HomeMy WebLinkAbout2020/09/08 - ADMIN - Minutes - City Council - Study Session Official minutes
City council study session
St. Louis Park, Minnesota
Sept. 8, 2020
The meeting convened at 5:30 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), Engineering Director (Ms. Heiser), CFO (Ms.
Lammers), City Attorney (Mr. Knutson), Deputy City Manager/Human Resources Director (Ms.
Deno), Senior Engineering Project Manager (Mr. Sullivan), Director of Community Development
(Ms. Barton), Planning and Zoning Supervisor (Mr. Walther)
Guests: Stacy Kvilvang, Ehlers
1. Dakota Edgewood trail bridge
Mr. Harmening stated staff answered several questions and concerns of council about the trail
bridge, adding that the report reflects these answers.
Ms. Kvilvang discussed financial impacts of the project. She noted goals for the discussion will
include the bridge discussion, 2021 capital plan, and 2021 tax revenue/levy . She noted
franchise fees will cover pavement management projects as per council policy. Ms. Kvilvang
pointed out over the next 10 years the city will bond for capital costs at 34%. She noted the levy
increase is 1.2% with average yearly debt levy of $318,000.
Ms. Kvilvang added the average home levy increase will be $26 annually, which is $2 per
month. She pointed out the total levy increase would be about 6%, which covers the general
fund, including staff increases. She noted it’s best to set the levy higher and then work to
decrease if possible.
Councilmember Mavity noted last year was 4.96% tax increase, which was a $73 per year
increase. She added the 6% for 2021 increase is actually less and asked if this is correct. Ms.
Kvilvang stated yes, that is correct.
Councilmember Harris asked if the bridge project is included in the capital improvement plan .
Ms. Kvilvang stated yes as well as all the other capital projects discussed earlier.
Councilmember Rog asked if the increase of 6% reflects the Nature Center costs coming on.
Ms. Kvilvang stated this is already included as well as the debt service increases, such as the
trail bridge.
Councilmember Mohamed stated the tax increase is 6.11% and last year it was $73. She asked
for clarification here. Ms. Kvilvang provided clarification and stated because the overall
valuation of homse has increased, this allows for a lower tax increase.
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Councilmember Kraft asked about 6.11% tax increase and stated the council was aiming for that
to be 3% or less. He asked about the future capital needs, debt information, the 2021 pavement
management being $30 million, and bonding at $5 million. He asked for clarification. Ms.
Kvilvang explained that 3 sources pay for pavement management: franchise fees, tax levy, and
MSA funds. She stated bonds are only used when needed .
Councilmember Kraft stated $20 million seems to be unaccounted for here and he would like
more detail. Mr. Harmening stated staff can provide more of a breakdown on the numbers for
the council at next week’s meeting.
Councilmember Brausen stated the 2022 projected increase shows $105 noting this includes
the pedestrian bike bridge debt that will be paid for and asked if that’s correct. Ms. Kvilvang
stated yes, adding the biggest portion comes in 2022.
Mayor Spano asked about the 2021 levy at 6.11% at $37 per year increase. He asked if this gets
down to 3%, what the cost would be to the homeowner. Ms. Kvilvang stated it would be a tax
decrease.
Councilmember Mavity stated setting the levy higher in September and bringing it down later
has happened every year she has been on council. She added she is comfortable with the $37
increase and then going lower.
Councilmember Rog asked if the typical staff COLA increase is 3%. Mr. Harmening stated it is
typically around 3%, but given we are in the midst of Covid, the recommendation has been to
go to 1%.
Councilmember Rog asked about the new positions and the fire position being an expense vs. a
decrease. Mr. Harmening stated this all nets out as there will be a savings in the fire
department.
Councilmember Rog asked about the 20-year vs. 10-year bonds and what the additional costs
are if the timeframe is doubled and spread out over 20 years.
Councilmember Rog referenced the franchise fees issue and how we collect $4 million each
year for pavement management. She is interested in exploring whether a portion of these fees
should be used to reduce the debt service on the bridge , provide more fluidity and flexibility
going forward, in terms of it aligning with the city’s commitment to non-vehicle travel. She
asked also what the trade-off is with storm water fees. Ms. Kvilvang stated the difference
would be approximately $300,000 from a 20-year to a 10-year bond.
Mayor Spano stated if we are making a policy change here, this should be a robust and stand -
alone discussion at a different time, although it is a creative idea.
Councilmember Rog agreed with Mayor Spano, adding at the appropriate time it would be
helpful to see what the possibilities are.
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Mr. Harmening stated pavement management revenue sources are broken out by the
improvements being done, and then funding would come from that particular area of the
budget.
Councilmember Harris stated the levy and debt load is a big picture look at how the Dakota
Bridge fits into the budget. She noted the 20-year bonding and asked if this is the lowest cost
option for the community in terms of bonding. Ms. Kvilvang explained that 20-year bonding
makes this project more affordable over time vs. 10 years, which would impact homeowners
and residents more.
Councilmember Kraft asked if the bridge project expenses will come in 2021 or 2022. Ms.
Kvilvang stated in 2022.
Councilmember Kraft asked of the 7.22% increase in 2022, if 1.2% is for the bridge. Ms. Kvilvang
stated yes.
Councilmember Brausen stated the increase of the general levy by 3% and the impact of the tax
burden on residents goes down because of redistribution around industrial and commercial.
Ms. Kvilvang agreed and added redistribution around rental property also.
Councilmember Brausen commented on the 20-year vs 10-year bonding. He stated the 20 year
is a basic fairness argument and a project that will last 100 years . He added to give the burden
to tax payers in 10 years does not seem fair, and stated it does not work here to pay it off early .
Here the project will be paid off over a longer period of time and also spread to future residents
as well to pay for it. He stated he is supportive of the staff recommendation for 20-year
bonding.
Mr. Harmening stated any decision on the bridge project tonight by council is not related to the
tax levy or the 20-year vs. 10-year bond financing. He stated staff will come back to council with
more discussion on these items at a future meeting.
Councilmember Kraft asked what the timing would be if council wanted to review the
pavement management plan and policy and franchise fees. Mr. Harmening stated this
discussion can be part of the overall financial management plan.
The meeting adjourned at 6:31 p.m.
______________________________________ ______________________________________
Melissa Kennedy, city clerk Jake Spano, mayor
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