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CC 2009 12 07 CHANHASSEN CITY COUNCIL SPECIAL MEETING DECEMBER 7, 2009 Prior to the meeting the City Council held an executive session to discuss the City Manager’s performance review and interviewed applicants for Southwest Transit Commission. Mayor Furlong called the special meeting of the City Council to order at 7:05 p.m. The meeting was opened with the Pledge to the Flag. COUNCILMEMBERS PRESENT: Mayor Furlong, Councilman Litsey, Councilwoman Ernst, Councilwoman Tjornhom, and Councilman McDonald STAFF PRESENT: Todd Gerhardt, Laurie Hokkanen and Greg Sticha PUBLIC PRESENT: Anish Shah 1420 Lake Susan Hills Drive Mayor Furlong: Thank you and welcome to those here in the council chambers and those watching at home, we’re glad that you joined us. This meeting of the Chanhassen City Council is a more limited agenda than our regular meeting that we’ll have next week but at this time I’d ask any members of the council if there’s desire to change or modify the agenda for this evening. If not, we’ll proceed with the agenda as published. Okay with that, without objection we’ll move forward. PUBLIC HEARING ON THE PROPOSED 2010 BUDGET. Mayor Furlong: Let’s start with a staff report and presentation please. Mr. Sticha, good evening. Greg Sticha: Good evening Mayor and City Council members. I just want to start off by explaining the slight change the State had and why this is now called the public budget hearing. Budget meeting versus a Truth in Taxation hearing. The State changed the requirement this year for this meeting. In years past the Truth in Taxation hearing is what it was formally called and that meeting was required if your levy from the previous year had increased about the inflation amount that the State set aside. If you did not increase your levy above that amount you were not required to have a Truth in Taxation hearing. In years past we have been below that increase every year and have still gone ahead and held the Truth in Taxation hearing. This year they took away the eligibility of either having or not having it. You are required to have a public budget meeting, which is what we’re having this evening. Very similar to Truth in Taxation hearing where you discuss the budget and the levy that you set for a preliminary levy and give the residents of your community the opportunity to give their input in regards to that preliminary levy before setting the final levy next week. So just wanted to kind of comment on that quickly before we get into the presentation. The budget process, I go through this slide every year. What, just kind of want to give a brief summary of what we’ve gone through to get to this point so far. It’s an extensive process. We begin actually in almost June or July. In June I think we even have a, kind of a preliminary meeting to discuss some preliminary issues in regards to the City Council Special Meeting – December 7, 2009 upcoming year’s budget. In July our department heads submit their budgets to finance and their request for their budgets for coming to finance. Todd and myself review the requests in early August and then in August we have one or two budget meetings to discuss the preliminary levy. th Before we set the preliminary levy on September 15. That preliminary levy is set mostly and primarily to allow the County to prepare Truth in Taxation statements for the residents who got them about 10 days ago. They should have received their Truth in Taxation statements by this point in time. If they have not, please contact the County or the City and we can make sure that they get a copy of it. In October we held our detailed budget meeting where we went over the budget in detail with our department directors. And this evening we’re holding our public th budget meeting and then next week at the December 14 meeting we’ll be adopting a final budget and levy and a final CIP for 2010. First I want to go over the general fund, budgeted expenditures for 2010 as we passed with the preliminary levy. You’ll notice that the bottom line accounts for approximately a 3% or just over a 3% decrease in total expenditures. This number this year was driven primarily by the reduction in revenues, mostly building permit revenues within the general fund. So you’ll note a couple changes within the expenditure side that were driven primarily because revenues within the general fund, permit revenues were adjusted this year to reflect what we’re actually receiving in permit revenues in 2009, 10, and what we appear to think what is going to be going on in the near future. The only item of real note on this first slide as far as expenditures go, you’ll notice the transfer for roads was decreased by, well $142,000 as it appears on this slide. In years past we have had a levy within the general fund and then was transferred to our revolving assessment construction fund. That levy has typically been $150,000 this last year and the year before. However in 2009 we had $42,000 that was available, that became available at the end of the budget process related to other cuts that we had in the budget so we decided to at that time put those dollars towards the road reconstruction fund so that’s why it was the odd amount of $192,000. As part of this year’s budget balancing process staff felt it was necessary to reduce that transfer down to $50,000 to make our expenditures become more in line with our revenues and we’ll go over the revenue slide right here. Again the revenues match the expenditures within the general fund. The biggest and most obvious difference between the previous year is license and permits. A difference of roughly 600 some thousand dollars. A 44% decrease. For the most part the other revenue line items stayed fairly close to the same. We did add one charge for service within the general fund. We began charging a 5% administrative fee for engineering services provided on utility projects. In previous years we had contracted out with an outside service to provide those engineering services. The engineering staff felt comfortable enough taking those services on, thus bringing in that additional revenue into the general fund. It has no effect on the enterprise funds because staff is doing the work in-house versus paying for an outside agency to perform those engineering services. So the increase in the charges for service line is primarily due to that number. Taking a look at the general fund expenditure history over the last 7 or 8 years. You can see the total expenditures within the general fund as compared to 2009 and decreasing by 3.1% from the $9,859,000 down to the $9,557,000. This graph just kind of gives you a feel for what the expenditures within the general fund have done over the last several years. Kind of went over some of the factors that changed the budget for 2010 and what some of the items were taken into account when doing budget for 2010. As noted in one of the previous slides the total general fund expenditure has decreased by 3.1%. We plan for no cost of living or wage increases are included in the budget for 2010 for employees. Most other expenditure line items were kept flat from the previous year. There were no increases or substantial increases in any 2 City Council Special Meeting – December 7, 2009 line items from the previous year. We talked about the transfer for roads were adjusted to help balance the budget. One FTE was eliminated for the 2010 budget and budgeted permit revenue as we discussed earlier had been reduced by $650,000 or 49% from the previous year’s budget. This then impacts the various levies as follows. The general fund levy does go up by 2.9%. I kind of like to categorize these levies into a couple different categories. If you take a look at the general fund levy and the MSA or sealcoating levy, if you combine those two levies for this year they roughly went up by about $140,000 which if you remember from our earlier discussions this year, we had new growth of $138,000 so essentially the new growth was captured within these two levies is one simplistic way to look at it. We captured that new growth to help the general fund and we did have to make a slight adjustment in the sealcoating fund to help balance the budget. If you take a look at some of the other levies, the general obligation debt levy which went down, and then if you look at my second page, the park referendum levy which was eliminated in 2010, those two decreases amount to pretty close to the increases we had for adding Audubon Road, the $253,000 levy for that, and the public works facility which our first bond payment will be next year on that facility. So I kind of look at it as the decreases in those two debt levies that I talked about previously are offset by replacing them with other debt levies. So essentially the levies in total are pretty similar to the previous year. The only difference being the amount that we had in new growth within the city has been captured essentially within the general fund. The second page are the levies that are voter approved levies. The park referendum again has come off the books in 2010 and the library referendum remains relatively the same. The net levy effects as I showed earlier, the general fund levy increased by 2.9%. The total tax levy increase of $138,000 or 1.38% is the exact amount of new growth that we had within the city for tax year 2010. So then the question becomes how does this affect some homes or residents within the City of Chanhassen. The average home actually dropped in value in 2010 within the city. The actual amount that the average home dropped by is somewhere between 1 1/2 and 2 percent, and as you take a look at these numbers it becomes obvious that that was probably the case. I put 6 examples on this slide ranging in value from a more modest home to a larger valued home within the city and you look at example number one. That home changed, or reduced in value by 3.2%. Again these came straight from the Truth in Taxation statements that the County distributed so these are hard numbers that we got directly from the County. That home decreased in value by 3.2% and the property tax bill, the City portion of the property tax bill reduced by 2 1/2% or $14. Item number 2 or parcel number 2 decreased by about 2.2% and it had a $4 decrease in their property tax bill. Parcel number 3 is the closest to the average and had about the closest to average percentage decrease in value of the home at 1.4% and as you can see the property tax bill is roughly almost identical to the previous year. It’s down just about a dollar. And as the level of the homes increase in value, the 2.2% reduction in parcel number 4 saw a corresponding decrease in their property tax bill of 1.2% and so on and so forth. In parcel number 6 I wanted to throw one example into the slide, even though more homes decreased in value than increased in value. We did have some homes that did either stay the same or increase in value. Parcel number 6 saw an increase in the value of about 4.7% resulting in a 7 1/2% increase in their property tax bill or I think it’s about $180 I believe. So those are 6 examples of Truth in Taxation statements that came from the County that kind of give you a feel for exactly what the preliminary levy does to some of the average valued homes within the city. At this point I guess I don’t have any further comments to add about the budget th or the levy. What needs to be done going forward is on Monday, December 14 we need to pass 3 City Council Special Meeting – December 7, 2009 a budget and a levy. A final budget and a final levy that will be used to create the final tax bills that our residents will see, and also pass a CIP next Monday. Mayor Furlong: Okay. Very good. Thank you Mr. Sticha. The purpose here tonight is to listen so at this point, unless there’s any objection we’ll go ahead and open the public hearing and invite all interested parties to come forward to the podium and address the council on the budget or ask questions of staff or others if you would so, gentlemen. If you’d like to come forward at this time. Yep, please. If you’d just come forward to the podium sir and if you could state your name and address for the record. Anish Shah: My name is Anish Shah. I’m at 1420 Lake Susan Hills Drive. Been a resident for 8 years. Mayor Furlong: Very good. Thank you for coming this evening. Anish Shah: My first time at this hearing or meeting. Mayor Furlong: Okay. Anish Shah: I might be wrong in posing this question or incorrect in posing this question but my property levies have gone up by close to 18% and with a total property tax change of 1.7% even though my taxable market value of the house has dropped by several thousand dollars so it doesn’t match with what was presented on the screen. Mayor Furlong: Okay. Greg Sticha: Can I see your statement? Anish Shah: Sure. Greg Sticha: Your city portion of your property tax bill stayed identical from the previous year. The city portion of property taxes was $677.31. Last year it’s $677.36 so it went up by 5 cents. And actually your referendum approved levy went down by 50 cents so the amount of money you’re paying towards your city property taxes did stay the same. Exactly the same from the previous year, and based on the reduction in value that corresponds to a lot of the numbers seen up there. It appears that your increase is primarily due to Carver County’s did go up by about $30. Anish Shah: I was looking at this. Greg Sticha: And your school levy did go up by about $150. So the majority of your increase in your property tax bill is the school district and a small part from the county but your city portion of your property tax bill is almost identical to the previous year. Anish Shah: Thanks for the clarification. 4 City Council Special Meeting – December 7, 2009 Greg Sticha: Yep, no problem. Mayor Furlong: Okay? Thank you. Todd Gerhardt: Mayor, council members. Mayor Furlong: Yes Mr. Gerhardt. Todd Gerhardt: Just to kind of explain. There’s like four different levels to your property taxes. A portion of it goes to Carver County. The other portion goes to the school district and then a third area goes to the City of Chanhassen and then there is a small amount that go to other special districts. Mosquito Control. Vo-tech and then the watershed district that your home is located in. Anish Shah: Thank you. Mayor Furlong: Okay, thank you. Anyone else who would like to speak this evening? Okay. Thank you. Thank you for coming. Without objection then we’ll close the public hearing on the city budget. Again the council will be considering final adoption of the budget and other aspects at our meeting next Monday so for people watching at home, if you have questions about any of the issues with the budget feel free to contact Mr. Sticha here at city hall or Mr. Gerhardt, or if you have thoughts or comments that you’d like members of the council to consider, feel free to email us, either individually or collectively. Our email addresses are on the web site. Or give, pick up the phone and give us a call and be happy to hear from you as well. So thank you very much for everyone there. Todd Gerhardt: Mayor, just encourage the public and the gentleman to attend the other hearings at the county and school district. If they’re having meetings, there should be some dates and times on that notice so you should attend those meetings also. Anish Shah: Okay, thank you. Mayor Furlong: Thank you. Appreciate that comment. Okay. With that then let’s move on in our agenda. CHANHASSEN TRANSIT STATION: CONSIDER APPROVAL OF COOPERATIVE AGREEMENT WITH SOUTHWEST TRANSIT. Mayor Furlong: This is a hold over from our meeting 2 weeks ago but let’s go get a staff report if we could please first. Mr. Gerhardt. Todd Gerhardt: Mayor, council members. In front of you is a cooperative agreement between the City of Chanhassen and Southwest Transit. Basically what is happening here is that the City of Chanhassen will be acquiring the road right-of-way, the land where the railroad depot sits and relocation of the scene shop of the Chanhassen Dinner Theater. Southwest Transit will take the entire responsibility of building the roadway system that was presented to you at our last City 5 City Council Special Meeting – December 7, 2009 Council meeting. Costs for the city’s portion is $322,195 and for the road construction for Southwest it is $749,300. Very similar to the assessment amount that was presented at our last council meeting. With that staff recommends approval of the cooperative agreement and open it up to any questions that you may have. Mayor Furlong: Thank you. Any questions for staff? No? Okay. The other agreements with this project were approved at our last meeting contingent upon us approving this cooperative agreement so. Todd Gerhardt: That’s correct. Mayor Furlong: If my memory serves so with the approval of this agreement then all the agreements between the City and Bloomberg Companies and the City and Southwest Transit will have been adopted by the council. Any questions? Other questions or comments? If not, would somebody like to make a motion. Councilwoman Tjornhom: I’ll make a motion. Mayor Furlong: Councilwoman Tjornhom. Councilwoman Tjornhom: I make a motion that council approve the cooperative agreement between the City of Chanhassen the Southwest Transit Commission. Councilwoman Ernst: Second. Mayor Furlong: Thank you. Motion’s been made and seconded. Any discussion? Councilwoman Tjornhom moved, Councilwoman Ernst seconded that the City Council approve the Cooperative Agreement between the City of Chanhassen and Southwest Transit Commission. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Furlong: Thank you again Mr. Gerhardt for putting in the time since our last meeting to get that worked out. ANNOUNCE RESULTS OF CITY MANAGER’S PERFORMANCE EVALUATION. rd Mayor Furlong: The City Council met in executive session on November 23 and again this evening, December 7, 2009 to discuss Mr. Gerhardt’s performance and compensation as our city manager. Following is a summary of those discussions. Mr. Gerhardt’s performance this year was ranked exceptional by the City Council. This rating recognizes that Mr. Gerhardt’s performance during the 2009 was one that consistently achieved the highest level of performance in his duties and often went above and beyond those expectations. He accomplished many of his personal goals and those of the City Council and together with the City Council and staff coordinated and executed a number of strategic initiatives for the city. Some of our major accomplishments this past year included completing the City’s new public works building, which 6 City Council Special Meeting – December 7, 2009 is being constructed on time and under budget, along with various street and utility improvement projects and storm water projects that will improve our city’s public services, infrastructure and lake water quality for years to come. Working actively to promote economic development within the city through changes in our city code and through activities such as the working together program that develops relationships with local business leaders. Facilitating and negotiating agreements with the Bloomberg Companies and Southwest Transit Commission that will result in the construction of the Chanhassen Station. A 240 plus stall parking ramp and transit station located next to the Chanhassen Dinner Theaters. Continuing to improve our city’s financial position, planning process and outlook. In spite of the difficult economic and financial times in which we’ve operated, as exemplified by Standard and Poors bond rating increase, the second in as many years, from AA+ to AAA. A level that is enjoyed by only the most financially strong and operationally sound cities in the state and across the country. Working closely and effectively with other government organizations such as School Districts 112 and 276 and Carver County, which is best exemplified by the opening of the Chanhassen High School this year and the beginning of the new Highway 41 trail that will extend from Minnetonka Middle School West south to Longacres Road on the east side of Highway 41, and include an underpass into Minnewashta Regional Park operated by Carver County. Working closely and building relationships with our various civic organizations in order to together build a better city and quality of life for all. The dedication of the veteran’s monument this spring rdth spearheaded by the American Legion and the coordination of the July 3 and 4 celebration which is sponsored by the Chanhassen Rotary Club and supported by many other businesses and organizations to help make that happen are just two of the many examples of these efforts. All told the city’s accomplishments in 2009 under Mr. Gerhardt’s direction were numerous. Each is built upon the many successes that we have seen in our city over the years. Money Magazine’s unsolicited ranking of Chanhassen as the second best place to live in the country reinforces our own knowledge that Chanhassen’s quality of life is truly exceptional. Mr. Gerhardt’s service as city manager for the last 8 plus years is one of the many reasons that Chanhassen has become nationally known as such a great place to live, work and raise a family. In consideration of his performance the Chanhassen City Council also discussed Mr. Gerhardt’s compensation package for 2010. Notwithstanding his performance, in consideration of the current economic financial conditions and consistent with the anticipated 2010 budget, there will be no changes in Mr. Gerhardt’s compensation in the coming year. At this time I would invite other members of the council to provide any comments that they would like to make regarding Mr. Gerhardt’s performance as city manager. Thoughts or comments. Councilwoman Ernst. Councilwoman Ernst: Comments that he’s heard before but publicly I just want to say thanks Todd for a very challenging year and working through those challenges and doing the best thing for the city in making those recommendations. I really appreciate it. Todd Gerhardt: Thank you. Mayor Furlong: Thoughts. Councilwoman Tjornhom: Yeah Mayor I think you pretty much summarized everything for the council. I don’t know if we’ll come up with any other things, wonderful things Todd’s done and all of them I mean, that’s what made us the second best city to live in I think and as I said in the 7 City Council Special Meeting – December 7, 2009 work session also that it’s not just what you’ve done now Todd, it’s what you’ve already implemented for next year that keeps us going and makes us strong and so we’re very proud of you and thank you for all your hard work. Thank you. Todd Gerhardt: Thank you. Mayor Furlong: Any other thoughts? Councilman Litsey: I’ll just say that in spite of the position the council’s put you in at times, you performed admirably and I appreciate your good performance. Todd Gerhardt: Thank you. Mayor Furlong: Anyone else? Councilman McDonald: If I could just add my thanks also. You know one of the things that I tried to point out back in chambers, it’s all about communications and I think that this has been a trying and difficult and you have managed on a number of levels and with different activities to be able to communicate with people and keep things moving, even though as you express, sometimes it gets a little I guess like hitting your head up against the wall. I appreciate you keep on trying. Thank you. Mayor Furlong: Mr. Gerhardt, any thoughts or comments? Todd Gerhardt: Well just to summarize 2009, you know just like most things in life it’s not a smooth road. We had our up’s and we had our down’s. Being recognized by Money Magazine, getting the AAA bond rating are definitely some of the up’s. Dealing with the budget shortfall was definitely one of the down’s and the nice thing is, is that we continue to weather these storms and you know I could not do it without a great staff that I have. The department heads. All city employees. When we were going into the 2010 budget season I did not receive one email, one call about employees not receiving pay raises for the 2010 budget year, and they knew it was going to be a difficult year and they supported my recommendation and just a good example for the City Council to know how clued in all our city employees are and how the city operates. I want to thank them and the City Council for your continued support. We may not always agree but that’s what makes this city really special is when we challenge each other and we raise the bar for everybody so thank you. Mayor Furlong: Thank you. And Mr. Gerhardt, the Chanhassen City Council and residents are proud to have you as our city manager. We thank you for your continued service and commitment to our city and we wish you all the success going forward. Todd Gerhardt: Thank you. Mayor Furlong: Thank you. That completes that item on the agenda. If there’s nothing else, that also completes our agenda items this evening. We will be meeting in a more extended 8 City Council Special Meeting – December 7, 2009 agenda at our regular meeting next week. Next Monday. If there’s nothing else to come before the council this evening, is there a motion to adjourn? Councilwoman Ernst moved, Councilwoman Tjornhom seconded to adjourn the meeting. All voted in favor and the motion carried unanimously with a vote of 5 to 0. The special City Council meeting was adjourned at 7:35 p.m. Submitted by Todd Gerhardt City Manager Prepared by Nann Opheim 9