09-10-2018 Council Packet - Laserfiche WebLink

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Orono City Council Work Session Monday, August 27, 2018 Council Chambers 5:00 p.m. PRESENT: Mayor Dennis Walsh, Council Members Richard F. Crosby II, Wendy Dankey, Aaron Printup and Victoria Seals. Representing staff were City Administrator Dustin Rief, Police Chief Coffey Farniok, Finance Director Ron Olson, Director of Public Works/City Engineer Adam Edwards, Community Development Director Jeremy Barnhart, Accountant Maggie Ung, and City Clerk Anna Carlson. GUESTS: Greg & Jewel Vitas Meeting Start Time: 5:00 p.m. 1. Budget Discussion Finance Director, Ron Olson presented the 2019 budget memorandum. Olson mentioned that city staff has made a number of changes since July under direction of the Council. In July, there was a large deficit in Revenues. Staff has looked into administrative charges to the Enterprise Funds, determined what the overhead costs were for those funds and how they would be recovered. This resulted with staff allocating the funds across the board rationally. Olson noted that wages, zoning code official, and the one-time fee for rewriting the Zoning and Subdivision Code is reflected in the budget. Council Member Victoria Seals asked if there is a way to write into the contracts or create a fund or merit pay schedule based on performance of employees that the City could use for unions. Olson referred to a merit pay system and how it is a difficult system to use, especially how it could affect discrimination. Seals is would like further information on a performance based system and would like to have the discussion about performance based raises. If employees are going above and beyond their job description they should be rewarded for it. There was discussion of different ways to improve and look into a performance based raise system. Olson requested guidance on the amount Council is comfortable with for a tax levy increase. Olson noted that in September, the preliminary levy needs to be adopted by law and once it is adopted there can be no increases made afterwards. Mayor Dennis Walsh is comfortable with the tax levy and the direction the city is going. Olson explained that the Insurance Fund began approximately 20 years ago, the City goes through the League of Minnesota Cities Insurance Trust and it pays dividends as years pass by. Olson noted that money used to go into the General Fund. A previous Finance Director created the Insurance Fund to keep track of the dividends. As years have gone by the Insurance Fund has grown considerably. City Administrator Dustin Rief noted that Council should consider putting a cap on the fund, by policy. Rief noted that by putting it in writing and by saying it in a public forum it will force future Councils to follow the plan.