HomeMy WebLinkAbout08-25-2009 Council Minutes SPECIAL WORK SESSION August 25,2009
APPROVED
CITY OF LINO LAKES
MINUTES
SPECIAL WORK SESSION
DATE : August 25,2009
TIME STARTED : 5:35 p.m.
TIME ENDED : 8:05 p.m.
MEMBERS PRESENT : Council Members Reinert, Stoltz, Gallup,
O'Donnell and Mayor Bergeson
MEMBERS ABSENT : none
Staff present: Acting City Administrator, Dan Tesch; Director of Finance, Al Rolek; Director of
Public Safety, Dave Pecchia; Director of Public Services, Rick DeGardner; Director of
Community Development, Michael Grochala; City Clerk, Julie Bartell
Mayor Bergeson called the meeting to order at 5:35 p.m. in the Community Room at Lino Lakes
City Hall.
2010 Budget Proposal - Mayor Bergeson explained that the purpose of the meeting is to discuss
the budget but no action will be taken. He noted that the council has concurred with the terms of
an early retirement program.
Finance Director Rolek reviewed his written report outlining a budget proposal for 2010 based
on previous directives of the council. The proposal takes into consideration the ranking of
alternatives by council members at the previous meeting. It includes staff reductions, an unpaid
furlough mandate for employees, assumes certain fee revenue to replace tax levy dollars and
begins the phasing in of a debt levy for the outstanding bond obligation. He explained that the
impact of this budget would be a reduction in the city's tax capacity rate from 2009 levels; staff
is recommending that the tax capacity rate be kept at the 2009 level in order to maintain future
flexibility and create less onerous effects on city service levels. Mr. Rolek discussed the
negative service impact of personnel reductions.
Mr. Rolek reviewed the items included in the levy reduction proposal: a ten-position workforce
reduction, discontinuance of the joint powers agreement with Centennial School District for field
services, revenue increases (storm water utility and franchise fees), an internal loan for Legacy
bond debt service, renegotiation of union contracts and a mandatory one-week furlough for all
staff. He reviewed the impact of the proposed reductions on the tax levy and then reviewed net
tax capacity calculations. He pointed out that tax levels on residential properties of various
values is far less in 2009 than it was in 1999, indicating that the city has continued to provide the
same level of services at less cost through that ten year period.
It was noted by a council member that the tax bill to residents will include the county and school
district levy also and those rates are yet unknown. The city controls only about 35% of that
property tax bill.
SPECIAL WORK SESSION August 25, 2009
APPROVED
The directors had included information in the report on the service impacts that would result
from the proposed staff reductions. Mr. Rolek added that service levels will absolutely be
impacted by the reductions and it would be unwise to reduce to the point where the city cannot
respond appropriately to an increase in needs or to a point that is not sustainable.
Directors were asked to comment. Community Development Director Grochala remarked that
much time has been spent by directors evaluating the situation based on the directive of the
council and they have done so knowing also that they cannot responsibly ignore the long-term
needs of the city. Based on recent strategic planning activities, the council has identified their
values for decision making—operational excellence, customer intimacy, and program and
service leadership. Those are the three things that would be hurt the most from these reduction
proposals.
Public Safety Director Pecchia noted that the Police Department has included their impact
statement in the staff report. He added that they have relied on their citizens' public safety
commission to work through the process and have made recommendations based on their goal to
continue to deliver an appropriate and a high level of services to the community.
Public Services Director DeGardner asked that the council carefully review the indications of
service reductions that will occur with the loss of each individual position. If these workforce
reductions are implemented, the citizens will be absolutely be impacted as far as services.
Finance Director Rolek said that he concurs that staff reductions will have significant service
level impacts. Businesses sometimes reduce personnel and understand there will be resulting
production decreases. The city however cannot reduce production. The Finance Department in
particular has no less work and, in fact,would have more work if a storm water utility is
implemented.
Administration Director Tesch noted that the city has recently been recognized for its high
quality of life. These cuts are to the point where that they will impact some basic functions of
the city.
The council had been requested to receive input from the charter commission regarding their
budget. Commissioners Dahl and Sutherland were present.
Commissioner Sutherland read a statement that thanked the council members that attended the
recent joint council charter commission meeting, provided background on the role and structure
of the charter commission, focused on the independent nature of the commission's work, and
noted the impact of responding to an audit of the commission. Ms. Sutherland provided the
council with written information that included historical data on the commission's funding, a
revenue/population comparison of the city, and the commission's most recent bill from attorney
Karen Marty. She noted that the attorney bill indicates that most of the commission's legal
expenses of late have been associated with responding to the city's audit. She provided
information also on the commission's standard "cost of doing business" items such as
publication and recording secretary, noting that the commission is requesting $3,000 for the
remainder of 2009 for that type of cost. She pointed out that the statute that sets a budget amount
SPECIAL WORK SESSION August 25, 2009
APPROVED
for charter commissions was passed in 1947. The commission is further requesting an additional
$1,500 for the remainder of 2009 to fund attorney fees relating to the commission's efforts to
frame and amend. Further,based on discussions at the joint meeting, the commission requests
that the 2010 budget for the commission be set at $8,500 (to fund operating expenses, attorney
consulting fees, frame and amend legal fees and strategic planning). The council could delineate
that funding if they so choose. The commission requests that the items be added to the agenda
and voted upon at the next regular council meeting. Ms. Sutherland also provided some written
information for review relative to what the city has spent on legal fees for review of a proposed
charter amendment as well as some information on costs gathered from other cities that have
looked at tax cap amendments to their charter.
It was confirmed that the budget request for 2009 is $6,070.35 (that includes the initial $1,500
appropriated in the approved budget).
A council member noted that the 2010 budget isn't yet determined and is still well under
consideration so the commission's request really becomes a part of that discussion. The council
could appropriately make a determination on the 2009 supplemental request though. A council
member noted that those council members present at the joint meeting agreed to put the matter
on the September 14, 2009 council agenda based on discussion at the September 8 work session.
It was noted that staff has not yet reported back on the council's questions and directives related
to the charter commission audit and that information should be fully reviewed and understood as
the council looks at the charter's budget. Staff was directed by Council Members Stoltz and
Reinert to report on the charter commission audit directives at the September 8 council work
session. Commissioner Sutherland requested that the council receive Charter Attorney Karen
Marty's response to the charter audit as part of the background information for that item.
Regarding the budget request for 2010, a council member recommended that the discussion
should include how the council and commission will be working together as much as possible in
formulating amendments, leaving the costly legal work to be done on a product agreeable to both
groups. Is that an approach that is agreeable to the commission? Ms. Sutherland suggested that
the concept of strategic planning could be helpful in developing collaboration. A council
member suggested that it would be helpful to include more itemization on the $8,500 2010
budget request, as city departments would do.
A council member requested a copy of Ms. Sutherland statement (as it was in writing)to be
written into the record. She replied that she would provide the portion relating to numbers.
The council returned to the overall 2010 budget discussion. It was noted that staff is
recommending holding the budget at the 2009 tax rate (approximately$8,700,000). To move
from the $8,400,000 proposed to that larger figure should probably be done through changes in
the workforce reduction area to avoid reductions in services. The schedule was clarified—the
maximum levy will be submitted to the state in mid-September after that and until mid-
December the work will continue to finalize a budget.
SPECIAL WORK SESSION August 25, 2009
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A council member had been contacted by an employee asking the council to consider alternatives
to workforce reduction such as furloughs. It was clarified that the council is looking at all
possibilities including a retirement incentive.
There was a discussion about a storm water utility and franchise fees as possible revenues
sources. It was noted by Director Rolek that most cities in the metro area have implemented a
storm water utility and he added it is generally considered a more equitable way to meet the
water quality mandate because it removes the cost from the levy and reaches users in a different
way. The franchise fee is widely used in the area as well. Staff will be reporting at an upcoming
work session on those two revenue options. A council member noted that the budget for 2011
may be just as or more difficult as 2010 and the council may want to reserve the storm water and
franchise fee options for those difficult times ahead.
Regarding fund balance, Mr. Rolek noted his reservations in recommending any use of that
important resource. It is a one-time use and must be considered cautiously however it could be a
good stop-gap until the economy and budget start revitalizing.
A council member noted that the city's leadership has worked hard to keep stable or lower the
tax rate in the past. If that choice continues, it is important to be cognizant of the impact on staff,
citizens and services. It is clearly a difficult time for cities and tough choices on both ends—
taxes and services—are being made. Mr. Rolek noted that governments generally feel the
impact of an economic downturn such as this later because of the taxation process etc. It is
important however to remember that the city needs to be ready for the rebound when it comes.
City employees were in attendance at the meeting and were invited by the council to
engage in the discussion.
Bart Anderson, AFSCME Council 5 business agent for Local 2454 read a letter prepared by the
union membership. He also noted concern regarding the proposal for early retirement in that it
has not been properly negotiated through the collective bargaining process. He will be reviewing
the program documents and will work with Mr. Tesch if there are concerns. He is also
concerned that the union has not been asked to engage in a meet and confer process in regard to
proposed layoffs. Mr. Anderson noted the great concern of the Local membership with the
current situation as well as the membership's interest in working together with the council and
city to meet the challenges.
Tim Hillescheim, on behalf of the 49ers union, suggested they would welcome the chance to talk
about options and how their members can be a part of collectively working together to solve
some of the city's budget problems.
Lisa Hogstad, Community Development Secretary, remarked that the written report received by
the council indicates the duties that would be lost with the proposed work force reduction. She is
concerned that the information presented is incomplete and that those employees do much more
and the city will lose much more than what is being presented.
SPECIAL WORK SESSION August 25, 2009
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Dawn Bugge, Community Development Assistant, remarked that she believes this situation
speaks to the point that you don't know what you've got until it's gone. She asked that the
council be mindful of that as decisions are made and services are lost.
Georgia Woltjer, Building Secretary, stated that she has worked in customer service for her
entire career and she believes that it would be devastating to the city's service level to only have
one window open to the public. If there is a storm similar to last year, there is no way she can
issue 8,000 permits and answer the phones for the entire building.
Carol Danielson, Administrative Assistant, remarked that during her three and a half years with
the city, she has been proud to be an employee representing the city and feels that staff provides
a high quality of service. The city would lose a very high caliber of employee.
Tanya Mozingo, Recreation Supervisor, asked the council to consider all level of city services
that are at risk. Services don't start and end with the taxpayers. The employees work hard,
enjoy their work and provide a high level of service to all residents, preschoolers on up.
Jackie Bowdich, Police Department, acknowledged the difficulty of the situation. Services as
well as people are an important consideration. The loss of a job can be devastating and result in
harsh consequences such as the inability to pay for homes, cars, schooling, etc. She hopes the
council will consider that employees are real people. She believes that the employees are willing
to stand together and make concessions to help the city get through the budget crisis.
Paul Bengtson, Associate Planner, asked the council to consider that a reduction in an area such
■` as planning could result in the need to pay for more outside consulting services. He encourages a
closer look at cutting back on that type of fees so the city can maintain its current employees who
can provide superior services based on their knowledge and experience within the city.
Lester Rydeen, City Mechanic, noted that he came to the city from the private sector where he
had heard plenty of jokes about government workers. Coming to work here, however, he found
real employees doing real work providing real services. The numbers the council is looking at
are tough but he hopes they will remember the benefit and need for continuity. The practical
knowledge and experience these employees have built up and will pass on are important
elements to the present and the future functioning of the city.
Connie Sutherland, resident of Lino Lakes, commented that it is striking that the budget
recommendations seem unequal—there are no proposals for reductions at the director or non-
union levels. She thinks broad spectrum reductions, rather than just hitting the front line
workers,would cause less service impact. She encourages the council to be more creative,to
hear that employees are willing to work with the city on ways to hold onto experienced workers
and to look at reductions in a broader sense as the private sector is currently doing.
The work session was briefly recessed at 7:30 p.m. reconvened at 7:45 p.m.
Finance Rolek recalled that the council will be asked to consider the levy limit at the council
meeting on September 14, 2009. A council member suggested that the enormity of the budget
SPECIAL WORK SESSION August 25, 2009
APPROVED
work still to be done will have some bearing on how the council sets that maximum levy. The
council will consider the budget again at the next regular work session(September 8) and as well
at a special work session on August 31. A council member asked that staff provide a picture of
what it would look like to have the Legacy situation fully funded through an internal loan. The
council concurred that they want more information on the storm water utility.
Two members remarked that the council owes it to everyone involved to dedicate adequate time
up front in the process to deal with the process fully; they are committed to having as many
meetings as are necessary to deal with this properly. Employees are welcome to engage in the
process; and council members encourage the employee groups to get their negotiating process
underway with the city.
The meeting was adjourned at 8:05 p.m.
These minutes were considered and approved at the regular Council meeting held on September
28, 2009.
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City Clerk, Julianne Bartell John Bergeson, Mayor