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HomeMy WebLinkAbout2005 05-16 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 MAY 16, 2005 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 6:42 p.m. ROLL CALL Mayor Myrna Kragness and Councilmembers Kathleen Carmody, Kay Lasman, Diane Niesen, and Mary O'Connor. Also present: City Manager Michael McCauley, Assistant City Manager/Director of Operations Curt Boganey, Fiscal and Support Services Director Dan Jordet, and Deputy City pp P tY Clerk Maria Rosenbaum. Others present were Financial Commission Chair Donn Escher and Commissioners Robert Anderson, Mark Nemec, Robert Paulson, Susan Shogren Smith, and Earl Simons. PRESENTATION BY AUDITOR OF 2004 AUDIT AND COMPREHENSIVE ANNUAL FINANCIAL REPORT City Manager Michael McCauley discussed that the 2004 Audit and Comprehensive Annual Financial Report is in draft format and that the final transfers and notes will be prepared for the June report to the Council. Dave Mol and Jeff Wilson from HLB Tautges Redpath, Ltd. discussed the draft Audit Management Letter and outlined the following: • Report summary elements, overview, and other matters • Financial Statement Analysis • Property Taxes • Tax Increments • General Fund Summary • Working Capital Reserve • Tax Increment Financing (TIF) District No. 2 • TIF District No. 4 • Debt Service Funds I 05/16/05 -1- • Capital Reserve Emergency Fund • Capital Improvement Fund • Infrastructure Construction Fund • Street Reconstruction Fund • Technology Fund • Enterprise Funds During their discussion the Council had the following questions: Councilmember Carmody questioned why three different funds had advanced funds for the Earle Brown TIF District. Mr. McCauley discussed that some of the funds were put together when the Earle Brown Heritage Center was put together and transfers were needed. Councilmember Carmody questioned what the personal services were for the Economic Development Authority. Mr. McCauley discussed that those services would be for the Community Development Director and Community Development Specialist. Mr. Mol added that "personal services" is standard language to describe personnel costs. Councilmember Carmody asked if municipalities that have liquor stores own or rent their buildings; and if they do or do not own the buildings does it affect the operating expenses. Mr. Mol discussed that some do and some do not. Mr. Mol also stated that debt service for an owned structure and lease payments might be fairly equal. Councilmember O'Connor questioned if the golf course is paying off their debt. Mr. Mol informed that they are paying off their debt. It was noted that there are a few typographical errors and those errors will be amended for the June report. Councilmember Lasman questioned the Moody's Rating. Mr. McCauley discussed that the City had not issued bonds in 2005, but its rating was A -1 for the bonds issued last fall. She also asked if the City would be submitting its 2004 CAFR for a Certificate to the Government Accounts Standards Board. Fiscal and Support Services Director Dan Jordet advised it would not be submitted this year, but the format as followed. The City would save $400 in application fees and also save staff time as a result. 05/16/05 -2- REVIEW OF PREVIOUS BUDGET PRIORITIZATION Mr. McCauley reviewed for the new members that since 2003 the primary focus for the City's budget has been dealing with the loss of Local Government Aid (LGA) and that in 2004 the process used with the Financial Commission looking at items as a whole for eliminating or reducing activities was started. If the Council and or Financial Commission would like to have something different done for this budget preparation comments could be addressed now so staff would have time to analyze and report back. REVIEW OF 2006 BUDGET DATES Mr. McCauley reviewed the following dates for future budget discussions and actions; August 15, 2005 Work Session to discuss the decision for the Preliminary Levy which will be adopted on September 12, 2005 September 12, 2005 City Council meeting for adoption of Preliminary General Fund Levy and Budget October 3, 2005 Work Session to discuss Enterprise Funds November 21, 2005 Work Session to discuss General Fund December 5, 2005 Truth in Taxation Hearing December 12, 2005 City Council meeting to adopt budget. OVERVIEW OF 2006 ISSUES Mr. McCauley discussed that the most significant influence on the General Fund continues to be the reduction in LGA and that at this time there are a lot of unknowns for the budget adoption in December. After losing $1.68 Million in LGA in 2004 with the ability to back only 60 percent of that lost aid and no levy for inflation, the City lost an additional $310,422 in LGA in 2005. He discussed that a three percent increase in real estate taxes generates approximately $300,000 or a 2.3 percent increase for the General Fund and that in 2005, the 1995 street bonds will be retired. The debt service levy in 2005 for the 1995 bonds is $73,000. For 2006 staff is projecting the cost of increased wages and insurance contributions at roughly $295,000 in the General Fund; however, it is unknown at this time whether the Legislature will increase employee and employer contributions to Public Employee Retirement Association (PERA). Council and Financial Commissioners discussed the issues the City will be facing in dealing with the 2006 budget. 05/16/05 -3- Councilmember Niesen asked if the Financial Commission could or would provide input on department salaries. She expressed she would like to have the Financial Commission review salaries and whether the City could save money by having Hennepin County take over Assessing. Mr. McCauley discussed that the Financial Commission has not been asked to review salaries. Financial Commission Chair Donn Escher discussed that he believes that would be a management issue and difficult with the number of Unions; however, if the Council directed them to take on this type of review they could do so. Mayor Kragness suggested that the Council discuss this request at a future Council Work Session. PRIORITIZATION/FOCUS FOR 2006 BUDGET DEVELOPMENT Mr. McCauley discussed that this meeting is to provide direction for developing the draft General Fund Budget so that the Council and Financial Commission priorities or issues can be addressed. If no different priorities are established staff will develop the draft budget assuming a three percent tax increase plus the amount of the 2005 bond levy for the August 15, 2005, budget Work Session. The Council will continue this discussion at its Council meeting. ADJOURNMENT A motion by Councilmember Lasman, seconded by Councilmember Carmody to adj ourn the Work Session at 8:38 p.m. Motion passed unanimously. City Clerk e Mayor a 05/16/05 -4-