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HomeMy WebLinkAboutCity Council - 02/06/2009 - Other APPROVED MINUTES 2009 CITY COUNCIL PLANNING SESSION FRIDAY, FEBRUARY 6, 2009 CITY CENTER 6:00 PM, HERITAGE ROOM II CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Ron Case, 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, Finance Manager Sue Kotchevar, Assistant to the City Manager Michael Barone, and Recorder Lorene McWaters I. QUALITY OF LIFE SURVEY Bill Morrison and Peter Leatherman, Decision Resources Inc., presented the results of the 2008 Quality of Life Study. Morrison said they surveyed 400 households with an average interview length of 28 minutes, and statistical accuracy within five percentage points. In general, Eden Prairie residents desire "affordable excellence." "Tax hostility" is higher than in the last survey in 2006,but is still at a manageable level. Residents feel they are receiving excellent services from the City. Morrison said he expects the tax climate to worsen, but residents will continue to expect excellence. The City will need to concentrate on maintaining a high level of core functions. Morrison also characterized Eden Prairie as "conservative greens." They feel attention to the environment is essential,but should be carried out prudently. II. THE CITY'S CURRENT FINANCIAL CONDITION Scott Neal presented a PowerPoint on the City's current financial position. Information presented included: • A comparison of general fund revenues and expenditures showing the gap between revenues and expenditures narrows from 2000 to 2008 and revenues are expected to dip below expenditures in 2009 • A chart that tracks the percentage of change in general fund revenues and expenses from 2001 to 2009 • A graph depicting percentage of general fund revenue from various sources, including property tax levy, intergovernmental revenue, licenses and permits, transfers in, and "other"revenue • A graph showing that development revenue fell significantly in late 2008 and is projected to fall again in 2009 • A graph showing that annual debt service costs are expected to peak at about $4,000,000 in 2010 and then begin to fall • A bar graph that projects estimated property tax levy from 2008 to 2014, including the percent of general fund levy • A spreadsheet detailing projected tax levy for the years 2009 to 2014 Finance Manager Sue Kotchevar presented several spreadsheets showing general fund projections through 2014 using several different sets of assumptions. The current projection shows a negative balance of$749,999 for 2009, assuming the City continues its current operating standards. Neal said about 70 percent of City revenues are from the property tax levy and an equal percent of expenses is for employee compensation. He said it is clear that the City cannot continue to do what is has been doing. In all four scenarios, the Budget Stabilization Fund will be consumed within a few years. Neal said staff has surveyed businesses with approved development plans scheduled to start construction in 2009. Many say they are delaying their projects for at least at year or two due to financial conditions. Wal-Mart would like to go ahead with redevelopment this year,but they have not set a firm schedule. Neal said development revenue typically has two peaks throughout the year, one in May/June and one in October. Staff will be better able to project development income for 2009 later this spring. Neal said staff needs Council input on how to meet the budget shortfall for 2009 and beyond. He has asked each department to develop proposals that incorporate a five percent decrease in funds,both with and without personnel cuts. Also, employees have been asked to submit ideas on how to lower costs. Neal said he expects to present a plan that could include reductions in what we do or elimination of service lines to the Council in June. III. DISCUSSION Council Member Aho asked if staff anticipates a decrease in the need for services in non- development-related areas. Neal said staff does not foresee a decrease in needs in areas such as street maintenance, etc. Council Member Nelson asked if 2009 pay increases are negotiable at this point. Neal said that most increases have already been granted, and he does not think they can be retracted. Mayor Young said he does not think a compensation adjustment for 2009 is feasible. Council Member Case asked if the Capital Improvement Plan (CIP)budget could be adjusted so that planned projects are pushed further out in time. He also asked about the possibility of putting liquor store profits toward the general fund for one year. Dietz said it is problematic to use one time revenues that cannot be sustained. Kotchevar said the majority of the CIP is devoted to repair and maintenance. A small portion is for new projects. Some are new Parks and Recreation projects, which are supported by cash park fees. Case said he does not feel knowledgeable enough to suggest areas for cuts. Council Member Nelson suggested using upcoming Council Workshops to educate Council Members on City operations. IV. ADJOURNMENT The meeting was adjourned at 8:30 p.m.