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1990 12 10CHANHASSEN CZTY COUNCZL REGULPJ~ ~EETING DECEHBER 10, 1990 HayoK Chmiel called the meeting to order at 7:32 p.m.. The meeting was opened with the Pledge to the Flag. COUNCILHEHBERS PRE~ENT: Hayor Chmiel, Councilman Workman, Councilman Wing, Councilwoman Dimler and Councilman 3ohnson STAFF PRESENT: Don Ashworth, Gary Warren, Todd Gerhardt, Paul Krauss, Roger Knutson, Scott HarK, Todd Hoffman, Jean Heuw[ssen, and Tom Chaffee APPROVAL OF AGENDA: Councilman Johnson moved, Counc[lwoman O[mler seconded to approve the agenda amended to Include the follow[ng under Council Presentations: Hayor Chmiel added an item and Councilman Workman wanted to d[scuss the dead pine trees along Kerber Boulevard. All voted [n favor and the mot[on carried. PUBLZC HEARI#G: CONSZDERRTZON OF THE 1991 Public Present: Name Address , Pat Driscoll Earl Bergstrom George P. Shorba Peter B. Kurth Jim Pehr~nger Harilyn Larson Dave Oummer Gene Gagner Hike Hason 3ames B/xler Warren Rietz Hal & Kathy Dahl Richard Herrboldt Dick Hingo R£chard Larson James R. Roehl Hel Kurvers Scott R. John Sp[ess Bob HacFarlane Jim Jason 691 Bighorn Drive 7493 Saratoga Circle 306 Chan View 1040 Lake Susan Hllls Orive 1010 Lake Susan Hills Drive 7380 H[nnewashta Parkway 417 Santa Fe Trail 802S Dakota Avenue 833 Woodhtll 7038 Red Cedar Cove 7058 Red Cedar Cove 6631 Horseshoe Curve 6464 Hurray Hill Road 7601 Great Plains Blvd. 8141 Ptnewood Circle 1735 Med[na Road, Long Lake 7240 Kurvers Point Road 661 Sierra Tra[1 6610 Arlington Court 201 ChanView 7301M[nnewashta Parkway Mayor Chmlel called the publlc hear[ng to order. Don Ashworth: City Council has had a number of work sesslons to look at the proposed 1991 budget. At the current point in time we are looking to an approximate 13X increase in general property taxes as a part of that budget. As Council may recall, we started the process with approximately $S50,000.00 short of what would be needed to fund all programs. Through a comb[nat[on of City Council Meeting - December 10, 1990 reduction in expenditures and, primarily a reduction in expenditures, we've been able to reduce that to a level of approximately $$2,000.00. I would anticipate that most of the discussion thls evenlng center on how we can solve that $52,000.00 problem. I have made various attempts to look at how we might do that. Some of those I am not too happy wlth in terms of potentially delaying the start of a street maintenance man. That would save approximately $13,000.00. Councilman Johnson: Don Ashworth: $16,000.00. The biggest work load in the street area hits into the spring timeframe and really the latest that I would recommend that we start that individual would be spring so the savings there could be $8,000.00. I've outlined various potential areas within the Fire Department. Again I feel that making those cuts could be devastating in terms of that, we've done the budget down to such a lean area that if there is any type of errors or problems this next year, we don't really have a place to go back to to try to correct any other type of deficiencies that may come up this next year. Accordingly, I would hope that the Council would look to leaving the 13~ property tax in place. It should be stated that the community is looking to an overall tax base increase of approximately 15~ so when we're looklng or when we're statlng 13~ increase in expenses, that should still relate to an approximately 2~ reduction in property taxes for our taxpayers. If we're able to find the $52,000.00 problem in some other area, we could look to a potential decrease of approximately 4~. For people who are interested in the overall numbers associated with the budget there is a handout. I should have started that out. Started out statlng that, on the podlum in the rear. This is a publlc hearing. It's opportun£ty for citizens to give their comments regarding the 1991 budget. Councilman Johnson: Mr. Mayor? May I suggest that Don mentions the truth in taxation statements that were sent out and as I called it in other meetings, the untruth in taxatlon statements that were sent out and why it sald 19~ and now we're actually looking at decreasing of 2~ to 4~ tonight. Don Ashworth: Sure. That ls correct. The State dld mandate that all cltles send to each of the homeowners a truth in taxation notice. That does show 19~ increase. That 19~ lsa number that was created by the State. It represents the overall levy limits of our city. Thls ctty has never levied to the maximum allowed under our levy 11mits. We're not oonsidering that currently. Part of what we were required top publish that amount, if we published anything other than that amount, we would be subject to that lower level in all future years. In addition the City could not put into the not£ce any estimates as to the overall growth that we have looked to in the community. Z thlnk any of us drtvlng around the community have seen the number of new homes that we have, businesses, etc.. We are literally virtually assured that there lsa 15~ increase in the overall value within the community. In other words, our tax base has rlsen by that amount. We were not allowed under State law to dlsclose that fact to you. I think that it's really a shame because in fact we are talking about a tax decrease, not a tax increase. Mayor Chmiel: Now if that is perfectly clear to everyone. Councilman Johnson: Except for the State legislature. City Council Nesting - December 10, 1990 Mayor Chmiel: We'll open this up and is there anyone that would like to address this at this particular time, please come forward. State your name and your address. Jim Bixler: Jim Bixler, Red Cedar Cove. I don't know. This is the third meeting I've attended. County, School Board and you're the last on the list. It seems like every time we attend these meetings, or I've attended these meetings, some one Jumps up and drapes a cape over the tax situation. Pulls it off and it's somebody elses problem. It still boils down to it's our problem. I'm happy to hear that this Council and you as manager, City Hanager, have at least taken into consideration the plight of the homeowners in this area and have looked at a decrease. I don't believe you though. And until we start seeing at least the easing of our property taxes, our school taxes and our county taxes, I think if you took a vote or at least a show of hands of the people that are here. Not only the 19.1 that showed here as far as the Excelsior people, or I'm sorry the Chanhassen percentage. Tack that onto the 16.1 at the school district level and we are in the Minnetonka School District. Plus the 16~ or whatever it is that the County is putting on and then going over there and finding out well, it's not really 16, it's on 10.8. Well that's really a 7.4 and all this hocus pocus that goes on. At some point all this growth that you're achieving here in the fine city of Chanhassen is going to be, gee I wonder where they went because there is a gentleman here that isn't here this evening who is going to be here in a short time and I hope this public hearing is still open, who's going to have to move after one year of being in his home. Now at some point, and I think it's at this level, I ertl1 don't know. I'm frustrated to the point where I'm looking at my Council members, my school board members, the County board, the State legislature and I would like to see any representative at the State level stand up and show his face or her face here this evening which is the third meeting I've attended that nobody from the State has been at. Representatives or so forth. Senators or whatever. And then finally the federal level. In 1990, late '90 and '91 I hope a grass roots organization starts in this country where all of a sudden the politicians regardless of the level that they're at, realize that they are employees of everyone of us in this room whether we happen to be working for the establishment or living in it or under it. Our three tier taxing system is, it's a joke because everytime you tell us that nothings going up, our homes are re-evaluated or they change the taxing from market value to appraised value or whatever the heck that little hocus pocus was. We go from a 1~ to a 2~ to a Nobody says a thing do they? Well it's going to happen and as elected officials yet employees of us, the people in this community, I think you have a moral obligation to number one, stay within the guidelines of the taxing geared to the growth of the entire economy and I don't think there's anyone in this room that would stand up. I'd like to ask for a show of hands of people who are satisfied and have come here tonight regarding taxes and just say hey, that's really great. You guys are doing a great job. I think you are kind of doing a great job for the most part. After talking to some other people in other communities, I have found out what some of the other tax increases in some of the other surrounding areas. They are certainly within the guidelines of what we're looking for but I was kind of appalled last, what was it Tuesday night? We went to the County meeting and the commissioners over there asked for a certain pet project. Whether it's a new pothole manager or whatever it is, I don't know what he is. But they thought that was very important for the County to fund, and I agree. It is an important consideration for the County but not at a City Council Meeting - December 10, 1990 or 18~ increase as they projected. People in this room are not asking to give up a lot. All we're asking is that you do not, or that you do take into consideration what we have to 11ve wlth. Now I run my own business. I'm in the retail food business. I manufacture a product. If I raise the price of that product for whatever reason, being it salaries, materials, Z justlfy that on the end user site. It costs me more to transport that product, everyone of you and everyone in thls room are paying for that product. For that lncrease in some way. I would like you to tell us how do you justify an increase at this level? How do you get more production out of the people that are worklng? How do you hold back from that other position? How was it done before? Can we get by with doing it before? I'm sure all those were considerations when you were looking at this budget. But you have an opportunity, each and every one of you have an opportunity to say Chanhassen is golng to lead the way in terms of staying withln a growth that our citizens can put up with. Because I'll tell you right now, if I pay more taxes, I'm golng to give less to my church. I'm golng to give less to the other things that you want supported in this community and it's going to trlckle rlght on down. Thank you for listening. Mayor Chmiel: Thank you Jim. Councilman Johnson: Jim, did you ever figure out what the County was finally going to be at? Jim Bixler: 10.8 and I think by the tlme they got done sticklng it with a fork, they were hoping to get it down to about 9. 10.8 is what they say they can levy at and what they budgeted at. Resident: It was 16. Councilman Johnson: Yeah, that was their max budget. Mayor Chmiel: Yeah, that's their maximum. Councilman Johnson: Was that with or without growth? It doesn't matter. Jim Bixler: I could care less. Mayor Chmiel: It's inmaterlal, yeah. Jim Bixler: My income's not growing that much. Mayor Chmiel: I might say Jim, I buy your product. Jim Bixler: Thank you, but you've got very smart children. Mayor Chmiel: No, I just wanted to just to assure you that at least from this Council's standpoint, in the last two years we have lowered taxes unless the County as you said, came out and re-evaluated the property. In most instances years past we have lowered taxes. Don Ashworth: The City portlon. Mayor Chmiel: Right. On the City portion only. The County, as you're just City Council Meeting - December 10, 1990 saying, is right in what you said is that they have increased them with re-evaluations. I can tell you that right now my taxes went up $700.00 and I know exactly what you're saying because I can feel that as well as you do. But as [ see what we're doing right now from the City aspect again, we are looking at lowering a certain percentage again this year. We have no control over what the School Oistrict does nor do we have any control over what the County does except express our opinion, and we do. But ! just thought I'd like to just put that in. Jim Bixler= Our particular house has been re-evaluated 3 times in the last 4 years. And at some point all the quality of life, it's going to be worthless and I'm not going to move further west than New Germany because they're in the same district. Councilman 3ohnson: Mine's been re-evaluated 4 out of the last 4 years because I have a building permit. If you've got a building permit, he automatically comes out and I've got one of those never ending building projects going on in my basement that [ never have time to get to so once a year he comes out and says are you through yet? Councilwoman Oimler= Have started. Councilman Johnson: Oh no. It's real close. Jim Bixler= Well it's awfully frustrating from our standpoint to go to the County meeting and watch the buck being passed up to the State level and I'm sure if we were sitting over in St. Paul it would be passed right onto Washington. Now Z know there's impact from both the Federal and the State and the County as far as what has to be done or things that have to be done. The funds that you're going to qualify. I may be all wrong but what I'm hearing is that a lot of the impact, the tax increase over in Carver County is based on the State requirements to do certain things. I guess at this point I have to think that if that's the case, and I don't start at the top. I mean you'd like to think you could go to the CEO of the company and...product or service or whatever. I don't think that's believeable for any of us here. If we have a problem with city services, we know we can call you Don or we can get a hold of one of the Councilmembers and that problem will be addressed. The problem here is not necessarily that we're dissatisfied with services or certainly the village. The quality of life or whatever but at some point in time we have to, from our personal standpoint say that's it. I'm not going to buy that up model car. I'm not going to buy from this particular store that I'm used to shopping at. I'm going down a level if you will in terms of quality or something like that. It's very tough to give up quality but it's awfully easy to give up some of the things that you do when you're not really budgeting for them. And certainly I think all of us can take a leave from the budget that you put together and say hey, let's tighten our belts by 4~ this year, if that's the real number Don. Don Ashworth: It is. Jim Bixler: Okay. That may be the real number and as you said Mayor, you know that our taxes are going down. Well, mine didn't, fly city taxes went up last year. They may have gone down as a percentage but I'm paying more money. You're City Council Meeting - December 10, 1990 going to have a tough time selling that to me when the County's out there re-evaluating my property next year. You know they're going to be there. Mayor Chmiel: Yeah. And if we didn't have that certain amount of reduction,- it'd stiIi be a IittIe higher than what they are presentIy too. I know that in looking over our entire budget for 1991, there's been a Iot of cutting and I thikn we've gotten to the point where we're sort of iean and mean and ue have been watching those dollars and I think everyone sitting here feels the same way as I do but it's just auay of doing business, unfortunately. We have to operate uithin a certain amount of dollars to make the city function properly and still provide the services here for the residents. Councilman Johnson: If you also look at your 1989 tax bill compared to your 1988 tax bill, there was a little hocus pocus done in that year by the State again. They took aid that was golng to the Clty and transferred that exact same aid to the school district trying to make the school districts look a little better. So they took, ! don't know, what was lt? 3~ or 4~ of what we were getting. Gave it directly and made absolutely no difference on your tax bill but it made your school dlstrict b111 look a 11ttle less even though in some school districts it went up because of other things but It gave them a little ald but at the same time they took the exact same ald away from us so it was neutral to everybody but it made us look like we actually increased that year when we actually decreased that year. So it was klnd of confusing in 1989 because of gymnastics. Jim Bixler: You go to the school board meetlng and, I'm glad you explained it the way you did because over there it was well, we saved you money last year. Zn looklng around here, I know one person was at that school board meetlng last Thursday night. That's basically what they told us. Well, we had a 10~ reduction in the school taxes for 1989. They dld. Councilman 3ohnson: They didn't tell you where though. Jim Bixler: They didn't tell us where because they were trying to jam down our throats a pretty good percentage this year to make up. Mayor Chmiel: Thanks Jim. Is there anyone else wishing? Yes sir. Please state your name and your address. Dick Herrboldt: My name is Dick Herrboldt and I live at 6464 Murray Hill Road and I, like this gentleman, have gone to most of the meetings and I've been in front of thls group before talklng about my property taxes. What I would 11ke to know is what, you know we're talking about 1991 and I've listened to the County and I've 11stened to you revlew your budget. I'd 11ke to know what ls in the long range planning over the next 5 years? What are we going to be looking at as far as a property tax levy in this area? Can anybody address that? There's got to be some plans and I know we're building a new County jail. What's the City going to be dolng? Oon Ashworth: If I may? Mayor Chmiel: Go ahead. City Council Meeting - December LO, ~990 Don Ashworth: Part of the question again gets back to what happens from State and the Federa! but valuations, and getting back to your quest£on, £s the number an accurate number and will that reduce property tax decrease. Values that are established for actually L99L were set on January Lst of ~990 so literally ~ year ago we knew what the values would be this next 3anuary. Sim£LarLy we know what the value wiLL be the following year Just by knowing what permits have been issued this past year. Residential will go on in 6 to 9 months after the initial permit was taken out. Commercial/industrial will take a Longer period of time. So for the period of '91-'92, we're looking at continued growth in that overall tax base and what I have stated to the Council is ! know of no projections for increased expenditures that would rise above the level of our base increases. In L993 one of the tax increment districts w£1L be literally coming off and that value will be going onto the tax base. Our debt position is fixed and I now of no additional debt that's being considered. think with two community center votes being voted down, ! don't see where that issue is likely to take and come back for quite a period of time. So I feel very good in terms of saying that I feel that within, for the next 2-5 year period of time, the City of Chanhassen should not be faced with any type of a tax problem and in fact if anything, by the 1993 timeframe, we should be able to Look at more major tax reductions. One thing that concerns me very deeply, and that is I feel comfortable with this year's projection in saying that that increase in the base is there and that the projection for the 4~ reduction in taxes is a correct number. What concerns me is the fact that the State LegisLature for many years provided homestead credit to me, to you, to each of us. That showed up on our tax bill as a $750.00 credit so you had the City and the County and the School and then minus the $750.00. You no Longer see that. That has been reclassified as homestead credit back to cities so they've taken you out of the picture and that is an amount now that is being paid from the State back over to cities and counties. ! am confident in my own mind that the State Legislature made the moves during the last 2 years to switch over to this 1~ to change things so you didn't know what's going on regarding valuations to take away that $750.00 so that you and ~ didn't see it so then it became an amount simply due to the various cities around the State and if they do have the budgetary problem that they're talking about for L991, ~ personaLLy think that they will simply reduce that amount as it would go back to cities. ! am not fearful that we can live within our means for this year but for next year that homestead credit represents 25~ of the revenues of this city. So when we talk about property tax and if you look at the listing there, you'll see the $1,848,000.00 for 1990 or $1,972,000.00 for 1991. Right below that you'll see the homestead credit amount of $510,000.00. That amount again is the accumulation of all of the previous $750.00 that used to be on your property tax statement and used to be on mine. No longer there. And by simply a wave of the hand, that $510,000.00 could disappear. That could set up a meeting far worse than this year's next year. Dick Herrboldt: So our recourse is to talk to the people at the State? Don ~shworth: We're trying to get the message out and we would hope that as many people here as possible would have one statement to your State legislator. Bo not remove homestead credit from property taxes. Councilman 3ohnson: Don't balance your budget by raising my city taxes. City Council ~eeting - December 10, 1990 Dick Herrboldt: Right. I understand that system. Basically what you're saying is we in the City are pretty stable for the next 3 to 4 years barring any major situations that occur on the State level. Okay? Well that's, these thlngs are important to all of us because I would like to say once again that property taxes are kllling us all out here and you're taxpayers yourself. It's gettlng to be very severe. Very severe and a lot of people are feeling the crunch and I'd just like to stand up in front of thls body and make that statement. Anything that you can do, anything that any of us can do to help cut taxes on our property would be sincerely appreciated. Believe me. Thank you. Councilman Workman: Don maybe, Don Ashworth, maybe you can explain what on a smaller scale the State did to us mid-budget wlth the LGA thls year. Ocr Ashworth: Well that again is part of the problems we are faced with with 1990 and we work withln our own means but we were hlt in two areas. One, we've had good growth and coming into 1990 we had anticipated a similar level. We did see a reduction in our overall bullding actlvlty and that caused about $250,000.00 deficlt for us for 1990 or at least over what we originally projected. In addition, Councilman Workman ts absolutely correct. The State came in and again to balance their budget removed approximately $$0,000.00 in aid to us. Now that $50,000.00 in comparison to the total amount of dollars that the City is operating with was something that we could again reduce expenditures and look to other ways to lnsure that we stayed wlth a balanced budget. But everytime that that occurs, it just places a different additional straln on that overall budgetary process. In fact even for thls next year in terms of the homestead credit, the State has already said that there would not be an lncrease in terms of any local government ald or any homestead credlt and I think the more and more that clties are dependent upon the State, I think the worse it is. The only one good thlng about the State continuing to remove thelr involvement wlth our clty is we have that much less to deal with them. I mean- lt's, they have zeroed us in terms of local government aid whlch ls really kind of ironic because if you look at any of the iron range communities that are our same slze or smaller, or any of the outstate cities, you'll see that the local government aid in those areas is still at a million dollars. A milllon five and they've reduced ours from $300,000.00 down to zero. That's klnd of crying and I don't mean for this hearing to come out in that direction but I think everyone should be aware that there has been major shlfts in what it ls the State ls funding in the past years. There's been more and more of a burden placed on the surburban homeowner. He ls paying a larger and larger share of not only local property taxes but also the overall State funding. Jlm Blxler: Can I ask one question? What is the projected growth of, real growth as far as building permits? New home building permits in Chanhassen for 19917 Don Ashworth: We actually decreased that from, you're talklng about permlt as far as permlt revenue? Jlm Bixler: Yeah. How many people are moving in here? How many homes are going to be built in Chanhassen in 1991 projected? Don Ashworth: We had looked to approximately, well we had approximately 350 in 1989. We had anticipated that same level coming into 1990. We're probably more City Council Meeting - December 10, 1990 into a 250-275 for 1990 and we use that same estimate then for 1991. In other words, reduced level over 1989. Jim Bixler: Wouldn't those increase tax dollars that could be available for you from taxes on those new properties to fund this $55,000.00? Don Ashworth: Well it's, those new properties that are representing that 15~ growth in the tax base. The 15~ does not include properties such as your own where they have simply increased that value over the previous year. The 15~ is a new value percent and we're looking to that being pretty much the same for 1992, meaning into about 13~ to 14~. As your overall level gets higher and value stays the same, the percent will drop a little bit. Jim Bixler: I think I just went south on your answer. I'm not sure I understood that. Councilman Johnson: I think I understood your question and his answer, you're right. They kind of missed each other. The increase in value that we will realize in 1991 we won't feel in taxes until 1993. We don't collect. When somebody comes next year and builds a house in Chanhassen, his increased property value does not hit the tax rolls until 1993. What was built in 1988 comes on, or what was built in 1989, was on the ground as of January 1, 1990 is taxed next year. $o that 15~ growth happened a year ago. We now know what our growth is during this year, or we have a very good projection of what our growth is during this year and can project that for the 1992 budget because that's when that will come along. Anything in next year comes on in 1993. That's another whole problem with the tax system is that when somebody builds a new house, we provide all the services to them but they don't pay the taxes for another 2 years. That's the way of life. Jim Bixler: But 15~ came back in 19897 Councilman Johnson: Yes. 15~ came on in 1989. That's already included that. Jim Bixler: We're looking at a 15~ growth? Councilman Johnson: Right. Jim Bixler: Close? Councilman Johnson: No. Not in the next 2 years. 15~ was kind of our max. It was down this year from the 15~. We're closer to like about 10~, if I have my, we did what 350 and then we did 250 this year so we're looking at about that same level of growth next year. So we're not looking at a 15~ growth for our 1992 budget. It'd be less. Depending on what Saddam Hussein does, who knows. Hayor Chmiel: Okay, is there anyone else that would like to address the issue? If seeing none, I'll have a motlon to close the public hearlng. Councilwoman Dtmler moved, Councilman Work~an seconded to close the public hearing. AIl voted in favor and the motion carried. The public hearing ~as closed. City Council Meeting - December 10, 1990 Councilman Johnson: Yeah Don, I'll start this off. I think you probably know where I am. I have enough jitters about lggl and what's going to happen in oil prices and everything else. We use a lot of gasoline in this town, and what might happen recessional wise and everything else that might happen in the year lggl that I thlnk I'd 11ke to stay ulth a 2~ decrease and bank that $52,000.00 right now instead of looking for any more ways to cut our budget and cut that $52,000.00 out. Instead of going with the 4% decrease in our taxes year, stay with 2~ because I just have such bad feelings about next year. I'd hate to get at the end of the year next year and be out of balance. I mean we really had to fight, we had some lucky things to stay in balance this year with two positions leaving town and leavlng that ue didn't replace. That's where I slt on thls. I thlnk we've done a good job of making it lean and almost too lean if we take any more out. Mayor Chmiel: Okay, thank you Jay. Councilman Johnson: Of course that's you all's problem next year me being the lame duck. Councilwoman Dimler: That's why you're proposing that. Councilman Johnson: Just trying to make it easier on you. Mayor Chmiel: Tom? Councilman Workman: I don't know Jay, I think there's always ways to cut. I guess I would like to make the comment however nasally as I can. I think this lsa pretty conservative Council flscally anyway. There's several unhappy times of the year to be on the Council. One is when assessed value cards go up and ue have the publlc hearing at the Board of Equalization and everybody, 140 or so came in thls year and also this is getting to be a worse time because there's no doubt there's growing hostility out there. It's affecting whether or not I want to move into a blgger house and which side of the school district boundary do I want to 1lye on. That has everything to do wlth a lot of things and I'd just as soon take into account quality of education maybe in which school district I choose rather than whlch one's going to keep my klds out of the latest styles of demtn. I don't know. You know it's a very complicated thing. I know we've whlttled it down. We've worked wlth lt. Wlth Don Ashuorth working the numbers. I don't know. He's got some details that in hls mlnd about how things could be further whlttled and I don't know if we should maybe have him discuss what some of those are and what our options are to get it down to either 2~ or 4~ and maybe make a declsion based on that. Mayor Chmiel: Okay, we'll finish with Council and then come back. Dick? Councilman Wing: I thlnk I'll pass on this Don primarily just because of my newness on the Council. I share some of your frustrations. I'm certainly not here as a liberal. I'm very conservative in expenditures and things we talked about during the campaign just because that's the most recent period of my life with the clty. You can't have increased servloe levels and decrease in taxes and it was the city, it's true we turned down the city center for whatever reason but the people coming into Chanhassen I see are requesting additional services and city services and strong services. The fire department referendum, 10 City Council Meeting -Oecember 10, 1990 $1.5 million for fire truck and building was passed easily. People wanted that service. That was a big expenditure so what's frustrating me right now is that we're looking at an increase in the City budget. The City budget from 19~0 to 1~91 is going up but we're talking about a decrease in our taxes so I'm sort of new enough that that's still spinning my mind a little bit. ! just share your thoughts and appreciate your coming in tonight. Mayor Chmiel: Thank you Dick. Ursula? Councilwoman Oimler: Well I've got the answer. I want to tell Dick that his newness on the Councll has nothing to-do wlth being confused or not belng confused. I'm still as confused as I was ~ years ago. I agree with Jim out there that there's a lot of shuffling, gymnastics and as people say different things in different ways and it just adds to the confusion. I was told that this budget proposal reflects no property tax increase and I believe that that is true but I'd like to see us go a step further and that is to actually see. us reduce some things. I have a few ldeas on where those reductions mlght be. I think that on page 6 of Statement 2, on the report that Don passed us, it states that most of the functional area expendages reflect only minor increases from 19~0 and therefore they are not highlighted. I guess I'd like to know for what other reason other than Inflation these minor increases are. I'm always frustrated when I hear that things are naturally going to go up and I really would like to see that explained better and justify those increases. Don? Mayor Chmiel: He just left. Councilman Johnson: He just went to get his copy of the report. Mayor Chmiel: He will be back. Why don't you continue. Councilwoman Dimler: Okay. That's one of those you know maybe we can reduce some functions rather than always increasing. Also I'm concerned about our animal contract. The budget requests this year is $70,750.00. I Just want to make sure, it's not that I don't like the animal contract but I want to make sure that the Chanhassen citizens are not subsidizing antmal control for the other cities and I didn't see the other side of the equation there. Mayor Chmiel: I think I can address that one. With what we've been doing with the other cities in providing the services as we have, not only for ourselves but our neighboring communities, that is one area and I've discussed thls wtth some of the other mayors, making sure that they realize they're paying exactly what they have to pay to us. We're not losing anything 'from it. Plus the fact that we're able to have that one individual on full time and it's more to our benefit than anyone elses. Councilwoman Dimler: And were the other cities willing to pay the increase? Mayor Chm£el: I'm sure that if there are increases that are going to be occurring within, I'm sure they would pick up their additional cost. Councilman Johnson: Every city wrote us a fine letter a few months back saying how good they thought the service was. City Council Meeting - December lO, 1990 Councilwoman OimIer: Oh, I understand that, yes. What was your question? Councilman Wing: I didn't see it in the budget. That $70,000.00, how much is that reduced by the other cities? Their payments to the city? Councilwoman gimlet: Well that's what I wasn't clear. That's what wasn't there so I couldn't make any comparisons but I just want to make sure that we're not subsidizing. The citizens of Chanhassen should not be subsidizing that program in any way, shape or form. Also, I saw under community development $137,500.00 for contract services to implement the Chapter 509 plan. I still think that that's too high and I'm wondering if that number has been revised downward. Since we funded it at 60~ I think we should take that into consideration. Don Ashworth: That is out of there. Councilwoman gimlet: Was that the Don Ashuorth: It was placed into the other fund. That's in the first stage implementation so yes it is. It was taken out of the planning department and engineering in the total amount of $135,000.00. In separate action the Council did establish the water surface fund and that particular expenditure was a part of the requirements under the State and is included as a part of that fund. It is not part of the general property taxes. Councilman Johnson: No longer has any affect on this budget. Councilwoman Oimler: Yes. Okay. Also I'm wondering whether at this time, as was mentioned earller since it looks 11ke we're in a recession or certainly heading towards one, whether we shouldn't be looking at perhaps a hiring freeze. No new personnel. That's all I have for now. Mayor Chmiel: Don, I think Ursula had a question on the first part. Councilwoman Dimler: Oh yeah. On page 6 of Statement 2. It says that most functional area expenditures reflect only minor increases from 1990 and therefore are highlighted. I get frustrated when I hear that things are naturally golng to go up. Why are these increases other than inflation? And there a possibility that we could reduce some of the functions? Don Ashuorth: The statement in there, what we tried to do was highlight those areas where there had been an lncrease over, from 1990 1nrc 1991. Even those where there's an inflationary type of an increase, we tried to know, especially where we have new subdivisions, etc. such as the street 11ghtlng section is one that we saw was more than just an inflationary type of an increase. We will pay a higher cost associated ulth NSP bills but we're also going to be paylng a higher increase because of the additional miles of streets and street lights, etc. so I don't know if I've answered your question. Councilwoman Oimler: So that's where the increase is? Don Ashworth: That's correct. Councilwoman Oimler: Okay. There's nothtng we can cut there then? City Council Meeting - December 10, 1990 Don Ashworth: No. Councilwoman Oimler: And then other than that, I'd like to know where Don proposes that we cut. Mayor Chmlel: Okay. I guess I made my statement before is that we have worked several budget sessions. Many late evenings that we had done. In sitting down and reviewing how we can trlm it to the best we possibly can and I think we really have worked at it really hard to come down to the taxes that are going to be levled. I feel that Oon has really worked thls tn the best lnterest of everyone here, including my own with my increase in my taxes. I think that there are some areas that could be shaved to a certain point. I'm afrald that if we do shave in those kinds of areas that it probably would not be to the beneflt of the citizenry of the Clty of Chanhassen. So with that I think I'd just like to turn that back over to Oon to see if there is anything in addition because he is our great wlzard with the pen. Hopefully with his crystal ball we can work this budget accordingly. Oon? Don Ashworth: Since many of the people present were not through some of the budget sessions that the Council did go through, we're looking at about 40 full time employees for the city. As a part of the balancing process we have eliminated three full time positions that existed in 1990 that will not be in 1991. Did you have a question? Mayor Chmiel: Yes, go ahead. 3im Bixler: Are we allowed to ask questions since you're making statements? Mayor Chmiel: I'd like to keep this open. I don't see any real objection to lt. Zf I feel it's. Jlm Blxler: As I see it Mr. Ashworth is you're cutting 3 positions. What percent increase are the other 37 getting over 1990 wages, salaries or whatever and is some of that under contractual agreement with a union or a group or is it biding arbitration or whatever? I'd like to know what that percentage increase is for the pald employees ls for 1991 projected. Don Ashworth: The City has no organized unions. One of the reasons that I feel that we, most of the clttes, in most of the cities tn the Twin City area, there are unions that exist for both public works, police, clerical, technical. I feel that our city has been competitive and our people have not had to look to a union to protect them. The percent increase overall is approximately 6~ but that figure represents both those people who are low in their range. So in other words. Jim Bixler: By who's standards? Don Ashworth: By who's standards? Jim Bixler: Who's saying they're low in their range? Don Ashworth: The City conducts or ts a part of a multi-city survey process in which we look at each one of our positions in comparison to other cities within 13 City Council Meeting ~ December lO, 1990 the Twin City area. Under the State comparable worth requirements, we're requlred to look at each of those positions. They're looklng primarily for female dominated but it gives you an overall look at all of your employees. And as a part of that, the salary scale for our city then is broken into what your salary is in comparison to the average salary for that same posltlon in another city. I would say that overall. Jim Bixler: It sounds like a great way to run a communist country. What they're doing in Plymouth has nothing other than to do job description. Don Ashworth: I disagree. Jlm Bixler: You say the marketing manager for Colgate Palmolive Company should be, or that I should pay somebody at the same rate, my little dinky company should pay a nlarketlng manager the same rate I pay a Colgate Palmolive guy gets pald simply because it's the same job classification? Can you Mr. Ashuorth sit there and say that a 6~ lncrease in wages ls justified in the economy that we're going through right now? Don Ashworth: Yes. Jim Bixler: You can? Don Ashworth: The reason for that again is. Jim Bixler: Are you getting a 6~ increase? Don Ashworth: No I'm not. Jim Bixler: I commend the Council on that. Not that you're not doing a good job but somebody has to start somewhere and when it says City Manager, maybe that's where it has to start. But if the economy is growlng by 1%-2%, I think somebody should sit down and say that's what our employees, that's the way it is. That's what the dock workers, that's what the guys in the grocery stores are getting and that's what you're going to get and if somebody doesn't llke it, let them go over to Plymouth. Mayor Chmiel: Maybe we'll just let Oon go a little. Jim Bixler: Sorry. It's frustration. Don Ashworth: We are in a competitive market in terms of the building inspector. We try to look at what it is that somebody else pays a bullding inspector in a similar size community to our own. That does represent our competition you might say. We start those people, 75~ to 80~ of the mid-point for that position. We would hope that they grow tn their position each year and as a part of that we'll get closer to the average salary for that position. A part of the 6~ is their growth in their range. We look at your performance and if you have performed for us, we will attempt to get you closer to the average salary for that position. So that ~ flgure that I gave represents both a natural growth withln the economy as well as each of those individual people who we are anticipating wtll be growing within their range. They will not get that salary lncrease unless in fact they have gone through a performance revlew and City Council Meeting -Oecember 10, 1990 they in fact have grown over, well at least in their own position. I have to believe that you do something similar in your bus£ness. Jim Blxler: You're right In that we're talking about a dollar paid for a dollars work, okay? I mean if you're talking about compensating people simply because they happen to fall into whatever category it is, I totally 'disagree with that and I'm sorry that I misconstrued what you said. But I don't believe there ls such a thlng as a &~ natural growth as you just said 5 minutes ago in the economy. Don Ashworth: I dldn't say there was a Jim Bixler: ...run for Congress. Don Ashworth: I dldn't say there was a 6~ natural growth. I sald that the overall increase is 6~ that represents a combination of salary increases for those people who are low in their position right now. Jim Bixler: I understood that. There's also an indication that somewhat according to the way the economy is groalng. Don Ashworth: I apologize if that was the case. But anyway there are three positions that have not been included for this next year. We are looking, and again this reflects again just the miles of streets. We would like to be able to add a street maintenance employee. The existing budget does have that position in there. I would recommend that we look to a spring start potentially on that position. That's one of our biggest work times ls to move from spring into summer. That's potholes. That's when every(htng that has accumulated during the course of the year basically shows up and tf that were looked at, over the budget you are, you could cut approximately $8,000.00. Fire department we could look to reduclng tralnlng there by about $4,000.00. It simply recognizes that I think we would still be able to meet our overall training standards for EHT, Emergency Medtcal responders but I don't think that we're going to be able to have each of the people that we currently have lined up able to attend each of those schools. And I would look to that potentially saving approximately $4,000.00. I think that the equipment the Fire Department has looked to insures that we can continue to provtde service to our community but I think that that could be even further cut by $5,000.00 which would significantly hamper agaln our ablllty to carry out those functions. We've already looked to a reduction in street maintenance area from 110 down to 75. I find difficulty in recommending further reductions there. Almost each of the operational areas are looking to basically costs similar to last year unless it things beyond their control such as additional lighting to the building, insurance. I hadn't shown the deletion of a fire pole for our west fire station. One of my difficulties in, that's $1,500.00. One of the difficulties I have in continuing that recommendation is we have not put any dollars into that west station. It's not in as good a shape as we'd 11ks to have it in and I think most people even going by the building don't even now what it is. We have difficulty tn trying to man that statlon. That is one of our real difficult areas to get wlunteer ftremen is in that west station. Anything that we could do to improve that statlon. Make it more attractive to potential volunteers, I think that we should consider. I'm not saying that that $[,500.00 will make the difference one way or the other but lt's on the table. 15 City Council Meeting - Oecember 10, 1990 CounciIman Johnson: I didn't know we had a second floor on it. Councilman Wing: It's a flagpole. Councilman Johnson: Oh flagpole. Councilman Wing: American flagpole. Councilman Johnson: Not a firemen pole but a flagpole. I was wondering how we had in a one story building we had a fire pole. Mayor chmiel: I also look at some of these things that we've gone through and agree with what Don's saying. I look at, even though we're talking recession and watching what we've done in the past 20 years, more specifically as I've. watched Eden Prairie, I'm a little more optimistic in seeing that possibly we're going to grow a little more so than what we have been. I think I associated with the company that I work with at Northern States Power. I think I probably said this before but if some of you have heard it, just have a little patience with me. Our total electrical load growth back in a time when we had a recession and we also had the energy crunch then come through, Eden Prairie was growing. Growing just by leaps and bounds only because they were the next suburb to the other suburbs that had built up. Well we're almost in that same position now. Eden Prairie filling up and with us being here. The electrical load gross that we had, we were growing company wide only at 2~. The city of Eden Prairie never noticed any difference in time when they had the recession. They were growing at roughly anywhere from 21) and their lowest point was Electrically load growth which meant because of where they were, their growth just automatically came and that's going to happen I feel the same way here. Sort of see that same kind of movement coming out here to Chanhassen just the way we've grown within the last few years. We've got the land and people are looking at this area. They think it's a fine area and so do I. I think that is going to just continue with a growth and hopefully by doing that we may even have the tendencies to having our budget. Where we have it presently I think it might be a little low. Optimistically I'm looking to see if maybe we can't pull in some more dollars as far as the buildings are concerned so I do see this sort of falling in line with what's happened in the past. You can see the same thing has happened to the city of Eagan. The city of Maple Grove. Because of where they're at in relationship to the other cities, that growth just automatically came. So with that, any other discussion? Councilman Johnson: Well I tend to agree with you to a point in that we've seen that peak last year and this year we ran into a budget crunch...and the loss of those 3 positions bailed us out of that quite well. In looking at just a stable economy next year and stable growth as to equal to what we did in 1990, I'm still a little pessimistic and that's why what I would like to do is, I would like to keep that street maintenance person put in the budget as it is. When I came on the Council 4 years ago we had 60 miles of streets. We now have 90 miles of streets. We had the exact same number of street maintenance people that day as we do today with 50~ more streets. That position's very important but I'd like to keep it in the budget at it's full thing because the $8,000.00's not that much of a savings. I'd like the engineering department to really consider and look very closely as to whether they actually, if they don't actually need that until spring, that's when they hire them and not hire them 16 City Council Meeting - December 10, 1990 in January. I don't see the need for a street maintenance person in January but I'm not an expert. I've talked to Gary on this a little bit and to delay it to spring, that gives us a little bit of $8,000.00 cushion for my pessimism but what I'd like to see us do tonight is approve the budget at the level of current forecast requirements and increase our revenue side of it by the $52,000.00 that we need to in order to make it balanced and that would result in approximately a 2~ decrease in what we levy against our individual homeowners. Mayor Chmiel: Is that a motion Jay? Councilman Johnson: Yes, I'll make that as a motion. Mayor Chmiel: Is there a second? Councilwoman Dimler: Would you restate it please? Councilman Johnson: I move that we establish our budget at the current anticipated expenditures of, it would be this $1,307,000.00 Don? Don Ashworth: No. Expenditures. Councilman Johnson: Oh, of $5,880,145.00. Oon Ashworth: Really the general fund portion... Councilman Johnson: Okay, general fund. Anyway, to make up the $52,000.00 shortfall between projected revenues and projected expenditures by increasing your revenue by $52,445.00 which results in a net 2~ decrease in taxes. Mayor Chmiel: Okay, is there a second? Councilman Workman: Decreasing revenue by 52? Councilman Johnson: $52,445.00. Don Ashworth: So in that case both revenue and expense would be $3,004,095.00. Councilman Johnson: $o we have a balance budget and not try to chop anything more out of expenses. So what we would do is increase the general property line up there which is $l,538,000.00 to $1,090,445.00. Councilman Workman: How do you propose to do that? Councilman Johnson: Just by doing that. That ends up, instead of having a 4~ reduction in property taxes, it ends up with a 2~ reduction in property taxes. I think that gives us very little fat in the budget to play with if something in the economy really goes whacky next year. ! think we'll be, I'm just being an Army Reservists, I'm real concerned about what Saddam does over there. Mayor Chmiel: There's a lot of people in the same thought too Jay. I agree. Is there a second on that motion? !f not, I will second that motion. Any further discussion? 17 City Council Meeting - December 10, 1990 Jim Jason: Is there discussion from the floor at this time? Mayor Chmiel: Yeah, go ahead. Normally it's not. Jim Jason: I did't know when to speak up. Mayor Chmiel: okay. We had the public hearing meeting already. We closed the publlc hearing meeting. I wlll give you the opportunity to come fo¢ward and state your opinion at this time. Would you come up to the microphone and state your name and your address please? Jim Jason: Sure. I'm Jim Jason, 7301Minnewashta Parkway and I guess, you know I hear you talklng about the 11ttle stuff. The $10,000.00 here and $15,000.00 there or $8,000.00. The questions that I have are like sewer and water charges are golng from a m1111on to a mi111on nine. Maybe this was covered in another meeting and I missed it. Professional services went from $600,000.00 to $900,000.00. 81g numbers. Am I at the wrong meetlng for thls? Was thls covered at another meeting because those are the things that. Mayor Chmiel: Those specifics as you're discussing. Don? Don Ashworth: You were talking about under the enterprise fund that the overall revenue is golng from the, I'm sorry. I mlssed your number. Jim Jason: Yeah, the sewer and water charges went from a million to a million nine. Councilman Johnson: We established that a couple weeks ago. We've been running our sewer and water at a deficit rate and I think it was just our last meeting. Mayor Chmiel: Z weeks ago. Councilman Johnson: 2 weeks ago we did and that's your sewer and water charges. It doesn't have anything to do with this meeting because we're now talking about the general property tax funds and what we dld 2 weeks ago was bring us baok to a balanced budget so we have enough cash left in our sewer and water fund to contlnue to repalr the sewers and the waterlines. Don Ashworth: A majority of that comes about through new customers but Councilman Johnson is correct in that additional charges that we're looking at as a city back from MWCC, Metropolitan Waste Control Commission, represents about approximately $300,000.00 of that overall lncrease from 19g0 to 1991. The other portion of it recognizes again that the City has continued to literally deflcit flnance that particular operation for the past 3 years. Our auditors have continued to state that we cannot run that utility into the fall and there was a rate lncrease that was approved by the City Counc11. Tom, can you recall the overall percent on the utility rate increase? Tom Chaffee: ...conglomerate between the water and sewer, we're looklng at roughly at 14~ increase overall. That's not to say that one person's bill won't go up 16% and another one will only go up 12~. Another thing I want to point out, while he's talking about, I see the figures that he's comparing to. The $1,090,000.00 versus the $1,914,000.00. We have to conslder the faot that 18 City Council Meeting - December 10, 1990 additionally the Council established in October surface water management utility which the projected revenues from that are included in here for the first time so it's kind of an addition but in comparison...$3,000.O0 and $4,000.00 revenue there. Councilman Johnson: So that's where it was. Councilwoman Oimler: So that's where it was. Tom Chaffee: Along with the projected increase in customer count. Don ashuorth: Tom, I'd like to make a clarification. He said 14~. That may be an overall increase in revenues but the actual rate increase, we were talking 3X to 5~. Tom Chaffee: Yeah. Yeah. ! was talking in terms of overall dollars. Don Rshworth: Because the rate increase is into that 3~ to 5~ level and I should note that we have not increased sewe~ or water rates for what, 4 years? Tom Chaffee: Since 1986. Councilman 3ohnson: S years. Oon Ashworth: The second question you had sir? Jim Jason: Professional services went from $623,000.00 to $904,000.00. Councilman Johnson: That will also include the surface water ahich isn't coming out of this fund. Tom Chaffee: Over $200,000.00 of that is included in the enterprise category because of the surface water manageaent utility and the professional services required just having to adopt the 509 plan. Don Ashworth: So that's 200 of the 300 increase. Do you recall the other [00 Tom? I guess to really make that comparison, we need to see which of those. Councilman Johnson: I think we're down to about $80,000.00. While he's looking for that, if you're not aware of what the surface water utility is? Rye you familiar with that? Jim Jason: No I'm not. Councilman Johnson: This last year we're one of the leading cities in the state to pass a surface water utility in that there's a lot of expenses coaing up to where cities in managing surface waters. Water quality in the future. Lake Riley's has some problems and several of our other lakes, Storm aster apparatus'. We have no fund for repairing store water. We have funds for repairing your sewer but we had no system for repairing a storm sewer other than taking it out of general revenue. ~e felt that the best way to fund these things was to form a utility that charged it, rather than based on your property value, based on what kind of property you had so a homeowner who will generate City Council Meeting - December 10, 1990 so much storm water off his, the average home, just because your home is worth $300,000.00 and mine's worth $90,000.00 doesn't mean you have to pay that much more to manage storm water than I should so it turns out that, because my yard stlll puts out as much storm water as yours does. We pass the storm water utillty that does the storm water work at a flxed rate basically so everybody will be paying that and that will be going on, that you'll be seeing on your sewer bill next year also in addltlon to that. That the Counc11 voted to fund that at 60~ of the level that staff wanted to run that utility at. So while 'he's looklng that up I flgured I'd f111 some tlme and lnform you of that. That was a couple months ago. What do you they call that, an awkward pause or something? Pregnant pause or something. I don't know. Tom Chaffee: Over $300,000.00 of the increase in professional services, actually some areas, professional services dld go down from 1991 as opposed to 1990 and that's just the $300,O00.O0...increasing professional dollars and the lncrease in professional services were solely wlthln the enterprise fund whlch has no impact whatsoever on the property tax levy. The enterprise fund is by law run as an enterprise and it has to derlve lt's revenues...so lt's not really an impact on property taxes per se. Jim Jason: I guess that was my questlon is how was this. Tom Chaffee: Notice another increase, while you're looking at those specific lines then ls the 11ne that says, MWCC reimbursement. That represents a 40~ increase from 1990 to 1991 yet our sewer rates are not going up Councilman Workman: Metropolitan Waste Control Commission. Mayor Chmiel: Right. Those were all charges that come back to us. Basically we have to pay the MWCC, Metropolitan Waste Control Commission. Jim Jason: Okay, thank you. Mayor Chmiel: Thank you. Okay, we have a motlon on the floor wlth a second and discussion. Councilwoman Oimler: I have something else. I'm really frustrated here. I hear the citizens saying they want us to cut spending. I'm not sure that Jay's motlon does that. Jay, do you feel your motlon cuts spending? Councilman Johnson: Yes. Don says it cuts spending by around 2X. It's basically a 13~. Councilwoman Dimler: ~re you cutting 2% of the increase or actually cutting Councilman Johnson: Okay, basically this budget as it is is 13~ increase in expenditures from last year. Okay, I'm going to spend 13. What I'm proposing is to spend 13~ more money than last year. Councilwoman Dimler: Right. Councilman Johnson: Because the property values, new properties coming on line had increased by 15~, I will be receiving 15~ more money from these new 2O City Council Meeting - December 10, 1990 properties into for which I can pay.that 13~ off. That's ho~ I come up with 2~ decrease. Councilwoman Dimler: Okay, I understand what you're saying. Councilman Wing: Okay, I guess I would ask that if [ was sitting in the audience. If we're considering recessionary period and you're worried about the Hideast situation, should this city be addressing a 13~ increase in it's budget? ! don't care where the dollars come from. I understand that the. Councilman Johnson: With 1S~ growth? We had 15~ real growth in town and we're considering a 13~ increase in our budget. Councilman Wing: I understand but from 1990 to 1991 we're going to spend an additional 13~ over 1990 to 1991. I understand there's more growth but 13~ compounded out over the next 10 years is, you know where does it stop? I guess what if ! threw in the word freeze? What if we just froze the 1991 budget at the 1990 levels? Councilman Johns'on: We'd be in deep trouble. Jim 8ixler: Here, here. Councilman Wing: No, no. Now wait. That's not reasonable because I don't think in all honesty you represent the majority of this community because I've been out door to door these last few months. The majority of this community want services and they're not about to tolerate a freeze so that's not necessarily reasonable thinking. I just threw that out for discussion. Councilman Johnson: Well let's put this into the business world. I have 15X increase in customers but ay boss will only let me spend what I had last year. Can I provide those customers, that 1S~ increase in customers, can I provide them services? What we are doing is we have a 15~ increase in our customer base and we're providing them with the same services with 13X. Councilwoman Dialer: And then another question I had was, I saw this letter from a Wayne Hiller living in Chaska. Oon, did you see this? Are his numbers correct here that Chaska's proposed budget compared to Chanhassen's? Mayor Chmiel: No. Councilman Johnson: Did you see Oon's response to that? Councilwoman Oimler: No, I didn't. Councilman Johnson: He had a very good response to that. Don ashworth: It follows that. Councilwoman Dimler: Okay, so that's not? Don Ashworth: Right. The two points that I tried to make in response to that. Chaska is in a very enviable position in that they operate their own electric 21 City Council Meeting - December 10, 1990 utility and for 1991 are transferring from their electric utility to the general fund $?20,000.00, if my recollection. Second enviable position that Chaska has ls that most of the Jonathan area was actually, the improvements in that area including the parklands, etc. were paid for by the Federal government. Now they went through many lean years in terms of when that went through bankruptcy, etc. but the bottom line out of that was that in that community they have very little debt as a result of elther the federal government paylng for those improvements in that area or through how well their electric utility... Councilwoman Dimler: Okay, so he was comparing apples to oranges and not really a fair comparison? Mayor Chmlel: Right. I agree. Councilman Johnson: How does our electrlc bi11 with NSP compare wlth Chaska's? If that's a fair question. Mayor Chmiel: Lower. Jim Bixler: Mayor, Councilman Wing threw out a word. I don't know that you did that for the benefit of the television audience, if there is any. Councilman Johnson: Oh there is. It's amazing how many people watch thls. Jim Bixler: Why did you bring up the word freeze if in fact you just wanted to, oh but I don't mean lt? What did you mean? Were you talklng about the 2~ increase over 19907 Councilman Wing: We have a 15~ increase in growth. That doesn't mean a lot to me in terms of services. I mean I can't relate that back to service levels. I mean are our service levels at the normal levels, excessive levels or are they below what people would like? I mean I can't right now define what service levels are or should be. A 13X lncrease seems like a blg increase to me. understand we have a lot of growth but still, with a 13~ increase so I Just threw out the word freeze because I guess I don't fully understand what that might mean to this city. If we froze the levels, what would that do? I mean Jay sald we'd be ina world of trouble. ! don't know that for myself and I guess I would ask Don, if we did freeze from ZggO to 1991, no increases in any departments ulth one exception. I dlsagree ulth you on taking care of our employees. If I was to freeze, the City Manager, 'gO to '91, I would still want to take care of my employees so we'd actually even beyond that point so that I don't agree with you. The 6~ lncrease that Don talks about, I wouldn't get 1nrc but the employees I'm really touchy about because I feel they do such a good job for us but that's off the point. If we froze the budget, would we be ina world of trouble? Obviously thlngs are golng to get cut back. Service levels get cut back. Is that an inappropriate comment at this time? Don Ashuorth: Just for the benefit of, well yourself because you really had joined this Council after many of the work sessions and we didn't take an approach that we simply took last year's budget and started adding to that. I mean we went back and started to look at each and every function. The legislative branch. Can we get by ulth a lesser level of Mlnutes? Can we reduce travel? Can we reduce right on down the line? As we went through each 22 City Council Heeting - December 10, 1990 of the departments, we didn't just start at what it was in 1990 and say okay we're going to build on that for 1991. We went back to literally the point of the beginning. In the area of streets, 3ay's correct in terms of the overall miles of streets that we plow, etc.. There is a certain percentage of those streets where we have been plowing the street and now to have an inftll or let's say there hasn't been a home on part of the street. Rs that home is put in, you know there's really no additional cost to the city to clean the streets or clean the sewer or to flush the watermains. So hopefully each year we can be more efficient in what it is we do. ! mean if we put in x miles of new streets, ! do not agree that we have to simply increase our budget by that same amount. I think that we can continue to look at, since we have men in that area and they are currently plowing, the additional time to have them plow that additional street should produce cost savings for all of us. I'm a taxpayer here too right? Whether it can be cut more and you can go down to 4~ reduction or not, [ don't know. Councilman Wing: ! want to say in Oon's defense that ! think that our City Manager has a real fine pencil and ~ think he's done a really good job along with the Mayor in holding these things down. Now I wasn't at the early meetings so ~ have to be really cautious here but Z think your frustration and mine doesn't rest with the city as much as it rests with the State and the property taxes because this bite here is so small and Z think so conservative and so well managed that ~ didn't mean to bring up the freeze to be critical. Only as a discussion point to ask why because I wasn't privy to the earlier meetings so I had the same questions that you did. Thank you Don. Mayor Chmiel: Okay. No other further discussions, I'll call a question. Councilman Workman: Well, I guess I'll just for open discussion also I'd like to discuss, you know we talked about the animal control contract, etc. which I've been fundamentally against doing animal control for our neighbors. You know we say that so we are doing animal control for our neighbors so that we can have a CmO on full time. We weren't doing it for, with that CSO officer doing it for our neighbors. We don't have them full time anyway. And I don't know where the numbers fit in. That's another small part. We've discussed and I don't know how finely tuned we have this but we've discussed over and over that our building permits are down, down, down. When we brought on'new building inspectors we talked about the fact that they, if we had a building problem and we talked about it all of them, right before we hired them, that be sure that we have the ability to remove them if we have a downturn. We're now in that downturn but we haven't removed building inspectors and I guess Oon, maybe you can expound on that. The permit, the building permit fees are way down and it's been one of the sole sources of why we had the problem. The $500,000.00 to $600,000.00 problem but yet we still have the employees there. Don ~shworth: In 1991 we were looking at an overall expenditure of $550,000.00 so that number is correct but of that the revenue problem was a downturn of approximately $250,000.00 in the permit revenue and $50,000.00 was in terms of the State ~ids. So the total permit revenue drop was from projected 1990 of slightly over $700,000.00 to about $460,000.00. We're looking to that same $460,000.00 in 1991. In other words, that reduced level. One of the problems that we are faced with as a community, well for many years we actually made money off of our permits. The City should not make money off of the permit 23 City Council Meeting - December 10, 1990 revenue. We're collecting a fee to provide a service. The service is the inspection of the property that we're collecting the fee from for that inspection and for 1990 total inspection costs are approximately $325,000.00. The City is still netting, even at the reduced level, approximately more in revenue for both lg90 and 1991 than we're spending. Now that flgure does not include vehicles which on an amortized basis would be about $50,000.00 to $60,000.00 and assumlng that you charge back a very healthy administrative type of fee, 25~-30~, you would still not really reach that 450 level. At that point it would break even. If we move into 1991 and if the permlt revenue does not meet even these lower projections, then there's no question that ue will have to eliminate inspectors in 1991. But at least this budget reserves the option for you that if you do have a downturn in those revenues this next year, that you've got someplace to make it up ln. You should also note that even though the overall permit revenue is down, that the level of inspections is still up from the 1989 level. What that says is that you've got more fences. You've got more smaller type of permits that have come tn in comparison to the Hc81ynn's, the Rosemount's, etc. that may produce $50,000.00-$60,000.00 wlth one permit. Councilman Johnson: And even wlth the downturn in the economy that might stop new'homes, a lot of people do remodeling then. Those that bother to get the permit, and those permits generally don't go for nearly as hlgh of a cost but the inspection takes almost as much time in a lot of cases. I think we're not dolng an adequate job of inspecting where I firmly believe that 4 years ago when I came to this Council that ue weren't doing an adequate building inspection job. We dldn't even have a heatlng inspection. The furnace in your house was not inspected by a heating inspector because it was built before we had a heatlng inspector on staff. Now we're dolng heating inspections. Mayor Chmiel: We're providing those kinds of services and it also eliminates 1labilities against the city as well by providing those services. So yes, I feel too that if the growth isn't there and butlding isn't done, then we have to cut on those. Councilman Workman: But that's where I thought ue were. When we added those inspectors it wasn't my assumption that if we had a downturn and we recoglnized it that it would occur in the next year following the downturn. We're in that downturn. The Councilmember that used to sit in this spot and has left town sald very few things that Z always liked to agree ulth him on, as everybody knows but one of the things he dld say was that he was waving a flag saying, we have not, we've got to not have, am Z saylng that rlght? We should not have a reliance on our permit fees to balance the budget. So we have $140,000.00 more and we're klnd of balancing the budget ulth that but we st111 are relying on that because once that rug gets pulled out then we're really, wlth that plus MWCC plus legislature playlng hocus pocus and everything else, then we're going to be a real bad time and then we're not going to have 8 people running for the Clty Council. We're going to have none. In regards to the anlmal control contract, I agree. We shouldn't make money off of services we provide to our citizens. We should not be a money making operation. However, one maybe amendment I'd like to make, if we're going to continue an animal control contract, I thlnk lt's only fair that since the city has taken on a job and providing it to $ of our neighbor8 in place of private free market operators, then we should also make a proflt off of lt. I st111 don't know where we stand City Council Meeting - December 10, 1990 with that. We're expending $75,000'.00. I don't know if we're getting 75 back but I don't have a problem getting $100,000.00 back if we're doing a job that the private sector doesn't want to do and was doing and now we can do it. That will number one give them an incentive to take care of it themselves or not provide it. I don't know. Z mean it's just one more thing so in that situation maybe we should be making some money because there are costs there that I think they are not picking up. But that again is a small thing and maybe a philosophical point as much as anything. Councilman Johnson: And that's something in just the operation of the city next year that next year's Council can insure that that is happening. Mayor Chmiel: I think we're already there. We are maklng money with that contract. Councilman Workman: With the 2~ or the 4~, I want to be proud of that and Z can be proud of it because [ know that it is a reduction, certainly in comparison to the school district and the county. And I've said this before that the school district get to do everything with our citizen's money and the city unit doesn't get to do a whole lot and that's why people complain, where's the services? Where's the fund? Where's the police department and the community center and everything else? Where's my sidewalks for God's sake? Where's everything that we want and we're putting it rightly as a priority I think to keep the taxes down but yet the County and the State, School districts are doing that and so we're not able to keep it right here where we can spend it best I think for our citizens which is a real downer for the city. However, 4~, 2~ isn't anything for me to get real excited about. I guess I had higher expectations. Not so much as a freeze because [ guess the cost of oil and asphalt and insurance and everything else goes up just like anything else. Freeze would be tough unless they're obviously bloated over the previous year. So I don't know, I guess I'm ready to vote and I'll live with it and I'll be looking at it next year again. Resolqt[on ~90-&50A: Councilman 3ohnson moved, ~ayor Chmiel seconded to approve the ].991 budget for the C/ty of Chanhaseen as proposed by the City ~anager to levy a net 2~ decrease in taxes to make up for the $52,445.00 shortfall between projected revenues and projected expenditures. R11 voted in favor and the motion carried unanimously. Mayor Chmlel: Thank you for comlng to the meeting. I think we've done the best job we know how. Jim Bixler: What passed? The 2~7 Councilman Johnson: The 2~. Mayor Chmlel: We passed 2~ is what we voted on, right. Thank you. 25 City Council Meeting - December 10, 1990 PUBLZC ANNOUNC~HENTS: RESOLUTION COHHENDING THE CHANHASSEN FIRE DEPARTMENT FOR A SUCCESSFUL $990 FZRE PREVENTION PROGRAH. Mayor Chmiel: I'd like to just read a Resolution commending the Chanhassen Fire Department for successful 1990 fire prevention program. And it reads, a Resolution commending Chanhassen Flre Department for successful 1990 flre prevention program. Whereas, the Chanhassen Fire Oepartment is charged with providing both fire flghting and flre prevention servlces to the City of Chanhassen, and Whereas the Chanhassen Fire Oepartment has continued to develop flre prevention education programs for the City, Now Therefore Be It Resolved by the City Council of the City of Chanhassen as follows: That the Chanhassen Flre Department be commended for the efforts of all members for that for the spectacular job of providing fire prevention education to our community at their Open House and throughout the Flre Prevention Week 1990. Thank you. Passed and adopted by the Chanhassen City Counctl. Thanks Dale. You bet. To the rest of the firemen too. Dale Gregory: Thank you very much. Councilman Johnson: Do we have to vote on that Resolution? Councilwoman Oimler: Yes. Councilman Johnson: ! move the resolution. Councilwoman Oimler: Second. Mayor Chmlel: Yes, thank you. Resolution ~r9o-151: Councilman Johnson moved, Councilwoman Dimler seconded to approve the Resolution commend/ng the Chanhassen F/re Department for a successfu! 1990 F/re Prevention Program. All voted in favor and the mot/on cart/ed unan/mously. Councilman Johnson: You can't read it and not vote on lt. Mayor Chmiel: You're right. I'm just looking at all these other things we've got to go. Councilman Workman: Can I say something in the publlc announcements? Quickly? Mayor Chmlel: Maybe. Okay. Councilman Workman: This is it. This is the last meetlng of the year and it's been a fun year. The end of the year always stlnks and so I don't let that weigh on all the fun that I've had in the past year. I guess I just wanted to use the opportunity. This is Jay's last meeting and it's also Gary Warren's last meetlng, our City Engineer and it's also one of new newspaper people's getting laid off or something, Anne Hanson. Councilman Johnson: Really? 26 City Council Meeting - December 10, 1990 Councilman Workman: Yes. The economy's in a contraction. But anyway, thanks Jay for 2 years of just a lot of fun and Gary Warren who's upstairs crying with tears on this. Councilwoman Oimler: Here he comes. Councilman Workman: But anyway you know, it's nice to get to know ail these people and another nice year of working with. Councilwoman Oimler: We're talking about you. Councilman Workman: I told Gary earlier, it's fun to watch the contortions on his face as we disapprove of whatever it is he's up to. But anyway, ! thought it appropriate to. Councilwoman Oimler: ! agree with you and ! think we should give them a hand. Mayor Chmiel: One other public announcement. We're also going to have on the 18th ! believe, we're going to interview the commission members on that particular date. What was our time? Was it 7:00 or 7:30? Councilwoman Dimler: What commission members? Oon Ashworth: This is for each of the different commissions. Planning Commission, Park and who was our third? Mayor Chmiel: What time are we starting? Councilman Workman: Board of Adjustment. Councilwoman Oimler: Board of Adjustients? Mayor Chmiel: I didn't have a time. Oon Ashworth: It's open. You could do something early. Councilman Workman: ~ can't do it early. Don Ashworth: That's the only item we'd be doing. Mayor Chmiel: 7:00? Let's do it at 7:00 and see how far we can go. 7:00 p.I.. Councilman Workman: That's for all the commissions? Bon Ashworth: Yeah. There's 3 commissions you'd be looking to. Councilman Workman: That's Tuesday right? Don Ashworth: Yes. Mayor Chmiel: Tuesday the iBth. 27 City Council Meeting -Oecember 10, 1990 Don Ashworth: In that same regard, we will send out a list. The resolution that you passed a year ago states that you're going to interview commission members and then the Council has the right to add to that list if you wanted to add additional with a reminder that if you don't find the name in there that you like, make sure you give me a call so we slot that person. Mayor Chmiel: Okay, thank you. CONSENT AGENDA= Councilwoman Dimler moved, Councilman Johnson seconded to approve the following Consent Agenda items pursuant to the City Nanager's recommendations: c. City Code Amendment to Chapter 18 - Subdivision, Article III - Design Standards Regarding Updating the Code to reflect current city Standards for Right-of-way widths, driveways, etc. and the Urban Service Area, First and Second Reading. e. Re~qlution ~90-152: Accept Street and Utility Improvements in Chanhassen Hills 2nd Addition project 87-25. f. Resolqtion 090-153: Accept Street and Utility Improvements in Lake Susan Hills West 3rd Addition, Project 89-12. h. Accept Donation from Chanhassen APT toward purchase of Handicapped Accessible Play Equipment for City Center Park. i. Approval of Accounts. j. City Council Minutes dated November lg, 1990 Plannlng Commission Mlnutes dated November 28, 1990 Park and Recreation Commission Minutes dated November 27, 1990 All voted in favor and the motion carried unanimously. A. APPROVE RESOLUTION A!4ENDING THE JOINT POWERS__AGREENENT .FOR_THE SOUTHWEST METRO TRANSIT COHH)SSION REGARDING LAND PPRCHASES_. Mayor Chmiel: On item 3(a) that I had, on the Joint Powers Agreement. I dld have some discussions wlth Paul on thls and the only concern I had at the time was whether or not the Board for the Southwest Metro Tran$1t Commission has the authority to revlew the total dollar Dost for those rlde lots. They did and so I would make that recommendation that we approve Consent Agenda item 3(a). Councilman Workman: Don, what was your specific point? Mayor Chmiel: My concern was with $5,000.00. Not just have a staff person run off and purchase all they want. Councilman Johnson: No, the Board has to vote on it. Mayor Chmiel: The Board has to approve on it. There is a condition contained within so I would move. 28 City Council Meeting - December 10, 1990 Councilman Workman: I have another point on that. Mayor Chmiel: Okay, go ahead. Councilman Workman: On the resolution part here, 6(m). First line is kind of confused with the second line. The Commission may purchase passenger shelters without prior approval of any of the Councils of the parties to this agreement period. Now that sort of intent to flow in with the next sentence. The commission may, without prior approval of any of the Councils of the parties to this agreement, execute an agreement to purchase blah, blah, blah. The problem I have with the first sentence is maybe the architectural review side of things, could they buy, if it's not connected to the second sentence, the way I'm reading it is they can buy shelter without our prior approval and it can be just about anything they want. That's the way Z'm reading it. Zs that the way it's stated? Councilman Johnson: As one of the commission members, we went into this, we've been discussing this thing since August. Councilman Workman: Then you can clarify that for me. Councilman Johnson: The city that the shelter goes into, this is, we're just like any other company working within the city. We have to go through the same site plan review and get the same approvals that anybody else. We cannot just come in and put up a tin shed and call it a bus shelter. We'll go through, if we have to do subdivisions or whatever, we have to go through everything. Councilman Workman: That's not the way that ! read it. Councilwoman Oimler: See I agree with what you're saying Jay. That is the intent but I'm not sure the way it's stated here. Maybe we j~st need to reword it to clarify that point. Councilman Workman: It says they may purchase passenger shelters without prior approval of any of the Councils of the parties to this agreement period. Councilman Johnson: But they can't install them. You see previously. Mayor Chmiel: You still have the ability to review it once it comes back to you. I had the other concern, the same thtng you had Tom. In the event they don't come back to the city and ask us, we have properties somewhere that we feel might be just adjacent to it that they haven't even looked at. Councilman Workman: Well what if it's already there? Mayor Chmiel: If the shelter's already there? Councilman Workman: Yeah. Mayor Chmiel: Well then it's already been pre-approved right? Councilman Johnson: Then we're not purchasing anything. City Council Meeting - Oecember lO, ~9~0 Councilman Workman: They could purchase a shelter that's already there. It doesn't need to be put in. Councilman Johnson: Oh, you mean purchase a house or a building or something? Councilman Workman: Yeah. We could have a bus pulling up to. Councilman Johnson: But in order to convert that use you're still going to have to ask for a variance or something. Roger Knutson: Not following our Zoning Ordinance, I don't believe using a single family home for a bus shelter. Councilman Workman: But hey, Z'm just being. Councilman Johnson: You have to go back to where this originated. Councilman Workman: I just thlnk if we moved a perlod or something it'd flx everything. Councilwoman Oimler: How about a comma? Councilman Workman: A semi-colon. I don't know. Just make it part of the rest of it and that says. Councilwoman Oimler: I think just to clarify. Councilman Workman: So that it goes with the bottom of to the approval of the Councll of the city in which that real estate is located or purchased. There. I don't know. Mayor Chmiel: Roger? Roger Knutson: I really think that when you look at, this says they can purchase something. That doesn't give them the right to put it anywhere as Jay said. They can purchase it and put it in Duluth but they can't put it in the clty of Chanhassen unless they comply with your Codes. They have to comply with your Zoning Ordinance, Subdivision Ordinance, what have you. I don't thlnk this gives them a blank check to do anything in this community. It gives them a check to buy the thlng but not to do anythlng with it. Councilman Johnson: In the previous writing of this, the city of Chaska could say you can't put a bus shelter in Chanhassen and blackball our bus shelter purchase and if we were mad at Chaska we could blackball Chaska. Councilman Workman: We get along with those communities. Councilman Johnson: I know but then there's Eden Prairie over in Hennepin County. Councilman Workman: No, but it's just a little technicality and you know, I just wanted to prove that I read all the way through these packets and waste these valuable minutes of counc11 meetings. No, just a technical thlng. 3O City Council Meeting - December lO, 1990 Councilman 3ohnson: Have the other two cities approved this yet? We're the third to approve this? Diane Harberts: No. 3ay, they haven't approved it per Council but we sat down with our attorney and representatives from each of the cities to come up with this language. One of the things I just wanted to remind the commission, or excuse me, the Council is that you do have representat£ves on the coaaiss£on that has the ultimate approval of purchasing a passenger shelter. And with regards to the word of passenger shelters, our attorneys did the review of language because they had originally had said buildings but they needed to be more specific because it's just the purchase of passenger shelters which in transit terminology is bus shelters as other people may refer to them. Councilman Workman: But so then really it doesn't make any sense for you to purchase anything or have that line in here because we're going to want to approve it before you do anyway and that's going to dictate the price. Diane Harberts= The Commission will have to first approve it which includes representation input from each of the cities and you're right. We're not ultimately going to go out and purchase a bus shelter if we're not going to have a permit to put it someplace. What the intent of the Joint powers agreement was was for Southwest Commission to be able to purchase the bus shelters without having to come to each Council and say can we buy a bus shelter and then turn around and come to you again and say, now can we put it someplace. $o what we're doing is just receiving the authority to go ahead and purchase a bus shelter after it's been through the Council and I'm sure the input from the city staff without having to come to the council for an item of this nature. Mayor Chmiel: Rather than an automatic purchase, I'm sure you'd take an optton in the first place on that piece of property. With Council approval. Diane Harberts: With the regard to the, right. What we're looking at is two separate issues. One is the first sentence to address buying a bus shelter without com[ng to you folks, to any city council. And the second issue is to have the authorization'to enter into a purchase agreement to purchase a piece of land but within that purchase agreement is going to be subject to the approval by the city in which it's located to even develop it according to what we want to do with it. So basically the city in which it's located has that final approval. Councilman 3ohnson= We're not going to purchase something until the City's already made the approval that ue can do something with it. We don't have a lot of excess funds. Diane Harberts: The purchase agreement will in a sense tie up the land so we can move forward with it in a timely manner and at the same time once that information hits the general public, if we didn't have it tied up into a - purchase agreement, it may inflate the pr[ce as a result of that. $o there's cost things to think about as well as the timeliness. Councilman Workman: Right and I see clearly that it's two separate things. Purchasing of land and purchasing of bus shelters but that last sentence has it connected to the part with the bus shelters although it's implied that we have 31 City Council Meeting - December 10, 1990 to do that and that's what I'm wondering why and so that isn't with that. It's two separate things, you're right and you're implying that because we have bought this piece of land therefore we are going to buy a shelter. You're saying okay, you have to approve this purchase of land but the way I read this, it didn't say we had to approve the shelter. So once we've approved the land that the shelter will go on, and now you're going to approve a shelter that in this, it doesn't say we have to approve the shelter. Because now that it's been zoned a bus you know. Diane Harberts: Well yes, and our understanding is in the approval of developing that piece lnto a park and rlde lot, that would include the site plans whlch lncludes what type of passenger shelter we're golng to lnsta11. So before it would come to you, the Council, the staff would be looking at our site plan uhlch would include what design we have for a passenger shelter and that whole package would come to you for your recommendation or approval or not. Councilman Johnson: But under current, not only does the site plan have to come to you, but after the site plan fs approved and everything, then we have to come back to each City Count11 and have them specifically approve the purchase of that shelter. What we're trying to do is get that second step. There's no use in comlng back. Councilman Workman: Jay, it says the commission may purchase passenger shelters without prior approval any of the councils of the partles to thls agreement. Councilman Johnson: Right. Councilman Workman: So that's a lie. That's not true then. Councilman Johnson: No. Councilman Workman: The Commission may purchase passenger shelters without prior approval of any of the councils of the parties to this agreement period. Councilman Johnson: Approval of the purchase, right. That's correct. Councilman Workman: Okay. That just doesn't make sense in there then as you were explaining lt. Diane Harberts: I think what it's. Councilman Workman: Are you going to buy our bus depot or aren't you? Or are you going to buy our train depot and put it there or not? Okay. Mayor Chmiel: Okay, any other discussion? Is not hearing any I make a motion to approve item 3(a). Is there a second? Councilman Johnson: Second. Resolution ~90-154: Hayor Chmiel moved, Councilman Johnson seconded to approve the Resolution amending the Joint Powers Agreement for the Southwest Hetro Transit Commission regarding land purchases. All voted in favor and the motion carried unanimously. 32 City Council Meeting - December 10, lggO B. APPROVE EXTENSION OF HINING/GRADING PERHIT FOR HC6LYNN BAKERIES UNTIL NOVEHBER. 1991. Mayor Chmlel: The next ltem I have ts just ltem 3(b) and it's a real quick one. I agree with the proposal that's being done. I would like to have one more condition applied to that and that being condition number 5. Keeping the sidewalks clean of dirt and mud. Can we add to that Paul? Paul Krauss: Yes Hr. Mayor. .Councilman Johnson: I second that. Paul Krauss: Possibly the language, the applicant shall also be requlred to keep the area streets and sidewalks clear and passable, tn clear and passable condition free of mud and debris. Mayor Chmlel: Because I've had several complaints of people walking there so I just want to make sure that durlng construction that It ls. Councilman Workman: I've got a point on this one too. First of a11, I was kind of shocked at why they, I wasn't shocked that they didn't make it November 15, 1990 but when I saw it November 15, 1991 I was shocked. As to why so long and then in number 3, we've been talking about keeping things clean for the U.S. Open. Ithtnk the dates June 8th thru June 17th ought to encompass at least a week prior to the U.S. Open for cleaning up. June 1st at least to June 17th. We've talked about sweeping off medians or trimming and doing all sorts of things. I don't thlnk that gtves us adequate time to. Councilman Johnson: Because there's a lot of activities the week before. People coming in. Councilman Workman: Maybe we need the last week in May but I don't, you know, that covers the period right 2 days before it starts. I don't think that. Gary Warren: I was just going to say, from a maintenance standpoint it shouldn't take that long to clean up whatever would be there. I guess I don't think you need to require 2 weeks advance notlce for that type of action to be taken. Councilman Workman: What should we be requiring any major excavation projects to do this? It's pretty much built into the contract I think but are we going to have compressed clumps of clay on the hlghway? Gary Warren: I think the State, I know the State is as concerned as we are that the proper image be there for the U.S. Open. Shafer's contract, I haven't seen it specifically but I would imag[ne the concerns that the State has built £nto your contract as far as the road itself and seeing that that is free and clear and any construction activity. Scott Spisak: That's just normal, a standard specification. Councilman Workman: It's normal you said? 33 City Council Meeting - December 10, 1990 Scott Spisak: The standard specification allows them to have control over our operations at any point during the duration of the contract. Mayor Chmiel: Okay. Councilman Workman: June lst? Councilwoman Dimler: Are you amending it to June lst? Hayor Chmiel: June 1st. Councilman Workman: And why did it go another year? Why did they need another complete year? Gary Warren: When you're saying, which schedule time are you looking at? Councilman Workman: They're going until November 15th, 1991. Scott Spisak: Just to conincide with the completion date of the contract... Gary Warren: Substantial completion date is well before that. Scott Spisak: I believe it is. That would allow for restoration. Gary Warren: Some of those things but the actual roadway construction, in fact Scott and I were talking before and we can see I think from the evidence of what's going on that things are moving ahead of schedule in that regard. Mayor Chmiel: That's good. I would make a motion that we approve item 3(b) with the two revisions. Councilman Johnson: Second. Nayor Chmiel moved, Councilman Johnson seconded to approve the extension of the Nining/Grading Permit $90-11 for Sharer Contracting Company through November 1991 with the following conditions= 1. The applicant shall provide the City with an extended letter of credit to December 31, 1991 in the amount of $38,150.00 to cover any road damage, maintenance, erosion control measures and site restoration. 2. The applicant shall notify-and obtain an extension to the Riley Watershed permit from the Riley-Purgatory-Bluff Creek Watershed District. The applicant shall not perform any hauling operations durlng the perlod of June 1 thru June 17, 1991 during which tlme the United States Open Golf Tournament and related activities will be held at Hazeltine National Golf Course. The applicant shall abide by the 11 conditions of approval from the previous Gradlng Permit ~90-11 and shall complete all work by November 15, 1991. 34 City Council Meeting - December $. The applicant ehal! keep all area sidewalks and streets passable and clear of all mud and debris. voted in favor and the mot/on carried unanimously. D. ACCEPT WATER SYSTEH ANALYSIS STUDY; AUTHOP,/ZE PREPARATION OF PLANS ~ND SPECIFICATIONS FOR CONSTRUCTION OF ~ELL NO. & AND RELATED k~TERHAINS AND APPURTENANCES. PROJECT 9~-1. There was a tape change during Councilwoman Dimler's comments on this item. Gary Warren: ...Twin Cities Testing in Hopkins where they run the analysis and we get the results. That test ls basically for chlorine content and bacterla and is not a full spectrum test but it is the bastc test that are required for the water system. We do ourselves run an annual test or we have the last couple of years on the full spectrum of ingredients in the water, in the wells and those tests lnclude test for radiation, radon, basically the whole background. Councilwoman Oimler: Okay, so the City does it yearly? Gary Warren: That's correct. Those tests are very expensive but we have been doing that annually and Z do have the results in my office if anybody from the public cares to take a look at them. Councilwoman Dimler: Okay, I will send them to you. Thank you. With that will approve item 3(d). Councilman Workman: Second. Resolution ~90-155: CounciZwoman Dtmler moved, Councilman Workman seconded to accept Water System Analysis Study; authorize preparation of plane and specifications for construction of gel! No. & and reZated watermatna and appurtenances, Project 91-1. Al! voted tn favor and the motion carried unanimousZy. VISITOR PRESENTflTZONS: None. PUBLIC HEARING: SALE OF APPROXIHATELY 3,2 ACRES OF LAND NORTH OF LOTUS L~N AND GARDEN TO REDMOND PRODUCTS. Mayor Chmiel: This is a public hearing. I'll open the public hearing for the sale of approximately 3.2 acres of land north of Lotus Lawn and Garden to Redmond Products. Is there anyone wishing to address this at this particular time? Councilman Workman moved, Councilwoman Dimler seconded to close the public hearing. A11 voted in favor and the morton carried. The public heartn~ wa~ closed. Councilwoman Dimler: I move approval of item 4. Councilman Johnson: Second. 35 City Council Meeting - OecembeF 10, 1990 Councilman Workman: This money is then designated to storm water utility? Mayor Chmiel: Right. Resolution ~90-155A: Councilwoman Dimler moved, Councilman Johnson seconded to approve the resolution authorizing the sale of land to Redmond Products, Inc. in accordance with the terms and conditions of the Real Estate Transfer Agreement. All voted in favor and the motion carried unanimously. 5. REJECT BIOS FOR MARKET SQUARE 72" STORM SEWER EXTENSION, PROJECT 90-13. Councilman Workman: I would move approval or denial. Councilman Johnson: Second. Rejection. Councilwoman Oimler: Move approval of the rejection. Resolution ~0-156: Councilman Workman moved, Councilman Johnson seconded to reject all bids for the Market Square 72' storm sewer extension and authorize re-advertising for bids for this project in the spring of 1991 consistent with the developer's time schedule for Harket Square. All voted in favor and the motion carried unanimously. NEW BUSINESS: 1991 CITY COUNCIL MEETING SCHEDULE. Mayor Chmiel: I think we've had some concerns about possibly changing some of the, or some discussion I should say. It appears to me that if we were to go through the process of changing our calendar, unfortunately we'd have to change around our commissions and do a lot of other shuffling which would cause some additional inconveniences. Councilman Johnson: We used to be first and third. Mayor Chmiel: I know. Councilman Johnson: We changed a few years ago. Mayor Chmiel: Yep, to second and fourth. Councilwoman Dimler: Unfortunately we've moved other things into those dates and it'd be hard to change those now. Councilman Johnson: Actually when I look(:d at it, f~rst and third h~d as interferences as second and fourth so it really didn't matter next year. But what you do in November still has to be decided and I agree with Hay. Mayor Chmiel: Yeah. The 13th and 28th. Also in November, Veteran's Day. Councilman Johnson: Well I agree with the 6th and 20th of May and moving to the first and third that month. 36 City Council Meeting - December 10, 1990 Mayor Chmiel: Yeah. That's what it is intended for the 6th and 20th rather than the 13th and the 28th. 6nd November is Veteran's Oay which is the llth which is the second Monday of the month and the Council should change the meeting dates to the first and third Monday which will result in Council meetings two weeks in a row. ! guess ! don't, ! think that would probably be the best time frame for us to go through that. The lZth and the 2Sth. Councilwoman Dimler: When is Thanksgiving? Mayor Chmiel: Thanksgiving is, I don't know. I don't have a 1991 calendar. Councilman Johnson: The 21st. Isn't it the third Thursday of every November? Councilwoman Oimler: Yeah. Councilman Workman: So it'd be the 4th and the 18th? First and third in November? Mayor Chmiei: No. What we're looking at, we're looking at the 12th. Councilwoman Oimler: The other thing is Oon Rsh~orth, do you know yet ahen the League of Cities dates are next year because usually it's right after Thanksgiving? Councilman Workman= It's the first week. Don Ashworth: Yeah, it's like the first week in Oecember or the last week in November. Councilwoman Dimler: Yeah, so if we go to the 25th, that might be a problem. Don ~shworth: Potentially. Mayor Chmiel: Maybe we could sort of shift that. Leave it where it is now and then maybe move that at that particular time if ~e have to. Don ~shworth: $o go with the iith and the, well wait a minute. Councilman Johnson: The llth is Veteran's Day. Mayor Chmiel: The 12th and the 25th. Councilman Johnson: Have a Tuesday meeting? Mayor Chmiel: That would be a Tuesday, the day following. Councilman Workman: I'd rather go first and third and keep it on Monday. Councilman Johnson: Go with the 4th and the 18th and then you avoid both of those but you have a meeting then two Mondays in a row. The 28th of October and the 4th. 37 City Council Meeting - December 10, ~990 Councilman Workman: Nothing wrong with a short meeting. We won't even tell the attorney to show up. Mayor Chmiel: Will we run into any conflict with anyone else on those dates? Councilwoman Oimler: Not on Monday. Not if you stick with Monday. Councilman Johnson: Plus they can reschedule. Once they know our schedule they can unconflict them. Don Ashworth: That's your budget timeframe as well so you're probably going to be meeting ali of those Mondays. Mayor Chmiel: Okay, 4th, llth, 18th and 25th. No, the llth you wouldn't. It'd have to be the 12th because that's Veteran's Oay. Councilwoman Dimler: November, leave it on the 4th and 18th. Mayor Chmiel: 4th and 18th? Councilwoman Dimler: Yeah. Councilman Workman: I would move it. Councilman Johnson: What do you think Mike? I don't care. Councilwoman Oimler: You don't care huh? Councilman Johnson: I'll give you a Mike's second. Mayor Chmiel: Tom has moved it. Who is seconding it? Councilwoman Oimler: Second. Councilman Workman moved, Councilwoman Oimler seconded to approve the 1991 City Council Meeting Schedule for the second and fourth Monday of each month with the exception of May and November being the first and third Monday and December having just one meeting on December 9, 1991. All voted in favor and the motion carried unanimously. APPROVAL OF THE POSITION CLASSIFICATION ~ND PAY COMPENSATION PLAN. Oon Ashworth: We've gone through an update of the classification plan. There are no materlal changes over thls past year. Each employee has had an opportunity to look at those. The next step in the process is, assuming Council acts to approve lt, would be they can go back with each of the employees. Review their, carry out their reviews for this past year. Move into a goal process. I'm hoping that departmental goals can be submitted to the City Council ms a part of your first Council meeting in January and hopefully that will lead to a work session where we can talk about goals the Councll would 11ke to achleve. Mayor Chmiel: Good. Any discussion? City Council Meeting - Oecember 10, 1990 Councilman 3ohnson noved, Councilwoman Dimler seconded to approve the Position Classification and Pay Compensation Plan. All voted in favor and the ~otion carried unanimously. COU#CIL PRESENTATIONS= Mayor Chmiel= Okay, one of the things that ! wanted to discuss a little bit is having possibly a smoke free environment within the City. I had some discussions. Councilwoman Oimler: The entire city? Mayor Chmiel: Within the City Hall. Councilwoman Oimler: Oh good. Mayor Chmiel: There's been some additional concerns coming out through the systems in relationship to the second hand smoke of cigarettes which is really causing a lot more discussion. A lot more concern and a lot more legality aspects and [ did just bring this up and talk briefly with Oon about it here last week. I think that we should consider the possibility, and I know your wife's going to love me of eliminating this. Tom, do you want to chime in? Councilman Workman: No, I think this is great. You know a year ago when we talked about this and vending and everything else and Oon, you approached me on this. Not I, you. Mayor Chmiel: Yes. Councilman Workman: Let it be known because it can cause some discord and if it does I'd like you to handle it. I think it is appropriate. I saw in the paper there's an honor roll of smoke free whatevers and the City of Chanhassen was on there. I immediately had no credibility of the list because the City of Chanhassen is in fact not deserving of being on a smoke free honor roil because they are not smoke free. There are cubicles of smoke in City Hall where they shouldn't be but I think it's a good move. Hopefully we can accommodate those who still maintain the habit. Councilwoman Dimler: And I will third that motion. It's not a motion I understand. Mayor Chmiel: No, it's just discussion. Councilwoman Oimler: I think ue...setting the example for our youth and also I belong to the smoke free coalition 2000 so that's one of their goals and I can go back and report to them that Chanhassen is now smoke free. Mayor Chmiel: I think one of the things you know that, and I'm just going to throw this out for discussion. I know that, I don't know whether they want to quit smoking, that's strictly up to them. I'm not going to say one way or t'he other but being a former smoker myself, you know it takes sometimes more of an incentive. I don't mean incentive pay but maybe at a point of providing an additional service to those people if they choose to maybe get some therapy on City Council Heeting - December 10, 1990 it or another way of assisting them if they want to. Only if they want to. I'm not giving any direction to say you quit smoking. That's your perogative to smoke all you'd like. But I'm saying that maybe the City should offer some way to assist those people in quitting if they'd like to. Councilman Johnson: PHP does. Councilwoman Oimler: We have PHP. Councilman Johnson: We have PHP. I know that when my office in Wayzata went smoke free, one of the things that some of the people did do was go through their health insurance of PHP in some of the smoking courses and stuff like that. Of course none of those smokers quit but, they just went out back which meant if I wanted to find some of my employees, I went outside where they were standing having a cigarette. I'm in favor of smoke free environments but I also realize how difficult of a monkey it is to get off of someone's back and I believe the studies show that it's harder for women than it is on men. I'm not sure how many we still have smoking. It is a minority. Some second hand smoke problems may be able to be handled with some ventilation if you have smoking and non-smoking areas and stuff. Hayor Chmiel: We're still saying smoke free. Councilwoman Dimler: Smoke free in the entire city. Well not just City Hall but the Firehall as well. Is that what you're saying? Councilman Wing: The firehall is smoke free now. Councilwoman Oimler: How about the Public Works Building? Don Ashworth: I believe they are by choice. Jerry Schlenk still smokes but I don't think that he smokes out at Public Works does he? Councilwoman Oimler: Does he? Councilman Workman: How about in vehicles? Councilwoman Oimler: In vehicles, yeah. You know I mean how far do you want to extend thls? Hayor Chmiel: I'm not thinking about vehicles themselves. Don Ashworth: It would appear as though the writing is kind of on the wall. There's no use making lt. What about slnce thls 1rem was not on the agenda, I'll place it and formalize it and basically what that alZows me to do is to brlng 1l to the 5 people who do smoke at Clty Hall the good news that after the first of the year, yeah. Jo Ann, Jean, myself, Sharmin and Vicky. Councilman Workman: Jo Ann? Jo Ann Olsen rlght? Somebody told me Jo Ann smoke? Paul Krauss: No. 4O City Council Meeting - December 10, 1990 Gary Warren: Jean and Tom. Councilman Johnson: After the Council meetings she's smoking but not I mean. Councilman Wing: Mr. Mayor, this is new to me but [ can't think of a company, with one exception. The County Board Room but beyond that I'm not aware of anyplace that isn't smoke free at this time and I think. Councilman Johnson: Honeywell. Honeywell is not smoke free. It went smoke free and then it just almost had a real problem. And then they provided smoking facilities within each building where you could go and smoke. Councilman Wing: Well that may be the case but highly isolated and there's no intermixing. Councilman Johnson: Right. You walk in there and you cut it. Say, ls anybody here? Councilman Wing: I'll certainly go along wlth Mr. Ashworth's request to table th£s until the first of the year assuming that there w[11 be a unanimous declslon to do that. Councilman Johnson: To get input from the city employees. Don Ashworth: I'm hearing the Council say that that's the policy you're going to implement and take effect basically the flrst of the year. That will be the policy. Councilman Wing: Could we amend that office hours not to include the City Manager? Would that help? Mayor Chmiel: No, that wouldn't work too well. Okay, Tom? Pine trees. Cut them down. Councilman Workman: That and I did forget one 11ttle thing I wanted to mentton. I believe it's Section 8 in the City Council rules, Voting. Both papers blew lt. They blamed Paul Krauss. What happened when we voted on that storm water utility fundtng was, and I'll get the rule out. I'm sitting on this book because the chair's so short. Here's the Rule. Section 8, Voting. Unless a member of the Council states that he is not voting, his silence shall be recorded as an affirmative vote. That means yes. What happened was that I didn't say anything meaning it to be an affirmative vote. I didn't agree with the 6OX. I dldn't want to be on the affirmative side so that later on I could be a part of the affirmative side so that if I wanted to bring tt up I could. Okay? So there's some strategy in that kind of a vote and that's why the rule provides that. I didn't want to say yes but I dld. You understand? What I did was apparently after the vote was over I klnd of mumbled you know I didn't vote. I didn't say anything. I think that was construed by staff or the newspapers that I did vote. It was reported in the paper that it was a 3 to i vote wlth Workman abstaining. When people see that they go, well what are you doing? How come you're not votlng you know? You're on the City Council. Don't you have any guts? And so anyway, it wasn't an abstention. So It was 4 to 1. Our Minute's prlnter over there got it absolutely correct. The newspapers dldn't. 41 City Council Meeting - Oecember 10, 1990 But I wanted to make sure that that was clear both to the Council and to the people out there so that they know there is a reason to vote like that. Okay. Second of all, the trees along Kerber and Jay you brought this up. I have a new chainsau and I'll go out. Councilman Johnson: Don has 4. Don Ashuorth: 3. Councilman Workman: Don has 4 so he's 3 tlmes the man that I am. We need to flnd out from the neighbors, I believe that bluff, is that berm ours and are those trees ours and we need to re-establish that? We need to tell somebody... Gary Warren: They're Rick Murray's. Councilwoman Oimler: Those belong to Rlck Hurray. Gary Warren: He has cut down some. I mean there are some voids there. Councilman Workman: Rlck Murray has? Gary Warren: I don't know when that was done. I was just noticing today when drove by that here and there you'll see a stump where you didn't. The rest of them he was trying to let. Mayor Chmiel: They're not comlng back. Gary Warren: Plenty of time has lapsed huh? Councilman Johnson: Those are called evergreens. Not come back from browns. Councilman Workman: Can't we do something there? Councilman Johnson: Is there actually a pine bark beetle infestation in those trees? ...forestry guy, there is. In those dead trees. As such, can we do the forester or somebody else. Gary Warren: The weed inspector. Don Ashuorth: Hy recollection ls that he installed those trees beyond what was required on the platting development contract. Councilman Workman: So you're saying we have no recourse, talk to Rlck? Councilwoman Oimler: They are his trees. Don Ashworth: Well he put them in for the subdivision. Now the subdivision owns them, or the owners in the area. That's another possibility is to go back to the homeowners association and see if they would. You know we could help them out in terms of either purchasing or somehow. Councilman Workman: I would they'd want to dress that berm up. It sits up hlgh with some bush and it would be nice but it's... 42 City Council Meeting - December [0, ~990 Councilman Johnson: I think they're in private yards. Mayor Chmiel: Property owners, I think it's their own area if I'm not mistaken. I think it's out of our right-of-way. Gary Warren: It's in the back yards I would think of each of the individual lots there and Don is correct, Rick planted those beyond what was required. The City was negotiating with Mr. Murray for some additional property as a part of the storm water, or the TH 101 north leg project. Maybe there's some opportunity there. Councilman Workman: Well we don't want the berm. We just want the trees down. I'll talk to Rick. Councilman Johnson: But if those are infested, there's got to be some state law requiring you to remove an infested tree. Mayor Chmiel: I don't know if there is. Councilman Johnson: I don't know if there is but there should be. Mayor Chmiel: Well there should be but there isn't. Councilman Johnson: If it was Outch Elm there is. Mayor Chmlel: Okay, Tom you'll approach Rick? Okay. ADHINISTRATIVE PRESENTATIONS: APPROVE CITY EHPLOYEE BENEFITS. ASSISTANT CITY ~ed~ER. Todd Gerhardt: Included in your packet, this past summer worked closely with Deloltte and Touche in putting together a request and proposal. In doing that we reviewed all the existing employee benefit plans and the results of that were kind of amazlng that our long term disability plan was one that dldn't provtde the percentages of what a lot of comparable cities were getting and we felt the need to go out and ask for or request for proposals in these areas. We haven't done this in the past 5 years. The auditors had written this up in last year's audlt asking that we should review those every 3 years so in that, this past October we sent out...and asking for requests for proposals in both our health insurance, long term disability and life. We also looked at the adding of another benefit of flexible spending account. In that what the employees would have is an option to use pre-tax dollars tn funding certain parts of medical expenses, the co-payments, daycare, things like that. What I'd like to do right now is introduce Joe Hartens from Deloitte and Touche. Joe has worked closely with myself in doing this and reviewing those quotes and I'd just like to have Joe go through his analysls that was lncluded in the packet and 3om and I will be ready to answer any questions that you may have. Joe Harten: Thanks Todd. My name is Joe Harten and I work for Deloitte and Touche in Minneapolis. You have the recommendations in front of you that we prepared. We requested proposals through direct solicitation of various insurance carriers. We also through city staff placed notice in the city's 43 City Council Heeting - December 10, Z990 publication of record allowing any carriers who wished to get a copy of the request for proposal, to do so and some did. The results that we came up wlth, flrst of all on the health package. We are recommending that the city remaln wlth Physician's Health Plan, PHP for the 1991 plan year at a 10.5~ increase in premlum. Councilman Workman: It states that we determined that it uould not be necessary to request proposals on the medlcal program at this time. When was the last tlme we did get them? Todd Gerhardt: Z can clarify that. There's two different processes. You can go out to a formal bid process and through that formal bid process you had to accept those bids. When you go out for a request for proposal, you do not have to accept the bids. You can just take it and review the information and not make any changes at all. State law says that if you see an lncrease of 20~ or more, you do have to go out for the formal bid process. We took the later of the two processes and went out wlth the request for proposal. Councilman Workman: But my question is, when's the last time. In the health insurance, when ls the last time that we, when is the last tlme that we took a look at proposals? Todd Gerhardt: I would dlrect that over to Joe. Joe recommended to us that we did not have to go to a request for proposals in that employees were happy wtth the PHP provider than golng to another provlder that everybody would have to switch doctors if they didn't have that provider. Joe looked at the comparison of what our premiums were from PHP and what Aware Gold or some of the other providers have given to other cities and he felt that they were comparable and that if we could go in and change some of those conditions withln the PHP plan, that we could get a better bid just from PHP. Joe Harten: To answer your question, to get back at my rationale in making thls recommendation, there's been a State law change over the past couple of years. It used to be that the State law was that you had to go out and seek bids. Blds meaning bids would come back. You would open them. The lowest bidder would get the business. Over the last couple of years, the state has changed that law recognizing that sometimes the lowest bidder does not have the best program and change that to a request for proposal process. The law now reads that you must seek proposals every 3 to 4 years rather than seeking bids and the effective date of that law I belleve was 1989 was when that change came about. So it may well be that down the road it w£11 be a good idea to go out and seek proposals. At this tlme based on our knowledge of the marketplace in the publlc sector, we felt that there was no carrier that could come close to the two criteria, both satisfaction from the employees and cost effectiveness on the health side. Councilman Workman: Let me tell you why I bring this up. Because health insurance costs have gone up 25~-40~ and 50~ over the past year. For consecutive years. Every year they're going up 40~. Two years ago my wife who's a school teacher, we had PHP. She had a choice between PHP and Ned Center. She also enjoyed her doctor. I don't ever go. That's why I'm always slck. So she none the less, when last year came around, that would be 1989 in October, whenever they had to make the choice, Med Center was almost half. For that we switched. Okay, we dld. She st111 would rather have that doctor. Z City Council Meeting - December 10, 1990 guess I don't understand how we came up with and really got a good idea on thls because it has been different. I mean maybe Med Center's have come up now and maybe they haven't but I don't know, without really going through and looking at an awful lot of proposals, how we can really Judge that comparing apples to apples because It ls so volatile. Councilman Johnson: To add on to what Tom is saying here, I have PHP. I pay for it myself. Okay? The price quoted here for the family is the same prlce they quoted me as an individual almost. I mean it's within a few dollars. Not a group of 40. The group that I'm in ts from my former employee. I pay $284.00 a month for my PHP and it's a full ride PHP. Todd Gerhardt: As an individual? Councilman Johnson: No. It's a group. Todd Gerhardt: For an individual or a family? Councilman Johnson: It's family. That's my family. I wrote the check the day before yesterday. No, I wrote the letter. It's not due for another 2 weeks so I haven't written the check but it's $284.00 which is over a $100.00 less for a famlly and thls ls for an office of 30 people versus a city of over 40. Why ls the city having to pay over $[00.00 more than an engineering office? Joe Harten: I can answer that in two ways. Flrst of all the demographics of your particular office may be different than the city as a whole. I mean you might have a younger work force. You might have more males in your work force. Those would be two categories that wouId change your premium a great deal. The other plece is, as a risk, titles are generally htgher rlsk than private sector firms. Counties, states, cities, school districts are all as public sector entities, are generally higher risks and are rated appropriately. So that would be my comment to that. Councilman Workman: And that's very evident in the disability side of things. They have a very difficult time getting any kind of maybe maximum 30~ disability. Any kind of a disability even tf they want to go out and buy it themselves. If they're an employee of the city, they can only get 30~ max of thelr monthly lncome whereas you could maybe get 75~ because they're a city employee. But that's all something a little different. Because of the volatility of it and I'm sensitive to the happiness part of it but I'm in the insurance industry and that is one area that is going wild and out of control and I don't see it as being so compacted that we shouldn't take a peek. Joe Harten: No, I agree with your statement and the reason we decided not to seek proposals was we do thls an awful lot for ctties, counttes and publlc sector groups of various sizes and based on the rates that we saw here from PHP and the relatlve lack of interest among the other traditional insurers of groups of this size and I would say Blue Cross perhaps, Med Centers perhaps, those types of organizations are less interested in municipalities, especially smaller municipalities as you are. Based on that, we felt that there would be no financial advantages, as a matter of fact going out for a proposal, we would not get anything better and would probably get quite a bit worse [n other proposals. 45 City Council Meeting -- December 10, 1990 Don Ashuorth: Joe, would it be possible for you to submit to the Councll some of those comparisons? Joe Harten: Certainly. Don Ashworth: I mean you've gotten Champlin and whatever other number of cities and the specific proposals that came in, potentially even into January if the Councll feels that there are not enough statistics to support the position or a feellng that you'd like to take the proposals. There's nothing wrong ulth going back and taking proposals if that is the Council's decision. Joe Harten: Right. If the Council wishes to do that, that's certainly. Councilman Johnson: Are these yearly contracts and is there a date that the contract has to be renewed? Councilman Workman: Yeah, they're renewed every year. Joe Harten: Yes. January 1st is the renewal date of the contract. Councilman Johnson: But I mean there's not hardly enough time to go out for proposals between now and January 1st. Mayor Chmiel: There doesn't appear to be so. Councilman Workman: In insurance, December's a down month. Councilman Johnson: In everything. Councilman Workman: I mean you're right. It's not quick. Todd Gerhardt: To meet the guidelines as Joe had mentioned that we're going to have to go out to bid every 3 to 4 years was it Joe that the State? Joe Hartens: Right. Councilman Workman: But in the health insurance industry, I don't think 3 to 4 years ls dolng. Joe Hartens: I would generally agree with that. Unfortunately the tendency of the way the insurance industry looks at municipalities such as yours is that groups such as yours are low rate shoppers. Okay, you know every year you go out and look for the lowest posslble rate and that doesn't engender a great deal of confidence in the marketplace and that reduces the number of carriers that would be interested in any particular group. I agree that certainly every 4 years is probably not fiscally the way you'd want to go but every year, puttlng this package out for proposal will only serve to limit the number of potential carrlers each year. It wlll continue to decline. Councilman Workman: Except that, and you're talking about marketing. I'm talklng about an lndustry that in 4 years could not look anythlng 11ke it does today. City Council Meeting - December [0, [990 Councilman Johnson: Of course we could have these guys take this same look at the industry. Basically he's looked at the industry and said PHP's as good as anybody else at this present time. If he does this again for you next year and Med Center is the best thing for you. Councilman Workman: Okay. Mayor Chmtel: Yeah, I think so. Okay. Joe Harten: With the health package, utth the 10.5~ increase in city premiums, we would recommend a sl£ght reduction In benefits and adding a $[0.00 copayment for every offlce vislt of a non-wellness nature and that's how we got to a 10.5~ increase in benefits. Changing that PHP policy a little bit. That would lncrease the clty's cost by $12,000.00 next year. The employees pay a portton of that as well. Under the life insurance package, we recommend that you contract with Minnesota Mutual. Minnesota Mutual provides lower rates than your current Minnesota Mutual policy. They're rated through two separate pools. Currently you're insured through a League of Clttes program tn association with many other smaller cities. Minnesota Mutual would proposal to rate you on your own. Now you're blg enough to do that and therefore you're getting a lower rate. In conjunction with that, we are recommending an increase in the l£fe insurance benefits from a flat $10,000.00 per employee to a one time salary ltfe insurance benefit which is much more common among public sector groups and is much more realistic as an employee benefit. That change, the lowertng of the rates but the slight increase in the benefits would increase your costs approximately $1,500.00 next year. Don Ashworth: Joe, if I could stop you and go back one point. Employees were really not that Interested in thts copay. That ls increasing thetr costs but we were in the middle of that budget crisis and I guess one of the things that we had to do was say this is a major cost factor to the city as well and that's where the decision came in that rather than looking to a potential, what was it 15~? Joe Harten: 15~ increase without any changes. Don Ashaorth: Without the copay, that even though the employee would be ptcking up 1/3 of that, 2/3 of that ls ours and so again we said ~e have to look to the employees picking up that. Todd Gerhardt: That in dollar amounts roughly ts savings of $7,500.00 over the year from going with that $10.00 copayment than going w£th what our existing policy is rlght now. Don Ashworth: I wanted to make sure that the Council dtd realtze that there has been some reductions in here as well as some points up. Councilman Johnson: Did you look at PHC? Joe Harten: Excuse met Councilman Johnson: Physician's Health Choice which ts a part of PHP. 47 City Council Meeting - December 10, 1990 Joe Harten: Right. You have what's called the combo plan right now which offers people the choice to go to the PHP providers or the rest of the world and PHC is basically Physician's Health Plan's self insured entity and as a city we would not, ue don't think that you should be in a position of moving toward a self insured program for very definite budget reasons. You're too small and the risk is high and who pays the bill if you're over what you shoot at. That's the problem with the program there. On the long term disability package, we are recommending that you contract with UNUM. They formerly were Union Hutual Life. Now they've demutualized and become a stock company. That would lower your rates significantly from your current program. Also would increase your benefits from a 50~ reimbursement plan if you're disabled to a 66 2/3~ plan. The overall impact of both increasing the benefits and lowering the rates is a savings of $4,200.00 to the City and that's on a 2 year rate guarantee so we will not need to change that in the next 2 years. Councilman Workman: What your definition of long term? 6 months? Joe Harten: 90 days. Councilman Workman: 90 days is long term? Joe Harten: Right. 90 days is, anything 90 days or over. Todd Gerhardt: G5~. It's &5~ of the salary. Previously it was 50%... Joe Harten: And the final recommendation we're making, as Todd mentioned, was to Implement flexlble spending accounts whlch allow employees to pay for health care, dental care and dependent care expenses on a pre-tax basis. We are recommending that you do that in house and take care of those clalms or those reimbursement checks in house. ~ith the payroll tax savings that the City would recelve from FICA savings on a reduced payroll, we anticipate you'll save in excess of $2,500.00 per year. That is subject to a little bit of change depending on how much money people declde to put aslde but that's the sum total of our recommendations. Mayor Chmiel: Okay. Thank you Joe. Does anyone have any questions? Council~oman Oimler: Yeah, I do under the life insurance. Is there any reason why the Counc11 members cannot be lncluded in that whlle they are serving? Joe Harten: Generally the problem becomes, from the insurance carrier's point of view, full tlme employee status and under larger public sector c11ents, that is done. Smaller public sector clients it's a little tougher to do but certainly we could negotiate wlth the insurance carrler to try to arrange that if that was a desire. Councilwoman Dimler: For us it should be the $10,000.00. Councilman Workman: I know where you can get some. 6et the checks printed, I'll have a m1111on dollars on each of you. Oon Ashworth: If you would like us to check into that, we could. 48 City Council Meeting - Oecember 10, 1990 Councilwoman Oimler: Yeah, if it doesn't increase the cost too much. Mayor Chmiel: It might take a lot of time and be costly. Councilwoman Dimler: No, I just wanted to know if there was, if it were a simple procedure fine. If not. If it's going to be complicated, forget it. Don Ashworth: The Council should also be aware that we had two meetings, or three with the employees. You know we did look at some other type of things such as dental and just felt that the cost of that just would be too excessive. That's something we should not be looking at. I can't remember the other optlons but this program has not been brought in just saying, kind of keep things the same. We relooked at basically everyth£ng we're doing. Councilman Johnson: Do you have vislon under PHP? Is that on your PHP plan? Joe Harten: Yes it does. An exam benefit without a real sLgnificant lens benefit. Councilman Wing: Just real quick for my own benefit, the city is pro~iding medical and dental insurance? Don Ashworth: No dental. Councilman Wing: Just medical? Don Ashworth: That's correct. Councilman Wing: Alright and that's, for a family that's a $404.00 that we're paying? Todd Gerhardt: No. Don Ashworth: The employee, we pay the employee portion and the employee pays 50~ of the family coverage. So they pay the $202.00, that amount. Councilman Wlng: Okay, I understand. On life insurance, that's an option then for the employee or do we provide a certaln amount? Don Ashworth: We would provlde the base coverage and the employee then would have the right to purchase the additional insurance. Mayor Chmiel: What is base coverage? Don Ashworth: Well it was $10,000.00. We're recommending the one time salary so and then they would be allowed to take and purchase then an additional one time salary but they would pay the full cost of that. Councilman Wing: Okay. And the disability plan, that's provided? Oisabte, we provide that? Don Ashworth: That's correct. City Council Meeting - December lO, ~990 Mayor Chmiel: At what percentage? Don Ashuorth: That's 100~ city cost. Mike Mason: Can I ask a question about the copay? Mayor Chmiel: Sure. Mike Mason: Is that per illness or per visit? Joe Harten: It's per visit. Mike Mason: So if someone has bronchitis and I have to go to the doctor 5 times for that one illness, they have to pay l0 bucks. Councilwoman Oimter: Each time. Joe Harten: Correct. Each time. Mike Mason: My personal opinion of that, I'm really opposed to that...and just to give you some of my background, I do negotiate contracts for the teachers in Eden Prairie and that was a really contentious issue. We had one option of a copayment per illness. We didn't want to have anything to do with that but I think to tell someone with a family with 3 kids and 3 kids get pnemonia and have to go to the doctor G times in one week and they have to pay GO bucks just for that is really wrong. I mean I'm sorry. I feel, obviously I feel pretty strongly about that. Councilman Workman: But and with that, you know there's nothing for free and so it's got to be paid for somewhere. Mike Mason: That's true Tom. I agree with that but you know this whole group health, PHP, HMO thing, you know for whatever reason, you know my insurance rates in Eden Prairie have gone up 40~ and we could go a thing about it so we're feeling it too. Don't get me wrong but I think all of a sudden to turn around and tell a group, hey tough. You've got a family worth of chicken pox, start writing out the checks. I think that's something that needs to be considered for the people. Councilman Johnson: But to add on, when z was with Honeywell we had PHP and then cost cutting they went exactly to this. This $10.00 and all of a sudden, when you start to go, you know with PHP you tend to go into the doctor and you prevent getting sicker. If you go in, unlike Tom who says he doesn't go in. I waited until Thursday last week before I went in where I should have gone in on Monday but when that $10.00 was there, you know $10.00 was not much to me at my salary I was making with Honeywell but ue dld thlnk twlce about golng in when the kids had the little cough or something where it may have prevented them from gettlng slcker. I've got 3 klds and that can really bulld up. Now they don't charge on everything. When I went in for allergy shots, they didn't charge the $10.00 copay on that. And wellness visit, the physical exam or some preventive thing they don't charge on that but an illness you're saying they do charge it. An ear infection, you're going to go in and that's two vlsits automatically. 5O City Council Meeting - December 10, 1990 Mike Mason: I get a little worried when we start dealing with things like that. When you start, the kid is sick. Well you're not that sick. You can watt another day. Well you're not that sick, you can wait another day. Maybe some times you can, maybe some times you can't and all of a sudden the parents are put in the position that they're not used to be put into when you throw it at them everytime like that. Todd Gerhardt: Joe, how many trips to the hospital did we calculate by savings that 4.5X by going with the copayment? Joe Harten: Rlght. [t turned out to be 6 trips to the doctor was the break even point between the premium and the copay. Between the increases. Don Ashworth: Wasn't that monthly? Joe Harten: Annually. Don Ashworth= Oh, on an annual basis? I was thinking that it was 3 times per month. That if an employee paid 1, we paid 2 so It was like $30.00. Councilman Johnson: Is this for the employee? Their break even point? Todd Gerhardt: The family coverage that the employee pays towards the 50~ family coverage, if you go with the non-copayment, you're going to see a 4.5~ increase in that. So if you go with the copayment... Councilman Johnson: And that's equal to about $60.00 a year you're saying? Joe Harten: Correct. Right. Councilman Johnson: Which my family, I'm sure I'd go far over that $60.00 a year with the number of ear infections we have. Todd Gerhardt: But after you count in the flexible spending account, we use pre-tax dollar, I think that gets it back up towards the 10 visits because you're saving 30~ on using pre-tax dollars than out of pocket. You've got about lO I think is what we calculated. Councilman Workman: Nobody at City Hall has any dental plan? See to me that's outrageous. Todd Gerhardt: But the flexible spending account allows you to use pre-tax dollars again where you're getting a 30~ reduction in doing that where a dents[ plan right now doesn't cover your major dental problems. You know It gets you the preventive. Don Ashworth= If I hear the Counctl correct, I guess it's too late basically to do anything for January 1. This is an area that you have Interest tn. [ would suggest that we set it as a goal to try to bid out in this next year. lhat we start the process early in terms of bringing back some comparab[es so the City Council knows what it is that we might be looking at and also some options. Start talking about how much would it cost for dental and moving the office visit back to full pay versus the copay with the idea then that we would 51 City Council Meeting - Oecember 10, 1990 actually take the proposals and be in a position so a year from today we can say here's what we're wording and everyone is happy with not only the coverage but the process. Councilman 3ohnson: Have the city employees been...$tO.00 copay? Don Ashworth: Yes. And I can tell you that they're overly happy with it. Councilman Johnson: Is that what you call an understatement Don? Mayor Chmiel: Can we get an approval for the city employee benefits? Councilman Workman: So moved. Mayor Chmiel: Is there a second? Councilwoman Dimler: Are we supposed to vote on that today? Mayor Chmiel: Yeah. Councilwoman Oimler: I'll second it. Councilman Workman moved, Councilwoman Dimler seconded to approve the City Employee Benefits for 1991 as presented. All voted in favor and the motion carried unanimously. Councilwoman Oimler moved, Councilman Workman seconded to adjourn the meeting. All voted in favor and the motion carried. The meeting was adjourned at 10:23 p.m.. Submitted by Don Ashworth City Manager Prepared by Nann Opheim 52