HomeMy WebLinkAbout2006 09-11 SMWiT
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Council Chambers, City Hall
Meeting No. 06-24
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FROM: Finance Director
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Annually when the General Fund budget is prepared, revenue accounts are analyzed and a
re-estimate for current year revenues is prepared. This information along with a re-
estimate of expenditures for the current year is used to forecast the ending fund balance for
the current year. The size of this balance is an important factor for the preparation of the
budget for the next year.
The attached financial statement for the General Fund indicates revised revenue and
expenditure estimates for 2006. Based upon these new estimates for 2006, the 12-31-06
fund balance will be $5,691,536.
After the budget for the next year is prepared, the re-estimates for the current year are
more important than the original budget. Therefore, it is recommended that the Council
authorize the Finance Director to revise the 2006 budget to equal the 2006 re-estimates for
the General Fund revenue and expenditure accounts that are included in the proposed
2007 budget.
P\finance\word\agn\2006 budget changes
CITY OF MAPLEVVOOO.M|NNESOTA
GENERAL FUND (101)
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES |N FUND BALANCE
Revenues:
Taxeo - ourn»n property
Taxeo - o|ecthohanuhiae
Taxmo - othor
Special assessments
Licenses and permits
Fines and forfeits
Intergovernmental
Charges for services
W1iom*||onooua
Total revenues
Expenditures:
Community Development
Executive
Finance
Fire
Human Resource
Legislative
Parks and Recreation
Police
Public Works
Reoonds, Elections and Licenses
Total expenditures
Excess (deficit) of revenues over
expenditures
Other financing sources (umen):
Operating transfers in(ouU:
Public Safety Comm System Fund
2006
2005 ORIGINAL 2806
ACTUAL BUDGET RE-EST.
$8.157,645 $10.118,210 $10.039.080
O
U
0
218,930
175,830
243,830
56.998
37.000
34.610
1.575.557
1.550.230
1.383.790
184.084
228.030
206.210
807.770
083.860
071.685
3.278.884
3.419.480
3.398.070
280
229
258
15,648,504 16,739,750 16,533,065
1.238.779
1,374J70
1.344.720
1.213.138
1,287.120
1,485.550
844.857
965.888
655.570
1.911.807
1.918.408
1.501.680
350.553
381.290
371.320
117.887
151.370
146.080
1.592.844
1.591.990
1.525.030
8.483.191
6.783.010
9.685.650
2.049.580
2.225.220
2.204.370
692,833
760,010
788,020
(355.865) (70.310) (245.835)
-Al
Total other financing sources (uueu
Net change in fund balance
Fund balance - January 1
Fund balance ' December 31
Fund
Fund balance/expenditures
(355.985) (79.310) (288.352)
6,333,553 5,906,733 5,977,888
38.2% 34.8% 34.4%
2
AGENDA NO. E2
FROM: Finance Director
RE: 2006 Budget Adjustments for County Tax Increment Charges
11 i' 11 111111 iii
The annual tax increment charges from Ramsey County for administrative costs
were more than anticipated this year. Details on the costs are in the attached
letter from Ramsey County. These charges are financed by tax increment
revenues. It is recommended that the Council authorize the appropriate 2006
budget adjustments for the county tax increment charges.
P\finance\word\agn\2006 budget changes2
017-flKIINIM
Daniel F. Faust, Finance Director
City of Maplewood
1830 E County Road B
Maplewood, MN 55109
Dear Mr. Faust:
Minnesota Statutes 469.176 Subd. 4h authorizes County Auditors to
obtain payment for administrative costs incurred during the calendar
year 2005 related to Tax Increment Finance (TIF) districts. The
enclosed invoice and attachment show administrative expenses related
to TIF districts in your City. I have also enclosed a list of County
Auditor TIF administrative duties.
The costs include expenses related to the creation of new TIF districts
and the overall maintenance of existing ones. Any costs directly
attributable to a particular TIF district are billed to that district.
Indirect maintenance costs totaling $78,879.80 are charged to 170
districts in the County for 2005. One half of the cost is apportioned
equally to each district ($232.04 each) to reflect fixed costs per
district. The remaining half is apportioned to each district based on
the number of parcels in the district. A per parcel charge of $9.40
is included to reflect the variable costs.
Please contact Brian Erickson at 266-2048 if you have any
questions regarding this bill.
Sincerely,
R�
Brian Erickson, Accountant
Tax Accounting
Enclosure
BE
0-
FROM: Finance Director
RE: Budget Adjustments for the CIP and Redevelopment Funds
DATE: September 5, 2006
The 2006 budget assumed that the old Gladstone fire station site would be sold for
$248,000 in 2005 and that the proceeds would be allocated to the CIP Fund ($148,000)
and the Redevelopment Fund ($100,000). It is unlikely that the fire station site will be
sold in 2006 or 2007. Therefore, most of the projects in the CIP Fund have been
delayed.
In 2007 the city will receive $156,000 from Ramsey County for the sale of dispatching
equipment. This money can be used to eliminate the deficit in the Redevelopment Fund
and to finance some of the delayed projects in the CIP Fund. Attached are financial
statements which list the proposed budgets for the CIP and Redevelopment Funds.
It is recommended that the 2006 budget and 2007 proposed budget for the CIP and
Redevelopment Funds be revised to the following amounts:
see
Redevelopment Fund
0 - - I - '
Q1111 01
1 99
2007 revenues - $45,000
2007 expenses - $920
P\finance\word\agn\2006 budget changes3
CITY OFMAPLEYYOOD.MINNESOTA
CAPITAL IMPROVEMENT PROJECTS FUND (405)
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES |N FUND BALANCE
2006
ACCT 2004 2005 ORIGINAL 2008 2007
NO. ACTUAL ACTUAL BUDGET RE-EST. BUDGET
2
Property Taxes:
3011
Curren
$O
$113\154
$O
$0
*0
3012
Delinquent
488
119
O
400
O
3017
Interest
95
80
0
O
U
Special Assessments:
3130
Delinquent
125
O
0
O
O
3160
Penalties/interest
13
U
0
O
U
3523
State homestead market value credit
O
3.100
O
O
O
3530
State grant
O
O
0
10.000
U
3544
Cable commission grant
0
O
O
37.380
0
Miscellaneous Revenue:
3801
Investment earnings
1.027
1.558
3.400
1.500
200
3804
Sale ofproperty
0
0
O
0
111.000
Total revenues
1
118008
3400
49
11120O
Expenditures:
4480
Fees for service
O
19
0
O
U
4640
Audio visual equip. for council chambers
0
0
53.000
90.380
0
4040
Police/Fire mobile digital communications
30.704
O
O
0
0
4640
Fire Station security system
8.901
O
O
O
O
4720
City Hall campus improvements
O
O
20.000
30.000
20.000
4730
Fire station remodeling
0
O
85.000
0
30.000
4730
Carpet replacement City Hall
4.657
U
O
O
0
4730
Tartan Arena improvements
O
80.000
0
O
O
4758
City-wide sidewalk improvements
18.819
17.189
0
O
40.000
4930
Investment management fees
481
347
220
100
40
Total expenditures
61
97
138
120480
80040
Excess (daficd)ofrevenues
over expenditures
(59.904)
20.454
(134.820)
(71.200)
21.160
Other financing sources (uuen):
Transfers in(ou1):
Environmental Utility Fund
O
O
O
O
10000
Net increase (deomasa)in fund balance
(59.004)
20.454
(134.820)
(71.200)
31.160
Fund balance January
114596
54
170
75
3
Fund balance December 31
2
CITY OFMAPLEVVOOD.MINNESOTA
REDEVELOPMENT FUND (430)
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
ACCT
NO.
Expenditures:
200
ACTUAL
2005
ACTUAL
2006
ORIGINAL
BUDGET
2006
RE-EST.
2007
BUDGET
4120
Property Taxes:
0
990
0
O
0
3011
Current
$O
$O
$O
*O
$O
3012
Delinquent
48
4
O
O
O
3017
Interest
11
A
O
0
0
4752
Intergovernmental Revenue:
O
1.073
0
O
O
3544
Other Govt. -K8iuogrants
7.900
0
O
O
0
4930
Miscellaneous Revenue:
0
767
80
O
20
3801
Investment earnings
0
3.442
AOU
0
O
3802
Rent
1.000
O
U
0
O
3804
Sale ofproperty
98.455
400.000
0
O
45.000
Total revenues
77 ,513
3
Expenditures:
4120
Program supplies
0
990
0
O
0
4480
Fees for service
9.738
2.753
0
O
0
4490
Consulting
7.900
240.790
O
O
0
4720
Land improvement
0
50.000
O
O
0
4752
Outside engineering
O
1.073
0
O
O
4920
Interest onintorfundloans
1.500
O
0
1.800
000
4930
Investment management fees
0
767
80
O
20
Total expenditures
19,246
305,073
60
1,800
920
Excess (do5oit)ofrevenues
over expenditures
58.287
98.382
900
(1.800)
44.080
Fund balance - January 1
Fund balance - December 31
Fundba|anuoA*xpenditunea
-727.8%
-13.7%
81801.7%
-2414.3%
67.7%
3
AGENDA NO. E4
AGENDA REPORT
TO: City Manager
FROM: Finance Director
!E: 2006 Budget Adjustments for Debt Service and Capital Proje
Funds i
The following 2006 budget adjustments are recommended for the reasons indicated:
1. Debt service fund for the Series 2004E Bonds, increase account 352-000-000-4820,
interest payments, by $4,800 as the amount listed in the schedule of payments was
incorrect.
2. Debt service fund for the Series 2004E Bonds, increase account 352-000-000-4920,
interest on interfund loans, by $2,000 as the amount in the original budget was
underestimated. Interest expense will be due to a larger than anticipated temporary
deficit in the fund due to the incorrect schedule of payments listed in #1.
3. Budgets need to be established for the debt service funds for the bonds that were
issued on April 19. The budget amounts are as follows:
Debt service fund for the Series 2006A Bonds:
Debt service fund for the Series 2006B Bonds:
4. W.A.C. Fund for the North St. Paul Water Service District, increase account 408-
000- 000 -4930, investment management fees, by $150 as the amount in the original
budget was underestimated. The fees are based on investment earnings which will be
higher than anticipated.
5. Open Space Land Acquisition Fund, increase account 410-000-000-4930,
investment management fees, by $1,000 as the amount in the original budget was
underestimated. The fees are based on investment earnings which will be higher than
anticipated.
6. Tax Increment Housing District #1-5 Fund, increase account 426-000-000-4820,
interest payments, by $3,510 because the amount due to the developer has increased
due to an increase in the tax increment revenue.
7. Tax Increment Housing District #1-7 Fund, increase account 428-000-000-4820,
interest payments, by $19,480 because the amount due to the developer has increased
due to an increase in the tax increment revenue.
8. Tax Increment Housing District #1-8 Fund, increase account 429-000-000-4820,
interest payments, by $45,920 because the amount due to the developer has increased
due to an increase in the tax increment revenue.
9. Legacy Village Tax Abatement District Fund, increase account 431-000-000-4930,
investment management fees, by $8,000 as the amount in the original budget was
underestimated. The fees are based on investment earnings which will be higher than
anticipated.
P\agn\2006 budget changesl
AGENDA NO. E5
AGENDA REPORT
TO: City Manager
FROM: Finance Director
RE: PROCEDURES FOR SELECTION OF AUDITING FIRM
DATE: August 3, 2006
09�
It is proposed that an audit committee be formed consisting of a council member, the city
manager, finance director and assistant finance director to prepare a recommendation to the
council on selection of an audit firm.
BACKGROUND
KPMG has conducted the city's annual audit for the past 23 years. The initial contract with
them was for three years and there have been four five-year extensions. A request for
proposals has been sent to several audit firms in August. In October the proposals will be
reviewed and representatives from the audit firms will make a verbal presentation. Since
audit firms technically report to the council and work closely with management and the
finance staff, an audit committee with council, management and finance representatives
would be useful for reviewing the proposals received.
Additional information is in the attached excerpts from AN ELECTED OFFICIAL'S GUIDE TO
AUDITING. It should be noted that on page 43 it states that "the principal factor in selecting
an auditor should be the auditor's technical qualifications. While fees are an important
consideration, they should not be allowed to dominate the auditor selection process. A poor
quality audit is no bargain at any price."
Also attached is data on auditing firms for 24 metro cities with populations over 25,000. A
request for proposals has been sent to the audit firms that audit at least three cities in this
population range. In my opinion firms that audit fewer than three cities with a population over
25,000 do not have sufficient experience to do a high-quality audit for Maplewood.
RECOMMENDATIONS
It is recommended that an audit committee be formed consisting of a council member, the
city manager, finance director and assistant finance director to prepare a recommendation to
the council on selection of an audit firm.
PAWORMAWAUDITSEL.doc
MANAGING THE FINANCIAL
STATEMENT AUDIT
Who is responsible for selecting
the auditor?
Unless the auditor is statutorily appointed by
some higher level of government (e.g.,
municipalities that are required to be audited
by state auditors), the selection of the auditor is
ultimately the responsibility of a government's
legislative body. Sometimes, this responsibility
is delegated to a task force or committee of the
legislative body (e.g., the finance committee).
Ideally, the task is assigned to a specially
selected audit committee. In either case, those
to whom this responsibility is delegated
normally are expected to return to the
legislative body with a formal recommendation
for its approval.
To AUDITING 41
2
How should an auditor be
selected?
The quality of auditors, like that of other
professionals, can vary substantially from one
practitioner to another. Some audit firms
perform high quality audits of state and local
governments, while others lack the specialized
experience and expertise needed to successfully
complete such engagements. Therefore, it is
critical that governments select their auditors
carefully to ensure that they obtain the high
quality audits they need.
Several studies conducted by the U.S. General
Accounting Office (GAO) have indicated
significant problems with the quality of some of
the audits performed for state and local
governments? Another GAO study indicates
that there is a correlation between the quality
of a government's audit procurement process
and the quality of the audit it receives
Therefore, to avoid a substandard audit, a
government's audit procurement process should
possess the following characteristics.
First, governments should make sure that the
audit procurement process is open and
competitive. An open and competitive audit
procurement process is likely to encourage
greater participation by high quality audit
firms.
'CPA Audit Quality: Inspectors General Find Significant
Problems (December 1985) and CPA Audit Quality: Many
Governmental Audits Do Not Comply With Professional
Standards (March 1986).
10 CPA Audit Quality: A Framework for Procuring Audit
Services (August 1987).
42 AN ELECTED OFFICIAL'S GUIDE
Second, a government should prepare a
comprehensive request for proposals (RFP). A
sound RFP should obtain from proposers all of
the information needed to evaluate their
technical qualifications to perform the audit. It
should also provide proposers with a detailed
description of the government, its specific audit
needs, and the government's audit procurement
process.
Third, the principal factor in selecting an
auditor should be the auditor's technical
qualifications. While fees are an important
consideration, they should not be allowed to
dominate the auditor selection process. A poor
quality audit is no bargain at any price.
Finally, it is essential that the government
enter into a written agreement with the
auditor that outlines the rights and
responsibilities of both parties. Often such
contracts incorporate the terms of the RFP by
reference. Governments should not rely solely
on engagement letters furnished by their
auditors.
Detailed, step -by -step guidance on all facets of
audit procurement and monitoring (including a
complete model RFP) can be found in the
GFOA's Audit Management Handbook. These
steps are briefly summarized in the appendices
to this publication. The GFOA's model RFP for
the procurement of audit services is also
available on computer diskette. In addition,
readers may wish to obtain a copy of the
National Intergovernmental Audit Forum's
publication How to Avoid A Substandard Audit:
Suggestions for Procuring an Audit, which
provides a good overview of the audit
procurement process.
TO AUDITING 43
3
What other services may auditors
be requested to perform in
conjunction with an audit of the
financial statements?
In practice, auditors, often provide a wide range
of services to their clients in conjunction with
audits of the financial statements. They often
agree, for instance, to take responsibility for
the fair presentation of certain financial data
accompanying official statements (i.e.,
"underwriters' letters "). Similarly, auditors may
take responsibility for special purpose reports
furnished to state agencies and grantors.
Auditors also may provide peer review services
to internal auditors, or professional training to
the government's accounting staff. Similarly,
auditors may agree to help a government to
achieve the GFOA's Certificate of Achievement
for Excellence in Financial Reporting.
These ancillary services, while important, are
not part of the basic audit engagement.
Accordingly, governments desiring such services
should be sure to request them in their RFPs.
44 AN ELECTED OFFICIAL'S GUIDE
What is the optimal duration for
an audit contract?
Auditors are required to gain and document an
understanding of a government's internal
control structure as part of the audit planning
process. Understandably, this process is
especially costly in the first year of an audit,
because the auditors are becoming acquainted
with and documenting the internal control
structure for the first time.
A multi -year audit contract has the advantage
of allowing auditors to recover these and
similar start-up costs over a longer period of
time, and so can lead to lower overall audit
costs. Also, multi -year audit contracts can help
to create needed continuity in the audit process.
Accordingly, the U.S. General Accounting Office
(GAO) is on record recommending that "entities
should consider using multi -year agreements,
preferably of a five -year duration, due to the
potential cost savings and continuity benefits
over the long- term. ""
Of course, governments must retain their right
to terminate such multi -year contracts should
the auditor's performance prove unsatisfactory.
Also, a government may wish to retain the
services of an audit firm following the
expiration of a multi -year contract.
"CPA Audit Quality: A Framework for Procuring Audit
Services (August 1987), p. 28.
TO AUDITING 45
0 L ?
Sh ould auditors be "rotated � .
Recently, there has been much public discussion
about the advantages and disadvantages of
"term limits" for elected officials. Those in favor
of the concept often argue the need for "new
blood" and a "fresh perspective." Opponents, on
the other hand, typically cite the benefits of
"continuity" and "experience." To date, no
national consensus has emerged in favor of
either view.
The same situation holds true, in many
respects, for the concept of "auditor rotation:'
Some argue that there should be a mandatory
change of auditors at the end of a specific
number of consecutive contracts (e.g., two five-
year contracts). Others argue that a
government's current auditors should be allowed
to compete on an equal footing with other
potential auditors for each subsequent contract.
No clear consensus has emerged in favor or
against the concept of auditor rotation.
It should be noted that, under current
professional standards applicable to auditors,
there is no ethical limitation on the number of
consecutive years that an auditor may continue
to audit a given client. It should be further
noted that some of the proposed benefits of
auditor rotation can be obtained within a firm
by changing key personnel assigned to the
audit, such as the partner in charge of the
engagement. Nor is there any consensus on the
concept of auditor rotation in the private sector,
where some corporations periodically require a
change in audit firms, while others have
continued with the same audit firm for decades.
46 AN ELECTED OFFICIAL'S GUIDE
5
DATA ON AUDITING FIRMS FOR METRO CITIES WITH POPULATION OVER 25.000
DATA GROUPED BY AUDITING FIRM
city
Pop
Auditing
St
44.511
Abdo Eiok& Meyers Ltd
Lakeville
49.097
BdeBaiUyLLP
Maple Grove
58.7E4
EideBaiUyLLP
Coon Rapids
62.243
Bde8aiUyLLP
Shoreview
20.381
HLBTau(gooRedpothLtd.
VVoodbu
50.050
HLBTauh]aaRedpathLtd.
Frkdle !
27.088
HLBTautgeaRedpotb.Ltd.
Oakdale
27.657
HL8TeutgeaRodputh.Ltd.
Brooklyn Cente
20.005
HLBTau¢JeoRodpeth,Ltd.
Andover
20.262
HLBTau(geoRedpaUh.Ltd.
Cottage Grove
31.774
HLB TautgeeRedpuih.Ltd.
Richfield
'34
HL8TauigenRadpeMh.Ltd.
Shakopee�
28.013
Kern DeVVontorViunaLtd
Inver Grove Heights
32.193
Kern OaVVente/ViernLtd
Roseville
34
Kern DoVVonterVianeLtd
Apple Valley
48
Kern DeVVenterVieroLtd
Minnetonka
51.480
Kern DeVVen0arVieneLtd
Eagan
65.764
Kern DeVVenterViereLtd
Brooklyn Park
68,992
Kern OoVVenterViomLtd
Edina
48,050
Malloy Montague KammmmakiRadooevioh&CoRA
Eden Prairie
60.460
Malloy Montague KormovmkiRodooevich&CoPA
Burnsville
61.425
Malloy Montague KarmmmekiRadouevioh&CoPA
Plymouth
70,082
Malloy Montague KamnowekiRadoeeviuh&CoPA
Blaine
51.002
Virohmw Krause &CoLLP
Note: Maplewood population is36,27S according butheMetCuumci|Apr|2O05eotmate
H.
I - •
FROM: Finance Director
RE: Water Surcharge Ordinance First Reading
11 i' 11 111111
It s proposed that a water surcharge fee on North St. Paul Water Service District
accounts be implemented effective 1 -1 -07 to finance water system improvement costs
that cannot be assessed.
BACKGROUND
Maplewood has a 2% water surcharge fee on St. Paul Water Service District accounts
to finance water system improvement costs that cannot be assessed. During the
annual update of the five-year Capital Improvement Plan, the Public Works Director has
identified some water system improvements that are needed in the North St. Paul Water
Service District that cannot be assessed which total $75,000. These costs are
proposed to be financed by the Water Availability Fund for the North St. Paul Water
Service District. There will be insufficient revenues in the fund unless a water surcharge
is implemented effective 1-1-07. The proposed surcharge is 6.7% of the North St. Paul
water charge. The surcharge would be approximately $1.00 per month for an average
home. The revenue generated by the surcharge would be approximately $9,500 in
2007.
Implementation of a water surcharge fee probably would not be controversial because
the use of the revenues should be easily understood and the fee is very small. If the
water surcharge fee is not implemented, the unassessable water system improvements
would have to be financed by property taxes.
RECOMMENDATION
It is recommended that the Council approve first reading of the attached ordinance to
implement a water surcharge fee on North St. Paul Water Service District accounts
effective 1-1-07.
ORDINANCE AMENDING THE MAPLEWOOD CODE
RELATING TO WATER UTILITIES
THE COUNCIL OF THE CITY OF MAPLEWOOD DOES HEREBY ORDAIN AS
FOLLOWS:
Part 1. Section 40, Article III is hereby amended to read as follows:
Division 5. Water Surcharge
Section 40-477. Purpose and Intent.
The city has determined that water system improvements in the St. Paul and
North St. Paul water service districts need to be constructed that cannot be fully
assessed. In order to pay for these costs a surcharge on water charges in the St. Paul
and North St. Paul billing districts is established.
Section 40-478. Rates.
A surcharge on water charges in the St. Paul and North St. Paul billing districts
shall be set from time to time by the council and shall be on file for inspection in city
offices.
Part 2. This ordinance shall take eAect and be in force beginning January 1,
2007.
P\agn\water surcharge NSP 1
2
AGENDA NO. E7
TO: City Manager
FROM: Finance Director
RE: Electric Franchise Tax Increase
DATE: August 25, 2006
In order to minimize the tax levy increase for the 2007 General Fund budget, electric
franchise tax revenues totaling $959,350 were added to close the "budget gap" and
diversify revenues. Currently the electric franchise tax produces $182,190 of revenues
for the Street Light Utility Fund and homeowners pay $0.50 per month. The rate for
homeowners would have to increase to approximately $2.00 per month to generate an
additional $959,350 per year. (The rate on commercial accounts would range from
$2.85 to $516.70 per month.)
Currently Xcel Energy is billing electric franchise taxes in 39 cities and 13 of these cities
also have a gas franchise tax (see attached table). An increase in the electric
franchise tax would make Maplewood revenues more like the other cities listed on the
attached table.
In order to increase the electric franchise tax rate effective 1 -1 -07, Xcel Energy needs a
proposed ordinance approved (two readings required) by the City Council by November
1. It is requested that the City Council determine if they want staff to prepare an
ordinance to implement an increase in the electric franchise tax to produce an
additional $959,350 per year.
p\agn\franchise fee increasel
FILE NAME: ELEOSURCHARGES
LOCATK}N:P:\EXCELUN|GC
DATE: 28/\ug-00
PREPARED BY: DF
CITY SURCHARGES ON RESIDENTIAL ELECTRIC SERVICE
1
2
3
4
5
0
7
O
V
10
11
12
13
14
15
10
17
10
19
20
21
22
23
24
25
20
27
28
29
30
31
82
33
34
35
RES.
RES.
ELEC.
ELEC.
SERVICE
SERVICE
GAS
GURCHAGE
GUROHAGE
SERVICE
AMOUNT
CITY
— RATE
O�50
Maplewood
FS
NO
0�50Oa*]o|o
FS
YES
O.77
White Bear Lake'
1.50%
NO
1.00
Cottage Grove
FS
YES
1�00
Hopkins
FS
NO
1.00
St. Joseph
FS
YES
125
St. Louis Park
FS
NO
1.30
Mah1omodi
F8
NO
1�35
FaribmuK
FS
YES
1.48
Brooklyn Center
FS
NO
1.50
New Hope
FS
NO
1.50
St. Paul Park
FS
YES
1�55
Sauk Rapids'
3.00%
YES
1�53
South SL Paul'
3,00Y6
NO
1.55
GL Cloud'
3.00%
YES
1.65
Richfield
F8
NO
115
Dilworth
FS
NO
1J5
Little Canada
FS
NO
2.00
Afton
FS
YES
2.00
Minnetonka
FS
NO
ZOO
Mound
FS
NO
2.00
Stillwater
FS
YES
2.O4
Coon Rapids'
4.00%
NO
2.04
Hastings'
4,0096
NO
2�O4
Mounds View'
4.00%
YES
Z04Rohhinsdo|o"
4,00%
NO
2.04
Winona
4.00%
NO
225
SarteU
FS
YES
Z35
Grant
FS
NO
Z50
Deophavan
FS
NO
2.50
Excelsior
FS
NO
2.50
St. Michael
F8
NO
2�55
Minneapolis'
5.00%
NO
2.68
West St. Paul'
5,26%
NO
525
Baker
FS
NO
Monko0
FS
NO
New Brighton
FS
YES
Owatonna
FS
NO
GLPau|
FS
YES
1 Monthly amount estimate based on surcharge rate nn estimated avera residentia
electric bill of $51.
2 The monthly surcharge is$U.0U23 per kWh
» The monthly surcharge is $0.001O per kWh when peak demand is less than 100
kW and $V.0V14 per kWh when peak demand is greater than 1OONN
* A 0.5% City sales tax add-on to the State sales tax is applicable in general to
customers subject to the State sales tax.
s The monthly surcharge is $2.45 per meter plus $0.0086 per KWH and is in effect
just for the months of May through October.
2
AGENDA NO.
TO: City Manager
I ; I z Is] �j = 9 H FFFN ro r; i Lei 172-TOUSM
1111111111;11111pi��!��Ijj 11 111 111 1111111�111 11 111 111
a �01 we IN rl't
� III Amidtod-11
luugnlmm i !/•
State law requires that cities certify their proposed property tax levies to the county
auditor by September 15. The proposed tax levy that is given preliminary approval
cannot be increased. Therefore, it is important that the proposed tax levy provides
adequate revenues to finance the 2007 Budget.
The City Council needs to decide the maximum levy that they are willing to approve
and then adopt the attached resolution.
Z WAR HMO l r 1 l
r r
• • •t• -• • its •. .• - ii • -• - •- ii• •
WHEREAS, the City Council has reviewed the Proposed 2007 Budget and
has determined the amount of the proposed tax levy payable in 2007 which is the
maximum amount that will be levied.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF MAPLEWOOD, MINNESOTA THAT the proposed tax levy for 2006
payable in 2007 in the amount of is hereby given preliminary
approval.
P \agn \2005PROPOSE DTAXLEVY
S \agenda \2005PROPOSEDTAXLEVY
2
ETC a 0 1 DUM 0 •
AGENDA REPORT
TO: City Manager
FROM: Finance Director
- "% , E: Set Public Hearing Dates on Proposed 2007 Budget and
Property Tax Levy
State law requires that the City hold a public hearing on its budget and property tax levy for
2007. The following procedures must be followed:
• Certify to Ramsey County the date it has selected by September 15 th ;
• Hold the meeting between November 29 and December 20th;
• Hold the hearing after 5:00 p.m. if it is on a day between Monday and Friday or at
any reasonable time on Saturday; and
• Not to conflict with hearings for the county, metro special taxing districts or the three
school districts in Maplewood.
The following dates are recommended as the Legislature has reserved the dates for cities:
Initial hearing - Monday, December 4th at 7:00 p.m
Continuation hearing (if needed) - Monday, December 11 at 7:00 p.m
Adoption hearing - Monday, December 11 at 7:00 p.m.
PTI NAN C EMord\AW2007budgethearing
S\AGENDAN2007budgethearing
0
MEMORANDUM
September 6, 2006
TO: City Council
FROM: Greg Copeland
RE: Legal Consultant for Personnel Matters
Background
Agenda Item EIO
On August 6, 2006 and on four additional dates a public notice was published in the
Pioneer Press requesting proposals for City Prosecutor for the City of Maplewood.
Additionally this public notice was published in the St. Paul Legal Ledger to maximize
the response to the RFP notice from the legal community.
Proposals were received from three law firms:
Bethel & Associates P.A. of St. Paul
Kennedy & Graven of Minneapolis
Morrison, Fenske & Sund of Minnetonka
Attached is a description of fees and charges proposed by each firm.
There was significant variation in the fees proposed by each firm ranging from hourly
rates of $85.00 per hour to $190.00 per hour. One firm also has charges for copies, faxes,
mileage and online legal research.
There are three separate legal services being sought by the City:
1. Labor contract negotiations
2. Legal consultant for Personnel Matters
3. Employment Investigations
The largest and oldest firm to respond was Kennedy & Graven founded in 1989 with 35
lawyers representing numerous public sector clients in the labor law and labor
negotiations. Two of the attorneys with the firm are former assistant city attorneys for
Maplewood, Sarah J. Sonsolla and Linda K. Thompson. The primary legal adviser would
however be Michael T. Norton, currently City Attorney for Crystal, Victoria and
Franklin.
Kennedy & Graven proposes a $135.00 per hour rate to provide all three legal services.
Separate charges for the following items were proposed:
Copies
Fax
Mileage
Westlaw/Lexis Legal Research
Messenger Services
$.20 per page
$.50 per page
.445 per mile (or IRS rate)
Actual Cost
Actual Cost
Eighty percent of the firm's clients are public entities and Kennedy & Graven represents
no labor organizations.
Morrison, Fenske & Sund is a 13 member law firm founded in 1991 in Minnetonka.
James K. Martin is the firm's lead attorney on labor law having been previously practiced
employment law with Larkin Hoffman Daly & Lindgren. Mr. Marin was most recently
Executive Director of Human Resources with the Bloomington Public Schools and
teaches "School Human Resources Administration" at the University of Minnesota. He is
also a legal consultant for personnel matters with the City of Excelsior.
The firm is serving both private (75%) and public (25%) clients and no labor
organizations.
The firm proposes a $190.00 per hour rate.
The smallest firm is Bethel & Associates located in St. Paul and founded by Charles
Bethel in 2000. Mr. Bethel and his three associate attorneys primarily serve private sector
clients in labor and employment law as well as complex litigation in contract law serving
both plaintiffs and defense in employment, labor, commercial and personal claims.
Mr. Bethel represented school districts and insurance companies while with Rider
Bennett Egan & Arundel before joining Mahlum & Associates as a litigator in labor and
employment and contract law for international technology companies.
In his own firm Mr. Bethel has represented labor unions in contract negotiations with the
City of St. Paul and the St. Paul School Board. While no longer representing labor
organizations his participation in mediation, arbitration and grievance procedures from
the perspective of public employees gives him a unique insight into negotiations from the
point of view of the bargaining units seeking contracts with the City.
Mr. Bethel also provides contract administration services and assistance in drafting
employee handbooks, discipline procedures, benefits analysis and prevention services to
employers to avoid sexual harassment and work place violence through education and
policy development.
A former editor in chief of the Hamline Law Review he is now an adjunct Professor at
Hamline University's Legal Studies Program.
Mr. Bethel has a Maplewood connection having prepared the incorporation papers pro
bono for the Friends of the Maplewood Nature Center earlier this year.
Mr. Bethel is offering the services of his firm at $90.00 per hour for labor contract
negotiations and $100.00 per hour for General Personnel Consultation services and
employment investigations at $80.00 per hour for an attorney and $45.00 for a law clerk.
Recommendation
Bethel & Associates would provide the City of Maplewood cost effective legal
representation to negotiate labor agreements with our city's seven bargaining units as
well as providing personnel consultation and employee investigation services. The City
Council should approve a motion to direct the city manager to negotiate a contract for
above referenced legal services with Bethel & Associates.
FIRM
LOCATION
PROPOSED FEES
MINIMUM PROJECTED
ANNUAL COST BASED
ON 100 HOURS PER
MONTH
BRADLEY &
St. Paul
$175 Senior Attorney per hour
$210,000 to $162,000
GUZZETTA
$135 Staff Attorney
BURSTEIN GLASER
Minneapolis
$110 Senior Attorney per hour
$132,000 to $108,000
$90 Associate Attorney per hour
HELLMUTH&
Eden Prairie
$9,600 Retainer Fee
$115,200
JOHNSON
KNAAK &KANTRUD
Vadnais Height
$8,250 fixed monthly fee
$ 99,000
MORRISON FENSKE
Minnetonka
$5,000 per month plus $1,200
$114,000
& SUND
for 4" jury trial day in a month
and each jury trial day thereafter
MARGARET
St. Paul
$80 per hour
$ 96,000
MURPHY
PRIOR CONTRACTOR
2006 RATE
2005 ACTUAL COSTS
KELLY & FAWCETT
St. Paul
$9,825 flat rate per month
$117,900
FIRM
OPEN TO
COPIES
FAX
MILEAGE
ONLINE
POSTAGE
TELEPHONE
MESSENGER
CITY HALL
LEGAL
LONG
COURIER
OFFICE
RESEARCH
DISTANCE
SERVICES
HOURS
BRADLEY&
Yes
Not
Not
Not
Not
Not
Not
Not
GUZZETTA
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
BURSTEIN
Not
.10 pp
No
Not
Not
Cost
Not
Not
GLASER
Addressed
Charge
Addressed
Addressed
Addressed
Addressed
HELLMUTH
Yes
No
No
Not
No
No
Not
Cost
&JOHNSON
Charge
Charge
Addressed
Charge
Charge
Addressed
KNAAK&
Yes
First 500
Not
Not
Not
Not
First $25 per
Not
KANTRUD
per month
Addressed
Addressed
Addressed
Addressed
month no
Addressed
no charge
charge
MORRISON,
Not
No
No
No
No
Not
Not
Not
FENSKE &
Addressed
Charge
Charge
Charge
Charge
Addressed
Addressed
Addressed
SUND
MARGARET
Not
Not
Not
Not
Not
Not
Not
Not
MURPHY
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
MEMORANDUM
August 28, 2006
TO: City Council
FROM: Greg Copeland, City Manager
RE: City Attorney's Services Contract
Background
On July 7, 2006 Kelly and Fawcett resigned their contract to provide city attorney
services. On July 10, 2006 Knaak & Kantrud P.A. was hired on an interim basis to
provide the City with legal services until a successor firm is selected.
On August 6, 2006 and on four additional dates a public notice was published in the
Pioneer Press requesting proposals for City Attorney Services for the City of Maplewood.
This same notice was published in the St. Paul Legal Ledge to maximize the response to
the RFP notice from the legal community.
Proposals were received from four law firms:
Bradley & Guzzetta of St. Paul
Kennedy & Graven of Minneapolis
Knaak & Kantrud of Vadnais Heights
Morrison, Fenske & Sund of Minnetonka
A separate description of the fees and charges proposed by these firms has been
distributed to each City Council member.
While there was significant variation among the competing firms, all firms proposed
hourly rates below the former city attorney Kelly & Fawcett. Bradly & Guzzetta's hourly
rate proposal placed it as the highest cost proposer with Senior Attorney rates of $175 per
hour.
While two firms Kennedy & Graven and Morrison, Fenske & Sund used different
approaches to determine their flat rate proposals my analysis is that on an annualized
basis using a minimum projected 100 hours per month cost basis they were essentially
equal for our City's purposes. Each proposed essentially a hundred and fifty thousand
dollars per year retainer/fee.
Kennedy & Graven proposes a $500 charge for City Council meetings, including attorney
travel time that exceeds four hours.
Morrison, Fenske & Sund limited their $5,000 proposed monthly retainer to a maximum
of 50 hours with a $150 per hour charge there after.
Based on a minimum of 100 hours of monthly service charges the $5,000 retainer plus
$7,500 based upon additional 50 hours at $150 equals a $12, 500 monthly cost, or
$150,000 on an annual basis.
The flat rate per month of $8,250 proposed by Knaak & Kantrud generates a $99,000
annual cost, excluding major litigation. Litigation costs for any one file requiring 10
hours per month are covered under the flat fee, however, charges for the eleventh hour
and any additional hours in a single month would be billed at $90 per hour.
Knaak & Kantrud's flat fee annualized rate is over $50,000 less than either Kennedy &
Graven or Morrison, Fenske & Sund proposed retainer/fee cost.
The Kennedy & Graven firm located in Minneapolis also proposes to charge the current
IRS per mile rate for travel to Maplewood, as well as a $.50 per page charge for fax
transmissions.
While Kennedy & Graven is a very large law firm with a considerable number of
municipal clients as well as school boards and other government clients as well as private
clients I think there is an advantage for Maplewood to be one of the largest municipal
clients of a smaller local law firm Knaak & Kantrud whose capacity for immediate
attention and personal service is already well known to the City.
Knaak & Kantrud represent the Cities of Fridley, Newport and formerly Lake Elmo as
City Attorney. The White Bear Lake Conservation District is also represented by the
firm. Knaak & Kantrud's practice is approximately 75% municipal. Legal ethics are
important and the proposal from Knaak & Kantrud outlines a policy in place to avoid
potential conflicts of interest with its municipal clients by not representing real estate
developers, unions or other labor associations.
Additionally, there is a commitment to providing legal services to the City of
Maplewood, Knaak & Kantrud declared in its proposal: "To the extent there could be
professional conflicts and or commitments in the future that could interrupt the service to
the city, our commitment would be to the City, first, and our choice would be to decline
that future work or add staff to accommodate the additional resources needed and not
interrupt the service(s) enjoyed by the City."
Recommendation
Based upon the positive experience with Kaaak & Kantrud over the last seven weeks
during service as interim City Attorney, the firms commitment to a high standard of
ethical conduct, knowledge of pending legal matters and significant cost savings which
can be realized on an annual basis by selecting Knaak & Kantrud, the City Council
should adopt a motion to allow the City Manager to negotiate a contract for City Attorney
Services with Knaak & Kantrud.
FIRM
LOCATION
PROPOSED FEES
MINIMUM PROJECTED
ANNUAL COST BASED ON
100 HOURS PER MONTH
BRADLEY &
St. Paul
$175 per hour Senior Attorney
$210,000 to $162,000
GUZZETTA
$135 Staff Attorney
KENNEDY & GRAVEN
Minneapolis
$12,500 monthly retainer
$150,000
covers all routine matters. City
Council meetings less than 4
hours including travel time, the
actual duration of the meeting
will apply to retainer at $135
per hour. City Council
meetings exceeding 4 hours
including travel time applied to
retainer $500 per meeting.
KNAAK &KANTRUD
Vadnais Heights
$8,250 per month flat fee.
$ 99,000
Except litigation exceeding 10
hours on an individual file in a
single month, billed at $90 per
hour Attorney/ $50 per hour
paralegal.
MORRISON, FENSKE &
Minnetonka
$5,000 monthly retainer, with
$150,000
SUND
range of 25 -50 hours per
month with, additional charge
or credit of. $150 per hour
PRIOR CONTRACTOR
2006 PER HOUR RATES
2005 ACTUAL COST
KELLY & FAWCETT
St. Paul
$300 Partner
$190,180.20
$190 Associates
$ 90 Law Clerks
$ 90 Paralegal
FIRM
LITIGATION
COPIES
FAX
MILEAGE
MESSENGER
ONLINE
OPEN TO
COSTS
EXPRESS
LEGAL
CITY HALL
MAIL
RESEARCH
OFFICE
HOURS
BRADLEY &
Attorney $175 -$135
Cost
Cost
.485 pm
Cost
Not
Yes
GUZZETTA
Paralegal $90
Addressed
KENNEDY &
Attorney $155
.20 pp
.50 pp
.445 pm
Actual
Actual
Yes
GRAVEN
Paralegal $90
Cost
Cost
KNAAK&
Attorney $90
First 500
No
No
No
No
Yes
KANTRUD
Paralegal $50
copies
Charge
Charge
Charge
Charge
each
month no
charge
MORRISON,
Not
No
No
No
Not
No
Not
FENSKE &
Addressed
Charge
Charge
Charge
Addressed
Charge
Addressed
SUND
MEMORANDUM
August 28, 2006
TO: City Council
FROM: Greg Copeland, City Manager
RE: Prosecution Services Contract
Background
On July 7, 2006 Kelly and Fawcett resigned their prosecution services contract with the
City of Maplewood and continues to provide those services until transition to a successor
firm is accomplished. .
On August 6, 2006 and on four additional dates a public notice was published in the
Pioneer Press requesting proposals for City Prosecutor for the City of Maplewood.
Additionally this public notice was published in the St. Paul Legal Ledger to maximize
the response to the RFP notice from the legal community.
The following responded with written proposals to provide Prosecution Services:
Bradley & Guzzetta of St. Paul
Burstein Glaser of Minneapolis
Hellmuth & Johnson of Eden Prairie
Knaak & Kantrud of Vadnais Heights
Morrison, Fenske & Sund of Minnetonka
Margaret Murphy of St. Paul
A separate description of the fees and charges proposed by each firm was previously
provided to each City Council member.
I reviewed each of the proposals submitted to narrow the field and asked Police Chief
Dave Thomalla to do the same given the daily involvement of the City Prosecutor with
the members of the Police Department.
One firm was eliminated on the basis of a lack of municipal prosecution experience and
another had limited prosecution experience. One proposal lacked the organizational
capacity to meet our prosecution demands. Another firm had prosecutional experience,
but proposed an hourly fee based billing system which I don't believe is appropriate for
Maplewood given our volume of cases or in our financial interests.
Among the remaining firms each has municipal prosecution experience. Cities an
their current or past clients were:
Knaak & Kantrud White Bear Lake, Newport, Fridley and Mr. Alan Kantrud
additionally prosecuted cases for Stillwater, Marine on St. Croix and Baytown before
joining Knaak & Kantrud.
Hellmuth & Johnson proposed lead prosecutor Shari Jacobus lists North St. Paul,
Roseville and Vadnais Heights as municipalities in which she has prosecuted cases.
Hellmuth & Johnson proposed a retainer fee of $9,600 per month and Knaak & Kantrud
proposed "an all inclusive flat fee of $8,250 per month." Selecting Knaak & Kantrud
would produce an annual savings of $16, 200
Each of these firms indicated in the RFP they would be open to scheduling office time at
City hall to enhance availability to city staff, specifically the police department.
City prosecution requires a quick response time, a commitment to weekend call out and
an ability to meet charging deadlines and location of the law firm's office is a
consideration to avoid excessive police time being used to travel to get complaints
signed.
Knaak & Kantrud is located in Vadnais Heights in Ramsey County, while Hellmuth &
Johnson's office is in Eden Prairie in Hennepin County.
Recommendation
Having weighed the experience and capacity to meet the City of Maplewood's
prosecution needs and proposed fees for those services I believe the City Council should
approve a motion to direct the City Manager to negotiate a city prosecution services
contract with Knaak & Kantrud of Vadnais Heights.
FIRM
LOCATION
PROPOSED FEES
MINIMUM PROJECTED
ANNUAL COST BASED
ON 100 HOURS PER
MONTH
BRADLEY &
St. Paul
$175 Senior Attorney per hour
$210,000 to $162,000
GUZZETTA
$135 Staff Attorney
BURSTEIN GLASER
Minneapolis
$110 Senior Attorney per hour
$132,000 to $108,000
$90 Associate Attorney per hour
HELLMUTH&
Eden Prairie
$9,600 Retainer Fee
$115,200
JOHNSON
KNAAK &KANTRUD
Vadnais Height
$8,250 fixed monthly fee
$ 99,000
MORRISON FENSKE
Minnetonka
$5,000 per month plus $1,200
$114,000
& SUND
for 4" jury trial day in a month
and each jury trial day thereafter
MARGARET
St. Paul
$80 per hour
$ 96,000
MURPHY
PRIOR CONTRACTOR
2006 RATE
2005 ACTUAL COSTS
KELLY & FAWCETT
St. Paul
$9,825 flat rate per month
$117,900
FIRM
OPEN TO
COPIES
FAX
MILEAGE
ONLINE
POSTAGE
TELEPHONE
MESSENGER
CITY HALL
LEGAL
LONG
COURIER
OFFICE
RESEARCH
DISTANCE
SERVICES
HOURS
BRADLEY&
Yes
Not
Not
Not
Not
Not
Not
Not
GUZZETTA
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
BURSTEIN
Not
.10 pp
No
Not
Not
Cost
Not
Not
GLASER
Addressed
Charge
Addressed
Addressed
Addressed
Addressed
HELLMUTH
Yes
No
No
Not
No
No
Not
Cost
&JOHNSON
Charge
Charge
Addressed
Charge
Charge
Addressed
KNAAK&
Yes
First 500
Not
Not
Not
Not
First $25 per
Not
KANTRUD
per month
Addressed
Addressed
Addressed
Addressed
month no
Addressed
no charge
charge
MORRISON,
Not
No
No
No
No
Not
Not
Not
FENSKE &
Addressed
Charge
Charge
Charge
Charge
Addressed
Addressed
Addressed
SUND
MARGARET
Not
Not
Not
Not
Not
Not
Not
Not
MURPHY
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed
Addressed