HomeMy WebLinkAboutCity Council Minutes 08-29-2001 SpecialAdopted Minutes
Special Council Meeting
August 29, 2001
A Special Meeting of the Plymouth City Council was called to order by Mayor Tierney at
7:00 p.m. in the Public Safety Training Room, 3400 Plymouth Boulevard, on August 29,
2001.
COUNCIL PRESENT: Mayor Tierney, Councilmembers Harstad, Slavik, Hewitt, Stein,
Black, and Johnson (arrived at 7:40 p.m)
ABSENT: None.
STAFF PRESENT: City Manager Johnson, Assistant City Manager Ahrens, Park and
Recreation Director Blank, Community Development Director Hurlburt, Public Works
Director Faulkner, Finance Director Hahn, Finance Office Supervisor Leitner, Fire Chief
Kline, Acting Police Chief Twaddle, and City Clerk Paulson.
City Manager Johnson stated that the Council would be discussing the proposed 2002
budget this evening, requesting further information if necessary from staff, and deciding
whether to conduct a Truth in Taxation Hearing. He stated that the maximum tax levy
must be adopted by September 15. He noted that another Budget Study Session would be
conducted on September 4.
Status Report on 2001 Budget — Building Permit Forecast
City Manager Johnson reported the Finance and Community Development departments
analyzed the proposed building permit revenue for the remainder of this year, and it
appears that this revenue would be approximately $217,781 less than what has been
budgeted. He noted that the total shortfall in the 2001 general fund budget could be
approximately $300,000 due to the decrease in the building permit revenue and a
computer error in developing the 2001 budget for salaries.
Councihnember Harstad asked if the commercial building permit revenue is more at risk
than the residential building permit revenue. Community Development Director Hurlburt
replied staff s projections are fairly conservative. She stated that due to the lack of land
for new commercial construction, there would be smaller projects and redevelopment of
the current sites.
Councilmember Harstad asked if the building permit fees have changed from 2001 to
2002. Community Development Director Hurlburt replied no. The fees are based on the
valuation of the improvement.
Adopted City Council Minutes
Special Meeting of August 29, 2001
Page 2 of 6
City Manager Johnson discussed the impact of the tax reform legislation. Some major
items included the elimination of Homestead and Agricultural Credit Aid (HACA), class
rate compression, and levy limits. He stated there was an error in the tax law for omitting
six months of revenue in the transit fund. The Metropolitan Council would be able to
provide a one-time grant in the amount of one million dollars to the City, and the City
would expend all transit funds to cover this shortfall.
Presentation of Budget Summa
City Manager Johnson reported the general fund spending is proposed to increase by
7.1% over the budgeted amount for 2001. This compares with a 6.7% increase in the
general fund spending in 2001. Staff is confident that the proposed spending increase is
reasonable based on growth of 4.3% and inflation of 3.4%.
He stated the overall City property tax levy is proposed to increase by 27.5%. The
projected increase for an average home valued at $243,300 is 28.5% or an increase of
139.89. He stated the projected increase for a business property valued at $1,058,000 is
7.3% or $232.08. He noted that fiscal disparity numbers due from the County by the end
of August could change these projections significantly.
He indicated that the large disparity in the percentage tax increase between residential
and business property is not due to any action of the City. It would occur because of two
factors: residential property appreciated at a faster rate than commercial/industrial
property, and the Legislature made major revisions in tax laws in 2001.
Councilmember Harstad suggested that the City levy up to the City's maximum levy
amount due to the loss of the HACA funds. He feels this type of action would be
justified due to the need to repair many roads in the City. He stated if the City
experiences another bad winter, the conditions of the roads could worsen due to potholes
and the need to repair those roads.
City Manager Johnson stated with the proposed budget for 2002, the City would be
230,000 below the maximum levy amount. He advised the Council that there is an issue
of trust with the taxpayers especially since the overall property tax levy is proposed to
increase by 27.5%.
Councilmembers Black and Slavik disagreed with Councilmember Harstad in levying the
maximum amount.
Adopted City Council Minutes
Special Meeting of August 29, 2001
Page 3 of 6
City Manager Johnson discussed other significant factors such as energy costs, the salary
vacancy factor, declining building permit revenues, computer program error, and PERA
contributions that are also affecting the 2002 budget.
He discussed one full-time position that is proposed in the budget, which would be a
maintenance worker at the Plymouth Creek Center. He explained that due to the
increased use of the facility, this position is warranted. In addition, the increased
revenues at the facility due to increased business volume would assist in paying for this
position.
He mentioned the new positions resulting from consolidations or increased hours that are
included in the budget.
A considerable amount of discussion was held on whether the proposed Public Works
Manager position would be justified. City Manager Johnson and Public Works Director
Faulkner spoke of the necessity for this position. It was noted that the transit consultant
would continue to be utilized as well, and this position would work closely with the
consultant as well as with the Public Works Director.
Councihnembers Harstad and Stein suggested that in five to 10 years, the City may have
to consider an economic development director position if there would be an increase in
vacancies for the commercial properties.
City Manager Johnson stated the Council approved a budget allocation of $25,000 in the
2001 budget for Web page redesign. However, due to the anticipated budget shortfall
this year, this project would not be undertaken in 2001 and is being re -budgeted in 2002.
This funding would be sufficient to transfer to the Web for Cities site, hosted by the
League of Minnesota Cities. Councilmember Johnson stressed that this should be a
priority for this year, and perhaps the funding would be available before the end of the
year.
The Council discussed the SCBA equipment for the Fire Department, the salt brine
storage tank, a dozer cab, and rental and/or possibility to rent to own a truck -mounted
spray patcher. These items are all included in the 2002 budget.
Councilmember Harstad asked if a sewer rate increase would be necessary due to the
Metropolitan Council's increase in treatment costs. Finance Director Hahn replied the
fund would be balanced even with the Metropolitan Council's increase, and this would be
due to surpluses in this fund during the past three years when the Metropolitan Council
decreased their rates.
Adopted City Council Minutes
Special Meeting of August 29, 2001
Page 4 of 6
Councilmember Harstad asked if the water rates should be increased. Finance Director
Hahn replied there is adequate revenue in the water fund, and due to the new tier rate
system, there is an increase of revenue in 2001 than what was projected.
Councitmember Slavik suggested that staff include the tier calculations on the utility bills
to assist residents in understanding the rates.
Review Individual Budgets
The Council discussed every department's budget in detail. Listed below are requested
amendments or requests for further information from this discussion:
1. Police Budget: Suggested by Councilmember Harstad to include funds for CrimNet.
2. Plymouth Civic League: Suggested by Councilmember Slavik to budget $25,000 for
the Plymouth Civic League for Music in Plymouth, and if they were unable to receive
sufficient donations, the City would allocate another $5,000 (Civic League had requested
30,000).
3. Human Service Agency Funding: Staff is to provide to the Council for the September
4th Budget Study Session, annual reports/requests from all human service agencies who
are requesting funding in order that the Council could determine if the agencies are
providing a direct benefit to City residents.
Councilmember Black stated after reviewing the proposed budget, she has compiled a list
of items that she feels could be reduced and/or eliminated for one year. She stated her
goal is to try to reduce the 27.5% increase in the property tax levy. She also does not
support levying up to the maximum amount due to the loss of HACA funds. Listed
below are the items that she requested be reviewed by staff to determine the impact on
the budget, and she requested a report be provided to the Council for the September 4th
Study Session:
1. Roadway landscaping. Any landscaping projects that wouldn't be associated with
new road construction projects, would be eliminated.
2. Cut or reduce City Council salaries.
3. Eliminate some of the City festivals on a one time basis.
4. Eliminate or reduce funding to Civic organizations.
5. No new staff positions unless paid for by revenues from the facilities where the
positions would be stationed.
6. Reduce funding for Council travel and conferences.
7. Reduce funding for board and commission and volunteer recognitions.
Adopted City Council Minutes
Special Meeting of August 29, 2001
Page 5 of 6
8. Eliminate staff training (with the exception of police and fire), conferences,
subscriptions, cell phones, etc.
9. Eliminate funding for updating of the City's Web page.
Councilmember Johnson stated that she could also compile a list of possible cuts or
reductions depending on her views whether items are a need or want. However, it was
understood that the City could levy any funds that were eliminated by the State (HACA
funds). She would be willing to review budget items that could be reduced. However, if
the City wouldn't levy back the funds, there would be levy limits in place next year. She
stated she would like to add eliminating seal coating on streets to Councilmember
Black's list.
Councilmember Harstad and Hewitt stated once items are cut, it is difficult to include
them in future budgets as well as within next year's levy limits. They also spoke of the
potential for decreased employee morale for those cuts that would affect employees.
Councilmember Slavik stated she would consider reducing or cutting any items contained
in the budget due to the current economic climate. This would include funding for the
human service agencies.
Discussion of Truth in Taxation Hearings
The Council decided to not conduct the Truth in Taxation Hearings. The Council
requested that a press release be prepared in order to notify residents when the Council
would be considering the budget in December.
Verify Questions for Follow -Up
Councilmember Johnson asked why staff isn't proposing to levy up to the maximum
amount. City Manager Johnson reiterated the public's trust is very important when one is
increasing the property tax levy already; and in his opinion, he would suggest that the
Council maintain the current level of services.
Finance Director Hahn suggested that if the Council desires to cut or reduce certain
expenditures, that they be more permanent in nature as it would be very difficult to
include those items in the budget next year due to the levy limits and the phase-out of
limited market value.
Adopted City Council Minutes
Special Meeting of August 29, 2001
Page 6 of 6
Councilmember Harstad requested a report for the September 4 I Study Session on the
roads that are in need of repair in the City, including the gravel roads.
Mayor Tierney requested that staff clarify with the City Attorney the super majority issue
as it relates to approving a budget where the property tax levy is being increased.
Adjournment
Motion was made
adjourn the meetil
Harstad and seconded by Councilmember Black, to
at 10:45 p.m. With all members voting inn favor, the motion carried.
Sfindra R. Paulson, City Clerk