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HomeMy WebLinkAbout2020 8-03 FCAV I RT UA L meeting being conducted by electronic means in accordance with Minnesota S tatutes, section 13D.021 P ublic portion available for connection via https://zoom.us/j/95190289907? pwd=aTczUkRpVjlX S D V C NS9O NzNJ Z HF Cdz09 Meeting I D passcode 985228 A ugust 3, 2020 AGE NDA 1.Call to Order The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City C ounc il packet is available to the public . The packet ring binder is loc ated at the entrance of the council chambers. 2.Approval of Agenda 3.Introductions 4.Operating Budget Values Development a.Goals and Expections for meeting b.Budget Approval Process and Timeline c.Budgetary Conditions Overview d.Demographic and E conomic Conditions Overview e.Established P olicies Governing Budget f.Council Values, Priorities and Governing F ocus or Fiscal 2021-2022 g.Budget Limitations i) Maximum Tax L evy ii) Maximum F ee L imit 5.Report from P revious Budget M eeting Questions a.C I P E valuation P rocess and M etrics 6.Future Budget Discussions 7.Adjourn 1 | Page Date: August 3, 2020 From: City Council/Financial Commission To: City Council Subject: Operating Budget Values Development- Fiscal 2021-2022 Introduction To say that 2020 has been an unusual year is a gross understatement in my opinion. With the COVID-19 pandemic, murder of George Floyd, community protests for social justice and violent uprising; these things have made 2020 a year for the ages. On a local level, we have experienced significant leadership turnover with a change in Finance Directors and retirement CARS Director James Glasoe after nearly 30 years. In addition, several long tenured employees have retired. We have acting directors for the CARS Department and Administration Department. As we have followed the ever-evolving executive orders of the Governor, most office employees’ work remotely, we have reduced seasonal employment in parks maintenance, we have had layoffs in the Liquor Store, Community Activities Recreation Services and the Earle Brown Heritage Center. Several vacant positions have been placed on hold, public access to buildings are limited requiring customers to rely on electronic or remote services. Typical events and activities have been modified, cancelled or postpone and of course we continue to host meetings virtually. We have responded to an unexpected influx of nearly 90 high need homeless persons relocated to the Radisson Hotel. Of course, nearly every police department operates in an environment of hyper scrutiny, criticism and community distrust warranted or not. Of course, I could go on. I am proud to say through it all, staff remains vigilant and committed to providing the best quality service they can. Every day they demonstrate creativity and innovation as we address the changing and ongoing service needs of residents’ visitors and business. The Beyond COVID-19 process is a great example of how the staff continues to step forward in a responsive and creative way. The Council has continued to drive policy leadership in these unusual and challenging times. As City Manager, I acknowledge how challenging your job in this environment has been and you should know I appreciate your support of staff and your essential policy direction. Goals and Expectations for Meeting Tonight’s meeting has the following goals and expected outcomes • By consensus I am seeking input and policy direction that will be critical for me as the City Manager to effectively meet my budget preparation mandates under the City Charter and comply with State Statutes governing the adoption of City b udgets • By consensus I am seeking policy clarity around Council values for ongoing service needs 2 | Page • By consensus I am seeking policy clarity around Council values related to strategic priority focus • By consensus I am seeking policy clarity around Council values related to the issue of tax and fee burden for owners, residents and customers John Carver the developer of the ground-breaking concept Policy Governance and author of the book Boards That Make a Difference argues that the primary role of any effective governing body is to determine what benefits for what people at what costs. I hasten to add, I agree with Mr. Carver. He goes on to say that the Budget is perhaps the most critical expression of the values described. While it is the mandated charge of the City Manager to prepare a budget annually, that budget is only good if it reflects the values of the governing body. While the City Manager is delegated the responsibility of determining the “means or methods” by which policy is executed; to be successful the Manager must look to the City Council to describe what “benefit” policies are to be executed to what “people” should the policy benefits be directed. Finally, the Manager’s budget should reflect what the costs (tax burden) of the benefits will be and who will pay those costs. What I have described is a lot but fortunately we are not starting from scratch. Over the years the City Council has expressed its’ values and given policy direction in a lot of these areas. On Monday we will be asking the Council if it wishes to confirm or modify previous policy direction. We will ask the Council if greater focus should be provided in any given policy area next year and beyond. We ask if there are new policy areas that need to be reflected in the spending plan for next year and beyond. Finally, we will ask the Council what should owners, residents, customers be expected to pay for the critical benefits you desire to see reflected in the budget. Budget process and timeline • In 2020 the preliminary budget and not to exceed preliminary tax levy must be approved no later than September 30, 2020 • Between November 25 and December 28, the City must host a public hearing on the budget and levy • On or before December 28th the City Council must certify the final levy and file the certificate of compliance with the department of Revenue by December 28th 2020. • By Charter the City Manager must at least 30 days prior to the adoption of the proposed annual budget and property tax levy The City Manager must submit a preliminary budget proposed budget to the City Council. The final budget must approve not later than 3 days prior to the statutory requirement for certification (December 28th) of the budget to the County. Budget Conditions Overview I have attached a document to this memo with the subject heading. The purpose of this information is to provide the Council and Commission Members with financial context for your deliberations. The report is not intended to be an exhaustive report. We have provided relevant financial trend data. The report focuses on the General Fund which provide the greatest share of non-enterprise 3 | Page operations that essentially relies on property taxes for revenue. Hopefully this report paints a reasonably clear picture of the current financial condition of the City. The report also expresses our “best guess” regarding the near-term financial capacity of the City. We have also attempted to highlight financial risks and opportunities facing the City in the near and medium term as well. Demographic and Economic Conditions Overview I have also attached a report with the subject heading. In this report we have attempted to inform your judgement by providing Brooklyn Center specific economic context. The hope is that this information will provide some insight and context around community needs and challenges; especially immediate needs and capacity to deal with the challenges of the current economic downturn and effects of the current Pandemic. Unfortunately, the future is very difficult to predict because of the degree of COVID-19 uncertainty. Established Policies Governing the Budget Because of the great work done by previous Financial Commissions and City Councils, we have a fairly comprehensive list of conservative fiscal principles that through consistent application have contributed to the development of financially conservative budgets and strong fiscal stewardship for the City. None of this is to suggest that these policies are perfect or that they might not be improved or amended. The existence of clear policies does allow staff the ability to do long-term fiscal planning which in itself is a positive for the City and its constituents. Council Values, Priorities and Governing Focus (What benefits for what people?) 2020 was planned to be a time to review in some detail the current strategic priorities. Ideally this would have happened in advance of budget adoption. With that said, I do hope the Council will devote some time this year to a substantive review of the Strategic Priorities before adoption of the next budget. Having said that we are fortunate that the City has adopted a Council Values Statement, Vision Statement and Strategic Priorities. The staff is diligently pursuing their accomplishment. We will continue to do so until revised by the City Council at this point our plan is to continue to make appropriate investments of time and resources toward their achievement. With that said each budget year is an opportunity to redirect focus and emphasis. It is also an opportunity to refine the strategic direction. This is a time to in effect make sure we are putting our money where our priorities are. Is the right amount of resources going where they are most needed as defined by the Council? This is the feedback the City Manager needs to develop a relevant budget for the Council to consider. It is also an opportunity to identify and pursue new priorities as well. The discussion of these questions will be the heart of the meeting on Monday. I look forward to receiving that clearly articulated direction from all of you. Budget Limitations 4 | Page (At What Cost?) Just like the values discussion, your feedback on the issue is critical if I am to prepare a Council relevant budget. What I really need at this stage in the process is to know, as an order of magnitude what kind of tax and fee burden would you accept if you believe the budget developed will meet your expectation for results. If the budget developed adequately addressed your value expectations what should people be willing to pay? Report from Previous Budget Meeting In response to questions raised at the last budget meeting on the CIP, staff prepared the attached report to describe our process for recommending and the timing for including projects in the proposed CIP. Hopefully the report is responsive to your requests. Relevant Budget Provisions City Charter Section 2.01. FORM OF GOVERNMENT. The form of government established by this charter is the "Council-Manager Plan". The Council shall exercise the legislative power of the City and determine all matters of policy. The City Manager shall be the head of the administrative branch of the City Government and shall be responsible to the Council for the proper administration of all affairs relating to the City. Section 2.02. BOARDS AND COMMISSIONS. There shall be no separate administrative board of health, library board, park board, or any other administrative board or commission, except for civil service commissions and boards and for the administration of a function jointly with another political subdivision. The Council shall itself be and perform the duties and exercise the powers of such boards and commissions. The Council may, however, establish boards or commissions to advise the Council with respect to any municipal function or activity, to investigate any subject of interest to the City, or to perform quasi-judicial functions. Section 6.02 Subdivision 7. The City Manager shall keep the Council fully advised as to the financial condition and needs of the City, and shall prepare and submit to the Council the annual budget. Section 7.05. PREPARATION OF THE ANNUAL BUDGET. The City Manager shall prepare the estimates for the annual budget. The budget shall be by funds and shall include all the funds of the City except the funds made up of proceeds of bond issues, public service enterprise funds, and special assessments funds, and may include any of such funds at the discretion of the Council. The estimates of expenditures for each fund budgeted shall be arranged for each department or division of the City. The budget shall show the income and expenditures classified in accordance with generally accepted accounting principles. The City Manager shall submit with the estimates such explanatory statements as the City Manager may deem necessary, and under this charter, the City Manager shall interpret this section as requiring comparisons of the City's finances with the two previous budgets of this municipality. Section 7.06. PASSAGE OF ANNUAL BUDGET. At least thirty (30) days prior to the adoption of the proposed annual budget and/or property tax levy required by state law, the City Manager shall submit a preliminary proposed budget and/or property tax levy to the City Council. Public hearings, notices of public hearings, and other legal publication requirements shall be in accordance with state law. Complete copies of the City Manager's proposed budget shall be available for public view at all meetings at which the Council reviews the proposed budget. The annual budget finally agreed upon shall set forth in detail the complete financial plan of the City for the ensuing fiscal year for the funds budgeted. It shall indicate the sums to be raised and from what sources and the sums to be spent and for what purpose according to Section 7.05. The total sum appropriated shall be equal to the total estimated revenue and allocated surplus. The Council shall adopt the budget not later than three (3) calendar days prior to the statutory requirement for certification of the budget to the County Auditor by a resolution which shall set forth the total for each budgeted fund and each department with such segregation as to objects and purposes of expenditures as the Council deems necessary for purposes of budget control. The Council shall also adopt a resolution levying whatever taxes it considers necessary within statutory limits for the ensuing year for each fund. The tax levy resolution shall be certified to the County Auditor in accordance with law. At the beginning of the fiscal year, the sums fixed in the budget resolution shall be and become appropriated for the several purposes named in the budget resolution and no other.