REQUEST FOR COUNCIL ACTION
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1 REQUEST FOR COUNCIL ACTION Date: 12/07/2015 Item No.: 13.a Department Approval City Manager Approval Item Description: Adopt a Final 2016 Tax Levy and Budget BACKGROUND State Statute requires all cities in excess of 2,500 in population, to adopt a preliminary tax levy and budget by December 30 th for the upcoming fiscal year. The final levy amount must not exceed the preliminary levy that was established in September. However, the Council has discretion in modifying the budget at any time. At the September 14, 2015 City Council meeting, the Council adopted a 2016 preliminary, not-toexceed tax levy and budget. A summary is presented below Tax Levy & Levy Impact The 2016 preliminary tax levy is $18,944,720, an increase of $667,818 or 3.65%. A summary of the increase is shown in the table below Tax Levy $ 18,276, Levy Reductions Supplies, materials, contractual services $ (229,845) Personnel-related costs (313,000) Debt Service (150,000) Change in non-levy revenue sources (89,925) Total Levy Reductions $ (782,770) 2016 Levy Additions Supplies, materials, contractual services $ 381,710 Employee cost-of-living-adjustment 175,000 Employee wage step increases 106,463 Employee position changes/reorg. 326,215 Insurance & pension increases 63,200 Capital replacements 398,000 Total Levy Additions $ 1,450,588 Net Levy Change $ 667, Tax Levy $ 18,944,720 % Increase 3.65% Page 1 of 9
2 As shown above, the tax levy is scheduled to increase by 3.65% in For a median-valued home that experiences a 0% valuation increase (citywide average), the tax impact will be $1.90 per month or an increase of 2.7%. A Summary of the 2016 Tax Levy by major category is presented below 2016 Proposed Tax Levy $ Increase % Increase (Decrease) (Decrease) Operations $ 12,995,902 $ 13,478,720 $ 482, % Capital 1,801,000 2,136, , % Debt 3,480,000 3,330,000 (150,000) -4.3% Total $ 18,276,902 $ 18,944,720 $ 667, % It s worth noting that the State of Minnesota provides a number of property tax relief programs that are designed to offset local tax increases. For 2014, eligibility for homeowners was capped at household incomes of $107,150, while renters were eligible up to an income of $58,060. Depending on household income, residents could potentially receive a partial refund of their increased taxes. This would effectively reduce the tax impacts noted above Budget The 2016 Preliminary Budget as currently amended is $52,112,620. The Budget for the tax-supported programs including capital replacements is $28,745,490, an increase of $690,150 or 2.46%. Spending increases in the tax-supported programs is detailed below Operating Budget $ 28,055, Budget Reductions Supplies, materials, contractual services $ (361,485) Personnel-related costs (313,000) Debt Service (150,000) Total Budget Reductions $ (824,485) 2016 Budget Additions Supplies, materials, contractual services $ 382,710 Employee cost-of-living-adjustment 205,000 Employee wage step increases 124,715 Employee position changes/reorg. 632,315 Insurance & pension increases 73,200 Capital replacements 96,695 Total Budget Additions $ 1,514,635 Net Budget Change $ 690, Operating Budget $ 28,745,490 % Increase 2.46% It should be noted that the 2016 Operating Budget for the tax-supported programs continues to rely on $375,000 in cash reserves from the General Fund and $275,000 in reserves from the License Center Fund to achieve a balanced budget. Page 2 of 9
3 POLICY OBJECTIVE Adopting a preliminary budget and tax levy is required under Mn State Statutes. FINANCIAL IMPACTS See above. STAFF RECOMMENDATION Staff Recommends the Council adopt the final 2016 Tax Levy and Budget Levy as outlined in this report and in the attached resolutions. REQUESTED COUNCIL ACTION The Council is asked to take the following separate actions: a) Motion to approve the attached Resolution to adopt the 2016 Final Tax Levy b) Motion to approve the attached Resolution to adopt the 2016 Final Debt Levy c) Motion to approve the attached Resolution to adopt the 2016 Final Budget Prepared by: Attachments: Chris Miller, Finance Director A: Resolution to adopt the 2016 Final Tax Levy B: Resolution to adopt the 2016 Final Debt Levy C: Resolution to adopt the 2016 Final Budget Page 3 of 9
4 EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF ROSEVILLE * * * * * * * * * * * Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Roseville, County of Ramsey, Minnesota was duly held on the 7th day of December, 2015 at 6:00 p.m. The following members were present: and, and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION RESOLUTION SUBMITTING THE FINAL PROPERTY TAX LEVY ON REAL ESTATE TO THE RAMSEY COUNTY AUDITOR FOR THE FISCAL YEAR OF 2016 NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Roseville, Minnesota, as follows: The City of Roseville is submitting the following tax levy on real estate within the corporate limits of the City to the County Auditor in compliance with the Minnesota State Statutes. Purpose Amount Programs & Services $ 15,614,720 Debt Service 3,330,000 Total $ 18,944,720 The motion for the adoption of the foregoing resolution was duly seconded by member and upon a vote being taken thereon, the following voted in favor thereof: and, and the following voted against the same: WHEREUPON, said resolution was declared duly passed and adopted. State of Minnesota) ) SS County of Ramsey). Page 4 of 9
5 I, undersigned, being the duly qualified City Manager of the City of Roseville, County of Ramsey, State of Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of said City Council held on the 7th of December, 2015 with the original thereof on file in my office. WITNESS MY HAND officially as such Manager this 7th day of December, Patrick Trudgeon City Manager Seal Page 5 of 9
6 EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF ROSEVILLE * * * * * * * * * * * Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Roseville, County of Ramsey, Minnesota was duly held on the 7th day of December, 2015 at 6:00 p.m. The following members were present:, and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION RESOLUTION DIRECTING THE COUNTY AUDITOR TO ADJUST THE APPROVED TAX LEVY FOR 2016 BONDED DEBT WHEREAS, the City will be required to make debt service payments on General Obligation Debt in 2016; and WHEREAS, there are reserve funds sufficient to partially reduce the originally scheduled levy for General Obligation Series 2009A, 2011A, 2012A, and 2013A; and WHEREAS, General Obligation Series 2008A requires a slightly higher amount. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Roseville, Minnesota, that The Ramsey County Auditor is directed to change the 2016 tax levy for General Improvement Debt by $302, from that which was originally scheduled upon the issuance of the bonds as follows: Originally Additions Scheduled or Certified Bond Issue Levy Amount Reductions Debt Levy GO Equip Certs 2008A $ 354, $ $ 355, GO Housing Imp 2009A 115, (115,211.25) - GO 2011A 844, (9,745.70) 835, GO 2012A 1,437, (62,922.50) 1,375, GO 2013A refunding 880, (115,320.00) 765, Total $ 3,632, $ (302,309.33) $ 3,330, The motion for the adoption of the foregoing resolution was duly seconded by member a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: WHEREUPON, said resolution was declared duly passed and adopted. and upon Page 6 of 9
7 146 Page 7 of 9
8 I, undersigned, being the duly qualified City Manager of the City of Roseville, County of Ramsey, State of Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of said City Council held on the 7th day of December, 2015, with the original thereof on file in my office. WITNESS MY HAND officially as such Manager this 7th day of December, Patrick Trudgeon City Manager Seal Page 8 of 9
9 EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF ROSEVILLE * * * * * * * * * * * Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Roseville, County of Ramsey, Minnesota was duly held on the 7th day of December 2015 at 6:00 p.m. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION RESOLUTION ADOPTING THE FINAL 2016 ANNUAL BUDGET FOR THE CITY OF ROSEVILLE NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Roseville, Minnesota, as follows: The City of Roseville's Budget for 2016 in the amount of $52,112,620, of which $28,745,490 is designated for the property tax-supported programs, be hereby accepted and approved The motion for the adoption of the foregoing resolution was duly seconded by member and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: WHEREUPON, said resolution was declared duly passed and adopted. State of Minnesota) ) SS County of Ramsey) I, undersigned, being the duly qualified City Manager of the City of Roseville, County of Ramsey, State of Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of said City Council held on the 7th day of December, 2015, with the original thereof on file in my office. WITNESS MY HAND officially as such Manager this 7th day of December, Patrick Trudgeon City Manager Seal Page 9 of 9
10 Attachment D City Manager s Office Memo To: City Council From: Patrick Trudgeon, City Manager Date: December 2, 2015 Re: Budget comments from the November 30 th City Council meeting Below are responses to the budget related comments raised at the November 30 City Council meeting. Forestry Coordinator. The 2015 budget proposed to include a full-time City Forester to take care of the multiple needs for the city regarding tree and forestry management. $65,000 was allocated for this position (salary and benefits). During the recruitment process, the City was unable to secure a full-time candidate to undertake all of these items. Instead, the City Manager decided to expand the seasonal (600 hours annually) positon to a half-time Forestry Coordinator (1040 hours annually). To address the review of tree preservation efforts in development proposals, the City entered into a contract with S&S Tree Services to provide services on an as-needed basis with a $65 hourly rate. This arrangement has worked well and as part of the 2016 budget, I have proposed to keep the same arrangement moving forward. With the half-time Forestry Coordinator position the City is now better served to carry out the overall diseased and hazardous tree program, including EAB. With the extra hours, we are now able to better coordinate the public tree inventory, obtain and manage grant funding, research and manage the EAB Program and connect with residents. We have also been able to initiate field surveys in Roseville and will work closer with the Minnesota Department of Agriculture in conducting these field surveys. This arrangement also creates improved consistency for the existing diseased and hazardous tree program that property owners have utilized for years. Under this new arrangement we are not only able to provide year round services to residents with diseased or hazardous tree issues, we are now able to respond quicker and more consistently. The total cost of the half-time position is $35,000 (wage and benefits). Our contract with the S&S Tree Services has also proven to be beneficial. Mark Rehder of S&S provides the review services to the Community Development Department for
11 development proposals. (Mr. Rehder also is assisting in the drafting of the Tree Preservation ordinance under a separate contract). As mentioned earlier, S&S is used on an as-needed basis. So far this year, we have only paid S&S $780 to review development plans. We do expect a higher usage of Mr. Rohde s services in 2016 with anticipated development. Contracting with S&S has led to a more technical review of development project and also saved dollars. While the 2015 budget allocated $65,000 for the full-time Forester position, the current arrangement has provided for the same level of service for significantly less. If we were to eliminate the Forestry Coordinator position and replace with a consultant such as S&S, we would expend approximately $68,000 (1040 hours x $65 per hour). Even if we were to consider reducing the number of hours or try to find a consultant with a lower rate, we would spend significantly more than we currently do. In addition, starting in 2016 the City will start charging for tree preservation plan review to recover the costs we reimburse S&S for their review. I strongly recommend that the City continue the current arrangement of a half-time Forestry Coordinator to oversee the diseased and hazardous tree program, the tree trimming program, and the EAB management program and also continue the use of S&S Tree Services as a consultant to the Community Development Department for development review. Union Contracts: The City has four collective bargaining units, IAFF represents the full-time firefighters, LELS represents the police officers, the Teamsters represent the police sergeants, and the 49ers represent the Public Works and Parks Maintenance staff. The City has settled a contract with IAFF and are currently in negotiations with the both LELS and the 49ers. We expect to have tentative settlements for both of these units by the end of the year. We have not yet met with the Teamsters, but are in the process of scheduling our initial meetings for late December/early January. Updated COLA Information: For the City Council s reference, I have included the October 21, 2013 RCA and meeting minutes for the Council policy discussion on COLA adjustments for non-union employees. The policy reads as follows: Annually, during budget discussions, the City will provide any cost of living wage adjustments as deemed necessary by utilizing the Bureau of Labor Statistics (BLS) site for the Consumer Price Index (CPI) of urban consumers in the Minneapolis/St. Paul area and the Employment Cost Index (ECI) for State and Local Government Workers for the previous fiscal year as the basis. In addition, the COLA calculation worksheet for 2016 is attached. The CPI was -1.0%, while ECI was 1.9%. I believe that the 2% COLA contained in the budget is consistent with this policy. In checking with surrounding communities it appears others are going with at least a 2% COLA. While there are several remaining union contracts that are not settled, Roseville s full-time firefighters will be receiving a 2% COLA. It is important that the City Council are aware of these factors as having a COLA deviating too far from other municipalities and Roseville union employees provides complications in ensuring compliance with federal and Page 2
12 state pay equity laws (internal equity) and maintaining a competitive compensation plan (external equity). Utilizing Volunteers in lieu of City Staff at the Reception Desk: As has been previously presented, the Finance Department is interested in hiring a low-cost, intern or long-term parttime employee(s) to cover the front reception desk from Noon-4:30, M-F. The estimated annual cost is $18,000 to be funded by water & sewer fees. This position will allow the Department to utilize the skillsets of the existing employee in the Finance & Accounting area that are not being utilized. Staff believes that a long-term part-time position is a low -cost alternative to our staffing needs at the reception desk while still maintaining a professional image. The learning curve for the assigned duties are relatively short, and it affords a student or other individual an opportunity to build their resume while earning a decent part-time income as they begin to establish their career. Which also means this individual will be highly motivated to embrace their schedule on a daily and on-going basis while building their office skills. I have talked quite extensively with Finance Department staff and consulted with Kelly O Brien, Roseville s Volunteer Coordinator on whether or not a volunteer could be utilized as a receptionist. Our consensus is that there would be difficulty in finding the necessary number of volunteers to do the receptionist job as well as other practical challenges. We do not have problems recruiting volunteers in Roseville. The vast majority of volunteers want to utilize their skills and work on-call, sporadic or project based. HANC is struggling to keep the front desk staffed, after years of relying on volunteers, and the comment that we hear most frequently from volunteers who leave is that they are bored, and/or unable to make the consistent commitment. In addition, the staff time needed to recruit, train and supervise multiple volunteers would impact the workloads of existing staff. Based on the above discussion, I continue to recommend the creation of a part-time position to staff the receptionist desk in the afternoons. Page 3
13 Attachment D REQUEST FOR COUNCIL ACTION Date: October 21, 2013 Item No.: 13.a Department Approval Interim City Manager Approval Item Description: Consider Policy on Annual Staff Cost of Living Adjustments BACKGROUND As requested by the City Council, staff has prepared language for a Council policy on city staff cost of living adjustments. During the September 9, 2013 meeting the Council requested that staff prepare a policy that would use the Consumer Price Index (which is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services) as the basis for staff cost of living adjustments annually. Policy Language: Annually, during budget discussions, the City will provide any cost of living wage adjustments as deemed necessary by utilizing the Bureau of Labor Statistics (BLS) site for the CPI of urban consumers in the Minneapolis/St. Paul area for the previous fiscal year as the basis. This percentage will be rounded to the nearest tenth of a percent. Using this methodology, the BLS CPI U for the previous fiscal year from July 2012 through July 2013 for consideration of the January 2014 COLA then is 2.05% or rounded to 2.1% as shown in attachment A POLICY OBJECTIVE To deliver a wage system and structure that is fair and equitable while allowing Roseville to attract and retain quality staff in the marketplace. BUDGET IMPLICATIONS The current budget for 2014 already has 2% set aside for wage adjustments. STAFF RECOMMENDATION Staff recommends that the City Council move ahead with a policy and budget decision at this time. Therefore staff recomends the following: 1. Implement the City Council compensation policy to be utilized moving forward. 2. Approve the 2014 cost of living adjustment utilizing the the 2.1% as indicated using the new policy. Page 1 of 2
14 Attachment D REQUESTED COUNCIL ACTION Consider adopting the compensation policy as laid out above and approve the 2.1% wage adjustment for January 1, 2014 for staff as indicated by the new policy. Attachments: A: BLS Minneapolis/St. Paul CPI - U Prepared by: Patrick Trudgeon, Interim City Manager (651) Eldona Bacon, Human Resources Manager (651) Page 2 of 2
15 Bureau of Labor Statistics Attachment D Consumer Price Index - All Original Data Value Series Id: CUURA Not Seasonally Adjusted Area: Minneap Item: All items Base Period: Years: 2003 to Month Year Annual HALF1 HALF2 Difference % % Source: Bureau of Labor Statistics Generated on: October 15, 2013 (05:17:37 PM)
16 Attachment D Business Items (Action Items) a. Consider Policy on Annual Staff Cost of Living Adjustments Mayor Roe noted that staff was presenting proposed policy language for City Council consideration based on the City Council's direction, specifically as detailed in lines 7-10 of the RCA dated October 21, Mayor Roe clarified that this was not intended as a hard and fast rule that is considered automatic, but to be used during budget discussions, and still at the discretion of the City Council with flexibility built in. If the Council preferred to have a more formal policy, Mayor Roe suggested that it be done in ordinance format. Councilmember Willmus spoke in support of an annual look back to determine future budget cycles; however, he admitted that he struggled with the tool, and whether the CPI or BLS Employment Cost index was the best tool, an answer he didn't yet have. Councilmember Willmus stated that he would like to do further research and was not ready to say if this is the policy needed to move forward. Councilmember Laliberte suggested annual reviews of more than one index to be used that were measurable and solid enough to rely on across the state and what could be done. Councilmember Willmus opined that it may also be important to address timing in the budget calendar, further roping that this seems to come before the City Council on a recurring basis; and the policy maybe should spell out a timeframe that could still accommodate setting a preliminary not-to-exceed levy and annual number. Councilmember Willmus noted that he was not sure when access was available for first half figures. Mr. Miller responded that they were often not available until September 30 th of a given year. Councilmember McGehee questioned if it would be acceptable for the policy to reference 2 indices: the Employment Cost Index for State and Municipal Employees as well as the CPI. Finance Director Miller clarified that those two indices were two entirely different measures used for two distinct purposes, and not intended to determine wages. Historically, Mr. Miller advised that the CPI, based on his observations, had remained a much closer approximation to other cities that with which the City competed for employee pools; but also noted that he was unaware of another City that used an employment cost index. Mr. Miller admitted that there may be some out there who do so, but he was not aware of use of the index which was intended for measuring something other than salaries. Mayor Roe opined that, if the broader overall Employment Cost Index was considered, based on his review of it over the last years, it consistently tracked almost identically with the CPI. Councilmember Willmus opined that it will also be broken into different components; and concurred with Mayor Roe that they track fairly close; however, he further opined that it should
17 Attachment D be something that was given a closer look. Councilmember Willmus reiterated that he was hesitant tonight to make a determination on which direction to go. At the request of Mayor Roe to clarify his hesitation, Councilmember Willmus advised that he was hesitant to make a decision to add an additional index or to approve the proposed policy, without further research. Councilmember Etten advised that his thought in using the State and City Employee measurement was in considering public and private sector positions when competing for expertise from the broader market beyond other cities or government agencies (e.g. Information Technology positions). Councilmember Etten questioned whether or not staying within only those indices that may trend lower, would put the City out of the market for those not necessarily giving thought to municipal employment at the time. Councilmember Etten opined that he didn't want to remove the City from the broader market in recruiting and retaining other candidates outside the public sector. Councilmember McGehee concurred with Councilmember Etten, opining that his was an excellent point; and reiterated that since this had been Councilmember Willmus' suggestion in the first place, it served to eliminate any contentious perceptions from the Compensation Study, and provided a more accurate and straightforward approach. If done mid-year, Councilmember McGehee opined that it would provide an even more accurate number for the preliminary budget, and would be a workable, nonjudgmental way to proceed. Councilmember Laliberte concurred with the comments of Mr. Miller that neither indices is typically used for this purpose; opining that this was her rationale in having both sets of data available for discussion versus basing policy on only one. Mayor Roe questioned the interest in having a policy that took them both into consideration or only mentioning one. Councilmember Laliberte opined that both could be mentioned with merit, while not ruling out other indices that may weigh in. Councilmember Laliberte clarified that she was not seeking a position to use the lesser number, as that would be disingenuous; however, she liked the idea for a timing factor rather than talking about it throughout the year. Mayor Roe opined that the mid-year idea provided a clear and accurate goal. Councilmember Willmus opined that the ECI index would be helpful for reference, but note that the CPI was published monthly, and not necessarily only Minneapolis data, but a broad index that tracked closely; and suggested incorporating both into the proposed policy. McGehee moved, Etten seconded, approving Compensation Policy language as recommended by staff and detailed in the RCA dated October 21, 2013 as follows:
18 Attachment D "Annually, during budget discussions, the City will provide any cost of living wage adjustments as deemed necessary by utilizing the Bureau of Labor Statistics (BLS) site for the Consumer Price Index (CPI) of urban consumers in the Minneapolis/St. Paul area for the previous fiscal year as the basis, rounding that percentage to the nearest tenth of a percent." Councilmember McGehee opined that left open the option for individuals to bring any other indices into the discussion by reference. Amendment Willmus moved, Laliberte seconded, amending the motion to incorporate inclusion of the Employment Cost Index for State and Government Workers. Mayor Roe offered his support of the motion to amend. Councilmember Etten stated that he could support the amendment, as long as those indices were guiding pieces and not the ultimate determination of COLA increases, even though he preferred a cleaner policy as originally moved. Roll Call Ayes: Laliberte; McGehee; Willmus; Etten; and Roe. Nays: None. Amendment to the Amended Motion Roe moved, Willmus seconded, an amendment to the amended motion to delete the sentence on line 10 of the RCA that the percentage be rounded to the nearest tenth of a percent. Roll Call (Amendment to the Amended Motion) Ayes: McGehee; Willmus; Etten; and Roe. Nays: Laliberte. Roll Call (Original Motion as amended twice) Ayes: Laliberte; McGehee; Willmus; Etten; and Roe. Nays: None.
19 City of Roseville Cost Of Living Adjustment (COLA) Calculation 2016 Attachment D Consumer Price Index: All Urban Consumers (Mpls./St.Paul Region) ** Ist Half, 2015 Figures to be released on 7/17/15 Year Annual HALF1 HALF Actual COLA Index Used July 1, June 30, % = COLA for % CPI July 1, June 30, % = COLA for % CPI July 1, June 30, 2015 (2.390) -1.0% = COLA for % Employment Cost Index-State & Local Government Wages & Salaries: All Workers (National) Cur Year ** Released quarterly. Next release on 7/30/15 Year Jun Actual COLA Index Used July 1, June 30, % = COLA for % CPI July 1, June 30, % = COLA for % CPI July 1, June 30, % = COLA for % Comments: * Per 10/21/13 Council-adopted COLA Policy: Non-union COLA shall be calculated as follows: -----> The BLS CPI-U (Mpls. / St. Paul) from July 1st - June 30th -----> The BLS ECI-State & Local Govt. Wages & Salaries: All Workers (National) may also be considered as a secondary measure
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