HomeMy WebLinkAboutCity Council Packet 12-06-2004 SpecialAgenda
City of Plymouth
Special City Council Meeting
Monday, December 6, 2004
7:00 PM
Council Chambers
1. Call to Order
2. Truth in Taxation Hearing
3. Adj ourn
Agenda Number:
TO: Laurie Ahr s, City Manager
FROM: Dale Hahninance Director
SUBJECT: 2005 Truth in Taxation Public Hearing
DATE: December 2, 2004 for City Council Meeting December 6, 2004
1. ACTION REQUESTED: Hold the 2005 Truth in Taxation Public Hearing and
determine if a continuation hearing is needed. if no continuation hearing is needed,
announce that the date for the adoption of the 2005 budgets and tax levies will be
December 141n
2. BACKGROUND: Attached is an updated budget memo for 2005 which reflects
direction given by City Council in the three budget study sessions held on August 23,
August 31, and September 7, 2004. It also reflects all utility and fee rate changes
approved since the proposed budgets and tax levies were adopted on September 131H
3. DISCUSSION: In early November, taxpayers were mailed notices of their proposed
2005 taxes, including information about where and when the Truth in Taxation Public
Hearing would be held. In addition, a notice was published in the Star Tribune
announcing the date and time of the hearing.
Prior to the public hearing, staff will provide additional information on the proposed 2005
budgets and tax levies, after which time the public hearing will be opened, and comments
received.
4. RECOMMENDATION: At the conclusion of the Truth in Taxation hearing, the
City Council should determine if a continuation hearing is necessary. If a continuation
hearing is not needed, it should be announced that the proposed adoption of the 2005
budgets and tax levies will be on December 14`"
ri CITY OF PLYMOUTH
2005 Proposed Budget
December 2004
Attached is the proposed 2005 budget for the City of Plymouth. The proposed budget is
designed to maintain service levels throughout the City. It places particular emphasis on the
council's annual goals and core services most heavily impacted by the City's continued
growth, such as public safety, street maintenance and reconstruction, drainage, and the City's
water system.
The City's overall tax rate is proposed to be 24.65, which is a decrease from the 2004 tax rate
of 24.87. The total rate is comprised of a tax capacity rate of 23.80, plus 0.31 for the Open
Space Bond issue and 0.54 for the Activity Center/Field House debt service. Because the tax
rate will be reduced in 2005, a supermajority vote of the Council will not be required to adopt
the tax levy. The projected numbers and percentages are based on our best-known sources at
this time and will have some minor adjustments when the final numbers are obtained.
Background
We historically begin the annual budget process with a look at population growth and
inflation, as both of these factors significantly impact our ability to maintain service levels.
Levy limits did not allow the City to levy for growth or inflation last year. Therefore, we are
showing this information for the past two years. The numbers are a conservative estimate
since population estimates from more than a year ago are used.
Total
2001 2002 2003 Increase
Population (April annual) 66,675 67,824 703238
Population % Increase 1.723% 3.559% 5.282%
Inflation CPI -U (dune annual) 179.9 183.7 189.7
Inflation % Increase 2.112% 3.266% 5.378%
Two Year Total 10.66%
This data indicates that population has increased by 5.282% in the past two years, while
inflation has been 5.378% over the past two years. If we started the 2005 budget process by
using a typical "growth plus inflation" formulae, as we have done for many years, this would
indicate that our levy would need to increase by 10.66% simply to maintain services at
current levels. One observation is that we are doing a good job of maintaining service levels
considering this 10 percent decline in buying power. Our employees are trying hard to keep
up and are identifying more efficient ways of providing services.
However, it is also honest to acknowledge that: some of our service levels have slipped over
the past few years. The impacts of many years of levy limits, most recently with no allowance
for inflation or growth, along with significant cuts in state aid, have put us in an increasingly
difficult position to maintain service levels as one of the fastest growing cities in the state. As
a few examples, less reforestation and tree trimming is done each year, no trail trimming will
be done in 2004, and additional ice rinks will be recommended for closure this winter. With
the exception of police squads, our vehicles and equipment are being carried over for longer
use. Some services like drainage maintenance and median maintenance have become
increasingly visible concerns. The number of police officers has not kept up with the
population growth, and we are getting further behind each year in maintenance and
reconstruction of the street system. In general, all services are stretched further.
City Councils of the past five years have adopted tax increases needed to maintain and
enhance core services. The following charts indicate how the priority of expenditures has
changed in the General Fund from 2001 to 2005 (proposed budget):
2001 General Fund Budget & Debt Service Allocation 2005 General Fund Budget & Debt Service Allocation
Street Community Support Street Community Support
Maintenance Service Services Maintenance Service Services
14.8% 2.0% 11.5% 14.8% 2.0% 11.5%
Fire Fire
7.7% 7.7%
y
Inspections & a ; Inspections &.., F..
Planning Police Planning
8.0% 36.3% 8.0%
Parks, Trails & Parks, Trails &
Recreation Recreation
19.7% 19.7%
Budget Process
The budget process began with employee information meetings in early June where
employees learned about operating and capital budgets, sound financial and budget practices,
council goals, historic information on Plymouth budgets and taxes, and the budget outlook
for 2005. Employees were informed that the; focus for development of the 2005 budget
would be to maintain service levels to the extent possible, to fund new known costs (such as
operating costs for the new facilities under construction), to address core services where we
are falling significantly behind (such as street maintenance and reconstruction), as well as to
focus on issues of overtime, contractual/professional services, revenues, and innovative
service changes to make our tax dollars go further.
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Police
36.3%
Employees who attended the information meetings were eligible for selection to serve on the
budget team, and Senior Planner Marie Darling was subsequently selected to serve. Other
members of the budget team were Finance Director Dale Hahn, Financial Analyst Mike
Kohn, Public Services Manager Pat Qvale, Finance Supervisor Bobbi Leitner, Human
Resource Manager Jeanette Sobania, and City Manager Laurie Ahrens.
In addition to the employee meetings, feedback was sought from all employees through a new
budget survey, and managers considered those comments while formulating their budget
proposals. Department budgets were developed and justifications were provided for changes
to line items. Department directors prioritized all requests for increased services and held
meetings with the budget team to fully discuss budget proposals. The budget continues the
program budget format that allocates personnel, material, and other costs to programs. While
this budget document is the "City Manager's ]Budget" as required by the City Charter, it is
more accurately the culmination of many ideas and much work by the budget team,
department directors and supervisors, and all employees.
The City Council held three budget study sessions to consider the proposed 2005 budget, and
adopted the preliminary tax levies and budgets on September 13th. The Truth in Taxation
hearing will be held on December 6, and the City Council is scheduled to adopt the final
budget and tax levies on December 14.
We also prepared the 2005-2009 Capital Improvement Program coincident with the operating
budget, and it was adopted on November 9th. This will help us more accurately identify and
budget the operating cost impacts related to capital projects.
Proposed 2005 Budget
General Fund spending is proposed to increase in 2005 by 4.83% over the budgeted amount
for 2004. This is considerably below the City's growth rate plus inflation, and well below
past annual General Fund increases averaging almost 6%. Due to the City's growth, no tax
increase would be needed to fund the proposed continued service levels in the General Fund.
The increase is due to other factors described below.
The overall City property tax levy is proposed to increase by 10.13%. We believe this is
needed to maintain service levels to the extent possible. The Legislature did not place levy
limit restrictions on the 2005 levies.
The projected increase for an average home valued at $323,900 is 9.54%, or an increase of
69.57. There are a number of factors that contribute to this increase:
Public Safety Bonds debt service and additional operating
costs associated with building and parking garage 4.1%
Additional Street Reconstruction levy 2.9%
Phase-out of Limited Market Value 1.5%
Valuation change differential between C/I & residential 1.0%
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The projected decrease for a business property valued at $1,000,000 is -2.88%, or - $82.63.
The disparity between residential and business property is not due to any action of the City in
the budget process. It will primarily occur because residential property appreciated at a rate of
9%, while commercial/industrial property experienced a 2% decrease in value for the year.
Levy Limits
There are no levy limits for the 2005 budget. This is certainly an improvement over last year
when the levy limits did not allow adjustments for inflation and growth, and allowed the City
to recover only up to 60 cents for each dollar of lost state aid.
Limited Market Value
In 2005, taxes on many Plymouth homes will be impacted by the phase-out of limited market
value. The 2001 tax bill included a six-year phase-out of limited market value that began in
2003. This phase-out did not impact most Plymouth homes in 2003 because the average 11 %
appreciation in value was greater than the 10% increase in the phase-out amount. In 2004,
approximately 14,500 parcels experienced some degree of phase out because the phase out
percentage was 12% whereas the average home value appreciated by only 8%.
In 2005, some homes will continue to be impacted to some degree by the phase-out.
Currently, about 7,250 of the 24,354 parcels in the City qualify for limited market value.
Although residential properties increased in value by 9%, the phasing out of limited market
value provides that taxes may be levied on taxable valuations that are increasing by up to
15%. Nearly all of the impact resulting from the limited market value phase-out will occur in
2004 and 2005, rather than phasing over the next few years until the program sunsets in 2008.
The weighted average of Plymouth homes will see a 10.5% increase in their taxable value for
2005. Most Plymouth properties will be taxed at their full value by 2006.
State Aid
The City lost all Local Government Aid ($74,579) and all Market Value Credit Aid
688,700) in 2004. Plymouth is scheduled to get back the Market Value Credit in 2005, but
based on past experience and the projected State deficit, we are not entirely confident that
this will occur. The budget proposes using the Market Value Credit Aid dollars for street
reconstruction, which could be paid for with bonding if it is once again cut to cover the
State's deficit.
Interest Earnings
The historically low interest rates continue to negatively affect all City funds. The impact on
the General Fund is moderate, but the impact is significant on the capital projects funds,
enterprise funds, HRA funds, and internal service funds. This will turn around if interest rates
rise in the future.
Salary Vacancy Factor
The 2005 budget includes a budget correction factor of $127,000 to acknowledge an ongoing
statistical job vacancy rate. Approximately 15 employees leave City employment each year.
The salary vacancy factor recognizes the savings that occurs when there is a lapse in time
from the former to new employee, as well as the fact that a new employee typically begins
employment at a lower rate of pay.
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Earlier Spending Decisions
New operating costs will affect the 2005 budget: for several capital projects where
construction is underway. The operating costs for the public safety building expansion are
estimated to increase by $150,000, and are included in the General Fund budget. Also, the
third sheet of ice will result in additional operating costs of $318,500 which will be fully
covered by increased user fees.
A second example of earlier spending decisions is the "tails" that result when positions are
added mid -year and the full budget impact does not occur until the following year. For
example, due to several mid -year positions hired in 2004, we began the 2005 budget with a
new" cost of $71,000. This occurred because we did not budget for the full position in the
year hired.
We are suggesting that full -year salaries be budgeted for all new positions in the General
Fund. While using mid -year dates can allow us to hire a position at less budget impact in the
current year, it always creates an additional burden in the subsequent year due to "salary
tails."
Working Capital/Contingency Fund
Some General Fund surplus is beneficial and expected, since the City budgets contingency
funds that are normally not needed. Moderate surpluses help the City maintain its policy of
having the equivalent of 40% of our General Fund levy in cash reserves. This is necessary to
provide "working capital" for the City since the City does not receive any property tax
revenue until July each year. The 2005 budget proposes a contingency amount of $200,000.
Revenues
All fee levels have been evaluated as part of the budget process. The budget includes the rate
increase in building permit and fire inspection fees that was adopted on November 23`
d. The
State law requires that all fees be justified through actual expenditure reporting.
Tax Capacity/Fiscal Disparities
The following chart illustrates the changes in total tax capacity and fiscal disparity
contributions. The City's net contribution to the fiscal disparities pool will be $6,438,000.
This equals 7.7% of our total tax capacity value.
Total Tax Capacity for ]Payable 2004 and 2005
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2004 2005
Actual Actual
Real Property: Tax Capacity 86,601,518 94,654,558
Personal Property: Tax Capacity 845,341 893.652
Total Tax Capacity 87,446,859 95,548,210
Fiscal Disparity Contribution 11,682,453) 11,363,043)
Tax Increment 537,046) 599,691)
75.227.360 83.585.476
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The table shows that Plymouth has had a healthy growth in the tax base during the last year.
Our growth in tax base has been uneven in the last year, with residential property increasing
rapidly while business properties have decreased in value.
The differences in valuation and tax capacity growth have an impact on the actual taxes paid
by Plymouth homes and businesses. The following table illustrates the changes in tax
capacity and taxes paid by this average value home ($323,900). An increase of 9% is due to
the real increase in property value, with an additional 1.5% applied to property value that was
previously not taxed under limited market value.
Estimated Tax Burden. on Average Home
2004 versus 2005
2004 2005
Average home value — $293,100
Homestead:
293,100 @1% = 2,931
Total Tax Capacity
City Tax Rate
Subtotal
Mkt. Value Levy
293,100 @.00346% (Open Space
Bonds)
293,100 @ .00604% (Activity Center
Bonds)
Total City Tax 728.94 Total City Tax
The average $1,000,000 business decreased in value by 2% during 2004. The following table
shows the change in 2005 taxes payable:
Estimated Tax Burden on $1,000,000 Business
2004 versus 2005
2004
Business value — $1,000,000
150,000 @ 1.50%=
Average home value — $323,900
850,000 @ 2.00%= 17,000
Homestead:
19,250
Less Fiscal Disp.
323,900 @ 1%= 3,239
Net Tax Capacity Value
2,931 Total Tax Capacity 3,239
23.92% City Tax Rate 23.80%
701.10 Subtotal 770.88
Total City Tax
Nlkt. Value Levy:
980,000@.00311% (Open Space Bonds) 30.48
323,900 @ .00311% (Open Space
53.12
10.14 Bonds) 10.07
323,900 @.00542% (Activity Center
17.70 Bonds) 17.56
728.94 Total City Tax
The average $1,000,000 business decreased in value by 2% during 2004. The following table
shows the change in 2005 taxes payable:
Estimated Tax Burden on $1,000,000 Business
2004 versus 2005
2004
Business value — $1,000,000
150,000 @ 1.50%= 2,250
850,000 @ 2.00%= 17,000
Gross Tax Capacity Value 19,250
Less Fiscal Disp. 7,660
Net Tax Capacity Value 11,590
City Tax Rate 23.92%
Subtotal 2,772.21
Mkt. Value Levy:
23.80%
1,000,000 @.00346% (Open Space Bonds) 34.60
1,000,000 @.00604% (Act Center Bonds) 60.40
Total City Tax 21
2005
Business Value — $980,000
150,000 @ 1.5%= 2,250
830,000 @ 2.0%= 16,600
Gross Tax Capacity Value 18,850
Less Fiscal Disp. 7,501
Net Tax Capacity Value 11,349
City Tax Rate 23.80%
Subtotal 2,700.98
Mkt. Value Levy:
980,000@.00311% (Open Space Bonds) 30.48
980,000 @.00542% (Act Center Bonds) 53.12
Total City Tax
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2005 Budget Overview
Estimating the Tax Levy Rate
City revenues from all sources in the General Fund will be $22,493,654, a 4.83% increase
from 2004. Of this amount, $17,035,807 (75.70/'0) comes from property taxes. We propose
a 2005 tax rate estimated at 23.80, plus a market value rate of .00311 for the Open Space
Bonds and .00542 for the Activity Center/Field House bonds, for a total estimated rate
equal to 24.65, compared to 24.87 for 2004.
Plymouth's overall tax levy will increase by 10.13% in 2005. The City's overall tax rate
will decrease by -.22 to an estimated 24.65. The following table compares the tax levy by
fund for 2004 and 2005:
Tax Capacity Value
Referendum Market Value
75.227.360
S7,138,190,300-
83.585.476
7,928,351,7007.928.351.700
I)Equals Market value Rate of .00346% (2)Equals Market value Rate of.00604% (3)Equals Market
Value Rate of .00311 %-Est. (4) Equals Market value Rate of .00542% -Est.
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2005
2004 2004 2005 Proposed Proposed
Tax Levy Tax Rate Tax Levy Tax Rate
GENERAL PURPOSE LEVIES
General Fund 16,189,626 21.52 17,035,807 20.38
Mkt. Value Cr Aid -State Aid Cut 737,392 0.98 0 0.00
Mkt. Value Cr Aid -Street Rec. 0 0.00 688,700 0.82
Street Reconstruction 0 0.00 600,000 0.72
Mill & Overlay 47,000 0.06 47,000 0.06
Recreation Fund 623,569 0.83 623,569 0.75
Capital Improvement Levy 309,000 0.41 318,270 0.38
Total General Purpose 17,906,887 23.80 19,313,346 23.11
SPECIAL LEVIES
1995 Open Space Bonds 247,071 1) 0.35 0 0.00
Act. Center/Field House Bonds 430,435 2) 0.60 429,962 3) 0.54
2003 Open Space Refunding 0 0.00 246,060 0.31
2003 Street Recon. Bonds 184,222 0.24 181,388 0.22
2004 Street Recon. Bonds 415,000 0.55 418,222 0.50
2004 Public Safety Bonds 0 0.00 619,942 0.74
PERA Increases 35,630 0.05 0 0.00
HRA 593,395 0.79 607,556 0.73
Total Special Levies 1,905,753 2.58 2,503,130 3.04
TOTAL ALL LEVIES 19,812,640 26.38 21,816,476 26.15
LESS:
Fiscal Disparity -City 1,106,269) 1.46 1,215,708) 1.45
Fiscal Disparity -HRA 35,044) 0.05 38,969) 0.05
18.671327 24_87 20.561.799 24_65
Tax Capacity Value
Referendum Market Value
75.227.360
S7,138,190,300-
83.585.476
7,928,351,7007.928.351.700
I)Equals Market value Rate of .00346% (2)Equals Market value Rate of.00604% (3)Equals Market
Value Rate of .00311 %-Est. (4) Equals Market value Rate of .00542% -Est.
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Expenditures
The 2005 budget includes total General Fund expenditures of $22,493,654. This
represents an increase of 4.83% over the 2004 adopted budget.
The following chart lists expenditures in all major operating funds:
Expenditures 2004 2005
General Fund 21,458,236 22,493,654
Recreation Fund 1,423,881 1,481,622
Transit Fund 4,345,337 4,518,060
HRA Funds 4,290,581 4,661,527
Water Fund 3,802,200 4,019,700
Sewer Fund 6,524,407 5,733,392
Solid Waste Fund 958,421 1,041,494
Ice Center Fund 919,277 1,292,674
Water Resources Fund 3,706,040 3,068,232
Field House Fund 285,200 290,000
Central Equipment Fund 2,185,883 2,154,955
Risk Management Fund 651,370 684,752
Design Engineering 369,237 378,982
Employee Benefit Fund 2,512,400 2,652,900
Information Technology Services Fund 1,660,591 1,837,647
Facilities Management Fund 856,739 1,082,602
Areas of Emphasis
Police
The City Council has adopted public safety initiatives as a top goal. In 2004, we
concentrated on staffing and added four new police officers in order to reduce committed
time. Committed time has actually increased significantly since last year because the
calculation includes all self -initiated contact by officers (i.e. traffic stops), as well as
resident calls for service. Our theory last year was to free up committed time to allow for
more proactive enforcement, and that is occurring. As proactive enforcement increases,
our committed time will increase. Committed time is certainly one measure of adequate
staffing, but we will also continue to consider a balance of issues such as types of calls,
number of officers per capita, and the outcomes we are trying to achieve.
Due to the training timeline, we have not yet realized the full impact of the four new
officers added in 2004. One new police sergeant and one new police officer are proposed
in the 2005 budget.
The most significant single impact on the 2005 budget is the new costs related to
operations and debt service for the public safety building expansion and garage project.
Nearly one-half of the proposed 2005 tax increase is due to this project.
Hennepin County has advised that the MDCs for the squad cars will be available in 2006
at an estimated cost of $120,000. The 2005 budget contains $60,000 to cover half of the
cost to prepare for the transition in 2006.
Streets
The proposed budget emphasizes street reconstruction and maintenance in several ways.
First, the budget proposes returning the City's normal street reconstruction amount back
within the normal levy. The budget proposes $600,000, and an additional $688,700 of
Market Value Credit Aid that the City is scheduled to receive in 2005, for street
reconstruction. Should the State eliminate the Market Value Credit Aid, a portion of the
street reconstruction could be bonded.
Due to the state aid cuts and strict levy limits of the past several years, the City bonded
street reconstruction in 2003 and 2004. We do not recommend continuing this as a long-
term strategy for the annual reconstruction costs due to the increased interest costs. In
addition, this is one factor that could negatively affect our Aaa bond rating. Our last two
conferences with Moody's have included a discussion about getting the annual street
reconstruction amount back within our normal levy, and this is a high priority for this
budget.
We are also working on options for a future street reconstruction bond issue in order to
catch up with reconstruction of local streets in serious need of repair. A number of
financing options will be reviewed during the budget process. A reconstruction bond sale
in 2005 would result in manageable, new debt service beginning in 2006. We also need to
consider incrementally increasing the amount of our annual levy for street reconstruction.
The budget also enhances street maintenance in several ways. The purchase of a conveyor
for loading the spray patcher is proposed in the amount of $31,000. The City currently
pays $26,000 annually for rental of this piece of equipment. By the second year, funds
will be freed up to apply toward additional street maintenance.
The purchase of a second spray patcher was considered. Rather than purchasing a second
patcher, we are going to try running two shifts using the existing spray patcher in 2005.
The City should be able to add at least four hours of machine operation per day using
existing employees, as well as eliminate a current contractual cost of $1,500 per day for
rental. A portion of this savings ($10,000) has been applied to increase the asphalt line
item.
The budget also moves the street repair work: that is required after water main break
repairs from the General Fund to the Water Fund. This will free up 540 hours of labor and
13,665 in materials in the General Fund to be applied toward normal street repair.
Finally, the budget proposes changing the Street Leadperson position to a Street and
Drainage Maintenance Supervisor. There is a cost savings in the proposed change, it will
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bring greater emphasis to street and drainage maintenance, and accountability will be
gained in these divisions.
Cell Phones
The majority of the City's workforce is mobile., and we gain efficiency through enhanced
communication in the field. A new feature in this year's budget is an allocation for cell
phone service. The budget previously charged each program for the purchase and service
of their phones, and there was no provision for replacement. During 2004, the
Information Technology Division negotiated new service plans, which resulted in a
significant overall savings to the City. The centralized administration of cell phones will
result in our ability to more frequently negotiate service plans, as well as provide for
replacement of phones and batteries.
Recommended Staffing Changes
The City's full-time work force of 257 would increase by one full-time equivalent. The
following describes the proposed staffing changes, most of which result in service
enhancements and budget savings.
Police Sergeant; 01/01/05
A new police sergeant is proposed ($83,442) in order to ensure that there is supervisory
coverage during all patrol shifts. This would result in a $25,000 savings in overtime.
Police Officer; 01/01/05
A new police officer is proposed ($57,000) to assist with reducing the officers' committed
time to conduct proactive patrol activities and traffic enforcement.
Transit Coordinator, 03/01/05
A Transit Coordinator would replace the services currently done by a contract provider.
These tasks include handling route issues and requests, financial and other required
reporting to the Met Council, customer service, and support to the Advisory Committee
on Transit. The Public Services Manager would continue to oversee the overall transit
program. Changing this position from contract: to an in-house position results in a cost
savings to the Transit Fund of $19,700.
Reclassify Street Lead Position to Drainage Maintenance Supervisor, 01/01/05
Last year, the City Council approved adding a second leadperson to the Street Division. It
was hoped that this would help provide additional work direction; however, it did not
solve the fundamental problem of span -of -control where one supervisor is responsible for
as many as 20-25 employees, nor increase availability to customers. The 2005 budget
proposes a restructuring of the Street Division into a Street Maintenance Division and a
Drainage Maintenance Division. Each division would have a supervisor and this would
help enhance accountability in each of these areas. This model was approved in the Park
Maintenance Division several years ago and is working well. Because the new leadperson
position was never filled in 2004 and we would not be replacing that unfilled position, the
reclassification request will result in a savings of $56,991.
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Ice Center Part-time Clerical Position — Expand Hours
The budget proposes adding seven hours per week to the Ice Center part-time clerical
position ($7,542). This request relates to the increased clerical support needed for the
third sheet of ice.
Volunteer Coordinator Part-time Position — Expand Hours
Increasing the Volunteer Coordinator position from 32 to 40 hours is viewed as an
investment to get many more hours of labor. The City's volunteer program is very
successful and is a best practices model used across the nation by other cities. The
program is currently at capacity due to the part-time nature of the coordinator position. In
2003, we had 1,042 volunteers contribute 13,741 hours of work to the City. This
translates into $227,276 of value added in service to the City of Plymouth. With the
expansion of the Volunteer Coordinator to a full-time position, we could easily meet or
exceed our investment of $14,366 through volunteer labor value in the first year.
Continue use of Tree Trust
We have a very positive relationship with The Tree Trust, a nonprofit organization
dedicated to improving communities through investment in people. Projects recently done
by The Tree Trust include construction of 1,100' of boardwalk at Lake Camelot Park at a
savings to the City of $70,000, construction of a stairway near Lions Park at a savings to
the City of $7,000, and construction of a 35'x 3' block wall, landscaping, and riprap for
50 yards of shoreline at Parkers Lake. The increased cost for the Tree Trust in 2005 is
2,500.
Expand I.C.W.C. from 2 to 3 days per week
We currently receive the services of an 8 -person labor crew through the I.C.W.C. program
two days per week. The budget proposes expanding this to three days per week. The
I.C.W.C. crew recently completed construction of the dog park including 300' of
boardwalk, installation of signs, trail layout, mowing, tree removal, and wood chipping.
They have also assisted with tree and buckthorn removal throughout the park system,
heavy cleaning at the ice center, removal of tennis courts and hockey rinks, and
reconstruction of hockey rinks. The cost of an 8 -person labor crew one day per week for
the year is $16,000, and the cost would be shared between the General Fund and the Ice
Center.
Public Works Clerical
A new part-time clerical position was requested for the public works facility. This is
particularly needed during peak periods of snow removal, heavy rains, and other events
when resident calls are very heavy. No new position is proposed for 2005. Instead, we
are going to try interdepartmental sharing from other buildings on a scheduled and as -
needed basis to address this need.
ii
Reduction in Overtime
While overtime is a necessary part of doing business for some divisions, we need to make
every effort to limit it. It costs the City 1'/2 times for a task that is done on overtime. If
overtime is limited, more dollars will be available to hire additional staff or apply to
program needs. The 2005 budget reduces overtime in the General Fund by $46,516.
Other Funds
While the General Fund is by far the City's largest operating fund, the City has a number
of other important operating funds. These include:
Recreation Fund. General tax support of the Recreation Fund will not increase for 2005.
Scholarships for recreation programs have been increased, as well as the amount paid to
Senior Community Services. These costs will be covered by increased registration
revenue. The Plymouth Fine Arts Council will make decisions on expenditures for arts
groups.
Transit Fund. This budget assumes Motor Vehicle Excess Tax (MVET) funding based
on the estimate from the Met Council. This budget includes the hiring of a Transit
Coordinator who will replace existing services by contract. This will result in a cost
savings to the Transit Fund. No reduction or increase in transit service is proposed in this
budget. Operating costs for'/4 year for a possible transit facility are included in this
budget.
Facilities Management Fund. This fund is an internal financing fund, similar to the
Central Equipment Fund. Major expenditures planned for the Facilities Management
Fund include maintenance items at the fire stations ($46,000), replacement of carpeting
and tables ($28,000) and replacement of the cement near the gas pumps at public works
9,000), wiring of a generator to serve City Hall from public safety ($33,800),
replacement of an alarm panel at City Hall ($12,000), purchase of updated software for
building maintenance ($3,000), and purchase of a sweeper for the new public safety
garage ($35,000).
Housing and Redevelopment Fund. The HRA levy is proposed to increase from
593,395 to $607,556. Last year's budget included the housing staff taking over the
Section 8 housing inspections, in order to allow more of the Housing Inspector's time to
be spent toward rental housing inspections and property maintenance complaints. The
2005 budget includes a vehicle for the housing staff to conduct those inspections.
Water Fund. This budget proposes an additional $30,000 to cover the repair of streets
that is required after watermain break repairs. This allocation to the Water Fund is
appropriate and will free up General Fund dollars needed for standard street maintenance.
Funds are included for leak detection as an initial step toward water conservation. The
Water Fund budget reflects the rates adopted at the November 9th council meeting to
cover the costs of the water treatment plant expansions and renovations.
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Sewer Fund. This budget reflects the sewer rate increase adopted at the November 9t'
Council meeting to provide funding for the 7.7% increase estimated by the Met Council
for treatment costs and long-range system improvements. Manhole sealing is proposed in
the amount of $20,000 to reduce inflow and infiltration problems. This is needed to avoid
future Met Council penalties. A mainline reel, cable, and larger wheels are proposed
relating to the sewer camera, and our program for lift station upgrades and replacement
will be continued.
Solid Waste Fund. The budget includes the $38,000 grant recently awarded by Hennepin
County relating to analysis of the recycling program, and $8,000 for expansion of the
recycling drop-off site. This site expansion is needed due to the construction of the new
water treatment plant site, as well as to safely accommodate the large amount of traffic
that uses this site. Each year, the drop-off site takes in about 500 tons of material, which
is about the same amount picked up in one month of curbside collection.
Risk Management Fund. The budget would increase charge backs to other funds by
71,015 over the 2004 budget. Even with the increased allocation, the fund is anticipated
to have a $250,000 loss in 2005. The increased charge -backs are one-step toward
stabilizing the fund long-term. The consistently low interest rates have had a significant
impact on this fund, which previously maintained an adequate fund balance solely
through interest earnings. Growth of the City and increase of City facilities has also
increased exposure and premiums.
Central Equipment Fund. Expenditures of $1,155,700 are recommended for replacing
24 pieces of equipment according to the master schedule for equipment replacement. We
have been fortunate to get more useful life out of most of our equipment. Of the 24
replacement pieces, 16 are being replaced beyond their projected replacement year, 1 is
right on schedule, and 7 pieces have been advanced in the schedule. The equipment
replacement schedule is a guide, and we carefully evaluate each piece of equipment
before making the replacement. The budget includes $20,000 for a new swap loader for
single axle truck, as well as $5,600 for an on -the -vehicle brake lathe.
Design Engineering. This Fund manages the annual street reconstruction program in-
house, and transfers annual surpluses to the Street Reconstruction Fund for future
projects.
Iee Center Fund. This fund is again projected to be self-supporting with fees and rental
charges, and will provide its share of the outdoor maintenance costs. An amount for
retained earnings is also allocated, which will be reserved for future building repairs and
equipment replacement. The budget includes funds to cover the costs associated with the
new third sheet of ice in the amount of $318,500.
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Information Technolozies Fund. This budget maintains the current level of services,
which includes modest advances in e -government, such as the ability to take credit card
payments and access accounts via the internet.
Field House Fund. The operating costs of the field house are anticipated to be fully
covered by rental revenue. An amount for retained earnings, which will be reserved for
future replacement, is also projected. The budget includes purchase of a larger
replacement Cushman to maintain the field ($3,000).
Water Resources. The City Council received. the report from the Surface Water Task
Force at the Special Council meeting on August 9h. The report included
recommendations for water quality activities and funding sources. Based upon these
recommendations, staff provided recommendations for utility fees at the first budget
study meeting on August 23`d. The utility fee has not been increased since its adoption in
2001. On September 28th, the City Council approved a rate increase consistent with the
Task Force recommendations, and the 2005 revenue projections reflect the revised rate.
The 2005 budget includes increased services of $16,000 for lumber, drainage materials
and additional goose removal. Also recommended is machinery and equipment of
41,000, which includes $31,000 for a trench compactor, $6,000 to purchase a sewer pipe
camera which is shared with sewer, and $4,000 for an automatic water sampler.
Conclusion
The City remains in excellent financial shape. Plymouth is among an elite group of cities
with a Aaa bond rating — the highest rating possible. This rating has saved the City
thousands of dollars in bond interest costs. The City has a diverse tax base and a low debt
per capita. Plymouth recently received an exemplary audit report, and the Financial
Trends are positive. The 2005 budget attempts to strengthen core services, while maintain
a balance of services that Plymouth residents expect and enjoy.
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