City Council - 03/08/2006 - Workshop APPROVED MINUTES
EDEN PRAIRIE CITY COUNCIL WORKSHOP &
OPEN FORUM/OPEN PODIUM
WEDNESDAY, MARCH 8, 2006 CITY CENTER
5:00—6:25 PM, HERITAGE ROOM II
6:30—7:00 PM, COUNCIL CHAMBER
CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher,
Ron Case, and Philip Young
CITY STAFF: City Manager Scott Neal, Police Chief Dan Carlson, Fire Chief George Esbensen,
Public Works Director Eugene Dietz, Parks and Recreation Director Bob Lambert, Community
Development Director Janet Jeremiah, Communications Manager Pat Brink, Assistant to the City
Manager Michael Barone, City Attorney Ric Rosow, and Recorder Lorene McWaters
Heritage Room H
Councilmember Case was absent.
I. 2007 BUDGET
Scott Neal said staff has been preparing 2-year budgets for the past four years. So, when
the 2006 budget was prepared, staff also prepared the draft 2007 budge. Finance
Manager Sue Kotchevar presented a PowerPoint overview of the 2007 budget.
Kotchevar said a second budget workshop will be held on June 20. Council will adopt a
preliminary levy on September 2. The annual truth-in-taxation hearing will be held in
December, and on December 18 Council will be asked to adopt the final 2007 budget.
The levy is scheduled to be certified on December 19.
Kotchevar explained that since this is the second year of the two-year budget process,
staff's main task will be to update revenue and expenditure projections; however,
Department Directors have the opportunity to request any "material and necessary
changes."
Outcomes for the 2007 budget include:
• Maintaining service levels
• Planningibudgeting for Fire Station 4
• Updating the Comprehensive Plan
• Implementing the rental housing inspection program
• Providing funding for the Capital Improvement Plan (CIP)
• Supporting the scheduled level of financial investment in the maintenance and
replacement of fleet
Council Workshop Minutes
March 8, 2006—page 2
• Implementing building assessments
• Maintaining reasonable debt levels
• Maintaining wage and benefit programs
Kotchevar reviewed proposed general fund revenues and expenditures for 2006 and 2007,
as shown in the tables below:
Revenues 2006 2007 %
Prop. Prop. Diff. Change
Taxes $ 23,201 $ 24,686 $ 1,485 6.4%
Licenses and permits 2,983 2,924 (59) (2.0%)
Cable TV 510 525 15 2.9%
Intergovernmental revenue 1,128 1,127 (1) (0.1%)
Charges for services 2,775 2,835 60 2.2%
Fines & penalties 450 465 15 3.3%
Investment income 250 250 - -
Other revenue 346 377 31 9.0%
Transfer In 485 485 - -
Total $ 32,128 $ 33,674 $ 1,546 4.8%
Expenditures 2006 2007 %
Prop. Prop. Diff. Change
City Manager $ 9,151 $ 9,954 $ 803 8.8%
Community Development 1,869 1,961 92 4.9%
Parks & Recreation 4,705 4,810 105 2.2%
Police 8,119 8,487 368 4.5%
Fire 3,092 3,163 71 2.3%
Public Works 5,192 5,299 107 2.1%
Total $ 32,128 $ 33,674 $ 1,546 4.8%
Kotchevar said she compiled the following list of general fund budget drivers based on
feedback from Council during last year's budget process. The major drivers are:
• Wages and benefits
• Contracted services
• Electric costs
• Supplies
Kotchevar also reviewed the debt levy for 2006 and 2007 and summarized other possible
budget changes. The following table is a summary of the 2006 and 2007 tax levy:
Council Workshop Minutes
March 8, 2006—page 3
U/o
2006 2007 Diff. Change
General Fund $23,628,715 $25,154,576 $ 1,525,861 6.5%
Market Value
Homestead Credit 629,029 629,029 - -
Debt Service Tax Capacity 1,289,000 1,564,000 275,000 21.3%
Debt Service Market Value 1,711,724 1,676,724 (35,000) (2.0%)
Housing and Redevelopment 200,000 200,000 0 0%
E ui ment Revolving 639,392 664,968 25,576 4.0%
Capital Improvement/
Maintenance 1,000,000 1,000,000 0 0%
Fiscal Disparity Distribution (1,284,921) (1,375,000) (90,079) 7.0%
Total $ 27,812,939 $29,514,297 $ 1,701,358 6.1%
Kotchevar reviewed the utility operations budget, and noted that a water rate increase is
likely in 2007. Although water use has remained steady, costs have risen about seven
percent. The storm water drainage operation lost money for the first time in 2005, and
staff is likely to ask for an increase here as well. Kotchevar said liquor store profits
continue to grow. She said she will likely recommend that$600,000 be transferred into
the CIP fund and that$300,000 remain in the liquor operation fund to be used for
expansion of one liquor store and upgrades to the other two stores.
Neal said after the January 21 Council Retreat, he asked Kotchevar to develop and budget
process model that incorporates more time and a methodical process for council review
and public input. Kotchevar presented a flow chart entitled "Achieving Strategic and
Financial Alignment—Recommended Strategic Planning and Budget Process."
Kotchevar said getting input at the front end of the process is critical, and getting public
input through surveys or town meetings would help staff in preparing the budget.
Kotchevar said the City may also want to consider setting a target price for government
services, as was discussed at a previous workshop.
Mayor Tyra-Lukens said it looks like a good plan,but she suggested both conducting a
survey and a holding a town meeting,rather than choosing just one. Neal said he also
recommends both. He said there is room for both statistical and anecdotal data.
Aho asked when the survey might be done. Kotchevar and Neal said they had not
discussed timing yet.
Neal said Bill Morris of Decision Resources does these types of surveys for a number of
cities, which allows for comparisons with other communities. The City can also add
questions of its own.
Butcher suggested being "very visible" about conducting the survey,based on input
Council received from citizens during the last budget process.
Council Workshop Minutes
March 8, 2006—page 4
Neal asked Council to give some thought to the new budget process. He said staff may
add a motion to approve the process to the next Council agenda. Neal noted that
Councilmember Case was absent, so he will brief him before the next meeting.
Council Chamber
II. OPEN FORUM
III. OPEN PODIUM
IV. ADJOURNMENT