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HomeMy WebLinkAbout2004/11/22 - ADMIN - Minutes - City Council - Study Session i jJ4CITY OF OLIIST. LOFFICIAL MINUTES RK CITY COUNCIL STUDY SESSION November 22, 2004 The meeting convened at 6:30 p m. Present at the meeting were Councilmembers John Basill, Phil Finkelstein, Paul Omodt, Susan Sanger, Sue Santa, Sally Velick and Mayor Jeff Jacobs. Staff present: City Manager(Mr. Harmening), Director of Community Development (Mr. Locke), Economic Development Coordinator(Mr. Hunt), Housing Programs Coordinator(Ms Larsen), Finance Director (Ms McGann), Public Works Director (Mr Rardin), and City Clerk (Ms. Reichert) 1. Lease Agreement with STEP for 5925 Highway 7 Jackie Olafson and Sharon Abelson from STEP were present at the meeting Councilmember Finkelstein asked how STEP's search for a new location was going Ms. Olafson stated that they really want to purchase a permanent property but there is not a feasible property available right now that fits their needs. Councilmember Finkelstein was concerned that future road improvements would need to be made before STEP found a home. He wanted to be clear that this was temporary and the city's reason for purchasing the property in the first place had been to make room for roadway improvements Councilmember Santa was concerned that public perception will be that this location is STEP's permanent home. Councilmember Velick emphasized the need to advertise the temporary status She had concerns that the longer STEP remained in the building, the less likely they would be to receive grants and funding Councilmember Basill stated that STEP has been working hard to find a new location and he inquired if it is realistic to believe STEP can find a building or pay the rent amount the city wants to charge. Councilmember Santa stated that the primary objective is to move the road Councilmember Santa emphasized the importance of making sure that work is done ahead of time to ensure public awareness of the issues: the temporary location and the reason for the purchase of land at 5925 Highway 7 Councilmember Velick asked about relocation assistance for STEP Mr Locke replied that STEP is eligible for assistance. Mayor Jacobs felt the amount of rent is not a concern but is concerned about the construction timing. Mr. Hunt responded that the earliest construction could start is July of 2005, but that the project could be delayed longer. Councilmember Sanger asked if there was any assistance from the schools for relocation Ms Olafson responded that there has not been any assistance. Council discussed vanous options for lease terms, rental amounts and relocation compensation. Councilmember Basil! asked that the lease specifically stated that the purpose of the property is for road improvements. Study Session Minutes -2- November 22, 2004 Council discussed the options presented to them and agreed to a$1 per month, seven month lease with a six month extension with the opportunity to negotiate relocation fees. 2. Louisiana Court Update Steve Cramer, Barbara McCormick, and Ron Price from PPL were present as well as their counsel Angela Christie, Faegre & Benson. Mr. Locke stated that they are looking to update Council on PPL's financial condition and are not looking for any immediate decisions at the moment. The representatives gave a presentation of the financial analysis prepared by PPL Councilmember Sanger inquired what would happen to recently awarded MHFA grant funds if foreclosure occurred. Ms. McCormick responded that funds would not be accepted if foreclosure is considered. Councilmember Sanger then questioned if this cycle, revenue shortfalls and unfunded capital improvement needs resulting in additional funding requests, would be repeated year after year. Councilmember Sanger stated that exit surveys of previous residents indicated that social issues were a problem and a reason for leaving. Ms. McCormick stated that they are seeing an improvement in social dynamics. Councilmember Sanger was told by someone who had been in the PPL buildings-that the interior of the buildings were not in as good of condition as those operated by Perspectives Councilmember Finkelstein felt management should be present at the PPL property around the clock and the police are not equipped to deal with the issues that are occurring. He would like to see a report prepared on the turnover rate Ms. Schnitker stated that the police department is exploring the possibility of having an officer live on site as part of"police in residence" program that has been developed with PPL. At present, there are no officers interested in living on-site at the PPL property. Councilmember Velick had questions about the cleanliness of the property Ms McCormick explained that the carpet was not replaced but was supposed to be a capital improvement that has not been able to be done yet. Councilmember Basil] felt surveillance cameras were needed and common spaces need to be maintained. Mayor Jacobs commented that the project was thinly capitalized in the beginning. Mark Ruff, Ehler's & Associates, stated that they did not use over-leveraged figures. He said at the time of the project there was a housing crisis and they did not expect vacancies to be an issue The occupancy of the property was to provide capital for operations and improvements and now they are playing catch up while trying to compete in a competitive environment. Councilmember Finkelstein asked if-the City could get out of the project Mr. Ruff stated that they would not be able to do so in the near future but they could possibly do something long term such as finding another investor to sell the bonds to Councilmember Finkelstein inquired what is the worst that could happen. Mr Ruff replied that the City would foreclose and sell the property at a price that would not cover the outstanding balance on the bonds. Mr. Ruff did state that the city's credit rating should not drop. Study Session Minutes -3- November 22, 2004 Councilmember Finkelstein asked about the long term goals for PPL. Ms. McCormick replied that they are in it for the long haul and they will continue to improve the property as they are able to do so. She felt that to do nothing would be a disaster. Mr. Harmening stated that PPL's proposed Stabilization Plan and additional funding awards from the County and MHFA would provide two to three years of stabilization. Physical property improvements will improve the value of the property. Ms. McCormick stated that they are looking to the larger issue of improving the living conditions. Councilmember Basill felt the replacement of the management needs to move forward and thought the city should consider getting out the project. Mayor Jacobs stated that they have come a long way and they should not stop now Improvements have been made but there is still work to do Councilmember Finkelstein felt they should consider getting out at a later date. Some factors that will come into play will be decisions made by US Bank to provide additional funding the project, new management, and vacancy and turnover rates. Mr. Ruff encouraged the formation of future draft performance expectations. He suggested setting up the parameters of success expected and reviewing the topic again in February Councilmember Finkelstein would like to see a contingency plan in place should US Bank not decide to provide continued support to the project. Mr. Harmening replied that US Bank is in the project for the long haul. Councilmember Sanger stated that she had no confidence how funds were spent and suggested an audit be conducted. Mr. Harmening replied that staff has reviewed invoices from independent contractors. Ms. McGann stated that she is confident about the integrity of PPL. Councilmember Finkelstein was concerned about the $500,000 request for additional funding from the City and Mr. Harmening replied that he was confident that they will be in good financial condition even if something happens to PPL. 3. Budget Ms. McGann stated that for the 2005 tax year an increase of 5.69% was estimated She spoke about adding resources in finance, administration, and technology and support services She added that there are additional requests that are not outlined in the budget and she may be able to deliver some of those requests by using contingency funds. Councilmember Sanger suggested raising the tax increase to 6% to allow the city greater flexibility in reinstating programs and services that were cut in 2004 Council discussed adaptive recreation and would like to discuss options for that program at a later date. They also agreed that a funding source for public art must be found. Council discussed the amount of the tax increase and concluded they wanted to go to 6%. 4. Excess City Owned Land Mr. Locke explained how the city obtained the parcels of land He explained the proposed plan to develop a task force to bring recommendations forward to Council as well as comments received at an open house. Mayor Jacobs stated that the process sounded good. Study Session Minutes -4- November 22, 2004 Councilmember Sanger would like to see a phase in the process to establish cntena for selling the parcels and then see that taken out to the public. Councilmember Santa suggested modeling the process after the one used with the trails and sidewalks. She felt the entire community has an interest. Councilmember Sanger would like to vote on the sale of a group of properties rather than individually Council considered how proceeds from the sale of the properties would be used and that should be done pnor to an open house Councilmember Omodt does not feel art should be funded through public dollars Mr Harmening felt the process was laid out in a workable fashion. 5. Communications Mr. Rardin updated Council on the recent meeting regarding Lamplighter Pond. 6. Adjournment The meeting was adjourned at 10:25 p m. "e2— p C ty Clerk M yor