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HomeMy WebLinkAboutBudget Advisory Commission - 01/26/2010 APPROVED MINUTES BUDGET ADVISORY COMMISSION MEETING TUESDAY,JANUARY 26, 2010 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: Sue Kotchevar, Finance Manager; Scott Neal, City Manager; Angie Perschnick, Recorder I. CALL TO ORDER/ROLL CALL Chair Uram called the meeting to order at 6:01 p.m. Commissioner Proops was not able to attend the meeting. Uram requested approval of the agenda; Schultz moved and King seconded approval of the agenda without changes. The agenda was approved 6-0. II. MINUTES A. BAC MEETING HELD TUESDAY, DECEMBER 8", 2009 Chair Uram asked for any additions or corrections to the minutes. King clarified that the reference to the "payment management program" on page 3 (third line) should instead read "pavement management program." King noted a sentence that needed rewording on page 4 also (the first two sentences of the 3ra paragraph). Recorder Perschnick clarified that it reads correctly if the period between the first and second sentences is removed: "Chacko asked how the BAC can address the issues Proops mentioned and other topics in a monthly two hour meeting." No other changes were added. MOTION: Muilenburg moved and Schultz seconded to approve the minutes from the December 8 h meeting. The minutes were approved 6-0. III. STAFF UPDATES A. 2010 BUDGET 1. Budget Reductions Scott Neal explained that the budget meeting with City Council resulted in reducing operating expenses in the general fund. The goal was to have the same or less taxation in 2010 than in 2009. The IT and Facilities Internal Service Funds were reduced by $50,000 each and the reduction was spread across the board for a .4% reduction (totaling $150,000). There were reductions to supplies, materials, and training primarily. On January 19t, Neal brought the reductions to City Council and they were approved. Eden Prairie Budget Advisory Commission Minutes January 26, 2010 Page 2 Both internal service funds had adequate balances, and no City services were materially reduced. Uram asked about the snow removal costs from the holiday snowstorm. Neal responded that between December 24th and 26th, the City spent approximately $60,000-$70,000 on snow removal. B. UPDATE ON CITY DEBT Kotchevar presented an overview of City debt. The debt payments supported by the tax levy are approximately 9% of the general fund budget. 5-15% is considered a moderate debt level for a City based on Moody's Investors Service. The current outstanding debt is projected to decrease over the next 16 years (on debt previously issued). The City Center building was recently refinanced for a low (2.5-3%)rate. Uram added that this is one of the best times to issue debt if projects are planned that could use the money. Neal noted some money for the park plan and trails is still outstanding (from the '06 Park& Community Center remodeling referendum). According to Minnesota state statute, the City could issue over$269,000,000 more worth of debt(only 7% of debt capacity is currently being used). Future debt may be issued for SCBA equipment and possibly for utility operations capital projects. Some projects have been delayed to 2012 (police remodeling, garage roof, etc.) King asked Neal about the staff meeting reaction to the recommendation of flattening the debt levy, and Kotchevar responded that staff members were flexible about the recommendation since they understood the difficult budget situation. IV. BAC PLANNING FOR 2010 A. Capital Improvement Plan B. Utility Rate Study The findings for the utility rate study will be presented in May. This study was approved by City Council at a January meeting. In February or March, Kotchevar suggested the BAC tour the water plant as part of the regularly scheduled meeting. 2009 financial results should be available in March. On April 20th, the BAC is scheduled to meet for a planning session with City Council members. In June or July, the 2011 operating budget update could be presented by Neal or Kotchevar. C. Fire Relief Pension At the last City Council meeting, Neal suggested questions be pursued on the Fire Relief Pension program, possibly through an external committee with BAC members. The City Council did not react with a clear position on this idea. Mayor Young and Ron Case are the two City Council members currently serving Eden Prairie Budget Advisory Commission Minutes January 26, 2010 Page 3 on the Fire Relief Pension Board. King asked if there is a reason not to have the groups meet together. An external committee would likely be seen as less cooperative than a joint meeting with the Fire Relief Pension Board and BAC members. King would prefer to see BAC members involved in meetings with the Fire Relief Pension Board. Uram asked Neal to send an update to the BAC after the next City Council meeting regarding this issue. Kotchevar was formerly a voting member on the Fire Relief Pension Board, but it was decided recently that two City Council members be appointed instead of one member plus Kotchevar. Neal explained that the state statute changed to allow this to happen. Chacko said he does not understand how some decisions were made regarding the mix of investments used on the Fire Relief Pension plan. Neal replied the financial advisor and actuary will likely address a meeting of the Fire Relief Pension Board and BAC committee to explain this further. Neal explained the main causes of the Fire Relief Pension financial problems: (1) the annual benefit increase ($56 per month per year of service)recently took effect, (2) Eden Prairie increased the size of the Fire Department by approximately 25% with the addition of Fire Station#4, and (3) the bad economic situation. D. Other Uram expressed his concern that June or July seems late for the BAC to have time to provide meaningful input for the 2011 budget. Neal noted this is an election year for four of the five Council members. Typically that means the City is likely to have a busy first quarter, a safe second and third quarter, and a lot of work will be done by the Council in the last two months of the year. Chacko agreed the BAC may not be able to contribute a lot to the budget if the group starts reviewing it in June or July. King asked if the BAC could meet in April the week after the City Council workshop to start the preliminary budget discussion based on the 2009 financial results. Uram noted there could be time to start the 2011 budget discussion after the 2009 financial results are presented at the March BAC meeting. Uram mentioned Proops and other BAC members have discussed the idea of digging deeper into specific City departments. Schultz said that, after a lot of time was spent reviewing each department during the first year of BAC meetings (with presentations and questions), sitting and talking with staff at this point may not gain the BAC much more information. Uram noted Proops seemed to think there could be cost savings to find; Uram supports this generally for the largest departments. King asked if the BAC could offer a pilot test case for Proops and anyone else who may have a passion to do this. The largest departments are Public Safety, Public Works, and Parks and Recreation, so one of those might offer a good opportunity for further review. Neal expressed he does not generally like this idea because it implies that these types of reviews are not already happening with City staff. Neal could support some review,but he would like to ensure maintaining service levels is considered too. King added the BAC discussed and voted against completing detailed reviews of departments. Eden Prairie Budget Advisory Commission Minutes January 26, 2010 Page 4 Muilenburg expressed concern that detailed reviews conducted by the BAC would take time away from staff who are trying to do their jobs. Uram asked what program is significant and could be analyzed. The pavement management program was mentioned, and Neal was not sure if this would work. Parks and Recreation was mentioned,but the cost recovery questions were already answered with Lotthammer's presentation. Uram added that he is not interested in looking at line items in the budget;however, when a study takes place, it provides a good opportunity for the BAC to become more involved. The BAC decided that the utility rate study would be a good focus for Proops and anyone else interested in looking at financial details. Uram offered to talk with Proops about this idea since he has expressed a lot of interest in looking at details related to the budget. V. CHAIR AND STAFF ADMINISTRATIVE ITEMS A. Meeting Dates: March 23, November 23, December 28 The March 23rd City Council meeting now conflicts with the BAC meeting, so the BAC meeting will be moved to March 30th. Kotchevar mentioned that last year the November meeting was canceled and the December meeting was moved earlier in the month. The BAC will make decisions about these meetings later in the year. B. Meeting Rotation and Tours Kotchevar suggested holding several off-site BAC meetings and touring some of the City's facilities. In February or March, the BAC will meet at the water plant for a tour and meeting. C. Joint City Council and BAC Workshop April 20th The regular BAC April meeting will be held on April 27tn VI. ADJOURNMENT The meeting ended at approximately 7:22 p.m. Schultz moved and Uram seconded the motion to adjourn.