Lino Lakes Adopts Preliminary Budget For 2008
City Tax Rate To Remain At 2007 Payable Levels
LINO LAKES - Following a series of animated budget workshops, at its meeting of September 10 the Lino Lakes City Council unanimously adopted its 2008 preliminary general operating budget in the amount of $9,932,236, a 3.36% increase over last year's budget.
The preliminary $8,866,956 2007 tax levy, collectible in 2008 and adopted by resolution at the same meeting, will remain virtually the same: at 38.994% in 2007, it is 38.991% in 2008.
"The proposed levy would result in a tax rate which is basically level," city Finance Director Al Rolek said at the council's budget workshop on September 4.
For a home with a market value of $250,000, its 2007 city tax would have been $974.85. That home's calculated 2008 city tax would be virtually identical at $974.78; however, according to Rolek, a home valued at $250,000 in 2007 is expected to increase in market value to $262,000 in 2008. On that basis, the estimated 2008 city tax would be $1,021.56, an increase of 4.79% due to increases in valuation.
Over the past year, the city's taxable market value has increased from $1,928,715,900 to $2,021,483,000, a 4.81% increase, one-quarter of which is due to new construction. A key cost-cutting measure included in the proposed budget is the gradual elimination of the use of outside engineering consultants for routine engineering services.
Other elements of the budget include the addition of one patrol officer, and using an annual levy to finance equipment replacement in a "pay-as-you-go" approach in lieu of the use of debt service (bonding).
"If we can fund it [equipmentreplacement] annually and put money into a revolving fund . we can save anywhere from $60,000 to $80,000 a year in finance charges," Rolek said.
Increases in funds slated for maintaining the city's pavement and storm drainage infrastructure are also included; according to staff, the budget "fully funds" the maintenance portion of the new Pavement Management Plan adopted by the city.
Approximately 40% of the overall budget is for public safety: $3,101,308 for police protection and $487,757 for fire protection.
On the revenue side, the city has trimmed its expected residential housing building permit application revenues from $450,000 - originally anticipated in 2007 - to $325,000 in 2008. Although permit revenues were trailing considerably at summer's end ($162,629 in August), Rolek expects that new residential construction within the Legacy at Woods Edge develpatrons who wanted to light up could simply take their business to other bars that still allowed smoking.
In response, many bars in Hennepin and Ramsey constructed semi-permanent "outside" smoking structures featuring roofs and amenities including space heaters and even TV's.
It's unclear whether a similar phenomenon will occur in the area after October 1, as outside smoking structures are regulated talking with city staff about finding outside locations for smoking areas.
City Administrator Mike Ericson said that while the city is willing to help bars find suitable outside smoking locations, drinks won't be allowed outside, at least for the time being: that move would require an amendment to a bar's liquor license.
The state legislature passed the Freedom to Breathe Act last spring, and it was signed into law by Governor Tim Pawlenty.
According to ClearWay Minnesota, an independent, non-profit anti-smoking organization, the law makes Minnesota one of over a dozen states that have gone smoke-free.opment will pick up in 2008.
Engineering Moves "In-House"
The city council's Five Year Financial Plan, which according to City Administrator Gordon Heitke serves city staff as a guide in the preparation of the city's annual budget, included plans to decrease the city's dependence on outsourced engineering services.
Currently, the city's engineering needs are served by City Engineer Jim Studenski, who works for TKDA, the city's engineering consultant. Studenski spends most of his time on site at Lino Lakes City Hall.
With an eye toward a future 4-member in-house engineering team, staff has recommended hiring two engineers next year - a city engineer in March of 2008 and an assistant city engineer in June.
The city would still use a "fair amount of contractual engineering the first year," explained Rolek at the council's budget workshop on August 27. Staff additions in 2009 would phase out the current consultant arrangement.
In-house staff would address street overlay and sealcoating projects, plan reviews and construction services connected with new residential developments, and the day-to-day engineering tasks associated with the general operation of the city's sewer, water and drainage systems. "Once we have a full complement online," Rolek said, "we would still [occasionally] use consulting services."
Those contracted services would be for bigger public improvement projects and more extensive engineering studies where additional expertise would be required, he explained.
Currently, Rolek says, developers ante up for their project reviews, and those funds pass through the city's hands and end up in the coffers of its engineering consultants. Over the past 3 years, those development reviews netted an average of $420,000 each year. Rolek anticipates that the diversion of this "revenue stream" to the city will help offset some of the costs of adding in-house engineering staff.
But plan reviews are only one component of city engineering. Community Development Director Mike Grochala estimates that over the period of 2004 to 2006, the city spent an average of $1.28 million annually on engineering costs.
The revenues to fund this work come from many different sources, including the general fund, which is supported by property taxes, and the water and sewer funds, which are self-supporting. Cost figures provided by Grochala indicate that the switch to in-house engineering could save the city's general fund as much as $63,000 on an annual basis.
Council Member Jeff Reinert raised some objections at the workshop as to whether 2008 was the appropriate time to make the switch: "The whole world is going toward outsourcing," he said, adding that he wondered if the city would be losing the expertise afforded by an experienced engineering firm.
"The discussion hasn't been whether we're going to do it, but when we're going to do it," Mayor John Bergeson countered.
And staff members believe that much of the day-to-day engineering can be done in-house without a loss of quality. "We'll do what we have the capability of doing," Grochala said, "the rest [will get] contracted out."
As a part of Resolution No. 07-131, council members agreed to have further discussion on unresolved matters prior to adopting the final tax levy and 2008 budget this December. The city can decrease its proposed tax rate following its Truth-in-Taxation hearings this December, but cannot increase it.