HomeMy WebLinkAbout2010 04-05 City Council Manager Workshop Packet
AGENDA
MAPLEWOOD CITY COUNCIL
MANAGER WORKSHOP
5:00 P.M. Monday,April 5, 2010
Council Chambers, City Hall
A.CALL TO ORDER
B.ROLL CALL
C.APPROVAL OF AGENDA
D.UNFINISHED BUSINESS
E.NEW BUSINESS
1.Presentation and Discussion With Ramsey Washington Metro Watershed District About
Cooperative Watershed Management Projects
2.Discussion of Parameters for Preparation of 2011 City Budget
F.ADJOURNMENT
THIS PAGE IS INTENTIONALLY LEFT BLANK
Agenda Item E1
AGENDA REPORT
TO
: Jim Antonen, City Manager
FROM:
Charles Ahl, Assistant City Manager
SUBJECT:Presentation and Discussion with Ramsey Washington Metro Watershed
District about Cooperative Watershed Management Projects
DATE:March 30,2010
INTRODUCTION
The Ramsey Washington Metro Watershed District (RWMWD) will be attending this work session to
review various priorities and projects that they conduct within Maplewood. RWMWD has been a very
supportive and cooperative partner for Maplewood in implementing various storm water improvements,
specifically partnering with infiltration type of projects to assist Maplewood with meeting our National
Pollution Discharge Elimination Permit (NPDES) requirements. RWMWD has provided Maplewood
with a number of grants for infiltration projects, including funds toward the pervious pavement at the
Maplewood Public Works parking lot, along with various other project related grants.
The RWMWD also has been implementing a major cooperative project that involves the Maplewood
Mall infiltration and treatment system for runoff waters that are a part of the White Bear Avenue
improvements. The Administratorof RWMWD is Cliff Aichinger. Cliff will be present at this meeting to
discuss some of these efforts.Cliff will also review the various goals and directives that the RWMWD
Board has adopted for the next few years. It is anticipated that the presentation and discussion will
last about 45 – 60 minutes.
RECOMMENDATION
No action is proposed on this item. It is informational only.
Attachments:
1.RWMWD Strategic Overview
Agenda Item E2
AGENDA REPORT
TO
: Jim Antonen, City Manager
FROM:
Charles Ahl, Assistant City Manager
SUBJECT:Discussion of Parameters for Preparation of 2011 Budget
DATE:March 30, 2010
INTRODUCTION
Consideration of the 2011 Budget is beginning at the staff level. Preparations are well underway to
analyze the Capital Improvement Requests for 2011 – 2015 and that planning document will be
presented to the City Council in late May and early June. This session is a discussion of the various
parameters and thoughts from the City Manager on the Council’s goals and objectives for 2011. A
review of the General Fund will be the specific items to be reviewed, as this fund has the majority of
impact on the overall tax levy. Discussions on parameters for development of the budget document
that staff arehoping to present to the City Council in early August 2010 for consideration. The
proposed budget calendar is attached for consideration.
2009 Budget
In a general overview, the budget for the City operates in accounts and funds that are managed inter-
actively with transfers, charges, revenues, debits and various credits. Maplewood operates on a
calendar year and each fund is estimated for fund balance and cash balances on that annual basis.
The General Fund is the largest operating budget and contains nearly 67% of the overall City
operating expenditures. An operating balance is necessary to maintain a positive cash flow during the
year as many expenses are incurred before actual revenues are received. Over the years, the City
has attempted to maintain a fund balance of at least 36% of operating revenues in the General Fund.
For 2009, as the staff is closing the books for review by the Auditors, there are a number of factors
that are reviewed as estimates are prepared for 2010 and 2011. Overall, the news for 2009 appears
good in that the General Fund ended approximately $135,000 over the amount estimated for the year.
The key factors within the numbers are that revenues were nearly $1.0 million short of the amount
originally estimated;however, staff instituted reductions during the year that reduced expenditures
over $1.0 million, resulting in the $135,000 surplus. The final numbers are still being reviewed and
adjusted as final costs and revenues arerecognized, but current values are:
2009 Revenue:$18,488,280 [budgeted] $17,493,030 [actual]
2009 Expenditures:$18,090,330 [budgeted] $17,069,851 [actual]
2009 Surplus: $135,000 [undesignated]
2010 Budget
The undesignated surplus of $135,000 is available to use for the 2010 budget. The 2010 budget for
2010 after all expenditures, revenues and transfers are accomplished estimated a deficit year [or
spending of reserves] of $188,645. Obviously, extending these two values out provides:
2010: +$135,000 [09 surplus] -$188,645 [10 deficit] = -$53,645 [10 deficit]
2011 Budget Parameters
Page Two
2010 Budget [cont.]
As noted previously, the revenues for 2009 were $1.0 million below the estimate. In reviewing these
values, in comparison to the 2010 budget assumptions, it is likely that adjustments in 2010
assumptions should also be made. If the 2010 budget assumptions for revenue are held, the overall
General Fund would need to see a 6.0% increase in revenues from 2009 to 2010. A levy increase of
5.0% was dedicated, and other sources within the fund are not likely to see this increase. It is
estimated that a 3.8% increase in revenues is more likely, resulting in a deficit in revenue for 2010:
2010 Revenue:$18,536,105 [10 budgeted revenue]
2010 Revenue:$17,493,030 [09 actual] * 3.8% [estimated increase] = $18,160,000
2010 Revenue shortfall:$18,536,105 - $18,160,000 = $376,105
2010 General Fund Deficit: $ 53,645
2010 Expenditure Reductions Needed: $429,750
2010 Expenditures:$18,159,750 [10 budget] - $429,750 [deficit] = $17,730,000 [10 re-estimate]
This is a 2.4% reduction in planned 2010 expenditures. The City staff is preparing re-estimates
of expenditures for 2010 and will present the revised expenditures as part of the overall budget
in August, although an across the board 2.0% reduction is planned along with other specific
reductions as determined by the City Manager.These reductions will begin immediately under
the City Manager’s direction. Revenue trends for 2010 willcontinue to be tracked on an on-
going basis and additional revisions will be made as these trends are analyzed.
2011 Budget Considerations
With the adjustments noted above in 2010, the beginning of the 2011 budget assumes that with a
balanced budget that any increase in expenditures will require a corresponding increase in revenues.
As a baseline, the City Manager will be considering a minimal growth budget. The various impacts of
this minimal growth are represented in the following categories of impact:
1.Debt Service
: as reported in 2008 by Springsted, Inc. the debt service fund is in good shape.
We still anticipate that nearly 65% of the City’s current debt will be retired within the next 8-10
years and that our credit rating remains strong and we believe that we are due for a slight
increase in our debt rating. That being said, the City Council has maintained its goal of
continuing infrastructure investment. The funding for debt service was impacted by the Market
Value Homestead Credit reductionsin state funding. This will require at least a 2% levy
increase to cover this loss of funding to the state over the past couple of years. In addition, the
advanced construction programs of 2007-2009 are now becoming due as first time payments
on the bondssold for these projects are maturing. We are well positioned for this increase,
although a continued rise in debt service may be necessary to maintain a solid debt service
fund. Staff is looking at savings from a number of the bond issues that will betransferred into
Range of levy increase: 2% to 5%.
the debt service fund to offset the impact of the increase.
2011 Budget Parameters
Page Three
2011 Budget Considerations[cont.]
Employee Compensation:
2.concern has been expressed over the past months as we have
endured the Great Recession. Employee contracts, negotiated in mid-2008, were for 2 years
and provided for 3% cost of living increases in exchange for some concessions and revisions
to the employee’s health care coverage. The overall health care coverage increases were
substantially decreased [by an estimated 35-50%], but increases still were in the 15-20%
annual range for health care costs. A 3% increase in COLA for employees translates into a
need for a 2.0 percent levy increase.A 10% increase in employee health care costs translates
into a need for a 1.0 percent levy increase. The City Manager and HR staff will begin contract
negotiations with all employee bargaining groups during the summer of 2010 for the 2011
compensation year. The City Manager will have further contract discussions with the City
Council as these negotiations draw nearer. At this point, the overall goal is to maintain
Range of levy increase: 0% to 2%.
employee expense increases in the 0 – 3% range.
Capital Expenses:
3.the City has delayed a number of capital expenses in the past 2-3 years
due to expense reductions. In addition, the Council has expressed a desire to increase
funding for replacement of Parks infrastructure. Delayed replacement costs at MCC and City
Hall along with the need for new infrastructure for our technology infrastructure [internet
service] require an investment. The seal coating of streets has been deferred for the past 5
years as we dedicated funds for the replacement of our streets;however that expense is
needed soon to protect that investment. The replacement of equipment for the Fire Truck
Fund has also been deferred over the past couple of years. We have enough funds available
for a purchase in late 2010 or early 2011 for one fire truck, although we should begin to levy
for that replacement each year. As the Capital Improvement Plan is presented to the City
Council in May and June 2010, considerationof these expenses will be reviewed for the
Range of levy increase 0% to 4%.
overall levy increase.
Recreation Program and Maplewood Community Center Subsidies:
4.these two programs
operate at deficit each year and require subsidies from the levy. The 2010 Budget proposes
$472,875 of levy for these operations, which translates in a 3% levyeach year. Both programs
ran in the red in 2009 and fairly sizable reductions will be necessary in 2010 to avoid similar
deficits. Both programs experienced substantial reductions in revenue from 2008 to 2009 and
increases in programming and funding is not likely to be significant in 2010 or 2011. The
Council’s goal of increasing Park and Recreation funding to pre-2007 levels could be impacted
by the operations of these programs. The range of funding to be explored over the next 3-5
months included expanding these subsidies to maintain programs versus cutting these
Range of levy
subsidies which will result in programming and likely staffing decreases.
increase: -2.0% to +3.0%.
Community Development subsidies:
5.the economic downturn has hit the Community
Development department significantly.In addition, Maplewood has transformed from a
development community to a maintenance community.This department is a part of the
General Fund. A review of fees for building and planning permits indicates this trend:
a.In 2005, this department had revenues of $1,731,103.
b.In 2010, these revenues are budgeted to decrease to $806,300.
c.This is a decrease of $925,803 to the general fund or nearly a 6% levy increase.
d.The department expenses from 2005 to 2010 have decreased by $79,680 eventhough
staff has received raises and adjustments.
e.New duties of code enforcement have been assumed as well.
It is not expected that development fees will return to pre-2006 levels at any time soon. The
department staffing levels have been decreased and duties are changing. Further discussions
Range of levy increase: -2.0%to 0.0%.
on the department functions will continue.
2011 Budget Parameters
Page Four
Overall Operating Expenses:
6.the general cost of operating the city continues to increase.
The cost of fuel purchased to operate snow plows, squad cars, ambulances and fire trucks
has jumped by 60% from the low in 2008 when fuel was purchased at $1.60 per gallon. Utility
costs along with normal office expenses are expected to continue to rise slightly over the next
year. General trends of maintaining existing operations indicate that an increase will be
Range of levy increase: 0 to 1%.
necessary.
EDA Funding:
7.the City Council has endorsed the development of an EDA and implemented
appointments to an advisory board of the Business and Economic Development Commission
[BEDC]. The goals of the EDA and BEDC will require funding. The levy of expenses are
similar to the general levy, but are outside parameters of the levy limit, butstill impact the tax
Range of levy increase: 0 to 3%.
payer as a Maplewood expense.
NOTE: a 1% levy increase provides $160,000.
Council Considerations
The intent of this discussion is to begin framing the prioritiesand parametersthat the City Council
would like to establish for the 2011 budget. Input and thoughts from the City Council on the above 7
items that will help frame the overall budget for 2011 are requested. The Council should also indicate
the range of a levy increase or goal for the 2011 budget. As reported previously, the 2010 levy
increase was 5.0%. The impact of this levy on residential property was mitigated by a nearly identical
decrease in residential property value, so the impact on 85-90% of the Maplewood residents wasto
see a very slight decrease or no change in their Maplewood property taxes. The increase, however,
was shown in our commercial – industrial properties, which maintained most values, or actually saw
slight increases, and thus bore a majority of the 2010levy increase. Current trends appear to be
stabilizing in both markets, as residential property values, while not increasing are not decreasing to a
similar extent. Commercial-industrial values may slightly decrease for payable 2011, so a return shift
to 2009 tax levels may face the Council later this year.
Withall these factors to consider, it is requested that the Council consider establishing a goal for a
maximum levy increase that they are willing to consider. The City Manager is considering thefollowing
as general parameters in preparing the budget document:
Debt Service Levy Increase:2.0%
Operating Levy Increase: 2.0%
This includes all employee and operating expenses.
o
Also includes MCC – Rec Program subsidies.
o
EDA Levy Increase: 1.0%
Maximum 2011 Levy Increase:5.0%
RECOMMENDATION
No action is proposed on this item. It is informational only.
Attachments:
1.Budget and CIP Calendar
2011 Budget and 2011-2015 CIP Calendar
2011 – 2015 Capital Improvement Plan
CIP Instructions Memo Provided to Department Heads February 24
All Department CIP Requests due to Finance March 16
Analysis of Requests/Fund Impacts/Debt Analysis Completed April 23
Department Heads Meeting with Management on Requests April 26 - 30
CIP Document Prepared May 7
Presentation of CIP to Commissions May 11-26
City Council Work Session Review May 24
Planning Commission holds Public Hearing June 1
City Council adopts CIP Document June 14
2011 Budget
Chuck B, Chuck A., Jim A. prepare parameters for budget March 1 – 19
City Council Work Session to Review overall budget parameters April 5
Budget Instructions with Wage Information provided to Department Heads May 14
Department Budget Requests due to Finance Department
IT Dept June 1
Admin/Finance June 4
Community Development June 9
Fire Department June 11
Citizen Services June 15
Police Department June 18
Park and Recreation June 22
Public Works June 25
Finance Department provides analysis of Fund Balance Impacts July 2
Department Heads Meetings with City Manager on Requests July 19-23
Final Revisions reviewed with Department Heads from City Manager’s Office July 26 - 30
Draft Budget Document as recommended by City Manager prepared August 13
City Council Work Session to review City Manager recommendations August 23
Department Presentations on Draft Budget – 2011 Department Goals:
Public Works, Comm Dev and Parks, Police / Fire August 30
Citizen Services - Admin/Finance/IT Sept 13
City Council Adopts Maximum Levy September 13
City Council Work Session on Budget Options October 4
Department Presentations on Budget Impacts Oct 4, 11, 25
City Council Work Session on Budget Directions November 8
City Council – Calls Public Hearing on Budget November 22
Budget Hearing December 6
Final Levy Certified to Ramsey County December 10