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HomeMy WebLinkAbout2006 10-16 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 OCTOBER 16, 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 6:36 p.m. ROLL CALL Mayor Kragness, and Councilmembers Kathleen Carmody, Kay Lasman, Diane Niesen and Mary O'Connor (arrived at 6:38 p.m.). Also present: City Manager Curt Boganey, Director of Fiscal and Support Services Daniel Jordet, Public Works Director /City Engineer Todd Blomstrom, and Deputy City Clerk Camille Worley. Financial Commission Members present: Mark Nemec and Gene Maze (arrived at 6:38 P.M.). 1. REVIEW OF 2007 BUDGET DATES: City Manager Curt Boganey explained the following budget dates and their purpose: a. Capital Projects and Enterprise Budget Review — October 16th 2006 b. Final Draft Review- November 20th 2006 C. Truth in Taxation Hearing — December 4th and 11th if necessary d. Budget Adoption — December 11th 2006 The City Council and Financial Commission members stated the dates were acceptable. 2. CAPITAL/ENTERPRISE AND OTHER BUDGET FORECASTS a. 2007 -2021 Capital Improvement Program Public Works Director /City Engineer Todd Blomstrom discussed the 2007 -2021 Capital Improvement Plan and stated it is going to be proposed to be extended because there is a need to reorganize the schedule for neighborhood improvements. He stated there is a need for a comprehensive summary for future improvements. He explained that when these improvements come into the five year plan, the cash flow is affected. He stated another reason is so that the money can be organized better for the projects. He discussed the 2007 Capital Improvement Program Preliminary Draft that was distributed to the City Council and Financial Commission. He stated the projects included in the program are not expanding, however for the primary purpose of replacing the current infrastructure. 10/16/06 1 He stated in some cases, the plan proposes to reduce some infrastructure in the City. He explained the details included in the 2007 Capital Improvement Program including: Street and Utility Improvement Projects, Storm Water Improvement Projects, Miscellaneous Utility Improvement Projects, and Park and Trail Improvement Projects. b. 2007 -2021 Enterprise and Capital Cash Flow Review Director of Fiscal and Support Services Daniel Jordet addressed the cash flow analysis. He discussed the need for inflation factors and described a spreadsheet where the cost for the projects and inflation factors are calculated along with the inflation of those projects being used. He stated a 2% inflation factor is used and are included in the cash flow analysis. i. Water Utility ii. Sanitary Sewer Utility iii. Storm Water Utility iv. Street Light Utility v. Street Reconstruction Fund vi. Capital Improvement Fund vii. Recycling Fund 2004- 2010 Mr. Jordet explained that the goal is to keep the pending cash line positive until the year 2021. He discussed factors that will change and increases that will take place. He stated inflation factors were built into each item. He discussed utility rate increases that will be determined after needs are determined, in order to keep the ending cash line positive. He stated there is a large number of ways to keep the cash line positive and explained several of those ways. He discussed the total of a 91% increase in water utility rates through the year 2021. He discussed comparison rates to other communities. He stated it would take a 75% increase by the City of Brooklyn Center's utility rates to reach the median utility rates of other communities. He discussed options to increase rates at a more moderate pace. Mr. Boganey stated the cash reserve target is a number that was not inflated, however it may need to be inflated over time. There was discussion of an automated meter reading system that would allow water meter readings to be gathered more efficiently and accurately. The affects of the meter readings on the budget were discussed. Councilmember Niesen stated concern for the process of delinquent utility bill collection. She asked that the process be reviewed and discussed at a later meeting. There was discussion on the meter readings not being accurately collected or collected in a timely manner and how that affects the utility billing system and the budget. The difficulty of estimating utility bills for long periods of time was also discussed. Mr. Blomstrom explained that with the automated meter reading system, the City could easily convert to a monthly utility billing system, improving the cash flow. 10/16/06 2 Mr. Jordet discussed the bonding option for upgrades in the utility systems. There was discussion of the percentage of inflation used on each item in the budget. Councilmember Carmody stated it might be worth considering a higher rate increase than 4 %. She stated it may be beneficial to even the rate increases out. She stated it may be beneficial to increase the rates earlier rather than later. Councilmember Niesen stated objection to an earlier increase in the rate increases. Mr. Jordet stated the City needs to build up some cash to cushion itself and this tool is designed to allow the City to cushion itself so that rates are more consistent and not increasing or decreasing inconsistently. Mr. Blomstrom explained that the improvement plan and rate increases coincide and the improvement plan can be extended to reduce the rate increases. Mr. Jordet explained the spreadsheets including: Storm Water Utility, Street Light Utility, Street Reconstruction Fund, Capital Improvement Fund, and Recycling Fund 2004 -2010 included in the packet. Councilmember Niesen stated she has once again been asked why there are no lights at Lions Park. She stated someone told her that the City does in fact own the park. Mr. Boganey indicated that he would check on the ownership of Lions Park and get back to Councilmember Niesen. 3. BUDGET REVIEWS — UTILITIES AND INTERNAL SERVICE FUNDS a. Water Utility Fund b. Sewer Utility Fund C. Storm Utility Fund d. Street Utility Fund e. Central Garage Fund Mr. Boganey explained what each of the funds includes and major changes to the funds. There was discussion on the life of a water meter and the cost of replacement. Mr. Blomstrom addressed Councilmember Niesen's inquiry about the Central Garage Fund and stated the fund includes fuel to operate equipment, replacement charges, and repair charges. Mr. Boganey stated the proposed budget assumes a 4% increase in storm water fees for 2007. There was discussion on the street lights being installed in the City and it was indicated that the street light fees should not increase due to the City's acquisition of more street lights. 4. CONSTRUCTION FUNDS a. Street Reconstruction Fund b. Infrastructure Fund 10/16/06 3 C. Municipal State Aid Construction Fund d. Capital Improvement Fund Mr. Boganey explained what each of the funds includes and major changes to the funds. He discussed projects funded by the Infrastructure Construction Fund. There was discussion regarding maintenance and replacement of the recreation and park equipment. 5. OTHER ENTERPRISE FUNDS a. Recycling Fund b. Centerbrook Golf Course Fund C. Liquor Operations Fund d. Earle Brown Heritage Center Fund e. Earle Brown Heritage Center - Capital Fund Mr. Boganey stated the recycling fund tracks the funding of all recycling matters in which the City is involved. He stated the Hennepin Recycling Group (HRG) is in the process of retrieving bids from recycling companies due to increased costs. He explained that there are only two companies that serve Brooklyn Center, therefore receiving the best cost for Brooklyn Center is difficult. Mr. Jordet explained that HRG is debating whether they will accept the rate surcharge or purchase their own equipment to provide the service themselves. Mr. Boganey stated more information will be available in November on this topic. Mr. Boganey explained the new equipment purchased under the Centerbrook Golf Course Fund. He stated the budget is primarily dedicated to maintaining the facility. He explained that $29,500 is included in the budget for capital in order to improve the irrigation system in which its controllers are 20 years old. There was discussion on depreciation and funding of depreciation. Mr. Jordet explained that the City does not fund depreciation. Mr. Boganey discussed a position to be upgraded at one of the liquor stores that will add value to the operation and fairness to the employee. Councilmember Niesen stated the Muzak should be removed from the liquor stores to save $60.00 per month. Mayor Kragness stated music is nice while people are shopping. Mr. Boganey indicated that he would speak to Liquor Operation Manager Tom Agnes regarding the matter. Councilmember Niesen stated objection to the upgrading of the position at the liquor store in 2006 and noted Council was discussing the 2007 budget. Mr. Boganey stated the employee has worked 35 hours a week with no benefits for many years and he and Mr. Agnes feel it is appropriate to upgrade the position. Mayor Kragness stated the City should show appreciation to the employees. Councilmember Carmody stated the Liquor 10/16/06 4 Fund can afford the position upgrade based on the increase in sales. Councilmember Lasman stated the loyalty of the employee during the busiest season should be rewarded. There was discussion of departmental goals for the liquor store. Mr. Boganey stated he would like to see the position upgraded this year, unless there is City Council objection. Councilmember Niesen stated if the upgrading of the position can not be voted on tonight, she would like the item brought to a future City Council meeting. She stated she did not think it was allowable for the City Manger to increase the number of full -time employees without a vote of the Council and that the 2006 budget specified the number of full -time employees. She stated she was not opposed to discussing the position but she wanted this brought to the Council for a vote if changes were to be made during this non- public meeting. Councilmember O'Connor stated the Earle Brown Heritage Center is of no benefit to the City since the funds are kept within the enterprise. There was discussion on the water tower at the Earle Brown Heritage Center where extensive repairs or replacement is needed within the next few years. Mr. Boganey discussed grant monies available, up to $100,000 if the water tower was renovated. He stated if the grant funding was not received, the City Council would have to consider options rather than replacement. He stated there will be enough money in the capital fund to cover the expense if that option is chosen. Development, Grant and Forfeiture Funds L EDA Fund Mr. Boganey explained the budget associated with the EDA requirements. He stated nothing has been added, just the funding necessary to continue the EDA. g. CDBG Fund Mr. Boganey stated this money can only be used for specific things such as benefits to low or moderate income families or urgent needs. He stated this fund is on a different fiscal year than the regular budget and programs must be approved separately. Mayor Kragness stated these programs have served the citizens of Brooklyn Center well and should be continued. h. Grants Fund Mr. Boganey stated the Grants Fund is to identify money received for grant purposes. He stated there is nothing budgeted for 2007. Mr. Jordet explained the different grant funds and stated most of the grant fund amounts are undetermined. 10/16/06 5 i. Police Forfeiture Fund Mr. Boganey stated an estimated $28,000 will be received next year. He stated he will check with the Police Chief as to items related to this fund. 6. TAX INCREMENT FINANCING AND DEBT SERVICE FUNDS a. TIF Districts # 1,2,3 and 4 b. General Obligation Improvement Bonds i. 1996A ii. 1997A iii. 1998A iv. 1999A v. 2000A vi. 2001A vii. 2003A C. GO Building Refunding Bonds i. 2004A ii. 2006A d. GO TIF Refinancing Bonds i. 2004B e. GO TIF Bonds i. 2004D Mr. Boganey explained the TIF Districts and activities within the funds. There was discussion on the various TIF Districts and the process of distributing the funds. Mr. Jordet explained the payment of bonds and the effects on the various TIF Districts. 7. BUDGETARY ISSUES REMAINING FOR NEXT MEETING a. Technology Fund b. Use of un- appropriated Local Government Aid Mr. Boganey discussed the budgetary issues remaining for the next budget meeting. g Y g Y g . g g ADJOURNMENT Councilmember Carmody moved and Councilmember Lasman seconded adjournment of the City Council meeting at 10:48 p.m. Motion passed unanimously. City Clerk May r 10/16/06 6