City Council - 07/26/2005 - Workshop APPROVED MINUTES
EDEN PRAIRIE CITY COUNCIL WORKSHOP
TUESDAY,JULY 26, 2005 CITY CENTER
5:00 PM, HERITAGE ROOM II
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, Finance Manager Sue Kotchevar, City
Assessor Steve Sinell and Recorder Lorene McWaters
Councilmember Butcher was not present.
I. 2006 BUDGET
City Manager Scott Neal presented a PowerPoint on the 2006-2007 budget, including the
status of the draft budget. The August 16 Workshop will include further budget
discussions as well as presentation of the draft CIP. Council will be asked to certify the
preliminary tax levy at the September 6 Council meeting. Staff will finalize the budget
this fall; the truth-in-taxation hearing will be held December 5; and Council will certify
the levy and adopt the final budget on December 20.
Neal reviewed tax levy history,budget history, and population changes. Tax legislation
impacting the 2006/2007 budget includes:
No levy limits
Market Value Homestead Credit is not being funded for 2005 and 2006
Increases in PERA contributions for Coordinated and Police and Fire Plans
Based on input from Department Directors, the draft budget for 2006 includes
$31,845,000 in revenues and $34,082,000 in expenditures, with a $2,237,000 shortfall.
For 2007, revenues are projected at $32,870,000 and expenditures at$34,847,000,
resulting in a difference of$1,977,000. Neal said staff is working on closing the gaps by
identifying which items reflect increases in costs, which reflect higher services levels,
and which are the result of new services. By the August 16 workshop, staff will have a
clearer idea of what is needed to maintain current service levels.
General fund revenues are expected to increase by 4.4 percent from 2005 to 2006.
Councilmembers Young and Aho noted the 20 percent projected increase in fines and
penalties, which they said seems high. Kotchevar said this number is based on
information provided by the Police Department, and it is based on past experience. Chief
CITY COUNCIL WORKSHOP MINUTES
July 26, 2005
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Carlson said his department has increased traffic enforcement efforts significantly over
the past several years; however,he stressed that the City does not have "quotas" for
writing tickets.
General fund expenditures are expected to increase by about 11.5 percent from 2005 to
2006. The largest increase in expenditures is for the Office of the City Manager. Neal
said about $1 million of this increase is for Facilities projects. This reflects an increase in
a service level, and some of these projects may be transferred to the CIP budget. From
2006 to 2007, staff projects a 3.2 percent increase in general fund revenues and an
increase in expenditures of 2.2 percent.
Councilmember Aho asked how much of the tax levy increase represents growth in
population and the tax base. He asked to see the numbers without the referendum.
Sinell explained that the property tax levy is the driver of the tax rate. Staff calculates
what we need to run the City, and then staff calculates the tax impact on the average
taxpayer.
Staff projects taxable value increases of 8.9 percent for residential, 2.2 for apartments,
and 5 percent for apartments from 2004/05 to 2005/06. From 2005/06 to 2006/07
increases are estimated at 7 percent for residential, 5 percent for apartments, and 5.5
percent for commercial. Tax increases for 2006 are estimated to be 9.3 percent for
residential, .65 percent for apartments, and 3.6 percent for commercial. Increases from
2006 to 2007 are projected to be about 4.2 percent for residential, 1.6 percent for
apartments, and 2.2 percent for commercial.
Mayor Tyra-Lukens asked how these numbers were calculated. City Assessor Steve
Sinell said the estimates are based on new construction and market activity. Sinell also
noted this is the first time staff has projected tax impacts and value increases out two
years, so there is more guess work involved.
IV. ADJOURNMENT