City Council - 04/21/2009 - Workshop APPROVED MINUTES
CITY COUNCIL WORKSHOP & OPEN PODIUM
TUESDAY,APRIL 21, 2009 CITY CENTER
5:00—6:25 PM, HERITAGE ROOM II
6:30—7:00 PM, COUNCIL CHAMBER
CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Ron Case, Jon Duckstad, and
Kathy Nelson
CITY STAFF: City Manager Scott Neal, Police Chief Rob Reynolds, Fire Chief George Esbensen,
Public Works Director Eugene Dietz, Community Development Director Janet Jeremiah, Parks and
Recreation Director Jay Lotthammer, Communications Manager Joyce Lorenz, Assistant to the City
Manager Michael Barone, City Attorney Ric Rosow, and Recorder Lorene McWaters
Heritage Room H
I. 2008 FINANCIAL RESULTS
Sue Kotchevar presented a PowerPoint on 2008 financial results. She said the City Council
will consider a motion approving transfers at their regular meeting. The audit process and
financial statements are being finalized and the auditor will make a presentation to the City
Council on May 19.
General Fund
Kotchevar reported 2008 General Fund Results are as follows:
Revenues 38,368,960
Expenses 36,740,000
Transfer to Facilities Internal Service Fund 750,000
Transfer to Capital Improvement Fund 94,044
Revenue Less Expense 784,916
Kotchevar said the $784,916 (Revenue less Expense) will be added to the fund balance.
This allows $750,000 to remain in the fund balance for the 2009 budget the City Council
adopted in December.
Capital Improvement Maintenance Fund (CIMF)
Kotchevar said the CIMF is the fund in which liquor profits, tax levy, and other revenue
sources are accumulated to pay for projects without other funding sources.
Kotchevar reported 2008 CIMF results are as follows:
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April 21,2009
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Pavement
Capital Imp.Maint.Fund CIMF Mana.-ement Trails Total
Revenues
Misc.Revenue 560,473 560,473
Liquor Transfer 834,884 834,884
Tax Levy 275,515 275,515
Market Value Homestead Credit 228,184 228,184
Interest Income 359,477 47,920 7,397 414,794
Transfer In 1,000,000 185,000 1,585,000
Total Revenue 2,258,533 1,447,920 192,937 3,898,850
Expense
Projects 2,276,002 1,089,306 232,793 3,598,101
Transfer Out 1,660,000 1,660,000
Total Expense 3,936,002 1,089,306 232,793 5,258,101
Revenue Less Expense (1,677,469) 358,614 (40,396) (1,359,251)
CIMF Cash Balance is as follows:
CIMF 7,308,309
CIMF—Trails 146,785
CIMF-Pavement Management 1,695,006
Total 9,150,000
Kotchevar provided two CIMF projections, one based on a $1 million levy and one based on
a $650,000 levy. Both scenarios assume $900,000 in annual liquor revenues and a
calculated interest rate of 2.5 percent. Under the $1 million scenario, the fund will have
about$1 million remaining in 2015. Under the $650,000 scenario, the fund will be depleted
by 2015.
Capital Improvement Program(CIP)
CIP program expenses for 2008 totaled $14,983,620.
Utility perations
Water usage for 2008 decreased from 3.6 billion gallons in 2007 to 3.3 billion gallons. Sales
revenue was $9,433,254, which represents a 6 percent increase. The increase is due to a rate
increase of ten cents per 1,000 gallons of water and five cents per 1,000 gallons for sewer.
Irrigation revenue increased about$500,000 due to an increase in the rate of one dollar.
Storm Utility perations
The storm utility rate for residential customers increased from$3.00 to $4.00 per quarter and
the rate for commercial customers increased 33 percent. Sales totaled $800,033, which
represents a 35 percent increase. Operating expenses totaled $881,522.
Liquor Operations
Liquor sales totaled $10,987,111 for a 4.8 percent increase. Net income was $1,063,146.
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April 21,2009
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Discussion
Council Member Case said he has heard that the State is looking at cities' fund balances and
may consider tapping into those balances as a revenue source. He asked how our balances
compare to other cities. Kotchevar said Eden Prairie's fund balances are medium to high
compared to other cities,but they are not out of the ordinary.
Council Member Duckstad asked Kotchevar to provide detailed information on the City's
debt level at a future meeting. He suggested devoting a workshop to the topic. Kotchevar
said staff has modified the budget to push some maintenance projects out a few years to
flatten the level of debt the City will see in 2010 and 2011. Kotchevar said these are
projects that can be deferred without negative long term impacts.
II. DEVELOPMENT REVENUE UPDATE
City Manager Scott Neal gave an update on development and permitting revenues. He
presented graphs comparing the number of development permits issued by month from 2004
through 2008. For most of 2008, the number of permits issued followed the typical pattern
the City saw from 2004-2007;however, in the last quarter of 2008 the number of permit
applications dropped significantly and has not rebounded. Development revenue for 2009
has remained flat at a little over$50,000 per month. City Building Inspector Kevin Schmieg
said that the City usually sees a spike in permit applications in April/May and
September/October though the ranges can vary significantly from year to year. Schmieg
said inspections staff is receiving a lot of questions about home remodeling,but so far has
not experienced an uptick in permit applications. Community Development Director Janet
Jeremiah said there are several large development projects slated for 2009 that are on hold
due to "upside down" financial markets. It is possible some of these projects could begin
construction this year.
Neal said the voluntary early retirement and reduced work schedule options offered to
employees in March generated some interest,but not enough to cover the $300,000 in
staffing reductions needed to help balance the 2009 budget. Neal will work with department
managers to develop a proposal that will likely include staff reductions. This plan will be
presented to the City Council on May 19.
Council Chamber
II. OPEN PODIUM
1. Linda Biemert
Biemert appeared with two other members of her townhome association, which is
near the Eden Prairie Senior Center. She said a tree growing on City property fell
onto the townhome's property in August 2008. She said she has spoken with several
City staff members about who should be responsible for paying for removal of the
fallen tree. It is the City's position that it is the responsibility of the property owner
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whose property the tree fell onto. The townhome association believes it is the City's
responsibility. Mayor Young asked City staff to review the issue and make a final
determination on whether or not the City is liable for costs.
1. Dan Wick of Congressman Erik Paulsen's Office
Wick said he works in Congressman Paulsen's Eden Prairie Community Outreach
Office. He said their office can help local residents with a variety of things,
including passport issues, flag requests and grant applications. He distributed
business cards with Congressman Paulsen's contact information.
III. ADJOURNMENT