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HomeMy WebLinkAboutBudget Advisory Commission - 04/28/2009 APPROVED MINUTES BUDGET ADVISORY COMMISSION MEETING TUESDAY,APRIL 28, 2009 7:00 P.M., CITY CENTER Heritage Room 8080 Mitchell Road COMMISSION MEMBERS: Chair Don Uram, Vice-Chair Rick King; Commissioners: Annette Agner, Eapen Chacko, Jon Muilenburg, Richard Proops, Gwen Schultz CITY STAFF: Sue Kotchevar, Finance Manager Tammy Wilson, Finance Supervisor Jay Lotthammer, Director of Parks and Recreation Angie Perschnick, Recorder I. CALL TO ORDER/ROLL CALL Chair Uram called the meeting to order at 7 p.m. Vice-Chair King was absent. Commissioners Chacko and Agner arrived at 7:02 p.m. and 7:04 p.m. respectively. II. MINUTES A. BAC MEETING HELD TUESDAY, MARCH 24, 2009 Proops noted, on page nine, the word "not" needed to be added so the statement reads: "Senior Center activities are not senior specific..." MOTION: Muilenburg moved and Proops seconded to approve the minutes from the March 24 meeting. The minutes were approved with a vote of 4-0 before Chacko and Agner arrived. III. PARK AND RECREATION TRENDS Lotthammer spoke about current trends in the Parks and Recreation Department. The first area of focus was the Art Center. After due diligence was completed, the Art Center was accepted as a gift donated to the City with very few strings attached. Fundraising efforts by City Staff has raised $50,000, and the Friends of the Art Center has raised about$15,000. The Art Center is functional and ready for the grand opening on Tuesday, May 26 from 4:30-7:30 p.m. A glass blowing studio and other improvements are likely to be added later as more funds are raised. Upgrades to restrooms have taken place so they are now up to code. Pottery wheels have been purchased, and other necessary supplies have been donated or purchased also. Eden Prairie Budget Advisory Commission April 28, 2009 Page 2 Sources of revenue for the Art Center include fees, memberships, grants, and fundraising. Some of the money from dedicated sales tax funding will go to the Arts, and there are some grants that may be available from foundations of companies. The Art Center may be eligible for a state grant aimed at supporting arts in the suburbs. The Art Center may be able to raise additional revenue by serving as a venue for birthday parties (similar to the birthday party offerings at the Community Center). Chacko asked how much money was put into building upgrades. The response was that $87,000 was spent by the City for the parking lot expansion, and $28,000 was spent on internal improvements. The family who contributed the building gave $35,000 for internal upgrades. With the economy, the Friends group has not been able to raise as much money as they had hoped. Proops asked if activity scheduling could be combined for the Senior Center and Community Center(and possibly the Art Center at some point in the future too). Lotthammer explained two different people are onsite currently (one at the Senior Center and one at the Community Center). They are actually down one person for scheduling now at the Community Center due to the hiring freeze, and the current person in that position is overwhelmed. They actually have to utilize other employees to help out with some of the workload. It does not seem feasible to add to the position further by combining scheduling for the Community Center and Senior Center. It was noted sales and marketing work is a piece of the scheduling job at the Community Center too. In 2007 and 2008, a lot of fundraising has taken place, including money and in-kind donations (such as the Art Center). Fundraising offsets operating costs and generates revenue, so it has a positive impact on the budget. Almost everyone on Lotthammer's staff has fundraising responsibilities. Many volunteer hours have been donated, and these are not reflected directly in the budget. Parks and Recreation received approximately 1650 registrations this year, and revenue is estimated at$90,000 in 2009 (compared to $61,000 in 2008). The increase in registrations happened largely because of the new Community Center. The economy is driving people to Parks and Recreation where they get a lot of value for their money. This summer, they are expecting an increase in usage of the parks as people save money by traveling less. They are conserving costs by filling up the programs they already offer instead of expanding their program offerings. As part of the EP Promise, the online registration target is 30%. This goal has been reached as there has been an increase in online registrations recently. About half of people use the walk-in or mail in registration option, and fewer are using the phone in registration system. The City plans to phase out the TTR phone registration system in the near future, which will save some money. Since 1995, the City Council put in place a cost recovery minimum target for most Parks and Recreation programs, ranging from 25% to 50%. In 2008, many of these programs are recovering between 40% and 75%. For seven programs, the City increased the cost recovery goals; for five programs, the City dropped cost recovery goals. The Parks and Recreation department tries to recover costs as much as possible, and many programs are running at higher percentages than the cost recovery targets that were set. They monitor and adjust programs based on cost recovery. Between 2008 and 2009, fees were raised for Parks and Recreation programs almost across the board (for camps, swim lessons, etc.). Eden Prairie Budget Advisory Commission April 28, 2009 Page 3 Uram said he would like to see the cost recovery numbers by program because the way to impact the budget may be to increase fees. It was noted 16% of classes are canceled or combined (if they will not meet cost recovery goals). Canceling less than 20% of classes is considered good, and they continue to monitor the cancellation figures quarterly. In 2008, the cancellation fee was increased. The Passport to Fun Scholarship provides $150 per year for participants to be able to participate in recreation programs. It is based on financial need, and participants are allowed access to open skate, open gym, and open swim in addition to only having to pay half of the cost of classes they take (up to the $150 per year maximum per participant). In 2009, the budget for this program was $7,000. In 2010 and 2011, the budget for the program is likely to increase due to increased demand. Agner and Schultz noted this is a nice program for the City to offer. There has been a reduction in budget and hours for the 2008 and 2009 cycle for usage of some parks for skating. For 2010 and 2011, the City is moving to a regional approach on Saturdays because they received negative feedback about the decrease in hours at the parks. Going forward, some parks will now be open longer but other sites will have shorter hours. Residents may not be able to go to the closest park for skating,but they will be able to go to a park in the City during hours the parks would typically be open for skating. The City monitors usage of Riley and Round Lake beaches, and they are busy frequently in the summer. Uram asked about the two houses near Riley Lake. They are not owned by the City yet. The City has been negotiating with the property owner, and the City would like to take down the buildings and restore open space and maybe add a picnic area or parking lot. This would expand the park and give capability going forward; however, it is a low priority for funding. In the past, the houses were not affordable for the City to purchase,but the boat launching area is affected negatively by having the houses located there. Acquiring these houses is in the City Guide Plan,but they have not been able to pay for them yet. Stu Fox said they would not anticipate an increase in parking or encouraging more boats on the lake at this time since the lake is already busy. Adult athletics have expanded, and the cost recovery for those programs is 120%. Since the revenue is greater than expenses, these programs make money for the City. There has been an increase in basketball and volleyball because of the new Community Center, but there is less space for softball this year(some fields are unavailable or will be lost due to the Pioneer Trail expansion). The Community Center has increased rentals significantly after expanding, and they expect an increase in room reservations for 2010 and 2011. Some insurance companies reimburse Community Center memberships if they are used enough. Nearly 400,000 people were in the Community Center at some point during 2008. Although membership is growing, they are not yet concerned about going over capacity (approximately 2,000 memberships). A third rink was added last year for indoor skating, and there is only a shortage of ice space during prime time hours. In 2010 and 2011, they expect to increase revenue significantly with additional rentals of ice time. The Community Center has planned cost recovery of 50% in the 2008 budget, and the 2008 Eden Prairie Budget Advisory Commission April 28, 2009 Page 4 actual cost recovery was 64.7%. Their goal is to increase this number. Staff researches area competition and increases fees when it is market competitive to do so. They want to establish a repeat referral business too. Fox stated some parks that were offline in recent years are now available for full-time use in 2009. A higher service level is needed for certain new facilities. Chacko asked if there is any potential for converting lawn to low maintenance green landscaping. In Crestwood Park, low maintenance grasses have been used,but it is not possible to make this change in most parks in the City. Neighbors often complain and people feel it is not inviting to have the wilder grasses. Some low-maintenance berm areas have been accepted at Miller Park. The City maintains 1,100 acres of parkland. They mow 700 of these, and they have had to increase maintenance for some areas recently (Forest Hills and Edenvale). Like pavement management in Public Works, the Parks area uses a detailed report to plan preventive maintenance that extends the life of the pavement. The data is used as a planning tool to assist with budgeting for yearly maintenance. Annual work includes seal coating, overlays, or total replacement of degraded surfaces. Chacko asked about the use of permeable pavement. Lotthammer explained application of permeable pavement would cost about four times more than asphalt, so it is not cost effective. Although he sees the environmental benefit, the cost for a green roof is not cost effective either. Fox noted in the winter, nothing is permeable in Minnesota. They would have to overbuild the system, and snow removal causes problems for permeable pavements. Instead, rain gardens are sometimes used in Minnesota, and the jury is still out on the cost savings benefit. There are no grants available for these environmental investments except possibly through the Watershed District. The deer management program reduced the number of deer relative to habitat so fewer deer/car collisions occur now than in the past. The City aims to manage the density of deer to 25 per square mile of habitat. They did not contract for deer reduction in 2009. Schultz asked why Eden Prairie is as high as 25 deer per square mile. This is an accepted number in the metro area, and the City tried to balance environmental concerns with concerns relating to possible deer/car collisions. Proops stated last month the BAC approved moving the Senior Center activities to the Community Center. He suggested a report format that could be used to acquire cost data about the Senior Center. Uram said Proops needs the BAC to review and approve the report format before it would be distributed to anyone. Uram said the BAC would discuss and the City Council would give direction to Parks and Recreation regarding the Senior Center if further data was needed. Proops noted some members of the City Council indicated they wanted to see some details about the issue. Schultz asked if volunteer summer interns have been considered for the Parks and Recreation department. With the hiring freeze, they are not planning to bring on interns with a stipend as they have in the past($800 for 12 weeks). Schultz noted unpaid interns may be an option. Lotthammer noted this is a tumultuous time for them to have interns around, and they may not be much of a net gain after training has taken place. Muilenburg asked what the position is that they have taken on overtime. Lotthammer Eden Prairie Budget Advisory Commission April 28, 2009 Page 5 explained most of his staff do not qualify for overtime because they are exempt employees, so they are just working extra hours without extra pay. They are evaluating the possibility of utilizing a recreation computer software system for scheduling. Lotthammer also noted many volunteers were high school students who now need to work, but they can still try recruiting for volunteers. The Parks and Recreation department often uses court-referred volunteers/inexpensive labor to stuff envelopes. Close supervision is needed for this group. Muilenburg asked if they have considered the feasibility of increasing fees to 100% for most classes and programs (besides the macro-events like the Fourth of July celebration). The response was if classes are not affordable, enrollment declines and no additional money is collected for the program. The majority of classes and lessons do meet the 100% to 120% cost recovery goals,but for some this is not a reasonable goal. The full list that was requested by Uram will show the cost recovery amounts of various programs. Proops asked who does the cost recovery analysis, and Lotthammer stated the Finance Department calculates these for him. IV. BAC COMMENTS For the benefit of new BAC members, some background was given on what happened during the last budget cycle. About a dozen recommendations were made from the BAC to the City Council, and a full business case was not provided for each recommendation. Uram noted it takes a lot of time to put recommendations together, and the BAC is better off focusing its recommendations on where it can have a big impact on the budget. Uram said the recommendations need to be based in fact, and the line item detail for the Senior Center appears to show that the savings may not be as big as the BAC initially thought. Proops asked where the numbers came from that Uram and Kotchevar referred to relating to the Senior Center costs. Proops thought the numbers he had seen seemed relatively meaningless. He was concerned the minutes from the previous meeting did not include much of the discussion that the BAC had about the Senior Center issue. Agner said it does not make sense to say the BAC cannot go to the City Council without detail,but the detailed costs for the Senior Center need to be requested from staff by the City Council. Kotchevar said that a mechanism for gaining more information might be that the BAC is interested in learning more about a certain topic, and she could bring in experts on that topic to talk about it. Uram said this discussion is not specifically about the Senior Center. Whenever the BAC wants information, it can ask for and receive it from staff. Chacko stated the minutes will not reflect the full report. BAC members did not have full information about the Senior Center when they brought forward the recommendation. Chacko went on to explain because this issue reached the public domain before anyone had a chance to discuss it, the suggestion will have no support now from the City Council. Chacko noted Kathy Nelson asked for a full business case. Now the BAC is in an unfortunate position since it does not have all the numbers needed to show the business case. Muilenburg explained many of the costs of an individual facility cannot be quantified because some information is not tracked. Kotchevar confirmed that some numbers are available and others are not because they are not tracked by facility. Muilenburg noted this is a budget not a policy advisory commission, and the group Eden Prairie Budget Advisory Commission April 28, 2009 Page 6 should be apolitical in its recommendations. The BAC does not make a decision for the City Council,but rather the BAC makes recommendations for the Council to consider. Uram stated he is not interested in moving the BAC's Senior Center recommendation forward at this time. Proops said although we do not have detailed report with all of the numbers, he would like to see one. That is why he offered the report format. Uram said staff is in the best position to provide reports in the format that works for them, and the BAC does not need to dictate how information is presented. Agner does not see anything wrong with the recommendation the BAC made at the last meeting regarding closing the Senior Center, but she would have liked to see the numbers Uram mentioned sooner. Uram clarified he just received additional data the day before the April BAC meeting, so it was not available to him before the recommendation was made. Agner mentioned there is now a Community Center, an Art Center, and a Senior Center, and it may not make sense to have all three in light of the budget challenges and current economic environment. It was noted the BAC has to make decisions on what goes to the City Council and when. Schultz stated the Senior Center recommendation should not go to the City Council now because it lacks the necessary level of detail. Chacko asked if Uram would be requested to provide detailed numbers regarding the Senior Center recommendation. Kotchevar explained during the previous budget cycle, the BAC took a lot of time for discussion and recommendations were written up; then the BAC approved the resulting report and passed it along to City Council. The BAC was not expected to provide specific numbers for each recommendation,but the City Council may request more information from staff with numbers available if it is needed. Kotchevar further clarified the follow up would happen if the City Council would like to move forward with the recommendation. The Council will see the minutes from the last BAC meeting that were approved tonight, and the recommendation is in the minutes. Chacko stated the BAC has made a recommendation, and someone has to do something with it. Chacko said maybe the BAC does not want to go down this politically unpopular road with limited time and resources. Proops said the BAC cannot drop the Senior Center recommendation at this point. Schultz asked what the BAC's options are and what the members want to do. Uram responded the minutes have been approved, so the recommendation would go forward if nothing else is done. He noted one option would be for the BAC to rescind the motion. Proops thought it would be a mistake to rescind the motion because it was unpopular with a group of citizens. Proops noted Mayor Young expressed an interest in taking a closer look at the data behind the recommendation. Proops was concerned that Ron Case's article regarding the recommendation may have hurt the credibility of the BAC. Muilenburg would like to put this issue to bed after figuring out all of the relevant costs (cost recovery, cost to maintain the Senior Center, cost to move Senior Center activities to the Community Center). Muilenburg would like for the City Council to request the numbers needed to evaluate the recommendation further. Proops said that request is inherent in the report format he put together. Agner stated the City Council could request not to move the motion forward in that way. Uram said he is not prepared to make a statement to move the motion forward,but the City Council could ask for the Eden Prairie Budget Advisory Commission April 28, 2009 Page 7 issue to be analyzed. Uram does not see this recommendation finding the support it would need to go forward. Based on the political indications that have been given to the BAC, he would like for the group to put the recommendation to bed. Chacko agreed the recommendation may make sense, but it is dead on arrival. Chacko noted Mayor Young and Scott Neal met with a group of seniors who were concerned about the possibility of closing the Senior Center. It was the usual expected opposition, and the BAC does not know what most citizens think about the issue. Proops proposed a mail survey of Senior Center users to see how many are violently opposed to the closing and how many do not really care. Chacko thought the BAC was correct to try to save the City money with this proposal, but the recommendation did not come out in a way that it will be supported. At this point,he is being pragmatic in saying it is not likely to go forward. Chacko would like to resolve the issue with the City Council regarding what the Council would like for the BAC to do this year. The BAC is trying to address the budget shortfall;however, if the recommendation to close the Senior Center will not pass the City Council, then it is a waste of BAC and staff time to gather additional data and discuss the topic further. Muilenburg does not think the BAC should automatically drop the recommendation based on the political will of a group of people. It was noted the issue is in the City Council's court already, so the BAC may not need to take additional steps. Schultz noted we need to be careful with quoting conversations with City staff or Council members that have taken place outside of BAC meetings. Proops indicated the BAC does not know how to move forward because of a lack of information. The BAC asked for direction from the City Council earlier in the year,but it was not received. Proops mentioned the BAC needs more details since its job is to make recommendations to the City Council. Chacko stated the Senior Center issue could tie up staff time to do a study in a short amount of time,but the BAC is wasting its time if the recommendation will not go anywhere for political reasons. Agner said from what the BAC has looked at to date, closing the Senior Center is a recommendation that could make an impact on the budget. The next significant issue the BAC will need to consider involves personnel costs, and that will be a tougher area to recommend cuts. Proops asked what else the BAC has to chew on at this time besides the Senior Center issue. Agner agreed, although the Senior Center recommendation has been very uncomfortable, it makes more sense than focusing only on staff cuts. We are in a negative budget period, and difficult cuts need to be considered. 70% of the $40 million budget consists of personnel costs. Uram mentioned there will be a greater need in the future for senior activities due to the aging demographics of the City. Muilenburg would prefer to save money on the Senior Center because it is an ongoing cost that will keep increasing as the population ages. Schultz said further Parks and Recreation discussions make more sense later in the budget cycle. It was noted a plan is in place for the 2009 shortfall, although it has not been formalized. The plan will be presented to the City Council in May, and Kotchevar stated the City can balance its budget for the year without closing the Senior Center. Eden Prairie Budget Advisory Commission April 28, 2009 Page 8 Chacko reviewed the BAC's charter, which says the BAC should "propose budgetary and operating reforms to aid the City in making policy decisions." Chacko does not think that listening to presentations for an hour at each meeting is helping us to do what we are supposed to do. Muilenburg mentioned the elephant in the room is the 70% of the budget that is made up of personnel expenses. Since the BAC is giving its recommendations in four months, BAC members' time may be best spent on preparing recommendations relating to personnel and benefits along with the services the City provides. Schultz asked how the BAC can get the City Council to answer questions about what the BAC should focus on. Uram said it seems like moving the Senior Center issue forward is a moot point currently since the Council may not have the political will to close it. Chacko asked what is likely to happen if the BAC leaves their recommendation. Kotchevar said the minutes which include the recommendations will be forwarded to the City Council. Chacko asked if the BAC wants to do anything with the Senior Center motion. It was noted the alternative may be to reduce City staff,but the BAC was not sure how they could adequately review and recommend staff reductions. Chacko suggested a motion to request a meeting with the City Council so the City Council can give direction and tell the BAC if certain topics are off limits to consider for reductions. Chacko asked and Kotchevar clarified the City Council will not require Uram to present a business case at this point for the recommendation about closing the Senior Center. MOTION: Chacko moved and Agner seconded that"the BAC requests an annual February meeting between the City Council and Budget Advisory Commission at which the City Council would communicate its priorities for the budget year. This year's will be held in May of 2009 or as soon as can be arranged." The motion carried by a vote of 5-1 with Proops opposing it. MOTION: Schultz moved and Uram seconded that"the BAC proposes to rescind the BAC's prior recommendation to close the Senior Center and to relocate its facilities and activities to the Eden Prairie Community Center." The motion failed 2-4 with Schultz and Uram for and the rest of the BAC against the motion. V. CHAIR AND STAFF ADMINISTRATIVE ITEMS Kotchevar noted the next meeting will be held on May 26. On June 2, Eric Willette will speak about Minnesota property tax determination at 7 p.m. in the Heritage Room. The Commission banquet is on May 13"'. BAC members were asked to please bring their completed paperwork back at the next meeting. Muilenburg said he would like to see the impacts of staff reductions on different departments, and he would like for department leaders to address how they will handle the labor shortfall. VI. ADJOURNMENT The meeting ended at approximately 10:02 p.m.