08-18-04 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
August 18, 2004
The meeting was called to order by Mayor Kirsch at 5:37 p.m.
Council Members
Present:
Martin Kirsch, Mayor; Susan Rosenberg; Gertrude Ulrich; John Enger; and
Sue Sandahl.
Staff Present:
Samantha Orduno, City Manager; Steve Devich, Administrative Services
Director; Dan Scott, Public Safety Director; Bruce Palmborg, Community
Development Director; Mike Eastling, Public Works Director; Bill Fillmore;
Municipal Liquor Operations Director; Brad Sveum, Acting Fire Services
Director; Frank White, Recreation Programs/Athletics Manager; Karen
Shragg, Nature Center Manager; AI Payne, Facilities Manager; Chris Regis,
Finance Manager; and Cheryl Krumholz.
Item #1
City Manager Orduno stated the Worksession will consist of the Department budget
presentations. She added that City Council direction is requested to determine if expenditures and
revenues are consistent with Council goals and to what extent the $600,000 franchise fee set aside is
to be used to off-set the reduction in the local government aid (LGA) allocation. The budget
presented tonight reflects the use of $300,000 of the set-aside. The City Council should decide how
to reduce the City's dependence on LGA. The State has intended to level the playing field related to
the property tax burden between Commercial/Industrial and Residential properties and shifting the
burden of paying for services onto property taxes.
City Manager Orduno provided a budget overview including:
. Timetable and Key Events
. 2005 Budget Influences
. Key Issues for 2005 and Beyond
. History of State Aid Losses
. LGA Comparison
. Revenue Comparison
. City Council Preparation Philosophy
. 2005 Proposed Budget
~ Equipment Certificate Purchases
. Gross Tax Levy History
. 2004 Proposed Budget
~ Major Initiatives and Issues
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August 18, 2004
City Manager Orduno stated almost all of the proposed tax levy is due to the loss of LGA and
the levying back for part of it.
Administrative Services Director Devich continued the budget overview including:
. General Fund History
. Full-Time Regular Personnel
. 2005 (2004) Proposed Budget General Fund Revenues
. 2005 (2004) Proposed Budget General Fund Expenditures
. 1995/2005 Expenditure Profile
. 2005 Monthly Costs for Services
. 2004 Tax Capacity Rates
. 2005 Proposed Levy Estimated Impact
City Manager Orduno concluded the budget overview including:
. 2005-2006 Critical Issues
. Where are we Going?
City Manager Orduno reviewed and answered questions regarding the revised and proposed
Legislative/Executive Department budget. The divisions reviewed included Council/Mayor, Other
Agencies, Human Services, City Manager, Legal, Boards/Commissions.
Council Member Ulrich stated the dispatch study provided useful data regarding placing
centralized services at City Hall.
Council Member Enger asked about the medical insurance, dental insurance and term life
insurance charges in the City Council budget since the City Council does not receive these benefits.
Administrative Services Director Devich explained that the reallocation of staff time includes
benefits as well as salaries.
Council Member Enger asked how the Family-Friendly initiative allocation was determined.
City Manager Orduno explained the costs were based upon discussions with other cities and
their start-up costs.
Council Member Enger asked about the types of activities to be included in the initiative.
City Manager Orduno stated there are a litany of activities including, but limited to, additional
recreation programs, housing affordability.
Administrative Services Director Devich reviewed and answered questions regarding the
revised and proposed Administrative Services Department budget. The divisions reviewed included
Administration, Finance, IT, CATV, Assessing, Human Resources, Risk Management and City Clerk.
Administrative Services Director Devich stated the City Clerk's level of passport business
appears to be impacted by the City Hall message board - when the message states passports are
sold here, the number significantly increases.
Council Member Sandahl suggested staff check into installing permanent signage for the
passport business.
Public Safety Director Scott reviewed and answered questions regarding the revised and
proposed Public Safety budget. The divisions included Support Services, Police, Inspections and
Emergency Services. He also reviewed the Part I Crime Trend and Construction Valuation.
Acting Fire Services Director Sveum reviewed and answered questions regarding the revised
and proposed Fire Services budget.
Community Development Director Palmborg reviewed and answered questions regarding the
revised and proposed Community Development budget.
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August 18, 2004
Council Member Ulrich asked about the Housing Inventory study and suggested a complete,
thorough study be conducted.
Community Development Director Palmborg explained the studywill include collecting and
compiling data from Hennepin County, Assessing real estate records. Walk-by inspections will not
take place.
Public Works Director Eastling reviewed and answered questions regarding the revised and
proposed Public Works budget. His review included General Fund Divisions of Administration,
Engineering, Streets, Park Maintenance and Forestry, Utility Divisions of Water, Wastewater and
Storm Sewer and Internal Funds of Central Garage and Building Services.
Nature Center Manager Shragg reviewed and answered questions regarding the revised and
proposed Wood Lake Nature Center Division budget for the Recreation Services Department
Recreation Programs/Athletics Manager White reviewed the revised and proposed Recreation
and Community Center Divisions budget for the Recreation Services Department.
Council Member Enger asked about Recreation buildings being open during after school
hours for children 12 and under when their parents are not home.
Mr. White explained only the Kids-in-Parks program was open during the summer, but nothing
was provided during the school year. He added City park buildings don't work well for long-term
activity because larger space is needed.
Council Member Ulrich said that topic could be included in the Family-Friendly Initiative.
Mr. White suggested installing a sign in Veterans Memorial Park along Crosstown to promote
Richfield.
Council Member Sandahl requested staff review the associated costs and sign regulations for
this area.
Facilities Manager Payne reviewed the revised and proposed Arena, Pool and Special
Facilities Division for Recreation Services Department.
Municipal Liquor Operations Director Fillmore reviewed the revised and proposed Liquor
Operations budget.
Council Member Rosenberg asked about the sales at the Shops at Lyndale store.
Mr. Fillmore explained the sales are even, but upcoming road construction could affect sales.
Council Member Enger asked about an entrance/exit on 77th Street in the area between the
liquor store and the other stores so access would be easier.
City Manager Orduno explained that issue has been discussed at length and is not possible.
City Manager Orduno stated the proposed general levy is a 7.17% increase, using $300,000
of the set-aside and all of the anticipated 2005 LGA. The signage along Crosstown will be reviewed
with MnDOT.
City Manager Orduno asked the City Council for direction on decreasing or amending
expenditures. She clarified the funds for the Family-Friendly initiative in the City Council budget are
for marketing strategies and in the Recreation Services budget for program design.
City Manager Orduno requested the City Council provide direction on the use of the set-aside
funds. She strongly recommended not using all the set-aside funds.
Council Member Ulrich suggested not using the set-aside and wishing the amount was higher.
City Manager Orduno said not using all of the LGA will increase the levy.
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August 18, 2004
Council Member Sandahl added that was true unless the franchise fees were increased. She
assumes LGA will be reduced next year.
Council Member Sandahl asked about the affect on the levy if the $300,000 is not used.
City Manager Orduno explained the levy increases 3%, to 10.13%. The tax capacity rate
basically remains the same. She reviewed the anticipated levy of the other metro cities.
Council Member Rosenberg stated support for keeping the levy at the 7.17% increase.
City Manager Orduno explained the levy cannot be increased too much because it becomes
unaffordable and the Legislature could re-instate levy limits. If LGA is reduced again in 2006, the City
Council will need to make policy decisions regarding dramatic service changes or increase the levy.
Council Member Sandahl suggested the street light utility fee could be re-considered.
City Manager Orduno stated the street light fee could be implemented mid-year. She added
the State could attack reserves, but not take them. The Legislature is focusing on Market Value
Credit Aid.
Council Member Ulrich suggested using the $300,000, set-aside keeping the franchise fees
and considering a mid-year street light utility fee. She added her first preference was to leave
$600,000 in the set-aside. She said she has not seen or heard an uprising over the franchise fees.
City Manager Orduno stated the cap on franchise fees is not to exceed 5% of the total gross
revenue.
Council Member Sandahl suggested increasing the franchise fees annually and consider the
street light fee.
Council Member Rosenberg stated raising the fees to keep the levy at 7.17%.
Council Member Enger stated that if not a lot of flack has been received, he was not against
increasing franchise fees to keep the levy down, instead of establishing a new fee like the street light
utility.
City Manager Orduno said different scenarios on franchise fees and their impact on the levy
will be provided for discussion at the August 24 City Council Worksession.
All budget presentation materials are Clerk's File No. C-397.
The meeting was adjourned by unanimous consent at 9:04 p.m.
~"A~<~
Cheryl K umhol
Recording Secretary
Date Approved: September 16, 2004