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HomeMy WebLinkAbout2010 08-30 CCM Joint 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 JOINT WORK SESSION WITH FINANCIAL COMMISSION AUGUST 30, 2010 CITY HALL - COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Joint Work Session with the Financial Commission and the session was called to order by Mayor Tim Willson at 6:30 p.m. ROLL CALL Mayor Tim Willson and Councilmembers Kay Lasman, Dan Ryan, and Mark Yelich. Councilmember Tim Roche was absent. Also present: City Manager Curt Boganey, Fiscal and Support Services Director Dan Jordet, and Deputy City Clerk Maria Rosenbaum. Others present were Financial Commissioner Rex Newman. Financial Commissioners Susan Shogren Smith arrived at 6:37 p.m. and Teneshia Plunkett arrived at 6:49 p.m. GENERAL FUND REPORT AND REVIEW City Manager Curt Boganey discussed since the last budget meeting staff had identified ways to conservatively increase estimated revenues by $40,000 and to reduce expenditures by $50,000. With other minor corrections to the original budget plan, there is a revenue shortfall of $423,841. To resolve the budget imbalance, four options have been developed for consideration and were outlined as follows: Option 1 Increase the property tax levy by $423, 841. This would result in an overall levy increase of 2.03 percent and the impact on tax payers would vary. The impact on the median value residential taxpayer would be a $632.30, annual City tax in 2011 compared with $637.84 paid in 2010. This option would result in a levy increase that would exceed the rate of inflation, one of the strategic goals of the City Council. Option 2 Eliminate the six vacant positions. Currently there are six vacant positions and the cost of these positions is estimated at $453,000. Removing these positions from the budget would eliminate the gap. Unfortunately, this option would reduce service levels and the achievement of high City priorities of public safety, code enforcement, and redevelopment. 08/30/10 -1- Option 3 Use excess undesignated general fund reserves. Your policy allows for the use of undesignated general fund reserves in excess of cash flow requirements (50 percent to 52 percent). As general good fiscal policy, the use of fund balance reserves to the extent possible should be limited to non recurring operating expenses. For this reason, it is recommended that this approach should be limited to funding no more than the contingency appropriation. In that past several years the City has rarely had to use the contingency and the most significant use last year was when the State reduced funding. Of course the State may reduce funding again next year but the City has been somewhat buffered against this by limiting State General Revenue to 4.5 percent of revenue or $650,000. If the undesignated fund balance is used for this purpose it would be unavailable for the typical uses, for example, transfer to the Building Maintenance Program, Street Reconstruction Fund, or Technology Fund. If undesignated fund balance is limited to $250,000, there would still be a $173,841 revenue gap that would remain. This gap could be filled with a levy increase of $173,841. The impact of this increased levy on the median residential home would be a $624.95 City tax in 2011 compared to a $637.84 tax in 2010. Option 4 Use a vacancy factor of $226,000. This approach would allow filling three of the current most critical vacant positions: Police Officer, Planning Official, and Code Enforcement staff support position. This would leave the following three positions vacant: Patrol Officer, Housing Standards Inspector, and Maintenance II. During any given year, the City will experience vacancies that result in budget savings which is what the vacancy factor represents. As new vacancies arise the most mission critical positions will be filled first. At the same time during 2010, staff will identify at least one regular full time position to be eliminated, ideally through attrition if possible, and up to three positions will be identified and removed from future budgets. The remaining gap of $197,841 may be filled by either a levy increase, which would result in a median residential household City tax of $625.03 compared to a $637.84 tax in 2010. Alternative would be to use undesignated fund balance, or a combination of the two. City Manager Boganey informed that his preferred option would be Option 4 since he believes this would minimizes a levy increase and allows filling three critical of the six positions vacant. This option also puts the City in a position during the year for ongoing cost reductions. Council and Financial Commissioners discussed the options and the impacts of Option 4 with regards to the three positions of the six positions being filled, and whether or not to fill the remaining gap of $197,841 with a levy increase only or with a combination of a levy increase and undesignated funds. There was consensus to move forward with Option 4 and to use a combination of a levy increase and undesignated funds. 08/30/10 -2- REVIEW NEXT STEPS Mayor Willson suggested that the impact and levy increases on median households be included with materials for the September 13, 2010, meeting. Fiscal and Support Services Director Dan Jordet informed that he would be including first median and third quarter quartiles. There was no discussion regarding the current upcoming meetings. City Manager Boganey informed that if additional meetings were needed they could be added. ADJOURNMENT Councilmember Lasman moved and Councilmember Ryan seconded to adjourn the Work Session at 7:45 p.m. Motion passed unanimously. 08/30/10 -3- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of the of the City Council of the City of Brooklyn Center Joint Work Session with Financial Commission held on August 30, 2010. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the City Council adopted said minutes at its September 13, 2010, Regular Session. cl�• City Clerk Mayor 08/30/10 -4-