Minutes - Council Work Session - 03/19/2013

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Finance Director Lund explained that if we keep $1.5 million funding within the General Fund budget, about 17 employees would need to be cut. Ramsey currently has 60 full -time employees so that would be cutting over one -fourth of the staff. As an example, Department wise, $1.5 million would cut administrative by three - fourths and the Police Department by one - third. Councilmember Riley stated this would fix only one -half of the problem so the City would still need to do assessments but it sounds like there are problems with the assessment process. But if paying a franchise fee each month, it does not feel like the Council has solved anything. Acting Mayor Backous stated he does not support assessments because it is not an efficient way to address road reconstruction. He pointed out that one argument made to keep 20% assessments is to keep a bonding ability but he does not know how big of an issue that is. Interim Engineer Nelson stated there is a fairly new Statute, the Street Reconstruction Act, under which the City would prepare a five -year CIP, hold one hearing, and then if the CIP is approved the City can bond for the improvements under a different State Statute. Finance Director Lund noted, in regard to bonding, that is still a tax levy and has to be incorporated into the budget. If only assessing 20 %, the City still needs to fund 80% on the General Budget tax levy. Acting Mayor Backous stated a portion of the project could be funded through franchise fee. Councilmember Riley pointed out this is a long -term problem and if the City bonds now, it would be revolving funding. He felt it would be better to pay it now and then continually pay it. Parks and Assistant Public Works Superintendent Riverblood stated the franchise fee only covers one -half with numbers based upon the ordinary schedule but streets in the system now could be phased in other than the optimal schedule. He raised the option of matching projects to the franchise fee without resorting to assessments. Public Works Superintendent Riemer agreed the road reconstruction schedule could be stretched out. City Administrator Ulrich stated that is a good point and the estimated numbers can be refined from a $40 million effort to perhaps a $30 million effort. In addition, staff can refine the standards such as whether it is an urban design (more costly) or more rural design. He stated a $28 /month franchise fee may not even be allowed by State Statute and he thinks residents would not support that high of a franchise fee. City Administrator Ulrich noted the financing will need to be a combination of franchise fees, assessments, and General Fund with the Enterprise Funds also paying a portion. Finance Director Lund stated this scenario did not include any franchise funds. City Administrator Ulrich stated the Stormsewer Fund and Utility Fund are potential sources. City Council Work Session / March 19, 2013 Page 5 of 16