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City Council - 05/18/1999 - Workshop APPROVED MINUTES EDEN PRAIRIE, CITY COUNCIL/STAFF WORKSHOP TUESDAY, MAY 18, 1999 5:00- 6:55 PM, CITY CENTER HERITAGE ROOM H CITY COUNCIL: Mayor Jean Harris, Councilmembers Sherry Butcher-Younghans, Ronald Case, Ross Thorfinnson, Jr., and Nancy Tyra-Lukens CITY STAFF: City Manager Chris Enger, Public Safety Services Director Jim Clark, Parks & Recreation Services Director Bob Lambert, Public Works Services Director Eugene Dietz, Community Development and Financial Services Director Don Uram, Management Services Director Natalie Swaggert, City Attorney Roger Pauly and Council Recorder Peggy Rasmussen. I. CALL MEETING TO ORDER-MAYOR JEAN HARRIS Mayor Harris called the meeting to order at 5:30 p.m. H. APPROVAL OF AGENDA Case moved, seconded by Tyra-Lukens,to approve the agenda. Mayor Harris stated Judy Smith was not able to be present for the Council Forum; however the subject of brackish water on ponds would be added to the agenda for the workshop. Motion approved 5-0. III. TOPIC: 2000-2001 BUDGET PREPARATION A. General Overview Enger said the purpose of the workshop is to go over the year 2000 budget objectives, to propose biannual budgeting,review the city's 1998 financial performance,point out highlights of the 1999 budget,review the budget adoption schedule and receive direction from the Council. CITY COUNCIL/STAFF WORKSHOP MINUTES May 18, 1999 Page 2 B. Year 2000 Budget Objectives Enger reviewed the year 2000 budget objectives. First is to begin a biannual budget cycle. Staff would coordinate the two-year budget cycle with the Strategic Plan. The State Legislature extended 6 percent levy limits for one year, and the City's budget will comply. Enger said Staff doesn't know the long-term effects of these levy limits. To minimize tax impacts, Staff will develop a balanced budget model. Another objective of the budget is to reserve surplus building permit fees as funding for future operations. The majority of the surplus has been coming from commercial and industrial construction permits. Other objectives are to fund necessary services and staffing, fund capital improvements, and reduce the rate of increase in operational expenditures. Enger explained that Staff is prioritizing the capital improvements, and is hoping to continue to increase the levels of capital improvement funds. Reducing the rate of increase in operational expenditures is a big challenge; it is still running above 6 percent. C. 2-Year Budgeting Process In the first year of the two-year process, Staff will fully develop, and the Council formally adopt,the year 2000 budget. Staff will start preliminary development of the 2001 budget,identifying specific revenues and expenditures they know of, and other general increases or decreases. During the second year, a budget for 2001 will be completed and formally adopted, and Staff will fully develop a budget for 2002. The advantages of a biannual budget are that Strategic Planning would occur in alternate years, Staff and Council would develop a longer-term perspective, there would be improved financial planning,budget preparation becomes much simpler, and it allows time to focus on other areas. The limitations of a biannual budget are that taxes, levy limits and other legislation can impact revenues and expenditures,budget decisions could become outdated and economic conditions could change. D. 1998 Financial Performance Uram described the City's positive 1998 budget performance, with revenues of $23,569,353 and expenditures of$21,114,063,leaving a surplus of$2,455,290. The reasons for this are conservative budgeting, including 5 percent tax abatement totaling$775,000;building permit and development fee collections of$580,000; and delayed expenditures of$737,290,which were encumbered from the 1998 budget. Of this amount,$1,200,000 has been transferred to the Capital Improvement Program (CIP), and $518,000 is reserved in the Undesignated Funds for future operating expenses. A liquor enterprise transfer was used to reduce the Den Road store debt service. CITY COUNCIL/STAFF WORKSHOP NHNUTES May 18, 1999 Page 3 E. 1999 Budget Highlights • Budgeted transfer of$500,000 to CIP forl999 projects • Completed preliminary CIP,which will be reviewed in October. a Centralized purchasing, including computers and software, wireless communications, and furniture F. Budget Adoption Schedule May 18 Budget workshop May Workpaper distribution June/Aug Preliminary budget preparation Aug 17 Preliminary budget workshop Sept 7 Certify Preliminary levy Sept 15 Preliminary levy certified to County Oct/Nov Final budget preparation Dec Truth in Taxation hearing Dec 21 Certify levy and adopt budget Dec 30 Final levy certified to County G. Council Direction/Discussion General discussion followed regarding levy limits and use of surplus funds. Uram pointed out that the fire station would be paid for through an annual appropriation in the general fund. A mortgage for$2.8 million will be obtained in the near future. IV. OTHER BUSINESS A. Guthrie Theater Relocation Tyra-Lukens noted that the Board of Directors of the Guthrie Theater is discussing relocating the theater,possibly to a suburban community. She said an Eden Prairie resident is on the Board of Directors. Mayor Harris offered to contact her. B. Reorganization of Boards and Commissions Tyra-Lukens inquired about progress being made by the group looking at reorganization of the City's boards and commissions. Thorfinnson responded that the group has met several times with department heads and others in the organization, and made a list of proposed changes resulting from those discussions. The next step is to take this information to the chairpersons and staff liaisons of the various boards and commissions to get their feedback. The group CITY COUNCIL/STAFF WORKSHOP MINUTES May 18, 1999 Page 4 adopted a list of objectives. One was to retain as many boards as possible; no commission or board would cease to exist, but their roles will be more clearly defined. The effective date of commission appointments is October 1, and the group is expected to finish its work before then. Mayor Harris asked Enger to put this subject on the agenda for a future workshop. C. Condition of Stormwater Ponds Mayor Harris said Judy Smith, who lives on Ticonderoga Trail, called about the condition of the pond in her backyard,which has turned green from algae for the first time in the 17 years she has lived there. Harris told her the City does not treat ponds. Dietz said the City is looking at ways to reduce the services it supplies and has never treated ponds with chemicals to remove algae. Last year conditions were drier than normal,but now pond levels are up and algae grow faster. Lambert said the City has 200-400 ponds,including NURP ponds and can't afford to start treating ponds. Individuals have to get a permit from the DNR to treat a pond. A fountain in a pond helps aerate the pond and reduce algae. There was discussion about the effects of fertilizer use on ponds. Mayor Harris suggested putting a request on the City's web site and in the newsletter to refrain from using fertilizer with phosphorous. This should include information on lawn maintenance,where to get information on treating ponds,etc. Residents need to take responsibility. Dietz pointed out even if everybody stopped using phosphates on their lawns,it runs off impervious surfaces such as streets,parking lots, etc. into the ponds. This has been found to be the case on Round Lake,which is surrounded by a walking path. V. COUNCIL FORUM 6:30—6:55 PM VI. ADJOURNMENT Thorfinnson moved,seconded by Case,to adjourn the meeting. Mayor Harris adjourned the meeting at 6:45 p.m.