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HomeMy WebLinkAboutBudget Advisory Commission - 08/09/2007 UNAPPROVED MINUTES BUDGET ADVISORY COMMISSION THURSDAY,AUGUST 9, 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 King, Jon Muilenburg, Richard Proops, Gwen Schultz CITY STAFF: Scott Neal (City Manager), Sue Kotchevar(Finance Manager), Tammy Wilson (Finance Supervisor), Angie Perschnick (BAC Recording Secretary), Luke Fischer(Intern) I. ROLL CALL/CALL THE MEETING TO ORDER Chair Kardell called the meeting to order at 5:02 PM. Commissioners Schultz and Uram were absent. II. MINUTES A. BAC MEETING HELD THURSDAY,JUNE 28, 2007 Muilenburg noted that in the last sentence on page 5, paragraph 4, the word should be "water" instead of "waster." The approval of the June 28"' minutes include the changes recommended at the July 31st meeting. MOTION: The minutes were approved 4-0-1 (For-Against-Abstain) with Kardell abstaining since she was not in attendance at the meeting on June 28. B. BAC MEETING HELD TUESDAY,JULY 31, 2007 MOTION: The minutes were approved 3-0-2 (For-Against-Abstain) with King and Proops abstaining since they were not in attendance at the meeting on July 31. III. FINALIZE RECOMMENDATIONS OF THE BUDGET ADVISORY COMMISSION RELATIVE TO THE FOLLOWING BUDGETS Kardell corrected the agenda item IILB. which should read 2008 TO 2012 CAPITAL IMPROVEMENT PLAN. Her first idea for how to proceed was credited to King, and it included first voting on the version 2 budget Scott Neal presented at the last meeting first; then, the BAC would vote on the recommendations individually in the memo Proops prepared for the group. Kantor is okay with doing the version 2 budget vote first if the memo is on the screen for items to be added to or deleted. Eden Prairie Budget Advisory Commission August 9, 2007 Page 2 King submitted a two-part motion called the BAC Budget Recommendation motion. King moved and Kantor seconded the motion as follows: • First, that the BAC commend the City Manager and his staff for their extraordinary work in creating version 2 of the budget and that the BAC accept it as submitted. • Second, that the BAC will make its own recommendations by additional motions and that these additional motions, in combination with the first section of this motion, comprise the complete BAC recommendation to the City Council. • The form of our report cover the City Manager's version 2, and the BAC's recommendations divided into three parts: Unanimously approved items, Majority approved items and Minority report. MOTION: The BAC Budget Recommendation motion carried 5-0-0 (For-Against- Abstain format) with all present commissioners' in support of it. The budget recommendation document consists of both specific budget recommendations with dollar impacts and policy recommendations for the City Council to further consider over the course of the next budget period. Kardell recommends organizing the document by putting the specific budget recommendations first by appropriate department or category. King asked who would be authoring the document, and Kardell said that Tammy Wilson is editing. The goal is to have a final version of the recommendations for the group to look at individually one more time early the week of August 13th, but Kardell expects that commissioners would not do further wordsmithing after that review. King clarified that they would be approving the recommendations but not the precise wording of it. Kardell said that was what she meant unless the group did decide to meet again on August 14"'. King said he thought minor wordsmithing through email should be acceptable as long as policy was not discussed or the intent of the recommendation modified. Kantor wondered how they would manage situations where there is no consensus. Muilenburg asked if dissenting opinions would be incorporated into the process. From the role call voting process, we will know and document who supports which recommendations. Proops passed out the memo of recommendations to the audience that he prepared for the group. Recommendation 1: CAPITAL IMPROVEMENT FUND Kardell noted the correct amount of money currently in the Economic Development Fund should be $2.6 million. Also, the combined funds in the CIP would be $10.6 million. All present commissioners include Muilenburg,King,Proops,Kantor, and Kardell. Eden Prairie Budget Advisory Commission August 9, 2007 Page 3 Kantor noted this is one of the most complicated suggestions in the recommendations. King said he would be prepared to support this. Kardell said she is not in favor of supporting this recommendation since she sees the tax levy as a stable source of capital and a relatively minimal amount. If the cash were depleted, a tax levy would be needed again. Kantor asked what the purpose would be of combining funds if the tax levy for the CIP is eliminated. Proops responded that there is $2.6 million sitting in the fund and it is not in good faith with the taxpayers to ask for more money when there is already money sitting in this fund. He said it is similar to a referendum in 2005 when $6.3 million was available for parks and the public was asked for another $6.5 million without being told there was already money in a fund for the parks. He sees this as a way of taxing residents less, but it is basically transferring funds. It could pay for the blip in funding for the Community Center. King noted that they still have land that was not sold around Fire Station 4 that will be added to this fund in the next year. The funds will be replenished, so the cushion will not be ended but rather leveled before it is filled up again. Kardell noted that the economic development fund represents the only resources the City has for economic development activities, such as the MCA study. Neal confirmed that it funds studies and gaps in economic development projects. Kardell asked if the elimination of the CIP levy would affect the City's credit rating. Kotchevar said this one decision is not likely to directly affect the bond rating, but removing or decreasing the levy may have an impact with Moody's. There would be questions about what the political will would be to bring back this fund when it is needed. That is why pay-as-you-go is so nice as a stable funding base. She would not move in this direction for the City's fund rating,but she does not want to say it would have a negative impact either. Muilenburg said that, if this is adopted, in the next budget cycle they could choose to add the levy back. They would not likely deplete this funding during that time period anyway. Neal agreed it would probably not be depleted in the next couple of years. Kantor noted that it is always harder to add things back in later and it is a relatively small amount of money, so he would prefer not to eliminate the fund. Proops noted that the fund was $500,000 in 2004 and $1.2 million in 2005, so the amount has varied significantly from year to year. King asked and it was clarified that the funds from liquor sales from 2008 go into the CIP fund. Kotchevar said they project the revenue coming in and expenditures and when they are likely to run out of money for the pay-as-you-go program. The City will be funded for their CIP ($3 million per year) until 2019 and still have about $2.5 million in the bank (this amount includes the market value homestead credit of $600,000 and $1 million per year funding). In 2014 they would be out of money in the fund if the market value homestead credit were not included. Proops said they do have time to reinstate the levy before running out of money. Capital Improvement Fund Recommendation: It is recommended that the two funds be combined, and the Tax Levy for the CIP be temporarily Eden Prairie Budget Advisory Commission August 9, 2007 Page 4 eliminated. Funding for capital improvements would continue to come from the CIP, which would be about $10,600,000 after combining the funds. The 2007 Total Tax Levy is $29,917,000. The 2008 version 2 Total Tax Levy increases by 4.7%, $1,418,000. By eliminating the $1,000,000 CIP levy, the increase would be approximately $418,000, less than a 2% increase in the Total Tax Levy. MOTION: Motion to adopt Recommendation 1 passed 3-2-0 with King, Proops, and Muilenburg for the motion and Kantor and Kardell against. Recommendation 2: WAGES AND BENEFITS Kardell noted that the PERA amounts in this portion are state-mandated and cannot be altered in the budgeting process. King asked about the version 2 budget numbers, and Neal confirmed the wage increase amount for 2009 was 3.85% in that budget(.6% step and 3.25% market adjustment). The recommendation does not adjust the version 2 budget wage and benefit increase amount for 2008 (of 4.1%). Kotchevar clarified that, if you pull out the benefits piece of the wage and benefits increase totals, the amount of increase for wages would be $599,000 in 2008 and $584,000 in 2009. She also suggested combining any step program increase amounts with recommendation#4. King sees item 2 as a monetary recommendation, and the recommendation can be done as a total number (including merit and step program amounts). Item 4 is a policy item, so he would not suggest mixing the two recommendations. Kardell wondered if we need to include the PERA information in the recommendation since it is just one piece of the total benefits picture. She suggested leaving that piece out. Neal said Proops had raised the question of whether or not the City would pass along information to employees regarding the increase in cost of the PERA benefit. King asked about the impact of these recommendations on staff relations. Neal responded that he wants to see where the BAC settles at, and then Neal will talk with staff and their reactions will be figured into the process later. Staff recommendations will be included along with BAC recommendations. Neal noted that some salaries will be bargained for in 2008 and 2009, and they continue to gain information about salaries in peer cities also. For 2008, the data is pretty close to market data from peer cities,but the 2009 amount in the BAC recommendation being discussed is a little low relative to the market projections. He would want to spend some more time on that number and looking at the data. Kantor said that going from 3.5% to 2.6% seems pretty drastic. He is wondering if it would make sense to compromise at 3% instead. He asked why they would do a lower increase in 2009 than in 2008. Proops responded that the goal was to Eden Prairie Budget Advisory Commission August 9, 2007 Page 5 decrease the rate of increase in wages since previous wage increases have been generous. He noted that he included PERA data because that is a real wage increase too. He does not think most companies in the private sector would offer 3% increases two years ago plus the benefits increases, and he recognizes that this is a highly subjective and sensitive issue. Kantor noted that most companies do not budget two years in a row, and the rate of inflation and unknown market data could impact that number. Proops agreed that, if inflation goes wild, it would make sense to re-evaluate the wage increase number. He does not think the budget number will come down after the BAC makes this recommendation, even if inflation were lower than expected. King moved that we accept the version 2 budget proposal for recommended increases as written. Kantor seconded. Muilenburg suggested finding middle ground on the wage increase numbers, and he mentioned that all the group is doing is making recommendations at this point. Kantor asked and it was clarified that there is a way to get to an all-in number (that would include merit and step increase amounts). Muilenburg suggested and moved for a 3.4% wage increase for 2009 (and keeping the 3.4% wage increase in the version 2 budget also), and he suggested removing all the extraneous information regarding wages and benefits increases in the past. Kardell noted that some compromise would be needed, and Proops noted he could just vote against the recommendation too. King asked if 3.4% for 2009 would be close enough to the market data projections (for the City to hire and retain people), and Neal thought that it would be. Muilenburg moved and Proops seconded the recommendation. Wages and Benefits Recommendation: It is recommended that wages be increased, as scheduled in version 2,for 2008, and by 3.4%: for 2009; a reduction of$150,000 from the version 2 budget. MOTION: Motion passed 4-1-0 with Muilenburg, Kantor, King, and Kardell for the motion and Proops against. Recommendation 3: PERSONAL TIME OFF (PTO) Kardell suggested this is a policy item and does not have direct budgetary impact. She recommends moving this item to the end after other items are discussed. Proops was okay with that but sees this item as having a budgetary implications. Kardell said that its impact is not easily quantifiable. King moved to accept the recommendation to analyze during 2008 the possibility of converting to a PTO policy for 2009. Muilenburg seconded that. Proops quoted a statement from the Mayor noting that part of the purpose of the BAC is to question how the City provides services and the costs of these services. Kardell said they would plan to address this type of issue, but she was suggesting focusing primarily and first on the items that have direct budgetary impact. PTO Recommendation: It is recommended that an analysis be made during 2008 of converting to a PTO policy for implementation in 2009. Eden Prairie Budget Advisory Commission August 9, 2007 Page 6 MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 4: STEP PLAN FOR NON-EXEMPT STAFF King said the Step plan brings people in as a lower base salary and moves them up to market over a five-year period, so they are paid less than market for about five years. There is a benefit to the City in using this program even though it adds complexity. It inflates the year-to-year wage increase amount since part of that number is the step increase amount. The program saves the City money, and the City is still able to attract good people. He would support studying the program to see if it meets its objectives, and he recognizes the benefits of it now in a way that he did not when the BAC first learned about the program. Kantor has some concerns about eliminating the program because he thinks it would be difficult and possibly costly to administer the transition to a new program. Also, he noted that some of these programs might have ramifications beyond what is apparent, such as implications for bargaining with the union. Proops noted there are two ramifications to the program that are not mentioned in the recommendations. He is concerned that the City might not attract really good candidates, and he is also concerned that employees who are not performing well might still get the step increase even if their performance did not warrant it. He asked Neal if employees had ever been denied their step increase based on performance, and Neal said that had happened at times in the past. Muilenburg said a person in this program would likely be inexperienced, and they would gain experience and bring themselves up to market over time. He sees the program as beneficial for the City since it saves money in the long run and decreases the rate of increase in salary for a period of time. Neal said it is not a bad idea for the City to study the step program to see if it is actually meeting its goals. Kardell does not support this recommendation either as stated (to remove the step program for future new hires). Muilenburg moved to strike the recommendation, and Kantor seconded it. Step Plan for Non-Exempt Staff Recommendation: The motion was made and carried to strike the recommendation that was previously made for the step plan for non-exempt staff. MOTION: Motion was passed unanimously (with all commissioners present in favor of it) 5-0-0. Recommendation 5: COMBINING THE COMMUNITY CENTERS Kardell noted that it was the Senior Center facility (referred to as just "the facility" that costs $250,000 to operate annually. Kotchevar made a few corrections to the numbers. It costs $100,000 per year to operate, and the major Eden Prairie Budget Advisory Commission August 9, 2007 Page 7 repairs in the CIP are $90,000 ($150,000 for windows was taken out of the CIP). Proops noted and Kotchevar agreed that the rest of the money was taken out of the CIP and could potentially be added back at some point. King asked if this idea has been studied or if it is something that should be studied. Neal said they should study it before a decision is made. They have also not studied whether or not the Community Center could accommodate the Senior Center activities. King could support combining the Community Center and Senior Center, but he would want the data from a study first. He does not want to just say "study it," but rather "study it" with an eye towards the outcome of combining the centers if it makes sense. Kardell is not sure if the expanded Community Center can accommodate the Senior Center activities. King thinks it would be but wants a set of facts before a recommendation is made to close the Senior Center. Proops wondered what kind of data King would like to see. King said not the sale price, but he would want to know that the space is available in the Community Center, to know the staffing implications, and similar issues. Kantor wondered if there is something compelling about having the Senior Center separate that encourages people to use it. He thinks we cannot answer those types of questions without asking people who use the Senior Center, and quantitative data regarding space availability at the Community Center will not answer this type of question. Proops said he is sure there are 27 people who will object to combining the centers, but that should not necessarily dictate a management decision. Kantor said that if those are 27 of 28 people who use it, it is something worth considering; if those are 27 people out of 270, maybe other factors weigh more heavily in making a decision. Kantor thinks it is important to consider factors besides the amount of square footage used in a given day at each center. Proops thinks it will be traumatic for some people since they will have to go to a different building and walk a little farther, but he still thinks this is the way to go. He does not mind taking a short period of time to look at the square footage, but he does not want to put too many items in the "study it" category instead of taking action. King agrees that there is a fiscal duty to manage the facilities well, and he does not want to see buildings underutilized just because some people prefer a specific building. Instead, he wants to accommodate people's needs within the new building. Kantor and Kardell questioned the assumption that the centers are underutilized, and Kardell does not think that fact has been established. King said the Community Center was underutilized because the programming requires a significant increase in revenue, number of new memberships and renewals. Kardell said she thought he was referring to the Senior Center, and King clarified that he was referring only to the Community Center as underutilized. If the Senior Center activities can fit in the Community Center, he is in favor of combining them to have fewer buildings and costs. He is not in favor of allowing the preferences of users to drive the decision. Kardell asked King if he is Eden Prairie Budget Advisory Commission August 9, 2007 Page 8 concerned about the accessibility factor. King said that public buildings always need to have appropriate accessibility, so he assumes the Community Center would be acceptable in this area. Neal asked if that is what Kardell meant by accessibility. She said that she was referring more to the inconvenience of walking more in the ice and snow is a long walk for seniors. She thinks that is worth consideration even though it is not numerical. Muilenburg thinks we can overcome those types of challenges relatively easily with special parking for seniors and good snow removal practices, and he wants to see this decision made relatively quickly since it may impact the design of the new Community Center that is being built. Muilenburg asked if staff salaries are included in the Senior Center numbers for facility operation and maintenance ($100,000), and Kotchevar said facilities salaries are included but operations are not included. Ground maintenance and snow removal are included. Proops asked if insurance is included in the number, and Kotchevar said that it was. Neal said the question they are getting at is whether or not the current activities at the Senior Center can be accommodated at the Community Center. King said he would orient the idea towards a direction more than a question. If it is reasonable to close the Senior Center based on the data,he would lean in that direction personally. Kantor's concern is that there are a lot of different facilities that could be combined or removed. The Senior Center has been picked for some reason, maybe because it is obvious. There seems to be a concern that we have overindulged ourselves on space. King said he did not see another option that could be easily combined since some buildings have space rented out, and conceptually combining the Senior Center and Community Center fits well since seniors are part of the community. Kardell said she agrees it makes sense to look at this option conceptually, but she wants to make sure the Senior Center programming can be accommodated in the Community Center. She would want to make sure this is not an opportunity to reduce Senior Center programming for lack of space in the Community Center. King said that would not be his intention. Kardell would want to make sure the accessibility issue is adequately addressed since senior citizens should be able to get into a building fairly easily. Proops said there is a lot of space, including many multi-purpose rooms and gyms. While construction is going on is a good time to finish those rooms if the centers were to be combined. Proops thinks he could get the information in about three days, and he is fairly sure the space in the Community Center exceeds that in the Senior Center. King suggested the feasibility study be completed by the end of October. Proops asked if the feasibility study could be concluded at the end of September. Neal had some concern about committing to that tight of a timeframe with the current workload of staff. Neal said he thinks an end of October completion would be reasonable and still give enough time for the study to be useful to the project. Muilenburg asked if there are construction milestones that need to be considered. They do not want work to stop at the Community Center site based on the study. Eden Prairie Budget Advisory Commission August 9, 2007 Page 9 Neal responded to a question regarding heated sidewalks and confirmed that these are included in the new Community Center to help melt snow. Kardell recommended that extraneous information above the actual recommendation be removed from the document. Muilenburg asked if the woodshop would be included in the Community Center, and Proops thought it would and noted that is part of the study. King withdrew his previous motion (which was very similar to the recommendation that was then moved). Proops moved and King seconded the recommendation. Combining the Community Centers Recommendation: It is recommended that the Senior Center be closed and the programs currently offered there be transferred to the Community Center, subject to the completion of a feasibility study by the end of October 2007. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 6: RJM CONSTRUCTION Kardell confirmed with Neal that a contract with RJM Construction for the Community Center is already in place. Kantor was not sure what the purpose of this recommendation is. Muilenburg did not see how this recommendation adds value. King asked if it would be useful for them to suggest that the system in place be documented and that the Council be aware of it. They would just shine a light on what they have in place. Neal said they have a clearly specified contract in place currently, and that has been approved by the Council. There is no concern about the contract, and Neal will handle any questions that come up relating to it anyway without a recommendation needed. He is in agreement with the suggestion that the BAC strike this motion. MOTION: Motion to strike this recommendation was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 7: COMMUNITY CENTER BUDGET Kardell asked what a flexible budget would be. Proops said he meant a budget that varies with revenue (advertising may vary based on revenue, for example). Kantor said people supporting this program think it will work, and he wants to give them time to make it work. He's not sure how they could tie costs to revenue at the beginning. It is a catch 22 since they have to offer programs (invest a little to get the program going) to get people to sign up. After two years or so,he could see why they would not want to invest any more in programs that people are not self-sufficient. Muilenburg agreed with that and said it might make sense to have a flexible budget come into play in years four and five, after a history is established with the facility. Kardell said there should be a specific subsidy target Eden Prairie Budget Advisory Commission August 9, 2007 Page 10 or break-even target established for the Community Center as there are for other recreational programs, but not until after the facility has had a chance to get opened. Muilenburg said maybe in year five it has to be zero-sum (break-even). Kantor said he would want to say beginning in year 3 or 4, the City Council sets the target subsidy amount should be x amount (maybe 20%). He's not sure that we can recommend specific numbers. Proops said he still wants some checkpoints along the way. He agrees they need to invest money since they'll have unsupported expenses for awhile,but he wants to know it is budgeted to cost a certain amount beyond revenue. He would want to know where they are relative to targets for revenue, number of members, and expenses. Kantor agreed that it would make sense to have mid-year calibrations for this as with other budget items, but he is not sure what value we are adding by this recommendation. King said what it does suggest is that the income for this area is based on a large number of new memberships, renewal rates that are well above the current rates for the industry, and significant price increases. To the extent that the expense side is predicated on these three things all being completed, it is a very aggressive revenue plan. This recommendation is geared towards making sure the start-up costs and expenses are balanced out with revenue appropriately. They want to govern the expense plan while watching revenue come in. He hopes that if revenue is not there, variable expenses that are going towards canceled programs will be reduced. Kantor said the people managing these programs will make sure that teachers are not paid for classes that are canceled. Proops said there are no other departments in the City with this much cost at-risk ($1 million), and the magnitude of cost indicates a special control over the money would be useful. A yoga instructor may not be financially oriented to cancel a class with too few students. Kantor said it would be the job of the Community Center management to make sure the class is canceled and the teacher is not paid. He is not sure why Community Center programs are being singled out instead of the fire program, for example, since they could waste money too. King said the revenue is the driver of expenses here, which is not the case in fire. Kantor responded that we either trust the City to do their job or we don't, and he doesn't see this as part of the BAC's role. King implicitly trusts the City staff to do their jobs, but he thinks the revenue projections are too high and they need to watch the numbers. Kantor said that if the revenue projections are too high, that is a different issue. King said he thinks this is a valid issue to consider. Neal said this is part of what they need to do anyway (evaluate the costs relative to revenues for the Community Center and its programs), whether or not this recommendation is made by the BAC. They know greater attention will need to be paid to these numbers since it is a big investment and the revenue goals are aggressive. Neal said they are trying to determine what year they would target for the Community Center to break even. They want to have one or two years under their belt first. Kantor said they would be reporting on the early returns and then recommend a point at which the Community Center Eden Prairie Budget Advisory Commission August 9, 2007 Page 11 should be self-sustaining. Proops said a third part would be pulling together all the costs to see what it really costs to operate the Community Center. Kardell said from an accounting perspective, if the intention is to turn the Community Center into an enterprise fund, could they show all the costs? Kotchevar said they would be able to pull the data together from the different funds on a periodic basis for reporting. Kardell asked if the group wants to add a year to the recommendation. Her concern is that a target level is not established. Given the size of the Community Center operation, it seems there should be a policy target. Muilenburg suggested they modify this recommendation to say that all costs should be compiled and the target timeframe for break even can then be determined. Proops suggested that the BAC should establish a timeframe instead of giving the City Council that work to do. Kardell said they are the ones who do the work. Muilenburg said he does not think the BAC can make that recommendation without having data to base it on. Kotchevar said it is common for a City to partially subsidize Community Centers, so she would hesitate to say the Community Center needs to be self-sufficient. Kantor suggested the City Council should then establish a subsidy level every other year as part of the budgeting process. The point is that we don't want to let it go unchecked, but we don't know what the right level is at this point. Neal said the terminology that is typically used is "cost recovery" rather than "subsidy" levels. Muilenburg said these sound like different things to him, but Neal clarified that they would describe the cost recovery level as 80% rather than a subsidy level of 20% (so it essentially saying the same thing but from a different perspective). Muilenburg asked if we wanted to go with 6 years since the budgeting process is bi-annual. Kardell suggested and the group agreed to 4 years. Kantor moved and Muilenburg (and a few other people) seconded the recommendation. Community Center Budget Recommendation: It is recommended that all costs of completing, maintaining, and operating the Community Center over the next 4 years should be consolidated in a single budget. We recommend that Staff provide and establish a time frame for the Community Center to become self sufficient or establish cost recovery levels for Council approval. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 8: PARKS AND TRAILS King moved and Kantor seconded the tentative recommendation for the purpose of having discussion. Kantor said he is not sure what the purpose of the recommendation is (what they want to accomplish from a budget perspective). Proops said there has been a lot of growth and money involved, and he would like to know how much more is to come. Muilenburg asked if he meant how much more land acquisition would take place. Proops said he was referring to how many more dollars would be involved. Kantor said whenever they tell the public Eden Prairie Budget Advisory Commission August 9, 2007 Page 12 something is complete, if something comes up several years down the road, the City might have to go back on its word. He could understand a recommendation to avoid spending more than 10% of the budget on parks, for example. He wants to make sure they don't make the wrong statement to the public. If a great new opportunity comes up to buy some land, he wants the City to be able to make a reasonable decision about it. Kardell does not see the value of this recommendation since redevelopment may occur and there may be a need for more open space as part of that. King wants to set a level (he asked about and Neal confirmed that all open space in the City, including water, is 25-30%) at which they are done. Kardell said they have a master park plan, and Neal confirmed this. Proops said he doesn't know how much is left on the master park plan. If there is another $10 million in that plan, maybe it's time to review it. The BAC could say that for the next five years, there will be no additional land purchases for this purpose. There have been people dedicated to the growth of parks and trails for a number of years, and the parks and trails are wonderful, but at some point it should be enough. Kantor said he agrees that they don't want spending to be unbridled. King is glad to withdraw his motion in favor of something that could better accommodate these considerations. Kantor said they could table this and let someone think creatively about how to restate it. Proops said he could take a few minutes to do that now. Kantor said he assumes the City is reviewing the master park plan already, so he is not sure why the BAC would make a recommendation suggesting they do that. Kardell said this is part of the CIP. Proops asked if they have published how much more is coming, and Neal said it has not. Then Neal said they could assemble this information. They occasionally get requests from the City Council or others as to where they are at in the master park plan. Proops suggested that it be published in Life in the Prairie. Muilenburg clarified that they are looking for the expenditure through the life of the plan. Proops moved and King seconded the recommendation. Parks and Trails Recommendation: It is recommended that a review be made of the master plans trails and parks and the cost of the remaining growth be reviewed and published. MOTION: Motion was passed 4-1-0 with King, Proops, Muilenburg, and Kardell for the motion and Kantor against. Recommendation 9: RECREATION PROGRAM Kantor moved and Muilenburg seconded the recommendation so the group could move into discussion. Kantor clarified that his understanding of the intent of this recommendation is that the City Council is ensuring appropriate levels of cost recovery for any given program. He suggested we could use the same wording but suggest starting this immediately (instead of waiting a couple of years as for the Community Center). Kardell doesn't think any members of the BAC are Eden Prairie Budget Advisory Commission August 9, 2007 Page 13 qualified to determine the appropriate cost recovery levels that the City Council should set. Muilenburg said that the goal is that the fees are established to reflect the cost of the program, and that is a valid goal. The representatives that spoke to the BAC said they have conducted classes without meeting the stated minimum number of participants. Kantor said they could run classes that don't recover costs and still be within the boundaries. Neal clarified that there is a cost recovery set for classes (50% of costs), but sometimes the cost recovery is less than 50% if they conduct classes without the minimum number of participants. Kardell confirmed the issue is that instructors aren't always adhering to the stated minimum number of participants, and Kantor asked if we want that to be strictly enforced. Muilenburg said these programs should be self-sustaining (complete cost recovery). Kantor said that is different than what the representatives of the recreation programs said. Muilenburg said then the demand isn't there and maybe they shouldn't offer those programs. Kantor disagrees with that but understands the logic. Neal said there is a protocol about adult programs needing to have full cost recovery, but most other programs do not have full cost recovery. Kantor noted that the Fourth of July celebration doesn't have any cost recovery but there is a high demand. Muilenburg said that event and others like it are targeted to the entire community rather than a small microcosm. Kantor asked what threshold should be set up; what is enough of the community to have 50% cost recovery? Kantor said the Council needs to be the ones to decide that. Kantor said it is appropriate for the Council to have an expectation of partial cost recovery, but he does not feel able to set those levels. He is okay with requesting staff follow the funding guidelines. Muilenburg said he would like to see an overall goal of cost recovery program-wide (instead of at the level of individual classes). Some of the revenue-producing sports or other activities could offset the ones that do not have complete cost recovery (a zero sum). Kantor asked if he would be fine with asking the Council to review this on a bi-annual basis (to see if complete cost recovery is an appropriate target). Kantor thinks the Council is not having enough input into this issue today. Neal said that this document was developed at the Parks & Recreation board level and then traveled to the Council, and any modifications would travel that same route (with a public hearing included in the process). Kantor withdrew the previous motion, and Muilenburg moved and Kantor seconded the reworked recommendation. Recreation Program Recommendation: It is recommended that Staff provide a plan for the recreation programs to become self-sufficient or establish cost recovery levels for Council approval. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 10: HOUSING AND COMMUNITY SERVICES Eden Prairie Budget Advisory Commission August 9, 2007 Page 14 King asked if this would change the recommendation in the version 2 budget. Neal said it might, but they are already doing a review like this anyway to see what programs they would change, reduce, or eliminate. This includes looking at which services are duplicated. King said the version 2 budget goes farther than this recommendation, and this recommendation is proposing a review but does not encourage the more substantial reductions in version 2 of the budget. Muilenburg asked if he wanted to modify this recommendation to reflect the idea of determining what redundant services may be offered. King thought this was an important area to discuss, and this area is of interest to a lot of the community. Neal said this recommendation is part of the way they would approach the issue. This recommendation would not preclude Neal from recommending more significant reductions than what the BAC suggests. Kantor wants to add something to modify the scope of proposed cuts. He is not comfortable with the possible future costs that may be incurred as a result of these reductions (impact for the community and extra costs). He would like that more sharply understood and presented as part of the plan. He is not sure we are making the best choices in this area. King asked if Kantor's comment is germane to the entire block of reductions Neal proposed. Kantor said if they only reduce redundant programs, that would be closer to where he wants to be. Kantor wants to see more study about longer-term monetary and non-monetary costs that could result from reductions in these programs since he is not sure if these reductions will get the community where it wants to go. If they have this information, the Council will be in a better position to decide if they want to go with these reductions. Kantor is not saying that there should be no reductions, but maybe smaller ones could still make an impact. Proops is not sure how the non-monetary costs could be evaluated. Kardell said the BAC is saying we want to see better justification before these cuts are made (what and how much the impacts would be). Kantor wants to know how it will get better if positions are reduced, not just that they think it will. Muilenburg said these services are still available and the City is not taking them away but rather removing redundancy. Kantor said that is not the plan in version 2. Neal said version 2 does both: it eliminates the few duplicated services that do exist, and it reduces services that are currently supported. Kantor notes that on a percentage basis, the cuts will be weighted towards unduplicated services. King said he favors the original motion that says to eliminate duplicate services and leave the rest. The implication with that is to add money back into the version 2 budget. Proops is concerned that adding money back into version 2 creates a windstorm. Muilenburg said he would want the flexibility to remove services beyond those that are duplicated after a study is done. King is willing to add some money back into the version 2 budget for non-duplicated services. Kantor said they could focus on non-duplicated services but not be limited to those. Muilenburg added that they could also cut services that are determined to be non-essential. King said he would not feel qualified to decide which services are non-essential. Muilenburg said that we wouldn't make the determination of what is non- Eden Prairie Budget Advisory Commission August 9, 2007 Page 15 essential, but experts in these areas could decide what service reductions could have a negative impact in the future. Kantor is relatively comfortable that people will get the gist from the recommendation. King said these costs may be up to $190,000 in terms of what they add back into the version 2 budget. King moved and Kantor seconded the recommendation: Housing and Community Services Recommendation: It is recommended that the management of the Community Development Department review the services provided with an emphasis on those which duplicate those available from other organizations or are deemed nonessential. This will modify the Version 2 recommendation. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 11: HERITAGE PRESERVATION Muilenburg moved and Proops seconded the recommendation. King asked if there are any statutory limitations in terms of deactivating the commission. Kardell recommended deleting that part of the recommendation. Kantor said the part that limits the future acquisition of preservation sites doesn't seem useful. Proops said that it sends a message to the Heritage Commission that,having spent a few million dollars on preservation efforts, they are not looking for a next project. It says we are done spending money on restoring old buildings. King asked if there was a full-time staff position for Heritage Preservation. Proops said it is a half-time person. Neal said they used to have someone who was almost full-time,but they now have that person spending a lot of time on other projects. The workload of that person is more general and they expect it to move more into different projects other than heritage preservation in the future. Kantor asked if we are recommending that the Council not spend more money, but the Commission will do its job whatever that might be. Then the Council will decide what to do as a result of that Commission's recommendations. King said our obligation to the Council is to provide our recommendations, and it is appropriate to have a recommendation in this area to limit spending. Kantor hopes we will focus on spending limits, not acquiring more sites. Someone could will the City a site for no money, so why wouldn't the City take it in that case? Proops doesn't think the recommendation would shut the door since the Council can change its mind later. This isn't a binding policy,but it establishes a direction and a policy for the Council and the Heritage Preservation Committee. Kantor asked if they could limit future spending to a certain amount to set a direction but not limit the City. Muilenburg said they could say the City will not actively expand its holdings. King thinks this recommendation gets at what we're trying to say by discouraging expanding currently. It puts the brakes on,but they can make exceptions as needed. King thinks putting a number in is more limiting and arbitrary. The point would be that they don't want the City Council to turn down Eden Prairie Budget Advisory Commission August 9, 2007 Page 16 a good deal because of this recommendation. Kantor requested that the recommendations be separated into two different ones, and the group agreed to do that as shown below (11a and 1lb). King moved and Muilenburg seconded recommendation 1la: a. It is recommended that no further sites be acquired at this time. MOTION: 11.a. Motion was passed 4-1-0 with King, Proops, Muilenburg, and Kardell for the motion and Kantor against. King moved and Kantor seconded recommendation 1 lb: b. It is further recommended that a review of the ownership of historical properties be conducted to determine if title could be transferred to a unique business or a historical society. Since these have a historical designation, they would continue to be protected. MOTION: 11.b. Motion was passed unanimously 5-0-0. Recommendation 12: POLICE DEPARTMENT King moved and Kantor seconded the recommendation for the purposes of discussion. King noted that the Police Chief is undergoing a review of his organization now, and he wondered if he is using any consultants in that process currently. Police Chief Rob Reynolds was in the audience and indicated that he was not. King recalled he was trying to move more officers to patrol, and King is comfortable offering assistance if Reynolds needs any. King mentioned the Captain position has not yet been filled, but King would be tempted to strike this item since Reynolds has not expressed a need for consulting assistance and he would look into the option of removing the Captain position if that seemed appropriate to him. Neal confirmed King's assumptions are correct. Proops said he wants to make sure the Captain position is not included on the organization chart and filled just because that is what they have always done. He thinks an outside perspective could help determine the needs better. He is not sure if anyone has had the time to really look closely at each of the job descriptions in the department. Maybe duties could be reassigned to eliminate the need for filling the Captain position. Proops' source of information is that his daughter-in-law was an Administrative Assistant for Apple Valley's Police Department, and they did not have both positions (for 52,000 people vs. 62,000 in Eden Prairie). Looking at how other cities organize their police forces could end up saving the cost of this relatively expensive position. Muilenburg asked and it was confirmed that these consulting services are not currently in the budget. He would like to recommend making these services available if Reynolds is interested, and then he would note that these services are Eden Prairie Budget Advisory Commission August 9, 2007 Page 17 outside the current budget. Proops said the word "provided" becomes "offered" in the current recommendation to fit with this suggestion. Muilenburg would also say the position of Captain could be eliminated "or deferred." King asked if the consulting service could provide information beyond the Captain position, and Proops said it could. They could provide job descriptions and review the roles of multiple positions in the organization with the outside consulting service. Muilenburg asked if they want to put a recommended maximum dollar amount to be spent on the consulting services, and he noted consulting services could end up costing a lot of money in a very short period of time. Proops noted they could save a lot of money too. Kardell said they should note that, if accepted, this recommendation could add dollars into the version 2 budget. King clarified that this recommendation states that the Chief is under no obligation to accept these services. Muilenburg moved and King seconded this recommendation. Police Department Recommendation: It is recommended that consulting assistance be offered to the Police Chief to assist in the organization planning. This may provide the opportunity to determine if the position of captain can be eliminated or deferred. If accepted, this could result in additional expenses to Version 2. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 13: LIFE IN THE PRAIRIE Muilenburg moved and King seconded the recommendation for the purpose of discussion. Kardell clarified the word website should be added (instead of web). Kantor asked if anyone recalled the cost of the website redesign. Kardell remembered that it was a big number. King recalled that streaming video was more costly than the website redesign. Neal said this recommendation is consistent with the version 2 budget. Neal also clarified they only send out one Life in the Prairie by mail to all the residents. The rest are included in the Eden Prairie News only. Kantor said he doesn't want to limit website redesign and updates to a new standard, etc. since there are already staff dedicated to this type of basic information technology work. He doesn't want to limit staff to never do any maintenance or redesign, and he noted redesigns can be minimal in cost. Kardell said they can maintain it, but this would indicate no redesign would be done. Kantor said redesigns often happen naturally over time instead of a big change all at once. Neal said they are planning to increase the archival value and make changes slowly over time. Proops asked if they could eliminate the item. Neal said they could leave it in. Kardell said it shows the BAC agrees with the direction Neal is already taking with the budget. Kardell said they could say they want to avoid a major redesign. Eden Prairie Budget Advisory Commission August 9, 2007 Page 18 Muilenburg withdrew his previous motion. King moved and Muilenburg seconded the recommendation. Life in the Prairie Recommendation: It is recommended that LIFE IN THE PRAIRIE be the primary media for communicating news and information to City residents and that streaming video and major redesign of the website should not be pursued. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 14: FEES FOR UTILITIES AND OTHER SERVICES Kantor moved and Proops seconded this recommendation with no discussion. Fees for Utilities and Other Services Recommendation: It is recommended that a comprehensive review is made of all fees to achieve cost recovery and provide for scheduled replacements. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 15: MAJOR CENTER AREA STREETSCAPE WAY FINDING Kantor moved and Muilenburg seconded this recommendation for the purposes of discussing it. Neal said the funding source was partly the economic development fund (tangible) and the Special Services District (this is identified but is an intangible funding source currently). Kardell said that if this project goes forward, the businesses that benefit should bear the costs except for public safety signage and the like. Kantor clarified that the group previously recommended that the economic development fund be eliminated. Kardell said they were going to merge and decrease it. Kantor said it would be harder to spend money out of it if that previous recommendation took place. Kardell asked if there was interest in requiring the businesses that benefit from this bearing the cost. Muilenburg supports this idea too. Neal said there is an element of democracy to the Special Services District since they can decide what they want, vote on it, and fund it. Kantor asked if there was an appetite for changing the recommendation to refer to funding this from the Special Service District. Neal said this recommendation goes into the Council's realm since it comments on a project that has already been approved by the Council. It steps over what the BAC needs to comment on relating to the financial and not policy direction. Muilenburg noted there will be some benefit to the people in the community outside of the Special Services District, so it would probably make sense to have some funding from the City (around 10%). Kardell said there is a question of how the costs are shared. Kantor asked if we could recommend the Council look at the amount that is spent by the Special Services District and base Eden Prairie Budget Advisory Commission August 9, 2007 Page 19 their contribution on that amount in a way that the Special Services District bears most of the cost. Kardell asked if they wanted to put a percent. Muilenburg noted that the high end is where the exposure is and it should be a self-regulating system. Proops suggested the City's cost should not exceed $400,000, which is 10% of the currently projected costs of the project. King withdrew the previous motion. Kantor moved and Muilenburg seconded the recommendation. Major Center Area Streetscape Way Finding Recommendation: It is recommended that the costs of these improvements be born primarily by the developers/businesses that benefit, with the City's share limited to an amount not to exceed$400,000 or 10% of total project costs, whichever is less. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 16: OPTICAL FIBER CONNECTION Muilenburg moved and King seconded the recommendation. Discussion ensued when Kantor asked about the meaning of this recommendation. King said the Fiber issue is related to LOGIS, and this recommendation is saying the Task Force will determine what is needed. Kantor asked if they could get by with current technology until the Task Force has reported, and Neal confirmed they could since the Task Force will be wrapping up their recommendations this year. Optical Fiber Connection Recommendation: It is recommended that this project be deferred until the Community Technology Task Force has reported, and a study has been made of alternatives to LOGIS. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 17: MOBILE COMPUTING AND TELEPHONY STRATEGY Kantor moved and Muilenburg seconded the recommendation without discussion. Mobile Computing and Telephony Strategy Recommendation: It is recommended that an analysis be made of the overall mobile computing and telephony requirements of the staff and a single provider be selected, if feasible. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 18: CIP FORMAT Eden Prairie Budget Advisory Commission August 9, 2007 Page 20 King moved and Proops seconded the recommendation. Kardell said the individual projects are separated out to show ROI, etc., but you have to look past the summary information to see the individual project data. Kantor asked if we could rewrite the items separately for the recommendations. Kantor asked if they could separate out the recommendations since there were a few different ones put together. Proops said the information he had put above the actual recommendation could be incorporated into the recommendation. Kantor was concerned that it could be really difficult to make the summary page reflect the individual projects. Kardell did not think it would be since she clarified that she just meant for them to add to the summary page what the City's obligation would be for each project. The group discussed tabling or deferring this recommendation and discussing it at the next meeting in the interest of time. King suggested empowering the Chair to rewrite the recommendation. No motions were needed to table the item for later. Later in the meeting, after the other recommendations were completed, this item was discussed again. The group agreed at that time that the information listed above the original recommendation should be incorporated into the actual recommendation and modified slightly as shown below. King moved and Muilenburg seconded the completed recommendation as follows: CIP Format Recommendation: It is recommended that the CIP budget be modified: a. All CIP projects should require justification to include a Return on Investment calculation. b. The CIP summary format should clearly indicate the City's share of the total budgeted for projects. c. The practice of requesting projects for "placeholder" position should be eliminated. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 19: CIP PROJECT COMMENTS Muilenburg noted that these were a list of comments rather than specific recommendations. He suggested these be tagged onto the end for considerations. Neal said they would make a staff comment after each of these. Kantor said these get at the issue above about wanting better justification in the CIP Format Recommendation. King asked if they should move to incorporate these in their report, and Kardell thought that made sense. King moved and Kantor seconded the recommendation to incorporate comments on these items in their report. Eden Prairie Budget Advisory Commission August 9, 2007 Page 21 CIP Project Comments: #08229-$125,000 for signage and exterior monument the amount seems excessive and the essentiality of this expenditure is questionable #08201 and I020I-$502,000 and $75,000 to replace the main roof on the City Center. The anticipated life of this replacement is 10 years; the useful life is stated as 20 years. We recommend an evaluation of longer term solutions. #08600 and 0860I-$450,000 each for pumper truck replacement. The useful life of the equipment is stated as 20 years and the policy for replacement is 20 years. The CIP requests funding at 18 years, 10% early. Recommend extending the life of the trucks, not decreasing it. #I5IO2-$1,950,000 for Cedar Hills Park Development. The lease on this property will be for 30 years. The time limit on the lease the investment may not be justified. #0508I-$1,360,000. Unspent annual allocations are carried forward to fund larger projects. Recommend denial of funding for this project until accurate total requirements are available. #08294, 08295, 08299-Carpet cleaner, floor scrubbers, ice resurfacer. Can existing equipment be utilized, rather than duplicating equipment? MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 20: THE E-BILLING PROJECT King moved and Kantor seconded this recommendation. King clarified that the issue of whether or not credit cards should be accepted was not specifically mentioned in the recommendation. Neal said they could charge a service fee if people pay online, but the City has to eat the cost if the customer pays at the window. Proops asked if e-billing could be to the Visa card instead of the bank, and Neal said it could. E-Billing Project Recommendation: It is recommended that the e-billing project be pursued, and that all city functions be considered for inclusion. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Recommendation 21: 20-40-15 Kantor moved and Muilenburg seconded the recommendation. 20-40-15 Recommendation: It is recommended that all activities under this initiative be evaluated for Return on Investment and true energy savings reflecting not just what is realized by the City, but also the impact of manufacturing, acquisition and disposal. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Eden Prairie Budget Advisory Commission August 9, 2007 Page 22 Kardell said at this point the group would discuss other recommendations that were not part of the previous list. Kantor had a question about the version 2 budget. He wasn't sure if there was a return to some items that were part of the first budget, and Kotchevar said there were and they were noted as such. Muilenburg noted that, in the Quality of Life study, the two biggest concerns of citizens were taxes and traffic congestion. With the right programming, it would be possible to run up 212 to 494 without stopping or just stopping once. Proops said he thought that was underway, and Neal confirmed it was already done along 212 but only on 212. Muilenburg said there is a lot of money set aside to expand intersections. If they can time the lights throughout the entire City, they may not need to expand some of those intersections. Proops said a lot of the expansion is the responsibility of MNDOT. Neal said some of these are joint projects with MNDOT and the City, and it cost $160,000 to synchronize the lights on 212. Kardell proposed a recommendation that was modified slightly and then moved and passed to read as follows. King said this does not have to be tied to new construction. Kantor asked if they should add a caveat that this may add cost back into the budget. King moved and Kardell seconded the recommendation. Transportation recommendation: It is recommended to commission a study to determine feasibility and impact of reprogramming traffic lights within the city to alleviate traffic congestion. It may add costs to Version 2. MOTION: Motion was passed unanimously (with all commissioners present in favor of it 5-0-0). Muilenburg said they could avoid coming back for the tentative meeting scheduled Tuesday, August 14 if they completed work on the tabled recommendation (item 18 above). The changes that were made at this point in the meeting are included in that recommendation above. Kardell restated her recommendation that they try to organize the recommendation document so that items are generally grouped together by department. Finance staff will type up the recommendations and send it out. Kardell said they want the names of who approved which recommendations incorporated into the recommendation page. She suggested they fix the typos on the cover memo and do a spelling and grammar check on the memo and recommendation document. King confirmed that the process from here would be that the group would review the document by email. Kardell confirmed that was the plan, and hopefully there would be no significant changes at this point. Schultz will be back in town to review the document, but Uram will not. Proops asked if he could have a day to verify the numbers (for the Senior Center operating costs, etc.). Neal said he needs the document next Thursday to deliver to the City Council. Finance staff committed to sending the document out by the end of the day on Monday. Kardell asked if the group could get the revised version early next week, and then comments would be due back to Sue Kotchevar Eden Prairie Budget Advisory Commission August 9, 2007 Page 23 by Wednesday at noon. Neal clarified that the comments need to be very minimal (minor edits). Kardell said there is no more wordsmithing to be done. Proops expressed appreciation for Tammy Wilson's work. Kardell said there is a budget workshop at 5:30pm in the Heritage Room on August 21sr, and the BAC is encouraged to attend. This is separate from the public hearing that will take place later. Kardell said that officially the BAC's work is done, even though their term is appointed for a longer time period. Neal will present the budget to the Council, and the BAC will see City staff's comments and recommendations prior to this presentation. Proops asked if Neal meant he would intersperse his recommendations with the BAC's, and Neal confirmed that is correct (they would be next to each other). Kardell confirmed that City staff would respond to the BAC's recommendations. King said it would be good for the group to adopt the recommendations of the cover letter. He thinks it should be approved if it will be submitted with the recommendations. At the bottom, they will list everyone on the BAC instead of just Kardell. King moved and Kantor seconded the cover letter. All present commissioners approved the motion to accept the cover letter. The group decided to cancel the meeting tentatively scheduled for Tuesday, August 14 since the recommendations were completed at tonight's meeting. Neal said he planned to meet with each of the Commissioners to debrief, including gathering their feedback about how this process could be improved. He thanked the group for their time and energy. King and Muilenburg said a group debriefing session and short meeting would be good (sometime after August 21s) Neal said he would actually prefer to meet as a group too, and he will send an email and try to schedule a time that works for everyone. IV. ADJOURNMENT Muilenburg moved and Kantor seconded the adjournment at 9:04 PM.