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HomeMy WebLinkAboutCity Council Minutes 08-31-1995 SpecialMINUTES SPECIAL COUNCIL MEETING AUGUST 31, 1995 A special meeting of the Plymouth City Council was called to order by Mayor Joy Tierney at 7:00 p.m. in the Public Safety Training Room, 3400 Plymouth Blvd., on August 31, 1995. COUNCIL PRESENT: Mayor Tierney; Councilmembers Edson, Lymangood, and Wold. Councilmember Helliwell arrived at 7:05 p.m. ABSENT: Councilmembers Granath and Anderson. 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 Supt. Peterson, Public Safety Director Gerdes, and City Clerk Ahrens. REVIEW 1996 PROPOSED BUDGET Manager Johnson reviewed information on the Community Improvement Fund. He provided two charts showing the projected fund balance. The first chart assumed a 3 percent average interest rate through 2002. This scenario results in an ending balance of 13.3 million. The second chart assumes 5 percent average interest earnings and results in a balance of $15.4 million. In response to a question by Mayor Tierney, Finance Director Hahn stated it is likely that a 5 percent average interest rate can be achieved. Councilmember Helliwell arrived at 7:05 p.m. Mayor Tierney noted that the projected balances of the Community Improvement Fund assume no expenditures; however, some additional funds would be coming into the Fund. Finance Director Hahn explained that some excess special assessment funds will be transferred to the Community Improvement Fund, but he anticipates no additional funds going into the Community Improvement Fund. Manager Johnson presented a status sheet on the cash and fund balances of the City's various funds. Finance Director Hahn noted that the General Fund, in particular, fluctuates depending on the timing of tax settlement receipts. Manager Johnson presented information on the number of new employees added over the past several years. He stated that 206 full-time employees are proposed in the 1996 budget, which would be about 3.61 employees per thousand residents. He stated that staff is unaware of the number of employees other cities are proposing in their 1996 budgets, but this information could be obtained for the November budget hearing. Special Council Meeting August 31, 1995 Page 2 Councilmember Lymangood compared the proposed 3.61 employees per thousand residents anticipated for 1996 with information provided with the 1995 budget. He stated that at 3.61 employees per thousand residents, Plymouth would still be at the conservative end compared to other communities. Manager Johnson stated that it appears that the number of employees per thousand residents is leveling off. He stated that as the City continues to grow and service systems increase, additional employees will be needed. However, most of the additional employees in the future will likely be in the public safety and public works maintenance areas, which are the most sensitive to population and system increases. Mayor Tierney asked for Council comment on proposed salaries. She stated that the proposed budget contains a 5.07 percent increase in the salary category. This includes the addition of five full-time employees. She stated that the budget increase would be 3.85 percent without the five new employees. Councilmember Helliwell stated that the Council needs to consider ways to cut the budget. She stated that residents with lower valued homes will receive a greater percentage increase in taxes. A number of employees have been added over the last several years, but she believes that reductions are needed in the budget. The City's tax base has been broadened and City taxes should be decreasing. She would like to see a tax decrease for Plymouth residents from $10 to $20 per month. Councilmember Helliwell stated that in previous years, the Council met to review and discuss the budget many times, and during some years, Councilmembers listened to department requests. She believes the Council needs to review the budget line by line, in order to find areas for reductions. Manager Johnson cited, as an example, that even if the salary category had no increase, the $126,000 reduction needed to ensure no tax increase could not be met. Councilmember Helliwell stated that she is not advocating a salary freeze for existing employees, but she wants the Council to carefully evaluate the addition of new employees. She would also like to review areas such as equipment acquisition for possible cuts. Manager Johnson explained that although the City's overall property valuation has increased by about 8.5 percent, the City has been able to benefit by only about 5 percent of that amount because $384,000 was paid out in fiscal disparities. He stated that Plymouth is not getting full benefit this year from the tax base increase, but predicted that in 1996 the City will again be paying a normal amount of fiscal disparities. Councilmember Helliwell asked if staff feels there are items in the budget that could be cut. Manager Johnson stated that funds could be cut from the proposed 1996 budget, but he does not believe this would be responsible because it would result in a delayed increase for the 1997 budget. He stated that the number of new homes being constructed each year is also decreasing. During Plymouth's peak construction year, about 800 new homes were constructed. This year 400 new homes are anticipated, with a projection of only 300 Special Council Meeting August 31, 1995 Page 3 new homes during 1996. This results in less of an increase to the City's tax base. He also explained how capital equipment was requested, ranked, and proposed for purchase in the 1996 budget. Councilmember Lymangood stated that the Council has directed the City Manager to prepare a budget that does not increase the City's tax rate, and that rate has actually decreased. He stated that the proposed 1996 budget has a more positive net impact on residents than the 1995 budget. In 1995, an additional $1 per month recycling fee was charged to Plymouth residents. This resulted in a $12 increase in costs to the average homeowner in 1995. He stated that it is incorrect to assume that more development automatically results in a tax base increase and a decrease in taxes because with growth comes a demand for more service. Councilmember Edson stated that the amount Plymouth pays in fiscal disparities also increased with the recent valuation increase in commercial property. He stated that when the commercial values were reduced, the City's fiscal disparities contribution decreased. He stated that it is likely in 1996 that commercial properties may receive a slight decrease in taxes. Councilmember Lymangood requested that staff prepare information on the net tax impact for residential properties and for commercial/industrial properties for the budget hearing. Manager Johnson stated that the average homeowner was paying $6 more in 1993 in actual City taxes than will be paid in 1996 under the proposed budget. The actual amount of City taxes paid on an average value home was $401 in 1993, compared to $394 in 1996. He noted that during this time, the average value home in Plymouth appreciated in value from $147,000 to $166,000. Councilmember Lymangood requested that this information also be provided at the budget hearing. Councilmember Edson responded to Councilmember Helliwell's suggestion that the Council review the proposed budget line -by-line. He stated that the Council receives the proposed budget from staff in a more final form than in previous years, and a program budget method has been adopted. He does not feel a need to go through the budget line - by -line; however, Councilmembers should feel free to meet individually with staff to do so if they wish. He does not favor tax increases, but noted that Plymouth is faced with development and expansion resulting in a need for increased services. He explained that increased services" also means providing all residents of the City with a minimum standard of service, and maintaining that level of service with growth. He suggested that the City should plan several years into the future to prepare for when growth stops. He believes that the proposed salaries are in line with the marketplace. Councilmember Edson noted that office rents are again increasing, and this may result in a delayed increase in commercial property valuations. Special Council Meeting August 31, 1995 Page 4 Councilmember Wold stated that a decrease in City taxes of $10 to $20 per month, as desired by Councilmember Helliwell, would be a huge portion of the City's General Fund budget and would not be reasonable. Manager Johnson reviewed information from the League of Minnesota Cities newsletter relating to regulating tobacco sales. He stated that Public Safety Director Gerdes has been working on a proposal for enforcement to curb smoking by minors. Public Safety Director Gerdes explained that Plymouth has applied to the ASSIST Program for a $10,000 grant along with five other cities to develop a program relating to tobacco regulation. Staff was directed to investigate alternatives for regulating tobacco sales, review the existing ordinance and license fees, and provide a recommendation to the Council. Councilmember Lymangood requested that several pieces of information be prepared for use at the budget hearing. He requested that a graph be prepared showing the actual City tax dollars paid on an average valued home over the last several years. The graph should also show the increase in property value along with the declining tax rate. He requested that the budget hearing presentation include reference to the $200,000 reduction for recycling services from Hennepin County last year, as well as a history on tax abatements. He requested that the fiscal disparities issue be discussed. He requested that the number of new homes constructed each year from 1992 to the present also be shown in graph form. This information will show how the proposed budget is absorbing impacts from various sources. Councilmember Lymangood stated that the offering circular on the recent bond referendum indicated that the value of commercial permits has increased from $12 million dollars to $60 million. He asked if that information is reflected in the budget. Community Development Director Hurlburt stated that the offering circular was referring to building permit value. This information is not directly reflected in the budget, but rather recorded as valuation increases by the City Assessor. Public Works Director Moore stated that this information can be misleading. He noted that in 1995 Plymouth will show a $58 million permit value increase relating to the new Wayzata High School. However, no taxes will be generated because this is tax exempt property. Councilmember Lymangood suggested that staff investigate whether the permit valuation could be separated by taxable and non-taxable at the point when permits are issued in order to give the City a more accurate prediction of future valuation increase. Special Council Meeting August 31, 1995 Page 5 Councilmember Lymangood stated that he will be meeting with staff to further review the audit report. He invited other interested Councilmembers to attend also. Mayor Tierney and Councilmember Helliwell expressed interest in attending the meeting. Mayor Tierney noted some concerns about increasing the City's donation to Music in Plymouth by $5,000. Manager Johnson stated that the Plymouth Civic League has detailed $9,000 of additional expenses for last year's Music in Plymouth. Growth of the event results in greater costs, and there has also been a decrease in the contribution for the fireworks. Councilmember Helliwell stated that the event continues to grow and she credited the hard work of the Plymouth Civic League in organizing the event. She stated there are a limited number of memberships and fundraising is very difficult. Costs for the event are substantial, including about $20,000 for the Minnesota Orchestra. Councilmember Edson stated the City is also donating more than a financial contribution to the event. There is a substantial amount of staff involvement in preparing the site, setting up, and policing the event. Councilmember Lymangood stated that he will support the $5,000 increase for 1996. He stated this is a minor amount in the entire City budget and Music in Plymouth is an important and visible event for the community. In response to a question by Mayor Tierney, Public Safety Director Gerdes explained that the Crime and Fire Prevention Fund is a volunteer charitable organization, organized under state law. They cannot receive funds from the City due to this designation. The organization conducts projects to raise funds to donate for specified purposes. Councilmember Edson asked about the social service contributions proposed in the 1996 budget. He stated that it may be time to consolidate the funding currently going to Interfaith Outreach and PRISM. He stated that both organizations have overhead expenses, and this causes some duplication. He stated that it is also confusing for people who need service because they don't know who to call. It would be preferable to have one agency serve the entire City. Manager Johnson explained that it is his intention to have the increases and decreases that have been discussed in the budget carried in the contingency account, rather than adjusting individual accounts. He cited as an example any possible increase in tobacco license fees. The meeting was adjourned at 8:35 p.m. O Laurie F. Ahrens City Clerk