10-17-01 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
October 17, 2001
CALL TO ORDER
The meeting was called to order by Mayor Kirsch at 5:32 p.m.
ROLL CALL
Members Present:Martin Kirsch, Mayor; Gertrude Ulrich; John Enger; Susan Rosenberg;
and Sue Sandahl (arrived at 5:35 p.m.).
Staff Present:Samantha Orduno, City Manager;Steven Devich, Administrative
Services Director; Mike Eastling, Public Works Director; Bruce
Palmborg, Community Development Director; Jim Topitzhofer,
Recreation Services Director; Kevin McGinty, Fire Services Director;
Bill Fillmore, Municipal Liquor Operations Director; Dan Scott, Public
Safety Director; Brad Sveum, Assistant Fire Chief/Fire Marshal; Chris
Regis, Finance Manager; and Cheryl Krumholz, Recording Secretary.
Item # IDISCUSSION OF 2001 REVISED/2002 PROPOSED BUDGET AND 2002
PROPERTY TAX LEVY
City Manager Orduno stated tonight’s Council Worksession was called at the Mayor’s
request because a clearer budget and levy can now be presented since all data is now
available. She said the major difference from the previous budget presentation was a levy
decrease from 24% to 21%.
City Manager Orduno reviewed the following items related to the 2002 tax levy and
budget:
x
Gross Levy History
x
2001 Budget & 2002 Proposed Budget General Fund Expenditures
Special Worksession Minutes-
2-October 17, 2001
x
2001 Budget & 2002 Proposed Budget General Fund Revenues
x
2001 & 2002 Tax Capacity Rate
x
2002 Proposed Budget
i
Equipment Certificate Rationale
i
Issuance of Equipment Certificates
i
2002 Equipment Certificates
x
2002 Annual Costs for Services
x
2002 Proposed Levy Estimated Impact
City Manager Orduno distributed a levy survey of cities with a population over 10,000
in the seven-county metro area conducted by the City Manager’s office. She said Richfield’s
levy was less than most other cities.
Recreation Services Director Topitzhofer explained the rationale and expenses for his
departments 4% increase for 2002, including wages, medical insurance, PERA requirements
and inter-department labor increases. He also explained revenue increases.
City Manager Orduno said that the rationale for the expenses applies to all
departments.
City Manager Orduno explained the reasons for budget increases, including City Hall
facility repairs; facility operations costs; Information Technologies, cable and personnel
costs; and fire services personnel and equipment.
City Manager Orduno said the budget is a guide and does not include any significant
means of adding to the fund balance. She said a lean budget was maintained when a levy
limit in the double digits was known. She said that the levy limit could be reduced if the City
Council directs a reduction in services.
Public Works Director Eastling distributed and explained a utility (water & sewer) rate
comparison of Richfield with other cities in the metro area. He said Richfield is now in the
middle.
Council Member Sandahl asked for the current inflation rate.
City Manager Orduno replied that in August it was a little under 3%.
Council Member Rosenberg asked, in light of recent events, what are the City’s
precautions and responses for potential bio-terrorism activities.
Fire Services Director McGinty and Public Safety Director Scott provided a summary
of training, education and precautions taken by Firefighters, Police and 911 Dispatchers.
City Manager Orduno explained proposed security measures for City Hall and other
City facilities. She added that expenses would be kept to a minimum, as they are not
budgeted.
Council Member Enger asked if the 8.5% increase in market value was the maximum.
City Manager Orduno replied that was correct.
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3-October 17, 2001
Council Member Enger asked about the 2002 property tax decrease to be realized on
a $151,900 property. He also asked about the impact of the proposed school referendums.
City Manager Orduno explained the tax capacity rate increase on the property and the
tax compression impact.
Council Member Rosenberg responded that a decrease would still be realized with
the referendums.
Council Member Enger asked about tax increment financing and the Lyndale-Hub-
Nicollet area.
Community Development Director Palmborg explained the payment schedule.
Council Member Enger asked about the continually heard about short reserve
General Fund fund balance.
Administrative Services Director Devich explained that the City auditors recommend a
General Fund fund balance of 40% of annual General Fund revenues. The City’s balance
now is approximately 26%.
City Manager Orduno said that airport related expenses affected the fund balance.
Council Member Enger asked about the increased engineering costs in the Public
Works Department budget. He asked how much of those costs were related to the Best Buy
project. He said residents have been told repeatedly that Best Buy would not cost them any
money.
Public Works Director Eastling said that the engineering costs related to Best Buy are
offset by inspection permit fees. He said increased expenditures with increased income are
part of the project.
Council Member Enger asked about the use of tax increment financing in Richfield in
2002.
City Manager Orduno said that Sid Inman, Ehlers & Associates, would provide
information about the changes. He is preparing updated cash flow reports for the Best Buy
project.
Council Member Enger requested a written analysis of the impact on the City when
the amount paid by Best Buy is determined - a comparison of the original costs with the
current costs.
Council Member Enger stated he believes the budget increases are related to Best
Buy. He said anything related to that project should not cost Richfield taxpayers; expenses
should be born by Best Buy and the State.
Administrative Services Director Devich explained the factors considered in
determining the property tax levy.
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4-October 17, 2001
Council Member Enger asked about the loss in low income housing aid.
Finance Manager Regis explained the formula used in determining this aid.
Council Member Enger asked about the State levy limit.
Administrative Services Director Devich explained how the percentage is calculated.
Council Member Enger asked what 2002 would say as it relates to the gross levy
history.
City Manager Orduno said 21%. She added that Richfield has been below the
Consumer Price Index for eight years. She said the equipment certificates are necessary or
the Central Garage and Information Technology Divisions would experience a deficit. She
said the Legislature’s intent was to make local property taxes more directly pay the costs of
local services.
Council Member Enger asked about the replacement program for police cars.
City Manager Orduno said the squads are replaced every two years, which compares
with other cities. If kept longer, maintenance expenses become an issue. She said vehicles
are generally purchased through the State contract.
Public Safety Director Scott said approximately 50,000 – 60,000 miles are put on the
cars in two years.
Council Member Enger requested that when fees for service are discussed by the City
Council, he wants to include consideration of discontinuing the snowplowing of all sidewalks
in the City. He said this could be made the homeowners’ responsibility in most cases. He
said it was a waste of money to plow sidewalks, except along main thoroughfares which
should be scraped and the snow hauled away. He said the sidewalks cannot be walked on
after plowing because too much snow is still left on them.
Public Works Director Eastling said the bulk of the City’s sidewalks are along main
thoroughfares and around schools.
City Manager Orduno said sidewalk snowplowing is a City Council policy decision –
service delivery decisions are in the City Council’s hands and staff will do as directed by the
City Council. She said a determination would be needed regarding what the community no
longer wanted for services.
Council Member Enger said he didn’t mind charging people for services to try to hold
taxes down. He said residents wouldn’t tolerate a 21% property tax increase for very long.
He requested a report stating all the basic services provided by the City and City Council
could decide what might be cut. He suggested an article in the Your City and Richfield Sun
explaining the possibility of reducing City services in an effort to save taxes. He said this
would inspire residents to call the City Council or City Hall and declare what services are
important to keep or cut, which would assist in the City Council making a decision.
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5-October 17, 2001
Council Member Sandahl stated that Council Member Enger’s comments are making
the assumption that residents are more concerned about taxes than services. She said she
does not believe that’s true in Richfield.
City Manager Orduno said the Legislature’s goal was not directed to homes like in
Richfield.
Council Member Enger said the Legislature was not concerned about less affluent
people.
Council Member Sandahl said the budget appeared to be lean with no increase in
programs and staff. She supports maintaining services with the dollars available. She
supports gradual increases and realizes this year is an exception, which is out of the City
Council’s control.
Council Member Enger said he did not consider a 21% tax increase a lean budget.
Council Member Sandahl said the City needs to deal with the State’s changes by
either accepting them or cutting services.
Administrative Services Director Devich reviewed the issues not included in the
budget including the building up of the fund balance, compensation plan adjustments and
installation of an elevator in City Hall.
Council Member Enger requested consideration of a salary increase for the City
Council due to the number of meetings.
City Manager Orduno explained the policy related to adjusting City Council salaries.
Council Member Enger said he knew where a cut could be made – eliminate the new
Public Works garage at 66th Street and Cedar Avenue. He said priorities need to be set,
especially with City Hall having an unhealthy work environment due to mold. He said the
garage was not the most important priority.
Council Member Ulrich said she did not support the stopping of the new maintenance
garage.
Public Works Director Eastling reviewed the history of the need for a new garage and
how the new location was determined. He said that the City Council decided a new garage
in a new location was needed when the old facility was split in half because of the
construction of 77th Street.
City Manager Orduno said a consultant is conducting a space needs assessment of
City Hall and the report will be provided to the City Council.
Mayor Kirsch asked about the status of Richfield’s clean-up day.
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6-October 17, 2001
City Manager Orduno said this would be a fee for service project, and therefore, not a
budget item. She said discussion of clean-up day is scheduled for a future City Council
Worksession.
City Manager Orduno said the final budget would again come before the City Council
in December for their approval.
Council Member Enger asked if a public hearing on the budget would be held.
City Manager Orduno said yes, the Charter requires it.
Larry Wozniczka, 6744 Wentworth Avenue, asked for clarification on the tax impact
related to the school referendums. He also asked if there was anything published or written
on the equipment certificates.
City Manager Orduno said the Legislature’s intent was that property taxes are not an
educational issue.
Administrative Services Director Devich and Finance Manager Regis explained the
equipment certification process and said the written information is available in the State
Statutes.
All budget presentation materials are Clerk’s File No. C-377.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:05 p.m.
Date Approved: _________________
Martin J. Kirsch
Mayor
Cheryl KrumholzSamantha Orduno
Recording SecretaryCity Manager