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City Council - 08/24/1999 - Workshop APPROVED MINUTES EDEN PRAIRIE COUNCIL WORKSHOP TUESDAY, AUGUST 24, 1999 5:00 P.M. CITY CENTER Training Room, 8080 Mitchell Road CITY COUNCIL: Mayor Jean Harris; Councilmembers Sherry Butcher-Younghans,Ronald Case,Ross Thorfinnson, Jr. and Nancy Tyra-Lukens CITY STAFF: City Manager Chris Enger,Financial Services Director Don Uram,Public Safety Services Director Jim Clark,Parks &Recreation Services Director Bob Lambert,Public Works Services Director Eugene Dietz,Management Services Director Natalie Swaggert,Director of Inspections Kevin Schmieg,Director of Assessing Steve Sinell,Finance Operations Manager Sue Kotchevar, and Council Recorder Carol Pelzel I. CALL MEETING TO ORDER—MAYOR JEAN HARRIS Mayor Harris called the meeting to order at 5:30 p.m. H. APPROVAL OF AGENDA MOTION: Case moved,Thorfinnson seconded,to approve the Agenda as published. Motion carried 5-0. III. HIGHWAY 101 COMUNICATION AND CITIZEN INVOLVEMENT PROCESS City Manager Enger explained this group has previously discussed the process for design review approval of Road Projects and ways to improve this process. Enger indicated Public Works Services Director Eugene Dietz is present to review this Workplan and to discuss what will be involved in the process for Highway 101 improvements. Dietz briefly reviewed the Strategic Workplan and the Strategy Assessment establishing the process for approving road projects in the Community. Staff will be using Highway 101 as a working model.Dietz reviewed the changes made to the Workplan. The plan does include a formal presentation that will include a question and answer session. Dietz explained the biggest change to this Workplan is that the Mayor will be the moderator for the public meetings and informal neighborhood meetings will be held. Dietz further explained a newsletter was prepared by the County for the Highway 101 reconstruction and mailed in July to property owners within 800 feet of each side of the roadway. Dietz reviewed the approval process for Highway 101 explaining they do have more lead time with this project. They are anticipating construction in the fall of 2001 or spring of 2002. An open house will be held which will include a formal presentation with a time for questions and answers.Dietz stated they will present alternates but will focus on CITY COUNCIL WORKSHOP MINUTES August 24, 1999 Page 2 realistic options. Staff will structure a partnership with the potential for a final design task force. Dietz reviewed the communication strategy that will include team involvement, newsletters, Web site and the Eden Prairie News. Staff will also keep a chronicle of the process as this is a long process and will include different people at different times. They will need to remind the people of what has already taken place over the three-year period. Dietz explained that a meeting of the staff design team would be held on September 2 to finalize the agenda for the public open house scheduled for September 28. It will also be necessary to review the process with the Mayors of Chanhassen and Eden Prairie to determine what their role will be at the public meeting. The formal presentation will involve a panel discussion for the question and answer part. Tyra-Lukens pointed out that one of the challenging issues of this project is the involvement of two different cities and the County. She asked what happens if one city is in favor of a particular plan and the other city is not.Dietz responded that it would probably take time to solve the conflict. It is staff s hope everyone will recognize there are both fiscal and public transportation responsibilities to complete this project. In response to Butcher-Younghans questions regarding funding for this project,Dietz explained they would be using the turn-back process with the State. The road will have to be built to State Aid standards at the expense of MNDOT. Trails on both sides of the road will have to be done at the expense of the City along with any street lighting.Most of the financing for this project will come from MNDOT. The project cost estimate is$8 million to $9 million with 80%of the funds coming from the State through the turn-back process. Thorfmnson pointed out one of the lessons they learned from the Pioneer Trail project is that you cannot have engineers describing the proposed plans to the citizens. Thorfinnson asked if this has been addressed in this new process. Dietz responded at one point they did discuss this but have not built anything into this plan. They have discussed the role of the moderator being somewhat influential and they are considering having the Mayors be the moderators at the public meetings. Mayor Harris asked at what point would the Council be involved in this process and in what capacity. Enger explained that this process for the Highway 101 improvement gets them to the first meeting with the neighborhoods most affected by this construction. One of the reasons this item is being brought to the Council this evening is because ultimately the entire Council will be involved. They have discussed the dynamics of these meetings and how they will deal with the residents' answers and concerns. This road construction is part of an overall transportation system and they need to interact and communicate with the citizens on all road projects. All of the road projects ultimately require Council approval. Enger said this project may go on for three or four years and this will require keeping up to speed as to what is happening with this project and what has happened. Enger asked how the Council would like staff to provide information to them and what type of involvement they would like. Enger pointed out that they do have the framework for this process and would appreciate the Council's comments. CITY COUNCIL WORKSHOP NIINUTES August 24, 1999 Page 3 Thorfinnson pointed out he does not want to lose site of the fact that the engineers have difficulty in communicating with the residents. Enger said he believes they have to first deal with the concerns, fears and uncertainties of the people before they will be ready to process the facts. Thorfmnson said he feels they can resolve some of the concerns with open meetings and questions and answers. However,they need to formalize these meetings and have minutes prepared so the information can be delivered to the Council. This would help address any concerns there may be about the Council receiving the information.Dietz responded that the preparation of minutes is included in the strategy. Dietz reported while considering County Road 1 the staff and County did not put the facts on the table at the beginning and were in a responding mode dealing with misinformation. It is necessary they have a strong meeting at the beginning and get the facts out in the open. Dietz said he is not sure how they can resolve the communication problem between the engineers and residents. Tyra-Lukens suggested they ask the residents what their concerns are before they present them the plans for the road improvement and once staff is aware of their concerns they can evaluate the plans on the basis of those concerns.Dietz explained they do have several alternative plans and they will present a matrix that will show the pros and cons of each alternative. Case pointed out at previous meetings, it appears the residents feel it is already a done deal. It is government's responsibility to work with and educate the residents. Part of this project is a done deal in that they have decided that this roadwork is necessary.However, other areas are still workable and the residents' input is required. The elected officials have decided that this work is critical and it is important that the elected officials attend different meetings to present the historical information that is necessary. Following discussion,Mayor Hams asked that staff review this entire process and at a future meeting discuss what the role of the Council will be over the next few years. Dietz pointed out that the Mayor would be in attendance at each of the meetings serving as the moderator. He suggested they consider appointing another Councilmember as a member of a task force and report back to the full Council the progress of this project. Mayor Harris asked that staff bring back several options at a future meeting for Council consideration. IV. YEARS 2000-2001 BUDGET WORKSHOP H A. Presentation of Budget Information and Assumptions City Manager Enger presented introductory comments regarding the budget process. Staffs goal is to balance the budget but also keep taxes low. Enger explained this is the first year Service Area Directors have developed a balanced budget the first time through. Enger explained this is the first year they will be initiating the multi-year budget process. With regard to the multi-year budget,Enger explained in 1999 the Council would adopt the 2000 budget and develop the 2001 budget. In 2000 the Council will CITY COUNCIL WORKSHOP M MnS August 24, 1999 Page 4 adopt the 2001 budget and then in 2001 they will adopt the 2002 budget and develop the 2003 budget. This process allows staff to carry-over spending and revenues into the next year. Also,much of the activity involved does not follow the fiscal year. Therefore, it made sense to look at a couple of years for budgeting purposes. The advantages of a two-year budget is additional time can be spent on strategic planning in alternate years;there will be improved financial planning; and a streamlined budget process which allows staff time to focus on other areas. Enger reviewed the General Fund Budget objectives explaining that they will begin the multi-year budget cycle, comply with levy limits, coordinate the budget with the Strategic Plan,minimize tax impacts and ensure a balanced budget model. They will also fund necessary services, continue funding capital improvements and reduce the rate of increase in operational expenditures. B. Discussion of Budget Scenarios Financial Services Director Don Uram briefly reviewed the changes between the 2000 budget and 2001 budget on the revenue side.He explained that the total revenues will increase by 5%in the year 2001. The budget will increase by 6% from 1999 to 2000.Uram explained that licenses and permits increase 2.7% from 1999 to 2000 with the primary component of this revenue being building permits. Uram explained that expenditures will increase 4%from 1999 to 2000. Staff continues to try to increase the fund balance to reduce the levy at a future date. In response to a question regarding the 2000 payroll adjustments,Uram explained that staff has not yet allocated these funds. Wages are adjusted at the beginning of each year and are allocated throughout the year. Mayor Harris questioned the reduction of$35,000 under new employees from 2000 to 2001. Swaggert explained that that amount is expenses. In 2000 they are projecting additional payroll for a certain number of new employees. That amount will be incorporated into the 2001 budget. If positions are not added,the payroll number becomes much smaller. Swaggert explained in the year 2000 they are anticipating increasing staff at the front end and are seeing more activity in 2000 than 2001. There are new positions being proposed in the 2000 budget. This is a result of a number of emerging issues. These positions will be needed because of new technology and because of the continued growth in population. Butcher-Younghans asked how Eden Prairie's wages compare with other cities in the area. Swaggert responded that it is very difficult to do a comparison from one city to another because of the different service levels. Eden Prairie has a liquor enterprise and a different approach to the delivery of water and sewer. Swaggert explained that the wage base will be different depending on the services offered. However, economic adjustments and pay equity do balance out from city to city. The same economic factors are used and each year an informal wage survey is completed. Swaggert indicated for the year 2000 they are proposing a 4% economic adjustment with 2%pay equity and a 3%step increase. CITY COUNCIL WORKSHOP NIINUTES August 24, 1999 Page 5 Uram reviewed the various capital requests. He explained that median residential property will see a 2.3%increase in taxes for the year 2000. The median home in 2000 is valued at$186,000 with the median home valued at$195,000 in 2001. Uram further explained staff is projecting close to a$500,000 transfer from the General Fund to the Capital Improvement Program to fund capital improvements. Staff is attempting to increase fund balance levels to increase the City's bond rating. The City's bond rating is currently AA3 and they are looking for an AA2 rating. One of the things that is looked at when reviewing a city's bond rating is the city's fund balance. Eden Prairie's fund balance has increased$500,000 from last year and they have approximately$4.6 million on reserve.Uram stated that a study from the City's financial advisor indicated Eden Prairie has the lowest unreserved fund balance. A majority of the cities have a fund balance of at least 50%while Eden Prairie is at 25%. The City does not issue a lot of debt,therefore, the bond rating does not have such a large impact.However, Eden Prairie should be rated the same as similar communities that have a bond rating of AA2. Uram reviewed the budget model and indicated things look relatively good for the City five years out.Economic growth continues with market values increasing 10%. This may change at any time and that is why staff has taken a conservative approach. The model is based on information they have today and does not take into consideration the issuance of debt for a new fire station. This cost will have to be covered. Dietz reviewed the Utility Fund Budget and explained their goal is to maintain the $1 million fund balance. The actual fund balance at year-end in 1998 was $1,588,000. Staff is not anticipating any rate increases in the year 2000 and will look at those rates again in 2001. Thorfinnson asked that this be looked at very seriously. He does not want to get into the situation of where they have to raise rates 5% every year. Dietz said they would review the rates on an annual basis. Dietz reported the operating revenues for the Utility Fund Budget will increase 4% from 2000 to 2001 and operating expenditures will increase 1%. Dietz explained they have not been spending much for capital expenditures in the Utility Fund. They have recently completed the Wetlands Plan and will be developing a Water Management Plan. Once these reports are completed,they will better know what funds will be expended. Uram presented the Liquor Fund Budget objectives explaining that they have hired an inventory control clerk. The City does have an inventory of$5 million and they need to keep better control of this inventory. Uram indicated they would be spending additional funds to improve store security. Any remaining monies in this Fund will be transferred to the General Fund or to the Capital Improvement Program. Last year excess funds were placed in the Debt Service Fund. Case asked if there are any plans to have a liquor store located at the Hustad Development on Highway 169 and Pioneer Trail.Uram responded that staff has discussed this and feel it is an excellent site.However,they question whether or not this commercial operation is big enough to support a liquor store. Staff will continue to monitor this site.