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 5:32 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Council Members Present: Mayor: Mary Hershberger Thun. Councilmembers: Jim Crowley, Tom O'Connor, Kim Roden and Tom Strigel.

Absent: None

Others Present: City Administrator, Don Uram; Jylan Johnson, Finance Director; Holly Kreft, Community Development Director; Mike Norton, City Attorney; Ann Mahnke, Public Works/Park and Recreation Director; Cara Geheren, City Engineer; Finance Committee members, Sue Orsen, Victoria Gazette; and others.
 

Laura Wood, Fire Department Truck Committee, shared how much time the committee has put in to researching the specifications of a new engine and to make a recommendation to the City Council. She talked about the Finance Committee's discussion regarding the Fire Departments need for a new engine. Ms. Wood said they were concerned with the direction to wait by the Finance Committee because of the safety for the firefighters and residents. Ms. Wood reminded the City Council why they need a new truck now. She asked that the City Council change their perception. Ms. Wood talked about the historical purchases and how one of the engines caught on fire in the fire station.

Ms. Wood talked about how the department is trying to be frugal and that this is a need and not a want. Ms. Wood said the existing engines are aging and they need a new engine to protect the community. Ms. Wood explained they can't delay this purchase.

Mr. Pulvermacher talked about what the city would be getting with the purchase. He said they are making sure they are pursing an apparatus that is universal and would be flexible to respond to all calls.

Mr. Pulvermacher stated the team spent a lot of time working with a number of vendors and pulling stuff off the new engine to save more money. He commented on the budgetary concerns and said they need to find a solution to finance the fire truck. It was noted the first payment could be deferred to after the first year. Mr. Pulvermacher felt it was critical to purchase the truck today.

Mr. Uram asked Mr. Pulvermacher to provide an update from the discussions today. Mr. Pulvermacher said the manufacturer they have been working with came forward and extended the bumper to bumper warranty by doubling it to 2 years. They are also reducing the price by $17,500 and there would be $4,500 in additional credits. He said the purchase would be $415,084 and that would be financed over 7 years. The financing rate would be 3 to 3.25%.

Councilmember Roden commented on taking money from the reserves to finance the purchase.

Mr. Uram noted he did recommend the city purchase the truck at the Finance Committee meeting. He said they will continue to have discussions on the other equipment.

Mayor Hershberger Thun asked when they need to decide. Mr. Uram said the pricing is only good from HGAC until the end of August. He noted Mr. Norton has reviewed all the documents and a resolution has been prepared and added to the agenda.

Councilmember Crowley asked about negotiations. Mr. Pulvermacher explained the vendor process. He said they would be getting a manufacturer preferred customer discount and they went through a very extensive process. He noted they learned more working with multiple vendors.

Mr. Pulvermacher stated they feel this is a very good buy for the City.

Councilmember Roden asked about the anticipated requests in the next years. Mr. Uram said this is the biggest request.

A motion was made by Councilmember O'Connor, to amend the agenda to include the discussion on the purchase of a piece of equipment. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.
 

Mr. Uram said the Finance Committee looked at two different scenarios and summarized what they have done from an operational standpoint. He said it is possible to maintain a 37.4 % tax rate and the amount levied would go down but for the long term they can't continue to do that.

Mr. Uram talked about the revenue and said there aren't a lot of places to make cuts, noting that positions make up 70% of the budget. He noted the Public Works Department is short an employee and if they don't replace the employee that would be $60,000. He said the level of service provided to the residents will be impacted if that position is not replaced.

Mr. Uram said the scenarios are based on a set of assumptions.

Councilmember Crowley stated his concern is they are looking at costs and not addressing revenue. He said the tax base brings revenue. He noted they need to figure out how to drive more development. Councilmember Crowley said they need to come up with a way to do this without raising taxes. He stated he will not support increased taxes. Mr. Uram said municipalities have very limited opportunities to increase revenues.

Mr. Uram commented on the Lake Wasserman infrastructure and said the entire loop doesn't need to be completed at one time.

Councilmember O'Connor commented on the community having high expectations for the City to provide a high service level. He said there is an obligation to maintain the operation. He said they would all regret not maintaining the roads in the future. Councilmember O'Connor stated he thinks the public works facility is an absolute must.

Councilmember Roden questioned what they would be willing to sacrifice to do all these things. She talked about the $7.7 million used for the Victoria Recreation Center and said they could have had a public works facility and a city hall. She stated they need to get real on what they spend the money on in terms of public facilities. Councilmember Roden questioned how much the current facility would sell for. She said she wants to preserve reserves but they also have public needs. Councilmember Roden commented on looking at things in a global context and said the Victoria Recreation Center and the water treatment plant don't cash flow. She said what was done in the last 10 years impacts the next 10 years. Councilmember Crowley concurred.

Councilmember Crowley referred to a graph and said the burden would be on 70% of the tax payers.

Mayor Hershberger Thun said they need to give direction to the staff.

Councilmember Roden said they can't raise the levy after setting the preliminary budget. She asked if staff could bring something at the September 12^th meeting.

Mayor Hershberger Thun said if the City Council meeting is done by 8:00 p.m. they will come back to the budget discussion.

The budget workshop was recessed at 6:25 p.m. and reconvened at 7:57 p.m.

Councilmember Roden stated she wants to preserve maximum flexibility to do what they need to do.

Councilmember Roden commented on a change in the state law that could affect market evaluations. he said she contacted the County Auditor and asked for some models and information as to what the impacts would be to individual cities. She noted it would probably negatively impact the tax capacity.

Councilmember Strigel said he doesn't support scenario D1. Councilmember O'Connor said he doesn't support scenario D1 either.

Councilmember Crowley said the concern is the tax rate and they need more time to look at this.

Councilmember Crowley said they need to sell some land in order to get a public works building. Councilmember O'Connor said they can't wait on a public works facility

Councilmember Crowley said he doesn't want to fund it through taxes.

Councilmember Strigel said they could make it a requirement to sell something first before they buy.

Councilmember Crowley stated he doesn't think either of the scenarios are the right ones. He said he is not for setting the stage to raise the taxes in the future.

Councilmember O'Connor said he doesn't see it as raising taxes.

Councilmember Roden said she wants to know if other communities in Carver County are floating the tax rate. She said she did more research on the feasibility of doing a referendum and doesn't recommend a referendum. She said they need to look for alternatives.

Councilmember Roden said she also wants to know how many cities have a debt of $39 million.

Councilmember Crowley commented on putting up a temporary structure for a public works facility while the city finds another way to pay. Mr. Uram said they spent a lot of time looking at all options for a temporary or permanent space. He said temporary spaces have a tendency to turn into permanent spaces.

Councilmember Crowley said the challenge is developers aren't developing. He said they need a long term approach.

Councilmember O'Connor stated staff and past Councils has worked on this for a long time.

Mayor Hershberger Thun commented on an economic conference her husband attended. She said she likes the D7 scenario because there are no plateaus.

Councilmember Crowley questioned where to draw the line.

Mayor Hershberger Thun said she would be concerned with the Lions Club if the City Hall is put up the block.

Councilmember Crowley said they need to be more serious about putting a for sale sign on the City Hall. He said they need more information and a plan.

Mayor Hershberger Thun said they need to be prepared to answer questions.

Mr. Uram commented on the 13.5 acres and said that he doesn't expect anything to happen until after the Highway 5 construction. He noted they have two really solid assets.

Councilmember Roden said she thought when the properties sold those proceeds would be used to offset the cost of the public works building and pay down debt. She questioned what they can tell the community they are sacrificing in order to build the public works facility. She stated they need a public works building but said there has to be trade offs.

Councilmember Roden asked how long it took to build up reserves. Ms. Johnson said two years. She noted there is $110,000 in undesignated funds.

Mayor Hershberger Thun said she always assumed that when they sell the 13.5 acres the number one priority would be to pay the water fund loan. She commented on the flexibility and said she asks every year to put the permits in the budget and it never gets done. Mayor Hershberger Thun stated they need to give staff direction.

Councilmember Crowley said he is unwilling to compromise on raising taxes. Mr. Uram said they are not actually raising taxes.

Mayor Hershberger Thun asked staff to come back with an amount less than $110,000 in the undesignated fund.

Councilmember Crowley said he has talked to a number of residents who have asked that the taxes not be raised.

Mayor Hershberger Thun said to comfortably manage this city they may need to have a change in the tax levy.

Councilmember Roden questioned how many cities the size of Victoria have a similar debt.

Mayor Hershberger Thun asked the City Council Members and Staff to come up with their own lists on what they would sacrifice.

Councilmember Roden said she doesn't want to be backed into a corner. She said they could set the preliminary levy of D7 but that doesn't mean the final levy is approved. She noted that would leave three months. She said there should be enough votes to support a resolution for a preliminary levy.

Councilmember Crowley asked if they can have another meeting before the 12^th. He noted he found out $150,000 is really $75,000 for 2012.

The City Council agreed to schedule a meeting on Wednesday, August 31^st at 5:00 p.m.

The City Council also agreed to give their lists to Mr. Uram by August 29^th.
 

The City Council workshop adjourned at 9:10 p.m. and the budget discussion was continued to Wednesday, August 31, 2011 at 5:00 p.m.

Respectfully submitted,

Tanya Schmieg
Recording Secretary
TimeSaver Off Site Secretarial, Inc.