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HomeMy WebLinkAbout2023.12.04 CCM REGULAR SESSION12/4/23 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION DECEMBER 4, 2023 CITY HALL – COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center City Council met in Special Session called to order by Mayor April Graves at 6:30 p.m. 2. ROLL CALL Mayor April Graves and Councilmembers Kris Lawrence-Anderson, Dan Jerzak, and Teneshia Kragness. Councilmember Marquita Butler was absent and excused. Also present were City Manager Reggie Edwards, Assistant City Manager/City Clerk Barb Suciu Director, Director of Fiscal & Support Services Angela Holm, Director of Public Works Elizabeth Heyman, Director of Community Development Jesse Anderson, Fire Chief Todd Berg, Equity and Human Resources Director Jim Langemo, and Recreation Director Cordell Wiseman. 3. 2024 BUDGET City Manager Reggie Edwards proposed an amendment to the agenda, moving item 3e after item 3a as the levy is the first issue to come forward and everything else is premised off of the levy. 3a. CONSIDERATION OF THE 2024 BUDGET AND PUBLIC HEARING City Manager Reggie Edwards introduced the item and thanked the Council, Staff, and all others who participated in the budget process. He discussed the process of how the budget was put together and worked on throughout the year. The budget was shaped by the rippling effects of dealing with COVID-19, the death of Daunte Wright, and civil unrest, with a community and Staff who are still trying to heal and be stabilized to move forward. The City also is dealing with economic conditions of financial downturn, shifting development landscape, and increased inflation. Dr. Edwards shared the new mission and vision of Brooklyn Park that shapes what they are trying to do with the budget. He added that Brooklyn Center’s mission is to actively provide a safe, welcoming, and inclusive community. The vision of Brooklyn Center is to provide high-quality, equitable services that demonstrate they are inclusive and welcoming. Through actions, the City will establish an engaged relationship with the community, including increasing the safety and well-being of residents, City employees, businesses, and visitors while adding a wide range of economic development improvements. All of this leads to a renewed sense of price in the City and 12/4/23 -2- DRAFT its physical condition and aesthetics. He noted this is part of the rationale around the budget so that when they ask taxpayers to put forth additional tax dollars, the purpose is to achieve the City’s vision and live out the mission. The core values of the City include safety, community- centeredness, accountability, transparency, and sustainability. These values go through every decision that is made and every dollar that is spent in Brooklyn Center. Dr. Edwards shared the strategic priorities of the City as maintaining a strong financial position, maintaining and enhancing public places, improving community and employee safety, providing quality services with fair and equitable treatment, strengthening community and employee engagement in key decisions, being an effective partner with other public entities, strengthening and diversifying business development and housing, and improving employees’ experiences. These strategies begin to lay a roadmap to how they will utilize resource dollars. Dr. Edwards explained the budget priority strategies are balancing strategic direction and fiscal capacity, fulfilling State statutes, maintaining and sustaining current operations, Staff stability, public safety, and advancing strategic priorities and operational opportunities. He acknowledged that Brooklyn Center is challenged economically, with a lower tax base and a high poverty rate. Dr. Edwards shared the budget highlights, including a 3 percent Staff wage increase to maintain market competitiveness. The City tries to stay in the top quarter of comparable cities in employee wages. There is $50,000 assigned to achieving this market competitiveness. Other highlights include having an on-call 24-hour Fire duty crew, having a deputy City Manager, increasing winter salt and sand, adding to the fleet maintenance replacement and a fleet vehicle replacement fund, as well as having a Police Sergeant and a Police Detective while also unfreezing the remaining Police Department Officers. He added they are also increasing Staff, benefits, and market adjustment wages, and increasing Staff funding. They also froze the Performance Analyst position. The City was able to lower revenue calculations by removing permit fees from the general fund, lower employee vacancy rate, and lower lodging tax. Lastly, they were able to maintain 2023 expenditures. Dr. Edwards stated they had a windfall of $1,400,000 in State public safety aid which has been allocated to four departments that relate to public safety. Dr. Edwards invited Director of Fiscal & Support Services Angela Holm to present the 2024 budget. Director of Fiscal & Support Services Angela Holm shared they were done with the budget at the end of October which gave them time to go through the budget to tie up all loose ends. She explained that budget policies provide the basic framework and assist in the decision-making process. These policies are a balanced budget, current revenue should pay for current expenses, contingency of up to five percent of the budget, providing adequate funding for capital replacement and maintenance, the budget should describe goals, services, and programs, as well as a targeted unassigned General Fund balance of 50 percent to 52 percent of the next year’s General Fund budget. 12/4/23 -3- DRAFT Ms. Holm noted there are also revenue policies that direct how the City maintains the ability to pay for services it provides its customers. The policies include maintaining a diversified and stable revenue system, annual revenue estimates completed through an objective conservative analytical process, user fees should be reviewed and revised on an annual basis, fees and user charges for Enterprise Funds should fully support total direct and indirect costs, and user fees for City services will generally be established at a level which will recover the full cost of providing the service. Ms. Holm shared that the median home value in the City had a modest increase this year, which gives them a feel for where they are in terms of the values of the homes within the City. There has been a steady increase since 2014. She shared that Brooklyn Center is on the lower end of median home values compared to its comparable cities. Ms. Holm explained that tax capacity is the calculation that comes from the County based on the assessed values of properties. She noted that the residential portion of the tax capacity for 2024 payable decreased by around 1.3 percent which means the capacity for taxing the City can handle is transferred over into other areas. Ms. Holm stated the proposed property tax levy is 8.2 percent, which is a total increase of $1,861,356 over 2023. A property tax levy increase or decrease of 1 percent is approximately $225,000. Ms. Holm showed a chart outlining the cost of government. The chart showed where the tax dollars would be going for someone with a median-priced home at the 8.2 percent tax levy. She showed an example of how much an individual would be paying for Police, Fire and emergency preparedness services, Community Development, Public Works, recreation, technology improvements, health and safety prevention, general government, and the golf course, all based on the median value home’s tax levy. Ms. Holm shared that the impact on a single-family residential home with the median home value would only have an increase of $83 more than last year. These numbers will be different based on the value of all homes. She added if there were to increase or decrease the levy by one percent it would be a difference of $13 a year. Ms. Holm reviewed the information collected from all cities in Hennepin County. The median levy increase in the County was 10.74 percent, with the highest increase of 33.72 percent and the lowest increase of 1.75 percent. There are 26 cities whose proposed levy increase is higher than 8.2 percent. Ms. Holm explained how the rest of the budget process will go. She shared they will ask the Council to open the public hearing to accept public comments regarding the proposed tax levy increase. Following this, they would then ask for the public hearing to be closed and they would ask Council to consider the adoption of the 2024 proposed levy, the 2024 proposed budget, and the 2024 Capital Improvement Plan. She added that they would also be requesting the HRA to be opened to adopt the HRA levy and budget, as well as opening the EDA to adopt the EDA levy and 12/4/23 -4- DRAFT budget. Councilmember Jerzak moved and Councilmember Kragness seconded to open the Public Hearing. Motion passed unanimously. Umberto Virgillo, 1112 67th Avenue, shared he just received his tax proposal and it is $500 more than last year, an increase from $4,200 to almost $4,800. He added he is retired and received Social Security and cannot afford this tax. Mayor Graves said she understands the struggle of many people. She explained there is a process to contest the valuation of a home. She added that Staff will follow up with Mr. Virgillo on his concerns. Mr. Virgillo noted that he owns a home in Maple Grove that is worth almost $500,000 and he does not pay even $4,000 on his property taxes at that home. He stated he has been in this house for 43 years and has had a lot of businesses come and go. He added that every business that shuts down is lost revenue for the City. Mayor Graves noted this does put the burden on the residents. Maple Grove has an advantage that they have more businesses to help share this burden. Councilmember Lawrence-Anderson explained there is a breakdown on the tax statement that shows what portion of the taxes go to the City, the County, and the School District. Mr. Virgillo said he was told by the assessor that $2,250 of the taxes was for the City. Councilmember Lawrence-Anderson shared she was shocked when she opened her tax statement as more than half of the taxes on her home are not City taxes. Mayor Graves asked if the valuation of his home went up significantly from last year. Umberto V. said not really, only $25,000 at the most. Mayor Graves thanked him for coming forward this evening and encouraged him to connect with Staff to advise how to move forward. Joseph Davies shared he and his wife are here to address the tax increment on their home. He stated they are not getting any younger and they are seeing the taxes increase every year on their home, and if this were to continue over the next few years, it is not sustainable. They have children and grandchildren and cannot afford to lose their homes. He shared they would like the Council to look into this and try to readjust. Alfreda Daniels shared she is a fairly new homeowner and a young mother. She said she is worried 12/4/23 -5- DRAFT that she may have to leave the City due to the tax burden becoming too much. The option of getting an apartment is not an option for her as her mortgage would likely be less than an apartment. She stated she does not know how people are going to be able to deal with the increase in taxes. She wants to continue to live in Brooklyn Center but this limits her availability to stay. She hopes her daughters will be able to grow up and live in Brooklyn Center as well. She added she is a well- paid employee and she is even struggling to afford the increase. She said there are other residents who are struggling more than she is. She suggested focusing on bringing businesses back to the City and investing in small businesses that are already in the City. Councilmember Kragness moved and Councilmember Lawrence-Anderson seconded to close the Public Hearing. Motion passed unanimously. Mayor Graves shared she empathizes with those who have come in and spoken about the issue this evening. When she first purchased her home in Brooklyn Center as a single mother, it was a foreclosure which helped her financially. She said she has also seen her taxes increase since she purchased her home in 2011. She noted this is a good thing in that home values are increasing so assets are worth more, while it is hard that they also owe more in taxes as the valuation of their homes increases. Another thing the City struggles with is not having as many businesses to lean on to fill the tax capacity. They also have big city issues with some of the lower incomes in the metro area. All of these things make it difficult to address some of the issues and services that need to be addressed in the City. As they think about the budget process and where they want to invest, one thing that stuck out to her during the presentation was the ‘Cost of Government’ slide that Ms. Holm reviewed. She used the example of $95 tax dollars going towards Community Development and stated that felt low to her. She stated this is the department that is responsible for bringing in businesses and keeping these businesses in the City that would help share this tax burden. She added that she believes that the Staff has done a good job with the budget considering the limitations that the City has. Moving forward, she thinks investing more in Community Development will benefit all areas within the budget and help relieve some of the tax burden on residents. Councilmember Kragness shared her disappointment in this whole process. She said she has owned her home for over 20 years and her property taxes have doubled. She also liked the ‘Cost of Government’ slide as this put things into perspective for her to see what she is paying for. She asked about something that was grant-funded and is now 100 percent General Fund funded which increased the budget by a whole percent. She explained how she looks at every line item and cost to see if it is a want or a need and to see if it has a benefit for the future. She asked why positions were previously grant-funded but are now General Fund funded. She also asked about the new reporting for grant dollars as she has still not seen this distinction. She suggested having separate line items for things that the Council said they wanted, like the Deputy City Manager, the Fire crew, and the Police Detective. This would be beneficial for people to see what they are paying for. 12/4/23 -6- DRAFT Dr. Edwards noted there are no positions that were formerly grant-funded that are now funded through the General Fund. Councilmember Kragness said she sees things in the General Fund budget that were never there before. She asked for clarification on these items. Dr. Edwards shared they created an Office of Communication and Community Engagement in 2017 or 2018. This has now been split and falls under different supervisors. These items are not new. Councilmember Kragness stated the way they are presented in the budget makes it appear as though they are new positions. Dr. Edward explained that they tried to show this combined as well as separated. There are three spreadsheets in the budget that show this. Councilmember Kragness asked how this was done with the new positions. Dr. Edwards said there are not necessarily any new positions. They previously had a Communications Engagement Manager and beneath them were two Staff on the communications side as well as part-time Staff on the engagement side. When they separated this department, they now have a supervisor and a specialist in each area. Councilmember Kragness asked if the cost of the deputy City Manager, the Fire crew, and the Police Detective were split out into individual line items. Dr. Edwards said no. Councilmember Kragness said there is no consistency with this which makes it hard to follow. Dr. Edwards explained Communication and Engagement positions were separated because they created the two new units. If they had maintained one unit then it would have continued to show the one unit. He said they did not separate any of the other positions in other areas. Ms. Holm said it is a challenge to read this. She reiterated that there was a Communications and Community Engagement Department which was budgeted for 2023. In January of 2023, an organizational decision was made to split Staff into communications and engagement to two separate and distinct areas. Two different departments were created on the accounting books for this split. She stated they were intentional about budgeting for each of these two new departments in the 2024 budget. Councilmember Kragness requested that the other positions also be separated for clarification. Ms. Holm made note of this. Ms. Holm explained they are currently in the process of finalizing the grant funding within the Finance Department in terms of how this is going to look. They plan to be more intentional about reporting on specific grants in a meaningful way. This will be more intentional for year-end reporting as well as providing these reports more consistently to the Council. Dr. Edwards shared that on previous presentations given to the Council, they did have line items specific to items that the Council was interested in. The thought was that they could drop these numbers as they had achieved staying under the levy amount. He said they could go back in and 12/4/23 -7- DRAFT put the dollar amounts back in. Councilmember Kragness said there were numbers that were provided and the direction came back and now the numbers need to be reduced as a whole. Even though they had these numbers in the beginning they would not be the same numbers now. Dr. Edwards said the numbers as far as the positions are all still the same numbers. These were not reduced, rather the budget was adjusted to accommodate these items. Councilmember Jerzak finds himself very frustrated that they have been pushed up against hard deadlines. He has expressed previously his objection to the volume of information they have been given and all of the circumstances with the economic downturn and shift in development. He added they heard testimony this evening with concerns with taxes. The County, the State, and the School District all add to the taxes. Every enterprise department in the City had an increase in cost this year. He said all of these things go towards the bottom line. He shared he understands the increase in the valuation of homes; however, it is only value if someone sells their home. He also understands the reorganization of accounts, but it was hard for him to follow these. He agreed with Councilmember Kragness that the lack of designation for the grant-funded items as they have a way of showing up in the future wanting to be levied. He has always been careful of these types of things. He noted there was $500,000 that was past due from their enterprise funds. This is a symptom that residents are already feeling stress in the community with the ability to pay simple fees like water, sewer, storm sewer, etc. He said they have not completed the fixing of the meters, so they do not know if they are accurately billing people. This is another concern he had. Nine years in a row they have had the taxable revenue increase resulting in additional income reflecting increases in property taxes. He added that it is ambitious for the projected $4,000,000 for the Heritage Center, which is a goal they have not achieved. He does not want them to get back into a position where they have great goals and then fall short. He explained that every employee in the City deserves a raise, but the 3% increase is expensive. He did not see a lot of negotiation with this. He did see consensus on the Deputy City Manager, the Fire crew, and the Police Detective. He said he does not know that they went back and evaluated all of the things that they could remove from this. He added that a $2,000,000 increase in the budget is unsustainable going forward. Councilmember Lawrence-Anderson said she is not comfortable lumping a ton of money into professional services. She asked about the $25,000 for professional services. She added that she saw special events under this same category for $35,200. She asked what special events this was for. If this includes a parade, it should be under community engagement. She said asterisks are needed on the budget to help them understand where this money is going. She asked how the budget for Police patrol went down from 2023. She asked where the budget for the Police Sergeant was. She shared she is not comfortable voting on the budget this evening. She would appreciate more line item detail in some of these areas. She noted this is the first time the Council has seen this budget and now they are expected to vote on it. They have heard presentations, but they have not been asked if they are happy with the budget and she is not happy with the budget in its current state. Dr. Edwards explained the budget needs to be submitted by December 24, 2023. 12/4/23 -8- DRAFT Mayor Graves thanked the Council for the comments, concerns, and questions. She said it seems that the Council is not in favor of voting on this tonight. She wanted to be clear on what they need so they could get to a point where they can vote on this to get the budget submitted on time. With a Council meeting on December 11, December 18 seems like the most likely date they would be able to meet again to finalize this. She asked the Council if this date worked for them. The Council agreed with this date. Mayor Graves asked the Council to be very specific with what they need and to give this direction to Staff so they can get this information together. She asked Staff to get the budget information to the Council prior to the meeting on December 18 so they have a chance to ask questions before the meeting. Councilmember Jerzak shared he voted against any levy increase; however, he is open to compromise. He said he needs the overnight duty crew, the Police Sergeant and Detective positions, the Assistant City Manager, and the 3% wage increase. He asked Staff to carefully look at grant-funded positions and take a look at any potential duplications. He would like the departments to be given flexibility. He said he would be very transparent that no new positions are added without Council approval. Mayor Graves asked if Councilmember Jerzak is interested in a certain percentage levy decrease. Councilmember Jerzak said he is open to approving an increase based on what the survey has said all along with some inflation, no new programs, and public safet y as a priority. He said there is room for a lot of improvement and growth in public safety. Councilmember Lawrence-Anderson shared she believes they need to get back to the basics. She shared concerns about the infrastructure of the City. She noted concerns with updating the dilapidated building of the Community Center. She is also concerned with the CIP and spending money on something that is a lost cause. She said they need to be focusing on the big picture. She shared concerns that they are not looking long-term. She expressed the importance of funding the needs of the City and putting the wants to the side. Her two top priorities are crime and Community Development. She agreed with Councilmember Jerzak that the overnight duty crew, the Police Sergeant and Detective positions, and the Assistant City Manager are the needs. Mayor Graves asked if there is a different levy amount Councilmember Lawrence-Anderson would like to see. Councilmember Lawrence-Anderson said they could stay at an 8.2 percent increase if they were to reallocate some of the funds to where it is needed. She stated she would like the Police Department to have mobile cameras as the residents are concerned with crime in the City. Councilmember Lawrence-Anderson said in the past she has seen the City Manager poll the Council to see what their priorities are. This was not done this year and they have not had the opportunity to discuss these things. Councilmember Kragness thanked Staff for their work on putting this budget together. She shared 12/4/23 -9- DRAFT she voted for the 8.2 percent levy increase as a worst-case scenario. She added it is not fair that residents do not know what they are getting for their tax dollars. She said this needs to be balanced with having enough funds to run the City effectively. She noted they need to go back to maintaining the City. She is not comfortable with the 8.2 percent increase. She would like to see all of the information broken out and details on what all of the numbers in the budget represent. Dr. Edwards asked about the Council’s expectations at the December 18 meeting. He asked if they anticipate this session being a session where they are still working on the budget. Councilmember Kragness shared she would have preferred more information now so that they could be working through this between this meeting and the meeting on December 18. She said if they do not get the more detailed information prior to the December 18 meeting then she expects that they would be working through the budget that evening before voting on it. Mayor Graves asked Councilmember Kragness if there was a certain levy decrease she would like to see from the 8.2 percent. Councilmember Kragness said she sees areas where things could be cut and she could see a one to two percent decrease. Councilmember Jerzak said if he is not able to explain to his neighbors, business owners, or residents what various departments, they are paying for and are tied to outcome performance, then he would not vote in favor of it. He said these things have to be understandable and palatable to the taxpayers while also being tied to some kind of outcome performance. Dr. Edwards explained they had tried to create an outcome-based budget a few years ago. He shared they established a person on Staff to help with this model; however, this position is currently frozen. When they ask for programs to have outcomes tied to them, they do not have this position currently. He asked if they are wanting every department to establish outcomes and provide that information. Councilmember Jerzak said he would expect this of every department, that they cannot only come up with their budget but also do more than justify it. Even without this position, he still expects individual department accountability and responsibility around their budgets. Dr. Edwards asked if there is an expectation that the departments create these outcomes by the December 18 meeting. Councilmember Jerzak said the most important ones to see would be the overnight duty crew, the Police Sergeant and Detective positions, and the Assistant City Manager. He added he would not be opposed to the reallocation of funds for the Police mobile cameras. He added that he cannot support the CIP and the $2,000,000 for repairs for Public Works as these are not good investments in his mind. He would like to see a comprehensive analysis of this before he votes on this as all of these things are just debt. He wants to be prudent with City dollars. Councilmember Kragness said it is not realistic to come up with a whole new model in two weeks. However, she noted they should be able to justify an increase in a budget line item if it is not directly tied to survey results. If it is something that the residents are asking for, their tax dollars can go towards that, but if it is not something they asked for then they need to be able to justify it. Mayor Graves thanked the Council and Staff, as well as all who have worked on the budget and 12/4/23 -10- DRAFT with the strategic planning process. She also thanked the residents who answered the surveys. She said she is hearing the Council say that they need to have more specifics on the budget and to know where there are duplications and where the dollars are going. She is also hearing that the Council is not completely opposed to where the levy is at but they would like to see it a little bit lower. She noted they also need to have the budget highlight amounts specifically called out. She said she would also like to see where cuts and adjustments have already been made so the Council can see how Staff gets to the levy recommendation. Councilmember Lawrence-Anderson emphasized the need for justification within the budget. Going forward they can look at the outcome-based budget. She wanted to make certain that as they are cutting things from the budget it is not coming out of Police or Fire. She added that she would support adding a drone to the budget. She encouraged the department heads to look at their budgets and professional services to find money that could be reallocated. She shared concerns with security outside of City Hall. Mayor Graves said every department should be reviewing their budget for duplication and fluff items. Councilmember Jerzak moved and Councilmember Kragness seconded to continue the budget discussion to December 18, 2023, at 6:00 p.m. Motion passed unanimously. 3e. RESOLUTION APPROVING FINAL TAX CAPACITY LEVIES FOR THE GENERAL FUND AND DEBT SERVICE FUNDS AND A MARKET VALUE TAX LEVY FOR HOUSING AND REDEVELOPMENT AUTHORITY FOR PROPERTY TAXES PAYABLE IN 2024 This item was continued to December 18, 2023. 3b. CITY MANAGER’S BUDGET TRANSMITTAL LETTER FOR 2024 FISCAL YEAR This item was continued to December 18, 2023. 3c. RESOLUTION ADOPTING THE 2024 ANNUAL CITY BUDGET This item was continued to December 18, 2023. 3d. RESOLUTION APPROVING THE 2024-2028 CAPITAL IMPROVEMENT PLAN AND ADOPTING THE 2024 CAPITAL PROGRAM This item was continued to December 18, 2023. 4. ADJOURN 12/4/23 -11- DRAFT At 7:42 p.m., the meeting was recessed and continued to December 18, 2023 at 6:00 p.m. The meeting adjourned at 7:42 p.m.