Loading...
HomeMy WebLinkAbout2014/08/25 - ADMIN - Minutes - City Council - Study Session f/fSt. Louis Park OFFICIAL MINUTES MINNESOTA CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA AUGUST 25,2014 The meeting convened at 6:39 p.m. Councilmembers present: Mayor Jeff Jacobs, Tim Brausen, Steve Hallfin, Gregg Lindberg, Anne Mavity, Susan Sanger, and Jake Spano. Councilmembers absent: None. Staff present: City Manager (Mr. Harmening), Deputy City Manager/Director of Human Resources (Ms. Deno), Controller (Mr. Swanson), Finance Supervisor (Mr. Heintz), Director of Operations & Recreation (Ms. Walsh), Director of Community Development (Mr. Locke), Director of Inspections (Mr. Hoffman), Chief Information Officer (Mr. Pires), Director of Engineering (Ms. Heiser), Police Chief(Mr. Luse), Fire Chief(Mr. Koering), City Assessor (Mr. Bultema), Utilities Superintendent (Mr. Hall), Operations Superintendent (Mr. Hanson), Communications & Marketing Coordinator (Mr. Zwilling), and Recording Secretary (Ms. Hughes). 1. Future Study Session Agenda Planning—September 2 and 8, 2014 Mr. Harmening presented the proposed special study session agenda for September 2nd and the proposed study session agenda for September 8`h. He stated that Mr. Scott would be in attendance at the September 2nd special study session to discuss resident complaints about the Star Tribune Value Edition circulars and steps the City might take to stop unwanted delivery of these circulars. 2. 2015 Budget, CIP and Utility Rates Discussion Mr. Harmening presented the staff report and policy questions for Council consideration. Ms. Deno stated that the five union contracts are closed for 2015 at 2.5% and staff recommends a 2.5% wage adjustment for all employee groups in 2015. She stated that an internal employee group has met to review the employer contribution and staff will come back to Council with a recommendation related to the 2015 employer contribution amount. She then reviewed the 2015 staffing requests submitted in the 2015 proposed budget. Mr. Swanson reviewed the non-personnel requests included in the 2015 budget and advised that staff is recommending a franchise fee increase in 2015 of$.75 per utility or $18 per year and this $.75 increase would generate approximately $500,000 in the Pavement Management Fund. He stated that staff has completed two iterations of the CIP and noted the CIP does not have funds earmarked for a community center or projects related to Southwest LRT. He stated that staff reviewed the City's water service lines program per direction of Council and staff believes the cost of this program can be absorbed within the recommended utility rates and stated the cost to implement this program is approximately $210,000 per year and staff recommends moving forward with the City accepting partial ownership of residential water service lines from the water main to the curb stop beginning on January 1, 2015, with the implementation of a pilot program in 2015 and 2016. He stated that staff explored the possibility of having the City take over snow plowing of all sidewalks and it is estimated to cost approximately $1.2 million to hire a contractor to perform snow plowing of sidewalks, depending on the frequency of snow removal required. He stated if the sidewalk snow removal were performed in-house, staff Study Session Minutes -2- August 25, 2014 estimates the cost at approximately $917,000 in the first year and $408,000 per year thereafter. He noted that the addition of in-house snow plowing would require a 3.6% levy increase and a 4.4% levy increase if the City were to hire a contractor to perform this work. He reviewed the 2015 Preliminary Property Tax Levy and stated that property values for single-family homes have increased approximately 5.6% for property taxes payable in 2015, property values for condos have increased approximately 7.5%, and property values for apartments have increased approximately 20%, with commercial/industrial property values remaining stable at .4% for pay 2015. He noted that while property values were declining the last several years, the City's commercial properties were holding their value and the commercial/industrial properties have previously been paying more of the share of the property tax burden, however, as residential values increase, the residential properties will be paying more of the property tax burden than in the past few years. He stated the City's fiscal disparities contnbution in 2015 is approximately $3.9 million or approximately $200,000 more than in 2014, adding that the City's fiscal disparities contribution is about 6% of the City's total tax capacity. He advised that the 2015 budget proposes a 5.5% Property Tax Levy increase. The levy increase for 2014 was 3.5%. He stated that the HRA levy is used for infrastructure needs throughout the community and staff recommends continuing the maximum levy for 2015. He reviewed the Utility Funds and stated in 2015, the City will be in its fifth year of a ten-year plan for increasing the fixed rate charges for water to make sure the City is recouping its fixed costs and to reduce volatility in the system. He stated that sewer rates are proposed to increase as the City moves into a more aggressive infrastructure replacement plan, adding that one of the main drivers of this is the Met Council MCES charge representing approximately $3.6 million. He stated that solid waste rates are proposed to remain flat in 2015. He advised that more emphasis is being placed on storm water management resulting in a need to increase rates over the next five years to meet increased capital needs and debt service obligations. He stated that a typical homeowner would see an increase in their utility bill of approximately $45 per year or approximately $4 per month, representing a 4.6% increase in utility rates compared to 2014. He stated that Council would be asked to approve the 2015 Preliminary Property Tax Levy and HRA Levy on September 15, 2014, with final adoption of the 2015 budget and 2015 Property Tax Levy and HRA Levy on December 15, 2014. Councilmember Mavity asked if the 2015 capital improvement budget includes funding for sidewalks not originally included in the Connect the Park! program. _ Mr. Harmening replied that the 2015 budget does not currently include funding for additional sidewalks other than the 39th Street segment because staff needs to talk to Council about requests received from residents to amend the Connect the Park! plan as well as to discuss a specific policy for including additional sidewalks and who pays for the sidewalks. Councilmember Mavity stated that Council has already had some policy discussion on this issue and felt it was the will of Council to include more connections and she wanted to make sure there was a budget in place to reflect that moving forward, even if it was a placeholder in the budget. Mr. Harmening agreed to schedule a policy discussion with Council regarding this issue this fall. Councilmember Mavity urged the City to have a strategy in place for funding projects related to Southwest LRT and felt the City should be very aggressive in securing as much land as possible around Wooddale to make sure the City can guide and control that development. She also questioned whether there was any possibility of using the HRA levy for affordable housing. Study Session Minutes -3- August 25, 2014 Councilmember Lindberg stated one of his primary concerns is to keep staff whole and making sure that the City remains competitive in terms of compensation and benefits. He requested that Council and staff continue to look at the 2015 staffing requests and remain cognizant of the proposed increases in property taxes and fee structures. He expressed some concern about having too much in the undesignated fund balance especially related to capital and felt if Council is going to be making decisions on large purchases, it should be accountable project by project rather than depending on a slush fund. Councilmember Sanger stated she was fine with the proposed 5.5% Property Tax Levy increase and proposed HRA levy increase as well as the proposed utility rate increases. She was concerned about funding any staff positions with grant money given the uncertainty of future grants. She asked about the wellness incentive benefit and what evidence the City has that it has resulted in healthier employees. Ms. Deno advised that the City has some data available on the wellness incentive program and will bring this information to Council when the 2015 employee benefits are presented to Council. Councilmember Sanger requested further information about the sidewalk snow removal program and asked if the City would hire year-round or seasonal employees for this program. She expressed continuing concern about the inequity in the current system of sidewalk snow removal and stated her continued preference to have the City plow all sidewalks. Mr. Harmening replied that full-time employees would be hired and not part-time seasonal workers. He noted that this program would add approximately sixty miles of sidewalks to be plowed and the City would have to hire people who are trained and competent, as well as purchase equipment that costs approximately$100,000 a piece. Councilmember Hallfin pointed out that Council previously reached consensus regarding neighborhood and community sidewalks and indicated that Council may want to review a list depicting community sidewalks and neighborhood sidewalks to see if any changes need to be made. Councilmember Brausen asked where the funding would come from for the affordable housing strategies. Mr. Harmening advised that funding would probably come from a variety of sources including tax increment monies, the Development Fund, tax increment generated from specific projects, as well as other funders. He added that the City could also consider using the HRA levy for affordable housing. Councilmember Brausen was supportive of the additional staffing requests and agreed that the City should find dedicated funding sources to facilitate development related to Southwest LRT, adding that the City has identified approximately $40 million worth of infrastructure improvements related to Southwest LRT. He also spoke in favor of the proposed change to the water service lines program and proposed 5.5% levy increase and utility rate increases. Councilmember Hallfin asked about the lights at Carpenter Park and whether this project would be done at any time in the future. He also spoke in favor of the proposed 5.5%levy increase. Study Session Minutes -4- August 25, 2014 Ms. Walsh stated that this project is not in the current CIP and staff is hoping for a partnership with the Baseball Association on this project. Mayor Jacobs spoke in favor of the proposed 5.5% levy increase and felt that the 2015 budget was on the right track. Councilmember Sanger stated that Council will be receiving a report this fall from the consultants regarding the schematic design on the possible community center and asked if Council should include anything in the 2015 budget if the decision is made to continue the process for building a community center. Mr. Harmening stated that the next phase is final design and this has not been included in the capital plan. He stated the Park Improvement Fund could pay for final design work and reimburse the fund through bonds issued if the project moves forward and indicated that staff could research the cost further and include that amount in the CIP. Mr. Swanson presented preliminary information regarding the City's share of property taxes for pay 2015 for a median value home and advised that a 5.5% levy adjustment would increase the City's share of property taxes by $72 for a 7.8% increase. He reminded Council that these figures are very preliminary because Hennepin County has not yet supplied the numbers to the City. Ms. Deno advised that staff would continue preparing the 2015 budget using a 5.5% Property Tax Levy with the goal of reducing this amount by the time the final property tax levy is adopted in December. It was the consensus of the City Council to certify the maximum HRA levy amount for the 2015 levy. It was also the consensus of the City Council to agree with the franchise fee adjustment recommended by staff. It was also the consensus of the City Council to agree with the proposed utility rate adjustment plans. 3. Water Meter Replacement Program Mr. Heintz presented the staff report and advised the City has approximately 13,000 residential water meters that are read by a meter reader who manually reads the majority of the meters and the City's commercial meters are read on a drive-by system. He advised that in 2013, the City pumped over 350 million gallons of unbilled water representing lost revenue estimated at $500,000 per year. Ms. Deno advised that staff is recommending a fixed network system and stated if the City goes to a monthly billing system in the future, a fixed network system could handle monthly billing, adding that the cost for this program has been built into the City's rate structure. Councilmember Sanger expressed support for the fixed network system and stated that water conservation is an important element of this and catching leaks as soon as possible. She stated she assumed that the City's administrative costs would increase if the City goes to a monthly billing system. Councilmember Brausen supported the fixed network system and requested further policy discussion about the City's tiered pncing. Study Session Minutes -5- August 25, 2014 It was the consensus of the City Council to direct staff to move ahead with a program to replace the City's water meters with a fixed network system to collect readings. Communications/Meeting Check-In (Verbal) Mr. Harmening advised that Mayor Jacobs and the Mayor of Edina recently received a letter from Minneapolis Mayor Hodges about the property owned by the City of Minneapolis at 40th and France and the City of Minneapolis has indicated if it cannot strike a deal later this year, it will place the property on the market with the intent to sell it to a developer. He stated that the City of Edina's position has been that it would be happy to take the property but would not pay for it as the City of Edina considers the property an open space resource enjoyed by Edina, St. Louis Park, and Minneapolis and that the City of Edina should not have to pay for property that it is going to keep as open space. He stated that this item would be placed on the agenda for a future study session. The meeting adjourned at 8:52 p.m. Written reports provided and documented for recording purposes only: 4. South Side of Excelsior Boulevard Study Update 5. 2014 Semi-Annual Housing Programs Activity Report 6. July 2014 Monthly Financial Report 7. Delinquent Utility Accounts Li Nancy Stroth, eity Clerk Jeff Jaco 0 s, ayor