HomeMy WebLinkAboutCity Council Minutes 12-10-1992CITY COUNCIL MINUTES
BUDGET HEARDIG
DECEMBER 10, 1992
Mayor Bergman called a special meeting of the Plymouth City Council to order at 7:00
p.m. in the Council Chambers of the City Center, 3400 Plymouth Blvd. He stated the
purpose of the meeting is to continue the public hearing held on November 30 an the
peoposed 1993 budgets.
Acting Manager Boyles reviewed the presentation on the proposed 1993 City budgets that
was made at the November 30 budget hearing. He stated that the Council must by law
adopt the budgets and tax levy this evening.
ouncilmember Vasiliou noted that the estimated $20.05 City tax increase on a $100,000
valued home is for the entire year - not per month. This equates to less than $2 per month
increase for the next year for the City portion of the property tax bill.
MaN. it Bergman continued the public hearing at 7:03 p.m.
John Overland, 1041 Xene Lane, thanked the Council for the letter that was sent out by
stafrto residents in Cimsrnon Ponds. He said the letter explained the state guidelines, but
did not explain how the property taxes are calculated and specifically to what increases are
attributable He does not understand, for example, why the taxes on a home valued at
S66,100 are not $661 (or I percent under the state tax schedule for homes valued at
100,00.1 or more). lie asked if the City is charging in excess of the allowable state
guideline
Finance Director Hahn explained that the property tax is derived by multiplying the
property value times the tax classification rate ani the resulting number times the tax
capacity rate for tl+e combined taxing jurisdictions (school district, county, city, and
special districts.)
Councrlmember Edson clarified that there is no state -mandated tax rate for the City. The
state tax classification .'stem (I or 2 percent based on value for residential property)
relates to the way the taxes &-e spread - they are not tax rates.
John Gammell, 941 Zanzibar Lane, asked why lite cornmercial;industrial valuations were
decreased. He specifically questioned why the Northwestem Bell property had a decrease
in valuation?
Acting Manager Boyles explained that the assessment process is %ndependent of the
budget process. The reduction in conrntercial:industrial valuations was the result of the
economy and office space glut in the area
Budget Hearing
December 10, 1992
Page 457
Finance Director Hahn stated that the value reduction for the Northwestern Bell property
was largely the result of an asbestos problem in the building.
Mayor Bergman stated that the City sets values at what is estimated to be market value.
In some cases, the property owners obiect to the value through the court process and
reductions have resulted relating to market conditions.
Councilmember Edson stated many companies bypass the City's Board of Review and five
an objection to their value directly with tax court.
Councilmember Hell1well stated the loss in market value for commercial properties is :iue
to overbuilding of office buildings.
Mr. Gammen suggested that the City prohibit further commercial development so there is
no further impact on residential taxes resulting from the loss in value of commercial
properties.
Mayor Bergman stated that property owners have a legal right to develop their property,
and developers build to the market conditions at the time. He predicted that the economy
will turn around and residential property owners will again have the benefit of increased
commercial industrial values and a resulting shift in the tax burden.
Mr. Gammell questioned the advertised salary range for the City Manager position. He
compared the advertised Plymouth range of $63,300 - $94,000 to the salary range recently
offered by the City of Dubuque of $70,000 - $80,000. He questioned whether the
Plymouth ran,3e was higher than necessary, given that Plymouth has significantly less
employees and operating budget than Dubuque. He suggested that the Council seriously
consider the appropriate salary before selecting a new City Manager and that the
maximum be reduced to $75.000.
Mayor Bergman stated he dors not disagree with Air Gammell's comments, however the
market conditions are somewhat different in the metro market It is Itis opinion that the
starting salary should not be at the upper end of the advertised range, and this should be
considered for all City position vacancies, particularly since there is no shortage of
applicants for each vacancy.
Councilmember Vasiliou stated the Council will be interviewing the five finalist City
Manager candidates on fleccmber 12 This meeting is open to the public, and she invited
Mr. Gammell to attend the interviews. She stated comparable worth is another state
mandate that pushes salaries higher than necessary. She stated that some cities in
Minnesota are not ir. compliance with the comparable worth statutes and have not been
penalized She stated that Plymouth perhaps should iot have quickly came into
compliance. She shares Mr Gammell's concern about the rai,ge for the City Manager
position
Budget Hearing
December 10, 1992
Page 458
Councilmember Helliwell asked if a City could be fined fo: not complying with the
comparable worth statutes.
Acting Manager Boyles stated there are penalty provisions, one of which is withholding
local government aid which Plymouth does not receive. He stated that union contracts
negotiated with male -dominated employee,: affect the female -dominated positions. They
establish a target for wage increases.
Mayor Bergman stated that private businesses are not ret,uired to comply with a
comparable worth mandate This affects individuals who pay property taxes because,
unless they work for government, they probable dant receive comparable worth wages
Mr. Gammell stated he would like to see the City run life a business where revenues drive
the expenditures. He urged the Council to adopt a budget resulting in no increase in
property taxes and to allow the development growth in Plymouth and corresponding
growth in the tax base to handle the increased costs resulting from the growth. He
suggested that no new services be approved unless a corresponding reduction is made so
there is no impact to the overall budget.
Councilmember Vasiliou stated th .- Council must balance the desire of property owners
who feel as Mr. Gantmell that the current service lev:l should be maintained with the
desire of property owners who tend to live in the higher valued homes and are requesting
increased services. She noted that individuals living in higher v alued homes will receive a
decrease in their City tax in 1993.
Councilmember Vasiliou stated that the two new playfields completed this year will
require increased maintenance costs in future years. There are also requests for additional
ball fields because some residents feel the City is behind in kzeping up with the number of
needed recreation areas She stated that in the effort to balance the needs and desires of
all residents, it may be necessary this year to increase taxes. Her major source of concern
has been that the City has not budgeted money to maintain, repair, and replace park
equipment and facilities. She stated that she did not support the construction of the two
playfields, how.ver, now that they are built, she is going to ensure that adequate funds are
budgeted to maintain them to protect the City's investment.
Mr. Gammell urged the Council to adopt a levy at the same level as last year and to make
budget cuts to match That levy amount.
Councilmember Helliwell stated she supportv adopting a lev%- identical to 1992.
Acting Manager Boyles stated that due to sales tax on local government, comparable
worth and ADA mandates, and maintenance on the new playfields and new city buildings,
the City will face increased costs of about $500,000 for 1993. He stated that adopting the
E.
Budget Hearing
December 10, 1992
Page 459
1992 levy amount, would result in the loss of 10-20 City positions and no pay increases
for employees.
Mayor Bergman stated that Councilmember Helliwell has not offered ideas on where
budget cuts could be made.
Councilmember Helliwell stated she supported the construction of Bass Lake Playfield
because it was needed. The Public Works and Public. Safety buildings were also needed.
She stated that she has ideas where budget cuts couli be made, but she feels she is not.
well heard. She stated that every vote a Councilmembers makes d.irmg the year should be
analyzed for its budget impact and believes the Council has made some poor decisions in
1992 that resulted in unnecessary costs to the City.
Mr. Gammell stated he was disappointed at the November 30 budget hearing to hear
Councilmembers blame the current situation on actions made by a previous Council. Fie
stated it is the Council's responsibility to find solutions to problems whether or not they
were resporsible for creating them.
Gordy Raben, 16320 9th Avenue North, stated Fie is pleased with the budget handout:..
He doesn't think the City Council should adopt a levy equivalent to the 1992 ley because
the City cannot afford to lose between 10 and 20 people. He asked if the City gets credit
for fiscal disparities when the City loses value.
Director Dillerud stated that no money is returned to the City when value is lost. The
fiscal disparities Funds are distributed on a yearly basis and the money that went from
Plymouth to the pool has been distributed to other communities.
Paul Kuzma, 3825 Pilgrim Lane, complimented the handouts, however, he thought the
information was somewhat slanted. He would like to see the same information provided
for the 1992 budget year and would like a mere detailed explanation of the large increase
in the City portion of the taxes. He agreed with Councilmember Helliwell that the City tax
levy should be held at the 1992 level He stated that Plymouth did not need a library and
he feels the money paid for a site was unnecessary.
Councilmember Helliwell stated shy was a supporter of the library because many residents
do not have easy access to a library Every year Plymouth taxpayers are taxed about $1.6
million to hind the Hennepin County library system, and she feels that Plymouth is entitled
to its own library.
A resident in the audience objected to the empioymcnt contract of the former City
Manager
t'ouncilmember Vtsiliou stated there was nu eud .late on the contract
Budget Hewing
December 10, 1992
Page 460
Councilmember Tierney stated the contract was to be reevaluated every six to twelve
months and that provision was not followed by the Council.
Acting Manager Boyles clarified the contract had a performance evaluation provision - not
a contract renegotiation date.
rourcilmember Tierney presented information on the former City Manager's severance
package showing a net cost of severance of about $175,947.83. She stated that there are
other costs in addition to that amount that she believes results front the City Manager
dismissal, such as the recent clerical/technicaUprofessional unionization, team building, and
legal costs. She estimated that the actual legal expenses for 1992 u all be at least $330,000
to $350,.)00, which is much higher that the $304,000 adopted legal budget for 1992. She
stated the actual legal expenses in 1991 was $292,499, with the former law firm
Acting Manager Boyles stated the vote to organize was first tied. The union then
requested that another vote be taken since two employees who would have supported the
union did not get an opportunity to vote The union passed in the second election.
Councilmember Tierney stated that the attorney bills fir 1992 are exceedingly high, and
will be higher than t'te 1992 ado,tted and the 1993 proposed budg?ts. She stated this is
largely the result of the City Manager issue, and that the City Attorney drafted a memo
about termination of the Manager in April without the knowledge of two members of the
Council. She supports an effort to bring incre.ised communication to the Council and
teambuilding.
Councilmember Helliwell agreed and stated that there are other costs tLe City may face
that result from the City Manager issue.
Acting Manager Boyles stated that tearabuilding should not necessarily be associated with
the City Manager is3ue
Councilmember Tierney stated Fhe spoke with a State auditor's representative who
thought it was fair to include thr: expenditure for teambuilding in the City Manager issue
costs. She stated the Council noted unanimously to do team building and decided that it
should be done after hiring of the new Citv Manager
Mayor Bergman asked if the attorney fees noted by Councilmember Tierney include the
90,000 billed from Holmes and Graven in 1992.
Councilmember Tieraev stated yes
Mayor Bergman questioned whether the lege; fees in 199: are ani different than previous
years and v he6er circumstances from previous yea: s are identical
Budget Hearing
December 10, 1992
Page 461
Councilmember Vacifiou stated the 1941 actual legal expenditures were $302,000 and
1991 actual expenditures were $293,000
Acting Manager Boyles stated that the City does not know from year to year what cases
will be tiled. In some years the legal budget has been exceeded, in other years the actual
expenditures were less than budgeted.
Mayor Bergman stated that the change in City Attomey was not made for the purpose of
reducing legal fees.
Councilmember Helliwell reviewed the legal expenditures from the Idst few years. She
stated that the costs for 1990 and 1991 were approximately $300,000 per year, and she
doesn't believe that the lawsuits filed against the City have varied that much over the past
hree years.
Mayor Bergman closed the public hearing at 8.55 p.m
Councilmember Vasiliou stated she had asked the stpte auditor's office, why they were not
concerned about the $97,000 severance pay that Inver Grove Heights recently paid its
manager. She stated the auditor's office indicued that the Plymouth Council did the
correct thing to avoid more litigation The auditor's office did not say that the City
Attorney should be in-house, but rather questioned whether the Council had considered it
Councilmember Vasiliou stated that the City had never hid the legal service before. It was
di.iicutt for her to approve the $89,600 severance payment to the former City Manager
because she did not vote on that contract. She said the Council has been informed that
employees recently joined the union fbi job protection, but it is her opinion that the union
is no assurance of a particular wage or of job protection. She does not feel threatened by
the union. She also questioned the validity of employees ha%ing anonymous interviews
with the newspaper with respect to the union issue.
Councilmember Vasiliou noted that when the former City Manager recommended the new
law firm, he asked for a one month transition She assumed that everything could by
completed in one month, however, it has taken 10 months attd $90,000 to complete
business with the former City Attamey.
Councilmember Vasiliou stated she was informed by a representative to the HRA and
Charter Commission that the individual was asked by a Councilmember if she was going
to resign and if a Councilmember had assisted in writing a letter to the editor
Councilmember Vasiliou stated that action by a Councilmember was inappropriate
Ciuncilmember Tierney :.toted that CouncNiiertber Vasiliou's information is inaccurate
Counciln ember Tierney called the Charter Commission member, consistent with Charter
Commission policy, to ensure that she was still interested in being on the Chatter
Commission bet.euse she had a number of unercused absences Councilmember Tierney
Budget Hearing
December 10, 1992
Page 462
stated she also asked if there was some issues to discuss because the Charter Con•,mission
member had missed so many meetings and tier letter to the editor war hostile and
contained personal attacks. She stated that at no time did she ask he: to resign, nor
would she have the authority to do so
Councilmember Tierney stated that the tbrmer City Manager's letter of understanding
contained a clause that the City and Manager would meet twice each year for a
performance review. She stated that the Manager was not reviewed from December,
1989 until he was gone
Mayoi Bergman stated that if City Manager had continued employment the City would
still have some of the costs listed by Councilmember Tierney. He stated that the State
Auditor indicated in a letter that the outplacement service, the vehicle, and the one-year
severance were done prudently to protect the City from litigation. He stated the
Manager's whole life insur.nce contract was not specified in the 1990-91 budge:, or
specifically accounted for in the letter of understanding. He stated that it was shock for
him to learn that the City paid $26,800 premium pet year for a policy that the City did not
own.
Councilmember Edson stated that at the last budget hearing, the Council asked staff to
verify the net severance estimates that he had presented to the Council on November 30.
He stated the staff, current estimate is $128,897.97, which is much less than the amounts
submitted by Count ilmembers Tierney and Helliwell.
MOTION was made by Councilmember Fdson, seconded by Mayor Bergman, to direct
staff to assemble a detailel analysis of the co:,ts resulting from the City Manager severance
for Council discussion at the December 21 meeting.
Councilmember Helliwell stated that there is a 3-2 vote split on the City Council and staff
will bz in a difficult position !o write an unbiased report.
Councilmember Edson stated that the Council has a responsibility to move forward to
other issues, and the Councilmembers may never agree on the exact a,nounts.
Mayor Bergman stated there has never been retribution by any councilmember tv rd a
staff member for an action taken to his knowledge. The only person the Coun..il can
a'.iect is the City Manager. He stated that he will support having the costs verified by an
outside source if other Councilmembers desire that
Acting Manager Boyles stated the staff will assemble the information for the December 21
meeting
Motion carried. five ayes
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Budget Hearing
December 10, 1'192
Page 461
Councilmember Edson stater{ the budget process has been difficult. It was disappointing
to see the impacts of the ccnmercial/inde •!rial valuation decreases, the sales tax, and
change in tax structure. He stated that over the past few years, taxes have been controlled
because of the levy limit, and in 1993 the levy limit will be removed. He said the City
portion of taxes decreased in Plymouth in previous years because development paid for
increased costs, and the Council needt. to tack m the budget from a long-tclm perspective.
If the Counril adopted the 1992 levy amount there would still be a tax increase for some
properties and a decrease un City services.
MOTION was made by Couacilmember Edson, seconded by Mayor Bergman, to adopt
RESOLUT!JN 92-801 ADOPTING 1993 BUDGETS.
Councilmember Tierney stated that althoigh she has c:+ncerns about aspects of the
proposed 1993 budget, she will support i;. She stated the City has bills that nerd to be
paid and it is irresponsible iiot to mty them. She anticipated that the City w3l face
increased costs with respect to salines and legal services
Motion carried on a roll call vote faur eyes, Helliwell tray.
MOTION was made by Councilmember Edson, seconded by Mayor Bergman. to adopt
RESOLUTION 92-802 PROPERTY TAX LEVIES FOR TAXES PAW -ULE IN
1993,
Motion chrried on a roll call %ve, twir ayes; Helliwell nay
Councilmember Vasiliou stated the ptoposed five-year Capital Improvement Plan (C.I.P.)
has been reviewed by the Planning : o.nmi,;3ion and Park & Recreation Advisory
Commission. She suggested that the Council not add things to the C I.P. unless the funds
are identified for future mainterant.e and replacement. She stated that for each item, staff
should identify where known additional revenues will pay for it or where an existing item
will be cut to pay for it She said the good news is That the City did not heve to conduct a
referendum for any of the new buildings due to the prudent financial positinn of the City,
therefore, there is no aaditiunal bnnd indebtedness for those buildings
Couticilmember Vasiliou stated that the Park & Recreation Advisory Commission iF
preparing a surveN to ask residents wl,at they want for park aad recreational facilities andwhattheyarewillingtopayforShesaidthatPRACneedstoeducatethattheCitydoesnothavemoneytokeepaddingfacilitiesandprogramsPlymouth's population is aging
and the school portion of the tax dollar will continue .o increase. She doesn't want to
consider any item program without having a source of e. isting revenue to pay for it.
Councilmember Edson stated the original Fii,ancial .'ask Force suggested that the City
have a projection of operating costs before a cap -,..I expenditure is made Street
construction is different becau-e thi- snurce of funding it special assessments
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Budget Hearin&
December 10, 1992
Page 464
The meeting was adjourned at 9.35 p.m.
i Clerk
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