11-07-07 Worksession
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CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
November 7,2007
I CALL TO ORDER
The meeting was called to order by Mayor Goettel at 5:33 p.m.
I ROLL CALL
Members Present:
Debbie Goettel, Mayor; Sue Sandahl; Bill Kilian; Fred Wroge; and Susan
Rosenberg
Staff Present:
Steven Devich, City Manager; Bruce Palmborg, Community Development
Director; Bill Fillmore, Liquor Operations Director; Mike Eastling, Public
Works Director; Jim Topitzhofer, Recreation Services Director; Brad Sveum,
Fire Chief; Dan Scott, Public Safety Director; Chris Regis, Finance Manager;
Pam Dmytrenko, Assistant to the City Manager; and Cheryl Krumholz,
Recording Secretary
Item # I
DISCUSSION OF 2008 BUDGET AND TAX LEVY
City Manager Devich stated, at the September 11, 2007 City Council meeting, the 2008
preliminary budget and tax levy was discussed and approved. The preliminary tax levy was
established at an 8.40% increase over the 2007 adopted tax levy. As discussed at the meeting, the
2008 proposed levy was comprised of two components, the General Fund and Equipment Levy which
was 3.08% increase over the 2007 levy and the initial debt service levies for the 2007 A and 2007B
bond issues for the new maintenance facility and intersection improvements at Cedar Point, which
was a 5.32% increase over 2007.
The City Council approved the 2008 proposed levy with the request that staff review the
current 2008 General Fund budget with the goal to reduce the proposed levy increase as much as is
practicable.
Accordingly, staff has reviewed the budgets of each General Fund department and has
developed reductions to the budget that total $107,880 that minimize impacts on the provision of
services. In conjunction with these recommended reductions, staff is also recommending using
$250,000 of the 2007 Local Government Aid (LGA) reserve. The combination of these two actions
would have the effect to reduce the proposed 2008 Tax Levy to a 5.38% increase over the 2007 levy.
City Manager Devich said the City Council could postpone or reduce the current debt service
levy but there could be a potential new City Hall bond and the need for some public assistance for
development of the west side of 17th Avenue. which will impact the future tax levy.
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November 7,2007
Department Directors explained their proposed budget reductions.
City Manager Devich stated that he is always considering the reduction of City costs. He
reviewed the proposed 2008 salary increase for employees, which is based on the Stanton Group V
cities. Budget reductions may result in elimination of some positions. Progress has been made in
the property maintenance inspection program and could be maintained with the proposed reduction of
CSO hours.
Mayor Goettel asked about the amount of the current LGA reserve.
City Manager Devich stated the reserve is currently $684,000.
Council Member Sandahl asked about the tax levy impact with a bond for the new City Hall.
City Manager Devich explained the City Hall cost impacts on the levy. He added that Richfield
has not had a debt levy for a long time and each time one is put on, impacts the tax levy. Local
Government Aid allocations remain unknown and the economy is uncertain.
Council Member Kilian stated that if a portion of the LGA reserve is used this year, it's not
there next year. He said using the reserve is not paying for a decision on the capital projects.
Council Member Kilian continued that he didn't want to reduce CSO hours because of
additional issues needing to addressed.
City Manager Devich stated thatthe budget may be getting to a point that basic services may
need to be trimmed.
Council Member Kilian stated he had no problem with the originally proposed budget. The
reductions presented by the Departments are taking from one pocket to put in another, temporarily.
Council Member Wroge said he believed it was a mis-use of time at the first Worksession
because that's when the budget should be reviewed from start to finish. He thanked the City
Manager for the budget reduction ideas. He continued that it was a mistake not to think about the
impact on the tax levy last year..
Council Member Wroge said he supported the new maintenance facility and new City Hall but
they should have been done a long time ago but he was not on the City Council then and now the
projects cost more.
Mayor Goettel thanked staff for their budget reduction ideas. She said Richfield has many
seniors and families on fixed incomes so there should try to be a steady increase at a lower level.
She added she was looking for a 5-6% increase so she was satisfied with the 5.38%.
Council Member Sandahl that the general fund increase is 3.08%. Last year was unusual
because of the unexpected LGA allocation. She said she was reluctant to dip into the LGA reserves
and thought the original budget proposal was a good one. She did not support reducing the CSO
hours and human services funding.
Council Member Sandahl said all the City Council approved the bonds for these major
improvements and now they need to be paid. She added that staff works hard to save money
throughout the year and she appreciated the multiple ways to save.
Council Member Rosenberg stated she agreed with Council Members Kilian and Sandahl in
supporting the original proposed budget. She did not support reducing human services funding and
the other proposed reduction this evening were very minimal. All the City Council voted for the
maintenance facility and intersection improvements.
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November 7,2007
Council Member Rosenberg continued that the new City Hall would require some hard
thinking from her because she wasn't sure she wants that much debt again. She said she did not
support dipping into the LGA reserve because it's a type of insurance policy.
Council Member Rosenberg stated the City Council has always been frugal with the budget
and to say otherwise is a misrepresentation.
Council Member Wroge said sitting on the LGA reserve was not using money that belongs to
the taxpayers.
Council Member Sandahl suggested the interest earned on the LGA reserve could be used for
the new City Hall so there doesn't need to be a bond for the entire amount. She added that the City
is required by State Statute to have a balanced budget. Also, the City needs to maintain a good
financial bond rating.
City Manager Devich suggested that streamlining of services and increased productivity could
be discussed at the annual City Council/City staff goalsetting.
Council Member Sandahl asked about sales at the Cedar Liquor Store.
Liquor Operations Director Fillmore discussed the increased sales from last year generated by
the opening of Cedar Point. He said that the space for parking in the store's lot needs to be
addressed especially with the approaching holiday season..
I ADJOURNMENT
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che~mholz ~
Recording Secretary
The meeting was adjourned by unanimous conse
Date Approved: NovemhPT 17, 2007