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HomeMy WebLinkAbout2005/08/15 - ADMIN - Minutes - City Council - Study Session CITY OF ST. LOUIS OFFICIAL MINUTES PARK CITY COUNCIL STUDY SESSION August 15, 2005 The meeting convened at 6:32 p.m. Councilmembers present: John Basill, Jim Brimeyer, Phil Finkelstein, Paul Omodt, Susan Sanger, Sue Santa and Mayor Jeff Jacobs. Staff present: City Manager(Mr. Harmening), Finance Director(Ms. McGann) and Recording Secretary(Ms. Stegora-Peterson). 1. 2006 Budget and 2006-2010 Capital Improvement Program Ms. McGann noted at the last meeting, they were over$600,000 out of balance, now it was down to $154,000. New assumptions were that 3%of the operating levy would be a general operations increase and 4% for infrastructure and improvements. 2.53%was included as a property tax levy increase, thus they would not have to renegotiate or increase franchise fees. Ms. McGann indicated$1.5 million to fund programs would be collected in advance for the next year. They would maintain a$600,000 reserve. The 2.53% increase would be tax deductible. Councilmember Brimeyer had a problem because they sold the program on franchise fees, and would be going back on their word. People like pockets of money for pockets of projects. If it goes down,pavement management might need to be less aggressive. He suggested there be an increase in franchise fees and utility rates and no increase in property taxes. Councilmember Omodt asked if franchise fees were stable? Ms. McGann replied at this point in time. The only way a fee can increase is if the Public Utility Commission does an increase or to renegotiate franchise agreements with utility companies. Mr. Harmening stated that Centerpoint could increase fees $.50. An agreement was put in place with Excel in 1997 and would have to be renegotiated. The franchise fee was more stable than a levy. Public Works staff believed either they do pavement management or they don't. If they levy"x dollars", they need to stick with it. Ms. McGann indicated there would be a transfer of funds to the pavement management program in `05-'06 and they would need to find alternate funding. Councilmember Sanger asked if they would still have the option to renegotiate franchise fees in the future or if it was either/or? Mr. Harmening indicated they have levy limits. Councilmember Sanger stated that was a reason to add to the levy now. She was concerned about difficulties renegotiating with the utility companies and the criticism for doing that. Councilmember Brimeyer would rather work with utility companies than upset citizens. Councilmember Santa noted when they negotiate with utilities companies, there were a lot of issues about charges. Mayor Jacobs hadn't gotten complaints about that. Study Session Minutes -2- August 15, 2005 Councilmember Santa believed most people were OK with that,but a tax is a tax. Councilmember Basill stated unless they were getting rid of it, if they did a levy and eliminated franchise fees,people want to know how much they were paying and not being "nickeled and dimed" with fees. Did one of the two utilities not have to pay? Councilmember Santa responded Excel didn't pay as many permit fees. Mr. Harmening stated Minnegasco had the most underground utilities and paid the bulk of the fees. Councilmember Sanger believed whether they did franchise fees or not, they still raise taxes and would take heat. Her preference was to raise taxes and not franchise fees. Mayor Jacobs would go either way. The question was which was better and more efficient. Councilmember Brimeyer argued for a dedicated funding source and to raise the franchise fee. Councilmember Finkelstein preferred the method designed by Ms. McGann and wanted to continue pavement management. Councilmember Basill asked which protects it most? A future Council could change or eliminate a levy. Mr. Harmening responded they could use it for general operations in the future. Ms. McGann stated each year they allocate a portion of the general levy to the park improvement fund. They continue to fund capital improvements. Even when there is a budget crisis, they still fund the infrastructure. Mr. Harmening stated they could certify a preliminary levy and talk about it more and if necessary, drop it later. People will see the potential 7% levy increase. Councilmember Sanger asked what the percentage would be without this? Ms. McGann replied 4.58%. Councilmember Finkelstein indicated on the debt services and general principals,where do you get concerned? Ms. McGann replied the debt margin looks at overall tax capacity. St. Louis Park is well below and the amount outstanding was very low. The current outstanding is issued for ten years. Councilmember Finkelstein noted they should keep it under 10% and asked if there was a way to tell if there was too much TIF? Ms. McGann responded that was not reflected with this. Mr. Harmening indicated with pavement management, 6.98%. Should staff certify that preliminarily? The Council preferred a flat rate of 7% (3%operation and 4%capital). Councilmember Brimeyer indicated they could say that it was in lieu of an increase to the franchise fees. Councilmember Santa said that some would see it as a regressive tax because it is a flat tax. Ms. McGann indicated an average value home in 2005,would have an increase of$95-100, with a 7%property tax increase. If it were only 5%, it wouldn't go down much. Study Session Minutes -3- August 15, 2005 Councilmember Brimeyer asked if they allocate a percentage or dollar amount? Ms. McGann replied the percentage was 1% additional for parks and recreation. Pavement management is based on a dollar amount. They figured $415,000 based on a five year CIP. She projected over a longer period to allow adequate cash flows. Park and Recreation did a ten-year master plan, which was $1 million a year for five years and $1.5 million after. Councilmember Finkelstein requested that staff provide a written iteration regarding the Park Improvement fund, not just a project list. Ms. McGann replied staff would provide that August 22nd Councilmember Sanger asked if the figures included expansion of the Rec Center? Ms. McGann replied no, it was part of the general obligation bond. Councilmember Santa asked if they could provide more information when they replace park equipment and how often it is required. Ms. McGann would direct the request to Ms. Walsh. Councilmember Bnmeyer asked if there was a time frame to use the bonds? Ms. McGann replied there is a three-year spend down. Councilmember Finkelstein asked what they could consider park improvements? Ms. McGann replied it was a pretty broad definition. Ms. McGann reported on the general operating budget. The Council requested there be a liaison officer for the junior high. They incorporated a .5 time officer. They analyzed the revenue collections and future development projects to see if things were adequate. Councilmember Sanger asked what was cut? Ms. McGann replied they reviewed items such as maintenance contracts, revenue from permit and license fees. Mr. Harmening stated that revenue, reassessment, cuts or reapportionment would pay for one time items in 2005, not 2006. Councilmember Sanger asked if they were changing other major assumptions? Ms. McGann replied allocation regarding wages. Her wages come from the general fund and EDA. They analyzed her duties and were now increasing the EDA percentages. Councilmember Santa asked if the School District was willing to assist with funding the liaison officer? Mr. Harmemng responded they might reconsider and discuss it. Councilmember Brimeyer asked about other additional staff. That is a permanent fixed cost. He requested a one-page descnption on what would happen if they didn't have a position and what was not getting done. Ms. McGann reported on the police and fire pension fund. In 2004 the total transfer to support dispatch, GIS and other goals was $765,500. There was a 50%decrease in overall reliance. The hope is to decrease that. If you look at dispatch, in 2004 the general fund funded 23%. In 2006, it is up to 39%. Anything left at end of year goes to the technical Study Session Minutes -4- August 15, 2005 fund. If they eliminate reliance for dispatch,would need $300,000 (2%) additional property tax to pay for that. They are working with the Chief on a master plan for the funds. Mr. Harmening stated the next expense was likely for a fire station upgrade. Councilmember Finkelstein asked if there were restrictions on how it is used? Mr. Harmening replied for Police and Fire Programs and public safety. Councilmember Sanger asked if there was a deadline? Mr. Harmening replied no. Councilmember Finkelstein asked if they could use it to fund wireless for the Police? Mr. Harmening replied conceivably they could. Ms. McGann indicated they could, but they didn't have to. Councilmember Brimeyer using it for 800 MgHz and $300,000 to fund dispatch, will that get into principal? Ms. McGann responded$500,000 does. Councilmember Sanger asked if that included re-roofing? Ms. McGann indicated they allocated part of that to the 2005 GO bond. It can be reallocated, but is minimal expense. They should have a big plan for the dollars. Ms. McGann stated she would round the property tax increase to 7%. People would receive notice around November 1St. Councilmember Basill asked which was better from a marketing standpoint? Mayor Jacobs indicated people needed to justify what they were paying for. Ms. McGann stated that next week the entire packet would be given to Council to see the proposals. If need to talk about special projects, they will schedule a meeting in September. The meeting adjourned at 7:23 p.m. Cit Clerk Ma o