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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 I 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 0 Budget Hearin& December 10, 1992 Page 464 The meeting was adjourned at 9.35 p.m. i Clerk 0 0