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
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December 1, 1993
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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
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December 1, 1993
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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
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December 1, 1993
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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.
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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
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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