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HomeMy WebLinkAboutCity Council Minutes 08-24-1995 SpecialMINUTES SPECIAL COUNCIL MEETING AUGUST 24, 1995 A special meeting of the Plymouth City Council was called to order by Mayor Joy Tierney at 5:10 p.m. in the Public Safety Training Room, 3400 Plymouth Blvd., on August 24, 1995. COUNCIL PRESENT: Mayor Tierney; Councilmembers Anderson, Wold, Lymangood, and Helliwell. ABSENT: Councilmembers Granath and Edson. STAFF PRESENT: City Manager Johnson, Assistant Manager Lueckert, Community Development Director Hurlburt, Public Works Director Moore, Finance Director Hahn, Assistant Finance Director Jacobson, Finance Office Supervisor Leitner, Parks and Recreation Director Blank, HRA Chairperson David Crain, and Administration Senior Clerk/Typist Hoffman. Mayor Tierney stated that she was displeased that the meeting time had been changed through special meeting notice to 5:00 p.m. She said it is the City Attorney's opinion that the 7:00 p.m. meeting had not been legally called off. Discussion of Auditor's Recommendations and Staff Responses Finance Director Hahn stated that members of his staff are present to answer questions on the auditor's report and recommendations for the 1996 Budget. He pointed to the various fund balances and compared the data to last year. Assistant Finance Director Jacobson asked for questions from Councilmembers regarding the report and its outline. Councilmember Anderson asked about the issue of disability payments to employees. Finance Director Hahn pointed out that recently there has been an increase in employees claiming long-term disability. He said that even though the employees get 50-60 percent of their salaries, they lose the other benefit deductions. Under the recommendation, any disability they receive would be tax exempt. He added the City is looking at self-insuring disability programs in these cases. Some aspects of the plan will depend on union approval. He said they could expect an answer from the Auditor within a couple of weeks, and the matter would go to the Council for consideration. Special Council Meeting August 24, 1995 Page 2 Finance Director Hahn outlined the various funds and their balances. He pointed out that the balance figures in the report reflect the funding levels at the end of 1994. The Public Facilities Fund will diminish substantially as it is used for both building renovations and repairs. The amount in the Central Services Fund will go down as computer systems are replaced and upgraded. He said that the fund could diminish by as much as $500,000 dollars. Finance Director Hahn said that user and rental fees go into the Central Equipment Fund and will be used to cover the purchase and lease of vehicles by the City. About $1,250,000 will be used from the Community Improvement Fund for park improvements. Councilmember Lymangood asked about interest rates. Finance Director Hahn said he has tried to be conservative in the estimates and used a 3 percent rate, although at times a 6 percent rate may be attainable. Councilmember Lymangood asked that staff reexamine the Community Improvement Fund and assume 5 percent interest. The Permanent Improvement Revolving Fund is used for Building Fund infusion to cover major repairs - but not new structures. Councilmember Helliwell asked about consolidation of some of the funds. Finance Director Hahn agreed that it is possible since some funds no longer serve a purpose. He stated that the Street Reconstruction Fund is derived from the annual tax levy for street programs, and the Storm Sewer Fund is derived from user fees for future capital projects. Director Hahn stated that the Project Administration Fund is a growing fund, with fees from tax increment financing (TIF) recently on the increase. He suggested that the TIF fund balances be moved annually, rather than every two to three years as is the present case. The Project Administration Fund is used for land use work and other projects such as special studies and plans. Additional interest funds were moved into the fund last year when the Legislature threatened to reduce tax increment financing. City Manager Johnson stated that the City needs to examine its TIF program. Finance Director Hahn added that the City may want to sell some TIF bonds. He said most of the Project Administration Fund is not allocated to any specific project. It can be used in part for project contingencies. One to two percent of Special Council Meeting August 24, 1995 Page 3 project costs are transferred to it to cover any problems that might arise from other projects. Councilmember Lymangood pointed to the Project Administration Fund as a source of funding for the Capital Improvement Fund. Finance Director Hahn recommended that the Council not reduce the Project Administration Fund below $1 million. Other funds that may have lost their funding sources will get funds partly from this source before the end of the year. Councilmember Anderson asked for a report from staff recommending a minimum fund level. Finance Director Hahn said that every fund except the Public Administration Fund and the Community Improvement Fund is dedicated to specific purposes. Councilmember Lymangood suggested further study of that situation. Councilmember Helliwell asked if about $3 million from the Community Improvement Fund could go toward TIF programs. Finance Director Hahn recommended that funds be retained because of other projects needs. He pointed to the proposed Schmidt Lake Road Project. He said if that project is done, much of the Project Administration Fund would go there. Public Works Director Moore added that the County Road 9 bridge over I-494 may have to use some of this money since Hennepin County and the State of Minnesota have nothing dedicated to the bridge project. City Manager Johnson said staff will study this issue and proposed options for consideration by the Council. Finance Director Hahn explained that the City and Community Parks Fund is used to build parks and trails. Its source is park dedication fees. The Park Replacement Fund was implemented in 1989, and makes funding available for repair replacement of park facilities. The Risk Management Fund retains about $6 million to cover potential losses. The interest on this fund now covers premiums and cash outlays for self-insured expenses. Councilmember Anderson asked if the City would not get a better return by pooling the various park improvement funds. He also inquired on the reserve balance, asking if it was correct that there was a total of $62 million in reserves. Special Council Meeting August 24, 1995 Page 4 He asked for a recommendation on where the reserve balance should be maintained. Finance Director Hahn stated that the reserve balance amount is correct. The amount fluctuates during the course of the year. Councilmember Anderson asked for an objective opinion on at what level the City should maintain balances in the various funds. Finance Director Hahn said that the City's auditors have given the strongest encouragement to maintain fund balances at current levels, and to strengthen the water and sewer fund balances. Housing and Redevelopment Authority (HRA) Budget Request HRA Chairperson David Crain presented information on the Housing and Redevelopment Authority. He gave a brief history of the Plymouth HRA describing the three areas of activity: Community Development Block Grants, the Section 8 Housing program, and the Senior Housing Program. He outlined the strategic plan that was developed, based on the HRA mission statement and a vision statement. He called the proposal offered for 1996 funding a conservative budget, and said it was 16 percent below the allowable levy limit, and that it is the same level as was funded in the 1995 Budget. He said the budget proposal primarily covers Plymouth Towne Square subsidies and administration costs. Community Development Director Hurlburt presented a review of the proposed HRA budget. She pointed out that there is a proposed increase in funding for an intern to provide research assistance. Mayor Tierney asked about the work of an economic development committee or the port authority as part of the role of the HRA. Community Development Director Hurlburt said that emphasis depends on what projects the Council wants accomplished. She said that economic development would be a new role for the Plymouth HRA, but added that the relationship between jobs and housing exists. She said that no money is currently budgeted for economic development, but the HRA could administer such projects as it now does with Community Development Block Grants. David Crain stated that during the upcoming year, the HRA could explore the needs and potential for economic development, but the amount of study would depend on the demands of other programs. Special Council Meeting August 24, 1995 Page 5 General Overview of 1996 Budget and Maior Issues City Manager Johnson stated that the City receives 13 percent of the "property tax pie". He presented the budget overview and the sources of the tax base by market segment, noting that there was an overall 8.7 percent increase in property valuation. The number of new dwelling units being constructed is less each year. In terms of market value trends, he said that the taxable capacity is going up at a higher rate than increased tax rate. Councilmember Lymangood asked if there were differences in tax rates depending in which school district a person lived. City Manager Johnson said there is not much variation in the tax rate by school district. He said the greatest influence on the proposed budget from the previous year's budget is the fiscal disparities distribution to other levels of government. He said that Plymouth came out better last year than this year, and that had a major influence in the budget. He concluded that spending is decreased, but a slight tax increase is proposed. City Manager Johnson stated that he expects a surplus in the 1995 budget. This surplus will be used for tax abatements, paying a dump truck lease, and replenishing reserve funds. Councilmember Helliwell said that covering the tax abatements is a very good use of surplus revenue. Councilmember Lymangood asked about replenishing the Building Reserve and Computer Reserve Funds. City Manager Johnson said those funds would eventually have demands because of use this year. City Manager Johnson said that value losses through tax abatement is decreasing compared to other years. He said that the loss of HACA can be absorbed by the Street Reconstruction Fund, and the increase in building permit fees compensated for the slowing of building activity. Manager Johnson stated that the proposed staff growth rate is identical to the City's growth rate. Some of the funding for proposed increased police staffing is being covered by a federal grant. However, the salary would be totally paid by the City after three years. He said that replacement of a fire truck is proposed using 1996 funds, although it won't arrive until 1997. The largest portion of the equipment budget is in the area of computer replacement and upgrades. City Manager Johnson said that the Plymouth Civic League expenses were up substantially. Since the Music in Plymouth event is the most visible civic event of Special Council Meeting August 24, 1995 Page 6 the year, he recommended an increase in contribution in the amount of $4,500 to help offset the loss of private funding for fireworks. In order to provide for the Civic League funding, and for the HRA intern salary, he recommended a reduction in the contingency fund allocation. He asked the councilmembers about the issue of a City Council salary increase. If no increase is approved, the money could go into the Contingency Fund. Councilmember Anderson stated he is absolutely opposed to an increase in Council salaries. He advised putting the money into funding for the Plymouth Civic League. Mayor Tierney stated there has been no salary increase for several years. She suggested that the Council develop a plan for considering an increase in salaries. Councilmember Helliwell said this issue should be a formal agenda item if there is sentiment from the Council to amend salaries. She said that the Council has previously received a graph comparing salaries with similar cities. Assistant Manager Lueckert said that any action would need to be completed before the November 7 election. Councilmember Lymangood said he is opposed to an increase in Council salaries. Councilmember Wold also did not favor an increase. Mayor Tierney said she was in favor of using that amount for the Music in Plymouth program. Councilmember Helliwell agreed. Councilmember Anderson recommended that the Council make such a decision a directive when the budget issue comes up. City Manager Johnson stated the budget proposes a reduction from $2.00 to $1.58 per month for the recycling fee. This will save each household $5.04 per year and is based on lower City costs due to increased recycling markets. This appears to be a long-range trend. A proposed reduction in the recycling fee will be presented to the Council in December. City Manager Johnson provided a salary allocation report and asked the Council to identify any questions they might have after studying the report. Mayor Tierney stated that comparing the 1995 and 1996 budgets, there is a proposed $750,000 overall increase and $500,000 proposed for salary increases - yet a tax increase is proposed. Special Council Meeting August 24, 1995 Page 7 Assistant Manager Lueckert stated that there were 11 new employees during 1995, and 13 new employees in 1994. However, some of these positions are partially funded through non -tax dollars. Councilmember Anderson asked if employees are generally at the upper end of their step levels. City Manager Johnson stated the schedule denotes the location of each employee in their salary range. Determining Issues for Further Consideration Councilmember Anderson expressed amazement at the amount spent on photocopying. Finance Director Hahn stated that proposed new fax options would include routing via e-mail to other departments as a cost-saving measure. Mayor Tierney asked why the transit fund was going down for 1996. Finance Director Hahn said they were decreasing it each year. Councilmember Lymangood asked about the level of delinquent taxes. Finance Director Hahn stated it amounts to about $50,000 per year. Councilmember Lymangood asked why cigarette license fees are so low. Manager Johnson responded that staff will investigate a fee increase. Councilmember Anderson requested information on the police reserve program. Park Director Blank said that police reserves are paid as park patrol staff. City Manager Johnson stated that volunteer recognition is also being addressed and an event is being planned. Councilmember Helliwell asked about the squad car purchase program. Public Works Director Moore said the City can purchase squad cars through a county or state program on a bid basis. He said that ordering seven to nine squad cars and holding them in storage has proven effective. The City needs to order ahead of when the vehicles are needed for service because only a certain number of squad cars are manufactured each year. Councilmember Helliwell requested that newly proposed staff positions be discussed at the next budget session. Councilmember Lymangood expressed concern about questioning the proposed additional employees. He said that he has developed a healthy respect for City employees, and called the money well spent. Councilmember Anderson concurred. Special Council Meeting August 24, 1995 Page 8 Councilmember Lymangood suggested that staff not spend time comparing Plymouth personnel to other cities because each city operates with different elements, such as liquor stores, golf courses, and ice arenas. Mayor Tierney stated she would like to see where Plymouth compares with respect to number of personnel. Councilmember Helliwell requested an explanation of workload and justification for the new positions. The meeting was adjourned at 7:12 p.m. Mayor Tierney called the 7:00 p.m. meeting to order at 7:12 p.m. No business was conducted, and the meeting was adjourned at 7:13 p.m. K rt Hoffma Administration Senior Clerk/Typist