02-09-2010 Council Work Session Packet

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r�� 1' Back�round The Cities are currently operating under the "Police Zone" approach. Minnetonka Beach and Spring Park are being billed under the new formula. Long Lake contends that the ratification of the 2009 Annual Operating Budget automatically extended the contract by three years. As described in section 23 of the contract, the contract is automatically extended for three years when the "Budget Package" is ratified by all contracting cities, not when a single year's Annual Operating Budget is ratified. Section 15.1 of the contract defines the budget package as: The grouping of the Annual Operating Budget, the Year Two Budget and the Year Three Budget which is submitted as a unit by the City of Orono for ratification by the contracting Cities. Section 23.3 states: When during the third contract year of any three year period covered by the Agreement the Annual Budget Package is not ratified by Contracting Cities by October 1, this agreement will terminate at the end of that contract year. The only `Budget Package"that was ever provided to the contract cities was when the contract was si�ned in 2003. Since then the only budgets that have been ratified are the Annual Operating Budget. During one meeting between the administrators, this was described as a year to year agreement. Specific Obiections Minimum department size. Spring Park also commented on this. We may want to remove an absolute number because Orono may want to be able to decrease the number of officers. We need to have language that ensur�es that Orono has the final say on staff size. Financial effect on the contract cities. ? Funding by ad valorem taxes. This has been Long Lakes stand from the beginning. Orono would prefer no property value in the formula. Using 100% property value would result in Minnetonka Beach paying a greater share (8.02%) than either Long Lake (6.81%) or Spring Park (7.71%) while having only 5.03% of the population and 3.78% of the calls. Calls are a proxy for �opulation. This is not accurate. See Minnetonka Beach's percentages listed above. Long Lake's call percentage is 1.17 percenta�e points higher (15.43 — 14.26) than its population. This is an 8.2% variance. 50/50 Weighting Basis. This allocation applied to police districts would result in Long Lake and Spring Park's shares being decreased significantly. Long Lake would decrease by 5.7%. Minnetonka Beach's share would increase by 42%. Orono's share would increase by 7%. Administrative Fee. It is unclear how this was set at 10%, but this does not seem out of line. If the Finance Department budget and the City Administrator's wages and benefits are allocated by percentage of budget, the administrative fee would be $183,000 or 7.1% of the budget. There are additional costs associated with Central Services, Planning, Public Works, and Administration. Of the total fee, the contract cities only pay $87,000 with Long Lake's share being $36,400.