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HomeMy WebLinkAbout1994 08-15 CCM Special Work Session MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL WORK SESSION AUGUST 15, 1994 CITY HALL COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in special work session and was called to order by Mayor Todd Paulson at 7:04 p.m. ROLL CALL Mayor Todd Paulson and Councilmember Celia Scott. Also present were City Manager Gerald Splinter, Assistant City Manager Nancy Gohman, Assistant Finance Director Tim Johnson, and Council Secretary Barb Collman. Councilmembers Kristen Mann and Dave Rosene were excused from this evening's meeting. Councilmember Barb Kalligher arrived at 7:08 p.m. Also present were four members of the Financial Commission: Commissioners Denis Kelly, Ned Storla, Vi Kanatz, and Chairman Donn Escher. DISCUSSION ITEMS JOINT DISCUSSION OF 1995 PRELIMINARY BUDGET AND LEVY - CITY COUNCIL AND FINANCIAL COMMISSION The City Manager explained the purpose of the joint meeting of the City Council and the Financial Commission was to allow an opportunity for members of the two bodies to express their reactions to the preliminary 1995 budget. He added a similar meeting was held regarding the 1994 budget. The City Manager stated the next step in terms of the 1995 budget will be to formulate a proposed budget. He added the City Council must submit preliminary figures for a property tax levy to Hennepin County by September 12, 1994. After that date, the levy amount can be lowered but not raised; and taxes are based on the levy figures. The City Manager reviewed and briefly discussed twelve significant factors contributing to the complexity of the budget, as listed on pages one and two of the 1995 City Manager's Preliminary Budget and Property Tax Levy Report. 8/15/94 - 1 - i i A member of the Financial Commission asked whether the cost of the mobile data terminals for squad cars would be an ongoing expense. The City Manager said about half of the cost would be ongoing. Councilmember Kalligher arrived at 7:08 p.m. The City Manager reviewed the seven departmental requests which Staff had eliminated from the budget proposal. He said the act of cutting the items did not imply they were not justified expenditures, but that choices had to be made. He stated details of the reasoning behind the cuts would be available in the future. He said general fund spending in the preliminary budget is a one percent increase over 1994 (from two percent to three percent), and Staff attempted to stay within four percent in planning expenditures. The four percent increase in the general budget can result in a fifteen percent increase in taxes, as explained by the City Manager. The City Manager explained the school district is more profoundly affected because of its larger abatement so it will need an abatement levy. There has been a shift from residential /commercial tax base to residential due to major abatements because of vacant office space. There will be a shift back in the future. Commissioner Kelly asked how many dollars are represented by four percent and what impact there would be on a levy if the increase were held to two or three percent. The City Manager replied each $4.25 would equal roughly $100,000 in increased funds. Commissioner Kelly mentioned when budget cutting began there was a consideration of $500,000 at the tier four level. He asked whether there is an ongoing problem. The City Manager said currently the biggest effect of abatements is on retail and office buildings but there should be a levelling off. Commissioner Kelly questioned whether there will be a request to the voters again next year. The City Manager said if the industrial /commercial values stabilize, there will not be; however, based on tax court appeals, it is possible. Mayor Paulson commented the City can control the operating budget. Councilmember Kalligher questioned whether raising the uncollectible allowance for property tax to three percent for tax delinquencies would be sufficient to cover the shortfall. It would be better to plan ahead than to be surprised later. The City Manager said the estimate of three percent was an increase from two percent and it was close. The Assistant Finance .Director said the City is close, at about 97 percent. The City Manager commented the auditors agreed it was reasonable to raise it one percent but not to base it on possible court cases. Since the levy can be raised but not lowered, it 8/15/94 -2- would be possible to lower it in December. He stated Staff and auditors believe the three percent is sufficient. Mayor Paulson asked how it was figured that taxes went down in Brooklyn Center, as reported. The City Manager said there is a relationship to how much percent the City is of the school district levy. The total tax bill varies because there are four school districts. School districts are also affected by State Aid. Their impact is almost two times what the City taxes. The figures are based on nineteen percent of the total tax. Councilmember Scott asked when there will be preliminary figures on HACA. The Assistant Finance Director said the figure of about a $20,000 increase was received today. Councilmember Kalligher questioned whether the money cut from the budget which was requested for an image campaign would be invested for a greater return in terms of attracting people. She also questioned why the cut was made. The City Manager said it is possible the money will be spent in a manner that would justify the value of such a campaign. He commented the decision to cut the campaign request was made two weeks ago and at this time, due to recent news articles, he might feel differently. He added the Chamber of Commerce may be taking action on the City's image and encouraged the Council to have open minds in regard to this issue. The Assistant City Manager stated the Communications Coordinator would be attending a Chamber of Commerce meeting. She was hopeful the public relations campaign might be funded by the Chamber of Commerce. The City Manager added the Chamber of Commerce might match the campaign funding. He commented it is difficult to measure the value of such a campaign, but he believed something along the line of a campaign should be done. He added a campaign by Brooklyn Park appears to have been beneficial. Commissioner Storla added it is difficult to tell whether there is a monetary payback from an image campaign, but it is possible to sense a feeling in the atmosphere. He explained Brooklyn Park's campaign followed a lead by a grass roots group, which is an important factor. The City Manager stated it is hard to weigh whether using the money to buy a piece of equipment matches using it to fund a public relations campaign. Councilmember Kalligher asked how much would be necessary to fund the full -time fire marshal. The City Manager replied the cost would be $30,000. Councilmember Kalligher mentioned the City has been fortunate to have a volunteer fire department and should not force them into becoming full -time. She asked whether there is sufficient reasoning to support the expenditure. The City Manager said the department 8/15/94 -3- f I has made this request for four years; however, the department is functioning with two on duty crew rather than three. Councilmember Kalligher confirmed there are currently six park maintenance employees. She said she had understood in the past there were a total of nine. The City Manager said there have been retirements and shifting of personnel in this area and the number has been reduced to its current status of six. Councilmember Kalligher said this budget request would bring the number of park maintenance employees to seven. She commented upgrading to parks is planned and asked whether the request is justified and whether six employees is a sufficient number. The City Manager said the six employees are not able to keep up with the work. If weather is good, the work might be caught up; but if the weather is not good, the City may be losing ground in this area. Councilmember Kalligher asked whether the expenditure is justified. The City Manager said it is not, given the restraint of the four percent increase in the budget. Chairman Escher asked for dollar figures of the items cut from the budget. For the three police officers and squad car, the figure would be approximately $100,000. For the code enforcement officer, the cost would be approximately $29,357 (from the police department budget). The City Manager explained at one time code enforcement officer positions answered 17 percent of police calls, which eliminates that amount of officer time, so there is an impact. Currently, these positions are overburdened. A code enforcement officer is a first -line contact (like a paramedic) who works evenings and weekends. Councilmember Kalligher asked whether the code enforcement officer could be shared between Community Development and Police and be a part -time position. The City Manager said it could. Councilmember Kalligher asked whether it would be justified to share the cost. She said there are problems in the city which are not being handled. The City Manager stated Staff had to choose between requests, but budgeting can be rearranged and /or the four percent can be changed. Councilmember Kalligher commented there are factors to be considered, such as the possibility of the Chamber of Commerce helping with the image campaign. She said junk cars and unmown lawns hurt the community image, so if a code enforcement officer is needed perhaps budget expenditures should be shifted around. She said the community should not be allowed to slide just so taxes are not raised. Regarding the costs of items cut from the budget requests, the costs for the fire department personnel would be approximately $42,384 for the fire inspector with benefits and $22,043 for the third person duty crew. The expense of a dump truck is $90,000, $30,983 from general budget and the remainder is depreciation. The park maintenance position cost 8/15/94 -4- I I would be approximately $30,298 and the conversions of maintenance personnel to full -time would be approximately $5,113 and $10,287. Commissioner Storla commented perhaps the whole picture should be considered, including the school districts, as erha s priorities would change. The City Manager said Staff could P P P g ty g talk to the school districts and report back with the figures for their perception of the impact. He added the statistics are confusing and he will attempt to clarify them. Chairman Escher asked the date of the next meeting of the Financial Commission. The City Manager said a date had not been set. Mayor Paulson commented it is currently early in the budgeting process and it would be helpful to know whether priorities are being met. He said he would like to keep zero percent total increase in the operating budget and hire two police officers. Then, later it would be easier to look at the choices. Public relations is best tied in with some substantive issue. Commissioner Kelly agreed with a zero percent increase and stated a levy needs to be discussed. He also agreed these are broad principles rather than specifics. He said a fifteen percent levy would be four percent. The City Manager said $500,000 would be needed to cut back to zero percent. Commissioner Kelly said he recommended a three or four percent levy and a zero percent increase in general operating budget. Commissioner Storla questioned whether the recommendation is a four percent increase in budget ($400,000) and $72,000 for streets and if there is concern about falling behind (uncollected taxes are $63,000), are there some built -in increases. The City Manager said there is inflation. To keep at zero percent and add two officers it is necessary to cut $600,000 to $650,000 from this budget. This is necessary to accommodate inflation plus the two expenditures mentioned. Commissioner Kelly inquired the status of the 1994 budget. The Assistant Finance Director said fifty percent has been spent. Commissioner Kelly asked what is expected for the rest of 1994. The Assistant Finance Director said it is difficult to predict. The City Manager commented revenue is a big question. Commissioner Kelly said the years 1992 and 1993 were favorable, but it is important to consider 1994. The City Manager said a cut of $400,000 is necessary just to get to zero percent. Then there is the expenditure for officers. 8/15/94 -5- Commissioner Kelly said he was suggesting the expense side of previous budgets may not be comparable. The City Manager said the City should not rely on "projected" excesses of revenue. Councilmember Scott commented at least in 1994 there is no question as to what is coming from the state and federal funding, as there has been in other years. Commissioner Storla asked why factor number nine, concerning the central garage fund, would be a higher priority. The City Manager stated it stems from a general philosophy that since there is inflation on the prices of equipment, labor costs are being wasted if equipment breaks down. It is necessary to anticipate equipment needs. Councilmember Scott commented it is difficult to juggle costs when there are so many unknowns. Councilmember Kalligher asked when the budget work will be completed. The City Manager stated he and Staff are working to prepare the budget using a new format, which includes converting figures from old budgets into the new format, a program oriented budget format, so there can be a comparison in history. The City Manager added in some areas inflation rates are higher than three or four percent. For example, fire equipment has a high rate, plus there are OSHA regulations to comply with. Inflation has an impact far beyond the normal rates. Councilmember Scott added state sales taxes affected our budgets significantly. Mayor Paulson noted Staff will be answering questions in the future, but this meeting is the beginning of the process. Mayor Paulson noted an executive session of the City Council would be held following this work session for the purpose of discussing litigation matters with the City Attorney. Mayor Paulson expressed appreciation to the Financial Commission for its advice and participation in the meeting. The City Manager and the Financial Commission determined the next meeting of the Financial Commission would be Thursday, September 1 at 7 p.m. AUDITOR'S SELECTION PROCESS In regard to the Request For Proposals (RFP) for audit. services, the Assistant Finance Director presented four alternatives covering the roles of the City Council and Financial Commission in the selection process. He mentioned the, options listed were. only to be considered a starting point for discussion. 8/15/94 -6- The Assistant Finance Director commented the RFP process needs to be initiated so the step of determining roles should be completed at this meeting. Chairman Escher asked how many firms are expected to respond to the RFP. The Assistant Finance Director said he would expect bids from the six national firms and three or four local firms which have governmental clients, for a total of nine or ten. There was a motion by Councilmember Kalligher and seconded by Councilmember Scott to approve option two: Staff review the RFP's and recommend three accounting firms for interviews, the Ad -hoc Committee described in option one would conduct interviews and recommend one accounting firm to the City Council for selection. Mayor Paulson said he preferred option four. Options two and four were discussed. Mayor Paulson said he could be flexible. Councilmember Scott said she does not have as much knowledge as the Staff, and does not have time to do all the studying and interviewing. The Assistant Finance Director said an Ad hoc committee would be a substantial time commitment. Councilmember Kalligher added the Financial Commission members might have more time to commit. Commissioner Storla asked whether the Finance Director had made a recommendation in regard to the options listed. The Assistant Finance Director said he prefers the Ad hoc committee. Councilmember Kalligher asked whether, with an Ad hoc committee, the Council would retain the right to recommend one particular firm. The Assistant Finance Director said it would. Commissioner Storla asked whether Ad hoc committee meant an Ad hoc committee of the Financial Commission. Chairman Escher commented some members of the Financial Commission are generalists. Commissioner Storla asked whether there would be enough members from the Financial Commission. Chairman Escher said there should be three members from the Financial Commission. Chairman Escher, Commissioner Storla, and Commissioner Kelly volunteered for the committee. 8/15/94 -7- t The Assistant Finance Director said the composition of the committee and the roles of the bodies must be listed in the RFP. Chairman Escher said option three should be re- worded to mean an Ad hoc Financial Commission rather than Financial Commission. Commissioner Kelly said the committee would welcome members of the City Council. Councilmember Kalligher noted Councilmembers know they are always free to attend. Mayor Paulson said the Council should have a choice other than yes or no to the recommendation of the committee; therefore, he preferred option four. It was agreed they should reserve that right. Councilmember Scott suggested option four with three members of the Financial Commission and three Councilmembers. Chairman Escher stated there is a problem with the members of the City Council sitting in on meetings to determine what will later be recommended to the Council. Members of the Council should not be involved in the decision - making process. Commissioner Storla suggested using option three to say three firms would be recommended by an Ad hoc committee of the Financial Commission. Councilmember Kalligher and Councilmember Scott agreed to change the motion to reflect the discussion. They said it is not necessary to list an exact number from each body. The Ad hoc committee's goal would be to determine criteria; then, the appropriate RFP responses would be obvious. Mayor Paulson commented the City Council could sit in on interviews and he would like to retain the option that the Council could interview the last two or three firms if it desired. Commissioner Storla asked whether the firms should be presented in a ranked, or unranked, format. Councilmember Kalligher answered the firms should be presented with pros and cons as was done in the RFP process for a City Attorney. Councilmember Scott agreed comments from the committee should be offered rather than just quotes from the firms. Chairman Escher said the Financial Commission Ad hoc committee would consist of himself, Commissioner Storla, Commissioner Kelly, and one more to be named at a later date. The Assistant Finance Director asked whether the committee wanted to be involved in drafting the RFP. He noted the document is pretty straightforward and would include the criteria. 8/15/94 -8 - Mayor Paulson noted copies of the RFP should be distributed to the Financial Commission. He directed Staff to bring the RFP to the next meeting of the City Council. The amended motion was reviewed: to direct an Ad hoc Financial Commission and Staff to review the RFP's, conduct interviews, and recommend three accounting firms for selection to the City Council, with the reservation to call back for further interviewing. The motion passed unanimously. ADJOURNMENT There was a motion by Councilmember Scott and seconded by Councilmember Kalligher to adjourn the meeting. The motion passed unanimously. The Brooklyn Center City Council adjourned at 8:40 p.m. Deputy City Clerk Todd Paulson, Mayor Recorded and transcribed by: Barb Collman TimeSaver Off Site Secretarial i 8/15/94 -9-