##VIDEO ID:wEW4ntXlAEM## 6:00 and I called this is an actual meeting of the BR city council to please call the r you're not calling the who's calling the I chz here oday here stunich here Terry here Stang line here Johnson here bans here mayor BAU here okay everybody's here this is uh one item evening for the budget discussion of the 2025 budget and L Pres ation Connie take it away thank you Connie is this a meeting or a workshop it should just be a workshop just a workshop got it okay is it shorter uh Mr bevans Mr T a meeting is a workshop is a meeting it's a special meeting we can we can vote in this meeting if we wanted to as long as we don't deviate from our agenda thank you going to ask question okay Connie all right so theity of brainard's budget what do we budget a city has to adopt a budget for at least the general fund but it does not have to for every fund which is a good thing since the city has 62 different funds the city has historically adopted an official budget for the following funds the general fund special Revenue funds um for Public Safety this is police and fire Parks and Recreation and Street and Sewer fund these three special revenues funds along with the general fund are often referred to as the working fund and are the funds that we need to Levy for for operations for reporting purposes these three special Revenue funds are reported under the general fund the city has a historic budget we estimate all of the non-t tax revenu such as fees fines local government Aid we estimate all of the expenditures Personnel cost Supply Services debt capital and how we do that is we use the averages over the last several years and any additional information we may have to estimate both the non- taxable revenues and expenditures the difference between the two is generally the levy needed tonight's discussion again we'll focus on the working funds um debt and Capital Equipment and facility fund the funds that the city needs to Levy for operations the preliminary Levy needs to be certified to the county by September 30th the preliminary Levy is what's used to send out the tax notices to Residents in November and the final Levy needs to be certified to the county by December 30th the final Levy can be lower than the certified Levy in September but cannot be higher so per the city Charter the city council PNF chair and City administrator meet to discuss the 2025 budget this budget will presented to the council before September 1st and the budget that is presented tonight is reflective of that meeting so the chart on the following two slides shows the 2023 actual information the adopted budget for 202 4 the proposed budget as of today for 2025 the dollar difference between the two budgets and the percentage difference as well we start by estimating the operating expenditures Broken Out by Personnel Services supplies services and transfers out the operating expenditures total 13,531 155 and is a million increase or 8.04% different from the 2024 budget we'll be discussed each more in detail later when we look at the levy needs for facility and Equipment it is current the levy is currently at 1,289 127 and is the same as it was for 2024 we also need to consider that we have enough a levy to make The Debt Service payments the debt Levy is currently at 765,000 and is a decrease of $212,100 from the 2024 debt Levy we also need to consider the amounts needed for the for the other levies those set by Charter and for the library Eda and Airport the Eda library and Airport have all requested increases the current budget has kept the library Eda and Airport funded at the 2024 amounts the increases are not reflected in this summary so without the requested increase from the library Eda airport the total estimated expenditures are 6,794 155 which is an $848,000 which is about 85,000 or one or basically 1% % more than the 2024 budget the city also needs to take into consideration any additions or uses of fund balance 2025 is not an election year so therefore the city increases its fund balance in planning for the 2026 election we're also going to use some of the one-time Public Safety Aid that was received in 2023 in 2024 the council Direction was to fund the additional 1.5 sworn officers at 100% with the aid 66% in 2025 and 33% in 2026 Council Direction at the first meeting in August was to use the public safety Aid to pay for the increase in the records management software less the amount reimbursed from sourcewell also in 2024 the council set the levy at an 8% increase over the 2023 Levy this was approximately 113,000 more than what was needed to balance the budget and we did this to one implement the wage study and to help with the 2025 Levy since the amount budgeted in 2024 appears to have been enough to implement the wage study the 113,000 can be used to help balance the 2025 Levy the city's fund balance policy is that we're supposed to be at 35 to 50% of the current Year's expenditures at December 31st we were at 21% currently there is nothing in the budget to get the city closer to meeting the policy now that we have estimated all the expenditures and the non-property tax revenues the difference is the amount of the levy needed which is currently at 7,560 372 or an 8.64% increase over the 2024 Levy the 8.64% is not the recommended Levy increase rather it's what's needed to balance the budget as it currently stands and does not consider the increases to the library Eda and Airport from the 2024 funded amounts now if we go through each line item starting with Personnel Services Personnel Services increased by just almost $700,000 we are budgeting one less full-time equivalent in the working funds however we are budgeting a part-time employee this is due to not filling the assistant planner position we're budgeting additional 2.5 full-time temporary employees and have increase the wages to a range of $8 to $20 per hour this excludes the budget for csos and the part-time employee as they are on step one of the grid 10% of the city administrator salaries being allocated to public utilities department and the budget currently does not include any employees moving to step seven or eight assumes the employee will elect the same health insurance plan that they currently have today new employees will elect the $3,200 family plan option and will use an 8% increase in the sourcewell plans and a 5% in the other plans the league of Minnesota cities recommends a budget increase rate of 3 to 5% for workers comp rates and a 10% increase in the experience mod the current budget includes a 5% increase in the rates and experience mod of 1.07 which is an increase from 97 in 2024 there are no changes to the pair rates long-term disability or employer paate health insurance life insurance premiums if we look at surprise uh supplies we have an increase of $4,550 this is just bringing the budget more in line with averages for services we seeed an increase of $287,600 and the city has been saving for these costs in the capital fund the increase in expenditures is offset by an increase in the revenue in the transfers in which we will see in the revenue section computer support has increased approximately $499,000 this is primarily due to the increase in the records management software the increase in the estimated cost is about 35,000 with 20,000 to be funded from sourcewell and the 15,000 becoming uh to be covered by using the one-time Public Safety Aid this assumes that we will continue to use Vehicles due to supply the city has not been able to get the budgeted number of vehicles however we did get several vehicles in 2024 staff is working on analysis of lease versus purchasing and looking at the number of vehicles that the city needs the current budget reflects the high end of the recommended increases for the league of Minnesota City's um guide for rates values exposure and changes in experience mods for insurance overall this resulted in an increase of 46,000 or $ $ 1,190 this Chang is due to updating the amount to be transferred from the fire Capital fund per the fire Capital um board agreements for capital capital we're not proposing an increase um to the levy for Capital Equipment and facilities at this time the current level can fund the proposed plan the following two slides are compared the capital items proposed in June versus the current plan the broom attachment and Trail have been removed from the streets budget with a skid steer trailer and scanning tool and 50% of the cost of the attachments that will be shared by the parks department has been added we also increase the cost for the GPS receiver by $1,500 we have two amounts that will be transfer to the working funds to pay for the update to the comprehensive plan and the street sweeping screening staff needs to review what is included in the library exterior and mechanical cost and more discussion needs to be had on the city hall bathroom updates in the Street scan software we continue to look at the difference in the Parks Capital Area we removed the snowblower and added a skid steer and 50% of the attachments shared with the streets and we also increased the cost of the cameras by $1,500 the total cash to be spent in 2025 is $1,995 the park Port the park board requested 59,230 for to be added to the long-term capital maintenance account for a total plan expenditure in 2025 of $2,597 34 if we look at a portion of our long-term capital plan we see the levy of1 M 280,000 as well as additional funding from the fire advisory board's plan we see the $1,995 of cash expenditures from the previous slide and there is a $519,000 increase in the amount set aside for the Park's long-term capital maintenance projects this funding level is not a guaranteed in the future years we see a positive cash flow other than in 2027 but this plan does include the Park's long-term capital plan is not a guarantee so we think it'll iron itself out if we look at the 2025 debt Levy is a decrease of 212,000 again the debt Levy for 2025 is to pay the August 1st 2025 and February 1st 2026 debt payments and the current Levy is presented with the assumptions detailed in the memo from the August 19th council meeting if we look at our other levies the levies per the charter are a percentage of the previous year's total Levy the permanent Improvement fund which funds the infrastructure Capital Improvements pays for the general maintenance like crack cealing seal coding can go up to 9% of the previous year's level Levy it is at 9% as it has been in Pre is at 6% as it has been in previous years the library is requesting a 2% increase in the levy just about $3,000 the Eda commission has requested the maximum allowed by State Statute which would be expected increase of $27,800 and the airport is requesting a $225,000 appropriation from both the city and the county this would be an additional $78,900 from the 2024 Levy Mr Wright the airport executive o uh director will be discussing the increases at the August 28th PNF meeting I think that's also when we have discussion about the additional increases as well information from the library including the parks right yes the parks is included will be included in the discussion the parks lovey yeah we haven't had any discussion since they presented their request true okay it is presented as they requested in the levy but yes we will discuss the park board budget as well um for the PNF chair Council vice president and City administrator we kept the library Ed and airport at the same funding level as 2024 we look at other taxes we see a decrease of $14,500 this includes tax increment it's not Tiff lodging franchise and penalty and interest on delinquent tax payments part of the change is that the amount of the estimated for tax increment with a decrease in the tax rate due to the incre increase in the s market value we have less general tax increment generated the other part of the decrease is the cable franchise fee that is being collected if we could look at licenses and revenues we see a decrease of $64,500 staff is estimating that we will be short of the 2024 budget as well the current budget does not include any revenue for projects like country manager which were about the 80 to 90% that the project would go in 2025 or for 805 805 Laurel it doesn't include the revenue because we thought these projects would be State Le inspections so the fee would go to the state we have received additional information on the delegation agreement and we will discuss this at the next PNF meeting and we'll determine if we need to amend the budget at that point or update the budget when we look at revenues grants and AIDS we see an increase of 6,15 $50 and this is due to the increase in the certified local government aid for 2025 which is set at 5,244 1892 revenues from other governments increase about 40,000 we're budgeting 20,000 from sourcewell to pay for part of the increase for the cost of the records management software and the increase in the revenue from the cities of Baxter and nisah for the increased cost in the share of Mr minor prosecutor services charges for services increase about 45,000 this reflects the amount receive in 2025 from the fire service areas will increase about 17,400 this amount was set in February of 2024 and they were budgeting an increase in the campground Revenue as well we look at fines and services a decrease of about 3,000 again this is just adjusting the court find Revenue based on historical data we have other revenues an increase of $16,500 just adjusting light items based on historical data and staff would like to review the Utility Fund contribution to the city currently the contribution rate is a set amount per kilowatt hour sold perhaps this needs to be adjusted Andor look at a whole new contribution methodology when we look at our transfers in we see an increase of $59,000 this is a transfers in from the U from the capital fund for the comprehensive plan Plan update and the street sweeping screening cost so if we look at a recap of everything that we just covered the city would need to increase a levy by 8.64% for balanced budgeting if the council were to improve the request of the library Eda and Airport the proposed Levy would need to be about 10.22% over the 2024 Levy increase or ly the city's revenue is the amount that the city levies the only way the city can get additional revenue is for the city to increase its Levy a change in the estimated market value only changes how the pi is divided I think often times we hear all this development will generate more tax revenue for the city this isn't uh true as the development increases the total estimated market value of the city but it does not increase the amount of tax revenue the city collects unless the city increases the levy so for we have the city Levy divided by the total city tax capacity is what equals the city's tax rate we then take the tax capacity of a particular parcel multiply that by the tax rate that equals the city's revenue for the parcel or the port or the property's portion of the levy so if the tax levy were to say the same and the total tax capacity of the city increases the tax rate decreases and if the city's Levy were to say the same and the total tax capacity of the city decre increases the tax rate increases in Minnesota taxing jurisdiction such as the city sets the levy amount not the tax rate the tax rate is the result of the city's Levy and the tax capacity of the city I was not able to get the estimated market value from the county for tonight's meeting um the following chart though does show the estimated market value for the city for the last 6 years and shows the percentage change for the Last 5 Years 23 and 2024 increases of 22 and almost 15% respectively were significant and were like anything we've seen before this chart also shows the tax capacity of the city and the percentage change without having the preliminary estimated market value for paye 2025 I did not try to estimate the change in the tax rate Mr bevans yes can I ask a question absolutely Connie when you talk about the tax rate what value is that to us when we're trying to set our Levy I've never seen that really play a role in the dollars we need versus U you know each property's taxable amount and that type of thing how does that help us work through this if if at all the tax rate again with a city a municipality sets the levy amount the tax rate we have no control over that's my point same number that's my point I I I'm not I'm not even sure why we talk about it that we we talk about the tax rate just because we are so close to Baxter and so a lot of people will compare the tax rate between the among the city of what they're going to pay for taxes I think that's why we talk about the tax rate fair enough Gabby I think you had a comment yeah I'm just saying it it's it's the same number it's in percentage form or dollar form we set them both at the exact same time we don't set the tax tax rate the tax rate is simple division above the taxable value of the number we set we get to pick that number Ergo we get to set the tax rate it's the same number I would disagree because we don't have control over the values of our property in the city no but we know what the values are before we set the tax rate which is the one number that the one variable that determines so yes it's I just still disagree with you okay we have Council discussion or any any Council input or direction to staff good job all right question I I have one you didn't put the dollars total dollar of Levy what did we Levy last year versus what are we what what what was that yeah that was in the packet and I do. 64% I do have the slide here um that our 2024 Levy was the 6,9 58,800 which was an 8% increase and we had a tax rate of 54.1 83% and since we don't know the estimated market value but just adding up what you're presenting this evening you're roughly we would see an increase in our tax rate well depends on what the market if we assume a 5% increase in the tax capacity you know we are definitely going to see an increase in the tax rate anything above go back one SL please above uh 4% so 2025 $7 million roughly Plus 8 8 and a half% is that what it would be 8.64% incase 8 million yeah we're just going to blow past seven it's going to be 8 million based on the presentation correct well it's currently yes just below $8 million that's close to8 that was the number I wanted to know and it's 7 million what it's 6,958 for 2024 je right the presentation we just saw this evening was 8.64% high and that number is well be 8 Milli 7,560 372 so so 7.5 75,000 is about 1% 70,000 is about 1% change 75,000 well that'd be of the current but if you have to look at the 6.9 yep million from last year about 70,000 equals to 1% increase in the levy okay and what my last question is what's our deadline October 1st September 30th okay so if we look at what the next steps I'll just go back to here the preliminary Levy can be set at the September 16th council meeting or a special council meeting would need to be called needs to be done by September 30th we can discuss the current budget at the September 3rd council meeting or maybe Council would like another workshop for staff to provide additional information possibly the week of September 9th the final Levy needs to be certified to the county by December 30th and it cannot be lower but cannot be higher and then here was the levy history as just mentioned the final Levy can be lower but cannot be higher than the preliminary Levy as a reminder the preliminary Levy is what's used to send out the property tax notices in November often times when the preliminary Levy is set is been said the final Levy is not lowered this chart shows that for the previous 15 years uh of levies the increase the tax rate in the preliminary Levy and it shows that eight out of the 15 years the final Levy has been lower than the preliminary Levy so just informational Mr B Mr T um I I just wanted to mention the airport and um as we see that it's uh the asks now is 225 and up until this year it's been 1555 um and we got that differential between the county raising theirs 6% we lowered ours to 146 and uh change um and that's the recommendation moving forward to keep it at for next year at what it is this year at 146 um the other item that we've talked about was the city divesting the airport to the county and I see that they have about a 9089 to $90,000 um upfront cost to do that which uh from our meeting on August 1 at the airport with uh FAA many city city and county staff um there was a a cost identified I think the county has come up with a more uh probably accurate number based on they're going through the uh numbers and coming up with an $889,000 figure it's if you notice it's not 885 it's not 90 it's 89 so I'm confident that they've done their uh calculations pretty good but if if the count is willing to move forward on this they have to hear from us they have to hear that I think the best thing to do at this point would to consider for the future you know what's our return on investment here if we if we might want to uh say offer to the county to pay that upfront cost and make it more uh uh make it more appetizing for them to go forward because they're going to have to have other work being done by their staff if they do take ownership and um if we're looking at this in the long term not right today we pay the money today we save that airport Levy in in perpetuity we don't have that against our taxpayers every single year as it shows they want more for good moving forward and um I would just uh like to see something that we could see perhaps at our next meeting and I would uh offer to maybe put something on our agenda for the U next Tuesday to come back and have a discussion on that specific item and see if we would have a council approval maybe coming out of that meeting to uh get the staff to come back with a report or so something to show us uh where the numbers are what we learned from the FAA what we learned from the county and I read this in the paper from their budget meeting this past Thursday they didn't want to move forward but I think if you read between the lines they're saying they're looking for a little something in return from the city to help them moving forward so I just wanted to throw that out there because this is a long-term thing this is uh we might take a little a little you know hit on it to start out with here for the next year or two but it's a long process based on what the FAA told us it's a at least a year year and a half process once both sides agree and we have to do that through resolution to say yeah um here's what we'll do and here's what the county will do once they see that then they say okay now we start our process with dotting all the eyes Crossing all the te's and get everything done correctly to maintain the commercial licensing the FAA funding for all the grant money they get and um you know in the last 10 years it was stated they've received $31 million from federal funding that doesn't even talk about the Essential Air Service that's not even part of it which right currently is like $6 million a year for the for the commercial airline so I think um I would like to see that you know of course uh we don't need to you can get this on our agenda for Tuesday I'm just kind of putting that bug in everybody's ear I'll be asking for that and having that hopefully on our agenda and uh maybe we can move forward with that or at least a discussion to see where we're at right now okay Mr BRS has a comment uh thank you councilman chesak I do have a meeting with Debbie Ericson on Wednesday morning and I'll understand I've heard some of the chitchat informally on what the County Commission is thinking but I'll get some formal feedback from Debbie on Wednesday and I do intend to present some information at the next council meeting perfect um just on that note I appreciate that but um the one thing we have to consider here um is our Levy deadline preliminarily so if the county is able to set their Levy based on us telling them if this happens I I don't know what's going to happen but again um I'm sure Nick will come back with something then based on what he just said and um think if we're going to do this we have they have the same deadline we do to set their preliminary Levy so if if they're not interested in paying that upfront cost they're not going to Levy for it and if we tell them hey we're interested in helping you we will if that's the case I think that uh we can then uh they can then move perhaps have the thought of moving forward at that time but otherwise I don't think they'll do anything so that's just my thought I regardless it seems like we should have an airport discussion on the first meeting in September thank you you bet thank you any comments on the presentation this evening any other comments how about regarding an oh oh hello Tiffany I didn't see you okay what's up um well I I guess I I 8.64 is a large number uh but in looking at the the library's request it's a very modest number in the grand scheme of things we did hold them flat last year um you know we we put lumping them together with the Eda and the airport it's um I don't know that that's fair to to lump those numbers because they're just orders of magnitude different um and I guess I would like to hope that we could find a couple thousand dollars for them in our budget thank you that's not included in Mr President Connie mentioned during the presentation at the next council meeting we will be discussing the library we will be discussing the airport we will be that's already all on the agenda PF yep PNF which goes to the full Council for a vote and again just to show that the libraries request is $3,000 edas is $227,800 and the uh airports request would be about 70 $9,000 so it's about a total of $109,000 for all three plus $426,000 for the roof for what for what for the library roof that the building that we own yes but I think that that is going to decrease because I I think I believe that includes some of their HVAC system that they have done this year or that has been done this year thank you any other comments Cara just a quick question Connie and terms of personnel um none of the BPU stuff that we have going on is reflected in the levy part right they have a discussion right correct okay I just wanted to make sure any other discussion and just a reminder that the BPU presents their budget to the council the first meeting in December and then the council approves their budget thank you thank you anything else do we need to schedule another budget meeting at this point or that is up to you guys anybody feel we need to I don't believe we do think we're okay Mr be yep hang hang on one second I want to ask our PNF chair any idea we need to meet again do you think at this I don't think but we'll see on Tuesday night after how those discussions go yeah that's what I think we'll hold off for now Mr chz yeah based on our discussion here if and Mr Johnson said we'd still then meet on the 16th and that's when we' expect to set the preliminary Levy is that what our thoughts are that would be my that would be my expectation okay okay and if we need one between now and then we can we can try and squeeze one in okay any final discussions anything from staff hearing none we'll look for a motion to adjourn so Move Motion by stuning second by OD all in favor say I I we are adjourned