Loading...
HomeMy WebLinkAboutBudget Advisory Commission - 07/31/2007 APPROVED MINUTES BUDGET ADVISORY COMMISSION TUESDAY,JULY 31, 2007 5:00 PM, CITY CENTER 8080 Mitchell Road, Eden Prairie, MN Heritage Room COMMISSION MEMBERS: Katherine Kardell (Chair), Don Uram(Vice Chair), Mark Kantor, Richard (Rick) King, Jon Muilenburg, Richard Proops, Gwen Schultz CITY STAFF: Scott Neal (City Manager), Sue Kotchevar(Finance Manager), Janice Curielli (BAC Recording Secretary) I. ROLL CALL/CALL THE MEETING TO ORDER Chair Kardell called the meeting to order at 5:08 PM. Richard King and Richard Proops were absent. Don Uram arrived at 5:25 PM. II. MINUTES A. BAC MEETING HELD TUESDAY,JUNE 28, 2007 Kardell said Proops' added the following as the third sentence in Section L• "Vice Chair Uram joined after 10 minutes and chaired the meeting." He also changed Page 7, Section II.C., Paragraph 2, Sentence 2 as follows: "King said while billings are done with paper, the City should not go to monthly billings. The change should be when the billings can be done electronically." Schultz changed Page 7, Section II.D., Paragraph 1, Sentence 1 as follows: "Schultz asked on what the community center revenue projection is based." MOTION: Schultz moved, seconded by Kantor, to approve the minutes of the meeting held Tuesday, June 28, 2007, as amended. Motion failed 2-0-2, with Kardell and Kantor abstaining. B. BAC MEETING HELD TUESDAY,JULY 10, 2007 Kardell read King's changes to the minutes: Page 7, Paragraph 4, Sentence 4: "..., but in May, a new Hennepin County Jail Administrator was hired..."; Page 7, Paragraph 4, Sentence 5: "...to bring people to jail at Hennepin County..."; Delete Page 12, Paragraph 5, Sentence 7; Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 2 Page 14, Paragraph 1, Sentence 1: "Schultz asked about leave benefits for part-time employees."; Page 18, Section V, Paragraph 1, Sentence 2: "(1) Capital improvement budget has gone up...." MOTION: Kantor moved, seconded by Muilenburg, to approve the minutes of the meeting held Tuesday, July 10, 2007, as amended. Motion carried 3-0-1, with Kantor abstaining. C. BAC MEETING HELD TUESDAY,JULY 12, 2007 Kardell read Proops' changes to the minutes: Page 1, Section I, add Sentence 3: "King left to chair the Flying Cloud Advisory Commission meeting at 6:45 PM."; Page 2, Paragraph 5, Sentence 1: "...on the 3.5% basic wage increase..."; Page 2, Paragraph 5, Sentence 2: "King suggested they meet very soon to provide input."; Page 4, delete Paragraph 4. MOTION: Kantor moved, seconded by Muilenburg, to approve the minutes of the meeting held Thursday, July 12, 2007, as amended. Motion carried 3-0-1, with Kantor abstaining. III. BUDGET PRESENTATION (BUDGET VERSION II) Neal and Kotchevar presented the Version 11 Budget PowerPoint presentation, "Ahead of the Curve: Refocusing on our Core Mission." Neal said he presented the material to Proops and King in a two hour session last evening because they could not attend tonight's meeting. The presentation has about 50 slides and includes input received to date from the City Council. Neal said Proops asked what he meant by "Ahead of the Curve." He explained it was his intent to take a look at operations to see where they have been, where they are and maybe where they ought to be. We looked at some of our competitor cities and MLC cities (the 13 cities we regularly compare ourselves to). Some of the data tonight is based on where we are, where the other cities are, and learning from their experience. That knowledge should put us ahead of the curve and refocusing on our Core Mission is how we get there. Neal reviewed the budget calendar, noting the City Council has the first Budget Workshop on August 21, and September 4 is the date to certify the Preliminary Levy and adopt a Preliminary Budget. The Final Budget will be prepared in October and November, with a Budget Workshop scheduled for November 13 and a Town Hall Meeting on November 27. A Truth-in-Taxation Hearing is tentatively planned for December 3, and on December 18 the Final Levy is certified and the Budget is adopted. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 3 Neal said our objectives tonight are to explain Version 2 of the Proposed 2008-2009 Budget and Tax Levy and the proposed 2008-2012 Capital Improvement Plan. We will be answering key questions and providing support to the Budget Advisory Commission in its review and comment on the proposed budget. Rather than answering questions in the traditional sequence of Who, What, When, Where, Why and How, this presentation will answer the questions in the sequence, What, Why, What, How, Who and Why. The key question is why should the City change, since things are going well. For example, when we asked citizens and businesses what they thought of the City, 73% of the residents rate the quality of city services provided favorably, 97% of them rate their quality of life as either "excellent" or "good," and 84% of businesses rate Eden Prairie as a good place to do business. The median real estate value has increased 77% since 2000 while the median sale price has increased an average of 6% each year. There are a lot of good things going on and in 2006 Eden Prairie was rated by Money Magazine as the tenth best city in the United States in which to live. We need to change because we have a democratic form of local government, and as the City Council leadership changes, the job of the City Manager is to make sure the leadership direction in the City Council is reflected in the City budget and operations. We need to look out into the future to anticipate and prepare for changes. Neal said the net tax levy is one way of measuring the tax burden, so we compared the net tax levy of Eden Prairie with 12 other MLC cities. Our net tax levy started high and has remained high compared to our peers. Compared to the other 12 cities, we are ranked second behind Bloomington in our total 2006 net levy, but when that is adjusted by population, we are ranked first with a per capital levy of$424.70. We are ninth in our rate of net tax levy growth from 1995-2006, and are in last place in terms of our rate of net tax levy growth per capita from 1995-2006. Uram arrived at 5:24 PM. Neal said the mean city tax rate is not as easy to measure because there is not a single tax rate in the City. There are 12 or 13 different combinations of tax rates due to having multiple School and Watershed Districts within the City. We computed the mean city tax rate in order to compare it to the other cities. In terms of long term growth and other criteria, our rate is starting to trend down. We determined there are four trends forcing change in Eden Prairie: demographic, demand, supply and societal. The data on demographics is raw data only and does not include indicators of growth for certain subsets of the population. There was a 16% increase in population from 2000 to 2006, and a 12% increase in households for the same time period. Kardell asked if we have any projection that is reasonable as to what our population will be at build out. Neal said it has been projected at about 65,000 in the past, but our upcoming 2020 Comprehensive Guide Plan projects a total of 75,000-77,000 residents Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 4 and up to 35,000 dwellings, primarily because of a change to higher density. Neal noted the City Council has not yet approved a change to higher densities. Neal said there are factors causing increased demand. The calls for service to the Police Department are up 34% since 2000, including a 638% increase in calls regarding identity theft, a 126% increase in medical calls, a 62% increase in driving while impaired calls and a 36% increase in animal control calls. We project a total of 49,172 calls for police services in 2008, 52,122 in 2009 and 58,565 in 2010. The demand for Public Works services since the year 2000 has produced 25 more miles of water pipe since 2000, over 1,800 new water connections, and 23 new miles of storm sewer. Since the year 2000 expanded demand for Parks and Recreation services has resulted in a 55% expansion of the trail system, seven new city parks and a 25% increase in the total park acreage. From 2000 to 2006 there has been a 1% decline in building permits, a 10% decline in the number of inspections, a 2% decline in planning projects and no change in the number of variances requested. The demand for Human Services contracted services increased from an annual average of 4,000 from 2000 to 2005 to 5,260 in 2006. Neal briefly reviewed the budget goals and priorities, noting these are very important but they were presented to the Budget Advisory Commission in detail at the very start of the budget process. He said the service goals are both city-wide and department-specific and will help us maintain services to 65,000 residents and 2500 businesses and will help us to maintain our Top 10 status. We want to be proactive to the changing needs in the community and we want to continue to improve our business practices and manage our resources well. He noted we have not yet received the Implicit Price Deflator (IPD) number,but our goal is that our tax levy increase should be less than that number. The biggest area of impact on supply is our payroll costs which went up an average of 5% per year from 2000-2006. Our energy costs rose 46% since 2000, led by a 179% increase in motor fuel. Our total costs for technology are up, and, while the numbers of our vehicle fleet hasn't changed much since 2000, the number of large vehicles has increased. Neal said he believes our elected leaders reflect the societal demands and expectations of our citizens so that when the leaders change, we have to change as well. Neal next addressed the issue of how we go about deciding how to change. He used a decision-making model that defines three categories of services. The first category is the core mission that includes the kinds of essential services that the City must provide when 60,000 people live in close proximity to one another. Public health and safety must be provided so that, for example, we have a reliable source of water. There are environmental protection services needed to protect people, such as providing storm water and sanitary sewers. We need to provide them with recreational opportunities in parks and forests. We must provide for mobility so people have the ability to move around with vehicles, bicycles and by foot. We also need to protect real estate investments in the City by providing an environment where value will increase from year to year. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 5 There are other supplemental mission services that are important and valuable but discretionary as to whether the City provides them. These include everything that is not a part of the core mission side such as the cemetery, the Community Center, community services, economic development, housing, immigrant services, liquor stores, public safety programming, recreation programming, the Senior Center and social service outsourcing. He said some of these services, such as the Senior Center, have a vast range in quality among the other cities we studied, and our Senior Center is at the low end when compared to others. We can improve efficiency in some of the supplemental mission services, by such things as participating in joint recreational programs with other cities. The third category is the mission support services we provide as overhead services. These include administration, assessing, communications, facilities, finance, fleet services, human resources and information technology. Neal reviewed our strategy to make the changes necessary in the three categories of services. Because the demand for our core mission services is outside of our control, we need to prepare to provide the size of services needed to respond to the demand. We will need to determine the level of services required and the scope of the services for our core mission and may have to change the scope and size of the supplementary mission operations and the mission support operations if necessary. We plan to sharpen our focus and limit the growth of our core mission services by reducing one full time employee (FTE) Public Works Special Projects Manager in 2009, reducing one FTE in 2009 through attrition in the Building Inspections Division administrative support, and declining the proposed addition of one Training Chief in the Fire Department. We will decrease the scope and size of the supplemental mission services by reducing the number of FTE's in the Housing and Community Services Division from three to one starting in 2008. We will also reduce the total outsourced human services grants from the 2007 amount of$199,000 to $140,000 in 2008 and to $125,000 in 2009. We will reduce Recreation Services by one FTE. In order to restrict growth in the scope and size of our mission support services we will decline the proposed expansion in service level of the Communications Division, reduce by one FTE in the Finance Division in 2009, and reduce by one FTE in the Fleet Services Division in 2008 through attrition when possible. Neal then reviewed some of the possible impacts of the proposed reductions. He said the Housing and Human Services Division staffs and provides liaison service to both internal and external groups. We need to take a look at what each group is staffing and decide if we will continue to provide liaison to that group. We provide language and cultural services, such as the Somali learning services, and would have to outsource translation services if we do not provide those. We will need to look to see what direct programming of Human Services we would continue to work with in the areas of immigrant and lower income families and those in which we are a public partner with churches, the schools Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 6 and other organizations. We will lose one FTE in the Recreation Services area, and we will conduct discussions with the Recreation Services employees to look at the entire program and make decisions on which programs would be continued. In addition to reductions we will have some growth in the three categories of service. In the core mission area we will add one FTE in 2008 in the Patrol Division of the Police Department to provide flexibility in scheduling. We plan to increase the supplemental mission area by adding one FTE in facilities maintenance at the Community Center and adding $800,000 in new operational expenses there. The Community Center accounts for more than 90% of our new spending, so that is one area where we need some changes. We plan to increase our mission support area by adding one FTE in information technology to support our increased technological investment. Kardell recalled in Rob's presentation about the Police Department they planned to add two FTE's for the Patrol Division in 2009. Neal said that was true, and this is a change in Version II because we believe adding one FTE in 2008 along with some changes in programming will allow us to avoid adding another FTE in 2009. Neal reviewed the totals resulting from the changes in headcount. For the period 2008- 2009 there will be a reduction of seven FTE positions and an addition of 3 FTE positions, for a net reduction of four FTE positions. The total headcount will be 277.35 in 2007, 275.55 in 2008, and 273.55 in 2009. Neal then summarized the changes in the 2008 and 2009 General Fund Base, Step, and Performance Wages for both Version I and Version II of the budget. The base wage increase for 2008 in Version I is 3.5% and 3.0% in Version II. For 2009 the base wage increase in Version I is 3.5% and in Version II is 3.2%. He said the Wage and Base Subcommittee talked about the concept of an "all-in" number. For 2008 the all-in number is 4.8% in Version I and 4.1% in Version II. For 2009 the all-in number is 4.2% in Version I and 3.8% in Version II. Neal reviewed financial goals and targets, noting that we need to make a judgment on what the tax burden is going to look like. We need to limit the rate of growth in the 2008- 2009 budget for General Fund spending, for the total and net tax levies and for impact of the City property tax on the Mean Single Family Home (MSFH). He noted the MSFH will be $378,400 in 2008. He also noted that these goals and targets have not yet been approved by the City Council, but he thought this would be something they would be interested in. Neal said our goal for General Fund spending should be to limit the rate of growth to not more than 10% during the two-year period. He said the increase proposed in the Version II budget is 6.3% in 2008 and 3.3% in 2009. The Version I budget total for the General Fund was $37,100,818 and for Version 11 it is $36,114,862, for a reduction of $985,956. The total tax levy should grow 5% or less in 2008 and 2009, and the Version II budget includes a 5.0% increase in 2008 and a 1.9% increase in 2009. The impact of the City property tax growth rate should be 2% or less in 2008 and 2009. The Version II budget Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 7 includes a 1.84% increase in 2008 and an estimated 1.0% or less increase in 2009. The 2009 figure is difficult to project because we don't have the values,however we believe it could be 1% or less or possibly zero. Kotchevar took over the presentation to review information on the impact of the Version II budget. She compared the 2007 General Fund revenue budget with the proposed 2008 budget, noting the figure for intergovernmental revenue includes some Fire Department revenue and fines and penalties come primarily from citations. The 20.4% increase in charges for services is due primarily to the Community Center expansion. The decrease of 44.3% in transfer-in revenue is due to not using fund transfers to balance the budget. She also compared the 2007 General Fund expenditures budget with the proposed 2008 budget, noting that the 46.7% increase in the Community Center expenditures is because of the facility expansion. Kotchevar reviewed CIP expenditures and funding sources and the changes to the Capital Improvement Fund balance, noting that the expenditures in the 2007 budget are about $25,000,000, 2008 is $29,746,300 and 2009 is $30,889,050. Kardell asked if this is an accurate representation of the shares of City costs. Kotchevar replied there are various revenue sources but the CIP sources represent the City's "pay- as-you-go" concept. She said the liquor fund and the tax levy go into this to help cover costs. She reviewed the projected revenues for the Capital Improvement Fund, noting that we are recommending the MVHC credit be put into this fund. She explained that MVHC is a credit homeowners receive on their property tax. The state requires that we levy for it, and they reimburse us through that credit, but sometimes they haven't given the credit to us. Neal said the state legislature wanted to provide a true property tax relief program to homeowners so they said city, county and school districts would grant a level of tax relief and the state would send it back as a check. It worked fine for a couple of years until January of 2003 when Governor Pawlenty came into office and there was a large deficit. At that time the state legislature set up a system whereby they determined who would get the checks and who would not. The legislature that took away reimbursement for some cities promised to restore it in 2005. It didn't happen in that budget, but they said in 2007 we would get a check. We are now expecting a check for approximately $630,000 in November unless it is taken away again. The reimbursement amount decreases every year based on the number of homes that go over a threshold of$414,000. Kardell questioned whether it should be shown as a funding source because of its unreliability. Neal said we did not show it one year, and the legislature got upset with us because that showed we didn't trust them. It is now more of a legislative whim and has nothing to do with the taxpayers since the legislature determines which cities need it and which ones don't. Schultz asked which other cities do not receive it. Neal replied none of the other MLC cities receive it, with the exception of Apple Valley. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 8 Kotchevar reviewed the debt levy summary for the years 2007, 2008 and 2009. The total debt levy decreases from $3,435,724 in 2007 to $3,265,724 in 2008, and then to $3,190,724 in 2009. She said the number used for the Public Safety Software line item is very soft because they have no data on it. She reviewed the tax levy summary, noting the General Fund tax levy increases 6.6% in 2008 and 2.5% in 2009. The total City and HRA tax levy increases 5.0% in 2008 and 1.9% in 2009. Kotchevar reviewed the preliminary estimates of the 2008 city tax impact, emphasizing these are only estimates at this point. The estimates show increases in the average taxable value of 3.1% for residential property, a 5.8% increase for apartments, and a 9.5% increase for commercial property. A median value ($374,800) home has a 1.8% increase in city tax impact, a $5,000,000 apartment building has a 4.2% increase, and a $2,000,000 commercial building has a 8.1% increase. Kotchevar then summarized the 2008 budget impacts for Versions I and IL There was a 9.3% increase for General Fund Expenditures in Version I and a 6.3% increase in Version II, a decrease in the tax impact on a median value home from 5.1% in Version I to 1.8% in Version II, and a reduction in the dollar increase on a median value home from $54.00 in Version I to $20.00 in Version II. Kotchevar said utility rate increases will result in a 7.4% increase in utility revenues for 2008, and a 4.7% increase for 2009. The amount of decrease in the utility net assets is going down. The projected total revenue of the utilities capital system will increase 61% from 2007 to 2008. Kotchevar noted these are the funds collected that pay for improvements. The revenue from access charges will ultimately run out as development slows. The amount of decrease in the utility capital system net assets will go down. Schultz asked what causes the difference between the 2008 and 2009 figures for utilities capital system. Kotchevar said it is the difference in the estimate of projected revenue. Kardell asked how much it is because the development market is depressed. Kotchevar said they used a detailed analysis to produce the estimates. Kotchevar reviewed the changes in storm drainage revenues and expenses, noting these will be reviewed these, and they may recommend a rate change by the end of the year. She said they are not quite sure what we will be spending on projects. Kotchevar reviewed the utility fee history that showed the water rates from 1985 to 2009, starting with 95 cents in 1985 and increasing to $1.75 in 2009. She said they project a 3% increase in gross profit from liquor sales in both 2008 and 2009. Neal summarized the accomplishments of the Version II budget, noting that it meets or exceeds the three financial goals that were established. In addition it establishes a prioritized operational philosophy for city government, and it places restraints on our ability to grow the tax levy, to increase the general fund spending and to increase local taxes. It also refocuses city operations and repositions city government for the future. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 9 Neal said we are financially strong and now is the time to effect a change in the size and scope of our operations. While it is sad that there will be some reductions in the headcount size, it will help us to reduce costs and to contain costs in the future. He thought it is important to make decisions now when we are financially strong and not wait until taxes get to the top of the metropolitan area. If we make these changes, we can be "ahead of the curve." IV. DISCUSSION Kantor asked about the projection of 35,000 residential buildings and homes. Neal said it is based on the upcoming Comprehensive Guide Plan that includes a future where there will be greater number of high density living units in the city. A discussion followed regarding the wording in the PowerPoint presentation, and it was determined the demographic information on Page 9 should be changed to say "Up to 35,000 dwellings..." Uram said he understood the City Council hasn't been presented with the philosophy, but he liked the way it has been laid out. He asked how the percentage numbers were determined. Neal said there was no particular process used to determine the projected number except that it is less than our previous growth years. Earlier this year when Governor Pawlenty was being interviewed his response to where budgets should be was that 10% growth is enough for anybody. Neal thought about that statement and decided to look at where we would be when we grow 10% every two years and then compared that to our peer cities, so it was not a scientifically derived number. Uram asked why the median value single family home was chosen as a benchmark for the tax impact information. Neal said it is a measure that was in place when he arrived and it is a value people can use to compare the value of their home. He thought it was fairer to describe the middle of diverse data. Regarding the strategy points outlined by Neal, Uram asked if this was embraced by the leadership team and if we have a process in place to look at this annually. Neal said there are varying levels of "embracing" by the leadership team. In a situation where we are going to put restraints on spending and taxes, something else has to change to fit within the restraints. He thought there will have to be decision-making models to deal with that, and he would propose to use the same process every year. Kardell asked if Neal has been talking to the City Council so this won't be a major surprise to them. Neal said he has made them aware of this strategy but has not presented it in a formal manner. He said his job includes learning how to read elected officials and to read cues, and he believes this is a strategy this City Council would support. Uram asked about the increase in the General Fund Expenditures for the Police Department included on Page 26 of the presentation. Kotchevar said that is both wages and benefits and that department didn't follow with the 3.5% and 3.0% budget increase. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 10 Referring to Page 19 of the presentation, Kantor thought the Building Inspections Division talked about being particularly overburdened and he was wondering how the reduction of one FTE would work out. Neal said there are a number of inspectors and a number of administrative support personnel in that division. They are trying to push more of the associated inspection activities on line so that activities currently being done on paper and by phone will be done on line. This will enable them to reduce the administrative support through attrition in 2009. Kantor then asked about the decrease of two FTE's in the Housing & Community Services Division and the reduction in grants for outsourced human services. He thought there are reductions that wind up costing money later, and he asked how we took those into consideration. He thought there may be services we are not providing that might help reduce other things. Neal thought the question was fair, but he didn't have the ability to answer whether decreasing this budget line item will increase the use of resources for other activities. He thought that is part of the risk of not spending the money since it may or may not happen. We are recommending this as an area to reduce and in doing so we would be going back to a level of human services that we had in 2002-2003. Referring to Page 17 of the presentation, Schultz asked how the list of Supplemental Missions items was chosen. Neal thought the list might be different for everyone in the room,but he decided to start with these. Schultz then asked how we went about choosing the ones that were picked for reductions in staff. Neal asked if she meant why he choose to make reductions in Housing and Community Services, for example, but not to the Senior Center. Schultz said that was what she meant. Neal responded that he chose Housing & Community Services because of the services on this list, and this side of the operation is an area where we have the most amount of difference when compared to the other cities. He said they looked at what we are doing that our peers are not doing, and why we provide that service when other cities don't. Schultz then asked what items we provide that aren't provided in the majority of the other cities. Neal said most of the other cities have Community Centers but not many have city cemeteries. Most of the cities don't have municipal liquor stores, but we have recommended staying in that business because it makes money for us. Neal said we can do more joint programming in the Recreation Services area. He said we have had discussions about whether a centralized municipally-owned Senior Center is in the future. Schultz asked how our 9,000 square feet of municipal buildings compares to other cities. Neal said he did not know but he could get the data. Kotchevar thought it would be somewhat similar. Neal said we don't have a lot of facilities that others don't have,but he doesn't know the size of the facilities in the other cities. Kantor asked about the reduction of one FTE in the Finance Division. Kotchevar said we will become more efficient with new technology upgrades such as document imaging and remote deposit for utilities. Kantor said he didn't see the workload decreasing very soon. Neal said we see the possibility of changing the nature of the workload by having on-line bill processing and scanned Accounts Payable and Accounts Receivable. He thought there will be a lot less paper handling. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 11 Muilenburg asked if the net tax levy comparison took into consideration the rate of growth in population in each of the other cities. Neal said we have all of that data and we could plot it since it is a function between the rate of growth of the population and the rate of growth of the levy. Muilenburg commented those cities that are growing faster would have a much higher levy per capita. Kardell thanked staff, noting there were a lot of issues addressed, and she thought the focus on the core mission versus the supplemental mission was a helpful way to look at it. Neal said where we ended last night with King and Proops was that this is a lot of information but we will get back together on August 9 to hear recommendations based on this data and some personnel issues. Neal said Proops offered to serve as the compiler. Schultz asked if we would send our comments to him. Neal said, for the meeting on August 9, we discussed taking a recommendation from one commissioner, then we would discuss it and vote on it. We would keep track of the issue and the vote on it and would track names. We could have a minority report statement if we wanted. Kantor said we talked about making recommendations in three categories: unanimous, majority votes and no majority but worth thinking about. He thought we did not need to track the vote by name. From a Commission standpoint he thought we need to decide why we might want to make certain types of suggestions, for example, is PTO an appropriate issue for the Budget Commission. He thought it was a question of what is the right way to present those things that are within our domain and those that aren't. Kardell noted Schultz and Kantor have been part of the Wages and Benefits Subcommittee. Schultz said that Proops' email covers everything and gets into PTO because we don't have a cap on how much vacation time can be accrued or paid out. Kantor asked how that issue would make this a less worthy budget. He thought it is a policy issue for the City Council,but if it truly relates to the budget, then we should make a recommendation. He thought some of these are more policy issues and not budget issues. Uram thought it could be looked at in two ways. We could consider ourselves as technicians but also as long-term financial planners. PTO makes a difference in the long term but we can't tell staff they should do this. We can make a recommendation to look at it. Kantor agreed and said his point is that we should not say we should do away with PTO. We should be careful what we say our recommendations are. Kardell said these are some of the much broader policy issues, such as should there be a step system,but she did not think that is our job. Neal said the CIP group had questions and recommendations about the Major Center Area (MCA). Kardell said there should be careful consideration of how the burden should be shared. Neal said as we move forward with the MCA improvements, given that the City has adopted that as a priority and we are spending money on that, the City Council should give careful consideration to how that is done. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 12 Muilenburg said the structure of the commission's recommendations makes sense. He thought it would be a good format to identify the recommendation and support for it but also show the dissenting opinion. Kardell said at the 7:00 AM CIP meeting we spent most of the time looking at funding sources for the CIP. There was a misconception by people about where the money comes from for capital projects. There were questions about how much is derived from property tax and about the debt service impact. In terms of direct property tax levy the two areas of impact are the pay-as-you-go program and the debt service levy. She said it was a question of how to present the CIP and see the figures but not the details. They had discussions about the Economic Development Fund. The City Council made a policy decision to segregate and use the sale of City property for economic development. We had a discussion regarding that restriction and what that money could be used for. There was a discussion about combining those pools of money and making it all available for CIP. Muilenburg said there was a misconception that the move with WalMart was motivated by the MCA but it was really motivated by WalMart. Kardell was concerned that we should plan only for revenues that will happen and not for revenues that may not be received. She urged thought on revising that format. Uram asked about the process for submitting recommendations. Neal suggested emailing them to Kotchevar and she can work with Proops to compile them so it would not be subject to the same data practices issues. Kotchevar said she will email Proops and King to let them know the process. Muilenburg asked about the due date. Kardell said not later than Wednesday AM. Neal said he wants to meet with Schultz before she leaves. Schultz said she is scheduled to meet with Kotchevar on Thursday at 9:00 AM, but they may not need the meeting if she can email Kotchevar. Neal thought it would be okay to use email. Uram said he will not be here on August 9. Kardell said we must get done on the 91h because she will not be available for the alternate meeting date of August 14. Schultz asked if Kotchevar will send out the compilation to everyone. Kotchevar said it might be put into a PowerPoint presentation for circulating. Kardell thought it would be easier for the City Council to see a PowerPoint presentation versus a large written report. Schultz thought it would be good to limit what we give them because we don't want to include all the detail. Kardell thought we now have a format that seems to work okay. Muilenburg thought it might make sense for us to see all this before we get here on Thursday. Kardell said we could make the deadline on Monday in order to have time to look at it. Eden Prairie Budget Advisory Commission Minutes July 31, 2007 Page 13 Kardell reminded the commission members that we are not to be communicating by email. V. ADJOURNMENT MOTION: Kantor moved, seconded by Kardell, to adjourn the meeting. Motion carried 5-0. Chair Kardell adjourned the meeting at 6:55 PM.