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082498 CC WS Min . . . '. . , CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MEETING MONDA Y, AUGUST 24, 1998 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD IMMEDIATELY FOLLOWING REGULAR MEETING MINUTES 1. CONVENE CITY COUNCIL WORK SESSION Mayor Dahlberg called the meeting to order at 10:28 p.m. A. Roll Call Present: Mayor Dahlberg; Councilmembers Stover, O'Neill, Garfunkel and Champa; Administrator Hurm; City Engineer Larry Brown; Planning Director Brad Nielsen; Finance Director AI Rolek B. Review Agenda Mayor Dahlberg reviewed the Agenda for August 24, 1998. The agenda was approved as submitted. 2. DISCUSSION ON PROPOSED 1999 PRELIMINARY BUDGET Administrator Hurm and Finance Director Rolek presented the Proposed 1999 Preliminary Budget and discussed a number of issues associated with the budget. Hurm discussed balancing the budget and not relying on funds which are on hand, the use of the Street Fund rather than the General Fund for street patching materials, no transfer to the Park Fund, the removal of the $1,000 donation to Excelsior Fireworks, expansion of the Legal Fund, the minimal contingency amount which is budgeted as well as the contribution from Utility Funds for overhead costs. Mayor Dahlberg raised the issue of large equipment purchases which were made in the past year. He noted he had expressed concern relative to the large equipment purchases and is concerned now to find the General Fund is not where staff wants to be. Hurm stressed the importance of good equipment. Engineer Brown stated there comes a time when the use of older equipment affects the quality of service which can be provided to the community. Rolek explained the tax rate this year is 18.317 percent and it is anticipated to be 19.578 percent next year. Hurm reviewed the General Fund balances from 1987 through 1998, noting the balance will decrease from 57.23 percent in 1997 to 47.48 percent in 1998. He explained this balance is necessary to cover emergency situations as well as to carry the City through until funds are received from the State, which occurs halfway through the year. Councilmember Champa noted there was a decrease in the General Fund of approximately $250,000 and he questioned how those funds were disbursed. Rolek explained there was a court award in addition to legal fees which account for those funds. Rolek explained shortfalls are anticipated in engineering time which is charged as well as ill anticipated fines and forfeitures. " . CITY COUNCIL WORK SESSION MEETING MINUTES AUGUST 24, 1998 - PAGE 2 The City will be in a break even position relative to the storm expenses once the FEMA funds are received. Hurm explained the transfers which are proposed from the General Fund to the Street Fund for reconstruction, overlay and sealcoating, as well as storm drainage, equipment replacement and public facilities. Hurm then reviewed transfers which are proposed from the Street Fund, Trail Fund, Sewer Fund and Water Fund to the General Fund. With respect to the Legal Budget, Councilmember O'Neill questioned the reason for budgeting only $10,000 for litigation expense in 1998. Rolek explained prior to the pending litigation, the legal fees would generally come in very close to the budgeted amount. He noted this is an extremely difficult amount to anticipate. Councilmember Stover pointed out in previous years some expenses have been predicted quite accurately. Hurm stated situations arise in which additional funds are needed and they must come from the General Fund balance. Rather than budgeting for unknown situations, the contingency will be low and an attempt will be made to stabilize and possibly increase the fund balance. Rolek stated the City has applied for an extension of the Cop Fast Grant. If this extension is approved, the City would receive $25,000 in grant funds which is incorporated into the budget as an offset to policing costs. If the City does not receive the grant, there will be a need for an additional $25,000 for this fund. . Mayor Dahlberg stated he could support a budget which increases by the rate of inflation plus the increase in the tax base. Rolek commented this is the case. Rolek explained the levy limit is based on an increase based on the implicit price deflator which is the rate of inflation plus the growth in households. Rolek pointed out total spending which is being proposed for 1999 represents an increase of slightly more than 1 percent. This includes spending and transfers. He noted the most significant difference to be in 1998, the City is financing $72,000 of the budget from the General Fund balance. Staff proposes funding zero from the General Fund balance in the year 2000. It was noted the contract with the Hennepin County Assessor's Office for assessing services will result in a $15,000 increase for this service. Councilmember Stover felt the budget to be reasonable, noting 1999 will be a tight year. She noted her belief the levy limit is appropriate. Hurm stated anyone wishing to review the line by line details of the budget can set up a time to meet with him and Rolek. Mayor Dahlberg expressed an interest in meeting with Hurm and Rolek, as did Councilmember Champa. 6. ADJOURNMENT Stover moved, Champa seconded adjourning the work session at 11:35 p.m. Motion passed 5/0. . " CITY COUNCIL WORK SESSION MEETING MINUTES AUGUST 24, 1998 - PAGE 3 . RESPECTFULL Y SUBMITTED, Cheryl Wallat, Recording Secretary TimeSaver Off Site Secretarial, Inc. ATTEST: ~~C~ JAMESr, . HURM, CITY ADMINISTRATOR !/ ~!2J DAHLBERG T . .