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HomeMy WebLinkAbout1992 11-10 CCM Special Session MINUTES OF THE PROCEEDINGS OF THE BUDGET WORK SESSION OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION NOVEMBER 10, 1992 CITY HALL CALL TO ORDER The Brooklyn Center City Council met in special session and was called to order by Mayor Todd Paulson at 7:10 p.m. ROLL CALL Mayor Todd Paulson, Commissioners Dave Rosene, Philip Cohen, Celia Scott, and Jerry Pedlar. Also present were City Manager Gerald Splinter, Finance Director Paul Holmlund; Director of Planning and Inspection Ron Warren; City Assessor Mark Parish; and Council Secretary Nancy Berg. The City Manager presented the proposed City of Brooklyn Center Annual Budget. The Finance Director reviewed the 1993 City Manager's proposed budget for the City of Brooklyn Center including the General Fund, Debt Retirement Funds, Economic Development Authority, and Special Operating Fund. He informed Council the budget does not include separate levy for the Housing & Redevelopment authority of $145,619. The Finance Director explained the budget process started in January and is continuing to this date. He also reviewed the established truth in taxation public hearing dates, as well as the remaining important budget dates. He also stated the preliminary property tax notices should be received from the county this week. The Finance Director stated the significant problem factors total $952,064. He listed these factors as: - Fund balance transfer not available -- $303,725 - New State sales tax -- $100,000 - Cut -back of borrowing for equipment purchases -- $365,000 - Economic Development Authority first time levy -- $183,339 The Finance Director stated in addition to the factors unique to this year's budget, there are other issues that also have a direct bearing on the preparation of this budget. The following is a list of some of them: 11/10/92 _ 1 _ State aid to cities has been cut each of the past four years, 1989, 1990, 1991, and 1992. Most of these cuts occurred after cities had established their budgets for the year, and were unable to increase the property tax levy to compensate. - Cuts to December distributions of 1992 aid payments are still very possible. For 1993, cities are scheduled to receive a three percent increase in local government aid, and that has been built into this budget. But, by no means, is there any guarantee that this full amount will be received. Cuts have been made to the budgets the last years because of the revenue cutbacks. However, the city must continue to provide services and programs needed by our citizens. State and federal mandates continue to increase the costs of local governments. The state continues to tightly restrict the sources of revenue which cities may use to finance local services. Brooklyn Center, as well as most Minnesota cities, is making real efforts to provide additional services or to reduce costs, such as cooperative agreements. - The State, not cities, determine the property class rates which affect the portion of taxes property owners pay. - The amount of federal aid to cities has nearly evaporated over the past five years. Cities have either had to reduce services or raise property taxes to pay for programs which were previously funded with federal grants. Population growth substantially increases city costs for new facilities and expanded services. On the other hand, as population declines, the need for services does not immediately decline proportionately. For example, Brooklyn Center still needs to maintain the same number of miles of streets; as the City becomes more commercial, the need for police and fire protection does not go down; and the need for social services goes up. The Finance Director reviewed the following adopted policies for 1993: In accordance with the City Charter, the total sum appropriated in the general fund annual budget shall be equal to the total estimated g eneral fund revenue and the allocated general fund balance. 11/10/92 -2- The City will maintain an undesignated and unreserved general fund balance in an amount determined by applying the adequate general fund balance policy formula as established by the City Council. - Prior to adopting the general fund annual budget, the City Council shall review the adequate general fund balance policy formula. The City Manager when submitting the proposed budget to the City Council shall submit a balanced budget in which appropriations shall not exceed the total of the estimated general fund revenue and the fund balance available after applying the adequate fund balance formula. The Finance Director listed the accounting changes motivated by outside auditor's recommendations: Salary and fringe benefits netted against expense rather than shown as revenue Charge custodial costs to community center to better reflect costs to be recovered The Finance Director presented two areas for savings: Departmental reorganization -- Community Development, net savings $68,000 - Health regulation and inspection, net savings $44,000. The Finance Director reviewed the proposed tax impact showing residential and commercial property tax comparisons from 1992 to 1993 showing the rate of increase and the rate of decrease. This chart also showed the 1991 versus 1992 market value of properties. Councilmember Pedlar asked the City Assessor why a small commercial property was valued at $96,000 in 1991, and valued at $84,000 in 1992. The City Assessor answered in this case it was an office condominium on 71st and Brooklyn Boulevard. He explained that smaller commercial properties are going down in value while other types of property vary differently. For example, gas station values are up, office buildings are either stable or declining and retail values are stable. Councilmember Pedlar asked when appraising the small commercial property, is the income considered. The City Assessor answered yes, income is significantly down. The Finance Director stated the operating budget increased 1.85 percent, while the capital outlay decreased by 7.5 percent which results in the total general fund budget increasing 1.39 percent. 11/10/92 -3 - The Finance Director stated the Financial Commission had asked why there will be a tax increase if the expenditures are cut. He answered: - First time levy for EDA of $183,339 - Fund balance transfer not available -- $303,725 - Reduction in borrowing for equipment purchases -- $365,000 - Reduction in interest earnings of $140,000 Councilmember Pedlar asked if staff has given consideration to a prioritization process for capital outlay. The Finance Director answered yes, the City Manager has requested each department provide a prioritization of capital outlay. Councilmember Pedlar stated the Council should only be considering very urgent items -- items we need to continue to operate. Councilmember Rosene asked Councilmember Pedlar what his underlying philosophy is on this. Councilmember Pedlar answered he is accustomed to prioritizing and he likes the process. He compared it to buying a new car. Councilmember Pedlar explained when you buy a new car you have to decide if it is absolutely urgent or is it necessary. Councilmember Rosene asked if he meant lean and mean, bare bones. Councilmember Pedlar answered no, just request capital outlay that is absolutely urgent. He stated we have a paper society and we must find a way to handle in the most cost - effective manner. He explained the Council must ask what do we need to continue business -- only that which is necessary to continue business. Councilmember Rosene stated he has a request for the budget. The Human Rights and Resources Commission has suggested an evening get- together with all commissions, department heads and volunteers for an appreciation night. He stated the City could get along without this, but it is something that will help the commissions to work together and allow our commission members to network with department heads. Councilmember Pedlar stated this is a good idea and he supports it. The Finance Director advised that capital outlay is still cheaper than people, and to keep this in mind when making decisions. 11/10/92 -4- The Finance Director reported the Financial Commission met last night and after discussion made two recommendations: - They supported the tax increase - Important to set the levy high enough in the event that levy limits are restored for 1994 - To build up the fund balance - Recommended after going through prioritization process, the City Council ask the City Manager to go through the budget one more time and cut $75,000, but place the $75,000 in the contingency fund. Pamela Foster, Supervising Sanitarian, presented the Council with a memo regarding the elimination of the local health program. Ms. Foster stated it is not in the best interest of the residents, businesses and overall community of the cities of Crystal and Brooklyn Center to eliminate their locally shared health program and transfer to County services. She warned there is no provision for return of the programs to the City if a City relinquishes the function to a County. Councilmember Cohen asked what kind of service can the City expect from the County. The City Manager answered staff has contacted other cities who are using the County, and they are generally pleased. He further explained the service we have now is at a higher level then what we will be receiving if we go to the County. Councilmember Rosene asked if daycares will be required to obtain a license for providing food. Ms. Foster responded affirmatively. Councilmember Pedlar asked if some of the communities who have contracted with the County have retained some sanitarians. Ms. Foster answered yes -- Golden Valley, New Hope, Wayzata, and Hopkins have kept a part -time sanitarian to handle some licensing and emergencies. Councilmember Pedlar asked if we look at the opportunity of retaining the responsibility of restaurant licensing and seasonal items, would that be budget neutral. The City Manager answered that would be handled by the $10,000 set aside for emergency situations. He further stated it is staff's judgement the County is the place for this responsibility. Councilmember Cohen suggested the City keep its options open, possibly join forces with other cities for some services if the County is slow in responding. He stated if we need 24- hour service, the County will have to look at the City as being their customer. Ms. Foster stated that Roger Carlson at Hennepin County would want to hear the Council's concerns, and she believed he would want to work with Brooklyn Center. 11/10/92 -5 - I Councilmember Scott stated she was concerned about those inspections the County does not do on a regular basis. She asked if the $10,000 would cover all those things which might fall through the cracks. The City Manager answered yes, staff believes so. Councilmember Rosene asked staff to provide Council with cost comparisons between using Hennepin County for these services versus remaining with the present plan. Councilmember Rosene expressed concern about the additional licensing fees for establishments serving food, such as church -run daycares and Little League concession stands, if the City health program is transferred to the County. The City Manager stated one of the problems the City faces is how to cover the cost of the licensing; does the City cover or does the daycare and the Little League. He explained it is a difficult choice when making budget cuts. Councilmember Rosene stated a daycare would rather pay a smaller fee to the City than a larger fee to the County. He asked who should bear the burden for this. He stated the community as a whole benefits from having a quality daycare available; the whole community benefits and the City is not in a position to set up or run a daycare, but the City is in a position to help them out to make them viable. Councilmember Rosene stated the Council has a responsibility to make sure daycares are available and viable. The City Manager stated the City does not have that responsibility. He stated it is more of a social service area of the County or a matter for private business. The City Manager further explained it is a judgement call on the part of the City Council, but it does have to be careful because of the cost involved. He continued, if the Council subsidizes things such as daycares, it is stepping out of the bounds of City government. Councilmember Cohen reminded Council that the Hennepin County Board has changed its composure, and he asked the City Manager to keep the lifeline open with the County. He stated he was concerned about giving up all the health programs, and advised keeping some programs in the City in case the contract with the County does not work out. He stated it is hard to 'argue against this proposal, but also the Council wants to make sure the quality of service is maintained. Councilmember Cohen thanked Pamela Foster for her fair presentation, and stated it has always P y been good working with her. The City Manager will confirm that Hennepin County will provide an acceptable level of services. Pamela Foster asked that the Council make thcir decision as soon as possible as she needs as much time as I possible for the transition if that is the Council's decision. 11/10/92 -6- Councilmember Pedlar agreed with Councilmember Cohen in the City retaining a portion of the services. He asked staff to provide Council with estimated costs to retain some health responsibilities. Gary Shallcross, City of Brooklyn Center Planner, presented Council with a memo regarding the proposed elimination of his position. He stated the elimination of his position may be short -sited and asked Council to consider keeping his position for three reasons: 1. The real estate industry has been in a depression, however development now P � P takes more time. 2. The City is presently undertaking a study of Brooklyn Boulevard, and the result of the study will be plan implementation. 3. The business retention program. Mr. Shallcross asked the Council consider his service and the service of Mary Lou Larsen whose position is proposed to be reduced to two- thirds time from full -time. He explained he and Ms. Larsen produce the Planning Commission agendas and minutes; and he hoped their efforts have been acceptable. Councilmember Cohen thanked Mr. Shallcross for his presentation and stated the Council will look at his position as they get to it in the budget process. Councilmember Rosene asked how many different options were tried with these positions. The City Manager explained staff was trying to look at reduction, not moving people around. He emphasized it is not a question of their ability, it is a matter of reduction under the budget recommendations. Councilmember Rosene asked if the position is eliminated, are there any provisions for job transition assistance. The City Manager answered staff is working with the City of Crystal for employee relocation assistance and will have a program for Council's review should the reduction be made. Councilmember Pedlar stated the emotional part of eliminating positions is a very difficult one, but if it is in the best interest of the community, he would not be adverse to approval. Councilmember Pedlar asked if there is a need for this position. The City Manager answered there is a need for one position, but not two. Councilmember Pedlar further stated there is a need for many of the departments to reorganize with a division of responsibilities. He warned against too many leaders and not enough workers. 11/10/92 -7- The City Manager explained a reorganization is being proposed for the planning and inspection department to consolidate with the EDA/HRA which will result in the elimination of two full -time positions and the creation of one part -time position. He further stated because of this elimination, there will not be as much time available for planning, but staff can get by. Councilmember Cohen addressed Councilmember's Rosene's concerns about licensing for daycares, and asked the City Manager to talk to Northwest Hennepin Human Services and see what they are charging for licensing compared to Hennepin County. He stated it is important to keep those amounts equal. Councilmember Rosene thanked Councilmember Cohen for the good thoughts. He further stated he is uneasy with relinquishing all health responsibilities to the County, and would like to keep the City's options open. He further stated the Council is considering painful cuts, but it is the hope that eventually things will turn around. He agreed the City will lose services it has previously enjoyed. ADJOURNMENT There was a motion by Councilmember Cohen and seconded by Councilmember Scott to adjourn the budget work session at 9:25 p.m. The motion passed unanimously. Todd Paulson, Mayor Recorded and transcribed by: Nancy Berg Northern Counties Secretarial Service 11/10/92 -8 -