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HomeMy WebLinkAboutBudget Advisory Commission - 03/24/2009 APPROVED MINUTES BUDGET ADVISORY COMMISSION TUESDAY, MARCH 24, 2009 7:00 P.M. CITY CENTER Heritage Room 8080 Mitchell Road COMMISSION MEMBERS PRESENT: Chair Don Uram, Vice-Chair Rick King; Commissioners: Annette Agner, Eapen Chacko, Jon Muilenburg, Richard Proops, Gwen Schultz COMMISSION MEMBERS ABSENT: None STAFF: Scott Neal, City Manager Sue Kotchevar, Finance Manager Tammy Wilson, Finance Supervisor Carol Pelzel, Recorder I. ROLL CALL/CALL THE MEETING TO ORDER Chair Uram called the meeting to order at 7:05 p.m. II. MINUTES A. BAC Meeting Held Thursday, February 24, 2009 MOTION: King moved, seconded by Muilenburg, to approve the February 24, 2009, BAC minutes as presented. Motion carried, 7-0. III. 2009 PROPOSED BUDGET CHANGES Neal explained this evening's presentation has been given to various employee groups and discusses the process they intend to use to resolve the 2009 budget issue in the General Fund and also about how they will proceed for the upcoming five-year period, 2010 to 2014. Neal stated previously they had a gap between revenue and expenditures with revenues exceeding expenses each year. That gap has been tightened to minimize the tax impact over the past few years. The downside of tightening that gap is that a year like they are now experiencing results in a short-fall and they are not able to handle the loss of revenue like they would have been able to five or six years ago. Neal explained from 2000 to 2009 the City had budgeted about$2.5 million a year for development revenue with actual revenue received in 2000 of$3.5 million. In 2008 the City received $1.5 million which was under what was budgeted for that year. He stated it is difficult to estimate what they will receive for 2009. Right now they are running about 50 percent of what they were last year at this time in terms of development revenue. Neal said this is one of their challenges for 2009. BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 2 Neal pointed out another challenge they are faced with is the City's annual debt service. For 2009 debt service is at$3.5 million with debt service increasing to $4 million 2011 after which it then declines. Staff is looking at ways to reduce debt service which could include changing the way the City borrows or by refinancing some of the issues. Proops asked what causes the peak in debt service. Neal responded it is a result of the way some of the bond issues are structured and that results in an uptick. Chacko asked staff to provide the Commission with a listing of debt service. Neal presented a graph showing what the General Fund would look like if they continued doing things the way they are now showing expenses exceeding revenue from 2009 to 2014. He indicated the Council adopted a $750,000 budget deficit in 2009 to keep the tax levy frozen in 2008-2009. If they continue operating as they have been, in the next five years they will accumulate a deficit of a little over$10 million. Neal said the issue is clearly development revenues and they expect that revenue to be short$1 million from what was budgeted in 2009 and perhaps even more. Neal explained the priorities he is presenting this evening have not been adopted by the City Council. One of those priorities is to maintain the City's infrastructure and facilities. They need to continue to maintain capital investments that are already paid for. Neal said they must also maintain public safety while staffing that reflects demand is also an important concept. Experience shows that demand for some services may fall while demand for other services will increase. For example, in the development area they expect a decrease in demand for planning, building and inspections and engineering services. Neal said they should have staffing that will reflect a decrease in demand. Chacko questioned where they would expect the demand for services to increase. Neal said they anticipate Police services to increase, particularly an increase in calls for service as economic stress becomes more prevalent. Neal stated the economic condition of taxpayers is an important priority for the City Council and needs to be a priority for staff as they move forward with a solution. He indicated that they need to continue investing in capital improvements to keep Eden Prairie a community where people want to live. They need to make sure that the City's infrastructure is in good shape and maintained including parks and streets. With regard to the Town Center Area Plan, Neal said they do have a downtown redevelopment plan and the City Council continues to support that plan and feels it is important. Schultz questioned if the Town Center Plan was still a priority. Neal responded it is a priority in the sense that they are continually working with private interests to make it happen. It has not become a priority in the sense that if private investment is not available they will use public investment in lieu of private. Chacko asked what type of expenditures this activity would require. Neal answered this year they will be working on Singletree Lane. Private development can require improvements to public infrastructure and that will continue to be a priority for the City. Neal said they are looking for a balanced solution and one that looks at all of the City's areas or functions to provide balanced responses. Neal reviewed potential solutions stating BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 3 that they should look at increased revenues, decreased expenditures and transfer of reserve funds into the General Fund. For 2009 staff would recommend decreasing General Fund expenses and transfer into the General Fund some reserve funds. They are not proposing to increase tax revenues or user fees in 2009. With regard to increasing tax revenue, Neal said they are unable to do that for 2009 because of the way the tax levy is structured. He also explained that there are some cities responding to the decline in building development revenues by increasing building permit and user fees. Neal said staff feels this is the wrong response to that issue and they will attempt to increase revenue without an increase in user fees. Neal further explained to cover the projected $1 million shortfall, staff is proposing to transfer into the General Fund $500,000 from the Budget Stabilization Fund and to reduce General Fund expenses by $500,000. Staff is also proposing a$200,000 reduction in operating costs. He explained of the $500,000 reduction in the General Fund they are proposing a reduction of$300,000 in personnel expenses. They have implemented a temporary hiring freeze which saves wages of approximately $12,000 per payroll period. They are also considering a voluntary early retirement incentive as regulated by State Statute. Neal said they are considering a voluntary reduced work schedule program and involuntary staff reductions. Neal reported he has also been meeting with the Department Directors discussing the proposals and how they can reduce expenditures in their departments. Uram asked what the projected savings would be in a temporary hiring freeze. Neal answered that they estimate that they could save $336,000 annually. Uram asked if the vacant positions are necessary. Neal said he believes some of them are. If they do a reduction they would probably fill a couple other positions that are currently frozen. Neal said they need to decide what is important and what is less important since everything they do is important. They need to prioritize across the board. Neal explained for 2010 to 2014 they are looking at a balanced approach through expense containment, revenue enhancement, reserve funds and debt restructuring. Staff is analyzing budget savings they will achieve through reductions. They are also considering the introduction of a street lighting utility. There are lots of non-taxpayers that are utility customers and they should consider spreading that cost more equitably. Neal said they will also look at the impact of small consistent property tax levy increases and the impact of those increases on property taxpayers. Neal said they cannot make a meaningful decrease in spending and operations without getting into employee compensation. They need to provide a compensation system that will keep people here and to attract new people. The City's single biggest expense is wages. Neal indicated they will also look at restructuring debt service obligations. They are trying to stabilize the payments prior to the drop down occurring in 2014. Schultz asked how this would be accomplished. Kotchevar answered they would extend the terms of some of the debt and push some projects out further. Neal explained the voluntary early retirement incentive was introduced in March along with the voluntary reduced work schedule program. He indicated they would have a good BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 4 idea as to the savings to be achieved through those two paths for the April 21 Council Budget Workshop. Schultz asked when involuntary layoffs would occur. Neal said he anticipates knowing mid-April if there will be layoffs. They are not getting a lot of interest in the early retirement incentive. They are, however, getting more people interested in reduced work schedules than they had anticipated. They are working with individual Department Directors in putting a plan in place once they know what the numbers are. Neal said from the interest they are seeing in these programs there will have to be involuntary reductions. Schultz asked if they can reduce the budget as necessary if they wait until April or May to put these options in place. Neal said yes, the proposal does meet the $300,000 target in personnel costs in the July 1 to December 31 timeframe. He said if they keep the hiring freeze in place to the end of the year, there may be some positions they will want to fill and reduce some positions currently filled. Chacko asked if the amount saved in personnel costs would be $300,000 for the year, how much they would need from early retirement or reduced work schedules if they pick up the necessary funds from the hiring freeze. Neil responded there are a couple positions they will definitely fill. Even though they targeted around a$1 million shortfall based on development revenue savings, it is important to bank hiring freeze savings. Neil said there is some concern that they will be more than $1 million short on the development revenue side. Chacko questioned cutting training budgets when you still have people here trying to do their job. He also asked if withdrawing from metro cities organizations would have any political ramifications. Neal said there are and he explained there are three municipal policy advocacy groups; League of Minnesota Cities, Metro Cities and Municipal Legislative Commission. They have withdrawn from the Municipal Legislative Commission. Uram pointed out that with the proposed solutions he only sees things being equal with the only difference being in personnel costs. The shortage is being made up with a transfer in and an additional $200,000 or$300,000 in small line item changes. He asked what would happen if they were short $700,000 next year. Neal said there is the possibility of doing a street lighting charge or franchise fee. IV. BAC FEEDBACK ON PROPOSED CHANGES AND OTHER IDEAS FOR CONSIDERATION FOR THE 2009 BUDGET Proops asked if there is a priority list for capital expenditures and if items are being deferred such as building trails, streetscaping or way finding. He asked how many capital items would be moved out. Neal said staff will create such a list for the Commission's review. Proops asked if the City will continue to build trails. Neal responded staff is working with a Master Trail Plan. A bond issue was approved for the funding of trails and they plan to continue with that. Neal said he is unable to tell the Commission which projects they plan to do but they will continue with trail construction. Proops suggested staff focus on this item. He said he is suspicious of plans and feels the common objective is to build more and make better. Perhaps it is time to say they have enough of some of these things. Neal pointed out that streetscaping around the Town Center has been deferred to BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 5 2012. However, they cannot go to the public and say they will not do trails that they are committed to doing. Proops said there was $2 million bonded for trails and he believes they are spending a lot more than that. Neal explained they do maintenance on an annual basis and most of the new trial work is done. The CR4 trail was done jointly with Hennepin County and with funds from the $2 million bond issue. Uram asked if they are building the stabilization reserve. Kotchevar said it is at $5.5 million. Other than the $500,000 to be transferred, Uram asked what the obligations for that fund are. Kotchevar answered the $500,000 would balance the budget and there is no need for more than the $500,000 they are proposing. Neal explained the scenarios do include some use of those funds but they are being extremely careful not to deplete the fund. Uram asked what the cost recovery is for the Parks and Recreation operation. Since this is one of the larger departments he asked if there are any opportunities for savings there. Neal said they have looked at the various programs to determine if they should continue some of them. One of the proposed reductions in that department is in a program position that would require them to reduce their programming using the cost recovery expense strategy to do that. Schultz said they talked about development revenue shortfall being the main driver for the budget deficit. She asked if staff sees any other decrease in revenue as an issue. Kotchevar responded interest revenue will also be down. They are still working on the 2008 results. The Community Center is doing very well so that should end in the positive for 2008. Neal pointed out that an area where there might be some vulnerability is the receipt of Local Government Aid (LGA) and Market Value Homestead Credit(MVHC). Also, they are to receive approximately $800,000 for Police and Fire Pension aid. It is unlikely that will be reduced but they cannot guarantee that it will be received. Another area of vulnerability is in the area of fines and forfeitures. There could be an increase in percentage of what goes to the State and less for what the City gets for tickets. Proops asked if there is anything from the stimulus package coming to the City. Neal answered a lot of this money is being routed to cities through existing programs. Eden Prairie has not been eligible under previous programs so probably will not be eligible now. There is a program that provides some Police funding that they are looking at. They did get an additional $69,000 of funding for the Community Development Block Grant in 2008. Chacko asked what would happen if pension funding was reduced. Neal said under State law the City is obligated to pay and this would result in an additional increase in expenses. If this does happen, they probably would have to take money out of reserves or add it to the tax levy for next year. King suggested they look at the capital projects since it seems like this is the time, while still investing in some, to cut back and delay some of the other projects. Neil said is something they can do. It doesn't impact the General Fund operating situation but is something they can do in addition to looking at the General Fund. King also suggested they consider making deeper cuts since it appears that they are going with a very small cut with BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 6 the opportunity to make deeper cuts. He suggested they look at going a little deeper the first time around. They could take $800,000 out of the real stuff and $200,000 out of reserves. It appears that they should go further because the impacts are not dramatic. Also, they should adopt a mantra independent from State funding and make a plan over the next two or three years to wean the City from the State budget since the City does not get that much from the State. King said they should make it a goal to be independent of State aid by a certain date. This would not cause them to go up and down if the funding does not come from the State. Neal said among city governments Eden Prairie and Edina are probably at the top from being disconnected from State impacts right now. They do not depend on LGA or MVHC. He said there are still some cities that use that MVHC as operating revenue. Eden Prairie does not. Neal said fully disengaging from the State is an admirable goal and is something to look at in the long run. Neal responded to King's suggestion they cut deeper now stating that when they started this year they had the task to fill the gap between expenditures and revenues right away with some use of reserves and some reductions. This is the second look at the budget and is related to the projected shortfall. In response to the projected shortfall, they are proposing to make enough reductions to be responsive to the shortfall and have a positive impact in the future but they do not want to make immediate mid-year service level changes. They are about ready to start a policy process for the 2010-2011 budgets and if they make long- term service level changes they will do that as a result of discussions and deliberations with the City Council and Budget Advisory Commission rather than a staff decision. The proposed reductions do not change the service levels but achieves balancing the budget. Long-term, they will need to make structural changes in the budget but need time to work through those changes. In response to a question from King, Kotchevar explained under the current scenario, the total funds to come out of the Budget Stabilization Fund are $500,000. At the end of 2008 the reserve fund had a balance of$6 million and with the $500,000 taken out in 2009 $5.5 million remains. They also took$750,000 from that fund to balance the 2009 budget. Kotchevar said with the different scenarios presented some will use the Budget Stabilization Fund more and some less. They are proposing for 2009 the use of$500,000. King said if they are only taking out$500,000 now that is a little less than 10 percent of the fund. Neal said they are anticipating a $1 million shortfall in development revenues. At this time none of the State budget proposals propose a reduction in pensions but it could happen. Uram said in looking forward and with the market value situation, Eden Prairie is facing a hit with commercial property values going down. With the large drops in market value there will be the necessity to raise cash. He asked if staff has given any thought to how they will handle these decreases. Neal said they have not yet looked at this. Kotchevar said the budget projections use a 2 percent tax levy increase. Right now they are under the levy limits. Neal said this is an especially hard year to hit their targets. Values are going down and they don't know the impact of the 2 percent increase in the levy. They have to continue to analyze that and use 2 percent in their projections. Uram pointed out that a 2 percent BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 7 increase overall could result in a 15 percent increase for taxpayers. Neal said that could very well be true and that is something they can't do. Staff will have to look at this more closely. King asked if the Commission would like to discuss their involvement in this whole budget process and if there are ways they can be helpful especially during these challenging times. He suggested they talk about input before the budgets are formed or if there are other ways they can be helpful. Neal said at the last meeting they talked about the challenges and it is difficult to determine where this Commission fits into the process. Staff is working on a proposal for the Commission and Council to look at and they are developing these proposals with Department Directors. Neal said it is difficult to brief this Commission on the process when they are talking about laying off employees. That discussion happens best in a more private setting. He further explained when they talked about originally setting up this Commission they talked about how the Commission could be useful. It was the thought that the Commission would be the body the City Council would give general direction to and say the budget looks good but run it by the Budget Advisory Commission for their review. Staff would then bring the Commission's comments back to the City Council. Where that fits into the process when they are half way into the year isn't clear. Neal said it may be better for the Commission to look at the budget in the middle of the year and to look at current budget performance and review how they did last year. Perhaps they need to look back to see how they are doing right now rather than look forward which they have always done. Chacko said he finds it difficult to get involved. He does not understand where some of the information presented comes from and doesn't even know where to go to find additional information. He does not have the historical perspective with revenue, expenses and debt. Chacko explained when comments or suggestions are made he can't even get to the reasoning for these comments from what is presented. He said he does not know enough and does not feel he can contribute to the process. Schultz said part of the issue is that this Commission does not need to go into the level of detail that staff needs to. Proops said he agrees with Chacko and the Commission should know what exactly is causing the increase in borrowing and are they going to do streetscaping or way finding. Proops said he believes some of these things need to be reviewed with the Commission. The level of information presented is wonderful but they need more details. He asked if the issue of time off without pay has to be approved by this Commission or even receive their input. He also questioned if there is some approach they should take to go deeper. Uram said they are going in the right direction. Most of the Commissioners have been on this Commission for two years and eventually Chacko will be up to speed with the remaining Commissioners. Uram said he also believes their role is to look at the structural deficit and review Staff's recommendations to determine if they make sense. He also said their job for this year is to look at services provided and determine if they are necessary. Uram said he agrees with Neal on budget cutting situations and feels it is best done at the Department Head level because they know best where to cut. Uram stated it is important to BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 8 bring back the recommendations to this Commission but understands the need for discretion at this point. Chacko said it is difficult to see a structural deficit unless they see a time series. Kotchevar pointed out that at the last meeting they did go through the projections. Chacko said a new person does not see if there is a structural deficit or a downturn in revenue or an income shortfall because they don't have the history that the other Commission members have. Uram said information is available and asked Kotchevar to provide Chacko with the historical data. Chacko said he does not feel he is making any headway or contributions to what this Commission is doing. Agner said a lot of time and energy is given to this Commission but they don't know what is expected of them. They may have a recommendation or see a flaw but they are not sure because they lack reference points as to what they are talking about. The question of what can this Commission do to help continually comes up because it is somewhat nebulous. Agner said she does not believe the role of this Commission is very well defined and she is not sure whose responsibility it is to define their role. She said it would be nice to be able to offer more but she is not sure how they can do that. Muilenburg said what is being discussed is why it was recommended to the City Council that this Commission be appointed for longer than a two-year cycle. There is a learning curve and there is no way anyone is going to get this by sitting in meetings for two hours a month. He pointed out there are documents available for review that might help lighten this process. This Commission does not need to know all of the minor details but they do need to know what is important. Muilenburg said there are other areas this Commission could look at and recommend savings. For example, the Senior Center is a major cost to the City and it may be time to revisit that program. Also, there is a new Art Center and they don't know what the City is contributing for its operation or if it is self-sustaining. Muilenburg said those are the things this Commission should discuss. Are there actions that the City can take with these two items that would help the situation in the long-term. As earlier suggested, Muilenburg said he agrees they need to look at making deeper cuts. They should also look at the on-going implications if they restructure the employee base. Those are the things this Commission should explore at this point. Chacko said these are the things that should be on their agenda and recommended that they be placed on the agenda for their next meeting. Neil explained discussion regarding the Senior Center is one that catches political fire and the City Council responds to that issue at their Council meetings. The City Council did take action two years ago stating that they are not going to study the Senior Center. Debate and discussion of closing the Senior Center was stunted because it became a political issue with the City Council. Proops said in January he did present some recommendations and in February they discussed specific recommendations suggesting that the Commission endorse these recommendations for Staff and City Council consideration. He suggested after staff's budget presentation to the City Council they may want to go public with the number of BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 9 things they have done to balance the budget. This may also be a good time to look at the Senior Center and what it is costing the City to operate. Chacko explained the City has a problem they are trying to solve and this Commission is suggesting several actions. They are suggesting that staff look at deeper cuts and this Commission is a different set of eyes looking at solutions. Staff may feel these suggestions won't work but at least this Commission has attempted to make a contribution. Chacko suggested that staff also look at the Art Center and some of the other historic buildings as well as at other capital to determine if there are any cost saving actions that can be taken. Chacko said he is not claiming that this Commission knows everything but they do have some ideas. He recommended they develop an agenda of items they should review and spend some time to see if there are savings that would generate the necessary funds. Uram said the Commission has been asked to bring ideas forward at this evening's meeting and feels it would be appropriate to discuss these ideas tonight and move them forward. Proops said he is recommending several budget reduction items. He explained the Senior Center is currently costing the City $250,000 a year in operating costs with an additional $65,000 in the budget for major capital improvements in the next five years. Proops further explained the Senior Center activities are not senior specific and could work in other space. Very few things are done there that require a separate Senior Center. Proops said if they were to close the Senior Center they would lose kitchen and banquet rentals along with the wood shop. They would have to look at how much those facilities are used and determine how they would accommodate those activities. Proops stated the City has a nice new Community Center that has five multi-purpose rooms and there are some days when some of those rooms are not utilized and could be used for the Senior Center activities. He also pointed out that there are some drawbacks in moving the Senior Center to the Community Center but believes those issues could be worked out. Proops said he is recommending the Senior Center be closed and the activity scheduling and publications be combined, reducing costs by $250,000 per year. Proops said he is also recommending the City immediately pursue a new three-year contract for legal services with the current law firm possibly reducing the cost of legal services by $250,000 per year. With today's economy, the current law firm may be willing to negotiate with the City rather than have the City go out for proposals and hire a new firm. Proops pointed out the CIP includes a project for annual assessment of the condition of buildings. He recommended recent reports be reviewed to determine if semi-annual assessments would be sufficient,potentially reducing expenditures by $25,000 per year. With regard to the CIP Fund levy, Proops reported a lot of discussion was previously held and the CIP was reduced in 2008 and 2009. If the 2010 levy were $450,000 the budget would be reduced by $200,000. BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 10 Proops said it is his understanding that the severance expense is a partial matching of unused personal leave and sick leave, which accrue in the Severance Fund. He is recommending that the City's partial matching of severance funding be discontinued starting in 2009 for a budget reduction of$230,000. Neal said that is not correct. The City has to account for the severance liability cash flow of vacation and sick leave prior to paid time off(PTO). The value of those severance liabilities is $230,000 and is carried from one year to the next. Proops said since he did not understand the Severance Fund he would remove this recommendation for Commission consideration. Neal explained with regard to legal services, the City is in the midst of their three-year contract and they intend to go through the Request for Proposal (RFP) process for legal services some time this year. This was done three years ago resulting in the current contract. Proops suggested the City offer the current firm the opportunity for a new three- year contract at a reduced rate. Neal stated the City is not statutorily required to take the lowest bid. He said he believes it is the expectation of the City Council that they do an RFP to give other firms the opportunity to bid to provide City services. King said he feels the Art Center should be discussed by this Commission. Agner said she questions where the Art Center plays into the budget but suggested the wood shop at the Senior Center be moved to the Art Center. Kotchevar explained the Parks Director will be making a presentation to the Commission at their next meeting and that may be a good time to discuss the Art Center. King said he would like an update on the current fund raising status for this facility and what the current City funding requirements would be on-going including City costs for maintenance, programming, etc. He also stated in his opinion, the Senior Center recommendation is a good one and he is anxious to make a recommendation in the right way at the right time. It is important they quantify what the savings would be and someone needs to look at that more closely. The City Council previously decided not to look at the Senior Center and he questioned what would be the best way to get them to review this program. Neal said the last time the Commission brought this up he recommended that this is something staff should look at. The Council directed staff not to look at this any further. Agner pointed out that the last time they recommended a study of the Senior Center be done the economy was not as bad as it is now nor was there an Art Center. Uram said the Senior Center operation should be examined and he questioned if they should give direction back to staff to look at this further to determine the cost of operating the Senior Center and what it would cost to move the facility. Schultz said this should be sent to the City Council. They don't want to waste staff's time looking at this if the Council does not agree with their recommendation. Muilenburg said they may have to estimate some costs but the costs to move the facility would be one-time costs while the $250,000 savings would be recurring. Proops said he is recommending that this Commission forward to the Council their recommendations regarding the Senior Center, legal services, assessment and CIP fund levy. King explained he sees an issue with legal services since the City plans to go out for proposals sometime this year. Uram said they could move forward with the recommendation for legal services and ask staff to pursue a new contract next month since the way the BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 11 contract was written they will be going through the process anyway. Uram also stated the CIP Fund recommendation is a contentious subject. Neal explained a political commitment for the CIP Fund was made at a different time and it was agreed that they would go down in two years and then back up in 2010. Uram said a recommendation for the CIP Fund is not appropriate at this time and is something they should look at with the 2010 budget. Proops said he did not agree and questioned why it would be inappropriate to look at that fund now. King pointed out the other three recommendations all deal with potential savings in 2009. MOTION: Proops moved, seconded by Muilenburg, to recommend to the City Council that the Senior Center be closed and the activity scheduling and publications be combined, reducing costs by $250,000 per year; that a new contract for legal services be immediately pursued for a potential cost reduction of$250,000 per year; that recent reports be reviewed to determine if semi-annual assessments would be sufficient,potentially reducing expenditures by $25,000 per year; set the CIP Fund Levy at$450,000 for 2010 reducing the budget by $200,000; and, that wages be frozen during the 2010 and 2011 budget cycle, with provision for review of 2011 wages during June 2010. King suggested they only consider those items that affect the 2009 budget and look at the items that affect future budgets at a future meeting. He said he would like to amend the motion to focus the results on the 2009 budget items and remove the wage freeze and CIP levy from the motion and asked that a separate motion be made for the 2010 budget items. MOTION: King moved, seconded by Chacko, to amend the motion by deleting the recommendations to set the CIP Fund Levy at$450,000 for 2010 and that wages be frozen during the 2010 and 2011 budget cycle. Vote was called on the amendment with all members present voting aye except Schultz and Proops who voted nay. The motion carried, 5-2. Vote was called on the amended motion with all members present voting aye except Shultz who voted nay. The motion carried, 6-1. V. CHAIR AND STAFF ADMINISTRATIVE ITEMS Kotchevar reported on June 2 at 7 p.m. a representative from the State will be making a presentation on the Minnesota property tax system and Commission members are invited to attend that presentation. Neal said how the property tax system works will be explained and compared to the other 50 states. Kotchevar explained at the April 28 meeting the Parks and Recreation Director will be present to review his Department operation. Kotchevar said one of her goals for this year is to bring each Department in and let them talk to the Commission about their operations and staffing. They also plan to talk about some trends and where numbers are going up and also where numbers are going down and what all of this means to the 2010 and 2011 budgets. Kotchevar said they will also ask the Director to cover the Art Center and where they are at with funding. BUDGET ADIVSORY COMMISSION MINUTES March 24, 2009 Page 12 Kotchevar asked Commission members let her know what items they would like included on the agenda. Proops asked that during the Departments' presentation to the Commission, they tell them what problems they have and where this Commission might be of help or what isn't working that they would like this Commission to look at. On behalf of the Commission, Proops thanked staff for all of the time and work they put into this evening's presentation. XI. ADJOURNMENT MOTION: Motion was made by Schultz, seconded by Chacko, to adjourn the meeting. Motion carried, 7-0. The meeting adjourned at 9:10 p.m.