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09-09-03 WSSeptember 9, 2003 Page 1 MINUTES CITY COUNCIL WORK SESSION -September 9, 2003 A work session of the Hopkins City Council was called to order by Mayor Gene Maxwell at 6:30 p.m. on September 9, 2003, at the City Hall. Council members Brausen, Johnson and Rowan were present. City personnel present were: City Manager Steve Mielke; Finance Director Lori Yager; Communications Director Bobbie Hartfiel; Public Works Director Steve Stadler. Present for the discussion with former elected officials were: Nelson Berg, Fran Hesch, Ellen Lavin, Jerre Miller, Jim Shirley and Paul Slaton. Discussion with Former Elected Officials City Manager Mielke briefly summarized the situation, noting the LGA cut of $1,100,000 represented 13 % of the 2003 General Fund budget. Budget cuts have been favorably discussed that would equal almost half of that loss Council has voted to have a 9.9% levy increase, and could have gone as high as 17 % . Ms. Yager noted the levy increase would equals about a $10 per month increase for the average homeowner. There is still a $297,000 gap; Mr. Mielke recommends a franchise fee. He added, contrary to rumors, it is not planned to close the Activity Center, but it would be cut back to basically senior citizen services. Mr. Berg asked about city reserves, noting the state had said many cities had too big reserves. Ms. Yager said 50 % of a yearly budget is recommended; Hopkins had 66 % overall last year; now it is at 53% overall and the general fund reserve is under 50%. Mr. Slaton asked if Alliant Tech would have revenue impact. Ms. Yager said it would impact the market value of the Clty. There was discussion about "furlough." Ms. Yager said closing ten days would save $170,000 and represent a 4% pay cut to employees, with the exception of police. Mr. Brausen added he made the suggestion to reduce additional lay-offs, which he feels would hurt employee morale more. Later Mr. Mielke said closing Friday afternoons Memorial Day through Labor Day would save $120,000. Ms .Hesch mentioned a 4-day week with 91/2-hour days. Mr. Shirley asked why the days off couldn't be rotated; Mr. Brausen answered this is more uniform and restructuring schedules would be easier. Mr. Mielke noted contracts don't need to be renegotiated for furloughs. Ms. Lavin asked if it would hurt city efficiency. Mr. Mielke said far one day a month, it would work; one day a week would be a very big impact. Mr. Miller said the council had to balance layoffs with something the public would see as dramatic. He felt the furlough idea was a good way to do that as it kept permanent jobs but let the public see city hall closed more. Mr. Berg said reducing budget without big impact was the wise way to go; furlough would do that, as it wouldn't need to be long-term. There was discussion about franchise fees. Mr. Brausen said he favors it because it makes apartment dwellers and nonprofits share the burden with property owners more. It also helps the elderly, as a $2 per month fee is better than a property tax hike. Mr. Mielke added the largest user in town would see their bill go up $65 per month. Mr. Berg noted if reserves have to be used there would be big problems in the future. Ms. Yager said a franchise fee might prevent future crises. September 9, 2003 Page 2 Mr. Shirley said a franchise fee with a sunset clause has real merit. Mr. Berg added a sunset clause would help sell it to the public. Mayor Maxwell asked for comments from each past official. Ms. Johnson asked if they felt there was a reasonable balance between cuts and revenue sources. Mr. Slaton said he felt the budget had been cut to bare bone. He felt the reserve must be maintained; low reserves are what caused State's problems, who then "passed the buck" on to cities. Mr. Shirley suggested the school district had started a foundation program when they had financial problems so they could accept gifts for special projects. Could the city do this? He asked how permanent the state cuts were. Mayor Maxwell said the council looks on them as permanent. Mr. Shirley asked if user fees, such as Minneapolis charging for emergency fire truck calls, could be implemented. Building permits and inspection fees are also sources. Mayor Maxwell noted insurance companies pay for foam on fire. Mr. Shirley felt the Council had been very responsible in their planning. Mr. Berg asked about partnering opportunities with neighboring cities. Mr. Mielke said there is talk of 911 consolidations, but it would be 2-3 years away. Hopkins has joint recreation with Minnetonka, now the issue is if Hopkins can handle its one-third. Mr. Berg said he does not support cutting the "appreciation" items now and hopes they can be added back in future years. Ms . Hesch suggested the use of `furloughed' rather than `deleted' or `eliminated' in budget descriptions. She felt Council had done a good job of budget cutting. In some ways she had hoped there would be a cut with a "drastic impact" so the public would understand how state cuts had ........... _............ really hurt the city; she feels Hopkins is bearing a burden for poor decisions at state level. She expressed concerns for cuts of police and fire; closing city hall is better than that. Mayor Maxwell noted the fire department could function normally at 36 people. She would favor temporary cuts that are more visible rather than raising taxes to send the message "this is how we handle the cuts on such short notice for the next couple years rather than raise taxes." Later she added when she was on the Council she had never dreamed LGA would be eliminated; if it comes back, the city must plan how to not get dependent on it again. Mr. Mielke said some cities are already trying to budget their market value homestead credit for special projects. She asked about TIF districts coming onto the tax rolls; Ms. Yager said the effect would not be noticeable until 2006. Mr. Mielke added that may not mean more money if levy limits don't allow it. Ms. Lavin said she felt that less impact was better. She felt closing city hall was detrimental. Many programs were added in recent years; basics cannot be let go to keep them. She said the Council should be proud of it's plan: "Look what we did without hurting everybody." She noted with a one and a half million shortfall, everyone knows there will be a raise in taxes. She also stated that the burden of this problem should be placed on the sixteen thousand residents rather than on the employees. Mr. Miller felt franchise fees and furloughs near holidays had to be kept "in the mix. " Mayor Maxwell asked for suggestions about the September 30 meeting. Mr. Berg suggested that in presenting to the public the general fund figures be separated from the facility debt to make it clear Council had made a 50/50 balance of cuts and levy raises for general fund expenses. Mr. Rowan agreed. Mr. Berg also said it should be shown that the budget is 80% personnel costs; cuts are being made there through retirements and furlough so people are not put out on the street. He also noted that there would be `more heat' at the November/December September 9, 2003 Page 3 meetings after the notices for taxes come out. Ms. Yager noted that the $10 per month per home increase was what had been projected just for the facilities debt increase. Discussion, 2004 Budget, Public Works City Manager Mielke said Public Works is the department hardest hit by the budget cuts. He and Mr. Stadler do not think the plan is perfect, but was how Mr. Stadler feels the 12% cut mandate can be met. He commended Mr. Stadler for the effort put in and added he knows Mr. Stadler got "a lot of heat" for his recommendations. Mr. Stadler said he feels his staff has been largely supportive considering how many people they are losing. They understand the need for cuts, but feel they are shouldering more of the cut than they should be. He then went over the reorganization charts, noting he has eliminated 2 superintendents but added a maintenance supervisor (range 7 rather than the range 8 of a superintendent). He feels the reorganization will be good long-term as it will give more flexibility and help cross training; but there will be transition problems. He combined streets and utilities as both are on streets; utilities presently has more experienced people, which would be a problem in 5 years, but cross-training now will help alleviate that then. He broke out maintenance, as it will be responsible for more space; he may later include the park buildings in that responsibility. Mayor Maxwell asked why there had to be a lead mechanic for 2 mechanics. Mr. Stadler said he would have more responsibilities. Ms. Johnson asked how he would decide who stays, ....................... _ who leaves. Mr. Stadler said the new positions would be posted; for example both Street Superintendent and Utilities Superintendent are eliminated, bath could apply for the new position. Mr. Mielke added the transition details have not been worked out. Ms. Johnson expressed concern people in lower positions would get `bumped down.' Mr. Stadler said superintendents are non-union. Mr. Rowan asked if the present compartmentalization was a problem; Mr. Stadler said no, but improvement was possible. Mr. Stadler said he had talked to employees, without superintendents, by division. Their major concerns were that with less supervisory positions things would get missed and equipment services. He added Equipment Services was his greatest concern, but he had to cut there to meet the 12%. If the new superintendent does not have troubleshooting abilities, there could be problems . Since it was not broadening otherwise, he put equipment under Parks and Forestry, but is not really comfortable with the solution. Mr. Brausen asked if the superintendent could be eliminated and a mechanic added. Mr. Stadler said there has to be a superintendent; it is easy to underestimate the paperwork needed fora 10-12-person division. Mr. Mielke asked if he could do one add-back, would it be a mechanic. Mr. Stadler says someone has to be able to do invoices, work orders, etc.; the old superintendent did 50% paperwork and 50% "wrench." Mr. Mielke asked about adding a mechanic who could plow; Mr. Stadler said mechanics already do that when needed. Mr. Brausen said if the furlough plan were accepted, he would like to "buy back" a mechanic. Mayor Maxwell said he felt there were still too many superintendents. Ms. Johnson said going from chart to chart it was difficult to see how many people reported to each superintendent. She wondered if there could be fewer superintendents and more "leads. " Mr. Rowan asked if one Parks person could be 1/a park maintenance and'/z mechanic; Mr. Stadler thought that would take $50,000 more. Mr. Mielke asked for difference between leads, supervisors and superintendents. September 9, 2003 Page 4 Mr. Stadler said a lead is a local 49 position that manages a crew on the job but is one of the workers. A superintendent meets with workers, including leads, each morning to assign responsibilities. Mr. Stadler said he understood the Council wants fewer superintendents. He will see if he can do that. He wants to do his part in the cutbacks, but feels he cannot cut services. Other Mayor Maxwell said he had received a letter from the mayor of Plymouth asking if He would be interested in participating in a food shelf sleep-out. He indicated he was not interested and asked if anyone else was interested. Consensus was no. Mr. Mielke said the Downtown Park dedication would be October 8, a Wednesday, at 6:00 p.m. It would include a "Don Bates type" band. Mayor Maxwell said he had talked to Don Bates, who said they could play 6:15-7:30. Mr. Mielke said the park benches would be dedicated then. Ms. Johnson asked how many were not sold; Mr. Mielke said he thought 6 curved benches were left. Ms. Johnson asked that council members be given a list of buyers so they could see who might be approached on those remaining. Mr. Mielke handed out a copy of the forthcoming Sailor article on the budget. Mr. Mielke handed out a memo, noting that Sue McCarville had filed to run for Council. Mr. Brausen moved adjournment. Ms. Johnson seconded. Meeting adjourned at 9:50 p.m. Kasey Kester, Secretary ATTEST: Eugene J. xwell, Mayor