1. Call to Order. The regular work session of the Council of the City of Rogers was called to order by Mayor Bunting on November 12, 2013 at 5:30 p.m. at Rogers Community Center, 21201 Memorial Drive, Rogers, MN, 55374.
Council present: Jay Bunting, Don Hall, Rick Ihli, Darren Jakel, and Maureen Stanley.
Staff present: Mike Bauer, RAC Manager; Jeff Beahen, Police Chief; Gary Buysse, Liquor Operations Manager; Brad Feist, Fire Chief; Jason Greninger, IT Director; John Seifert, Public Works Supt.; Stacy Scharber, Assistant City Administrator; Steve Stahmer, City Administrator; and Lisa Wieland, Finance Director.
2. 2014 Financial Management Plan and Capital Improvement Plan Discussion
Administrator Stahmer directed Council to page 5 of the Financial Management Plan (FMP) and described the process for the sale of the bonds for the Police Department; specifically the need to adopt a five year Capital Improvement Plan (CIP).
Staff stated they are planning to discuss the equipment certificate for 2014 and 2015 prior to the November 26, 2013 City Council meeting.
Wieland stated on line 74 (pg. 5) the sinking funds are offsetting the debt service payments.
Jakel questioned if the sidewalk machine is a new machine or a replacement machine. Seifert explained the used piece of equipment that would be added to the fleet.
Wieland explained the timing of the squad replacement and the Chief is looking into the replacement schedule due to delivery dates being delayed.
Stahmer directed Council's attention to page 6 of the FMP; Fire equipment needs.
Staff reviewed the cash flow of the fire equipment fund with Council.
Jakel questioned the grass rig for 2019; asking if it is an added piece or a replacement. Feist stated it would be a new rig for station two. Jakel questioned if more trucks will be needed with the build out of a second station. Feist stated right now the only truck he sees as a new purchase would be the grass rig.
Stahmer stated the purchase of the heavy utility is on the regular agenda for discussion on tonight's meeting. Stahmer stated a decision is needed prior to December 1st if the City is to purchase the truck and take advantage of the 2011 pricing.
Jakel asked about the dates the existing SCBA bottles expire. Feist stated the bottles first start expiring in January 2016.
Stahmer stated the bottles can still be purchased in 2015, but not able to be used until a new truck can fill them. There was discussion on the ability to fill a 4500 psi bottle and the need for a cascade system to fill them.
Stahmer stated in terms of the timing of the purchase; now would give you 2011 pricing for a $20-$23,000 savings. The time frame is more reliant on the timing of the 2600 psi bottles expiring starting in January 2016.
Feist stated we are saving an additional $25,000 by switching out the chassis. Feist explained the difference between the chassis quoted and the one being recommended stating he is not getting the Velocity chassis, as the other trucks have, but getting the Impel chassis.
Hall stated you would still save the same savings if you didn't purchase the velocity chassis in the future. There was a discussion on having to spec a truck and the unknown of where the bids would come in.
Stahmer, the only other timing savings is savings on the bonding; by not bonding twice. If you decide to push off the fire truck purchase, and do the equipment certificate, the only other savings is trying to bundle borrowing costs. Stahmer then discussed the tax rate stating if the truck purchase is pushed off one year it does not change 2014 levy and tax rate at all. If you push it off to 2015; then you are moving the first payment to 2016. Stahmer stated if you push out the truck for two years, the anticipated tax rate in 2015 would move from 40.3 to 39.9%.
Wieland stated at this time we are anticipating interest rates inching up a little.
Feist read from a list of cities that are currently purchasing the Pierce truck to take advantage of the pricing.
Jakel stated if the purchase doesn't move forward at tonight's meeting, then what is the drop dead date to have a truck purchased for the 4500 psi bottles in 2016. Staff stated it would be 10 months to build the truck.
There was discussion on the timing of pushing the truck back and the savings that is being realized by getting 2011 pricing.
Ihli talked about the number of projects coming up would like to get other projects behind the Council before taking on another large ticket item like this.
Feist stated the upgraded air tanks are for the safety of the firefighters. The package that is being presented is looking at every option and putting the best number forward. Feist also stated the cost to the citizens is $400,000 because pull-tabs is paying for $165,000.
Hall stated that Feist has done a great job of peeling the truck apart and the decision wouldn't be this difficult if he hadn't done a good job.
Feist stated the truck purchase could be pushed off a year, but we won't get the same price. He stated he would love to have the truck now to give the tools to the firefighters that the new truck offers.
Hall stated he is at a quandary at this point.
Jakel stated to paraphrase Ihli's point, about needing this today – we don't, but a year from today we would need to purchase the truck. Jakel discussed the savings of purchasing the truck now.
Wieland stated borrowing money now and not spending immediately is something we have been doing with equipment certificates. 1.9% is the estimate on the interest rates for this borrowing.
Bunting stating he is only going to state the obvious. We don't know the pricing in a year and we don't know the type of rig that will be bid out next year. The savings is between 9 - 10.5% of the total cost if we buy this year versus next, if prices go up and the larger chassis would need to be bid. Bunting stated if you are looking at tax rate of 40.3% or 39.9% the average taxpayer wouldn't see the difference. Bunting discussed the ability to use new equipment for improved services.
Jakel stated if it is only pushed back one year, then maybe it doesn't make sense to push it off.
Bunting discussed the ability of the Council and future Councils to not have to commit to the purchases shown in the FMP after 2015.
Stahmer then directed Council to page 7; CIP buildings and improvements.
Wieland stated the CIP plan will need to declare in the next five years any new facility improvements. If there are any items the Council believes we should be doing in the next five years, now is the time to add them.
Council had no questions.
Staff then directed Council to page 8; Park and Rec CIP. Items were reviewed with Council including the items associated with a potential parks and trails referendum. The discussion included page 9; trail dedication fund. Wieland stated trails can be funded outside of a referendum. There was discussion on the referendum.
Jakel stated he personally doesn't believe we are ready for a referendum for one year from now. Jakel stated the residents deserve the opportunity to vote, but we are not ready for it and he would not want to see us put something on there that does not have a good chance. Jakel stated move 2014 out to 2015 and plan on spending funds in 2014 for a 2015 or 2016 referendum.
This led to discussion on the timing of holding a referendum.
Stahmer stated the City can do all the things in the FMP with the parks and amenities, and it still doesn't put taxes through the roof. It shows that we are in a really good position as a city.
Jakel commented on it being good that Council and staff discuss the FMP and CIP and specific discussion on the items within the plan.
There was discussion on a sales tax referendum versus a tax levy referendum.
Seifert stated the Park Commission is working on a scope of services that will be brought forward to Council for approval.
Staff stated a referendum may be coming in spring 2014 for the Elk River School District. Bunting stated it more than likely will not be coming forward.
Bunting stated he agrees with Jakel; we are not ready for a 2014 referendum.
Staff directed Council's attention to page 11; IT Sinking Fund. Staff stated the items are self-funding with the $50,000 IT sinking fund without the need for additional borrowing.
IS Director Greninger addressed the Council stating the items within the IT Sinking fund are for services that affect multiple departments or across the City as a whole. Staff stated that items that are department specific are included in line item budgets.
Stahmer stated that he, Wieland and Scharber met with the County assessors to discuss 2014 values taxes payable 2015. Stahmer stated we finally received good news; the residential is looking at a 10% increase in values and commercial values are believed to stay fairly flat.
Wieland directed Council to the front page of the FMP and discussed future tax rates. Staff stated if you look at area tax rates; we are in lower half of Hennepin County cities and for cities within our area, we are at the bottom. This FMP would still keep us near the bottom.
Wieland stated at the next meeting staff would like to discuss the 2014 and 2015 equipment stating all equipment with the exception of squads would need to be discussed. Wieland stated she is looking to have that discussion on November 26th. The bond sale would be on for the December 10th meeting. Wieland stated prior to the December 10th meeting she would like to discuss the enterprise fund budgets.
Council and staff discussed whether to hold a work session prior to the November 26th meeting or to discuss the equipment during the regular meeting. The consensus is to hold work session on November 26th. Staff stated that Council will need to add calling the work session to Other Business on the regular agenda.
3. Other Business
Council adjourned the work session at 6:50 p.m.
Assistant City Administrator/Clerk