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WS 2001 08 27CHANHASSEN CITY COUNCIL WORK SESSION AUGUST 27, 2001 Acting Mayor Labatt called the work session meeting to order at S:30 p.m. COUNCILMEMBERS PRESENT: Acting Mayor Labatt, Councilman Ayott¢, Councilman Pctcrson and Councilman Boyle COUNCILMEMBERS ABSENT: Mayor Jansen STAFF PRESENT: Todd Gerhardt, Mark Littfin, Bruce DeJong and Teresa Burgess FIRE DEPARTMENT UPDATE. Mark Littfin: Good evening. I'll give you just a quick fire department update. Again my name is Mark Littfin. I'm the Fire Marshal and one of the assistant chiefs. We kind of rotate with the gentlemen once or twice a month here. Just a couple quick updates. The ambulance will be moving into the new facility on September l0th. They've got slated for the move. They'll be moving out of Station//2. In the last week or so Waconia's been putting in. Acting Mayor Labatt: I thought they weren't going to move until... Mark Littfin: They can pull out and access it. We've checked with MnDot. Acting Mayor Labatt: Give them an address and then... Mark Littfin: Yeah, they can kind of go around the barricades and we checked with MnDot to see if that was okay with them and they said yeah so we'll have to kind of look at that. Acting Mayor Labatt: That doesn't give... Mark Littfin: Yeah, so we've been putting in cabinets and counter tops and we've got some furniture and there's a few things they'll leave at Station//2 once they move out. I think they'll be replacing carpeting at their expense for us and so we'll be seeing how that works. That should be, then we'll see how that works as far as us responding to most, a lot of calls in town here. If we'll cut back or kind of tone it back a little bit. Acting Mayor Labatt: Is that September 10th.9 Mark Littfin: Yeah, fireworks and that kind of stuff. I don't know what they'll do. Todd Hoffman: Bonfire. Mark Littfin: Have a bonfire. So that's, we're excited about that. Large calls, the only recent large call we've had is we were over at Eden Prairie at the house explosion a week ago Saturday. They called us mutual aid for a ladder truck so it wouldn't spread. It was in a quad townhouse unit so that was kind of interesting seeing something like that and experiencing that so. City Council Work Session - August 27, 2001 Acting Mayor Labatt: What caused that, was it gas? Mark Littfin: Yeah, looks like it. Acting Mayor Labatt: Gas line? Mark Littfin: No, it definitely wasn't that but they've had problems in the past with smelling gas from time to time and a lady was burned there previously, a couple weeks earlier from, she lit her cigarette. Had a flash in her house and got burned. And then she had been living with her son or relative during her healing process and when she was gone the thing decided to blow up on her so. Councilman Ayotte: That was a long term, a long, long time. Mark Littfin: Yeah. Councilman Ayotte: And have they figured out why they were unable to detect it? Is there any? Mark Littfin: We haven't heard the reports but what we do know is if there's, for example if there's a leak out in the street and as gas will migrate through the soil to foundations, it's odor will stay behind so you're getting unodorized or deodorized or you get gas with no smell.., can come out as the gas vibrates through the soil so it can get into the house if it's out in the street and it's a following a path along the pipe. I'm not saying that's what happened but that can happen and does happen. Particularly if they don't smell gas, there can be gas in there. Councilman Ayotte: Will there be a report? Mark Littfin: Boy, Minnegasco will get one to Eden Prairie and we can certainly follow up so at a later meeting we can, if we have any insight too, we can certainly pass that onto you so. Other calls, we've been up to Lake Minnetonka. We've had 4 calls up there. They've had some boats sink and they call us for our Hazmet trailer. We have containment booms and divers to assist is necessary so. Excelsior's called us twice and so has Mound Fire, St. Boni. Acting Mayor Labatt: Was it muskrats? Mark Littfin: I don't know. One last fall was muskrat. Carsons Bay the boat just sank. They don't know why or I didn't hear why. Another one, the guy just bought it on Friday. It sank on Saturday and he said well that's fine. I'll go out and buy another one. He could care less. Acting Mayor Labatt: He's the one that lived in St. Boni, right? Mark Littfin: That was the Minnetrista, yeah. Minnetonka Bay had a fuel spill. They don't know where that happens so we're getting up there quite a bit. Our Firefighter I class, which we're doing in-house is about halfway done. We've got 7 people in that class and we also have firefighters from Shakopee, Carver and Victoria. Our Open House is slated for Sunday, October 14th from 1:00 to 4:00. That's usually a huge event. And the week prior to that is when we do our Fire Prevention Week with the schools and the kids and we'll run about 3,000 kids through fire prevention activities at the station so. Some schools walk over. Some we bus in. City Council Work Session - August 27, 2001 Councilman Peterson: How many? Mark Littfin: 3,000 kids. We'll do 2nd and 3rd graders. They all come to the station. We kind of have them rotate from station, for different scenario at the station so, you know you're more than welcome to stop in anytime and kind of see what we do. We have a lot of fun. We have a lot of firefighters that volunteer to do that. We'll have upwards of 30 people that will take vacation, a couple days off. One guy will take a whole week off so we're very fortunate to get that kind of response from our firefighters. The 800 radio system. The sheriffs office has been testing me with the sheriff deputies. We'll probably have access to some new radios in the fall that we've kind of started playing with them. In 2002, at our option we'll be able to get into the system if we want, but more of a mandatory migration will be somewhere in 2003-2004 so sheriffs office has it now. They're going to work the bugs out and then we'll see how the capital budget does with buying these radios and mobiles so. There's a presentation at the Carver County Fire Chiefs Association is going to go to the County Board and see if they can get County Board to give some money to buy initial 2 or 3, 4 radios for each fire department and then after that we're kind of on our own, and they're expensive radios too. We're working on our budget for operating capital so we'll be presenting that to Todd to present to you here shortly so we're sharpening our pencil on that. Acting Mayor Labatt: Do you anticipate any equipment? I can't remember... Mark Littfin: Capital things that we're looking at, and it's got to get through Todd first but things this year we're looking at, our SCBA equipment, our air tanks to get OSHA compliant with filling these, we have to get a blast containment type of a system so we hook the tanks up. If they do explode, it's not taking out half the station. Some SCB updates and that's around 8 grand. We're looking at some money and putting it back into the fire station. I think there was $30,000 on CIP on that. The CIP things for 2001 are on schedule. We're actually coming off pretty good on that stuff. On some of the items. Other CIP items that stand, we usually try to budget $10,000 a year for turnout gear and hose. Acting Mayor Labatt: Do you recall what year was your.., boat? Mark Littfin: We bought the boat back in late, 80ish. 80's. Acting Mayor Labatt: Yeah, we had a new boat in the CIP. Do you know when that is? Mark Littfin: We're putting one in and I don't want to speak for the dive team and the fire boat at this point because we're throwing around a few different ideas for a boat. The zodiac discussion has come up. It's a little bit more diver friendly for getting divers in and out of water. We're looking at one type of a zodiac pontoon boat. They're almost 20 grand so it's kind of scaring us a little bit. Or even something not unlike a pontoon that is more diver friendly, but we're still working at our end of it for someone to present so. Right now we're kind of looking at the second boat to keep at the other station and use as something more diver friendly to get in and out. I think we're also putting in some more money for some dive, additional dive equipment which the Fire Board's reviewing at this time. And I think there's also going to be a third thermal imaging camera now. We've got 2 and there will be a third, and we use that quite a bit. Current staffing level, we have 41 members. We have 2 on active leave and we have 7 on probation. Their probation will be up June of 2002 so we see how they do in their first year and if they pass Firefighter I and past muster and they haven't done any bad things so. Calls year to date, as of Sunday we're at 533. Last year at this time we were at 460 so we're about 73 ahead of last year. 2000 and 1999 figures are about the same so we're very, we're climbing quite fast over 2000. City Council Work Session - August 27, 2001 Councilman Ayotte: Because? Mark Littfin: Population, medicals. We do break it down and what I'll do is for the next council packet, we break our calls down. What type of calls we have in a month. I should have made copies for everybody but 60 plus percent of our calls are medical related. We've had a few fire alarms this month. A couple of carbon monoxide alarms. A couple gas leaks. We're getting a lot more mutual aid calls from other communities. Week before last we were out 4 times. We were at Minnetonka, Eden Prairie, Mound, Excelsior, so we're, we have an unusually high year for mutual aid calls. And those, they can be expensive calls because it's a lot of personnel over a long period of time. Councilman Ayotte: What do you guys think? Do you think it's a trend that's going to continue? Do you think it's something you have to address in any particular way with do an analyst or it's just tough luck? Mark Littfin: The fires that we've been called to, let's see Chaska had a couple of bad fires this last winter. They had a fatal in a couple house fires. Minnetonka's been having 2 or 3 large house fires that we were called on. A lot of these are during the day when their daytime resources are getting limited so we're getting out during the day and then if we empty our city out, we have to call another city but we usually keep a command officer in town and a minimum crew to get out for medicals and we adjust accordingly so, but this is an unusually high year for mutual aid calls. It's just, there's big fires around us. Murphy's Landing. The hotel fire in Eden Prairie last June. Councilman Ayotte: So you're viewing it as a hiccup right now? Mark Littfin: I'm hoping that's what it is. But we've never seen this like in the past. Acting Mayor Labatt: ... I said we need to wrap this up guys. We can sit here and talk fire all night long if you want. The finance guy's... Mark, I've got a quick question. What are you using for the Fire Station #2, when the ambulance comes out, what are you going to put in the bay out there then? Mark Littfin: We'll just move the one truck up so we've got elbow room to walk around, because right now when the rescue truck is there and the ambulance, it's bumper to bumper like this literally. This is going to give some breathing room. And they'll get their station back to sit and relax and watch TV or have a cup of coffee instead of coming in when they're napping or sleeping or something so they're looking forward to getting it back. Councilman Ayotte: Thanks a lot. Acting Mayor Labatt: Finance guys. 2002 BUDGET DISCUSSION. Todd Gerhardt: Honorable Acting Mayor, council members, included in your packet... I just want to kind of go through the packet that Bruce handed out to understand what some of the items are. The first item is the Minnesota Department of Revenue. This is payable 2002, overall levy limitation. This is the limitation that the State has placed on us this year. That would be $6,689,004. That's the maximum you can levy for 2002. Just wanted you to reference page 2, the detail of alternative levy on the next page. Bruce, do you want to explain your $5,600,000 on the bottom? City Council Work Session - August 27, 2001 Bruce DeJong: Yeah. The $5,600,000 is what I was afraid of last year. That they would not allow us to go off of our 2000 levy limit with the normal increases but they would put it back to exactly what we had levied before, and luckily we dodged that bullet. You can see that bullet was almost $1.1 million so it's, our levy limit is up there. We have plenty of room above where we're levying right now. Plenty of room above anything that we would contemplate levying next year under the levy limit. Todd Gerhardt: And then the next pages are just definitions to each of the line items. As you move to the available cash and surplus versus potential commitments, Bruce has put together basically your available cash. Councilman Peterson: What page are you on now? Acting Mayor Labatt: Is that 4 or 5(d). Cash definitions? Bruce DeJong: Yeah, after page 5. The first one after that. Councilman Peterson: Now I lost you. Bruce DeJong: On the green thing that I handed out. Councilman Peterson: I missed it then. I'm looking at everything you gave me. Councilman Ayotte: It's in the council packet. Acting Mayor Labatt: The envelope that was delivered is what it was in. Councilman Peterson: When was that delivered? Friday? Bruce DeJong: I got an extra one. Todd Gerhardt: So did you see this Craig before? Councilman Peterson: No. Todd Gerhardt: Okay. Let's go over page 1 again. If you go to the very top of this Table 2002, Overall Levy Limitation for the City. That's $6,689,004. That's what the Department of Revenue is telling us, that's the maximum we can levy. And Bruce highlighted on the bottom of page 2 the $5,600,852. That was kind of our fear last year is that they would limit us to that amount. Councilman Peterson: Got it. Todd Gerhardt: Then we're going to go the page after page 5 and this will take us through the available cash and some of our current deficits. Bruce DeJong: This is just an update of the same sheet that you saw last year, for those of you who were here last year, which I guess is 2 of you. I don't know if you saw that or not Bob but last year we had a list of what the potential available cash sources were, which led to some discussion about really what is potential available cash and what isn't. And I've updated that with the amounts that are current based on City Council Work Session - August 27, 2001 the information that I had sent out to you in the packet. So the amount that's available, and actually I added some money out of the utility fund. The Council does have discretion over the utility fund and has the authority to transfer money in and out of there to the general fund or other areas as they see fit. So out of the roughly ooh boy, I'm not even sure what that cash balance was in the utility fund. $5.8 million maybe. I just kind of arbitrarily put in a million dollars, but the others are real actual dollars that are available based on the council's desire to transfer them for any particular use. Councilman Boyle: You mean the utility fund is not real actual dollars? Bruce DeJong: No, it is real dollars but it's not really undesignated in the same sense that the others are. The others, the closed bond fund, we had talked about earlier taking that money and using that as a revolving fund for projects that are small enough that you don't really want to bond for but yet people want to pay them off in special assessments. Something like this Quinn Road deal. Where you've got $20,000 worth of a project. You certainly can't bond for that and the people don't want to pay it all at once. They want to put that on and specially assess it over 8 years like you do with other projects so how do you finance that kind of thing? Kind of a revolving improvement fund is a great way to do that. So that's one of the things we talked about, but you could certainly transfer that closed bond fund money anywhere. The net capital replacement fund, because you can see that on that sheet we've got some mis-codings that I have to go in and correct but net available is about $270,000. Now that is kind of earmarked for spending on capital projects on basically equipment replacements. You know trucks, mowers, computers, that kind of stuff and we can either choose to bond for those things or we can pay for them with cash. This cash is available to do that. The utility fund, certainly there's money available there that the council could transfer at their discretion, but we do have a lot of projects scheduled for that fund in the capital improvement plan so that means that you may have to bond for a higher debt level there if you choose to transfer those monies out. Historic preservation trust fund is at the current value. We're certainly applying for another grant to the tune of about a million and three-quarters. We've talked to you about that already. Councilman Peterson: And we think that's coming. That's not included in here, right? Bruce DeJong: That's not included in here but we think that's coming. Certainly last year they knocked us down by about 40% over what we thought was coming, due to some technicalities of, until we actually get the check in our hands from the Department of Revenue, we're never really sure. Councilman Peterson: Will we know that prior to the budgeting? Prior to the final levy limit? Bruce DeJong: In previous years we've found that out kind of at the end of November. Councilman Peterson: So the answer is yes. Bruce DeJong: So the answer is probably yes. Councilman Peterson: On the potential cash available, have you, is our operating, our mandated operating amount in here or out of here? We have to keep a minimum of, what is it $200,000? Bruce DeJong: Per policy. Councilman Peterson: You know what I'm asking? City Council Work Session - August 27, 2001 Bruce DeJong: Yeah. If you compare that with the fund balance that's shown on the next page for the general fund, there's 4.85 million dollars in as a fund balance right now. That's not far off so what I did was I took the tax levy that we had presented last time, which was the 5.37 million of projected tax levy, divided that in half. Subtracted it from the amount of fund balance that's currently available and said that there's $2,051,000 surplus above and beyond that at this point. So our policy amount is reserved but this is available. Then just running through the others, you know there's some, we're still looking for that debt study information from Mark Ruff but he's been unable to get some information from Carver County so he's still awaiting that before we can update that and see exactly where we should be funding those deficits from. But those are actual deficits in those debt service funds that need to be closed out at some point here. So you've got those. You know that's almost $900,000 worth. There's a deficit in the McGlynn TIF district. Right now we talked about that. Last time that we need to be able to pay that deficit up and close that fund out. There are no other funding sources. That's going to have to be coming out of fund balances from one of these available cash sources. We also have the. Councilman Peterson: What's the timing on those, on the TIF deficits? What year do they have to be done by? Paid, our deficit covered. Bruce DeJong: Well I think that we need to pay it off when the bonds are retired and we still have 3 years of payments on those bonds. Councilman Peterson: On all of them? On all, on number 1 and 2? TIF 1 doesn't have 3 years left, does it? Bruce DeJong: Yes it does. The last payments on TIF District 1 are in February 1st of 2004. So we still have 3 years. Councilman Boyle: That's $712,000...what is that? Bruce DeJong: The TIF District 2-1, which is the McGlynn District, had. Councilman Peterson: That's the Carver County issue. Bruce DeJong: That's the Carver County issue. You know they're saying that we shouldn't have received any increment in 1998 because the TIF district should have been de-certified on May 24th of '98 and we're saying yes we are entitled to those funds and disputing that but if we lose and it's you know at Carver County right now and they're asking for us to pay the money back, we may go to a lawsuit and we may have to pay it back. Councilman Ayotte: Do we know, do we have a response to that letter? Have we gotten any feedback yet? Todd Gerhardt: I can't talk about it here. We'd have to go into a closed session to discuss that. It's a pending lawsuit. Councilman Ayotte: Okay. Bruce DeJong: So anyway you've got your worst case where we have to pay it all back. Your best case where we don't have to pay anything back and that may fall somewhere in the middle. Then the remaining debt service payments on TIF District 2-1 are, they're outlined in your schedule. I think that's debt service City Council Work Session - August 27, 2001 1347. But in some of the information I've given you earlier. Then you go to TIF District 1, I've kind of updated the projections that Ehlers did last year based off of some estimates that we'll receive about 30% less increment in that district for the life of the district if that's true, and we can collect the increment and pay off the debt like I'm hoping, then we'll be down with about a million 9 deficit. If we can't and you know that kind of depends on the State Auditor's office interpretation of the accounting issues involved, then it's going to be someplace around $7.6 million that we're in deficit. When the Brown and Cris lawsuit actually I just talked to Tom Scott and he said that is settled. That's something that they got settled right before Scott left, and I guess I had missed that, but he said he thought it was going to cost us about $20,000 so he's going to check on that and get me some figures back. Todd Gerhardt: The best case would be $20,000. Bruce DeJong: Yeah. So best case is about $20,000. So the bad news is that, and actually if you get a million three-quarters, that means they could potentially be someplace here of about a half million dollars short of the worst case and you could potentially have up to 4.2 million dollars available at the end of 2004 if none of these dire consequences come to fruition. So I don't know where that leaves us exactly. Councilman Peterson: Lower the levy limit. Bruce DeJong: What Todd and I have kind of talked internally about what we should do and one of the things that I thin we're going to recommend to you, tell me if I'm speaking out of turn, is at least transferring out of the general fund on an annual basis an amount sufficient to cover the debt service for the McGlynn TIF District. That's a little bit over a million dollars over the course of this year and next year and the following year. It seems to me that you should try and match up one time expenditures with one time revenues, and that's kind of where our general fund surplus is. We've got some excess money there above and beyond our fund balance policy. It's kind of one time revenues in the sense that we did much better than we expected in building permits the last couple of years. That's where the majority of the fund balances come from so let's match that up with some one time expenditures that we don't want to levy tax dollars for. And our choices are either find somebody to pay for those bonds as they come due, or put a tax levy out there, which is always possible but I don't think there's going to be much enthusiasm for that. Councilman Peterson: And the opposing view of that would be, not to get into last year's conversation but you could use, depending upon what we end up looking for the needs for the year, you could use that general fund dollars to offset any levy increase that may be necessary too. I mean that goes back to last year's Compensation 101 but. Bruce DeJong: Yeah, but it's a philosophical issue and that's why I think we, as you know your help are trying to say in this case one time revenues that came in better than expected, let's use them for one time expenditures that have a definite time period and try and lay that out. And from a recommended management standpoint, they recommend that you match up annual operating expenditures and annual operating revenues and then that's where we had the conversation last year so. Todd Gerhardt: And you don't have another revenue source. I mean you're going to have your options other than using cash is to look at combining it all and refinancing a little package and then levying another general fund expense against that. So that would be your other alternative than using cash. The other Bruce I was going to ask here, the potential.., cash. If for some reason we do end up selling the bowling alley or the land on West 79th Street, is that considered in any of these or is that... ? City Council Work Session - August 27, 2001 Bruce DeJong: Selling the land on West 79th would be part of this downtown TIF district. And I think that based on the legislature's change in the law, that that's considered TIF revenue and so that has to go into the downtown TIF district. So that would potentially reduce that deficit, but it's not going to be available cash. Councilman Peterson: Will it reduce the deficit dollar for dollar? The sale price? Bruce DeJong: Yes. The land sale on West 79th and the sale of the bowling alley will reduce the life of the entertainment TIF district I think. You know we'd be able to close that district out early, rather than being available in cash. Todd Gerhardt: We didn't use the increment there. We borrowed increment from the State. Bruce DeJong: Well that's possible. I don't know. I haven't researched the issue well enough so I could definitely say. Todd Gerhardt: Yeah, if it was an obligation someplace else where we borrowed it from. We'll have to look into those too. Councilman Peterson: So what I'm hearing you generally say is that from a cash position we're looking relatively good. Bruce DeJong: Yes. Councilman Peterson: If not very good. Bruce DeJong: Yeah, you know but that's hanging my hat on some accounting definitions that nobody else is willing to step up to the plate with. Councilman Peterson: I'm not with you. Acting Mayor Labatt: But that on-hand cash, does that take into consideration wanting to keep on the books one-half of the city's operating expense? Bruce DeJong: Yes it does. Acting Mayor Labatt: That does keep that in the money. Is that separate from what this figure is here? Councilman Peterson: That's my earlier question. He's already taken that into consideration. Bruce DeJong: Yeah. So this amount from the general fund is above and beyond your policy. Acting Mayor Labatt: Okay...to Craig, I think it's better than good. Bruce DeJong: Yeah, so we are sitting well. Councilman Peterson: So my argument last year has some merit, at least my speculations of, at least I'm not a goat. City Council Work Session - August 27, 2001 Bruce DeJong: We still love you Craig. Acting Mayor Labatt: Okay, what else? Todd Gerhardt: We handed out some proposed cuts for the 2002 budget, and we also gave you an estimated revenue and expenditure sheet which takes into account these cuts. With the available time, did you want me to go through each? Acting Mayor Labatt: No. I want to just kind of look at them real quickly and I wonder if we could maybe at the next council meeting, if you could almost attach some sort of justification to why you think this would be, to cut this out. I'm looking at some of these you know closing the Rec Center on that one day would save $5,000, but what's the down side to it? You know program supplies for $500 from the senior center. What are we going to cut and what's the affect on it? I mean that's what I'm just looking for. Maybe if we just send back that to the staff to say... Councilman Peterson: Yeah, I mean the intent for my request for this was not that we implement these but we look at those and justify each one within it's own merits so it all depends upon where we're at with the levy. With other city costs, etc, etc and my hope is we don't do any of these. Acting Mayor Labatt: If you look at cutting the mileage reimbursement by $1,000 by saying well maybe we budgeted too much. We can safely cut some of... Todd Gerhardt: We sat down with each department and these were some of the ones that we could really probably live with with the exception of the municipal code update. But we will get you...that didn't make any sense like sending your repairs to this building and not just paying your... Acting Mayor Labatt: Like turning the street lights off in the median. You know are we charging downtown? Todd Gerhardt: Yep. We've done it a couple of times and we think we could live with that because there's an outer ring of lights along the sidewalks and we typically shut them off during the winter time when we put the Christmas lights up facing the middle a little bit more. So I think we're going to lose much because you're got so much daylight during the summer period. We'll put a why and a what for on that. Acting Mayor Labatt: Good. So what's the status. Teresa Burgess: ... Todd, I'm sorry. Actually if you drive that, they're off right now. So that tells you how many people notice it. Acting Mayor Labatt: Okay. Teresa Burgess: We shut them down just to see. We did it last year also. We received a couple of calls just asking if those were out. They were off. I think they were off for about 4 months this winter. We shut them off when we put up the lights for Christmas and we just didn't turn them back on... Bruce DeJong: So just so you understand what we've done here with this new budget worksheet that I handed out tonight. Those cuts that are listed on the sheet are put into the recommended columns so you 10 City Council Work Session - August 27, 2001 can compare the expenditure difference when you get down to the end or you can take a look at each individual department and see what kind of a difference it makes. Todd Gerhardt: And that's that bonding information. Craig had asked for... That was our last bond sale in June. Acting Mayor Labatt: Okay. Acting Mayor Labatt adjourned the work session meeting at 6:55 p.m. Submitted by Todd Gerhardt City Manager Prepared by Nann Opheim 11