SUNFISH LAKE SPECIAL COUNCIL BUDGET STUDY MEETING
AUGUST 6, 2019
5:30 P.M. - ST. ANNE’S EPISCOPAL CHURCH
Mayor: Dan O’Leary
Councilmembers: Mike Hovey and,JoAnne Wahlstrom
City Treasurer: Ann Lanoue
Attorney: Tim Kuntz
Engineer: Jeff Sandberg
Fire Chief: Dave Dreelan
City Clerk: Cathy Iago
Councilmember Steven Bulach was absent and Councilmember Shari Hansen arrived at 6:45 p.m.
1. CALL TO ORDER: Mayor O’Leary opened the meeting at 5:30 p.m. for the purpose of discussing the proposed 2020
City of Sunfish Lake Budget and Tax Levy.
2. DISCUSS CITY OF SUNFISH LAKE PROPOSED 2020 BUDGET: Mayor O’Leary asked Treasurer Lanoue to provide an overview of the proposed 2020 Budget and Tax Levy.
Treasurer Lanoue distributed the Budget Analysis document which showed the 2019 Actual Budget, the 2019 Budget to date, and the proposed 2020 budget. She also distributed the Taxable Market Value and Tax Capacity Comparison for 2019-2020. She stated that the preliminary Taxable Market Value and Tax Capacity Valuation have actually decreased for residential property. She explained that she would review the proposed 2020 budget and then request direction from Council to prepare the preliminary 2020 Tax Levy and Budget for formal adoption at the September meeting.
The Treasurer explained that she does not usually receive the Fire Department budget request until after this special meeting, however, she asked that the Fire Department submit the request early so she would have a dollar amount to place in the budget. She advised that Fire Chief Dreelan was in attendance this evening to discuss the proposed 2020 budget request and to respond to questions. She asked Chief Dreelan if it was possible to receive the Fire Department budget request earlier so that she had time to prepare the information for Council discussion.
Chief Dreelan explained that he begins work on the Fire Department budget in June and submits it to the City of Mendota Heights in early July, however, the City does not begin their review the budget until the middle of August. He stated that the figures he submits would be only estimates and could change after the City of Mendota Heights reviews the requests.
Treasurer Lanoue stated that last year the Fire Department did not submit their request until after Sunfish Lake had adopted their preliminary budget and there was a large increase that was unexpected. She explained that it would be preferable to have an estimated figure prior to September. She asked if he could send her the information by July 15 in the upcoming years. She pointed out that the City of Sunfish Lake only has one Council meeting per month and that is why she requests the information earlier in the process.
Chief Dreelan explained that the amount he submits in only an estimate that is based on the year end costs for the previous year and reiterated that he cannot predict what the City of Mendota Heights would approve for the upcoming year. He agreed to submit the information to Sunfish Lake earlier, but explained that it would not be a final amount, only an estimate. He discussed the unforeseen expenses associated with the bond issue for the new fire station.
Mayor O’Leary noted that the amount submitted this year would not be higher after City of Mendota Heights reviews the proposal.
Chief Dreelan agreed that the amount would not increase and that he would begin conversations with Sunfish Lake earlier next year to make the process easier. He pointed out that the request was slightly less than last year. He explained that there is proposed increase of $500 per year to the Relief Association and explained how the funds would be distributed.
Councilmember Hovey referred to the Billing Formula and noted that Mendota Heights and Lilydale had more calls than Sunfish Lake, but Sunfish Lake was charged more.
Chief Dreelan explained that the formula is also based on the property valuation, which is higher in Sunfish Lake.
The Chief reported that the new fire station was slightly behind schedule due to delays with utilities and weather. He stated that the plan is to move into the new building in March and then remodel the old portion with the intent to finish in August next year. He offered to provide a tour of the facilities when they are completed.
Council thanked Chief Dreelan for attending this evening.
Treasurer Lanoue explained that the budget would be challenging due to the decrease in market value and tax capacity. She distributed the proposed 2020 Budget Analysis for 2020 and explained that the amount of the “Bond Fund Levy” was incorrect and should be listed at $138,428 versus $113,016. She referred to information submitted by staff with budget requests 2020:
Building Inspector: 80% of the revenue from building permits to the Inspector plus all plan review fees; the City receives 20%
of the revenue.
Planner: No change
City Attorney: No change
Police services: Proposed increase of 1 percent over 2019; per email from West St. Paul Finance Director
Fire Department: Estimated slight decrease The Fire Department has not had any formal numbers and are planning to construct the new Fire Station.
Election: Increase due to an additional election, Presidential Primary, in 2020.
City Clerk and Treasurer: Staff included a 3% salary increase for 2020.
City Forester: No increase last year; staff included a 3% increase for 2020.
Treasurer Lanoue explained that the Engineering costs are the largest portion of the budget. She stated that Engineer proposed three (3) road improvement projects totaling $148,750 for improvements identified in the Capital Improvement Plan
for Zehnder Road, Angell Road (east) and Sunnyside Lane. She explained that she kept the $3,000 cost to Inver Grove Heights for the City’s portion of plowing 60th Street. She noted that no billing statements had been received for this service, however, she kept the funds available.
Treasurer Lanoue explained that she included an increase for the lease of St. Anne’s Church and advised that this is the last year of the 3-year lease negotiated by the City Clerk and City Attorney. There was discussion regarding the possibility of researching other facilities or churches within the City to determine if the rental/lease costs could be decreased.
Mayor O’Leary suggested using the Homeland Credit facility and asked if the meetings could be held outside the City limits.
Attorney Kuntz explained he contacted the League of Minnesota Cities and was advised that although it is legal to do so, they would not advise meeting outside the City if possible.
Treasurer Lanoue asked if the Mayor would provide an amount for the update to the City website.
Mayor O’Leary advised that the initial cost would be approximately $4,000 and approximately $1,000 annually thereafter.
The Treasurer distributed information from Ehlers regarding to the Bond Payments that would be paid in 2020 for the Charlton Road and Sunfish Lake improvements. She reviewed the costs depending on whether Council choose to use the previously advertised assessments for the projects or amends the assessments to reflect the actual costs.
Attorney Kuntz explained that Council needs to levy funds sufficient to pay the bond obligation in February of 2020. He stated that Council needs to make a decision in order to conduct the assessment hearings for the projects in October. He noted that Ehlers recommended the City levy the full amount of $85,313.50. He pointed out that the City may reduce the number after conducting the Truth in Taxation public hearing in December, however, they cannot increase it once it is adopted.
Mayor O’Leary commented that he was uncomfortable increasing assessments for persons who willing contributed easements and only charging Mrs. Norton the lesser amount due to the negotiated agreement to obtain her easements. He advised he was not opposed to charging the higher assessment for the Sunfish Lake Outlet project since it is a private lake.
There was discussion relating to the proposed assessments for the project and Council concurred it would be appropriate to keep the Charlton Road assessments at the lower rate and to use the actual costs for assessments of the Sunfish Lake Outlet project.
Councilmember Hovey stated it was his preference to use the higher figure for the Preliminary Tax Levy noting it could be reduced in December but not increased.
Council concurred that staff utilize the higher amount of $85,313.58 when preparing the Preliminary 2020 Tax Levy and Budget for approval at the September meeting. It was further determined that the previous assessment roll be used for the Charlton Road project and that the actual costs be assessed for the Sunfish Lake Outlet project.
Treasurer Lanoue explained that no formal action is required at this time and that the 2020 preliminary budget and tax levy would be adopted by Council at their September meeting and certified to Dakota County. She advised that Council would have to schedule and conduct a public hearing in December, at which time the final budget would be approved.
Treasurer Lanoue pointed out that the City also has the option to utilize reserve funds to balance the budget and offered to send scenarios comparing using reserve funds.
There was discussion regarding what the amount is appropriate for the City to retain in reserve funds. Treasurer Lanoue explained that the City the average small cities retains between $600,000 and $700,000 in order to maintain city operations over one year; she noted the City has $800,000 in reserves at this time.
Mayor O’Leary asked if the City should have more reserves for street projects.
Treasurer Lanoue explained that Council does have the authority to set up a fund for street maintenance rather than increase the amount of reserve funds.
The Mayor asked if there were any further comments or questions and there was no response.
Councilmember Hansen arrived at 6:50 p.m.
Council directed the Treasurer prepare documentation for the 2020 Preliminary Budget, with one scenario using reserve funds, 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 6:50 p.m.
Catherine Iago, City Clerk Dan O’Leary, Mayor