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HomeMy WebLinkAbout2011/10/10 - ADMIN - Minutes - City Council - Study Session ' St. Louis Park OFFICIAL MINUTES MINNESOTA CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA OCTOBER 10, 2011 The meeting convened at 6:30 p.m. Councilmembers present: Mayor Jeff Jacobs, Phil Finkelstein, Anne Mavity, Julia Ross, Susan Sanger, and Sue Santa. Councilmembers absent: Paul Omodt. Staff present: City Manager (Mr. Harmening), City Clerk (Ms. Stroth), City Attorney (Mr. Scott), Director of Community Development (Mr. Locke), Economic Development Coordinator (Mr. Hunt), Communications Coordinator (Mr. Zwilling), Chief Information Officer (Mr. Pires), Controller (Mr. Swanson), Finance Supervisor (Mr. Heintz), City Assessor (Mr. Bultema), and Recording Secretary(Ms. Hughes). 1. Future Study Session Agenda Planning—October 24,2011 Mr. Harmening presented the proposed study session agenda for October 24th 2. Toby Keith's I Love This Bar & Grill Liquor License—Food/Liquor Sales Report Mr. Harmening presented the staff report and stated that the liquor license for Toby Keith's I Love This Bar & Grill was placed on probationary status for six months starting March 1, 2011 through August 31, 2011 because it had not met the requirement of at least 50% of its gross receipts attributable to the sale of food. He presented the reported monthly sales percentages provided by Toby Keith's through August 2011 for food, liquor, and other retail sales, as well as monthly sales percentages for food and liquor sales only. Ms. Stroth explained that the City's liquor ordinance was amended in 2000 to include the 50% requirement and noted that the requirement is not part of the State statute. She then introduced representatives from Toby Keith's: Barry Birks, Toby Keith's Corporate General Manager; Matt Sutton, General Manager; and Jason Sisk, Store Manager. Mr. Birks stated that Toby Keith's is committed to complying with the City's ordinance requirements and indicated that they no longer sell t-shirts, hats, or other retail and the retail area in all the stores is being converted into private dining rooms. He advised that they have been aggressive with food sales, including marketing campaigns and lunch bunch cards. Councilmember Finkelstein stated that when Toby Keith's appeared before Council in February, he did not feel they were treating this issue seriously enough and requested further information about what the restaurant has been doing to meet the 50%requirement. Mr. Birks explained they have been actively marketing with the hotels in the area to draw hotel guests in for lunch, dinner, and the after work crowd. He stated they have also extended invitations to local businesses. He indicated that they also had a two-day School of Rock promotion with the local schools that drew as many as 500 people. He stated that they want to make sure their food sales are consistent and that people come back to the restaurant. He added that they have gone to great lengths to emphasize that they are a restaurant and not just a bar with live music. Study Session Minutes -2- October 10, 2011 Councilmember Mavity stated the City has intentionally indicated that it does not want a bar district in St. Louis Park and the liquor ordinance is the tool to make that happen. She questioned whether there is anything different in the West End that might give Council reason to consider moving to a 60-40% requirement. She stated that if the City does not enforce the current ordinance, it is meaningless. She indicated at this point, Toby Keith's has made strong efforts to comply with the City's ordinance, but they are not yet in compliance. She noted that the City wants this business to be successful and it appears there are some tools available to the City, including imposing a civil fine up to $2,000. She proposed that the City impose a fine of $1,000 and to suspend that fine until Toby Keith's renews its liquor license in 2012; if Toby Keith's is in compliance when their liquor license is renewed, the civil fine would be forgiven and if they are not in compliance, the fine would go into effect. She also proposed that Council consider amending the 50%requirement contained in the ordinance. Councilmember Ross stated that the 60-40% discussion should not be part of the discussion related to Toby Keith's. Councilmember Sanger commended Toby Keith's for their efforts but did not feel that a one or two month improvement in food sales represented a trend. She stated she would like to continue the probation period for Toby Keith's through the time of renewal consideration in February 2012 so that Council can be certain of compliance with the ordinance on a consistent basis. She agreed with Councilmember Mavity's suggestion of imposing a civil fine. Councilmember Finkelstein stated he would like a wntten report detailing the activities undertaken by Toby Keith's to increase food sales. He indicated if the probation period is extended, he wants a written report submitted to Council outlining these activities. He also agreed with Councilmember Mavity's suggestion of imposing a$1,000 civil fine. Mr. Sutton agreed to provide the written reports requested by Councilmember Finkelstein. Councilmember Santa stated that she was pleased to see the food sales increase and commended the efforts of Toby Keith's to meet the City's ordinance requirements. She expressed support for extending the probation period and requested that Toby Keith's remain mindful of the City's earlier disappointment with Toby Keith's management. Mayor Jacobs felt that management at Toby Keith's has been putting forth a good faith effort to increase food sales and expressed support for extending the probation period for Toby Keith's. He agreed that Council should have a further conversation about the 60-40% requirement at a later date. It was the consensus of the City Council to extend the probationary period through February 2012. It was also the consensus of the City Council to require that Toby Keith's provide interim reports of food/liquor sales in December and at the time of liquor license renewal in February 2012. It was also the consensus of the City Council to leave open the question of a civil fine until February 2012. Mr. Scott advised that an agreement will be prepared containing the reporting requirements and extension of the probationary period. He added this agreement can be approved by Council as a consent agenda item. Ms. Stroth reminded the City Attorney of the resolution approving the previous probation conditions and Mr. Scott stated he would provide the best course of action. Study Session Minutes -3- October 10, 2011 3. Supplemental Construction Assistance Program (CAP) Funding Request from Hardcoat Inc. Mr. Locke presented the staff report and introduced Michael Kelner, President of Hardcoat Inc. He stated that the City still feels this is a good project and is anxious to see the building renovated. Mr. Kelner introduced Reg Plowman, current owner of the Flame Metals property. Councilmember Sanger requested further information regarding the City's CAP guidelines as well as the current balance in the fund and timing/use of the fund. Mr. Hunt explained that this project scored well under the City's criteria and there is approximately $1 million left in the fund in terms of unallocated tax increment. He stated the City has been careful about future projects and this project will allow other projects to be funded as well. He indicated that the legislature recently extended the deadline on these projects and any new projects must commence by July 1, 2012. He discussed a pending CAP funding request from Stone Mountain Pet Lodge to facilitate the renovation and expansion of the former Bennigan's property, as well as a CAP funding request from Anderson KM Builders to facilitate the construction of a 21,000 square foot office building at the former Oak Hill II site. Mr. Locke stated that the City's guidelines require a demonstrated need, which was shown here, and the types of projects include physical improvements, especially when dealing with clean-up or corrections to the site. He stated in this case, the City is also making funding available for tenant improvements and noted that this project is creating a TIF district which will allow the City to reimburse itself. He added that the CAP funding requests from Stone Mountain Pet Lodge and Anderson KM Builders could easily be funded. Councilmember Finkelstein stated that he was initially opposed to Hardcoat's CAP funding request, but given Mr. Kelner's significant investment in the project, he felt it was appropriate to support Hardcoat's request for additional assistance. Councilmember Santa requested further information regarding the Department of Agriculture's involvement. Mr. Kelner explained that the MPCA had previously issued a No Action letter for the property, but the matter was transferred over to the Minnesota Department of Agriculture (MDA) because of the nature of the spill and for that reason, even though the No Action letter was issued in 1989, it was no longer acceptable to MDA, despite MPCA's statement that it had no issue with the site. He stated that construction and financing have been postponed for five months because of this issue which has resulted in increased costs. He indicated they have gone through a series of water, soil, and bore testing and MDA's concern was with a concrete pad that has been on the site since the original building, even though remediation was done. He reported that the monitoring wells on-site and all of the testing showed the water quality was better than the water being delivered to the community. He added that MDA recently provided a draft report which requires him to remove a 10'x10' area of dirt and to properly dispose of the dirt. Mr. Tom Johnson, attorney for Hardcoat Inc., stated that the draft letter from MDA was received last Friday and they hope to close the financing next week, with construction resuming shortly thereafter. Study Session Minutes -4- October 10, 2011 Councilmember Sanger indicated she still has mixed feelings about this and stated that while the project is valuable, her concern is with the City's CAP program and the fact that the City has already provided twice as much funding as called for in the guidelines. She also expressed concern about the vitality of Hardcoat and whether the additional $80,000 represents a make or break for the business. She stated that from a policy perspective, it is not okay for every business to come back to the City to underwrite unforeseen business expenses. Councilmember Finkelstein felt that the unforeseen expenses were no fault of Mr. Kelner. He added that this is a site the City wants to deal with and given the circumstances, he felt it made sense to approve the additional funding. It was the consensus of the City Council to support Hardcoat Inc.'s supplemental CAP funding request related to the acquisition and renovation of the former Flame Metals property. Mr. Kelner reported that his business has now grown to 18 employees and he is confident the business will continue to grow. He expressed his thanks and appreciation to the City Council. 4. 2012 Budget Discussion Mr. Harmening presented the staff report and stated that Council adopted a preliminary tax levy of 5.0% in September, representing an increase of approximately $1.1 million from the 2011 levy. He noted that the bulk of that adjustment will be used to help pay the debt service on the two new fire stations. He indicated that the City's 2012 operating budget will increase 1.19% or approximately $243,000, and the proposed budget includes hiring one police officer and one engineer. Mr. Swanson discussed the legislative repeal of the Market Value Homestead Credit (MVHC) program and its replacement with the Market Value Homestead Exclusion program. He stated that the Market Value Homestead Exclusion represents a significant change for the City and will reduce the City's net tax capacity by approximately 3.5% and will increase the City's tax rate. He also discussed fiscal disparities and stated that in 2012, the City's net contribution will increase approximately $380,000, for a total contnbution of $3.2 million compared to $2.7 million in 2011. Mr. Harmening indicated that the State recently hired a consultant to look at fiscal disparities and conduct some case studies. He stated that he contacted the consultant to see if St. Louis Park could be used in the case study. Mr. Swanson reviewed the estimated City share of property taxes based on a 5.0% preliminary levy increase and noted that the property values are based on information from the Assessor and represent an approximate 2.5% reduction in values. He discussed the impact on the estimated City share of property tax adjustments based on a 5% levy increase and stated that homes with a value of$193,000 or below will see a reduction in the City's estimated tax, while higher valued properties are picking up the additional cost of the Market Value Homestead Exclusion program. Councilmember Mavity noted that the City's estimated tax increase on the highest valued home with a 0% levy increase would be $81 and that same home with a 5% levy increase would see an estimated City tax increase of $145, for a difference of about $65. She felt that the 5% levy increase provides a cushion for the City. Study Session Minutes -5- October 10, 2011 Councilmember Sanger noted that the difference between a 0% levy increase and a 5% levy increase is $10 on the low valued homes. She added that utility rates are partially under the control of residents and should encourage people to cut down and recycle more. Councilmember Mavity encouraged the City to concisely explain to residents the shift from Market Value Homestead Credit to Market Value Homestead Exclusion. Councilmember Finkelstein requested that the City also communicate with residents about how much of their property tax bill is related to the City and how much is the school distract, County, etc. It was the consensus of the City Council to direct staff to continue with a 5.0% property tax levy increase from 2011. It was also the consensus of the City Council to direct staff to proceed with hiring one additional police officer. It was also the consensus of the City Council to direct staff to proceed with hiring one additional engineer. 5. ParkAlert Citizen Notification System Policy Mr. Pires presented the staff report and draft policy for use of the ParkAlert notification system. He advised that the Reverse-911 program is a powerful tool that will include other types of communications and the policy will define the conditions under which this tool will be initiated. He explained typical emergency situations and other non-emergency conditions and stated that the notification system has the ability to complete 130,000 phone calls per hour. Mr. Zwilling indicated that this technology is used by others as a marketing tool, but that is clearly not the City's intent. He explained that residents and businesses will have flexibility in choosing their communications and can rank their preference for receiving messages. Mr. Pires stated that everyone who has a listed telephone number will automatically receive messages at that number; residents can then go on the web portal and select contact methods for receiving non-emergency messages. He noted that 67% of St. Louis Park residents are in the White Pages and an average of 25% do not have landlines, so the City will encourage those people to register. He stated that people can also register to be notified about events at five different locations, e.g., school and work. Councilmember Sanger stated it will be important for the City to have a privacy policy in place. Mr. Pires explained that a use policy has been reviewed by the City Attorney that states the City will not share information except as might be ordered by a Court. Mr. Zwilling noted that the City will have a contract with Everbridge for use of its citizen notification system. Mayor Jacobs stated it will be important to assure residents that Everbridge is bound by the City's contract with them with respect to privacy. Councilmember Sanger asked if the system could be used for notifying residents about variances or other similar requests so that the City does not have to mail out so many notices. Study Session Minutes -6- October 10, 2011 Mr. Pires replied in the affirmative and stated that the system can define a geographical area for sending messages. He stated that every time the City sends a postcard to residents, it costs approximately$7,500 and the ParkAlert system will cost $15,000 per year for unlimited use. He added that residents will always receive emergency messages, but would have to opt in for non- emergency messages such as road detours, etc. It was the consensus of the City Council to proceed with formal adoption of the ParkAlert Citizen Notification System use policy at its October 17, 2011, regular meeting. 6. Communications/Meeting Check-In (Verbal) None. The meeting adjourned at 8:41 p.m. Written Reports provided and documented for recording purposes only: 7. 2012 Budget& Property Owner Service Charges—Special Service Districts No. 1-6 8. Redevelopment Project & EDA Contract Status' • sort: 3rd Quarter 2011 di��✓u� Nancy Stroth, ty Clerk Jeff Jac abs,i a or