Minutes - Council Work Session - 07/10/2007

Home

Center is only a portion of the community; Ramsey is a vibrant community, and is still in an excellent financial situation as the recent audit showed. Councilmember Elvig stated the strongest position the City has is what they did financially. They put tax dollars into the municipal facility, and other than that not into anything. They also put hooks into the developer with a $3 million credit line and assessed the property. The City is in an excellent position and they want to ensure that. Consensus of the Council was to direct staff to include the statement regarding Ramsey Town Center on the agenda of the City Council meeting, to submit an article in the Ramsey Resident in response to the Pioneer Press Ramsey Town Center article, and to look into including an article in the Anoka County Union and the Pioneer Press. 1) 2008 General Fund Budget Interim City Administrator Nelson indicated staff has prepared the 2008 requested budget. The goal in going into this budget process was to maintain the tax rate so that there is not an increase. The proposed budget includes a .48% increase; staff has discussed ways to deal with that if need be, but think they have presented a budget request that reflects the true needs of the organization while managing the tax rate. Ms. Nelson stated one of the challenges this year is that there are not firm numbers from the County, but they are seeing valuation increases across the board at about 3.5%. In recent years valuation increases have been at 10% to 12%, so there is not a lot of new value to be working with. Ms. Nelson stated in addition, staff has taken a conservative approach to building permit revenue. At this point staff is not comfortable in predicting that revenue number above where it has been set, which has impacted the tax levy. Interim City Administrator Nelson indicated staff would like direction regarding the following in relation to the budget: · The budget incorporates the use of capital funds for the 2004 and 2005 debt certificate payments, as well as for the capital expenditures for 2008. Staff is looking for policy direction about the use of these funds for those purposes. · There has been a considerable amount of discussion internally about the use of gambling funds and whether to target more programming focused expenditures, such as Youth First. These funds have mainly been used for park improvements to this point. · The debt payment for the municipal building will double in 2009. Since they are not seeing the growth in the community, staff has concerns about the impact to the budget. Staff has looked at possibly restructuring the bonds to allow flexibility to manage the tax rate while making payments on this building. · Building permit revenue has not come in where expected for 2007. Staff has worked internally to come up with a proposal to amend the 2007 budget to reflect that decrease in revenue. Finance Officer Lund provided an overview of the proposed 2008 General Fund Budget with a tax rate of 39.96% in comparison to the 2007 tax rate of 39.44%. Ms. Lund advised that the proposed budget assumes that $453,000 of the debt levy of the municipal building, the debt service payment of 2004 and 2005 capital equipment payments, and 100% of capital would be funded by the Equipment Replacement Fund. This fund has a balance of approximately $4.5 million. The Equipment Replacement Fund was set up to be used for the replacement of capital; however, in the past five years capital equipment has been purchased through certificates and the transfer has not been done to the Equipment Replacement Fund, so this fund has been growing at a constant rate. The City has received a letter from the State City Council Work Session / July 10,2007 Page 2 of 6