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HomeMy WebLinkAbout2026/07/06 - ADMIN - Minutes - City Council - Study SessionOfficial minutes Special study session St. Louis Park, Minnesota July 6, 2026 The meeting convened at 6:33 p.m. Council Members present: Daniel Bashore, Sue Budd, Tim Brausen, Paul Baudhuin, Jim Engelking (arrived 6:50 p.m.), Mayor pro tem Yolanda Farris Council Members absent: Mayor Nadia Mohamed Staff present: city manager (Ms. Keller), city attorney (Mr. Mattick), engineering director (Ms. Heiser), legislative and grants analyst (Ms. Ferris), deputy city clerk (Ms. Scott-Lerdal) Guests: Dr. Carlondrea Hines, Patricia Magnuson, Jim Longevin, Dr. Quinnel Cooper and Ashley Sukhu of the St. Louis Park Public Schools Discussion Items 1. St. Louis Park School District Community Engagement Regarding Referendum Ms. Keller introduced representatives from St. Louis Park Public Schools, noting the presentation was educational in nature with no policy questions before the council. Dr. Hines, Superintendent of St. Louis Park Public Schools, opened by thanking the community for its support of prior referendums in 2018 and 2022. She outlined the district's mission and core values, noting the strategic plan's emphasis on centering student voice, academic excellence and cultural responsiveness. Dr. Hines referenced favorable statewide climate survey and district-wide parent survey data: 90% of respondents believed the district prepared well-rounded students, 86% viewed technology as important to learning, 84% believed the district was working toward a culturally responsive environment. She also noted the district's recognition as one of the 100 Best Communities for Young People for six consecutive years. She reported a 90% on-time graduation rate. Ms. Magnuson, Executive Director of Business Services, presented the district's financial overview. She emphasized a long track record of strong fiscal oversight, monthly school board review of financial data and a finance advisory committee active from September 2025 through April 2026. She noted that over many years, the district reduced spending to grow its fund balance, which she characterized as fiscally prudent stewardship. Ms. Magnuson explained that state funding per student had not kept pace with inflation, leaving a growing gap in buying power, and that 85% of the general fund goes to salaries and benefits. She described two voter-approved funding mechanisms available to districts beyond the general fund: a capital projects levy for technology and a bond issue for deferred maintenance. Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45 Special study session minutes - 2 - July 6, 2026 Mr. Langevin, Director of Facilities, described the deferred maintenance situation. He explained the district receives approximately $1 million per year in Long-Term Facility Maintenance funds for ten sites totaling roughly one million square feet, which he described as insufficient for major needs. He outlined the two primary projects in the ballot question: replacement of three boilers at the high school at an estimated cost of $30 million, and replacement of two boilers and related piping at the middle school at an estimated cost of $20 million. Mr. Langevin noted the existing boilers are original to the buildings and 70 years old, that maintenance costs spiked dramatically in the most recent winter, and that staff worked weekends to keep systems operational. He described the conversion from steam to high- temperature water systems, noting efficiency would improve from 50–60% to 90–98%. He also explained that approximately two miles of pipe at the high school would be replaced, citing mineral buildup from hard water that had reduced a three-inch pipe to less than one inch of capacity. He added that two 10,000-gallon underground fuel oil tanks at each school would be removed as part of the project, characterizing them as an environmental hazard, and that the district would transition to firm gas. Ms. Magnuson then addressed the technology levy component. She showed that the district's current capital projects levy of $4.2 million is among the lowest of neighboring districts, with Hopkins at $15.5 million, and that even on a per-student basis the district spends $270 less than comparable districts. She explained the request was for a 10-year technology levy to replace and increase the current levy, with funding directed toward network security, infrastructure and student safety systems, and that law requires any reserve to be held exclusively for technology purposes. Dr. Hines summarized the ballot question: a single question covering a $50 million bond issuance for the boiler and piping work and a revoke-and-replace capital projects levy, raising the levy from 4.287% to 10.127%. She noted the tax impact on a $400,000 home would be approximately $30 per month or $360 per year. Council Member Baudhuin asked what disruption the boiler replacement work would cause for students. Mr. Langevin responded that work would be conducted primarily during summers and school breaks, and that staff would be present during the school year to ensure heating systems remained operational without interrupting instruction. Council Member Baudhuin asked whether the 2022 bond included gender-inclusive restrooms. Mr. Langevin confirmed that work had taken place in 2022 and the district was continuing to look at inclusive restroom options. Council Member Baudhuin asked whether ritual cleansing facilities for Muslim students had been considered. Mr. Langevin acknowledged that was being looked into as it came more to the forefront. Council Member Baudhuin asked about broader advocacy efforts to increase state and federal funding for schools. Dr. Hines responded that the district visits the state capitol annually to share its story with legislators and that community voices amplify those efforts. She noted a Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45 Special study session minutes - 3 - July 6, 2026 permanent school funding proposal would appear on the November 2026 ballot but projected it would yield only approximately $200,000 for the district. Council Member Baudhuin asked whether city staff could develop talking points demonstrating how inadequate state and federal funding drives local property tax increases. Ms. Keller noted the subsequent legislative session update would address that topic with the city's advocacy team. Council Member Baudhuin asked how residents could obtain yard signs in support of the referendum. Ms. Sukhu clarified that yard signs are associated with a campaign independent of the school district, which by law may only provide neutral, educational information. Council Member Budd asked whether a simple majority is required for the referendum to pass; Dr. Hines confirmed that it is. Council Member Baudhuin asked about the district's fund balance target. Ms. Magnuson responded that the district targets 6%, which she described as a vulnerable position insufficient to withstand another pandemic, while noting the city targets 45%. Council Member Baudhuin asked how long the boiler and piping replacement project would last once funded. Mr. Longevin responded the piping should last 50–70 years, with a construction timeline of approximately 3–5 years. He indicated the middle school would begin the following summer after a positive vote, with the high school starting the summer after that. Council Member Baudhuin asked about the life expectancy of the new boilers. Mr. Langevin responded 20–25 years and noted annual maintenance costs per boiler would drop from $20,000–$25,000 to approximately $1,500, with a projected 7–10-year return on investment. Council Member Budd asked whether geothermal energy had been considered. Mr. Langevin explained that geothermal typically requires simultaneous replacement of heating and cooling systems, and that the cooling systems were replaced in the 2015–2017 referendum with 10–15 years of life remaining. He stated it would not be fiscally responsible to replace functioning chiller units, but that the new piping and boiler systems would be designed to accommodate a geothermal conversion in the future when the chiller units reach end of life. Mayor pro tem Farris thanked the district representatives for their presentation and discussion. 2. 2026 Legislative Session Wrap-Up Ms. Keller introduced Momentum Advocacy representatives Ms. Frederiksen, Ms. Nesse and Ms. Fadahunsi to provide the annual legislative session recap. Ms. Frederiksen provided an overview of the 2026 session. She noted the House was tied 67– 67, making this a policy and bonding year rather than a full budget year. She stated the legislature accomplished more than anticipated given the split chamber and election-year dynamics. She explained that roughly $2–3 billion remained on the bottom line from the 2025 budget, intentionally preserved to address a structural deficit projected for the 2027 budget Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45 Special study session minutes - 4 - July 6, 2026 cycle, with a large rainy day fund also left untouched. She described a current projected balance of $377 million for FY2028–29 while cautioning that federal uncertainty remains significant. Ms. Nesse added that the November 2025 and February 2026 state budget forecasts did not incorporate any assumptions related to HR 1 compliance, meaning the fiscal picture does not yet reflect anticipated federal impacts. Ms. Frederiksen described HR 1, the federal reconciliation bill passed in 2025, as a major source of uncertainty, particularly through Medicaid cuts whose implementation was largely delayed until 2027. She used the SNAP program as an example, noting the state used session funds to shore up the administrative side of SNAP but not benefits to recipients. Ms. Frederiksen reported that $5.1 million was secured in the bonding bill for the Oxford Street and Louisiana Avenue Improvements project, combined with a prior smaller federal appropriation. She credited the decision at the start of session to consolidate advocacy weight behind that project and acknowledged the city's legislative delegation for holding to the funding amount through bonding negotiations. Ms. Nesse addressed congregate care. She explained that in 2024 the legislature revoked cities' authority to inspect and license certain group homes, consolidating that authority at the state level. A coalition of cities, particularly those in the northwest metro with the highest concentration of congregate care facilities, spent two years attempting to restore local authority. While full reinstatement did not advance, several provisions did pass in the final Human Services bill: MDH or DHS must notify cities when a new license is issued; the commissioner may grant cities inspection authority; co-location of adjacent properties under the same license is prohibited; and an interagency agreement between MDH and DHS now requires the two agencies to coordinate on licensing and assess impacts on emergency response costs for cities. Ms. Nesse noted that a 650-foot separation requirement did not advance. She described the outcome as meaningful progress on a difficult and emotionally charged topic, noting that bad actors in Golden Valley and St. Louis Park had drawn legislative attention from Senator Rest. Ms. Keller added that St. Louis Park has fewer such facilities than exist in other suburban communities but emphasized two concerns shared with those communities: the inability to inspect homes for safety and the volume of emergency calls generated by some facilities, which she described as potentially overwhelming for local emergency response systems. Ms. Nesse addressed housing, land use and zoning. She noted the “missing middle” bill appeared in several forms but did not advance in either chamber. She described support and opposition as strong and bipartisan: climate-focused and density-oriented members align with individual property rights advocates on some points, while local control advocates oppose preemption from another direction. Council Member Baudhuin asked whether the divide was more geographic or ideological. Ms. Nesse responded it was more ideological, with a climate and density-focused caucus on one side and a personal property rights caucus on the other. She noted House Republicans framed Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45 Special study session minutes - 5 - July 6, 2026 their version as a starter home bill while the DFL version emphasized climate and affordable housing. Ms. Frederiksen addressed EMS local designation authority, noting it did not advance significantly, partly because public safety issues were overshadowed at the Capitol by other matters including Operation Metro Surge. She grouped LRT public safety funding in the same category. Ms. Nesse noted that the Met Council's receipt of a new metro area sales tax revenue stream beginning in 2023 had made any additional legislative funding to that body subject to heightened scrutiny, and suggested future advocacy on LRT public safety might be better directed at a Met Council push or a legislative directive to that body. Ms. Frederiksen addressed TIF modifications, city-county assessing resolution and paid family medical leave. She noted the Senate tax bill, which the city supported, included meaningful provisions but did not include TIF modifications due to Senator Rest's consistent opposition to TIF. She described the tax bill as ultimately narrow. She explained that paid family medical leave modifications and municipal aid became linked in final negotiations: Republicans withheld municipal aid unless they received paid leave modifications, while House DFL members refused any changes to paid leave. The two items failed together despite having no formal connection. Ms. Frederiksen described the coalition of cities that formed rapidly at the start of the legislative session in response to Operation Metro Surge. She credited city managers with volunteering substantial time to build the coalition, which grew to include cities beyond the metro area including Wilmar. She stated the coalition became a major voice at the Capitol, and that testimony from coalition members resulted in municipal aid being included in the Senate tax bill. She described three advocacy tracks: constitutional rights and federal overreach, public safety costs, and resident impacts including food insecurity, housing instability and reduced access to childcare and schools. She noted the coalition provided dollar amounts on costs to cities that legislators and reporters relied upon. Ms. Frederiksen reported that while municipal aid did not ultimately pass, the coalition's work yielded a $10 million appropriation to food shelves and food banks. Ms. Nesse described the housing bill as a genuine bright spot, passing May 14, 2026, with $165 million in one-time funds drawn from Minnesota Housing Finance Agency interest earnings rather than the general fund. She highlighted a $40 million allocation to the Family Homelessness Prevention and Assistance Program (FHPAP), funded through the Tyler settlement—a case in which Hennepin County foreclosed on a woman's condo illegally. She explained FHPAP funds are highly flexible, usable for first and last month's rent, rental or mortgage assistance and moving costs. She noted Hennepin and Ramsey counties had changed their rules to remove the prior requirement of an eviction filing before accessing rental assistance. She stressed the funds must be expended by year-end and encouraged the city to alert residents and housing providers, as distribution was expected to begin around August or September 2026. Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45 Special study session minutes - 6 - July 6, 2026 Council Member Baudhuin asked how much “red tape” was involved in accessing FHPAP funds. Ms. Nesse responded that documentation of need is required and that the program is highly regulated and audited with few findings. Council Member Budd asked whether the compressed timeline created fraud risk. Ms. Nesse responded that the documentation requirements on the front end provide meaningful protection, and that unlike Medicaid billing programs FHPAP has significant oversight requirements. Ms. Frederiksen noted the legislature also passed an Office of Inspector General with real enforcement authority and strong bipartisan support, describing it as similar in independence to the legislative auditor. She characterized it as a meaningful response to concerns regarding fraud that had dominated political debate. Ms. Fadahunsi provided a federal legislative overview. She noted the 119th Congress has operated with Republican majorities in both chambers. She described HR 1 as having passed via reconciliation in 2025, with implications for Medicaid, student loans and DHS funding beginning to be felt at the state and local level. She referenced the DHS partial shutdown from February through April 2026, which was most visible through TSA disruptions but did not cause significant direct impact to the city. Ms. Fadahunsi reported that $250,000 was secured through Congresswoman Omar's office via the continuing resolution. She stated that for fiscal year 2027, the city submitted congressional directed spending requests for Oxford Street/Louisiana Avenue Improvements project and Minnetonka Boulevard to all three delegation offices. She indicated Congresswoman Omar and Senator Klobuchar submitted Minnetonka Boulevard for advancement, and that Senator Smith's office had not yet confirmed, though she expected both Senate offices would align. Ms. Fadahunsi also noted the city applied for a BUILD grant through the Department of Transportation and received letters of support from all three congressional offices, with a decision pending. She reported Congress was in recess and outcomes on both the directed spending and BUILD grant were expected before the August 2026 recess. Ms. Fadahunsi described the Road to Housing Act as having passed Congress on a bipartisan basis but not yet signed by the President, who was conditioning action on passage of the SAVE Act related to elections and voting. She noted this left housing-related funding that would trickle to state and local levels in limbo. Ms. Frederiksen offered a brief outlook on the November 2026 elections. She noted over 22% of legislators are retiring or running for other office, meaning at least one-quarter of the legislature may be new. She predicted the House would flip DFL, citing district maps and the federal political environment, while acknowledging the fraud issue in Minnesota as a unique local factor. She described the Senate as more competitive given a favorable Republican map but assessed a DFL trifecta as the most likely outcome. She identified anticipated session priorities for 2027: gun violence prevention, economic assistance for communities, statutory protections for faith and community spaces, direct Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45 Special study session minutes - 7 - July 6, 2026 appropriation reform, small business assistance, childcare financial supports, mental health reform and health insurance reform. She noted $750 million directed to HCMC comprised $250 million in direct funds and a $500 million reserve fund accessible to other hospitals facing financial strain from HR 1 impacts. Ms. Frederiksen flagged a $90 million Renewable Development Account as a significant opportunity for next session, noting it is dedicated to renewable energy projects and was not distributed this session due to a disagreement between House and Senate chairs. She noted geothermal projects had been among those seeking those funds. Council Member Budd noted that some city sustainability accounts had been depleted due to program success and asked whether the RDA represented a relevant opportunity. Ms. Frederiksen confirmed it did. Ms. Keller closed by describing the summer process: city staff would participate in League of Minnesota Cities and Metro Cities policy committees; council members were welcome to attend those sessions with advanced coordination. Momentum Advocacy would work with staff through the interim to develop St. Louis Park's 2027 legislative priorities for council review. Written Reports 3. Good Governance System Kick-Off 4. Disposition of Public Land Adjacent to 2754 Xenwood Avenue South - Ward 1 The meeting adjourned at 8:14 p.m. ______________________________________ ______________________________________ Melissa Kennedy, city clerk Nadia Mohamed, mayor These minutes were created with the assistance of a generative AI transcript service, then edited and finalized by a city staff person. Docusign Envelope ID: A10D92F0-4C13-8349-8148-91CB7E159C45