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08/09/2005 - City Council Special MINUTES SPECIAL CITY COUNCIL MEETING AUGUST 9, 2005 5:30 P.M. EAGAN ROOM ? EAGAN MUNICIPAL CENTER City Councilmembers present: Mayor Geagan, Councilmembers Fields, Carlson, Maguire and Tilley. City staff members present: City Administrator Hedges, Assistant to the City Administrator Miller, Parks and Recreation Administrative Coordinator Mesko, Administrative Intern Walz, Chief Financial Officer Pepper, Director of Administrative Services VanOverbeke, Community Center Manager Breuer, Campus Facilities Manager Vaughn, Communications Director Garrison and Community Development Director Hohenstein. I. AGENDA ADOPTION Mayor Geagan called the meeting to order. Mayor Geagan requested that an item be added under Other Business regarding the compensation for the City Administrator. Councilmember Maguire moved; Councilmember Fields seconded a motion to approve the agenda. Aye: 3, Nay: 0 (Councilmember Tilley and Carlson not present) II. VISITORS TO BE HEARD There were no visitors to be heard. III. REVIEW PROPOSED 2006 PUBLIC ENTERPRISE BUDGETS ?Community Center ?Civic Arena ?Cascade Bay Community Center City Administrator Hedges introduced the item noting that given the various operating seasons of the Community Center, Civic Arena and Cascade Bay, it has been the City?s practice to review the annual budget for the three enterprise operations in advance of the General Fund Operating Budget. Councilmember Carlson arrived at 5:45 p.m. Hedges summarized the proposed 2006 Community Center budget, including a summary of the operating plan, renewal and replacement fund, capital outlay, marketing, revenue projections, expenditures, and policy changes per City Council direction. Hedges stated that the budget as proposed is balanced and includes a 6 percent increase, which includes funding for the renewal and replacement fund. Hedges noted that the budget includes a proposal for two seasonal interns as well as an additional concession staff person, per Council direction, to cover day shifts at the concession stand. The City Council discussed the proposed budget. The Council inquired as to the difference between 2004 actual numbers and 2004 budgeted numbers. Director of Administrative Services VanOverbeke noted that he would prepare a response as to the difference between the 2004 actual and budget numbers. The City Council inquired about the use of The Blast. Community Center Manager Breuer noted that The Blast has additional competition due to the addition of more indoor playgrounds being built in the metropolitan area. The Council directed staff to include the proposed Community Center budget on the August 16, 2005 City Council Consent Agenda for formal ratification. Civic Arena City Administrator Hedges introduced the 2006 proposed Civic Arena budget noting that a balanced budget is being presented and the budget incorporates recommendations from the 2004-2005 Organizational Study. Hedges added that the budget is proposed to increase by 1.3 percent and no rate changes are proposed for 2006. Hedges summarized the revenues and expenditures, capital outlay, renewal and replacement, and personnel proposals. Hedges added that due to the consolidation of the Cascade Bay Manager and Civic Arena Manager into one position, there remains a need for support personnel for both enterprise operations. Hedges noted that a proposed clerical position is included in the 2006 budget to be shared between the Civic Arena and Cascade Bay. Hedges also noted that the position would be hired on a one-year sunset provision in order to allow for staff to evaluate the affect of the position. Hedges summarized the financial commitments of the Eagan Hockey Association towards the Civic Arena and noted that the association?s commitments are scheduled to be paid off in 2007. The City Council discussed the proposed 2006 budget including the need for personnel, capital expenses, and change from contractual sporting officials to in-house officials. The City Council concurred with the proposal not to increase ice rental rates in the 2005- 2006 Civic Arena operating season. The Council also agreed that the purchase of 2006 capital outlay items should take place in 2005 in order to accommodate the operating season of the Civic Arena. The Council directed that the proposed 2006 Civic Arena budget be included on the August 16, 2005 City Council Consent Agenda for formal ratification. Cascade Bay City Administrator Hedges introduced the item noting that the Cascade Bay budget as presented is a balanced budget showing an increase of 0.4 percent over 2005. City Administrator Hedges noted how weather driven the facility is and commented that in 2005, the City has already surpassed the attendance in all of 2004. Hedges summarized the expenditures and revenues for the Cascade Bay budget, new and replacement, capital outlay, retained earnings, personnel and marketing. Hedges again noted the clerical position that is proposed to be shared between Cascade Bay and the Civic Arena due to the consolidation of the Cascade Bay Manager and Civic Arena Manager position. The City Council discussed the 2006 budget and directed that the 2006 proposed budget be included on the August 16, 2005 City Council Consent Agenda for ratification. IV. 2006 GENERAL OPERATING BUDGET UPDATE City Administrator Hedges introduced the item noting that the discussion was strictly informative and no specific action was required. Hedges noted that the budget team has met with each Department Director to discuss the 2006 budget requests that have been submitted to provide resources to be used to deliver services in their areas of responsibility. Hedges added that the previous City Council decision not to rely on the State to pay Market Value Homestead Credit (MVHC) for the 2005 budget turned out to be a very wise decision. Hedges noted that during the 2005 legislative session, the legislature took action to again withhold the MVHC and, therefore, will not be used as a revenue source in balancing the 2006 General Fund Budget. Hedges noted that work has also begun on estimating 2006 revenues, including property tax levies and results in impacts on property owners. The City Council discussed their consideration of the 2006 General Fund Budget and noted the State funding volatility that exists. Director of Administrative Services noted his concern with additional State mandates that could be imposed on cities. City Administrator Hedges noted that the 2006 proposed General Fund Budget will be presented to the City Council at their August 23, 2005 City Council workshop. Mayor Geagan took the opportunity to thank Cherryl Mesko, Parks and Recreation Administrative Services Coordinator, for her work over the past year in filling the void without a Parks and Recreation Director. V. 2006 GENERAL FUND BALANCE UPDATE City Administrator Hedges introduced the item noting that the City Council has directed as part of the 2005 Work Program that staff research the issues related to the City?s General Fund balance and to provide options for the potential use of the balance for consideration by the Council. Hedges noted that the City Council has also directed that staff research implications of the $1 million advance from the Community Investment Fund to Cascade Bay as part of the original construction financing package for Cascade Bay. Hedges noted that in an effort to keep rates at a reasonable level for customers and to generate some cash reserves, annual Cascade Bay budgets have not provided a specific appropriation to begin the repayment of the advance. Hedges also noted that the unexpected repairs to the facility resulting from faulty construction and the results in litigation have now made the available cash balance more uncertain. The City Council discussed the balloon payment issue at Cascade Bay as well as why the fund balance presented has increased over the past few years. Director of Administrative Services VanOverbeke noted that the increase in the fund balance is due to budgeting revenues conservatively and budgeting expenditures realistically. VanOverbeke also noted that the State Auditor has increased the recommended fund balance from 30 ? 35 percent to 50 percent. The City Council requested a detailed report on how the fund balance has increased and what funds are included in the Auditor?s calculation of the fund balance. Per the request of the Council, Hedges noted that such a report would be brought back to the City Council after the budget process is complete on September 15. VI. OTHER BUSINESS Mayor Geagan introduced the issue of compensation for the City Administrator noting that this past May, the City Council approved a new job classification system referred to as the Job Evaluation System (JES). Geagan added that while JES called for an increase to the City Administrator?s salary, due to the previous salary cap, the City Administrator did not receive an increase in pay. Geagan noted that since the legislature modified the salary cap, other communities are raising the salaries of their City Administrators. Geagan suggested a pay adjustment in order to put the City Administrator?s salary in line with other communities, to meet the compensation recommendation from the JES, and to rectify the issue of the City Administrator?s salary being even with salaries of Department Directors. The City Council concurred with Mayor Geagan?s suggestion. The Council directed that the compensation adjustment be included under Personnel Items on the August 16, 2005 City Council agenda. VII. ADJOURNMENT Councilmember Maguire moved; Councilmember Tilley seconded a motion to adjourn the meeting at 6:50 p.m. Aye: 5, Nay: 0