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HomeMy WebLinkAbout07-27-2015 Council Work Session Packet City Council Work Session Monday, July 27 2015, 5:00 p.m. Orono City Council Chambers AGENDA 1. Compensation Study Draft Report – 5 P.M. (30 Minutes) 2. 2016 Budget (60 Minutes) 3. US Internet Request (5 Minutes) 4. Goals Documentation 5. Verbal Update from Park Commission Chair Rick Meyers – 6:30 P.M. (15 Minutes) 6. Future Work Session Topics Upcoming Work Sessions August 24, 2015  Budget  Compensation Study  Crime Alert Standard Operating Procedure (SOP) Work Session Topics or Requests Annual:  Budget and Goals: part of June, all of July, August and October.  City Administrator & Police Chief update (3 times per year for 15 minutes)  Joint Planning Commission/Park/Council meeting for check-in/direction (done 11/5/14) Additional topics:  Emerald Ash Borer (LL)  Sewer Connection Fees Policy (MG)  Jennifer Munt from the Met Council (LM)  Marina licensing (MG)  Permit exception criteria for lots less than 2 acres (DW/AP)  Construction Hours – Truck Traffic (LL) Previous Work Session Topics June 22, 2015  WeCAB Request  Goals  Street Funding Discussion  2016 Budget Overview  Compensation Study Draft Report May 26, 2015  Goals  Street Funding Discussion  City Administrator Verbal Update  Memo of Understanding (MOU) for City Administrator  Intergenerational Conversation Draft Report  Spirit of the Lakes Parade April 27, 2015  Street Funding Discussion  Sprint Lease Buyout Analysis  Development Connection Fees for Northern Utility Extension (15 Minutes)  Met Council Population/Housing Projections MEMORANDUM TO: ORONO CITY COUNCIL FROM: JESSICA LOFTUS, CITY ADMINISTRATOR SUBJECT: COMPENSATION STUDY DRAFT REPORT DATE: JULY 27, 2015 Victoria Holthaus and Jean McGann from Abdo, Eick & Meyers will present a second version of the draft compensation study. Following a brief presentation, the City Council will have an opportunity to ask questions and the consultant will request input/direction. A copy of the draft report is attached. Item 01 TO: Mayor McMillan and Council Members FROM: Ron Olson, Finance Director DATE: July 27, 2014 SUBJECT: 2015 Budget Attachments: A. Revenues B. Expenditures C. Wage – COLA History D. Tax Levy Summaries E. Major Budget Impacts F. Street Funding Memo G. Insurance Increase - Police Chief H. June Budget Memo I. Tax Capacity Rates The draft 2016 budget reflects an effort to address current operating needs while keeping any tax levy increases to a minimum. Inflation continues to increase at the relatively low annual rate, but has increased by 10.1% since 2010. During the same period, the tax levy has only increased by 2.3%. As presented, the draft 2016 budget reflects a 1.7% increase in expenditures. Revenues The General Fund revenue budget as presented is a 1.7% ($128,700) increase from the 2015 budget. Major revenue changes will be highlighted in the following paragraph. A summary of the changes can be found in the revenue portion of the Major Budget Impacts document (attachment E). The Permits category is increasing by $55,250 on the strength of building permit revenue. This increase is based on current year actual numbers and continues the recent trend of increasing permit revenue. General Government Service Charges is increasing by $29,150. This is the result of revenues related to variances and plan check fees and reflects the rise in construction activity. Public Safety Service Charges are increasing by $67,650 mainly as the result of an increase in contracted police service charges. The Mound service contract includes a price inflator of 2.5% ($40,580) for 2016. Spring Park and Minnetonka Beach will also see increase based on the current 3.27% increase in the Police Budget and changes in the allocation formula factors. Based on current year results, Golf Course revenue is being increased by $18,000. Fine revenue is being reduced a total of $55,000. $30,000 of this reduction is for drug task force distributions that are being deposited in the PIR fund for accounting reasons. The detail for all revenue lines can be found in attachment A. Expenditures Item 02 The draft expenditure budget reflects an increase of $128,714 (1.7%). The expenditure section of the Major Budget Impacts (attachment E) lists expenditure increases and decreases of $5,000 or more. Expenditures changing by $10,000 or more will be discussed in the following paragraphs. Wages and benefits have the greatest impact on the General Fund budget. 2016 is the final year of the three year labor contracts with both the Sergeants and Patrol Officers. The contracts include a 2.75% increase in wages ($35,000). In addition, required step increases and longevity pay increases ($35,000) results in a total wage increase of $70,000 for our union employees. The contract also includes an increase in insurance contributions for employees with family health coverage equal to 50% of the annual premium increase. For 2016, the premium increase is $180 per month; qualifying employees will receive an additional $90 per month. This is an $11,800 increase in the police budget. One of the major decision to be made during the budget process will be non-union wage and benefit adjustments. The draft budget has been prepared with the same increase that the union employees are receiving. For wages, this would be an increase of $51,700 with an additional $8,640 increase in insurance contributions. If the Council chooses to provide amounts that are different from the union amounts, the budgeted amounts will be adjusted to reflect that decision. Also included in the draft budget is the 1% lump sum that was approved for 2015. If the council does not extend this payment, the budget would be reduced by $18,800. Other major expenditure increases include the following. Assessing is being increased by $20,000 to total of $180,000. Part of this increase is related to the increased construction activity and costs associated with new construction. 2016 is an election year which results in a $16,000 increase in the elections budget. An amount of $11,000 has been added to the fire budget. This is an estimate only and final numbers will not be available until later this year. In the Planning department there are a number of changes. The new Community Development Director was hired at the top of his pay scale. This results in a $20,000 increase of the previous director’s wages and benefits. The Inspection Services line is being increased by $28,000 (38%) to reflect the increased building inspection services being provided by Metro West. This increase is offset by the increasing building permit revenue. A change in staffing at the end of 2014 eliminated a position at the front counter. The 2015 budget still included an amount of $25,000 for the eliminated position. Special Services include hired police security and pass through engineering and legal costs. These expenditures are variable and include offsetting revenue amounts. Staff is looking at removing these costs and related revenues from the General Fund and into a Special Revenue Fund. Because applicants receive a $500 credit towards their legal and engineering costs staff is working on determining what amount to leave in the General Fund. Any change would not affect the tax levy. There are a number of expenditure lines that are being decreased in 2016. The change in the City Administrator’s work schedule will result in a reduction of $34,400 in the administration department. In the Public Works Department, the lines for Street Materials and Contracted Street Maintenance are being reduced by a total of $46,725. These items will be budgeted in the Pavement Management Plan and will still require a funding source. Items for Discussion  Tax Levy/Street Maintenance Funding – The Council indicated that they may consider the possibility of a levy increase to be used for funding road maintenance. Based on current property valuations, the property tax levy could be increased by $183,000 without increasing the tax rate.  Wages – The Council will need to decide the non-union compensation adjustments for 2016. Part of the 2015 non-union pay adjustment was a 1% lump sum payment. As of 12/31/2015, non-union wages will be decreased by 1%.  Health Insurance – Council can discuss if they wish to match the $90 per month increase for employees with family coverage that the union employees will receive. An employee with family coverage will receive $1,255 per month. The single contribution would remain frozen at $915.  The Police Chief has submitted an Operating Budget Decision form related to health insurance. A review of other area departments indicates that the City is below average in relation to insurance. Next Steps Staff is looking for feedback from the Council on the budget information that is being presented. Based on the feedback, staff will refine the budget and bring it back to the Council at the August work session for additional input. The preliminary budget and tax levy will be approved at the September 28th council meeting. Once the preliminary tax levy is adopted, it can only be decreased. MEMORANDUM TO: ORONO CITY COUNCIL FROM: JESSICA LOFTUS, CITY ADMINISTRATOR SUBJECT: US INTERNET REQUEST DATE: JUNE 22, 2015 Resident James Diebel has requested an alternative high speed option for internet service in Orono. Specifically, he’s requesting the city reach out to US Internet in support of installing their fiber-based internet network. A copy of his request is attached for your consideration along with a couple of recent articles staff found regarding the company. MEMORANDUM TO: ORONO CITY COUNCIL FROM: JESSICA LOFTUS, CITY ADMINISTRATOR SUBJECT: GOALS DOCUMENTATION DATE: JULY 27, 2015 In May and June the City Council worked on goal setting. Attached is the summary document for your additions, deletions, and revisions. Must do Nice to do Not this year Budget # (On-going)impact Budget Fund a road maintenance & improvement program to protect assets X Yes 3 Maintain current services and programs with lowest possible tax increase X Yes 2 Navarre Begin to explore the idea of mixed use/density in Navarre X No 2 Focus on improvements in Navarre ("missing" sidewalk and work with County on 15/19 intersection)X Yes 2 Create a plan to upgrade city land/ public space. Ex: muniLot, ROW corners, screening dumpsters X Yes Explore a special fall clean up day for the Navarre area, curbside to help with junk X Holiday lighting (& American flags by donation) for Navarre lightpoles X Yes Organization Undertake a careful review of the compensation study, develop a plan of action, and implement X Yes Consider a pay increase for Mayor, maybe City Council X Continue automating City Hall which may lower employee costs/ increase efficiency X No Encourage employees to set up a continual process of having the best vetting/competitive bidding X Continued Organization review. Ex: utility clerk .8, consider reduced or outsourced? Others opting for flexibility?X Improve relationships on City Council thru retreats or training X Roads Increase road repair slated for 2016 X Yes Notify private roads the options of combining maintenance work with nearby city road projects X No Controlled intersection at Old Cry Bay and 12 in the morning -such as no turn on red and enforced X Study no parking sticker concept like Wayzata. Ex: Orono residents get "free" sticker and Non-residents pay X What Should Be Accomplished in 2015-2016? Goal Must do Nice to do Not this year Budget # (On-going)impact Comp Plan & Code Updates Begin Comp Plan process; react to system statements (housing req), layout action plan for 2016/2017 X No 2 Understand current housing stock, needs, locations for various densities. X No 2 Continue to update code - including for "small projects" flexibility X No 2 Streamline the permitting process for the city X No Projects Drill second North well X Yes Consider an on site Daycare for the growing Staff with young families to help keep employees X Brush pile one weekend each fall X No Develop plan and budget for Community Center in the next 5 years (seniors, teen center, arts/theater)X Cooperative Efforts Wayzata Fire contract public hearing or request to Fire Adv. Cmte X No Build relationships with new partners in Lake Minnetonka area and strengthing those with existing X No 2 Complete plan for 112 Turnback X Yes Technology Complete Cloud backup X Yes Consider providing Council a city computer and phone for city use only (for "transparency", data requests)X Parks Continued Park Commission support X Yes What Should Be Accomplished in 2015-2016? Goal Guidance on using the ratings below. Must do Nice to do Not this year  activities that are required by law, contract or agreement  not essential services nor key support for essential services  not necessary to provide essential services  include or support essential services that serve many citizens  would service a major group of citizens  serves a small population or need  can be ongoing or new activities  would facilitate improved operations or interactions  is not time-sensitive  the things that will take up most of the resources (time, $, people)  can be ongoing or new activities  can be ongoing or new activities  would set the stage for future activities What Should Be Accomplished in 2015-2016? Top Goals (submitted by at least two or more members) Fund a ROAD maintenance & improvement program to protect assets Maintain current services and programs with lowest possible 2016 tax increase Focusing on improvements to Navarre Begin to explore the idea of mixed use/density in Navarre Continue Code Updates Build Relationships with new partners in the Lake Minnetonka area and strengthen those with existing MEMORANDUM TO: ORONO CITY COUNCIL FROM: JESSICA LOFTUS, CITY ADMINISTRATOR SUBJECT: COMPENSATION STUDY DRAFT REPORT DATE: JULY 27, 2015 Victoria Holthaus and Jean McGann from Abdo, Eick & Meyers will present a second version of the draft compensation study. Following a brief presentation, the City Council will have an opportunity to ask questions and the consultant will request input/direction. A copy of the draft report is attached. Item 01 TO: Mayor McMillan and Council Members FROM: Ron Olson, Finance Director DATE: July 27, 2014 SUBJECT: 2015 Budget Attachments: A. Revenues B. Expenditures C. Wage – COLA History D. Tax Levy Summaries E. Major Budget Impacts F. Street Funding Memo G. Insurance Increase - Police Chief H. June Budget Memo I. Tax Capacity Rates The draft 2016 budget reflects an effort to address current operating needs while keeping any tax levy increases to a minimum. Inflation continues to increase at the relatively low annual rate, but has increased by 10.1% since 2010. During the same period, the tax levy has only increased by 2.3%. As presented, the draft 2016 budget reflects a 1.7% increase in expenditures. Revenues The General Fund revenue budget as presented is a 1.7% ($128,700) increase from the 2015 budget. Major revenue changes will be highlighted in the following paragraph. A summary of the changes can be found in the revenue portion of the Major Budget Impacts document (attachment E). The Permits category is increasing by $55,250 on the strength of building permit revenue. This increase is based on current year actual numbers and continues the recent trend of increasing permit revenue. General Government Service Charges is increasing by $29,150. This is the result of revenues related to variances and plan check fees and reflects the rise in construction activity. Public Safety Service Charges are increasing by $67,650 mainly as the result of an increase in contracted police service charges. The Mound service contract includes a price inflator of 2.5% ($40,580) for 2016. Spring Park and Minnetonka Beach will also see increase based on the current 3.27% increase in the Police Budget and changes in the allocation formula factors. Based on current year results, Golf Course revenue is being increased by $18,000. Fine revenue is being reduced a total of $55,000. $30,000 of this reduction is for drug task force distributions that are being deposited in the PIR fund for accounting reasons. The detail for all revenue lines can be found in attachment A. Expenditures Item 02 The draft expenditure budget reflects an increase of $128,714 (1.7%). The expenditure section of the Major Budget Impacts (attachment E) lists expenditure increases and decreases of $5,000 or more. Expenditures changing by $10,000 or more will be discussed in the following paragraphs. Wages and benefits have the greatest impact on the General Fund budget. 2016 is the final year of the three year labor contracts with both the Sergeants and Patrol Officers. The contracts include a 2.75% increase in wages ($35,000). In addition, required step increases and longevity pay increases ($35,000) results in a total wage increase of $70,000 for our union employees. The contract also includes an increase in insurance contributions for employees with family health coverage equal to 50% of the annual premium increase. For 2016, the premium increase is $180 per month; qualifying employees will receive an additional $90 per month. This is an $11,800 increase in the police budget. One of the major decision to be made during the budget process will be non-union wage and benefit adjustments. The draft budget has been prepared with the same increase that the union employees are receiving. For wages, this would be an increase of $51,700 with an additional $8,640 increase in insurance contributions. If the Council chooses to provide amounts that are different from the union amounts, the budgeted amounts will be adjusted to reflect that decision. Also included in the draft budget is the 1% lump sum that was approved for 2015. If the council does not extend this payment, the budget would be reduced by $18,800. Other major expenditure increases include the following. Assessing is being increased by $20,000 to total of $180,000. Part of this increase is related to the increased construction activity and costs associated with new construction. 2016 is an election year which results in a $16,000 increase in the elections budget. An amount of $11,000 has been added to the fire budget. This is an estimate only and final numbers will not be available until later this year. In the Planning department there are a number of changes. The new Community Development Director was hired at the top of his pay scale. This results in a $20,000 increase of the previous director’s wages and benefits. The Inspection Services line is being increased by $28,000 (38%) to reflect the increased building inspection services being provided by Metro West. This increase is offset by the increasing building permit revenue. A change in staffing at the end of 2014 eliminated a position at the front counter. The 2015 budget still included an amount of $25,000 for the eliminated position. Special Services include hired police security and pass through engineering and legal costs. These expenditures are variable and include offsetting revenue amounts. Staff is looking at removing these costs and related revenues from the General Fund and into a Special Revenue Fund. Because applicants receive a $500 credit towards their legal and engineering costs staff is working on determining what amount to leave in the General Fund. Any change would not affect the tax levy. There are a number of expenditure lines that are being decreased in 2016. The change in the City Administrator’s work schedule will result in a reduction of $34,400 in the administration department. In the Public Works Department, the lines for Street Materials and Contracted Street Maintenance are being reduced by a total of $46,725. These items will be budgeted in the Pavement Management Plan and will still require a funding source. Items for Discussion  Tax Levy/Street Maintenance Funding – The Council indicated that they may consider the possibility of a levy increase to be used for funding road maintenance. Based on current property valuations, the property tax levy could be increased by $183,000 without increasing the tax rate.  Wages – The Council will need to decide the non-union compensation adjustments for 2016. Part of the 2015 non-union pay adjustment was a 1% lump sum payment. As of 12/31/2015, non-union wages will be decreased by 1%.  Health Insurance – Council can discuss if they wish to match the $90 per month increase for employees with family coverage that the union employees will receive. An employee with family coverage will receive $1,255 per month. The single contribution would remain frozen at $915.  The Police Chief has submitted an Operating Budget Decision form related to health insurance. A review of other area departments indicates that the City is below average in relation to insurance. Next Steps Staff is looking for feedback from the Council on the budget information that is being presented. Based on the feedback, staff will refine the budget and bring it back to the Council at the August work session for additional input. The preliminary budget and tax levy will be approved at the September 28th council meeting. Once the preliminary tax levy is adopted, it can only be decreased. MEMORANDUM TO: ORONO CITY COUNCIL FROM: JESSICA LOFTUS, CITY ADMINISTRATOR SUBJECT: US INTERNET REQUEST DATE: JUNE 22, 2015 Resident James Diebel has requested an alternative high speed option for internet service in Orono. Specifically, he’s requesting the city reach out to US Internet in support of installing their fiber-based internet network. A copy of his request is attached for your consideration along with a couple of recent articles staff found regarding the company. MEMORANDUM TO: ORONO CITY COUNCIL FROM: JESSICA LOFTUS, CITY ADMINISTRATOR SUBJECT: GOALS DOCUMENTATION DATE: JULY 27, 2015 In May and June the City Council worked on goal setting. Attached is the summary document for your additions, deletions, and revisions. What Should Be Accomplished in 2015-2016? Top Goals (submitted by at least two or more members) Fund a ROAD maintenance & improvement program to protect assets Maintain current services and programs with lowest possible 2016 tax increase Focusing on improvements to Navarre Begin to explore the idea of mixed use/density in Navarre Continue Code Updates Build Relationships with new partners in the Lake Minnetonka area and strengthen those with existing