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, Jim Paulsen and Kim Roden.

Absent: Councilmember Tom O’Connor.

Staff Present: Don Uram, City Administrator; Jylan Johnson, Finance Director; Cara Geheren, City Engineer; Ann Mahnke, Field House Director; Bruce Osborn, Superintendent; Tim Walsh, Fire Chief, Jennifer Kretsch, City Clerk, Tom Gray, Building Official and Kelly Grinnell, Accountant.

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

Mr. Uram said that Ms. Johnson will be providing an overview of the 2010 proposed budget. He noted the proposed budgets have gone to the Finance Committee and they have endorsed the proposal.

Ms. Johnson explained the goals are centered around the recently approved strategic plan, to minimize the city tax impact on Victoria residents and also to improve levels of service.

Ms. Johnson stated the proposed budget does maintain the City’s current tax rate of 37.4%. The proposed budget also reduces the general fund by $51,860 which is a 1.3% decrease in the overall general fund budget.

Ms. Johnson explained the total tax impact. She said the median assessed value of a home in 2009 was $369,200 and in 2010 it is $357,800. She noted that with the proposed budget if a home declined in value by the 3% there would be a $43 decrease in city taxes.

Ms. Johnson talked about the levy comparison and said it is divided into three components: the general fund levy, Field House levy, and the special levies for debt service. She said the overall levy decreased by 1.1%.

Ms. Johnson reviewed the general fund revenues and expenditures and said the overall decrease of -1.3%. She noted that permitting fees were projected based on 40 new homes for 2010 as opposed to the 35 in 2009. She said they did not include any commercial building permit fees. Ms. Johnson stated the projected year end fund balance for 2009 would be between 36 and 40% of expenditures.

Mayor Hershberger Thun asked if the deck fees were included. Ms. Johnson said yes and through the end of July the amount of fees collected were $23,000.

Councilmember Roden corrected page 4 to say personnel services, not personal services.

Councilmember Paulsen talked about the obligations in terms of the firefighter’s relief fund. He said there is a net shortfall of about $273,000. Ms. Johnson said $74,000 total would be funded this year. Councilmember Paulsen questioned dealing with the difference now or later. Ms. Johnson explained that for the 2010 budget the fire relief fund has $38,800 as a required municipal contribution plus there is a 2% that comes from the state which is around $35,000, so the total of $73,800. Ms. Johnson noted the contribution for 2009 has not been made, but they did budget a voluntary contribution. Councilmember Paulsen clarified the net shortfall after the money from the State and the City is about $200,000. Mr. Uram stated the deficit was calculated as of December 31, 2008. He said they still need to make the contribution and the city is liable to make up any shortfall. Mr. Uram talked about the liabilities and said there are five or six fire fighters that could leave right now with a maximum payout. Councilmember Paulsen asked what the interest rate is. Mr. Uram said he believes the State uses 5%. He explained the state calculates a mandatory municipal contribution and the city obligation is based on the number of people, years of service times what is paid as the lump sum distribution, so that pay is set. Councilmember Paulsen asked Mayor Hershberger Thun if she is satisfied with the investment program in place right now. Mayor Hershberger Thun said yes. Mr. Uram said other communities are trying to figure out a way not to rely on the 2% rebate from the State to fund the firefighter pension.

Ms. Johnson reviewed the Victoria Field House balances and said in 2009 the fund balance would increase by $115,509 and in 2010 it is estimated to be $17,000 additional to the fund balance. She noted at the end of 2009 the fund balance should be about $172,000. Councilmember Roden commented on the debt payments and asked how many more years are left to pay all the debt off. Ms. Johnson responded 2032. Councilmember Roden asked if there are any concerns with the fund balance being less. Ms. Johnson said no, at the end of 2009 the fund balance will be about 20% of expenditures.

Mayor Hershberger Thun asked what the revenue is for the city portion of the Field House. Ms. Johnson said about $125,000 is being projected for 2010. Mayor Hershberger Thun asked what the expenses on the city portion were. Mayor Hershberger Thun clarified she is trying to figure out how much it costs to operate the city portion of the Field House and how much revenue is being taken in and what the difference is between the two. Ms. Johnson said when the budgets are presented for approval they could have a slide to illustrate that. Councilmember Paulsen said the negative cash flow is about $250,000 on the Field House. Councilmember Roden commented on going in the right direction with the school district partnership. Mayor Hershberger Thun asked that in the future the Field House numbers be separated out. Councilmember Paulsen said he has that information. Ms. Johnson said she will separate the numbers to see what comes from the school district and what comes from the city. Mr. Uram clarified that after the $17,000 addition the fund balance will be close to $200,000. He noted that should be changed to show what the total balance is.

Ms. Johnson explained the budget recommendations; to continue with the City’s current tax rate of 37.4% and to use the estimated transfer of $544,000 for: $200,000 would be for the land acquisition in downtown, $150,000 would be used to partially repay the inter-fund loan and $184,000 for the capital facilities fund.

Mr. Uram commented on the City Council’s expectations for 2010 and said it was a decrease of 5% or greater reduction in the overall budget. He said his recommendation to the Finance Committee was to maintain a flat tax rate.

Councilmember Paulsen said the secret to the budget being successful is on the expenditure side.

Ms. Johnson reviewed the capital improvement plan. She noted the plan years are from 2010 thru 2014. Ms. Johnson explained the 2010 CIP budget funding sources:

-Cash reserves of $978,150 for all CIP expenditures except the 2010 street project
-Debt financing for 2010 street, utility and drainage project estimated $2,400,000
-City has adequate funding sources to support the 2010 CIP budget.

Mr. Uram commented on the park improvement fund and said what is different from last year is based on the agreement with the Metropolitan Council in regards to the tunnel project they have agreed to pay a lease rate for the park use.

Councilmember Amundsen commented on how much it costs to buy a computer and asked that those numbers be revisited.

Councilmember Amundsen commented on the $10,000 for the tennis courts in Lions Park and said they need to look at the partnership with Holy Family and make some decisions on the utilization.

Ms. Mahnke talked about the last Park and Recreation Committee meeting where they toured Lions Park. She said the plan is to come back with some potential design that would eliminate one or two of the tennis courts and a possible relocation of the hockey rink.

Mayor Hershberger Thun said she would question repairing neighborhood tennis courts before repairing the Lions Park tennis courts which are in the center of the city.

Councilmember Amundsen asked for a brief explanation when there are percent changes higher or lower than 50%.

Ms. Johnson said the next steps are on September 14 the levy will be approved along with the Field House and general fund budget and move forward with the CIP. She noted the CIP could be pushed off for later.

Ms. Johnson noted that the computer costs include the IS personnel for set up. Mr. Uram said they need to spend enough money to provide productivity needs for the workforce, but will watch the expenditures.

Councilmember Amundsen commented on the special assessment street improvement ending soon. Ms. Geheren noted there will still be streets that need to be maintained.

Mr. Uram provided an update on the Magellan pipeline and said as they do a maintenance clearing on the easement in the park they have a tree person managing what Magellan does. He noted Magellan has a right to clear cut 100 feet and in a lot of locations it is 30 to 40 feet. Mr. Uram said there were a number of trees that were rotted or had Dutch Elm disease and they are being taken out as part of this program which has been beneficial.
 

The workshop adjourned at 6:00 p.m.

Respectfully submitted,

Tanya Schmieg
Recording Secretary
TimeSaver Off Site Secretarial, Inc.