HomeMy WebLinkAbout2017/09/05 - ADMIN - Minutes - City Council - Study SessionIOI$t. Louis Park OFFICIAL MINUTES
M I N N E S O T A CITY COUNCIL SPECIAL STUDY SESSION
ST. LOUIS PARK, MINNESOTA
SEPTEMBER 5, 2017
The meeting convened at 6:31 p.m.
Councilmembers present: Mayor Pro Tem Thom Miller, Tim Brausen, Steve Hallfin, Gregg
Lindberg, and Anne Mavity.
Councilmembers absent: Mayor Jake Spano and Susan Sanger.
Staff present: City Manager (Mr. Harmening), Chief Financial Officer (Mr. Simon), Deputy
City Manager/Human Resources Director (Ms. Deno), Communications Specialist (Ms.
Pribbenow), and Recording Secretary (Ms. Wirth).
Guests: None.
2018 Budget
Mr. Harmening noted that this is the final check-in before considering the preliminary tax levy
on September 18, 2017.
Mr. Simon provided a presentation, noting the upcoming schedule for budget considerations,
including setting the preliminary property tax levy. Also, the 2018 budget CIP, fees, utility rates,
debt model, and the city's long-range financial management plan (LRFMP) will be reviewed and
discussed.
Mr. Simon presented comparison of the outcomes of a 5.80% tax levy increase; a 5.35% tax levy
increase; and a 4.95% tax levy increase. A 4.95% tax levy increase would result in an
approximate reduction of $124,000 when compared to a 5.35% tax levy increase. Mr. Simon
displayed a pie chart depicting a percentage breakdown of the tax levy and explained what each
included.
Mr. Simon reviewed the various estimated tax impacts with the 3 levy options on a median value
home whose value increased from $240,100 to $254,200 higher than the prior year.
Councilmember Brausen asked if Option C shifts certain expenditures projected for 2018 to
2017. Mr. Simon stated that staff looked at one-time 2018 budget items that could be included
with the revised 2017 budget and purchased this year.
Mr. Simon presented the HRA levy, noting that it goes up and down based on the market value
of the city. He reviewed the formula to calculate the HRA levy that would pay back the interfund
loan for the Highway 7 and Louisiana project. He explained how that loan will be paid off by
2019 or 2020.
Mayor Pro Tem Miller asked if the HRA levy is always the maximum. Mr. Simon confirmed that
has been the city's policy.
Mr. Simon asked whether the council is comfortable with Option A for a 5.8% levy increase. Mr.
Harmening stated that staff would recommend not going below 4.95% for the preliminary levy at
this time.
Special Study Session Minutes -2- September 5, 2017
Councilmember Mavity asked what will not get done with Options B and/or C that are included
in Option A. Mr. Simon stated that there is a $135,000 difference between Option A and B that is
in Council Programs for items that may come up. Ms. Deno stated that staff started at 5.35% and
added money to Council Programs to get to 5.8%. Mr. Simon stated that with Option C, staff
also looked at one-time expenses that can be moved from 2018 to 2017 but made no change to
service levels. Mr. Harmening stated that service delivery would continue at the same levels
with Options B or C. To get to this level, some shifts would be done with one-time purchases
made in 2017 and then removed from 2018 expenditures.
Councilmember Mavity asked if staff can foresee any impact if there would be a Federal
Government shutdown. Mr. Simon stated that there are not a lot of federal funds tied into the
budget, but potential impacts could be with the Safer Grant for two firefighters (which has been
received every month totaling over $100,000 per year) and with the Build America Bonds of
$160,000 and potentially any federally funded road projects.
Councilmember Brausen stated his support for a 5.35% preliminary levy and would not be
inclined to drop it below 5% as he supports having a reserve fund in case of a federal shutdown
disruption. He noted that this year, the city dipped into $120,000 of Council Program money to
finance solar lighting, and a similar circumstance may occur again next year.
Councilmember Brausen noted that if some of the 2018 one-time purchases are shifted to 2017,
and the levy is set at 5.35%, then it may be possible to have more than $75,000 in Council
Programs.
Mayor Pro Tem Miller agreed and suggested taking advantage of the 2017 fund balance to make
those one-time expenditures so Council Programs can be increased, even with a 5.35% levy.
Ms. Deno explained that Council Programs is a newer line item. Prior to the addition of Council
Programs, if there was an additional program mid -year, the city manager was asked to find funds
for it. She stated that if the public or staff asks about the use of the Council Programs account,
staff indicates that it is for climate action, race equity, enviromnental programming, or a specific
program that has federal cuts.
The council and staff discussed how to best identify the Council Programs line item in the budget
to assure transparency.
Mr. Harniening stated that with a 5.35% levy increase, the Council Programs distribution can be
higher than the proposed $75,000. Mayor Pro Tem Miller stated that is correct, and he supports
making 2018 one-time expenditures in 2017.
Councilmember Mavity stated support for 5.35% as a preliminary levy and to allocate more
money to Council Programs. She advised that during door knocking, she has heard more from
residents about property taxes than she has ever heard before. Because of that, she is concerned
that if the school bonding referendum passes, it will go into effect with the city's 2018 budget.
Councilmember Mavity noted that residents do not differentiate. It is one packaged amount to
pay.
Mayor Pro Tem Miller stated that he is also sensitive to that issue
Special Study Session Minutes -3- September 5, 2017
Councilmember Lindberg stated he appreciates that staff brought forward an option to go below
5%. Psychologically, it's a worthy discussion. But Option B for 5.35% is his preference for the
preliminary levy, with the idea that, consistent with past pattern, the final levy is marginally
lower. With regard to the Council Programs, he supports a different title so it can be better
explained. Councilmember Lindberg stated that the levy increases over time have reflected the
city's policy and initiatives, but he has some hesitation in this vote because there has been a more
than 20% increase over the course of time that he has served on the council. Councilmember
Lindberg stated that every penny invested in staff and major initiatives are worth the money but
asked where the balance is between doing the great things the council believes in while
maintaining a sustainable tax bill for single-family homeowners who bear a significant burden.
He stated that his preference is for a 5.35% preliminary levy and then coming in somewhat under
that for the final levy.
Councilmember Hallfin stated that he can support 5.35% preliminary levy and would like to
consider coming in under 5% for the final levy.
Councilmember Brausen stated he supports 5.35% as the preliminary and final levy because he
thinks it is important to have funds available. He noted that property values have increased 6%
so he thinks 5.35% will be fine, noting it would still be lower than the 5.8% in 2016. He stated
that at some point, the economy will not be as good, and then the city may have to consider more
significant levy decreases.
It was the consensus of the city council to support a 2018 preliminary property levy of 5.35%
increase and to direct staff to populate the Council Programs line item and reallocate dollars to
increase Council Programs to $198,000, with the offset coming from making one-time 2018
purchases in 2017. It was also the consensus of the city council to support the maximum HRA
levy so the loan can be paid down.
The meeting adjourned at 7:12 p.m.
Melissa nnedy, ity Clerk Thom Mill ayor Pro Tem