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2015-09-01 Council Workshop - BudgetCITY OF MENDOTA HEIGHTS ,. CITY COUNCIL WORKSHOP AGENDA September 1, 2015 — 5:00 pm Mendota Heights City Hall 1. Call to Order 2. Roll Call 3. 2016 Budget Review a. Review of 8/18 Workshop Discussion b. Fire Relief Association Presentation c. Fire Chief PERA Request d. Review of Improvement Packages e. Levy Discussion and Recommendation f. Other 4. Adjourn CITY OF MENDOTA HEIGHTS page 2 1101 Victoria Curve I Mendota Heights, MN 55118 651.452.1850 phone 1 651.452.8940 fax www.mendota-heights.com DATE: September 1, 2015 TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: FYI Budget Discussion COMMENT: INTRODUCTION At the September 1 Budget Workshop, you will hear a summary of information from the previous workshop, as well as requests from the Fire Relief Association, and Fire Chief John Maczko. Following that, it is my intent to review with you the Improvement Packages from the previous meeting, and determine which of those you want to include in the Preliminary budget which will need to be certified at the September 15th City Council meeting. NEW DISCUSSION ITEMS; Fire Relief Association: Tom Mattaini will be representing the Mendota Heights Fire Relief Association. Their request and rationale are attached (pp. 8-9). For background, the recent years of City contributions to the Relief Association are as follows (on a per fire fighter cost): 2012--$1972 2013--$2000 2914--$2000 2015--$2500 John Maczko Pension Request: John Maczko will present his reasons as to why the City should have placed him in the Police and Fire Pension when he was hired as Fire Chief in the mid 1980's, as opposed to the Coordinated Plan, into which the City has been paying since that time. The difference will make a significant difference in his monthly PERA benefit once he retires as Fire Chief, currently planned for next year, However, to make the change now will require special legislation by the State, and a determination as to how a $95,000 buy -in (early 2015 price) will be funded. page 3 August 26th Budget Workshop Follow-up See the attached memo (pp.5-7) with follow-up information which was requested by the City Council at the last meeting. The financial changes as a result of that discussion: • $10,000 additional for an Ehlers Long Term Financial Study. Staff recommends that that be funded in 2015, due to better than anticipated revenues. • Net increase of either $9000, or $30,000 for equipment notes for a PW Dump Truck Other Possible Revenue Increases/ Expenditure Decreases: • The State of Minnesota has annually provided refunds of between 30% and 40% of premiums paid by Cities for the health insurance of peace officers or dependents thereof, who are killed or disabled on the job. Potentially, this could mean the receipt of a payment of $10,500 in 2016. However, while those payments have been made in the past, State funding is not assured, and so it is not included in next year's budget • Since the August 18th workshop, staff has looked again at revenues, and have adjusted those to more accurately reflect what we think will be generated in 2016. • The 4330 line item includes a $2000 increase for Rogers Lake weed control. $1500 has been what the City has typically provided to provide for aquatic herbicides for Roger's Lake. The HOA there has requested that be increased to $3500 so as to treat a larger area of the lake, and that is what is included in the proposed budget. However, that may not be approved by the DNR, and the City wants to be careful to not impact the improving water quality of the lake. • Employee Tuition --$9000 in possible savings by reducing the cap is still in the budget Improvements Packages At the August 181h workshop, the Council heard 25 different options for spending. At the September 1 st meeting, Council should indicate which of those to include. Those are summarized in an attachment (pp.10-11). Levy/Property Tax Increase Impacts For each $70,000 of modofication, the levy is increased or decreased by approximately 1 % Depending on what is determined for the Relief Association and Fire Chief PERA issue (nothing is factored into the budget currently), the preliminary levy is $7,409,595, or a levy increase of 5.85% more than the 2015 figures (p. 12). The tax rate (including the referendum) will increase from 34.964, to 35.081, or .33 (pp. 16-17). The impacts on four differently valued home is shown on page 17, and the details of the City's revenues and expenditures are shown on the attached pages 13-15. page 4 Note that the employee tuition and Roger's Lake numbers are still included in the 2016 preliminary budget. Regarding staffing, this budget also includes the reduction of the police officer which had been added for 2015. ACTION REOUIRED: The City Council should review and discuss, and, if ready, direct staff to prepare a preliminary levy and budget for action to be taken at the September 15th City Council meeting. If further deliberation is needed, Council should call for an additional budget workshop, which could be held on September 8th Mark McNeill City Administrator page 5 Follow-up from 8-18-15 City Council Budget Workshop Highlighted items will be discussed at the 9/1 Workshop. After discussion by Council, no Improvements Packages had changes from recommendations, other than the following: #4 Interest in funding $4,000 for laserfiche scanning help --$2k from election equipment, and $2k from elsewhere The amount of funding for election equipment was reduced by $2000; the same amount was removed from the Administration Contingency. #7 Find better costs estimate for Comp Plan study for Years 2/3 $5000 is still the applicable figure to include in FY 2016. The $30,000 and $15,000 figure for the two following years will be adjusted as appropriate, but they look to be accurate for now. #20 Look for donations to fund AED's #21 Approach City of Sunfish Lake for contribution on Portable Pump #23 Possible Dump truck funding through equipment notes Mayor/City Council • Move $60,000 contingency from Mayor/Council to Administration Done • Need explanation of tuition cap See attached memo from Tammy Schutta • What is tax impact on a $225,000 home? Included in Finance Directors Information • Consensus to have City retain Health Insurance Premium To be negotiated; is still included in the proposed 2016 budget. • Workshop needed on revenues—Fiscal Disparities, conduit bond financing, park dedication fees, utility franchise fee, etc. If the Council Is interested in doing this (and I would recommend that it be done as a "Financial Futures" workshop), one of the costs to do this would be a long term financial study by Ehlers. The quote to do this provided to the City is $10,000, which should be available in the 2015 budget year, due to better - than -anticipated revenue collections. Administration, including HR, Finance, City Clerk • Par 3 and rec budget approved as submitted IT page 6 • Council wants big picture/longer term review of IT • Look for extra help options for IT other than PT employee Planning/Recycling • Get word out in advance of future clean-up days that construction materials will not be accepted, or accepted in only limited quantities Public Works/ Parks/ Engineering/Building Official • What is the City receiving in exchange for the contribution to Henry Sibley HS field maintenance? The City Attorney and I have reviewed the 1991 agreement. There are no provisions for an "opt out" until 2030. As I understand it, the purpose of the agreement was to provide playing space for Mendota Heights youth and adult athletic groups, but also organized sports of ISD 197, and the District's youth and adult leagues. The advantage is that the City is that it didn't have to construct these facilities itself. • What is the City receiving in exchange for MHAA annual contribution? See answer above. • Look at what it would cost to issue equipment certificates for replacement dump truck, instead of quick release for plow The City's financial adviser Ehlers indicates that it would be the most cost effective to roll $200,000 of equipment notes in with the sale of bonds for street reconstruction, and a couple of bond refinancings which will be possible. If it is done on a 5 year term, the annual debt retirement expense will be $45,000; if it is done on a 10 year term, the annual principal and interest amount will be $24,000. If the truck is able to be purchased in 2016, Public Works would not request the $15,000 for a quick release fitting. The net addition for the budget would therefore be either $9000, or $30,000. • Need to determine long term funding source of equipment replacement funding. Options will be presented during the City's "Financial Futures" workshop. Police • Mayor wants more comprehensive look at police Dept. Fire page 7 1101 Victoria Curve I Mendota Heights, MN 55118 651.452.1850 phone 1 651.452.8940 fax www.mendota-hei ghts.com mCITY OF MENDOTA HEIGHTS DATE: September 1, 2015 TO: Mayor, City Council and City Administrator FROM: Tamara Schutta, Assistant to the City Administrator/HR Coordinator SUBJECT: Tuition Reimbursement Policy BACKGROUND In 1985, the City Council passed Resolution 85-107 adopting the personnel code. The purpose of the code is to establish a uniform and equitable system of municipal personnel administration for all employees of the city of Mendota Heights. Included in the personnel code is Section 23, Education Incentive — Tuition Refund. During the 2012 budget discussions in August 2011, the City Council asked staff to review the Educational Incentive — Tuition Refund policy. Per City Council direction in 2012, the tuition reimbursement policy was amended with an effective date of January 1, 2013. Changes to the policy included the following: Employees may be eligible for reimbursement up to $5,250 maximum per calendar year. For budgeting purposes, employees must submit a Tuition Reimbursement Application Approval Form to their department head during the budget cycle in the year preceding the year in which the employee seeks tuition reimbursement for. An employee who receives tuition reimbursement under this program and who later leaves employment within two (2) years must repay the City 100% of the amount the City reimbursed the employee for all tuition, books and fees related to the course(s). The objective of the Tuition Refund policy is to encourage employees to continue to improve their skills and knowledge as an investment in quality performance for the mutual benefit of the employee and the city. Employer provided education assistance benefits are an important part of the city's benefits program. It helps attract, develop and retain employees. Even more importantly it's an investment in our employees. Staff recently conducted a survey of metro cities that provide tuition reimbursement to their employees. The average tuition reimbursement is $2,500 to $3,000. The City's Labor Attorney did review the current policy and determined the City Council could consider funding a lower amount for employees. City Council could also consider funding the 2016 requests as submitted and direct staff to amend the Tuition Reimbursement policy setting a new tuition reimbursement maximum for 2017. BUDGETIMPACT Five employees submitted Tuition Reimbursement Applications for 2016. Total amount requested is $24,000. RECOMMENDATION For informational purposes. page 8 Mark McNeill Subject: FW: Budget/City Contribution Attachments: City Cont 2013.pdf From: Tom Mattaini Sent: Thursday, August 20, 2015 12:17 PM To: Mark McNeill <markm@mendota-heights.com> Cc: John Boland Subject: Budget/City Contribution We have been meeting with the city council and the city administrator for the past several years to discuss the issue of our lagging city contribution for our defined contribution plan. Last year, the city council agreed to increase the contribution to $2,500 per member. Even with the increase to $2,500.00, we are still lagging far behind our peers and it appears that the gap is getting even larger. Last year Justin requested that we compile an analysis of specific cities that have a plan that is similar to Mendota Heights. I have updated that information, added the city of Eagan and have attached it for your review. The information is from the most recent State Auditor report and the data is from year end of December 31,2012. The data on the attachment will show that the Mendota Heights City Contribution in 2013 was $1,839.00 and the total contribution, (including state aid) was $3,555.89 per firefighter. This ranks us well below the average of $3,591 for municipal contribution and $7,307.80 of Total contribution per member. If we apply our 2015 planned city contribution of $2,500 per firefighter to the data back in 2013 we are still significantly behind the averages. Please review the information and let me know if you are open to another meeting with John and I. Thank You, Tom page 9 31 -Dec -13 Chaska > 36 134,758 229,754 6,382 364,512.00 10,125.33 1 Roseville;i 41 299,012 .89,211 2,176 388,223.00 9,468.85 2 Savage. , 36 146,517 184,514 5,125 331,031.00 9,195.31 3 :ppple Valley 66 259,396 303,591 4,600 562,987 8,530 4 -Eagan 96 370,429 297,339 ,097 667 768 00 ... 6,9.55.92. 5 Mendota Height 37 _r 63;534 68,034 .3 1839';1 13156&00: Wayzata . 27 44,727 45,000 1,667 89,727.00 3,323.22 7 `Tota] 339;; 1 217,443 24 886 2 535;816 51 15S `Average.:; .... ... 24 214r 86 960 21........ page 10 FY 2016 Improvement Packages Planning 7. Begin Comprehensive Planning Process 5000 5000 8. Code Amendment study for non-residential 5000 -0- uses in R -zone Information Technology 9. Laserfiche Technical Service Support & 7000 2000 Training 10. Additional PT IT Staff position 38651 15000 Note: Assumes FT Status of Current Employee to PT 11. New City Hall Telephone System 40,000 -0- Note: $25,000 recommended to come from Cable Fund General Fund Administration Requested Recommended 1. Job Evaluation System Redesign and $15,000 -0- Compensation Study Update 2. Color Copier Lease 5342 5342 3. Pilot Knob Area Restoration 2075 -0- 4. Laserfiche Scanning PT position 9360 4000 5. City Hall Smoke Detectors/Security Improvements 20,000 10000 6. City Hall Cellular Telephone Amplifier 16670 6000 Planning 7. Begin Comprehensive Planning Process 5000 5000 8. Code Amendment study for non-residential 5000 -0- uses in R -zone Information Technology 9. Laserfiche Technical Service Support & 7000 2000 Training 10. Additional PT IT Staff position 38651 15000 Note: Assumes FT Status of Current Employee to PT 11. New City Hall Telephone System 40,000 -0- Note: $25,000 recommended to come from Cable Fund page 11 12. Server Room Dry Fire Suppression 17000 -0- Note: Critical, recommended for 2015 expenditure 13. Fire Technology Needs Assessment 35000 15000 Police 14. Additional Captain Position 164,800 -0- 15. Firearms replacement 23000 23000 16. Personal Protective Equipment 15139 -0- Note: Fund through Civil Defense Fund in FY15 17. Purchase of Reserve Squad 12185 12185 18. Taser Replacement 20900 16500 19. Replacement of Investigator Vehicle 38500 -0- 20. Replacement AEDs 10500 -0- Fire 21. Portable Pump 7000 -0- 22. Aerial Truck Repairs 10000 10000 Public Works 23. 2.5 Ton Dump Truck/Snow Plow 200,000 24000 24. Turf Truckster 23000 23000 25. Quick Connect 15000 -0-* *Assumes Equipment Certificate Funding of Dump Truck TAX LEVY SUMMARY page 12 CITY OF MENDOTA HEIGHTS 2016 BUDGET TAX LEVY SUMMARY 2015 2016 % CHANGE GENERAL FUND $5,711,992 $6,022,954 5.44% EMERGENCY PREPAREDNESS $25,000 $25,000 0.00% FIRE RELIEF $90,000 $90,000 0.00% INFRASTRUCTURE/FACILITY RESERVE $20,000 $20,000 0.00% EQUIPMENT RESERVE $20,000 $20,000 0.00% LEGAL AND CONTINGENCY $40,000 $40,000 0.00% GENERAL FUND LEVY $5,906,992 $6,217,964 5.26% IMPROVEMENT BONDS $737,029 $828,509 12.41% EQUIPMENT CERTIFICATES $55,066 $53,765 -2.36% EQUIPMENT CERTIFICATES - DUMP TRUC $0 $24,000 100.00% TOTAL SPECIAL LEVY $792,095 $906,274 14.41% MARKET VALUE REFERENDUM LEVY $267,887 $265,367 -0.94% STREETLIGHT TAXING DISTRICT $33,000 $20,000 -39.39% TOTAL TAX LEVY $6,999,974 $7,409,695 6.85% CITY OF MENDOTA HEIGHTS 2016 PRELIMINARY BUDGET GENERAL FUND EXPENDITURE SUMMARY page 13 GENERAL FUND FUND 01 DEPARTMENT 2013 ACTUAL 2014 ACTUAL 2015 BUDGET 2016 PRELIMINARY % CHANGE CITY COUNCIL $33,275 $34,277 $33,796 $34,315 1.54% ADMINISTRATION $808,656 $851,456 $956,626 $1,064,110 11.24% ELECTIONS $28,692 $52,932 $41,088 $71,572 74.19% IT $131,216 $157,854 $138,437 $178,171 28.70% POLICE $2,97300 $2,973,890 $3,337,183 $3,446,595 3.28% FIRE $399,204 $1,013,549 $474,615 $468,625 -1.26% BUILDING OFFICIAL $158,532 $130,852 $133,050 $149,455 12.33% PUBLIC WORKS -STREETS $1,421,938 $1,206,889 $981,232 $1,021,778 4.13% PUBLIC WORKS -PARKS $682,910 $725,979 $761,395 $758,157 -0.43% RECREATION $45,656 $56,559 $46,700 $48,400 3.64% PLANNING $96,321 $118,141 $122,231 $131,462 7.55% RECYCLING $25,028 $23,257 $24,370 $27,804 14.09% ANIMAL CONTROL $5,914 $4,862 $8,000 $9,000 12.50% TOTAL GENERAL FUND $6,811,231 $7,350,497 $7,058,723 $7,409,444 4.97% GENERAL FUND CONTINGENCY $65,872 $11,149 $40,000 $40,000 0.00% CITY OF MENDOTA HEIGHTS 2016 PRELIMINARY BUDGET GENERAL FUND REVENUE SUMMARY page 14 GENERAL FUND FUND 01 REVENUE SOURCE 2014 ACTUAL 2014 BUDGET 2015 BUDGET 2016 BUDGET % CHANGE TAXES CURRENTTAXLEVY $5,379,652 $5,454,959 $5,711,992 $6,022,954 5.44% LICENSES AND PERMITS CIGARETTE LICENSES $0 $600 $600 $600 0.00% RUBBISH LICENSES $1,415 $1,400 $1,400 $1,400 0.00% DOG LICENSES $1,115 $750 $800 $1,000 25.00% CONTRACTOR LICENSES $16,550 $17,000 $17,000 $17,000 0.00% LIQUOR LICENSES $31,363 $21,000 $21,000 $28,500 35.71% BUILDING PERMITS $336,441 $135,000 $180,000 $225,000 25.00% HEATING PERMITS $27,701 $25,000 $30,000 $32,000 6.67% PLUMBING PERMITS $11,171 $5,000 $7,000 $8,000 14.29% WATER PERMITS $60 $50 $50 $50 0.00% RIGHT OF WAY PERMITS $11,161 $5,000 $6,500 $10,000 53.85% MASSAGE PERMITS $2,096 $1,800 $2,000 $2,000 0.00% RENTAL LICENSES $4,425 $1,000 $3,500 $4,000 14.29% TOTAL LICENSES AND PERMITS $443,497 $213,600 $269,850 $329,550 22.12% FINES AND FORFEITS COURT FINES $57,234 $70,000 $68,000 $65,000 -4.41% FALSE ALARMS FINES $737 $3,500 $3,500 $3,000 -14.29% DOG IMPOUNDING $1,100 $1,000 $1,000 $1,000 0.00% TOTAL FINES AND FORFEITS $59,071 $74,500 $72,500 $69,000 -4.83% CHARGES FOR SERVICES ACCIDENT REPORTS $0 $0 $0 $0 0.00% RECREATION PROGRAMS $40,043 $29,000 $32,000 $38,000 18.75% PARK USE FEES $4,113 $7,000 $7,000 $5,000 -28.57% SOFTBALL LEAGUES $10,684 $11,000 $11,000 $11,000 0.00% MAPS AND ORDINANCES $29 $0 $0 $0 0.00% SURCHARGES $34 $0 $0 $0 0.00% PLANNING FEES $11,406 $6,500 $6,500 $10,000 53.85% FIRE CONTRACTS $85,217 $83,877 $101,067 $107,000 5.87% FIRE PERMITS $0 $0 $0 LILYDALE POLICING $223,512 $226,545 $229,883 $231,500 0.70% MENDOTA POLICING $67,356 $65,514 $73,861 $74,500 0.87% POLICE SECURITY (OFF DUTY OT) $11,313 $18,000 $18,000 $18,000 0.00% FIRE CALLS $0 $0 $0 $0 0.00% STREET MAINT. CHARGES $1,250 $1,000 $1,000 $1,000 0.00% ASSESSMENT SEARCHES/SPLITS $60 $0 $0 $0 0.00% STREET CHARGES $0 $0 $0 $0 0.00% FILING FEES $40 $20 $0 $20 100.00% LEASE MAINTENANCE CHARGES $2,257 $3,500 $3,500 $3,000 -14.29% TOTAL CHARGES FOR SERVICES $457,314 $451,956 $483,811 $499,020 1 3.14% CITY OF MENDOTA HEIGHTS 2016 PRELIMINARY BUDGET GENERAL FUND REVENUE SUMMARY page 15 CITY OF MENDOTA HEIGHTS 2016 PRELIMINARY BUDGET INTERGOVERNMENTAL MSA MAINTENANCE $137,287 $128,000 $130,000 $136,000 4.62% POLICE STATE AID $129,472 $110,000 $115,000 $118,000 2.61% SCHOOL RESOURCES OFFICER $99,303 $95,000 $97,000 $99,000 2.06% FEDERAL AND STATE GRANTS $15,987 $6,000 $6,000 $6,000 0.00% DAKOTA COUNTY GRANT $656 $10,000 $10,000 $10,000 0.00% PERA AID $9,073 $9,070 $9,070 $9,070 0.00% TOTAL INTERGOVERNMENTAL $391,777 $358,070 $367,070 $378,070 3.00% MISCELLANEOUS REVENUE SUNDRY REVENUE $27,936 $5,000 $5,000 $5,000 0.00% GRAVEL TAX $100 $0 $0 $100 100.00% DONATIONS $20,706 $0 $0 $0 0.00% INTEREST $115,322 $35,000 $35,000 $35,000 0.00% TOTAL MISCELLANEOUS $164,064 $40,000 $40,000 $40,100 0.25% DAKOTA COUNTY WASTE MANAGEMENT $15,000 $14,000 $14,000 $15,000 7.14% TOTAL DAKOTA COUNTY $15,000 $14,000 $14,000 $15,000 7.14% OTHER REVENUE UNAPPROPRIATED FUND TRANSFEF $109,500 $109,500 $99,500 $55,750 -43.97% TOTAL OTHER REVENUE $109,500 $109,500 $99,500 $55,750 -43.97% TOTAL GENERAL FUND REVENUE $7,019,876 $6,716,585 $7,058,723 $7,409,444 4.97% CITY OF MENDOTA HEIGHTS 2016 PRELIMINARY BUDGET page 16 WfMoTATMr-MITITSUMN - I Net Tax Capacity Pay 2015 Pay 2016 Actual Preliminary Tax Capacity Value 20,953,527 22,036,694 5.17% Fiscal disparaties Contribution (2,554,386) (2,494,377) -2.35% Net Tax Capacity 18,399,141 19,642,317 6.21% Tax Capacity Rate Estimate Tax levy 6,699,087 7,124,228 6.35% Fiscal disparities (268,921) (268,609) -0.12% Net tax levy 6,430,166 6,855,619 6.62% Net Tax Capacity 18,399,141 19,542,317 6.21% Tax Capacity Rate 0.34964 0.33% page 17 O (0 (0 LO 'IT lC C%j C\l cq CN L6 6 ui L6 0 C.0 LO 04 C) 0 C) C� M CD 69. 69. 69 - x m F-- 'IT LO O I- CD CNI N L6 L6 O cli N L 00 co U')O C) C4 69- 0 64 E LO LO CD CD m Lq C� rl- CD O CY) 63 6c3 69 - CM ell EE :3 = 70 _0 c C: x ce) co 0 (0 2 2 Fes - 6 'i U5 CC) to U') O IN (0 64 69- 613- 61D. 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