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HomeMy WebLinkAboutCity Council - 07/13/2021 - Workshop APPROVED MINUTES CITY COUNCIL WORKSHOP & OPEN PODIUM TUESDAY, JULY 13, 2021 CITY CENTER 5:00 – 6:25 PM, HERITAGE ROOMS 6:30 – 7:00 PM, COUNCIL CHAMBER CITY COUNCIL: Mayor Ron Case, Council Members Mark Freiberg, PG Narayanan, Kathy Nelson and Lisa Toomey CITY STAFF: City Manager Rick Getschow, Police Chief Matt Sackett, Fire Chief Scott Gerber, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, Administrative Services/HR Director Alecia Rose, City Attorney Maggie Neuville, and Recorder Jan Curielli Workshop - Heritage Room II I. 2022-2023 BUDGET Case noted he has heard the Council budget is a singularly historical legacy document of the Council and is the record that shows what each City Council has prioritized during their time in office. While the staff does the hard work of assembling the budget, the undergirding philosophy comes from the Council. The Council always appreciates the hard work of the staff as we review the budget several times over the next few months. Getschow explained staff will come back in September with the preliminary levy and will continue to work during the fall on the Enterprise Funds before the budget is finalized in December. The initial document described in tonight’s PowerPoint kicks off everything with the proposed budget presentation. We will continue to develop the budget throughout the year. Before getting into discussion of the proposed budget, Getschow said he wanted to review some of the details regarding the Federal COVID dollars. Last year we had presentations about the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act program and received the audit for that in May of this year. On May 29, 2021, the City received over $3,700,000 as part of the 2021 American Rescue Plan. We are scheduled to receive a second similar payment a year from that date. The funds received are to be used for COVID-related items until the year 2026. Interim guidance has been issued for use of the funds, and final guidance will be issued after July 17, 2021. Sue Kotchevar and Tami Wilson are the City’s point people for the American Rescue Plan funding, and auditors will have final audit guidance in December. It is an evolving process in terms of allowable uses for the funds. These funds can be used for our loss of revenue, which is our biggest issue, and we can also use the funds for such things as infrastructure. Fortunately, we do not need to set aside any of the funds for infrastructure right now because we have our Capital Improvement Plan funding available for those projects. We cannot use the American Rescue Plan funds to lower property taxes. Case asked if the guidance for use of the American Rescue Plan funds will be less stringent than it was for the CARES Plan. Kotchevar replied we are still learning about items that are actually eligible for use, and it may actually be more stringent than the first package. She City Council Workshop Minutes July 13, 2021 Page 2 explained it is an education process as we learn for what we can and cannot use the funds. She noted there is a lot of reporting required for use of the funds. Getschow added the funds can be used to cover eligible government services to the extent of the loss of revenue, which was not true for CARES funding. We do have anticipated revenue shortfalls for 2022 and 2023 as well as the shortfalls that occurred in 2020 and 2021. Getschow observed there are many different eyes on the City budget process. The Council has already had discussions about priorities, the results of the Quality of Life Survey, and a review of the work plans for every division in the City. He displayed the Building Inspections Division work plan as an example of the plans each division prepares to reflect their objectives for the coming years. He reviewed the 2021 City Council priorities: implementation of the Housing Task Force report, sustainability initiatives, the race equity initiative, small business support, coordination with City non-profits, light rail opening day communication/planning and post-COVID community engagement. A review of the Quality of Life survey results discussed by the Council in April shows the City continues to be among the top cities in the nation in terms of being a highly desirable place to live with highly-rated City services. The survey showed public transportation and light rail are a focus of the community. The over- arching City-wide goals were based on the 2016 and 2018 surveys and include community well-being and safety, high quality efficient services, preserved and beautiful environment, sense of community, innovative and sustainable practices, and economic vitality. The specific goals for the 2022-2023 budget are centered around providing value to citizens by maintaining high quality City services with reasonable tax impacts, maintaining a strong financial position and bond rating through such means as a balanced budget, conservative estimates of revenues and expenditures, capital planning, and sustaining current levels of employee morale and engagement. He noted our development revenue has continually exceeded our budget amount, but we don’t want to get to the point where we rely on that continuing to be true. We must continue to conservatively estimate our revenues and expenditures. Case related the 1990-1994 City Council bought down the tax levy with revenue received from property sales and development to keep taxes artificially low. That action brought about the situation in 1995-1999 where budget levies had to be increased 5-7% to catch up. Fortunately, there was a very robust economy during those years which helped to keep the tax levy from rising abruptly. Getschow explained the budget includes funding for a 3.0% base wage increase, or a total wage increase of 5.1% and 4.4% in 2022 and 2023 if the new positions and step increases are included. Health and dental insurance are also part of the total wage increase, and those are dealt with as part of a five-year increment process with some negotiated max caps in place. We are currently in the fourth year of the five-year process for health insurance negotiations. Narayanan asked about the max caps on health and dental insurance. Rose explained we negotiate for periods of four or five years with health and dental insurers for our contract for co-insurance, and that includes the maximum caps for “not-to-exceed” premium increases. Case asked if we could buffer that if we joined a larger group. Rose replied we are able to do that, but thus far we have not wanted to because we have a good claims experience with which to negotiate. We have a long relationship with Health Partners and, thus far, have been able to negotiate for good prices directly with them. City Council Workshop Minutes July 13, 2021 Page 3 Getschow reviewed the new positions proposed to be added in 2022 and 2023 which included an additional City Forester, a Police-Social Services Outreach coordinator, a 911 dispatcher for the Police Department, and an additional Assistant Fire Chief in 2022. For 2023, an additional Police officer and a full-time Fire Admin Assistant are included. Nelson asked why we need to add a City Forester. Lotthammer replied the position is for both forestry and natural resources. We currently have one forest technician for all the work we have which includes converting much of our turf to natural grasses and working with the State DNR and Hennepin County. By adding another forester, the current forester will be able to work at a higher level. The position is as much about natural resources as it is the forestry part. Freiberg asked if there would be any value to move up the additional Police Officer from 2023 to 2022 because the environment is right and there would most likely be very strong support for that strategy. There also may be opportunities to add qualified candidates as officers leave positions in other cities. Getschow explained the proposed budget includes more new positions in 2022 than in 2023, so adding another position in 2022 would put pressure on the budget. Chief Sackett stated his department is fortunate to be getting qualified candidates to fill open positions and is comfortable with waiting another year to add another officer. They are very excited about the Police-Social Services Outreach coordinator position proposed for 2022. That individual will be able to review what we do and suggest changes. Narayanan asked about the Police Department’s current strategies in the social services outreach area. Chief Sackett replied a lot of the work in that area is not getting done because we must rely on Hennepin County to provide those services and the County is understaffed. The new coordinator would provide reassurance the Police Department is able to take care of situations beyond the initial response if that is needed. Nelson said she assumed the social services outreach coordinator would help to avoid some of the problems that may occur for which we are not able to do follow ups. Chief Sackett replied the new person would have a background in crime analysis as well as experience with the mental health and chemical dependency calls the department receives. Case stated he would go along with the staff recommendations, but staff should also know the Council would be amenable to shifting funds for the additional police officer to 2022. Toomey asked how the construction of the light rail will impact the number of officers and police funding. Getschow explained the fact the SWLRT comes in 2024 is a part of the proposed changes. We have added three officers in the last four years as we ramp up for the opening of the SWLRT. Toomey asked about the use of reserve officers on the trains. Sackett replied all our officers there will be stationery or will be assigned to ride the train back and forth, and all of them can serve as an extra contact for the community. Nelson has heard concerns about the possibility of riders who take the train downtown, return to the station having had too much to drink, and then have to drive home from the transit station in that inebriated condition. She suggested the Southwest Transit PRIME service work on a plan to offer service to take people to their homes after they return on the LRT if they are in no condition to drive home. City Council Workshop Minutes July 13, 2021 Page 4 Case suggested that we begin work later this year or at least early in 2022 to develop a policy or a plan of action to address concerns about the coming LRT and how we will handle additional police hired for that assignment. We could then let the community know we are excited about the LRT and are working on an action plan that has dollars and people behind it and are ready for the possibilities afforded by light rail. Getschow noted we have set that as a major goal of the Council and are working on that this year. Case suggested we let people know early on that we have a work study and are doing things such as talking to other municipalities. The Council is already getting some contacts from people with concerns about what we are going to do about the SWLRT. We need to let them know we are preparing for the possibilities and the ramifications of the SWLRT. Getschow continued reviewing other highlights of the budget including the 2022 Election Year costs, employee health insurance enhancement, workers’ compensation increase, and increased IT services. We add six figures or more for a general election year, especially with the large increase in numbers of absentee voters. We will have enhancements to the employer share of certain employee’s health insurance. There is an increase in workers’ compensation tied to the entire State of Minnesota. There is a sizable increase in the IT services budget for a number of items, including the cost of maintenance and storage of the police body cameras. Chief Sackett noted some testing and other actions are necessary, but the body cameras can be put in use in early August. Getschow reviewed the General Fund revenue budget and the revenue challenges we are facing. He reported the Community Center membership declined from close to 3,000 members in 2019 to 1,100 members in 2021. The projected revenue from the Community Center is $800,000 for 2021, but the 2021 budget was projected to be $2,200,000 when we set that figure two years ago. He noted we have set the revenue budget for 2022 and 2023 at conservative amounts of $1,100,000 and $1,400,000, respectively. Case noted we would also have savings for the expenditures for the Community Center during the past 1-1/2 years. Kotchevar noted the facility was actually closed down for part of the year 2020; however, we are currently running the facility at a more normal level so the operating costs will be higher this year. Nelson assumed we are doing something to try to get back the previous membership and add new members as people feel more comfortable about going back to their former fitness routines. Lotthammer responded October will be a good indicator of how many want to get back to normal because that is the second highest month for membership, with January being the highest month. We are budgeting conservatively because we are trying to bring back membership by offering a somewhat reduced price. Once we get the volume back, we will start to move the price back to pre-COVID levels. We do have a top number that we can accommodate at the Community Center so we are able to adjust our prices to work around that. Nelson commented many people got comfortable working out at home during COVID, plus we currently have restrictions regarding kids under 12 not using the locker rooms. Lotthammer replied that will be a factor, but we also believe there will be people whose financial circumstances have changed and are no longer able to afford boutique fitness facilities who will join the Community Center. He believed we are being conservative with the budget revenue and expenditure numbers. City Council Workshop Minutes July 13, 2021 Page 5 Getschow explained we are plugging in a 4.8% change in the tax levy for next year. The budgeted amounts for charges for services and other revenue are lower for 2022 because of the decreased revenue from the Community Center and other revenue sources, but we have projected a moderate increase in the revenue stream for 2023. He noted we have had three really good years for revenue from building permits and fees and the budget for those will go up, although we don’t want to get too far out with that budget item. The franchise agreement for cable needs to be renewed, and revenue from that has been pretty flat. Intergovernmental revenue is neither growing nor decreasing. All of the factors involved have resulted in a 5.5% budget increase for 2022 and a more moderate increase of 3.2% in 2023. We will pull in $2,200,000 in Federal funds in 2022 and 2023 that will help to reduce some of the effect of the lost revenue. Between now and the end of the year we will be working to reduce the $1,200,000 loss that will remain after allocating the Federal funds. Getschow reviewed the changes to the budget categories noting we are decreasing our facilities and electricity budgets as a result of our sustainability efforts. Staff is still working on the budget for fiscal disparities. Case noted it is difficult to estimate that effect. Getschow replied the budget for fiscal disparities is somewhat of an extrapolation, but we will know the exact number in September. Getschow observed we are trending towards a market value of $12,000,000,000 in 2022. While the City tax rate will be higher in 2022 than it is in 2021, it will still be lower than it was in 2018. He commented he could not find another city in Hennepin County that reports a tax rate lower than it was four years ago. He noted our flat debt levy helps bring down the total levy, and we are still in the lower third of the 2021 comparison of city tax levies. Getschow reviewed the upcoming budget process: September 7, the Council adopts the 2022 preliminary tax levy and budget; November 16, further budget discussion and review including utility and liquor operations; and December 7, the public hearing and adoption of the final budget and tax levy. Narayanan asked if the cable revenue is based on subscribers. Getschow replied every subscriber’s cable bill has a 5% City surcharge included, and the cable company sends that on to the City. Case noted in past years we did not expect to ever get to that point. Nelson asked if that includes internet. Getschow replied the cable companies were including payouts for internet for a few years, but it is now just for cable TV. Narayanan asked why Edina has a lower tax rate and why we moved from the No. 4 position to No. 5. Getschow replied Edina has had a lower tax rate for many years, and they have more value in their property. He noted he believed we will be able to return to No. 4 by September as we continue to work on the budget. II. MILLER SPRING Lotthammer reported we have sent in water samples for both Miller Spring and the Richard T Anderson Spring for a complete work-up. We plan to make the results available after receiving the analysis. He noted our own tests have shown the Richard T Anderson Spring actually tested less in nitrates than did Miller Spring and may be the better water source. City Council Workshop Minutes July 13, 2021 Page 6 Case asked when we would get the results of the water tests. Lotthammer replied it would take about ten days for the complete work up, and the Council might want to have a workshop session to discuss the results. Case suggested he discuss this with Mr. Getschow and Mr. Lotthammer so we can determine the best way to disseminate the information in a controlled manner. Lotthammer stated the question of adding multiple spigots was also raised. As it turns out, this is a hydrology question, and it seems we will always get the same amount of water whether it is from one spigot or three. Having multiple spigots does not speed up the flow, and we are not sure it would not actually decrease the total flow. Narayanan noted having multiple spigots would help the situation where one person is “hogging” the only spigot as he fills multiple containers. Case said he earlier questioned what would happen to the water pressure coming out of the hill, but he was okay for now with keeping the number of spigots at one. Nelson stated she thought it was just right as it is and we shouldn’t change anything. Those attending the meeting spent hours telling us they didn’t want anything to change, so she agreed we should not change it. Toomey asked if we could put on another spigot that could be turned off if it were not needed. Lotthammer responded we have to be very careful about changing the water pressure so as not to cause backflow into the hill. Case asked about the possibilities regarding having a pavilion on the site. Lotthammer replied we would have to take some trees out in order to construct one, and we would want to come up with something with an historic fit confined to a very small area. Case asked if it could be something with an overhang and a picnic table. Lotthammer said it might be possible to put a canopy right over where you get the water. Case asked if we could do that without taking out any trees. Lotthammer replied we most likely could. Nelson reiterated we should just leave it as it is. Toomey noted we promised to make it better at the meeting. Case stated he would like to make it better for the residents of Eden Prairie. He suggested we continue the conversation. Lotthammer reported the Prairie Bluffs Conservation Area is now heavily signed; however, the signs have been pulled out, spray painted and bent by people using the area. We are in the process of working with the Police Department to come up with an interpretive sign about how special the area is and how the grasses help to stabilize the fragile area. The sign will include information regarding fines for disturbing the area and the notice that tickets will be issued for those who go into the area marked “Keep Out.” We have taken out the barrier and put up more posts in the road. Overall, people cannot tell us they didn’t know they shouldn’t be in that area. We are in the process of harvesting seed from the area so we can use the native seeds to replace the worn-down areas this fall. We will continue to do more enforcement down there because people are not respecting the signs. City Council Workshop Minutes July 13, 2021 Page 7 Case asked if the Police Reserve Officers can write tickets. Chief Sackett replied Reserve Officers and CSO’s can write tickets, and we will quote the appropriate language from the State statutes on the signs. Case observed we have 21 reserve officers, and we could use some of their support for this effort. He would really like to prioritize enforcing this on a regular basis for a while. He noted Jim Clark reported there were fireworks set off down there on the Fourth, and there was a big tent set up for a wedding. We need to have some police presence down there every night for the next 30 nights to issue tickets and to enforce the rules. This is a critical 58-acre area that has to be near the top of our endangered parks, and he wanted to make a concerted effort on this one. Nelson asked if we could encourage residents who see the trespassing to call 911 to report it. Chief Sackett stated we are encouraging people to call, but the majority of calls come in after the action occurs. He said it is stated as a misdemeanor under State statute, and they are trying to get down there to spread the word about the consequences. Case noted we should leave this to the experts, but staff has heard the Council’s concerns. Ellis reported the Council Members received a copy of a letter regarding the delineation of the recharge area for Miller Spring that will be sent to homeowners within the area. The letter contains information regarding the impact of waste management, hazardous waste, fertilizers and pesticides, yard waste and other practices occurring within the recharge area. We will also post the information on the website. He noted the letter will go out to residents in the recharge area on an annual basis. Nelson asked if Noble Hill is beyond the recharge area. Ellis replied it is outside the recharge area. Case thought the letter was clear that any actions taken in response to the letter regarding the impact on the recharge area would be voluntary. We want to engage those residents, not threaten them. Ellis replied the letter states our goal is to inform them of their role as a property owner in the area so we can ensure everyone continues to have clean water. II. OPEN PODIUM III. ADJOURNMENT