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HomeMy WebLinkAboutCity Council Minutes 12-01-1993 SpecialMINUTES BUDGET HEARING DECEMBER 1, 1993 A special meeting budget hearing of the Plymouth City Council was called to order by Mayor Bergman at 7:00 p.m. on December 1, 1993, at the City Center, 3400 Plymouth Blvd. PRESENT: Mayor Bergman, Councilmembers Edson, Tierney, and Vasiliou ABSENT: Councilmember Helliwell STAFF PRESENT: City Manager Johnson, Assistant City Manager Lueckert, Finance Director Hahn, Public Works Director Moore, Park Director Blank, Public Safety Director Gerdes, Community Development Director Hurlburt, Acting City Assessor Bye, and City Clerk Rauenhorst Manager Johnson stated the City Council has conducted five study sessions on the proposed 1994 budgets. He explained that City taxes as a portion of the average tax bill are approximately 13 percent. Under the 1994 proposed budget, the amount of tax dollars levied would drop from $8,808,000 to $8,641,000, and the levy rate would decrease from 18.04 to 16.63. He stated the taxes would decrease by about $12 on an average value home in Plymouth ($145,000). Manager Johnson compared the 1993 tax levy and 1994 proposed tax levy. He compared the City tax on $145,000 valued homes in comparable cities and noted that Plymouth is the lowest, with the exception of Edina. Manager Johnson described factors used in establishing the tax levy rate. He stated that the projected 1993 General Fund surplus would be used to reduce the levy requirements. A portion would be used to pay off existing bonds, saving $43,300 in 1994 and $315,000 long-term. A portion of the 1993 General Fund surplus would also be used to eliminate the special tax abatement levy, saving $127,400. He stated the proposed 1994 budget includes elimination of the storm water levy, saving $100,000, and elimination of the City's special assessment levy, saving $113,000. Manager Johnson stated an additional $100, 000 would be saved by paying the liability insurance from risk management fund investment proceeds. He stated that engineering fees for in-house engineering of street reconstruction would generate $158,000 in new revenue, and reallocation of project administration fees to the General Fund would save an additional $100,000. Manager Johnson stated that the 1994 budget proposes an $80,600 increase in the levy for street replacement. The budget also includes normal increases to keep pace with Special Council Meeting December 1, 1993 Page 2 Plymouth's annual growth rate of 3 to 4 percent. He cited as examples, new positions of park maintenance worker and lead person, and temporary street maintenance worker. He stated that the budget needed to overcome a 7.7 percent decline in commercial/industrial property values. The proposed 1994 budget also includes expanded services, including the addition of two police officers, a police sergeant, and six firefighters for daytime response. Manager Johnson presented market segment comparisons between residential and commercial properties from 1993 to 1994. He stated that residential property values increased in the City 10.6 percent, while commercial property values decreased 7.7 percent. This results in a net value increase of 4.9 percent for the past year. Manager Johnson described the 1994 General Fund budget revenue categories, as well as the department budgets as percentages of the overall 1994 budget. He also presented the 1994 General Fund budget expenditure categories. Manager Johnson compared the major operating funds of the City from 1993 to 1994, and stated that Plymouth's expenditures per capita were $299 in 1991. This is very low compared to similar communities. Manager Johnson presented information on the City's contractual services, including expenditures and number of contractors. He also presented information on total employee compensation as a percent of the 1992, 1993, and proposed 1994 budgets. He stated that full-time equivalent authorized positions would increase from 179 in 1993 to 190 under the 1994 proposed budget. He stated that the net increase in General Fund tax supported positions is 6.54 positions under the 1994 proposed budget. He stated that new tax supported positions would be police sergeant, two police officers, community service officer, one half time clerk/typist for the fire division, and a park maintenance worker. New non -tax supported positions include a one-half time microcomputer support person and a one-quarter tax supported school liaison officer. He stated new self funding positions include design engineer, senior technician, technician, and financial analyst. Manager Johnson stated a number of positions would be upgraded including planning supervisor, which replaces the planning technician, and park maintenance leadperson, which replaces maintenance worker. A number of positions will also have increased hours including data control clerk for parks, clerk/typist for parks, forestry aide, and senior citizen program coordinator. Manager Johnson stated the proposed 1994 budget will accomplish more patrol time, crime prevention and community policing, as well as more firefighters to improve daytime response in the public safety area. He stated that in the area of parks and recreation, residents will realize more athletic field maintenance, more winter trail maintenance, more comfort stations in parks, budgeted park patrol, evening supervision of park crews, a geese control program, and an upgraded forestry program. Manager Johnson stated the Special Council Meeting December 1, 1993 Page 3 proposed 1994 budget includes items for increased management effectiveness, including more funding for employee training and development, and completion of the PC computer network for all departments. City street reconstruction projects will be accomplished through in-house engineering, and there will be more financial analysis and planning, as well as an emphasis on commercial appraising. He stated the street reconstruction program will benefit from increased levy funds. The 1994 proposed budget also would accomplish increased communication with neighborhoods and the general public by providing more funding for mailed notices to neighborhoods, and telecasting of planning commission meetings on cable TV. He stated the 1994 budget would increase financial stability by reallocating some state aid money to the street reconstruction fund, paying down of existing debt, and increasing the contingency fund. Mayor Bergman opened the truth in taxation public hearing at 7:30 p.m. Chris Slack, 2135 Weston Lane North, stated he is a Ward 1 resident, and believes he has an opportunity to provide neutral budget information to the City Council. He also has 20 years of business analysis experience. Mr. Slack stated he attended two City Council budget study sessions, and discussed the proposed 1994 budget with several staff members. He stated the City employees' responses were prompt and accurate. He also met with the Finance Director, and reviewed budget reports, year-to-date actual expenses, and the budget requests and justification documents. Mr. Slack presented information showing that the City staffing has increased 14 percent since 1992. He stated that under the 1994 budget proposal, City revenues will have increased 16 percent since 1992, while expenses will increase 21 percent. He stated these increases seem to be very high, given the economy. Mr. Slack presented information on the development of the 1994 tax levy. He believes there will be an additional $300,000 General Fund surplus, which should be used to further reduce the 1994 levy. Mr. Slack reviewed the department managers' budget requests, and stated that he believes cost reduction is not a priority, and that excessive requests set a poor example for the rest of the organization. He stated it is an old government style philosophy that tax funds are unlimited, and government is immune from economic problems and competition. Mr. Slack stated he further believes there are additional expenditure reductions that could be made. Mr. Slack posed a number of questions relating to the proposed increase in police officers to reduce committed patrol time, and stated that similar questions need to be asked for other new hires. He recommended that all hiring be frozen until these questions are answered. He suggested that the justification of hiring three new engineering positions be reevaluated and other alternatives considered, such as bidding road engineering by the job, and standardizing as many engineering requirements as possible. He recommended that 7 percent of the budget be moved out of department designations and placed in the Council area. He stated this would not change the overall budget total, and would reduce continued budget padding that results from the current budget development process of using current year estimates (when a surplus is anticipated) to project the following year's revenues and expenditures. He stated it would move fiscal responsibility from the Special Council Meeting December 1, 1993 Page 4 taxpayers to city management and employees. This would also communicate to taxpayers and employees that the old style budgeting philosophy has changed. Mr. Slack stated that cost reduction and improved productivity should be included with other job requirements, and innovation and productivity should be recognized and rewarded at all levels of the organization. He stated that the 1994 budget should provide direction to make Plymouth a model of innovation and creativity. Councilmember Vasiliou thanked Mr. Slack for his input. She agreed with many of his comments, and stated that some of the responsibility also needs to go back to the taxpayers. She noted that the increased services proposed in the 1994 budget are the direct result of requests from constituents. She stated that the challenge to elected officials and employees needs to also be extended to the taxpayers. Mayor Bergman stated that the basic role of the City is to provide infrastructure. The responsibility of the Council is to get the most service out of shrinking dollars, and the Council must set limits to accomplish this. He agreed that the City could be more creative in providing service as one alternative. Councilmember Vasiliou defended the increases in public safety personnel proposed in the 1994 budget. She stated that the number of staff throughout the organization has been lean - perhaps too lean. She agreed with Mr. Slack, however, that it is appropriate to ask questions of what the City will get for additional personnel expenditures. She stated that it is increasingly difficult to provide public safety services and the City should not get further behind. Councilmember Edson stated he would support future development of a program budget process, so that the budget could be more outcome based. He would support establishing a timeline to review the budgeting process. Councilmember Edson stated he was previously a member of the Financial Task Force, and one of the issues discussed was program budgeting. He stated the new City management has interest in the concept of setting desired outcomes. Councilmember Tierney stated that she did not see Plymouth's growth factor in Mr. Slack's presentation. She noted that the City adds about 800 homes and 2,000 people per year. Mr. Slack stated the Council should look at future growth, not at what has occurred in the past. He stated the City's increased expenditures since 1991 have more than offset the growth and inflation factors. He stated his concern is that the City budget contained a surplus the past two years, and the proposed 1994 budget is based on those previous year's budget and will likely result in a surplus. Councilmember Tierney asked if Mr. Slack could recommend a comfortable surplus. Special Council Meeting December 1, 1993 Page 5 Mr.. Slack stated the City is currently running at about a 10 percent surplus - which is too high. Mayor Bergman stated that over his last four years as Mayor, he believes the City was understaffed compared to comparable cities. He stated the City's work is getting done well because employees accomplish more than employees in other communities. Ron Hanson, 4225 Quaker Lane, questioned the increase in compensation given to employees from 1992 to 1993. He also stated that residential property owners will be paying increased property taxes that will be shifted from commercial properties. Manager Johnson stated that salary increases ranged from 2.9 percent to 3.25 percent in 1993 based on the bargaining category. He stated there are four bargaining groups, and one non -represented group in the City. Manager Johnson stated that in developing the proposed 1994 budget, he asked department heads for budget requests that were reflective of a continued budget, as well as an increased service budget. He stated that the recommended continued budgets overall contained a 4 percent increase, which is less than could be expected due to the growth and inflation amounts of about 6 percent for the City. He stated that he believes department managers are finding ways to be more efficient in their budgets. Manager Johnson explained the proposed in-house engineering positions. He stated concern with increasing the contingency amount, as proposed by Mr. Slack. He stated that he believes the City needs to adopt a budget plan and be accountable for it. Dennis Zylla, 3125 Holly Lane, stated that he is a member of the Plymouth Planning Commission, but will be vacating his seat on January 31, 1994. Mr. Zylla stated that his overall concern as a taxpayer is that the Council consider the budget with an emphasis on establishing given service levels and resulting costs. He wants the City to look for the most efficient ways of providing service. He stated the Council needs to stay focused on truly needed services, and must be willing to say "no" to non-essential requests. He stated the Council should consider whether the increased patrol officers are needed in order to maintain emergency response level, or non -emergency response times. He stated that increased firefighter positions should be analyzed for response as well. He questioned whether the financial analyst position would be self-funded. He also questioned whether the $800,000 proposed for new equipment is truly necessary, and questioned whether the private sector could do a better job of providing service than the in-house engineering alternative. He stated that with the overall growth of the community, the Council needs to ensure that the inspection's budget is adequate. Manager Johnson stated -this year's increase in equipment stock equals the growth rate of the City at about 3.5 percent. He agrees that the City needs to move toward a program budgeting system so that results can be measured. He stated that in the case of the Special Council Meeting December 1, 1993 Page 6 increased police officer positions, the City is attempting to reduce its committed patrol time. He stated that Plymouth police officers currently spend about 59 percent of their time responding to calls. This does not leave much time for crime prevention efforts and working with neighborhoods. He stated that nationally, a committed patrol time of about 35 percent is ideal, however, the public safety department has established an ultimate goal of 45 percent. The proposed 1994 budget hopes to decrease committed patrol time from 59 percent to 56 percent in one year. He stated that the increased firefighters are needed for improved daytime response. Mayor Bergman closed the truth in taxation hearing at 8:55 p.m. Manager Johnson stated the next meeting to consider the proposed 1994 budget will be at 7:00 p.m. on December 13, 1993. Carty Jerk