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HomeMy WebLinkAbout2020/05/26 - ADMIN - Minutes - City Council - Study Session Official minutes City council study session St. Louis Park, Minnesota May 26, 2020 The meeting convened at 6:30 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), CIO (Mr. Pires), Director of Operations and Recreation (Ms. Walsh), Senior Planner (Ms. Monson), Building and Energy Director (Mr. Hoffman), Deputy City Manager/Human Resources Director (Ms. Deno), Sustainability Manager (Mr. Ziring), Senior Management Analyst (Ms. Solano), and Recording Secretary (Ms. Pappas). Guests: Stacy Kvilvang & Liz Diaz, Ehlers 1. 2021 Budget Ms. Kvilvang presented an overview. She noted the city’s budget priorities support core services, including public safety, recreation, public facilities, utilities, streets, infrastructure and administration. Additionally, budget priorities include the city’s strategic priorities of sustainability and racial equity, including the community needs of residents and businesses. Ms. Kvilvang pointed out in her presentation that if the city does not increase the levy, there will need to be budget reductions. Likewise, if utility fees which support water, sewer and solid waste, are not increased, there will either need to be larger increases or the elimination of capital expenditures, in the future. Additionally, if franchise fees are not increased, the city will have to hold off on pavement management projects as well. Councilmember Kraft asked about using taxes for pavement management instead of franchise fees as franchise fees are regressive. Mr. Harmening explained the council made a decision in the early 2000s to use franchise fees to fund pavement management instead of assessing property owners for street improvements, but noted the council could decide to instead do a property tax levy or special assessment to fund. Councilmember Harris asked how the levy was set in 2008-10 when there were budget shortfalls. Mr. Harmening stated he will have staff research this and bring those numbers to the council. Mr. Harmening noted capital projects are always a good expenditure that can be put off to a later date but added this will catch up with the city later and then it’s harder to finance these projects. Councilmember Harris stated she is leaning toward a very modest tax increase, if any. DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001 Study session minutes -2- May 26, 2020 Councilmember Mavity agreed with Mr. Harmening, stating the city will need to be cautious about stepping back too far on essential services fees, adding when this was done in the past, there was push back from residents. She stated the city will need to fund core services with some minimum fees, adding increases that had previously been negotiated in water and sewer rates several years ago are important to ensure resources to sustain our system, as well as looking at program costs. She stated she would be comfortable up to 3%. Councilmember Mavity stated if the economy is in a 20-25% downturn, this will continue for 1- 3 years before it shifts back, so the city will want to look at the long view and make sure it’s sustainable, if there is a deeper downturn. Councilmember Brausen stated he approves of franchise fees in order to avoid special assessments and spread costs to all, adding it’s a good way to fund street improvements, by having everyone pay for the roads they use. He added they should also keep to proposed increases on utility rates as well, to provide the essentials and maintain adequate reserves for capital improvement projects, which can be more expensive if held off to the future . Councilmember Brausen added the city will want to continue to pursue its goals of affordable housing. He noted he would approve up to a 3% levy increase; however, adding this increase does not contemplate any new staffing. He noted the impact on the average homeowner won’t be significant and will be less for apartment dwellers. Councilmember Rog stated she hopes the city can leverage what has been learned from this time and create a true new normal. She stated she will not want to pull back on racial equity work or sustainability and going forward the city should become bolder on these issues preparing for the future. She stated she is not sure what 3% means, but in order to make an informed decision, she will need to know more about what the outcomes will be . She stated the city can be smarter going forward. Councilmember Mohamed added the city needs to look at creative ways to set the budget, noting many have lost jobs, and we don’t want to add to their costs. She stated if the city needs to tighten its belt, she is comfortable with that decision and looks forward to further discu ssion on this and minimal increase. Councilmember Kraft stated he wants to see how projects like Dakota Bridge and others affect future debt payments. He is not sure what’s right about utility fees, adding he would not want to get behind. He stated if we are going into a recession or depression, he would expect the city to be very stringent with requirements put on residents and budget should be flat or flattish. He added this is a unique time with COVID and racial equity issues, along with climate change, and the council needs to be financial stewards, while making progress on these key areas. Mayor Spano noted the timeline is appropriate and he is not interested in changing franchise or utility fees. He appreciates the use of these fees as a tool for the city’s infrastructure. He added he will be letting cost benefit analysis define city spending and ask staff ongoing where the city can get their best bang for the buck on strategic priorities . He added they may want to look at stretching out projects such as Connect the Park from 5 years to 8 or 9 years, in order to defer expenses. He stated although there was confusion and anxiety from the community on local DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001 Study session minutes -3- May 26, 2020 option sales tax, he thinks staff and the council need to think about this more broadly and creatively. Mayor Spano stated he is more interested in a low-end increase between 0-3%. Councilmember Mavity asked about reserve funds and if they can help mitigate financial pressures. Mr. Harmening stated the council has reserves, adding that $600,000 has been set aside for COVID-related expenses, and $400,000 for an infusion of cash, so there are no reserves right now to rely on. He added if the COVID expenses are not needed, then reserves would be available. Councilmember Mavity asked if 40% in reserves would be appropriate. Ms. Kvilvang stated in order for the city to keep its AAA bond rating, the government financial recommendation is 40 - 50%. Councilmember Mavity asked if they might explore 43 or 44% in reserves, instead of 45%. She asked also about union contracts and if they have been negotiated . Ms. Deno stated the contracts are open, except for safety dispatch which was settled at 3%. Councilmember Mavity stated she agrees with Councilmember Rog on strategic priorities, adding these priorities should be deeply embedded in how the city does business, and this is not a time to step back. She added the council does receive clarity from staff on the way financial planning is provided, and noted she feels confident the city is getting good outcomes . Mr. Harmening responded to Councilmember Harris’ earlier question on tax rates in 2008 -10, and noted the following increases:  2008 - 5.86%  2009 - 5.80%  2010 - 2.98% Councilmember Mavity pointed out that property values also went down during that timeframe. It was the consensus of the council that maintaining city infrastructure is important, as well as keeping utility plans. Staff to make recommendation on franchise fees or spreading projects out over time, look forward several years and modest tax levy increases up to 3%. Mr. Harmening stated staff will develop a strategy and come back to council with various scenarios for review. 2. Climate action in time of COVID Ms. Ziring presented to the council. She noted work on the city’s planned Climate Champions program which will recognize property owners who commit to undergoing an energy assessment and making energy improvements using loan or rebate programs. Ms. Ziring stated the Climate Champions program offerings will include:  Energy efficient home rebates  Commercial business refrigeration match  City of SLP Green building energy match DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001 Study session minutes -4- May 26, 2020  Building operator certification training match  Thermostat rebates  Solar programs Ms. Ziring stated the total costs for her 2021 budget request is $100,000, which is the same amount requested for the 2020 budget. Mr. Hoffman gave an overview of RECs, noting it is a unit of renewable energy traded on a market. He stated they are mentioned in the city’s Climate Action Plan, but it is a council policy decision on how RECs are used. Councilmember Kraft agreed with the comments and presentation, noting the COVID crisis is a dress rehearsal for climate crisis, which kills 100s of thousands of people around the world every year. Last year, a study done by the MN Dept. of Health and the MN Pollution Control Agency found that air pollution from fossil fuels was implicated in up to 4000 deaths per year in MN. Councilmember Kraft added the city has 10 to 25 years to meet the goals of Paris, stating there are no do-overs here, and every day where we don’t take action is a day lost that we can never get back. Because of COVID and business concerns at this time, Councilmember Kraft stated he agrees with a shift to focus on residential energy programs now but is interested in staff’s thoughts after contacting all the businesses in St. Louis Park. He asked how many households are needed to participate in Conservation in the Park in order to meet goals from our Climate Action Plan. He stated he would like to have metrics and answers for residents who ask how the city is doing on the Climate Action Plan. Councilmember Kraft stated as a city we now know what it looks like to respond to a crisis and use resources we didn’t know we had. He noted this will be the barometer that can be used for the climate crisis as well. He asked if there are other short-term things that will move the needle on climate action such as a local solar project with a community solar component that can benefit lower income households, creating temporary bike areas, shutting down roads and making it easier to encourage people not to use cars and increase pedestrian and bike use. Councilmember Brausen stated he is generally supportive of the new plan; however, added it will cost money and we will need to spend less in 2021. He asked about RECs and if they can be traded, or sold, or are they just for bragging rights. Ms. Ziring stated it is not about bragging rights, but that the city is not required to have RECs. She noted RECs are suggested within the Climate Action Plan, and those who wrote the plan originally thought they would be vital to be retained. She added retaining RECs allows the city to make renewable energy claims legally, such as being carbon neutral. Councilmember Brausen stated the focus should be on getting solar energy throughout St. Louis Park, and then RECs can be given to Xcel. He added he agrees with Councilmember Kraft that this is the biggest crisis we are facing for long-term survival of the species, and he would be fine with moving the Climate Champions program to 2021. Councilmember Brausen added he is less comfortable with slowing the greenhouse gases inventory, adding those metrics will need to be established as this moves ahead. DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001 Study session minutes -5- May 26, 2020 Councilmember Harris asked about RECs being traded, and if there is an entity who holds them as a certain amount of renewable power. Ms. Ziring stated RECs are a measure of greenness, and a certificate which proves that the renewable energy cannot be counted twice. Councilmember Harris asked about air quality, especially with more apartments being built near busy streets. She asked what the workplan envisions for improving air quality and emissions. Ms. Ziring stated air quality will be dependent on roads, adding they are looking at ways to get people out of single occupancy vehicles. She stated they are studying other cities and can look at MPCA air quality data. Ms. Ziring stated that closing roads to car traffic can help with emissions and city engineering is monitoring this option, however, she noted that density in St. Louis Park is lower than in Minneapolis and that engineering did not yet identify a suitable street with the vehicle volumes to warrant closing it for walking and biking. Councilmember Mohamed stated she is happy with the plan and in agreement with it. Councilmember Rog added she is supportive of the 10-month work plan and the staff recommendation on RECs. She noted she is not supportive of postponing the greenhouse gas emissions inventory and would like to see the $30,000 spent as planned . She stated she wants to see metrics for conversation at home and would like to know how many are needed to participate in order to make this a meaningful change. She would like to look at larger scale projects including solar. Councilmember Rog stated she has concerns about backward movement related to single occupancy vehicles and added she would like to see collaboration with engineering on street closings for creating more space for biking, walking and sco oters. She asked where the scooters are for this year in St. Louis Park. Mr. Harmening stated the scooter program was not workable for the city and the scooter company was going to charge the city a large amount of money to participate in the program, which made it unrealistic. Councilmember Mavity stated RECs are very creative and a great strategy, but she cautioned she would like to see better green standards on housing. She noted, however, costs could also be higher and added the city will need to be cautious as it might be a disincentive for folks to come in and provide affordable housing. Mayor Spano stated he is curious about LEED certification, and asked if there is a cost associated. Ms. Ziring stated yes, the costs are higher because of requirements from the US Green Building Council. Mayor Spano stated RECs seem similar to LEED certification – a badge of honor. Ms. Ziring stated the city could pay less for power if relinquishing RECs, through discounts. She added the tradeoff would be showing a building is powered by renewable energy. Mayor Spano added he would like to see a focus on the actual creation of renewable energy . He stated he is agreeable with the work plan. DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001 Study session minutes -6- May 26, 2020 Councilmember Kraft stated he was involved in helping to write the Climate Action Plan, and at that time, renewable energy credits were a secondary goal. He stated the goal was how to stop greenhouse gases and added RECs were not as well understood at that time. He stated the council will need to come back to this for further discussion. Councilmember Kraft added he would like to see more metrics, transit, biking, and pedestrians all working in sync. He asked if the city or staff is really treating climate action as a crisis, and requested staff think outside the box. He stated he will leave this to Mr. Harmening and Mr. Hoffman to make sure this is happening. Councilmember Kraft added, if the city is not developing new buildings with a long-term green building policy, the can is only being kicked down the road, and ultimately others will be forced to spend the money. Ms. Ziring stated the city’s green building policy has been in existence since 2010 but noted staff will look at other ways to modernize the policy and look at other cities in order to create one policy for a cohort of cities to work on together. She stated a larger solar project that staff has been working on is at the Rec Center, adding that funding and financing are being discussed. Councilmember Kraft stated he would like Ms. Ziring to come back to the council again, ideally in one month, with the conservation in the park goals tied to the Climate Action Plan, with a plan or thoughts on how to pursue a significant and visible within St. Louis Park solar project , and with thoughts on green building codes, and temporary pedestrians and bike corridors. 3. Future study session agenda planning and prioritization Mr. Harmening noted the crime free work group discussion will be held at the June 8 study session. Councilmembers Mavity and Kraft agreed it would be helpful to see crime rates data during this presentation, especially since the ordinance has been on moratorium for 1 year. Councilmember Mavity added it would be helpful to compare this data over the last 10 years as well, with neighboring communities. Councilmember Rog stated, however, the council needs to recall we are not studying the issue but listening to the information gathered by the work group. She added the council is not asking for new data to be produced, as that was the work group’s job. Mr. Harmening noted written item #4 related to temporary expanded outdoor customer service areas. He stated the city is working to help businesses survive, noting this will require flexibility and judgement on the part of staff. He stated this should begin, and then course corrections can be made along the way if needed. DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001 Study session minutes -7- May 26, 2020 Mr. Harmening stated this policy will also be a large time saver in that the city manager will have authority to approve temporary liquor licenses, without council approval. If businesses abuse temporary licenses, the city manager can revoke them quickly as well . It was the consensus of the council to support this policy of temporarily ex panded outdoor customer service areas. The council also discussed recent events related to the death of George Floyd, and noted he was a St. Louis Park resident. The meeting adjourned at 9:39 p.m. Written Reports provided and documented for recording purposes only: 4. Temporary expanded outdoor customer service areas 5. April 2020 monthly financial report ______________________________________ ______________________________________ Melissa Kennedy, city clerk Jake Spano, mayor DocuSign Envelope ID: 7CF0FED8-95B9-4CDC-8A0D-2E6DC115C001