4. Staff Report-2014 Budget Follow-ups from August 13, 2013 Meeting � �
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SCANDIA
Staff Report
Date of Meeting: August 27, 2013
To: City Council
From: Kristina Handt,Administrator
Re: 2014 Budget-Follow ups from August 13, 2013 Meeting
Agenda Item #: 4.
Background:
At the August 13, 2013 work session the Council asked staff to provide more information at the
next meeting regarding the legality of using City funds for holiday parties and monthly dinners
for the Fire Department, cost analysis of contracting out tree trimming services versus bringing
more in house and need for additional public works employee, and clarification on Council
approval for Farmer's Market. Each item is addressed below.
Use of City Funds for Holiday Dinner and Monthly Meals:
At the last work session, Council member Swanson mentioned she had gotten an email from
Tom Miller last year saying it was ok to have a holiday party. He email read: "The question
which needs to be addressed is whether or not there is a public purpose served by the
expenditure. There is no clear case law or attorney general opinion that addresses this. I know
that the State Auditor construes `public purpose"very narrowly. However, in this case I believe
that maintaining lines of communication and improving staff and appointed official morale
constitutes a valid public purpose. Finally, if Scandia has adopted policies regarding
expenditures offunds the policies should be reviewed. IfScandia hasn't adopted such policies, I
would add that task to the list of policies the Ciry should consider after the new Administrator
comes on board." Scandia does have an adopted policy for employee recognition. This
information was not shared with Mr. Miller however has been reviewed by our current City
Attorney and he provided the comments below regards to whether the City can spend funds on a
holiday party and if the City's policy needs updating. A copy of the policy was provided to each
Council member in their New Council Member Handbooks in 2010.
State law does not authorize a City to spend public funds for an annual holiday party. However,
if the City has an established Employee Recognition Policy, the City is authorized to spend as
necessary to achieve the objectives of the established Policy. Recognition events may be hosted
by the Ciry to facilitate the objectives of the Policy. While the Ciry's current Employee
Recognition Policy identifies its objectives as being 1.) to increase morale and employee
motivation; 2.) to encourage loyalty and long-term retention of employees; and 3.) to celebrate
the accomplishments and service of retiring employees, to demonstrate appreciation of the City
Council, employees and citizens of the City of Scandia for the public service provided by all
Scandia residents, the Policy should be revised to identify the rypes of expenditures that would
assist in meeting these objectives. Specifically, the City could include language at b) under 4.
OTHER RECOGNITION PROGRAMS to recognize the importance of semi-annual recognition
events where the public service of all residents, City Staff and the Ciry Council are celebrated.
The Policy could specifrcally indicated that as so ordered by the City Council, the City may host
an annual recognition event in conjunction with the holiday season to recognize the important
contributions of its citizens. If an event is open to the public, all of the Ciry's necessary
expenditures under its Policy appear to be authorized. However, if only certain individuals are
being recognized, the State Auditor has opined that the public entity may not pay for spouses or
third parties to attend. Additionally, under no circumstance may the expenditure of public funds
be used to purchase alcohol.
Under the current policy a holiday party would not be allowed; the Council should provide
direction to staff on updating the policy.
The City Attorney has determined that the fire department's monthly dinners meet the public
purpose reyuirement. The catering of dinner is ancillary to the actual purpose of the gathering
which is the Fire Department's monthly meeting. Clearly, the monthly meetings serve a
legitimate governmental function. The expenditure associated with providing dinner to the
volunteer frrefighters benefits the community as a whole and is directly related to the core
functions of government. The catering of dinner is not designed to be a private reward. Rather,
it provides the volunteer firefighters with an opportunity to meet, interact and conduct their
regular monthly business. The catering of dinner wholly falls within the public purpose
requirement for expenditures and the Ciry does not need to adopt a new policy in order to
continue with this practice.
Originally, the question was posed for the Council after review of information on the
clerk/admin list serv through LMC in April. The question was asked by the City of Harris which
doesn't pay for refreshments for the fire dept if other cities do pay for these things and the
following are the responses to that inquiry:
Clear Lake: pay for out of training budget if all day training; have Relief Assoc. purchase
beverages to store at station for after calls or during short night trainings.
Pine River: pays for refreshments during annual meeting with townships, nothing for monthly
meetings or trainings.
Princeton: City does not pay for refreshments at meetings, Fire Relief Assoc usually pays for that
stuff.
Lake Lillian: the city does not pay for refreshments at regular monthly meetings but has covered
minimal costs of refreshments for special training events where Lake Lillian is the
host; if it is a big event the fire relief covers it.
St. Martin: pays for monthly lunch of sandwiches, chips and pop, cost about $1,000 a year.
As noted above, an alternative to using taxpayer fund for the meals would be to seek funding
from Relief Association.
Cost Analysis and Additional Info for Public Works Employee:
At the work session Council member Lee stated he wanted to see a cost analysis of contracting
out the tree trimming work versus hiring staff to do it. Below is a per hour breakdown.
Current Operation Current Price per hour
Bucket truck and 1 contracted staff member $85.00
Chip truck, chipper,and 1 contracted staff member $85.00
Loader truck and 1 contracted staff member $85.00
Bucket truck,chipper truck, chipper, and 1 contracted staff member $150.00
2 City staff members $66.00
Performed 1 ditch mile(having to wait for contractor)
Cost per hour(Bold prices) 216.00
Proposed Price per
Proposed Operation hour
Contract bucket truck and 1 contracted staff member when needed $85.00
Rent chipper($450 per day)cheaper if purchased $56.25
Rent chipper($1800 per week)cheaper if purchased $45.00
Rent chipper($5100 per month)cheaper if purchased $31.88
3 City staff members $99.00
Propose 6 ditch miles(not waiting for contractor)
Cost per hour(Bold prices) 155.25
The cost per hour of the new proposed full time public work employee is approximately
$33/hour(this includes wages and benefits). This assumes the employee is hired at the minimum
wage on the step scale and takes family health insurance.
As you can see on the previous page, if the City continued the same tree trimming practice as last
year which involved a contractor and two City staff the cost per hour is $216. Last winter the
City spent over$8,000 and accomplished tree trimming along one ditch mile.
Under the proposed operation of renting a wood chipper on a per day basis (note costs would be
cheaper if rented for longer period or purchased) and using three City staff the cost per hour
would be $155.25 or$60.75/hour less than using a contractor. Additionally, since City staff
won't have to wait for a time when the contractor is available the Director of Public Works
believes we can accomplish tree trimming tasks along 6 ditch miles in a winter. Still only half of
the 12 miles established in the tree trimming policy but dramatically more than using a
contracted service.
In addition to the tree trimming analysis, the City Engineer has provided the following data after
reviewing the Pavement Management Plan to address questions of why an extra staff person is
needed at this time to maintain our roads when a smaller staff was used in the past.
• According to the Pavement Management Plan oldest road was paved in 1978 (only
1700')
• All other roads were paved l 989 or newer.
• If taken the year 1999 or newer(46.26 miles of our roadways were paved/reconstructed
in this period)
• If taken the year 2002 or newer(33.45 miles of our roadways were paved/reconstructed
in this year)
• From 2002—2006 we added new roadways that included Tii Gavo, Wylewood Acres,
Natures ls`&2"a Addition, Sanctuary, Wild Bush Acres, Manning's Overlook, Hill shade
Farms
• In 2005, 2006, 2007 significant road improvements were completed
• In 2004, 2005, 2006 & 2007 several culvert&drainage improvements were completed
throughout the City
• When the City was completing all the other projects with Contractors this was taking
away the time that maintenance would be needed throughout the City.
• With the "newly"paved roads this eliminated bituminous patching throughout the City.
Now today all the roads are all in stages that require significant patching...takes more
time.
• When Contractors were doing drainage projects, this involved ditching, culvert
replacements, and pond grading. In 2006 a significant number of culvert crossing were
replaced, and in 2007 over 500' of culvert crossings were replaced with the 2007 Street
Improvements (Paving Project). Prior to replacing these culverts they were full of
sediment and never maintained.
• Another thing the improvements completed on 188`"-Norell-185`"that included street
improvements & sanitary forcemain extension was done in 1999 or 2000. This added
more septic tanks, but again reduced blading/grading, but now the road is 12+years old
and requiring additional maintenance and other issues with the drainfield.
• The City is now dealing with the things that are in the stages of significant maintenance
or repair. So much infrastructure was built from 1996-2005 in Scandia. Things are
10-20 years old now .... infrastructure this old just simply requires extra
maintenance.
Committee and Council Votes Regarding Establishment of Farmers' Market:
At the work session Council member Swanson asked how the Park and Rec Committee could
decide to not continue with the Farmers' Market when the Council had directed them to
participate in the past. The market began in August 2011. I've reviewed the minutes from the
PRC and Council meetings from June 2011 through the first season of the market and have
included the excerpts related to the market below.
7/11/11 PRC: Agenda changed to add Scandia farmers market–Approved as revised
e. Farmers Market-Gammelgarden is interested in donating the parking lot to
start a Farmers Market. Money would be needed for ads, vendors would need to
sign up and could include food and live entertainment. Money is available for
events in the budget. A subcommittee including Matt and Sally with help from
Laurie was formed to discuss and organize.
7/19/11 Council: Council member Swanson, Park and Recreation Committee liaison, reported
that the Committee has made plans to sponsor a Farmers Market in Scandia. The
market will be held on Wednesdays from 4:00 p.m. to 7:00 p.m. during the
months of August and September, located in the Gammelgarden parking lot.
Vendors will register with the City for booth space.
8/1/11 PRC: Farmers Market
a. Sally ran 2 ads in the paper for the market
b. 11 vendors have signed up so far and Laurie talked to a few more who were
interested in signing up
c. Sally has supplies to make a sign to put up at the 4-way stop at 97
d. Laurie sent out a press release that was picked up by the Pioneer Press, Star
Tribune, Forest Lake Times and Country Messenger
e. Laurie talked to Pam Arnold who is a graphic designer. She is interested in
volunteering her time to work on branding and a logo for the market.
9/12/11 PRC: Farmers Market—Swanson reported that it had been going very well, and that a
committee will gather to make plans, including branding, for next year's market.
If the Council would like for the City to remain involved in the farmers market the Council
should establish the appropriate roles, duties, responsibilities and authority for the PRC, staff,
Council members, vendors, etc. I have had multiple vendors seek advice on who has the
authority to spend funds, set policies, create advertising material, and other decision making
authority. I could find no votes by the Council on these items. Additionally,the personnel
services budget in the parks department would increase by $2,370 (this was the original amount
proposed to the PRC before they decided in June that the market should be a separate entity)to
account for staff time spent on market activities.
In February I solicited feedback on the LMC list serve and contacted Forest Lake and Chisago
City to ask what the City's involvement in their farmers market was. A summary of the
responses is provided below.
City City Funding Staff Involvement Policy Makers MISC
Chisago City Farmers Market
Chisago City through EDA Liasion to qtrly mtgs Board
$1,500to hire Parks Diredor,
Forest Lake manager Market Manager Parks Director Park Board and CC approve fees annually
Winona Farmers Market provide space in street and parking lot 2 days a
Winona none none Association week
2-3 vendors and seniors club set up in community
Heronlake none none centerparkinglotonemorningaweek
Princeton Farmer's Market
Zimmerman none none Association use park one afternoon a week
Princeton Farmer's Market
Princeton none none Association use of city parking lot
Waterville none none local interestgroup
Dassel none none Chamber of Commerce
Spring Grove none none use of city park
Mantorville none none Chamber of Commerce use of city park
Cokato none none private
porta potty and
advertising
Sandstone (small amount) none annual permit to use city parking lot
Golden Valley none none Use of City Hall every Sunday,$1 rent
EDA Requested Levy:
At their first meeting on August l 9, 2013,the EDA Board voted to request a$5,000 levy for
EDA purposes and $5,000 levy for HRA purposes. The funds would be used for contractual
services such as legal, engineering,planning and other professional services.
As you may remember from Assistant City Attorney Pratt's memo first reviewed in January, the
EDA may use taxes to fund a portion of its operations. The City Council levies the tax on behalf
of the EDA. The levy cannot be more than O.OI 8l 3%of taxable market value, and the proceeds
can be used for any EDA purpose described in state law. Since the EDA also exercises HRA
powers,the EDA may levy a tax for HRA purposes with the consent of the City Council. The
maximum amount of the tax levy cannot exceed 0.0185%of taxable market value. The proceeds
derived from each levy should be segregated into different sub-accounts,to ensure the EDA levy
is being used for EDA purposes, and the HRA levy is being used for HRA purposes. Because
EDA and HRA purposes frequently overlap, a large expense could usually be paid for out of
each levy, but payment options should be determined on a case-by-case basis. The levy for the
EDA must be counted toward the levy limit however the levy for HRA purposes is considered
outside the levy limit.
If the additional $10,000 is added to the draft budget the levy would increase by 0.49%for 2014.
New revenue and expense summary sheets as well as departmental sheets for the EDA and HRA
levies are included in your packet.
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2014 Draft Budget
EDA REVENUE FUNDS
2014
Proposed
Account Description Revenue Notes:
Taxes
31000 Washington Cty.Tax Settlement 5,000
Totai Property Taxes 5,000
Intergovernmental Revenues
33422 Other State Grants&Aids
33640 Other Grants
Total Intergovernmental Aid 0
Other Income
36210 Interest Income
36230 Donations
36240 Insurance Refund
36250 Misc. Refunds
Total Other Income 0
Other Financing Sources
39101 Sale of General Fixed Assets
39203 Transfer from other Funds
39300 Bond Proceeds
39350 Certificate of Indebtedness
Total Other Financing Sources
Total Fund 5,000
1 EDA 5:16 PM8/21/2013
2074 Draft Budget
HRA REVENUE FUNDS
2014
Proposed
Account Description Revenue Notes:
Taxes
31000 Washington Cry.Tax Settlement 5,000
Total Property Taxes 5,000
Intergovernmental Revenues
33401 LGA
33422 Other State Grants&Aids
33640 Other Grants
Total Intergovernmental Aid 0
Other Income
36210 Interest Income
36230 Donations
36240 Insurance Refund
36250 Misc. Refunds
Total Other Income 0
Other Financing Sources
39101 Sale of General Fixed Assets
39203 Transfer from other Funds
39300 Bond Proceeds
39350 Certificate of Indebtedness
Total Other Financing Sources
Total Fund 5,000
� HRA 5:16 PM8/21/2013
2014 Draft Budget
EDA EXPENSE FUNDS
2014 Change
Proposed '13-'14
Account Description Budget Budget
Materials&Supplies
200 Office Supplies
203 Printed Forms& Papers
210 Operating Supplies�Equipment
Total Materials &Supplies #REF!
Contractual Services
301 Auditing&Accounting
302 Surveying
303 Engineering Services 1250
304 Legal Services 1,250 #REF!
308 Other Professional Services 1,250
309 Software Support&Maintenance
312 Planning Services 1250
313 Committee&Commission Reimburs
319 Other Services
322 Postage
331 Travel Expenses
360 Insurance
490 Donations
Total Contractual Services 5,000 #REF!
Total Dept. Fund 5,000 #REF!
Notes:
1 EDA 5:16 PM8/21/2013
2094 Draft Budget
HRA EXPENSE FUNDS
2014 Change
Proposed '13-'14
Account Description Budget Budget
Materiais&Supplies
200 Office Supplies
203 Printed Forms &Papers
210 Operating Suppiies&Equipment
Total Materials &Supplies #REF!
Contractual Services
301 Auditing&Accounting
302 Surveying
303 Engineering Services 1250
304 Legal Services 1,250 #REF!
308 Other Professional Senrices 1,250
309 Software Support&Maintenance
312 Planning Services 1250
313 Committee&Commission Reimburs
319 Other Services
322 Postage
331 Travel Expenses
360 Insurance
490 Donations
Total Contractual Services 5,000 #REF!
Total Dept. Fund 5,000 #REF!
Notes:
� HRA 5:17 PM8/2112013