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HomeMy WebLinkAbout2022/10/03 - ADMIN - Minutes - City Council - Study Session Official minutes City council special study session St. Louis Park, Minnesota Oct. 3, 2022 The meeting convened at 7:25 p.m. Councilmembers present: Mayor Jake Spano, Tim Brausen, Sue Budd, Larry Kraft, Nadia Mohamed Councilmembers absent: Margaret Rog and Lynette Dumalag Staff present: City Manager (Ms. Keller), Deputy City Manager (Ms. Walsh), Director of Building and Energy (Mr. Hoffman), Engineering Director (Ms. Heiser), Finance Director (Ms. Schmitt), Economic Development Manager (Mr. Hunt), City Attorney (Mr. Mattick), Director of Community Development (Ms. Barton), Communications and Technology Director (Ms. Smith) 1. 2023 budget: 2023 capital improvement plan Ms. Schmitt presented the report. Councilmember Brausen asked if the debt came in under 4%. Ms. Schmitt stated yes with the HRA levy. Councilmember Brausen stated that is the benefit of the city’s AAA bond rating. Councilmember Mohamed asked what the fees are that go into funds. Ms. Schmitt stated fees for cable tv show up here. Councilmember Mohamed asked where fees for pavement management and other funds come from. Ms. Schmitt stated cable TV is franchise fees on cable television, pavement management is franchise fees on gas and electric, park improvement comes from general levy authority fees, as well as capital replacement and IT funds. She added the vehicle and equipment fund is charged back to different departments, depending on if they have any equipment in the fleet. Councilmember Kraft asked if the capital improvement is financed by debt. Ms. Schmitt stated usually the debt is for larger projects, such as an HVAC project. She added it depends on the size of the project within the fund, so sometimes debt is considered so a fund balance remains and there is cash flow for the next year. Councilmember Kraft noted a big-ticket item within engineering, with projects like the Cedar Lake Road project, that is in all separate funds. Ms. Schmitt stated this report shows the funding by department. Councilmember Mohamed asked if the city should use debt or savings to pay for capital improvements. Ms. Schmitt stated most cities do use debt and have a 10-year rotating schedule. She stated every 10 years debt will fall off, and then more can be added on . She DocuSign Envelope ID: 1F759556-A1EA-4846-BFA7-C557E476401A Study session minutes -2- Oct. 3, 2022 continued since the city has not had that debt fall off, because the 10 -year mark has not yet been reached, the city is having to increase their debt levy. Councilmember Mohamed asked if because the city does pay off its debt, that is why they do have a AAA rating. Ms. Schmitt agreed that is a component, adding there are other factors as well. Councilmember Mohamed stated debt is a healthy thing to have, but too much of it in the next few years might create too high of interest rates to pay. She suggested the council think more about how to pull back on debt and work on savings to invest in projects, and a forward - thinking way of covering gaps. Councilmember Brausen stated the city has taken on debt and done a good job of handling it and does not overburden itself. He noted if the construction costs are going up, postponing the spending will be much more expensive down the road, so it is important to keep the debt ongoing. He referenced $375,000 for the solar array on the fire station and stated postponing this is not smart, adding the payback is immediate and allows for meeting the city’s climate action goals. Councilmember Kraft stated he agrees with Councilmember Brausen on the fire station project. He added very few of the capital projects generate money in return, and he would like to see this generating money. He noted on debt, his position has not changed . If the city did not have the debt, and wanted to create a savings account, it would be painful in trying to keep projects going. He stated he is for continuing a judicious use of debt, but with the cost of debt going up, there is a limited amount of levy that can be asked of residents to pay . Councilmember Kraft asked about the process of what projects are included in 2023 and which ones are not. Ms. Schmitt stated the departments evaluate what they need and if they request a new project, they must justify it and it is all reviewed during the process. Councilmember Kraft stated he is supportive of this process and the projects for 2023 . He also noted in the pavement management fund there will be no increases and asked if that was correct. He asked about the decontamination laundry. Ms. Schmitt stated there is an increase for this year, but the project was value engineered and is now slotted for 2025 . Ms. Keller stated the decontamination laundry would build in a suite for the fire station, which decontaminates firefighter clothing and items from dangerous chemicals. She noted at this time there is a process in place, but the suite would be an upgrade to the current process . Councilmember Budd stated she agrees with continuing to use debt to fund capital projects . She added she has concerns with some of the costs of projects down the road, but she trusts staff on this and balancing this. Councilmember Kraft stated he is interested in grants and alternative funding, and a local option sales tax. DocuSign Envelope ID: 1F759556-A1EA-4846-BFA7-C557E476401A Study session minutes -3- Oct. 3, 2022 Mayor Spano stated he is also very interested in the local option sales tax. He added as the city proceeds, they will need to be careful to explain the process of this to residents. He asked about pavement management and what is the process for residents to add a section of road to the pavement management list. Ms. Heiser stated the city pavements are condition driven and would be reviewed for PCI to keep it a more equitable process. She added, however, if there is a pothole or other major item, that can be elevated and assessed. Mayor Spano stated on the cable TV fund, more folks are going away from cable, so the city needs to look at alternate ways to fund that . Ms. Smith stated the city has not seen a dip in this fund, and part of this is the 10-year cable franchise fee approved last year by council which has proved to be very healthy. Mayor Spano asked how the city stands on licensing and software fees. Ms. Smith stated staff has been looking at various products, as well as moving to the cloud-based systems. Councilmember Brausen asked why this is a priority number 3 instead of a number 1 priority for the ERP conversion. Ms. Schmitt stated there is much prep work that needs to happen first, even though the city wants to do it quickly. Mayor Spano noted the two slides about interest costs, stating finding true costs of projects is of importance. He stated he would like to see staff continue to look at end costs, especially in case they decide to pursue a local option sales tax. He added he is supportive of both policy questions, using debt and proceeding with the plan outlined. He thanked all the department directors for their work on this and moving the levy percentage down to 8% and easing the burden for residents. Councilmember Brausen added he is supportive of the capital improvement plan for 20 23. He noted most cities plan 5 years out, but St. Louis Park plans 10 years out, noting the city has an aging infrastructure. He stated it does residents well to plan accordingly into the future and residents benefit from this. Councilmember Brausen asked if the council is interested in adding back in the solar panels for the fire station this year. Councilmembers Kraft, Mohamed and Budd agreed. Mayor Spano asked if other things will need to be cut out . Ms. Schmitt stated she would work to find other sources, not levy funds. Ms. Keller asked if the council would like staff to explore the local option sales tax . Mayor Spano stated he would want the missing councilmembers to weigh in . Ms. Keller asked if staff should bring this discussion back to council. The councilmembers agreed yes, they would like further discussion on this topic. 2. Draft ordinance regulating the sale of cannabinoid products DocuSign Envelope ID: 1F759556-A1EA-4846-BFA7-C557E476401A Study session minutes -4- Oct. 3, 2022 Mr. Hoffman presented the report. He noted changes to the draft ordinance and fees regulating the sale of cannabinoid products, Mr. Hoffman stated the process for the license would involve the applicant completing an application, where it would be reviewed by staff, and the police would perform a background check. If needed, the applicant would then be contacted if there were a concern . Staff would discuss any potential denial as an internal check and balance review. If there was a denial, there would also be a formal administrative hearing appeal process with the city manager. Councilmember Brausen appreciated the work done on this, but noted he is still concerned if anyone will apply for a license given the fees. He noted, however, he will support this proposed ordinance. Councilmember Mohamed added she is happy to see the fees were lowered, as well as the eligibility from five years to three years. She noted there seems to be some miscommunication with residents and the communities of color lack of access to licenses like this. She noted several residents asked her if this is only for BIPOC community members. Mr. Mattick stated anyone who qualifies for the license can apply and no caps are on the number of licenses and there are no set asides for certain people or groups. Councilmember Mohamed stated the conversations with neighbors were around equity and intentionality and recognizing how past political policies continue to affect our systems today and how can we address any barriers. She stated she wanted to clarify this. Councilmember Mohamed asked why this licensing is not done for tobacco and alcohol . Mr. Hoffman explained there are state requirements around alcohol adding background checks are also required for tobacco. Mr. Mattick stated there is guidance from the state on certain background checks, and the council could reexamine those decisions in the future regarding alcohol and tobacco. Councilmember Kraft asked what will cause ineligibility. Chief Harcey noted the reduction from five to three years for eligibility as well as looking at the crimes and if they were of a serious nature. He added they looked at the need for a possession felony charge level, and being very clear on this, as they could be disqualifying. Councilmember Kraft stated as a parent of high school students, he looks at this with mixed feelings because marijuana can impact young brains when looking at the research . He hopes to be able to keep this out of the hands of young people but does agree it needs to be legal versus being on the illegal market. He stated he is supportive of this, but it may make sense to review it in six months versus a year, and he would suggest that. Councilmember Budd asked if dropping the number of tests targeted, was there any consideration if the retailer was also the manufacturer of the product and keeping test volumes DocuSign Envelope ID: 1F759556-A1EA-4846-BFA7-C557E476401A Study session minutes -5- Oct. 3, 2022 higher for those. Mr. Hoffman stated if someone had a license and was the manufacturer, and they had a violation, then the penalty would be more severe, with a larger fine and suspensi on or revocation. Councilmember Budd asked if this would cause fees to be raised . Mr. Hoffman stated yes especially if additional testing were being done. Councilmember Budd asked if there is a liquor store exclusion. Mr. Mattick stated the state of Minnesota has said infused products are not eligible to be sold at liquor stores ; however, some are selling them, and that could impact their liquor licenses . Councilmember Budd asked where the felony charge level was mentioned in the ordinance . Chief Harcey stated it is in the ordinance on section 4-74, on page five. Councilmember Budd stated she is in support of this. Mayor Spano stated he will support this also; however, agreed with comments of Councilmember Kraft, while noting the reality is that this is already out there, so the city moving forward with this regulation does provide a framework to monitor this . He appreciated the work on the fee structure and providing a process. Councilmember Brausen noted the written report shows that every city department is coming in under budget which is impressive. Communications/meeting check-in (verbal) Ms. Keller noted the early voting for the state general election has begun in the council chambers. Mayor Spano and former city manager Tom Harmening will be traveling to Oregon to present on the city’s retreat and relational work done in St. Louis Park. The meeting adjourned at 8:42 p.m. Written Reports 3. August 2022 monthly financial report. ______________________________________ ______________________________________ Melissa Kennedy, city clerk Jake Spano, mayor DocuSign Envelope ID: 1F759556-A1EA-4846-BFA7-C557E476401A