1. Call to Order. The workshop session of the Council of the City of Rogers was called to order by Mayor Bunting on Tuesday, July 24, 2012 6:00 p.m. at Rogers Community Center, 21201 Memorial Drive, Rogers, MN, 55374.
Council present: Rob Bell, Jay Bunting, Rick Ihli, and Maureen Stanley.
Also present: Don Hall.
Staff present: Jeffrey Beahen, Police Chief; Gary Buysse, Liquor Operations Manager; Stacy Doboszenski, Assistant City Administrator; Brad Feist, Fire Chief; Steve Stahmer, City Administrator; Bret Weiss, City Engineer; and Lisa Wieland, Finance Director.
2. Initial City Council 2013 Budget Work Session
Administrator Stahmer stated the first budget work session a conceptual discussion to make sure staff and Council are on the same page. At subsequent work sessions staff will bring forward the Financial Management Plan and preliminary figures. Stahmer also stated there will be a PowerPoint presentation at the regular meeting to clear up any inaccuracies that have been discussed within the community as it relates to tax rates, TIF, and fiscal disparities.
Administrator Stahmer stated staff had a preliminary budget meeting/discussion and have compiled some recommendations that will be discussed with Council.
Stahmer then provided an overview of the history of the budget since 2006/2007: The past decade was marked by rapid growth in Rogers (population, market valuation, staffing needs) followed by the past several years of market value reductions and budgetary constraints. Budgetary and staffing cuts between 2007 and 2012 have allowed the City to remain in a very healthy financial condition. Such efforts were implemented early on in the recent recession, with the City weathering multiple years of unprecedented reductions in market value.
From 2007 to 2012, the City cut approximately 15% of its full-time workforce; most through attrition/non-replacement and a couple layoffs in order to keep within budgetary constraints. Following those cuts, 2.0 FTEs were added as additional Patrol Officer hires within the PD both to handle increasing workloads within the department as well as to prepare for the significant increase in territory and responsibility resulting from annexation. Cost of living adjustments to the City's pay scale were held flat for 2009 and 2010, with a small increase for 2011 and 2012 resulting from successful union negotiations which were also extended to non-union positions, and limiting the COLA to 1.5% in 2013.
It is important to note that the City was under levy limits imposed by the State Legislature for 2009, 2010 and 2011. Each year the City levied well below the allowable limit.
Stahmer discussed the zero levy from Hassan Township and the restricted and unrestricted cash from Hassan; a majority of which was for debt payments.
While the annexation was a major development in the history of Rogers/Hassan, it was not the only significant impact on the Rogers budget process. The City's largest TIF district (TIF #1) was decertified. The City's percentage of total tax capacity in TIF went from 22% to 1.8%.
With the major TIF and annexation impacts as a backdrop, Rogers Council and staff adopted a 2012 budget designed largely to maintain existing services in Rogers while extending those services into the newly annexed areas while remaining extremely cost-conscious given the implications of the zero-levy. We did not add much in staffing to meet the service level demands within the newly annexed community.
For 2012, the City's net tax capacity was increased significantly due to the expiring TIF district, as noted above. In 2013, the City will also see an increase in tax capacity due to the 2012 annexation. But along with that increase in tax capacity comes the responsibility to provide service to a population that is now 30% larger and a land area that is now 3 times the previous size. It is important to note that the City of Rogers is not currently a bedroom community and has not been for some time. There are more jobs located in Rogers than the City has working age adults. We are a net supplier of jobs; approximately 8,500 jobs with a population of 11,000.
Stahmer then reviewed the following bullet points for Council to consider:
• Fund balance – the City's general fund reserve/fund balance is currently very healthy and above City policy. In order to remain within the 45-50% policy goal, it may be recommended that dollars be allocated to pavement management fund and/or other capital funds in order to begin saving for such future costs in the merged community. One thing to discuss is where to allocate the dollars to get the reserve to an acceptable level but using the dollars to be well spent on capital items.
Bunting stated one of his concerns is there were a lot of streets created in a very short period of time. An issue down the road of spending a great deal of money to take care of roads built in the late 90's and early 2000's; 80% of our roads were built in a decade's time. For these funds, the roads have to be one the priorities. Bunting stated we also need to plan for future capital; we can no longer be a City that can rely on pull-tabs for the equipment replacement in the fire department. Also we need to plan for public works equipment (road grader, plow trucks). Some purchases have pushed out have allowed the reserve balance to build. Now is not the time to ignore what will be some serious costs not too far down the road.
Don Hall stated he can add to that, knows of communities that plan well and those that don't. A lot of money can be spent on infrastructure repairs. We need to be very prudent to look at it that way.
Stahmer added building and systems replacement needs to also be addressed.
Bunting discussed the population growth of the City and we can't keep operating like we are a city of 3,000.
Hall stated he agrees and these are tough decisions.
Ihli stated in 13 years he recalls one overlay, the main artery through Mallard is washboard. Some roads are in dire straits and need repair.
Ihli discussed the cost of the next truck replacement; estimated at $510,000. Chief Feist stated 2016 is the next engine; 2018 is the next heavy rescue vehicle.
Stahmer stated he is hearing consensus when looking to designate fund balance, to consider those items discussed; streets and capital. Stahmer also mentioned we may need to revisit the fire contracts when considering new capital for the fire department.
• Debt service and inter-fund loans were discussed with Council by Wieland.
Wieland explained the two inter-fund loans; RAC capital and the public works building. The Public works building is a 10 year loan of approximately $800,000; $120,000 per year payment.
Wieland also discussed the funds that are in the negative stating there are many ways we can discuss how to pay those off. Stanley asked for some examples of funds; Wieland went through a list of funds.
• Increased tax capacity; because of TIF and the annexation, can allow the City a modest reduction in tax rate.
Stahmer provided history of tax rates back to 2006. Also discussed was the rebuilding of staffing levels in three key areas. Combination of a modest tax rate reduction, while still incrementally rebuilding staffing levels in 2 to 3 key departments were cuts were made in 2009/2010, the initiation of capital fund savings, and debt repayment and clean-up of negative balances.
• Staffing needs
Non-sworn, support positions within the police department, a records management system, and a support position in fire as well. Stahmer also addressed a shared position between RAC and Public Works, a City Planner, and the ½ time position that was in finance and trying to bring that position back to the pre-cut time. Stahmer talked about getting the Finance Director back to focusing on the big picture.
Wieland discussed the ability to charge a Planner's time back to projects.
Ihli stated he is very much in favor of brining in a planner. If you could share the position with a community development position it would be a big bonus. Staff does a great job, but having someone there to handle it immediately would be a great help to the City.
Bunting discussed adding staffing back; staff is reactionary and not proactive. Bunting is in favor of adding a planner/community developer to staff.
• Additional service demands; senior programming
Stahmer stated areas seeing increased service demand, as evidenced by substantial dialogue with the various constituencies, include senior programming (increased funding in 2012) and recreation. Councilmembers and staff have all fielded questions regarding the City's lack of a general recreation facility/community center. While not currently feasible within the City budget, it is likely that interest will continue to build, and the City should discuss planning efforts related to any possible future facility.
Ihli stated help to the seniors is pretty important. They deserve some of the extra things we can allow.
Bunting commented positively on senior programming and parks.
• Growth and facilities
Stahmer discussed the growth and the numbers coming back with new home building permits. Stahmer discussed current population of 11,314 (Met Council 2011 estimate) to a projected population of 15,000 by 2020 and over 21,000 by 2030. Stahmer discussed the need to plan for City facilities through a needs study to use for financial planning.
Stahmer continued through his memo:
• Staff continues to explore ways to reduce costs and improve efficiency through scrutiny of existing contractual services, cooperation across departments, cooperation with other jurisdictions/cities and partnership with state and federal funding partners (largely transportation related).
• As is done routinely, staff will be analyzing salary splits between departments/funds to determine whether any changes should be made for 2013.
Stahmer concluded his presentation and asked for any questions or areas for staff to look into?
Stanley thinks we are on track. Bunting agrees.
Stanley moved, Ihli seconded a motion to adjourn the budget workshop at 6:49 p.m.
Assistant City Administrator/Clerk