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HomeMy WebLinkAbout2012/10/22 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA OCTOBER 22, 2012 6:30 p.m. CITY COUNCIL STUDY SESSION – Council Chambers Discussion Items 1. 6:30 p.m. Future Study Session Agenda Planning – November 5 & November 13, 2012 2. 6:35 p.m. Fiber Optic Study 3. 7:35 p.m. Friends of the Arts Annual Report and Update 4. 8:20 p.m. Project Update – Highway 100 Reconstruction Project 5. 8:50 p.m. Zoning Ordinance Amendment Regulating Outdoor Lighting 6. 9:05 p.m. Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering 7. 9:20 p.m. City Manager’s 2012 Performance Evaluation 9:30 p.m. Communications/Meeting Check-In (Verbal) 9:35 p.m. Adjourn Written Reports 8. September 2012 Monthly Financial Report 9. Third Quarter Investment Report (July - September, 2012) 10. Open to Business Program Update Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting. Meeting Date: October 22, 2012 Agenda Item #: 1 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Future Study Session Agenda Planning – November 5 and November13, 2012 RECOMMENDED ACTION: The City Council and the City Manager to set the agenda for the Special Study Session scheduled for November 5 and the regularly scheduled Study Session on November 13, 2012. POLICY CONSIDERATION: Does the Council agree with the agenda as proposed? BACKGROUND: At each study session approximately five minutes are set aside to discuss the next study session agenda. For this purpose, attached please find the tentative agenda and proposed discussion items for the Special Study Session scheduled for November 5 and the regularly scheduled Study Session on November 13, 2012. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. Attachment: Future Study Session Agenda Planning – November 5 and November 13, 2012 Prepared by: Debbie Fischer, Office Assistant Approved by: Nancy Deno, Deputy City Manager/HR Director Study Session Meeting of October 22, 2012 (Item No. 1) Page 2 Subject: Future Study Session Agenda Planning – November 5 and November 13, 2012 Special Study Session, November 5, 2012 – 6:45 p.m. Tentative Discussion Items 1. Sidewalks and Trails Update – Public Works (45 minutes) Update Council on the public process and input received along with proposed activities and next steps associated with approving the Pedestrian and Bicycle System Implementation and CIP Plan. End of Meeting: 7:30 p.m. Study Session, November 13, 2012 – 6:30 p.m. Tentative Discussion Items 1. Future Study Session Agenda Planning – Administrative Services (5 minutes) 2. Community Recreation Facility Task Force – Parks & Rec (45 minutes) Members of the Community Recreation Facility Task Force will be present to talk about recent discussions and progress thus far. 3. SWLRT DEIS – Community Development (60 minutes) Review of the Southwest Light Rail Transit Draft Environmental Impact Statement (SWLRT DEIS) and discussion of draft comments to be submitted to the Hennepin County Regional Rail Authority (HCRRA). 4. Highway 7 / Louisiana Update – Public Works (30 minutes) Update Council on R/W Acquisition and Billboard Relocation Activities, Staging and Traffic Detour Plans, Business Owner Concerns and Mitigation Efforts, Project Schedule, and Estimated Costs related to this project – Project No. 2012-0100. Communications/Meeting Check-In – Administrative Services (5 minutes) Time for communications between staff and Council will be set aside on every study session agenda for the purposes of information sharing. Reports 5. Policy for Spending Lodging Tax Revenue 6. Hearing Officer Appointments – Administrative Penalties Program End of Meeting: 8:55 p.m. Meeting Date: October 22, 2012 Agenda Item #: 2 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Fiber Optic Study RECOMMENDED ACTION: The purpose of this discussion is to (1) present findings and recommendations from the current fiber optic study that was authorized by Council at its September 19, 2011 meeting; (2) clarify information presented in the study and address Council questions; and (3) determine next steps, if any, Council would like to direct relative to the study’s recommendations. CTC study consultant and President Joanne Hovis will be present to guide Council through the session. Members of the Telecommunications Advisory Commission (TAC) and Fiber Optic Study Task Force (which includes TAC members) may also be present. Both the TAC and Task Force will have an opportunity to meet with Joanne Hovis and ask final questions on October 22 prior to the Council meeting. In the meantime, the TAC considered the draft report at its October 10, 2012 meeting and approved a motion (6-0) recommending Council proceed with the recommendations as proposed by CTC in the report, “Building on Fiber Success: A Strategy for Enhancing Broadband in St. Louis Park.” Participation of both the TAC and Task Force are considered to be vital components of both the study itself and the public participation process. POLICY CONSIDERATION: Council last met on this topic at its January 9, 2012 meeting. At that time, Council affirmed its desire that the study continue its focus on the original policy questions, and the Statement of Work designed to do so. As a reminder, it is fully expected that findings from this initial study may yield the request for more in depth analysis on areas of Council interest. There have been two umbrella policy questions since the study concept began: (1) What else, if anything, might be done with the existing City-School-LOGIS owned fiber optic network, beyond existing institutional uses? (2) Should the City provide any requirements or incentives to include fiber optic facilities in new construction or significantly remodeled buildings or other assets? The deliverables from this study include responses to these two larger questions and sub- questions along with analysis, opportunity and risk identification, and recommended follow-up steps. BACKGROUND: This item is presented to Council as a follow-up to Council’s approval of the consultant agreement at its September 19, 2011 meeting. In addition, Council considered this item at its study sessions of September 12, 2011, and June 14 and December 6, 2010. Most recently, Council considered this at its January 9, 2012 study session, where CTC study consultant Joanne Study Session Meeting of October 22, 2012 (Item No. 2) Page 2 Subject: Fiber Optic Study Hovis was present. All related reports were provided on January 9, 2012, especially for newer Councilmembers, but also as a refresher for all on Council. In support of addressing the policy questions noted above, the consultant and City developed a Statement of Work for this study. Council reviewed that at its January 9, 2012 meeting as well. Two of the major tasks – meeting with public sector stakeholders and with private sector stakeholders (including incumbent service providers) – consumed the bulk of time at the beginning of the study. Data gathering and analysis dominated the rest of the study period from late 2011 to the present. ANALYSIS AND RECOMMENDATIONS: The entire study completed by CTC exceeds 100 pages in length. It contains very helpful details and background in support of the findings and recommendations. The report is certainly available to Council members who may be interested in the deeper details. For purposes of this meeting, the Executive Summary is attached. It contains a briefing on the study’s major findings and recommendations. The summary will be the focus of the study session discussion where the CTC consultant can present and clarify findings, address questions, and help guide Council in determining optional next steps. In order to prepare the Council, outlined below is a summary of the study background, findings, survey results, and recommendations. Project Background and Goals The City of St. Louis Park seeks to advance community connectedness and productive use of technology; to ensure that the jointly-owned City–public school district-LOGIS broadband infrastructure is adequate to meet future educational and governmental needs; and to explore options for additional community benefits. The City approaches strategic opportunities with the idea that it needs to constantly anticipate, innovate, and adapt. This study focuses on identifying how St. Louis Park can anticipate, innovate, and adapt with respect to fiber optics and related technologies in keeping with the City’s goal to continue to be competitive and attract residents, businesses, and non-profits to locate, stay, and thrive in St. Louis Park. To these ends, this study analyzes and provides recommendations with respect to various options to leverage the City’s existing fiber optic infrastructure, including: 1. Options for maximizing the benefits of existing City infrastructure 2. Options for expanding existing City infrastructure 3. Options for City actions that could facilitate private construction of infrastructure This study presents a range of potential strategies—both modest and ambitious—for expanding broadband facilities and broadband use in St. Louis Park. Summary of Findings The City Has Successfully Met Internal Communications Needs We (the consultant) find that the City has very successfully met the voice, video, data, and radio needs of public agencies and users through its existing fiber network and, in collaboration with the independent St. Louis Park Public Schools (“Schools”), has assisted in meeting high bandwidth needs for students, faculty, and staff as well. Beyond this are mutually beneficial intergovernmental arrangements where cities work together through the LOGIS consortium. Study Session Meeting of October 22, 2012 (Item No. 2) Page 3 Subject: Fiber Optic Study Fiber Represents the Emerging Standard for Broadband and the Most Scalable and Capable of Broadband Technologies Fiber represents an infrastructure asset with a lifetime of decades that is almost endlessly upgradeable and capable of supporting any number of public or private sector communications initiatives. The key advantage fiber holds over other technologies is that it is future-proof. It enables not just today’s high-bandwidth applications, but all applications in the foreseeable future, and can deliver a range of well-documented benefits to residents and businesses. The Availability of Consumer Broadband Products Has Increased Since St. Louis Park Last Evaluated Broadband Access Our business survey and other research regarding broadband supply suggest that broadband availability in the City has improved since St. Louis Park last conducted surveys half a decade ago. St. Louis Park Consumers Do Not Have Access to State-of-the-Art Fiber Networks We also find, however, that the consumer markets—residential and business—do not have access to the very high speeds that are enabled over fiber optics and that are increasingly viewed as the emerging international standard for the long-term. Summary of Business Survey Results In the City’s earlier explorations of broadband needs in the middle of the last decade, one of the key issues identified through surveys was a supply problem for small businesses; these small businesses were not in the City’s cable or DSL footprint. To answer this and other questions CTC conducted an online and mail survey of small businesses in St. Louis Park. Our sampling suggests that the broadband picture in the City has improved since the City conducted its surveys more than half a decade ago: most small business respondents appear to have access to broadband Internet, though not to the very high speeds enabled by fiber. Summary of Recommendations Lease Access to Existing Fiber and Conduit to Enable Private Investment We recommend the strategy of maximizing the City’s existing fiber infrastructure by making it available, under defined terms, to the private sector to encourage competition, economic development, and last-mile construction (i.e., connections to homes and businesses). Incrementally Expand City Fiber The second set of strategies CTC evaluated relates to continued expansion of the City’s existing fiber and conduit footprint, building on the joint City-St. Louis Park Public Schools-LOGIS successful and systematic efforts to build fiber over the past decade. We make the following recommendations—all of which focus on relatively low-cost strategies that the City can pursue in the short term, and that will likely pay dividends in relatively short order in terms of achieving the City’s broadband goals. • Build Fiber Between Park Nicollet’s Facilities The City’s highest-priority target for fiber construction should be Park Nicollet, which reports that the existing market does not offer the services it would like to purchase: dark fiber leases between its two facilities in the City. We therefore recommend that the City construct fiber to connect Methodist Hospital and Park Nicollet Clinic. We estimate that constructing this fiber would cost approximately $85,000 (comment – it is assumed the City would lease the fiber access to PN) Study Session Meeting of October 22, 2012 (Item No. 2) Page 4 Subject: Fiber Optic Study • Build Fiber to Parks & Recreation and Public Works Facilities These facilities are the last remaining governmental buildings that are not connected on the City’s fiber network, and are thus a prime opportunity; building connections to these sites would complete the City’s internal fiber network and would deliver the same operational benefits as are currently enjoyed by other City agencies. We estimate that constructing this fiber would cost approximately $500,000. A project to connect the Texa-Tonka COP Shop is already scheduled. Should the City move ahead with some kind of community center facility, fiber connectivity should be provided for both staff and clients. • Build Fiber to the City’s Third Water Tower Two of the City’s three water towers are already connected over City fiber. Connecting the third tower—which is located relatively close to existing fiber infrastructure—would be a low-cost project with potentially large impact. (We estimate that constructing this fiber would cost approximately $35,000). Direct fiber to all three City water towers would likely be attractive to wireless providers, many of whom already lease space on the water towers themselves. If the City builds the fiber to the third tower, the providers already located on the towers could lease fiber access as well as additional or more valuable tower space, which would enable them to improve existing services and speeds. • Build Fiber to the St. Louis Park Library The City could consider extending its fiber to the library located in St. Louis Park, which is relatively poorly served; even though broadband services at that branch are the responsibility of the County, not the City, the City could step in to make sure that there is better broadband service for St. Louis Park residents who use the facility. We estimate that constructing this fiber would cost approximately $22,500. • Build Fiber Over Time to Key Economic Development Targets We recommend an incremental and opportunistic approach to prioritize the most viable and likely development areas: Where the opportunity presents itself for cost-effective fiber construction, the City should act immediately. Where clear economic development projects are in sight but not yet concrete (such as on the route of the proposed light rail route), the City should build where the opportunity arises but with less urgency. • Continue Installing Conduit During Capital Improvement Projects We recommend that the City continue its current successful practice of placing conduit any time it undertakes a capital improvement project. Among other opportunities, the 10- year Sidewalk and Trail Capital Improvement Plan represents on ongoing opportunity to add conduit. The potential benefits of this growing amount of conduit accrue not only to City agencies but also to private providers. Coordination with the Highway 7 / Louisiana Avenue interchange and County Road 25 sewer projects are a couple imminent examples. We also recommend including fiber with the conduit going forward (to make more immediately available for opportunities), and adding it to existing conduit only as determined by current or projected business need. Study Session Meeting of October 22, 2012 (Item No. 2) Page 5 Subject: Fiber Optic Study • Complete Fiber Rings Where Possible During the Course of Routine Fiber and Conduit Installation As the City explores the recommendations above, it should also focus on expanding the City’s existing fiber and conduit footprint in such a way as to connect its existing fiber routes into rings. It will create redundant paths that will maximize the value and resilience of the entire network. We estimate that constructing this fiber would cost approximately $400,000. Proceed With Caution Regarding Expansive Strategies to Enable Broadband in St. Louis Park Beyond the incremental fiber construction that we have recommended above, the City could take a long-term approach to expanding its fiber network and construct a fiber-to-the-premises (FTTP) infrastructure that reaches all residences and businesses in the City. This approach would, potentially, deliver the greatest benefits to the City’s residents and businesses by providing ubiquitous access to high-speed connectivity. But constructing an FTTP infrastructure would involve the greatest risks for the City, too: It would require the most construction; would entail the largest municipal investment, in terms of financial and human resources; and would likely require a long-term commitment to sustaining a substantially expanded operation. Even in an environment of very lean capital and operating costs, FTTP is very challenging to make work from a financial standpoint. Unless the network operator is the incumbent and faces little or no competition, it is a significant challenge for these networks to pay for themselves. Accordingly, CTC advocates for FTTP builds only where the community understands that a subsidy is likely. This applies whether the actual operator is from the private or the public jurisdiction itself. In the event that City Council is interested in further understanding this model and its sensitivities—its risks and its benefits—we recommend a more comprehensive study that includes statistically valid market research, more detailed engineering and cost estimation, and further data collection to enable the best possible estimation of potential revenues. Using a range of generally applicable assumptions, CTC engineers estimate that deploying an FTTP network in St. Louis Park will cost about $20 million to $31 million, depending in part on aerial versus burial construction. Operational costs are in addition to this estimate. Evaluate a Fiber Model Similar to the Alley Assessment Model An alternative to building fiber to every residence, business, and institution in the City (FTTP) is to consider an approach that brings fiber to those who are interested and willing to pay for its build out to their premises. Google “fiberhoods” provide an example. The City’s alley assessment program provides a model and precedent in St. Louis Park. One version of this model would require that some minimum number of residents / businesses in a defined area to commit to construction of fiber facilities and service (and related assessments and / or service fees). Those properties would then be eligible to be connected to the core network to receive service. There are several other variations and operational aspects to this approach, including identifying providers capable of delivering the desired services in such a model. The potential interest in this model is something that we would recommend evaluating through a statistically significant survey process. Study Session Meeting of October 22, 2012 (Item No. 2) Page 6 Subject: Fiber Optic Study Require Conduit and Fiber Installation for New Construction Among other strategies, we evaluated one that has caught the eye of St. Louis Park: The prospect of reducing the costs at individual locations for future advanced broadband deployment by requiring some combination of cable pathways, fiber connections and internal fiber wiring to be built by developers and owners according to industry standards during construction, reconstruction, and rehabilitation projects. In St. Louis Park, where it is not yet clear what the City’s fiber strategy is likely to be, this approach will likely yield a less immediate benefit. That said, it is worth pursuing because it represents a small burden for developers, and a potentially noteworthy incremental benefit to the City. With the potential construction of the light rail system, the livability of St. Louis Park, and its proximity to Minneapolis, rehabilitation of existing residential units over time is likely to be an important phenomenon. Expedite Local Processes and Waive Fees to Facilitate Private Sector Infrastructure To support models under which the City would facilitate the expansion of private sector broadband infrastructure, we briefly explored options for the City to offer access to real estate and other City property, expand access to rights of way, tweak regulations related to permitting and rights of way, and other operational changes—changes that many private sector carriers claim would incentivize private sector investment in broadband expansion. In our experience, there is little that any local government can do to encourage carrier build-out of advanced networks where the carrier does not already have a compelling business interest and business plan to achieve the same goal. In that event, however, City efforts to facilitate and streamline processes—and potentially to make assets available to providers—can help that provider to successfully enter the local market, to the benefit of both the provider and local consumers. FINANCIAL OR BUDGET CONSIDERATION: The 2011 and 2012 Cable TV budgets each include $25,000 for this study. Those budgeted amounts were kept in mind as we considered the study’s scope, statement of work, and how much can be accomplished within the combined $50,000 budget limit. It appears at this time that the study will be completed within the $50,000 allocated. It should be noted that an additional $50,000 has been proposed in the 2013 Cable TV operations budget in the event Council wishes to pursue further research related to study recommendations. Other potential future financial impacts relate to any requirements or incentives to incorporate fiber optic infrastructure in private construction and / or a decision to expand the public fiber infrastructure that Council may direct. The Capital Replacement Fund has been updated to include approximately $1,042,500 in proposed expenditures that reflect specific study recommendations. These expenditures are placeholders and optional based on Council direction. They include fiber extensions to enhance institutional (e.g., City, Library) use of the network, add network resiliency and failover capability, better position the City to pursue fiber lease opportunities, and provide amenities for high-speed and wireless access at locations such as selected public locations, primarily parks and park buildings. Targeting specific economic development opportunities is recommended; related costs would need to be estimated based on each opportunity. Study Session Meeting of October 22, 2012 (Item No. 2) Page 7 Subject: Fiber Optic Study Notably, no funds have yet been allocated for any broader citywide deployment of fiber to all premises (homes, businesses, other institutions). That is an example of a topic that would require additional study that would be done only at the direction of Council. That said, the consultant’s high level estimate for construction of such a deployment is in the range of $20 million - $31 million. Beyond that are operational costs to potentially deliver services over that deployment (voice, video, very high speed Internet). It is unlikely that capital and operational costs could be matched by revenues generated, whether by the private sector or public sector, over any reasonable period of time. Finally, the report does touch on potential incremental costs related to potential requirements related to fiber construction during development or redevelopment. VISION CONSIDERATION: Depending on what is actually done with existing or additional fiber resources, this could support St. Louis Park’s desire to be a well-connected community in the 21st century. Attachments: Executive Summary from, “Building on Fiber Success: A Strategy for Enhancing Broadband in St. Louis Park.” Prepared by: Clint Pires, Chief Information Officer Approved by: Tom Harmening, City Manager Study Session Meeting of October 22, 2012 (Item No. 2) Page 8 Subject: Fiber Optic Study 1. EXECUTIVE SUMMARY - “BUILDING ON FIBER SUCCESS: A STRATEGY FOR ENHANCING BROADBAND IN ST. LOUIS PARK.” 1.1 PROJECT BACKGROUND AND GOALS The City of St. Louis Park seeks to advance community connectedness and productive use of technology; to ensure that the jointly-owned City–public school district broadband infrastructure is adequate to meet future educational and governmental needs; and to explore options for additional community benefits. The City approaches strategic opportunities with the idea that it needs to constantly anticipate, innovate, and adapt. This study focuses on identifying how St. Louis Park can anticipate, innovate, and adapt with respect to fiber optics and related technologies in keeping with the City’s goal to continue to be competitive and attract residents, businesses, and non-profits to locate, stay, and thrive in St. Louis Park. Put differently, its goal is to use broadband infrastructure to support the City’s “Vision St. Louis Park”1—“a community-wide strategic plan aimed at creating a community so special that people will make a conscious choice to make St. Louis Park their lifelong home.” The City has incrementally and successfully built fiber for more than a decade. From a return-on-investment perspective, the City has concluded that it has met all of its metrics. Now the City seeks to determine how to leverage its fiber for the future to support residents and businesses, enable entrepreneurial service providers, and deliver the best possible government services—as well as to plan for the future for an economically vibrant and diverse community. To these ends, this study analyzes and provides recommendations with respect to various options to leverage the City’s existing fiber optic infrastructure, including: 4. Options for maximizing the benefits of existing City infrastructure 5. Options for expanding existing City infrastructure 6. Options for City actions that could facilitate private construction of infrastructure This study presents a range of potential strategies—both modest and ambitious—for expanding broadband facilities and broadband use in St. Louis Park. The study was researched and prepared in 2012 by CTC Technology & Energy (CTC). 1 “About Vision St. Louis Park,” St. Louis Park website. http://www.stlouispark.org/vision-st-louis- park/about-vision-st-louis-park.html (accessed August 29, 2012). Study Session Meeting of October 22, 2012 (Item No. 2) Page 9 Subject: Fiber Optic Study Over the course of the engagement, CTC performed the following general tasks: 1. Met with key public stakeholders, including representatives of many City agencies and the St. Louis Park Public Schools 2. Met or spoke with private stakeholders, including local businesses, the Convention and Visitors’ Bureau, the Chamber of Commerce, interested entrepreneurs, and private schools and universities 3. Appeared before the City Council and the Telecommunications Advisory Commission to present data, solicit input, and answer questions 4. Met with fiber planners for Hennepin County, the Local Government Information Systems Association (LOGIS), and neighboring localities 5. Met with or spoke with a range of potential private sector partners from both the incumbent and competitive sides of the telecommunications/broadband industries 6. Researched and evaluated the current demand for broadband communications products and services in the City through a range of efforts and methodologies, including extensive conversations with broadband providers throughout the City regarding the demand for, and adoption of, their products 7. Researched and evaluated the current supply of broadband communications products and services in the City through a range of efforts and methodologies: a. Evaluated the National Broadband Map data collected and published by the Federal Communications Commission (FCC) and Department of Commerce b. Surveyed small businesses throughout the City to understand their use of, and needs for, broadband c. Conducted discussions with project stakeholders, including St. Louis Park businesses who indicate that their broadband needs are currently unmet 8. Developed recommendations regarding how the City can use its existing fiber to potentially stimulate or catalyze broadband investment in St. Louis Park 9. Developed recommendations regarding opportunities for the City to make incremental strategic investments in expanding broadband infrastructure as a means of enabling expansion of private sector broadband offerings and competition 10. Developed a preliminary engineering and financial analysis of requirements for deploying a fiber-to-the-premises (FTTP) broadband network across the City SUMMARY OF FINDINGS 1.2.1 THE CITY HAS SUCCESSFULLY MET INTERNAL COMMUNICATIONS NEEDS We find that the City has very successfully met the needs of public agencies and users through its existing fiber network and, in collaboration with the independent St. Louis Park Public Schools Study Session Meeting of October 22, 2012 (Item No. 2) Page 10 Subject: Fiber Optic Study (“Schools”), has assisted in meeting high bandwidth needs for students, faculty, and staff as well. With a few exceptions (such as the library, which is a County rather than a City facility; some public works and parks sites; and a Texa-Tonka police department site), all public facilities are connected over dedicated fiber optics and receive state-of-the-art services. The City has largely met its own broadband needs through its systematic and concerted efforts to build fiber and its involvement in LOGIS,2 which includes not just shared fiber and a data center, but also a general pooling of resources and the realization of operating efficiencies. The Schools buildings are all served over fiber, as are most City buildings. 1.2.2 FIBER REPRESENTS THE EMERGING STANDARD FOR BROADBAND AND THE MOST SCALABLE AND CAPABLE OF BROADBAND TECHNOLOGIES Fiber represents an infrastructure asset with a lifetime of decades that is almost endlessly upgradeable and capable of supporting any number of public or private sector communications initiatives. The key advantage fiber holds over other technologies is that it is future-proof. It enables not just today’s high-bandwidth applications, but all applications in the foreseeable future, and can deliver a range of well-documented benefits to residents and businesses. It is universally accepted that fiber is the holy grail of broadband technology and that fiber to the premises (FTTP) is the optimal architecture—an investment in the future that is endlessly upgradable and usable. Gigabit (1,000 megabits) over fiber offers more than 25 times the maximum capacity of advanced cable networks,3 more than 75 times the capacity of advanced copper/phone networks,4 and 250 times the capacity of the fastest, most sophisticated commercial wireless services currently available to consumers on smartphones and laptops.5 1.2.3 THE AVAILABILITY OF CONSUMER BROADBAND PRODUCTS HAS INCREASED SINCE ST. LOUIS PARK LAST EVALUATED BROADBAND ACCESS Our business survey and other research regarding broadband supply suggest that broadband availability in the City has improved since St. Louis Park last conducted surveys half a decade ago. It appears that both the DSL and cable system footprints have expanded into small business areas, an important improvement over the situation in the 2005-2007 timeframe. Most small business respondents to our survey appear to have access to some form of broadband Internet. We encourage the City to conduct more extensive surveying to validate and refine this conclusion and to test whether it is true in the residential market. 2 LOGIS, http://www.logis.org/ 3 Assuming average downstream speeds of approximately 38 Mbps. Note that cable modem networks are usually engineered to enable far slower upstream speeds. 4 Based on maximum downstream speeds on a VDSL network of approximately 13 Mbps with a maximum distance of 5,000 feet between the customer premise and provider Central Office. Note that DSL networks are usually engineered to enable far slower upstream speeds. 5 Assuming average downstream speeds of 4 Mbps, currently available only in limited markets. Note that wireless networks are usually engineered to enable far slower upstream speeds. Study Session Meeting of October 22, 2012 (Item No. 2) Page 11 Subject: Fiber Optic Study 1.2.4 ST. LOUIS PARK CONSUMERS DO NOT HAVE ACCESS TO STATE-OF-THE-ART FIBER NETWORKS We also find, however, that the consumer markets—residential and business—do not have access to the very high speeds that are enabled over fiber optics and that are increasingly viewed as the emerging international standard. Google’s fiber-to-the-premises (FTTP) deployment in Kansas City, for example, will provide gigabit (1,000 megabits) speeds, which is an order of magnitude higher than is available to most Americans but comparable to the speeds increasingly available in our competitor nations in Asia and some parts of Europe. The City’s phone and cable companies do not plan to build FTTP in St. Louis Park. In fact, none of the City’s existing wired providers has significant FTTP plans anywhere in the country. At best, these incumbent providers will move incrementally to expand their existing networks, but they have no plans to invest in FTTP and, even if they wished to, are constrained in their investment choices by the capital markets, which do not reward long-term expense for investments like FTTP. Comcast operates a high-quality, reliable hybrid fiber/coaxial (HFC) system that can compete against other offerings in today’s marketplace. Its network, however, is limited by its lack of fiber—even with advanced electronics and software, its system cannot keep pace with the potential speeds of fully-fiber networks such as that in Kansas City. Cable systems are limited by the inherent shortcomings of the coaxial cable that runs from their nodes into the home. An additional limitation arises from the shared nature of cable modem service—bandwidth within a neighborhood is shared rather than dedicated. As a result, speeds may be significantly decreased by one’s neighbors’ simultaneous use of their cable modems. CenturyLink is the incumbent local exchange carrier in St. Louis Park, where it offers digital subscriber line (DSL) services to most of the City and leases enhanced circuits to businesses at higher prices. Small and medium-sized businesses may have difficulty affording these enhanced circuits. DSL represents a relatively low-bandwidth form of broadband—a network of roads, not superhighways. DSL runs on telephone network copper wires, which simply cannot handle the same capacity as fiber or even as Comcast’s HFC networks. As capacity requirements increase, DSL is likely to fall further behind cable.6 Even with newer DSL investments, its limitations are likely quickly to be reached. From a technical standpoint, DSL is a short-term solution in a market where bandwidth needs are growing exponentially and high, symmetrical capacity is increasingly needed for small businesses and for popular applications like gaming, video downloads, and video-conferencing. Aging copper plant is not capable of meeting these needs in the medium or long-run. Wireless technology is the current focus of investment by the two largest phone companies, AT&T and Verizon, and its use is growing exponentially. It is critical to understand, however, that wireless does not supplant or compete with wireline broadband; rather, these technologies inherently serve to enhance and complement each other. Fiber offers theoretically infinite bandwidth while wireless offers far lower speeds that cannot support some of the ultra-high speed applications made 6 The limitations of DSL are illustrated Verizon’s investment, over the past decade, to supplement its old copper phone networks with new FTTP networks in limited metropolitan areas within its existing footprint. Study Session Meeting of October 22, 2012 (Item No. 2) Page 12 Subject: Fiber Optic Study possible by fiber in the areas of business, health care, education, and the environment. At the same time, however, the key advantage of wireless cannot be mirrored by fiber; wireless offers mobility and connectivity during movement. 1.3 SUMMARY OF SURVEY RESULTS In the City’s earlier explorations of broadband needs in the middle of the last decade, one of the key issues identified through surveys was a supply problem for small businesses; these small businesses were not in the City’s cable or DSL footprint. (This was a driver that led to the City’s WiFi project; the goal of the City’s WiFi effort was to expand broadband availability through WiFi technology, both to the business and residential markets.) A lingering question for the City, then, is whether the broadband market for the City’s small business users has improved. To answer this and other questions CTC conducted an online and mail survey of small businesses in St. Louis Park. The survey is a useful tool for getting initial indications of the broadband available to St. Louis Park’s small business community and for evaluating whether further surveying is advisable. Our sampling suggests that the broadband picture in the City has improved since the City conducted its surveys more than half a decade ago: most small business respondents appear to have access to broadband Internet, though not to the very high speeds enabled by fiber. If the City chooses to further investigate the feasibility of a FTTP initiative, we recommend that it more methodically study the small business market to determine to what degree its condition has improved since the last scientific surveys were completed in the mid-2000s—and what kind of market exists, or may emerge, for very high bandwidth applications. The following are our other key findings with respect to the 234 businesses who responded to the survey: • Over 95 percent of responding businesses have Internet service and 94 percent of responding businesses have a website. • Cable modem is the most common Internet connection type at 44 percent, followed by DSL and leased line service at 21 percent each. • Over 80 percent of responding businesses experience Internet “downtime” less than once per month. • The average monthly cost of business Internet service is approximately $219. Leased line service tends to be more expensive than average, while DSL and cable service is less expensive than average. • The most common uses of business Internet are photo and image sharing, large data transfers, and online data storage or backup. • Respondents rank reliability as the most important aspect of business Internet service, and also rank it the aspect with which they are most satisfied. • There are substantial gaps between importance and satisfaction levels for a number of other service attributes; price and download speed have the largest gap. • Over one-third of respondents would be willing to pay 20 percent more for very high speed Internet service. The interest in very high speed drops to less than five percent when the Study Session Meeting of October 22, 2012 (Item No. 2) Page 13 Subject: Fiber Optic Study price increases 50 percent or more. • Respondents indicated that high-speed Internet helps them improve operational efficiency, reach customers and vendors, improve competitiveness, and achieve strategic goals. • Respondents believe that high-speed Internet is as essential for their business as other services such as water and electricity. • Responding businesses indicate some willingness to support City building facilities to enable private high-speed Internet. The survey methodology and data are described in detail in Section Error! Reference source not found. below. 1.4 SUMMARY OF RECOMMENDATIONS 1.4.1 LEASE ACCESS TO EXISTING FIBER AND CONDUIT TO ENABLE PRIVATE INVESTMENT We recommend the strategy of maximizing the City’s existing fiber infrastructure by making it available, under defined terms, to the private sector to encourage competition, economic development, and last-mile construction (i.e., connections to homes and businesses). In a low-risk strategy, the City and Schools should make spare capacity available for use by the private sector at competitive rates. Such an arrangement would ideally result not only in a modest revenue stream to the City and Schools, but would also enable competitive providers to enter the St. Louis Park market and invest in the last mile. It could also potentially enable the incumbent providers to expand their fiber use footprints within St. Louis Park by leasing from the City on routes where they do not themselves have fiber. The interviews conducted jointly by CTC and City staff suggest that there is real interest in the dark fiber among a modest number of entities across a range of business models, from broker to institutional user to dark fiber carrier—which suggests that a potential market exists for the City’s dark fiber. In order to determine and select the model that is most likely not only to give the City and schools some modest revenues, but also to facilitate the City’s public policy purposes, we recommend that the City undertake a request for proposals (RFP) process to select one or more private sector partners. In order to limit its upfront costs and risks, the City can wait to see the results of the RFP. If merited by the RFP responses, it can go to the expense of adding fiber where it currently has only conduit. 1.4.2 INCREMENTALLY EXPAND CITY F IBER The second set of strategies CTC evaluated relates to continued expansion of the City’s existing fiber and conduit footprint, building on the City’s and the St. Louis Park Public Schools’ successful and systematic efforts to build fiber over the past decade. We make the following recommendations—all of which focus on relatively low-cost strategies that the City can pursue in the short term, and that will likely pay dividends in relatively short order in terms of achieving the City’s broadband goals. Study Session Meeting of October 22, 2012 (Item No. 2) Page 14 Subject: Fiber Optic Study 1.4.2.1 Build Fiber Between Park Nicollet’s Facilities The City’s highest-priority target for fiber construction should be Park Nicollet, which reports that the existing market does not offer the services it would like to purchase: dark fiber leases between its two facilities in the City. We therefore recommend that the City construct fiber to connect Methodist Hospital and Park Nicollet Clinic. It could then either lease the fiber directly to Park Nicollet or to an Internet service provider who would serve Park Nicollet. Such a scenario would have two important outcomes: The City would enable a very important corporate citizen and employer to lease the kind of communications facilities that it needs but cannot currently get, and it would do so in a way that would enable an entrepreneurial service provider. We estimate that constructing this fiber would cost approximately $85,000; a map of the proposed route is included in Section Error! Reference source not found.. 1.4.2.2 Build Fiber to Parks & Recreation and Public Works Facilities These facilities are the last remaining governmental buildings that are not connected on the City’s fiber network, and are thus a prime opportunity; building connections to these sites would complete the City’s internal fiber network and would deliver the same operational benefits as are currently enjoyed by other City agencies. We estimate that constructing this fiber would cost approximately $500,000. 1.4.2.3 Build Fiber to the City’s Third Water Tower Two of the City’s three water towers are already connected over City fiber. Connecting the third tower—which is located relatively close to existing fiber infrastructure—would be a low-cost project with potentially large impact. (We estimate that constructing this fiber would cost approximately $35,000; a map of the proposed route is included in Section Error! Reference source not found..) Direct fiber to all three City water towers would likely be attractive to wireless providers, many of whom already lease space on the water towers themselves. If the City builds the fiber to the third tower, the providers already located on the towers could lease fiber access as well as tower space, which would enable them to improve existing services and speeds. The City would potentially realize modest revenues and, significantly, could incentivize expanded mobile and fixed wireless service for residents and small businesses. (We note that City agencies almost uniformly note a need for more, cost-effective mobile broadband, and that enabling better service by the private sector will help those agencies—though it is unlikely to impact service fee levels.) 1.4.2.4 Build Fiber to the St. Louis Park Library The City could consider extending its fiber to the library located in St. Louis Park, which is relatively poorly served; even though broadband services at that branch are the responsibility of the County, not the City, the City could step in to make sure that there is better broadband service for St. Louis Park residents who use the facility. We estimate that constructing this fiber would cost approximately $22,500. If the City were to provide broadband service to the library, the arrangement could be eligible for participation in the federal Schools and Libraries Universal Service program7—typically referred to 7 “Universal Service for Schools and Libraries,” Federal Communications Commission. http://transition.fcc.gov/wcb/tapd/universal_service/schoolsandlibs.html (accessed August 30, 2012). Study Session Meeting of October 22, 2012 (Item No. 2) Page 15 Subject: Fiber Optic Study as the E-rate program—which subsidizes the provision of broadband and telecommunications services to eligible K-12 schools and public libraries. The program also provides for subsidy of construction of lateral fiber to connect schools and libraries to existing networks, which could present an opportunity to expand the City’s fiber to the library within St. Louis Park. 1.4.2.5 Build Fiber Over Time to Key Economic Development Targets We recommend an incremental and opportunistic approach to prioritize the most viable and likely development areas: Where the opportunity presents itself for cost-effective fiber construction (as it has in The Flats of West End area, where the City has taken advantage of construction efficiencies to build conduit), the City should act immediately to install conduit and fiber. A relatively small fiber extension, for example, would enable the City to connect The Flats at West End / Hamline University areas and Benilde–St. Margaret’s to the City’s existing fiber footprint. (See Section Error! Reference source not found..) Where clear economic development projects are in sight but not yet concrete (such as on the route of the proposed light rail route), the City should build where the opportunity arises, but with less urgency. These opportunities will evolve over time—most likely from the list of sites that the City is already tracking (see Section Error! Reference source not found.)—and, as the departments have done in the past, will be evaluated regularly in consultation between the City’s departments of Economic Development and Information Resources. We note, too, that the degree to which these two departments collaborate is uncommon in our experience, and truly commendable; they work together hand-in-hand to ensure that opportunities are not missed—to the benefit of the City. 1.4.2.6 Continue Installing Conduit During Capital Improvement Projects Placing conduit during capital improvement projects can dramatically lower the cost of network construction.8 Accordingly, we recommend that the City continue its current successful practice of placing conduit any time it undertakes a capital improvement project. Among other opportunities, the 10-year Sidewalk and Trail Capital Improvement Plan represents on ongoing opportunity to add conduit.9 The potential benefits of this growing amount of conduit accrue not only to City agencies but also to private providers. A coordinated fiber or conduit design can provide capacity for dozens of separate service providers. This strategy has the benefit of maximizing long-term value and minimizing the potential for future disruption. Imminent examples include a sewer project on County State Aid Highway (CSAH) 25 and the Highway 7/Louisiana Avenue interchange project. 8 “Brief Engineering Assessment: Efficiencies available through simultaneous construction and co- location of communications conduit and fiber,” White Paper, CTC, 2009. http://www.ctcnet.us/2009%20CTC%20Coordinated%20Conduit%20Construction.pdf (accessed August 30, 2012). 9 “Connect the Park!,” St. Louis Park website, Aug. 22, 2012. http://www.stlouispark.org/connect-the- park.html (accessed August 29, 2012). Study Session Meeting of October 22, 2012 (Item No. 2) Page 16 Subject: Fiber Optic Study 1.4.2.7 Complete Fiber Rings Where Possible During the Course of Routine Fiber and Conduit Installation As the City explores the recommendations above, it should also focus on expanding the existing fiber and conduit footprint in such a way as to connect existing fiber routes into rings. Expanding to a ring architecture would result in significant operational benefits for the City and the St. Louis Park Public Schools in that it would offer a level of redundancy, reliability, and resilience that the current network does not have. As an example, redundant fiber routes would enable the City’s fiber to make the City’s 800 MHz public safety radio system more reliable. Placing conduit and fiber and failsafe electronics between the City’s public safety radio base stations and the City PSAP (which houses the radio core) will create additional communications paths between the base stations, allow the system to continue to operate at full functionality even in the event of a fiber cut, and increase capacity of the links, making it possible to operate more advanced public safety wireless services in the future. The change would also increase the value of the existing network with respect to potential leasing of the fiber. We estimate that constructing this fiber would cost approximately $400,000; a map of proposed routes is included in Section Error! Reference source not found.. 1.4.3 PROCEED WITH CAUTION REGARDING EXPANSIVE STRATEGIES TO ENABLE BROADBAND IN ST. LOUIS PARK Beyond the incremental fiber construction that we have recommended above, the City could take a long-term approach to expanding its fiber network and construct a fiber-to-the-premises (FTTP) infrastructure that reaches all residences and businesses in the City. This approach would, potentially, deliver the greatest benefits to the City’s residents and businesses by providing ubiquitous access to high-speed connectivity. But constructing an FTTP infrastructure would involve the greatest risks for the City, too: It would require the most construction; would entail the largest municipal investment, in terms of financial and human resources; and would likely require a long-term commitment to sustaining a substantially expanded operation. Even in an environment of very lean capital and operating costs, FTTP is very challenging to make work from a financial standpoint. Unless the network operator is the incumbent and faces little or no competition, it is a significant challenge for these networks to pay for themselves. Accordingly, CTC advocates for FTTP builds only where the community understands that a subsidy is likely. The example of Monticello, Minnesota demonstrates the two sides of the FTTP opportunity: A municipal FTTP network in that City has already resulted in significant new economic opportunity, the fastest broadband in the state, and low prices. The system is likely to pay “beyond-the-balance-sheet” benefits to that community for many decades. At the same time, however, the City faces two very aggressive private competitors and has insufficient revenue to sustain the network; as of June, 2012, the City has been unable to make payments on the fiber network’s revenue bonds.10 10 Other communities in Minnesota are also pursuing innovative broadband projects. The city of Eagan is working to utilize its existing fiber footprint as an open access network for a wide range of commercial entities. Windom, Minnesota has long operated its own municipal FTTP network, and has delivered state- of-the-art services to its citizens. The network was sufficiently well regarded that eight surrounding Study Session Meeting of October 22, 2012 (Item No. 2) Page 17 Subject: Fiber Optic Study In the event that City Council is interested in further understanding this model and its sensitivities—its risks and its benefits—we recommend a more comprehensive study that includes statistically valid market research, more detailed engineering and cost estimation, and further data collection to enable the best possible estimation of potential revenues. At a system level, and based on a range of generally applicable assumptions, our engineers estimate that deploying an FTTP network in St. Louis Park will cost about $20 million to $28 million.11 (The cost would be about $2 million higher were it not for the City’s existing conduit and fiber backbone.) The cost estimates represent the likely range of pricing on various elements of the construction, from make-ready costs to fiber drop installation; while the lower cost is possible, the actual cost will more likely be at the higher end of the range. Utilizing the general cost estimate described above, CTC conducted a basic financial analysis of the viability of a potential FTTP network. Like the design and cost, this analysis is very preliminary and would require extensive additional research and refinement in the event that the City considers this strategy. Based on these preliminary cost assumptions, a market share in excess of 50 percent to 60 percent would be required to reach a cash-neutral operation. We caution that this represents an extremely challenging goal: In many FTTP overbuilds, including both public and private initiatives, we see a market share slow-down at around 30 percent penetration and an effective ceiling on sales at around 40 percent. Based on this preliminary analysis, we conclude that public FTTP is likely not sustainable as a standalone enterprise under existing market conditions. Such an initiative would require long-term financial support. With time, however, this calculus may change: New applications and network uses emerging from Google’s Kansas City project and other forward-thinking initiatives may, with time, change the revenue model for FTTP networks. Also, as discussed in detail below, there are emerging business models that, while relatively untested, are promising. These include the model being pioneered separately by the Urbana-Champaign Big Broadband (UC2B) project and Google, in which the community incrementally builds an FTTP network, starting with neighborhoods where a critical mass of residents and businesses commit to purchasing services in advance. This strategy enables the community to lower its risk by building first to those neighborhoods where revenue is likely to be sufficient to sustain the network. The drawback of this model is that, inevitably, higher-educated, higher-income neighborhoods will be built first.12 It is not clear whether neighborhoods where there is less knowledge of or interest in high-speed services will ever see construction. As a result, this model exacerbates rather than reduces the digital divide. However, it is a lower risk strategy communities partnered with WindomNet to successfully apply for a federal stimulus loan/grant package from the U.S. Department of Agriculture to expand the network. The expanded WindomNet will serve many residents of a rural area where very slow DSL or dial-up service have, until now, been the norm. After the full expansion, the network will serve just over 5,000 homes. 11 This cost estimate was based on the City’s GIS information and typical construction costs. If the City would like to pursue this option, we recommend more detailed on-site surveys. 12 UC2B has partially alleviated this concern by using a federal grant to build to low-income neighborhoods first; its expansion model, however, will not be grant funded—and will prioritize neighborhoods that pre-commit to service, so as to reduce its financial risk. Study Session Meeting of October 22, 2012 (Item No. 2) Page 18 Subject: Fiber Optic Study that bears further evaluation in the event that the City chooses to further evaluate the viability of a municipal FTTP initiative. An additional consideration is that cash flow may not be St. Louis Park’s prime metric for evaluating the feasibility or the importance of an infrastructure program. Many communities define their success metrics more broadly and consider the “beyond the balance sheet” benefits that such a network would deliver. These benefits have nothing to do with traditional financial measures. Rather, they represent the “return” to the community in terms of such largely intangible societal benefits as economic development, enhancing health care quality, narrowing the digital divide, providing enhanced educational opportunities to schoolchildren, delivering job search and placement opportunities at public computer centers, and helping isolated senior citizens make virtual social connections. These benefits are the reasons that governments build broadband infrastructure in the first place. Local governments are in the business of providing education for their young people, job training for their unemployed, and so on; broadband is just the latest, and newly essential, tool to enable those public goals. In this light, we recommend that, if the City does decide to further study the viability of fiber to the home, it undertake an analysis to fully understand and quantify all of these benefits—so as to be able to adequately understand the interplay of risk and reward. 1.4.4 EVALUATE A FIBER MODEL SIMILAR TO THE ALLEY ASSESSMENT MODEL The City’s alley assessment program provides a model and precedent in St. Louis Park for something like the Google fiberhoods initiative, and demonstrates that in this engaged, civic-minded community, there is an interest and appetite for local decision making to invest in infrastructure through assessments to benefit the community. One version of this model would require that some minimum number of residents / businesses in a defined area to commit to construction of fiber facilities and service (and related assessments and / or service fees). Those properties would then be eligible to be connected to the core network to receive service. There are several other variations and operational aspects to this approach, including identifying providers capable of delivering the desired services in such a model. The potential interest in this model is something that we would recommend evaluating through a statistically significant survey process. 1.4.5 REQUIRE CONDUIT AND FIBER INSTALLATION FOR NEW CONSTRUCTION Among other strategies, we evaluated one that has caught the eye of St. Louis Park: The prospect of reducing the costs at individual locations for future advanced broadband deployment by requiring some combination of cable pathways, fiber connections and internal fiber wiring to be built by developers and owners according to industry standards during construction, reconstruction, and rehabilitation projects. In St. Louis Park, where it is not yet clear what the City’s fiber strategy is likely to be, this approach will likely yield a less immediate benefit. That said, it is worth pursuing because it represents a small burden for developers, and a potentially noteworthy incremental benefit to the City. With the potential construction of the light rail system, the livability of St. Louis Park, and its proximity to Minneapolis, rehabilitation of existing residential units over time is likely to be an important phenomenon. Study Session Meeting of October 22, 2012 (Item No. 2) Page 19 Subject: Fiber Optic Study 1.4.6 EXPEDITE LOCAL PROCESSES AND WAIVE FEES TO FACILITATE PRIVATE SECTOR INFRASTRUCTURE To support models under which the City would facilitate the expansion of private sector broadband infrastructure, we briefly explored options for the City to offer access to real estate and other City property, expand access to rights of way, tweak regulations related to permitting and rights of way, and other operational changes—changes that many private sector carriers claim would incentivize private sector investment in broadband expansion. In our experience, there is little that any local government can do to encourage carrier build-out of advanced networks where the carrier does not already have a compelling business interest and business plan to achieve the same goal. In that event, however, City efforts to facilitate and streamline processes—and potentially to make assets available to providers—can help that provider to successfully enter the local market, to the benefit of both the provider and local consumers. 1.5 NEXT STEPS First, we recommend the City proceed with the recommendations noted above. Second, in the event that the city chooses to further evaluate FTTP, particularly the emerging new models such as Google’s fiberhood neighborhood self-nomination process, we recommend the following activities be undertaken: 1. Extensive, scientific surveys of the residential and small business markets to supplement the surveys conducted for this report of the community anchor and institutional markets. The small business survey, in particular, should have a larger sample size and more scientific methodology than was enabled by the scope of this project. Most importantly, however, the residential survey can serve to determine the satisfaction level of the citizens of SLP with current services and pricing; the needs they are likely to have for communications services in the coming decade, and their willingness to participate financially in the emergence of a next-generation communications infrastructure that would enable SLP to thrive. An additional benefit of such survey efforts would be to provide the data inputs for a more sophisticated business model, enabling more reliable revenue projections—either for the city’s own initiative, or to attract a private partner—by quantifying the potential market. 2. Preparation of a system-level design for ubiquitous fiber to the premises in SLP. Order of magnitude engineering was performed for this project, but should the City decide to move to the next phase of planning, those costs should be refined based on the potential business model, and a more detailed operations model should be developed. 3. Preparation of a fiber to the premises business plan. The revenue assumptions enabled by the surveys, and the capital and operating assumptions enabled by the engineering work, should be merged in the form of a fully fleshed-out business model. Ideally, a number of variations—ranging from full municipal ownership and operations to a range of public-private partnership models in which the city shares some of the risk of the initiative—should be examined for their feasibility. Both the benefits and risks of these models should be quantified, to enable the City Council and the public to fully understand the range of options. Meeting Date: October 22, 2012 Agenda Item #: 3 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Friends of the Arts Annual Report and Update RECOMMENDED ACTION: No action is needed at this time. Members of Friends of the Arts will be present to update the Council on activities and initiatives. POLICY CONSIDERATION: Does the City Council have questions or concerns regarding the activities of Friends of the Arts? BACKGROUND: The City of St. Louis Park has been working with Friends of the Arts in a partnership since 2006 to further the arts in the community. Beginning in 2006, the city has contributed $20,000 to Friends of the Arts annually. One of the most visible things that Friends of the Arts (FoTA) sponsors is the “Our Town” project which currently occurs every other year. The first “Our Town” project was Faces and Places. Many residents took pictures throughout the community which were then compiled into a series of photographs. These photos are displayed in City Hall, have appeared in the City/School calendar and have appeared at other locations throughout the city. The second “Our Town” project was Verses and Voices. A Community Poet was named and assisted in compiling poems from a variety of sources throughout the city. These poems were on display in a variety places and eventually used in the City/School calendar. The attached annual report from Friends of the Arts provides information about their third “Our Town” initiative called Beats and Streets. FoTA has a very successful “Arts for Life” scholarship program. This grant awards money to aspiring artists of all kinds. They have awarded grants to five different recipients in the past year. FoTA is planning an organizational audit to clarify their mission as well as goals and focus. They have applied to the Metropolitan Regional Arts Council for a $10,000 grant to assist them in funding this process. As a part of clarifying their mission, Friends of the Arts is hosting a Town Hall Meeting on October 25 at 7 p.m., City Council is invited to attend this meeting. The City of St. Louis Park in cooperation with FoTA provides Arts and Culture Grants to residents wanting to do art projects around the City. Each year the City budgets $16,000 for these grants. Recipients are chosen by a committee made of the community members. FINANCIAL OR BUDGET CONSIDERATION: Payments to Friends of the Arts in the amount of $20,000 annually were approved February 6, 2006 to promote art events and related activities that create an awareness and appreciation for arts. Staff recommends continuing supporting FOTA by contributing $20,000 for 2013. This allocation is included in the proposed 2013 Development Fund budget. Study Session Meeting of October 22, 2012 (Item No. 3) Page 2 Subject: Friends of the Arts Annual Report and Update Friends of the Arts use the funding from the city to leverage funds for grants and donations. Their annual budget is projected to be $55,000 for 2012 and has been fairly consistent the past few years. All funds for scholarships are provided by contributions from individuals and foundations. Approximately $20,000 in grants is used for “Our Town” programs. VISION CONSIDERATION: Continuing our partnership with Friends of the Arts is consistent with one of the City Council’s adopted Strategic Directions - St. Louis Park is committed to promoting and integrating arts, culture, and community aesthetics in all City initiatives, including implementation where appropriate. Attachments: Friends of the Arts Annual Report Town Hall Meeting Press Release 10-1-12 Prepared by: Cindy W. Walsh, Director of Parks and Recreation Approved by: Nancy Deno, Deputy City Manager/HR Director Study Session Meeting of October 22, 2012 (Item No. 3) Page 3 Subject: Friends of the Arts Annual Report and Update September 2012: Summary of Where we Are and What is Next As a small community-focused grass roots organization, SLP Friends of the Arts (FoTA) has developed in an organic way; partnering on programs that seem a good fit, serving needed functions for smaller less established arts groups who do not have the capacity to become nonprofits, and serving as the go-to place for the arts in the Park. We have an active board, a part time office administrator, and contracted consultants who provide marketing and programming support. Over the past two years, our success with the Our Town initiatives has expanded our own expectations about what we can accomplish. In addition, the strong arts foundation in our community has attracted new groups and activities. MN Public Theater moved its summer programming to SLP last summer and returned again this past summer with an excellent production of “Romeo & Juliet.” Twin Cities Film Festival is launching its second year at the new West End in SLP this fall because of the great success they had last year. We are collaborating with both of these groups to share resources and build opportunities. In addition to this the new SLP Visitors and Convention Bureau is partnering with as many organizations as possible to build on our combined potential. So it is time to ask ourselves, could we and should we be doing more? We now have many more arts activities to coordinate, shared resources to manage and lots of potential for growth. In June, we were approached by a social service organization that provides services, care and arts activities to adults with disabilities. They already have one facility in SLP but would like to open a second site that would be arts-based. They want us to explore shared space for program activities, offices, staff, etc. In a related, yet separate course, the City of SLP is exploring ideas to develop a community center space that would be jointly managed by Parks and Recreation. Clearly, we have several different directions we could pursue and know that we need help from a team of consultants to sort out what our best options are. After several board conversations, we believe the best approach would be to undergo an organizational audit to clarify our mission, goals and focus, followed by a process that engages the community in discussing what role they want the arts to play in SLP, and then some financial modeling that would help to better understand the possibilities and the ramification of each of these choices. For this reason, we have requested an Organizational Development Grant from MRAC (Metropolitan Regional Arts Council) for $10,000 and hope to receive funding to accomplish this process in the first half of 2013. Study Session Meeting of October 22, 2012 (Item No. 3) Page 4 Subject: Friends of the Arts Annual Report and Update Summary of Programs: 2012 Our Town: Beats and Streets Friends of the Arts’ 2012 Our Town: Beats and Streets has come to an end. This past summer rhythms were heard throughout St. Louis Park as we brought the sounds of drums and percussion to our city. There were workshops, performances, and community drum circles. Our Town: Beats and Streets kicked off in May and ran throughout the summer ending with a performance at Wolfe Park Amphitheater August 30, 2012. Our Town: Beats and Streets brought diverse community members together to participate in a series of drumming and percussion focused activities. Through Our Town: Beats and Streets, Friends of the Arts was able to expand our outreach through a creative form that was, above all, accessible and inclusive for all members of the St Louis Park community. The following drumming activities comprised the community arts components for Beats and Streets: Beat and Streets Workshops: Throughout the summer, six one- hour Beats and Streets workshops were offered at key community centers in St Louis Park. The workshops were taught by professional percussionist Stan Kipper and Chico Perez. Kipper and Perez have over 20 years of experience in teaching and inspiring students in the art of drumming. Using five-gallon buckets as drums, participants had the opportunity to explore the common language of drumming. The workshops took place at six diverse community partner locations. • Meadowbrook • Sholom Home • Partnership Resources* • SLP Senior Program • SLP Library • Perspectives *Patch produced a great video of the workshop at this location, viewable on the homepage of the SLPFOTA website. http://slpfota.org/index.html Drum Circles: Working with Jeff Scroggins of Earthshake World Rhythm Ensemble, Our Town brought these weekly circles to the community in July and August. Drum circles were attended by people of all ages and abilities. The main objective was to share the rhythm and get in tune with each other. These gatherings were very popular and a lot of fun. • Wolfe Park each Thursday in July • Oak Hill Park each Sunday in August Culture Drum Series: Exposing the St. Louis Park community to the wide variety of instruments and music, four different groups were highlighted and took the stage at Wolfe Park Amphitheater throughout the summer. Stan and Chico of the New Primitives performed at the Ice Cream Social and inspired audiences to follow what FoTA was up to the rest of the summer. • Batucada Do Norte marched in the Parktacular parade and followed it up with a performance on the Wolfe Park Amphitheater stage. • Mu Daiko presented their exciting concert featuring Taiko drumming. • Buckets and Tap Shoes led an explosive, high-energy rhythmic performance, involving the audience in their unique blend of excitement. Study Session Meeting of October 22, 2012 (Item No. 3) Page 5 Subject: Friends of the Arts Annual Report and Update Our Town 2010: Voices & Verses Continues through quarterly poetry jams each run by a different community member/poet and televised by Park TV. Attendees span all age groups and neighborhoods. We continue to highlight a community poet in our online newsletter Poetry Corner. Community Poets for the last year have been: Ruby Stillman, Christy Hicks, Wendy Brown-Baez, Becky Leistman, Susan Budig, Doug Sievers, Bob Ramsey and Lynn Albright. Arts for Life The Arts for Life scholarship program remains well funded and distributing awards quarterly: Upcoming review deadline is Dec 5, 2012. Following is the list of grants that have been awarded the first three quarters 2012. 12-Mar Estrella Bradley $100 12-Mar piano classes less than 8 Maggie O'Brien $100 12-Mar choir trip age 9-17 White Jasmine Koita $35 12-Mar select choir 13-25 AF Amer 12-Jun Pam Luer $475 12-Jun Artist retreat 51-60 white 12-Sep Holly Peterson $200 12-Sep printmaking class 26-35 white Arts & Culture Grants Two groups received funding for the 2012 grants. 2013 application results are not yet available. 1. The Park Theater Company- $3,755 (Fall 2012 production) 2. MN Public Theater- $7,500 (Summer 2012 production: Romeo and Juliet Shakespeare in the Park) Fiscal Agencies Friends of the Arts serves as fiscal agent for four St Louis Park arts organizations with a standard agreement approved and in use for each. 1. Maggie’s Farm Theater 2. Community Band 3. Jr High Theater 4. Park Theater Company Study Session Meeting of October 22, 2012 (Item No. 3) Page 6 Subject: Friends of the Arts Annual Report and Update Operations and Management Board Development We continue to have excellent executive committee leadership. Our student representative on the board, Ben Share, graduated from high school this spring and will study abroad in Israel this fall before attending University CO Denver. Serving as a board member for four years, he brought a great deal of youth perspective to our organization and we will miss him dearly. We have five board members with terms expiring at the end of this year and five board members with terms expiring at the end of 2013. We are actively recruiting new board members. Several of our board members act as liaisons with other local and state organizations, furthering our relationship building objectives. Administrative Sara Valesano, Office Administrator has been with us three years and is very effective in her position. Tammy Sarto acts as a monthly consultant and grant writer. She is a significant asset for grant applications and media communications. Marketing/ Communications Adding new leadership in 2011, our Membership and Communication Committees continues to develop. We submit press releases to and receive press coverage from local media; especially Sun Sailor and SLP Patch. We advertise in the St Louis Park Community Education catalogue and recently placed add space in the new SLP Magazine which came out with its first issue in September. Park TV- routinely publicizes our events New Website Our website has undergone a significant update this past year with significant developments in the following areas • Interactive website for community artists and businesses • Updated community calendar and schedule of events • Current blog with interesting art related topics Newsletter Summer statistics as follows Sent Opened Clicks Aug 764 24% 0% July 836 26% 2.5% June 760 25% 4.5% Telephone communication Number and type of inquiries, year to date, as follows Study Session Meeting of October 22, 2012 (Item No. 3) Page 7 Subject: Friends of the Arts Annual Report and Update Email communication On average, we receive 320 emails send 150 emails per month. Finance Board Treasurer, Sandy Hicks, has been with us two years. 2011 tax returns were completed, reviewed, and filed by the May 15 due date. Detailed and comprehensive financial reports are presented and reviewed monthly. Study Session Meeting of October 22, 2012 (Item No. 3) Page 8 Subject: Friends of the Arts Annual Report and Update St. Louis Park Friends of the Arts Announce Town Hall Meeting to Discuss the State of Arts in St. Louis Park (ST. LOUIS PARK, MN)…October 2, 2012. St. Louis Park Friends of the Arts (FoTA) announce a public Town Hall Meeting for the arts on October 25, 2012 at City Hall at 7:00PM. The purpose of the Town Hall meeting is two-fold: to provide an overview of all the arts organizations, programs and activities that are currently happening in St. Louis Park, and to hear from community members about what they value about the arts and the role they would like the arts to play in our community’s future plans. The meeting will be facilitated by Carlo Cuesta of Creation in Common. Creation in Common is a local consulting firm for nonprofit organizations that want to strengthen their communities through the arts. Gathering information from the community is the first step in a strategic planning process that defines the role the arts will play in St. Louis Park’s future. “We have seen tremendous growth in and demand for the arts in St. Louis Park over the past few years,” said FoTA Board Chair, Susan Schneck. “The FoTA Board feels it is vital that we begin an arts planning process now because we see exciting possibilities for expanded programming, arts organization support and other community partnership opportunities emerging,” she added. Friends of the Arts (FoTA), a nonprofit community organization, designated by the City of St. Louis Park to support, organize, enhance, and promote all art forms in St. Louis Park. FoTA connects people and organizations around the arts, shares arts-related information and resources, and coordinates community arts programs. For more information about the group, please visit our website at: www.SLPFriendsoftheArts.org. ### FOR IMMEDIATE RELEASE Contact: Tammy Hauser Director of Communications, SLP FoTA 612-578-0952 tammyhauser@blueskythinking.net Meeting Date: October 22, 2012 Agenda Item #: 4 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Project Update - Highway 100 Reconstruction Project RECOMMENDED ACTION: The purpose of this discussion will be to update and make Council aware of upcoming activities and actions with regards to the Highway 100 Reconstruction Project - Project No. 2005-2000. POLICY CONSIDERATION: None at this time. Please let staff know of any comments or questions you might have. BACKGROUND: A report was provided to Council on September 10, 2012 providing an update on the Highway 100 project. The report provided a general history and background of the entire project, including the process over the last few years that led to the current layout (Exhibit A) being forwarded by MnDOT. Council was also provided information with regards to the municipal consent process, the noise wall determination process, a list of anticipated next steps, and a projected schedule. Subsequently, a formal letter (dated September 18, 2012) requesting municipal consent was received by the City. This request was presented to the City Council at the regular meeting on September 24, and a public hearing was scheduled for November 5, 2012. NEXT STEPS: Municipal Consent: Prior to holding the public hearing, MnDOT will be hosting an informational meeting on Wednesday, October 24 in the Council Chambers from 5:00 PM to 7:30 PM. The meeting will be conducted in an open-house format and interested citizens will be able to provide questions and comments on the final layout prior to the public hearing. The public hearing will be held at the regular City Council meeting on November 5, 2012. The City must approve or disapprove the MnDOT municipal consent request within 90 days of the Public Hearing or let the time period expire, in which case it is deemed approved. If the City disapproves, MnDOT’s options are: 1. Make the changes requested by the City (if any) 2. Refer the layout to an Appeal Board 3. Stop the project 4. Modify the project so municipal consent is not required 5. Prepare a new final layout and start the municipal consent process over from the beginning Noise Walls and Environmental Assessment: Concurrent with the Municipal Consent process, MnDOT is conducting a parallel process with approval of the Environmental Assessment (EA) and whether or not to remove noise walls from the project design plans. MnDOT has indicated intent to release the EA later this year with a public hearing to follow. Study Session Meeting of October 22, 2012 (Item No. 4) Page 2 Subject: Project Update - Highway 100 Reconstruction Project Noise walls are presently included as part of the project layout and design. The State of Minnesota, in accordance with federal regulations follows a process that allows for adjacent property owners to remove the walls from the project should they desire through a voting procedure. Informational meetings explaining this process were held on October 16 and October 18. Notification of the meetings, voting information, and voting ballots were sent to property owners determined affected in accordance with federal and state requirements. Noise Advisory Committee (NAC) meetings have been held since the end of last year and the fourth and final meeting was held on June 19, 2012. As previously reported, MnDOT created the NAC to comply with the “new” federal Noise Analysis process required for this project. The intent of the NAC was to provide two-way communication between the community and the project team, educate residents about the noise evaluation process, review the noise analysis methodology and results, and provide feedback to the City Council as well as communicate project information to neighborhood residents. As a result of these meetings and the information conveyed by committee members to their neighbors, many residents already had a good deal of knowledge and background information prior to the meetings on October 16 and October 18. Visual Quality Process and Public Art: MnDOT is in the process of hiring a consultant to help facilitate a Visual Quality Process Manual Development for the project. This process typically includes a committee to allow for articulation of community values and objectives to ensure sensitivity to visual quality and aesthetics in the design. This process will also include the consideration of public art, similar to procedures utilized for the Highway 7/Louisiana Avenue project. Staff has assembled a list of community representatives to serve on this committee consisting of representatives from adjacent neighborhoods, religious and educational institutions, and other community interests. Project Advisory Committee: MnDOT is also working to form a Project Advisory Committee. This group would meet on a biannual basis through the design phase and more frequently during actual construction. The purpose of this committee will be to allow MnDOT to provide current project information and receive feedback from stakeholders to help better understand and address the many issues that arise during a project of this magnitude. Specific committee members have not yet been determined, but it is expected that members will include a wide variety of interests, including representatives of the many agencies involved (both elected representatives and staff), such as the City, County, State, the business community, and other stakeholders as appropriate. Schedule as of October, 2012 Based on the current project status and progress made to date, the following schedule is anticipated at this time (subject to change): Municipal Consent Approval Process Municipal Consent Request Received Mid-September City Sets Public Hearing Date September 24, 2012 City Publishes Notice of Public Hearing October 4, 2012 MnDOT Hosts Public Meeting October 24, 2012 City Holds Public Hearing November 5, 2012 Deadline to Approve / Deny Request February 3, 2012 Public Environmental Assessment (EA) Released October-November, 2012 Noisewall Voting Process Ballots and Information Mailed Early October Information Meetings October 16 and 18, 2012 Study Session Meeting of October 22, 2012 (Item No. 4) Page 3 Subject: Project Update - Highway 100 Reconstruction Project Voting Period Expires December 28, 2012 Development of Construction Plans and Specifications Fall 2012 - Spring 2014 EA Process Completed Early 2013 Right of Way Acquisition May 2013 - May 2014 Open Bids and Award Contract May 2014 Construction Late 2014 - 2016 FINANCIAL OR BUDGET CONSIDERATION: As described in MnDOT’s request, the City’s share of the MnDOT project cost is estimated to be approximately $60,000. As the City continues to work with MnDOT through final design, including visual quality and public art considerations, the City’s share of the project cost may increase, depending on the level of improvements desired by the city. In addition to cost participation in the actual MnDOT project, the city also has several other obligations related to this project: Engineering Expenses: Previous Expenses and Studies $90,000 Additional Engineering Expenses $150,000 Utility Relocations or Improvements: Stormwater Facilities $600,000 Sanitary Sewer Facilities $1,000,000 Water Facilities $900,000 Utica Ave Reconstruction $250,000 VISION CONSIDERATION: The following Strategic Direction and focus area was identified by Council in 2007: St. Louis Park is committed to being a connected and engaged community. Focus will be on: • Developing an expanded and organized network of sidewalks and trails. • Promoting regional transportation issues and related dedicated funding sources affecting St. Louis Park including but not limited to Highway 100 and SWLRT. • Evaluating and investigating additional north/south transportation options for the community. Attachments: Exhibit A - Current Layout Prepared by: Scott Brink, City Engineer Reviewed by: April Crockett, West Area Engineer, Mn/DOT Michael P. Rardin, Public Works Director Approved by: Nancy Deno, Deputy City Manager/HR Director Study Session Meeting of October 22, 2012 (Item No. 4) Subject: Project Update - Highway 100 Reconstruction ProjectPage 4 Study Session Meeting of October 22, 2012 (Item No. 4) Subject: Project Update - Highway 100 Reconstruction ProjectPage 5 Meeting Date: October 22, 2012 Agenda Item #: 5 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Zoning Ordinance Amendment Regulating Outdoor Lighting RECOMMENDED ACTION: Discuss amendments to the Outdoor Lighting regulations in the Zoning Ordinance. POLICY CONSIDERATION: Should there be further provisions added to the Outdoor Lighting Ordinance? BACKGROUND: On September 24, 2012, the City Council adopted the first reading of the Outdoor Lighting Ordinance, and requested that it be further reviewed at a Study Session prior to the second reading. The ordinance was also discussed at City Council Study Sessions on April 9 and July 9, 2012. Attached are copies of these minutes. On July 18, 2012 the Planning Commission held a public hearing and recommended approval of the proposed ordinance; these minutes are attached as well. ORDINANCE CONSIDERATIONS: The questions brought up with the first reading of the Outdoor Lighting Ordinance were: 1. Should there be a limitation on the number of evenings per week for lighted athletic fields? 2. Should all fixtures be required to be changed out over a certain period of time? 3. Should the hours be limited to 10 p.m. versus the current provision of 11 p.m.? These questions are addressed below: 1. Regarding the limiting the number of evenings that recreational fields could be lit, the City’s Recreation staff notes that demand for lighted fields in St. Louis Park is high. There is a big demand for lighted fields for adult leagues in the city, some of which are being turned away. There is also unmet demand for lighted fields for evening youth football. Lighted fields can typically be used 5-6 evenings per week in the fall, and 3-5 nights per week in the spring and summer. It would be detrimental to the existing athletic programs to further limit the evenings to use these fields. 2. The proposed ordinance would require existing facilities to come into compliance if they are expanded or as fixtures are replaced. Changing fixtures over time will reduce the glare impacts of the lights because the new fixtures will be required to have the glare reducing features. A specific timeline for replacement could be placed in the ordinance if the Council desires; the existing facilities that do not have the glare packages are not grandfathered in via the previous ordinance. It could require the city and the two high schools to replace their athletic field lights by a specific date at a significant cost. A recent estimate for baseball field replacement showed a cost of $70,000 to $120,000 per field; a football field would likely be more. 3. In regards to reducing the hour limits on the lights, it should be noted that while most events are completed relatively early, the 11 p.m. lights out provision is needed for some Study Session Meeting of October 22, 2012 (Item No. 5) Page 2 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting events. Some games, such as baseball and occasionally football, can run past 10 pm and it will take typically ½ hour to an hour for athletes and fans to leave the area and for the cleanup to occur. The 11 pm time limit works for these sports. There is a provision in the ordinance that requires “the main lighting shall be turned off no later than one hour after an event ends.” And another provision in the ordinance that states, “Where technically feasible, a low level lighting system shall be installed to be used for patrons leaving the facility, cleanup, nighttime maintenance and other closing activities.” The 10 p.m. time limit would be a problem for some evening athletic activities. NEXT STEPS A second reading of the ordinance is tentatively scheduled for November 5, 2012. FINANCIAL OR BUDGET CONSIDERATION: None at this time. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community, including having strong neighborhoods. Attachments: Proposed Outdoor Lighting Ordinance Excerpt Unofficial City Council Minutes of September 24, 2012 Draft Planning Commission Minutes of July 18, 2012 Study Session Minutes Excerpts – April 9 and July 9, 2012 Prepared by: Meg J. McMonigal, Planning and Zoning Supervisor Reviewed by: Kevin Locke, Community Development Director Approved by: Tom Harmening, City Manager Study Session Meeting of October 22, 2012 (Item No. 5) Page 3 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting ORDINANCE NO.____-12 AN ORDINANCE AMENDING THE ST. LOUIS PARK ORDINANCE CODE RELATING TO ZONING BY AMENDING SECTION 36-363 THE CITY OF ST. LOUIS PARK DOES ORDAIN: Findings Sec. 1. The St. Louis Park Ordinance Code, Section 36-363 Outdoor lighting, is hereby replaced in its entirety as follows: Sec. 36-363 Outdoor lighting. (a) Purpose. The purpose of this section is to minimize the adverse effect of light and glare on operators of motor vehicles, pedestrians, and on residential and other land uses in the vicinity of a light source in order to promote traffic safety and to prevent the nuisances associated with the intrusion of spill light and glare. (b) Applicability. The requirements of this section apply to all outdoor lighting, except lighting for signs which are covered under section 36-362, and for street lighting within public rights-of- way. (c) Definitions. The following words; terms and phrases, when used in this section, shall have the meanings ascribed to them in this subsection, except where the context clearly indicates a different meaning. Cutoff or Shielded – An outdoor light fixture constructed or shielded in such a manner that no more than 2.5 percent of its light occurs above the horizontal plane of the fixture, and no more than 10 percent of its light occurs above 80 degrees. Direct Light – Light emitted directly from the lamp, off of the reflector or reflector diffuser, or through the refractor or other diffuser lens, of a luminaire. Footcandle – The basic unit of illuminance or the amount of light falling on a surface. One footcandle is approximately equal to the illuminance produced by a light source of one candle in intensity, measured on a surface at a distance of one foot above grade. Footcandles can be measured both horizontally and vertically by a footcandle or light meter. Full Cutoff or Fully Shielded – An outdoor light fixture constructed or shielded in such a manner that no light occurs above the horizontal plane and no more than 10 percent of its light occurs above 80 degrees. Glare – The sensation produced directly by a light source or indirectly from reflective surfaces within the visual field that is sufficiently brighter than the level to which the eyes are adapted, which can cause annoyance, discomfort, or loss in visual performance and visibility. Study Session Meeting of October 22, 2012 (Item No. 5) Page 4 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting The magnitude of glare depends on such factors as the size, position, brightness of the source, and on the brightness level to which the eyes are adapted. Illuminance – The amount of light falling on any point of a surface, typically measured in footcandles (or lux in the metric system). Indirect Light – Direct light that has been reflected or scattered off of other surfaces. Lamp – The component of the luminaire that actually produces the light, more commonly known as a bulb. Light Spill – Light that falls beyond the boundaries of the property on which the lighting installation is located and because of quantitative, directional or spectral content causes annoyance, discomfort, or loss in visual performance and visibility. Lumen – A unit used to measure the actual amount of light that is produced by a light source. The lumen quantifies the amount of light energy produced by a lamp at the lamp, not by the energy input, which is indicated by the wattage. For example, a 75-watt incandescent lamp can produce 1,000 lumens while a 70-watt high-pressure sodium lamp can produce 6,000 lumens. Luminaire or Fixture – The complete lighting assembly or fixture (including but not limited to the lamps, housing, ballasts, photocells, reflectors, lenses, shields, visors, louvers) but not the support assembly (poles or mounting brackets). Mounting Height – The vertical distance as measured from the ground directly below the centerline of the luminaire to the lowest light-emitting part of the luminaire. Ornamental Lighting – Lighting that is installed mainly or entirely for its decorative effect rather than as an aid to visibility. Semi Cutoff or Partially Shielded – An outdoor light fixture constructed or shielded in such a manner that no more than 5 percent of its light occurs above the horizontal plane of the fixture, and no more than 20 percent of its light occurs above 80 degrees. Shielded – A luminaire from which no direct glare is visible at normal viewing angles by virtue of its being properly located, aimed, oriented, and properly fitted with spill and glare control devices, such as shields, barn doors, baffles, louvers, skirts, inserts, visors and reflectors. (d) General provisions. (1) Lighting plan. Submittal of a lighting plan shall be required to ensure compliance with this section for all new development, redevelopment, and additions other than single- family and two-family dwelling units. The city may also require a lighting plan for any proposed new light source. This lighting plan shall include the following: a. A site plan showing locations of buildings, parking areas, landscaping, and all proposed outdoor lighting fixtures; b. Proposed mounting height of each outdoor lighting fixture; c. Descriptions of each proposed outdoor lighting fixture including but not limited to manufacturers catalog specifications sheets, photometric data, IESNA “cutoff” fixture Study Session Meeting of October 22, 2012 (Item No. 5) Page 5 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting designation, glare control package, type of lamp (e.g. high pressure sodium, metal halide, mercury vapor, fluorescent induction), lamp color temperature, and on/off control devices. d. An illuminance grid (point-by-point) plot of footcandles overlaid on the site plan, plotted out to 0.0 footcandles, indicating the location and aiming of outdoor lighting fixtures in compliance with the regulations of this section. (2) Maximum illuminance levels. Outdoor lighting shall not exceed the maximum maintained illuminance levels as recommended by the Illuminating Engineering Society of North America (IESNA). (3) Measurement. Post-installation lighting levels shall be measured after dark at the property line of the adjacent property by facing a light meter directly at the light source at 3 feet above grade. (4) Spill light and glare. Outdoor lighting shall be designed and arranged to limit spill light and glare on adjacent properties. Reflected glare or spill light shall not exceed five-tenths (0.5) footcandle when the source of light abuts any residential property or one (1.0) footcandles when the source of light abuts any commercial or industrial property, as measured at the property line of the adjoining use. (5) Hours of operation. The city may limit the hours of operation of outdoor lighting equipment if the city believes it necessary to reduce the impact of light on the surrounding neighborhood. (6) Prohibited lighting. No flickering or flashing lights shall be permitted. (7) Luminaire design. a. For the lighting of predominantly horizontal surfaces, luminaires shall be aimed straight down and shall meet full cutoff criteria unless ornamental light fixtures are installed in the manner provided in a site and building plan approved by the city. Ornamental fixtures may be approved when the developer can demonstrate that undesirable off-site impacts stemming from direct or reflected views of the light source are eliminated by the fixture design or location of the lighting fixture. b. For the lighting of predominantly non-horizontal surfaces, such as building facades, landscaping, fountains, displays and statuary, luminaires shall be located, aimed and shielded so as to not project their beam onto abutting properties, past the object being illuminated, skyward or onto a public roadway. The lighting shall be fitted with such devices as shields, barn doors, baffles, louvers, skirts or visors to minimize spill light and glare impacts. (8) Maximum mounting height. Light poles or standards for exterior lighting shall not exceed a height of 45 feet, except that poles or standards on the top level of parking structures shall not exceed 25 feet. (e) Recreational lighting provisions. Because of its unique requirements for nighttime visibility of recreational activities and limited days/hours of operation, outdoor recreational facility lighting is exempt from the outdoor lighting standards of section (d) (2) through (8) above. An Study Session Meeting of October 22, 2012 (Item No. 5) Page 6 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting outdoor recreational facility that has illuminated playing fields, courts or performance spaces shall be subject to the following standards: (1) Luminaire design. All outdoor recreational lighting fixtures shall be directionally shielded. Lighting fixtures shall also be aimed to ensure that their beams fall within the primary playing area of the fields/courts/tracks or primary performance space and immediate surroundings so that spill light and glare on adjacent properties are minimized. (2) Glare control. All outdoor recreational lighting fixtures shall be from a manufacturer that offers a glare control package and it shall be fitted with the manufacturer’s glare control package. (3) Maximum illuminance levels. All outdoor recreational lighting installations shall be designed to achieve no greater than the maximum illuminance levels for the proposed recreational activity as recommended by the Illuminating Engineering Society of North America (IESNA). (4) Maximum spill light levels. Spill light shall be minimized to the greatest extent possible given the unique illumination constraints of the outdoor recreational facility. Since outdoor recreational facilities require much higher lighting levels than other outdoor lighting uses and are in operation for limited periods of time, the maximum spill light level allowed is also higher. When an outdoor recreational facility abuts a residential dwelling unit, it shall be designed so that the illumination at the residential property boundary line that is attributable to the recreational lighting does not exceed 1.5 maximum vertical footcandles. (5) Maximum mounting height. The mounting height of outdoor recreational lighting fixtures shall not exceed a maximum height of eighty (80) feet. The City Council may approve additional height if it is shown as necessary to reduce spill and glare and has no additional adverse impacts. (6) Hours of operation. The use of outdoor recreational lighting shall not be permitted between the hours of 11:00 PM and 7:00 AM. The main lighting shall be turned off no later than one hour after an event ends. Where technically feasible, a low level lighting system shall be installed to be used for patrons leaving the facility, cleanup, nighttime maintenance and other closing activities. (7) Visual impact plan. To assist the City in determining whether the potential impacts of proposed outdoor recreational lighting have been suitably managed, applications for illuminating outdoor recreational facilities shall be accompanied not only with the information required under section (d) (1) above but also by a visual impact plan that contains the following: a. Plan views containing a layout of the outdoor recreational facility, showing light pole locations, and showing the location of abutting residential properties and structures. b. Elevations containing pole and luminaire mounting heights, and luminaire arrays for each pole location. c. Light scans in the maximum vertical plane containing illuminance plots at the boundary of the adjacent property, taken at a height of three (3) feet. Study Session Meeting of October 22, 2012 (Item No. 5) Page 7 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting d. Proposed frequency of use of the outdoor recreational facility during hours of darkness on a month-by-month basis and proposed time when the recreational lighting will be switched off. e. A narrative describing the measures proposed to achieve minimum off-site disturbance, including landscape screening. (8) Subsections (e)(5) and (6) shall apply to all outdoor recreational facilities existing as of the effective date of this Ordinance. Subsection (e) shall apply in its entirety to any new outdoor recreational facility, the expansion of an existing facility, upon replacement of the luminaires or fixtures or upon any reconfiguration of existing lighting installations. Outdoor recreational lighting installations existing as of the effective date of this Ordinance may continue to be operated in their existing configuration, including repair and maintenance, so long as there is no increase in maximum illuminance levels, light spill or glare. Sec. 2. The City Council has considered the advice and recommendation of the Planning Commission (Case No. 12-19-ZA). Sec. 3. The contents of Planning Case File 12-19-ZA are hereby entered into and made part of the public hearing record and the record of decision for this case. Sec. 4. Section 1 of this Ordinance shall take effect fifteen days after its publication. Section 2 of this Ordinance shall take effect twenty days after its publication. Public Hearing July 18, 2012 First Reading September 24, 2012 Second Reading Date of Publication Date Ordinance takes effect Reviewed for Administration Adopted by the City Council City Manager Mayor Attest: Approved as to Form and Execution: City Clerk City Attorney Study Session Meeting of October 22, 2012 (Item No. 5) Page 8 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting Excerpt from September 24, 2102 Unofficial City Council Study Session Minutes 8b. First Reading – Zoning Ordinance Amendment Regulating Outdoor Lighting Ms. McMonigal presented the staff report and explained that the Ordinance amendment updates existing lighting regulations to minimize glare and spillover light on adjacent properties, addresses the feasibility of achieving the City's requirements related to seeing a light source from off-site, and clarifies the measurement methods used in measuring light. She stated the City hired Jeff Miller from HKGi and Mr. Miller researched outdoor lighting regulations and prepared a draft Ordinance, which was discussed with Council in April and July this year. She indicated this Ordinance reflects the comments received at the study session including adding a low lighting option at athletic fields when events are finished and also adding a provision that landscaping can be used for screening the lighting at athletic fields. She stated that all existing outdoor lighting facilities will be required to comply with the Ordinance if the facility expands its operations or as fixtures are replaced, noting that typical lighting replacement occurs every four to fifteen years so it will take a bit of time until all athletic fields are in compliance but over time there will be a permanent reduction in light spill and glare. Mayor Jacobs opened the public hearing. Mr. Lee Snitzer 2504 Quentin, appeared before the City Council and stated he did not feel the proposed amendment does enough to minimize glare and spillover light. He stated he lives adjacent to Benilde and the City earlier granted Benilde a special use permit to have that field in a residential neighborhood where property values exceed $250,000. He stated that Section 6 of the Ordinance dealing with hours of operation appears to expand the hours of operation allowing use of lighting up to 11:00 p.m. and requested that the City consider 10:00 p.m. as a reasonable time that outdoor lights be required to be turned off because most activities are over between 9:00 and 9:30 p.m. He stated the activity on the Benilde field is not what they anticipated and they were told the field would be used 1-2 nights per week but the field's lights are on seven nights per week. He noted most City parks have two courses of lights but Benilde has three courses of lights, which creates more light pollution and glare. He suggested the City consider requiring all fixtures to be painted black now because that would cut down the glare from the shiny fixtures. He added he appreciated the City Council's sensitivity to the issue. Mayor Jacobs closed the public hearing. Councilmember Sanger stated the previous ordinance provided there should not be spillover light and glare in neighborhoods because the light pollution goes into the nearby homes and into the eyes of drivers. She understood that the City did not think it was possible to control this or eliminate it entirely, but when given suggestions on how to minimize it, the City has an obligation to test them. She stated she is opposed to the proposed amendments because a lot of light pollution will enter into homes of nearby residents and her concern was that the City has not struck a good balance with the needs and rights of property owners living nearby. She stated her biggest concern was there is no limitation on use of the fields and these fields can be used seven nights a week and indicated she would feel better if a balance could be struck, e.g., the lights cannot be on more than "x" number of nights per week. She stated she was also concerned about how Study Session Meeting of October 22, 2012 (Item No. 5) Page 9 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting the City got to this point in the first place, stating this issue has come up in other parts of the community and the issues at Benilde galvanized the City into taking action. She indicated Benilde asked for permission to redo their fields and part of the agreement was that Benilde must comply with the Ordinance requirements, but Benilde did not comply as it relates to spillover glare and rather than enforce the Ordinance, the City relaxed its requirements. She stated she was not in favor of the Ordinance as drafted and would prefer that Council take another look at the limitations on how many nights a week that fields can be lit and also the issue regarding other ways to control glare. Councilmember Spano asked how Section 7(b) regarding shielding devices would be implemented to minimize glare impacts. Ms. McMonigal explained it is expensive to change out all the lights and this Ordinance would require every athletic field to install the most updated glare packages on their lights when they are changing out their fixtures. She added that several of the City's fields have already been updated but it will take some financial planning on the City's part to plan for their eventual replacement. Councilmember Sanger suggested that the Ordinance require that all fixtures be changed over within a certain period of time. She stated priority needs to be given to recreational lighting within a specified distance of residential properties to prevent glare into homes. Mr. Scott stated that the City Council could require that all fixtures be changed over within a certain period of time; in the case of Benilde, most if not all of the current facilities are not in compliance from a glare standpoint and these are non-conforming uses and if the City wanted to impose a deadline, the City Council could do that. It was moved by Councilmember Sanger to table First Reading pending further discussion of proposed amendments by Council. Councilmember Ross stated she felt the Ordinance should require lights off at 10:00 p.m. instead of 11:00 p.m. and suggested looking at a provision that states if fields are going to be lit past 10:00 p.m. those fields need to be retrofitted now and that might alleviate some of those problems. Councilmember Hallfin noted that a majority of the fields are City fields and he felt the Ordinance was well written. He commended staff for their efforts in drafting the Ordinance after significant discussion with Council. The Motion failed for lack of a second. It was moved by Councilmember Hallfin, seconded by Councilmember Santa, to approve First Reading of Ordinance Amending the St. Louis Park Ordinance Code Relating to Zoning by Amending Section 36-363 and to set Second Reading for October 15, 2012. Councilmember Ross stated she agreed with Councilmember Sanger's concerns and requested Council review the Ordinance in study session prior to the Second Reading. The motion passed 6-1 (Councilmember Sanger opposed). Study Session Meeting of October 22, 2012 (Item No. 5) Page 10 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting UNOFFICIAL MINUTES PLANNING COMMISSION ST. LOUIS PARK, MINNESOTA JULY 18, 2012 – 6:00 p.m. COUNCIL CHAMBERS MEMBERS PRESENT: Lynne Carper, Robert Kramer, Dennis Morris, Richard Person, Carl Robertson, Larry Shapiro MEMBERS ABSENT: Claudia Johnston-Madison STAFF PRESENT: Meg McMonigal, Gary Morrison, Nancy Sells *** B. Outdoor Lighting – Zoning Ordinance Amendment Applicant: City of St. Louis Park Case No.: 12-19-ZA Meg McMonigal, Planning and Zoning Supervisor, presented the staff report. She explained that the proposed amendment is in response to issues that came from the public, in particular when the Benilde fields were rebuilt. She said there were requirements in the ordinance that were difficult for anyone to meet. One of them regarded seeing a light source or its reflection from off-site. Staff took a look at all of the outdoor lighting, revamped the glare and spillover requirements, addressed additional types of outdoor lighting, changed the measurement methods and with that change changed the requirements of footcandles for outdoor recreational facilities. Ms. McMonigal said the new ordinance adds quite a few requirements that staff will look at in advance when reviewing site plans or conditional use permits to minimize spillover effects on other properties. She reviewed a number of new requirements. Ms. McMonigal addressed questions about the ordinance which Commissioner Carper sent in advance of the meeting. One of his questions regarded abutting properties. Ms. McMonigal said staff measures the lighting at the property line of the use. In addressing Commissioner Carper’s question about horizontal surfaces, Ms. McMonigal said the requirement is that the lights on buildings be pointed down, not out. Commissioner Carper also asked if the criteria were tested on non-recreational areas to determine if most lighting applications meet the criteria. Ms. McMonigal said for non- recreational areas the standards will be the same and most of the lighting on new sites has had to meet these criteria in the past. She said staff did measure 10 or more of the major fields around the city and almost all of them should meet the criteria. There might be one or two spots on one or two fields that might not meet the criteria but most of the lighting will meet these new criteria. Chair Kramer asked if an outdoor recreational area has an official designation. Ms. McMonigal spoke about the definition of an outdoor recreational facility that has illuminated playing fields, courts or performance spaces. She said there are probably a dozen around the city, and they are schools and parks. Study Session Meeting of October 22, 2012 (Item No. 5) Page 11 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting Chair Kramer asked about lighting which was temporary or seasonal. Ms. McMonigal responded that typically that kind of use wouldn’t come through for an approval, but if there is an issue the proposed ordinance would allow the City to work with the installer of the light. Chair Kramer opened the public hearing. Michael Valley, 2509 Princeton Ct., Princeton Ct. Association president, said the association has raised concerns about Benilde’s lighting since the beginning of the field remodel. He said of the 24 residences, 7 abut the Benilde field and feel the impact of those lights. Mr. Valley asked if the Benilde field fits the new proposed criteria. Ms. McMonigal said Benilde’s fields have been measured several times with some of the Princeton Ct. residents. These fields will meet the new guidelines. She went on to say the Benilde fields meet the current guidelines as well, with the exception of being able to view the light source or its reflection from off-site. Mr. Valley asked how the 80 ft. maximum mounting height was determined. Ms. McMonigal stated a consultant helped with the lighting study and she believes 80 ft. is a typical maximum for recreational fields. She said she didn’t think Benilde’s lights are quite that high. Mr. Valley asked if the proposed ordinance was written to allow Benilde’s lighting to fit the new ordinance. He asked how the consultant looked at what currently exists in the City, compared it with model ordinances, and then came up with the proposed ordinance amendment. Ms. McMonigal stated that the consultant looked at a number of sources, including Illuminating Engineering Standards and a number of ordinances around the country and the general practices. At the same time, City staff measured all around the city looking at all the fields to see the current situation in St. Louis Park. She said the goal was to increase the requirements, particularly with the lights themselves, to do the maximum amount of shielding possible so a field could still be adequately lighted for safety, but not going over that maximum. The efforts in the ordinance go to the spillover effect. Mr. Valley asked why the maximum illuminance levels of the Illuminating Engineering Society of North America (IESNA) weren’t spelled out in the ordinance. Ms. McMonigal said specific levels weren’t referenced because the handbooks of the IESNA change over time. Commissioner Robertson commented that specific illuminance levels probably weren’t referenced in the proposed ordinance because there are different standards for different applications, and to reference the IESNA’s standards covers all the bases. Chair Kramer closed the public hearing as no one else was present wishing to speak. Commissioner Morris made a motion recommending approval of the revised Outdoor Lighting Zoning regulations. Commissioner Robertson seconded the motion, and the motion passed on a vote of 6-0. Study Session Meeting of October 22, 2012 (Item No. 5) Page 12 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting Excerpt from Study Session April 9, 2012 6. Outdoor Lighting Ordinance Ms. McMonigal presented the staff report and introduced Jeff Miller, consultant with HKGi. Mr. Miller presented the findings of the exterior lighting ordinance study and stated that the critical issues identified in the study include the need to change the standard that prohibits a light source from being visible off site, addressing spillover or glare, standards for recreational fields, and it was found that the current measurement methods are confusing. Councilmember Sanger requested clarification regarding recreational lighting versus other outdoor lighting. She questioned why there is currently so much spillover recreational lighting on adjacent properties. Mr. Miller explained it is typical for recreational lighting to be treated differently because lighting needs for spectators and participants is challenging and the amount of time that lighting is used is limited compared to a parking lot or street light. He stated the lighting for different types of sports needs to be different, must be aimed in different directions, and requires different light levels. He indicated they are recommending that the City focus on shielding of lights and aiming of lights in preparing an outdoor lighting ordinance. Councilmember Santa stated that lighted recreational facilities in the City have spillover issues and the City appears to be the biggest offender. She reminded Council that it needs to think about how it is going to apply these standards to its own facilities and not just Benilde-St. Margaret’s. Councilmember Sanger expressed concern that the City previously approved the plan by Benilde-St. Margaret’s to build an athletic field and Benilde-St. Margaret’s was aware of the City’s Ordinance requirements and has failed to comply. She stated the City has received complaints and the City has not forced Benilde-St. Margaret’s to resolve the problem. She requested that any outdoor lighting ordinance include a requirement to eliminate glare. Councilmember Mavity stated she appreciated Councilmember Sanger’s frustration but it is not possible to meet the City’s current ordinance and it needs to be amended. She added that light pollution is part of life in an urban setting and to require the elimination of all glare is not reasonable. Councilmember Hallfin suggested that the hours of operation be expanded to allow operation of lights whenever games are being played because it is sometimes dark before 4:00 p.m. and lights are needed for games. He requested that staff look at the best practice for this requirement. Councilmember Spano requested that the ordinance include a requirement for natural buffers, e.g., trees, around lighting sources. He stated that when Methodist expanded its facility, plantings were used as light shields and the trees have done a great job of shielding the neighboring properties from the lights on the sides of the building. Study Session Meeting of October 22, 2012 (Item No. 5) Page 13 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting Councilmember Sanger requested that the setback requirements be reviewed to require lighting be installed a minimum number of feet from adjacent residential property lines. She also asked if height restrictions on lights could be added. Ms. Deno agreed that staff would look at best practices in other models for residential property setbacks and height restrictions. It was the consensus of the City Council to direct staff to develop specific outdoor lighting ordinance provisions with the Planning Commission and prepare an updated ordinance for Council review in study session. Excerpt from Study Session July 9, 2012 1. Outdoor Lighting Ordinance Ms. McMonigal presented the staff report and proposed Outdoor Lighting ordinance. She advised that it appears impossible to meet the requirement that a light source or its reflected image not be seen off-site particularly as it relates to outdoor recreational lights. She stated the proposed ordinance contains new requirements for measuring light which results in a different standard that is clearer and which can be measured consistently. Mr. Miller stated the new ordinance contains a higher standard noting that the current ordinance allows 0.5 footcandles at the property line for all outdoor lighting. He indicated their research found it was very atypical to have recreational lighting held to the same standards as other lighting. Mr. Fulton demonstrated how light is measured under the current ordinance and how it will be measured under the new ordinance, noting that the lighting consultant informed the City it should be measuring the maximum plane of light which will be different for a car lot versus recreational lighting and this measurement will yield a higher number. Councilmember Spano stated he would like to see requirements for using natural landscaping or plantings to help shield neighboring properties. He asked if there was any discussion about using landscaping around recreational facilities that abut residential properties to prevent fixtures from being viewed from the property line. Ms. McMonigal agreed to research this further. She added that the City reviews lighting and landscaping plans as part of its review of site plans and the issue of shielding neighboring properties from light glare could be addressed at that time. Mr. Miller noted that the ordinance contains a new requirement to submit a visual impact plan when applications for outdoor lighting are submitted to the City. Councilmember Sanger suggested that the third sentence of paragraph (d)(6) be revised to state “where technically feasible, a low level lighting system shall be installed to be used for patrons leaving the facility, cleanup, nighttime maintenance and other closing activities.” She also suggested that the ordinance include some time limits or specify the maximum number of hours Study Session Meeting of October 22, 2012 (Item No. 5) Page 14 Subject: Zoning Ordinance Amendment Regulating Outdoor Lighting or days of the week for hours of operation. She also asked if the new ordinance will apply to current recreational fields or only to future lighting. Ms. McMonigal stated the ordinance will apply to future outdoor lighting. She indicated the section regarding hours of operation can be changed by the City Council and noted that limiting the maximum number of hours or days of the week would be difficult to enforce. Councilmember Mavity stated she appreciated the concerns raised by Councilmember Sanger but was concerned about the City mandating the maximum number of hours or days of the week and mandating that a low level lighting system be installed at every location. Councilmember Spano suggested that landscaping be noted as an option for screening lighting from neighbors. It was the consensus of the City Council to direct staff to hold a public hearing on the outdoor lighting ordinance at the July 18, 2012, Planning Commission meeting. Meeting Date: October 22, 2012 Agenda Item #: 6 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering RECOMMENDED ACTION: The purpose of this agenda item is to discuss the proposed revisions to the Mobile Food Vehicles and Catering Zoning Ordinance amendment. POLICY CONSIDERATION: Does the City Council wish to make changes to the City Code to allow mobile food vehicles as a temporary use on private property, and to allow catering as an accessory use in the R-1, R-2 and R-3 Zoning Districts? BACKGROUND: The City Council considered the first reading of the proposed ordinance on September 4, 2012. The City Council asked that the proposed ordinance be scheduled for a study session so it could discuss mobile food vehicle performance standards. The City Council also asked to discuss the impacts of allowing catering as an accessory use. Below is a summary of the proposed ordinance as amended to address the concerns expressed by the City Council. Mobile Food Vehicles Mobile Food Vehicles are currently allowed in a limited fashion as a temporary use. Existing Ordinance: A mobile food vehicle is a motorized vehicle, a trailer or a push cart that is used for preparing and selling food and beverages to the general public. The City currently allows mobile food vehicles in two ways: 1. As a temporary sales activity in the same manner as we allow sidewalk sales and other special event sales a retailer may have. This means a property owner may have a mobile food vehicle for up to 14 days per calendar year, and the business owner can only sell outside what is also being sold inside their building. Therefore, a mobile food vehicle can only locate at private property that is also selling food inside the building. 2. As a vendor participating in a special event such as Parktacular or a farmers market. Proposed Ordinance: The proposed ordinance will create a new section in the temporary sales section of the zoning ordinance that is specific to mobile food vehicles. This will create a clear distinction between temporary food sales and temporary sales of merchandise. The proposed ordinance expands the permitted operation of mobile food vehicles primarily by allowing them to operate at any non-residential property, and by removing the requirement that they can only sell what is being sold inside the building located at the property on-which the City Council Meeting of October 22, 2012 (Item No. 6) Page 2 Subject: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering mobile food vehicle is operating. The proposed ordinance also includes numerous performance standards to address safety and potential nuisance issues. At the September 4th City Council meeting, the City Council directed staff to include performance standards to mitigate the following potential impacts: • Signage. Additional standards were added to limit signage to anything applied to the vehicle itself by decals, paint, and awnings. It also allows signage to be attached to the vehicle as long as it does not extend above the height of the vehicle. (Some vehicles attach a menu board to the side of the vehicle when it is in operation.) A pedestrian sign is also allowed within five feet of the vehicle. A pedestrian sign is a temporary sign that fits within the volume of three feet wide by three feet deep by four feet high. • Lighting. Shielding was better defined so that the light is directed down and illuminates only the point of sale area and no more than 10 feet away from the vehicle. The intent is to provide lighting that is safe and necessary for the operation, but is not a nuisance to neighbors. • Noise. Noise making devices such as radios, televisions, visual entertainment devices or noisemakers such as bells, horns or whistles are not permitted. A limit of 70 decibels is also established for power generators. This is the limit used by the City of St. Paul. They found that this works well for newer generators, and can be a problem for older or poorly maintained generators. • Hours of operation. Hours of operation were added to the ordinance. The proposed hours are 7 am to 10 pm. This limitation is consistent with the hours of the day higher noise limits are allowed by the existing City noise ordinances. • Overnight parking. Overnight parking or storage of the vehicle is not allowed. The only exception to this is vehicles under long-term contract with the property owner to be open nearly every day. Examples include the hot dog trailer outside Cub Foods; Home Depot has also expressed interest in a hot dog trailer outside their store. These trailers will be secured and stored overnight in the same location that they operate from. • Alcoholic beverages. A provision was added to allow only the sale of food and non- alcoholic beverages. Staff reviewed ordinances from Minneapolis and St. Paul, reviewed the findings of a study completed by the City of Eagan in which they surveyed numerous cities in the metropolitan area, and reviewed the performance standards with the Inspections Department, Public Works, Parks and Recreation, the Fire Department, and the Police Department. A revised copy of the proposed ordinance is attached for your review. The bold language represents new language added to the ordinance as a result of the research since the September 4th City Council meeting. Catering Over the past two years, City staff has received requests from property owners/managers of community centers, religious institutions and educational facilities to allow small catering companies to use their commercial kitchens. Facilities such as these are required by the state food codes to install commercial grade kitchens even though the facility may be in-frequently used. The equipment is expensive, and allowing a catering company to utilize the equipment while the facility is not in use allows the facility to re-coup some costs. In some cases the facility also benefits from having the catering company readily available in the building. The caterer can provide food for events happening at the facility, and make meal programs available to the congregation and community. City Council Meeting of October 22, 2012 (Item No. 6) Page 3 Subject: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering There are approximately 16 facilities that have commercial kitchens. Of these, 11 are schools the remaining five are religious institutions and community centers. It is not expected that a public school will take advantage of this provision, but a private school like Holy Family may be more likely. The City has received interest in the past from the Jewish Community Center and Lenox Community Center, so it is likely that they will take advantage of the ordinance. Property Taxes: The proposed ordinance allows for-profit catering businesses to operate out of educational facilities, community centers, and religious institutions all of which are non-profit uses, and do not pay property taxes. However, if a for-profit business operates from a tax-exempted property, property taxes are owed for the for-profit activities. Cory Bultema, City Assessor, calculates the taxes due by determining a ratio that reflects how the activities of the for-profit use compared to the activities of the non-profit use. That ratio is then applied to the property valuation, and the property owner pays property taxes on the for-profit portion of the formula, while the non-profit remains tax-exempt on the remaining portion. Existing Ordinance: Catering is currently allowed as a principal use in the Industrial and Business Park Zoning Districts, and as an accessory use to restaurants in the Commercial, Office and Mixed-Use Zoning Districts. Proposed Ordinance: The proposed ordinance would allow catering as an accessory use to Religious Institutions, Community Centers and Educational Facilities located in the R-1, R-2 and R-3 Zoning Districts. This would allow the catering company operating at one of these facilities to use the kitchen to prepare food for consumption at an event located off-site. The only condition attached specifically to the use is a prohibition on the outside storage of vehicles used in the catering business due to the close proximity most of these uses have to residential properties. Planning Commission Action: The Planning Commission conducted a public hearing on August 15, 2012. No comments were received from the public. The Commission recommended approval of the ordinance upon a 7-0 vote. NEXT STEPS: Schedule the ordinance for a first reading before the City Council on November 5, 2012. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to promoting community gathering places. Attachments: Draft Zoning Ordinance Prepared by: Gary Morrison, Assistant Zoning Administrator Reviewed by: Meg McMonigal, Planning & Zoning Administrator Kevin Locke, Community Development Director Approved by: Tom Harmening, City Manager City Council Meeting of October 22, 2012 (Item No. 6) Page 4 Subject: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering ORDINANCE NO.____-12 AN ORDINANCE AMENDING THE ST. LOUIS PARK ORDINANCE CODE RELATING TO ZONING BY AMENDING SECTIONS 36-4, 36-82, 36-163, 36-164, AND 36-165 MOBILE FOOD VEHICLES AND CATERING THE CITY OF ST. LOUIS PARK DOES ORDAIN: Findings Sec. 1. The City Council has considered the advice and recommendation of the Planning Commission (Case No. 12-21-ZA). Sec. 2. The St. Louis Park Ordinance Code, Sections 36-4, 36-82, 36-163, 36-164, and 36-165 are hereby amended by adding underscored language. Section breaks are represented by ***. Section 36-4. Definitions *** Mobile Food Vehicle means a vehicle or cart used to prepare and serve food and/or beverages. *** Sec. 36-82. Temporary uses. (a) Purpose and effect. The purpose of this section is to provide conditions under which temporary uses may be allowed in order to ensure a minimum negative impact to neighborhoods and neighboring land uses. (b) Authorized temporary uses. A structure or land in any use district may be used for one or more of the following temporary uses if the use complies with the conditions stated in this chapter: *** (10) Mobile Food Vehicle. Mobile food vehicles (vehicle) are permitted with the following conditions: a. The vehicle is not permitted on property that is zoned residential and used as a residential dwelling. b. The vehicle shall have all permits and licenses required by the State and Hennepin County to operate. A current copy of the permits and licenses shall be kept at the vehicle and immediately made available upon request. The operator shall comply in all respects with all requirements of state and county law. c. The vehicle may be parked in a public right-of-way if the right-of-way is closed as authorized by the City. City Council Meeting of October 22, 2012 (Item No. 6) Page 5 Subject: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering d. The vehicle operator shall have written permission from the property owner to operate on their property. The written permission shall be kept with the vehicle, and made immediately available to the City upon request. e. Only food and non-alcoholic beverages shall be sold. f. The vehicle operator shall comply with the following site standards: 1) The vehicle shall be parked on a paved surface, unless it is located on a public park as approved by the City. 2) The vehicle shall be located at least 30 feet away from an entrance to a public road. 3) The vehicle shall not disrupt traffic and parking. 4) The vehicle shall not have a drive-thru. 5) There shall be at least six feet of safe pedestrian passage around the vehicle. g. Hours of operation shall be limited to the hours between 7:00 a.m. and 10 pm. h. Lighting shall be limited to: 1) Vehicular lighting that is required by law. 2) Lights necessary to illuminate the inside of an enclosed vehicle, service deck of a cart, and the point of sale area of the vehicle. The lighting shall not extend above the vehicle, shall be downcast, and shielded in such a way to illuminate the vehicle, and a point of sale area only. The lighting shall not directly illuminate an area more than 10 feet away from the vehicle. i. Noise generated by the vehicle and the use shall not become a nuisance. The operation of the vehicle shall adhere to the following: 1) No vehicle shall use or maintain any outside sound amplifying equipment, televisions or similar visual entertainment devices, or noisemakers, such as bells, horns, or whistles. 2) Power generators shall not exceed 70 decibels measured 10 feet away from the source. j. Signage shall be limited to the following: 1) Text and images permanently applied to the vehicle as a decal or painted image and text. 2) Signs that are attached to the vehicle. The signs shall not extend above the roof of the vehicle, or extend more than five inches beyond any side of the vehicle. These signs can be unlit or internally lit. 3) Text and images permanently applied to awnings that are attached to the vehicle, do not extend above the height of the roof of the vehicle, and are at least six feet from the ground to the bottom of the awning. 4) Text and images permanently applied to umbrellas that are attached to a food cart. The umbrella shall be less than nine feet in height, and maintain a clearance of at least six feet from the ground to the bottom of the umbrella. 5) One Pedestrian sign as defined in Section 36-362. The Pedestrian sign must be located within five feet of the vehicle. k. Trash, litter, recycling and refuse shall be handled in the following manner: 1) All waste liquids, garbage, litter and refuse shall be kept in leak proof, nonabsorbent containers which shall be kept covered with tight-fitting lids and properly disposed of at the establishment the vehicle operates from. Public trash cans shall not be used to dispose of waste generated by the operation. Excepted from this is the occasional use by customers. City Council Meeting of October 22, 2012 (Item No. 6) Page 6 Subject: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering 2) No waste liquids, garbage, litter or refuse shall be dumped or drained into sidewalks, streets, gutters, drains, or any other place except the licensed food establishment. 3) The vendor shall provide a garbage receptacle with a tight fitting lid. The receptacle shall be easily accessible for customer use, and located within five feet of the vehicle. 4) The operator shall be responsible for all litter and garbage left by customers. l. Overnight parking of the vehicle is not permitted, except that a vehicle under a long term contract to operate on a premises may be kept overnight on the same premises with the following conditions: 1) The vehicle is open for business at least six hours and five days per week for every week it is kept on site. The business hours must be posted on the outside of the vehicle at all times. 2) The vehicle is kept along the front wall of the building, near the customer entrance of the building. 3) The vehicle is kept within 10 feet of the principal building wall. 4) There is a minimum of six feet of pedestrian walkway between the vehicle and the edge of the sidewalk or marked pedestrian walkway. 5) Vehicles located on public property are exempt from these requirements pertaining to overnight parking. *** Sec. 36-163. R-1 single-family residence district. (a) Purpose and effect. The purpose of the R-1 single-family residence district is to provide appropriately located areas for single-family living on larger lots ensuring adequate light, air, privacy and open space for each dwelling; protect residents from the impacts of high levels of traffic; minimize traffic congestion; avoid the overloading of utilities by preventing the construction of buildings of excessive size when compared with surrounding structures; provide institutional and community services such as parks, schools, religious facilities, and community centers supportive of a residential area while safeguarding its residential character; and protect residential properties from noise, illumination, unsightliness, odors, dust, dirt, smoke, vibration, heat, glare, and other objectionable influences. *** (e) Accessory uses. The following uses shall be permitted accessory uses in an R-1 district: *** (14) Catering is permitted as an accessory use to Community Centers, Educational (academic) facilities, Country Clubs, and Religious Institutions with the following conditions: a. Vehicles used to receive and/or deliver food shall not be stored outside. *** City Council Meeting of October 22, 2012 (Item No. 6) Page 7 Subject: Zoning Ordinance Amendment Pertaining to Mobile Food Vehicles and Catering Sec. 36-164. R-2 single-family residence district. *** (e) Accessory uses. The following uses shall be permitted accessory uses in an R-2 district: *** (14) Catering is permitted as an accessory use to Community Centers, Educational (academic) facilities, and Religious Institutions with the following conditions: a. Vehicles used to receive and/or deliver food shall not be stored outside. *** Sec. 36-165. R-3 two-family residence district. *** (e) Accessory uses. The following uses shall be permitted accessory uses in an R-3 district: *** (13) Catering is permitted as an accessory use to Community Centers, Educational (academic) facilities, and Religious Institutions with the following conditions: a. Vehicles used to receive and/or deliver food shall not be stored outside. Sec. 3. The contents of Planning Case File 12-21-ZA are hereby entered into and made part of the public hearing record and the record of decision for this case. Sec. 4. This Ordinance shall take effect fifteen days after its publication. Public Hearing August 15, 2012 First Reading November 5, 2012 Second Reading November 19, 2012 Date of Publication Date Ordinance takes effect Reviewed for Administration Adopted by the City Council November 19, 2012 City Manager Mayor Attest: Approved as to Form and Execution: City Clerk City Attorney Meeting Date: October 22, 2012 Agenda Item #: 7 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: City Manager’s 2012 Performance Evaluation RECOMMENDED ACTION: Staff requests feedback on City Council’s desired approach for an annual performance evaluation for the City Manager. POLICY CONSIDERATION: What is the City Council’s desired approach for the City Manager’s 2012 annual performance evaluation? BACKGROUND: The employment agreement between the City and the City Manager states “that the City may conduct an annual review of the Manager’s performance.” The purpose of the evaluation process is to provide feedback to the City Manager on performance so that he can strive for continuous performance improvement based on City Council expectations. Over the years, Council has used different methods to provide performance feedback to the City Manager. These methods ranged from completing the process “in-house” assisted by staff to hiring consultants. In 2009, 2010, and 2011 the City hired consultant J. Forrest to compile and summarize council comments on the City Manager’s performance for a total cost of around $2,000 per year. Attached is the form that was used to collect data in 2009-2011. The practice has been for the Council to complete this form and send it to the consultant who then aggregates/compiles the results and submits a report to the City Council. The consultant then facilitates a discussion between the members of the City Council and the City Council and City Manager on the results of the evaluation. FINANCIAL OR BUDGET CONSIDERATION: Using in-house staff to facilitate the City Manager’s evaluation will not have a budget impact as costs will be covered by general salary. Consultant costs would be applied to the Human Resources budget and funding is available. VISION CONSIDERATION: Not applicable. Attachment: Evaluation Form Prepared by: Ali Fosse, HR Coordinator Approved by: Tom Harmening, City Manager Study Session Meeting of October 22, 2012 (Item No. 7) Page 2 Subject: City Manager’s 2012 Performance Evaluation City of St. Louis Park CITY MANAGER APPRAISAL FORM CHECK ONE BOX FOR EACH CATEGORY PROVIDE COMMENTS FOR EACH CATEGORY IN THIS COLUMN Organizational Management & Leadership Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know Communication Skills and Public Relations Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know Relationship with the City Council Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know Interagency Relations Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know Long Range Planning Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know Study Session Meeting of October 22, 2012 (Item No. 7) Page 3 Subject: City Manager’s 2012 Performance Evaluation CHECK ONE BOX FOR EACH CATEGORY PROVIDE COMMENTS FOR EACH CATEGORY IN THIS COLUMN Staff Supervision/Overall Performance of City Staff Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know Fiscal/Business Management Exceeds Expectations Successful Meets Expectations Needs Improvement Don’t Know OTHER COMMENTS: ___________________________________________________________ Signature Date Meeting Date: October 22, 2012 Agenda Item #: 8 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: September 2012 Monthly Financial Report RECOMMENDED ACTION: No action required at this time. POLICY CONSIDERATION: None at this time. BACKGROUND: This report is designed to provide summary information each month of the overall level of revenues and expenditures in both the General Fund and the Park and Recreation Fund. These funds should be a primary concern in analyzing the City’s financial health because they represent the discretionary use of tax levy dollars. Actual expenditures should generally run about 75% of the annual budget in September. Currently, the General Fund has expenditures totaling 71% of the adopted budget and the Park and Recreation Fund expenditures are at 79.3%. Revenues tend to be harder to gauge in this same way due to the timing of when they are received, examples of which include property taxes and State aid payments (Police & Fire, DOT/Highway, PERA Aid, etc.). All General Fund departments are running at or under budget through September. A portion of the current Park & Recreation Fund budget variance is due to seasonal expenditures. It is quite common and consistent with prior years to have a temporary variance after the summer months. Comments on a few specific revenue and expenditure variances are noted below. General Fund Revenues: • License and permit revenues in the General Fund have been running well ahead of budget all year, and as was anticipated, they began to exceed the total annual budget in August. At the end of September, license and permit revenues are now exceeding budget by 14% or $333,000. The majority of this excess, or $287,000, is due to permit activity. This additional permit revenue is due to several large commercial development projects that started in 2012, which were not able to be determined at the time the budget was prepared during the summer of 2011. Parks and Recreation Expenditures: • The Organized Recreation Division is at 82.4% of budget through September. This is in part because the full annual Community Education contribution in the amount of $187,400 was paid to the School District earlier in the year. The timing of this large expenditure is consistent with prior years and is only a temporary variance. Also, some costs in this Division are seasonal, with larger expenses occurring for recreational Study Session Meeting of OctREHU 22, 2012 (Item No. 8)Page 2 Subject: September 2012 Monthly Financial Report activities over the summer and early fall months. When comparing 2012 to prior year through September, the results are very consistent. • The Recreation Center Division is at 83.9% of budget. Since a large portion of the budgets for temporary employees and supplies are spent over the summer months for the pool and concessions, it is typical for there to be a seasonal variance at this point in the year. Building and equipment maintenance expenses have exceeded budget and are higher than prior year through September. Staff plans to thoroughly review these expenses to ensure that they are correctly classified as operating expenses or if some should be paid from a capital project fund. • Expenditures in the Vehicle Maintenance Division are exceeding budget at 79.9%. The variance is mainly due to overages in parts and tires, motor fuel, and outside equipment repair services, all of which are unpredictable and difficult to budget. Staff will continue to monitor these expenditures as the year progresses. These areas were also looked at closely for the 2013 budget and adjusted accordingly. FINANCIAL OR BUDGET CONSIDERATION: None at this time. VISION CONSIDERATION: Regular and timely reporting of financial information is part of the City’s mission of being stewards of financial resources. Attachments: Summary of Revenues & Expenditures Prepared by: Darla Monson, Senior Accountant Reviewed by: Brian Swanson, Controller Approved by: Nancy Deno, Deputy City Manager/HR Director 2011 2012 2012 Balance Budget Actual Budget Sept YTD Remaining to Actual % General Fund Revenues: General Property Taxes 15,372,076$ 15,998,292$ 8,294,166$ 7,704,126$ 51.84% Licenses and Permits 2,797,588 2,368,799 2,702,138 (333,339) 114.07% Fines & Forfeits 281,047 328,150 242,998 85,152 74.05% Intergovernmental 1,243,494 1,163,677 679,917 483,760 58.43% Charges for Services 1,077,137 1,270,354 485,874 784,480 38.25% Miscellaneous Revenue 129,142 111,650 77,527 34,123 69.44% Transfers In 2,553,665 2,023,003 1,500,752 522,251 74.18% Investment Earnings 203,282 125,000 - 125,000 0.00% Other Income 22,686 3,450 4,853 (1,403) 140.67% Total General Fund Revenues 23,680,117$ 23,392,375$ 13,988,225$ 9,404,150$ 59.80% Park & Recreation Revenues: General Property Taxes 4,000,561$ 4,171,506$ 2,085,753$ 2,085,753$ 50.00% Licenses and Permits 110 6,600 220 6,380 3.33% Intergovernmental 208,536 68,902 36,084 32,818 52.37% Charges for Services 1,082,163 1,070,750 957,166 113,584 89.39% Miscellaneous Revenue 1,035,310 967,900 614,269 353,631 63.46% Other Income 78,902 42,150 1,223 40,927 2.90% Total Park & Recreation Revenues 6,405,582$ 6,327,808$ 3,694,715$ 2,633,093$ 58.39% Summary of Revenues - General Fund and Park & Recreation As of September 30, 2012 Study Session Meeting of October 22, 2012 (Item No. 8) Subject: September 2012 Monthly Financial Report Page 3 2011 2012 2012 Balance Budget Actual Budget Sept YTD Remaining to Actual % General Government: Administration 825,168$ 1,012,554$ 619,557$ 392,997$ 61.19% Accounting 624,573 641,691 478,190 163,501 74.52% Assessing 506,426 517,840 387,091 130,749 74.75% Human Resources 629,734 667,612 475,615 191,997 71.24% Community Development 1,082,461 1,076,376 800,459 275,917 74.37% Facilities Maintenance 955,880 1,083,128 681,176 401,952 62.89% Information Resources 1,421,858 1,507,579 980,441 527,138 65.03% Communications & Marketing 256,558 265,426 180,481 84,945 68.00% Community Outreach 84,300 8,185 6,153 2,032 75.17% Total General Government 6,386,958$ 6,780,391$ 4,609,163$ 2,171,228$ 67.98% Public Safety: Police 6,943,375$ 7,273,723$ 5,359,039$ 1,914,684$ 73.68% Fire Protection 3,061,962 3,346,931 2,380,032 966,899 71.11% Inspectional Services 1,818,212 1,889,340 1,400,261 489,079 74.11% Total Public Safety 11,823,549$ 12,509,994$ 9,139,332$ 3,370,662$ 73.06% Public Works: Public Works Administration 803,259$ 389,783$ 275,475$ 114,308$ 70.67% Public Works Engineering 816,280 927,337 668,793 258,544 72.12% Public Works Operations 2,461,099 2,604,870 1,866,674 738,196 71.66% Total Public Works 4,080,638$ 3,921,990$ 2,810,941$ 1,111,049$ 71.67% Non-Departmental: General 81,287$ -$ 50,000$ (50,000)$ 0.00% Transfers Out 900,000 - - - 0.00% Tax Court Petitions - 180,000 - 180,000 0.00% Total Non-Departmental 981,287$ 180,000$ 50,000$ 130,000$ 27.78% Total General Fund Expenditures 23,272,432$ 23,392,375$ 16,609,436$ 6,782,939$ 71.00% Park & Recreation: Organized Recreation 1,266,774$ 1,305,747$ 1,075,555$ 230,192$ 82.37% Recreation Center 1,424,076 1,466,246 1,230,065 236,181 83.89% Park Maintenance 1,462,866 1,461,645 1,102,780 358,865 75.45% Westwood 488,579 515,456 381,126 134,330 73.94% Environment 396,664 390,009 280,669 109,340 71.96% Vehicle Maintenance 1,300,708 1,188,705 949,430 239,275 79.87% Total Park & Recreation Expenditures 6,339,666$ 6,327,808$ 5,019,624$ 1,308,184$ 79.33% Summary of Expenditures - General Fund and Park & Recreation As of September 30, 2012 Study Session Meeting of October 22, 2012 (Item No. 8) Subject: September 2012 Monthly Financial Report Page 4 Meeting Date: October 22, 2012 Agenda Item #: 9 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Third Quarter Investment Report (July - September, 2012) RECOMMENDED ACTION: No action required at this time. This report is being provided for information sharing purposes. POLICY CONSIDERATION: None at this time. BACKGROUND: The City’s investment portfolio is focused on short term cash flow needs and investment in longer term securities. This is done in accordance with Minnesota Statute 118A and the City’s Investment Policy objectives of: 1) Preservation of capital; 2) Liquidity; and 3) Return on investment. The total portfolio value decreased by approximately $4.2 million in the third quarter from $62.4 million to $58.2 million. This decrease was primarily in available cash held in money market accounts which was needed to fund normal operating cash flow needs. The overall yield of the portfolio remained constant at 1.29% compared to the second quarter (1.27%), and is still up slightly from the end of 2011 (1.12%). Cities generally use a benchmark such as the two year Treasury (.23% at 9/30/2012) or some similar measure for yield comparison of their overall portfolio. Interest rates continue to be at record lows and are not expected to improve very much for the remainder of 2012 and into 2013. The City has been able to maintain a fairly consistent yield by balancing cash flow needs with short and long term investment options. Approximately 25% of the portfolio is currently invested in money markets. This is necessary to keep funds available to cover normal on-going cash flow needs for payroll and general operating expenses, as well as for larger construction project payments. Money market rates currently range from .13% at UBS to .21% at Citizens Independent Bank. Purchasing commercial paper may be considered from time to time in the short term to help increase yields on available cash. These are promissory notes issued by financial institutions and large corporations that have short maturity periods typically ranging from one to nine months. Rates on commercial paper are considerably higher than on money market accounts, which make it a good option for investing available cash short term. Commercial paper was previously used for investing the Fire Station bond proceeds. Another 5% of the portfolio is invested in fixed rate certificates of deposit at rates ranging from .5% for two years to 1.75% for five years. With rates on bonds continuing to be very low, purchasing these fixed rate CD’s has helped to keep the portfolio yield stable. There are 11 CD’s Study Session Meeting of October 22, 2012 (Item No. 9) Page 2 Subject: Third Quarter Investment Report (July - September, 2012) in the portfolio, each with a face value of $240,000, which guarantees that each CD is insured by the FDIC up to $250,000. The remaining 70% or approximately $41 million of the portfolio is invested in other long term securities, including municipal debt and agency bonds. Municipal debt instruments are bonds issued by States, local governments, or school districts to finance special projects. Agency bonds are issued by government agencies such as the Federal Home Loan Bank or Fannie Mae, and are typically callable. These callable agency bonds will usually have higher interest rates to the final maturity date in five years, but the issuers have the right to call the bonds at specific intervals prior to maturity if interest rates decline. This has happened quite frequently in the market conditions of the past few years. Four agency bonds were called during the third quarter. Available cash will continue to be used to purchase these types of longer term securities whenever possible to help keep the overall portfolio yield stable. Here is a summary of the City’s portfolio at September 30, 2012: FINANCIAL OR BUDGET CONSIDERATION: None at this time. VISION CONSIDERATION: The City has a sound investment policy that brokers are required to follow with the goals of preservation of capital, liquidity and return on investment. The policy is strictly followed in making investment decisions to protect the City’s resources. Attachments: Quarterly Investment Report Prepared by: Darla Monson, Senior Accountant Reviewed by: Brian A. Swanson, Controller Approved by: Nancy Deno, Deputy City Manager/HR Director 6/30/12 9/30/12 <1 Year 45% 41% 1-2 Years 16% 19% 2-3 Years 8% 7% 3-4 Years 14% 16% >4 Years 17% 17% 6/30/12 9/30/12 Money Markets $18,712,273 $14,353,318 Commercial Paper $0 $0 Certificates of Deposit $2,401,663 $2,651,770 Municipal Debt $25,129,353 $26,104,703 Agency Bonds $16,105,045 $15,119,766 City of St. Louis Park Investment Portfolio September 30, 2012 Institution/Broker Investment Type CUSIP Maturity Date Yield to Maturity Par Value Market Value at 9/30/2012 Estimated Avg Annual Income Citizens Indep Bank Money Market 0.21%5,030,572 5,030,572 10,564 4M Fund Money Market 0.02%3,133,108 3,133,108 627 Citigroup/Smith Barney GNMA 36217C4W3 6.21% 20,573 22,787 1,415 Wells Fargo Advisors FHLB Step Up 313380B63 08/16/2017 1.031% 1,000,000 1,000,360 10,310 UBS Muni Debt - Illinois State 452152FD8 04/01/2013 1.84% 1,000,000 1,011,990 18,350 UBS Muni Debt - NYC Trans Auth 64971MN40 02/01/2016 3.03% 1,000,000 1,079,980 30,250 UBS Muni Debt - NYC Trans Auth 64971MN40 02/01/2016 3.07% 1,000,000 1,079,980 30,700 UBS Muni Debt - Dist of Columbia 25476FLE6 06/01/2015 1.33% 1,000,000 1,074,230 13,310 UBS Muni Debt - Calif State 13063A7E8 10/01/2013 0.78% 2,000,000 2,057,900 15,680 UBS Muni Debt - Gilroy, CA 376087CZ3 04/01/2015 1.81% 1,125,000 1,187,179 20,363 UBS Muni Debt - Calif State 13063BNR9 10/01/2015 2.00% 1,000,000 1,030,170 20,000 UBS Muni Debt - Atl City, NJ 048339RR8 12/15/2015 2.70% 470,000 480,852 12,690 UBS FNMA Step Up 3136FTXU8 12/29/2016 1.25% 1,000,000 1,018,980 12,500 UBS FHLMC 3134G3CB4 12/05/2016 1.45% 1,000,000 1,002,140 14,500 UBS Barclays Bank DE CD 06740KFS1 01/11/2016 1.60% 240,000 243,182 3,840 UBS Amer Munic Pwr Ohio 02765UER1 02/15/2015 1.54% 1,000,000 1,053,330 15,400 UBS Freddie Mac 3134G3PE4 02/24/2016 0.85% 1,000,000 1,004,890 8,500 UBS Bank of China NY CD 06425HN85 05/02/2014 0.60% 240,000 240,365 1,440 UBS Discover Bank DE CD 254671AG5 05/02/2017 1.75% 240,000 240,763 4,200 UBS Safra Nat'l Bank NY CD 786580J76 05/03/2017 1.50% 240,000 240,293 3,600 UBS GE Cap Retail Bank UT CD 36160NJZ3 05/04/2017 1.75% 240,000 240,641 4,200 UBS Medallion Bank UT CD 58403BXU5 05/07/2014 0.60% 240,000 240,331 1,440 UBS Apple Bank NY CD 037830KP0 05/09/2014 0.50% 240,000 240,319 1,200 UBS FHLMC 3134G3WV8 06/06/2017 1.01% 1,000,000 1,009,410 10,140 UBS FHLMC 3134G3MZ0 02/24/2017 0.89% 1,000,000 1,008,420 8,930 UBS FNMA step up 3136G0ZV6 08/28/2017 1.17% 1,000,000 1,001,650 11,740 UBS Sallie Mae Bnk UT CD 79545OPE9 08/29/2017 1.70% 240,000 239,714 4,080 UBS FHLMC 3134G3NN6 02/27/2017 0.72% 1,000,000 1,008,710 7,220 UBS Money Market 0.13% 6,189,638 6,189,638 8,047 25,225,058 Sterne, Agee Muni Debt - Waukegan, IL 942860MS3 12/30/2012 2.45% 1,500,000 1,513,170 36,750 Sterne, Agee Muni Debt - Greenwood Cnty Sch 397118EC0 03/01/2013 2.03% 740,000 746,312 15,022 Sterne, Agee FNMA 3136F9BZ5 03/18/2013 3.96% 1,000,000 1,017,320 39,600 Sterne, Agee Muni Debt - Van Buren, MI Sch 920729GQ7 05/01/2013 3.12% 300,000 304,302 9,360 Sterne, Agee Muni Debt - Milan, MI Sch 598801HF8 05/01/2013 3.16% 580,000 588,248 18,328 Sterne, Agee Muni Debt - Illinois State 452152FD8 04/01/2013 1.75% 1,000,000 1,011,990 17,500 Sterne, Agee Muni Debt - Waukegan, IL 942860MT1 12/30/2013 2.95% 1,500,000 1,556,640 44,250 Sterne, Agee Muni Debt - Outagamie Cnty WI 689900TH1 04/01/2014 2.53% 810,000 831,149 20,493 Sterne, Agee Muni Debt - Van Buren, MI Sch 920729GR5 05/01/2014 3.52% 705,000 731,289 24,816 Sterne, Agee Muni Debt - Union Co NJ 906347SC4 06/01/2014 4.04% 555,000 349,678 22,422 Sterne, Agee Muni Debt - Illinois State 4521518U0 01/01/2014 3.25% 1,225,000 1,269,872 39,813 Sterne, Agee Muni Debt - Illinois State 4521518T3 01/01/2013 2.63% 850,000 855,933 22,313 Sterne, Agee Muni Debt - Milwuakee Co, WI 602245WW8 10/01/2013 1.50% 1,000,000 1,009,580 15,000 Sterne, Agee Muni Debt - Smithfield, RI 832322NM9 01/15/2013 0.88% 275,000 275,699 2,406 Sterne, Agee Muni Debt - Smithfield, RI 832322NN7 01/15/2014 1.35% 275,000 279,887 3,713 Sterne, Agee Muni Debt - Smithfield, RI 832322NP2 01/15/2015 1.90% 275,000 281,925 5,225 Sterne, Agee Muni Deb - Smithfield, RI 832322NQ0 01/15/2016 2.40% 275,000 288,192 6,600 Sterne, Agee Muni Debt - Racine, WI 750046GB4 04/01/2014 0.70% 1,010,000 1,074,317 7,070 Sterne, Agee FNMA Step Up 3136FTC98 01/25/2016 0.50% 1,000,000 1,000,550 5,000 Sterne, Agee FNMA Step Up 3136FTV89 02/28/2017 0.65% 1,000,000 1,002,730 6,500 15,988,782 Wells Fargo Muni Debt - New York, NY 64966HXW5 03/01/2013 1.00% 1,000,000 1,008,070 10,000 Wells Fargo Muni Debt - State of WA 93974CLV0 08/01/2014 1.33% 1,000,000 1,045,880 13,300 Wells Fargo FHLB 313372RK2 03/27/2013 1.02% 1,000,000 1,004,050 10,200 Wells Fargo GE Capital UT CD 3616OXC62 01/06/2016 1.70% 240,000 243,194 4,080 Wells Fargo Goldman Sachs Bank NY CD 38143AGR0 01/12/2015 1.50% 240,000 241,570 3,600 Wells Fargo Ally Bank UT CD 0200SQYM9 01/26/2015 1.15% 240,000 241,397 2,760 Wells Fargo FHLMC 3134G3HP8 01/27/2016 1.00% 1,000,000 1,008,390 10,000 Wells Fargo Freddie Mac 3134G3HW3 10/30/2015 1.00% 1,000,000 1,002,570 10,000 Wells Fargo Freddie Mac 3134G3MP2 08/24/2016 1.00% 1,000,000 1,006,810 10,000 Wells Fargo Fond Du Lac WI School 344496JQ8 04/01/2017 1.05% 1,000,000 1,026,960 10,500 7,828,891 GRAND TOTAL 58,229,557 751,855 Portfolio Yield 1.29% Study Session Meeting of October 22, 2012 (Item No. 9) Subject: Third Quarter Investment Report (July - September, 2012)Page 3 Meeting Date: October 22, 2012 Agenda Item #: 10 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Open to Business Program Update RECOMMENDED ACTION: This report provides an update on the Open to Business program which provides small business technical assistance services to St. Louis Park businesses and residents. POLICY CONSIDERATION: Not applicable. Please let staff know of any questions or comments you might have. BACKGROUND: Under its contract with the EDA, the Metropolitan Consortium of Community Developers (MCCD) is required to provide periodic updates detailing the small business technical services provided in St. Louis Park under its Open to Business program. The last update in March provided information on the program for activities from April 2011 to March 2012. This latest update covers activities from January to September 2012. Through the first nine months of this year MCCD staff has met with 27 would-be entrepreneurs and small businesspeople seeking assistance with a wide variety of business ventures. During that period MCCD has provided 133 hours of service in the city. These services have included business plan development, business focus, loan packaging, feasibility analysis, lease review, strategic planning, employee relations, cash flow analysis, network referrals, bookkeeping assistance and general business advice. The “Test Drive Your Business Idea” counseling sessions continue to experience increasing activity and are expected to accelerate as word of the program spreads. Since the Open to Business program began in St. Louis Park it has provided a $40,000 loan to a local business, helped a struggling coffee shop access a $1,000 grant, helped a Minneapolis business expand to another location in St. Louis Park, provided a $20,000 loan to a St. Louis Park resident operating a barber shop along the Central Corridor, provided another $25,000 loan to a St. Louis Park resident expanding a Minneapolis restaurant, and facilitated two micro grants to St. Louis Park businesses. The Open to Business program was approved by the St. Louis Park EDA in March 2011 and became operational by August. Through this program the EDA is able to offer one-on-one technical assistance to existing St. Louis Park businesses, local aspiring entrepreneurs, and parties interested in opening a business in St. Louis Park. Prospective and existing entrepreneurs receive counseling with a business advisor from the MCCD staff who provides help with planning and organizing business ideas, financial management, marketing, regulatory compliance, and assistance with leases or property purchases. Counseling sessions occur the fourth Monday of each month from 9 a.m.to 11 a.m. at City Hall or by appointment at the place of business. Study Session Meeting of October 22, 2012 (Item No. 10) Page 2 Subject: Open to Business Program Update FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: The Open to Business program supports the strategic direction of providing a well-maintained and diverse [building] stock. Attachments: None Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Kevin Locke, Community Development Director Approved by: Tom Harmening, EDA Executive Director and City Manager