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2019-09-10 Council Work Session MinutesCITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the City Council Work Session Held September 10, 2019 Pursuant to due call and notice thereof, a work session of the City Council, City of Mendota Heights, Minnesota was held at the City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Garlock called the meeting to order at 4:03 pm. Councilmembers Duggan, Miller, Paper and Petschel were also present. City staff present included Mark McNeill, City Administrator; Cheryl Jacobson, Assistant City Administrator; Kristen Schabacker, Finance Director; Ryan Ruzek, Public Works Director; and Nancy Bauer, Deputy City Clerk. DISCUSSION OF PRELIMINARY BUDGET AND LEVY Mark McNeill, City Administrator, presented a spreadsheet of recommended Budget Improvement Packages which included the costs of each improvement package. The total for the improvement packages that would be funded by the Levy is $64,725 and would be for personnel expenses. An office assistant position would be added and there is additional funding for the recycling coordinator. The recommended Budget Improvement Packages that would be funded by the General Fund Reserves totals $514,086. The recommended parks projects funded by the Special Funds totals $826,100. The Budget Improvement Packages not recommended total $408,000. Councilmember Paper asked why the 3/4 ton pickup truck that was listed for recommendation was in both the General Fund Reserves and Special Fund. Kristen Schabacker, Finance Director, responded that the truck was to replace the Public Works Superintendent's truck and would be paid for.by streets, parks, and utilities. Mr. McNeil explained that the greens mower for the Par 3 needs to be replaced and used mowers have been looked at for purchasing. Used greens mowers usually have a lot of hours on them and that is why they are being sold. Looking for a possible demo to get the cost down is also being researched. Councilmember Duggan asked for the amount in the Special Parks Funds and for fees that could be collected in 2019. Ms. Schabacker said there is about $800,000 in the Special Parks Fund now. Mr. McNeill said there is not any anticipated revenue for the Special Parks Fund unless there would be a lot split. There will be revenue once the lots in the Village are sold. Councilmember Petschel asked about an area for little dogs within the Off Leash Dog Area at Pilot Knob. Ryan Ruzek, Public Works Director, says that issue has not been discussed yet but will be soon. Councilmember Petschel says she is interested in pursuing this. Mr. McNeill stated that in order to maintain the AAA bond rating the General Fund Balance needs to be at least 75% of the General Fund expenditures. A Tax Levy Summary spreadsheet for the 2020 Budget was shown and Mr. McNeill discussed the numbers. Ms. Schabacker said bond payments for the fire station were lower in 2019, will increase in 2020 ($104,000) and stay at $620,000 for the remainder of the term of the bonds. Mr. McNeill stated that the total levy for 2020 as presented is $10,064,087. This amount includes $75,000 for a parks maintenance position that has not been filled. If the position is not filled it does decrease the 2020 total levy and would decrease the amount of maintenance done in the parks. Councilmember Duggan responded that there have been discussions that the parks employees are having trouble keeping up with the maintenance of the parks. Councilmember Petschel said the MHAA fees should fund this position. Mr. McNeill said that partial funding would come from fees being collected for field usage. Cheryl Jacobson, Assistant City Administrator, said MHAA is requesting a waiver for their tournament fees. The Council decided to remove the fees for the in-house tournaments and will submit a new invoice to MHAA for $2,325. Staff will stress this is a one-time waiver. Mayor Garlock asked if the new position would decrease the overtime for the parks maintenance personnel. Ms. Schabacker said that it should. Councilmember Paper asked if the new person would be working weekends. Ms. Jacobson said yes. Councilmember Petschel asked if there was overtime this summer. Ms. Schabacker said there was, does not have the amount and would need to look it up. Mr. Ruzek responded that summer helpers for parks maintenance were hired and they are almost done working for the summer. There are currently 10 full-time employees including the Public Works Superintendent, who is helping with some of the parks maintenance. Councilmember Paper said he is in favor of hiring a new parks maintenance worker to keep up with the parks maintenance. Councilmember Duggan said he would also support the filling of the new position. Councilmember Petschel said she supports the position, if park fees cover the costs of the position. Ms. Jacobson stated that the parks policy and fees would come back to the City Council in November to review and discuss. Mr. McNeill presented options for the 2020 Budget. September 10, 2019 Council Work Session- Budget Page 2 of 4 Option 1 is a base level budget which includes the parks maintenance worker and removes contractor and dog licenses as revenues. The impact would be a 4.54% increase ($69.82 annual increase) on a home valued at $408,407. Mr. McNeill said that Option 2 includes all of option 1, and increases the health insurance contribution to 10%. The impact would be a 5.09% increase ($78.35 annual increase) on a home valued at $408,407. Ms. Schabacker said that we received notice that the insurance rates were going to increase 13.5% this year. The city could contribute up to 5% to 10% towards the increase. Mr. McNeill said that negotiations need to happen with the four unions. Ms. Schabacker said another lower cost option is being looked at for health care coverage for employees. A new, lower priced option would be a big change for employees. Ms. Jacobson said there would need to be negotiations, by state law, if there was a reduction of employee benefits. Ms. Schabacker explained that current health insurance is purchased through a co-op right now. Unfortunately, our rates went up a lot this year. If a lower priced option is used for health insurance (PEIP), we would need to sign up for two years with a one year guarantee on the rates quoted. Option 3 includes all of the changes in option 2 and adds an office assistant. The impact would be a 5.74% increase ($88.32 annual increase) on a home valued at $408,407. Ms. Jacobson said the new office assistant position would help the Recreation Programmer which would reduce the amount of overtime that is being worked now. Councilmember Petschel asked if it would be a full-time position. Ms. Jacobson said it would be a full-time position. Ms. Schabacker said duties for the position would also help her. There is work that the part-time accounting assistant does not have time to do, such as scanning accounts payable information. When the position was filled a couple of years ago, it went from full-time to part-time. The new office assistant position would also be responsible for filling in at the front desk. Mr. McNeill explained that a way to reduce the levy would be to take money out of the Infrastructure/Facility Reserve Fund ($20,000 budgeted for 2020), and Equipment Reserve ($33,000 budgeted for 2020). The funds would be replaced in those accounts when the sale of the Village lots is completed. The sale of the lots will also help with the shortfall for the fire station expansion. Councilmember Paper asked how much is in the Equipment Reserve and what is it used for. Ms. Schabacker said it is currently close to $400,000. Councilmember Miller said it is used for big purchases such as a fire truck that will need to be replaced soon. Mr. McNeill concurred that it is used for bigger equipment purchases, and with funds available to make purchases, bonds would not need to be sold. Councilmember Petschel said she is comfortable with removing the funds for one time only and replacing the funds with the sale of the Village lots. She recapped saying the increase would be for the fire station, workers compensation, insurance contribution and adding two staff positions. September 10, 2019 Council Work Session- Budget Page 3 of 4 Ms. Schabacker said there would be a resolution on the next Council agenda to discuss and approve the preliminary 2020 budget. It is better to certify a higher amount now, because once approved, you cannot raise the levy amount, but can lower the amount levied. The 2020 final budget will be presented in December for final approval. It was the consensus to move forward with option 3 for the 2020 Budget and Levy. OTHER BUSNIESS Ms. Schabacker reported that there would be an item on the next council agenda to approve the sale of bonds for the Wesley Lane street project and the retaining wall improvements at the Village. There is also bond refunding for the 2010 and 2011 bond issues and the city will see a savings of $80,000. Mr. McNeill said another workshop should be scheduled for the discussion of: 1. Charitable gambling 2. Liquor license ordinance in regard to distance from religious establishments 3. Creating a commission for historic Pilot Knob 4. Massage licensing The Council agreed to schedule a future work session. The trail for the Wesley Lane project was discussed. Mr. Ruzek said he is trying to coordinate a meeting with the homeowners who will be impacted by the new trail. ADJOURNMENT There being no further business, Mayor Garlock adjourned the meeting at 5:18 p.m. Neil Garlock Mayor ATTES Lorri Smith, City Clerk September 10, 2019 Council Work Session- Budget Page 4 of 4