Mayor: Molly Park
Councilmembers: Mike Hovey, and JoAnne Wahlstrom.
City Treasurer: Ann Lanoue
Engineer: Don Sterna
City Clerk: Cathy Iago
Councilmember Steven Bulach arrived at 6:10 p.m. and Councilmember Cathy DeCourcy was absent.
1. CALL TO ORDER: Mayor Park opened the meeting at 6:00 p.m. for the purpose of discussing the proposed 2016
City of Sunfish Lake Budget.
2. DISCUSS CITY OF SUNFISH LAKE PROPOSED 2016 BUDGET: Mayor Park asked Treasurer Lanoue to provide an overview of the proposed 2016 budget and Tax Levy.
Treasurer Lanoue referred to the Budget Analysis document which showed the 2014 Actual Budget, the 2015 Budget to date and the proposed 2016 budget which included staff requests for the upcoming year. She explained that in order to balance the proposed 2016 budget amount of $430,023 a 7.15 percent increase would be necessary. She noted that if the levy remained unchanged the 2016 Budget would be $388,428 and the tax rate would be reduced by 2.30 percent. She stated that if the Tax Rate remained unchanged the 2016 Budget would be $398,542 and the percentage increase would be 2.35 percent.
Councilmember Bulach arrived at 6:10 p.m.
The Treasurer reviewed the Comparison of Average Home Values and Impact of Various Tax Rates information which comparted the 2015 and 2015 mean and median rates for properties within the City and explained that in order to attain the proposed 2016 balanced budget using the 2016 Mean amount would require a 5.82% increase and using the 2016 Median amount would require an 8.92% increase.
Attorney Kuntz asked if the amount necessary to balance the 2016 proposed budget would be the amount that must be levied for the increased General Fund expenditures.
Treasurer Lanoue responded yes and advised that the bond levy remains the same and would be included in the total amount levied.
The Attorney asked if the tax rate were not increased as proposed, would Council have to decrease the requested expenditures and the Treasurer responded yes. She noted that the $41,461 figure for the Bond Fund levy remains constant in each scenario shown in the budget analysis described in her report.
Councilmember Hovey asked if the balanced budget scenario included all the consultant requests for increases.
Treasurer Lanoue responded yes and advised that the consultant requests were included in her report. She noted that some requests were percentage increases for services and the largest increase was approximately $22,000 in the Engineering budget. She commented that there was little room to "juggle" the requests from staff for operating expenses. She advised the largest increase in the engineering budget was for roadway maintenance.
The Treasurer commented that the percentage increase appears to be high because the City’s total budget amount is small.
Attorney Kuntz indicated that adoption of the balanced budget amount would be the only scenario that would maintain the budget increase requests from staff since the bond payment amount cannot be changed.
Engineer Sterna explained that Council wished to move forward with the Salem Church Road street improvement project in 2017 and that was the reason for increasing his budget request to cover the cost of the feasibility study preparation for the project. He commented that the project could be pushed back one year if necessary.
Treasurer Lanoue explained that the City received a payment of $6,500 from the Small Cities Assistance Account and would receive an additional $6,500 in December that must be used for road work. She stated that the payment was presented to small cities that do not receive M.S.A. funding from the State of Minnesota, however, at this time she was unsure if the same amount would be provided in 2016. She noted that the letter received with the payment encouraged cities to utilize the funding this year.
There was discussion relating to the special assessments received from residents in 2014 and the Treasurer explained that the former City Treasurer had erroneously split the principal and interest payments into two line items and she was attempting to fix the error. She noted that the new bond issues included in the proposed 2016 budget are for the 2014 improvement projects that were completed on Windy Hill Road, Windy Hill Court and Angell Road.
Attorney Kuntz pointed out that the increase for operating expenses proposed in 2016 is only $22,000 and the remainder of the total amount would be for the bonds for the 2014 improvement project.
Treasurer Lanoue advised that if Council adopted the proposed increase in the 2016 budget it would be an approximate increase of $80 per person based on the population. She indicated that she had not calculated the increase on a per household basis.
Attorney Kuntz explained that Council must adopt a Not-To-Exceed 2016 Budget at their September meeting, however, they would retain the opportunity to reduce the budget at the Truth in Taxation meeting in December. He pointed out that Council has three options to assist with reducing the 2016 budget; 1) Use money from savings to lower the amount; 2) Use the funding from the Small Cities group for roadway maintenance to reduce the Engineering budget amount requested; or 3) Reduce the requested increases from staff for 2016.
Councilmember Bulach asked if the funding received from the Small Cities group could be used to undertake the feasibility study requested by the City Engineer.
Treasurer Lanoue responded yes and advised that the group suggested the funding be used as soon as possible. She stated that Council would have to adopt the amount of $471,484 at their September meeting if they wish to authorize the requested operating expenses as presented in the budget document this evening. She further commented that Council may reduce the amount at their December meeting, but they cannot increase the amount if a lesser number is adopted in September.
There was discussion relating to the use of the funding received from the Small Cities Assistance Account to possibly lower the 2016 budget in December.
Councilmember Wahlstrom asked if the City Engineer had a project in mind for using this funding.
Engineer Sterna explained that it could be used to prepare the feasibility study for the roadway improvement to the east half of Salem Church Road that was moved forward in the CIP.
Attorney Kuntz explained that Council would be able to explain to residents at the December public hearing that the percentage increase in the proposed 2016 Budget was due in part to the bond issue for the 2014 improvement project. He also noted that staff could work to modify the budget document prior to December if the funds from the Small Cities Assistance Account are used to reduce the Engineering budget requested for 2016.
Mayor Park asked if there was any further business for discussion and hearing no response, called for adjournment.
3. ADJOURN: Councilmember Wahlstrom moved, to adjourn the Study Meeting at 6:55 p.m., seconded by Councilmember Hovey and carried. (4-0)
Catherine Iago, City Clerk Molly Park, Mayor