HomeMy WebLinkAbout2010/10/25 - ADMIN - Minutes - City Council - Study Session Ifl St. Louis Park OFFICIAL MINUTES
MINNESOTA CITY COUNCIL STUDY SESSION
ST. LOUIS PARK,MINNESOTA
OCTOBER 25,2010
The meeting convened at 6:35 p.m.
Councilmembers present: Mayor Jeff Jacobs, Phil Finkelstein, Anne Mavity, Paul Omodt, Julia
Ross, Susan Sanger, and Sue Santa.
Councilmembers absent: None.
Staff present: City Manager(Mr. Harmening), Deputy City Manager/Human Resources Director
(Ms. Gohman), Controller (Mr. Swanson), Finance Supervisor (Mr. Heintz), Community
Development Director (Mr. Locke), Planning/Zoning Supervisor (Ms. McMonigal), Director of
Public Works (Mr. Rardin), Director of Inspections (Mr. Hoffman), Communications
Coordinator (Mr. Zwilling), Park Superintendent (Mr. Beane), IT Manager (Ms. Nelson), and
Recording Secretary(Ms. Hughes).
Guests: Jamie LaPray and Tom Miller, Safety in the Park representatives.
1. 2011 Budget, 5 Year Capital Improvement Plan (CIP), Long Range Financial
Management Plan (LRFMP)
Mr. Harmening presented the staff report and policy questions for Council consideration. He
stated that the preliminary property tax levy of 4.88% adopted by Council in September includes
a significant amount of funds targeted for capital needs; final action on the property tax levy will
occur in December.
Mr. Swanson stated that the staff report includes information pertaining to the Enterprise,
Internal Service, Special Revenue, and select Capital Projects funds. He advised that while
Council does not formally adopt these budgets, staff felt it was important to provide Council with
a comprehensive picture of all the various funds in the City's budget.
Councilmember Santa noted that several of the budgets appear to be under-funded.
Mr. Swanson advised that the Council will be asked to adopt a balanced budget for the General
and Park and Recreation Funds; the remaining funds will be covered by the Long Range
Financial Management Plan (LRFMP). He then presented an overview of the Capital
Improvement Plan (CIP) and stated that the next five years include some of the most significant
construction projects in the City's history, including construction of two fire stations. He advised
that the 2011-2015 CIP has a total of approximately $168 million in projects over the next five
years, with approximately $57 million representing City funds and the remainder coming from
external sources, some of which are guaranteed and some not.
Councilmember Sanger asked if the CIP includes City money for the Highway 7 and Louisiana
and/or Highway 100 projects.
Mr. Rardin explained that the Highway 7 and Louisiana Ave project is currently included in the
CIP and if that project goes forward, there is a minimum amount the City would be required to
participate in as required by the Met Council, or approximately $2.7 million. He noted that this
project is included in the City's detailed planning documents and is shown as fully funded based
on the City obtaining additional federal or state funding of approximately$11 million. He added
Study Session Minutes -2- October 25, 2010
that the proposed Highway 100 project would be part of the 2016 budget and is shown as
approximately$7 million of possible City cost; this possible project will continue to be evaluated
by staff over the next couple of years.
Councilmember Finkelstein reiterated his concern with respect to the State's increasing budget
deficit and whether there are ways the City can earmark funds for specific projects.
Mr. Swanson stated that pursuant to new accounting rules, the City will be able to utilize five
different classifications for restricting or designating funds in its budget.
Mr. Rardin presented an overview of the Public Works CIP and explained that the public works
department has been inventorying every public works asset in the City and then determining
ownership and condition of those assets. Based on that, long term maintenance, rehabilitation,
and replacement plans are developed for every asset. He reviewed the priority status of various
projects within the department and noted that priorities are determined based on lifecycles of the
various asset components managed within the department. He discussed 2011 projects and stated
that some of the projects listed in the CIP include projects for which the City will receive outside
funding.
Mr. Beane presented an overview of the Parks and Recreation CIP and reviewed the priority
status of various projects within this department. He explained that improvements will be
completed to Northside Park in 2011; other 2011 projects include the Rec Center east arena
dehumidification and improvements at Westwood Hills. He stated that the City received grant
money in 2010 for replacement of ash trees and the City will need to determine funding sources
for tree replacement in future years, particularly if there is a large infestation of Emerald Ash
Borer.
Ms. Nelson presented an overview of the Technology CIP and reviewed the priority status of
various projects within the department, noting that ongoing hardware and software replacement
is essential for continuing to provide efficient service to the City's customers. She discussed the
email archival and document management projects; these projects will be completed in 2012.
She also discussed the ongoing fiber conduit expansions and the current study being conducted
to have fiber throughout the City.
Mr. Harmening noted that the fiber conduit projects would be done as part of any streets projects
in the City, so that if a street is being torn up, the assumption is that fiber conduit would be
installed at the time the street is under construction.
Councilmember Ross requested an update regarding a potential partnership with the School
District as it relates to a Cable TV communication center.
Mr. Zwilling stated that this item is contained in the Cable TV CIP and the project has been
funded.
Councilmember Finkelstein stated that Cable TV continues to show a decline in viewership
because more viewers are migrating to the internet.
Mr. Zwilling stated that the City's franchise agreement runs through 2021 and noted that the City
has not yet seen revenues drop off significantly. He explained that all of the capital for Cable
TV is funded through franchise fees and the budget estimates were revised from a 3% growth to
Study Session Minutes -3- October 25, 2010
a 1% growth in revenue from franchise fees. He stated that staff is considering consolidation of
some of the Cable TV channels for ease of use.
Mr. Harmening stated it appears there are major changes coming to the cable TV industry due to
other advances in technology, and staff will continue to monitor the industry and incorporate
appropriate changes into the CIP.
Mr. Heintz reviewed the City's Long Range Financial Management Plan and stated that based on
various assumptions, the LRFMP provides a snapshot of the City's financial status projected out
to 2020. He discussed the Cable TV fund, Police and Fire Pension Fund, HRA Levy, Permanent
Improvement Revolving Fund, Park Improvement Fund, Pavement Management Fund, Capital
Replacement Fund, Sewer, Solid Waste, Storm Water, and Water Utility Funds, Housing
Rehabilitation Fund, Development Fund, and Uninsured Loss Fund.
Mr. Harmening explained that the Permanent Improvement Revolving Fund has resources
available that give the City the ability to redirect funds to those funds showing a deficit.
Councilmember Sanger requested that the Council focus on those funds that do not appear to be
sustainable over the long haul and how that will impact the City's tax levy in future years. She
expressed particular concern regarding the sustainability of the Park Improvement Fund, Capital
Replacement Fund, and the Development Fund.
Mr. Heintz discussed the Park Improvement Fund, noting that this fund includes an assumption
that the levy is 4.88% with no park dedication fees included in the balance due to the uncertain
nature of these fees. He added that this fund is showing a conservative positive fund balance.
Mr. Swanson explained that part of this is due to the loss of the Market Value Homestead Credit
and staff chose to leave out park dedication fees even though it is anticipated that the City will
receive some park dedication fees in the future.
Mr. Harmening stated that overall, the City is in good shape financially to fund all of its projects
over the next five years; after that, there will be challenges but over time, and with the movement
of dollars, the City will be able to fill those gaps and remain financially sustainable.
Councilmember Sanger stated that the assumptions are based on the preliminary tax levy of
4.88% earlier set by Council, but if the Council were to deviate from that amount, the
sustainability of these funds would be in further jeopardy.
Mr. Swanson presented the proposed tax levy options for 2011 and 2012, and stated that based
on a 4.88% tax levy in 2011, the estimated tax levy needed for 2012 would be 3.21%.
Councilmember Mavity stated that one of the Council's goals may be to have some level of
predictability and consistency for residents with their taxes. She indicated the 4.88% 2011 levy
assumes that it goes down the following year. She asked if there would be any advantage to
having a 4%tax levy in each of 2011 and 2012, which may feel more predictable to taxpayers.
Mr. Swanson replied that there is a possibility that levy limits will come back into play which
would limit the City's ability to levy taxes. He added that revenues for capital would decrease
and long term projects would be underfunded.
Study Session Minutes -4- October 25, 2010
Councilmember Sanger expressed her support for the 4.88% levy previously approved by
Council and noted that the actual increase to taxpayers on the City portion of their taxes is very
modest.
Mr. Harmening stated that taxpayers should not be surprised if their County property taxes go
up, even though the County levy is not increasing. He noted that because the values in St. Louis
Park have remained more stable than in other cities, the City's portion of the County pie is larger
as it relates to fiscal disparities.
Councilmember Finkelstein stated that staff prepared its assumptions based on information
received from the County and the County numbers changed after the Council approved its
preliminary tax levy. He expressed frustration that staff was not able to rely on the figures given
to it by the County in preparing its preliminary tax levy.
Mr. Swanson reviewed with the Council the impact to taxpayers of a 4.88% levy versus a 4.0%
levy.
Mr. Harmening stated that the Council has several options including reducing the amount of the
levy, reducing the amount of the levy associated with specific services, reducing the capital side
of the levy while maintaining City operations, or a combination thereof He stated that based on
the assumption that service levels should remain the way they are today, and if Council chooses
to reduce the levy, reductions would appear on the capital side versus impacting any City
services.
Councilmember Finkelstein requested that additional information be provided to Council with
respect to reducing the capital portion of the levy. He stated that consideration needs to be given
to the fact that residents are going to see increases in garbage service, water rates, and other fees.
Mr. Harmening agreed to provide Council with further information regarding a possible
reduction in the capital portion of the City's levy, as well as potential impacts to homeowners
when coupled with franchise fee adjustments and utility increases.
2. Auditing Services
Mr. Harmening presented the staff report and stated that the City has contracted with Abdo, Eick
and Meyers, LLP, for the past six years and staff has been very satisfied with the services
provided by Abdo, Eick and Meyers. He indicated that typically, auditors are retained for three
or four year periods and the Council has the option of entering into a one year or four year
contract with Abdo, Eick and Meyers; alternatively, Council may direct staff to prepare a
Request for Proposals for auditing services.
Councilmember Omodt asked if there is a best practice to provide guidance with respect to audit
services.
Mr. Swanson replied that the State Auditor provides no specific guidance on this question.
Mayor Jacobs stated that the Council has worked with Abdo, Eick and Meyers for six years and
it is important that the City not have an image that it is too close to its auditors and to maintain
the independent nature of the audit.
Study Session Minutes -5- October 25, 2010
Councilmember Sanger agreed and stated she felt the City should send out Requests for
Proposals.
Councilmember Finkelstein agreed and felt it was a good idea to switch auditors every four to six
years. He added that he has been impressed with the work performed by Abdo, Eick and
Meyers.
Mr. Harmening asked if Council would like to be involved in the interview process.
It was the consensus of the City Council to direct staff to prepare a Request for Proposals for
auditing services. It was also the consensus of the City Council to direct staff to review the
responses to the Request for Proposals, conduct interviews of potential auditors, and provide a
recommendation to the City Council.
3. Freight Rail
Mr. Locke presented the staff report and explained that three freight rail studies are currently
underway, including two studies initiated by the County in response to the City's July 6th
resolutions. He stated that the third study currently underway is the MNS Freight Rail Study,
funded by Mn/DOT and the County, and the purpose of this study is to determine what
improvements would be required if the TCW trains were to be routed to the MNS tracks, what
the potential impacts of this rerouting would be, and what mitigation is needed to address
negative impacts. He advised that the next PMT meeting is scheduled for Tuesday, November
9th, and will include a presentation of a draft engineering concept for routing trains on the MNS
tracks; following this meeting and the next PMT meeting in mid-December, PMT members will
have an opportunity to review and consider the ideas presented on November 9th, and to review
those ideas with their neighborhoods. He stated that the goal of the December PMT meeting will
be to settle on the best approach and to define the concept plan to be evaluated through the
Environmental Assessment Worksheet (EAW) process. He reviewed staffs proposed process for
analyzing and responding to the information contained in the studies, including a presentation to
the City Council by the County's consultants on the RL Banks and 2009 TCWR study; these two
studies will likely be wrapped up in November and the County has indicated that its consultants
will be ready to make a presentation on November 29, 2010 at the joint City Council/School
Board meeting. He stated that the MNS study is anticipated to be completed in December or
January and the PMT process has been designed to obtain public input into that process directly.
He added that throughout this process, the City will use SEH Consultants to assist in evaluating
the rail studies.
Councilmember Mavity stated that one of the studies is looking at the engineenng and associated
costs on the Kenilworth route, while the PMT is looking at the engineering and cost options for
the MNS, and then there is the reassessment of the alternatives routes in the 2009 TCW Freight
Rail Realignment Study. She asked how the costs and engineering estimates in the MNS and
Kenilworth studies are comparable to the 2009 reassessment. She stated it seems duplicative,but
the results are coming to the Council at different times. She added that the information being
obtained through the PMT process has to feed into and has to be part of the bigger analysis.
Mr. Locke advised that while there were six alternatives in the 2009 study, the focus is really on
four options and the question that both the Kenilworth study and the 2009 reassessment are
attempting to answer comes from the Council's policy question of whether there are other viable
alternatives beyond MNS. He indicated that the 2009 reassessment is intended to determine if
Study Session Minutes -6- October 25, 2010
there are options worth exploring but this particular study does not have the wherewithal to go to
the same level of detail as the Kenilworth or MNS Study.
Councilmember Sanger stated that until the 2009 reassessment addresses the issues of
engineering costs and mitigation costs, it will not be possible to make an apples to apples
comparison to determine the most viable and cost effective route.
Mr. Locke stated that staff has conveyed these issues to the County and staff understands that the
County will go to the level of detail necessary to be able to understand the viability of the various
options. He added the question of viability is subjective and it will be important for the City to
work with its own railroad consultants to answer these questions from the City's point of view.
Councilmember Mavity questioned how the City will be able to effectively evaluate the 2009
reassessment without having the benefit of the full PMT results.
Mr. Locke stated that the City will not be in a position to make a definitive statement by the time
of the November 29th meeting, but there will be a significant amount of information available at
that time. He added that as the studies are wrapped up, the City will have more definitive
information on which to make judgments. He noted that it is not realistic to expect that all of the
options will have complete design costs associated with them.
Councilmember Ross requested information regarding the City's timeframe for analyzing the
information with the City's consultants.
Mr. Locke replied that if the two County studies are presented to the City in November, the goal
will be to review the information presented and figure out the City's direction by the end of the
year or early 2011, which coincides with the City's receipt of the MNS study. He stated that it is
not clear at this time which agency will have overall responsibility for determining what happens
with freight rail. He added that it is important for the City to focus its efforts at this time on
reviewing the studies and determining what it wants to do going forward.
Councilmember Ross asked how the City can help in terms of mitigation and whether there are
things the City can do to aid in future mitigation to make sure that citizens are safe.
Mr. Locke stated that the City can advocate for and control some things, and the Council's July
resolution laid out a number of things that need to be addressed if the MNS route is chosen.
Councilmember Sanger stated that she felt it was important to go forward with the PMT meeting
on November 9`h. She also felt it was incumbent upon the City to take action to put some teeth
behind the policy statements adopted in the July resolutions and to take additional steps to
influence the process so that more of the mitigation measures are in fact seriously considered and
the associated costs fully evaluated. She suggested that the City give consideration to hiring a
lobbyist to assist the City in making sure the Council's policy statements are implemented.
Councilmember Finkelstein stated that he needs to see more clarity regarding the timeline for
making decisions and to understand what powers the City has on these issues. He requested that
the City's consultant meet with the Council before the meeting on November 29`h.
Mr. Harmening stated that the Kenilworth study and the 2009 reassessment will be presented to
the Council and the School Board on November 29th; following that meeting, staff will work
Study Session Minutes -7- October 25, 2010
with its consultants to further analyze those studies with the intention of coming back to the
Council with a proposed course of action, including input from the community.
It was the consensus of the City Council to direct staff to proceed with the five-step approach as
outlined in the staff report.
Safety in the Park Presentation
Ms. LaPray stated that one of the things that appears to be missing is that nowhere in any of the
studies does the County recognize the unsuitability of the MNS line compared to the other lines.
She indicated that the MNS line is a physically different kind of railroad line and the line is
narrower, more crooked, and is a different grade than the other lines. She expressed concern that
none of these factors are being taken into consideration in the MNS study. She advised that they
asked for separated grade crossings and were told those types of crossings are not in the
preliminary study. She discussed Safety in the Park's concerns in choosing a line with so many
inherent problems, and provided an example of the visibility problems on the MNS line. She
stated that she and other PMT members have felt they were being rushed and that there was not
enough time given to addressing their concerns. She asked the Council to assist them in making
sure that the process in place is easier to work with and to assist them with the timelines.
Councilmember Ross stated that she asked Commissioner Dorfman to ensure that there is an
appendix or attachment to the report that contains all of the comments received and to make sure
that everybody feels they have been heard.
Mr. Miller stated that Safety in the Park would like to request that the City Council formally
adopt a resolution requesting information from the County and/or the State with respect to how
decisions are going to be made, who will make those decisions, and an associated timeline for
those decisions.
Councilmember Mavity stated that due to the fluidity of the process, the City appears to have
some flexibility in defining the decision-making process.
Mr. Locke stated that the City has been informally asking these questions and proposed that the
City send a statement to the effect that the City would like to work with the County and Mn/DOT
to come up with a process for how decisions are made throughout the process.
Councilmember Sanger stated it will be important that the City not have the appearance that it is
part of the decision-making process if in fact the City does not have a voice in the final decision.
She indicated that the City can assist with community input but it should be clear that the City is
not making the ultimate decision.
Mayor Jacobs stated his agreement with assisting the County in the public input process and the
City's commitment to encouraging as much public input as possible, but it needs to be clear that
the City is not governing where the trains will go.
Mr. Harmening suggested that staff prepare a letter to the County requesting clarification
regarding timelines and the decision-making process with respect to the MNS study.
Councilmember Sanger stated that she felt it would be better if the request to the County were in
the form of a Council resolution rather than a letter from staff. She requested that staff prepare a
Study Session Minutes -8- October 25, 2010
resolution for Council review and to include in the resolution a request that the County outline all
of the criteria it will be using to make an informed choice regarding freight rail.
Mayor Jacobs asked staff to draft a letter to the County for Council review.
4. Future Study Session Agenda Planning—November 1 and November 8,2010
Mr. Harmening presented the proposed special study session agenda for November 1st and the
study session agenda for November 8th. He reviewed the proposed discussion items for
November 8th and requested Council input on prioritizing these items on the agenda.
Councilmember Ross requested that a future study session agenda include a discussion of the
City's policy with respect to responsible parties, e.g., how it is determined when a resident is
responsible for tree removal.
Councilmember Sanger requested that this agenda item also include a discussion regarding right-
of-way and who is responsible for maintaining the City's right-of-way.
Mr. Harmening agreed to send an email to the Council with a list of future agenda items so that
the Council can prioritize the items for staff.
5. Communications/Meeting Check-in (Verbal)
None.
The meeting adjourned at 10:11 p.m.
Written Reports provided and documented for recording purposes only:
6. September 2010 Monthly Financial Report
7. Third Quarter Investment Report (July—Se tember,2010)
8. Construction Assistance Program (CAP) pdat'•/Application from Hardcoat Inc.
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Nancy Stroth, 'ity Clerk Je r Jp.bs 'Mayor