SUNFISH LAKE SPECIAL COUNCIL STUDY MEETING – AUGUST 7, 2012

6:00 P.M. - ST. ANNE’S EPISCOPAL CHURCH

Attendants:

Councilmembers: Mike Hovey and JoAnne Wahlstrom.

City Treasurer: Mike Blair
City Attorney:  Tim Kuntz   
City Clerk: Cathy Iago
Councilmembers Judy MacManus and Roger Conant were absent. Mayor Richard Williams arrived at 6:30 p.m.

1.   CALL TO ORDER:            Councilmember Hovey opened the meeting at 6:00 p.m.

2.   DISCUSS CITY OF SUNFISH LAKE PROPOSED 2013 BUDGET:  Attorney Kuntz suggested that the Treasurer present the proposed budget information to the Councilmembers present and that the information could be summarized for the Mayor when he arrives.

Treasurer Blair distributed the revised 2013 Budget document and explained that after he prepared the budget documents, he received information from the Fire Department that service costs would increase by $4,000 in 2013. He noted that the new calculations reflect this increase in service costs, however; the proposed 2013 operating budget amount of $374,000 reflects a $19,000 decrease from than last year’s budget. 

Treasurer Blair stated the Salem Church bond levy of $28,400, which is $200 over last year, agrees to the amount recommended by Ehlers when the bonds were originally issued. Average overall property tax per homeowner is $1,935, a $34 decrease from last year.

Treasurer Blair explained that the number of homesteads in Sunfish Lake that are shown on the Dakota County website changed from 176 last year to 214 this year; he advised that he had contacted the County to discuss this matter, but he has not yet received a response..

The Treasurer reviewed the expense budget line items as follows:

Permit Income – No substantial change

Assessments – Essentially the same as last year. He noted there is $2,700 in delinquent taxes; however, this information was received from the County in February. He indicated there were 8-10 parcels that are delinquent.

Councilmember Hovey questioned the dollar amount for the delinquent taxes. Treasurer Blair indicated that in February the County listed the amount at $45,000; he noted that the City portion of this amount would be approximately 25 percent or $11,250.

Councilmember Hovey asked if the City must wait for the County payment of the delinquent taxes. Attorney Kuntz explained that 5-years after non-payment of property taxes, once the property goes tax-forfeit, the City receives payment from the County after the sale of the property occurs. 

Engineering – No significant change in expenses, with the exception of the proposed Capital Improvement Projects.

Staff – A 2% increase in salary for the Clerk and Administrator positions.

Election – A decrease in this area since there is no election next year.

The City Clerk pointed out that in 2014 the City will be purchasing new election equipment and sharing the costs with Dakota County.

Police – An increase of approximately 3% was included. The Treasurer explained the increase for services in based on the yearly CIP index per the contract with police.

Fire – An increase of $4,000 is proposed. The Treasurer explained the charge for services is based on the number of fire calls in the City; the number of calls increased from 27 in 2010 to 32 in 2011. He stated this cost is shared with Lilydale, Mendota and Mendota Heights and there is a formula used to calculate the cost for each city.  

Permit Income – The Treasurer explained this number is estimated and that the City pays out 80% of the income to the Inspector.

Engineering – The Treasurer explained there is a slight decrease in this area; however, costs would be dependent upon improvements ordered. He noted that this year the road maintenance expenditure was $12,000. He pointed out that the proposed road maintenance budget for 2013 is $13,300, the CIP is estimated at $39,500 for road improvements, and $5,100 is estimated for Charlton Road grading and dust control. He further explained that this year the City spent $700 as a cost share with Inver Grove Heights for plowing of 60^th Street. He advised that the 2013 budget for snow plowing is $30,000, which is the estimated amount for a normal snowfall year.

Forester – There is no increase in this item. He noted that the Arbor Day Tree purchase would be a pass-through item.

The Treasurer advised that the balance of the budget remains unchanged from prior years and he offered to respond to questions from Council.  

Councilmember Hovey asked if the League of Minnesota Cities Insurance would increase for Worker’s Compensation. Treasurer Blair responded that it should remain the same.

Engineer Sterna advised that if Council approves the CIP, those expenses would be included in the 2013 budget. He explained that the document is a 5-year plan for roadway improvements and that the plan could change depending on roadway conditions or direction from Council.  He advised that maintenance of Charlton Road is an on-going project and that he included $5,100 in the 2013 Budget for this purpose.

Mayor Williams arrived at 6:30 p.m.

Councilmember Hovey asked if that amount included more than on grading of Charlton Road.

Engineer Sterna explained that each grading and dust control event costs $2,500; he suggested that Council could increase the amount by an additional $2,500 for a total of $7,600 to insure there are sufficient funds for this purpose. He explained that $12,800 has been spent this year and that the costs due to the culvert and ditch cleaning would bring the total costs over the estimated budget amount for 2012.

Treasurer Blair advised that he and the City Engineer had discussed co-mingling the culvert cleaning costs with other line-items in the budget.

Engineer Sterna advised that he added additional funds in the amount of $5,500 for street sweeping and for sign replacement. He advised that there are sign standards for reflectively were recently increased by the Federal government and that signage throughout the City is old. He noted that he was contacted by the City of Inver Grove Heights regarding cost sharing for sign replacement along Pieper Road and he would discuss this with Council at the regular meeting.

Councilmember Hovey asked if the County would pay for sign replacement along Delaware Avenue. Engineer Sterna responded yes.

The Engineer pointed out that $8,000 was budgeted for bituminous roadway maintenance in 2012 and only $4,000 was used for seal-coating.

Engineer Sterna explained that the CIP document proposes a roadway improvement project for Windy Hill Road in 2014. He suggested that if the project is scheduled for 2014, it would be appropriate to add $4,000 to the 2013 budget to prepare a feasibility study. Treasurer Blair commented that the cost could be reimbursed through assessments for the project if it is done in 2014; however, the expense would be incurred in 2013.               

Mayor Williams stated that Council would need to have a feasibility study to determine if the project would be an overlay or reconstruction of the street.

Attorney Kuntz explained that the purpose of this meeting is for Council to gather and review data from staff. He stated that Council must adopt a not-to-exceed budget and tax levy at their September meeting for submission to the County as required by State law. He advised that this information serves as a basis for notice to the public for the December public hearing required prior to final adoption of the 2013 Budget and Tax Levy.

The Attorney pointed out that the CIP spreadsheet in the revised document distributed by the City Engineer for adoption at the regular meeting lists $35,000 for roadway maintenance, such as crack-sealing and seal-coating. He suggested that Council consider adding an additional $5,000 for the purpose of culvert/ditch cleaning and repairs. He commented that in a year where there is a project decrease of $19,000 in the budget, Council has an opportunity to set aside funds for this purposes and save some funds for future reserves.

Attorney Kuntz asked if there was a line item in the budget for roadway maintenance reserve funds and the Treasurer responded no.

Mayor Williams commented that the City would still have reserve funds, but no reserve funds for roadway maintenance purposes.

The Attorney noted that there are wide swings between previous years’ expenditures for snow removal; he suggested that Council consider adding an additional $5,000 to the snow removal budget since there is such a large decrease in the proposed budget.

The Treasurer explained that the State Auditor suggests that cities maintain a cash reserve that is consistent with the operating costs for three to six months.

Councilmember Hovey pointed out that although the City is not making any money with interest on the cash reserve, it is nice to have a “cushion” for emergencies. He commented that it may be more appropriate not to have such a large decrease in the budget and to use this opportunity to build-up reserve funds.

Treasurer Blair agreed that it would be appropriate so residents do not experience large swings in the tax levy amounts.

Attorney Kuntz pointed out that Council does not need to take formal action on the document this evening. He suggested that Council consider adding the following amounts to the 2013 proposed budget: an additional $5,000 for culvert/ditch repairs, $5,000 for snow plowing, and $2,500 for Charlton Road dust treatment. He noted by additional the additional funds, the amount of the 2013 budget would still decrease from the 2012 budget. He also pointed out that Council would have the opportunity to further reduce the budget prior to adoption, but once an amount is adopted, they cannot increase it.

Mayor Williams agreed it would be worthwhile to have some additional funds for roadway maintenance and he suggested he could provide an explanation to residents regarding maintaining additional funding in a future City newsletter.    

After a brief discussion, Council concurred to direct the City Treasurer to include additional funds in the proposed 2013 budget document as follows:  $5,000 for culvert/ditch cleaning and repairs; $5,000 for snow plowing and $2,500 for dust treatment on Charlton Road.

Treasurer Blair stated he would revise the proposed budget as directed for adoption at the September meeting.

Attorney Kuntz pointed out that Sunfish Lake is unique in the fact that it has only single-family dwellings and would not be as affected by lessening property values as cities that have a large business base for tax purposes.
Mayor Williams asked if there were any further questions or comments and there was no response. He stated there was no further business for discussion and called for adjournment.

3.   ADJOURN:   Councilmember Hovey moved, to adjourn the Study Meeting at 6:55 p.m., seconded by Councilmember Wahlstrom and carried. (3-0)

__________________________                                            ___________________________

Richard A. Williams, Jr., Mayor                                              Catherine Iago, City Clerk