Monday, July 9, 2012

Salary Adjustments

Salary adjustments are made on an occasional basis in all organizations. They can also be done at any time of the year. There are three basic types of salary adjustments. They include adjustments for promotion, adjustments needed for internal equity and a cost of living adjustment. A city is generally prohibited from giving bonuses.

The cost of living adjustment is one that is accomplished across the board, given to all employees, at the same rate. It generally addresses the concept that things are more expensive now then in the past. There is no one standard that is used to set the rate of adjustment but rather some form of an inflation factor is considered.

A promotional raise is just that. The raise is give to an individual that takes on more responsibility by being promoted into a new or expanded position. Promotional raises can be of any amount based on job requirements.

The last form of salary adjustment is used to deal with other issues. For instance it can be used to address long term percentage increases where an inequity exists with lower paid over higher paid employees. Over time the range becomes skewed making an adjustment desirable for lower paid positions. This is a form of internal equity.

In Minnesota we have a law regarding pay equity where female employees must be paid on the same scale as male employees for the same job worth. Pay equity adjustments are made periodically to address these concerns. The State of Minnesota requires reporting for Pay Equity every three years. With that reporting, if a position is out of compliance the employer must make an adjustment to bring the wage scale into compliance.

Recently the City Council made adjustments to wage rates for four employees. Two were considered promotions as greater responsibility was given to them. Two other salary adjustments were considered pay equity adjustments.

The council has been concerned about personnel costs and has been very frugal in that regard. There is some thought that internal equity among employees needs to be further considered. The ability to raise revenues and maintain services has to be considered while addressing these issues. Compensation needs to be fair and in parity with others within the organization. The challenge is finding that balance.

Thursday, June 28, 2012

Fund Balance

The fiscal health of the City of Breezy Point has been a concern for the city council. All aspects of accounting have been scrutinized to address concerns. A good number of factors have played into these concerns.

We have seen issues with detachment. This has resulted in the loss of property and tax payers. We have seen a tax appeal that not only reduced taxable value of the community but also reduced the amount of taxes to be collected. This was further compounded with the reduction in taxes being retroactive for the year past. General taxable value of the community is in decline with the real-estate market reductions. Tax appeals and value reductions continue to plague the city.

With these factors of concern the city did what it could to reduce spending. We also did what we could to improve revenues. In the end between spending cuts and improved revenues the city was able to increase the unrestricted fund balance by a good margin.

The city also has adopted a policy concurring with Governmental Accounting Standards Board rule number 54. The policy the city adopted, among other things, provided for the maximum unrestricted fund balance as a percentage of the current operating budget. Comparing the fund balance against this policy has allowed the city to move some funds from the unrestricted fund balance to a reserve account for future improvements.

Upon finalizing the audit the city determined that funds could be transferred as discussed. Funds have been transferred and approved by the city at their June meeting. These funds improve the fiscal health of the city while also maintaining an adequate unrestricted fund balance to meet cash flow requirements. The transfer amount of $200,065 remains in the general fund but becomes assigned for future use and remains an asset of the city.

Tuesday, June 5, 2012

Rezoning

Some of you may know that the DNR has owned property south of the curve of Co. Ro. 11 where it goes from north to east near Schafer Lake. The property consisted of two parcels of approximately 39 acres and 25 acres. The city had wanted to acquire these properties when the DNR considered them surplus but the state no longer will donate properties to other governmental units. There intention was to sell the property.

Several years past they has set a minimum value and tried to auction off the parcels. The value was apparently too high for a minimum bid so the property did not sell. After a few more years hoping to sell the property, the DNR reestablished a value that was considerably lower than previously established. The auction date came and went with no one bidding on the property. After that date the minimum established price becomes the purchase price for anyone interested in buying the property. This spring the 25 acre parcel sold.

The property was zoned Public as it was DNR property but to use the property by a buyer requires the rezoning to another designation. The intended use was residential so after a public hearing the Planning Commission had recommended the property be rezoned to Wooded Residential.

After the property owner and the DNR closed on the property, the property could be rezoned as recommended. The City Council at their May meeting rezoned the property. There are no immediate plans for construction of a residence on this parcel but we will see some changes when the property owners plans become current.

Thursday, May 24, 2012

Life Saver Award

The City of Breezy Point Police Department has run a Paramedic Program for a good number of years. This service is offered to the surrounding area. It is staffed by two police officers that are also paramedics. The department has been very fortunate to also link with North Memorial to provide the required oversight to provide for the program.

Generally speaking if a call for help occurs our paramedic will go to the site and hopefully be there prior to the ambulance arrival. The patient is stabilized and life supporting efforts are accomplished. Some of these life supporting efforts would not be possible were it not for equipment that has been purchased through donations from many governmental units, grants and other donors. Of particular importance have been a 12 lead heart monitor and recently an automatic CPR machine.

Fairly recently Paramedic Officer Jason Rieber, Sergeant Brian Sandell and Chief Kevin Merschman responded to the report of difficulty breathing on January 3, 2012. A third degree heart block was detected utilizing a 12 lead heart monitor. An IV was established and the patient was sedated. The monitor was then utilized as a pacemaker which allowed the patient to survive transport to a facility capable of treating the life threatening heart condition.

As a result of this action the city awarded these officers Life Saver Awards at the May 7, 2012 meeting. Mayor Weaver presented the award and congratulated them for their actions. The city has a lot to be proud of when it comes the Paramedic program. The city is also extremely grateful for the assistance we have received in acquiring the tools to make a difference in emergency responses.

Thursday, May 17, 2012

2011 Audit

Every year the city has an auditor conduct an Audit. The auditor looks at the financial transactions of the city and accounts for revenues and expenditures for the various funds. There are inquiries into payroll, vendor transactions, bond payments, and receipts. This takes a bit of time for the city to gather up the required data as well as the auditor to put it all together into a single report.

The preparation for the audit is something we think about on an ongoing basis. Standard transactions are one thing but non-standard ones require additional detail. Having this detail readily available in the “Audit File” makes the process go a bit quicker. Having an audit file and anticipating needs also saves time as we don’t have to dig for the information. Being totally prepared isn’t possible as part of the audit process is to “test” documentation and files but having a system that allows for that retrieval is also important.

The report was given to the council at the May 2012 meeting. The audit and related information is available at the city web site. At that meeting a summary was made concerning our books. The city is in good financial condition.

On the revenue side our variance from budget saw the largest difference in the property tax area. The budget and levy had been completed for 2011 with no adjustment made for the Breezy Point Resort tax appeal. All property tax adjustments made, as the result of the appeal, happened in 2011, for both 2010 and 2011. Smaller deviations were noted in charges for services and fines, both of which didn’t meet budget projections.

On the disbursement side expenditures were kept in check with positive variances in most line items. Overall expenditures were $148,661 under budget. This improves unreserved fund balance by this amount. This is after we have transferred funds to Revolving Capital. The Revolving Capital Fund was improved by $148,962. The majority of these transfers provide for future expenditures. They also help manage ups and downs in levy requirements allowing for a planed approach to capital expenditures and improvements.

The audit was accepted by the council and they were pleased with the outcome. I was pleased with the effort made by employees to manage expenditures. We all pitched in to address the shortfall that was pending. We also benefited from some other unexpected revenues so in the end we had a great finish.

Monday, May 14, 2012

Comprehensive Fund Balance Policy

Governmental finances are slightly different then business finances. With business the focus is usually dominated by the profit and loss statement. With governmental accounting we deal more with revenues and expenses. We also deal with fund balances. There are a number of different types of funds and with these they need to have special designations.

There is an overseer of accounting standards for governmental accounting. They are known as GASB or the Governmental Accounting Standards Board. This group periodically establishes rules to provide for more definition in how governmental funds are managed from an accounting standpoint.

The most recent rule that was implemented is known as GSAB 54. This rule provides that all city funds be designated as to their assigned use. The use designations of each fund fall into the following categories:
Non-spendable
Restricted
Unrestricted – both committed and assigned
Unassigned

Using these designations on each fund explains, to a point, the funds intended purpose and how it can or should be used. As an example of a restricted fund is debt service. Debt service funds can only be used to retire debt.

The rule also made a recommendation that a policy be adopted called a Comprehensive Fund Balance Policy. The policy addresses these areas:
Minimum Fund Balance
Order of Resource use
Stabilization Arrangements
Committing Funds
Assigning Fund Balances

With this in mind the City Council at the April meeting adopted the Comprehensive Fund Balance Policy with defines funds as described and meets the requirement of GSAB 54 in addressing the recommended policy issues.

If anyone has an interest in this policy it can be found in the meeting packet information from the April 2012 meeting.

Thursday, May 3, 2012

Conflict of Interests

At the urging of Mayor Weaver the Breezy Point City Council considered the adoption of a Conflict of Interest Policy and Statement of Values and Conduct. The Conflict of Interest Policy also included some references to other ethical issues.

State Law is rather specific in what constitutes a Conflict of Interest. State Law also requires ethical behavior of elected officials on other issues. One issue is that of the open meeting law. Another issue is that of gifts to elected officials. Conflicts of interest come in a variety of circumstances that are well defined but at times somewhat difficult to grasp as the law is more far reaching than one may think. The policy incorporates situations where the laws are applied helping to better understand what constitutes a conflict and what doesn’t. It also describes conflict situations that may be exempted from law or where notice must be given.

The Statement of Values and Conduct is a policy which defines civility and responsibilities. It asks that all participants work together in a constructive and appropriate manner. Its goal is good government that expresses openness and understanding. It holds us all accountable for actions in the process and outcomes.

All commission and council members are required to uphold the Conflict of Interest Policy requiring them to declare a conflict when it occurs. They will be required to sign off on a receiving a copy of the policy and acknowledging the need to declare a conflict. The statement of Values and Conduct is for all commissions, council and staff members to uphold. Working together in an appropriate manner will only lead to better outcomes.

These documents were adopted at the April 2nd meeting. If you are interested in reviewing them go to the council meeting packet for April, 2012.

Thursday, April 19, 2012

Fire Contract

Fire service is provided in Breezy Point primarily through the Pequot Lakes Fire Department. We also get some service from Ideal Township. Pequot Lakes Fire Department services a number of townships as well as the city. Their fire service is set up as a fire district providing a shared cost to all that participate in the district.

The contracts for fire service are renewed on an annual basis and with Pequot Lakes the contract amount is determined by three factors. One of these factors include the annual budget of the Fire Department. The value of the buildings within the area served is another factor. The third is a use factor, which is a percentage of use over a ten year period.

The past few years with this contract we have seen large increases in use and value but with this last contract we saw a reduction in our contract price based on two of the factors. The budget for the fire department stayed the same for 2011 to 2012 so no changes there. The valuation portion of the formula went from $226,147, 200 to $218,790.800. Keep in mind this represents only building values. The use factor saw the largest change going from 32% to 27%.

When all of these are factored our cost for the past contract period was $79,427.81. The new contract period has our cost at $68,686.17. This represents a savings of $10,741.64. This is a rather significant savings, about 15%, to the tax payer in Breezy Point. When we look at ways to save money this is great. We expected to see some savings this year but this beats expectations.

I hope the trend continues with low usage as this really helped. Keep in mind this is a ten year average so one year does not make or break us in terms of costs but we have seen a tremendous benefit from that factor.

Stay safe and do what you can to prevent fires!

Tuesday, April 10, 2012

We're ready for Co. Rd. 11

As many of you know Crow Wing County is preparing to undertake some improvements along County Road 11 between Pequot Lakes and Breezy Point. The proposed improvements started with a mill and overlay of the driving lanes of the highway. The county, wanting to be proactive, also looked at the future with a concern for safety. A task force was assembled of local participants to look at the needs within this corridor.

With this review and concern for safety they are proposing to expand the project beyond just driving lanes. Right and left turn lanes will be established at Eagle View School and also at Ranchette Drive in Breezy Point. Some bypass and right turn lanes may be established. Improvements will also be made in Pequot Lakes.

Not completely explained in the past was some improvements of lesser significance but still important. These include drainage and storm sewer, some curb and gutter, ADA pedestrian ramps and some limited sidewalks near the intersection of CSAH 11 and CSAH 4. Guardrails will be replaced in the area near the Commander.

There is a cost share to the city for these improvements. The cost share amount has been estimated at $30,084. Actual costs will be determined following bidding and construction. The county has agreed to allow payment of this amount over a two year period. Doing this helps with cash flow but also allows the county to receive some payment before closing out the project, adjustments can then be made in the final payment.

Any time a highway project is accomplished in the city it requires municipal consent. This consent was given at the April 2nd meeting. Final plans will be bid in the near future and once that is accomplished a schedule will be developed. It is not anticipated that this project will take a great deal of time but some disruption will occur this summer. The end product will be worth the disruption.

Thursday, March 22, 2012

Whats AIS?

Many of you know that there is a problem with Aquatic Invasive Species. The threats have been from plant life to fish to Zebra Mussels. The Zebra Mussels seem to bring the highest threat in most people eyes. The local concern is the introduction of these into Pelican Lake.

Zebra Mussels have been found locally in Lake Ossawinnamakee. More recently they have been found in Gull Lake. Mille Lacs has had them for a number of years. The same holds true for the Mississippi River. One Zebra Mussel was found in Pelican Lake this past fall. There is the thought that if they are present, more than one would be found. They are very prolific. Time will tell if they are there but regardless, keeping them at bay is the goal.

A concern was raised with the Breezy Point Public Landing. There was some thought that by closing the landing we limit the possibilities of introduction. The City and the State of Minnesota (DNR) established this landing in 1985. The agreement requires that the landing remain open and free to the public. Closure or limiting hours is really not an option. The landing could be closed between midnight and 4 AM as the only possibility. A number of other landings are available to users of the lake so limiting one access doesn’t really solve the problem in that regard.

Efforts have been made to ward off the threat. The Pelican Lake Association has been working with the DNR on a volunteer basis to inspect boats as they use the landing. The city police officers have been trained in Aquatic Invasive Species so they can enforce laws applicable to this issue. The City Public Works personnel have also been trained in this issue as they do maintenance at the landing and beach. They too can address the issue. The city will install a sign to let boaters know that laws associated with Aquatic Invasive Species will be enforced by the Breezy Point Police, as a reminder.

This year the DNR will again be working with local volunteers to monitor the access. They had also asked for a Right of Entry Authorization. In addressing this with the DNR they intend on having decontamination service available at the boat landing to further address the threat. It is everyone’s hope that Zebra Mussels have not been introduced.

Boaters and the public in general need to recognize that the responsibility for introduction really lies with the individual. There are far too many public and private landings in the states waters to guard against the introduction.

Be a good steward of our public water resources, doing what you can to ward off the introduction of Aquatic Invasive Species. Maintaining the lake as invasive free ultimately lies with your actions.

Thursday, March 15, 2012

To Buy or Not

In Crow Wing County there is a rather high incidence of property reverting to the county under tax forfeit laws. If taxes aren’t paid for a period of time state law provides that the owner, in essence, has abandoned his ownership. The county then takes jurisdiction and ownership of the property.

Once this occurs the county designates the property as “Conservation” meaning it is conserved for a period of time. The jurisdiction where the property is located is given the opportunity to review the properties prior to a change in status to “Non-Conservation” which means they can then sell the property. The city, with their review, can maintain the property as Conservation. The governing body would need to say they are interested in the property. The county has the option to deed the property to the local jurisdiction if there is a public purpose at no cost. This is done with a deed restriction limiting the use of the property. The county also has the option to sell the property outright.

For number of years Crow Wing County had allowed cities to acquire properties for public purposes at no cost. This became a problem with the amount of property that had to be accounted for and the various designated public purposes. Trying to manage these with enforcement became overwhelming. Cities started with good intentions and generally fulfilled those obligations but there were some of these properties that, over time, had shifted in use. Doing so negates the agreement for the property. When this happens the property can revert back to the county for disposition. The resources needed to manage enforcement became a problem.

Crow Wing County determined that, regardless of buyer, the property would be sold at a fair market price. The city could reserve the property for a period of time but would have to eventually purchase it. Funds for purchase of tax forfeited property go to the county. A portion of the sale price is paid to the local jurisdiction.

The properties the county is changing to Non-Conservation are reviewed by the city on an annual basis. One property that was felt desirable this year was considered for drainage. The City Council considered the purchase and determined the need wasn’t strong enough to justify the expense. So for this go around, the city won’t be acquiring any tax forfeited properties and hope the land returns to the tax roles for development.

Tuesday, March 6, 2012

Wildwood Access Closing?

I have written in the past about the process and progress that was being made with the improvements proposed for Co. Rd. 11 between Pequot Lakes and Breezy Point. Crow Wing County had undertaken a study of this corridor to develop a greater understanding of the needs that exist from a traffic safety standpoint. They also wanted to take a futuristic look at what might happen when the 371 Bypass is built in Pequot Lakes. This is anticipated for 2018 and when built, traffic patterns will change. Anticipating how things might change helps to anticipate how best to manage the future.

Through this study process a Task Force was established to help the county better understand local needs and perspectives. The Task Force was composed of local public officials. The Task Force worked with a consultant Traffic Engineer on a plan that would enhance traffic movements while also providing for safety improvements. With these things in mind those areas of concern were identified and possible solutions were posed.

One of these situations was the possibility of closing the access to Wildwood Lane from Co. Road 11. This would require the diversion of traffic down Ski Chalet to Ranchette Drive to access Co. Rd. 11 at that location. As the process occurred two Public Open Houses were held to let the public know what was occurring and what was being considered. The second Open House was held on February 23rd and residents who held property which gained access off of Wildwood Lane were specifically invited to attend. At the meeting the issues were explained and comments were heard from the residents. The comments received showed little support for the closing of this access point. The primary concerns included extended driving access times and distances, additional emergency response times and the need to provide other improvements to support the closure.

At the March 5th City Council meeting the City Council conserved the question of closure of Wildwood Lane to Co. Rd. 11 and rejected the idea. They also made suggestions for improvements for the county to consider. One such improvement, a bypass lane, will be considered by the county for implementation however the project is driven by the budget available and if the additional work can be accommodated it will be done. The entire project includes, in addition to a mill and overlay, improvements at Ranchette and at Eagle View Elementary School. It is hoped there are sufficient funds to do the additional work but we will not know until the bids are received.