- DRAFT -
SUNFISH LAKE SPECIAL COUNCIL BUDGET STUDY MEETING
AUGUST 3, 2021
5:30 P.M. – ONLINE MEETING
Attendants:
Mayor: Dan O’Leary
Councilmembers: Mike Hovey, JoAnne Wahlstrom, Steven Bulach, and Shari Hansen.
City Treasurer: Ann Lanoue
Attorney: Tim Kuntz
Engineer: Jeff Sandberg
Planner: Tom Ramler-Olson
City Clerk: Cathy Iago
1. CALL TO ORDER: Mayor O’Leary opened the meeting at 5:30 p.m. for the purpose of discussing the proposed 2022
City of Sunfish Lake Budget and Tax Levy.
2. DISCUSS CITY OF SUNFISH LAKE PROPOSED 2022 BUDGET: Mayor O’Leary asked Treasurer Lanoue to provide an overview of the proposed 2022 Budget and Tax Levy.
Treasurer Lanoue reviewed the following requests from staff:
City Clerk – Requested $2,000 for the 2022 Elections, $500 for the Minnesota Clerks & Finance Officers (MCFOA) conference, and $35 for the International Institute of Municipal Clerks (IIMC) annual dues.
City Attorney – Requested $36,500 which is a decrease of $2,000 from 2021
City Planner – Requested $43,400, $36,000 for planning services and $7,400 for additional zoning
ordinance amendment work
Police Department – Requested $107,311 which is a 1% increase from 2021
Fire Department – Preliminary figures show a request of $65,140 for the fire department and an increase of $5,622 for a total of $70,762 Treasurer Lanoue explained that the Fire Department budget included requests for some capital items which have had not yet been approved by the Mendota Heights City Council and also some construction items. She stated that she should have an exact amount from the Fire Department prior to the September meeting. She advised that Mendota Heights Fire Department uses a formula based on the number of calls to each of the four (4) cities that they provide service when calculating these figures.
City Engineer – Requested $146,000
Engineer Sandberg referred to his memorandum dated July 26,2021 and reviewed the proposed engineering budget requests for 2022:
Engineering services monthly and administrative costs for water permits - $44,790 – He explained this amount is a 3% increase over last years budget. He stated that Council determined the permit fees for lake pumping permits should be waived and that he included $2,500 in the engineer’s budget to cover the administrative costs to issue the permits.
Water Quality Monitoring and Lake Maintenance $6,140
General Street Maintenance $13,600 – Engineer Sandberg explained that the City would be in the second year of a three-year contract for snow plowing services and that street sweeping was included in the contract costs; therefore, there would be no charge for street sweeping in 2022
Snow Removal – Inver Grove Heights: $3,000 Treasurer Lanoue explained that there has been an agreement for sharing the cost of snowplowing a border street between Sunfish Lake and Inver Grove Heights for a number of years. She stated that the City of Inver Grove Heights has never sent a bill for plowing, however, she has always left the funds in the budget in the event a bill is received in the future.
Snow Removal – City Streets: $39,000
Funding from CIP for 2022 Projects: $146,000 Engineer Sandberg explained that staff recently completed the Pavement Management Inventory of all the city streets. He noted that the proposed CIP projects for 2022 would not be assessable to property owners and would be paid by the City. He advised that this type treatment with a pavement sealing is done every 5-7 years to maintain the city roads.
Mayor O’Leary asked what amount was spent last year for this purpose.
Engineer Sandberg stated it was most likely higher as it would have included the four (4) road projects proposed for this year that are 80% assessable. He stated that the roads proposed for treatment in 2022 include the west end of Salem Church Road, Acorn Drive, Roanoke Road and Angell Road west. He explained that the costs for this treatment would be reduced in 2023 to approximately $101,660. He advised that Council has the option to adjust the costs by removing one or two of the roads and delaying the treatment for a year or two, however, in his opinion, it would not be ideal to delay the road treatments if funds are available.
Mayor O’Leary noted that there are no funds listed for this purpose in 2024, 2025 or 2026 but then this would appear again in 2029, 2030 and 2031. He asked the Treasurer if the city could absorb those larger expenditures if necessary. He also asked if the city could add money could be added to the reserve funds to be used for future road maintenance. He commented that it would be prudent to stay on the CIP schedule.
Treasurer Lanoue stated that the city has reserve funds that could be used for this purpose and also that the city may add funds to the reserves for future years.
Engineer Sandberg pointed out that the monies spent now would extend the life of the roads. He explained that when staff completes the Pavement Management Inventory, a number is assigned to the condition of the roads. He explained that the last time the inventory was done, the condition of the roads was given a ranking of 80, and, if the four (4) roads listed receive maintenance this year, it was his opinion that the ranking would increase to 89. He commented that it is important to show forward movement with the road maintenance number.
Planner Ramler-Olson stated he was unable to display his requests on-screen at this time. He offered to email his list to Council and staff so they could view his report. He stated that the request included $36,000 for the Planner and an additional $7,400 for work on the Zoning Ordinance amendments. He reviewed the status of the proposed Zoning Ordinance amendments and the approximate amount of time it would take to complete the review of the amendments. The document also listed the hourly rates for the Planner and the Assistant Planning Staff. He noted that the Water Extraction and Shoreland Alteration ordinance reviews are listed as 0% complete since they have not been analyzed, only discussed. He advised that the Sign, Building Height, Submittal Requirements, and Accessory Building regulations are approximately 75 percent complete since previous staff completed research and draft language on these items. He stated that he was unsure if there had been a first reading on these items and that he could amend the figures if necessary. He advised that the estimated costs for work on these additional items would be $3,300 for the Planner and $4,000 for the Assistant Planning Staff for a total of approximately $7,400.
Mayor O’Leary stated that some of the current zoning ordinances appear to be contradictory with other ordinance and may require additional research. He recommended that the Planner’s portion of the budget, $43,400, be increased by 15% to include an additional $6,510 to allow staff to work on a review of the current zoning ordinances. He noted that he had discussions with a member of the Mendota Heights City Council who expressed the same concerns regarding contradictory regulations in their ordinances and was also working on a review of their regulations. He asked if Council would agree to the 15% increase for the Planning Budget to accommodate the review of the City Zoning Ordinance.
Councilmembers concurred to include a 15% increase in the Planner’s budget.
Treasurer Lanoue stated she would insert the percentage increase amount into the preliminary budget for Council review and formal action at their September meeting.
The Treasurer referred to page 3 explained that the Taxable Market Value and Tax Capacity both increased by over 9% and that the Tax Capacity was due to $6.2 million in new construction added to the tax roll. She noted that it is always good to have an increase in these areas. She referred to page 1 of her budget documents and stated that on the revenue side, everything is basically the same as last year. She noted there was a slight increase in the tax levy for debt service and that city is currently balanced well.
Attorney Kuntz explained that there was a tax Levy schedule that Ehlers provided with the bond resolution that showed a tax collect year of 2022 with net levy in 2021 at $27,543.99. He suggested that this number be confirmed with Todd Hagen from Ehlers for inclusion in the proposed bond resolution to be discussed at the regular Council meeting later this evening.
Treasurer Lanoue agreed she would to verify the dollar amount to be included in the proposed budget and bond resolution for adoption by Council at the later meeting. She explained that the bond sale would increase the debt levy by approximately $27,000 and an additional $5,000. She stated that dollar amount may be reduced if some residents pre-pay special assessments this year.
Treasurer Lanoue reviewed the following Expenditure items for inclusion in the preliminary 2022 Budget and Tax Levy:
Council Expenses: $400 For training miscellaneous items
Mayor: $878 For seminars or training.
Salaries for Clerk, Administrator, Treasurer and Forester: Added 3% increase which was the same as last year. This amount may
be adjusted by Council.
Attorney: $36,500 - Decrease $2000 from 2021
Planner: $43,400 - $36,000 Planner plus an addition $6,500 (15% increase) and additional $7,400 for Ordinance Review
Police: $107,311 – 1% increase from 2021
Fire: Preliminary amount $70,762 – Increase of $5,622 from 2021 or an increase of 17% This may change, however, it is wise to
leave it at the higher rate at this time until the final amount is received.
Building Inspector: Receives 80% of the permit income and all of the monies from plan check fees.
Engineer: Engineer $44,790, Water Monitoring/Lake Maintenance $6,100, General Street Maintenance $13,600, Funding from
CIP for 2022 Projects $146,000, Snow Removal Inver Grove Heights $3,000, Snow Removal City Streets $39,000
Forester: 3% Salary increase
Deer Management Program: No Change
League of Minnesota Cities/Workers’ Comp Insurance: $2600
Memberships: No change
Rent: Decreased $4,200 No fee for use of First Calvary Baptist Church
Office Supplies: No change
Surcharges: No change
City Website: $4,000 for costs of Website Manager and Consultant
Miscellaneous: $500
The Treasurer offered to respond to questions.
Councilmember Hovey asked if the total proposed 2022 budget estimate of $839,000 would now increase to approximately $870,00 with the proposed increases in expenditures that were discussed; he commented that he rounded up the amounts.
Treasurer Lanoue responded yes and she referred Council to the options shown at the bottom of page 2 in her report. She explained that the amounts shown under the headings 2022 Bulget Balance and Levy $ Unchanged do not include the additional do not show the increases discussed this evening. She noted that if the tax levy dollar remains the same it would reduce the amount by 9%; she commented that all options show a reduction in the tax rate. She stated she would prepare information for Council to review at the September meeting.
Councilmember Hovey asked if it made sense to increase the budget slightly and pay more to the bond debt.
Treasurer Lanoue stated the increase in funds would have to be placed in general reserves since the City cannot pay extra to the bond issue. She explained there would be a “refunding” process to follow with fees and that may be end up costing the city additional funds.
There was discussion regarding the amount the City has in reserve funds and what is an acceptable amount to retain in reserve.
Councilmember Hovey asked if there was any advantage to pay the bonds early.
Treasurer Lanoue explained that Ehlers has a schedule for bond payment and would advise Council if it would be advantageous to pay off the debt early. She stated she wasn’t aware of any early payments that would be due at this time.
Mayor O’Leary asked if it would be wise to place some additional funds into the reserve this year.
The Treasurer offered to prepare some scenarios with various percentages or with dollar amounts to add to the general fund reserves and email the information to Council.
Councilmember Bulach questioned what amount is currently in the reserve funds and noted that he does not recall the City using any of the reserve funds since he has been in office.
Treasurer Lanoue stated the City has over $1 million dollars in reservices and she explained that there has not been a reason to use the funds.
Councilmember Hovey that the City Budget is around $900,000 annually and there is approximately $1 million in reserve funds.
Treasurer Lanoue advised that there is enough in reserve to operate the city for one year in the event of an emergency.
Mayor O’Leary asked if there were any further questions or comments and there was no response.
Council concurred to direct the Treasurer prepare documentation for the 2022 Preliminary Budget for their review and adoption at the September meeting.
Council thanked the Treasurer for a wonderful job presenting the proposed budget and an excellent job handling the city finances.
Mayor O’Leary asked if there was any further discussion and, hearing no response, adjourned the meeting at 6:35 p.m.
__________________________ ___________________________
Catherine Iago, City Clerk Dan O’Leary, Mayor