Council Minutes
COMMITTEE OF THE WHOLE
Wednesday, August 21, 2002 - 12:00 noon
The city council met as the Committee of the Whole on Wednesday, August 21, 2002 at 12:00 noon in the council chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Brooks, Hamerlik, Glassheim, Gershman, Christensen, Kerian - 6; absent: Council Member Kreun - 1.
Mayor Brown announced that today his budget for 2003 will be presented, that it's a budget with just the right amount of efficiency and quality, that it's honest and tough and what we need to continue providing excellent services and providing them with excellent value, that budget processed with two underlying directives - 1) do not increase the mill levy and 2) maintain the level of current overall services - that these were the principals decided by the council and mandated by him to the administrative coordinator, finance director and the departments. Department heads stepped up to the plate to deliver honest budgets and budgets that showed that they could make cuts where possible, sometimes painful cuts in resources and personnel but made those cuts without diminishing the level of vital services that we expect from living in Grand Forks, and applauded each department head for their ability to continue to make this government as efficient as possible.
He stated that his mandate he placed on departments was challenging. He addressed the budget for the police department, that this process was challenging however, Chief Packett and he are in agreement that the ability of the police department to perform the vital services of public safety and law enforcement have never been in question, these services are the ones that all of the regular citizens expect and the ones that we can continue to expect; that the Chief has assured him that he like every department head, will rise to the task of providing appropriate peripheral services with the available resources and these are the ones that are necessary to maintain Grand Forks' excellent quality of life. He stated this budget is honest and that they've set them at a goal for a zero mill increase - that his budget has a minor increase in utility fees and services cost money and our quality of life carries a value that worth paying for. Our flood protection project costs money and it is crucial to our present and our future; that his budget would never jeopardize something so critical to our community; that there are many other services that the residents expect and in the end comes back to quality and efficiency and in order to get that we must be honest and tough and that is what he and department heads have done and is confident that the budget is the best deal.
Present at roll call were Council Members Brooks, Hamerlik, Glassheim, Gershman, Christensen, Kerian - 6; absent: Council Member Kreun - 1.
Rick Duquette, administrative coordinator, stated his comments would be brief - that earlier this year in their budget planning meetings the council asked the mayor and his administration to bring a budget that does not increase the mill rate, yet maintains quality services to the community, that he echoed the mayor's comments that the mayor and his administration is delivering a 2003 budget that is committed to maintaining excellent services without a mill increase, and also reflects a recent recommendation from the wage study, again without an increase in the mill. He acknowledged the hard work of our department heads and their employees as they prepared the budget; that under the Mayor's direction the departments submitted individual budgets that met, and in many cases, exceeded expectations - and is confident that even with these reductions we will continue to deliver very high quality services in public safety, public health, utilities and public works. He thanked those involved with the budget process.
John Schmisek, city auditor, presented the 2003 preliminary budget for the City of Grand Forks and made a summary presentation and highlighted some of the changes in the budget (attached).
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He thanked the departments that worked very hard to hold their increases down and makes the work for his department easier and makes the effort in establishing the budget that is efficient and doesn't put an excess burden on our taxpayers; and thanked the personnel in his department who worked to put this together; and to the mayor and council. He thanked them from the employees' side of things because heard only good comments that you are looking and hoping to implement a wage study in a timely manner, but realize there is still work to do on that and haven't established the process.
Council Member Hamerlik stated he has four items: that before the Alerus was built they consistently said they had $250,000 when they closed down the civic auditorium, and when look at that expenditure but that was a commitment before and are transferring in less than what they had anticipated. 2) that the two CSO's and if they are in the high schools (they are not - the school resource officers are in the high schools and their grant is funded through the end of 2003, and the anticipation on that is that Mr. Duquette has had conversation as he has with Dr. Sanford and they need to look at those as a school system when they start to establish their 2003-04 budget to pick those up); 3) if the City has funded food for the fire department and why is that in there, Mr. Schmisek stated this would be the first time and was approved by the mayor; 4) that in the wage study there is $447,000 and that the negotiated salary was based on the economy, etc. of .04% and this would give the employees more than what was negotiated but going for our overall objective of getting to the market value in the areas that the market comes from for their specific positions.
Council Member Kerian stated that last year had a number of employees who were temporary, some receiving benefits, etc. and this budget incorporates those changes made over the last year and that is positive.
Council Member Gershman thanked the mayor and Mr. Duquette, John and department heads and also employees because it is his understanding that there were a number of employees who came forward saying there are fewer of us who can do this work, and that's where want to go, and so everybody understands with this market plan for the wages, that if the department heads and the employees can keep finding that, we can keep staying at market.
Council Member Brooks stated in general fund keeping the balance as it is, but what are they transferring in; the city auditor stated they will have the $539,000 of payment in lieu of taxes from the utilities and there is $600,000 coming from Highway Users Funds which they will anticipate to be a routine and have said 25% of the street department will pay with the gas tax but transferred in some money from emergency levy fund which they have consistently done over a number of years because know will have blizzards during the winter and the one time transfers in the pension fund and Social Security Fund that amount to about $201,000 when they close those out because it is not money they will have in 2003. Council Member Brooks stated that the transfers in and have done that and not make it look like the deficit is larger than it is and is something they should look at as they do it every year but make it a set revenue. He stated they have to look at a 3-year strategic
financial plan, sit down and say where they are going to get because not raising the mill levy this year and concerned about next year. Mr. Duquette stated he was encouraged by comments about planning and strategic planning and is one of critical roles of policy makers to invest time and effort in that and that he, the Mayor and Mr. Schmisek are focusing in on the process for that as they move into winter and spring.
Council Member Glassheim stated that as they look at the situation a year from now is hoping that will be more concerned with the well-being of the city and with 1 or 2 or 3% mill increase which
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may be necessary, that they have reduced or held the line on the mill rate for 6 straight years and very proud of that and was the right thing to do because of the flood situation and the pain that everybody in the city was in but starting to come out of that and may well have to consider something next year. He stated there is a figure of effective tax rate of 1.29% and asked for explanation. The city auditor stated that normally they talk in mills and if you know the market value of your house can take it times 1.29% and that would be the tax you would pay. Council Member Glassheim stated that the mill rate is the same, the amount brought in by the mill has increased, and asked for amount of the increase from new construction (either from new construction or an increase in value of our homes and properties). Mel Carsen, city assessor, reported the percentage of increase on an overall basis 37 or almost 38% of the increase came from re-evaluation and about 62% came from new property and 2.27% of the total increase is new property. He stated that re-evaluation on an average is 2.8% of residential property, and existing residential property increase on an overall basis by 2.8%, some increased not at all, some increased 5 or 6%, but average is 2.8%. He stated they study home sales by neighborhood and based on those sales make changes to the 2002 value based on those indications. (essentially there are 36 neighborhoods in the whole city and range from 30 blocks to 80 blocks) and try to group them by neighborhoods that have highly common price ranges and similar amenities, and do that every year - they study sales and every sale price to the assessed value they have on that house and each one produce a ratio and that ratio should be 97% if it's perfect and if 92% consistently in a neighborhood, then would raise that neighborhood by 5% to reach the 97%. No neighborhoods have gone down for 2002 but had several where no increase.
Council Member Glassheim stated there were service fees for extraordinary services, and asked for explanation. The city auditor stated that is going to turn in as part of what doing on the survey with other cities and may come later this fall and winter as do the planning, some cities charge for fire inspectors that inspect businesses because direct relation between that and a reduction in fire or building insurance, and as look at the planning process, and what expect to be covered by property tax and what should be a fee basis, but to look at how we are doing business.
Council Member Glassheim asked what the total for economic development will be, $1.2 or $1.3 million, annual income. The city auditor stated $1.3 for city sales tax going into the economic development area; and have in that fund about another $1.2 million but also have in the JDA about $2.57 million that's useable. He noted there is nothing in there from social service, human needs pot of money. The city auditor stated that part of the reason for that is in speaking with Mr. Hanson is that there is some additional programming income coming in and he thought there would be more money available for the CDBG funds than there has in the past, which will offset some of what we funded.
Council Member Glassheim stated we don't have anything set aside for the seed money or for recruitment at UND and may or may not want to discuss it, there is some problem with the match from the University's side and noted that it's not there and thought that these were productive
programs if we had the money to use for economic development and these additional programs. The city auditor stated that part of the thinking was that when we had the Alerus budget their deficit, we knew we had to cover that and those were the two areas we basically backed out but with the thought that within the economic development area, it would still leave you a pool of money as council to decide how you want to use it and at some point in your discussion you look at those and say those are pretty productive and that's how want to use it and is within your discretion. Council Member Glassheim stated that could be done at any time; and stated that the Alerus $223,000 is not a hard number and if three more shares we may not need any of it.
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Mr. Duquette stated that if there is not a need for more working sessions, will look at September 3 for preliminary approval. Council Member Hamerlik stated that an agenda item on the Committee of the Whole might be for next Monday and if want to schedule another meeting, would give them time to decide.
ADJOURN
Council Member Christensen stated he appreciated the Mayor not bringing the budget forward in light of the wage study that came in and what they saw with the wage study and the opportunity to implement the wage study; that this council along with this administration and group of people presenting the budget have given this council and this administration the opportunity to get a market based wage study in place, so when this budget is finalized, we put that wage study in place because we made a covenant with our employees to give them that COLA increase which is part of the wage study increase.
Council Member Christensen moved to adjourn, seconded by Council Member Hamerlik. Carried 6 votes affirmative.
Respectfully submitted,
John M. Schmisek
City Auditor