HomeMy WebLinkAbout2003-07-01 Council Special Meeting MINUTES OF THE SPECIAL WORK SESSION
OF THE EDINA CITY COUNCIL
HELD AT CITY HALL
JULY 1,2003
5:30 P.M.
ROLLCALL Answering rollcall were Members Housh, Masica and Mayor Maetzold.
Member Hovland entered the meeting at 5:45 p.m.
Mayor Maetzold said the purpose of the special work session was to review issues that will
affect the preparation of the City's 2004 Operating Budget.
Manager Hughes explained the City would loose approximately $615,000 revenue annually
from the Market Value Homestead Credit. This amounts to about three per cent of the
General Fund Revenue. Cities have been given the authority to levy back 60% of the lost
revenue or about $360,000. Mr. Hughes added that the levy limits put in place by the
legislature are very strict and there is no increase in funding for inflation or cost of living.
Mayor Maetzold pointed out that the City would be loosing the Market Value Homestead
Credit or three per cent from the 2003 Operating Budget without any recourse. Mr. Hughes
agreed and reminded the Council it had anticipated this loss and planned for it when
formulating the 2003 Budget.
Mr. Hughes stated the legislature did not limit cities ability to levy debt. Cities can issue
General Obligation Debt for projects in their Capital Improvement Plan without referendums
for City Hall, Police Departments, and Public Works Buildings. He noted this presents an
opportunity for relocating the City's Public Works Facility possibly in conjunction with the
bus garage. Mr. Hughes said that he did not believe we could issue General Obligation
Bonds to finance equipment or for recreation. Mr. Hughes reviewed the following area that
will be affected by the State's budget bill:
• Cuts will affect Edina Community Health. There will be an approximate $35,000 loss,
which has been used as a pass-through to Bloomington Community Health. This will
come from an annual budget of$160,000.
• Levy limits will expire and Market Value Homestead Credit is planned to come back
to cities in 2005, however,most people are fairly skeptical of this actually happening.
• Other Revenue Sources need to be considered such as a Housing and Redevelopment
Authority Levy (HRA). The HRA is actually a separate political subdivision in the
eyes of the State and may levy taxes (.0144% of taxable market value of Edina's 5.5
billion market value to a maximum of $750,000). The City may only levy for those
services performed for the HRA,which is estimated at about$141,000.
• Edina's fees and charges are at the top end of the scale
• Could potentially transfer from other funds (i.e. liquor fund)
• Reserve surpluses could be used (can potentially affect bond ratings negatively)
■ Expenditure reductions (i.e. eliminate annual appropriation for Capital Improvement
Plan or extend life of equipment; program reduction, and hiring freeze)
Minutes Special Meeting/Edina City CounciVfuly 1,2003
Mr. Hughes outlined the areas where costs can be expected to increase and noted there will
be additional costs in moving into new City Hall such as televising Council meetings. He
noted that dealing with the pressing traffic issues would take another staff person.
Mr. Hughes reviewed the projects percentage increases proposed for the various 2004
Operating Budget areas:
■ 2004 Salaries and Step Programs-3.5 %
■ 2004 Contractual Services -3.0%
■ 2004 Commodities-3.0%
■ 2004 Central Services -3.0%
If these percentages were used for the 2004 Operating Budget, the expenditures would
increase to approximately $22,959,705 from about$22,245,119.
Member Housh said that philosophically he initially did not want to levy back the lost
revenue. He said he felt the City must look at cuts before making any additional levies,
however, he could see enacting the HRA levy because those are costs for services being
performed by staff.
Member Hovland agreed that the Council must perform due diligence to find cost savings,
but he also stated he wanted to still give employees salary increases.
Mayor Maetzold said it appeared the Council needed to have further discussions. He
requested staff prepare some scenarios for further review.
Mr. Hughes cautioned that if the City did not levy back the 60% allowed for 2004, it might
loose the ability to do so ever. He said the staff would look at budget scenarios with program
eliminations and increased fees for presentation to the Council.
There being no further business, Mayor Maetzold declared the meeting adjourned at 6:45
p.m. r,
Debra A. Ma en, City Clerk
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