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HomeMy WebLinkAboutSpecial City Council Minutes 06.30.2004MINUTES OF THE CITY COUNCIL OF LAUREL June 30, 2004 A special meeting of the City Council of the City of Laurel, Montana, was held in the Council Chambers and called to order by Mayor Ken Olson at 5:30 p.m. on June 30, 2004. COUNCIL MEMBERS PRESENT: Dick Fritzler Kate Stevenson Gay Easton Jennifer Johnson Doug Poehls Mark Mace Daniel Dart John Oakes COUNCIL MEMBERS ABSENT: None Mayor Olson led the Pledge of Allegiance to the American flag. Mayor Olson asked the council to observe a moment of silence. PRESENTATION OF THE 10-YEAR CASH FLOWS OF THE MAJOR FUNDS: Mayor Olson introduced Nathan Tubergen, the Administrative Assistant, to present the ten-year cash flows of the major funds. Nathan distributed a packet of information to the council regarding the revenues and expenditures in the General Fund, the Street Maintenance Fund, the Water Fund, the Sewer Fund, and the Solid Waste Fund. Nathan used the overhead projector to present the information to the council. The presentation included the distributed information, a copy of which is attached to these minutes as the record of this meeting. During the presentation, there was discussion regarding the following: possible revenue sources; safety mill levies; the possibility of a mandate for the City of Laurel to have a full-time fire department after the 2010 census; a city fire district; a park maintenance district; explanation of the projection of the three pement employee wage and benefit package; the street maintenance district assessment; the basic charge in the sewer fund; the inequities in charges in the solid waste fund; the need for a rate study for the solid waste fund; the letter the mayor will send to the commercial solid waste users (a copy is attached to these minutes); the possibility of additional special revenue fimds; the upcoming Local Government Review; and the continued need for an administrative assistant. Nathan informed the council that he will not be available as the administrative assistant for the City of Laurel after June 30, 2005. The Mayor charged the council to look into ways that we can fill the vacancy, as Nathan's services will be greatly missed. Mayor Olson recommended that the information Nathan presented be referred to the Budget/Finance Committee in order to work with the staff. UNSCHEDULED MATTERS: Mayor Olson informed the council regarding the street closures for the 4th of July celebration. The fire chief, chief of police, and the Public Works Department had reviewed the requests for street closures. All requests for street closures were approved with the exception to close West 8th Street between 1st Avenue and 2nd Avenue from after the parade until the beginning of the fireworks display, as the granting of this request might cause a critical delay to emergency services acting in the vicinity. Upon their recommendation, Mayor Olson has signed a memo approving the street closures for the 4th of July for the Laurel Volunteer Fire Department, the Public Works Department, the Laurel Jaycees, and the Freedom Jam. Copies of the memo will be distributed to the city council, and a copy is attached to these minutes. ADJOURNMENT: Motion by Alderman Poehls to adjourn the council meeting, seconded by Alderman Mace. Motion carried 8-0. Council Minutes of June 30, 2004 There being no further business to come before the council at this time, the meeting was adjourned at 7:30 p.m. Cindy~etary Approved by the Mayor and passed by the City Council of the City of Laurel, Montana, this 6th day of July, 2004. Attest: Mary K. ~,{nbleton, Clerk-Treasurer CITY OF LAUREL CASH FLOW OF FUNDS FOR 10 YEARS JUNE 30, 2004 By Nathan R. Tubergen Administrative Assistant GENERAL FUND REVENUES The revenues were flat for the fn'st three years, with a minor increase in the fourth year. I have added a 1 to 2 percent growth factor in the future years. This could be overstated, but I think we are going to see an increase in different areas in the budget that justifies the increased projections. The State-shared revenues, interest rates on investments, and some of the other revenues are part of the projections. EXPENDITURES The expenditures include a 3 percent increase in wages and benefits, which average $60,000 per year over the four-year projection. The expenditures are over revenues by $246,429 in fiscal year2005/06 to $387,188 to $387,188 in fiscal year 2008/09, based on no major changes in revenues or cuts in the expenditures. There is no new capital outlay in the estimated budgets. The total request in the Capital Improvement Plan is $1.3 million. I recommend that we balance the budget for next fiscal year 2005/06 with additional revenues, or by cutting the expenditures, or a combination of both. This may require a reduction in services, depending on how severe the cuts are in the general fund. I would recommend that the City maintain at least a $500,000 fund balance, but a larger one would be preferred. WHAT CAN BE DONE? The staffis looking for possible new revenues. I have asked them to review what could be cut next year. After I have reviewed the possible new revenues with departments and the city attomey regarding the legality of each, we will bring them to you to see which ones you are interested in reviewing further. SPECIAL REVENUES STREET MAINTENANCE FUND REVENUES The revenues are based on 2 cents per square foot; this is projected to generate $517,756 per year. The total revenue with miscellaneous income provides an estimated revenue average of $520,000 per year for the next four years. EXPENDITURES The operation and maintenance, including wages and benefits, from fiscal year 2005/06 is $183,013, and in fiscal year 2008/09 it goes to $226,490. With the increase in revenues, we can provide capital outlay in fiscal year 2005/06 in the mount of $149,258. In fiscal year 2008/09, that mount is $142,846. The loan repayment requirement for the major project in the fiscal year 2004/05 budget is estimated at $101,920 per year, based on a ten-year payment schedule. We need to build up the reserves to at least $400,000 to $450,000, so we are recommending that $50,000 be added each year to reserves to provide working capital for each year's projects. The capital outlay will provide money for new street paving, chip sealing, and capital equipment replacement. ENTERPRISE FUNDS WATER FUND REVENUES The estimated budget for 2005/06 has a 6 percent rote increase in it, as approved by the city council. I have added a 1 percem increase for each of the following fiscal years, based on projected increases in new customers and water sales. The miscellaneous income has a small increase in the revenue based on increasing interest rates on investments and miscellaneous sales. Overall, the revenues increased by $180,000 over the next five fiscal years. EXPENDITURES The expenditures include a small increase in operation and maimenance plus a 3 percent increase in wages and benefits. The debt service is estimated at $650,000 per year. The mount we are anticipating to spend on the capital improvement projects each year ranges from $200,000 to $500,000, depending on the funds available in the street fund to do paving. We can do replacement of the water lines in the alleys in the years the street fund cannot provide money for their share for the repaying of the street program. This fund is using reserves to fund the capital improvement projects. The city needs to watch so the reserves do not go below $1,000,000 in the operating and capital improvement accounts. If the city follows this plan, you may need to considerer a rate increase in the year of 2008/09. The Capital Improvement Plan has a $6.4 million dollar request which has not been added into the cash flow. Staff is also working on an updated Capital Improvement Plan. SEWER FUND The sewer fund, as you are aware, is in the process of a rate study, so the information that I am using is part of the draft study. We will be back with a new rate schedule when we complete the rate study. REVENUES The revenues are based on a 6 percent increase per year. We are not sure how this will affect all of the sewer customers, but we are looking at the current billing information and comparing this to the new rate schedule that we are working on. EXPENDITURES The expenditures reflect a 3.5 percent increase, based on what the engineering firm has used in the projections for the study. The debt service is estimated at $150,000 per year. I have provided two cash flows for this fund to show how the 6 percent increase affects the operation and raaintenance and debt service plus capital outlay. The first cash flow has no capital outlay expense. The 6 percent only covers the operating expense and debt service in year nine or fiscal year 2007/08. The second cash flow, adding in capital outlay for the replacement of sewer lines, reflects a shortfall of $750,000, with no reserves in the tenth fiscal year of 2008/09. As in the water, we have not included the Capital Improvement Plan, which shows $4.5 million in request with the staffworking on an update. As we continue to work on the study, we will look at what size ora rate increase is needed to do capital outlay and replacement of equipment. SOLID WASTE FUND As you recall, in the budget presentation we recommended that the charges for the commercial customers be adjusted to bring then in line with the residential charges. This will take several years to bring the system in total equality with the billing process. The revenues will go from the $536,516 in fiscal year 2004/05 to $651,580 in fiscal year 2008/09. This reflects the increases in the monthly billing for the commercial customers. EXPENDITURES This includes a 3 percent increase in wages and benefits and a small increase in operation and maintenance. The debt service will be paid offin the 2006/07 budget. We do not have any new capital purchases in this budget, based on the reserves balance. The balance will be $320,000 at year ten, or fiscal year 2008/09. The purchase of a new route packer and roll-offpacker is about $315,000. The Capital Improvement Plan shows a request of $310,000. Staff is also updating the request for the Capital Improvement Plan. This fund should have a rate study to see if we need to update our chargcs for service so they reflect the actual charges and breakdown in both the commercial and residential areas. This should include wages and benefits, operation and maintenance, land fill charges and capital outlay equipment, and building and land. ~ ILl LU E · = ~ ~ , ,~ x o=~ ._ ~ - o 0 July 2, 2004 Laurel Commercial Solid Waste User - Single Container Service: The City of Laurel has studied the current solid waste program to determine operational efficiencies and the current method of the application of the existing rate structure between residential and commercial customers. Study of the current rate structure has indicated that the 'rates are not being charged to all customers equally. When user fees are looked at from the perspective of the amount of solid waste generated and removed from individual properties and deposited in the landfill, there is a difference in the fee charged per amount of solid waste volume between commercial users and residential users. The difference between the one container or less commercial fees and the residential fees has been identified as 2.7 cents per gallon and 1.5 cents per gallon, respectively. This is due to the frequency of solid waste services provided to commemial customers compared to the once-a-week pickup provided to the residential users. To correct this issue, the following will be effective on your August 10, 2004 billing. An approximate increase of 0.3 cents per gallon per year for the next four years to the commercial solid waste users being served with one can or less. This increase is represented by a change from 1.5 cents per gallon to 1.8 cents per gallon in the first year, with the next tb2ee years at 2.1, 2.4, and 2.7 cents per gallon, respectively. If you have any questions as to the monthly effect on your bill, please call City Hall, Utility Billing, at 628-7431, Ext. 2. Staff will inform you regarding your new charge for Solid Waste Services. Sincerely, Kenneth E. Olson Jr., Mayor CITY HALL 115 W. 1ST ST. PUB WORKS: 628..4796 WATER OFC: 625-7431 COURT: 628-1964 FAX: 628-2241 ity Of Laurel P.O. Box 10 Laurel, Montana 59044 MAYOR DEPARTMENT MEMORANDUM TO: Terry Ruff, Fire Chief Rick Musson, Chief of Police Steve Klotz, Director of Public Works FROM: Mayor Kenneth E. Olson, Jr. Street Closures and Requests for City Services to Assist Community Events Associated with the Fourth of July Celebration. DATE: June 30, 2004 As Mayor of the City of Laurel, I hereby grant permission for the following requests to support non-profit community events held in conjunction with the Fourth of July area celebrations: Laurel Volunteer Fire Department: Street closure and the use of barricades for: East 8th from 1st Avenue to the alley immediately west of Pennsylvania for the majority of the day as directed by the Fire Chief. Public Works Deparhnent: · Street closure mad the use of barricades for: East 6th from 1st Avenue to Pennsylvania for the majority of the day as directed by the Fire Chief. Laurel JC's: · 15 - 300 gallon waste containers at the comer of 2nd Ave. and West 1st Street be delivered by 4:30 pm on the 3~a and picked up on the 6th. · Street closure and the use of barricades for: West 1st Street from 1 st Ave to the West side of the intersection on West 1st Street and 2nd Avenue from 7:00 pm to 3:00 am. · Street closure and the use of barricades: 2nd Avenue from Main Street to the North side of the intersection on West 1st Street and 2aa Avenue from 7:00 pm to 3:00 am. · 8 - 300 gallon waste containers at Fireman's Park on Main Street delivered on July 3rd and picked up on July 6th. Mayor Ken Olson/4~ of July Street Closures 2004 City Of Laurel is an EEO Employer Equal Housing Opportunity Freedom Jam: · 6 - 300 gallon waste containers at West 7t~ Street between 1st Ave and 2na Ave delivered on the 3ra and picked up on the 6th. · Street closure and the use of barricades for: West 7th Street between 1st Ave and 2na Avenue from after the parade tmtil the begirming of the fireworks display. Respecffull , Kenneth E. Olson, Jr. Mayor Mayor Ken Olson/4~h of July Slreet Closures 2004