HomeMy WebLinkAbout1996 03-14 FCA•
AGENDA
BROOKLYN CENTER FINANCIAL COMMISSION
March 14, 1996
City Hall
Conference Room B
1. Call to Order: 7:00 P.M.
2. Roll call.
3. Approval of Minutes: February 1, 1996
4. Requests for Proposals for Professional Services.
5. Mayor and Council Member Total Compensation.
6. Report on City Tax Base and Fiscal Disparities Pool.
• 7. Set Date of Next Meeting.
8. Adjournment: 9:00 P.M.
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• MINUTES OF THE PROCEEDINGS OF THE FINANCIAL COMMISSION
OF THE CITY OF BROOKLYN CENTER
FEBRUARY 1, 1996
CITY HALL, COUNCIL CHAMBERS
CALL TO ORDER
Chair Donn Escher called the meeting to order at 7:00 P.M. in the Council Chambers.
ROLL CALL
Present at roll call were Chair Donn Escher, Commissioners: Ned Storla, Larry Peterson, Lee
Anderson and Jay Hruska. Also present were City Manager Michael McCauley and Finance
Director Charlie Hansen. Commissioner Ron Christensen arrived at 7:14 P.M.
Chair Donn Escher announced that Commissioners Larry Peterson and Jay Hruska have been
reappointed to another term.
Approval of Minutes
A motion was made by Commissioner Larry Peterson to approve the minutes of the November
9, 1995 meeting. Commissioner Ned Storla seconded the motion and all members voted in its
favor.
a Election of Officers
Commissioner Larry Peterson nominated Donn Escher to be Financial Commission Chair for the
year 1996. Commissioner Lee Anderson seconded the motion and all members voted in its favor.
Chair Donn Escher appointed Commissioner Ned Storla to be Vice Chair.
&Quests for Proposals for Various Professionaoervices
Charlie Hansen explained that the City Council had instructed that requests for proposals (RFPs)
be done in 1996 before services would be needed in the areas of auditor and financial advisor for
bond sales. Mike McCauley stated that in his initial discussions with the City Council, he had
proposed that these RFPs be delayed in order to allow staff to focus on the more important issues
of the budget format, bond sales for city buildings and parks, and evaluating the operations of the
Earle Brown Heritage Center and the Liquor Stores. He also proposed that RFPs would be placed
on a schedule so that all finance related services would go out for RFPs periodically. The
assignment for the Financial Commission is to come up with a proposed schedule and develop a
policy to guide the RFP process.
An extensive discussion of professional services followed which included factors of price verses
quality, the intervals between RFPs, and the need to monitor performance in between RFPs.
Charlie Hansen stated that some RFPs had been done as recently as 1994, but that some other
services had been with the same consultant for 20 years or more. Chair Donn Escher suggested
• that the staff begin work on a draft policy and bring it back to the Financial Commission at the
next meeting.
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• Moor and Council Member Total Compensation
Donn Escher explained that the Financial Commission has recommended appropriate salaries for
the compensation of the City Council for the last several years under a policy adopted by the City
Council. The City Council recently directed the Financial Commission to study a proposal to
compensate City Council members on the basis of meetings attended. The Financial Commission
discussed issues including attendance, the use of per diem pay, the nature of public service,
showing up at meetings unprepared, and legal costs of enforcement.
The recall of elected officials was also discussed but it was concluded that this would have to be
considered by the Charter Commission. The Financial Commission concluded that the potential
cures for the problem may be worse than the problem. Mike McCauley reported that he had faced
this issue at a couple of cities he had worked at previously. Donn Escher requested that the City
Manager prepare a draft of a report which would include the sense of the discussion and his
previous experience with the issue.
Address to Joint Meeting of City Council and Advisorv Commissions
Donn Escher reminded the Commissioners of the joint meeting on February 7 and announced that
Ned Storla would be speaking on behalf of the Financial Commission.
Next Meeting
Chair Donn Escher announced that he would like to set a standard meeting schedule which would
• have the Financial Commission meet on the second Thursday of every month. Adjustments would
be made as needed to handle conflicts. The next meeting will be Thursday, March 14, 1996 at
7:00 P.M.
ADJOURNMENT
The Financial Commission adjourned the meeting at 8:33 P.M.
•
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• POLICY AND PROCEDURE ON
REQUESTS FOR PROPOSALS FOR PROFESSIONAL SERVICES
I. NEED FOR POLICY:
The City needs a policy and procedure to provide for the orderly conduct of requesting proposals
for professional services for handling financial affairs, to ensure that all services will be
periodically reviewed, and that the proper balance will be maintained between cost and quality of
services.
II. POLICY:
1. All professional services in the area of city finances will be periodically let out for
request for proposals according to an established schedule.
2. Service levels will be monitored by the City Council and Staff and if unsatisfactory
service is received, that contract will be re-advertised prior to the year set in the
schedule.
3. Quality of service will be the primary factor in awarding a contract for professional
service, but cost will also be a determinant.
III. PROCEDURE:
1. A schedule shall be established for the conduct of R.F.P.s. The schedule should
be adhered to unless there is a performance problem or other justification for an
earlier R.F.P. Going to the market too frequently with R.F.P.s expends staff time,
requires extensive orientation of new professionals, and discourages quality firms
from submitting proposals at their most attractive price since they will expect to
only have the contract for a short time.
2. Specifications tailored to the professional service to be advertised will be prepared
by staff and approved by the City Council.
3. A review committee made up of the City Manager and Finance Director shall
review proposals for Banking Services, Insurance Agent, Risk Management
Consultant, and Custodian for investment securities. Financial Commission
members and City Council members may also be appointed as appropriate to
review proposals for Auditor and Financial Advisor for bond sales.
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4. The specifications will emphasize the abilities, qualifications, and experience of the
applicant firms to provide high quality service to the City. Price will be
considered after one or more applicants have been identified as providing the
desired quality of service. When appropriate, the specification shall require prices
to be submitted in a separate, sealed envelope to be opened after applicants have
been ranked according to quality.
5. The City Manager shall make a recommendation to the City Council of a provider
to be appointed to a multi-year engagement. It shall be written in the engagement
that the appointment may be terminated earlier.
•
•
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PROF -E.55, _ g years
sales Bank
ial Advisor for bond 3 years Ins Agent
Ffinanc Risk Mgmt
1990
Banking $er Aces 4 years
1988 Risk Mgrir►t
Insurance Agent 4 years custodian
ent Consultant 1993 Auditor
Risk Managem 6 years
an for investment securities 1994
custodi 4 _ g years
Auditor
3113196
City of Brooklyn Center
A great place to start. A great place to stay.
To: Financial Commission
From: Michael J. McCauley
City Manager
Re: Requested analysis of compensation issues
Date: March 13, 1996
This memo will summarize the discussion from the February Financial Commission meeting. In
that discussion, the commission reviewed the issues that had been referred to them by the City
Council whether changes in the method of providing compensation to City Council members
should be considered to relate compensation to meeting attendance. Among the options were:
- payment on a per diem basis for meetings attended
- reductions in compensation for non-attendance.
The discussion of these options dealt with a number of implications of trying to tie compensation
to attendance. Those issues included:
- the nature of council service
- being unprepared at a meeting
- enforcement issues related to determining compensation on some basis other
than general performance of duties or attendance
- not attending an entire meeting
- whether to include commission and special meetings.
Generally, the nature of public service by a council member is a complex set of activities that
goes well beyond attendance at City Council meetings. The number and length of meetings
varies. If a compensation plan was tied to meeting attendance, apportionment of compensation
would be difficult. For example, if the council had 2 meetings in one month and 4 in the next,
would council members be paid 50% of their monthly compensation for each of the 2 meetings
in the one month and 25% o of their monthly compensation for each of the meetings in the
following month. Payment per meeting would result in a fluctuating compensation that could be
increased or decreased by calling meetings. Similarly, if meetings were the basis of
6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430-2199 • City Hall & TDD Number (612) 569-3300
Recreation and Community Center Phone & TDD Number (612) 569-3400 • FAX (612) 569-3494
An Affirmative Action /Equal Opportunities Employer
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compensation, issues would arise in terms of being late or leaving a meeting early. If a meeting
lasted 1 hour, would it be worth less than a meeting that lasted 3 hours? But then, if a person
missed 10 minutes of a 3 hour meeting, would the reduction in compensation be the same as if
she/he missed 10 minutes of a one hour meeting? To tie compensation to meeting attendance in
this fashion would be unworkable.
Council service involves receiving telephone calls from constituents and attending many
meetings in the community and city commissions. To single out attendance at city council
meetings as the only basis for compensation would understate the effort and time required of a
council member. Enforcement would become an issue in terms of computing compensation.
When I advised the Mankato Charter commission, the commission labored over a number of
months trying to determine whether a council member should be removed based on meeting
attendance and/or excused absences. The commission finally determined that a formula to
determine a failure to perform the duties of a council member was too elusive to quantify. Issues
were raised relative to a council member being ill and fairness in removal for circumstances
beyond the control of the member. Also, since council members are elected, the commission felt
it inappropriate to void the electorate's choice, except under the most egregious circumstances.
However, the commission was unable to develop a consensus on what criteria should be used for
removal. The Mankato Charter provided for recall and this was left as the exclusive means of
removal, other than moving out of the ward or city.
As the commission indicated in February, the potential "cure" of trying to fix compensation to
attendance is probably worse than the problem. Also, attendance is generally not a problem and
seeking to structure a formula to address attendance is not responding to a recurring problem in
cities. In the final analysis, council member compensation is not intended to provide them with a
salary so much as a recognition of the demands on their time that go well beyond regularly
scheduled council meetings. Tying payment to attendance of meetings raises all of the issues
detailed above and creates a whole host of issues that would bog us down trying to answer that
question, rather than using that effort and time to deal with the issues of operating the city.
•
• MEMORANDUM
TO: Financial Commission Chair Donn Escher, Members Ned Storla,
Ron Christensen, Lee Anderson, Lawrence Peterson, Jay
Hruska, Phillip Roche, Council Liaison Kathleen Carmody, and
City Manager Michael J. McCauley
FROM: Charlie Hansen, Finance Director
DATE: March 11, 1996
SUBJECT: City Tax Base and Fiscal Disparities Pool
Donn Escher noticed an article in the February 16, 1996 Star Tribune on property
taxes and asked that a report on the subject be given at the next Financial
Commission meeting. The article was on fiscal disparities, but raised larger
questions about the city's tax base. Another article appeared in the March 10, 1996
Star Tribune about falling values in Minneapolis' tax base. Reference was made in
that article to Brooklyn Center having experienced only a 1.1 % increase in the value
. of residential properties between 1990 and 1995.
The fiscal disparities pool is designed to capture taxes from new commercial/
industrial property value. The new value is taxed at the same rate as comparable
property, but 60 % of the tax is paid to the jurisdictions is which it is located, and
40 % is paid into the fiscal disparities pool. The money in the pool is then
redistributed to all taxing jurisdictions in the metro area to reduce property taxes.
Brooklyn Center both pays money into the pool and receives distributions from it.
Since the pool was created back in 1971, we have always paid in more than we
received back. The attached table "Metro Area Fiscal Disparities Pool" shows our
experience for the last five years.
The second article attributes a 1.1 % growth to residential properties from 1990
through 1995. For the first four years of that period, minor increases and decreases
netted out to 0% change in residential value. In the fifth year (1994 sales), growth
of 1.1 % occurred. Property sales in 1994 affected the assessed value for 1995,
which determines taxes payable in 1996. Residential sales which occurred during
1995 (assessed value for 1996) are showed increases of 4.5 Sales so far in 1996
continue to show about a 4.5 % rate of increase.
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• Brooklyn Center missed out on the home appreciation of the early 1990s as most of
the interest was in upper braket and move up homes. The majority of Brooklyn
Center's residences are viewed as starter homes in the current market. These
haven't attracted much interest until recently. We expect the appreciation to
continue, although this market segment may be sensitive to interest rates.
Brooklyn Center's total tax base (History of Brooklyn Center Gross Tax Capacities)
declined during the last five years. Commercial and industrial properties were slow
to rebound from the last recession and appealed their assessed values to tax court in
record numbers. Recent sales are also indicating this segment is increasing in value.
Precise changes are difficult to map due to the smaller number of properties sold per
year in these categories.
•
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•
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•
CITY OF BROOKLYN CENTER
METRO AREA FISCAL DISPARITIES POOL
CONTRIBUTION
TO FISCAL
TAX DISPARITIES
YEAR POOL
1991 pay 1992
1992 pay 1993
1993 pay 1994
1994 pay 1995
1995 pay 1996
FSCLDISP.XLS
5,308,215
5,468,349
5,276,796
4,215,440
4,297,186
DISTRUBUTIONS
FROM FISCAL
DISPARITIES
POOL
3,923,279
3,918,252
3,743,029
3,260,824
3,609,891
NET
TAX
LOSS
-1,384,936
-1,550,097
-1,533,767
-954,616
-687,295
3111/96
•
BROOKLYN CENTER TOTAL GROSS TAX CAPACITY FOR 1992 THRU 1997
1992 1993 1994 1995 1996 1997
$26,036,766 $25,206,713 $23,731,361 $23,082,098 $23,327,766 $23,905,743
Preliminary
History of Brooklyn Center Gross Tax Capacities
1992 1993 1994 1995 1996 1997
$26,500,000
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$26,000,000
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$25,500,000
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$25,000,000
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$24,000,00
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Series1
3/11/96