HomeMy WebLinkAbout2022/08/22 - ADMIN - Minutes - City Council - Study Session Official minutes
City council study session
St. Louis Park, Minnesota
Aug. 22, 2022
The meeting convened at 6:30 p.m.
Councilmembers present: Mayor Jake Spano, Tim Brausen, Sue Budd, Lynette Dumalag, Larry
Kraft, Nadia Mohamed, and Margaret Rog
Councilmembers absent: none
Staff present: City Manager (Ms. Keller), Engineering Director (Ms. Heiser), Finance Director
(Ms. Schmitt), Economic Development Manager (Mr. Hunt), Housing Supervisor/Deputy
Community Development Director (Ms. Schnitker), Communications and Technology Director
(Ms. Smith), Race Equity and Inclusion Director, Ms. Guess, Fire Chief Koering
Guests: none
1. 2023 budget and preliminary levy discussion
Ms. Schmitt presented the report. She noted there are no levy limits in place. There is a
preliminary budget with a 7% levy, and she noted the recommendation is to set the levy at 8%.
She added the recommended HRA levy is $1.582 million, and the recommended EDA levy is
$500,000.
Ms. Schmitt stated the market value increase for homes is high at 12.6% for a median value
residential home, adding that the tax burden has shifted. She also noted operating costs for
supplies, fuel, and waste removal have increased and staff costs are also up with health
insurance, work comp, and a 3% cost of living increase.
Ms. Schmitt noted capital plan costs and assumptions and revenue and assumptions. She
reviewed the current policy questions, including does the council wish to follow their previous
policy direction to allocate $2 million of ARPA funding to offset general fund costs and reduce
the levy impact. Additionally, given current financial realities, is the council comfortable setting
the preliminary general fund levy at 8%, the HRA levy at $1.582 million, and the EDA levy at
$500,000.
Mayor Spano stated he is impressed with staff’s work on this report and thanked the m.
Councilmember Brausen stated he is comfortable with the 8% levy increase and would be fine
with it being higher also. He added he is fine with all the other levies as well. He stated he has
already spoken to residents on this, and they are not surprised with taxes increasing 7-8% being
that the cost of living/inflation has risen the same amount. He noted they accept the fact that
the city will have to increase the levy in order to provide the same city services. He stated he is
not comfortable taking the bollards off but understands this and the Connect the Park bike and
pedestrian counts seems crucial, noting this will not get less expensive. He added the fire cadet
program is also crucial and the cost is not excessive, and he would like both added back into the
budget.
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Councilmember Brausen stated the street sweeper is probably not worth it with tradeoffs for
carbon impacts. He added the solar rooftop on the fire station does make sense and payback
and savings will come, so he would be willing to increase the tax levy just to keep these
programs in the budget.
Councilmember Kraft stated he has heard similar comments from residents like Councilmember
Brausen, but he has also heard from folks that are hurting. He stated given valuations in the
market, regardless of the council decisions, most residents in single-family homes will see a
significant tax increase this year. Ms. Schmitt agreed. Councilmember Kraft added he is fine
with the 8% and trusts staff on their recommendations. He added he would like to add the fire
cadet program and would also like to see the solar sooner rather than later. He stated he
resigns himself to the bike and pedestrian project being delayed .
Councilmember Kraft stated the two areas he wants more information on are the HRA and EDA
levies. He stated the EDA levy is now paying for salaries that historically were paid by the
development fund. Ms. Schmitt stated yes. Councilmember Kraft asked for further explanation.
Ms. Schmitt stated the development fund would not have a sustainable source without the EDA
levy and salaries are typically paid for through the fund balance. She added the city is looking to
sell some land to give a cash infusion into the fund but using the levy to sustain the fund
balance would keep it steady.
Mr. Hunt stated one land sale is pending with Sherman Associates, that is about $6 million.
However, this cannot be depended upon. He added there is another sale pending for next year
as well, noting that years ago the city purchased those properties and are now looking to be
paid back with the sale of the lands.
Councilmember Kraft asked about the salaries, noting at some point the city must find a
resource or they go away. He stated this is a tough year, with prices going up. He asked given
the pending $6 million land sale; is this the year the city should go from $200,000 for salaries to
$500,000 on salaries. He stated that is a significant increase and asked why that is necessary
this year, and maybe this should go from $200,000 to $0 this year . Ms. Schmitt stated she is
responsible for mitigating risk, so if the $6 million land sale does not go through, that is her
concern.
Councilmember Kraft stated his point is to question if the EDA levy needs to be at that level this
year and to indicate he is not comfortable with it.
Mayor Spano stated staff salaries will need to be paid from somewhere and this is the most
prudent way, with what is known, to pay them. Ms. Schmitt agreed.
Councilmember Kraft added he is open to some other number than $500,000 for the EDA levy ,
adding he prefers paying it from development fund cash on hand, or general balance fund, as
we have in the past. He would approve of that, instead of adding more to the levy this year.
Councilmember Rog stated when the EDA levy was discussed last year it was noted the council
could make changes to it. She is hopeful the council can continue this discussion, especially in
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this difficult year, and in light of the school district levy increase . She stated she is supportive of
Councilmember Kraft’s proposal.
Councilmember Budd stated she liked Councilmember Kraft’s comments also, while
understanding the risks. She added while folks are really stretched, she is in favor of bringing
the $500,000 down to $200,000 and hoping the $6 million sale goes through.
Councilmember Dumalag stated she supports staff’s proposal and would be more comfortable
if the sale was closed.
Councilmember Rog asked about the sale. Mr. Hunt stated there are no guarantees with these
development projects and until you close, it’s up in the air.
Councilmember Mohamed asked about the risks for decreasing the EDA levy. Ms. Schmitt
stated if the sale did not go through, that would mean dramatic drops in the city’s cash balance .
It is more about planning and if the city needs money, will we have to do a larger levy increase
next year.
Councilmember Mohamed stated she likes the idea of dropping the amount if the $6 million
sale closes. Ms. Schmitt noted the preliminary levy can be dropped later and final council
approval doesn’t happen until December.
Mayor Spano asked why the recommendation is to pay salaries out of the development fund
versus the general fund. Ms. Schmitt stated because the staff being paid work on development
in the city. Ms. Keller noted development funds are also less restrictive.
Mayor Spano stated he is comfortable with staff’s recommendations but added this decision
does not need to be made today. He will also not support planning city finances around
potential land sales which may or may not happen.
Councilmember Kraft stated he is in favor of reducing the EDA levy to $200,000 regardless of
whether the land sale happens or not. He stated the development fund is at a cash value of less
than $10 million. He added if all salaries are paid out of the development fund, and the
difference is $7.6 million to $7.9 million, he is willing to take the risk.
Councilmember Brausen stated the concern is always about the levy going up, and he is on a
budget himself, but the little bit he will save does not make sense, and he trusts staff on this.
Councilmember Kraft stated while he is incredibly proud of the city’s affordable housing
program, he asked how much is being spent on affordable housing currently. Ms. Schnitker
stated the budget is a little over $2 million this year and will be $3 million next year. She noted
salaries come out of the housing trust fund, adding they are also working on more affordability
than what the inclusionary policy provides for but working with developers on f unding.
Councilmember Kraft noted TIF monies invested here and pointed out that new developments
are awarded TIF based on the amount of affordability they are including in their projects. He
asked what TIF does over time and questioned how much the city should be investing every
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year on this. Ms. Keller stated there will be a discussion on TIF later as it relates to the budget in
October.
Councilmember Kraft stated we are starting to hit some of our targets and asked as the city is
investing in other areas, could less be invested into the HRA levy. He noted these are trade offs
that could be made and then lighten the load on the HRA.
Councilmember Rog agreed and added the timing of these conversations are a bit off as they
leave off information on TIF pooling. She stated figuring out how to tie the TIF conversations
more closely with the housing budget and HRA discussions would be helpful . Ms. Keller noted
that Ms. Barton should be in attendance for those conversations. Ms. Schmitt stated the yearly
TIF reports were completed in July, and discussion is set for October. She added when the
council passes the levy in September, that goes into the truth in taxation mailing to residents .
Councilmember Dumalag added she would also like the TIF discussion b efore the preliminary
levies are approved, as well as discussion on fees and debt. Ms. Keller stated there will be
discussions before the end of the year on fees, debt, TIF, and the overall budget.
Councilmember Mohamed asked if projects could be put on hold for another year. Ms. Schmitt
stated yes. Councilmember Mohamed stated she would like to have more conversations on all
the elements of the budget noting she is comfortable with the 8% general levy and the HRA and
EDA levies, with the understanding they could come down before finalized. She added she is
not surprised the burden will fall on single-family homeowners, as well as renters. She added
she wants to further discuss the numbers and effects on residents .
Councilmember Dumalag asked about the unfunded projects and if the municipal parking lot
study is for maintenance and assessment. Ms. Heiser stated the study is about need and not
about re-building the lot, only if they are necessary.
Councilmember Dumalag stated she would like to see the fire cadet program and Connect the
Park continue to be funded, and to review if Connect the Park is being funded in the right way.
She stated related to the policy questions, she is comfortable with all staff recommendations,
adding taxes are a pass through for renters and this is something for council to think about as
well. She noted maybe discussion of programs to help renters alleviate some of these cost
burdens can be conducted later. She added she does want to further discuss TIF and fees
before the preliminary levies are set.
Councilmember Kraft stated he approves staff recommendations; however, is not supportive of
the EDA levy, and he is not sure yet on the HRA levy.
Councilmember Rog asked about the broadcast upgrade and the improvements. Ms. Smith
stated there are three parts to the upgrades including the newer and improved broadcasting
system, public comments, closed captioning, and improving the control room with better
streamlined equipment. She added the community room on the lower level would also have
some upgrades and upgraded equipment as well as a live feed to the community room if there
is an overflow crowd.
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Councilmember Rog asked if we are also thinking about opportunities for residents to comment
on public hearings virtually. Ms. Smith stated it would be managed through a TEAMS meeting
versus a phone bank. Councilmember Rog asked if process will be discussed. Ms. Keller stated
this is only about technology and not process but noted she will ask the city clerk about the
potential of virtual comments from the public for public hearings.
Councilmember Rog asked about going back to meetings in the community room. Ms. Smith
stated this was changed to council chambers because council wanted to broadcast all study
sessions and the technology in the council chambers provided the best system. She added if the
community room were upgraded, that could also be used for broadcasted meetings.
Councilmember Rog noted the fire cadet program and asked for details and controls of the
program that will enhance diversity. Chief Koering stated it is difficult to advance diversity in
the fire department because as soon as they are hired, employees are already trained to start
work immediately. He added most are hired from other suburban fire departments. He noted
they did increase diversity by 60% this past year by making some recruiting changes but noted
this is a harder path. He stated the cadet program targets needs of the department, but also
includes candidates that are already participating in the Minneapolis pathways program. Chief
Koering stated the program helps diverse cadets see themselves more in this type of role and
work to help with program fit.
Councilmember Rog asked what the $98,000 pays for within the program. Chief Koering stated
it pays for the curriculum, training, uniforms, time and gets three fire fighters through the
program. Councilmember Rog asked if this will be an ongoing program. Chief Koering stated it
would be three cadets every two years, and ongoing.
Councilmember Rog asked why this program was not included, given how it is proposed. Ms.
Keller stated this program came in and did not have flexibility, so it’s in the unfunded portion;
however, it is within the city priorities, and staff would like to work this into the budget with
council support.
Councilmember Rog stated while she supports this program, she is not certain this is the year to
fund this, but she will support it in the future. She added on the other unfunded programs, she
would like to wait on the Connect the Park biking, bollards on the bikeway, and the municipal
parking lot study. She would like to see the yearly expenditures on engineering reports as well.
Councilmember Rog noted moving the alley paving project could also be something to move to
later. Ms. Heiser stated the alley projects are funded by franchise fees and not by the general
fund. Ms. Heiser stated the utility and franchise fees are dedicated funds and can only be used
for certain projects related to infrastructure.
Councilmember Rog stated she is supportive of the use of ARPA funding and the 8% preliminary
levy with the hope it will be lowered. She added she looks forward to more discussion on the
HRA levy to adjust or eliminate it this year and noted she is not supportive of the proposed
$500,000 EDA levy for reasons discussed earlier.
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Councilmember Budd stated she is supportive of the use ARPA funding and the 8% preliminary
levy with the hope it will be lowered. She added she will support the HRA levy but is also
interested in learning more about how much is spent on affordable housing and TIF . She
supports a $200,000 amount for the EDA levy versus the $500,000. She noted she likes the fire
cadet program, and thinks timing is important here to implement it as a higher priority, as well
as holding off on the bike programs until later.
Councilmember Dumalag is supportive of the fire cadet program and Connect the Park bike and
pedestrian program but is open to delaying this.
Councilmember Mohamed stated she is interested in supporting the fire cadet program as well
but wants to be sure if the city is hiring BIPOC community members, that they are staying
competitive. She added investing in the city staff and looking like the community we serve is
high priority. She stated the other projects can wait for now.
Mayor Spano stated he is comfortable with staff recommendations and is interested in the HRA
levy conversation, as well as TIF and how it drives revenues into the community. He added he
supports the fire cadet program and even expanding it and supports the bike and pedestrian
program. He stated he is not sure a study is needed on the parking lots but agrees data analysis
would be well served on the bike and pedestrian programs.
It was the consensus of the council to support the proposed use of ARPA funds, the 8%
preliminary levy and further discussion of the HRA and EDA levies.
2. July 2022 monthly financial report
3. Citywide crash analysis
4. MNDOT – Highway 7 Road Safety Audit
Ms. Keller introduced the new Race Equity and Inclusion Director , Ms. Radious Guess. Mayor
Spano thanked Ms. Guess for joining the city on behalf of the council.
Mayor Spano noted he would like further discussion on written report item #4, regarding the
MnDOT report on Highway 7. He stated he has real concerns and questions about the data and
the area where there was a fatality on Highway 7, they only talk about more study and not
about any recommended changes. He added this was a look back at crash data to predict future
but did not discuss any growth of traffic and concerns.
Mayor Spano asked for more in-depth discussion with MnDOT and how they arrived at their
decisions. Ms. Heiser stated MnDOT did want to come in for further discussion, and this can be
done at a study session. Mayor Spano stated council can come up with a list of questions for
MnDOT versus having them come to do a presentation. Ms. Heiser stated she does not think
the council can influence the MnDOT report.
Councilmember Kraft stated he also has concerns especially about where growth is happening
and what concerns there are for the future on Highway 7.
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Councilmember Rog asked what proportion of the engineering budget is spent on studies . Ms.
Heiser stated this takes a lot of time, and $25,000 for the crash study alone. She noted the
Dakota bollard study was $30,000 and the parking lot study will look at four lots and will be
$50,000. She stated staff could try to do this, but they don’t have capacity .
Councilmember Rog stated the council has discretion around franchise fees, and they can be
directed to whatever the council prefers. She stated this is important to keep in mind when
looking at all expenditures and could be redirected. Ms. Heiser stated franchise fees are to be
used for infrastructure projects as per policy. She added it is a policy discussion and decision by
council and can be discussed further in October.
The meeting adjourned at 8:45 p.m.
______________________________________ ______________________________________
Melissa Kennedy, city clerk Jake Spano, mayor
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