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FINANCE COMMITTEE MEETING

September 10, 2018

The City of Jackson Finance Committee met in the Council Chambers of the
Jackson City Hall at 5:50 p.m. on September 10, 2018 with the following persons
present: Finance Committee members Mayor Wayne Walter, Brandon Finck
and Dave Cushman, City Administrator Matt Skaret and Recording Secretary
Dave Maschoff. (A quorum of the Finance Committee was present.)

2019 PRELIMINARY LEVY


City Administrator Matt Skaret said the City’s Preliminary Levy for 2018
collectible in 2019 needs to be set by the end of September. He said that will
need to be done at the September 18th Council meeting.
Skaret said basically he’s recommending a 4 percent increase in the
Preliminary 2019 Tax Levy. Skaret said he believes there is some wiggle room to
lower the levy before it’s finalized at the end of the year.
Skaret outlined items that were driving the 4 percent Preliminary Levy
increase. He said the budget was drafted with several assumptions. Skaret said
that includes a 3 percent COLA increase with step increases for those who have
not reached the end of the step schedule yet. He said the budget also
incorporates the 25 percent increase in health insurance premiums. Skaret said
it’s hoped the premium increase can be lowered. He also noted there will be no
Small Cities Street Aid as the state funding ran out and Governor Dayton vetoed
the Supplemental Appropriations Bill that would have continued it and resulted in
a loss of approximately $26,000. Skaret also pointed out the City doesn’t get
cable TV franchise fees from Southwest Broadband anymore due to the
conversion to the internet streaming service for television, a loss of approximately
$18,000. He also pointed out the Bank Midwest Tax Abatement has run out, so
that is completely on the tax rolls and is $23,000 less the City has to levy for.
Skaret listed the key drivers behind the levy increase.
Skaret noted one of the key drivers is the health insurance increases. He said
this past year was the first year the City levied for a Street Reconstruction Fund.
He said the City levied $50,000 for that. Skaret said he bumped that figure up to
$75,000 in the proposed budget but it can be cut back to $50,000 is so desired.

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Skaret explained he penciled in a 5 percent increase for law enforcement
services for the County. He said he will be meeting with Sheriff Shawn Haken to
discuss the budget further.
Skaret said $25,000 was added to the Fire Department budget to save up
additional funds for future equipment and trucks.
Skaret noted the City needs to be more aggressive in replacing the City’s aging
Street Department equipment. He said the proposed budget adds $75,000 for a
new dump truck in addition to the $75,000 already set aside for new Street
Department equipment, plus the $26,000 set aside in the Council’s Unallocated
Fund for a new Street Department truck. Skaret said that gets that figure up to
$176,000 available for a new or newer dump truck, which is in the range of what a
new or newer truck would cost.
Skaret said another item in the proposed budget is replacing the Sanitary
Sewer Vac Truck. He said there is already $75,000 set aside for that in the Council
Unallocated Fund plus money in the Sewer Fund Reserves which will not impact
the tax levy.
Skaret provided the Finance Committee members with a history of the tax
levies back to 2008 for their review.
Cushman asked about the 5 percent increase for County law enforcement
services. He said the law enforcement services were turned over to the County
years ago to save the City money. Cushman asked if the City was still saving
money.
Skaret said the City’s share for law enforcement paid to the County is
budgeted at approximately $720,000 per year.
Finck said he would like to know what the whole budget for the Sheriff’s
Department is and what percentage the City is footing the bill on.
Skaret said he will find out that information when he meets with Sheriff
Haken.
Mayor Walter noted if the City would have continued with the Police
Department, the City’s expenses would have also gone up over the years.
Skaret said the City is in the third year of a three year contract with the
County for law enforcement services.

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Skaret said one thing the City is really saving money on is with the Economic
Development Office and contracting with CEDA (Community and Economic
Development Associates). He noted CEDA has just one staff person in the
Economic Development Office compared to having two full-time City staff in the
past.
Finck said that should be about an $80,000 savings.
Skaret said those savings were reflected in the City’s 2018 budget.
Cushman noted even with a two-and-a-half percent levy increase in 2018,
property taxes for City residents actually went down.
Skaret explained that was because the City’s valuation City-wide went up so
there was more of the pie to draw from.
Cushman said he’s OK with a 4 percent preliminary levy increase as a starting
point but considering the economy the way it is, he wants to work towards a hard
and fast number so the City isn’t a burden to the taxpayer.
Finck asked about where the City budget was regarding revenue and
expenses.
Skaret said the City’s total General Fund expenses year-to-date as of
September 10th were $1,952,608 and revenue in the General Fund so far is
$2,008,072.
Finck asked if there is any more revenue to come into the General Fund.
Skaret said the City still has the second half of property taxes along with the
second half of the Local Government Aid coming in December which are the two
big ones.
Finck said the way the economy is he has a hard time swallowing a 4 percent
levy increase. He said he really struggles looking at a 4 percent increase for the
long term.
Skaret said it’s not his intent for the 4 percent to be the final number. He said
he sees it as a starting point. Skaret said he would fully expect at his point to
come in at less than 4 percent but there are just too many variables out there
right now especially with what the health insurance costs will be.
Cushman said he thinks that some savings can be found as the different line
items in the budget are reviewed.
Finck said he struggles with having a levy increase beyond 3-and-a-half
percent. He noted that’s what the average wage increase was in the area and
anything above and beyond that hurts the household and the household is going
backwards.
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Finck said he would like the City to work within what the wage increase
number was for the area which he understands was 3-and-a-half percent.
Mayor Walter said he thinks the City can get to that percentage or maybe
less.
(Finck leaves the meeting for another appointment)
CUSHMAN/MAYOR WALTER moved and it was unanimously carried to
recommend to the City Council that the City’s 2018 Preliminary Tax Levy
collectible in 2019 be set at 4 percent.
Cushman thanked Skaret for his work on the City budget.

CITY COUNCIL WORKSHOP ON SEPTEMBER 13, 2018


Skaret asked Finance Committee members what they would like to see for
supporting documents for the City Council’s workshop meeting on Thursday,
September 13th.
Cushman said he thinks having 100 percent attendance at the meeting is
important. He said all the Council Members and the Mayor need to be present at
the workshop.
Skaret said he knows the Council wants to talk about streets and
infrastructure. He said he can provide information listing the streets and costs
that were compiled from the Street Department and engineer a of couple years
ago. Skaret said there can also be reports from Department Heads or appropriate
committees.
Mayor Walter said the Council can discuss what the City needs to work on like
the streets, infrastructure and prioritize where money needs to be spent.
Cushman said he didn’t have anything specific for the meeting.
Skaret said he will provide supporting information for the workshop meeting.

ADJOURNMENT
With no further business, the Finance Committee meeting was adjourned.

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David A. Maschoff, Recording Secretary