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HomeMy WebLinkAboutCity Council - 10/30/2007 - Workshop APPROVED MINUTES CITY COUNCIL WORKSHOP TUESDAY, OCTOBER 30, 2007 CITY CENTER 6:00 PM, COUNCIL CHAMBER CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Sherry Butcher, Jon Duckstad and Kathy Nelson CITY STAFF: City Manager Scott Neal, Police Chief Rob Reynolds, Fire Chief George Esbensen, Public Works Director Eugene Dietz, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, and Recorder Jan Curielli I. 2008-2009 BUDGET DISCUSSION Mayor Young called the workshop to order and noted he would like to start by getting rid of some of the budget options as he thought there were too many. He suggested discussion start with Version 1.8, find out if we have a plurality of the Council Members in agreement, and then add changes either up or down to that. Aho and Nelson agreed with that as a starting point. Butcher said she didn't mind starting there, but she would like to go back to the last workshop and pick up Version 1.5. She noted she did not want to drop any of the versions. Duckstad said he agreed with starting at Version 1.8, subject to further discussion. Young then asked City Manager Neal to outline Version 1.8. Neal said Version 1.8 is essentially Version 1.5 with CIP levy reductions. City operations would be at Version 2.0 levels with transfers in and temporary reductions in the annual CIP levy to produce a budget proposal with annual spending increases below 5% and annual City tax increases below 1%. In Version 1.8 the budget increase for 2008 is 4.8% and for 2009 is 3.1%. Operational levels are at Version 2.0 levels, except that the two Full Time Employees (FTE's) in Housing and Community Services are added back in, and outsourced human services contracts are restored to 2007 funding levels. All new amenities at the Community Center are opened for 2008 as they become available. Version 1.8 includes a market wage increase for city employees of 3.0% in both 2008 and 2009. He reviewed the 2008 tax impacts on three property categories, noting there will be a $9 increase (0.86%) for a Median Single Family Home (MSFH), a$569 increase (3.27%) for a $5,000,000 Apartment, and a $960 increase (5.47%) for a $2,000,000 Commercial/Industrial property. Based on the assessor's best estimate of what values may be doing in 2009, there will be a $9 increase (0.76%) for a MSFH, a $569 increase (3.27%) for a $5,000,000 Apartment, and a $389 increase (5.60%) for a $2,000,000 Commercial/Industrial property in 2009. Neal said Version 1.8 includes the change discussed at the last workshop to temporarily lower the CIP levy to provide some level of tax relief during the upcoming year when we are taking on new operational costs at the new Community Center. The levy would be reduced by $250,000 in 2008 and by $100,000 in 2009. He said staff recommends the levy be restored by 2010 or at least re-evaluated. Nelson asked why the numbers for the Commercial/Industrial property tax impact are almost the same for the amount taxed for both years but the percentages are completely different. Neal said that is because of the levy reduction. CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 2 Neal then presented a sample tax statement for a MFSH in the Eden Prairie School District and the Riley-Purgatory Creek-Bluff Creek Watershed District that showed a net tax increase of 1.85% for all taxing entities, which he said was a historically low number. Referring to the key features of Version 1.8, Duckstad asked what was meant by a market wage increase. Neal said we participate in a number of different salary surveys to test our total compensation levels with those of other cities and with the private sector for many of our job classes. He distributed a handout, noting the first page summarized the latest Employers' Association wage trend survey. He said that is mostly a private sector organization and the information explains what their members are looking at in terms of wages for 2007-2008. Duckstad asked how much of the information is for the public sector versus private sector. Neal said the first page has wage data from the 225-member Employers' Association, so almost all of that is from the private sector. He said there is information on the second page that specifically compares base wage increases for other city governments for 2008-2009. He said these are most of the cities that we compare ourselves to in regard to many things including maintenance budgets and staffing levels. Duckstad asked if most of the cities have an increase for 2008 of about 3%. Neal said that was correct. Duckstad asked if these are the cities we typically compare ourselves to because they are more comparable than other cities. Neal said they are more comparable in terms of levels of operations and other demographics. Young asked if the 3% market wage increase is an "all-in" number, or is it exclusive of step increases. Neal replied it is exclusive of step increases. Young then asked what the increase would be if the step increase were factored in. Neal said he didn't know what that would be. Duckstad asked if any of the other cities use a step and performance increase in addition to a wage increase like we do. Neal said it is a fairly common public sector pay system so he suspects they do. Duckstad then asked if the handout does not include the total wage increases for all the cities. Neal said the explanation at the top of the graph states the base increase reflects salary movement only and all cities will give step increases in addition to base increases. Duckstad asked if the diagram indicates how much the step or performance increases are. Neal said it does not. Duckstad asked if that information is available. Neal said it is information we can gather. Aho asked what effect the addition of performance increases would have in terms of our budget process. Neal said it is hard to characterize as it only applies to about a third of our work force, which means about 2/3 of the employees are not in the step program. In addition various employees are at various steps within the plan. Aho asked what the total percentage is. Neal said it is about a 1% difference. Aho asked what the total would be for all wage- related cost increases. Neal said the total, or "all-in" number, is 4.1%, with the base increase of 3% and 1.1% for step and performance increases. Young asked if the 6.7% increase for 2008 in Version 1.8 for the General Fund includes the general operational costs of running the City. Neal said that was a fair characterization. Duckstad asked how the proposed wage increase in Version 1.0 compares to the proposed wage increase in Version 1.8. Neal said for 2008 Version 1.0 had a 3.5% base wage increase CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 3 and a 4.8% "all-in" increase, and for 2009 there was a 3.5% base increase and a 4.2% "all- in" increase. Duckstad asked how much that was reduced in Version 2.0. Neal said in Version 2.0 the 2008 base wage increase was 3% and 3.25% in 2009. Duckstad then asked if the Version 1.8 increase is the same as Version 2.0. Neal said it is actually less in Version 1.8. Butcher thought we need to go back to talk about the policies that impact any budget that we might select. This one is particularly disturbing to her, because we didn't make a decision when we were talking about the CIP levy at the last meeting. She would like to pull back and talk about the policy of the CIP and what we have really depended on in terms of that policy. We are a policy-making board and our policies are very important. She thought we need to have a policy discussion first and make a decision on what we are going to do about it before we see a change in it. As we all talked about last time, since 1999 we have had a financial policy to contribute $1,000,000 per year to the CIP, and we have had no decisions to change that policy. She thought this policy is one of the reasons we have been awarded the AAA bond rating and the Distinguished Budget Award. Noting the policy is an important statement in this dialogue, she proceeded to read the Financial Policy. She said she thought it is clear that we need to invest more and not less in our City infrastructure to protect our capital assets. She noted our strategic plan and mission is to keep a steady road of paying as we go rather than experiencing much higher tax increases in the future. She thought it is also wise to look at what other cities around us are doing because that is one of the markers we have when we make decisions. She noted Minnetonka is similar to us in many ways, and she understood they levy about $5,000,000 for their roads and capital investments and also have a $2,000,000 levy for capital expenses. She thought we need to have this conversation and make a decision before we start making changes to the money we have agreed to for years and years. Young thought it is hard to compare one city to another and, whether we levy for$1,000,000 or $500,000, those dollars are not being dedicated to the $225,000,000 total needed for infrastructure projects. He didn't think anyone has suggested a change from prudent financial planning. We are in a time now when we have a certain level in our CIP fund and in our Economic Development fund, and we have received some one time dollars from the sale of properties. He asked if, in this unique time, we need to levy the same amount or, taking into account we will receive significant one-time dollars, can we reduce that levy on a temporary basis and give a break to the taxpayers in 2008. Duckstad disagreed that this is only a policy argument. He said the CIP levy issue was generated by the Budget Advisory Commission (BAC), which consisted of seven highly qualified people. He thought when you look at the CIP fund there is more than just one fund that now has $9.5 million. The Capital Project Fund has a total of $30,000,000. The BAC asked if the levy is really needed in light of all the other circumstances in the City. In addition to the $1,000,000 levy, it is funded by about $1,000,000 in liquor store proceeds. He didn't see anything on the horizon that has such an immediate need that by temporarily reducing the levy we would jeopardize our capital building projects. We just got through with the $18,500,000 investment in the Community Center, and he thought if we spend that kind of money on that kind of project we need to hold up some other projects that aren't needed immediately so that we don't drive the budget up unnecessarily or take money from the taxpayers that we don't really need at the moment. He did not think there is anything CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 4 about that particular fund in and of itself that pertains directly to the bond rating from Moody Services. He concurred with the BAC recommendation on the issue and was in favor of suspending the levy. Young asked if Council Member Duckstad was in favor of suspending the entire CIP levy by $1,000,000 for the next two years. Duckstad replied he would consider cutting it in half if other Council Members were in favor of that. Young noted Council Member Aho raised some questions about wages, and he wanted to find out the direction on that subject. He asked if the Council Members proposed a change to the 3.0% wage increase in Version 1.8. Duckstad said he would like to see a little more information about the step and performance increase in other cities. His view on wages is that he was in favor of our employees getting wage increases but was not sure what level that increase should be. He saw some information from the BAC that projected wage increases for 2008-2009 of 12.6%, and he was not sure at this point they should have that kind of increase. Young said he understood the 12% figure was an attempt to calculate the change in total compensation from the City, taking into account the changes in census. Duckstad said he thought the computation was based on the present salaries paid and the projected salaries in 2007 and 2009 and did include fringe benefits. Young asked if the figure related to the same number of employees. Duckstad replied that was his understanding. Kotchevar said the total of 12% is the increase between 2008 and 2009, and it includes wages, changes in census, and changes in fringe benefits including health and dental insurance, pensions, disability, life insurance and part-time wages. Neal noted that we characterize this as the wage bill. Butcher said she wanted to clarify the BAC's recommendation about the CIP fund. The BAC's vote on that recommendation was 3-2, so it was not unanimous. In addition one of the commission members, Don Uram, was not present at that meeting and he has stated he would have voted against it had he been present. She thought we should not"hang our hats" on that recommendation because it was not a unanimous decision. Young asked if there was agreement on suspending the CIP levy for the next two years and if we agreed we don't have enough information about the 3.0% wage increase proposed for 2008-2009. Duckstad said he was in favor of increases across the board but needed more time to look at the exact figure. Aho said in terms of the CIP fund he felt it is extremely critical the City maintain all our properties. He thought we are doing a good job of that. When we look at a capital improvement plan, we have things beyond just improvement and maintenance of facilities. If we change the CIP funding to a degree, it doesn't mean the buildings are going to fall apart. He thought we do have an opportunity here to reduce the amount of the CIP levy for a period of time, and he was very much in favor of reducing it. He thought a temporary reduction of$500,000 would be in order for 2008 when we have some new facilities coming on line and a lot of additional costs because of that. He said his hope is that the amount we need for operating expenses for the Community Center will decrease over time as the facility gets used more so the net impact on our budget will be lessened. He said we need to fund the amenities as they come online and put them into service as they are available. He CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 5 thought we really need to be conscious of that impact and look to reduce the levy temporarily. Young asked Council Member Aho if his position was that he would support a CIP levy of $500,000 for 2008. Aho said he would support $500,000 for 2008, and possibly increasing it slightly for 2009 to $600,000 or $700,000. Young then asked him about his position on the employee wage issue. Aho said he thought it is important to keep pace with the wage increases that are required to meet the market, both in terms of the cities around us and to keep pace with inflation. He thought we are doing that, and the 3.0% plus the 1.1% puts us at a total of 4.1% which is a pretty good amount. He would like to see it be 3% in totality because he did not like things to not be transparent. When we say the wage increase is 3% and then there is another 1% for step increases, it gives the perception we are not packaging it all together and he didn't like that perception. He would like it presented as the total number, not as separate pieces. Young then asked if he would like to see the total be 3.0%. Aho said that was correct,but he could be flexible on that position. Nelson said if necessary she could go along with the Version 1.8 CIP levy, but she was concerned about it because we are already taking dollars from it in 2007 and proposing to take another $250,000 out of it would be an even bigger reduction. She thought we need to look long term to be sure that we have the money we need. She noted the homestead credit could change as could the liquor store profits. She could compromise for one year and go to the $750,000 amount, knowing we would be taking the extra money from 2007. She asked if our bond rating will be affected if we go down to $750,000. Kotchevar said she did not think it will have an immediate impact on our rating, but she could not guarantee that. Neal said next time we issue debt we will have to answer questions about it. Nelson said she was very concerned we look long term and that we look at maintenance of our parks and streets and keep adequate numbers of Police and Fire for public safety. She thought that is part of what defines Eden Prairie. If you look at the market report from the real estate industry, our home values are going up and she wanted to make sure we continue to maintain our home values. As far as the employee wage increase was concerned, she thought the 3.0% seems to be what is happening in other cities. We are obviously below the private industry trend, and that leaves some of our best employees potentially "stealable." She would really question going down to an overall 3.0% increase, knowing that all the other cities also have step increases added to the base. We could get rid of step increases by employing all employees at market wage but she thought we do it this way to provide time for training of new employees. She thought we have a wonderful employee base and many have been with the City for a very long time. Our surveys say they give excellent service and she would like to see that continue. Young asked where in the Version 1.8 numbers is the concept that we should put in the extra from the 2007 budget. Neal said that was not shown in the Power Point presentation he gave. Young asked if it is still part of the Version 1.8 budget. Neal said it is. Nelson asked how much we expect that to be. Kotchevar said she would expect it to be very similar to last year. Young thought if we take in more in tax than we budget for, that amount belongs to the taxpayer. Neal said they get it back when it goes back into the CIP. Nelson thought it was very appropriate to have it go back to the total tax base because it is like an internal rebate. CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 6 Butcher asked how much the 5.5% and 4.8% increases in the Versions 1.5 and 1.8 budgets would increase the tax impact on a MSFH. Neal said they estimate that number to be $9 for Version 1.8 and $18 for Version 1.5. Butcher asked if we put a total of$2,500,000 per year into the CIP, with the $1,000,000 levy and other revenue of about $1,500,000 per year. Kotchevar said that was correct. Butcher asked if every year about$3,000,000 is used from the CIP. Neal said that was true. Duckstad said Council Member Aho indicated he was interested in a figure of 3% for wage increases and asked if that was for both years. Aho said that was correct. Duckstad said that was a wage increase with no step increase. Aho said it was a total of 3.0% for all wages. Duckstad then said he would support that position. He thought we are very competitive when you think about the private sector because many companies in the private sector do not have the pension plan that we have. He thought the same is true for our health care plan because we have the government programs and we have the best health care plans compared to the average out in the private sector. That is one of the factors we overlook when we say we have to pay the highest wage to be competitive. He thought we do not have to be at the top to attract and retain good employees. The taxpayers deserve good employees, but we have to balance that against what the taxpayers have to pay. Regarding the CIP, Aho read the definition of Capital Improvements. He said some of it goes for maintenance of equipment, vehicles and facilities, and some goes for new equipment. He asked if we have a rough idea of what percentage is for maintenance versus what percentage is for new items. Dietz said about $1,400,000 was spent in 2007 for street maintenance and about $170,000 on trail maintenance, and those are the two primary infrastructure maintenance items. We also have projects for building maintenance. He said acquisition of new equipment is always taken from the operating budget. Aho said he did not think reducing the amount of money taken in for the CIP levy for a period of time means we would be directly impacting the ability of the City to maintain our facilities and keep them in good shape. He thought we will have to look at what we are spending for new things in the CIP plan. Since we just built the Community Center addition he thought we might be able to defer some of the other projects and put those out a little to make sure we don't spend down the CIP fund too quickly. Butcher noted we are still behind if we put in $1,000,000 each year. Aho said the point is that right now we have enough funding in the fund so that if we reduce the levy for the next two budget years, we won't jeopardize our ability to maintain the facilities. Butcher said she understood his perspective but did not agree with it. She thought we need to continue to have a levy of $1,000,000 when we are using $2,000,000 a year just for essential maintenance. She thought a fundamental difference is that this year has been the year that we have the lowest taxes. What she did not understand is that our residents have given their approval through the referendum for the new Community Center which represents half the budget increase. Our residents have said they are willing to have a change in their tax billing otherwise they would not have approved the referendum they knew would CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 7 bring additional costs. We are pushing costs further out when the survey results showed that residents enjoy the services they have been given and they also approved the referendum. She thought we are talking about a basic cause and effect. She said it does not make sense in a year when people are prepared to do this and voted to approve it. She asked what another budget version would look like that was between Versions 1.5 and 1.8 and added back in the $250,000 from the CIP so we kept the whole levy. Neal said it would probably be close to Version 1.5 and there would be a tax increase on a MSFH of somewhere between $9 and $15. Young said he would like to talk about the budget proposals and he understood the dollar impact on taxes although he disagreed with looking at a budget from that perspective. Regarding the Community Center, he said the referendum passed by 250 votes and it came in over budget. Aho said he did not agree with using the Community Center as a way of saying people are willing to spend more on taxes because it did cost them more than was on the levy and there are additional costs to run it. He didn't know that anyone knew what that impact would be. He did not think this was a very strong case to keep the levy the same. Nelson said she was impressed by the fact that we can stay so low with the Community Center coming in. She thought we should shoot for a lean budget, and she believes we need to spend what we need to spend. She was concerned about the CIP numbers because she recalled there being things like a new roof for City Hall and some significant money for some facilities capital projects. She was a little hesitant to say it is just the streets, which are certainly important, but there are a number of different roofs on the list and those are very expensive. We can put off some things that are new but it should not be the radios for the Police and Fire systems. She thought we need to look at what the big dollar amounts are and she would need more information about what we could put off for a year or two. She said she was willing to go along with the $750,000 levy if necessary. Regarding employee wages she said she was concerned about doing a total of 3% instead of a 4.1% total increase because that is just a 1.9% increase which is below inflation and a whole percentage point below other cities. Even the BAC recommendation was higher than that. She didn't want our employees to say that we don't value them and aren't willing to pay them what other cities pay when the City is not in a budget crisis. Kotchevar said we project out revenue and expenses for the CIP fund and we project there will be money in the Capital Improvement Fund until 2015 at which time we would run out of money. Staff believes we need to put a steady amount in it every year to maintain the fund. Young asked if the projections include the balance in the Economic Development fund and what that amount is. Kotchevar said it did not. Jeremiah said the amount is $3,000,000. Young then asked about the sale to Presbyterian Homes. Kotchevar said it is $2,000,000. Young also asked about the sale of Fire Station 4. Kotchevar said we will receive the gain on that sale only. Young said, as far as wages are concerned, he thought we need to pay market rate wages to our employees. He didn't want to lead the pack but also didn't think we need to pay more than any other city and he assumed the 3% number reflects that position. He said there were some other minor tweaks to discuss. He thought we need to get out of the car allowance CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 8 business. We should use market rate compensation as a base wage and not use car allowances as a wage correction. Regarding certain staff changes, he thought the Community Services Technician position was not a service we need to provide. He asked how much time the Heritage Preservation Specialist spends on heritage preservation issues. Jeremiah replied the employee spends nearly full time on heritage preservation with some general training duties for the balance of the time. Young asked how many sites we currently maintain and how many the employee works on. Jeremiah noted there will be a full response to the BAC recommendation coming soon and listed the primary sites the employee is currently working on. She said there are other initiatives being worked on such as updating ordinances for clarity. Young said for 2008 he would like to move that responsibility to half time, and then over time get it down to a quarter time position. He said he didn't agree with a 3% cap on total wages. Regarding the CIP, keeping in mind it would be on a temporary basis, he would support some level of reduction for 2008 but would like to see it growing back in 2009. He would support a levy somewhere between $500,000 and $750,000. Butcher said she didn't support any change to the CIP levy. Regarding the Community Services Technician, Nelson said she believes that is a position the community needs at this point. They work with people in the greater Eden Prairie community such as businesses, the library and Hennepin Technical College to work through problems. They do some work with the Police and Fire Departments and can work with Parks. This is the kind of service the community still needs to have. She would like to take it down to half time with benefits with the City and fund the other half through a service agency. We need someone we can send immigrants to if they have questions about planning and zoning. With the largest immigrant community within the City being Somali, it makes sense the person speaks Somali. She thought over the next three years as the community grows the position should be phased into something else; however, she didn't believe this year or next is the time to do that. Young thought the dynamics would change if there were other proposals being brought to us from some other groups such as the library or the School District to provide some of the costs for these services. Nelson said we can certainly talk about such changes but she did not think it was practical to finalize anything during the next month. She thought we could keep the position and ask staff to research having a fee for use or look at how we can work through the various parts of this position. Young said there is a certain level of service outreach the City does have to provide the community in terms of public safety and parks and recreation. Regarding the Community Services Technician position, Aho said he would like to see the City work as a catalyst with the organizations within the City to transition those services. He didn't think this is a core responsibility of the City, and we should transition it to the private sector. As far as the Heritage Preservation position was concerned, he thought a full time person is excessive for the number of properties, and he would like to see it transitioned to a half-time or lower position. Butcher said she thought the Community Services Technician position was essential and she CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 9 thought we could fund it in 2008 and evaluate it in 2009. After receiving the information from staff on the variety of roles the Community Services Technician fills, she didn't know how you would fill those roles in other ways. Hennepin County has made it clear they don't have the resources to do that for us. She thought we could move from the stalemate if we continue the position for at least a year, and then review it after that to see if there are other ways that it could be filled. Duckstad said he agreed with Council Member Aho with regard to the Community Services Technician position. He thought the City could make some further effort to make sure Hennepin County can't provide services in this area, because his understanding is that there are many full time employees at Hennepin County who are devoted to the immigrant services area and they have a significant budget for those services. He thought we should make every effort to transition this to some other agency. We owe it to the citizens of Eden Prairie because Hennepin County is funded in a significant amount, and when they pay property taxes for the same services the citizens are really being doubly taxed. He said he agreed with Mayor Young and Council Member Aho on the heritage preservation position and thought that should be reduced to half time. Aho said one of the things we talked about in the last budget cycle was a new policy to establish a Budget Stabilization fund that would be maintained at 15% of our annual operating budget so we could ride out differences. If we keep that budget percentage the same, he asked if we see any additional amount as surplus in that fund that could be applied to the General Fund. Kotchevar said the policy hasn't changed. Aho then asked if we have any additional funding that we could apply to the General Fund as a result of a surplus in the Budget Stabilization fund because we had additional funds in there when we set it at 15%. Kotchevar said that was a one-time deal. Neal reviewed the tax increases over the years since 2002, noting that Version 1.8 has a $9 increase for a MSFH for 2008. He thought that is a very reasonable number. When you look at the service composition that goes along with that number, it is actually extraordinary. We now have the fourth highest tax capacity in the state and are behind only Minneapolis, St. Paul and Bloomington. Our economy is doing well and our taxation is not dampening the local economy in the least. He said a couple of months ago we gave the Moody representative an update on where our City is headed which he shared with the Council at a workshop. We had a chance to take the pulse of our residents earlier this year, and one thing that stood out for him was that 73% of those surveyed believe the value of what they receive in services from the City is good or excellent. When we look at what our City is doing in terms of operations, we are keeping pace with what our peers are doing and are doing better than many. One of the reasons we are able to achieve that is the employee base we have. He thought that, at a time when we are going to be imposing a very low tax increase, this is not the right year to ask the employee base to accept a below market wage increase. He asked the Council to give further consideration to how that would affect employee morale. He noted his hope as City Manager is that we get a budget with five votes behind it because that gives a stronger representation to the community as well as to City staff. Young said he has always looked not just at relative change but also at the absolute. We are probably doing pretty good compared to other cities; however, on a per capita basis when CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 10 compared to our peers, we are the highest tax based city. Neal said he knew that is true, but wanted to point out that when we look at the trend of the data, the trend for Eden Prairie is going in the right direction. We are starting to slow down the rate of growth, and that is reflected in our spending habits for the last few years. Nelson said she would like to clarify two things. One is the tax per capita which she believes is very similar to Minnetonka and Edina. When you look at cities that seem to be very prosperous with homes and businesses, all three cities have good schools and a very good business base. Our homes have a higher value for the same house than surrounding communities. Most of us purchased our homes knowing that and whatever we do she wants to make sure Eden Prairie stays at that level. The other item in the packet talked about keeping the money for services in Version 1.8 and she would like to see that happen. Young noted that is the next item on the agenda. He said the total dollar difference spread on the Council is not huge. He didn't think that Eden Prairie will ever be a low tax city but he would prefer not to be the highest taxed city. Regarding the survey, Duckstad said Question Number 32 asked for those in favor of or opposed to an increase in property tax to maintain city services at the current level. The results showed 41% were in favor and 39% were opposed. Nelson said for 2009 she would like to throw back on the table the half-year Training Chief position for the Fire Department, which is an extra $45,000, and potentially the $60,000 needed for the two Fire Department vehicles. She thought this is a core area and it is an important position. Young said he thought we have time to talk about that. Nelson thought we should discuss it before we vote in December. Jeremiah noted the Manager of Hennepin County's Multicultural Services said they have a total of three Somali employees and they also serve Ramsey County. With regard to the three employees, they provide access to county programs so there is no overlap we can find with our position. II. OUTSOURCED HUMAN SERVICES CONTRACTS Neal said Ms Jeremiah manages this part of our budget operation as well as the committee that reviews the applications and makes recommendations. He said he is not expecting a final decision tonight, but he wanted to get some direction from the Council because all of the groups have calendar year budgets and want to know where the City is headed. He said this will come to the Council for approval on the November 13 agenda, and he wanted the Council to have it ahead of time in case there were questions or concerns. Jeremiah said the first of the two items before the Council is entitled Agency Contracts for Human Services. She pointed out the Human Services Review Committee recommends full funding of the requests received from the non-profits for the contract services this year and that is possible under budget Versions 1.0 and 1.8. She noted the committee was also asked to provide recommendations for the reductions proposed under Version 2.0. It was a very difficult task, but they were able to come to consensus and that information is on the second half of the first page of the memo and continues on the second page with recommendations CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 11 for 2009. The recommendations ranged from not funding two or three agencies in 2009 at all, to funding agencies up to 83.3% of their request. She reviewed the criteria they used to come up with the funding recommendations. They look at funds that assist people with basic needs of daily living and that assist Eden Prairie residents. She said in many cases the applicants are able to leverage funds up to four to ten times the amount we provide. Jeremiah said the review committee also looks at balance in funding to various targeted populations such as seniors, immigrants and families; however, there aren't any programs in the current list that specifically served immigrants. The reason for that is we haven't found any agency out there that specifically serves immigrants, has a proven track record, and meets some of the other criteria. Because we have not found an agency to fund for immigrant services, that expense has been allocated to the Community Services Technician. The review committee also looks at the likelihood of their continuing current services with other funding possibilities and also whether they could survive the cuts. The committee looks to see if they are accessible to large geographical populations and different economic means as well as their history of working in collaboration with other agencies and providers. There is a lot of monitoring involved, and they must submit quarterly reports. Staff members talk with providers on a regular basis and also make site visits. Each year the full committee interviews each agency candidate. Young said the discussion about the Community Services Technician reminded him of a discussion he had with PROP about taking on those services if the City increased its funding to PROP. He noted PROP obviously can't hire someone and pay what the City does. He asked if that remains a possibility as it was two years ago. Jeremiah said she had no recent information on that, but her concern at the time was that 45% of the person's time is spent helping City departments and other agencies with cultural issues and problem solving so very little time is spent helping PROP. It wasn't clear those duties would be maintained, and we would lose a lot of control over what duties the position performed. Nelson asked if we have looked at funding the position at half time with full benefits and moving the other half into PROP with extra funding for them. Jeremiah thought we could explore that, but she was not sure it would save the City dollars. Neal said he recalled the conversation a couple of years ago, but he didn't think we have had any further discussion with PROP or any other agency. Butcher said she served on the Human Services Review Committee and found this to be a good model for the delivery of funding to organizations that meet the needs of our population. She noted we have always had a very rigorous evaluation process, and we are talking about a total of $154,800 going to eight organizations. She said the committee felt strongly about funding these groups because they served so many of the populations whose needs would not be met in other ways. She supported full funding for all of the groups, and she thought we would see a negative reaction in other ways if we don't provide funding to all the groups. Aho thought all the programs are worthy and worthwhile, and he thought the programs we decide to support should receive funding at the levels required. He would like to have open dialogue on each one of them and see if it is within the cities purview to support each one. He thought Meals on Wheels is a fantastic service, as is PROP. He had some reservations in CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 12 supporting the YMCA program at the level we have been asked to because he thought that is less of a City function than some of the other services. Young said as far as the contracts we enter into, it is important they be reasonably related to services that people could reasonably expect the City to provide. He had questions about the Family Center and the YMCA. He thought the Family Center is a School District function and they should support it. The YMCA is an after-school program located at CMS. He thought it should be in the School District budget and not the City budget. Other than those two,he thought they all should be fully funded. Butcher noted the person from the YMCA gave a compelling reason why we should continue funding them because they help kids at risk and the program changes their lives. In addition we are only talking about$25,000 for that service. Young said there was no question about the value but rather the question is how closely related the services provided are to obligations the City has. He thought a program at the schools should be funded by the schools. Butcher asked if these programs are funded at all by the schools. Jeremiah said her understanding is that the School District is not contributing to the YMCA program currently, but they are providing some space for that person during the day. Neal said he can't recall the exact ratio, but there is a joint funding feature at the Family Center. Jeremiah said the City has provided $14,000, the State of Minnesota and program fees provide $29,000, and the Rotary Club provides $1,000. Butcher said she felt our role is at a policy level and this feels like micromanaging when we talk about these relatively small amounts out of a very large budget. She thought if there were to be cuts, the recommendations made by the people who are close to this are different from our perspective and we need to weigh what their opinion is. In her opinion, there is a disconnect to cut funding for programs that have served us so well in the community. Nelson said if we are going to fund things she would like to see them funded all the way out. She saw a lot of value in the Family Center and the money put in comes back many times over in services you don't have to provide later on. She said she was not as familiar with Storefront, but she noticed their main operation is in Richfield. Regarding the YMCA, she thought anything that helps teens and junior high age youth and keeps them out of the criminal justice system saves us money. She was not as familiar with the Family Community program but it sounds like they do good work. She thought by doing this private/public partnership we certainly take our money and make it grow. She was willing to trust the committee and would go with their evaluation if we have to cut but she didn't want to do that. Duckstad agreed and said he liked all the programs and thought they all should be supported. Part of our job is to recognize that we are entrusted with the public's money and we should spend that money wisely. He particularly likes the Meals on Wheels program and PROP. If he had his choice, he thought the City should be continually vigilant to look for non-profit groups that are looking for an opportunity to help the community. Young asked when a decision was needed. Neal said he planned to advance this material for Council approval on November 13. He said it may feel out of synch with the budget CITY COUNCIL WORKSHOP MINUTES October 30, 2007 Page 13 approval, but he thought our budget has the ability to stretch or contract by at least this amount. It has been our custom to make this decision as early as September. Young said Council Member Nelson's comments about the YMCA led him to believe the service will not be provided if we don't provide funding. Jeremiah said that was very likely true, because our support is about half of the program. Young then asked if we can talk to the School District and see if they are willing to come up with money for the program so we could transition this to them. He didn't want the service to go away, but his first read on it was that this should be in the School District budget. Neal said he will communicate with the School District. Young said he would also like a better reason why we should continue the Family Center funding. Aho thought it would be good to do this as early as we can because it is tough for non- profits to come up with the dollars. Nelson noted some of these organizations leverage City money with other foundation or government money, and they may have other funding pull out if we pull out. III. ADJOURNMENT Mayor Young adjourned the workshop at 8:25 PM.