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CR 92-113 General Fund Adjustments , May 15, 1992 council Report 92-113 PROPOSED 1992 GENERAL FUND ADJUSTMENTS Proposed Action Staff recommends adoption of the following: Move to adiust the 1992 General Fund budqet by $149,800 as recommended by staff. Approval of this action will reduce expenditures in the General Fund budget to compensate for the State-mandated sales tax. This will also compensate for previously unbudgeted salary and health benefit costs. Overview In 1991, the City Council authorized a budget of $5,817.000 in the General Fund. Included in the budget was an anticipated 2% salary increase for General Fund personnel costs and a $5 increase in the City contribution toward health insurance. In April of 1992, the State Legislature and Governor approved the charging of sales tax at 6.5% on purchases made by local units of government, except school districts, nursing homes and several other exceptions. In reviewing the impact of this change, the staff has conservatively estimated the cost to the city of Hopkins to be $200,000. Of that $200,000, $100,000 would come from the General Fund and the remainder from the enterprise and special revenue funds. Staff is recommending budget reductions in the General Fund to offset these added costs which were unanticipated during the budget period. The total of the adjustments equals $149,800. The adjustments will affect personnel, equipment and services. Primary Issues to Consider 0 What factors caused the additional cost in personnel? 0 How will the sales tax affect the city of Hopkins? 0 How will the budget adjustments affect the General Fund? Supportinq Documentation 0 Staff analysis of issues 0 1992 Adjustments General Fund ....- -.~ ,/' Steven C. Mielke, City Manager ~ page 2 Council Report 92-113 General Fund Adjustments staff Analvsis Of Issues 0 What factors contributed to the extra personnel costs? When formulating the budget for 1992, the staff first anticipated the expected cost of living adjustments which would be demanded by the labor unions. In the Fall of 1991 it was anticipated that the cost of living adjustment would be roughly 2% and that health benefits would increase only modestly and thus a $5 contribution was recommended. During negotiations, it became obvious that the standard in the Metropolitan area was between 3 -3 1/2% and upon settling with the negotiating groups, a figure of 3% was agreed to. Health insurance and costs were significantly higher than anticipated and resulted in a benefit increase of $15 per month per employee. While these increases kept us near the mien of the Metropolitan area, . it was nonetheless more than budgeted. These two items together are expected to cost roughly $48,000. 0 How will the sales tax affect the City of Hopkins? The sales tax, which the City is currently exempt from, will now be applied to all goods and services purchased by the City after June 1st. Generally speaking, all goods and services which are taxable to the general pUblic will now be taxable to the city. The funds raised by the City sales tax will be apportioned along with the general sales tax and thus the state will be able to reimburse itself for budget reductions it was forced to take as a result of the state budget shortfall. The state Legislature and Governor chose to impose a tax on local governments as one of its major ways of solving the state budget crisis. In essence, the state will not reduce our local government aids but instead will charge us a sales tax in an amount roughly equal to the proposed cuts. The sales tax will be spread across all funds and divisions of the City. While the General Fund is the largest fund for the city, it will absorb a major portion of the sales tax, however, other funds, such as the enterprise fund rely more heavily than the General Fund on goods and services. Thus the apportionment between General Fund and the other funds is considered about equal. Staff has estimated the cost of the sales tax at roughly $100,000 for the General Fund. Other funds will be analyzed at the end of 1992 to determine whether rate adjustments or other steps will be necessary to compensate for the added expense. The Metropolitan Waste < page 3 Council Report 92-113 Control Commission has estimated that sewage charges to the cities within their jurisdiction will see a 1% increase in cost. 0 How will budget adjustments affect the General Fund? While the added cost of the sales tax will most directly affect those sections of the budget which rely on purchases of goods and supplies, and the personnel costs will mainly affect the personnel section of the budget, the staff has chosen to approach the cuts by physically reducing expenditures. other cities have attempted to simply adjust their spending habits to compensate for the added 6 1/2%. It was the staff's opinion that this approach was more direct and more clearly anticipated the added expense. Additionally, the supplies, services and other charges sections of the budget have already been tightened as much as staff can feel comfortable and thus, this approach will more likely ensure that we do not overspend our General Fund budget. The proposed adjustments will affect personnel in the following ways: 1. A full-time position in the Public Works Department will not be filled for 1992. This position will be added to the currently unfunded position causing the Public Works Department to currently be two people short of fully staffed. 2. The Fire Department will delay the replacement of four firefighters. The effect of this change will not cause a lack or reduction of service buy will instead cause additional pressure on existing firefighters to carry the load. 3, A shift in the Planning and Economic Development Department will cause more of the Director's salary to go to the 204 Economic Development Fund. 4. An additional cost for the street Superintendent's salary will be shifted to the refuse fund to account for the time spent within refuse by the Public Works supervisors. 5. Part-time and over-time costs in many departments will be reduced. , page 4 Council Report 92-113 - 6. A large amount of the capital expenses budgeted for this year will be delayed until following years. The Police Department is most clearly affected by this change although most department will see a reduction in capital outlay. 7. . The Recreation Department will see two service reductions. The most obvious will be the delay in the opening of the ice rinks from December 20th to December 27th. School is out on the 23rd of December and the delay in the opening of the warming houses for four additional days will cause some service reduction. Staff anticipates that this will not be warmly regarded and it is possible to reevaluate this decision in December based upon the balance of the General Fund. 8. Staff is also recommending the use of $25,000 of the contingency fund. A normal response to salary adjustments and overruns is to utilize the contingency fund. This modest use of the contingency fund will allow for other contingencies should they occur for the remainder of the year. pUMMARY ~rhe Council should recognize that the staff prepared contingency plans in March anticipating the possibility of budget cuts from the State Legislature. The staff worked diligently with division heads and department heads to try to make cuts which would offer the least impact on the services and programs offered by the City. This is the third straight year that the city has had to lnake adjustments in its budgeting due to restrictions and cuts from the State. Staff anticipates that next year will also include budget reductions as a result of State budget problems. While the State has had major spending increases in education and health and human services, it has chosen to relieve most of the budget woes on local governments while 'the relationship of the State with local governments is strained, it is imperative that we relate to the State our desire to work with them on the provision of governmental services. During 1993, the legislature will be wrestling 'with the local government aid formula along with a budget page 5 Council Report 91-113 shortfall which is three times worse than this year's problem. I wish to commend the department heads and staff for their patience and understanding and their diligent work on these budget reductions. It is difficult to provide services to the residents of Hopkins while being unsure of the status of your budget. Equally, the employees who are effected by these cuts are to be thanked for their understanding and cooperation. . 1992 ADJUSTMENTS GENERAL FUND ACCOUNT OBJECT CODE DESCRIPTION AMOUNT TOTAL City Council 40410 302 Reduce LMC Conf. $ 1,000 302 Policy Dev.Trng. 900 -------- 1,900 $ 1,900 City Manager 40420 203 Newsletter Postage to Cable fund 6,000 301 Newsletter printing to Cable fund 4,700 302 Reduce LMC Conference 1,100 302 Reduce Staff Trng fund 1,000 570 Reduce Capital outlay 400 -------- 13,200 15,100 City Clerk 40510 120 Cut Additional Secret- arial Services 200 301 Reduce publications & printing 200 302 Reduce Travel, conf's. 500 -------- 900 16,000 ?inance 40520 200 Reduce Supplies 900 304 Reduce computer mtnce 1,600 304 Redice Computer Repairs 700 -------- 3,200 19,200 Activity Center 40960 301 Cut publication, printing 200 302 Cut Travel, Conferences 500 580 Reduce capital Equipment 4,300 --------- 5,000 24,200 Police - Admin 41100 302 Reduce Travel 3,000 570 Cut office furniture 1,500 Patrol 41110 570 Cut booking rm lockers 1,000 580 Cut Laser Radar Unit 3,000 Prevention 41112 570 Cut Officer Furniture 2,000 Communications 41120 570 Cut office equipment 2,000 ~liC Service 41121 570 Cut lockers and safe 2,000 . ;ords 41122 110 Reduce overtime in records 3,000 -------- 17,500 41,700 page 2 1992 ADJUSTMENTS GENERAL FUND ACCOUNT OBJECT CODE DESCRIPTION AMOUNT TOTAL f1 Fire 41200 Delay replacement of 4 firefighters 100 Payroll 6,000 201 Uniforms, protective Clothing 4,600 302 Training 1,400 303 Physical Exams & vaccinations 1,800 ------- 13,800 55,500 Community Development - Administration 41400 303 Professional Services 100 570 Office Equipment 750 P & E. D. 41500 100 Shift Director's Salary to 204 2,500 169 - 195 Shift Director's fringe to 204 750 302 Reduce Training Expense 500 Assessing 41600 302 Reduce Postage 500 Inspections 41800 202 Reduce supplies 500 570 Cut software purchases 1,200 ------- 6 900 62,30u PUblic Work:s - Administrat.ion 42120 120 Cut part-time 1,500 Engineering 42125 110 Reduce Overtime 1,000 Street 42130 100 Cut one vacant position 28,600 Snow 42140 110 Reduce overtime 4,000 336 Cut rental of grader 3,000 ------- 38,100 100,400 Public Works Refuse 100 Assume additional cost of street supt. salary 20,000 ------- 20,000 120,400 Recreation 43510 131 Remainer of Open GYm 500 132 Delay Opening of ice rinks 3,900 ------ 4,400 124,800 Contingency 43931 451 Use of Contingency 25,000 ------- - 25,000 149,8C 1992 CONTINGENCY PLAN 1992 5% BUDGET CUT City Council - 40410 66,600 3,330 302 - Cut National League of Cities 7,000 302 - Reduce League of MN Cities 1,000 302 - Cut Policy Development Training 900 390 - Child's Play Theatre 1,000 Total savings: 9,900 Health & Welfare - 40415 43,100 2,155 390 - Reduce all Social organization funding 5% 1 ,400 465 - Reduce Chemical Health Commission budget 1,000 Total savings: 2,400 City Manager - 40420 194,900 9,745 203 - Assign newsletter postage costs to Cable Fund 6,000 301 - Assign newsletter printing costs to Cable Fund 4,700 247 - Reduce Wellness Program 1,000 302 - Reduce League of MN Cities 1,100 302 - Cut ICMA Conference 1,400 302 - Cut 1,000 out of city training fund 1,000 570 - Save remainder of capital outlay 400 Total savings: 15,600 City Clerk - 40510 79,500 3,975 120 - Cut additional secretarial services 200 110 - City Clerk takes minutes at Council Mtgs. ($125/mon. * 6 months) 750 100 - Reduce the hours that city hall is open to the public. Receptionist on duty from 9 am - 3:30 pm for 6 months. 3,000 301 - Reduce advertising, pUblication & printing 200 302 - Reduce Travel, conferences, and schools 500 Total savings: 4,650 Finance - 40520 198,300 9,915 200 - Reduce supplies 900 302 - Cut national conference 1,300 302 - Cut staff training 300 303 - Reduced DCA administration 600 304 - Reduced cost for computer maintenance 1,600 304 - Reduce cost for printer repairs 700 304 - Shift computer maint. to enterprise funds 3,700 570 - Shift PC purchase to Equipment Replacement Fund 4,500 Total savings: 13,600 Legal - 40600 93,000 4,650 302 - Eliminate NIMLO Conference 1,500 401 - Eliminate NIMLO dues 300 Total savings: 1,800 Total Budget for these departments: 675,400 Total amount of a 5% reduction: 33,770 TOTAL OF PROPOSED CUTS: 47,950 " Steve Mielke Budget Reductions Page 7 - 1992 SUMMARY OF 5% BUDGET REDUCTIONS COMMUNITY DEVELOPMENT DEPARTMENT Comm. Dev. Admin. P.E.D. Inspections Assessing Total 100 Reg Employees $7,100 $2,500 $9,600 169-195 Fringe (30% ) 2,150 750 2,900 120 Part Time (Temp) 450 450 202 Gen Supplies $500 500 203 Postage 200 $500 700 301 Advertising/Pub 300 300 302 Travel 500 500 1,000 500 2,500 303 Expert/Prof. 100 100 .70 Office Equip 750 1,300 2,050 $11,050 $4,250 $2,800 $1,000 $19,100 Total HRA Rent $4,000 (Revenue) 300 sq. ft. x $14 Increase Rental Registration Fees 4,500 5% cut = $27,600 0 Regular employee salary reductions - assumes that Economic Development accounts will pay applicable amount 0 Assumes City will charge HRA employees for office space (Paul S., Karen S., Inez L., Kersten, Jim K.) 0 Assumes an increase in rental registration fees , DATE: March 24, 1992 TO: steven Mielke, City Manager FROM: Richard Wilson, Recreation Director ~~ SUBJECT: Contingency Plans For Loss Of 1992 Revenue Enclosed are alternatives for you to consider in developing the City's contingency plans regarding the loss of 1992 revenue, and suggested potential reductions to the Recreation Department and Activity Center. Overview of each budget, a status report, and alternatives considered, are included in the Supplement pages enclosed. CONTINGENCY ALTERNATIVES - RECREATION To the Recreation budget, five percent equals $6,800. As noted in the attached supplement, the Recreation budget has only $4,400 remaining after the summer, to be delayed for a later decision. Therefore, action is recommended to be taken now, to cut back summer expenditures to make up whatever amount is necessary, and assuming that totals $6,800. The considerations for contingency funding and actual cut backs are: -Contingency, not financing open gym, saving........................... $ 500 -Contingency, delay opening of warminghouses until December 27, saving $3,900 -Delete PGSA at Valley Park during August, saving.......................$2,100 -Experiment at Central Park with PGSA IV, C, 2. The saving should not be counted on, but might amount to...............................................$1,100-$2,100. -Delete "benefits" on the above, saving.................................$ 400 If further cut-backs are necessary in 1992, a decision must be made in March, before commitments are finalized for the summer. CONTINGENCY ALTERNATIVES - ACTIVITY CENTER To the Hopkins Activity Center budget, five percent equals $5,000. The consideration for contingency funding, actual cutbacks and increased revenue sources are: -Contingency, 101-40960-580, Other Equipment, saving..................$4,300 -Delete, 101-40960-301, Advertising, Publications, Printing, saving....$200 -Delete, 101-40960-302, Travel, School, Conferences, saving...........$500 -Delete, 101-40960-100 & 101-40960-120, Personal services, (see attached for explanation of increase in funds) additional...........................$l,OOO -Increased revenue sources, 38620, General Budget Fund, +4,800. The first $1,000 offsets the increase cost for Vold. Any amount in excess should lessen the potential "deletions" and/or contingency reductions....................Unknown . ACTIVITY CENTER SUPPLEMENT . Contingency Plans For Loss Of 1992 Revenues March 1992 Alternatives I. contingency A. Other Equipment 101-40960-580 $4,300 of the $7,700 would be in contingency. $3,400 of the $7,700 has already been contracted out for landscaping. Note: Landscaping was eliminated from the 1992 budget, however Mr. Mielke said that the landscaping could returned to the budget as long as we stayed within the $7,700 budgeted amount for all items purchased. II. Deletions A. Travel, School, Conferences 101-40960-302 Delete $500 from the $1,300 budget. Planned schooling will be eliminated. B. Advertising, Publications, Printing 101-40960-302 Delete $200 from the $800 budget. Planned professional printing will be eliminated. C. Personal Services 101-40960-100 & 101-40960-120 +$1,000 Reduce personal services by closing at 6:00 p. m. , during June, July, August for regular use, plus the reduction of personal services when Susan Newville goes on partial maternity leave during June, July, August. This reduction would be approximately $5,000. Increased personal services due to Debbie VoId being approved to work 30 hours per week, however this was not reflected in the 1992 Budget. This increase would be approximately $6,000. III. Increase Revenue Sources A. General Fund 38620 Restructure the present fee schedule so that community users would be charged per use. Approximately $1,400 would be generated. B. General Fund 38620 Implement a system that Hopkins Activity Center Program participants pay .25 each time they participate in an activity. This would not apply to groups who already are paying a fee to participate in a program, i.e. Hopkins-Minnetonka Recreation sponsored Golden ACTIVITY CENTER SUPPLEMENT contingency Plans For Loss Of 1992 Revenues March 1992 . Swinger Square Dancers, Hopkins community Education classes, LaVelle Aerobic Caress, 50 and Fit Exercisers. Approximately $3,400 would be generated. If we are able to make up any portion of the 5% through generating revenue in the above ways, I would like the cuts recommended in I and II reduced proportionally. - RECREATION DEPARTMENT SUPPLEMENT Contingency Plans For Loss Of 1992 Revenue March 1992 OVERVIEW I. Joint Recreation Department Budget....................................$751,400 A. Hopkins Taxes......$135,600....18% B. Minnetonka Taxes...$200,500....27% C. Fees...............$415,300....55% II. Hopkins Taxes In Recreation Department Budget..........................$135,600*(1) A. Distributed directly to Minnetonka for "shared" costs............$ 75,500 (1) B. Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500 C. Personnel Costs For "Hopkins Only" Program.......................$ 59,600 1. Open Gym..................... $ 1,000 2. Ice Rinks (Warminghouse).....$14,300 3. Playgrounds..................$13,700 4. PGSA. . . . . . . . . . . . . . . . . . . . . . . . . $23,000 5. Benefits. . . . . . . . . . . . . . . . . . . . . $ 7,600 III. status Of "Hopkins Only" Funds. 1. open gym. There remains $521. No further expenditures are anticipated until November. 2. Ice rinks. There remains $3800. No further expenditures are anticipated until December. 3. Playgrounds. There remains $13,700. The program is being advertised currently. Employment should be completed in early April. 4. PGSA. There remains $23,000. The program begins May 2, and is being advertised currently. Employment should be completed in early April. 5. Benefits. Staff has no control over this line item. However, it can be anticipated that $450 will be saved on a reduction of $7,000 salaries. ALTERNATIVES I. Shared program with Minnetonka. No alternatives are being considered at this time because they would effect Minnetonka also. II. Open Gym. A. This service provides an adult supervisor at Eisenhower Community Center, on Saturdays before the youth basketball season during the practices, and during the season. This is a requirement of the school district. The cost will be added to the youth basketball budget and become part of the user fee. III. Ice Rinks (Warminghouses) A. The $3,800 remaining for 1992 warminghouse salaries can truly be considered a contingency fund. No decision on this service is necessary until late summer, early fall. ~ This total does not include funding of $11,800 committed to Minnetonka for a share of senior citizen activities. RECREATION DEJ?ARTMENT SUPPLEMENT contingency Plans For Loss Of 1992 Revenue Page 2 The final date of the last payroll period of 1992 is December 26. Therefore, any sialaries encumbered through December 26 are chargeable to this year. December 27 and on are charged to the 1993 budget. B. The December weather will dictate how early in December the ice rink conditions will be good, and when the warminghouses can be open. It is conceivable that the opening can be by December 11 (two weeks before December 26) and very practical to anticipate opening December 18 (one week before December 26). 1. Opening one week before December 26 will cost $350 per location, or $2,100. 2. Opening two weeks before December 26 will cost $550 per location, or $3,300. Accepting the opening on December 26 as a contingency, provides a possible $3,800 reduction. IV. Park Guests Services Attendant. The program exists at Burnes, Central and Valley parks. Central begins in April and extends to late September. Burnes and Valley begin May 2 and extend <through Labor Day. An attendant is on duty at each location seven days weekly. They provide minimal daily maintenance inside the park building and out of doors, make the rest rooms, drinking fountain, electric outlets, etc., available, supervise the park, host picnics, are available for emergencies, etc. The estimate cost per site is: -Burnes $ 7,000 -Central $11,900 -Valley $ 6,000 Total: $24,900 Funds available $23,000 (2) A. T'he hours/days at each site can be reduced, by the corresponding amount of funds necessary to meet a reduced budget. This method will not directly address the concerns on impact to the public. There are better methods to reducing cost/services. B. Burnes Park PGSA. It is not recommended to reduce any hours/days at this facility. 'I'he park is very popular for group picnics. It is very popular for the general public's use. Group picnics reservations are being accepted at this time. C. Central Park PGSA. 1. Discontinuing PGSA entirely at Central is an option, but is not prudent. The park will have organized softball use weekday nights, from early spring to late September. As an economics move, we have already deleted about three and one- half hours daily, from the past experience. The Recreation Department Softball program will reimburse $3,000 of the evening PGSA costs. The Pavilion will be able to close earlier than 8:00 p.m. some nights because the public rest rooms in the park building will be available, through the PGSA services. The PSGA will also administer the tennis court lighting system, and be host for group picnics. Therefore, it makes no sense to delete the PGSA services on weekday nights. 2. The Central Park Saturday and Sunday PGSA tax costs can be reduced through several actions. They are: (2) Softball I funds are estimated to reimburse up to $3,000 of these costs. _ ~.EATION DEPARTMENT SUPPLEMENT ingency Plans For Loss Of 1992 Revenue Page 3 a. The Pavilion will be open several Saturdays during the season. If there are no scheduled activities in the park .on these Saturdays, the City can get by with no PGSA on duty. The public can use the Pavilion for rest rooms, emergency calls, etc. Trash will not be picked up, vandalism identified, etc., but this is livable. No picnics will be scheduled for Saturdays at Central, unless they are willing to pay the cost of a PGSA, or it coincides with a Saturday that the Pavilion will be closed and therefore a PGSA will be on duty. b. The Raspberry Festival, and others, will pay for "exclusive" use of Central for softball tournaments, on certain Saturdays and Sundays. The charge should cover all PGSA costs. c. An organization operating an Apartment Softball League is willing to rent two softball fields, late afternoon and evening, on seven Sundays during the summer. The amount they will pay should cover the PGSA cost for the whole day. I must be recognized that these two fields will not be available to the public at these times. d. All of the "weekend cost-reduction" considered here are experiments. They might be successful, and maybe will not be. However, by trying them, we will know for 1993 D. Valley Park PGSA. 1. One alternative is to delete the PGSA for the whole season, May 2-September 7. The saving would be $6,000. The consequences for May to August weekday evenings is there are a lot of people in the park, engaged in a variety of activity. The PGSA makes the rest rooms available and coordinates a lot of uses in the park. On weekends, there is less scheduled activity but often many from the general public, use the park. On the positive side, the PGSA makes the facilities available and provides a sense of safety. On the negative side, the presence of the PGSA provides someone to correct people who are engaged in doing unlawful or damaging activity such as golfing, driving on the park, drinking illegally, climbing on the building, letting their dog run, etc. The system also allows for groups to reserve a picnic site on weekends and for the PGSA to "host" it. 2. Deleting the PGSA services August 3-September 7 is another option. The savings is $2,100. There are few scheduled activities during the week, at this time of year. We would withdraw or refrain from scheduling group picnics on the weekends. The consequences are to the general public. The building will not be open for rest room use, no one will sweep the rain water off of the basketball court, etc. 3. A compromise option is to discontinue the PGSA services approximately fourteen days (two weeks) earlier than Labor Day, or whenever the PGSA employee must return to college. That is a difficult time to be assured of employees anyway. However, this does not address the need for the PGSA services, if indeed it is desired. The fourteen day savings would be $900. . RECREATION DEPARTMENT SUPPLEMENT Contingency Plans For Loss Of 1992 Revenue Page 4 ~ v. The PLAYGROUNDS hours/program has been cut back many times over the past years. There is very li,ttle discretion left as a cut back. The next reduction will be a complete playground location, saving $1,800 per location closed. The 1992 playground program is being publicized at this time, and employment is being finalized. Making reductions in this program, at this time will be very difficult. - . ~ - To: Steve Mielke . From: Dave Klocek~'t- Date: Tuesday, March 31, 1992 Subject: 1992 Budget Contingency Plan The Fire Department is submitting this contingency plan for your consideration and action should the City receive additional cutbacks in local government aid. It should be noted that the fire department's 1992 budget is only increased $2,900.00 over the 1991 budget. This is less than a one percent increase. Our contingency plan is made up primarily of personal services and a reduction in part-time fire inspections. The primary savings will come from not hiring firefighters to fill the four positions currently open in the department. Enclosures . FIRE DEPARTMENT BUDGET CONTINGENCY PLAN -- Part I There are currently four open positions in the department. Delaying the hiring of firefighters until 1993 would result in the following savings in the 1992 budget: . Code 303, physical exams, hepatitis vaccinations $1,800 . Code 201, Uniforms 600 . Code 201, Protective clothing 4,000 . code 302, Training firefighting and EMS 1,400 · Payroll, 6 mos. 6,000 Total Savings $13,800 Part II The fire department's current part-time fire inspector has accepted a position with the City of Excelsior as their Fire Marshal. I am proposing to leave this position vacant for the rest of this year. Unfortunately, this is a reduction in services we did not plan on as this program was showing an increased momentum in proactive fire inspections. Increased emphasis will be put on the Fire Marshal's inspections of target hazards and other required inspections. Hopefully, the housing inspector will continue doing fire inspection in our apartment buildings. . Code 140, Total savings $3,000 Pa:I't III Additional budget reductions are proposed in the following areas: · Code 202, General Supplies $ 500 . Code 215, Hose Replacement 1,000 ThE~ total contingency reductions proposed by the fire department for budget year 1992 are $18,300.00. . CITY OF HOPKINS -"- MEMORANDUM DATE: March 27, 1992 TO: Steve Mielke, city Manager FROM: Lee Gustafson, Public Works Directo~ SUBJECT: 1992 Budget 5% Contingency Cuts As you have requested we have reviewed the Public Works General Fund budgets for 5% contingency cuts and possible revenue sources. The two main areas of cuts and revenue that we are proposing are the loss of one maintenance person, and the transfer of additional refuse funds to the general fund. The transfer of refuse funds is being proposed to more accurately reflect the time spent in this area by Kathy Max, Vern Pankratz, Norb Kerber, and myself. Following are detailed line item costs and revenue services to meet a 5% contingency cut of the Public Works General Fund (approximately $86,745). BUDGET CUT DESCRIPTION AMOUNT 101-42120-120 Part Time $ 1,500 101-42125-125 Over Time $ 1,000 101-42130-100 Loss of person (wages) $28,598 101-42140-110 Over Time $ 4,000 101-42140-336 Rental $ 3,000 Subtotal $38,098 REVENUE DESCRIPTION AMOUNT 717-48930-100 Kathy Max $12,889 717-48930-100 Vern Pankratz $20,155 717-48930-100 Norb Kerber $ 7,001 717-48930-100 Lee Gustafson $ 9,547 Subtotal $49,592 Total savings to General Fund $87,690 , March 27, 1992 Page 2 The effect of the proposed cuts will be primarily in the level of service in the streets and sanitation areas. All areas would .- continue to function, but the level of service in street maintenance (patching-street sweeping) would probably see a decline due to the loss of the maintenance person. As mentioned above, we are proposing to increase revenue in the General Fund by charging the time of four people to the refuse fund. Kathy Max currently charges 3 hours per day of her time out to this fund which does not accurately reflect the actual time she is spending in this area. Our proposal is to increase Kathy's time to 5.5 hours per day, and have Vern charge 3 hours per day and Norb and I each 1 hour per day. Currently, Vern, Norb, and I do not charge any of our time the Refuse fund. The Refuse fund does have an administrative fee of $22,800 budgeted in 1992 that is a transfer to the general fund. It is our opinion that this amount barely covers the cost of supporting that utility with our Finance Department and other administrative personnel at city Hall. We therefore feel that it is only fair tha't we recover other administrative support costs by charging out the actual time spent by Kathy, Vern, Norb and myself. The cuts and revenues proposed herein have the least impact on the Public Works operations versus having to cut some of our other areas. If we are forced to make additional cuts, many of the services that we presently provide may have to be significantly cut back, or changed. possible changes could include establishing fees for brush and yard waste services as we have previously discussed. ~ C I T y 0 F H 0 P K I N S MEMORANDUM DATE: March 30, 1992 TO: Steven C. Mielke, City Manager FROM: Chief Earl L. Johnson SUBJECT: Recommendations - Police Department Budget Cuts (1992) ----------------------------------------------------------------------------------------------------------------- At your direction we have reviewed the 1992 budget to determine where it would be possible to make additional cuts. We have utilized the 5% figure and applying that to our budget the result would be $95,500. It is readily apparent that there would be no way to reach this figure without laying off police department personnel. The following capital items would be frozen until we could determine the actual necessities for cuts. These are in fact very necessary expenditures, however, we are recommending that they be frozen at this time; Administrative Furniture $ 1,500.00 Booking Room Lockers $ 1,000.00 Laser Radar Unit $ 3,000.00 Crime Prevention Furniture $ 2,000.00 911 Address Printer $ 1,000.00 Paper Shredder $ 400.00 Cabinet Base for Dispatch Center $ 600.00 Women's Locker Room Lockers $ 1,000.00 Property Room Safe $ 1.000.00 Total $11,500.00 The following would be our recommendations under the category of supplies, services and other charges; Reduce Administrative Travel, Conferences and Schools Budget $ 3,000.00 Cancel increase of 1992 Police Reserve Budget $ 1,000.00 Reduce Canine Budget $ 1,000.00 Reduce Overtime Allotted to Records Area $ 2.500.00 Total Savings $ 7,500.00 The following are reductions in service through programs now provided by the department. The 1010 First Street South Hopkins, Minnesota 55343 Phone: 6"12-935-8474 Fax: 612-935-1834 An Equal Opportunity Employer ~ Memorandum 3/30/92 . Budget Cuts Page Two majority of the budget reductions would come from the layoff of personnel due to the cance:llation of a specific program. The personnel savings are based on cancellation of these programs and the layoffs occurring as of May 1, 1992. Layoffs which would take place after May 1, would result in a reduction of the savings; CRIME PREVENTION: Supplies, Service and Other Charges $ 5,500.00 Personnel * $22,000.00 DRUG TASK FORCE: Personnel * * $26,800.00 Canine program - the result in negligible savings for 1992 as personnel would still be retained for n~gular patrol duty. * - Personnel savings result from layoff of less senior officer and the return of David Teclaw to full patrol duty. ** - Personnel savings result from layoff of next junior officer and the return of Officer Robert Dole to full patrol duty. Total budget savings by elimination of the above programs; $54,300.00. Sub Total; programs/equipment/supplies and other charges - $73,300.00. Additional reductions would be possible through additional lay offs. Savings from lay offs of next senior officer: $26,000.00 Savings from layoff of records personnel with lowest seniority: $15,000.00 It is apparent that to achieve a budget reduction of 5% the department would be forced to layoff three officers or two officers and either one records person or one PSO. Our recommendations woulld be to layoff the two patrol officers and one records technician. - ELJ/pac steve Mielke Budget Reductions Page 3 -- 169-195 Fringes $750 Due to reallocation of salary to economic development accounts, savings will occur in area of fringe benefits. 30% of salary was assumed to be amount of fringe benefits. 203 Postage $200 (22%) May be a problem if development activity increased in 1992. 301 Advertising/ $300 ( 27 % ) Same as above. Publications 302 Travel $500 (20%) No major/significant impact is expected. May restrict some training e.g. Planning Commission and City Council. Total Cuts $4,250 IV. Inspections 202 General $500 (33%) Supplies 302 Travel $1,000 (8%) Although impact seems nominal, a large part of this budget item relates to mileage expenses. Some training programs may be impacted by cut. 570 Capital $1,300 (100%) Eliminates purchase of C.D. ROM software. No drop of service will occur. However, service could improve with purchase. Total Cuts $2,800 V. Ass ssing 203 Postage $500 (36%) Should have no major impact as significant postage expense has already been experienced. 302 Travel $500 (15%) Although impact seems nominal, this line item also contains expenses for mileage for in-town property assessment purpose. This cut may have an impact on continuing ed training. Total Cuts $1,000 steve MiE~lke Budget Reductions Page 4 - VI. Summary of proposed 1992 Budget Reductions 0 Community Development Admin. $11,050 0 Planning/Economic Development 4,250 0 Inspections 2,800 0 Assessing 1,000 Total $19,100 VII. New Revenues To assist with Community Development's 5% budget reductions, new revenues are being proposed. These revenues are as follows: A. HRA Rent Staff has consulted with legal counsel and has determined that it would be possible to charge the HRA rent for the office space the City provides its employees. In this case, I propose a figure of $4,000 based on an assumption that approximately 300 sq. ft. of office space is used by the HRA at a cost of roughly $14 per square foot. It may be possible to increase this figure, although we should make sure we can justify the amount. If we were to pursue this option, the City and HRA should probably enter into some type of rental agreement. B. Rental Registration Fees The city has not raised rental registration fees in some time. Community Development proposes to raise an additional $4,500 by increasing the current rates by a nominal amount, as follows: 0 Duplex/single family rentals - from current $20 fee to $25. 0 Multi family - from current fee of $15 to $20 for the base fee, and from the current fee of $2 to $3 for the per unit fee. An increase to rental registration fees appears possible as we do not start collection of these fees, and the rental registration process, until October. VIII. Ot,her Ideas/comments What follows are other ideas or comments regarding the Community Development budget: - 0 Housing Rehab Inspections - Currently, the HRA contracts with an inspector to undertake inspections relating to the city's housing steve Mielke Budget Reductions .page 5 rehab program. The amount the HRA pays for these inspections is approximately $3,000. It may be possible to have the city's Building Inspection Division undertake these inspections and retain these fees. The downside of this approach relates to liability concerns which the City may experience by having its Building Inspection Division undertake these types of initial inspections. In addition, inspection personnel may need to reduce services in other areas, nuisance complaints for example, to allow for time to do the up front inspections, write up the scope of work document, etc. 0 HRA Levy - Consideration could again be given to implementing an HRA levy for 1992. This levy could raise approximately $80,000. There could be ways to funnel these dollars to the general fund. 0 Sale of City Property - The HRA could purchase the City's well site property which would raise approximately $170,000. Also, the city may experience compensation relating to the use of the city property by Youngstedt Amoco, if the project should proceed. 0 Administrative Fees - Fees could be raised in Community Development, particularly in the area of building inspection. However, it should be noted that only a small fraction of cities with building inspection departments have building permit fees higher than what Hopkins and most other cities charge. 0 Eliminate Hop-A-Ride - In 1992 the City subsidized the Hop-A-Ride program by $10,000. However, the Hop-A-Ride program also pays $6,300 (or 20%) of the Planner's salary. As a result, dropping the program at this point would only save about $4,000. 0 Reduce Staff in Ins~ections Division - If the City were prepared to eliminate services, we could drop the housing code inspector position. The impact of this action could be as follows: - Garbage and general nuisance complaints may have to be handled by another department, or response to complaints may take much longer. - Junk car enforcement may have to be handled by other departments, or part time people as they once were, possibly the police department. - section 8 inspections may have to be turned back to the Metro HRA. This would mean the loss of about $2,600 in revenues. - Swimming pool inspections may have to be transferred to the health inspector which could raise his fees about $3,000 per year. This function probably could not be eliminated unless we dropped our health inspection program entirely with the corresponding loss of revenue. The authority to do these steve Mielke Budget Reductions Page 6 ....- inspections is granted to the County from the state. It is questionable whether the County would allow us to discontinue just this portion of the program. - May have to drop the implementation of the Truth In Housing program. - The housing code program and related inspections would have to be cut back to answering only the most critical complaints. It would seem we could no longer take a proactive approach to this program. - Implementation of the 1992 Inspection Department goals and objectives may have to be eliminated to free up the building officials time in the field. - The ability for the City to undertake the Wayzata agreement would have to be reviewed. Unless we could hire additional part time persons, it would seem the agreement may have to be terminated or additional cuts necessary in the housing code program. TH03242C ~ C I T Y o F HOP KIN S . MEMORANDUM DATE: March 24, 1992 TO: steve Mielke, City Manager FROM: Tom Harmening, Community Development Director SUBJECT: 5% BUDGET REDUCTIONS - COMMUNITY DEVELOPMENT DEPARTMENT -------------------------------------- As per your request, I have met with Community Development staff to prepare a plan illustrating how 5% could be reduced from the Community Development Department budget. The discussion which follows is broken into the following areas: 0 Proposed reductions by division, with an outline of the impacts of the reductions. 0- Proposed new revenues for 1992. 0 Other ideas/comments. 0 Matrix summarizing proposed cuts by division. As you review the following information please take the following points into consideration: 0 It is estimated that $30,000 in additional fees will be provided to the City of Hopkins due to the ~ecent relationship established with the City of Wayzata. Due to this innovative approach, I would respectfully request that you consider applying a fair and equitable amount of this $30,000 towards any future budget reductions which may have to be made from community Development. 0 The budget reduction plan proposed is essentially a short term approach to address the 1992 budget problems. However, I do not feel the 1993 budget figures can be held to the resulting line item figures due to the 1992 budget reductions. I say this as I do not feel. that Community Development can operate on the long term in a high quality, efficient fashion at the limited levels which may be imposed in 1992 relating to training, supplies, capital acquisition, etc. This will require that we deal with fundamental issues relating to services and programs provided by community Development as a part of the 1993 budget preparation process. steve Mi,elke Budget Reductions Page 2 . I. 5% Budget Reduction The Community Development Department has a total General Fund budget of $552,400. 5% of this figure is $27,620. The attached information illustrates budget reductions and new revenues equaling $27,600. II. Community Development Administration Amount of Line Item Reduction Impact 100 Regular $7,100(12.5%) Involves reallocating portion of salary Employees to economic development accounts. This action seems justifiable as C.D. Direct- ion is involved in E.D. activities. 120 Part Time $450 (38%) May not allow for full-time temporary Employee replacement of C.D. secretary due to illness or vacation. Will require other secretaries to pick up work load. This mayor may not be always possible. 169-195 Fringes $2,150 Due to reallocation of salary to economic development accounts, savings will occur in area of fringe benefits. 30% of salary was assumed to be amount of fringe benefits. 302 Travel $500 (30%) Restricts substantive travel and training programs. 303 Expert & $100 (100%) Professional 570 Capital $750 (24%) No real impact. This amount is what remains after planned capital expendi- ture was made. Tot.al Cuts $11,050 III. Pla,nning/Economic Development 100 Regular $2,500 (5%) Involves reallocating additional portion Employees of Directors salary to 204 or 208 account. This would result in almost 50% of Directors salary being paid by Special Revenue accounts. -