1. Call to Order. The budget workshop session of the Council of the City of Rogers was called to order by Mayor Grimm on Tuesday, October 27, 2009 at 5:30 p.m. at the Rogers Community Room, 21201 Memorial Drive, Rogers, MN, 55374.
Council present: Jason Grimm, Jay Bunting, Rob Bell, and Steve Rauenhorst.
Council excused: Jamie Davis.
Staff present: Gary Buysse, Liquor Manager; Stacy Doboszenski, Assistant City Administrator/Clerk; John Seifert, Public Works Supt.; Steve Stahmer, City Administrator; and Lisa Wieland, Finance Director.
2. 2010 Enterprise Funds Budget Discussion
Finance Director Wieland reviewed the Enterprise Funds budget worksheets with Council.
Public Works Supt. Seifert provided a review of the City’s water fund (601) with an explanation on the proposed 2010 budgeted items.
Bunting questioned the large increase in dues and subscriptions for 2009. Seifert provided an explanation on the state of Minnesota’s rate structure for dues and subscriptions; a mandate the City needs to comply with the state.
Bunting questioned the part-time employee budgeted. Seifert explained the 2009 hire with hydrant recall repairs. Seifert explained the position will do maintenance projects.
Seifert proceeded with an explanation on the City’s sewer fund (602) as budgeted for 2010. Seifert explained the comprehensive sewer plan update needs to be completed in 2010.
Grimm discussed the cost effectiveness of bringing sewer cleaning in-house.
Seifert explained the cost of the equipment and discussed how the sewer cleaning is occurring to date. Seifert continued to discuss the purchase of a sewer jetter truck and the multi-purpose use of the truck.
Rauenhorst asked if he is recommending the purchase. Seifert stated yes. Rauenhorst questioned if there is a need to hire additional staff with the new equipment. Seifert stated he believes the City can do the work with existing staff.
Bunting stated he would like to see a pay-back projection on the new equipment.
Administrator Stahmer asked about a service contract on the equipment. Seifert stated it would come with a warranty and would need to research that further.
Wieland stated it is included in the budget and utility rate study, but prior to any type of purchase, the Council would need to authorize it; it wouldn’t be authorized with the adoption of the budget.
Seifert spoke on a televising camera system used in sewer maintenance and suggested jointly working with other communities for this type of purchase.
Seifert then reviewed the 2010 storm water utility budget (603) with Council. Seifert explained the revenue sources for the fund. Seifert noted items of significance within the budget.
Staff explained that as the City moves forward with the public works re-org plan, the personnel cost numbers within the utilities budgets could change.
Rauenhorst questioned the large increase in overtime. Seifert stated he looked at which personnel were split across the utilities and the water and sewer were taking up a bulk of the overtime and not enough was previously allocated to the storm water utility fund.
Seifert spoke on the possibility of starting a street light utility and suggested the right time may be when the Township is annexed. Seifert stated he would champion there are some lights within the city that are beneficial to everyone and should remain in the general fund as an expense. Those that are specific to certain neighborhoods could be handled within a utility fund.
Bell asked under dues and subscriptions what it is for. Seifert explained the City going from a minor to a major facility under the MPCA after an EPA audit. Seifert clarified this was for sewer fund not storm water fund.
Wieland stated the Elm Creek watershed dues were shifted from general fund to the storm water utility fund.
Bell pointed out an error in the worksheet regarding the subscription line item.
Liquor Operations Manager Buysse reviewed his enterprise funds with the Council starting with the on-sale location. 6% to 7% increases in sales up through 2008. In 2009, we may not realize that. The largest factor being the lack of growth and economic slow-down. Buysse explained the ability to split the difference on gross profit with the savings in case prices and his purchasing ability. Buysse stated the labor expenses will not be receiving COLA either, similar to all other departments. Buysse explained he has the ability to run a lean department because of the assistance from other city departments.
Buysse continued stating he is maintaining a similar cost of sales and gross profit runs about 25%. Buysse stated he may need to increase advertising in 2010 due to road construction.
Council questioned the increase in revenue projections on the tobacco line item. An error was discovered in the revenues versus expenses in tobacco.
Buysse discussed a potential Sunday/Monday closure with the on-sale location and continued to discuss the on-sale budget with Council.
There were no questions from Council regarding the liquor operations funds.
Buysse spoke on the benefits received from operating wine tasting events and asked the Council to attend an upcoming event.
Wieland stated she will take the corrections/changes noted and incorporate it into the final budget documents.
Wieland spoke on the fund balance growth for the potential of a second off-sale location.
3. Further Discussion on Utility Rate Study
Wieland stated Dave Callister from Ehlers and Associates is present if the Council wanted an update on the Utility Rate Study being considered at the regular meeting.
Council did not request an update.
Motion by Rauenhorst, seconded by Bunting to adjourn at 6:34 p.m. Motion carried 4-0.
Assistant City Administrator/Clerk