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HomeMy WebLinkAboutCCMinutes_2009_08_25 43 � Brookings City Council August 25, 2009 The Brookings City Council held a meeting on Tuesday,August 25, 2009 at 4:00 p.m., at City Hall with the following members present: Mayor Tim Reed, Council Members Julie Whaley,John Kubal, Mike McClemans,Jael Trieb, and Tom Bezdichek. City ManageY Jeff Weldon, City Attorney Steve Britzman, and City Clerk Shari Thornes were also present. Proposed 2010 City Budget. Weldon opened his presentation with Proposed Funding Requests. There is a strict policy regarding what is eligible for funding and the process involved. Many are based on history and changing situations within the community. The official actual applications were reviewed by council earlier. • United Retirement Center—Requesting$122,000 for emergency power back up system mechanical improvements. Funded by the city and a state grant,which has already been secured. Weldon recommended denial of the request: 1) it is a new request and he is trying to flat line projects, and 2) it did not meet the requirements of the criteria set forth in policy. • SDSU xequests: 1) McCrory Gardens Visitors Center, and 2) PAC II Project. Weldon stated these are not xelevant to the 2010 budget process. There will be discussion on these two items in the future, and there is nothing to be done with these at this time. • CASA. Requesting$5,000. Weldon recommended denial of the request as it is a new request. • First United Methodist Church. Requesting$5,000. Weldon was confused by their application and whether it was for capital or programming. If for capital,it would go towards the construction of the Community Life Center,which is theix building addition. If for programming,it would probably be towaxds the Harvest Table and Head Start Program. • Boys & Girls Club. Requesting$125,000. Weldon recommended holding this one constant in operation for$75,000. This is the amount funded in the past. • BATA. Requesting$70,000 to help fund an expansion of their service level to 24 hours. This is a good program and is part of their overall strategic plan. Given the constraints in the budget this year,Weldon recommended to rema,in level with funding foY$60,000. It was increased from $50,000 to $60,000 last year due to cost of fuel. • Brookings Arts Council. Weldon recommended maintain funding at$21,000. • BEDC. Requesting$142,000, as part of a special retail development initia.tive. Weldon recommended holding this constant. • Chamber of Commerce. Requesting$25,000. Economic Development partner. • Community Band. Weldon recommended funding at$8,000 as they have been funded in the past and is a quality of life issue. • Convention Visitors Bureau/DBI. Economic Development parmeY. Weldon xecommended continuing funding. • East Central Mental Health. Requesting$15,000. Weldon recommended continuing funding. • My Neighbor. This is a new pxogram to help disadvantaged people in the community. Weldon xecommended denial of this request, as they are new and were not funded last year. • SDSU Safe Ride. Weldon xecommended funding at the same level. They have a proven track record and axe part of the overall transpoxtation program. • SDSU Innovation Campus. This is the sixth year the city has funded the Growth Parmership, and Weldon recommended continuing funding at$150,000. • Visitor Promotions Committee. Requesting$250,000. The VPC has historically, pursuant to an agreement,been funded out of the Triple B for$225,000. Weldon recommended a change to their funding offering the following explanation: VPC's request was based on how much money they could use to leverage more events to bring in additional Triple B Yevenue. The VPC conducted an exce]Ient exercise to quantitatively attempt to deterniine how much more they could do for the communiry with their mission if they had`x' amount of dollars. Thei�model started with being constant at$225,000, then$250,000, $275,000,and$300,000. What they came up with was interesting;at$250,000 they thought they could do more and yet come closer to lodging capacity, but with more money they felt the community doesn't have the lodging to accommodate more events. Weldon recommended funding at$237,500 as he was compelled by their axgument and their study to justi.fy more activity in the community. However, there is a commitment in the agreement which expires June 2010. Weldon's recommendation honors the cuxrent agreement with the VPC, and suggested when the agreement expires,to fund them an extra $12,500 for the balance of the yeax,which would get them on the road to $250,000. This does beg the issue of redoing the agreement. The agreement set to expixe was fox three years. A year-by-yeax or multi-year agreement could be done,but is yet to be determined. 437 • Volunteer Service Bank. This is a transportation service for people with health needs primarily going to and from Sioux Falls medical facilities. Weldon recommended denial of the request due to budget consttaints. • School District Subsidy. Requesting$207,200. Weldon clarified that his policy position on this issue hasn't changed from last year, but he heard the council loud and cleax and for that reason only Yecommended continuing funding. Weldon clarified his recommended figures are incorporated into the budget. Whaley stated we are all on the same issue with the school. She would like to find a transfer from the hospital or elsewhere to allow the city to take some of this money for subsidies. There are a lot of progYams out there such as CASA,My Neighbor, etc. in need of financial help. She would like to see within the next year or within the next si�c months, talking with the Hospital Boaxd about funding the school, allowing the city to fund some other additional programs/organizations that will help our kids that grow up in our community. She clarified that this would not affect this budget. Baxtley commented in looking at these funding requests year to year, some are defuutely start-up operations and some are ongoing operations. Some will always continue to be paxmers and need our funding services, but there are some that once the start is been achieved, they can pxobably go on their own because they are not city-run functions. He sees a need to have a discussion as to how long it will take for staxt-up operations to stand alone and not be subsidized by the ciry. It becomes difficult when cutting department budget requests to subsidize other programs/organizations that we should pxobably stop funding at some point in time. 'The school district funding subsidy is one of those he supported last year and commented at that time the council should look at the possibility in the future to establish a policy to xeduce that amount or eliminate it all together,but to do it on a graduated scale; 2, 3, or 5 yeax reduction schedule. There are several programs/organizations on the subsidy list which this could be done with at some point. As a matter of policy,it would be stated to fund this progYam for `x' amount of years and phase it out eventually. Bartley doesn't know if going to the Hospital Board and asking them to subsidize the school will work. It is an option,but needs discussion. There is also the need to discuss continuing subsidies on an ongoing yearly basis. There will be new requests every year and we can't continue to fund them if there axen't reductions somewhere along the line. He stated these discussions need to be had,but following this budget cycle. He would like to see future policy established regarding funding requests;how long they are funded and at what level. He supports the City Manager's recommendations. Reed asked if there was any objection to talking about subsidies in general, not just the school subsidy, on a future agenda. No objection was made. Jay Bender, Falcon Plastics, commended Weldon on his job of reasoning for subsidies and why some can't be funded. He spoke on two things: 1) Innovation Campus. This is an economic development project and is the main reason he got involved. When this pxoject was started,it was known it would take approxirnately 20 years to build out. The first five years were pla.nning and getting started; there is one building in, another one going up and more on the way. Bender stated they never would have gotten to whexe they are without the city. The city's parmership in this project was critical and certainly is good for SDSU and the students. On top of the city's funding, there is $1.5 million from the private sector that has been put into this project, along with some federal government funding. He encoiaraged the council to continue funding on the operational side until they can take the training wheels off and keep this thing going. They axe not there yet,but with the progress being made, are well on theiY way. 2) Brookings Economic Development Corp. BEDC is the city's partner in economic development. The city receives a lot of volunteer power out of the investment being made. He thinks highly of the directoY, the board, and the activities done that are making a big difference in Brookings. He encouraged the council to continue to help the BEDC; they owe it to the community to be a partner with the economic development activities of the Chamber, the CVB, DBI, and other entiries involved with that group. The level of funding could be debated, but their parmership shows a commitment to the business community and to the citizens that they want to grow the city and grow the revenues and make Brookings a better place to live. He appreciated the council taking rime to listen to him. Reed stated it is important to note in looking at the list of subsidies, they come from different funds. This too will have to be discussed. This list is subject to change. Weldon spoke to Whaley's question regarding the Hospital funding the school subsidy. There was a discussion a year ago at this time about the hospital transfer. We2don and former Mayor 43 � Munsterman met on two occasions with Hospital Board representatives about this, and tried to come up with an amicable approach in addYessing the issue and your concerns. They were not successful. The attempt was made, and Weldon believes the ultimate goal can still be achieved,but it is going to take a different approach,which we will have to discuss at some other time. Ope�ating Bud�et. Weldon stated in looking at the Budget Summary,it is divided by department and gives a 10,000 foot view of the city's operations. Categories consist of: personnel expenses, opeYating, and capital. The department heads are here to answer any specific detail questions you may have. The operational budgets are Yelatively flat-lined. There is the increase of thxee employees by year end. The impact on the budget is actually 2 '/z employees;proposing one be added at mid- year for a total of three by yeax's end. Reed expressed concerns with the drop in xevenue. Decreasing the sales tax number projections last year by 5%was a wise choice looking now that we are down about 1.5%. We don't know how or when the economy is going to rebound,but we are seeing decxeases in sales tax revenue. If total both personnel and operating expenses, thexe is a 3.3%increase. Reed would like to see the possibility of decreasing or flat linuig that to 1.5%. He would hate to have to,in a year from now, cut 6% out of operating. When expenses go up and revenue goes down,you pull from other sources to make the budget balance. In regaxd to capital expenses,which have dropped from last year,we are transferring in$691,000 from Second Penny which is something not done before. If cuts are going to be made,we need to look at the subsidies at the same time. It is not fair to have only city staff make cuts. Some subsidies, such as economic development related,would be haxd to cut;however, subsidies for the Boys & Girls Club,BATA, the Arts Council, Community Band, East Central Mental Health, and SDSU Safe Ride are a few we may want to decrease by 5%, so everybody is having to cut back, and it's not only the city's operating expenses. Reed also expressed concern with the Second Penny cash flow. In 2009, there was a cash balance of $1,800,351, and with this budget that is dropped down to $792,809,and is projected to drop even further to $216,000 in 2011. That is a pretty drastic drop. Obviously this is capital funding and you can see all the projects there. We are not having the sales tax g�eowth enjoyed in previous years helping build up a surplus used to invest in projects like the innovation campus. He feels the need to make sure this cash balance is kept for any`opportunity knocks'projects that may come along. Weldon commented on the 75% sales tax transfer for$691,000. These three capital projects have been strictly funded from the general fund. Of those 3 projects, $516,000 is for seven street improvement projects, $125,000 is for the concrete floor at the La.rson Holding Barn, and$50,000 is for the first yeax's work on the Nature Park. These axe 75% Second Penny funding capitalized projects,but because there's no construction account or construction fund to identify them, they were pulled into the general fund. Weldon cautioned the council if they are looking at cutting street projects, that they ta.ke a close look at these seven projects as they are on thexe for a reason and need to be fu�ed. Reed stated this is the first year the 75% Second Penny has been used for streets repair/maintenance. Weldon stated it was transferred to 75% Second Penny from the general fund as the general fund couldn't finance it, yet it still meets the cxiteria of 75% Second Penny policy with public impxovements. Weldon considers street maintenance to be considered street improvements. Rita Thompson, Finance Manager, commented on the revenue issue. Sales ta.x has dropped,but due to being conservative in the past, the city is almost 3% ahead of budget projections. If it was flat lined and the city xeceived the same amount currendy xeceiving, there would be substantially more in sales tax than what is projected. Reed stated that is through the first seven months of this year,but it is trailing down. Rita stated it is 2.88%ahead of what we budgeted and is actually breaking even. Reed asked if Thompson had checked the July numbers;he stated they are down 1.5%. Thompson clarified July revenue is really June's revenues because we are one month behind in receiving it. Thompson received the rest of July's revenues today and they were way up. Baxdey commented no one really knows how the state figures out sales tax revenues. Last month's revenue report was three or four days short from a full month,which would be why it was down then and why it's up substantially this month. He stressed being careful in looking at even a six or seven month review of revenue. In response to Mayor Reed's comment,if revenue was flat lined and sta.yed at 3%,it is still more than what is already budgeted in this process. Reed clarified he is not talking about this year,but 2010 and with projecting a decrease in revenues by 3%, should we be increasing our opexating expenses by 3.3%. Bardey said it is alteady flat lined. Reed argued that that 439 is not flat lined. Thompson stated if stay with her projections for 2010, the city would be flat lined, because the city is running almost 2.9%right now above what was measured foY 2009. Reed,in looking at the 2010 budget and total revenue,it is budgeted at$13,642,000 and 2009 adopted figure was $14,102,00O...revenue dropped. Thompson clarified what is throwing that off is the many types of revenues in the general fund the approximate $.5 million in donations not received in 2010 as those projects are not being done. Revenues are not down that far because of sales tax revenues. Other revenue soutces such as fees, fines, permits, etc. have all been flat lined. Property Tax estimates from the County Finance Officer shows a slight increase. Reed commented the sales tax revenue forecasted is less than in 2007, and in total the revenue has gone down because of different numbers that have come in and out. The largest chunk of revenue is First Penny Sales Tax which has been flat lined. Thompson stated she flat lined it with what was budgeted in 2009, but what is being xeceived compared to the budget in 2009 is 2.9%more than what was actually budgeted. With one month up and one month down, Reed's concerns are that the city is trailing down. His point is in regards to flat lining the major revenue source, but increasing expenses by 3.3%. Once those expenses are increased,it will be difficult to make cuts. Reed questioned,with cuxrent sales taY revenue,if they should be cutting back on expenses. McClemans shared the sta.te website shows the city revenue to be down 5%in May, 16%in June, and 5%in July. To him that is a cause for alarm that the city is not doing as well. Thompson stated they were doing double digit increases in actual, but only budgeting 3-4% at the maxtmum,which is why BYOOkings is where it is now, not having to make significant cuts. They never increased operating to that revenue level and have just been adding it to the balances. Yes, total revenues are down about$450,000, but the donation from BISA for the Larson Ice Arena project played a role in that. Thompson has held the revenues steady, flat lined operating, the only thing in personnel is the two additional positions and anyone who has any kind of increase coming, and lowered capital is how the budget got balanced. Reed stated there were very wise choices made in the revenue budget and agreed with Thompson 100%. Going back to 2007 sales tax revenue numbers is smart and prudent. Six months fxom now, if trends continue upwards, the budget could be readjusted at that point. His concern is if sales continue to decxease, then projected revenue would have to be decreased more for the 2011 budget, and then there would be trouble with expenses,unless we continue to back off on capital. However,if continue to back off on capital, there would be issues with incYeased costs for repairs which could amount to more than it would if we were to buy new machinery/equipment. Reed feels capital and expenses should still be cut. Weldon responded on cutting personnel and operating expenses. This is a very lean budget, and in 19 years of developing municipal budgets, this is probably the leanest one he's had the pleasure, or displeasure, of putting together. There are two union contracts expiring at the end of this year. This budget provides something to meet those union contracts;we have to have a compensation system that allows us to attract and retain a qualified work foYCe. Any employer needs to do that even in a recession economy. If the council wants to cut operations in terms of personnel and basic expenditures, there will have to be a discussion on what services to cut back on. Some things can be done to cut services, but a discussion needs to be had how that picture is going to change dynamically as there will be lots of responses back from our constituents about what it means to not mow the parks as often, or not repair the streets as quickly, or not trim up the ttees on the boulevard, and reduce foot patrol downtown, and not have as much code enforcement, or cutting back the houxs at the library or the pool...those types of decisions are going to have to be made. This is going to be a point of service reductions. That is why in the past they have tried to do cut it out of capital, especially pxojects, because those are things that can be pushed out; they may be nice to have,but a lot of the capital projects are impoxtant to help move this community forward so we can continue to be progYessive and entrepreneurial at the same time. Basic core services have to be provided that our constituents pay taxes for and have come to expect. Weldon will not agree to cut back on public safety or snow removal. There can be potholed streets once in a while,but snow removal can't be cut. We need to proceed cautiously and judiciously about cutting back on those. The cost of fuel can't be controlled...it is what it is. The same goes for the cost of asphalt and pea rock for chip sealing and street repair. Koss Delfinis, Street Supt., did an excellent job this year by changing the material for chip sealing and saved the city over$80,000. Some citizens were upset due to the increase of dust, but that little bit of dust was worth the$80,000 in savings out of this budget. That's important;it is what this comes down to. Thompson talked about the projection chart for the 75% Second Penny. The cash balance is at $792,000. There is $700,000 that is not an expenditure on the planning sheet,but is set aside for 440 new street development. It is set at$500,000 in 2011. So,in reality there is actually$700,000 more in cash that you do not see. Adding the$792,000 and the $700,000 totals $1.4 million,which is money set aside in a fiznd for future pxojects. Thompson agreed that it is misleading in that it is listed like it is an expenditure. Bardey asked Thompson if it is fair to say that,as Mayox Reed had suggested,we can have a budget amendment to adjust the budget as needed as the year goes on;whetheY it be an incxease, or a fall in revenue sources. Thompson replied that is absolutely right. The budget is a plan;it is something that we try to achieve and the City Manager watches very closely and she does. Budgets are monitored; spending, trends, and if saw it going where it would fall short and something needed to be done, the City Manager would be the first one to tell the council it is time to address and amend the budget. Bartley questioned at what point would the council need to have the services discussion. Thompson replied if the trend continued downward. Bartley appreciated all the work Weldon,Thompson, and staff has done to put the budget together. This budget is certainly more complicated than the standard budget most people look at. He understands the concerns that we have to have fox this to look realistic. He asked Mayor Reed in cutting the subsidies by 5%if he figured out the dollar amount that would save. Reed responded he did not;he wanted the council to decide if that is what they would want to do. Ba.rtley stated it amounts to $12-13,000 and doesn't know where else this could be applied and in actuality,it is more symbolic than actual dollars. Reed stated that was his point ... symbolic. The city can afford these things right now,but the numbers are up and down. It won't be known for an enti�e year if we have to make a reaction. There is no way of knowing what the xevenue is going to be; this is a concern. Reed would rather plan ahead and in the next yeax,if the city is in good shape and the economy is recovered, then turn around and make budget increases. Thompson added,when times were good and were having those double digit increases in sales tax revenue, they added anywhere from$.75 million to $1.5 million to fund balances;which is how the ciry ended up with$4 million to be used to buy the DOT property,which is now being used to finance the Innovation Campus. Thompson has almost 3%built into this budget that can fluctuate by flat lining. Bezdichek commended Mayor Reed for the time he has spent reviewing this budget. In years of working with Thompson, and Weldon's 19 years of experience, they know the budget process and have done an outstanding job. Bezdichek sees himself as an optimist. In looking at Brookings, there is nothing but good things taking place;Main Street is done, the Innovation Campus is being developed, there are new houses and apartment complexes, and new resta,utants and businesses being built. This budget is very lean, and if the council needs to revisit the budget halfway through next yeax, then that will be done at that particular time. Reed clarified his concern is the economic recovery forecast and not necessarily what is going on in Brookings. BYOOkings is growing and is in a position where cuts don't have to be made. Many places are having to cut back on expenses and would love to have a flat line. Brookings fortunately doesn't have to go less than that. If at the end of next year we haven't really recovered, then we will be asking for a 6% decrease;that is when it really gets tough. Reed stressed it is prudent for the next yeax just to be cauti.ous. Trieb agreed with Mayor Reed that she would rather be prudent than reactive...be more conservative. McClemans asked for clarification in the $700,000 set aside for street improvements and what paxticular project is that earmaxked for. Weldon stated it isn't any one particular project,but rather a practice to start setting aside funds to build or reconstruct several streets in the community in order to accommodate more development. One street project that came to mind was North 25th Avenue as a means of getting from Sixth Street to the Innovation Campus and to service the new Innovation Village, a complex opening soon, adhering the possibility some adjacent land could be primed for development. Weldon stated in his Budget Message needing to start looking at 20`k` Street South and South Main Avenue. These two streets are currently county roads that are going to increasingly serve urbanized subdivisions and are in need of upgrades and improvements to do so,with no one in particular to assess for those costs. There is the proposed overpass at 20`�' Street across I-29 to 34`�'Avenue. There is the potential need for signalization at 20`f' Street South and South Main Avenue intersection to accommodate the growth of Prairie Hills,Moriarty Heights, Esther Heights, 441 and Valley View Addition. All those residential neighborhoods are putting much moYe traffic on County Road 16 (20``' Street South) and axe going to need some improvements in the very neax future. There needs to be a plan, similar to what has been done with setting aside fiznds for the fire trucks and railroad safety cxossings, to help establish a fund to be able to make those capital improvem.ents in streets. The South Main Avenue Sewer Line Extension is set to go in next year for a cost of$500,000. That expense would be recovered with connection fees. It is a project where the city has to put cash up front to begin with,but is a reimbursable line item. Reed stated that may be what needs to be shown in the spreadsheet. Reed asked if it conld be forecasted when those funds would be returned. If it is too risky,it could be left in like it is now and treated as extra funds for investment in the future. Thompson stated the budget has almost$1.9 million set aside that should come back eventually over the next 20 years into the general fund: $700,000 for new streets, $694,000 for the Innovation Campus projected to come back through tax increment, $500,000 budgeted for within the special assessment fund for the South Main Sewer Line Extension which would be assessed in 2011. Reed commented on the number of sessions at NLC last year that dealt with what to do in down economic times, and of course when in November that wasn't seen that in the Midwest yet and everybody else had already gone through one budget cycle having/trying to make cuts and most were dipping into reserves. With that point, he understood Bezdichek's optimism that Brookings is in good shape. However,we need to continue to be prudent for the next year. Bartley feels we have been prudent with the budget. Brookings is growing,many communities are not. We have to prepare to continue to move forward and we can't do that if we axe continually cutting capital projects to the point where it is so austere that the rest of the growth of the community suffers from it. 'This budget is a good basic budget that is going to work for us. It continues to provide for the expansion of the community. Whaley stressed her concerns in talking with MayoY Reed was cutting things. In regards to subsidies, we talk about beginning parmers sta�ting up. What if it was set up similar to what was recently done with the Boys and Gixls Club where they got a set amount for a set number of years? Cutting any services to the community is wrong. Five years ago when the city took a tumble, nothing got done. Morale of the whole city got bad. We need to keep it focused. Everybodp has energy going in this direction, and if we take and start cutting back,morale is gone, and the citizens axe going to get upset with things that were cut. Whaley stated when talking anything operating and if we start cutting, basically the citizens of Brookings are going to be affected. Reed stressed if we begin to have less revenue,we could run into problems where we are back to 2000 when we had to make those severe cuts. ACTION: A motion was made by Reed, seconded by Bezdichek, to revise the proposed budget which would provide for an increase of only two percent (2%), holding services and expenses to a 2% increase (which is a reduction of 1.3%). Di.rcu.r�ion: Bartley confirmed Keed svanted 2%acro.r.r the board. Keed re.rpondedye.r. Bartley a,rked the�ect on.rervice,r;hoav and in zvhat zvay. Keed,rtated thi.r i.r avhere the City Manager avould have to come back in the next�vork.re.r.rion and.ray thi.r is ivhat i,rgoing to be czrt. It can alu�ay.r be put back. In essence, we are directing the City Manager to decide u�hat area.r svould be cut in a.rking for a 2%increa,re. Kirbal.rtated I�eldon ha.r already touched upon this, and agr�e.r there are some area.r that ab.rolutely.rhould not be ctrt; public.rafety and.rnosv removal. Betidichek e.xpre.r.red he svill be voting again.rt this a,r it i.r a very lean budget and u�hat it does to general.rervice.r. Kubal a.rked if thi.r motion pa.r.ce.r, it i.r forplasanirrg pur�iose.r, and i,r not set in concrete zvhat avoudd have to be done. Beed responded that i.r correct. Thompson a,rked Mayor Keed if she i,r,ruppa.red to bring fortvard an Ordinance svith a 1.3% reductzon. Keed.rtated ye.r. The City Manager,rhould bring it back to the council clarifying u�here the cuts zvould be. Once the City Manager .rhoaur the propo,red cuts, the council may not have the.rtomach to do it, and at thatpoint the council could.ray they are going back to the original budget a.r prepa�zd by the City Manager. 44 � I-Yleldon a.cked for clarification on the motion, and that it i.r callilag for an increa.re of only 2%. Keed.rtated that i.r correct. Bartley que.ctioned the dollarr that actually repre.rent.r. One percent of the total budget is roughly,�'130,000. Keed clarified that he looking at.rerUice.r and e.xpen.re.r Bartley again a.rked for a dollar amount. Keed.rtated if the total is,�'10.7 million, it is approximately�'>07,000. Bartley e.xpre.r.red thi.r a.r being mare of a.rymbolic decrease than actual. Keed.rtated not in this case. Bartley.rtated it rvould be more�ymbolic in term.r of the,$107,000, butyet it i.rgoing to involve.rervice.r avhich are not.rymbolic when it come.r dou�n to the public;that i.r hi.r concern. Ifyou don't cut it from one, tsvo, or three department.r, but rather take S%from the Park.r d�'Becreation department, that i.rgoing to affect.romebody in order to get cut the overall,�'107,000. Thomp.ron stated operating i.r almo.rt fdatlined. The increa.re i.r in perronnel. Some of tho.re are by union contract.r, and there i.r no COLA built into that figure. We avould be talking cutting per,ronnel or cutting o�ierating.rign�cantly. Keed.rtated there ha.r been a problem at the.rtate and national level.r avhere e.xpen.res irtcrea.red more than�venue. He doe.rn't svant to get to the point�here it i,r ignored for a cou�ile ofyear.r, and then the�ituation ari.re.r�vhe�e re.rerue.r have to be u.red. Betidichek'.r concern.r are in line avith I�haley'.r. There i.r not a city empdoyee who in the la.rt �8 month.r ha.rn't tightened their belt, done urithout thing.r orgiven up thing.r. I�e are in tough time.c, but all the.re emblayee.r and cititien.r of Brooking.r are making.racrifice.r and to him the la.rt thing to do i.r make that la.rt little >.3% reduction. W>ith everybody making.racrirfice.r, it svould be good for thi.r council to.ray.rtate�ve know time.r are tough, but sve are going to .rupport thi.r budget and 12 month.r from nosv we may be right, or u�e may be avrong. Noav i.r not the right time to do it in light of everything. Trieb.rummaritied avhat.rhe ha.r heard�vith the majority of increa.re.r i.r�vith persorznel. She directed a que.rtion to i�eldon if there 1va.r a po.rnbility of,for the Fore.rtry Dept., u�ing an intern rather than a full time employee. W>eldon .rtated that i.r a good que.rtion. The nature of the avork in the Fore.rtry Department i,r highly.rpeciaditied, and hatiardou.r involving a lot of tree trimmin� climbing�into tree.r, being.ruspended from trees, operating a bucket truck...these aren'tjob.r thatjust anybody can do. The for�.ctry diui.rion i.r an�ort to try and keep u�aa�ith di.rea.re eradication a.r well a.r boulevard tree trimming. The need for thi.r po�ition ha.r been documented for.rome time. Thi.r budget reque.rt�vas denied la.rtyear�vhere ave tried to supplement avith.rome part-tzme employee.r had.rame succe.cr, but not a.r much a.r he had hoped. Thi.r budget provide.r for an increa.re in the full-time employee.r and a corre.rponding reduction in the.rea.ronal employee.r to balance. The level of technical training and.rkills required for fore.rtry require.r a full-time employee. Tavo major function.r an the fore.rtry department are disea.re eradication and neighborhood boulevard tree trimming. If there�as a reductaon in re.rource.r to meet tha.re.rervice.r, I�eldon zvould put the priority on getting rid of the diseased tree.r svhich i.r important for our community and aur urban fore.rt. There are.revera!communitie.r that certainly don't provide the.rerUice of boulevard tree trimming. Several communitie.r treat their boulevard tree.r a.r zve do.rideaa�alk�'and .rno�v removal,•propery ou�nerr take care of the.ridesvalk in front of their hou.re arrd they al.ro have to trzm the boulevard tree no matter how big it i.r. It may be on the city boulevard, and it may be a city tree, but they are re.rpon.nble for doing that. Communities that don't keep up svith boulevard tree trimming ea perience all kind.r of school bu,re,r,garbage truck.r, and snoiv plolv.r that have bu.rted�a�indshields becau.re of overhanging limb.r that don'tget trimmed. But, �vhen it come.r to priority, the crucial i.r,rue here i.rgetting rid of the di.rea.red trees and that i,r zvhere he svauld have to put the re.rource,r. On the motion; Kubal, McClemans,Reed and Trieb voted YES; Bartley, Bezdichek and Whaley voted NO; Motion Camed. Weldon asked the council for dixecti.on as to what services they see could be cut. Reed stated he is concerned with that, as the e�ertise lies within city staff to determine and bring back to the council proposed cuts. Reed wasn't sure if the council could suggest the most appxopriate place, as it becomes baxgaining between which areas/departments. Bezdichek commented those council members voting for this motion should take the time and sit with Weldon and Thompson and help determine where the cuts should be made. It is not as simple as voting and dixecting them to now come back with some cuts. City staff has worked diligendy for hours, days, and weeks, and if you voted for a reduction then come to City Hall and spend some time and figure out whom to cut staff on. 443 Reed stated wl�ich then we will be called micro-managers. He has given a high level directive. Bezdichek asked how are we not micro-managing the way it is right now. Every department head has diligently done everything they possibly can to get this budget to where it is. They, as department heads proposed this budget,we just now micro-managed it because some of you want a reduction by 1.3%. That by his estimation is called micro-managing. Reed stated this is at a supervisory level that this motion was put forward. He, himself in business, has gone through this kind of request when putting budgets fonvard. If the Yevenue is not theYe, then it had to be changed. Bartley is concerned much staff time is going to be expended on this and the anticipated results will not be seen. The motion was made and passed, and in order for him to offer direction to staff, he would have to think about it as he certainly doesn't have any immediate suggestions. He hates to consider this at this point as the budget stands on its merits. Whaley stressed eliminating staff,in her opinion,is not an option. She requested an analysis of the time and cost involved for staff in determining potential cuts,when this budget was finished and balanced. Weldon responded that preparing an annual budget is part of the job. The process isn't finished until the council votes on it at the Sept. 22°d Meeting. Thi.s budget is still a work in progxess. As staff, we will do whatever the majority of the council tells us to do;that is our job. Weldon asked Whaley if he understood her cor�ectly, that her preference was not to eliminate staff. Whaley responded that was correct. For a city that is supposedly booming and growing, she doesn't see adding six to seven employees over the course of ten years as growth. Reed stated the axgument could be had that the tax structuYe may not be correct for our growth. This is a down year. Ca�ital discussion. Weldon,in regards to capital projects and the 75% Second Penny, expressed the need for some consensus to help determine what capital projects are included in the budget as we move toward the final budget. The most important one is the Swiftel Center. The component of the Swiftel Center is a couple of different things: 1) a number of capital items seen on an annual basis. Some of it is carryover on some lighting improvements from past years which wasn't spent due to staff looking for the best available lighting options. This is a moving tasget. That number reflects some unspent funds that have been advanced forward from ptevious years ($60,000). 2) Weldon was compelled by Tom Richter's Budget presentation in the amount spent out of operating revenue for renting certain types of equipment. What is proposed is purchasing that equipment. It comes as an analysis that certain types of equipment which is Yented three or four times,and by the fifth time,it would have been cheapex to have purchased it. Weldon would like to change that. 3) Of the $650,000, $300,000 is set aside fox architectural services on the proposed Swiftel Center Expansion Project. This is in the budget as a kind of down payment for the pxoject. If it is decided to go ahead, the money is there to get started. Weldon does not want to be in a situation where the project is decided to proceed,but the funds are not there to get staxted and the project is delayed. If it is decided not to do the project, there is an extra$300,000 in the 75% Second Penny that could be put toward othex uses. Just because it is in the budget, doesn't mean it is going to be spent. Weldon would not do that without a special authorization on that issue. Kuba1 in clarifying they are looking at the Swiftel Center CIP for$650,00O...if anything was taken out of that,it could be added to the $792,000 available cash. Weldon responded that is correct. If you eliminate that number,it just makes the available cash go up by a corresponding amount, because it is an expenditure in this category. Weldon cautioned the council the Swiftel Center project is still an open project. Pursuant to council direction, RFP's will be in by the end of the month. Ten architects were invited to respond with schematic designs and cost estimates, as the most xecent estimate was about two years old. It is important to be proactive and if decide to proceed with this project, the means and methods are there. Reed stated it is important to continue to collect the information Weldon is talking about. Due to the Swiftel Center expansion project, there is much discussion if this should be done at another location in town and the only way to figure out the right place is to have all the information. It will cost us to get to that point, but it would be better to spend the money up front in order to make a good decision as this is likely to go to eitheY a referendum or a public debate. Reed questioned if the 44 � $300,000 should be taken out of the budget and show it as available cash and would approve doing so. McClemans stated he was not in favor of this pYOject when the council voted on it, and is still not in favor of it. Bardey commented he would leave it in to know exacdy where the budget is at. We've talked about making budget amendments later,and changing t�ungs later on, and that was not acceptable before and now it is. It is prudent planning since the council has directed it and is waiting for the RFI's. We need to be able to back it up with cash when it happens. If the council approves the project, then the budgeted amount is there to get started. Whaley believes if the money comes out of the CIP for$650,000,it is going to disappear as the funds did for the fire sta.tion. The money is fine where it is and we know what it is supposed to go to. McClemans asked Whaley is she was talking about the $650,000 or the $300,000. Whaley clarified the $300,000. Reed agreed with Bartley that this semantics. Weldon would bring it to the council if there was going to be an e�enditure like that. Trieb,in looking at and visiting with others about this potential project,would like to hear more support for the project itself before money is continued to be put into it without really knowing what direction to take. She is concerned that$300,000 is going to be spent and the council will still be unsure whethex to do the project. Kuba1 agreed with Trieb,if that$300,000 is spent, the momentum will be begun to proceed with this project,unless it goes to a referendum. Kubal agreed with the Mayor that these funds should be taken out and set aside. ACTION: A motion was made by Kubal, seconded by Trieb, to pull out the $300,000 for architectural fees for the Swiftel Center from the 2010 budget. Di.rcu.r�ion: lVhaley commented in regard.c to thi.r project....look at�vhat has been inve.rted by the city for the Innovation Cam�ius. There is a vi�ion that they�arill groav. Thi.r i.r part of the vi.rion for the Ssviftel Center. I�emouing thi.r money fynm the budget and setting it a.nde i.r movirsg backsvard.r. I�eldon,rtated it i.r im�iortant to keep it in per,rj�ective, and ju.rt becau.re it is in the budget doe.rn't mean:ve are going to do it. Budget.r are.rpending plan.r and thing.r can change. He:vould not recommend committing to a�'300,000 architectural cantract until the council ha.r made a deci.rion to,rupport thi.r p�ject. In the event a decision is made to move fonvard, the re.rource.r zvzll be in place to jump.rtart thi.r project to make the fir.rt.rtep of hiring an architect. I�Y/e are.rtill in the due diligence pha.re. Tivo combr�hen.nve.rtudie.r have been done�a�ith more svork cur�zntly being done to update that information. There ha.r been more due diligence on thi.r project in the la.rt tsvo year.r than mo.rt of the project.r undertaken in thi.r community. Thi.r project ha.r had more.rcrutiny than anything done in recentyear.r and it i.r .rtill nat fini.rhed. Thi.r i.r a very.rign�cant j�ublic policy issue for the community and it de.rerve.r thi.r kind of attention. But, Weldon doubt.r there svill be otherproject.r reque.rted that svild have thi.r.rame amount of due diligence. The ,8'300,000 allow.r the council to have the resource.r available in the event the final deci.rion i.r made to go ahead avith the project. If it is decided to notgo forward urith the project, it is cash available in the bottom line. It is important ta have the tool, zvhich i.r�vhy the fund.r tvere put there. I.Veldon a.rked the council to defeat the motion. Bartley echoed I-Yreldosz's sentiment.r. Ifyou avant to kill thi,r project pa.r.r thi.r motion. He.ruggested leaving the money a.r i.r and have further di.rcu.r.rion later. Kubal doesn't think anybody i,r talking about killing the j�roject at thi.r.rtage, but maybe there i.r the pre.rumption that it i,r a done deal and that sve are going to go ahead and move on�arith the project. He zvould like to have feedback finm the general public in regard.r to eac�anding the Suriftel Center. During hi.r campaign, he did not hear a lot of people telling me thi.r project ava.r one of their front-burner i.ccare.r. He doe.rn't see it a.r taking money aavay, but rather.rhifting to a d�erent location. It doe.r not a�i�iear a.r committed a.r if it wa.r in the budget. Kubalfeel.r it make.r sense to�iull out the,�'300,000. Bartley reiterated Kubal is sending a me.rsage to the public the council isn't intere.rted or committed to this project. The council has not debated thi.r in it.r entirety. Thi.r i.r a budgetary concern, but if it is removed fmm the budget, it.renc�c a mes.rage to other.r�vho might be intere.rted in partnering on thi,r endeavor(hotel.r, re.rtaurant.c, etc.)that the council i.r not 44 � all that committed and maybe they.rhoarldn't be that committed. The money doe.rn'tget e.�cpended unle.r.r tho.re partner.rhip,r are foun�l Ifyou take it out at this point in time, it doe.rn't.rhoav the commitment on the city's part to follozv throargh zvith the diligent zvork that ha.r Geen clone. Al KurtenGach, Daktronic,r, encouraged the co7rncil to leave thi.r item in the budget. The deci.rion ha,r been made to receive propo.ral.r. If the propo,ral.r are acceptable, thenyoar avould proceed zvith the project. If they are not acceptable, yoza u�ould not proceed. Keed a.rked if there wa.r any idea zvhat the amoarnt might be in the proposal.r, and avhere i,r thatgoing to be pulled fram. Wleldon.rtated it depends on svhere the proposal.r come in at. They may all be�zjected if they are outrageou.r. For the.rco�ie defined in the propo.ral.r, ,$5,000-7,000 at the most i.r e.xpected. Thomp.ron sugge.cted.retting aside the�'300,000 in a re.rerUe account for the architectural co.rt and derign fee.r. She zvill 6e coming to the counczl thi.r fall avith re.rolutian.r to set a�ide other fund.r. Keed a.rked ho�v it u�ould get removed frnm the budget and set a�ide if it sva.r decided to not do the project. Thomp.ron stated it take.r a majority vote of the council. Keed agreed that.retting a�ide the money might be fair. Keed prefer.rgoing fortvard lvith getting all the information a.r the right deci.rion ha,r to be made. I�eed received a tour of the Slviftel Center by Tom l�ichter, Execartive Director. He ava.r amatied urith zvhat ha.r been done and the number and type of event.r held svhenyou take a look at aa�hat they are svorking zvith. Aeed believe.r the Ssviftel Center need.r to be reviezved in a larger.rcope than ju.rt e.xj�an�ion. There a�z.reveral in�ciencies at the Su�iftel Center that they may actually be sva.rting money. Anything done ta.ret up for an event involve,r moving.romething out of the zvay. The back half of the buildin� ariginally de.rigned a.r a.recond entrance, i.r being u,ced for.rtorage. The facility in it.r entirety i.r not being u.red a.r de.rigned and over time, we have tried to keep them moving by adding on. Noaa�, it needs to be decided that after.reveralyearr urithgrzat econornic development zvith these types of event.r, are sve zvilling to continzre to fund the�'300,000. I�eed feel.c the council need.r to take a hard look at the Sa.viftel Center, and if they don't inve.rt in it, then they are going to have to reengineer avhat is done in that facility. Betidichek re.rtated ayes vote an the mationgive.r Thomp.ro�r no opporturzity to come back lvith an ordinance.rtating hosv it is.ret a.ride and earmarked. A no vote give.r Thomp.ron an opportunity to at lea.rt look at the revenue. He zvanted to make.rure the council underrtand.r ivhat they are voting for. Thompson.rtated it could be removed from the budget, and.rhe could come back�vith a resolution, a.r all fund.r have re.rerve.c She�arill be coming to the council for the gerreral fund and the.recond penny funcl and.retting a.ride re,rerue.r, and detailing why the fund.r a� being.ret a�ide. Kubal a.rked Thomp.ron if aye.r vote i.r doable. Ye.r. i�haley didn't under.rtand u�hy Thomp.con ha.r to go to all the aa�ork because it.ray.r s�hat it i,r for in the current budget. It doe.rrr't make any.rense to move it from zvhere it i.r at. Keed.rtated there is apprehen.rion from the council to move fonvard urith thi.r project. W/hen the KFPr are in, then the council.rhoaal�l di.rcuss the next.rtep. Each time a.rte�i i.r made, the council.rhould be looking one step further. On the motion; Kubal, McClemans, Reed and Trieb voted YES; Bezdichek, Bartley and Whaley voted NO; Motion Carried. Weldon asked if thexe wete any quest�ons in regards to the other capital items. If the council is comfortable with those, they will be incorporated into the budget oxdinance with the change made to the Swiftel Center budget. Reed clarified leaving the Swiftel CIP at$350,000,which includes $60,000 in lighting improvements caxried oveY 2008 and 2009. Thompson stated the big capital item is the Swiftel Center arena lighting for$220,000 with the rest being small items. Weldon stated the issue on axena lightt.ng is still not resolved. Several electrical engineers have looked at it,but they are not satisfied with what they have come up with, so it is still a work in progress. This number reflects on the high end the possible amount. Regarding the airport,Bezdichek asked in regards to the $294,880 if that will come out of 2010 or 2011, and how the $500,000 in 2012 and the$400,000 in 2013 will play out. He is unsure of the timefYame involved in decisions that need to be made. Bezdichek also questioned the $250,000 for engineering fees and if that was going to be in 2010 or 2011. Weldon stated theq axe hoping that is the airport layout plan,which is the axchitectural 446 engineering and design work associated with a new airport. If a final decision is able to be made on the airport location, following FAA requirements and processing an engineering and architectural firm, the first task would be to do an airport layout plan. It is very possible this could overlap into 2011. Reed,reverting back to Swiftel Center capital, feels the number is still large,but this is what it might cost to continue to operate the center. There are a lot of capital expenses involved in a building such as this. There are also efficiencies that can be gained. Weldon's idea to stop renting and purchase some equipment may be what it will come down to in ordeY to decrease some of the city's subsidy. It all costs money. Reed asked Whaley if she remembered when they went through second penny,and a motion was passed to lock in a certain dollax amount per yeax. Whaley remembers it being set between$75- 80,000 for 5 to 6 years. The amount incxeased after that. Thompson clarified it was $70,000 and there was a percentage to be set aside, and when it went up it meant there was enough accumulated enabling Richter to start replacing and fixing,which is where the $60,000 derives fxom. The first xeading of the Budget Ordinance is set for September 8. Weldon is not sure of the format the council would like to review the general fund changes, and reminded them they a,�e scheduled to meet in joint work session with the County Commission at 4:00 p.m. on that date. There are some pressing issues regarding space needs at that point, so would not want to see that changed. As the process was questioned earlier,thexe could be a discussion agenda item prior to the first reading as long as it could be resolved at that point. Bartley asked Britzman if that would be considered a minor amendment on the first reading. If the proposed change is adopted as requested, that wouldn't be done until the second reading. Britzman stated the change could occur to the proposed ordinance before it is submitted for first reading. It could be done an houx befoxe. Weldon sta.ted it would have to be written in as Thompson wouldn't be able to present the documents reflecting the change duting the meeting. Bardey sta.ted that is his whole point...how is it supposed to be handled? Britzman stated action can be taken, and assuming any change is clear within the houY timeframe, a first reading can lawfully be held with a modification made within an hour of the first reading. Bartley stated that would not necessarily be an easy task. Britzman stated there are alternatives if it can't get done witliiri that timeframe to make it clear to the public as to what is being put forward as a first reading. A special meeting might have to be scheduled. It does put some pressure on us to know that we can't bridge the gap between any suggested changes and the first reading scheduled the same day. Bartley asked about having a special council meeting to discuss this before prior to the first reading. Thornes stated a 24 hour notice needs to be given prior to an emergency meeting of the council. Reed asked if it was left the way it is now for the fixst reading. Amendments can be made on the final reading. Britzman stated any amendments could be saved and brought forward for the second reading,which would constitute as a modification to an existing ordi.nance. Britzman,given the significance of the overall budget, stated it is faixly typical to make those types of changes between the first and second reading of any budget. It would be construed as a minor amendment and could be made for the second reading. Bartley does not have a problem with this if it would be considered a minor amendment. Thompson asked for clarification;when the City Manager comes back with the budget ordinance for the first reading,it is supposed to reflect a 2%incxease for operating e�enses. Yes. Weldon stated at the first reading, the ordinance would read as it is now. The changes would be prepared as an amendment and ptesented at second reading. 6:00 P.M. REGULAR MEETING. Consent A.genda. A motion was made by McClemans, seconded by Whaley,to approve the consent agenda,which was to approve the agenda as printed. On the motion, all present voted yes; motion carried. 181 Reading—Ordinance_No. 19-09. First reading was held on Ordinance No. 19-09,an Ordinance Clarifying Open Burning and Creating Requirements for Recreational Fires in the City of Brookings, South Dakota.. Public Hearing—September 8`� 18`Reading—Ordinance No. 20-09. First reading was held on Oxdinance No. 20-09, an Ordinance pertaining to an application for a Conditional Use for a church in the Business B-2 District. Public Hearing—Se�item6er 8`u 447 2nd Reading— Ordinance No. 17-09. A motion was made by Bart�ey, seconded by Kubal, to approve Ordinance No. 17-09, an Ordinance Amending Article V of Chapter 26 of the Code of OYdinances of the City of Brookings, South Dakota and pertaining to Ta�cabs. Di.rcu.r.non: Coaancil Member McCleman.r raised the gue.rtion if limoia.rine,rervice.r avere licen.re�l and if they.rhoarld be covered in thi.r ordinance. A motion was made by McClemans, seconded by Bezdichek, to table until the September 8, 2009 meeting. All present voted yes; motion carried to TABLE. R&T Center Lease Agreement. The City Council reviewed request from A1ex Kahler, owner of Biogenetic Services, Inc., one of the City's tenants in the R&T Center. The owner is requesting a modification to the new lease to continue the rental rate which expired June 30 through the end of the year. The reason for this is the economy. The new leases approved by the Council,which went into effect for all tenants,went to $10 pex square foot on July 1. Other tenants are paying this amount. The request is to maintain rent at$8.75 per square foot until yeax-end. However, the tenant has not paid rent, or any portion thereof, for June,July, and August. The lease provides for late penalties which axe also being accrued. The City Manager outlined the following options fox the Council's consideration: 1)Agree to the request; 2) Deny the xequest. The response by the tenant would be either to pay the new amount or vacate the propeYty; or 3) Agree to the request but have the difference phased-in by having it added to subsequent months in 2010. This would allow the tenant some relief until the end of the year but would "re-pay" that amount through a temporary suxcharge on future month's rent for a determinate number of months. This option would preserve fairness with other tenants. Mr. Kahler was invited, but did not attend the meeting. The City Manager recommended option number two. ACTION: A motion was made by Bartley, seconded by Bezdi.chek, to approve option number two,which is to deny the request and start action to vacate the property. All present voted yes;motion carried. Executive Session. A motion was made by Whaley, seconded by McClemans, to enter into executive session at 6:32 p.m. to consult with legal counsel for contractual and legal matters with the Council, City Attorney, City Clerk, City Managex, and Community Development Director present. A motion was made by Whaley, seconded by Kuba1, to e�cit executive session at 7:04 p.m. Adjourn. A motion was made by Whaley, seconded by Trieb, to adjourn. All present voted yes; motion carried. Meeting adjourned at 7:05 p.m. CITY OF BROOKINGS G�.��av sRO // �. ���+coeaa'•.,o� //�„^ o-q.,2 Ir- ' �o:c� N Tim Reed,Mayor x: 1�839 �.Q 2% J'C.,,� '��G O Ts , � Srhha.ri Thornes, City Clerk