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HomeMy WebLinkAbout2020/04/27 - ADMIN - Minutes - City Council - Study Session Official minutes City council study session St. Louis Park, Minnesota April 27, 2020 The meeting convened at 6:54 p.m. Councilmembers present: Mayor Jake Spano, Tim Brausen, Rachel Harris, Larry Kraft, Anne Mavity, Nadia Mohamed, and Margaret Rog. Councilmembers absent: none. Staff present: City Manager (Mr. Harmening), CFO (Mr. Simon), Engineering Director (Ms. Heiser), Deputy City Manager/Human Resources Director (Ms. Deno), CIO (Mr. Pires), Senior Management Analyst (Ms. Solano), and Recording Secretary (Ms. Pappas). Guests: none 1. COVID-19 pandemic update Mr. Simon presented an update on financials in light of COVID. He stated he would discuss the $2.4 million budget gap, cash flow, and debt flexibility. He stated the information is a collaborative effort by city staff and the department directors . Mr. Simon noted that savings measures included: no new hiring of employees or interns for the time being, no new inventory, or supplies, and holding of consultant activity. He added with less activity at city hall, there are savings on utilities as well. The total savings within the general fund would be $760,000. Mr. Simon added that because 2019 had a strong performance in the city’s general fund, these funds can be held or used as needed, and not transferred out, for a savings of $696,700. Mr. Simon also noted a gap of $272,000 in the general fund, and staff is still working on this. Mr. Simon added that cash flow impacts and preservation is important, and some maintenance or projects may be pushed out to the fall or to 2021, if not critical to the city’s infrastructure. He added projects at Walker Lake and Connect the Park will be held off for now, some storm water projects can be re-quoted in the fall, alley projects will move to next year, and Park and Rec and Operations will reprioritize some projects into 2021. Councilmember Mavity agreed with the strategy, adding the city will not be able to look to the levy to make up the differences, as residents are stressed as well. She stated the multi-family market remains strong with continued demand and asked if apartment projects a re still moving forward. Mr. Simon stated they are moving forward, but some may be delayed a bit, adding apartments represent 32% of the budget. Councilmember Harris appreciated Mr. Simon’s approach. Councilmember Harris asked about the annual levy, and if it feasibly could stay at 3%. Mr. Simon stated this would be discussed in detail at the May 26 council meeting. DocuSign Envelope ID: 701DD1F6-8E79-47DF-A96F-6B8289D189EF Study session minutes -2- April 27, 2020 Mr. Harmening added everything will depend on what happens over the next few months. He stated he is concerned about 2021, adding effects of the pandemic will reach into 2021 and longer. Mr. Harmening stated the assumptions are a modest levy adjustment at best, and possible cuts or delays on projects. Councilmember Harris asked if any labor contracts negotiated last fall might be revisited to benefit the city in the future. Ms. Deno stated the city is positioned to work with the labor union groups for positive outcomes, adding there is another year in contract on health benefits not to exceed 9%. Councilmember Rog asked what positions are affected at this point on staff. Ms. Deno stated engineering tech, public works facilities, permit technician, building inspectors, an additional sustainability specialist, moving a naturalist from part-time to full-time, several public service workers and GIS on hold, and also the delay of some new hires for police, along with the racial equity specialist to work in administration. Councilmember Rog asked what all was included in the $2.5 million reduction to parks and recreation and operations. Mr. Simon stated this would also include playgrounds, sanitary sewer, special service districts, and a street lighting project that will be delayed to fall. Mr. Harmening explained this plan will help to preserve as much cash on hand as possible, adding the projects will be done in the future. He explained if revenue projections are not as bad, some projects will be brought back, noting staff wants to be sure core services are strong, while also being mindful of council strategic priorities. Mr. Harmening added if opportunities arise to fund projects, strategic priority projects would be given strong consideration. Councilmember Rog noted concerns for proposed savings measures around the efficient buildings program and benchmarking, adding she is concerned about eliminations around sustainability programs and measures. Councilmember Kraft asked about tax delinquencies, and if these are postponements. Mr. Simon stated yes, adding the tax payments would come back in the future. Councilmember Kraft thanked Mr. Simon for staff’s ideas on cash flow and conserving cash. He asked Mr. Simon if these measures will be enough. Mr. Simon stated yes, they will preserve a large amount of the city’s capital and a significant amount of cash. Councilmember Kraft asked how much time this plan will buy the city. Mr. Simon stated it will buy a couple extra months in addition to other savings measures the city will conduct. Councilmember Kraft asked Mr. Simon how the monthly report tracking against the budget will change for the rest of year. Mr. Simon stated staff is looking at how much is being spent related to COVID and if a budget amendment is needed later in the year, it will be brought forward to council at that time. Councilmember Brausen thanked Mr. Simon and staff for their conservative calculations, adding the reductions of revenue were based on figures from the recession of 10 years ago . He DocuSign Envelope ID: 701DD1F6-8E79-47DF-A96F-6B8289D189EF Study session minutes -3- April 27, 2020 stated he hopes the city will do better with tax revenues, which are mainly paid directly through mortgage escrow accounts. He added sustainability matters to him, and he hopes the city can visit this again this year. Mayor Spano asked if there will be more information on the savings gap closer to July . Mr. Simon stated yes. Mayor Spano asked about pass through monies on the special service districts. Mr. Simon stated the special districts are for maintenance, and the city is responsible for infrastructure . Mayor Spano stated that as the city moves forward on staff cuts or renegotiating contracts, the council should be included in the conversation, as well as thinking about council salaries in that same way, and discussing those if needed also. Mr. Simon pointed out that Hennepin County had moved tax settlements to July 30 for cities, noting this is positive news. He added that COVID operating expenditures in the city to date are $18,940 for PPE and other purchases. Mr. Simon stated staff is also tracking staff time spent on COVID and thus far, it is at $365,000 of staff time tracked. He noted this will be relayed to FEMA for reimbursements at the appropriate time. Mr. Simon stated there have also been changing effects with water not being pumped as much into commercial businesses during this time, while residential water use is up. He added solid waste is also up in residential, adding both will be above budget. It was the consensus of the council that the direction staff is taking to address the financial impacts of COVID are in line with council expectations. Councilmember Mohamed asked about the city’s ability to distribute grants and loans and how that might be affected during this time. Mr. Simon stated this will need to be reviewed and both staff and the council will need to be conscious of this. Councilmember Mohamed stated she is pleased with staff’s report, adding sustainability and climate change issues should definitely stay a priority. Councilmember Harris added how the council addresses racial equity and inclusion during this time, along with sustainability and housing, will all need to be addressed. Councilmember Rog added this is all in line with systems-approach thinking. She asked about the $200,000 to support the city’s small businesses, support the city has promised to STEP, and if staff has analyzed all of this as well. Mr. Simon stated staff will analyze the city’s grant program and make a recommendation to council. Councilmember Mavity stated she appreciated the update, and added it is difficult to know what is coming in 2021. She appreciated staff’s conservative approach and the budget parameters. She stated it will be important to look at how to embed council priorities into the work being done, in different ways. DocuSign Envelope ID: 701DD1F6-8E79-47DF-A96F-6B8289D189EF Study session minutes -4- April 27, 2020 Mayor Spano stated his expectation is that staff will be on this early and often, while being creative and identifying gaps in the budget and opportunities to save money, while understanding council priorities. He agreed council will need to re-engage on the conversations around STEP. Mayor Spano stated these will not be easy decisions, but he is confident in the team, adding the council has appreciated Mr. Simon’s work, which has advanced the finances of the city. On behalf of the council, Mayor Spano wished Mr. Simon all the best in his new position. 2. Future study session agenda planning and prioritization The council discussed future study session agenda planning and prioritization and included the following priority items:  Wooddale  COVID updates  STEP conversation with executive director – and potential of new facility (May 11)  Westwood Hills Nature Center access fund  Crime-free ordinance with presentation by the workgroup and discussion  Climate action in the time of COVID – leveraging new behaviors to meet climate goals Councilmember Brausen noted the South Cedar Trail written report, stating he is supportive of designating this area for improvements and noted over time, the city will get money back with interest. He pointed out the homeowners’ association should be required to participate in climate activities, sustainability, and energy efficiency. Councilmember Kraft asked about a future council/school board meeting. Mayor Spano stated this was suggested to discuss COVID, how to support each other, and how does distance learning impact building improvements. Councilmember Mohamed asked if the city budget can afford to support the improvements of the South Cedar homeowner’s association. Mr. Harmening stated that is a small financial commitment, so it is doable currently. The meeting adjourned at 8:25 p.m. Written Reports provided and documented for recording purposes only: 3. South Cedar Trails Homeowners Association Housing Improvement Area (HIA) 4. March 2020 monthly financial report 5. First quarter investment report (January – March 2020) ______________________________________ ______________________________________ Melissa Kennedy, city clerk Jake Spano, mayor DocuSign Envelope ID: 701DD1F6-8E79-47DF-A96F-6B8289D189EF