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HomeMy WebLinkAbout2010/06/14 - ADMIN - Minutes - City Council - Study Session If! Stu Louis Park OFFICIAL MINUTES MINNESOTA CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA JUNE 14, 2010 The meeting convened at 6:30 p.m. Councilmembers present: Phil Finkelstein, Anne Mavity, Paul Omodt, Julia Ross, Susan Sanger, and Sue Santa. Councilmembers absent: Mayor Jeff Jacobs. Staff present: City Manager (Mr Harmening), Deputy City Manager (Ms. Gohman), Controller (Mr. Swanson), Finance Supervisor (Mr. Heintz), Community Development Director (Mr Locke), Housing Supervisor (Ms. Schnitker), Planning/Zoning Supervisor (Ms. McMonigal), and Recording Secretary (Ms. Hughes). Guests. Mark Ruff and Stacie Kvilvang, Ehlers and Associates, Jami LaPray, "Safety in the Park" representative, Steve Cramer and Barbara McCormick, PPL representatives. 1. 2011 Budget Discussion Mr. Harmening introduced the topic and stated that staff and the City Council were able to solve the 2010 budget gap by working with various departments and the bargaining units, but challenges remain from a capital perspective. He noted that the City is doing well in terms of staying on budget for 2010 Mr. Swanson presented the 2011 budget projections for the General Fund/Park and Recreation Fund which projects a budget gap of approximately $412,000 for 2011; this projection assumes continuation of current operations, a levy which generates $500,000, a salary increase of 2.25% on 12/31/10, a benefit increase of$65 per month, and limits an increase in expenditures. He discussed the $114,000 anticipated reduction in fire aid based on information from the State. He added that the $496,000 figure for salary adjustments includes PERA increases and is based on current FTE information. Ms. Gohman stated that the City is not currently planning any staff reductions in 2011 and noted that payouts come out of a different fund. She indicated that there are currently two retirements happening and staff is conducting an analysis of each position and will make a recommendation to the City Manager regarding hiring. Councilmember Mavity requested that staff provide the Council with historical information regarding past levy increases. Councilmember Finkelstein expressed his appreciation to staff for their diligence in preparing a conservative budget while still maintaining services He requested that staff provide the Council with a list of all funding the City receives from the State, including where those funds come from and what the funds are supposed to be used for, particularly given the State's financial difficulties. Study Session Minutes -2- June 14, 2010 Councilmember Santa stated it will be important to also give consideration to the services currently provided to cities by the State, in the event that State-provided services are reduced in any way. Councilmember Finkelstein suggested that the City Council invite Gary Carlson from the League of Minnesota Cities to a budget discussion meeting. Mayor Pro Tern Sanger stated that the City should anticipate that there will also be more money demands from the school districts given the State's financial woes. She cautioned against preparing a barebones budget or minimal tax levy for 2011 and stated she did not want residents to expect that future levies will only be 2.5% or 3%. Councilmember Mavity cautioned against increased tax levies when residents are not always receiving salary increases. Mr. Swanson then discussed the $50,000 transfer in from the police and fire pension fund pursuant to the Long Range Financial Management Plan and provided some historical background regarding this fund. He explained that the full unwinding of this fund will cease in 2014, and it was the Council's decision to use the police portion to continue this unwinding. Mr. Harmening pointed out that the 2011 budget projection currently assumes that Golden Valley will be included in dispatch services. Mayor Pro Tern Sanger requested information regarding the budget assumptions with respect to property tax valuations and how declining valuations might impact the City's ability to collect the full tax levy. Mr. Swanson replied that the 2010 budget assumed residential properties declined more than commercial properties; the 2011 budget assumes that commercial properties will decline more than residential properties. He added that staff continues to monitor the real estate market and will continue to look closely at property values going forward. Mr. Swanson then reviewed the proposed franchise fee increases to assist with capital needs and stated staff is proposing a $.50 per month per utility increase for residential customers, while the majority of commercial properties would see a $4 increase per month. He explained that the proposed adjustments would generate approximately $294,000 in 2011 and would be dedicated to the Pavement Management Fund. Mr. Harmening stated that staff is negotiating with CenterPoint Energy and Xcel Energy on future franchise fee increases; the utility companies have agreed to the 2011 planned increase but have not committed to continued automatic increases at this time. He indicated that staff has projected franchise fee revenue over the next ten years, and has determined that the Pavement Management Fund will run into a deficit if franchise fees are not increased over that period of time. He added if the franchise fees are increased in 2011 and every other year thereafter at a rate of$.50 per month per utility over the next ten years, the Pavement Management Fund will become stable over the long term. Study Session Minutes -3- June 14,2010 Mayor Pro Tem Sanger stated that she did not feel the City should count on an increase in franchise fees every other year, and her preference would be to increase the franchise fee more than $ 50 now in case the City is not allowed to increase the fee in the foreseeable future, particularly since the current $1.25 rate has been in existence since the time the fee was initially imposed and it is lower than in many of the other metro communities Mr. Swanson presented information prepared by staff with respect to the Pavement Management Fund and the Capital Replacement Fund, together with comparative data for other city's current franchise fees. Ms. Gohman stated that staff will continue to work on the 2011 budget, including the proposed property tax levy and proposed franchise fees She indicated that the City Council will continue its discussions regarding the budget in the coming months. Councilmember Santa requested that the next draft of the budget include a notation as to any assumptions that may have changed, e.g., the contract with Golden Valley for dispatch services 2. Update on the Financial and Operational Status of Project for Pride in Living's (PPL) Louisiana Court Development Mr. Locke presented the staff report and introduced Barb McCormick and Steve Cramer from Project for Pride in Living He explained that 2010 presents the first opportunity to refinance the Louisiana Court project and reduce the debt. The current cash flow situation is not sustainable indefinitely. He indicated that one of the frustrations with this property is the high vacancy rate and the proposed refinancing would reduce the cash flow expenses so the property can operate in the black. He discussed the concept of a shallow rent subsidy program that would provide a $200 monthly rent subsidy to encourage people on the city's section 8 program waiting list to rent vacant units at Louisiana Court. Councilmember Finkelstein stated he was in agreement with the proposed refinancing as a way of reducing the debt on the property and reducing the City's exposure on the property. Mayor Pro Tern Sanger expressed concern regarding the shallow rent subsidy program and felt it was important to determine why the vacancy rate is so high at this property. Mr. Locke stated that there appear to be a number of factors affecting the vacancy rate, including needed improvements to the kitchens and baths. Councilmember Mavity requested that the Council have a broader future policy discussion regarding affordable housing and concerns about concentrated affordable housing. She added that she also had concerns about the City implementing any type of rent subsidy program. Councilmember Ross stated she would like to know what the property manager is doing to entice future residents. She added that the proposed rent subsidy program does not appear to be equitable Study Session Minutes -4- June 14, 2010 or fair to the other renters already living at the property, and stated she would rather see the money go for updating the units. She requested further information from staff regarding a rent subsidy program, including who would be eligible and whether existing tenants would be eligible. Councilmember Omodt stated that he was in agreement with the proposed refinancing. He also stated that he felt the City should move forward with the rent subsidy pilot program using available TIF dollars. Councilmember Finkelstein stated that PPL has been working very hard to manage this property and all parties have the best intentions in mind for the property. He stated he would like to see money put into capital improvements on the property. Councilmember Mavity stated that PPL has a stellar reputation in the community and acknowledged that this project has struggled in the past. She stated she wanted to make it clear that PPL has done a great job for the community. It was the consensus of the City Council to move forward with the bond refinancing on the project. It was also the consensus of the City Council to continue its policy discussion regarding the best use of TIF money for affordable housing, as well as a continued policy discussion regarding a long term approach to the Louisiana Court property and an exit strategy for the City Councilmember Mavity disclosed to the City Council that her husband, Tom Fulton is employed by the Family Housing Fund, one of the funders of the Louisiana Court project. Mr. Cramer stated that PPL will continue to meet the City's obligations on this property, as well as meeting its obligations to the limited partner on the property. He pointed out that PPL has contracted with a private management company for the past four years, and a leasing agent has recently been hired. He stated he felt the shallow rent subsidy program was an innovative idea that should be explored. 3. Freight Rail Policy Mr. Locke presented the staff report and proposed resolutions prepared following the City Council Study Session on May 24, 2010. Mayor Pro Tem Sanger suggested several revisions to the resolution relating to freight rail activity She requested that an additional "whereas" clause be added to state that the City of St. Louis Park has never consented to the realignment of freight rail traffic throughout the community. She also requested that an additional "whereas" clause be added to state that the Hennepin County 2009 study of potential routes for realignment of freight rail traffic did not address and compare many significant and relevant factors, including but not limited to, amount of and proximity to nearby homes, schools and sensitive land uses, at-grade road crossings, transportation network, costs including environmental mitigation and other factors as outlined in the City's letter of July 2009. She requested that the resolution contain a new paragraph 4(e) that reads "Creation of a true freight rail corridor with significant right of way between tracks and adjacent properties." Study Session Minutes -5- June 14, 2010 Councilmember Santa requested that any true freight rail corridor not be allowed to cross over and/or block any kind of street or thoroughfare. She expressed concern that trains may block crossings which will prohibit public safety vehicles from reaching an emergency call. Mayor Pro Tern Sanger requested that the fourth "whereas" clause in the resolution be revised to reference the City of St. Louis Park's opposition to freight rail in the community. She requested that paragraph 3 be revised to remove the words "in general." She further requested that the fourth line of paragraph 4(b) be revised to state "vibration, odors, traffic congestion and safety, school use and safety, park use and safety;..." Councilmembers Omodt, Santa, and Finkelstein expressed agreement with Mayor Pro Tern Sanger's proposed revisions. Councilmember Mavity stated that the proposed revisions to the resolution regarding the County's 2009 study may be more germane in the resolution requesting that the County reanalyze potential routes. She questioned whether the request to reanalyze the potential routes can be reduced by eliminating those options where the City has no leverage, e g , Appleton or Glencoe. Mayor Pro Tern Sanger stated that she is interested in receiving an analysis that applies all of the criteria to each of the six options to ensure that an appropriate, cost effective route is selected and that allows the City to undertake an apples to apples comparison which will allow the County to arrive at the best solution for all residents of the State. She suggested that paragraph (3) of the resolution be revised to include a request to evaluate at-grade road crossings and the number of and proximity to homes, schools and sensitive uses, to evaluate the operational impacts to TCWR and the operational impacts and costs to compensate TCWR for possible competitive disadvantage based on the route selection. She also suggested that the City should request a more detailed analysis regarding property acquisitions and environmental mitigation for all six routes, as well as an analysis of the extent of adjacent right of way between railroad tracks and schools and adjacent home uses. Councilmember Omodt agreed with the gist of Mayor Pro Tern Sanger's suggested changes and stated the Council requires this additional information in order to make an informed decision. Mr. Harmening stated that staff will revised the two proposed resolutions based on Council's discussion and present them to the Council on June 28t. He added that the County is aware that the City will be requesting additional information. 4. Future Study Session Agenda Planning—June 21 and June 28 Mr. Harmening presented the proposed special study session agenda for June 21 and the proposed study session agenda for June 28. He also presented the results of the prioritization of future agenda topics pursuant to Council input. He agreed to include this list in future meeting packets and to update the list as Council adds items for discussion. Study Session Minutes -6- June 14,2010 Mayor Pro Tern Sanger requested that staff provide its interpretation of the follow-up items and which items are high priority. Councilmember Mavity stated that she felt the Council should invite the Parks and Recreation Advisory Commission to a Council meeting. Mr. Harmening agreed to invite the Parks and Recreation Advisory Commission, along with the Human Rights Commission, to a meeting in July. 5. Communications (Verbal) Mr. Harmening stated that the City's auditors will present the 2009 audit to the Council on June 21". He stated that the audit contains no findings and the City is showing a strong fund balance. The meeting adjourned at 9:52 p.m. Written Reports provided and documented for recording purposes only: 6. Property Acquisition Update — 7015 Walker Street (formerly Reynolds Welding Supply property) 7. Property Maintenance Division Organization and Tools for Compliance 8. Highway 100 Reconstruction (Full Build) Project Update 9. Metropolitan Highway System Investment Study 10. Fiber Network and Policy Study 11. City Code Amendment to Chapter 3 Re rding Brewer's Off-Sale Malt Liquor Licensing �NanNancy i tyClerk Jeff c bs, Mayor