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HomeMy WebLinkAbout09-04-12-WS lt ,fi` EN HILLS Approved: September 24, 2012 CITY OF ARDEN HILLS, MINNESOTA SPECIAL CITY COUNCIL BUDGET WORK SESSION MEETING SEPTEMBER 4, 2012 ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Pro-Tem Nick Tamble called to order the Special City Council Budget Work Session meeting at 5:24 p.m. Present: Mayor David Grant (arrived at 5:35 p.m), Councilmembers Brenda Holden, Fran Holmes,Nick Tamble, and Ed Werner Absent: None Also present: City Administrator Patrick Klaers; Director of Finance and Administrative Services Susan Iverson; and Deputy City Clerk Amy Died 1. ADOPT AGENDA MOTION: Councilmember Holmes moved and Councilmember Werner seconded a motion to approve the meeting agenda as presented. The motion carried unanimously (4-0). 2. AGENDA ITEMS A. Budget Discussion Director of Finance and Administrative Services Iverson presented the City Council with a memo regarding the proposed 2013 preliminary budget and tax levy. She noted that the memo addressed the following information: preliminary tax levy, residential property values, operating budget, salary and benefit changes, and preliminary fund balance projections. She stated that at the May 21, 2012, City Council Work Session, the Council directed that a tax levy increase of 4.1% be used to prepare for this preliminary work session discussion. Director of Finance and Administrative Services Iverson provided a comparison of the 2012 adopted levy and the proposed 2013 payable amounts. She noted that the levy was increased per Council directive. The City's share of fiscal disparities has decreased, as has the City's tax capacity, which combined with the 4.1% levy increase, results in a 10.1% increase in the tax rate. ARDEN HILLS SPECIAL CITY COUNCIL BUDGET WORK SESSION—SEPTEMBER 4, 2012 2 Director of Finance and Administrative Services Iverson explained that fiscal disparities runs on a one year lag and is based on the levy amounts that jurisdictions submitted for 2012. She indicated that the jurisdictions who increased their levies will receive more, and those who kept their levies flat, or had fairly small increases, will see decreases in fiscal disparities funds. The effects of the market value exclusion from last year are also seen in this year's fiscal disparities numbers. Director of Finance and Administrative Services Iverson stated that according to information provided by Ramsey County in May 2012, the median home value in Arden Hills will decrease from $272,800 for 2012 taxes to $257,400 for 2013 taxes. She noted that this is a 5.6% drop in value compared to the county average decrease of 7.6%. She further explained that Ramsey County noted that assessed value has declined for the past five consecutive assessments as a result of the recession, and that the loss in value this period has been the largest loss in value of residential property. She commented that there are encouraging signs that the markets have stabilized, and there is a flattening in the decline of residential values. Apartment values are rising and the commercial markets are showing a promise of appreciation, and foreclosures are at a lower percentage than they have been in many years. Director of Finance and Administrative Services Iverson stated that in order to evaluate the true impact to the residential property owner, two things need to be taken into account. First, is the amount of the decrease in fiscal disparities, which is 8.2%, and second is the change in the taxable value, which is a decrease of 4.4% after exclusions. The reduction in fiscal disparity dollars and changes in the assessed market value, resulted in a net tax rate increase of 5.4% before any changes are made to the levy. Director of Finance and Administrative Services Iverson recapped Arden Hills' levy history. She noted that the State of Minnesota has given local municipalities the authority to levy taxes to fund operations and debt payments. She explained that the City's entire tax levy goes to general fund expenditures. She stated that for the City of Arden Hills, the property tax levy accounts for approximately 78% of the general fund revenues. Although the City does not generally use reserves to balance the City's budget, due to the turn in economy, the City used $41,201 to balance the budget in 2010 and $20,000 in 2011. Reserves were not used in 2012. She noted that the City has been very conservative in its budgeting and has reduced department budgets or used reserves to deal with the increased costs of contracted services such as public safety. Director of Finance and Administrative Services Iverson indicated that the 2013 preliminary budget was prepared assuming a 2% wage increase for non-union staff and a $32 per month increase in the City's contribution to health and dental insurance. She also discussed the General Fund and the revenues and expenditures within the fund. She noted that using the Council directed levy increase of 4.1% equated to $128,516 in additional tax revenue. In spite of the tax levy increase, some departmental budgets are decreasing (Administration, Finance and Administrative Services, and Government Buildings). Therefore, a slight revenue loss shows up in the General Fund as the overhead charges are decreasing. She also reminded the Council that the City received conduit debt fees from the Presbyterian Homes project in 2011 and transferred those funds to the EDA in 2012. There is no other funding source identified for the EDA or for funding reserves in the capital funds at this time. ARDEN HILLS SPECIAL CITY COUNCIL BUDGET WORK SESSION—SEPTEMBER 4, 2012 3 Director of Finance and Administrative Services Iverson indicated that increases in expenditures in the General Fund consist of salary and benefit costs, public safety contracts, Council training and tablets, auditing and accounting services, IT services and network support, park maintenance materials, streets maintenance and supplies, insurance expenses, and other miscellaneous adjustments. She noted that public safety expenditures have increased by $57,228. Director of Finance and Administrative Services Iverson stated that staff recommends that a funding source be identified for the EDA fund, and also based on the draft CIP, recommends a transfer of$50,000 to the EDA from the PIR Fund in 2013 for the Gateway signs. Director of Finance and Administrative Services Iverson reminded the Council that the final levy is established and certified in December. Once a preliminary levy is established, the amount can be reduced, but it cannot be increased. Discussion ensued regarding the 2013 preliminary budget and levy. The consensus of the Council was to direct staff to bring back various options to reduce the levy, and the levy discussion will be continued at the September 10, 2012, City Council meeting. 3. COUNCIL COMMENTS AND STAFF UPDATES Councilmember Werner complimented the repair work that was done at Floral Park on the steps. Councilmember Tamble stated that an email was received from an upset resident regarding a letter she received on Friday afternoon prior to a three-day holiday weekend. The letter noted that water shut-off s would begin on Tuesday, and the letter notified residents to contact City Hall with questions. She was unable to contact City Hall because the letter was not received in a timely manner. Councilmember Holden noted that the City mailed the letter on Tuesday with the intent that it would be delivered sooner than Friday. Councilmember Tamble expressed concern that the Star Tribune was dropping off unwanted papers/advertisements in his driveway. City Administrator Klaers stated that the Star Tribune can be contacted to stop the delivery of unwanted materials. Councilmember Holden announced that she had tickets for the Northwest Youth & Family Services' Taste of Northwest event scheduled for September 27, 2012. Councilmember Holden inquired about the I-694 pedestrian bridge meeting at the Shoreview Community Center on September 27, 2012. City Administrator Klaers explained that it is a MnDOT study regarding existing and needed pedestrian crossings between I-35E and 1-35W. He noted that the study is in the early stages. ARDEN HILLS SPECIAL CITY COUNCIL BUDGET WORK SESSION—SEPTEMBER 4,2012 4 ADJOURN Mayor Grant adjourned the City Council Work Session meeting at 8:00 p.m. `David Grant Grant Patrick Klaers Mayor City Administrator