RFP Memo for Council - Le Sueur, Minnesota

CITY OF LE SUEUR

REQUEST FOR COUNCIL ACTION

TO: Mayor and City Council FROM: Jasper Kruggel, City Administrator

Zach Doud, Finance Director SUBJECT: 2020 Budget Review

DATE: For the City Council meeting of November 12, 2019 PURPOSE/ACTION REQUESTED Provide an update for the 2020 Budget including the Tax Levy, Enterprise Budgets including rates, and Capital Improvement/Capital Equipment (CIP/CEP) for 2020-2024. SUMMARY Tax Levy No major changes have occurred to the Preliminary Tax Levy as City Staff has not gotten final information from all insurance providers (health, dental, auto, liability, etc.) for the 2020 fiscal year. City Staff has worked on the tax levy budget for the information that has been received and is working to make sure that all of the changes that have been received are able to get to the goal of City Staff of a 6.0% tax levy increase. As a reminder that the Preliminary Tax Levy was approved at 9.47% which results in a tax impact decrease of 2.48%. Some major points were the hiring of a Streets and Parks employee, change in allocation of the Community Development Director, reduction of revenues to be more accurate based on current projection of revenues, and finally the increase in number of pools hours which results in an increase in pool staff time. Enterprise Budgets Overall the Enterprise Budgets, with the exception of the Sewer Fund, are performing at a level that is sustainable if the City Council was not focused on planning for the future. Due to the City Council being focused on planning for the future of the City, Enterprise Budgets will all need to be increased slightly with this in mind. The Enterprise Budgets are all being adjusted to plan for the future and to cover the increased costs due to inflation increases. Water Fund: Additional planning for CIP/CEP, one additional W/WW Supervisor (50% funded by the Water Fund), reduction of bond costs due to a bond being paid off in 2019. These are the major changes for the Water Fund. Sewer Fund: First off, the budgets were designed without MRVPUC in mind and full operations of the Sewer Treatment Plants under the control of the City. With this being said, there are additional costs and additional revenues for this change. Again additional planning for CIP/CEP, and the additional W/WW supervisor (50% funded by the Sewer Fund). These are the major changes for the Sewer Fund. Electric Fund: Additional planning for CIP/CEP is the only major change for the Electric Fund.

Storm Water Fund: No major changes noted in the 2020. Refuse Fund: No major changes noted in 2020. Overall, Enterprise Budgets are all needing small changes to rates based on the CIP/CEP planning that City Staff and City Council has focused on over the past couple of years. The proposed utility rates for 2020 are in the tables below: Water Rates – Note that all rates per 1,000 gallons was $4.00 in 2019.

2019 Actual 2020 Proposed Meter Size Accessibility Fee (Monthly) Accessibility Fee (Monthly) Factor 5/8” meter $15.00 $20.00 1” meter $35.25 $47.00 135% 1.5” meter $70.50 $94.00 100% 2” meter $112.80 $150.40 60% 3” meter $225.60 $300.80 100% 4” meter $351.94 $469.25 56% 6” meter $703.87 $938.50 100% All accounts Absorbed in rates $0.81/month ($9.72/year) MDH testing fee

Tiered Rates

• 0-10,000 Gallons - $3.25 per 1,000 gallons • 10,001-20,000 Gallons - $3.75 per 1,000 gallons • 20,001 and up - $4.25 per 1,000 gallons

Non-Essential (Irrigation) Water

2019 Actual 2020 Proposed Meter Size Accessibility Fee (Monthly) Accessibility Fee (Monthly) Factor 5/8” meter $15.00 $5.00 1” meter $35.25 $11.75 135% 1.5” meter $70.50 $23.50 100% 2” meter $112.80 $37.60 60% 3” meter $225.60 $75.20 100% 4” meter $351.94 $117.31 56%

Tiered Rates

• 0-20,000 Gallons - $5.00 per 1,000 gallons • 20,001-40,000 - $6.00 per 1,000 gallons • 40,001 and up - $7.00 per 1,000 gallons

Electric Rates

2019 Actual 2020 Proposed Service Type Accessibility Fee (Monthly) Service Charge

(Monthly) Rate & Demand Factor

Large Industrial Service & Time of Use

$175.00 $180.00 10%

Large General Service

$34.00 $35.00 10%

General Service $18.00 $18.50 110%

Residential $8.00 $8.50 100% Rural $10.00 $10.50 125% Interdepartmental $10.00 $20.00 10% EAC (Energy Adjustment Charge)

5% 5% 5%

• Franchise Fee of $0.0042 per kWh • Underground Fee of $0.005 per kWh

Account Type Usage Type 2019 Actual 2020 Proposed Large Industrial Service & Time of Use

Demand (Oct-May) $9.89 $9.79 Demand (Jun-Sep) $14.80 $16.59 Time of Use Weekdays kWh

$0.05667 $0.05611

Time of Use Weekends kWh

$0.04834 $0.04786

Time of Use Off Peak $0.03445 $0.03411 Large General Service

Demand (Oct-May) $9.89 $9.79 Demand (Jun-Sep) $14.80 $16.59 kWh $0.05667 $0.05611

General Service kWh $0.1082 $0.10712 Residential kWh $0.10304 $0.10202 Rural kWh $0.11592 $0.11477 Interdepartmental kWh $0.5667 $0.05611

Sanitary Sewer Rates – Note that all rates per 1,000 gallons was $13.50 in 2019.

2019 Actual 2020 Proposed Meter Size Accessibility Fee (Monthly) Accessibility Fee (Monthly) Factor 5/8” meter $20.00 $25.00 1” meter $47.00 $58.75 135% 1.5” meter $94.00 $117.50 100% 2” meter $150.40 $188.00 60% 3” meter $300.80 $376.00 100% 4” meter $469.25 $586.56 56% 6” meter $938.50 $1,173.12 100%

Flat Rate of $12.85 per 1,000 gallons

Storm Water Rates

Stormwater Stormwater 2019 2020

MAX Acreage

Base Rate Charge Base Rate Charge

0.5 $ 8.00 $ 6.00 $ 9.50 $ 7.13 1 $ 8.00 $ 8.00 $ 9.50 $ 9.50 2 $ 8.00 $ 12.80 $ 9.50 $ 15.20 3 $ 8.00 $ 16.80 $ 9.50 $ 19.95 10 $ 8.00 $ 20.00 $ 9.50 $ 23.75

Refuse

Refuse Refuse 2019 (6% WM Increase) 2020 (2% WM Increase) Container Base Admi

n Recycling

9.75% TAX

TOTAL Base Admin

Recycling

9.75% TAX

TOTAL

96 Gallon $ 17.82

$ 2.45

$ 3.45

$ 2.31

$ 26.03

$ 18.17

$ 2.45

$ 3.51

$ 2.35

$ 26.49

64 Gallon $ 14.67

$ 2.05

$ 3.45

$ 1.97

$ 22.13

$ 14.96

$ 2.45

$ 3.51

$ 2.04

$ 22.97

32 Gallon $ 8.61

$ 1.35

$ 3.45

$ 1.31

$ 14.71

$ 8.78

$ 1.35

$ 3.51

$ 1.33

$ 14.97

2/96 Gallon

$ 28.42

$ 3.60

$ 3.45

$ 3.46

$ 38.92

$ 28.99

$ 3.60

$ 3.51

$ 3.52

$ 39.62

Senior $ 8.08

$ 1.30

$ 3.45

$ 1.25

$ 14.07

$ 8.24

$ 1.30

$ 3.51

$ 1.27

$ 14.33

Overall We will look at the Overall Utility Bill along with the Property Taxes to show the entire picture of how Utility Rates and Taxes will affect the City of Le Sueur Residents as they are proposed today. Average Home is valued at $189,100 in 2019 that uses 6,000 gallons on a ¾” meter, 450 kWh of electricity, 96 gallon refuse bin, and a .5 acre parcel. I have provided both the home with no increase in value from 2019 to 2020 and a home that increases 12% to $211,200 which is the tax capacity increase from 2019 to 2020.

2019 2020

Proposed Difference Water $39.00 $39.50 $0.50 Sewer $101.00 $102.10 $1.10 Electricity $56.17 $58.55 $2.38 Refuse $26.03 $26.49 $0.46 Stormwater $6.00 $7.13 $1.13 Total $228.20 $233.77 $5.57

No Value of Home Increase and 1/2 Dep

Average Utility Bill discussed previously w/no Sprinkler Home Value of $189,100 in 2019 Monthly Yearly 2019 2020 2019 2020 Average Utility Bill 228.20 $233.77 2,738.38 2,805.23 City Taxes 114.27 111.01 1,371.18 1,332.13 County Taxes 75.30 78.52 903.58 942.29 School Taxes (assuming no ref) 56.26 54.89 675.12 658.71 Total $474.02 $478.20 $5,688.26 $5,738.36 Total Change $4.18 Total Change $50.10 Total Percent 0.88% Total Change w/ No Utility Increases Monthly ($1.40) Yearly ($16.75)

Home Value Increase and 1/2 Dep Average Utility Bill discussed previously w/no Sprinkler Home Value of $189,100 in 2019 and Increased based on Tax Capacity Increase (12%) to $211,792 Monthly Yearly 2019 2020 2019 2020 Average Utility Bill 228.20 $233.77 2,738.38 2,805.23 City Taxes 114.27 124.33 1,371.18 1,491.98 County Taxes 75.30 87.95 903.58 1,055.37 School Taxes (assuming no ref) 56.26 61.48 675.12 737.76 Total $474.02 $507.53 $5,688.26 $6,090.34 Total Change $33.51 Total Change $402.08 Total Percent 7.07% Total Change w/ No Utility Increases Monthly $27.94 Total Change $335.23 5.89%

CIP/CEP Please see the attached CIP/CEP listing which shows all of the planned projects/equipment needs for the City from 2020-2024. RECOMMENDATION Provide feedback/ask questions about the 2020 budget overall to City Staff.

City of Le Sueur, MinnesotaCIP and CEP Plan 2020 - 2024

Department Project # 2020 2021 2022 2023 2024

Capital Lease Payment 30,200 16,000 16,000 16,000 16,000

Administration Total 30,200$ 16,000$ 16,000$ 16,000$ 16,000$

Taxiway Extension w/ Utilities 795,464

Pull Behind Finish Mower 14,000

2004 New Holland TV145 Tractor 225,000 Airport Hanger Construction Project 450,000

Airport Total 809,464$ 225,000$ 450,000$ -$ -$

Council Chamber AV Upgrades 25,000

City Council Total 25,000$ -$ -$ -$ -$


Underground Conversion 150,000 150,000 150,000 150,000 150,000

Expansion Joint Repairs to Building 10,000

Utility Billing Conversion 48,000

Fencing/Dirt Structure 15,000

Truck Replacement - 2008 70,000

Cost of Service Study 50,000

Distribution System Planning (DGR) 27,000

Future Projects 371,143

125 CFM Air Compressor 20,000

Skid Loader Replacement - 1994 70,000

Backhoe Replacement - 2007 75,000

Replace Boright II Substation Capacitors 75,000

SCADA System Maintenance 60,000

Jack Hammer Replacement 10,000

Double Bucket Truck Replacment - 2006 250,000

CSAH 22 Turnback Bond 110,000 110,000 110,000 110,000

Dump Truck Replacement - 1985 85,000

Digger Derrick Replacement - 1989 210,000

Underground Conversion Projects 900,000 Upgrade Main Street Substation Bond 115,000 115,000 115,000

Electric Total 836,085$ 914,942$ 1,664,942$ 469,942$ 469,942$

Administration

Airport

City Council

Electric

1 of 4 11/6/2019




Fire Department Total 21,000$ 21,000$ 21,000$ 21,000$ 21,000$

Air Conditioner Replacement 5,000 Furnace Replacement 5,000

Library Total 5,000$ 5,000$ -$ -$ -$

Police Leases 19,500 19,500 19,500 19,500 19,500

Police Total 19,500$ 19,500$ 19,500$ 19,500$ 19,500$

Locker Room's Renovation Planning 5,000

Gym/Fitness Wall Project 30,000

Indoor Pool Resurfacing (Diamond Brite) 125,000

Ice Arena Water Heater 7,000

Outdoor Pool Diving Board 20,000

Outdoor Pool Bath Floors 5,000

Ice Arena Acoustic Panels 17,500

Fitness Equipment Lease Payment 72,000 72,000 72,000

Ice Arena Coolant 10,000 10,000 10,000 10,000

Ice Arean Coolant Conversion (Ammonia) 1,000,000

Hockey Scoreboard Replacment (1 and 2) 30,000

Zamboni Water Heater Replacement 7,000

Outdoor Pool Slide 90,000

Security System Maintenance 25,000

Outdoor Pool Feature 20,000

Outdoor Pool Media Filter 20,000 Outdoor Pool Caulking 7,000

Recreation Total 291,500$ 1,119,000$ 244,000$ 10,000$ -$


Annual Street Maintenance 450,000 450,000 450,000 450,000 450,000

Bruce Frank Field Rehabilitation 150,000

Police

Fire Department

Library

Recreation

Streets and Parks

2 of 4 11/6/2019



1998 Ford F-250 Replacement 35,000

Outdoor Pickleball Court 70,000

POST Plan Contingency 50,000


1995 Chevy Plow Truck Replacment 225,000

Legion Park Playground 250,000

2004 Ford Ranger Replacement 30,000

2001 EZ-GO Freedom Series Replacement 19,096

Annual Street Maintenance Projects 75,000

2008 Freightliner Water Truck Replacement 225,000

Curbing on Kingsway Trail 350,000

Inclusive Playground 850,000

Facility Roof Maintenance 5,000 5,000 50,000

Sign Maintenance Program 50,000 50,000 50,000 50,000

CSAH 22 Turnback Bond 175,000 175,000 175,000 175,000

Anderson Park Basketball Court Maintenance 25,000

Anderson Park Playground Mulch 6,000

Park Sign Replacement 6,000

Annual Street Maintenance Projects 75,000


1973 John Deere 302 Tractor Replacment 100,000 2001 Freightliner Plow Truck Replacement 240,000

Streets and Parks Total 908,200$ 2,892,296$ 1,320,200$ 878,200$ 828,200$

Ferric Doors, Bldg B doors, screen room garage door 34,000

pH Probes & spectometer 25,000

RAS Gates (3 @ 5,000) 15,000

Kruger/Centrifuge SCADA Conversion 60,000

Locator 2,750

Future Projects 67,936


Sewer Slip Lining/Spot Repairs 50,000 50,000 50,000 50,000 50,000

Manhole Rehabilitation and Replacement 20,000 20,000 20,000 20,000 20,000

Fiber (Henderson Rd, Mayo, LS 4,6,9) 25,000 25,000 25,000 25,000 25,000

Sewer Video Camera Maintenance 100,000

Truck Replacement - 2006 3/4 Ton 65,000 CSAH 22 Turnback Bond 90,000 90,000 90,000 90,000

Wastewater Total 346,686$ 468,680$ 303,680$ 303,680$ 303,680$

Wastewater

3 of 4 11/6/2019



Water Treatment Plant Maintenance 15,000

Booster Station Generator 40,000

Well House Roof Maintenance 10,000

SCADA Communication 48,181

Middle/Lower PRV Vault and Valving 95,000

Meters: Influent, Lower, Middle 40,000

Fluoride & Chlorine Systems Maintenance 90,000

Booster Station Pump 1 check valve/motor 16,000

Doppy Lane Water Main 550,000

Hometown BioEnergy water service 10,000

Cost of Service Study 25,000

Well Acccess Controls & Camera System 15,000 15,000 15,000

Well Inspections/Rehabilitation 40,000 35,000 35,000 35,000

Water Valve Replacement Projects 20,000 30,000 30,000 30,000

Fire Hydrant Repair and Replacement Projects 20,000 30,000 30,000 30,000


Water System Master Plan 1,900,000 1,350,000

Well House Fencing Projects 15,000 15,000 15,000

CSAH 22 Turnback Bond 120,000 120,000 120,000 120,000 Water Tower Inspection/Cleaning 25,000

Water Total 1,106,910$ 2,217,729$ 1,692,729$ 302,729$ 192,729$

4,399,545$ 7,899,147$ 5,732,051$ 2,021,051$ 1,851,051$

Water

Grand Total

4 of 4 11/6/2019

Documents

RFP Memo for Council - Le Sueur, Minnesota