City Council

City Council Meeting Minutes

Strategic Planning Meeting

Roseville Skating Center

February 7, 2009

1.         Roll Call

Mayor Klausing called to order a Special Strategic Planning Meeting of the Roseville City Council at approximately 9:40 a.m. in the Fireside Room at the Roseville Skating Center.

Mayor Klausing announced that the purpose of the meeting was to discuss strategic planning; with the goal of prioritizing issues, planning for the future, and building cooperative relationships between the City Council and staff, and among City Councilmembers

City Manager Malinen advised that the meeting had been duly noticed in accordance with State Statute; and was being videotaped for delay broadcast on CTV-Channel 16.

Attending: Councilmembers Johnson. Ihlan; Roe; Pust; and Mayor Klausing.

Staff in Attendance: City Manager Bill Malinen; Finance Director Chris Miller; Public Works Director Duane Schwartz; Parks and Recreation Director Lonnie Brokke; Community Development Director Patrick Trudgeon; Police Chief Carol Sletner; and Assistant Fire Chief Tim O’Neill

Also attending: Facilitator Aimee Gourlay; and Recording Secretary Sheila Stowell.

Members of the Public in attendance: Former Councilmember Bob Willmus

2.         Agenda Review

The agenda was approved by consensus, as presented.

3.                 Public Comment

No one appeared wishing to speak.

4.                 Outcomes Review

City Manager Malinen summarized the purpose of the meeting based on comments in his memorandum dated February 5, 2009.  Mr. Malinen noted that staff had been reviewing impacts and potential reduced operational options for potential reduced revenue from state-mandated reductions in anticipated Market Value Homestead Credits (MVHC), estimated at $400,000, both collectively and department-wide.  Mr. Malinen noted that this was in addition to the levy caps already mandated by the state for 2009-2011 budget years. 

Mr. Malinen noted that the previously-discussed revisions to the City’s budgeting process, implementing budgeting for outcomes, became much more important given these fiscal constraints.  Mr. Malinen noted, for the benefit of the public, that the 2009 budget effectively froze all expenditures at 2008 levels, with the exception of personnel costs.  Mr. Malinen advised that, since December, he had implemented a hiring freeze intended to anticipate revenue losses of $400,000, including not filling a number of currently vacant positions, while department managers determined which positions they preferred to fill and how to reallocate their existing personnel resources.  Mr. Malinen further advised that, it had been determined internally through staff analysis that no new capital equipment purchases would be done, even those approved as part of the 2009 budget.  Mr. Malinen noted that there would be additional maintenance costs in keeping the existing equipment running, however, opined that it was significantly less than major capital outlays. 

Mr. Malinen noted, however, that the above-referenced short-term remedies did not serve to provide for a long-term structural adjustment.  Mr. Malinen further requested direction and authorization from the City Council to pursue options with neighboring communities for additional cost-saving measures and joint purchases as applicable.

Mr. Malinen advised that each department was prepared to share their specific challenges and budget impacts to funding reductions pro-rated for each department; as well as some options for Council consideration as they look at the overall picture and policy-making contexts for those decisions.  Mr. Malinen noted that there was also the option of using reserve funds to facilitate this potential $400,000 reduction in revenue; however, he again noted that this, or a combination of reduced programs, service levels and other remedies did not provide long-term structural solutions.

Discussion included equities in distributing budget cuts among departments proportionately for those funds supported in part or in full by property taxes, and independent of their revenue sources. 

City Manager Malinen introduced Ms. Aimee Gourlay. 

Ms. Gourlay briefly reviewed her part in the day in keeping the City Council and staff focused on their discussions, and her keeping summary comments for future reference.

5.                 Department Head Presentations – 2009 Challenges

AND

6.                 2009 Budget Impacts for Market Value Homestead Credit (MVHC)

Public Works Director Duane Schwartz

Mr. Schwartz noted that his department had already been severely impacted by the difficult economic climate and significantly squeezed by inflation, considering that it operated mostly from tax revenues.  Mr. Schwartz noted the ongoing costs for construction, fuel and materials.  Mr. Schwartz noted that staff had been anticipating some relief in fuel costs; however, he noted that to-date, bids for asphalt were not indicative of any cost reductions.  Mr. Schwartz noted that this creates further issues in the City’s historic service levels.

Mr. Schwartz reviewed each of the tax-supported fund areas within his department:

Public Works Administration/Engineering

Mr. Schwartz advised that there would be minimal significant impacts in this area in continuing to deliver the City’s construction program through its Pavement Management Program (PMP); however, noted that other services to the community (i.e., GIS mapping and other internal services) would be impacted.  Mr. Schwartz advised that reductions would eliminate his staff’s ability to seek outside assistance for engineering services.  Mr. Schwartz advised that, over the last 2-3 years, the department had gained some revenues from the Joint Powers Agreements (JPA’s) with the Cities of Falcon Heights and Arden Hills that helped to offset some of the City’s overtime costs and seasonal employee costs, which had served as a real benefit.   

Street lighting

Mr. Schwartz advised that reductions to this department, already being kept consistent with 2008 budgeting, including increased Xcel Energy rates, would reduce the department’s ability to repair contractually city-owned lighting systems that were already in place; and advised that he would need to continue to monitor related impacts due that.

Building maintenance

Mr. Schwartz advised that there had been no increase in this area; however, he noted that line item revenues may be depleted by year-end, due to significant use of City facilities for after-hour activities.  Mr. Schwartz noted that this increased maintenance requests for City Hall and conference room use, including supply purchases (i.e., paper products). 

Mr. Schwartz advised that they had recently sought Requests for Proposals (RFP’s) for janitorial services, and following analysis, intended to bring a recommendation forward to the City Council in the near future.  Mr. Schwartz advised that the current economic situation, had provided an increase in the number of proposals received, in addition to potentially providing for significant reductions in the City’s cost for janitorial services.  Mr. Schwartz advised that part of staff’s analysis would include their service levels, impacts in overall quality, and would include staff’s interviewing of each firm.

Central Garage

Mr. Schwartz advised that, with the proposed longer vehicle retention times, this would significantly impact the overtime budget for the remaining two mechanics on staff.  Mr. Schwartz noted that, significant down-time impacted operational costs for all departments; it also wasted taxpayer monies to have that down-time and reduced services levels (i.e., snow plow equipment).  Mr. Schwartz advised that the mechanics would do their best to keep the equipment in shape; however, noted that this may mean additional overtime so they can complete work in a timely manner or during off-time, allowing the equipment to be up and running by shift time the following day.

Street Division

Mr. Schwartz advised that staff had recently had the bid opening for the 2009 maintenance materials, and anticipated presenting them and staff’s recommendation to the City Council at their February 23, 2009 meeting.   Mr. Schwartz advised that the bids had been disappointing, but comparable to the experiences of other communities, having not come down from previous levels.  Mr. Schwartz noted that when the City had bid on 2008 materials, the firms had based those bids on 2007 prices, so the City was receiving almost a double-hit on this bid, as those companies attempted to recover from the previous year.  Mr. Schwartz advised that, given the unfavorable bids, staff was recommending, even without impacts of reduced MVHC, a reduction in sealcoat projects by 20%, reducing ice control by 10%, reducing sign maintenance by 10%, reducing pavement marking/striping by 25%, and reducing other contractual pavement and curbing repairs by 10%.

Other impacts

Mr. Schwartz addressed impacts of the recent hiring freeze, noting that the department had two recent retirements in the street division; currently have one military deployment, which he had just received notice that the deployment would be extended another year; two employees out on medical leave, one in the hospital and another scheduled for knee surgery.  Mr. Schwartz advised that this situation, in addition to the hiring freeze, significantly impacted his department’s ability to deliver major service operations in the summer; and advised that the department would need to rely on additional seasonal staff to bring the department back up to normal staffing levels.

Mr. Schwartz advised that reductions in his staff would have some impact on the department’s assistance to other departments (i.e., plan review; maintenance assistance).

Anticipated MVHC-Specific Reduction = $71,000

Mr. Schwartz provided the following options from his perspective in addressing the additional MVHC reduction, from a hypothetical basis:

§         Administration/Engineering: other than staffing, noting that it was a staff-heavy budget, elimination of seasonal employees, overtime pay, reduced attendance at conferences/training opportunities.  Reduce 2009 proposed construction from $5 million to $2.5 million, resulting in a 10% engineering fee internally to the department to send that construction delivery out to a consultant.  Mr. Schwartz reviewed the contractual budget, as well as the beneficial value of full-service engineering in-house.

§         Streets: Reduce staffing levels further or further program reductions, with the net effect to reduce pavement conditions or response times.

§         Lighting: Shut off60 lights.

§         Building Maintenance: Reduce lighting; increase/reduce heating/cooling seasonally.

§         Central Garage: Reduce staffing further; however, noted that there were only two in the department at this time, as previously mentioned

§         Discussion among Councilmembers and staff included the City Council’s request for staff’s percentages/numbers in writing following the meeting to provide a clear understanding of the impacts/relationship of those losses.(i.e., increased maintenance costs and vehicle/equipment repair); impacts of potentially higher costs in the future for deferring construction projects, and projections of whether costs will stabilize or increase significantly; staff’s ongoing monitoring of metropolitan construction projects and the bidding climate; and net value delivery impacts for engineering fees generated. 

Police Chief Carol Sletner

Chief Sletner reviewed the analysis and process the Police Department Police Department considered when submitting their original budget; the initial cuts prior to presentation to the City Council at 3.9%; further reductions to a 3.7% levy recommendation; and realities of those impacts to the department’s functioning and service levels.  Chief Sletner provided this information, in the form of a bench handout, entitled, “Roseville Police Department 2009 Work Plan,”

Chief Sletner noted that the City’s Police Department had a history of full-service, and this reduced service level created stresses across the entire department as well as the community.  Chief Sletner reviewed some of those services specifically impacting the department’s service levels to citizens and other agencies, including reduced follow-up on civil and non-criminal cases; elimination of neighborhood crime alert mailings related to area thefts from autos at hotels, and home burglaries; referring citizens to other agencies for assistance rather than handling it locally; limiting participation in county and state-wide task forces, even though those cooperative ventures had seen excellent success with metropolitan area-wide burglaries.

Chief Sletner advised that the department currently had one officer vacancy, causing the department to re-examine responses to certain accidents when not involving personal injury or if minor or on private property.  Chief Sletner advised that further reductions could cause the elimination of vacation property (patrol) requests; elimination of officer park patrols; Officer Friendly visits to schools and events; some reduction in vehicle patrol; and noting the high mileage of some of existing squads, realizing increased maintenance costs.

Chief Sletner advised that the department was already implementing further reductions, including taking property crime reports via phone, rather than face-to-face.  Chief Sletner advised that she was anticipating additional information technology maintenance required for squad equipment; had not ordered two new unmarked cars, or six new squads previously budgeted; and had decreased in-force training, creating the potential of increased civil liability litigation related to “use of force;” and expressed concern with impacts in reduced officer training and decreased overall service to citizens.

Anticipated MVHC-Specific Reduction = $174,000 plus

Chief Sletner opined that the Police Department would be bearing the brunt of cuts if the City realized the full $400,000 cut from the State of MN, requiring some or all of the following options to be implemented:

§         Eliminate the Community Service Officer (CSO) program, with officers on the street needed to pick those additional responsibilities, impacting response times to crimes in progress.  Chief Sletner noted that CSO’s perform a variety of details that allow officers to focus on crime prevention areas, including detox transports; security vehicles and awaiting tows of impounded vehicles; vehicle shuttling for maintenance; court runs; prisoner transport; bank deposits for Finance; and errands for Administration.

§         Eliminate volunteer program presence (i.e., park patrols; Police Explorer program, etc.)

§         Digital Recording rooms reduced, of which she’s a strong advocate to maintain

§         Citizen on-line reporting, similar to the programs already done by the Cities of Minneapolis and St. Paul

§         No access to a golf cart to provide transportation for seniors volunteering for programs

Chief Sletner advised that the above service level reductions would need to be implemented at the same time that crime statistics indicate increased crime trends from 2007 – 2009, with those statistics as follows:

From 2007 to 2009 Calendar Year

Robbery increased by 31%

Aggravated Assault increased by 16% 

Auto thefts increased by 21.5%

Shoplifting/General theft increased by 9.7%

Narcotic incidents & arrests increased by 18%

Chief Sletner further noted that other impacts to service levels would include:

§         A ten  day waiting period for Police Reports from archives and increased waiting time for the public to see an office to make a report, with current wait time approximately 30 minutes

§         Increased workload for front staff and technicians, which had originally prompted additional records maintenance staffing

§         Increased delay in processing BCA validation reports and suspended files

§         Impacts to other departments and agencies

§         One less officer to assist Fire calls

§         No volunteer personnel for the Parks and Recreation Department to provide security crowd control and traffic direction for community events/activities

§         Reduced service levels to the Public Works Department for traffic enforcement and traffic counts

§         Reduced service levels to the Community Development Department for officer-assistance on Code Enforcement

§         Reduced levels of service for the many tasks performed for the Administration Department

§         Longer turnaround time for background checks for license applications and renewals for the Finance Department

Parks and Recreation Director Lonnie Brokke

Mr. Brokke advised that current 2009 spending had been frozen at 2008 levels, sending a general message to staff that there would be limitations to “business as usual.” Mr. Brokke advised that any new programming or service offerings were put on hold.  Mr. Brokke noted that, for the short-term, some discretionary dollars available, so immediate reductions to programs, services and activities to the community would not be readily evident.  Mr. Brokke advised that his staff had been made aware of the need to strictly adhere to, or reduce, their budgets; and were actively searching for more sponsorships and contribution opportunities.  Mr. Brokke noted that, as the department realized the full inflationary impacts, it would require reduced spending for supplies and equipment.

Mr. Brokke indicated that immediate action had been taken in reducing the 2009 approved department budget as follows:

§         Diseased Tree Program: $50,000 eliminated, while reviewing City Ordinance and State Law for mandated maintenance and removal

§         Park Improvement Program under discussion by the Parks and Recreation Commission on how to make it work

§         Eliminated purchase of a replacement sidewalk machine, even though the existing one is on its last legs, which will limit the amount of snow removal on sidewalks

§         Recognizing that the Department is approximately 50% fee-supported; while receiving additional scholarship requests as more people are facing difficult economic situations and are unable to pay those fees (almost three times as many requests as in the past).  Mr. Brokke advised that staff and the Commission were in agreement that they wanted to avoid having to deny anyone from participating in the programs, feeling that such activities were more vital than ever.

§         Equity cost-sharing for travel expenses of affiliated groups and programs

§         Absorbing reaccreditation in this year’s budget given the importance of continuing that standing

Anticipated MVHC-Specific Reduction = $111,000

Mr. Brokke advised that the department anticipated accommodating that potential reduction as follows:

§         Reorganizing the department to absorb those cuts in staffing levels, even though the department’s current staffing level was less than in the 1990’s.  Mr. Brokke advised that there were currently three positions open in the department; noting that the department had remained stable over the last five years, however, they’d recently experienced two retirements; with one consciously held open as part of the skating center’s full analysis completed by the Oval Task Force, with the intent to follow their recommendation to reduce that position from 1.5 FTE to .75 FTE.

§         Mr. Brokke noted that, the open positions would impact activity registration/customer service in skating center and parks administration functions; and also noted that one retirement was in the Parks Maintenance function.

Mr. Brokke advised that the general plan to absorb these cuts would be to reorganize operations to the least impact to clients; reconsider contracted services; and attempt further increases in the Roseville volunteer network.  Mr. Brokke noted that it was the department’s hope to become a leadership model for volunteers in the metropolitan area; and to work with the Park and Recreation Commission to address some areas of service to the skate park and nature center by utilizing volunteers in more comprehensive ways.

Mr. Brokke discussed general impacts and/or considerations for the department, including:

§         Longer response times, creating more reactive rather than proactive situations

§         More time spent on definite projects and day-to-day operations, rather than in building community interest

§         Reduced time for special projects (i.e.,  Scout projects; Buckthorn removal); focus on day-to-day operations

§         Strategically limiting special community events, through reducing their number or downsizing them

§         Revisit the City’s Forestry Ordinance

§         Revisit off-road sidewalk plowing

§         A comprehensive identification of current and proposed program and service level offerings to structurally adjust for future operations

§         Programming impacts similar to schools with increased class sizes, fewer divisions in age-specific groups

Mr. Brokke recognized that there would be some impacts beyond the department’s control, including changes in interdepartmental cooperation, advising that the Parks and Recreation Department couldn’t do what they did without the support of the other City departments (i.e., Administration for community space availability and coordination; Emergency Response for special events; Public Works for diseased tree removal, plowing parking lots; and many other cooperative efforts).

Mr. Brokke, noting the time of the year and gearing up for spring/summer programming, asked that the City Council make a decision as soon as possible, given the logistical issues that would need to be addressed accordingly.  Mr. Brokke opined that, while the history of the department has indicated reduced staffing levels, the demands and expectations of the community has increased.

Mr. Brokke advised that he remained optimistic about trying something new and doing his department’s fair share to save money wherever possible; however, he advised that he was interested in moving out of the “holding stage.”  Mr. Brokke cautioned Councilmembers that these reductions would not happen without impacts; however, he expressed his willingness to work with the Parks and Recreation Commission in implementing the changes with the least impact to the community as possible, given the current economic situation.  Mr. Brokke opined that, in these current economic times, the department and Commission were of the consensus that parks and recreation opportunities become much more important, with close-to-home programs and opportunities for participation for everyone.  Mr. Brokke further opined that history had proven that impacts of eliminating programs may not be felt immediately, but over time it would change the face of the community.  Mr. Brokke asked that, in order to avoid panic and short-sighted decision-making, that the City Council look at the overall situation for the best long-term future of Roseville.  Mr. Brokke opined that the City of Roseville was a highly sophisticated and great community, and if things started to be removed or service levels reduced, that sense of community and involvement would be lost.

Discussion among Councilmembers and staff included working with the Commission to enhance volunteer programs; changing tiers and program efforts at the skate park and skating center, with higher fees; considering expanding the Nature Center to more recreational, rather than environmental programming; reviewing those programs that are more labor-or cost-intensive; clarification that the Parks and Recreation Department was responsible for plowing all pathways in parks and sidewalks, with the Public Works Department responsible for their initial construction; and philosophical discussions between staff and travel teams and their structures versus in-house teams.

Assistant Fire Chief Tim O’Neill

Assistant Fire Chief noted that the department was 100% fully- tax funded, with 69% staffing costs; and 31% maintenance, equipment, building maintenance, and supplies for firefighters.  Mr. O’Neill noted, that it became apparent that operational savings needed to be defined when 2009 budget levels  became frozen at 2008 levels by the City Manager.  Mr. O’Neill advised that, over the last six weeks, the department had addressed how to maintain the level of response to emergency calls for fire and emergency medical services (EMS), while ensuring firefighter and EMS safety issues.  Mr. O’Neill opined that it had been challenging to attempt to balance a budget with inflationary costs continuing to increase.

Mr. O’Neill provided a list of items that had been put in place, or were proposed to be implemented, in order to meet the 3.2% reduction for 2009 the department’s budget.

§         Reduce discretionary membership, unless mandated by Mutual Aid Agreements

§         Firefighter annual physicals: eliminate cardiac and cholesterol screening

§         Reduce firefighter uniform supplies as appropriate

§         As indicated to the City Council in recent e-mails over the last few weeks, the Fairview Fire Station #2 has been placed on inactive status, reducing response levels, with no paid, on-call staffing on that site.  Mr. O’Neill advised that equipment would continue to be stored there.

§         With Station #2 being placed on reserve status, proposed selling a ladder truck (1-19 years old), that would be coming up for replacement in the next few years, and proposing for future City Council action that that vehicle be eliminated from the existing fleet.  Mr. O’Neill noted that estimated replacement cost projections over the next 20 years would be $1.7 to $1.8 million.  Mr. O’Neill opined that eliminating this piece of equipment would not reduce safety to the community, but would have a minimum impact on the City’s ISO rating and classification.  Mr. O’Neill advised that the City’s numerous operational changes in the department over the last ten years since last classified should more than make up for those reduced points.

§         Placed Fire Station #1 on reduced mode; given the structural and mold issues; the thermostats had been capped at 55 degrees, which should provide energy savings, with no intent to use it during the summer months, saving further on air conditioning costs.

§         Reduce participation in community events; participating as much as possible by using on-duty staff rather than bringing personnel from home.  Mr. O’Neill noted that he was unsure of the impacts to the community and interdepartmental needs; however, he noted that it was very expensive to staff those special events.

§         Mr. O’Neill noted that, while the City had initiated a hiring freeze, the department had staffed up on part-time employees toward the end of 2008, which should carry them through 2009 without additional staffing needs.

§         Not filling one FTE staff shift vacancy, with current staffing schedules indicating five FTE at Station #3; and now serving with a minimum of four FTE, and not filling sick or other leave, thus reducing other costs as well.

§         Implementing strategic changes via a computerized payroll system for documenting when firefighters arrive and reducing their manual documentation and preparation for their shifts

§         Transitioning Fire Inspector position to assist the day shift rather than bringing in a person from home.

Anticipated MVHC-Specific Reduction = $48,500

Mr. O’Neill opined that, with the above-referenced items already reduced and/or eliminated, there wasn’t much left with the exception of personnel cost reductions.  Mr. O’Neill advised that further consideration would be given to whether early retirement options, reduced p-t staffing at fire stations, or complete layoffs were viable options.  Mr. O’Neill advised that there were no other operational items that would be considered for reduction or elimination at this time.

Mr. O’Neill noted that the location study, and interdepartmental coordination with other communities, had indicated that a reduction in fire vehicles could be achieved as the number of stations was reduced or relocation of remaining stations.  Mr. O’Neill noted that such reduction in vehicles would substantially impact and reduce costs for annual maintenance, and outright replacement costs, of the department.

Mr. O’Neill noted other potential cost-saving measures, while not recommended:

§         Reduce training provided by the department for other departments (i.e., Police Department training for hazardous material handling; OSHA requirements; First Responders training)

§         Reduce or eliminate participation in community events above and beyond that addressed in the previous list

§         Eliminate providing full annual CPR certification and training for all City staff, seasonal staff for Parks & Recreation and Public Works staff; eliminate Confined Space training and monitoring for the Public Works Department; eliminate fire extinguisher inspections for all city-owned vehicles and buildings; reduce Emergency Management training and record updating, which would impact his own position as co-emergency director

§         Attempt to create a list of potential revenue sources, by moving forward discussion of the number and location of fire stations; how to fund new facilities, in the current economy; review logistical issues; and recognizing upcoming scheduled replacement of one fire engine and one EMS unit from an already underfunded equipment replacement fund.

Discussion among Councilmembers and staff included: confirming the number of FTE salaries officers at eight, with 64 part-time firefighters and staff available at their hourly rates; further explanation of the computerized financial and payroll system, directly to the Finance Department, reducing extra administrative work and report creation.

Councilmember Roe suggested that other departments, if they haven’t already done so, look at similar financial/payroll redundancy issues.

Further discussion included current operations with a Fire Marshal, Administrative Assistant, Assistant Chief, and Fire Inspector, all working out of the City Hall Fire Station, and their ability to provide immediate response.  Mr. O’Neill advised that, by transitioning the Inspection to the Station #3 location, that person would be available to fill in when the part-time, on-call person was off-shift or as an emergency responder; and able to fill those other duties instead of another part-time person.

Finance Director Chris Miller

Mr. Miller noted that the department was comprised of three divisions, with their own specific challenges.

License Center Division

Mr. Miller noted that this had proven very successful, in addition to covering its own operational costs, providing a gross profit allowing it to offset other costs for the City, usually $200,000 surplus per year.  Mr. Miller expressed pride in the operational achievements of this division; however, recognized that the current economy would not allow the Center to sustain those revenues.  Mr. Miller estimated that, in 2009-10, revenues would be reduced by half due to reduced new car purchases, passports and other services, creating less revenue for General Fund and Information Technology operations.

Mr. Miller indicated that staff’s business model response would be to continue marketing efforts with auto dealers for renewal and registration services to bring in new business.  Mr. Miller noted that this had proven successful in the past, and would hopefully continue to do so.  Mr. Miller advised that cost reductions had been addressed by leaving one position unfilled for almost a year to attempt to maximize savings.  However, Mr. Miller asked that the division retain some flexibility in possibly bringing that position back, in order to keep service levels sufficient to keep surplus dollars coming in to the City.

Information Technology (IT) Division

Mr. Miller advised that the City’s IT division has been able to maintain its successful business model to offset support staff costs for the City by partnering and providing IT services to18 other communities and agencies.  Mr. Miller noted that this allowed the City to take fixed costs and spread them over a larger service area, reducing operating costs, while allowing for $800,000 in annual revenue to the City.  Mr. Miller advised that discussions were ongoing with several other cities who had verbally agreed to commit, with details still being negotiated before coming to the City Council for formal action.  Mr. Miller anticipated additional interest from cities as they were forced to reduce and outsource IT services.

Mr. Miller addressed challenges to the division, in being able to keep up with IT purchases to meet the demand of its clients, and ability to replace network services on a reasonable replacement schedule.   Mr. Miller noted that the department had currently fallen behind; and had recognized the need for better long-term sustainable funding; with staff constantly revisiting the business model and making improvements, while recognizing ongoing operational challenges.

Finance/Accounting Division

Mr. Miller noted that most of what was done by this division was mandated or proscribed by federal/state mandates and City Code.  Mr. Miller noted that priorities change with the loss of state aid or priority changes dictated by the City Council or legislative mandates. 

Anticipated MVHC-Specific Reduction = $20,000

Mr. Miller advised that since the IT and License divisions generate surplus revenue, it didn’t make sense to reduce their service levels or functions.

Mr. Miller further advised that, within the Finance/Accounting division, there were 15 distinct functions, with half fee-based or revenue-generating and not a viable option for reduced staffing based on their revenue generation functions; leaving only 6-7 primary core functions in the Finance area to turn to, with virtually all of those regulated by federal/state or City Code and not providing an option for elimination or reduction.

Mr. Miller noted that payroll, accounts payable, and annual audit reporting were all functions mandated by state law, limiting any areas to achieve savings.

Mr. Miller noted that, due to incredible limitations available, there was only one function that remained discretionary in the department: staffing the front reception desk at City Hall.  Mr. Miller noted that this was not a requirement of the department; however, for a portion of the day, his recommendation would be to scale back those hours of operation and funding for that reception desk; necessitating clients or citizens going to other service counters close to that lobby area.  Mr. Miller noted, however, that this would impact the Police Department, Parks and Recreation Department and Administration.

Mr. Miller advised that there was one other thing that would be considered within the Finance/Accounting Division, by looking at more efficiency in all positions of the department.  Mr. Miller advised that this was something done by the department on an ongoing basis; with significant revisions to-date, reducing from ten  to seven FTE; with changes made to those positions as well five  years ago, reducing staffing on a professional level, requiring a four-year degree, now down to three positions being systematically downgraded over the last five  years.  However, Mr. Miller noted that by this deliberate reduction in skill levels, it had impacted and eroded internal controls; and also reduced department response time for one-time events and requests.  Mr. Miller assured Councilmembers that the department would keep plugging away; attempting to find new areas and innovations; however, he opined that they were running out of options and places to go.

Discussion among Councilmembers and staff included discretionary options in our licensing, whether state mandated for regulation or not (i.e., massage therapists); clarification that Liquor and Massage licenses were both mandated; recognizing that the City’s role and level of involvement in the licensing process provided checks and balances in ensuring the health, safety and welfare of its citizens whether mandated or having other public purposes for legitimate business practices; in-house publication of financial materials rather than outsourcing; reducing color copy usage to reduce costs; and potential savings for major printing (i.e., Comprehensive Plan) and quality/color of draft versions versus final versions.

Community Development Director Patrick Trudgeon

Mr. Trudgeon noted that the Community Development Department was funded by user fees: building permits and other land use applications.  Mr. Trudgeon advised that, therefore, many of the decisions made by City Manager Malinen in December, and recent MVHC concerns didn’t directly impact that department as much as the other departments, with the exception of the indirect impacts that will be felt from reductions in interdepartmental cooperative efforts and assistance, affecting the department’s sustainability in maintaining its funding sources.

Mr. Trudgeon opined that staff continued to get stretched thinner, both through resources and equipment, making it more difficult for staff to perform their functions efficiently while not affecting the end work product and/or service. Mr. Trudgeon noted the staff cooperation interdepartmentally in regulating ordinances and reviewing projects, and the expertise required to accomplish that in the best interest of the City and its citizens.  Mr. Trudgeon noted that, while not indicating any obvious or quantifiable financial cost, the City Council was most aware of this when issues come before them that have not been thoroughly vetted or thought out, based on limited staff time and/or focus.

Mr. Trudgeon provided several examples:

§         The CDD partnership with the Police Department in code enforcement to coordinate and communicate effectively in dealing with consistent problem properties; and the great strides achieved over the last year.

§         The Cod’s close work with the Fire Marshal for plan and application review and comment

§         Intangibles of staff not having those resources readily available, causing sloppy plan review, with some impacts already being felt by the department

§         The difficulties on the CDD, based on General Fund tax dollars created from unsustainable market conditions and development as the economic market swung; making it more difficult for the CDD to count on that interdepartmental cooperation and coordination, and greatly impacting the reputation and work product of the CDD.

Anticipated MVHC-Specific Reduction = $ 0 – (fee supported)

Mr. Trudgeon opined that the CDD had been fortunate that 2008 was a good year, even with the current economic climate, with it being the best revenue-producing year since 2003 for building permits. However, Mr. Trudgeon anticipated that 2009 would be more challenging.  Mr. Trudgeon advised that, the CDD may need to look at continuing to fund services that don’t bring in revenue, such as Code Enforcement requiring a lot of time and minimal revenue; and while it is a high priority in the community, may need revisited.

Mr. Trudgeon addressed Economic Development activities and whether that functions would need to be reduced or eliminated; or whether a better source of revenue projects needed to be supported that would not be so subject to market fluctuations, and thus not allowing the City to realize long-term gains in the community (i.e., jobs and community development).

Mr. Trudgeon advised that CDD staff was continually trying to identify revenue sources, with recent escrow fees being charged to developers.

Mr. Trudgeon concluded by noting that even though the department may not be impacted financially on a dollar-for-dollar basis, the CDD felt the changes and challenges and realities from other departments that would ultimately impact the CDD quality and level of service for the work they produced.

City Manager Bill Malinen/Administration

City Manager Malinen advised that the Administration functions included elections, legal, City Council, Human Rights Commission, and Ethics Commission.

Mr. Malinen advised that, for the 2009 Budget year, the Administration Department had made reductions similar to other departments: reductions in the city-wide training budget; reductions in staff receiving career development education and advance training; reduced advertising; reduced professional service options.

Anticipated MVHC-Specific Reduction = $20,000

Mr. Malinen advised that reductions would be made to the City Council budget (i.e., recognition programs); and overall reductions and cost savings that shouldn’t prove too draconian; and noted that he would be delivering City Council Agenda packets on Fridays, rather than CSO’s.

Recess

Mayor Klausing briefly recessed the meeting at this time.

Outcomes of Department Discussions/Impacts

City Manager Malinen concluded that, while not getting into too much minutiae, residents and clients would begin to see and feel impacts from the current budget; requiring development of a strategic plan immediately as a first step, prior to looking at longer-term steps.

City Manager Malinen sought direction from the City Council on their preferences to respond to impending MVHC cuts, not specific, but at least indicative of the direction staff should pursue; where there was room to adjust service levels or make cuts, prior to transitioning into broader outcomes.

City Manager Malinen advised that the current hiring freeze was allowing the City to hold its own, allowing time to address other issues. Mr. Malinen noted the difficulties created when City Council’s had already set their 2009 budgets in 2008, to then be notified of pending reductions from the state; however, he advised that his rationale was the hiring freeze to allow time for things to be determined at the state level, while not impacting the City any further in the meantime.

Discussion included support for and participation in lobbying efforts by cities at the State level to support not reducing aid or housing credits; status of the 2009 budget as “bare bones” before this latest development in balancing the state budget; pros and cons of using reserves based on service reductions and long-range impacts (i.e., repairing streets now or setting aside depreciation costs for future capital purchased); and preparing for additional need for using reserves until the economy situation began improving, which may be several years away. 

Councilmember Roe opined that the state misinformed the taxpayers regarding MVHC and needed to step up to the plate in defining LGA and MVHC as they were intended, even if not politically enticing.

Councilmembers Roe and Pust cautioned the City Council to prepare for additional budget cycle needs over the next few years, and potential use of reserves during that time, based on a long-term approach versus a short-term need, and how to determine the wisest drawdown of those reserves over that long-term and foreseeable future.  Things of note that would provide long-term savings, based on staff reports and comments, included payroll accounting streamlining and reporting efficiencies; reallocation of maintenance functions and expenses in the Public Works and Parks & Maintenance departments; fee structures of the Parks function balanced with the public’s ability to pay; how to identify and utilize additional revenue sources; and identifying areas beyond core services in all departments that need to be paid for by tax dollars and/or fees, not just continuing to be traditionally provided free of charge.

Mayor Klausing noted his strong advocacy in not using reserves as a long-term funding strategy, identifying this situation as precisely the intended function of those reserves as a way to address unexpected crises.  Mayor Klausing concurred with Councilmember Roe’s comments, and opined that it was disingenuous of the state to put municipalities in the untenable position be eliminating levy funds, and then passing along further reductions to municipalities.  Mayor Klausing further opined that he may support some level of reserve fund use, but would not support that as the sole solution without considering other service or program reductions. 

Mayor Klausing complimented staff on their job of attempting to insulate citizens from the impacts; however, opined that they may have done too good of a job in providing that insulation with the public not experiencing significant property tax increases or having realistic expectations of the cost of providing services. 

Mayor Klausing advised that he would support looking at reductions that wouldn’t adversely impact the long-term health of the City, while recognizing the unfortunate need to look at increased frustrations for citizens (i.e., waiting for reports).  Mayor Klausing opined that Roseville citizens had previously expressed their willingness to pay a higher level than they are currently paying; and suggested having this same meeting in select areas of the community to achieve better dialogue from residents in the community.  Mayor Klausing further opined that there was no right answer, but that the City Council needed to hear if the citizens wanted a lower level of service based on current costs and economic conditions; or whether they supported a higher level of service and were willing to pay for it.  Mayor Klausing advised that this would provide the City Council with their marching directions accordingly based on the community’s choices.

City Manager Malinen opined that receiving such community feedback was part of what he’d envisioned for the budgeting for outcomes process; and expressed staff’s willingness to follow the City Council’s direction in obtaining that feedback.

Councilmember Roe opined that the City Council needed to hear what citizens were willing to pay for what level of service; but also needed to hear what citizens were willing to give up or not pay for, based on the examples provided by staff. 

Chief Sletner advised that, in her face to face conversations with citizens, she repeatedly heard that citizens loved their City and were willing to pay for it and their quality of life.  Chief Sletner spoke in support of meeting with the citizens; and questioned if it wouldn’t be easier to receive that feedback through a survey.

Further discussion included current City Manager-mandated actions in freezing hiring and freezing purchases of rolling stock.

Councilmember Johnson noted that he had yet to hear one department manager at the table mention whether salaries were being frozen, or if the proposed COLA was not a discussion item.  Councilmember Johnson recognized the difficulties in managing a business and difficult decisions to be faced related to employee compensation and relations; however, noted that the City Council did have control over this issue, while it may not have control over other complex and mandated government issues.

City Manager Malinen advised that the final 2009 budget levy included a 2.9% COLA to avoid impacting employees in the current economic situation, and to restructure what staff functions were being performed.  However, City Manager Malinen opined that this was a legitimate conversation, questioning how long the City could meet COLA increases in this economy; and noted that the other side would be short- and long-term ramifications to the organization itself and quality of employee it retained.

Further discussion included complications with union contracts and negotiations; how to balance layoffs and/or wages and the need for discussion and flexibility of all parties at the negotiating table; the need for the City Council to guide that discussion; and potential impacts for management staff salary freezes; and the need for public discussion of all salaries, no matter what level.

Ms. Gourlay noted several consensus recommendations from previous discussions:

§         Use reserves judiciously if at all

§         Seek maximum revenue sources

§         Avoid short-term gain reductions with long-term impacts

§         Include all salary levels in discussions

Councilmember Ihlan opined that the City should not use reserves to resolve the deficit from the reduced MVHC; since this was not a short-term problem, and would make those reserves unavailable for use in the future when they may be needed for more drastic situations.  Councilmember Ihlan opined that Roseville was in much better shape from the loss of state aid than many other communities across the state; and that given the tiny impact to Roseville citizens, she was shocked to hear Councilmembers discussing raising taxes for citizens.  Councilmember Ihlan noted that this would add further injury to citizens already dealing with unemployment, or potential unemployment issues; declining property values; and now the City was contemplating asking taxpayers to pay more taxes.  Councilmember Ihlan opined that reducing services should be the first option, rather than using reserves, since conditions should already be built into the structural budget.

Mayor Klausing concurred with Councilmember Ihlan’s reluctance to use reserve funds.  Mayor Klausing noted that the City Council had two (2) options:

1)     Spend reserves; or

2)     Reduce the Budget

Mayor Klausing spoke in support, only as a short-term measure for 2009, and only for the 2009 budget year, use of reserves.  Mayor Klausing opined that he didn’t anticipate the return by the state of MVHC anytime soon; and noted that the City needed to look at long-term structural changes.  Mayor Klausing opined that, if the City didn’t look at use of reserves or increased taxes, it needed to increase revenue through non-tax means or through elimination of services and/or programs.

Councilmember Pust opined that she hoped that discussion was geared toward budgeting for performance or outcomes; since it was impossible to take budgets that had already been squeezed out and then find another $400,000 in reductions.  Councilmember Pust, while not supporting the use of reserves, opined that in this short-term, it may be the only viable solution.  Councilmember Pust opined that the City needed a new or fresh approach, rather than continuing to take a system from the 1970’s and keep shaving off old government; further opining that it needed to be considered from the bottom line, starting from scratch, to make the numbers add up.  Councilmember Pust opined that this process discussed today, had been too depressing; and that staff needed to look at a different Chart of Accounts and start fresh, based on today’s technology, staff’s expertise; and the sophisticated citizens and clientele that the City serves.  Councilmember Pust suggested that staff and the City Council look at the process creatively from a perspective of starting a new City, and the services that City should provide.

Mayor Klausing concurred; opining that this was an exciting opportunity to do budgeting for outcomes; however, he expressed concern in realistically providing core services and quantifying those services and programs (i.e., police patrol car services versus park and recreation programming) based on priorities and essential needs.

Councilmembers concurred that the uniqueness of Roseville, its citizens, and their quality of life preferences became a subjective part of the discussion

8.         Budgeting for Outcomes Process and Support

City Manger Malinen briefly reviewed the purpose and process for budgeting for outcomes in developing a priority system for budgeting.  City Manager Malinen concurred with observations of Finance Director Miller that many function of the City are mandatory; however, he noted that others are discretionary and allow the City to cost out a level of service to be provided, then make decisions – with community input – on that level for long-term decision-making strategies of how to finance equipment replacement; how to depreciate buildings; and other fundamental and structural things.

Discussion included assumptions based on the priority level assigned to that portion of the budget or service; fixed costs versus discretionary spending; multi-tasking of current staff and how that works in the proposed budgeting process; and various tiers or levels of service and how that equated to positions (i.e., low, medium, or high levels of service) or whether the service, function, or program was needed at all.

Councilmember Pust suggested that the exercise needed in the process was to start with nothing; determine, for example, how many people it would take for police functions in a City the size of Roseville with its unique location, citizens, and issues; and without limiting that exercise based on labor and/or union constraints or current staffing levels.

Councilmember Ihlan questioned the cost for staff to do this budgeting for outcomes analysis; whether they would need consulting resources to proceed; and how to pay for staff time and consultants for that analysis, when faced with the current budgetary and time constraints.  Councilmember Ihlan opined the need for a strict cost analysis, since this could be a huge cost that the City couldn’t afford at this time and under these circumstances.

Councilmember Pust concurred with Councilmember Ihlan’s comments.

Public Works Director Schwartz opined that the current hiring freeze drastically impacted his department’s ability to deliver its programs, if the hiring freeze included seasonable staff; noting that this was also the situation with the Parks and Recreation Department and their need for hiring seasonal staff.

Councilmember Ihlan opined that staff should come before the City Council with their requests for seasonal and/or temporary positions as long as they were not permanent, long-term positions.

Councilmember Roe opined that while under a labor cost freeze, staff should be able to hire seasonal employees; however, if another position because vacant in another area, it may not indicate the same priority for City services.  Councilmember Roe supported the need to cap costs; however, noted the need to be flexible by putting resources where they were needed and removing them where they were not needed; and opined that this was not a “one size fits all” bandage.

Councilmember Pust questioned where salary savings were being reallocated at this time; with Finance Director Miller responding that they were being used to meet other areas that had been other needs.

Councilmember Johnson noted that prior City Councils had attempted to keep taxes to a minimum; and questioned if our expectations were too high; or if the standard/quality of living in Roseville is too high.  Councilmember Johnson noted that, when responding to public comment at Truth in Taxation meetings, and expenditures for rolling stock replacements, this conversation should be anticipated, whether due to the MVHC reductions or not.  Councilmember Johnson opined that the expectations of the citizens needed to be at the forefront of these discussions, and their expectations, to allow the City to provide responsible decision-making for long-term growth of the City, rather than knee-jerk reactions to crises.  Councilmember Johnson noted that this City Council was charged with paying it forward to future generations, as well as the current financial and political environment.

Parks & Recreation Director Brokke asked that Councilmembers provide direction to staff to move forward with reductions or adjustments; but that the current situation in limbo not continue, based on upcoming seasonal issues and programming; and staff’s intent to review everything for long-term impacts.  Mr. Brokke opined that the City’s Parks and Recreation Commission served as a voice in the community and represented citizens well.

City Manager Malinen reiterated that this is an opportunity for the City Council to make a decision: whether they wished to use any reserves; or whether cost-saving measures should be spread to departments as indicated and prorated accordingly.

Mayor Klausing spoke in support of a combination of the two options.

Councilmember Roe concurred to a combination of the two options for the 2009 budget year.

Councilmember Pust recognized the need that a decision was needed now; however, she noted that the City Council had just been introduced to a myriad of other concepts and possibilities, but that revenue producing options had not been provided.  Councilmember Pust opined that, if it came down to it, and there were no other options, she would support the use of some reserves; however, if she could find another way to achieve that result without using any reserves, that would be her preference.

Mayor Klausing concurred.

Councilmember Ihlan noted the need for formal City Council action.

Councilmember Roe noted that any action would require an amendment to the City budget; however, he opined that, regarding staffing decisions, the City Council would need to address them as they came forward; and that a small use of reserve funds may be needed in those particular cases.  Councilmember Roe opined that, while some decisions may be more time-sensitive, there may be others that could be postponed or delayed.  However, Councilmember Roe noted that the City Council would need to come to a decision-making point and provide direction to staff based on the available options, reserves, and/or potential revenue sources.

Councilmember Johnson spoke in support, on a one-year basis, for limited use of reserves, following additional discussion on specific and overall impacts.

City Manager Malinen admitted that he had come to the City unaware of the volatility of both LGA and MVHS; and advised in the future, as the City restructured its budget process, he would recommend that it be utilized, when realized, as part of the City’s capital outlay program, but not depended on for the structural budget.

Discussion included how this decision-making would change the face of the community; impacts to interdepartmental coordination and community events; how to pursue productive opportunities for enhancing or creating intergovernmental cooperation; need for re-engaging as a City Council and staff in a similar setting as today, not just reacting at a formal City Council meeting; additional education outside meeting formats for Councilmembers as they consider this decision-making and budgeting process; whether Council Work sessions are indicated; and additional opportunities for constructive interaction and discussion.

Recess

Mayor Klausing briefly recessed the meeting at approximately 12:00 p.m. for lunch and reconvened at approximately 12:25 p.m.

7.         Long Range Financial Modeling

City Manager Malinen briefly reviewed the previously-distributed ten (10) year Capital Improvement Plan; and staff’s preparation of a draft 2010-2019 Financial Plan for the City, provided at this meeting for the City Council’s first review.  City Manager Malinen noted that obviously, adjustments would be needed along the way, but that this provided a more long-term perspective based on known assumptions; identified challenges; recognized changes in expense/revenue cycles; and highlighted or re-emphasized some projected needs.

City Manager Malinen summarized enterprise operations and general purpose operations; noting that overall the plan represented expenditures of approximately $100,000 million, with projected revenues of $60 million; creating the reality of an unsustainable operation.

Finance Director Miller reviewed in more detail the various components contained in the draft 2010-2019 Financial Plan; areas of focus requiring the most immediate attention; assumptions and variables based on current trends, projected revenue growth (fee-based and tax based); costs for labor, materials, supplies, other labor, and equipment; and historic factors.  Mr. Miller noted that, factoring in all the assumptions and historical trends, in order to close the gap in revenue and expenditures, and solely by increasing fees or property taxes, impacts to property taxpayers would see property taxes increase annually by 17% over that ten year period.  Mr. Miller noted that increases on a typical single-family home would be $192 annually over that ten year period.

Discussion among Councilmembers and staff included other inflationary assumptions; the ten  year plan for sustainability, followed by the potential for future inflationary tax and fee increases; need to consider various options or corrections to “business as usual;” comparisons of current budget trends and situations versus the budgeting for outcomes approach and changes to the business model, operating decisions and assumptions; and recognizing that the budgeting approach will initially provide more workload for directors and their departments as they begin the process.

City Manager Malinen asked that, before staff undertook something like the proposed budgeting for outcomes, that the Council was supportive as a whole to committing to that process; or to identify their reservations at this time.

Councilmember Pust sought clarification as to the role the City Council would play; and how to achieve more of a teamwork approach between the City Council and staff in achieving goals.

City Manager Malinen advised that staff needed community and City Council interaction to provide direction to staff to get to a decision-making point on various desired budget outcomes; additional opportunities for this type of dialogue and interaction on a regular basis; and the need for staff to begin putting information together to share with the City Council and citizens for informed discussion and decision-making. City Manager Malinen noted the need to keep the community involved from inception to allow their ongoing input, and so the end results would not come as a surprise; recognizing that there will be changes for staff, citizens and the City Council.

Further discussion included options and outreach tactics to obtain input from citizens; validity of having outside assistance in the process, given the large undertaking represented; and the availability of someone to provide consistent analysis of costs for programs/services and a methodology that is cost-effective.

Councilmember Johnson questioned whether a Finance Commission, utilizing people already in the community, was viable; opining that there was much expertise in the community, and that there may be people with that financial background and expertise who would be willing to serve the long-term budgetary process in such a volunteer capacity.

Councilmember Roe suggested a steering committee role to initiate the process and contribute their expertise accordingly, while being representative of the community as well.

Councilmember Johnson opined that the more the citizens were empowered, the more beneficial for all.

Councilmember Ihlan reiterated her previous comment, that this was something that needed formal City Council approval; and opined that staff should not assume that, based on today’s discussion, that she was supporting the budgeting for outcomes process without a detailed review of costs; staff time; costs and qualifications of potential outside consultants; how to justify spending on something like this, while looking to reduce programming/service levels; and spoke to the need to look at other alternatives.  Councilmember Ihlan spoke in support of seeking public input.

At the request of Ms. Gourlay, Finance Director Miller, provided a brief summary of outcome based budgeting, by first deciding what your services should be, then deciding how to fund those services to get there and at what level or threshold those services should be provided; and how the model could be adjusted based on changing community needs and expectations.

Additional discussion included the potential for each area or department having three (3) different levels of service with a decision made on which level of service would be delivered; and looking at the best use of resources for specific functions (i.e., people/money).

Councilmember Roe shared concern about how much it may cost this year; however, opined that he liked the concept.

Mayor Klausing opined that the process offered potential possibilities; and it was obvious that “business as usual” was not a sustainable option. 

Councilmember Roe opined that, if due to the short-term constraints and lack of funding at this time, the City Council should consider this for the 2010 budget process; while addressing immediate budget issues before the City at this time.

Public Works Director Schwartz opined that time was running short to implement this type of analysis for normal department budget submittals in May/June of 2009 for the 2010 budget cycle; however, expressed his interest in seeing numbers from a consultant to meet such a schedule and how much staff input would be required for assisting an outside consultant; how to determine the true cost of providing services, based on comparisons to other communities; and how often ad hoc committees or commissions could bog down rather than enhancing or improving the process.

Police Chief Sletner opined that she continued to struggle with the process and overall idea; noting that most departments didn’t have just one person doing one specific thing; but that they interacted and impacted other departments as well.  Chief Sletner expressed frustration in attempting to define dollar amounts for specific services; and her lack of interest in current policing from a reactionary position rather than proactively.

Councilmember Ihlan excused herself from the meeting at this time; approximately 1:00 p.m.

Discussion ensued regarding resource allocations/decision-making for each department, activity or service; how to strike a balance between revenue and expenses by prioritizing the various components; benchmarking and tracking performance measurements for some services, while other functions (i.e., tracking statistics) not as amenable to such an approach; how to standardize the process within each department, or whether the City had that internal expertise to provide that analysis; and how functions impact allocations.

Mayor Klausing summarized his thoughts by indicating his interest in pursuing whether budgeting for outcomes would work for the City; noting his interest in reviewing current functions and traditional services and practices; and to determine if such a method would prove cost-effective and serve to break the City out of the current path which was not sustainable.

Councilmember Pust opined that her position was that budgeting for outcomes was great process when not working with a staff-driven model; noted the need to look to the experience of other local units of government in providing their services and programs, and expressed her lack of interest in having this discussion again at the same level, that the City Council needed to “fish or cut bait.”

Community Development Director Trudgeon opined that while he had no strong opinion as to whether the budgeting for outcomes process be done in-house or with outside consultants; he emphasized the reason for today’s discussion:

1) Lack of resources; and what are levels of service we should provide, no matter which process is used; and

2) The current staff frustrations due to the many uncertainties. 

Mr. Trudgeon advised that staff would make adjustments when they knew what was required of them.  Mr. Trudgeon opined that, when cuts were made at the last meeting of the year at the Council level, it put all departments in a tough position to respond effectively.  Mr. Trudgeon asked that a process be designed with a defined target, providing for some continuity, and to address what was important to the community for programs and services.  Mr. Trudgeon advised that, while staff may not like every decision, at a minimum that would provide more certainties and would better serve staff and the community.

Finance Director Miller opined that, from his perspective, Department Heads acknowledged that they couldn’t be great at everything they did; however, they wanted the City Council to tell them what they should be great at.  Mr. Miller opined that, in his seven (7) years with the City, the City Council had never defined their priorities for the community or for staff to pursue.

Ms. Gourlay summarized some of the consensus items, including: the need for community input and dialogue; need to determine what process to pursue and the timing for when to pursue it, whether immediately or for next year’s budget; and how to address long-term decision-making and planning.

Councilmember Johnson opined that the short-term approach identified itself; and that the Council consensus supported budgeting for outcomes in the long-term, with the need to identify an appropriate vehicle to get community input.  Councilmember Johnson opined that this community input part of the process needed to be the area in which the City Council and staff excelled in order to productively and concisely identify their expectations.

Councilmember Pust opined that the Imagine Roseville 2025 community visioning process was not that old; and provided some community input, indicating that everyone wanted everything, but they didn’t want to pay for it.  Councilmember Pust opined that the community discussion needed to be reframed with financial impacts addressed.  Councilmember Pust suggested, with Councilmember Johnson concurring, that every meeting include an agenda item to address cost allocations for services and programs; and that that part should have been included in the community visioning discussions and process.

Councilmember Roe concurred with Community Development Director Trudgeon’s comments; acknowledging impacts to staff with last-minute decision-making after the economy fell apart in the last quarter of 2008.  Councilmember Roe opined that, given the abbreviated time frame, it didn’t allow for the best decision-making.  Councilmember Roe opined that, in these times of economic uncertainty, from the beginning to the end of discussions throughout 2010, both the optimistic and pessimistic points of view needed to be considered and heard, so that there were no surprises due to a lack of understanding in making those decisions.

Mayor Klausing spoke in support of a more realistic, but hybrid budgeting process that would:

1) Allow us to focus on what services we value;

2) Take a different look at how we provide those services; and

3) Determine how best to provide revenue source generation – (i.e., IT)

Ms. Gourlay observed the different perceptions of an internal versus an external process, impacting people’s trust in the process, and the public’s perception of the City Council’s credibility.

9.         Wrap-up with Lunch

City Manager Malinen refocused discussion on City Council directive in staff seeking opportunities to engage neighboring communities, their individual departments, or other agencies to determine cost-saving opportunities; and whether staff preparation of a resolution indicating that City Council support would be helpful, considering potential impacts to political turf issues.

Mayor Klausing spoke in support of seeking feedback from others.

Councilmember Roe spoke in support of staff interactions with other entities; rather than being imposed by someone, and supported those ideas coming from departments to the City Council.

Councilmember Pust opined that, while Roseville was a very unique community, she doubted that today’s discussion was unique; and noted that value of other perspectives and ideas.

Councilmember Johnson spoke enthusiastically for partnering opportunities.

Mayor Klausing concluded Council comments regarding budgeting for outcomes, including:

§         Concerns with cost and timing

§         Observations that it wouldn’t work this year, but would like to look at it again

§         Need to review services provided, even if traditional or historical, and determine a current service level

§         Determine a more formal process for community input, whether through neighborhood meetings as logistically applicable away from City Hall campus

§         Limiting past budget process impacts by focusing on the budget process throughout the year

§         Agreement that this type of discussion on a more informal level outside of meeting times was productive for both the City Council and staff rather than only during the budget presentations by departments in August

§         Appreciation for staff’s honest and insightful comments and Councilmember’s desire to raise the trust level while having discussions whether in agreement with each other or not

§         Desire to meet again informally within the next 60-90 days, and allowing for public input, with the goal of continuing teambuilding and teamwork.

Ms. Gourlay encouraged Councilmembers to be clear on their purpose in seeking public input; defining cost for providing services, not cost versus service; to avoid frustrations of the public from their expectations based on the City’s realities.

Councilmembers Roe and Johnson suggested that the City Council should seek input on the proposed financial plan for 17% annual tax increases based on realities.

Conclusions

City Manager Malinen advised that he anticipated the following steps:

§         Staff would begin to bring more specific proposals to the City Council for their ongoing feedback on some level of reduced spending, and equated to some level of potential reserve fund use.

§         Each department would look to their staff, the City Council, public comment for input as it became apparent that services/programs may not be continued at their current levels.

§         Each Council Agenda would include a section entitled, “Budget Adjustment Discussion.”

§         For public information, summarize each departments listed options for public information.  Note:  Finance Director Miller cautioned that, since some of those options included existing City employees and their employment status that care be given to how notice was framed. 

§         Interest of the City Council in hearing from employees for their input and perspectives and creative ideas for resolution

§         Proceed with the concept of budgeting for outcomes, with the first step to determine costs for outside assistance.  Note:  Councilmember Pust asked that more sources be brought to the table related to the value of that expertise and their cost, and how much internal staff would need to be involved with or whether it would better serve the process to handle it internally.

§         Anticipating 2-3 months for staff to prepare cost functioning data

§         Anticipating the entire initial process to take 6 months from costing to priority setting.

Regarding seeking outside resources, the consensus of those Councilmembers present was not opposed.

City Manager Malinen continued with his interpretation of today’s meeting conclusions, including:

§         Support for working with others in cooperative and shared services, using creativity, with any options presented formally to the City Council for their approval

§         Pursue neighborhood meetings and public outreach opportunities for the City Council and staff to interact with citizens regarding budget issues

§         Introduce the CIP to the public based on it’s impact on the direction of the City and the need for public input

Councilmember Johnson thanked staff and Ms. Gourlay for their reports; and expressed his appreciation to staff for their candid comments and observations, as well as their time.

10.      Adjourn

          The meeting was adjourned at 1:35 pm.