey. The Council would need to determine what questions should be asked. City Administrator Dickinson stated the last community survey focused on issues such as commuter issues, wi -fi within the City, and was also the precursor to the open space referendum. A survey would cost approximately $12,000 and the questions for a quality of live survey would not be difficult. City Administrator Dickinson reviewed the City goals and values categories including fiscal values, commercial/residential development/ redevelopment, collaboration, service delivery, and livability/image. Councilmember Bukkila asked if the City was still talking to the schools about the City doing Andover City Council Workshop Meeting Minutes — October 25, 2011 Page 7 some of their maintenance. City Administrator Dickinson stated staff was still talking to them but the school district has just made a large investment into equipment. This may be something they would look at in the future at a point in time this equipment needs to be replaced and they need additional storage for equipment. He pointed out the collaboration project with the County regarding the facility management system was well received by the school district. The City needs to balance the use of this system with local business services to be sure businesses are not being pushed out. Not all the Service Delivery goals have been met at this time. The Council will discuss these goals again after the first of the year. Councilmember Trude suggested this also include discussions on the Administrative Fines process for the City. Mayor Gamache asked Mr. Dickinson to explain how the City is assisting businesses with Sewer Access Charges (SAC). City Administrator Dickinson stated there have businesses in Andover that have been hit with © large SAC charges when they have wanted to expand. In one case the business decided not to serve food on their patio because the SAC charge was too large. The City has been helping these businesses by appealing these Met Council decisions and working on behalf of the business to have these charges reduced. OTHER TOPICS VETERANS MEMORLML DRIVE City Administrator Dickinson stated staff had received an e -mail asking where the memorial was on Veterans Memorial Drive. The person stated there should at least be a flag pole along this road. He stated the City could install a flag in the park along Veterans Memorial Drive, but the flag would need to be lit. Councilmember Howard suggested a memorial be done on the corner when Veterans Memorial Drive is expanded. Mayor Gamache stated the City could look at designing a program for donations for a memorial along this road. Councilmember Bukkila stated the City could look at a program like the buy a brick program. a Andover City Council Workshop Meeting Minutes — October 25, 2011 Page 8 NOVEMBER WORKSHOP City Administrator Dickinson stated the Park and Recreation Commission would be at the City Council workshop in November. They would like to discuss the parking lot at Sunshine Park, artificial turf, and the revenue that is generated by the Clear Wireless lease on the Rose Park water tower. Councilmember Trude stated the Park Commission wanted to look at charging high school students to park at the Sunshine Park parking lot. City Administrator Dickinson stated there is excessive garbage in this area and it primarily occurs once school is in session. Councilmember Knight suggested staff work with the High School to find a solution. City Administrator Dickinson stated a detention class had picked up the garbage around the parking lot on Monday. Councilmember Trude stated the parking lot could not be closed because this would push those cars into the neighborhoods and would create other problems. City Administrator Dickinson stated the Park Commission would like to request that the revenue generated from the Clear Wireless antenna lease be put into the Park Improvement fund rather than the utility fund. REGISTRATIONPOSTERS Councilmember Howard asked if the City could restrict the location of activity registration signs to certain corners in the City. Councilmember Bukkila stated she would like to see something more than the campaign style signs used. Councilmember Howard suggested the area associations be listed in the newsletter and on the website so the information is easy for residents to find. ADJOURNMENT The meeting adjourned at 8:20 p.m. 0 Respectfully submitted, Tina Borg, Recording Secretary