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HomeMy WebLinkAbout10.12.09 Town Hall Meeting Town Hall Meeting Minutes October 12,2009 Mayor Larson called th~ Town Hall meeting to order at 5:30 p.m. Present: Also Present: Larson, Donnelly, Fogarty, May, Wilson Peter Herlofsky, City Administrator; Robin Roland, Finance Director; Kevin Schorzman, City Engineer; Lisa Shadick, Administrative Services Director; " Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant Audience: Jim Peroutky, Tom Flanagan, Cory Pays, Mathew Words, Erwin Hagen, Dawn Wright, Robyn Budensiek, Charlie Sievert, Shannon Walsh, David Pritzlaff The purpose of the meeting was to hear residents' ideas on the 2010 budget. Finance Director Roland gave a brief overview of the preliminary 2010 levy. The 2010 preliminary levy is 5% larger than the 2009 levy. Mr. Mathew Words, President of the Farmington Youth Hockey Association, asked the Council to consider funding the ice arena. There are over 400 skaters in the association and along with their families it is important for the longevity of the association. The majority of the attendees here are hockey parents, coaches, and board members. They would like Council to look at fixing the arena for the longevity of the association. Mayor Larson asked what the association's plan is for fixing the arena. Mr. Words stated they have met with the City and they have not made a concrete plan, but they do plan on participating in their fair share of what needs to be done with the arena. At this point, they have decided the floor needs to be fixed in its entirety and they do understand the association would be responsible for a percentage of that, approximately $30,000. The association does not have an issue with that. They want to find out what the total number would be and what the affect would be to the association. They would be hand in hand with whatever the City thought was fair and equitable. Mayor Larson stated at one point they discussed not only fixing the floor, but updating the locker rooms, bathrooms, and concession stand. He asked if the association is also considering those areas or just the floor. Mr. Words replied primarily just the floor. The other amenities could be discussed at a later date. The floor is the most important part of that structure at the current time. Mayor Larson spoke with an engineering firm today that had spoken with staff and they will be writing a report with an estimate for repairs. They felt we would get this year in, but nothing more. Mr. Tom Flanagan, 17712 Formosa Avenue, member of the Hockey Association, urged Council to fund the repairs for the arena, not just for the longevity of the association, it is for the longevity of the community. Hockey is part of the community, the high school hockey is part of the community. You lose that arena, you lose part of the community. Where would the high, school and youth hockey play? They become some other association and not Farmington. They Town Hall Meeting October 12,2009 Page 2 are just as important to this community as baseball, soccer, or anything else. It is part of what makes this a community. It is not just about the money. He understood from past meetings the arena is running fairly close to even in user generated fees. We are not putting a big tax burden on the City. The repairs put a tax burden on the City. The arena deserves the same credit that the baseball fields, football fields and soccer fields get in tax revenue. Those are all funded through parks and rec which the arena should be. We should see some fair share of our tax dollars coming back to the arena to help the community. Councilmember Wilson noted the budget shows a projected deficit for 2009 of $34,000. He asked where we are now in being close to that projection. Finance Director Roland stated we are coming into the beginning of the hockey season so we have seen more than two thirds of the year go by. That is not an inaccurate evaluation. Expenses are probably less than the $318,000 overall, but we do have theone time charges to fix the arena this year that total $30,000. Even with those we will still see the $34,000 deficit. That is as close as we have been to breaking even. City Administrator Herlofsky stated what is also important is having as much rental ice as possible. We encourage groups to use as much ice time at our arena as possible. Councilmember Fogarty stated if we had not had the repairs this year, there would have been almost no deficit. Mr. Erwin Hagen, 19643 Akin Road, stated in the winter, the parks department is cleaning the trail along Akin at 6:00 a.m. when it is still snowing. They clean it again in the afternoon when it is still snowing. They even do it on weekends. This seems like a waste of money. Why are the trails plowed in a snow storm? Councilmember Fogarty stated there are a large number of children that use the trail to get to school. They are trying to clear them so those walking to school can get through. There are also a large number of runners at all times of the year. Mr. Hagen stated in the summer there are people on the trail steady. In the winter, plowing it is a waste of money. Mayor Larson stated staff will look into how often and when the trail is cleaned. Ms. Shannon Walsh, 816 2nd Street, had a question on the budget. On page 40 where it lists the total general fund revenue, the $9.4 million, that is how much the general fund revenue is. For expenses on page 41, the bottom number for 2010 proposed of $9.2 million, that is how much money we are looking to spend. Finance Director Roland stated in addition you need to look at page 36, because what we spend in expenses also has to include the transfers out, the $175,000 is transferred from the generaL fund to support the Rambling River Center for operations and debt servic~.In the revenue, there are transfers in. The revenues total $9.4 million andthe expenses total $9.4 million and it is a balanced budget. Ms. Walsh understood it was balanced. It seems we are spending because the number in 2007 on page 40 for the revenues goes from $9.0 million to $9.4 million, which is $355,000. The expenses are going from $8.1 million to $9.25 million. This seems to be an increase in $1,057,000. It appears we are spending money three times more thanwe are getting it in andthat did not make sense. If you take the 2010 number, the $9.4 million and subtract$9.074l11.illion there is a $400,000 difference. Finance Director Roland statedline2 shows licenses and permits. In 2010 we are budgeting approximately $316,000 for licenses and permits. In 2007we received $1.2 million in licenses and permits from the high schooLconstruction. We added $600,000 to the fund balance that year. We are not proposing to receive that quantity. Ms. Walsh stated we have lost $900,000 in building permits and fees and Town Hall Meeting October 12,2009 Page 3 $300,000 in money from the state and she was wondering how we can keep spending at that level if the revenues do not seem to be increasing proportionately. Finance Director Roland ',. . noted the expenditure comparison line item by line item. We had a significant increase in the '.'. area of Administration due to the City Hall building being shifted frOlnParks and Recto '...> Administration. We are roughly flat in other areas. We did show over a $600,000increaseinY the Police budget. Thathas to do with personnel services, benefits, and the DCe.There isa> $200,000 increase inthe Fire Department for training and equipment for new firefighters. That is $800,000 in public safety. There is a decrease in the Parks and Rec department due to a decrease in staffing in the 2009 budget, as well as the shift of building maintenance from a Parks and Rec function to an Administration function. Municipal Services which is streets and maintenance and street lights, the street lights go away because ofthe street lightutility in 2010, and the streets were cheaper to sand and salt in 2007 because we didnothave to drop $100,000 in salt that is now inthe 2010 budget. Engineering services has the same amount of money, '.. $945,000 compared to $934,000. Human Resources and Finance area 3% increase between the two years. During 2007 - 2009 we did have contractual obligations for salaries and benefits that needed to be paid. Weare looking at less revenues and at expenditure levels that are at or above, but there are reasons for it. Ms. Walsh stated it is concerning because we cannot unbuild the building we cannot negate that expense. There are certain fundamental things we just cannot do. If we don't have as much revenue as expenses, regardless of what the reason is, we are still upside down. Regarding personnel expense, it looks like from 2007 - 2010 on page 41, it went from $5.5 million in 2007 to a proposed $6.6 million; up $1 million in personnel services. She assumed that is salaries, overtime, part-time, FICA, fire pension aid and employee benefits and insurance. Mayor Larson stated these are great points and Council will be looking to staff to make cuts. Ms. Walsh asked why the 2009 - 2010 budget is up. Mayor Larson stated this is a work in progress and we are not done with the budget. Ms. Walsh asked about the difference in the funding between 2009 and 2010 as it goes up $587,000. She understood there are a number of things going into it, but wondered about the remaining balance of$193,000. Councilmember Wilson stated the Finance Director highlighted changes between the two years in the beginning , of the budget document. Ms. Walsh stated if you take all the items on page ii, there is still $193,000 and wondered what that is. Mr. Charlie Sievert, 19825 Emperor Court, asked what would have happened if we would not have been able to get the arena back in shape. It would have had a big impact on the hockey . program and the community. He asked what we are doing to plan ahead to prevent this from: happening in the future. The message in this City is not different than other cities. From a ' revenue base we are challenged and will be for years to come. He asked what we are doing to explore ideas and be more creative to look at other ways to get projects done in Farmington without increasing taxes. Specific to hockey, Lakeville has done some creative things and also in Blaine and Plymouth. They have used investment bonds, and a joint powers agreement. In Plymouth there was a collaboration between City, private, and the hockey association. There was significant dollars that came through bonding for seed money to get it started. He also did not believe the responsibility falls on the City or the Hockey Association. It is a collaboration. Even beyond hockey, he remembered the study done by the Parks and Rec Department that showed the needs we have for soccer fields, baseball fields, football fields are significant. We know the revenues are not here today in our tax base. He asked what the City is doing to address that. Even looking at the arena, he did not know if anyone was stepping up, leading this, and Town Hall Meeting October 12, 2009 Page 4 accepting responsibility. He also was wondering whose responsibility is it. He was not saying it should be the City's or the school district's. Someone has to step up and try to move us forward to solve some ofthese problems. Mayor Larson stated we will get through this year with good ice and then a decision has to be made. Councilmember Fogarty stated there is a plan that involves the City, the school district, and the Hockey Association partnering together. Mr. David Pritzlaff, 20255 Akin Road, asked about the street light utility fee. It is more of a tax cut to residents that have more expensive homes as they will pay less. A home with a lower property value would pay more for the street light utility. He asked why Council would support that. Mayor Larson stated it is still on the table. Finance Director Roland stated a home valued at $221,000 pays $20/year in taxes for street lights under the current levy for 2009. The street light utility would charge $24/year for all properties, including businesses and tax-exempt properties. A market value home at $336,000 under the tax levy is paying $311year for street lights. Under the new scenario they would pay $24/year. Councilmember Wilson stated under this scenario, he would see a tax decrease. Is anyone parcel using more street lights than another parcel regardless of home value? Mr. Pritzlaff stated he was discussing whether they are using more street lights. If you have a property value of $175,000 that person will now be paying more for the exact same thing they have been getting for a certain amount of years. The person with $175,000 will pay more and houses with a greater value will see a decrease in that fee. He asked why the lower values are paying more and the higher values getting a tax break? What other avenues are there? He understood the City is trying to get tax-exempt properties to help pay for this. It might get the City more revenue, but some will pay more and some will pay less, so where is the extra revenue? Where is the savings to the taxpayers by doing a street light utility fee rather than leaving it the way it is? Councilmember Donnelly stated the intent is not to have a tax ,cut, it is just, the way the,math works. Councilmember Fogarty stated it is no different than garbage or water. ' You pay the same flat rate for what you use. It is an even amount over the board. Mr. Pritzlaff stated you pay for what you use. He asked why it cannot stay the same as it is now versus having a street light utility fee. Finance Director Roland stated if we do what Mr. Pritzlaffis suggesting, we would need to add $155,000 back into the general fund which would have to be funded by the tax levy and Council would need to cut $155,000 somewhere else out of the general fund budget in order to make that happen. We moved it out of the general fund in order for that $155,000 to pick up some other portion and the levy would not have to go up as high.Councilmember May stated it is an increase because we would collect the street light utility fee plus increase the budget plus increase the taxes. Finance Director Roland stated if we do not have a streetlight utility in this budget, there would not be the charges for street light utilities. Councilmember May stated it would increase whether it is a street light fee or we kept it in. Finance Director Roland confirmed it is just an alternative source of revenue. Mr. Ptitzlaffthenaskedaboutthe garbage fee and noted it has been stated that is a revenue generating department. Each of us pays a certain amount per quarter for solid waste. If it is revenue generating and we are paying a fee, is he paying too much for solid waste and the City is making a profit off of solid waste, or is the profit from the transfer station totally funding all the capital improvements for the garbage service such as trucks, maintenance, etc. He asked if the Solid Waste department is making money or are we losing money on solid waste? City Administrator Herlofsky stated the solid waste operation is operating within a budget. It covers its capital costs and it covers its operating costs. Much like any other service, staff is asking for Town Hall Meeting October 12,2009 Page 5 an increase in 20 I 0 to match up to the current costs. There was an article in the Star Tribune about how communities that have one solid waste pick up, how much more beneficial iUs.O'll" solid waste operation is working very well. It is providing some offset to the general fund.>.> . There is an H.R. cost for the employees, so it is reimbursing the general fund for appropriate costs. It is a very well run and well managed function of City government. Finance Director Roland stated the Solid Waste department is part of the City Enterprise Fund operations and also contributes towards the debt service for the Maintenance Facility. Without that the other Enterprise Funds would have to increase the amount of money they pay towards the debt service or the general fund would have to contribute towards the debt service. All of the City's garbage, which the City generates a lot of, is funded through the expenses in the Solid Wastefund.Wf;_ are able to take care of our own trash and would not have to contract out with another hauler to< take care of those costs. Mr. Pritzlafffelt a resident is paying more than they should for solid waste collection. His bill also funds picking up solid waste, but also funds other things. Thatis charging more for the service than he is getting. Mayor Larson stated Council will look at it. Mr. Pritzlaffstated in the 2010 budget, 5% over 2009, other cities have had dramatic freezes in hiring, and staff reduction. He asked what staff reductions Council would support or suggest. Mayor Larson stated they will look at it and it will be discussed at the workshop. Mr. Pritzlaff asked when Council will discuss the actual amount they will support in December? How many more workshops will there be before you come to a number. Mayor Larson replied as many as we need. Mr. Pritzlaff asked where does the money go when the City sells a piece of property? Councilmember Fogarty stated a good portion of the properties are owned by the EDA. If the EDA sells a piece of property it goes back into the EDA fund. Mr. Pritzlaff asked where the EDA money comes from. Is it a levy from the taxpayers? Councilmember Fogarty stated the fund has been established for a long time. Some has come from selling properties in the industrial park and some money from the federal government through CDBG funds. Mr. Pritzlaff asked if we have levied the taxpayers for some of that money. Councilmember Fogarty stated currently there is no EDA levy and there has not been. Mr. Pritzlaff stated there have been discussions about selling a piece of property in the downtown, the amount we are selling it for, and why we are not accepting higher amounts of proposals. Mr. Pritzlaff stated as far as the plowing of trails, there are certain trails that have a ranking as to which ones we plow first. He has also said numerous times, the trail along Akin Road is cleaner than the street. It is plowed during a snow fall. He asked why we are plowing a trail four or five times while it is still snowing and we leave the road until the snow is done. He differed about how many people use the trail to walk to school. People do use it for exercise, but there are not a lot of kids walking to school. Mr. Pritzlaff asked how can the City sustain salaries versus revenue. Looking at the revenues coming in and salaries, in three years we will pay more in salaries than we take in in revenue. How is the Council this year approaching that for the next three years as a long term fix? Mayor Larson stated they will look at it. Town Hall Meeting October 12, 2009 Page 6 Mr. Pritzlaff stated staff spoke about property taxes for five properties. If you add all the valuations of the properties, in 2010 there is a 10.12% reduction in the valuation of those properties from 2009 to 2010. In City tax there is a 3.86% increase in the tax for a difference of 13%. He asked Council to explain that. Mr. Pritzlaff stated it is not a 5% increase, it is a 13% increase. Part of his taxes is going up. Finance Director Roland replied he is comparing valuation to a tax increase and the two do not equate. A 10% valuation decrease, does not mean property taxes should decrease 10%. It has to do with a formula where the levy is one amount. When we say 5%, it is the amount the actual levy itself is going up. It is $400,000 more in 2010 than it is in 2009. If we were to levy the exact same amount in 2010 as we do in 2009, because of the valuation of the properties, taxes would go down, but they would not go down the full 10% you see in a decline in: property value. Each property would decline at a different rate, depending on how much their market value declined over the year. One property might see a decline of 2% and because the levy is the same amount, they would see that 2% decrease in the City portion of their taxes. A commercial property that increased in value by 3% or 4% would see an increase in taxes paid because the levy stayed the same. Weare talking about the levy and the valuation. They are not cumulative. They are two separate things. Mr. Pritzlaff stated when a property is valued in 2009 at $186,000 and in 2010 it is worth $180,000, if he is taxed on a percent level why would his taxes not go down as he is taxed on a lesser value for his property. Finance Director Roland stated if the levy amount were the same, the amount should go down. Mr. Pritzlaff asked if the Citywere to keep the levy amount and not take credit for the property value going down, at what rate would it be that this property at $186,000 in 2009 and $180,000 in 2010, what percent of the increase should that be to make a zero increase to the tax. Councilmember Wilson clarified he was asking what levy amount would produce a net zero effect on property taxes. The $225,000 reduction in the levy amount keeps the property tax flat. Councilmember Fogarty stated the number used was the average value. Individual property taxes will still vary. Council cannot ensure everyone's taxes will stay the same. Council member Wilson stated Council needs to determine a number we want for the levy. Mr. Erwin Hagen, asked about the street light utility. He asked if Council was going to add this fee to help balance the budget. If Council does, he would like to see it charged the same to each resident, business, or industry. As far as street lights, none of them do him any good. Someone that lives in town on a corner may have street lights that benefit them. He wants to see everyone charged the same. FinanceDirector Roland replied that is what the street light utility will do. It will be$2/property/month. Mr. Hagen asked if Council was going to increase the utilities. Councilmember Fogarty stated it is not a part ofthe proposed budget at this point. CouncilmemberWilson stated Mayor Larson and Councilmember Fogarty have been talking with the Hockey Association. He asked if there were any thoughts that if we look at new bonded improvements which could add to the City debt, if residents would be comfortable paying more in taxes for that. Hockey Association members would. Councilmember Wilson stated it is not just a City issue, it is a broader community issue. Mr. David Pritzlaff asked if there was a way for the ice arena to be run by a different entity or does it have to be owned by a different entity so everyone that uses it pays for it. Mayor Larson stated one partnership is with the school district and also with the hockey association. Finance Director Roland noted tax dollars do not fund the arena. The arena is completely funded by user Town Hall Meeting October 12,2009 Page 7 fees from the hockey association, from the school district, from private groups who rent ice time. The City owns the building, but tax dollars as far as the tax levy do not support this. In a way the whole community through the school district, the hockey association and people who use it pay for it. In the future, if we expand it do we pay for it with tax dollars and if so, where do those ' come from. Councilmember May asked whether it is the arena or another City owned building,. is there a percent of the general fund balance that is set aside forcapitalimprovements?There,is repair and maintenance on all buildings, so is that determined on an annual basis based on what the projected improvements are going to be and would that not have been the case with the ice arena? City Administrator Herlofsky stated we are looking for a revenue stream to cover the capital costs which included participation with the school district and the hockey association, but also setting aside an equipment replacement fund that has not been in place. That is very difficult to bring to Council, but would be an excellent start for the arena. MOTION by Fogarty, second by Wilson to adjourn at 6:55 p.m. APIF,MOTION CARRIED. Respectfully submitted, {1 ~ ff ..r;? /' '74':"-: ': /;?--7 d-Cf:J2u' _.~'~_,/c~ "6ynthia Muller Executive Assistant