City Council mulls over finances, taxes and projects

By Sue Odegard

The City Council took a close look at three items relating to the financial operations of the municipal government Tuesday night.

The first was the council's unanimous approval of the 1998 comprehensive annual financial report.

"The 1998 comprehensive financial report shows that the city of River Falls is in a very strong financial condition," said City Administrator Bernie Van Osdale in his memo to the council and Mayor Cecil Bjork. "General fund balances at the end of 1998 were $3.4 million with an undesignated fund balance of $2,979,000, which represents 51.2% of our annual operating budget."

According to Finance Director Julie Bergstrom, "This is exactly where we want the fund balance to be per the council's direction of maintaining 50% of annual expenditures in reserves."

"The city's general fund balance was increased by $101,502 in 1998, due to expenditure savings of nearly $300,000, or 5% of the annual budget," Bergstrom added.

The report is made to comply with requirements of the Securities and Exchange Commission (SEC) for the city's bond holders.

"The fiscal condition of the city at the end of 1998 is very strong, with combined assets at nearly $72 million," said Bergstrom in her memo to the mayor and council. "This is a 13% increase in the total value of the city's operations, of which 9% is attributable to the city's enterprise funds. Fund equity of all funds grew by 8.6% from 1997."

Enterprise funds, including electric, water, sewer, and ambulance funds, had a total net income of $790,212 at the end of 1998. This includes $478,397 for electric, $220,757 for water, $101,873 for sewer, and a loss of $10,815 for ambulance.

The loss in the ambulance fund resulted from lower than expected ambulance revenues and increased costs for architectural fees for the new ambulance facility, Bergstrom said. The new ambulance facility is located at 401 N. Second St. and cost approximately $540,000.

Ambulance fees were increased on Jan. 1, 1999, and revenues are expected to exceed budgeted projections this year. The yearly operating budget is $124,000.

Bergstrom said that special revenue funds increased by $69,114 due to cost savings in cable television, storm water utility, the environmental fee utility, and Tax Increment District #4. She said the city council can expect "continued growth in these funds in the future, especially in the storm water and environmental utility funds."

Bergstrom said debt service fund balances grew by $111,019 to $364,929. This was due to increased revenues from tax increments and interest income.

"Capital project funds were higher at the end of 1998 because of the general obligation notes that were approved late in 1998 for the Cenex site purchase, City Hall renovation, and the future government center," Bergstrom said. "Most of these funds will be drawn down in 1999, with the exception of the government center funding."

In January, the city closed a deal to pay the New Richmond Farmers Union Co-op (Cenex) $350,000 for what was once the agricultural hub of business for area farmers. It is located west of the Kinnickinnic River between Maple and Cedar streets.

This fall remodeling at City Hall, 123 E. Elm St., was completed. The tally for remodeling costs is $512,163. It included a handicapped accessible entryway, roof repairs, new exterior windows, updating electrical and heating/air conditioning/ventilating systems, new carpeting, installation of an elevator and additional office space, and storage rooms for the police department.

"The Whitetail Ridge Corporate Park ended 1998 with a modest deficit balance of $62,226, but this can be handled with future financing, increased tax increments, or an advance from the general fund," Bergstrom said. "I recommend that no action be taken regarding the deficit until the council decides what direction it wants to pursue in the park."

Whitetail Ridge is the city's second industrial park. A land contract deal between the city and the Paulson Family Trust for 221 acres owned by Duane Paulson along Hwy. 35N. is being finalized.

The city put down $175,000 on the property in September of 1994. The city has been making monthly payments since. The selling price for the property is $736,000.

Duane Paulson died this fall and the City Council gave his wife, Laurine, until the end of December to vacate the premises. All deeds and trust certificates have been exchanged and a final payment made to the Paulson family by the city.

The report was done by Virchow, Krause and Company, LLP, and was completed for the period ending Dec. 31, 1998.

Budget proposal

The proposed budget for 2000 will include an estimated 6% mill rate increase. For residents whose homes are valued at $100,000, that means an increase of roughly $50.

The overall general fund is $12,276,062. Of this, it's anticipated the tax levy for next year will be $2,405,442.

New additions to the 2000 budget include a new full-time ambulance service director. The estimated starting salary is $34,436, or $49,396, with benefits.

River Falls Area Ambulance Service Director Mike Stuttgen made the following request: ".I feel we need to prepare for the future. As our community continues to grow, so does the request for our services. During 1998 we rolled out 829 times; to date (July 29, 1999) our responses are over 500. Responding to calls is only a portion of the business.This is a business of constant change and improvement, the mission of the service has always been to be progressive and provide our community the best possible care.

"I sincerely believe with the job description categories, maintenance of the facility, vehicles, equipment, along with staffing, there is a valid justification for a full-time person to manage the day-to-day operations of the service.A full-time person could attend daytime city department meetings, workshops and conferences crucial to the management of the service."

The ambulance service is proposing to raise their residential rates from $275 per run to $325; and the advanced life support rate from $325 per run to $400.

Another new addition to the 2000 budget is a grant-funded police officer that will be sponsored in part by the River Falls School District. The school district and the River Falls Police Department made a joint application to the U.S. Department of Justice, Office of Community-Oriented Policing Services, for a COPS in School Award. A grant award in the amount of $125,000 over a 3-year period was awarded for an additional full-time officer. Matching funding will be reimbursed 75% by the school district and 25% by the police department. The city's portion of funding the salary is $3,000.

On Nov. 1, the River Falls Library Board discussed the 2000 budget. According to Library Board President Linda Kirk, they were "very concerned and disappointed with the drastic reduction" of city funding for the library.

The 1999 budget for the library was $448,167. The 2000 budget has been set at $356,930, a reduction of $91,237.

"A reduction of this size has a serious impact on our ability to maintain services at their current level," Kirk said in a memo to the mayor and city council. "The number of library cardholders has increased from 13,491 in December, 1997, to 16,694 by October, 1999. Moreover, circulation has risen nearly 30% in the last 2 years. If future funding levels are not augmented to keep up with the cost of increased library activity, and there is an increase in the cost of materials, reductions in patron services will have to be made."

According to Kirk, the council justified the reduction in funding by claiming the increase from Pierce County of $80,730 can be used to support library services. But the River Falls Library Board has chosen to accept a cash reimbursement from Pierce County and provide services to rural residents while maintaining local control, rather than participating in the county program which provides services such as purchasing books and equipment, offering professional development opportunities to staff and providing children's programs.

"County monies should not be used to supplant current levels of city funding," Kirk said, "if we are to maintain optimum services to all our library users. Basically, the council took advantage of what appeared to be a 'windfall' allocation from Pierce County without recognizing that the services must still be provided through the local library.

"Patrons from the townships have a right to expect that their funds will be used to add to the collection, provide assistance and receive materials," Kirk continued, "and participate in programs that were previously provided by Pierce County."

Kirk asked the council to reconsider its decision to cut funding and "reinstate the budget to the previous level of funding."

This item can be considered at the Nov. 23 council session during a public hearing. That is also when a final vote will be taken on whether to approve the budget for next year.

Capital Improvement Plan

The council also unanimously approved the city's 5-year Capital Improvement Plan (CIP). The CIP is a reference document to guide city staff and council members in future decisions. The plan can be modified by the council at any time.

The projects included in the plan for 2000, including Cemetery Road reconstruction, DeSanctis Park upgrades, Golf View Drive reconstruction, Paulson Road upgrades, have been incorporated into the proposed 2000 budget.