HomeMy WebLinkAbout2007-06-19 Council Work Session CORRECTED MINUTES
OF THE WORK SESSION OF THE
EDINA CITY COUNCIL HELD AT CITY HALL
JUNE 19, 2007
5:00 P.M.
ROLLCALL Answering rollcall were Members Bennett, Housh, Masica and Mayor
Hovland.
Mayor Hovland said the purpose of the special work session was to review issues that
will affect the preparation of the City's 2008 Operating Budget.
Manager Hughes explained the 2007 legislature did not enact any significant changes to
property tax laws. Therefore, the City's 2008 budget planning would not be affected by
levy limits, property tax freezes, or any other provisions that would further restrict the
Council's budget considerations. He noted the City would receive a Market Value
Homestead Credit in 2008, therefore the 2008 levy will not need to include that amount.
Mr. Hughes also noted 2005 legislation increased the PERA employer contribution
which has been estimated at approximately $100,000 for 2008. Mr. Hughes reminded
the Council the 2008 levy will see an increase of $455,641 in the levy to cover the first
year of the debt levy for the Fire Station Debt which will increase the percentage of the
levy increase.
Mr. Hughes reviewed forecasts used in developing the 2008 scenarios, which included:
Expenditures:
• Wage and Employee Benefits - a three and one half percent wage increase for
our employees is included plus an additional 1/2% to account for employees who
will go through salary steps in 2008
• Insurance Increases-Employee health insurance has an expected increase of
sixteen percent for 2008. The forecast includes either a $25 or 50 per month per
employee increase toward employee insurance coverage
• Contractual Services, Commodities - A three percent across the board increase in
contractual services and commodities and a three percent increase in central
service expenses were projected for 2008
• Budget Adjustments-Department Heads' proposed new programs/expenditures
for 2008
• Capital Plan Appropriation - the general fund appropriation to the Capital
Improvement Plan remains at$50,000.
Revenues:
• Non-Tax Revenue - In past years, the City has followed a conservative approach
in forecasting revenue from "non-tax" sources. Based upon past experience the
City was projecting additional revenues from building permits, ambulance fees
Minutes/Edina City Council/Work Session June 19, 2007
and investment earnings and fines. The added revenue would reduce
dependence upon property tax revenues to support the 2008 budget.
• General Fund Surplus - the general fund had an undesignated surplus of
approximately 1.2 million. It was suggested the Council consider designation of
the surplus in connection with the 2008 budget for items that could be deemed
one-time expenditures, not on-going operating costs.
Mr. Hughes reviewed the following calendar for the 2007 Budget development:
• July 27, 2007 - Budget submitted to Council
• August 7, 2007 - Budget hearing
• September 4, 2007 - Council Resolution setting maximum tax levy adopted
• December 2006 - Truth in Taxation hearings and final budget adoption
Mr. Hughes reviewed possible budget scenarios. The first scenario presented did not
include any new programs or additions. It used a three percent increases in
expenditures with an increase of four percent for personal services. The first scenario
would have a 4.9 percent increase in expenditures with a corresponding 5.5 percent
increase in taxes. The second scenario that included all the requested 2008 new
programs/expenditures and would result in an approximate 7.72 percent increase in
expenditures and corresponding 9.18 percent increase in taxes. The third scenario
included Mr. Hughes' recommendations for new programs/expenditures would result
in a 5.44 percent increase in expenditures and a corresponding 6.2 percent increase in
taxes.
The Council briefly discussed proposed 2008 Budget scenarios, gave direction about the
percentage increases they would feel reasonable for 2008; and reviewed the proposed
schedule for 2008 Budget preparation and adoption.
Mayor Hovland declared the meeting adjourned at 6:55 p.m.
Respectfully submitted,
ebr angen, City Clerk