City Administrator Joe Hoffman presented some possible adjustments to the 2017 budget at the city council’s September 6 meeting. Councilman Dave Harrison was absent.
The initial draft of the budget was discussed at the August 23 meeting with a $54,000 levy increase over last year, or 6.77%. Hoffman noted there was no increase in health insurance premiums, but none had been figured into the initial draft of the budget.
Hoffman’s adjustments would leave the operating budget unchanged, but would make adjustments to the bond payment for the Twenty-14 Improvement project. There is a $129,282 project surplus available from the Twenty-14 project. He admitted there usually is not this large of a surplus. Any surplus is usually left in the debt service account to bring down payments on the bond over the life of the bond. Using the surplus over a period of years keeps the payments level. Using the surplus in this way would allow the bond payment of over $153,000 from levy dollars in 2017 to be reduced. Other monies that will go toward the total bond payment include assessments and sewer, storm water and water fees.
Hoffman suggested adjustments could bring the total levy for the Twenty-14 project for 2017 to $112,167. However, he went on to explain that the storm water account, is in deficit. He outlined three options for the storm water account, including raising storm water fees, levying funds for the storm water account or allowing it to run in deficit. If $22,028 was levied for the storm water account and all the other changes he listed were made, the levy increase for 2017 would be 4.32%.
Hoffman had one more item for the council to think about. He questioned whether they should levy for repairs to city hall and/or the Dairy and Farm project. If $20,000 were levied for one or both of these projects, the levy increase for 2017 would be back to about 6.5%.
Hoffman said the architect hired for city hall repairs requested quotes for a new roof, EIFS (insulation and stucco) on the north wall, and a new metal canopy. Plans went to a variety of contractors last week and quotes are due on September 15. The quotes should be discussed at the next meeting. Funds could come out of the Capital Reserve fund. Hoffman suggested they may need to bump that fund up and discussed possibly replenishing the fund by levying $45,000 each year.
No action was taken this day on the budget. The preliminary levy will have to be approved by the end of September. It can be lowered but not raised before approving the final budget and levy late in the year.
Other business in brief
• Alissa Blaha, development coordinator for the Southern Minnesota Initiative Foundation, updated the council on SMIF projects. She noted this year is the 30th anniversary of the non-profit. They are committed to helping the workforce and the future workforce through their programs for early childhood and economic development. SMIF provides training for home-based child care providers.
In 2015, they supported the Driftless Fly Fishing Company in Preston. SMIF’s efforts in community development help keep small towns moving forward. Starting in July, SMIF will focus more on rural and small communities.
Hoffman said we certainly appreciate the participation of SMIF with the Preston Community Foundation. The city has allocated $500 to SMIF each year for over a decade. Councilmen Charles Sparks and Robert Maust said we get a lot more back than we pay in. The council voted to increase the allocation to $750 for 2016.
• Hoffman reported that MnDot has inquired about a possible settlement of the dispute over the outstanding invoice from 2005. The city’s final cost for the Highway 52 project was $762,454. The city paid to MnDot $686,204. The balance is $76,250. The final bill was submitted years after the completion of the project and the council felt the statute of limitations had run out. Of the balance not paid, over $56,000 was for MnDot engineering and about $20,000 was do to changes made. MnDot has suggested working out an agreement where most of the engineering would be written off. Any payment is 30% the responsibility of the city and 70% Preston Public Utilities.
By consensus the council asked Hoffman to work out an agreement with MnDot.
Hoffman discussed two scenarios concerning a future street project for 2018 or for 2020. Waiting until 2020 will see a reduction of other debt payments. However, delaying the project longer may result in increased costs and increased interest. No action was taken.
• Police Chief Matt Schultz recommended the replacement of his current vehicle (2007) that has transmission issues with a used 2014 Impala costing about $14,000 (24,000 miles). This would allow the replacement of his vehicle without increasing the annual funding for squad replacements. The purchase of the used vehicle was approved.
• A resolution adopting an ordinance to opt-out of the state statute for temporary family health care dwellings (granny pods) was approved as recommended by Planning and Zoning. Councilman David Collett voted no. Hoffman said the state law effectively overrides local zoning ordinances. If there is interest in allowing these kind of mobile dwellings, the normal process to change the zoning ordinance will have to be followed.
• A request from Aaren Mathison to close the 400 block of Spring St. NW and the 300 block of Franklin St. NW for a block party on September 25 from noon to 8 p.m. was approved.
• The recent Thursday storm that clocked the worst winds in 15 to 20 years was discussed. There was a lot of damage around Preston, including power poles. Crews worked through the night. Hoffman praised them for their work and their good attitude. Mayor Kurt Reicks noted there were a lot of positive comments from the public. Hoffman encouraged people to call in power outages, as they rely on phone calls to get any outages on a list to be repaired.