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08-12-02 Worksession r-- - - ---------- --~ I I I CITY COUNCIL MINUTES Richfield, Minnesota Special Worksession August 12, 2002 The meeting was called to order by Mayor Kirsch at 6:04 p.m. Members Present: Martin Kirsch, Mayor; Susan Rosenberg; Gertrude Ulrich; John Enger; and Sue Sandahl. Staff Present: Samantha Orduno, City Manager; Steven Devich, Administrative Services Director; Jim Topitzhofer, Recreation Services Director; Kevin McGinty, Fire Services Director; Bill Fillmore, Liquor Operations Director; Dan Scott, Public Safety Director; Bruce Palmborg, Community Development Director; Mike Eastling, Public Works Director; Chris Regis, Finance Manager; and Cheryl Krumholz, Recording Secretary. Item #1 City Manager Orduno reviewed the purpose of the City Council Worksession. She explained that 2003 is a year to brace for the future and a year of uncertainty. She stated preparation of the budget was difficult because the LGA amount certified from the State would likely be cut with the State facing a deficit. She added that the levy limit amount and fiscal disparity distribution from the State and County had not been received in time to estimate the impact on taxes. Ms. Orduno provided a budget review including: . Timetable and Key Events . Major Issues for 2003 . Budget Influences . Budget Preparation Philosophy . 2003 Proposed Budget . Major Initiatives and Issues . Staff/Service Reductions - Position Cuts . Equipment Certificate Purchases . Gross Tax Levy History . General Fund History . General Fund Balance as Percentage of Revenues . LGA Comparison . HACA Comparison . 2003 (2002) Proposed Budget General Fund Expenditures . 1993/2003 Expenditure Profile . 2003 (2002) Proposed Budget General Fund Revenues J Special Worksession Minutes -2- August 12, 2002 Council Member Enger asked how close the actual preliminary levy amount needs to be on September 13. Ms. Orduno said the levy set by the City Council cannot be increased, but can be decreased. City Manager Orduno reviewed and answered questions regarding the revised and proposed Legislative/Executive/Legal Department budget and program highlights. The divisions reviewed included Council/Mayor, Other Agencies, Human Services, City Manager, Legal and the new Boa rd/Com m issio ns/O rg a n izati ons. Administrative Services Director Devich reviewed and answered questions regarding the revised and proposed Administrative Services Department budget and program highlights. The divisions included Information Technology, Cable Television, Human Resources, Risk Management and City Clerk/Motor Vehicle Licensing. Council Member Ulrich asked if the Hennepin County Assessing contract is reviewed periodically for cost effectiveness. Mr. Devich said the contract is reviewed every four years and the City is currently in the second year of the current contract. Ms. Orduno said the City Council may wish to consider establishing a policy designating a percentage of the fund balance to start a City Hall building improvement fund. She said issues like mold, lack of handicap accessibility and limited work space need to be addressed. Council Member Enger asked if the mold problem had been professionally assessed. Ms. Orduno said Bloomington Health has assessed the mold problem and provided options for handling it, but it keeps returning. Mr. Enger asked how many motor vehicle transactions have dropped off annually. Mr. Devich said the transactions have remained fairly level - some dealers have been lost, but walk-in customers have increased. Public Safety Director Scott reviewed and answered questions regarding the revised and proposed Public Safety budget and program highlights. The divisions included Support Services, Police and Inspections. Mr. Scott explained the school liaison position funding. He said originally the School District gave the City approximately $59,000 and because the State used a different formula in 2001, the amount changed to $52,000. He said the current rate is very close to the City's expenses based on a nine-month (school year) period. Council Member Enger asked how many new squad cars are purchased. Mr. Scott said five marked squads in 2002 and five in 2003. He said the squads are kept for three years and then maintenance is evaluated for cost effectiveness. He said unmarked cars are kept longer because they are not used as much. Fire Services Director McGinty reviewed and answered questions regarding the revised and proposed Fire Services budget and program highlights. Community Development Director Palmborg reviewed and answered questions regarding the revised and proposed Community Development budget and program highlights. Council Member Enger asked how many townhomes were included in Lyndale Gateway. Mr. Palmborg said there are 15-18 townhomes with the balance as loft units. He said all units are for sale. Mr. Palmborg explained the decertification of the Lyndale/Hub/Nicollet tax increment financing redevelopment project. I I I I I I Special Worksession Minutes -3- August 12, 2002 Mr. Devich explained the gross levy reduction impacts of the approximately $425,000 revenues from the LHN decertification. He said the revenue does not mean the funds come to Richfield, but it reduces the tax capacity rate. Public Works Director Eastling reviewed and answered questions regarding the revised and proposed Public Works budget and program highlights. The divisions included General Fund divisions, Administration, Engineering, Streets, Park Maintenance and Forestry; Utility Fund divisions, Water, Wastewater and Storm Sewer; and Internal Fund divisions, Central Garage and Building Services. Council Member Enger asked if the 6% increase in the Forestry budget was related to trees. Mr. Eastling said $10,000 was included in the budget for the purchase of additional trees for County roads. Ms. Orduno said that next year, the City Council will need to establish a policy to continue the equipment certificates or charging for equipment replacement. She said the City is in the second year of a two-year certificate cycle. Mayor Kirsch asked if Richfield's water/wastewater rates were comparable to other metro cities. Mr. Eastling answered yes. Recreation Services Director Topitzhofer reviewed and answered questions regarding the proposed and revised Recreation Services budget and program highlights. The divisions included Wood Lake Nature Center, Community Center and Recreation Programs. Mr. Topitzhofer also reviewed the Enterprise Funds including the Ice Arena, Swimming Pool and Mini-Golf. Council Member Rosenberg said any reduction in recreation programs needs to be well publicized. Council Member Enger asked how many rides are provided as part of the Community Center transportation program. Mr. Topitzhofer said there were 6,700 one-way rides in 2001 and slightly more in 2002. He said the ride costs $4, but the donation is only $1. Council Member Rosenberg said this transportation service is important to maintain. Municipal Liquor Operations Director Fillmore reviewed and answered questions regarding the revised and proposed Liquor Operations Department budget and program highlights. His review included Liquor Sales Statistics, quality customer service, expenditure containment, non-sale addition to income and responsible selling commitment. Mr. Fillmore said the liquor to special revenues fund transfers were $4.4 million in 1992-2001. Recreation Services Director Topitzhofer said $1 out of every $5 goes to handle on-going park maintenance. Mr. Fillmore said Richfield municipal liquor stores have been #1 in sales in the State. City Manager Orduno said the budget presentations were completed at this time. She said she believes Richfield and some other cities will be a target for LGA reduction because they receive so much aid. She said the budget includes a realistic LGA amount. Council Member Rosenberg said staff has prepared a budget that follows City Council direction. She expressed concern regarding staff reductions and the potential for burnout and impacts on services. She requested these issues be monitored closely. Ms. Orduno said Council Member Rosenberg's concerns were valid. She said cross training of staff assists with coverage, especially during vacations. She said summer internships may be another option. She said a compensation analysis was done in 2001 because many staff are Special Worksession Minutes August 12, 2002 -4- underpaid, but increases can not be implemented in 2002 and 2003. She said staff is lost to other cities because other cities pay more. Council Member Ulrich stated agreement with pay being low. She expressed concern about I reduced professional development for staff. She discussed the options of internet training, videos and teleconferencing instead of attending conferences. Ms. Orduno said training opportunities are provided every other year. She said in-house training is an option. She said the City Council should discuss how they, the Council, decide who attends which conferences. Council Member Ulrich said City Council attendance at conferences needs to be fair. She said the City Council needs to determine who goes to a conference and the attendee should provide a report to the other City Council Members. She said if the staff is expected to reduce their professional development options, the City Council should do the same. Council Member Enger said the budget resolution referenced in the budget message is not included in the budget. Ms. Orduno said the resolution is not included because no final figures have been received yet. She said the budget resolution will be included when the City Council takes action on the budget in September. Mr. Devich said certification materials from the State have not yet been received. Council Member Enger asked about the comparative analysis of revenue related to the decreased license and permits from 2002 to 2003 and sources of Inter Governmental Revenues. Ms. Orduno said the licenses and permits are related to Best Buy. Finance Manager Regis explained the revenues. Mr. Devich said the budget environment according to the Richfield City Charter was great 15 years ago, but is not practical now because the State has shifted the process back by a couple of months. He said the current Charter states the timeline for the finished budget when the State timeline says to start the budget. Council Member Ulrich said the Richfield Charter must coincide with State requirements. Mayor Kirsch thanked staff for the budget presentation and announced the City Council had completed review and discussion of the 2002 Revised/2003 Proposed budget and proposed 2003 preliminary tax levy. All budget presentation materials are Clerk's File No. C-385. The meeting was adjourned by unanimous consent at 9:00 p.m. Date Approved: September 12~ 2002 ~L~~4 Cheryl,Krumholz 1/ Recording Secretary I I