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HomeMy WebLinkAbout2006 09-11 SMWiT Agamillill b717CP ITI011UaT, Z)UPLUMAPelf 1 Council Chambers, City Hall Meeting No. 06-24 U ffl . it . "� ORA OCI:901 W- w" F- IN [§�Ell U 2-1101TEWSIMICI A I 1�1111 ki I ATAI ".1114 1 ki I I �E 11111 [9111 ZR I Ai I A L • INI 0 �E 0- FROM: Finance Director q .ff 1' 1111 11 ! j 111111111 I rll�j iii 1111 111 1 1111111�1 Ing III IIIIIIIIii! 154 1 Wifarer:T, =-F 19wel I i 111111 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