1. Call to Order. The workshop session of the Council of the City of Rogers was called to order by Acting MayorDavis on Tuesday, November 23, 2010 at 5:30 p.m. at the Rogers Community Room, 21201 Memorial Drive, Rogers, MN, 55374. Council present: Rob Bell, Jay Bunting, Jamie Davis, and Steve Rauenhorst.
Mayor Grimm arrived at 5:28 p.m.
Staff present: Gary Buysse, Liquor Operations Manager; Stacy Doboszenski, Assistant City Administrator/Clerk; Brad Feist, Fire Chief; Jeff Luther, Police Chief; John Seifert, Public Works Supt., Steve Stahmer, City Administrator; Lisa Wieland, Finance Director; and Bret Weiss, City Engineer.
1. 2011 Budget Overview – Revised Draft Budget including Option #1Finance Director Wieland provided an overview of the revised draft budget as directed by Council to use version number one from the last budget workshop; a slight reduction in the levy with a relatively flat tax rate.
Wieland reviewed the budget summary worksheets with Council highlighting the 6% budget increase and the factors of the increase. 2. Discussion of Moody’s Bond RatingWieland reviewed the memo received from Jonathan North of Ehlers and Associates regarding the Moody’s perspective on any effect on the City’s bond rating as a result in a reduction of the general fund reserves. Wieland read directly from the memo explaining the difference in calculation used for determining percent of fund balance. Presently, at 56% reserves, Rogers is higher than the median group of cities reviewed by Ehlers.
In conclusion, the draw down proposed on the reserve balance will not have an impact on the City’s bond rating.
Davis questioned if staff knew St. Michael’s reserve balance. Staff did not have that information.
Wieland stated by budgeting use of $200,000 reserve balance, it doesn’t mean it will be spent. If the budgeted line items come under, requests are not followed through, or projects are not granted, the use of reserves will not be as great as budgeted. Stahmer noted the revenues could also come in higher than what is budgeted; not negatively impacting use of reserves.
Davis thanked Wieland for pulling the information together stating it’s helpful information for future councils to keep in mind during budgeting. Wieland stated she intends on including the entire memo from North/Ehlers into the final budget document.
3. Enterprise Funds Budget DiscussionWieland reviewed the enterprise funds budgets with Council stating enterprise funds are funds operated like a normal privately owned business. Wieland continued to review the enterprise fund budget summary with Council.
Wieland stated the sewer and storm sewer funds do show capital items built into their line item budgets.
Liquor Operations Manager Buysse stated the sales projection for 2011 is extremely conservative based on the sales since June 2010; which may have been impacted by construction.
Buysse pointed out that a percentage of IT and Finance salaries are taken from the enterprise budget.
Wieland continued to explain the amount of payroll/salary allocations that are coming from the enterprise funds.
Wieland provided comment on the current allocations.
Buysse stated another movable piece of the liquor budget, under off-sale, line item 43000 is credit card processing fees which staff is in the process of reviewing.
Wieland commented on the total budget increases or decreases for all enterprise fund budgets.
4. Capital Improvement Plan and financial Management Plan DiscussionWieland introduced the five year financial management plan (FMP) to Council highlighting the key lines on the spreadsheet. Wieland provided an explanation on the factors influencing future years fund balance.
Wieland stated line 75 will be focused on for capital related items. Wieland provided further explanation of the FMP cover page.
Wieland proceeded through pages two and three of the FMP; long range debt projections and streets capital budget. Page four of the FMP lists all City equipment with the exception of fire. Wieland explained how Hassan’s road projects and Hassan’s equipment replacement needs are built into the FMP. Wieland explained how the highlighted lines at the bottom of the pages of the FMP (debt levy) is brought into the front page of the FMP.
Wieland then spoke on the fire capital needs page of the FMP; highlighting tonight’s request for a new fire truck.
Wieland provided options for financing terms and stated if more items are purchased with one equipment certificate, the issuance cost would be spread across departments.
Stahmer provided comment on debt issuance related to road construction projects.
Wieland provided commented on the amount of debt related to TIF funded debt issuance.
Wieland continued through the FMP; page six facilities and explained the 2012 proposed expenditure for a remodel of the existing Hassan maintenance building. Wieland highlighted the cost of a senior center projected for 2014.
Stahmer stated that Chief Feist has been working with North Memorial on providing space in the fire department for 24/7 paramedic coverage in Rogers. Feist commented that North Memorial will help with completing the build-out project with a monthly lease from North Memorial for the use of a portion of the fire department. Feist continued to provide history on the coverage provided by North Memorial.
Wieland proceeded through the parks capital budget, stating the only way to pay for the items listed is through a park referendum or through park dedication funds. Wieland reviewed page eight; trails. Seifert and Wieland provided an explanation on the trails grants being received, and the grant the City was not eligible to receive.
Wieland reviewed page nine of the FMP; staffing plan, highlighting the 2011 positions that are built into the 2011 budget and the three officers budgeted for 2012.
Page 10; Management Information Services was pulled together with IT and staff. Wieland stated the proposal is to levy $50,000 every year into a sinking fund for IT related expenses such as software needs.
Wieland stated page 11 are the growth projections.
Wieland stated the capital needs listed in the FMP will be used as the City’s five year CIP.
Wieland asked Council for questions or comments related to the presented FMP.
5. Continued Discussion of CSO/CEO Program and PositionsStahmer reviewed his memo with Council regarding the CSO/CEO program and positions.Stahmer read the following from his memo:As previously discussed by Council, the implementation of a new CSO program would necessitate a reorganization of the current Code Enforcement/CSO position in order to continue necessary code enforcement duties. Based upon the need to retain one half of the position solely to continue with code enforcement, Council discussed at the November 9 budget work session the possibility of reassigning the position into Public Works. Under such a reorganization, the remaining one half of the position would be matrixed across duties that would otherwise fall in the category of part-time, seasonal Parks work.
Stahmer stated the Council intent was to try to use the budget dollars which would otherwise be used in part-time seasonal parks. In practice, there are a couple of issues that require some consideration. Because of the increase in wage and a benefited position, there would be fewer hours dedicated; approximately 370 fewer hours going toward parks for the same amount of dollars budgeted. Stahmer then commented on the seasonality of the position of CSO and parks.
Stahmer stated the assumption of the new CSO program discussed at the last meeting has a budget differential of approximately $8000 (increase). Stahmer stated to maintain the same productivity in parks, the cost would be approximately $4500. The total cost of the CSO program would be a $12,500 increase to the general fund. This was included in the regular meeting agenda at the request of the Council from the last meeting. Staff noted the increase of $12,500 is not currently built into the budget documents.
Davis questioned what this would look like if we made code enforcement part-time and left the parks as is. Stahmer stated half of the current position salary is $27,000 with salary and benefits. Staff and Council discussed the amount of budget savings by taking the current CSO/CEO to half-time and the costs involved in unemployment.
Scott Adams commented on the costs of moving the CEO into public works and the benefit to the police department.Bunting asked what is needed from Council to move forward with the budget. Wieland explained what was included in the budget documents and if the Council wants to include anything related to the CSO program, it would need to be added into the budget documents.
Grimm asked where the hourly rate for the CSO position was being derived from. Staff explained.
Bunting stated his opinion on the positions Council have been reviewing; CSO, Code Enforcement, Investigator position, etc. Bunting stated he would like to see these items reviewed at a Council retreat as was done a couple years ago. Bunting commented on getting specific information from the Sheriff’s department relating to investigations, the number of calls, etc. Bunting commented going into 2011 three months would allow us to maintain the current levy. If Council chooses not to proceed with the positions, it would allow Council not to spend down current reserves. Bunting continued to discuss getting information to determine the amount of hires necessary going forward into the annexation.
Rauenhorst stated for right now we are just looking at whether or not we want to include $12,500 into the budget for 2011.
Bunting stated if we do nothing until March, we would have saved enough money to go forward with the programs without increasing the budget by acting on it tonight.
Paul Przybilla stated one of the options is not to allow the hiring of a position to a predetermined time; to set a date in the future.
Bunting stated he is looking for value out of a retreat; what are the needs for all departments going forward. It’s to the Council’s advantage to take a look at these staffing positions.
Bell stated he thinks the retreat was a good thing and agrees that it may be a good time to review.
Stahmer stated what staff is looking for now are the dollars going into the budget. The process of implementation will happen next year with the new Council. For now what staff needs is whether or not these dollars need to be implemented into the budget.
Bunting stated, given a retreat, if these items should be implemented as a May 1st date; saving one-third of the budget year.
Staff explained there have been some calculations made considering these positions not being hired until March/April 2011; approximately $26,000.
Grimm asked if the use of fund balance is covering the costs of the increased number of positions. Staff clarified the use of fund balance would be able to pay for the positions if hired.
Bunting discussed having a late February retreat.
Chief Luther stated he agrees with the idea of the need for a thoughtful process to discuss these issues. Luther stated even if given approval to hire January 1st, there would still need to be a period of time to fill the position. The problem being, if not decided to hire January 1st, then the new hire would not come on board until June or July. Luther stated he has been working with the County’s investigators to determine the need for Rogers. It has been determined, and there is an urgency, to hire the investigator’s position now. Luther commented on the three positions in the FMP for 2012, but does not know if all three positions will be needed in 2012. Luther cautioned the Council not to move out the investigator position too far.
Stahmer asked Luther when he thinks he will have an idea of when he will know the need for additional officers necessary for the annexation transition.
Luther stated it will depend on the needs. Luther continued to discuss the need of hiring an investigator. Luther stated he can’t wait until June or July to hire the investigative position.
There was discussion between Bunting and Luther on the types of crimes being investigated by the Sheriff’s department and the crimes being investigated by the Police Department.
Luther commented on the increased number of police incidents for 2010.
Bunting stated he is not saying a position isn’t needed, but asking for the Council to be able to put together a plan. Bunting commented on asking for more help from the Sheriff’s Department for investigations until the City’s budgets can allow for the expenditures.
Davis stated this has been discussed for five months.
Bell stated it has been discussed, but not examined.
Paul Przybilla stated that Hennepin County is laying people off, with that he would like to embark upon the idea that there is not a lot of help that will be coming.
Bunting replied to Przybilla stating he does not recall work sessions being open up for comment; that is what the 10 minutes before a council meeting is for.
Stahmer stated he agrees that in the end the Council is left with the task of balancing the needs of the City with the available budgets and resources; this Council making the budget decisions and the next Council making the hiring decisions. If the Council wants to take this into a retreat format in the beginning of the year; if January 1st approval were made, March hire would be implemented. If the retreat/approval occurred in February, we would be able to account for a couple of months of salary savings in the budget.
Stahmer stated Council can provide direction to staff at the regular meeting regarding the 2011 budget.
Grimm asked for any additional comment for the budget meeting. No comments given.
6. Adjourn. Mayor Grimm adjourned the budget meeting at 6:45 p.m.
Respectfully submitted,Stacy Doboszenski, Assistant City Administrator/Clerk