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HomeMy WebLinkAbout08-18-08-WS ~ ~~HILLS Approved: September 29,2008 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION MEETING AUGUST 18, 2008 5:00 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Stan Harpstead called to order the City Council Work Session meeting at 5 :08 p.m. Present: Mayor Stan Harpstead; Council Members David Grant (arrived 5: 15 p.m.), Brenda Holden, Fran Holmes, and Dave McClung. Absent: None. Also present: City Administrator Ron Moorse; Assistant City Administrator Noah Simon; Public Works Director Gregory Hoag; Finance Director Susan Iverson; Civil Engineer Kristine Giga; City Planner James Lehnhoff; and Parks and Recreation Director Michelle Olson. 1. AGENDA ITEMS A. Proposed 2009 Budget Overview City Administrator Moorse presented the City Council with an overview of the proposed 2009 budget. He indicated his goal for tonight was to gain a general direction from the Council regarding the budget for the tax levy. City Administrator Moorse stated a maximum tax levy would need to be approved in September, which can be reduced but not increased. He indicated a final budget would be approved in December after a Truth in Taxation meeting. City Administrator Moorse explained that the proposed budget reflects the 3.9% state mandated levy limit plus allowable special levies for PERA and public safety personnel expenditures. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 2 Finance Director Iverson explained the special levies which would be outside the levy limit. Discussion ensued regarding which increases were within and which expenses were outside of the levy limit with regard to personnel and public safety expenditures. City Administrator Moorse identified all items that had a significant expenditure impact on the budget, which were itemized on Page 2 of the Budget Preliminary Overview memo. The Council reviewed these items and provided Staff with comments. The first item discussed was annual pay adjustments and scheduled pay steps totaling an increase in the budget by $36,096. City Administrator Moorse indicated due to the promotion of the associate planner, the position would not be replaced for 2009, but that a consultant would be used for future TCAAP planning issues as they arise. City Planner Lehnhoff agreed stating the upcoming work load did not support the hiring of a full time planner. Mayor Harpstead stated the next budgetary item to increase was the group insurance contribution. It was noted the proposed expenditures reflected a $24 per month increase in the City's contribution toward employee health insurance and other benefit options in the cafeteria benefit plan. City Administrator Moorse identified the next increase being additional costs related to expanding the Recreation Programmer Position from part-time to full- time increasing the budget by $13,600. The Council discussed the Recreation Programmer Position and how this position would be changed from 2008 to 2009. Finance Director Iverson explained several staff positions were budgeted during the 2008 operating year but remained vacant, the total budgeted headcount would change to 24 positions for 2009. In response to Council questions on how Arden Hills compares to neighboring and similar sized communities, she explained which positions were contracted out in comparison with neighboring communities of the same SIze. Further discussion ensued regarding the staff size and efficiency of the current employees. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 3 Councilmember Holden questioned what the Deputy Clerk would be responsible for. City Administrator Moorse explained the role of the future Deputy Clerk position. Mayor Harpstead encouraged Councilmember Holden to speak with staff further to clarify the City staff organization. Mayor Harpstead indicated the Mayor and Council salaries would be increased effective 1/1/09 per a resolution adopted by the City Council in September of 2007 for a total increase in the budget of$12,500. Mayor Harpstead explained the "Arden Notes" newsletter had a proposed increase of $2,000 for the 2009 budget due to an increase in the number of pages, size, postage expenses, color printing, etc. Finance Director Iverson stated the increase could run as high as $5,000. Councilmember Holden indicated she would not be in favor of this increasing by $5,000. Councilmember McClung explained the newsletter committee was still seeking estimates for color printing and paper pricing and that the numbers were not finalized. City Administrator Moorse indicated the engineering fees for 2009 were expected to decrease by 50% in the administration budget by $25,000. He stated further analysis would be needed in the joint powers agreement with Roseville to review the upcoming workloads. Finance Director Iverson explained that engineering cost were being charged to the departments or projects incurring the costs as opposed to administration and have been included in the budget. City Administrator Moorse explained the budget increase for the Contract Policing has increased by 6.2% or $50,225 over 2008. He stated this increase was due to the increase in a full year of the patrol power shift deputy position, which ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 4 was funded for half of the year in 2008 along with the purchase of an additional traffic car. Councilmember Grant questioned the benefit gained by the City from the new deputy position added. Councilmember McClung agreed stating neighboring cities have raised the same concerns. Finance Director Iverson stated the City has never received an accounting of services from the Police Department as to how much of an expense an officer is to the City of Arden Hills. Mayor Harpstead stated there needs to be a better way to manage the contract in such a way that when an increase is requested, the Council can see the benefit of the increase through documentation. He eXplained that with the levy limit set at 3.9% the police contract's request was over budget. City Administrator Moorse agreed with the Council's concerns stating the City would need greater clarification of the services provided. Mayor Harpstead reviewed the contract fire service expenses. He noted the 2009 budget reflects an increase of 9.1 % or $28,251 due to the proposed addition of a Deputy Fire Chief. Councilmember McClung stated the number of calls for the City of Arden Hills has been increasing over the past few years and will continue to increase as the City was growing at a faster rate than the neighboring communities. Mayor Harpstead encouraged Councilmember McClung to challenge the Fire Board leadership to lower expenses and increase efficiency. Councilmember Grant agreed questioning what the City was gaining with the new Deputy Fire Chief position. Mayor Harpstead suggested a Council delegation present the Fire Board with the Council's concerns. Councilmember McClung indicated it may be helpful to have the Fire Chief present at a future Council meeting to address these questions and concerns. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 5 After further discussion the Council agreed to invite the Fire Chief to a worksession meeting to address questions and concerns from the Council. Mayor Harpstead and Councilmember Grant would attend the September Fire Board meeting to address this issue as well. Public Works Director Hoag noted the motor fuel expenditure for the Streets and Park Department was proposed to increase by 27% or $4,050. Councilmember Holden questioned if the increase was for the number of gallons consumed over the past several years or if there was an increase in usage. Public Works Director Hoag stated the number of gallons consumed per year was roughly the same but that the price of each gallon has increased exponentially. Mayor Harpstead encouraged the City Staff to be as efficient as possible with the City vehicles due to the fact gas prices were so unstable and could potentially continue to increase. Public Works Director Hoag noted the maintenance materials in the Street and Park Department were proposed increase the road mix and sand/salt materials by $11,525. He indicated this number was derived based on the previous year's improvements and projects. Mayor Harpstead indicated it would be helpful to know the percentage changes on a yearly basis as a point of reference. Councilmember Holden concurred. Finance Director Iverson provided the percentage Increase changes to the Council. Councilmember Holden questioned if the budget reflected an increase in natural gas expenses to heat the City buildings. Finance Director Iverson stated the budget was not increased for 2009 due to the fact such a large increase was made in 2008 to account for this. Finance Director Iverson noted an intern has been budgeted for 2009 in the Finance and Support Services department. She explained the cost of the intern ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 6 would be offset by a matching grant for the MnGFOA with the total impact to the general fund budget being $3,000. Councilmember Holden questioned how many months an intern would be used. Finance Director Iverson stated the intern would be used for roughly three to four months full-time or longer if used part-time to assist with audit preparation, filing, etc. Council discussion ensued regarding TIF district #3. Finance Director Iverson explained that she has budgeted conservatively on this revenue item as the market value was still uncertain. She indicated if the market value fell, the City would receive less money. Mayor Harpstead indicated it would be helpful as a newer member on the Council to receive a breakdown of the different TIF districts explaining their purpose and history . Finance Director Iverson stated she is working on this with Ehlers, and will bring back a recommendation on the districts to assist the Council in future decision making. Finance Director Iverson reviewed the EDA finances with the Council noting that there was a negative fund balance of$15,000 in the EDA fund at the end of2007. Mayor Harpstead indicated this line item should have funds available for the Council to use in the Council's role of the Economic Development Authority. Councilmember Holden asked several questions regarding the risk management funds. Finance Director Iverson stated these funds were set aside each year for insurance deductibles, etc. Councilmember McClung clarified that the Council agreed to pay 28% on the new ladder truck for the Fire Department and wanted to assure that the budget numbers reflected this expense. Finance Director Iverson stated she would make this adjustment. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 7 Mayor Harpstead questioned the $46,000 in funds set aside for City Hall furniture in 2008 and asked if it would be used in 2008 or 2009. Finance Director Iverson indicated if the funds were not used in 2008 they would be transferred to a Capital Equipment fund to be used in 2009. City Administrator Moorse explained this was discussed at a recent staff meeting and that the timing was still uncertain. Councilmember Holmes asked if the enterprise funds were still struggling. Finance Director Iverson stated the fund was only showing revenue increases according to the previous rate study at this time. She explained the current rate study would be included after further discussion with Ehlers, and be back before the Council in October or November at a worksession. Finance Director Iverson noted the CIP would also be discussed at this time. Mayor Harpstead questioned if the proposed budget fell within the 3.9% levy limit. City Administrator Moorse stated this was the case noting the public safety and PERA levies were separate. He further explained the proposed budget for 2009 requires a 7.36% levy increase with 3.9% of that increase being from the general fund. The additional 3.46% increase would be levied for public safety. Finance Director Iverson noted the public safety numbers were subject to change and would be finalized by October. Finance Director Iverson explained how the levy limit percentage was calculated by the State of Minnesota. She indicated the current budget does have $110,063 in contingency funds as proposed at this time. Councilmember McClung indicated he would be in favor of certifying the maximum at this time allowing the City some flexibility with further evaluation to follow. Councilmember Grant stated he was not in favor of the $110,000 contingency, but would be more comfortable if this number were around $30,000-40,000. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 8 Finance Director Iverson reiterated the fact that not all budgetary numbers were final and that she would report back once the public safety numbers were set. Finance Director Iverson reviewed a handout of the tax impacts of levy increases with the Council. She stated a 6% levy increase would decrease the average residential homeowner's tax bill by $2.98 over last year. Finance Director Iverson explained that the proposed tax levy of 7.36% would increase the average residential homeowner's tax bill $4.86 for 2009. Finance Director Iverson indicated the local tax rate with a 6% levy would be 20.580. She stated with the 7.36% levy the tax rate would be 20.859. Councilmember Holmes stated she was in favor of the maximum levy to provide additional funds to be invested back into the City of Arden Hills. Mayor Harpstead agreed stating the residents would be receptive to an investment in infrastructure. It was the consensus of the City Council to direct staff to proceed with the budget at a 7.36% levy limit. This item will be further discussed at the September 8th meeting when the preliminary levy is approved. B. Discussion Regarding the Release and Settlement Agreement for the 3327 Dunlap Street Driveway Public Works Director Hoag presented the City Council with information regarding the property at 3327 Dunlap Street. He explained that last November a watermain broke underneath this property, which had a brand new driveway, complete with two year warranty. The resident was not happy with the replacement patch and asked that the driveway be replaced. Public Works Director Hoag indicated the resident was not satisfied with the suggestion of a saw cut replacement or patch job on the driveway. He noted he spoke with the City attorney on this issue. After much discussion, he is asking that the driveway be completely replaced to appease the resident and to provide her with a warranty. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 9 Councilmember Holden asked which account the $4,100 was budgeted from. Public Works Director Hoag noted the funds were budgeted from the Watermain Repair Parts Account and that this amount covered the replacement of the entire driveway. Discussion ensued regarding the replacement of this driveway and how these incidents have been handled in the past. Councilmember Holmes stated she didn't understand why this resident should receive a whole new driveway when other residents have received a patch job. Mayor Harpstead suggested the tail end of the driveway be fixed and made uniform with the City providing a one year warranty on the entire driveway. Councilmember Holmes asked how much it would cost the City to replace the bare minimum, the area within the right-of-way with a saw cat patch. Public Works Director Hoag estimated this expense to be $500-700. Mayor Harpstead indicated that while this is a much lower cost, the expense of defending a lawsuit would be far greater if the resident ,were not satisfied with the City's response. Councilmember Holden noted she was in favor of the $4,000 expense to replace the driveway. Councilmember Grant stated he was not in favor of paying the resident the $4,000 to have the driveway replaced but that a contract would have to be arranged between the City and her contractor. Mayor Harpstead agreed. Mayor Harpstead asked staff how the Council should proceed. Public Works Director Hoag indicated he feels staff has provided this resident with the best possible services to date and that Council should proceed with caution with this resident. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 10 Mayor Harpstead thanked staff for working so patiently with this individual. He questioned if a precedent would be set within the City if Council agreed to pay for the entire driveway. Due to this fact, he suggested again, that the bottom of the driveway be replaced to the best of the City's ability and that a one year warranty be offered on the entire surface. Councilmember Grant suggested the asphalt be repaired where disturbed and that the Council not commit to replacing the entire driveway. Councilmember Holden asked if the repaired bottom could be one entire piece. Public Works Director Hoag indicated the City would replace this as one piece, but that the resident will not be happy with the City employees completing this work and will want her contractor and his bituminous. Mayor Harpstead stated he would be in favor of the resident's contractor completing the repair to avoid future concerns. Councilmember Holmes indicated she was not in favor of this special request because it would set a precedent for future driveway concerns. Councilmember Grant suggested the contractor be contacted to see where his bituminous comes from to allow the City to use the same product to provide uniformity on her driveway. Public Works Director Hoag stated that all disputes in the future will be directed to the insurance company to avoid this type of problem. He suggested this item be sent to the League of Minnesota Cities for resolution. Councilmember Holmes stated she was in favor of treating this request just like every other resident within the City, who doesn't request a full driveway replacement. Mayor Harpstead indicated he was in favor with sending this issue to the League of Minnesota cities as well. It was the consensus of the City Council to direct staff to offer to replace the driveway within the right-of-way or to refer the driveway request to the League of Minnesota Cities. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST .18, 2008 11 2. COUNCIL COMMENTS AND REQUESTS City Administrator Moorse presented the City Council with a TCAAP update. He stated staff would be holding a conference call with the Army and DSA on August 19,2008 at 10:00 a.m. City Administrator Moorse explained these credits have to be agreed upon before the end of September or the contract could be rescinded. City Administrator Moorse indicated an amendment would be made to the purchase agreement to discuss the credits and the need for further conditions. He stated he would report back to the Council with the information gathered from this discussion. Councilmember McClung asked that the Council receive an email regarding the information gathered from this discussion. Mayor Harpstead stated the date to purchase would have to be extended with all of the rights for rescission still intact. City Administrator Moorse noted he was aware of these requirements. City Administrator Moorse reviewed the tour plan information with the Council noting it would take place on August 20, 2008. He stated Stacie K vilvang with Ehlers & Associates has arranged for a bus and has an itinerary. City Administrator Moorse noted she is proposing to tour sights in North Oaks, St. Louis Park and Minnetonka. City Administrator Moorse asked if the Council was available at 5 :00 p.m. to begin this tour. Councilmember's Grant, Holmes and Holden, and Mayor Harpstead stated they would be available at 5 :00 p.m. Councilmember McClung indicated he would join the group after their tour of Presbyterian Homes in North Oaks. Mayor Harpstead indicated he met with staff at Northwestern regarding Arden Hall. He stated 30 people have moved in to date with the rest arriving on Friday. Mayor Harpstead noted they have invited the rest of Council and Staff to tour the building as well. ARDEN HILLS CITY COUNCIL WORK SESSION - AUGUST 18, 2008 12 Councilmember Holden invited the Council to take part in the Taste of Northwest where 18 restaurants provide food and wine tasting at the Shoreview Community Center on September 25, 2008 beginning at 5:00 p.m. She noted there would be silent auction items available and that tickets were $25 per person. Councilmember Holmes indicated Michelle Olson clarified for her that the regular PTRC meeting will be held on September 23, 2008 at 6:30 p.m. She encouraged the Mayor to attend. Mayor Harpstead adjourne~-B~Gity Council Work Session /' "\. j Ronald J. oorse City Administrator