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HomeMy WebLinkAboutCity Council - 08/31/1995 - Workshop APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL THURSDAY, AUGUST 31, 1995 6:00 p.m. CITY CENTER COUNCIL/STAFF WORKSHOP Council Chambers, 8080 Mitchell Road COUNCULAIIVBERS: Mayor Jean Harris, Councilmembers Ron Case, Nancy Tyra-Lukens, Patricia Pidcock, and Ross Thorfmnson, Jr. CITY COUNCIL STAFF: City Manager Carl Jullie, Assistant City Manager Chris Enger, Assistant to the City Manager Craig Dawson, Director of Parks, Recreation and Facilities Bob Lambert, Police Chief Jim Clark, Director of Public Works Gene Dietz, Director of Assessing and MIS Steve Sinell, Director of Finance John Frane, and Planner Don Uram. I. CALL TO ORDER The meeting began at 6:40 p.m. The Council and staff had dinner in the Garden Room beginning at 5:30 p.m. II. BUDGET REVIEW City Manager Carl Jullie stated that staff had prepared the proposed 1996 budget for City Council review and comment per Council direction given at previous budget workshops. In discussing a summary of the proposed budget, he reviewed the previous discussions from which the present budget was evolved. He stated the Council had wanted to eliminate the use of one-time revenues and staff had worked to achieve that. Staff endeavored to hold operations spending to the 1995 levels and no new staff positions or programs or services were proposed. Prior commitments to new or enhanced programs were maintained, such as the Oak Point pool, Marketcenter streetlighting, and accelerated full-funding for the Fire Relief Association. The budget assumed the local match for the Metropolitan Livable Communities Act would not come from the General Fund. Modest salary adjustments were provided for staff which would keep pace with inflation. There was no contingency funding provided for extraordinary or special requests, and that would need to be addressed separately. Total spending, including debt service, would be $22.5 million in 1996, versus $22.1 million in 1995, which is an increase of 1.8%. Mayor Harris inquired if the MLCA funding was deferred because there was an assumption that the City will have to fund it in 1997. Enger responded that staff is looking at funding from tax increment financing or other sources for this year. Pidcock asked about the salary increases and what the percentage of adjustment was. Jullie responded that it was approximately 3 to 4%, and included such items as merit increases. Council Staff/Workshop Minutes August 31, 1995 Page 2 Jullie reviewed the revenue highlights, and stated that the tax levy was consistent with City Council direction. The taxes for the average-priced homestead will go to $557 in 1996, which includes a $32 increase for City services. As tax base is growing and the City is holding down expenditures, the disparity filled by one-time revenue is being corrected. Proposed revenues for 1996 are predicted on some significant assumptions, including the adoption of the fee schedule in the 1994 Uniform Building Code, the extension of the MUSA line, an increase in Engineering fees, and diminished profits from Liquor Enterprise because of the County Road 18 construction. He noted that the use of one-time revenues from $1.6 million in 1995 to $330,000 in 1996 was decreasing and staff anticipated that no one-time revenues would be utilized in 1997. Tyra-Lukens inquired what would happen if the MUSA line was not extended, and Jullie responded that the City would have to utilize some of the financial reserves to make up the difference. He noted that it could also happen that other fees were not collected as projected. Additional fees could be implemented for recreation programs, street lighting, etc. Staff is working with the Metropolitan Council to try to have the MUSA line extended. Pidcock commented that other cities had extended MUSA lines in their communities and she inquired about how long that took. Enger responded that Maple Grove was involved in that process about 1.5 years and Cottage Grove was 2.5 years in the process. Eden Prairie has been in this process for 13 months. Met Council is requesting that the City have a new transportation plan done, which is a very lengthy process. He noted that as Met Council has attempted to tie the MUSA line extension process to the Flying Cloud Airport Expansion, it could take even a longer time to resolve. He noted that this could have a large impact on the fees the City collects for new construction in the future. Jullie stated that departmental expenditures were reviewed and the City was maintaining the present levels into 1996. He noted that the tax levy accounted for an average valuation change of 5.8% on homesteaded properties in the City. He reviewed the tax capacities, tax levies and tax rates projected for 1996. Jullie discussed the increase in revenues because of the adoption of the 1994 UBC fee schedule. The tenant/rental income of$610,000 was built up over several years and it was used this year so those funds will not be there for next year. The City was also planning to sell a piece of property, but it will generate less revenue because of access problems. In comparison to budget workshop projections, there were areas where the tax receipts would be somewhat lower than anticipated. The Council would consider a resolution adopting the preliminary budget and setting the tax levy on September 5, and the final budget will be adopted in December. The tax levy cannot be changed after September 15th. Mayor Harris inquired about contingencies, and how staff anticipated those would be funded. Jullie responded that the City needs to develop plans and mentioned some approaches. Presently the contingency funds come from the General Fund reserve and other ways of funding these items should be identified. Mayor Harris inquired about the School District referendum and the Hennepin County budget and what percentage increases those might have on residential property taxes. Discussion ensued regarding Council Staff/Workshop Minutes August 31, 1995 Page 3 the stability of property values in Eden Prairie, a feature which makes it a desirable place to live. Mayor Harris commented that property values in Minneapolis and St. Paul are not stable, which makes tax receipts go down. Mayor Harris complimented staff on presenting Council with a good, lean, budget that controlled spending. Thorfinnson commented that the City had been using one-time revenues to buy down the tax rate and the City can no longer afford to do that. Case commented that although taxes may be at a plateau level in five to six years, funding the level of services will require small increases after that to offset expenses. Discussion ensued regarding how best to present this information to the residents. Jullie stated that highlights of the proposed budget would be included in the Community Newsletter. Tyra-Lukens commented she had received feedback from residents who felt that the City had been adequately developed, and were opposed to further development. She inquired if new development paid for itself. Jullie responded that staff had looked at the fees generated by new development and typically those do cover the costs of the development. Case asked if staff could obtain figures regarding the amount of benefit the City derived from a $200,000 home that was already built, occupied, and homesteaded. Jullie responded that those homes contribute tax dollars to pay for the improvements and contribute to the tax base of the City. Discussion ensued regarding the budget being predicated on the premise of growth and the desire for the community to develop. Pidcock noted that there was a basic infrastructure already in place, and the City depended on further development to share in paying for that. Enger stated staff would put together some figures illustrating how growth will impact the City and if that growth decreases it will significantly impact the budget and the plans for the City. Thorfinnson asked if the City was implementing a developer fee to cover the costs of staff time. Enger responded affirmatively, and noted that this was being accomplished with the adoption of the fee schedule in the 1994 Uniform Building Code. Mayor Harris asked if this would encourage a developer to construct further out, and Jullie responded negatively, noting that development was increasing in Chanhassen and Chaska at a rapid rate. Enger stated that Chaska had issued three times the building permits that Eden Prairie had. Tyra-Lukens inquired what City services were contracted for and if they could be compiled. Director of Public Works Dietz responded that the City presently contracts for street sweeping, sealcoating, and partial asphalt overlays. Such items as patching, crack sealing, etc., are not contracted. They use $460,000 of the Street Budget for contracted services. Jullie noted that some of the technology acquisitions need to be completed as they are falling behind in the system. Jullie stated that the Logis computer service was contracted also. Mayor Harris inquired if there were areas needing replacement or repairs of equipment, and Jullie responded that there was no funding set aside for this. Tyra-Lukens inquired when the Council would deal with the recreation fee policy issue. Director of Parks, Recreation and Facilities Lambert responded that the Parks Council Staff/Workshop Minutes August 31, 1995 Page 4 Commission would be addressing this in September and hoped to have information to present to the Council in October. He noted that the Commission would need to determine what items should be subsidized and which should not be. The Commission and staff will have to work through it and determine whether the proposed fees are equitable. He noted that this change had not been included in the 1996 Proposed Budget. A petition had been submitted for a section of trail along County Road 4 which was not in the proposed budget at this time. He was looking into alternative funding for this trail segment at this time. Mayor Harris noted that since no action was required by the Council at this time, the budget will be discussed again on September 5. M. ADJOURNMENT The meeting was adjourned at 7:45 p.m. Prepared by: Barbara B. Anderson Council Recorder CCWS831.MND