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HomeMy WebLinkAbout2006 08-21 CCM Joint Work Session with Financial Commission 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 21, 2006 CITY HALL COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Work Session with the Financial Commission and was called to order by Mayor Myrna Kragness 6:34 p.m. ROLL CALL Mayor Kragness, and Councilmembers Kathleen Carmody, Kay Lasman, and Mary O'Connor. Councilmember Diane Niesen was absent and unexcused. Also present: Interim City Manager Curt Boganey, Director of Fiscal and Support Services Daniel Jordet, and Deputy City Clerk Camille Worley. Financial Commission Members present: Commissioners Susan Shogren Smith (arrived at 6:35 p.m.), Mark Nemec, and Gene Maze (arrived at 6:35 p.m.). 1. REVIEW OF 2007 BUDGET DATES Interim City Manager Curt Boganey stated the addition of September 11 December 4 and December 11 meetings to the budget schedule. The City Council and Financial Commission confirmed that the 2007 Budget Dates are acceptable. 2. REVIEW OF PREVIOUS AND CURRENT YEAR GENERAL FUND BUDGET PRIORITIES Mr. Boganey stated the discussions on preparing the budget began on May 22, 2006, where the City Manager reviewed the status of the 2006 budget and gave an overview of the many ongoing issues underway by the administration. He stated since that time, the City has proceeded to prepare a budget that is referenced as Status Quo. He stated this budget is a starting point for further policy discussion and direction. Councilmember O'Connor stated two p jobs have been eliminated in the Police Dep artment; therefore � the budget amount should be less. Mr. Boganey stated that is true if the Council adopts the Status Quo budget. 3. OVERVIEW OF 2007 BUDGET ISSUES: 3a. REVENUE TRENDS AND ISSUES Mr. Boganey discussed the Revenues by Source 2002 -2007 Fiscal Years, General Fund Revenue by Source at $1,229,000 LGA. In response to Councilmember O'Connor's inquiry, he stated a 3% wage increase is proposed. He discussed the difference if the full amount of LGA is used or is not used. He discussed Major Funding Sources — Property Taxes with $667,665 of LGA for Operations verses 08/21/06 1 the use of $1,229,388 of LGA for Operations. He stated the difference in the property tax levy if the full amount LGA is used verses it not being used. He stated the increase in property taxes would be 2.85% if $667,665 of LGA was used for Operations, which would be a greater increase than last year, which was 2.72 %. Financial Commissioner Shogren Smith inquired about decreasing property taxes. Director of Fiscal and Support Services Daniel Jordet stated the City Assessor assesses residential properties each year and commercial properties every other year. He stated the City Assessor is finding that most properties are remaining steady, increasing, and few are decreasing. He stated the property values for this levy have already been determined and he discussed the Limited Market Value concept at the State level. Mr. Boganey discussed Property Taxes by Type- 2002 -2007, Local Government Aid - 2002 -2007, and Primary Funding Sources - Property Tax and LGA- 2002 -2007. He discussed the Property Tax History b Type with $667 665 LGA in Operations, and Preliminary Prop Tax Lev using $1 of Y Yp � p rY p Y Y g LGA for Operations. 3b. LOCAL GOVERNMENT AID Mr. Boganey discussed the unexpected Local Government Aid increase of $561,723 and stated although the increase is a good thing, the City may not be able to count on this increase in the future. The City Council, Financial Commissioners and City Staff discussed the reduction in population and the effects on Local Government Aid. Councilmember Carmody suggested budgeting $500,000, a more manageable loss if the LGA was reduced or payment was not received. She stated her preference that $500,000 to $600,000 be applied to recurring operating expenses and the remainder be applied to non recurring operating expenses. She stated preference that the entire amount not be applied to property taxes and stated tax dollars would be saved if the money was used on street reconstruction or towards technology. Mayor Kragness stated the Status Quo budget makes sense and she would like to be cautious with the spending. She stated preference that the City stays with the 2006 budget, other than the employee's salary increases. She stated a portion of the additional LGA money should be used and the excess should be set aside for emergencies. Financial Commissioner Nemec stated the 2006 budget should be followed and the remaining LGA money should be used on street projects or equipment replacement. Councilmember Lasman stated preference that LGA not be used to reduce taxes on a one time basis; but rather split that money between capital projects. Financial Commissioner Maze stated the budget should be approached conservatively and stated agreement with Mayor Kragness. Councilmember O'Connor stated School District 286 wants to offer the referendum again, which will raise the levy. She stated residents are concerned about property taxes. She stated she would like to show that the City is not having an increase in City property taxes. She stated two positions in the Police Department have been eliminated and one debt has been paid, therefore the taxes should not be raised. She suggested a compromise that half of the LGA be applied to property taxes and the other half be applied to a one time project. 08/21/06 2 Financial Commissioner Shogren Smith stated the City should be careful when lowering property taxes because of a one time LGA increase to prevent expectations in future years. The majority stated they would like to see the same amount used as last year for ongoing operations and the remaining money be used for non - recurring or capital costs as identified. Mr. Boganey stated specific options would be presented in November. He discussed an amount that could be set forth for contingency and stated there is a policy that says a contingency should be set. He stated if the City gets a new City Manager, that person may have some ideas and if they are stuck with a set budget, it would take 12 months for that person to act on anything new. He also stated due to the City Council Retreat being held late in the year, contingency funding would allow new areas of focus. It was the majority consensus that contingency funding be included in the budget proposal. Mr. Boganey discussed code enforcement software that was previewed by City Staff and which has been endorsed by the League of Minnesota Cities that allows the City to track requests for service, status of requests, and reporting of requests. He stated this would make it easier for management to tweak the code enforcement system. He stated two modules are available, module one costing approximately $50,000, and module two costing approximately two to three times that of module one. He stated there is also an ongoing expense to maintain the system. Councilmember Carmody requested an update on the Technology Fund balance and equipment that needs to be purchased or replaced. It was the majority consensus that $667,665 from the LGA be applied to the General Fund budget. J Y pp 4. BUDGET EXPENDITURE PRIORITIES FOR 2007 Councilmember Carmody discussed police responsiveness. Mr. Boganey discussed the proposed 2007 budget for the Police Department. There was discussion on the duties of the former Police Dispatchers and the replacement of those dispatchers that were transferred to Hennepin County. There was discussion on the Expenditures by Type for 2005, 2006, and proposed 2007, according the Status Quo budget. Mr. Boganey stated personnel services are increasing because of an increase in benefits such as PERA, health insurance and salary increases. He stated the status quo budget would increase General Fund expenditures by $602,534 a 4.35% increase. He stated of this increase, $325,156 represents an increase in the cost of current personnel. He stated these costs represent funding sufficient for a 3% wage adjustment, splitting the increase in healthcare insurance costs and a mandated increase to PERA contributions. He stated the balance of the total increase is $277,378. He explained that included in this amount are inflationary cost increased in supplies and materials i.e. fuel, utilities and salt. He stated supply and material increases amount to $70,842. He stated $48,600 is for minor equipment replacement in the fire department largely to meet mandated OSHA and NFPA safety requirements. Mr. Boganey stated a 3% wage increase is proposed in the Status Quo budget. He stated a survey was done with surrounding cities and 3% is consistent with those comparisons. 08/21 /06 3 Mr. Jordet stated the cost of living increase in the metropolitan area is 4.2 %. It was the majority consensus that a wage increase of 3% be proposed in the budget. 5. STATUS QUO OR NOT Mayor Kragness stated preference that taxes are kept as low as possible. She stated preference of using the Status Quo budget to achieve this. There was discussion about the Sentence to Serve alternative for various maintenance tasks. Councilmember Lasman stated concern for rental property trends and stated appreciation that it is addressed in the memorandum from Mr. Boganey. Financial Commissioner Shogren Smith stated concern for multiple families living in a single family home. There was discussion on lineal families verses multiple families living in single family homes and rental houses. Mr. Boganey offered that $50,000 might be set aside for the contingency fund. Several of the Councilmembers and Financial Commissioners indicated a higher amount should be set aside. Mayor Kragness, Financial Commissioner Nemec, Councilmember Carmody, and Financial Commissioner Maze stated they would be comfortable with $100,000 applied to the contingency fund. Financial Commissioner Maze stated he would be in favor of funding set aside for study and analysis; Mayor Kragness agreed. Councilmember O'Connor stated she would be in favor of using the Status Quo budget or below. It was the majority consensus that the Status Quo budget be used with money set aside for contingency along with alternative uses proposed for the additional LGA. Councilmember Lasman asked that rental property and municipal landscaping be focused on during the budget process. Mr. Boganey stated that these items are not included in the Status Quo budget. He stated if the City Council wishes to consider those items, then the funding would need to come from either the contingency money or other sources. ADJOURNMENT Councilmember Lasman moved and Councilmember Carmody seconded adjournment of the City Council meeting at 8:58 p.m. Motion passed unanimously. City Clerk Mayor 08/21/06 4