HomeMy WebLinkAbout2003 05-19 CCP Work Session AGENDA
CITY COUNCIL WORK SESSION
May 19, 2003
6:00 P.M
Council Commission Conference Room
Joint Meeting with Financial Commission
1. Review of Automated Clearing House transactions for utility bills
2. General Review of 2003 Potential Cuts
a. Governor's Targets
b. House Republican Targets
c. 2003 measures to balance budget
i. Use of Fund Balance
1. Capital
2. Streets
3. Buildings & Parks
ii. Central Garage Equipment
iii. Employees
iv. Programs
v. Equipment
vi. Other
3. Overview of 2004 Issues
a. Governor's and House Republican Targets
b. Revenues
i. Franchise Fees
c. Expenditures
i. Capital
1. Streets
a. Shifts to Enterprise on Street Reconstruction
2. Buildings & Parks
3. Central Garage Equipment
ii. Employees
iii. Programs/Departments
iv. Equipment
v. Other
1. Drop United Way
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4. Prioritization/Focus
5. Process
a. Public Meetings
i. Dates
1. Summer substitute August 18
2. Fall September 15 th ?
6. Future Council/Financial Commission Meetings on Budget
a. June 16
i. Add Discussion of Budget
b. Currently Scheduled
i. August 18th
ii. October 6 th Enterprise Funds (consider changing to October 20 1h )
iii. November 17
iv. December lst Truth in Taxation Hearing
c. Additional Meeting
i. July 2l or September 15
7. Miscellaneous With Financial Commission
8. General Work Session Items
a. Council Member Carmody
i. Gravel Driveways
ii. Commission Recognition
b. Council Member Lasman
i. Animal ordinances
9. Adjourn
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Memorandum
Date: May 8, 2003
To: Michael McCauley
City Manager
From: Douglas Sell
Director of Fiscal and Support Services
RE: ACH Services — Utility Billing Customers
The ACH program was initiated last fall with the development of an RFP for services,
solicitation for services, review of responses and award of a service agreement to Wells -
Fargo Bank.
Following this award, a plan was developed that included an implementation schedule,
marketing efforts and cost analysis of the program to determine appropriate charges for
the service.
The schedule provided for announcements in the City Watch, notices to all customers in
their utility bills and posting of information and application form to the City's web site.
These activities began in January and have continued through the first part of May. The
application form remains on the website and inserts have been included in all billings for
the past three months.
Our initial analysis indicated that the optimum operating point was at 15% participation.
This was predicated on the bank charges for this service compared to savings to be
achieved by automatic posting of payments. In addition, the 15% participation level was
established on data from several banks that offer the service to Excel Energy and Reliant
Energy customers. TCF Bank indicated that Excel Energy and Reliant Energy have 23%
to 25% participation based on a monthly energy bill. TCF Bank representatives were
confident that the 23% to 25% was sustainable because it was a monthly billing. Our
utility billing is quarterly and is less predictable than the monthly billings from Excel
Energy and Reliant Energy. The City of Lakeville has a current participation level of
15% and has been offering the service for nearly two years. The initial sign'up resulted
in nearly 7% to 8% participation and the program has grown steadily over the next 12
months. Lakeville has a customer base of more than 14,000 customers.
We have now billed all six cycles that included a sign -up form for the program in the
quarterly billing. The response has been less than anticipated.
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Billing
Cvcle No. Number of Customers Number of Responses
1 1807 38
2 1428 40
3 1294 32
4 995 (Billed 5/6/03, no responses)
5 1668 54
6 1733 40
Total 8925 213
Excluding Cycle No. 4 that was recently billed, the response has been less than 2.7% for
all customers made aware of the program. Nearly all of the responses have been to the
sign -up form included with the billing form as this form has a special color to attract
attention. Several have come as a result of using the form in City Watch and the form
from the City's web site. We have entered customer information into, each account
record as forms have been received and have worked with LOGIS and the bank as we
moved through the process. We have received several changes affecting account and
routing indicators from customers that have changed banks or accounts since signing up.
Council's directive, based on the recommendation of the Financial Commission, was to
terminate the program if participation did not reach 15% by the end of the first year. The
program would have to increase five -fold if we were to reach that goal by March of next
year. It seems clear that we will not reach that goal based on the responses to date.
We are suggesting that this program end as the savings will not offset the costs of the
program.
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i
To: Mayor Kragness and Council Members Carmody, Lasman, Niesen, and Peppe
Financial Commission
From: Michael J. McCauley
City Manager
Date: May 14, 2003
Re: 2003 Budget Update and Process for 2004 Budget
1. General Review of 2003 Potential Cuts
a. Governor's Target
i. Governor Pawlenty's 2003 cut to Brooklyn Center would be $1.17
Million
b. House Republican Targets
i. House Republican 2003 cut to Brooklyn Center would be $1.18
Million
c. 2003 measures to balance budget
i. Use of Fund Balance
1. Capital: Transfer for Street reconstruction from General
Fund Balance in amounts within current policy and look at
providing some additional transfer from Liquor fund for
Buildings & Parks
2. Streets: $1 Million transfer from General Fund Balance
this represents all of $480,000 2003 budgeted transfer that
is removed from 2003 budget and would cover 2004 and/or
provide additional monies since plan is to transfer from
General Fund to Streets since $480,000 annual budgeted
transfer is inadequate and assumes some fund balance
transfer.
3. Capital Projects Fund (Buildings & Parks): Transfer
$100,000 from Liquor Fund balance in addition to
budgeted transfer from Liquor operations, this leaves
transfer $25,000 below budgeted transfers ($100,000 from
Liquor operations and $125,000 from General Fund).
ii. Central Garage Equipment
1. We continue to defer central garage vehicle purchases until
a study of vehicles is completed.
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iii. Employees
1. Three positions in the 2003 budget have been vacant since
January 1 St and likely will remain unfilled:
a. Administration Technician in Administration
b. 2 Tech III positions in Engineering/Public Works
2. Police positions unfilled as follows:
a. Captain unfilled January 1 — May 15 (when
replaced with Lieutenant positions
b. Detective not filled after retirement in July
c. Clerical position vacant in May and may be unfilled
in whole or part for balance of year
3. Seasonal employees
a. 7 seasonal positions left vacant in Public Works
(General Fund)
b. 1 seasonal Engineering position left vacant
c. reduction to 1 seasonal assessing position with
overall reduction in hours
4. Pool
a. Using part-time personnel in lieu of full -time
aquatics director for $14,395 savings (This was
instituted last year, but 2003 budget is at a full -time
person to accommodate review of using part-time
personnel.)
5. Fire
a. Apartment fire inspection shifted to Community
Development for $8,000 savings on part-time fire
inspectors in fire department
6. Leave without pay
a. Two requests approved for $6,000 savings (primary
savings from leave without pay for police detective
up to retirement).
iv. Programs
1. CARS
a. Entertainment in Park/fireworks only to extent of
donations
b. Reduced senior programming
c. Eliminated teen dance
d. Summer playground is fee only (except to extent
grants received)"
e. Concessions closed at Community Center (had
been marginally profitable in past, but not in recent
past since re- opening)
£ Child care eliminated at Community Center
v. Equipment
1. Computer equipment for assessing, public works, and
CARS on hold
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2. Shelving for assessing deleted
3. Total station replacement deleted for Engineering
4. Fire Department eliminated equipment from budget
through successful grant application
vi. Other steps to balance 2003 in face of cuts:
1. Not spending from operating budget:
a. Contingency $69,111
b. Special Assessment Construction (Infrastructure
Replacement) transfer $480,000
c. Capital Project Transfer $125,000
d. Assume not more than 1 election potential saves
$20,800
e. Reduction in training and clothing budget in fire
2. Overview of 2004 Issues
a. Governor's and House Republican Targets
i. Governor's cuts to Brooklyn Center in 2004: $2.22 Million
ii. House Republican cuts to Brooklyn Center in 2004: $1.71 Million
iii. Senate Democratic proposal cuts are around $720,000
b. Revenues
i. Real Estate Taxes
1. Under the Governor's plan there would be no levy to
replace lost aids.
2. Under the House Republican plan the City could levy back
the additional cut in 2004 above the 2003 cut. This would
be $552,419 in levy authority.
3. The levy limits for 2004 and 2005 in the House Republican
plan would not include any provision for inflation. They
have removed the implicit price deflator from the
calculations. Inflation, as used in the current formula, is
running slightly above 3 %.
4. The Senate bill has complete levy freezes in 2003 and
2004.
ii. Franchise Fees
1. Several cities have or are adopting franchise fees on gas
and electric utilities. Robbinsdale and New Brighton have
adopted franchise fees. Crystal has a franchise fee
ordinance scheduled for public hearing on June P
2. A gas franchise fee of 4% would raise just under $400,000
per year.
3. An electric franchise fee of 4% would raise $600,000 per
year.
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4. A franchise fee could be used to replace the General Fund
contributions to street reconstruction and capital projects.
5. The City needs to adopt a new franchise agreement with
Centerpoint Energy by the end of June of this year.
6. The franchise agreement/ordinance with Excel provides
that we can impose a franchise fee, but we will have to give
them notice to impose more than approximately a 2% fee,
which can be done because other cities have adopted higher
fees. (The agreement provides a mechanism for higher fees
if 2 other cities served by Excel impose fees higher than
that specified in the ordinance /franchise agreement.)
Robbinsdale has a 4% fee and New Brighton imposed
$.0023 per kilowatt hour.
iii. Special assessments could be increased as a percentage of the total
cost of the street improvements. The issue is one of pricing and
acceptance so that program is able to continue. If the homeowner
cost rises to an unacceptable level we could find objections to
projects that would be an impediment to continuation of the
program.
c. Expenditures
i. Capital
1. Streets
a. Shifts to Enterprise on Street Reconstruction
i. The 2004 project in the western part of the
City is primarily driven by the condition of
the water lines. Changing the allocation of
project costs to reflect the dominant reason
for the project would reduce impact on
Infrastructure Replacement Fund.
2. Buildings & Parks
a. The Park & Recreation Commission is reviewing
the Capital Improvement Plan. They have
recommended and we are deferring the following
2003 projects:
i. Central Park tennis court improvements
ii. Evergreen Park scoreboards
iii. Rink lighting at Grandview
3. Central Garage Equipment
a. 2004 will reflect results of vehicle study.
ii. Employees
1. Impact on employees
a. At the level of cuts proposed by the Governor and
House Republicans, a substantial reduction in
programs will occur. This will require greater
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reductions in personnel than have been
accomplished through leaving positions unfilled to
this point, as well as retirements that are not being
filled. A determination of how that would be
accomplished cannot until w w
p shed of be made e know the
exact results of this legislative session and the
options for revenues, as well as the prioritization of
programs.
iii. Programs/Departments
1. Attached is an overview of areas of programming etc. in
the General Fund.
iv. Equipment
1. Deferral of equipment will probably be part of 2004.
v. Other
3. Prioritization/Focus
a. During the meeting, discussion about priorities and focus will be
undertaken using the attachments.
4. Process
a. Public Meetings
i. Dates
1. Summer substitute August 18
2. Fall September 15
This item is a discussion of potential timing for public informational
meetings on budget options for 2004.
5. Future Council/Financial Commission Meetings on Budget
a. June 16
i. Add Discussion of Budget
b. Currently Scheduled
i. August 18th
ii. October 6 th Enterprise Funds (consider changing to October 20 th )
iii. November 17
iv. December 1 St Truth in Taxation Hearing
c. Additional Meeting
i. July 21" or September 15
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Facing a $1.7 to 2.22 Million reduction in resources, prioritization based on values sought
to be achieved will be required to develop budget proposals and to frame public
informational/input opportunities. The following is suggested as a starting point of
discussion:
1 St Level
• Physical maintenance of infrastructure
• Code enforcement and sweep
• Sentence to Serve trash pick -up
• Good to high level of street sweeping, maintenance
• Good maintenance of parks (lower level than current ?)
• Good snow removal
■ Review level of service
• Basic Police service
o Patrol at sufficient level to engage in proactive efforts (26 patrol
officers 4 sergeants and 2 lieutenants)
o Investigation at current reduced level
o Sufficient support personnel for core operations
• Basic Fire service
o Maintain current level of staffing with marginal reductions in
overall costs and maximization of grants
2 nd Level
• Infrastructure Replacement
• Continued street replacement program
• Look at alternative funding such as franchise fees
• Park amenities
o General recreation facilities
3rd Level
• Community Services
o Northwest Hennepin Human Services
• Continue leveraged access to grants and programs
• Youth
• After school
• Maximum reach of program to groups that would otherwise not
have something to do or would impact ability to succeed
• Adult
• Community Center based
• Programs providing net revenue
• Community Center
o Basic facilities for community activities
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4 th Level
• Enhanced Basic Services
• Greater street/park maintenance
• Forestry
• Coop NW
5 th Level
• Community Enrichment
• DARE
• Entertainment in the Park
• Earle Brown Days Parade
• City Birthday Celebration
• Various special recreation department offerings such as Holly
Days, Halloween Party etc.
In looking even at basic or required services, guidance is necessary on what is desired as
basic level. For example, the City Watch Newsletter was increased to 6 issues per year. It
could be scaled back to save money.
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General Fund 2003
General Administration & Support $2,016,035
Central Supplies & Contingency $334
Police $5
Fire & Emergency Prep $769
Community Development $423,085
Public Works $2,964
Community Activities & Rec $1
Gen. Bldg. & Grounds $550,344
Social Services $93,105
Civic Events $7
Insurance & Risk Management $172,301
Transfers $1,648,494
Convention & Tourism $332
Reimbursements from other funds ($784,084)
$15
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General Fund
2003
GENERAL PUBLIC WORKS
City Council $134,303 Pub. Works Admin $575,683
Administration $205,689 Street Maint. $1,178,625
Human Resources $225,156 Traffic control $181,164
City Clerk $82,409 Park Fac. Maint $905,434
Elections $82,096 Forestry $123,310
Finance $425,124 $2,964,216
Assessing $250,343
Data Processing $360,915 CARS
Legal $250,000 CARS Admin $154,991
TOTAL: $2,016,035 Rec. Admin $357,797
Adult Rec $169,303
POLICE Teen Programs $7,152
Patrol $3,320,388 Youth Rec. $124,992
Investigation $703,090 General Rec. $64,243
Support Services $1,124,775 Community Cen. $268,225
Police Station Maint. $140,605 Pool $281,157
Administration $163,842 $1,427,860
TOTAL: $5,452,700
MISCELLANEOUS
FIRE Insurance & 'Risk Mgmt. $172,301
Fire $707,844 Central Supplies/ $334,915
Emergency Prep. $61,706 Civic Events $7,250
TOTAL: $769,550 Reimbursement Other Funds
($784,084)
COMMUNITY DEV. Transfers (debt)& Capital $1,648,494
Inspections $293,664
Planning & Zoning $129,421
TOTAL: $423,085
Conv. & Tourism $332,500
Social Sevices $93,105
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2003 Budget Reductions Governor's Proposal $1,170,299 House Republican $1,181,346
APPROXIMATE LEVELS Implement # $1,155,184 $1,155,184
Net $15,115 $26,162
Department Description Potential Implemented Department Description Potential Implementec
Adm' tr 1
m /Cen a Supplies Elections
Contingency $69,111 $69,111 no election $28,800
Admin Tech $23,531 $23,531 1 referendum $20,800 $20,800
Assessing
Transfers Out delete shelves
$3,000 $3,000
Special Assessment reduced part-time $2,200 $2,200
(Infrastructure) $480,000 $480,000 Public Works
Capital Project $125,000 $125,000 Retirements
$31,043 $31,043
Computer Euipment
Assessing $1,600 $1,600 Unfilled Tech 3 (2) $115,188. $115,188
Public Works Part-time Engineering Tech $4,045 $4,045
Street Maint. $2,000 $2,000 Seasonal
CARS $3,200 $3,200 Park $27,625 $27,625
b Traffic Control $4,533 $4,533
CARS Streets $16,293 $16,293
co Community Center Total Station $4,500 $4,500
i Close Sunday $30,000
Close 8:00 pm $24,120 Police
reduce waterslide $2,500 Reorganization $25,000.00 $25,000.00
Not fill full -time agautics $14,395 $14,395 Not Fill retired Detective $14,395.00
clerical leave without pay $1,457.66 $1,457.66
Community Band Not fill vacant clerical $27,688.42 $27,688.42
not move instruments $2,000 $2,000 Captain position 4.5 mo. vacan $34,923.00 $34,923.00
Entertainment in the Park $15,744 $15,744
Kid's Carnival $1,800 $1,800 Fire
Reduce Senior Programming $4,500 $4,500 Capital Outlay (grant covered) $24,000 $24,000
Eliminate Teen Dance $2,000 $2,000 Schools & Conferences $5,000 $5,000
Summer Playground fee only program $25,000 $25,000 Clothing $3,000 $3,000
Close Community Center concessions $11,000 $11,000 Shift Apartment Inspection $8,112 $8,112
Eliminate Child Care Comm. Center $1,500 $1,500
$782,381 $372,803
$13,184,702 Revenue Governor's Plan
$13,701,506 Revenue House Plan
Cummulative Fixed Costs Ones that cannot be eliminated or reduced
$1,735,771 $1,735,771
Debt $1,403,271
Lodging Tax Transfer $332,500
Gen. Organizational Costs: Ones that may be reduced marginally, but are necessary for overall operations or required by law
$3,832,433 $2,880,746
less reimbursement City Council & Charter Comm $134,303 General Management $205,689
($784,084) Insurance & Risk Management $172,301 Human Resources $225,156
net General Bldg. & Grounds $550,344 Finance $425,124
$2,096,662 Elections $82,096 City Clerk $82,409
Central Supplies - contingency $251,804 Information Technology $360,915
Police Building $140,605 Legal $250,000
$1,331,453 $1,549,293
Core Essential Services: Ones that are basic, essential components of City Service
$13,114,976 $9,392,543
Essential Police Administration $166,765 Public Works (Gen Fund)
Basic Patrol $3,121,294 Engineer $575,683
Investigation down 1 $630,077 Street Maintenance $1,178,625
Project Peace $46,317 Traffic Control $181,164
Dispatching Services $472,586 Park Maint. 905434
b CSO & Record etc $609,591 Forestry ( ?) $123,310
Assessing $250,768 Fire $707,844
Building Inspection $293,664 Planning & Zoning $129,421
$5,591,062 $3,801,481
City Wide Impact: ones that impact overall vitality, livability of City
$13,940,896 $715,920
Code Sweep & Crime Prevention $78,250 Sentence To Serve trash $14,000
Trash receptacles Publ. Works emptying
Northwest Hennepin Human Services $12,252.00
Coop Northwest $6,418.00
Street Reconstruction Transfer $480,000
Capital Project Transfer $125,000
$701,920 $14,000
Specialized: provide services to specific groups /needs
$15,385,722 $1,444,826 Recreation Programs Admin $512,788 Miscellaneous
Adult $169,303 Entertainment In Park in rec
General $64,243 Fireworks
Youth $124,992 EarleBrown Days Parade $12,328
Pool $281,157 Birthday Celebration $2,000
Community Center $268,225
DARE (also in basic patrol)
Discretionary Social Service "
Transportation 5 Cities $14,118
Prism $10,000
$1,444,826
Note: Community Center & Recreation raise $786,788 in revenues