City Council Minutes

Pursuant to due call and posted notice thereof, the City Council Workshop of the Victoria City Council was called to order at 5:00 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Present: Mayor: Mary Hershberger Thun; Councilmembers: Tim Amundsen, Tom O'Connor, Jim Paulsen and Kim Roden.

Absent: None.

Staff Present: Don Uram, City Administrator; Mike Norton, City Attorney.

Others Present: Sue Orsen, The Victoria Gazette, Recording Secretary Tanya Schmieg and others.
 

Mr. Uram said Aaron Nielsen will be providing a brief overview of the 2008 audit. He reported that the City of Victoria received a clean audit.

Mr. Nielsen stated that Victoria the GFOA Certificate of Achievement and Excellence in Financial Reporting. He noted there were about 123 entities that were awarded that certificate. Mr. Nielsen said they were no findings with the annual financial report and the City has been issued a clean opinion with regard to the city’s finances on the comprehensive manual report. He also said there were no incidents with regards to communication regarding any irregularities or discrepancies in the audit.

Mr. Nielsen commented on page 7 of the general funds and said the city is very close to the 3.8 million dollar budget for revenues coming in $23,000 better than expected. He stated good management has been shown with the overall budget process and the allocations.

Mr. Nielsen talked about the utility funds and the change to the water and sewer utility rate structure. He said they also discussed the importance of continuing to monitor the rate structure.

Councilmember Roden asked if there were any other actions that need to be taken with the analysis on the water treatment plant other than continue to review the rate structure. Mr. Nielsen said they did see an increase in revenues in the utility fund. He said they also discussed continuing the monitoring on the charges. Mr. Uram said this is part of a long-term financial plan. He said that typically there is an increase in price with the production of water. He noted the consultant has recommended a 2% annual increase. Councilmember Roden asked about the outside water billing process. Mr. Uram said that with outsourcing the utility billing information is available online to access water usage information. He noted that it is more expensive to do monthly billing versus quarterly billing. He stated that based on a customer base of about 2,200 the complaint call volume is less than 50.

Councilmember Roden asked about the growth rate of the general fund expenditures. Mayor Hershberger Thun said she asked Mr. Uram and Ms. Johnson to put together a chart to show what has been going on in the last couple years and why some of the increases happened. Councilmember Paulsen pointed out that the levy this year increased by 5%.

Councilmember Roden commented on the truing up of the property values to the market values and asked if that would be built into the financial plan. Mr. Uram said they are running the operation efficiently at the current time. He noted the challenge will be with the school district expenses being tough to change as they increase with the school population. He said they will continue to evaluate the financial plan and will look at a 5% and 10% decrease in the property values.

Councilmember O'Connor commented on the General Fund Reserve and how much cash is left as a percentage of expenses. He said that in the documentation there were three numbers listed and said they focused on 32 being the true number rather than 35.

Councilmember Roden asked about the latest on the legislation with regards to interest exemption. Mr. Uram stated that interest earned on Minnesota state bonds would be taxable.

Councilmember Paulsen clarified that the cross over refund of 6 million dollars is included in the 34 million dollar debt.

Councilmember Paulsen asked if water core fees are recurring or non-recurring fees. Mr. Nielsen said the water core fees are a non-operating revenue item. Councilmember Paulsen questioned using the non-recurring funds in a recurring expense. Mr. Nielsen said the water fund is non-operating revenue. Mr. Uram said that the water core fees are charged as part of the building permit and would be recurring as long as building permits are issued.

Councilmember Paulsen said he has a list of items he would like to see in next years report: decide which one out of business funds, utility funds or enterprise should be used. Mr. Nielsen said all the funds need to be used and explained the utility fund is the definition of the individual funds and the business type is the type of activity.

Councilmember Paulsen commented on the 34 million dollars of debt and asked if they know enough about what everyone else is doing to not worry about it. Mr. Uram said the overlapping debt is always a concern but the same guidelines apply. He said he is confident the county and the school district will make their bond payments.

Councilmember Roden said they are in business with the school district and questioned over capacity and if there is a way to fund it. She noted there are some communities that do meetings with their school boards to have a better handle on shared debt.
 

Mr. Uram said this is review of the Agreements for the joint operation with the City and ISD 112 expansion area at the Field House. He stated the Joint Powers Agreement and Ground Lease were approved in 2007. He noted there were minor modifications to the Use Agreement. Mr. Uram stated the school board reviewed the documents at the meeting last Thursday and was approved unanimously with minimal discussions.

Ms. Mahnke explained the Use Agreement is an outline of the operations and responsibilities. She noted the school district has yet to officially take over the facility.

Mr. Uram noted this item was reviewed by the Park and Recreation Committee last week and received unanimous approval.

Mr. Uram stated that the Ground Lease talked about splitting the utility costs 80/20, but there was discussion and all other expenditures were allocated 70/30. He said they concluded there would be about a $20,000 difference in the allocation. Mr. Uram noted that based on building square footage that 67% would be allocated to the school district and 33% the city. He said based on that they looked at the 70/30 allocation as being fair and reasonable.

Mayor Hershberger Thun referred to page A-4 of the use agreement and asked what the non-prime hours are of the Field House. Ms. Mahnke responded early mornings into early afternoons. She noted that during the hockey season teams usually run from around 3:00 p.m. to 10:00 p.m. Mayor Hershberger Thun clarified that there would be some weekend hours for open skate.

Mayor Hershberger Thun commented on page A-7 of the use agreement and said if the school district wanted more use of the whole Field House they would pay for it.

Mayor Hershberger Thun asked that something about the change of personnel be included as a written agreement or a letter.

Councilmember Roden asked what the process will be to continue to review the agreement between the City of Victoria and ISD 112. Ms. Mahnke said they do have an ISD 112 Committee that will meet annually. She said if there is a dispute with the agreement the agreement would also be looked at. Councilmember Roden said she would never rely on dispute language as a mechanism to resolve day-to-day issues. Mr. Uram said they have developed a good working relationship with the school district.

Councilmember O'Connor commented on the security and safety of the building and asked if someone will be in charge 24 hours a day. Ms. Mahnke said they are secure as they can be and she is very comfortable with how things are. Councilmember Roden asked about testing the safety process. Mr. Uram said they would rely on the school district’s experience. Councilmember O'Connor clarified the school district is responsible for the overall security.

Councilmember Amundsen commented on the parking and said there is no reference to who is going to manage the process. Ms. Mahnke said the challenge with parking seems to revolve around game days. She stated they will be installing signs for no parking along the main entrance and side spots. She noted the signs will go in this summer. Mayor Hershberger Thun clarified that they will have police on duty to get people in and out. Ms. Mahnke said they have talked about crowd control.

Councilmember Paulsen referred to the city option section under 7.2 on page 13 and questioned the option price. Mr. Norton explained the purchase price is 125% of the verified capital costs to construct and furnish the second sheet of ice. Councilmember Paulsen said he wants the city option agreement done. Mayor Hershberger Thun asked that there be an official letter. Ms. Mahnke pointed out that due to the construction costs there are still things that were taken out of the total construction with the idea that they would come back at a later time to finish those. Mr. Uram referred to the verifiable construction costs and stated the building permit number is lower than the actual construction costs they have to date. He stated he doesn’t have the final verifiable costs. Councilmember Paulsen said he wants a date to bring closure. Mayor Hershberger Thun clarified that if the building hasn’t been turned over there would not be a final number. She said it would be 15 days after the set date. Councilmember Paulsen noted the language said it would be done prior to construction. Mr. Uram stated he will work with the district to get that number.
 

Mayor Hershberger Thun commented on the amount of paper with the financial reports and asked if they could reduce the amount of paper. Councilmember Roden stated she has asked for a one-page analysis with more analysis and less data for the past five years. Mr. Uram said it is a priority to provide financial information and the goal is to produce a one page summary document with background information. He noted they have presented a new format and plan to have something to the Finance Committee in June for review. Councilmember O'Connor said he would prefer to get something a lot less than what they get. Councilmember Paulsen said he agrees and said they can use the website if they want more detail. Councilmember Amundsen said they just need the totals. Mayor Hershberger Thun directed staff to look at reducing the paper on an interim basis.

Mayor Hershberger Thun referred to the payment of the bills and asked if the City Council wants to continue to get all the backup of the claims roster. Councilmember Roden said she is comfortable with reducing the amount of paper. Councilmember O'Connor said he agrees. Councilmember Amundsen said he thinks one copy should be emailed. Councilmember Paulsen said he agrees it should be electronic. Mr. Uram noted that they would make sure it is available to residents.
 

The workshop adjourned at 6:08 p.m. Vote: 5 ayes, 0 nays. Motion carried.

Respectfully submitted,

Tanya Schmieg
Recording Secretary
TimeSaver Off Site Secretarial, Inc.