HomeMy WebLinkAboutCity Council Minutes 08-26-2002 SpecialAdopted Minutes
Special Council Meeting
August 26, 2002
A Special Meeting of the Plymouth City Council was called to order by Mayor Tierney at
7:00 p.m. in Meeting Room No. 1, Plymouth Creek Center, 14800 34th Avenue North
Plymouth Boulevard, on August 26, 2002.
COUNCIL PRESENT: Mayor Tierney, Councilmembers Hewitt, Johnson (arrived at
7:20 p.m.), Harstad, Slavik, Stein and Black.
ABSENT: None.
STAFF PRESENT: City Manager Johnson, Assistant City Manager Ahrens, Community
Development Director Hurlburt, Park and Recreation Director Blank, Public Works
Director Faulkner, Fire Chief Klein, Police Chief Gerdes, Public Services Manager,
Qvale, Housing Supervisor Barnes, Finance Director Hahn, Finance Office Supervisor
Leitner, Financial Analyst Kohn, and City Clerk Paulson.
Discussion of 2003 Proposed Budget
City Manager Johnson stated by September 15, the Council is required to approve the - - -- -- - -
maximum tax levy. He stressed that the Council can only lower the tax levy after that
date. In December, the truth and taxation hearing would be conducted and the final
budget would be adopted.
He discussed the budget summary which indicated that there would be a 2.5% increase in
the general fund budget. He noted that the 2002 general increase was 6.50%. He stated
the levy limit increase is based on the implicit price deflator (State's measure of
inflation), household growth adjusted, and Consumer Index growth adjusted at 50%. He
stated the tax levy increase includes $333,000 of unused 2002 limit (4.09%). He
indicated that for an average home valued at $284,000, there would be approximately
51.56 (7.69%) increase from 2002. Regarding an average business, there would be a
decrease of $65.17 (-2.05%). He noted potential State aid cuts that could include local
government aid ($74,579) and market value homestead credit ($828,477).
He discussed two options that staff has identified if there would be legislative cuts in
2003. The first option includes utilizing working capital/contingency ($250,000), capital
improvement levy ($309,000), estimated surplus ($282,000), and delaying expenditures
and hiring ($100,000). The second option would be bonding for street reconstruction
1,283,400).
Adopted Council Minutes
Special Meeting of August 26, 2002
Page 2 of 8
He commented that the growth factor lags behind actual growth of the City by several
years. The growth factor calculation of 1.4% for the increase in households is based on
2000 census data and building permit data from January through November of 2000. The
City had a building moratorium on during two-thirds of the measured period to allow the
City to complete the Comprehensive Plan update. The growth calculation for the 2003
budget makes no provision for the services required for the 803 new housing units
constructed in 2001 or the 974 new housing units permitted in the first seven months of
2002.
He indicated that the drainage maintenance and street sweeping budget has been moved
to the water resources fund which is funded by the surface water management fee. He
stated the water resources fund is stronger because not all of the incentives were
implemented, all the schools are paying the fee, and the interest earnings are higher than
expected. The water resources fund would still fund the entire water quality plan,
including the adopted plans for Medicine Lake and Parkers Lake. He noted that the
Council has previously discussed funding the maintenance of all the ponds throughout the
City (approximately 300). This type of obligation could cost approximately $7 million.
over a 15 to 20 year period.
He discussed two projects -that the Council approved last year that would impact the 2003 ---
budget. The first project would be the self-contained breathing apparatus equipment used
by the firefighters which would be scheduled for replacement in 2005 at a cost of
186,000 (setting aside $46,500 per year). The second project involves the setting aside
72,500 each year to convert to the new police software. The anticipated expense for this
replacement would be $290,000.
He spoke of the total tax capacity and fiscal disparity contributions. The City's
contribution to the fiscal disparities pool would increase an additional tax capacity value
of $563,492 for 2003. This is 0.8% of the City's total tax capacity value.
Mayor Tierney stated two major issues for the Council are improvements to snowplowing
and maintenance of all ponds within the City.
Mayor Tierney voiced her frustration in calculating the growth factor for the City when
its based on 2000 data, the potential loss of State aid, and levy limits.
Current State Representative for District 34 B, Jeff Johnson, commented that with large
Legislative bills, they at times contain items that may not be favorable for local units of
government. However, he understands the Council's frustrations.
Adopted Council Minutes
Special Meeting of August 26, 2002
Page 3 of 8
City Manager Johnson suggested that if the State desires to keep levy limits, that they
review the explicit price deflator formula.
Councilmember Johnson echoed that it's very difficult for cities when they are losing
state aid, increasing their populations, but yet need to fund the essential city services.
She stated counties, cities, and school districts are all shifting their tax dollars.
Current State Senator for District 34, Gen Olson, stated the property tax reform was
intended to be a reform; however, many citizens expected it to be a tax relief. The
primary goal was to "untangle" state and local governments, thereby bringing back more
of the responsibility to local governments to fund services. She noted the key element
was for the State to take over the basic funding for education. However, this couldn't be
accomplished without receiving funds elsewhere. She stated local units of governments
have more knowledge as to what their citizens expect. She would support removing the
value based formula and levy limits. She noted that when cities are growing, the costs to
provide services don't increase at the same rate as the revenue if they remain as per capita
based.
Councilmember Johnson mentioned the approximately $200,000 per year that the City
pays insales tax.-
Senator
ax.
Senator Olson stated given the current condition of the economy, it would be foolish to
place a bigger burden on taxpayers, as that would further aggravate the economic
recovery. The first priority would be to establish priorities and "hold the line" on
spending. She encouraged the Council to do the same and plan for the future.
Councilmember Black thanked Gen Olson for her efforts. She stated she feels
constrained with road construction in the eastern part of the City. The City is unable to
accumulate funds for road construction due to the levy limits. She stressed the need to
maintain the infrastructure in the older parts of the City.
Senator Olson pledged to continue serving on the Tax Committee if she is re-elected, and
she appreciates the Council's approach in working with area legislators:
Councilmember Hewitt commented that the City didn't levy to the maximum last year.
Councilmember Harstad in addition to enhancing snow plowing, cleaning of ponds, and
repairing streets, he suggested the Council consider a bond issue to assist with affordable
housing in the City. He spoke of the need to rehabilitate and maintain the housing stock.
He stated this is an issue that should be discussed at the Council level. He also noted that
the HRA has proposed to not levy to their maximum level. He stated proceeds from the
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Special Meeting of August 26, 2002
Page 4 of 8
bond issue and/or the increase in the HRA tax levy could assist with down payments for
homebuyers, Section 8 vouches, rehabilitating homes, and possible City acquisition of
properties that need rehabilitation.
Mayor Tierney commented she has been very hesitant in bonding at the local level.
Community Development Director Hurlburt stated unless the City would be constructing
and operating the housing, any other bonding would require a referendum. This has not
been discussed with the HRA. She acknowledged that the HRA could increase their
proposed tax levy. She also stated that the Community Development Block Grant
CBDG) program funds the current rehabilitation program, and there are a very limited
number of projects per year.
Councilmember Harstad requested that these options for affordable housing be discussed
by the HRA at a future meeting.
Councilmember Johnson noted that if the HRA were to increase their tax levy, the funds
would still be derived from property tax dollars. She stated there would always be an
unmet need for affordable housing and how would the City sustain the need?
Senator Olson commented that she is currently serving on the Solid Waste Advisory Task
Force. She stated even though Minnesota is the highest recycling rate, it is not keeping
pace. She also commented that the landfills are approaching capacity.
Councilmember Johnson asked if there would be any funding for e -government for 2003.
City Manager Johnson replied funding would be in place to finish the website but not to
add any other features.
Councilmember Johnson voiced her concern about pond cleaning as well as funding
drainage maintenance and street sweeping from the water resources fund. She stated
there is an expectation by the residents that the surface water management fee fund the
maintenance of the ponds.
City Manager Johnson stated this fund indicates a 1.5% increase, and with revenues, it
supports itself. Financial Analyst Kohn added that Medicine Lake, Parkers Lake, and a
third lake to be determined are included in the plan. There are some other small
improvements, but they don't total $1.5 million, which would be in the fund.
Councilmember Stein cautioned that this be a policy for future years. He stated either the
surface water management fee be reduced or the City assumes the cost of the
maintenance for all of the ponds.
Adopted Council Minutes
1 Special Meeting of August 26, 2002
Page 5 of 8
Councilmember Harstad suggested that only additional street sweeping costs be funded
by the water resources fund.
Mayor Tierney asked if these programs aren't transferred over to the water resources
fund, where would the $500,000 come from? She stated the Council needs to be
consistent and not separate previous and new street sweeping costs..
Councilmember Harstad voiced his support for bonding for street reconstruction. He
spoke of the immediate need for an accelerated program for street reconstruction. He
stated there should be a more aggressive policy for maintaining the roads.
Councilmember Johnson asked if the Council could delay sealcoating for one year which
would "free up" approximately $278,000. Public Works Director Faulkner replied that
the City is very behind with the street reconstruction program; therefore, he wouldn't
recommend that action.
Councilmembers Black and Slavik indicated their support for funding sealcoating.
l Dwight stated we shouldn't spend less on the streets than what we are currently doing.
He recommended taking those funds and putting towards -street reconstruction. --
Mayor Tierney requested that staff review the following items and provide a report for
the budget Study Session on September 3:
1. HRA's discussion on bonding for affordable housing.
2. Pond maintenance.
3. Bonding for street reconstruction.
Mayor Tierney asked what dollar amount could be derived by bonding for street
reconstruction. City Manager Johnson replied up to $1.3 million.
Councilmember Black stated she doesn't support placing more of a burden on taxpayers
for affordable housing. This would include any bond issue as well as the HRA increasing
their levy limit. She would encourage more of a business partnership to assist with
affordable housing.
Councilmember Stein stated affordable housing is more of a regional issue, not just the
City.
Adopted Council Minutes
Special Meeting of August 26, 2002
Page 6 of 8
Councilmember Harstad stated the focus would be more on rehabilitation loans. He
stated approximately 175 households could receive assistance with a $3.5 million bond
issue. He stressed that the Council needs to address the need and advertise the program.
Councilmember Slavik stated she wouldn't support increasing taxes for this purpose
when there are requests in the police and fire departments' budgets that won't be funded.
The Council proceeded to discuss the proposed budgets for every department.
Regarding the fire department's budget, Councilmember Johnson asked if there could be
any adjustments made to the proposed budget to address staffing levels. City Manager
Johnson replied there would be a fire department report in the near future, and that item
could be reviewed based on the report, if necessary.
Councilmembers Black, Slavik, and Hewitt also expressed their concerns regarding
staffing levels.
Fire Chief Kline commented that there is a proposed salary increase of 3.5%, which is
i identical to the remainder of City staff.
Councilemember Slavik requested the following accounts be reviewed again:
1. 101-1530-6205 (safety equipment and clothing - $5,000 requested in additional in
funding)
2. 101-1530-6207 (firefighting tools and equipment - $16,000 requested in additional
funding)
3. 101-1530-8004 (machinery and equipment - $17,820 requested in additional funding)
4. 101-1532-6205 (safety equipment and clothing - $6,200 requested in additional
funding)
Fire Chief Kline stated staffing has always been a challenge, but staff has made strives.
He noted that the staffing is at the same level that it was 10 years ago. He stated the
report that he would be providing to the City Manager would highlight options for
continued service, which could include different scheduling options, and how that would
fit with the proposed fourth fire station.
Councilmember Black stated the importance of having protective gear for the firemen to
perform their duties as well as ample staff.
City Manager Johnson stated there is ample gear, but the department desires to have
matched gear.
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Special Meeting of August 26, 2002
Page 7 of 8
Fire Chief Kline added the turnout gear should be replaced every three to four years due
to the turnaround with staff. He stated they also proposed to purchase a new jaws of life.
The current Jaws of Life is 15 years old, but it is very functional.
Councilmember Johnson stated funding the fire department is a fundamental thing, and
she asked if there is a way to juggle resources to fund some of these items.
Mayor Tierney stated she prefers to "hold off' until next year. She also noted the need
for additional funds for snowplowing.
Councilmember Black stated she is concerned that firefighters have appropriate gear to
fight fires. However, the purchase of a new Jaws of Life could be delayed.
Councilmember Harstad stated there could be funds available in the contingency fund for
that purpose.
Councilmember Hewitt suggested reallocating the $4,500 budget for Council conferences
and seminars towards the fire department's expenditures.
The Council took a five-minute break. -
Councilmember Slavik stated not to just single out the fire department, but there could be
needs for the police department that aren't proposed to be funded.
Police Chief Gerdes stated that all departments were asked to prepare their budgets taking
into consideration how difficult the budget could be. He acknowledged that his
department could utilize additional equipment and if there weren't levy limits, he
would've proposed the hiring of additional police officers. However, staff was asked to
prepare budgets for just continuing service.
City Manager Johnson cautioned the Council for the need to keep a delicate balance with
all aspects of the budget.
Councilmember Black reiterated that the water resources fund was not intended to fund
drainage maintenance and street sweeping. Therefore, she suggested that the transfer of
these programs be a short-term solution.
Mayor Tierney asked if the Council desires to increase the surface water management
fee.
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Special Meeting of August 26, 2002
Page 8 of 8
Councilmember Black stated at this point, the cleaning of ponds isn't included in the
budget, but it should be discussed at a future Study Session.
Public Services Manager Qvale stated regarding the possibility that there would be a
decrease in motor vehicle excise tax for transit services, the City would be able to
continue the service but with no enhancements.
Councilmember Johnson requested a report on figure skating as the projected revenue has
decreased.
City Manager Johnson briefly discussed the risk management fund and indicated that this
fund needs to be closely monitored for the next few years.
Finance Officer Supervisor Leitner explained the health consortium that the City is a
member of for employee's health insurance.
The Council briefly discussed the human services budget, and it was decided to wait until
November to update it.
l
Adiournment
Mayor Tierney declared the meeting adjourned;
dra
5 p.m.
i
Paulson, City Clerk