Loading...
HomeMy WebLinkAbout2004 10-14 FCAAGENDA Brooklyn Center Financial Commission Thursday, 14 October 2004 7:00 PM Council Commission Conference Room I. Call to Order II. Roll Call III. Approval of Agenda IV. Meeting Minutes 16 August 2004 9 September 2004 V. Fund Balance and Reserve Policy VI. Reports VII. Other Business VIII. Adjournment 0 • I Financial Commission Work Session Meeting Minutes 16 August 2004 1. Call to Order The meeting was called to order by Chair Escher at 6:30 PM (This is a joint work session with the Brooklyn Center City Council) 2. Roll Call Members Present: Chair Escher, Commissioners Hruska, Elftman, and Nemec. Others Present: City Manager Michael McCauley, Assistant City Manager Curt Boganey 3. Budget Review The attached minutes of the City Council Joint Work Session will serve as record • of the proceedings for the Financial Commission as well. 4. Adjournment The work session meeting adjourned at 8:10 PM. II MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA JOINT WORK SESSION WITH FINANCIAL COMMISSION • AUGUST 16, 2004 CITY HALL - COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Work Session and was called to order by Mayor Myrna Kragness at 6:30 p.m. ROLL CALL Mayor Myrna Kragness, and Councilmembers Kathleen Carmody and Diane Niesen. Councilmember Kay Lasman and Bob Peppe were absent and excused. Also present: City Manager Michael McCauley, Assistant City Manager/Director of Operations Curt Boganey, Fiscal and Support Services Director Dan Jordet, and Deputy City Clerk Maria Rosenbaum. Others present were Financial Commission Chair Donn Escher, and Commissioners Timothy Elftmann, Jay Hruska, and Mark Nemec. REVIEW OF 2005 GENERAL FUND BUDGET City Manager Michael McCauley discussed that the overall revenues in the General Fund would • increase 7/10ths of one percent with a three percent levy increase in the General Fund. The Local Government Aid (LGA) loss of$335,033 is greater than the revenue raised by a three percent levy increase. A three percent increase in the General Fund Levy raises$275,860 {$284,407 estimated uncollectible},and the overall increase in all City and Housing and Redevelopment Authority(HRA) levies is $212,301 or 1.97 percent. On the expenditure side there are a number of pressures that include wages and benefits that are included in the draft budget at three percent. This increase appears to be in the mid to low range of what might be expected to happen in the public sector and lower than the general trend in the private sector. The draft reflects shifting one street maintenance position to the Storm Water Utility Fund and a shift of some current General Fund personnel costs to the Liquor Fund. There are some expenditures that have been requested that can be removed in the next iteration of the draft General Fund Budget without requiring program or service cuts, but those reductions will be at the margin and would only be in the range of$20,000 to $30,000. Mr.McCauley requested direction as to what number should be proposed for the preliminary levy on September 13, 2004. Councilmember Carmody expressed that she believes the Council needs to make a decision if the Council would like to budget any money for REACH. 08/16/04 • 2 Councilmember Niesen questioned if the City had to switch to the 800 mhz for police and fire and if that would be a one-time expense. Mr.McCauley discussed that the City does have to switch to 800 • mhz and that there will be grant monies that will need to be matched along with some on-going capital costs. Plus, there is a continuing cost to Hennepin County for participation in the annual metro radio system. Councilmember Carmody informed that she has a concern with the repair and replacement of buildings and the need for funding for this purpose. Financial Commission Chair Donn Escher expressed that he would like the Council to consider a three percent General Fund Levy increase plus full replacement of lost LGA. Mayor Kragness asked that each member indicate what alternate for consideration should move forward for the September 13, 2004, preliminary adoption. Commissioner Nemec express that he believed it would be irresponsible not to go with a less than Alternate E:a three percent levy plus replacement of the additional 2005 Local Government Aid loss of$335,033 increase when looking at the future for the City. It was the consensus of those present that the preliminary General Fund levy increase be proposed at three percent plus full replacement of lost LGA($335,033)which results in a 5.08 percent increase in all taxes levied by the City and HRA. • Councilmember Carmody expressed that she would still like to consider a budget for REACH. Mr. McCauley suggested that the Council continue discussion regarding REACH at the next Work Session. MISCELLANEOUS Mr. Escher questioned if the Financial Commission would need to meet other than the scheduled joint meetings with the City Council. Mr.McCauley suggested that the Financial Commission might wish to meet to discuss the fund balance. Mr. Escher suggested September 9, 2004, 7:00 p.m. ADJOURNMENT A motion by Councilmember Carmody, seconded by Councilmember Niesen to adjourn the Work Session at 8:10 p.m. Motion passed unanimously. City Clerk Mayor • 08/16/04 3 Date: September 13, 2004 • To: Michael McCauley From: Diane Niesen RE: Changes to Meeting Minutes: August 16,2004 Joint Work Session with Financial Commission Please include this Memo as an Attachment to the above noted Minutes. It is my understanding that meeting minutes capture items of discussion that reflect the thoughts and opinions of the Council and, upon review and reflection, help provide the basis for understanding Council movement and direction. Given that intent, I feel that the following points were important to capture in the finalized Minutes: • Council Member (CM)Niesen noted that the materials prepared for the meeting included an opinion on salary increases for City staff. Niesen asked whether the same methodology used to assess Council Member compensation used by the Financial Commission was applied to City staff salary assessment. City Manager McCauley stated that a methodology termed: Comparable Worth, was used in salary assessments. • Niesen asked about the need to fund a City Assessing Dept. and the savings that might • accrue if BC adopted a policy similar to the one now being studied for the 911 Dispatch system. Mr. McCauley stated that this issue had been reviewed a few years ago and it was competitive/equivalent to the County at that time. That review has not been updated. • Other areas of potential expense reduction were questioned and discussed including the ownership and use of City vehicles (City garage),the use of outside consultants, and a different mix of staff resources. Areas to increase income outside of taxation were also discussed and included the sale of fiber optic cable the City recently purchased, TIF district phaseout and possible grants and other revenue sharing possibilities. • Niesen asked about estimated tax impacts to residential taxpayers for the various tax increase scenarios presented. Niesen thought that this taxpaying segment was probably at their upper limit of tolerance for tax increases, given the current market situation for commercial and industrial tax values, and the phaseout of Limited Market Value. • 08/16/04 4 O I Financial Commission Regular Meeting Minutes 9 September 2004 1. Call to Order The meeting was called to order at 7:00 PM 2. Roll Call Members Present: Chair Escher and Commissioners Hruska, Elftmann, Nemec, Shogren Smith, Simons and Councilmember Carmody. Commissioner Peterson was absent. Others Present: City Manager McCauley and Director of Fiscal & Support Services Jordet . 3. Agenda Ms. Shogren Smith proposed and Mr. Elftmann seconded a motion to adopt the agenda. With all voting in favor, the motion was adopted. 4. Minutes Mr. Nemec proposed and Mr. Hruska seconded a motion adopting the minutes of the 15 July 2004 and 16 August 2004 meetings as presented. With Escher, Hruska, Elftmann, Nemec, and Shogren Smith voting in favor and Simons abstaining as he was not a member of the Commission at either of those meetings, the motion was adopted. 5. Fund Balances and Reserve Policy Mr. McCauley reviewed his memorandum on policy and actual history of the fund balances and reserve policies. Also included in the packet were copies of the Management Letter from the City's audit firm, HLB Tautges Redpath, suggesting an examination of fund balance allocations. Discussion opened with how to make a change from the current policy. Mr. McCauley suggested that the amount of the reserve be raised to 50% - 52% and• the restriction of using only 1/2 of the excess reserve be removed but designated 5 to certain types of use such as capital and technology acquisitions and III replacements. A question was raised about whether reserves could be returned to the General Fund in the event of an emergency. As in any case, movement of reserves is the City Council's decision and funds could be returned if still available at any time. Removing such funds back to the General Fund would also necessitate deferring the projects funded with those reserves. A question was raised about whether transferred funds would have to be designated for specific projects. Mr. McCauley responded that the transfers are fund based, not project specific. The Commission reached general agreement to allow transfer of funds from the General Fund to the level of required reserves following the previous formula and raise the reserve requirement from 45% to 50% - 52%. Staff will return to the next regular meeting with a written proposal. 6. Upcoming TIF Bond Sale Mr. McCauley reviewed a presentation made to the City Council earlier in the summer. It described the parameters for development of the TIF District # 3 , the options for development, and the decision process being considered by the City Council. The next steps would be securing a consultant to develop specifications for development proposals then using those specifications to solicit • proposals for final development. Summerchase is not being considered as it is expected that such a project would bog down in legal proceedings and carry beyond the time limits for use of the TIF funds. No action was taken. 7. Reports A question was raised about dispatch services. Mr. McCauley reviewed the options being discussed and the cost implications of each option. They included: • Using the Hennepin County dispatch services • Using City of Minneapolis dispatch services • Forming a new consortium with 3 to 4 other cities to develop a dispatch center • Staying independent and upgrading our current dispatch center Mr. Jordet reviewed the process that will be followed for requesting proposals for financial advisory services. RFP's have been distributed and will be returned by 1 October 2004. Interviews will likely be the week of 26 October 2004. Mr. Jordet reported that the Single Audit of Federal Funds was completed and no reportable conditions were found. III • Mr. Nemec moved and Mr. Elftmann seconded a motion to reconsider the minutes of the 16 August 2004 joint meeting with the City Council. This action was the result of a suggestion that the City Council would be changing the City Council minutes that were attached to the 16 August 2004 Financial Commission minutes. With Escher, Hruska, Elftmann, Nemec, and Shogren Smith voting in favor and Simons abstaining as he was not a member of the Commission at either of those meetings, the motion was adopted. Mr. Elftmann moved and Mr. Nemec seconded a motion to table consideration of the 16 August 2004 minutes to the next regular meeting. With Escher, Hruska, Elftmann, Nemec, and Shogren Smith voting in favor and Simons abstaining as he was not a member of the Commission at either of those meetings, the motion was adopted. The next regular meeting of the Financial Commission will be held on Thursday, 14 October 2004 at 7:00 PM at City Hall. 8. Adjournment Mr. Hruska proposed and Mr. Nemec seconded adjournment of the meeting. Chair Escher adjourned the meting at 8:27 PM. 1111 Donn Escher, Chairperson ATTEST: Daniel Jordet, Director of F & SS • 7 • • This page has been left blank intentionally. 8 or City of Brooklyn Center A Millennium Community To: Financial Commission Members From: Michael J. McCauley City Manager Date: October 8, 2004 Re: General Fund Balance Attached please find a draft revision to the General Fund balance requirements consistent with the discussion at the last meeting of the Financial Commission. The draft would set 50 to 52% of the next year's General Fund operating budget as a fund balance target for cash flow at the close of the year. As indicated at the last meeting,this is an increase from the Adequate General Fund Balance Formula level of 45%. However, it is lower than the balances carried by operation of the Adequate General Fund Balance Formula due to the 50% limitation on transferring surplus funds in any given year. The draft policy change allows transfers above the 50 to 52% target and contemplates their use for capital purposes in the Technology, Street Reconstruction, and Capital Improvement funds. • • 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430-2199 9 (763) 569-3400 City Hall & TDD Number(763) 569-3300 FAX(763) 569-3434 FAX(763) 569-3494 www.cityofbrooklyncenter.org 2.3 Financial Management Policies • D. Reserve Policies 1. The City will maintain an undesignated and reserved General Fund balance mount--deter- e 1—by—a plyins=ie "— te Ge„er.,l Fund B lance Policy Formula established by the C:ty Council. The formula shall be reviewed annually by the City Council. The formulas shall be designed to establish a fund balance at a level which is sufficient to avoid issuing debt to meet current operating needs. The City shall manage its cash flow needs by having a target unreserved and undesignated General Fund balance at the close of each fiscal year equal to between 50 and 52%of the next year's General Fund operating budget. 2. If the City Ceunei deems it- iate to reduce fun balances for the portion above th f r.,,ule a „t el reductions shall not exceed 50%of thcxsessfo-eneyear. Undesignated General Fund monies that are not required for cash flow purposes may be transferred into other funds as may be appropriate or needed during the fiscal year. It is specifically anticipated that transfers will be made to the Street Reconstruction Fund, Capital Improvements Fund, and the Technology Fund when operating 411 results generate a surplus of actual revenues over actual expenditures to serve as a recurring source of funding for those 3 funds. Latest-Audited—Tetal-Fund-Balenee-at-Deeeithet-3-17-4497 ,80 1,D..+°on 1. Items Not Readily Convertible to Cash: a. Accounts Receivable 51,151 b. Advances to Other Funds 105.071 S-1-5-6722-3 2. Amount Appropriated to the General Fund Current Year Budget: 1998 $2574-2 3. Amounts to be Reserved for Working Capital and Variances from Revenue Estimates (15% of Total General Fund Current Year Budget, S-5-465340'1- leaf debt service) 15% of $12,115,336— $5,621,311 $977,139 • $4-$$ 14 10 • References: • City Council Resolution Nos. 99-21; 98-48 • City Council Minutes 5/22/95; 6/8/92; 2/26/90; 12/22/80 • • 11 • • I This page has been left blank intentionally. • 12 BROOKLYN CENTER FINANCIAL COMMISSION Chairperson and six members (revised October 2004) • Donn Escher, Chairperson Mark Nemec 3107 65th Avenue North 5538 Camden Avenue North Brooklyn Center, MN 55429 Brooklyn Center, MN 55430 nickie73@comcast.net Mark.Nemec@State.MN.US (763) 561-4533 (763) 566-1415 (h); (651) 556-6788 (w) Appointed: 7/13/92 Appointed: 6/14/99 Appointed Chair: 8/17/92 Term expires: 12/31/06 Term expires: 12/31/05 Lawrence Peterson Timothy Elftmann 5830 June Avenue North 5301 Howe Lane Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 Ieterson@strategicequipment.com TElftmann@Compuserve.com (763) 537-7022 (h); (612) 871-2727 (w) (763) 537-2279 Appointed: 10/25/93 Appointed: 7/13/98 Term expires: 12/31/04 Term expires: 12/31/05 Susan Shogren Smith Jay Hruska, Vice Chairperson 600 62nd Avenue North 5012 North Lilac Drive Brooklyn Center, MN 55430 Brooklyn Center, MN 55429 sssmith2@stthomas.edu 41) jhruska@visi.com (612) 812-8160 (763) 535-4637 Appointed: 1/26/04 Appointed: 3/13/95 Term expires: 12/31/05 Term expires: 12/31/04 Earl Simons 7201 Knox Avenue North Brooklyn Center, MN 55430 Earlsimons33@yahoo.com (763) 561-2963 Appointed: 8/23/04 Term expires: 12/31/05 2004 City Council Liaison: Kathleen Carmody (h) (763) 566-3114 council mem berca rmody©ci.brooklyn-center.m n.us City Manager: Michael McCauley (w) (763) 569-3309 mmccauley@ ci.brooklyn-center.mn.us • Director of Fiscal & Support Services: Daniel Jordet (w) (763) 569-3345 djordetPci.brooklyn-center.mn.us [October 8, 2004]