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HomeMy WebLinkAboutCity Council Minutes 08-28-1996 SpecialMinutes Special Council Meeting August 28, 1996 A special meeting of the Plymouth City Council was called to order by Mayor Tierney at 7:00 p.m. in the Public Safety gaining Room, 3400 Plymouth Blvd., on August 28, 1996. COUNCIL PRESENT: Mayor Tierney; Councilmembers Black, Wold, and Preus. Councilmember Lymangood arrived at 7:05 p.m. Councilmember Anderson arrived at 7:15 p.m. Councilmember Granath arrived at 7:20 p.m. ABSENT: None. STAFF PRESENT; City Manager Johnson, Assistant City Manager Lueckert, Community Development Director Hurlburt, Public Works Director Moore, Finance Director Hahn, Public Safety Director Gerdes, Park and Recreation Director Blank, Finance Office Supervisor Leitner, Financial Analyst Kohn, Information Technology Manager Birnbaum, and City Clerk Ahrens. Mayor Tierney announced that the purpose of the meeting is to discuss the 1997 proposed budget and tax levy. Manager Johnson explained that the Council must adopt a proposed budget and a preliminary tax levy before September 15. The tax levy can subsequently be reduced, but not increased. He presented information requested by the City Council at the previous budget study session. Manager Johnson provided information on tax increment district termination dates, estimated market values, and tax capacity values. In 1997, approximately $3 million in tax capacity value will come off of tax increment and onto the tax rolls. This equates to an increase of $284,900 in City taxes payable. About the same amount of tax increment will terminate in 1998. He said that this amount will not be found in a revenue line item in the budget, but has already been included in the projections for the proposed 1997 budget. Councilmember Lymangood arrived at 7:05 p.m. In response to a question by Councilmember Preus, Manager Johnson stated that Hennepin County has advised the City today that the 1997 revenue estimate will be 94,000 to $95,000 less than was projected two weeks ago. Finance Director Hahn stated that the City still has not been provided with a final revenue estimate. The current estimate could be off by as much as $25,000. He showed the latest handwritten information received from the County. Special Council Meeting August 28, 1996 Page 2 Motion was made by Councilmember Lymangood, seconded by Councilmember Wold, to direct staff to provide all Council members with a copy of the document provided by Hennepin County relating to the revenue estimate, and to place consideration of the timing and format of the document on the next Council agenda. Councilmember Preus expressed concern with the reliability of the information, given that the estimates were provided by the County in a handwritten, draft form. Motion carried, five ayes. Manager Johnson explained that since the time that the legislature required the preliminary tax levy to be established by September 15, the City has had difficulty getting accurate, timely information on fiscal disparities and tax capacity values. Councilmember Preus asked the basis for staffs previous tax increment estimates. Finance Director Hahn said that staff used an estimate of the value coming from each tax increment district and then estimated the amount of fiscal disparities from each district. Councilmember Anderson arrived at 7:15 p.m. Manager Johnson presented information on several issues requested by the City Council at the previous budget study session. He reported on timelines for short-term and long-term revenue forecasts. The first phase will be completed by year end. He reported that the estimated cost of a special election would be $13,000. He stated that to attain the same City taxes on an average -valued home ($175,700), for 1997 as in 1993 would require a reduction in the tax rate from 14.27 to 14.235, or $.97 less. The total City-wide impact on the budget amounts to a cut of $22,114 from the proposed budget. Manager Johnson presented information on a proposal to place limited market value adjustments on commercial and industrial properties. This concept could be placed on the Council agenda to consider endorsement to the legislature. Councilmember Lymangood asked if this idea has been presented to the Twin West Chamber of Commerce. Manager Johnson said he had discussed the concept with the Twin West staff. Councilmember Lymangood requested that the concept be forwarded to Springsted, Inc., and Twin West Chamber of Commerce, with a report back to the Council. Councilmember Granath arrived at 7:20 p.m. Special Council Meeting August 28, 1996 Page 3 Manager Johnson said that the Council had inquired about the net revenue effect of raising the anticipated ice rental fee from $120 to $125 at the new ice arena. Bill Abel, the Rink Manager, believes that for each $5 increase in ice rental, the City will generate approximately $25,000 on an annual basis. Staff is in the process of refining the rink budget and developing use policies. Councilmember Anderson asked if a more formal budget for the ice rink operations has been drafted. He believes that a possible increase in fees should be evaluated with the impact on demand. Director Blank said that further analysis is being done, including an estimate of energy calculations on the new building. He believes that at an hourly fee of $120 to $125, the rink will run at a profit. However, he stated that the City will lose $2,400 per day for every day after January 1 that the rink has not opened. Councilmember Anderson asked if a deficit is projected for 1997. Park Director Blank responded that January and February are prime skating months and revenue will be lost. However, there will be savings in energy and the delayed hiring of staff. He believes that it is possible to break even in 1997, with profits in 1998. Manager Johnson presented the staff report on the Council's inquiry about the possibility of expanding contributions to the City. Park Director Blank has suggested a gift catalog concept whereby the City would publish a catalog each year with items that residents and businesses could contribute. Mayor Tierney asked if the Council needs to designate money for this project. Park Director Blank said that it depends on how elaborate a project the Council desires. The project could be anything from listing needed items in the City newsletter to publishing a gift catalog. The program could entail City employees soliciting businesses for donations or just having a list available when a business approaches the City. Councilmember Lymangood did not favor calling it a gift catalog or having employees solicit donations. He suggested something like a "Partnership With Plymouth" program. The City currently has unsolicited businesses who donate to the City, and a prepared list could direct their donations. If a business or citizen expresses interest, the Council would be prepared to respond. Councilmember Wold agreed, and stated that the list of items with cost estimates could be distributed to administrative staff and City Council so that when they are approached by businesses, the information can be presented. Special Council Meeting August 28, 1996 Page 4 Manager Johnson summarized the project as making opportunities available to citizens and businesses to be partners with Plymouth. The City Council discussed information provided on the PC computer needs and replacement strategy. He said that the proposed per unit replacement cost is $2,300, rather than $3,500 as noted at the previous study session. Information Technology Manager Birnbaum said that the intent of the replacement strategy is to efficiently manage the network. The plan takes some risk on technology, and by the end of 1997 there will still be 25 to 30 low -speed computers on the network. Councilmember Wold said that the replacement strategy seems to be going in the right direction. He is comfortable that the plan calls for the least expensive and most reliable workstations, and that any further reductions would increase risk to the overall system. He suggested that a Subcommittee could look at the issues involved and report to the Council. Councilmember Granath said he is confident with the replacement strategy recommendation. He asked if a three-year replacement is done irrespective of how the equipment is functioning. Information Technology Manager Birnbaum said that because each computer has a life of about three -years, the plan budgets for one-third of the replacement cost each year. There is a risk in retaining equipment for longer than three years. There is a vast difference between the network office environment that runs aggressive software and home office use. Councilmember Anderson asked about the proposed processing speed and whether the equipment is upgradable. Manager Birnbaum said that the City is currently purchasing equipment with 120 and 133 MHz processing speeds. Staff will purchase the best equipment available for $2,300 per unit. He said that there is a poor track record with upgradable equipment. There are three classes of equipment: industrial grade, consumer grade, and mail order grade. There are price savings with the consumer and mail order grades; however, a great deal of risk is added to the network. The commercial grade of equipment has a high degree of reliability and extended warranty. Councilmember Anderson stated he would favor taking more risk because the City is on an aggressive replacement cycle. Motion was made by Councilmember Preus, seconded by Councilmember Black, to appoint a Subcommittee consisting of Councilmembers Wold (Chairperson), Granath, and Anderson to consider the issues relating to the City's computer replacement strategy and Special Council Meeting August 28, 1996 Page 5 provide a recommendation by October 15 on the additional risks and cost savings to modify the replacement plan. Motion carried, seven ayes. Manager Johnson presented the staff report on the issue of a contract versus a new in- house technical services position. Councilmember Anderson requested that this issue be added to the Computer Subcommittee agenda. Manager Johnson presented information on the costs and benefits of a new in-house permanent appraiser versus contracting out for an appraiser. Councilmember Lymangood asked if the City currently tracks which homes have had an in-home appraisal. Finance Director Hahn said this information is documented in the computer, but there is no way to extract the information. That is one of the requirements in the new computer system. Councilmember Lymangood suggested that the staff could write a program in order to extract information from the existing system to list the quartile homes that were appraised each year. The Council would like this information before an appraiser is hired. Finance Director Hahn said that he will have staff write a program to extract that information. The Council will be provided with the list of homes that were appraised under the quartile. Manager Johnson stated that currently just over 50 percent of homes in the quartile receive in-home appraisals. Assessor Bye has indicated that the City could reach 77 percent of the homes in the quartile every four years with the additional position. Councilmember Lymangood questioned how often each home should be visited and whether 77 percent of home visits is necessary. Manager Johnson responded that state law requires that each property must be "reviewed" every four years. Mayor Tierney questioned how the 77 percent goal was developed. She stated that the City's history at the Board of Review indicates that an outstanding job is currently being done and perhaps the existing appraisals are sufficient. Finance Director Hahn said that values may have slipped as the City has grown. Special Council Meeting August 28, 1996 Page 6 Councilmember Wold said that if 50 percent of the homes in the quartile are receiving in- home appraisals, then every home would be visited every eight years. Councilmember Lymangood asked if the computer software allows staff to input sales price. Finance Director Hahn stated yes. The sales price of homes are tracked, and the information is used to review homes by neighborhood. Councilmember Anderson said the goal of the Council was not to hire an appraiser to do mass appraisal, but to hire appraisers for short periods of time - such as during the Board of Review period. Motion was made by Councilmember Lymangood, seconded by Councilmember Wold, to direct staff to implement a system for tracking which homes are visited in each quartile and report to the Council, prior to considering the hiring of a part-time appraiser. Motion carried, seven ayes. Manager Johnson provided information on steel versus aluminum dump bodies for trucks, as well as weight violations. He said that no fines of City vehicles have been levied by the Public Safety department. Public Works staff are working with Public Safety on the allowable limits, and the City intends to run trucks within the weight restrictions. Manager Johnson presented information on the implementation program for the Storm Water Utility. He said that based on preliminary analysis, a rate of $1.48 per month for a single family residential property is indicated. As part of the process to establish the storm water utility, the area and usage of all properties need to be classified in order that the appropriate rate can be applied. Some of this information is already in the City's computer system, but much work needs to be done in order that it can be used for the determination of a rate for each land parcel in the City. The estimated cost for implementation is $87,000. Councilmember Lymangood asked what the $87,000 would cover. Public Works Director Moore stated this amount would cover the study of all parcel sizes and uses, as well as the amount of run-off from each parcel. Councilmember Lymangood stated that the City Council has not yet decided whether or how to proceed with the Storm Water Utility. He believes that the preliminary Water Resources Management Plan will provide needed information. Manager Johnson provided written reports on items that had previously been requested relating to the utility franchise fee study, Earth Day, and the lease status of the large photocopier. Special Council Meeting August 28, 1996 Page 7 Councilmember Lymangood stated that some nearby businesses have high-volume copy needs and perhaps a back-up plan could be identified. Mayor Tierney agreed that it would be less expensive to rely on a business such as Kinko's or on a cooperative back-up arrangement with another company than to purchase another large copier. Councilmember Anderson suggested that staff conduct a meeting with the Kodak copier representative to discuss renegotiating or breaking the current lease. Finance Director Hahn stated that he will meet with the Kodak representative by October 1 and report back to the City Council on the results of the meeting. Manager Johnson stated that representatives of the Plymouth Rockers recently met with him to request $4,000 to $5,000 for their director. He indicated to them that the source of funds would likely be the Recreation Fund which already is expected to increase for 1997 due to existing services. Therefore, staff will not recommend funding for 1997 for this new service or program. Manager Johnson stated that the intention of the proposed capital improvement levy is to supplement dwindling traditional revenues for future capital improvements. Available park dedication funds, project administration funds, and Community Improvement Funds are all substantially lower than several years ago, and will not replenish themselves. A new, stable source of capital funding is needed if the City is to continue with the orderly development of various projects. He explained that the proposed capital levy, which would begin producing revenue next June, will be deposited in the Community Improvement Fund created by the City Charter if the legislature has taken no significant action to reduce state aid to the City by that time. If any reduction in state aid exceeding 100,000 is approved or is pending in June 1997, the staff will bring the matter of the disposition of the capital levy funds to the City Council for a final decision, along with a staff recommendation on whether or not the levy funds are needed to maintain vital community services. Staff intends to update the entire five-year capital improvements program, including both available and proposed expenditures, before the end of 1996. Manager Johnson reviewed a possible list of currently unfunded community projects, along with the estimated costs: Community Activity Center (including senior center) 1,600,000 Armstrong High School Gymnasium addition 1,200,000 Field House at new Wayzata High School 2,200,000 Purchase Tenth Playfield Site 1,000,000 East Medicine Lake Trail Project Complete Ninth Playfield Construction 650,000 Preservation of Public Golf in Plymouth 5,000,000+ Build and Equip a Fourth Fire Station 2,000,000 Develop the Ess property 800,000 Special Council Meeting August 28, 1996 Page 8 Councilmember Lymangood noted that the Armstrong High School Gymnasium addition and field house at the Wayzata High School may be possible candidates for funding with existing tax increment funds. Manager Johnson also presented information on the projected balances from 1996 to 2000 of the park dedication fund. He presented a fist of possible future projects and undesignated fund balances, as well as capital projects completed or underway. Available sources of funds, and the fund balances were reviewed for the Community Improvement Fund, Project Administration Fund, Permanent Improvement Fund, and Land Sale. Mayor Tierney stated that another need previously discussed was 300 units of senior housing. Towne Square provides 99 units, but the City should not assume this is sufficient without further study. Mayor Tierney stated that when the Charter Commission recommended the Community Improvement Fund, it was modeled after a similar fund in Minnetonka. At the time the Plymouth Charter Commission reviewed Minnetonka's practices, only the interest was expended from their $20 million fund for capital projects. Manager Johnson showed an alternative budget proposal that reduces the tax levy to the level of the 1993 taxes on the average home. It also reduces the Community Improvement Fund levy from $400,000 to $271,653: Add special election +$ 13,000 Reduce Council salary to 1996 level - 1,392 Reduce Community Improvement Fund - 128,347 Total levy reduction -$ 116,739 He stated that this scenario would provide some capital levy funding and provides a balance of what taxpayers should be asked to pay. Finance Director Hahn said that under this proposal, the proposed tax levy would be 14.555. This includes the open space levy approved in 1995. Councilmember Anderson asked if there is fear of a legislative property tax levy freeze. Manager Johnson responded that in 1996 the Senate approved a freeze, but the House did not. Motion was made by Councilmember Lymangood, seconded by Councilmember Preus, to place on the next City Council agenda consideration to set the amount of total levy dollars at $10,423,786, which would be an estimated levy rate of 14.555. Special Council Meeting August 28, 1996 Page 9 Councilmember Wold stated that this is a good balance. He reminded the Council that this will set the preliminary levy and perhaps it can be reduced later. Councilmember Lymangood suggested that an additional budget study session be held prior to December to review all of the information pertaining to the proposed 1997 budget. Motion carried, seven ayes. Manager Johnson stated that it is difficult to find an available date in December on which to conduct the Truth in Taxation hearing. He suggested that the hearing be held on December 4, prior to the regular Council meeting. Motion was made by Councilmember Anderson, seconded by Mayor Tierney, to establish the Truth in Taxation hearing for December 4 at 6:00 p.m., with the Council meeting to follow. Councilmember Black spoke against the motion. She suggested that the hearing begin at 7:00 p.m. Councilmember Anderson accepted this as a friendly amendment to his motion. Motion was made by Councilmember Preus, seconded by Councilmember Lymangood, to table the issue of setting the Truth in Taxation hearing until September 4. Motion carried, seven ayes. Councilmembers Preus and Anderson stated that they favored further debate of some of the budget details prior to December. Councilmember Anderson asked about the budget surplus projected for 1996. Manager Johnson responded that $342,000 needs to be retained from the surplus in order to meet the current policy of having 40 percent of the General Fund available in cash. Motion was made by Councilmember Preus, seconded by Councilmember Anderson, to adjourn the meeting at 8:50 p.m. Motion carried, seven ayes. r . akte",L,C/ City berk