1. Call to Order. The workshop session of the Council of the City of Rogers was called to order by Mayor Grimm on Tuesday, August 31, 2010 at 5:10 p.m. at the Rogers Community Room, 21201 Memorial Drive, Rogers, MN, 55374.
Council present: Rob Bell, Jay Bunting, Jason Grimm, and Steve Rauenhorst.
Council excused: Jamie Davis.
Staff present: Gary Buysse, Liquor Operations Manager; Stacy Doboszenski, Assistant City Administrator/Clerk; Brad Feist, Fire Chief; Rose Lorsung, City Planner; Jeff Luther, Police Chief; John Seifert, Public Works Supt., Steve Stahmer, City Administrator; and Lisa Wieland, Finance Director.
2. LMC Video Presentation – Cities, Services & Funding: Broader Thinking, Better Solutions – (video preview & Outside the Ox)
Administrator Stahmer introduced the purpose of the video provided by the League of MN Cities. Council viewed the video preview and video entitled “Outside the Ox”.
No discussion by Council.
3. Overview of the 2011 Preliminary Budget Assumptions
Administrator Stahmer discussed the highlights of the preliminary budget assumptions:
• Some of the assumptions and inclusions of the budget are different than the five year financial management plan. Stahmer provided an example of the police department staffing.
• Two main things: Police staff issues and a discussion/direction on the use of reserves vs. levy vs. tax rate
o Police staffing issues; three options:
• Not include any of the options into the preliminary or final budget; remove from the 2011 budget document
• Include any or all of the police staffing options in the preliminary levy with more discussion to occur between the adoption of the preliminary and final levy
• More discussion between now and September 15th before making any decisions
o Levy vs. Reserves vs. Rate
• Would like to keep tax rate fairly stable
• Rate is not the only piece of information to look at
• Keeping the rate flat at 40%, but if the property saw a flat or decreasing value, they would see a slight reduction in local property taxes
• Flat rate, given tax capacity, would amount to approximately 7% increase in the levy and would use less than $100,000 in reserves.
• Setting a preliminary levy at an amount equal to a flat tax rate
• Status quo budget in terms of services; outside of the additional police officer hired in 2010 and some part-time and contractual additions in public works; administration and engineering services
• Current draft shows a general operating levy increase of $56,000 or a tax rate of 38%
• Debt levy increasing due to 2010 equipment certificate
• Overall decrease of taxable market value, however with the elimination of TIF 10 and 11, the taxable tax capacity has increased 6.5%
• The current liquor transfer is about $150,000 as shown in the preliminary budget. In 2010 we added an additional $100,000. For 2011 recommending a total of $200,000
Stahmer reviewed the other key assumptions included in the draft budget.
4. 5 Year FMP Presentation
Wieland provided a copy of the financial management plan on the overhead. Wieland reviewed the staffing plan in the financial management plan (FMP). Wieland explained how the FMP includes the requested staffing from the Police. Wieland stated by adding the changes recommended by the police would keep the rate consistent with the use of $245,000 reserves. Wieland provided examples of how the tax rate can remain constant either with the reduction of reserves or the increase to police staffing.
There was discussion on the different options available to council to maintain a flat tax rate; combinations of increased liquor transfer, decreased use of reserves, no additional staffing, etc.
Wieland proceeded through the capital equipment, facilities, parks/trails, and staff plan component of the FMP.
Bell questioned if there is a section that shows the salaried costs for the entire year for all employees. Wieland stated it was not included in the preliminary draft budget, but provided an overhead of the 2011 salaries across the general fund budget representing $140,000 increase.
Wieland proceeded through the draft 2011 salaries worksheets with Council. Council questioned the amount of benefits are included in the total salaries. Staff stated roughly 23 to 26% is benefits; just over $2M is salaries or half of the general fund expenditures.
5. Preliminary 2011 General Fund/Rogers Activity Center (RAC) Line Item Budget and Summary Worksheets Discussion
Stahmer stated the preliminary line item budgets are provided for Council to review but may not be discussed until between the preliminary and final budgets, unless the Council has questions tonight.
Bell questioned the assumption of the 0% COLA. What is the basis for the assumption of 0%?
Stahmer stated primarily based on our situation, the budget situation, low inflation, and a survey on City Managers list serve that most cities (75 to 80%) are going into their budgets assuming a 0% COLA.
Wieland stated a lot has been feedback coming from the Council. Bell wanted to have some justification for it.
Wieland stated the State factored a 1.83% increase from 2010 to 2011.
Stahmer spoke to the possibility of a required COLA increase due to arbitration. Stahmer also spoke about the ongoing 1.5% discrepancy between salaried and hourly employees.
Grimm stated it is important to note that those employees who are still stepping are getting increases.
Bunting questioned the following line item budget figures:
• Other Administration what the increases are in computers and dues and subscriptions; staff stated more computers are added and will check on the dues and subscriptions.
• Under police budget contracted services; staff stated adult corrections are now combined into the police department line item budgets
• Under fire, vehicle equipment repairs and maintenance. Bunting questioned if the antique truck is the recipient of the additional cost. Feist stated all ladders need to be tested which has increased the expense.
• Siren maintenance; one more siren added by the high school.
• Traffic signals line item. Seifert stated with the addition of signal lights, an increase in energy cost.
• Contracted services in general public works. Seifert stated it is the staff level increase with a temp position.
• Street repairs and maintenance; carry-over from 2010 of $67,000.
• Recycling; staff explained the $.15 per household increase and the increase in the number of households with the 2010 annexed properties.
• Training and travel were discussed. Bunting stated when working for corporate, those are the first things that were trimmed. Bunting commented, beyond the essential training, watch the dollars as much as possible. A lot of the costs were staying high throughout the year. Across the board it adds up to $60,000 to $70,000 in expenses. Stahmer stated staff will research the budgets; typically the trainings are for the department heads to attend one annual conference. Stahmer stated we will discuss more at a future work session. Grimm stated he disagrees with Jay citing a no COLA increase. It’s a small price to pay, but let’s look at it.
Stahmer asked for direction on the police staffing and on the recommendations made on the use of reserves vs. levy vs. flat tax rate.
Stahmer stated it is difficult for him to recommend the police staffing when looking city-wide. He discussed the proposed positions and assumed the half-time clerical is the least desired position addition. Stahmer stated he would recommend a full discussion of all of these items before the final levy and/or before implementation in 2011 if the Council decides to move forward with investigations.
Stahmer stated adding $50,000 from liquor is a likely recommendation along with keeping a flat tax rate.
Grimm, asked council if there were issues with increasing the liquor contribution by $50,000. Council agreed with adding the $50,000.
Bunting stated from his point of view, he is not as concerned about the rate as he is about the tax bill. He knows that you can’t say with absolute certainty the tax bill can’t go up.
Staff stated if the rate stayed constant, and the market value did not increase, the tax on an individual property would not increase.
Grimm, how do we feel about maintaining the same rate? Can we agree on that?
Rauenhorst doesn’t see it being a problem; we can add to the police, and the tax rate stays flat.
Grimm stated he doesn’t mind keeping staffing in the budget for now, but would like to have future discussion on the investigator position.
Wieland stated she will add the additional $50,000 from liquor, the PERA levy, and reduce use of fund balance and will bring that information back.
Grimm stated, in order to keep the rate the same, and including the police positions, we are using approximately $120,000 in reserves; a swap for the positions in police.
There was a discussion among staff and council regarding future tax rates.
Stahmer summarized the following: include $50,000 from liquor, setting and use of fund balance at a level that would maintain the same rate, keeping police staffing that were shown in the FMP for the preliminary levy, putting PERA in at approximately $67,000. Council agreed.
6. Discuss Direction for Next Budget Workshop if Set for Tuesday, September 7, 2010, 5:00 p.m.
Stahmer asked Council if they wanted a September 7th budget workshop, or can staff come forward with a preliminary levy including the above items. Council was okay without another workshop before September 14th.
Rauenhorst would like to see the numbers associated with a cadet program for the police department.
Luther addressed the Council to clarify the information being sought; developing a CSO/Cadet program and how much it would cost.
Luther asked the Council what information they wanted on the proposed investigator position.
Bunting asked for a position description and if it would be a combination of investigations and patrol.
Council and staff then discussed the option of setting the preliminary levy $100,000 higher as was done last year. Council agreed with setting a flat rate, but increasing the preliminary levy by $100,000 with the intent to reduce it for the final levy.
The budget workshop was adjourned at 6:58 p.m.
Assistant City Administrator/Clerk