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HomeMy WebLinkAboutBudget Advisory Commission - 02/03/2011 APPROVED MINUTES BUDGET ADVISORY COMMISSION MEETING THURSDAY, FEBRUARY 3, 2011 6:00 P.M., CITY CENTER 8080 Mitchell Road EDEN PRAIRIE, MN COMMISSION MEMBERS: Chair Rick King, Vice-Chair Jon Muilenburg Commissioners: Annette Agner, Eapen Chacko, Dan Funk, Michael Morris, Chris Nylander CITY STAFF: Sue Kotchevar, Finance Manager; Tammy Wilson, Finance Supervisor; Jay Lotthammer, Interim City Manager; Jan Curielli, Recorder I. ROLL CALL/CALL THE MEETING TO ORDER Chair King called the meeting to order to 6:05 PM. II. MINUTES A. BAC MEETING HELD TUESDAY OCTOBER 26TH, 2010 MOTION: Muilenburg moved, seconded by Chacko, to approve the minutes of the meeting held Tuesday, October 26, 2010, as published. Motion carried 7-0. III. INTRODUCTIONS Chair King reviewed the history of the BAC and the relationship the commission has with the City Council. He said there was a Council workshop three weeks ago to discuss the work of the BAC for this year. The Council wants the commission to provide options, not recommendations, and policy issues are not in the domain of the commission. He reviewed the procedures for BAC meetings, noting there will be times when we meet more than once a month. He also thought the meeting time might go over the scheduled two hours in order to complete our discussions. IV. UPDATE BAC WORKPLAN—Jay Lotthammer A. COUNCIL DIRECTION Lotthammer distributed a memo with the 2011 work plan attached. He said the January 18 workshop was our opportunity to get feedback from the Council. Last year the BAC and staff gave recommendations later in the year, and there were some frustrations about the budget process. The Council would like to work on the budget earlier in the year, and they want to have information and details prior Budget Advisory Commission Minutes February 3, 2011 Page 2 to or at the same time as the BAC receives the information. He said generally the commissions and staff interact by staff providing information to the commission to act on before it goes to the City Council. In the case of the BAC the Council would like to be a part of all of the sessions when information is given. Lotthammer said the Council also prefers to hear the advantages and disadvantages versus receiving one strong recommendation from the BAC. They would like points to consider with each alternative. They also want to be able to redefine things as the year goes along. They don't know what they are going to be working on when department work plans are presented in June and July, and there may be opportunities for them to request feedback from the BAC on other topics. The Council struggles with how to fund the Capital Improvement Program (CIP). The BAC has reviewed this before, and we came to the conclusion that the CIP is really about infrastructure replacement. Being able to fund the CIP is important to keeping the best quality of the community, and the Council has wrestled with the means to fund it. For the past few years they have not had the appetite to fund it through tax increases. Chacko asked when that philosophy changed. Lotthammer said until two years ago it was funded at$1,000,000 per year. There was a very specific decision by the Council to reduce that amount as a means of reducing taxes and also to change the philosophy about how much should be put into the fund. We know there are multiple ways to fund the maintenance of infrastructure, and we have wrestled with fees versus taxes. The new City Council talked a lot about wanting to make sure that our infrastructure is protected long term. Staff suggested it would be good to look at methods of funding the CIP projects over time. We suggested bringing in a consultant who have expertise in multiple ways of funding to provide a good education to staff, the BAC and the City Council at a joint meeting. That way we would all start on the same page. The BAC's role would then be to study and discuss the consultants' suggestions and analyze the advantages and disadvantages of the various directions we might head in, whether funding is done by taxes or fees or a mix of both. That process will probably take us to midsummer. The CIP is a key component of the operating budget and the BAC's analysis of alternatives will impact how the City Council views the operating budget. After that process is done they might want to restructure the BAC's work plan for the rest of the year. Lotthammer reviewed the 2011 work plan and the staff memo that summarized the roles. He noted the Council was very pleased with the format. The BAC will have some autonomy to come back, assimilate the information, and make recommendations. We were very clear with the Council that there needed to be clarity in the process for the roles of staff, the BAC and the Council. Chacko asked if the process would be similar to the utility rate study that was done last year. Kotchevar said the City has an $8,000,000 utility operation, and Budget Advisory Commission Minutes February 3, 2011 Page 3 we charge fees for providing water and sewer services. We hired a firm to do a utility rate study to improve our capital plan and the utility rate structure. Chacko said a consultant came to our meeting and presented a big package of recommendations and data on complex issues that involved capital and capital maintenance. He didn't think we were able to be that effective because there was too much to absorb in one evening. He felt we could have made some better recommendations but,because of the way it was laid out, it had to go to the City Council in a very short period of time. King said the utility rate study would have been one of the times when we need to meet a couple of times to deal with it but the Council was ready to vote on it by the time we met again. We need to figure out what we need to do to learn about a project and determine what kind of help we need to do that. With regard to the consultant for the budget process, Chacko said we need to make sure we don't just listen to the presentation and then have 25 minutes to make a recommendation. King said in this case we will be sitting with the City Council while the consultant gives the presentation. We will get the assignment at the end of the night so we will have to figure out how we will proceed with it. Agner said she liked the way the process is set up much better than before, and it seems to be a little less superficial. Lotthammer said he hoped we can run on parallel tracks with the Council and be a valuable resource to them. Agner thought there would be a much more complimentary exchange with this process. Chacko said one Council Member stated we have $1,000,000 in unfunded infrastructure costs. King said that is the kind of number we get if we add up the full CIP list. Muilenburg noted not all items in the CIP are defined needs, and some of the projects may be deferred. King said the I-494-169 interchange is in the CIP,but some of that will be funded by federal and state governments. Lotthammer said the BAC will get an overview of the CIP at the next meeting to see how that document gets put together and the philosophy behind it. We are trying to find the minimum needed to fund the big number required to maintain our roads and systems. Nylander asked if we will get the information in advance of the next meeting. Kotchevar said the 200 page CIP is on the website, and it has a 10 page narrative section that describes the CIP and what is included. Nylander asked if the role of the consultant is to inform or to make recommendations. Lotthammer said the importance of the commission is to give feedback to the Council in the area of finance. King said he thought the work plan chart is really helpful, and he knows the Council wants our help to make this work. V. STATE OF THE CITY Budget Advisory Commission Minutes February 3, 2011 Page 4 Lotthammer said we just received the results of our community survey from Decision Resources, and those results were pretty outstanding. Eden Prairie was named the No. One City in America by Money Magazine in 2010 and the results of the community survey corroborate that distinction. Lotthammer reviewed the 20-40-15 program progress and several community partnerships in the City. He said the local economy is good and there have been redevelopment projects completed as well as some new development. Traffic improvements were made to Singletree Lane and to Pioneer Trail, and the I-494- 169 interchange project is underway. He said there is a new City Council for 2011 but the Council Members have a lot of longevity of experience. There will be a new City Manager soon,planning continues for the Southwest LRT, and the Flying Cloud ball field improvement project will begin this year. King asked if we will see the results of the survey next time. Lotthammer said we will. Muilenburg asked if there are any plans to do anything about the water quality. Lotthammer said most of the 17 lakes in the City are in pretty good shape. There was a highly publicized drawdown of Anderson Lakes, and that project had mixed results. Round Lake was closed because of runoff issues a few years ago, but we were able to reopen it. Funk asked if we track the occupancy rates of buildings and if that has changed. Lotthammer said we have seen more vacancy rates on commercial property,but we aren't as bad off as other regional and national areas. King noted the percentage of parks and lakes in the City is 38%. He said that is a big chunk of land and is something that affects the revenue of the City. The development revenue was going up rapidly for many years, but the lack of both economic development and development space means that development revenue will be very low. We have chosen to ride out the bad economy and use the Budget Stabilization Fund to cover the difference. King asked about growth in residential development. Lotthammer said we did not see a lot of building permits in the last year. Most of the revenue comes from remodels, and the base seems to be staying a little over$1,000,000. We have budgeted very conservatively at$1,200,000 even though it came in last year at $1,800,000. Chacko asked if there are any changes in the corporate base. Lotthammer said ADC was taken over by Tyco Electronics. King said they moved their headquarters to Shakopee. Budget Advisory Commission Minutes February 3, 2011 Page 5 Chacko said some of the ponds in the City get"funky" on a regular basis. Lotthammer said the City has undertaken a big effort to inventory and inspect those ponds and determine their stage of usefulness. He said the EPA changed the law so that almost any of the deposits in the ponds are treated as hazardous waste, and we are struggling with that new regulation. Most cities will probably not be able to afford to do anything with them. Chacko said there are many ponds in the City and that may affect people's impressions of water quality. Lotthammer said we weaned ourselves off LGA quite a while ago. Some cities have that as a huge part of their operating budget,but Eden Prairie recognized it isn't a reliable source of funds. VI. ADJOURNMENT Kotchevar said the next meeting will be March 3 at 6:00 PM. She distributed a copy of the 2011 to 2015 CIP to all commissioners. King noted the FTP website is not public; however, all our meetings and documents are open. Chacko said the comment was made that sometimes what we do becomes public before the City Council knows it. He asked if that isn't a result of the media and people coming to the meeting. King said we will have discussion that everyone may not agree on, but we as a commission have a position on a subject. We had an instance where an individual directed his/her feelings about a subject to all the Council Members, citing that as his/her position as a commission member. Lotthammer noted it was also taken to the media. King said he thought that is a violation of group ethics. In that case the City Council had not deliberated on the subject before it was publicized. Our way of transmitting views to the City Council is through Ms Kotchevar who is our liaison and who works between staff and the City Council. We should be careful about independently taking something to the Council and be even more careful about the media if the matter is confidential. Funk asked how to handle emails from residents. King said another commission he serves on has an agreement that the Chair and the liaison respond to it but also put the item on the meeting agenda. MOTION: Morris moved, seconded by Nylander, to adjourn the meeting. Chair King adjourned the meeting at 7:40 PM.