City Council - 08/18/2009 - Workshop APPROVED MINUTES
CITY COUNCILBUDGET ADVISORY COMMISSION WORKSHOP
& OPEN PODIUM
TUESDAY,AUGUST 18, 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
BUDGET ADVISORY COMMISSION: Don Uram—Chair, Richard King —Vice-Chair,
Annette Agner, Eapen Chacko, Jon Muilenburg, Richard Proops, Gwen Schultz
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, City Attorney Ric
Rosow, and Recorder Lorene McWaters
Heritage Room H
I. PROPOSED 2010-2011 BUDGET
Budget Advisory Commission Recommendations
Budget Advisory Commission (BAC) Chair Don Uram reviewed the commission's response
to the City Manager's proposed 2010/2011 budget. Uram said the BAC would like to
supplement these "higher level" recommendations by reviewing and providing input on the
proposed line item budget.
Uram said, in general, the BAC supports the proposed budget;however, they have several
recommendations. Uram said the BAC believes the City Manager's proposed budget relies
too heavily on the Budget Stabilization Fund (BSF) over the next two years, which will
result in an "imprudently" low balance in the fund. The BAC recommends that use of BSF
be decreased by reducing expenses, eliminating or delaying proposed discretionary
"enhancements" to the budget, implementation of a franchise fee and a transfer of a portion
of the Economic Development Fund.
In particular, the BAC recommends delaying implementation of the Fire Department Duty
Crew initiative, which would cost $120,000 in 2010 and $240,000 in 2011. The BAC also
recommends that the addition of two police officers (at a cost of$156,000) in 2011 be
delayed.
The BAC recommends that the City consider instituting a street lighting fee, which would
spread the cost of street lighting across all users of the system.
City Council Workshop Minutes
August 18, 2009
Page 2
Commissioner Dick Proops distributed a document outlining his thoughts on the proposed
budget. Proops said the City has done a great job reducing the operating budget,but he has
not seen a comparable effort made in the area of major capital expenditures. Proops listed a
number of capital projects he believes should be deferred, specifically development of Cedar
Hills Park. Proops said he is concerned that it appears that capital improvements are being
expensed to the general fund. He recommended that a CPA firm be retained to review the
system.
Council Discussion
Mayor Young encouraged the BAC to examine the proposed line item budget in coming
months. He agrees that 2010 is not the time for budget enhancements. He said he needs
more information before he can decide whether or not a street lighting franchise fee is
advisable. He would like to have more discussion on the use of the Economic Development
Fund. He thinks this is an appropriate time to spend down the Budget Stabilization Fund;
however, the amount that should be used is open to further discussion. He said there must
be an effort to control expenses to avoid a significant tax increase in two years.
Council Member Case said balancing the budget with the Budget Stabilization Fund will
result in its depletion by 2012. He said he is not proposing tax increases,but feels the City
needs to determine what taxpayers want. He said the BAC should focus on how to do what
we do better, not on what we do. Regarding the proposed fire duty crew initiative,he feels
response time is important and a duty crew may be necessary to keep response times where
citizens want them.
Council Member Aho said the City does need to spend down the BSF,but not too quickly.
He said there should to be a balance between spending and revenues. He would like the
BAC to help find areas where spending can be reduced. He requested more qualitative
information on the duty crew proposal, and thinks it would be appropriate for the BAC to
examine the proposal in more depth. Aho said he is generally not in favor or franchise fees,
but would like more input from staff on the proposal. He said the purpose of the Economic
Development Fund is fuzzy and it would be a good idea to reexamine it.
Council Member Nelson said she has mixed feelings about franchise fees. She said the
groups a street light franchise fee will most impact(such as churches and non-profit
organizations) are already struggling economically. She said you should call it a tax if you
are going to tax it. She said employee wages cannot stay flat forever and salaries need to
keep up with the cost of living. She said the BSF is meant to cover things like the Fire
Pension. She said the City cannot continue to cut and cut and still continue to be the
community Eden Prairie is today. She would like to explore ways to cut costs in the area of
communications and technology. She would like the BAC to address the question of
whether or not the City can be run more cheaply.
Council Member Duckstad agreed that the BSF balance will go too low as proposed. He
agrees that this is not the time to make enhancements to the budget. He said he does not
have enough information to make a decision about a street light franchise fee. He said these
City Council Workshop Minutes
August 18, 2009
Page 3
types of fees tend to move in the direction of less transparency. He said he is not
comfortable with the Economic Development Fund being split out from the CIP.
Next Steps
Neal said the City Council will discuss the proposed budget and the BAC recommendations
in more detail at the September 1 Workshop. At the September 1 City Council Meeting, the
Council will set a preliminary levy. The Council will approve a final budget on December
15. The final budget can be set at or lower than the preliminary levy. Nelson said she
would like to hear more about the duty crew concept from Chief Esbensen. She would also
like information on emergency response budgeting.
Council Chamber
II. OPEN PODIUM
III. ADJOURNMENT