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City Council - 07/23/1996 - Workshop APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL TUESDAY, JULY 23, 1996 7:00 p.m. CITY CENTER COUNCIL/STAFF WORKSHOP Heritage Room IV, 8080 Mitchell Road COUNCIL IEMBERS: Mayor Jean Harris, Councilmembers Ronald Case, Patricia Pidcock, Ross Thorfinnson, and Nancy Tyra-Lukens CITY COUNCIL STAFF: City Manager Carl Jullie, Assistant City Manager Chris Enger, Finance Director John Frane, Assistant Finance Director Don Uram, Director of Assessing Steve Sinell, Director of Public Works Gene Dietz, Director of Human Resources & Community Services Natalie Swaggert, Director of Inspections Kevin Schmeig, Director of Parks, Recreation &Facilities Bob Lambert, Chief of Police Jim Clark, Fire Chief Spencer Conrad, Police Communications Specialist Gary Therkelson, Accountant Sue Kotchevar, and Recording Secretary Barbara Anderson I. CALL TO ORDER The meeting began at 7:07 p.m. Councilmember Ron Case was excused. H. 1997 PRELIMINARY BUDGET Jullie introduced the preliminary budget presentation. A. REVIEW OF MAY 26, 1996 MEETING Enger reviewed the latest revisions to the proposed 1997 Budget. He described the tax base spread and valuations of property which make up the main part of the budget. The 6% tax increase last year was accepted reluctantly but a similar increase would not be accepted this year. Staff has tried to project the expenses for the coming year based on land values and project assumptions and it is not as accurate as they would like it to be. Staff developed three scenarios for the Council to consider. B. BUDGET MODEL Enger reviewed the three proposed scenarios. Scenario 1 includes the 1997 Departmental Base Budget, Salaries and Benefits, and 4.5 new positions. This is the scenario staff is presently recommending to the Council. Scenario 2 includes all of Scenario 1, with the addition of funds for Capital Improvements. Scenario CITY COUNCIL WORK SESSION MINUTES Tuesday, July 23, 1996 Page 2 3 includes all those previous listed, and the addition of funds for Capital Maintenance and a 1997 Departmental Service Budget. Enger noted that funds could be moved into the Capital Maintenance fund from the Special Assessment fund which would enable the maintenance work to be accomplished. C. TAX IMPACT MATRIX Enger discussed the impacts of the three budget scenarios on the taxes of Eden Prairie residents as well as the impacts on commercial and office properties. A 5.1% increase has been approved and residents were notified. Most residential properties in Eden Prairie fall into the $100,000 to $200,000 valuation range. Sinell commented that the tax increases from commercial and apartments are recovering faster than was initially expected. He noted the valuation was still behind but was continuing to increase and the percentage of change was significant in this area. Pidcock inquired if staff had factored in the legal ramifications from appeals on taxes and Sinell responded that he was just finishing up the appeals from last year now. It appears that the City will not lose much on appeals as the valuations from the Assessing Department have been very close to the selling prices on properties which have changed hands this past year. However, it will take time for staff to process all that information. Enger noted that 95% of the budget projections was based on tax revenues collected by the City. He noted that homesteaded properties would impact those revenues. D. BUDGET ALTERNATIVES Enger requested direction from the Council as to how staff should proceed in developing the budget. If Scenario 1 is adopted it would put the City in the black for the next five years. Staff will have time over the next 30 days to go back over line items in the proposed budget with Department heads and refine them. Tyra- Lukens inquired if the benefits for the new positions were included in the benefit figures and Swaggert responded that they were. Jullie noted that the Public Safety joint training program with Edina had not been included but they would be asking for some funds for this. Clark commented that it would probably not be asked for in 1997. Jullie noted that the Council may have to find some funding for training. Pidcock asked if there could be some cost sharing by those communities that would be involved in the training and Clark responded they would explore those possibilities. Mayor Harris inquired how the Council members felt about the various scenarios presented by staff. Thorfinnson responded that he would have to support Scenario 1 with reservations, and Tyra-Lukens concurred. Enger commented that the City had recovered from a$1.6 million deficit and they have only had a 1.8% cost of living increase which gave them the ability to maintain a balanced budget. Building permit fees were raised last year but they will stay the same this year. Jullie commented that the taxation levels are going down which is the direction CITY COUNCIL WORK SESSION MINUTES Tuesday, July 23, 1996 Page 3 they want them to go. E. IMPLICATIONS/CONCLUSIONS Thorfinnson requested staff to compile the full cost of hiring the new staff requested, and not just the costs.of benefits and salaries. Enger commented that Eden Prairie has a large number of facilities to maintain given the size and population of the community. Eden Prairie is viewed as one of the most desirable communities to live in given this feature. Pidcock inquired if there was any means of determining which services would not be missed if they were scaled back or eliminated. Tyra-Lukens asked if there were any way of determining what the actual costs of performing services was in order to select which services might be trimmed back or deleted. Enger commented that there will be a slightly lower level of service provided to the residents across the,board given the amount of the proposed budget and the endeavors of the City to keep tax increases to a minimum, but he did not believe that it would have as great an impact that way. Thorfinnson requested a list of what the City spends on services so they can determine what to cut or modify. Mayor Harris stated she was not comfortable with Scenario 1 because it did not include capital improvements or the opportunity to upgrade to newer technologies for increased efficiency. Discussion ensued to determine the most efficient way of realizing the goal of reducing some services and still maintaining an acceptable service level at a reduced cost. Revenue income is based on the tax levy, fees, and other monies and must be balanced against the total expenses. It would appear that there is only a 3.5% spending increase over last year's budget. Thorfinnson commented that this area needed further exploration and the technology levels in the City need to be kept current to prevent an even greater expense later on to catch up. Thorfinnson inquired what justified the new positions, and Swaggert responded that there is a large cost in time and labor in hiring new police officers, and initially there were two officers requested. The testing and screening process for police officers is very extensive and time consuming and staff has found that it is usually cheaper to hire two officers at a time to keep the costs per officer down. Dietz stated that the Public Works Maintenance Worker was needed because they had promoted from within and not replaced that person, and given the length of service of most employees in his department they earned more vacation days and another worker was needed to make up the difference. The half-time clerical worker was needed for fleet data input and to keep it current. He noted that since Eden Prairie's growth was nearly complete, they would potentially be hiring two more people over the next five years to have a complete staff in his department. Additional needs would probably be contracted out. Staff was requested to provide more information before the next budget workshop. Lambert stated that the Parks and Recreation Maintenance Worker position was CITY COUNCIL WORK SESSION MINUTES Tuesday, July 23, 1996 Page 4 needed because there was more maintenance work needing to be done now and his department was also accruing more vacation time, which needed to be compensated for. The existing staff cannot keep up with the work load and are putting in a lot of overtime, which is more expensive. Park facilities are aging and need more repair. Staff reviewed the existing trail system and prepared a list of trails which needed replacement or repair. Dietz commented that major trail repair and replacement will cost about $200,000 and the new requirements bring it to over $600,000. Staff had discussed fixing the level of spending on trails and having the Park Board determine how it was going to be spent and establishing priorities. Clark stated that hiring new Police officers is expensive as they have to be trained and then become accustomed to the routine and the City and really don't become a viable asset for 6-8 months. Swaggert stated that staff was exploring the possibility that the volunteer coordinator position could be shared with another City to reduce costs and be reevaluated at the end of the year to determine how necessary the position was. Thorfmnson stated they would need to justify the expenses they are incurring to City residents. Pidcock inquired if there were any services that could be sold to raise revenues, and perhaps staff should look at that. Thorfinnson commented that perhaps there were additional fees which could be raised on January 1st that could be taken into account. Sinell stated that fees were not expected to be raised for a while, since they were raised last year, but that did not preclude the Council from raising some of them. Schmeig stated that the building permit fees are based on the Uniform Building Code fee schedule, and the City of Eden Prairie raises their fees about 9 months after the surrounding communities raise theirs, which results in few complaints from developers and residents. Mayor Harris requested staff to review the fee schedule. III. OTHER BUSINESS Mayor Harris noted that former Mayor Paul Redpath had passed away and inquired what acknowledgment the City was sending. Swaggert stated that the City was sending a large floral arrangement to the funeral on Thursday evening. IV. ADJOURNMENT The meeting adjourned at 8:50 p.m.