1. Call to Order. The budget workshop session of the Council of the City of Rogers was called to order by Acting Mayor Bell on Tuesday, September 13, 2011 at 5:30 p.m. at Rogers Community Center, 21201 Memorial Drive, Rogers, MN, 55374.
Council present: Rob Bell, Jay Bunting, Rick Ihli, and Maureen Stanley.
Council excused: Jason Grimm.
Staff present: Stacy Doboszenski, Assistant City Administrator; Brad Feist, Fire Chief; John Seifert, Public Works Supt.; Steve Stahmer, City Administrator; and Lisa Wieland, Finance Director.
2. Review of City Council meeting agenda item 7.01Administrator Stahmer opened the meeting stating the Mayor called the meeting in response to Hassan setting a near zero levy last Tuesday.
Stahmer stated the City has made significant cuts in 2009, 2010, and 2011 to remain on solid ground going into 2012. Stahmer discussed the following key budget points with Council:• No general fund operating levy increase from 2007-2011 (2012 programmed increases absorbed by TIF#1 expiration and its tax capacity coming in)• Previous loss of State aid (MVHC) changed to Market Value Homestead Credit Exclusion calculation (decreased capacity for eligible properties)• Expiration of levy limits• Previous substantial declining but currently stabilizing market values with continued smaller reductions• Net increase in special debt levy of $93,500 related to 2011 equipment certificate (including, new fire truck not covered by pull tab donation to City)• Increased overall tax capacity (largely TIF 1 and Phase II OAA capacity)
Stahmer stated the overall levy increase is 37% because of a loss in revenues; however, the general fund expenses increased just slightly over 1%. Stahmer highlighted the following:• Incorporation of Public Project Revenue Bonds of 2002 EDA (Public Works Building Debt) as special levy• Incorporation of Public Works Building debt 2006-2011 interfund loan repayment• Elimination of excess rate TIF revenue• Incorporation of 1st year of TIF#1 Cabela's tax abatement levy• No intentional use of Fund Balance to balance the 2012 budget
Stahmer continued to discuss preliminary budget key elements:• Continued $200,000 of Liquor transfer to General Fund• Removed 2011 budgeted Police staffing additions (investigator promotion, patrol backfill due to investigator promotion, additional PD admin hours)• Reallocation of Public Works, Parks and Utilities salary splits along with staffing/salary/contractual additions (primary staff addition in the Storm Water Utility)• Incorporation of additional Planning clerical activities anticipated for 2012 and reduction of Community Room/PW/Administrative clerical hours• Council goal of maintaining a largely flat tax rate for 2012• Results of contract negotiations, COLA discussions as identified below, currently unknown• Senior Programming and service level increases• Annexation impacts (zero levy, potential fund balance spend down, unemployment, contractual obligations, hire of 1 police officer, town hall fire station #3, wetland requirements, analysis of 2012 budgetary and service level needs and future CIP needs).• Other annexation assumptions/impacts: o January 1st annexation date o No assumption of Hassan Debt across all Rogers PID's (levy against Hassan PIDs only) o No phasing of taxes o Transitional costs (auditing; elections; institutional memory issues related to unique property knowledge, easements, agreements, other planning information). o Joint Planning – further ordinance revision/consolidation efforts• Establishment of IT/CIP Sinking Fund• Fire Contract revenue loss due to valuation reductions• Interim Police consulting firm costs/delay of Police Chief hire offsetting• Re-establishment of Lynde Mcleod brush/grass disposal services (with or without permit fee)• Fire on-call pay increasing with call load• Discussion of refinancing Certificates of Participation (Fire Station) and Public Project Revenue Bonds of 2002 EDA (PW Building Debt) to reduce special levied debt (savings not currently included in budget and levy)• Continued reference to Financial Management Plan (FMP) and – 5 year planning goals
Stahmer stated staff has removed $225,000 for roads and capital improvements that was shown in the FMP for Hassan.
3. Review of Financial Management Plan (FMP) as per staff recommendations for 2012 levy/budgetFinance Director Wieland reviewed the "no agreement" version of the FMP with Council, line by line. Wieland stated there is a budgeted 1.17% increase in operational cost; basically keeping expenses flat.
Wieland continued through the line items of the FMP.
Bell asked about increases to line 64; Wieland explained how the worksheet incorporates the tax capacity.
There was discussion on future tax rates; what the Rogers residents' taxes would do in future years. Staff indicated there is a slight reduction anticipated for Rogers residents.
Bunting commented on the staff's hard work and planning by Council and the ability to keep tax rates flat.
Staff discussed with Council the impacts for Hassan's near zero levy:• $225,000 capital for Hassan roads• Interfund loan repayment• Reduction on inflation• PD/Fire and City Hall pushed further into the future• Pushed back staffing level increases• Increased utility fund transfers
4. Review of Property Tax Levy worksheetsWieland continued to review budget documents with Council.
Bunting stated there are a couple items that he wouldn't mind seeing pushed back. Bunting commented on pushing out the technology sinking fund and the RSAC interfund loan payment until the combined community can pay for it.
Wieland stated, at this point, staff suggests leaving those two items in for the preliminary levy given the amount of unknowns.
Bunting stated, we have done this in the past, setting the preliminary levy at a maximum amount and not setting the final levy at that amount. Bunting stated he feels confident this Council will not spend every dollar available.
Stahmer stated those are the same two items that staff would have also recommended for cutting if necessary.
Bunting commended staff for doing a fantastic job for creating a budget with a flat rate given the challenges brought forward.
5. Discussion of Preliminary Levy and BudgetStahmer continued with the assumptions related to existing costs.
Stahmer stated staff is going to recommend in the regular meeting is a general fund operating levy of $3,877,376 with special levies $892,862 for a total tax capacity based levy of $4,770,238.
Stahmer then highlighted the following items affecting the 2012 levy from the staff memo:• Incorporation of Public Project Revenue Bonds of 2002 EDA (Public Works Building Debt) as special levy• Incorporation of Public Works Building debt 2006-2011 interfund loan repayment• Elimination of excess rate TIF revenue• Incorporation of 1st year of TIF#1 Cabela's tax abatement levy• No intentional use of Fund Balance to balance the 2012 budget
Wieland stated fund balance is still very healthy and the FMP shows we are healthy community. We are not in any kind of a financial crisis.
Staff asked council if there are any other items they would like to discuss.
Ihli asked if we would have to add the additional officer. Stahmer stated would wait to add with the recommendation of the new chief or consultant. Bell stated he is not opposed to keeping it in the budget; wait to see if we need it.
Stanley moved, Bunting seconded a motion to adjourn at 6:57 p.m.
Respectfully submitted,Stacy DoboszenskiAssistant City Administrator/Clerk