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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 Study Session 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 Study Session 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. Study Session November 8, 1993 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 Study Session November 8, 1993 Page 5 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. Study Session November 8, 1993 Page 6 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 Study Session November 8, 1993 Page 7 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. Study Session November 8, 1993 Page 8 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