HomeMy WebLinkAboutCity Council Minutes 11-08-1993 SpecialMINUTES
STUDY SESSION
NOVEMBER 8, 1993
A special meeting study session of the Plymouth City Council was called to order by
Deputy Mayor Edson at 4:05 p.m. in the Council Conference Room of the City Center,
3400 Plymouth Blvd., on November 8, 1993.
PRESENT: Deputy Mayor Edson, Councilmembers Helliwell and Tierney. Mayor
Bergman arrived at 5:40 p.m.
ABSENT: Councilmember Vasiliou
STAFF PRESENT: City Manager Johnson, Finance Director Hahn, Public Works
Director Moore, Public Safety Director Gerdes, Community
Development Director Hurlburt, Finance Office Supervisor Leitner,
Park Director Blank, Recreation Superintendent Bisek, Park
Superintendent Peterson, and City Clerk Rauenhorst
City Finances - Bonds, Debt Financing
Finance Director Hahn presented a report showing all outstanding general obligation debt
of the City. The report indicated those bond issues proposed for advanced refunding,
those proposed for call and payoff with available funds, and those proposed for no
advanced refunding.
Dave MacGillivray, Springsted, Inc., stated that under state law the City would not benefit
by advance refunding some of the bond issues, including 1987 Fire Station Bonds, 1991
Improvement Bonds, and 1990 Taxable Tax Increment Bonds. He supports the staff
recommendation for those issues proposed for call and advanced refunding.
Manager Johnson stated that earlier in the day, staff and Councilmember Tierney met with
representatives of Springsted and had a conference call to Moody's with respect to
upgrading the City's bond rating from Aal to Aaa. He stated that less than 100 of the
approximate 40,000 jurisdictions nationwide that hold bond ratings, have obtained a AAA
rating. The cities of Minneapolis, Minnetonka, and Rochester, as well as the Metropolitan
Council, have attained the AAA rating. He stated that 1 1/2 years ago, Moody's had
concerns with upgrading Plymouth's bond rating primarily due to the amount of
undeveloped land remaining in the City. He provided copies of reports used for the recent
Moody's presentation, comparing key credit factors between Plymouth, Minnetonka, and
Rochester, as well as the long-range capital infrastructure needs for the City of Plymouth
from the year 1998 through full development of the City. He stated the reports show that
looking ten years in the future, and assuming full development of the City, significant
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November 8, 1993
Page 2
amounts will not have to be borrowed in order to keep up with growth. He noted that in
five years the City will pay off 86 percent of its existing debt.
Dave MacGillivray noted that in the previous presentation 1 1/2 years ago, the Moody's
professional staff agreed that Plymouth should be awarded the AAA rating. However, the
Moody's committee was concerned about the future development of the City and impacts
that development could have on debt. He stated that the information prepared for the
recent presentation indicates that a lot of new debt will not result from future
development.
Finance Director Hahn stated that during the 1991 presentation, the City had also just
completed the year with a General Fund deficit in the amount of $648,000.
Mr. MacGillivray stated it is positive that the City has now identified which bond issues
will be called and refunded and has developed a schedule to reduce debt.
Public Works Director Moore stated that during the time of the 1991 presentation, the
City had just received approval for amendment of the MUSA boundary. The
infrastructure for this area has now been constructed without issuing new debt for major
improvements. This should be another positive aspect for consideration of the increased
bond rating.
Councilmember Tierney stated that she was present earlier in the day at the Moody's
presentation. She stated Moody's was interested in the Baton/French Park development
issue, as well as the general tenor of the City Council toward development.
Chuck Lymangood, Councilmember-elect, asked why the City is not proposing to call or
advance refund most of the tax increment bond issues.
Finance Director Hahn stated one reason the City has not considered calling the TIF bonds
is because once the debt service is paid, it is questionable whether the City would have to
pay large amounts to the school districts.
Councilmember Edson noted that if School District 284 constructs a new high school, the
City anticipates using TIF funds for street improvements.
Dave MacGillivray stated that under new state law, if a tax increment district is
established, school districts must share in the proceeds. He stated that he does not believe
there would be sufficient savings to call or refund the other issues, and noted that the cost
of refunding is significant.
In response to a question by Councilmember Edson, Mr. MacGillivray stated that the City
has the option to selectively call issues every six months. He stated that the City could
also consider an interfund loan to pay off an issue with available funds. He does not
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November 8, 1993
Page 3
believe there will be any additional existing bond issues that will be recommended for
advanced refunding.
Manager Johnson presented a report showing projected funds available in the Capital
Improvement Fund through the year 2002.
Mr. MacGi ivray stated he will be present for the bond sale award on November 17. He
stated that he and his associates would also be willing to conduct a brief workshop for the
new City Council with respect to debt and financing.
Manager Johnson suggested that this could be included in the orientation for the new City
Council.
Budget Study Session
City Manager Johnson presented a list of staff recommendations for the final 1994 budget
proposal. He suggested adding $50,000 for comprehensive planning for northwest
Plymouth to be funded from the project administration fund. He stated that there are
currently five to seven years left for development within the City's sewer service area. It
would be helpful to know generally what is planned for development of the last five square
miles of the City.
Community Development Director Hurlburt stated the first step in the process will be to
take an inventory of the vacant property remaining in Plymouth, both in and out of the
MUSA line.
Manager Johnson stated that once the inventory is completed, the Council will be asked to
address the policy question of how much land should be available for development, and
whether a request for a MUSA boundary line extension should be made.
Public Works Director Moore explained that the MUSA boundary was primarily set based
on the sanitary sewer service area. He stated that staff gets many requests to extend the
MUSA boundary by a few acres, but the staff response has been that land use planning
should first be addressed.
Director Hurlburt stated that other changes will also need to be considered during the
inventory, such as recent wetland protection laws and policies. This could also reduce the
amount of land available for development within the MUSA boundary.
Councihnember Tierney agreed that there is a need for an inventory. She stated that once
the inventory is completed, then the Council can establish goals and consider the economic
pros and cons of development.
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Page 4
The Council discussed the current requirements for development of parcels outside of the
MUSA boundary.
Councilmember Helliwell stated she knows several land owners outside of the MUSA
boundary who do not want to subdivide their parcels.
In response to a question from Mr. Lymangood, Director Hurlburt stated that the $50,000
for comprehensive planning is proposed to come from the TIF Project Administration
Fund. She stated this will be sufficient to fund first year costs, however, additional money
will be required to complete the study.
The Council indicated that they feel it is important to proceed with comprehensive
planning for northwest Plymouth and supported the addition of $50,000 for the final
budget proposal.
Manager Johnson suggested that the final 1994 budget proposal indicate a reduction of the
estimated city attorney expenses for 1994 from $380,200 to $350,000. He stated this
amount assumes maintaining the existing contract and services with Best & Flanagan. He
presented three additional options for legal services. The first would continue prosecution
and specialized legal services with Best & Flanagan, but hire an in-house attorney to do
the retainer type work, development work, HRA work, capital projects work, and most
civil litigation. The second option would be to do most attorney work in-house, including
prosecution, except for very specialized cases. The final option would be to keep Best &
Flanagan for all work except prosecution which would be done in-house. He summarized
the pros and cons of each option as outlined in the staff report. He stated that with any of
the options of in-house attorneys, there is the possibility of sharing a law library with the
City of Minnetonka.
Councilmember Tierney stated that the City of Golden Valley has also indicated an interest
in possibly sharing legal services and/or a law library. She suggested that perhaps several
cities could be involved.
Councihnember Helliwell stated that she does not believe any in-house attorney work
should be considered until the Council addresses the City Center expansion issue.
Mayor Bergman arrived at 5:40 p.m.
Manager Johnson stated that some temporary space may be available in the Public Safety
building, or the lower level of the City Center. He agreed that if the new City Council is
not inclined to address the City Center expansion in the next few years, the in-house
attorney issue possibly should be postponed.
Councilmember Edson stated that if the City's eventual goal is to have in-house legal
services, with the exception of specialized cases, prosecution services should not be the
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first item. He stated that hiring an in-house attorney to do the retainer type work and
continuing contracted prosecution work would probably be the best option to start with.
He stated that most city prosecution attorneys are individuals just starting out in law. If
the prosecution work was brought in-house first, the prosecuting attorney would be
working in an unsupervised environment which could be very difficult for the individual
and may not be in the best interest of the City.
Manager Johnson concurred and stated that the City Council does not need to select an
option at this time. It was his hope that the options and analysis will help the Council
reach a consensus on the overall 1994 budget amount, even if a final decision on how the
services should be provided is not yet made.
Councilmember Helliwell stated that she is uncomfortable with considering a change to in-
house legal services at this time. She reiterated that there is no space available in the
building and there are many factors to consider. She feels that if the City is to move ahead
with in-house legal services, all facilities, including a law library, should be available at the
City of Plymouth. She requested additional information on how many comparable
communities have their own in-house legal services.
Councilmember Tierney stated that she will support $350,000 for legal services in the
1994 budget. She still believes that this amount is high, but stated that the Council can
continue discussing the issue of legal services in 1994. She envisions a change from the
Best & Flanagan firm.
Manager Johnson stated that if the Council supports the reduction in estimated city
attorney expenses, he would recommend that $11,300 be added to the Recreation Fund to
support two additional playground supervisors and an expansion from ten to twenty hours
per week of the senior citizen service staff person. He further recommended that the
remainder of savings in the city attorney budget ($18,900) be moved to the contingency
budget to be shown as a reserve for legal expenses. This amount could help insulate the
City financially from any large or unusual lawsuits, or could provide some of the start-up
costs if the Council decides to have in-house legal service.
Manager Johnson stated that the City's tax capacity value has increased from $50,205,200
to $51,965,987. As a result, the projected tax capacity rate for the City is estimated to be
16.63, rather than 17.21. Most Plymouth taxpayers will see a decrease in their 1994 City
tax regardless of their home value.
Councilmember Edson asked if these new numbers will be used for the Truth in Taxation
notices.
Manager Johnson stated yes.
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Manager Johnson stated that as requested by the Council, the Financial Advisory
Committee reviewed the proposals for in-house engineering services and the financial
analyst position. The committee recommends approval of both proposals.
Finance Director Hahn noted that the Financial Advisory Committee recommended that
any savings to the City resulting from the move to in-house engineering, should go back to
the Street Reconstruction Program. The committee further believes that the City should
do a detailed analysis after the first year to determine whether the in-house engineering
services are really working. Finance Director Hahn stated that the committee feels that
currently the City does not do enough long-range planning and specifically, the City needs
to do more efficiency analysis.
Manager Johnson stated that staff would like flexibility as to the type of person who
would be hired with respect to the financial analyst position. He suggested, for example,
that it may be advisable for the City to hire a senior accountant who could take over some
of the existing work of the Finance Director or other staff members who would then be
able to concentrate on financial analysis matters.
Councilmember Edson suggested that the City Council review the 1990 Springsted Study
with respect to fiscal impacts of development in the City.
Councilmember Helliwell stated she still has concerns about having in-house engineering
services. She does not want to hire individuals and then one year later release them when
their positions cannot be justified.
Mayor Bergman suggested that this information could be included in their employment
contract. He stated that he supports the in-house engineering services for street
reconstruction projects as it may help to eliminate some of the criticism the City has
received from citizens that their streets are "over designed." The staff members should be
better able to respond to residents at an earlier stage in the construction project than
consulting engineers are able to do.
Manager Johnson stated he also believes that in-house engineering services will help the
City have better communication with residents in areas affected by street reconstruction.
He stated that if the Council does not wish to proceed with in-house engineering, the
budget amount for engineering expense will need to be increased $40,000 for 1994.
Mayor Bergman stated that he believes the financial analyst position is warranted and
money will be made through investments to pay for the position. He noted that the
position is recommended by professionals on the Financial Advisory Committee.
The Council reviewed information with respect to human service agency funding.
Manager Johnson noted that West Hennepin Human Services primarily does service
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delivery, whereas, Northwest Hennepin Human Services primarily does planning services,
according to information received from each agency.
Councilmember Edson stated he would like to know what services West Hennepin Human
Services agency may be providing that some residents of the City are not eligible for
because they live in the other service area.
Councilmember Helliwell stated she is very concerned that 70 percent of the Northwest
Hennepin Human Services budget is going toward planning efforts.
Manager Johnson suggested that representatives of Northwest Hennepin Human Services
agency be invited to attend a future study session to discuss this issue with the Council.
Councilmember Edson asked that staff also provide a service comparison for the two
human service areas of the City, as he wants to ensure that all residents of the City have
equal access to comparable services. He supported the idea of inviting a representative of
Northwest Hennepin Human Services to a future budget study session, and stated he
would like to know what plans they have completed and which of those have been
successful.
Chuck Lymangood suggested that staff could also report on what planning and
coordinating services other client agencies are receiving from Northwest Hennepin Human
Services.
Manager Johnson provided a list of specific new capital equipment items proposed in the
1994 budget. He stated that the total new equipment is proposed as $286,200 in the
budget, and this includes computers.
Manager Johnson stated that the City could speed up the conversation to PC's for all
departments if computers are purchased now. The amount of $100,000 is proposed from
the General Fund for this purpose in 1994.
The Council stated that they support moving ahead with the conversion.
Manager Johnson explained that the new equipment list was derived from having
departments rank their equipment requests on a 1-10 scale. He stated that everything
designated as a five or higher rating by the departments is included in the proposed
budget.
Mayor Bergman asked if an additional digital heart start unit and intoxilizer unit are
proposed in the 1994 budget.
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Public Safety Director Gerdes stated that the City has already purchased a second
intoxilizer from forfeiture funds. The digital heart start unit is proposed in the 1994
budget.
Mayor Bergman asked if consideration has been given to changing the lights on the sally
ports because they attract mosquitoes.
Public Safety Director Gerdes stated that pest strips resolved this problem. The lights are
needed as installed for security reasons.
Councilmember Helliwell asked if the K-9 dogs are included in the proposed 1994 budget.
Director Gerdes stated that if the program moves ahead, crime prevention funds would be
used for this purpose. K-9 units would not materially affect the requested budget
amounts.
The meeting was adjourned at 6:40 p.m.
City Clerk