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HomeMy WebLinkAboutBudget Advisory Commission - 05/27/2009 APPROVED MINUTES BUDGET ADVISORY COMMISSION MEETING WEDNESDAY, MAY 27, 2009 6:00 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: Scott Neal, City Manager Sue Kotchevar, Finance Manager Angie Perschnick, Recorder I. CALL TO ORDER/ROLL CALL Chair Uram called the meeting to order at 6:01 p.m. Commissioners Agner and Chacko arrived at 6:02 p.m. and 6:10 p.m. respectively. All Commissioners were present. II. MINUTES A. BAC MEETING HELD TUESDAY,APRIL 28, 2009 Proops commented he objected to the word "dictate" used by Uram(page 6 in the notes). He preferred the word "suggested" format since he is concerned the reports provided by City Staff may not provide enough details. MOTION: Schultz moved and Muilenburg seconded to approve the minutes from the April 28 meeting. The minutes were approved with a vote of 4-0-1 before Chacko and Agner arrived. King abstained from the vote. III. BAC WORK PLAN A. INTRODUCTION Kotchevar suggested the BAC could determine a work plan and the City Council could approve it. That is the preferred process for the City Council. Uram spoke with Mayor Young, and Mayor Young said the BAC needs to determine the specifics of the work they do. The BAC could put together a plan for the City Council to review, and the City Council could provide feedback. B. PRESENTATION Kotchevar began the presentation, which included topics of the BAC work plan, reporting mechanism, reporting depth, and meeting number and length. She proposed the BAC accumulate a high level report during the year, and Eden Prairie Budget Advisory Commission May 27, 2009 Page 2 recommendations from each meeting would be added to the previous sections of the report. King noted it seems the BAC would need to receive and comment on more detailed information to provide a good operational review. C. DISCUSSION/FEEDBACK Proops said at the January 2009 meeting, the BAC came up with two ideas, each of which would provide an estimated $100,000 in savings. He is concerned the BAC would be passing up the opportunity to make suggestions on a timely basis if a report is collected throughout the year before it is provided to the City Council. He noted the City gave up a chance to negotiate a new contract with a law firm, and he would like to know the status of this recommendation. Scott Neal suggested the BAC could take on the role of an accountability body. It may make sense for the BAC to review the mission and vision and how they are relevant today, as the Conservation Commission did last year. Most of the mission and vision for the Conservation Commission was similar, and the City Council approved the revised mission and vision statements. Neal sees the BAC as more of an internal auditor or inspector general for the City. The BAC can hold City staff accountable for the budget and what the City Council asks staff heads to do. The BAC meetings are less public than City Council meetings, and the BAC can look ahead to the next quarter. It was clarified that the City Council has not rewritten the BAC's charter, and the Council would want changes to come from the BAC. Proops noted the BAC's charter seems to include a license to investigate issues (such as the Senior Center). The BAC approved a recommendation to close the Senior Center, and Kathy Nelson requested details at the City Council meeting. Proops is concerned the BAC has no authority to get these details or talk to Neal's staff. Proops sees the BAC's effectiveness is based on (1) the BAC's ability to get detailed information and (2) the time commitment from BAC members to review financial information and make suggestions. Proops expressed concern no one asked the BAC if the Art Center was a good idea for the City. Instead, the Arts Commission was asked, and it is not surprising that members of the Arts Commission were in favor of accepting the Art Center. Proops would like for the BAC to take a detailed look at PTO and how the severance pay function could work with it. Proops suggested that Neal could use the BAC as friendly staff. Proops was concerned last year's year-end accumulation report was meaningless since the suggestions did not get implemented. Proops would like to be able to find out more information about various aspects of the budget. He noted more time would be needed from BAC commissioners to accomplish this more detailed review of budget items. Neal stated it is useful to consider where the BAC fits in to the overall City government. The act of studying the Senior Center is politically disruptive, so it may not make sense to expend the time and efforts of numerous City staff to study an issue that the City Council may not have the political stomach to move forward on. After the City Council decided to accept the Art Center, it does not Eden Prairie Budget Advisory Commission May 27, 2009 Page 3 make sense for the BAC to study the cost impacts. There is a difference between political and operational issues. King agreed the BAC cannot do an operational review without a much greater time investment. King is concerned if the BAC works as an audit function, members' time will be spent looking backward instead of forward. Uram noted some forward looking activities would still be included (such as when the BAC studied the CIP). Kotchevar said suggestions for the future can be incorporated after reviewing the previous budget. King thought the BAC had the authority to request more information from City staff if it was needed. Proops stated Kathy Nelson said he could not meet with all staff. Kotchevar said the BAC group can decide which department heads they want to talk to, and they can invite those individuals to attend future BAC meetings to speak to the whole BAC. Proops asked if the BAC has permission to request information from Neal about the Senior Center or other issues. Schultz asked if Proops was referring to BAC subcommittees. She noted the BAC subcommittee members did meet with staff in past years. Proops did not think a subcommittee was needed. The information is with the people handling details in the departments, and he wondered if the BAC could investigate. Neal responded a more efficient use of Department heads' time is in meeting with a subcommittee or the BAC rather than a lot of one-on-one appointments. If several people from the BAC met with the same department head, they would all have slightly different perceptions and recollections of what was said at the meetings. Uram said he tends not to get as involved in the detail but rather prefers looking at the big picture. Uram walked through the part of the presentation that includes other possible topics for the BAC to look into during the year. These include audit, outsourcing, on-going financial commitments (staffing, wagesibenefits, and fund balances). The BAC may be able to make more useful recommendations in these areas, including fund balances relating to a possible transfer to PTO. Muilenburg agrees the BAC needs to let the managers manage. 70% of costs are in the wages and benefits area, so this seems like a good focus and better use of the BAC's time. He noted BAC members do not have unlimited time to get into all of the details of different aspects of the budget. Areas he thinks we should look at further include Public Works, Public Safety, and Parks and Recreation since larger amounts of money are spent in these areas. Chacko would like to see the 80/20 rule applied and supports looking at those areas where most of the dollars are being spent. He wondered if there could be an educational function for the BAC like there is for the Conservation Commission. He agreed the BAC is not trying to serve as an alternative for City staff. He noted the BAC might serve an audit function similar to the GAO (Government Accountability Office) which operates in the big budget line areas and produces reports on specific topics. Chacko does not want to usurp the political function of the City Council or micromanage,but he supports asking the City Council to consider bringing the BAC into discussions when significant financial decisions are being made. Eden Prairie Budget Advisory Commission May 27, 2009 Page 4 Uram stated department heads could bring items to the group that are budget- related (such as the Art Center). He noted governments are considering the addition of balanced scorecards to their processes. King stated the work plan that is being proposed seems to involve Board of Director level information with the possible addition of other topics. If the BAC decides to look at specific topics in more detail, City staff would help on those few topics. Schultz asked if these proposed changes affect how the BAC looks to the City Council. The BAC may be more comprehensive in looking at financial operations and communications, not just at the budget. Neal suggested staff could meet with the BAC to explain what they did and why they did it at meetings in order for the BAC to serve in an audit or Board of Directors function. Knowing they need to present a report to the BAC will help staff members to be prepared to address reasons for significant decisions. During this process, the BAC can review trends in data and find topics to dive into further. King said the City Council needs to see this work plan. The BAC is seeing information after the fact. If BAC members saw information sooner, useful comments could be made. Schultz mentioned the time commitment for serving on the BAC was huge during the first year. Uram noted a lot of commissions meet two times per month during crunch times. It would be possible for the BAC to meet more often and possibly to start at 6 p.m. instead of 7 p.m. Proops asked if anyone read and understood the information he sent out about the Senior Center activities and their possible impact on the Community Center. King said he read and understood it. Neal confirmed he read it. Schultz noted she appreciates the time and expertise Proops has contributed to the group. Chacko said the BAC needs to solve issues about their role in order for Proops' work to be effective. Proops said he tried to bring up things that are outside the box and bring cost reduction and improvement ideas to the City Council. If a new deal with a law firm was done now, Proops argued it could save money for 2009 and in the future too. Neal disputes the City could save $100,000 this year by finding a new law firm. He also noted the City has an agreement with their current law firm through the end of the year, and the City is careful to honor their agreements. Proops noted there were three parts to the recommendations the BAC has made during this year: (1) Reconsidering the law firm contract, (2) Closing the Senior Center, and (3) Reducing the number of assessments by assessing buildings every other year instead of every year. Proops requested an update on the status of these recommendations. Neal responded the City Council has discussed the recommendations. There is a political dimension to the law firm contract, and the City needs to provide equal opportunity and a structured process for reviewing the law firm decision. A defined RFP process was used previously to find the firm used at this time. Neal agreed there is a political aspect to these types of decisions, and the City Council makes the decision that the majority of the Council members agree upon. Chacko said the BAC needs to keep its eye on the ball. The budget is Eden Prairie Budget Advisory Commission May 27, 2009 Page 5 approximately $37 million, and the BAC cannot audit every penny. Muilenburg noted a contract with a law firm could be better later on than right now. All parties on the Council wanted to put the law firm decision to rest for three years instead of having an annual debate. King is willing to try having more meetings or having longer meetings during crunch times as needed so that timely output can be provided from the BAC to the City Council. King favors focusing on some issues and working like a Board of Directors. Chacko requested the BAC obtain presentations in advance so the BAC can avoid having staff walk through presentations for much of the meeting. BAC members would then need to review the presentations before the meeting. Uram stated fine tuning is needed for the schedule, and it could be sent out for the next meeting. A subcommittee of King, Muilenburg, and Agner agreed to work on reviewing the work plan with some consideration to the expected outcome and nature of meetings and the charter between now and the next meeting. Kotchevar asked if the work plan would change each year. Proops asked what the BAC is going to be doing. King said the BAC could review and audit spending, address big topics (fund balances, wages and benefits, etc.) and any issues the group decides to study in depth. Proops thinks the BAC should review the City's financial reports. Neal thought the financial report would be a good resource that could be used to raise questions for the BAC to discuss or look into further. Staff could set a threshold with the BAC. If a project is significantly over budget, staff would then meet with the BAC to discuss it. Proops asked if the Cedar Hills Park deal with MAC has closed. Muilenburg clarified he was referring to the never ending (99 year renewable) lease. Neal and Kotchevar replied the City does not have possession of this Park yet. Schultz confirmed with Proops that what he is looking for is updates on the BAC's recommendations. The subcommittee will draft the work plan and send it to the BAC for review. King clarified with Neal that staff could be assigned to work on reports for the BAC as needed. Neal agreed City staff will be responsive to the BAC's requests. Schultz agreed with Chacko's idea of seeing presentations in advance so the BAC can dig into issues at meetings. IV. OTHER TOPICS V. CHAIR AND STAFF ADMINISTRATIVE ITEMS Kotchevar noted next Tuesday Eric Willette from the Department of Revenue is coming to talk about the property tax system in Minnesota and he will compare the Minnesota system to those of surrounding states also. The group discussed the possibility of meeting in a couple of weeks, and Muilenburg suggested that the subcommittee will probably need more time to review and prepare the work plan. The group decided that June 23 was a good date to keep for the next Eden Prairie Budget Advisory Commission May 27, 2009 Page 6 scheduled meeting. Between August and October, the BAC may need to meet more often. Scott Neal will submit his budget on July 21, and the City Council will review it for their August 18 meeting. King noted the group needs enough meetings between July 21 and August 18 for the BAC to make recommendations on Neal's preliminary budget. Neal noted the City is limited on revenue sources, so he expects the budget process to involve less discussion than in previous years. Uram clarified the City has until September 15 to approve the budget with the City Council. He wondered if the budget could be presented to the City Council at the first meeting in September. Neal confirmed the current plan with the Council is to review the budget at their August 18 meeting. Proops noted he appreciates Neal talking at the meeting and he apologizes for his earlier frank comments. VI. ADJOURNMENT The meeting ended at approximately 7:28 p.m. Schultz moved and Uram seconded the motion to adjourn.