HomeMy WebLinkAbout2018/06/18 - ADMIN - Minutes - City Council - Study SessionSt. Louis Park
MINNESOTA
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The meeting convened at 6:00 p.m.
Official minutes
City council special study session
St. Louis Park, Minnesota
June 18, 2018
Councilmembers present: Mayor Pro Tem Steve Hallfin, Tim Brausen, Rachel Harris, Anne
Mavity, Thom Miller, and Margaret Rog.
Councilmembers absent: Mayor Jake Spano
Staff present: City Manager (Mr. Harmening), Chief Financial Officer (Mr. Simon),
Finance Manager (Mr. Ebensteiner), Deputy City Manager/Human Resources Director (Ms.
Deno), Management Assistant (Ms. Carrillo Perez), and Recording Secretary (Ms. Pappas).
Guest: Dave Mol, Redpath and Company
1. Comprehensive annual financial report for year ended December 31, 2017 — auditors
discussion and review
Mr. Simon introduced Mr. Mol, Redpath and Company, to give the auditing report.
Mr. Mol stated the audit showed an unmodified or "clean" opinion on the 2017 financial
statements. He also noted this was a 34th consecutive year the city has been recognized for the
Achievement for Excellence in Financial Reporting certificate program.
Mr. Mol noted the audit consisted of selecting samples of transactions and performing detailed
tests to determine adherence to controls. He stated no items of non-compliance were noted.
Mr. Mol stated the auditors reviewed bank statements, contracting bids, benefits, and other
items. After city council review, the report is submitted to the Office of the State Auditor as
required and also submitted to the Government Finance Officers Association.
Councilmember Miller asked how TIF is considered an expense. Mr. Mol stated in the
agreements with developers, the city collects TIF as revenue, then pays it out at 90%. It is a zero
sum ultimately.
Mr. Harmening recognized Ms. Deno, Mr. Ebensteiner and Mr. Simon for their work on a daily
basis, managing the city's finances. He stated they all do really outstanding work, and the city is
very fortunate to have them.
Councilmember Mavity pointed out within this audit process, which also encompasses an audit
of city staff, Mr. Mol reports directly to the council, which, she said, puts more responsibility on
the council to be certain all is working well.
Councilmember Harris congratulated staff on the outcome of the audit adding she appreciated
the slides. She noted she is proud to be on a council that has such a strong financial staff.
Councilmember Brausen stated he is happy with the results of the audit and wanted to confirm
the city has an unassigned general balance fund that's 45% of the 2019 budget.
Study Session Minutes -2- June 18, 2018
Mr. Simon stated yes that's correct, adding the range is 40-50%, and because of the tax
settlement each year, the revenue helps to supplement.
Councilmember Rog asked what storm water revenues are. Mr. Ebensteiner stated they are
based on acreage and how much stormwater is produced. He added this is then based on the
type of hard surface involved, and a separate utility charge is paid.
Mayor Pro Tem Hallfin asked about internal controls and how they are looked at by the
auditors.
Mr. Mol stated the focus is mainly on money that goes out the door, so auditors look closely at
accounts payable, credit card charges, and ACH charges.
2. 2019 Budget
Mr. Simon stated the council has adopted new strategic priorities, which will affect the 2019
budget priorities. He explained that he and Mr. Harmening plan to conduct a Facebook live
session on the budget in November and will continue to respond to emails and questions from
residents on an ongoing basis.
Mr. Simon stated there are no legislative directives, and no levy limits in place for 2019;
however, this can change. He added from a staffing perspective, programming for a 3% budget
salary adjustment is currently being planned and active negotiations are in progress with some
of our unions.
Related to employee benefits, Mr. Simon stated there will be a formal bidding process for
health insurance that Human Resources will work on. He added based on claims experience,
the budget is estimating a 12% increase on employer contributions for health insurance. He
also noted that related to operating costs, line item details are being looked at.
Mr. Simon pointed out that program support items to be addressed for the 2019 budget
include: SWLRT, the comp plan, and newly adopted strategic priorities, race equity and
inclusion, outreach, ranked -choice voting, and the climate action plan. He added these will be
discussed further, as the council and staff look closer at all the budget details.
Councilmember Mavity noted that Councilmember Rog had raised a question about how the
HRA levy might get wrapped into a local housing trust fund. Councilmember Mavity would like
to be sure this is accounted for and articulated in the budget —so as costs are being looked at,
this will all be clear.
Councilmember Mavity also noted the climate action plan, concerns about business
development, and making sure there is a long-term plan in place with education in the next
year or two. She added this should be included as a line item.
Ms. Deno stated staff is searching for a consultant to assist with leadership and development of
a strategic plan and next steps to guide us in the work with Climate Action Plan. A large focus
will be on best methods for programs and communication and possible incentives for business
Study Session Minutes -3- June 18, 2018
and residential programs. The consultant will help staff on building a foundation, while
community development will also be a partner to develop programming and CAP
implementation.
Councilmember Mavity pointed out the city had a consultant in the past doing small business
outreach, who had been asked to reach out to woman and minority businesses. She stated it
would be helpful to have this as the baseline.
Councilmember Mavity noted she is interested in adding accessory dwelling units into the comp
plan, in order to help seniors stay in their homes. She noted there is a new program in place
that helps seniors retrofit their homes, so they can stay in their homes longer, which is a great
benefit to seniors —whose property taxes are rising, and incomes are not.
Councilmember Harris stated she would like to understand more from the Fire Department,
and their strategic plan, related to community health and how it fits with priorities and
estimated costs for this service.
Councilmember Rog added she would like to see the city pursue more affordable commercial
property as a way to help small businesses meet code, and address ways to start small
businesses, with low interest loans. She pointed out this aligns with the city's strategic plan.
Councilmember Brausen agreed with putting a placeholder on business development with the
climate action plan, noting incentives will need to be started, and then the city will need to get
punitive later. He also agreed with the programs for senior housing and would like staff to
provide a chart over the last 5 years showing the increase in taxable market value vs. the
increase in the city levy. He stated residents are still generating wealth with their homes and
the city helps with that. He added he would like to inform seniors about a county program
which can hold their taxes in place and stated he would like to look at shifting some of the $20
million spent on public safety towards help with mental health services.
Ms. Deno stated that 4.42% is the amount estimated for the general increase for wages and
benefits. As we continue to work on the budget we will get information from directors on other
staffing and operational funding requests.
Councilmember Mavity agreed, adding staff may be needed to support the 5 strategic priorities
set by council since we will be asking staff to operationalize the goals. She added council will
not want too large of a list of additional budget items, if we do not want to raise the levy over a
minimum.
Councilmember Rog asked as the city is building and growing, are there areas where some
programs can be retired, as the council reshuffles its priorities. She pointed out some parks are
underutilized and could be reviewed. She also asked how residents can find detailed facility
operating budgets on the Nature Center and the Roc.
Mr. Harmening stated it would be helpful to know what the questions are from residents, and
then staff can pull the information folks are looking for, adding there is so much detail in the
operating budgets.
Study Session Minutes -4- June 18, 2018
Mayor Pro Tem Hallfin stated when he considers projects, he looks at each as mutually
exclusive and votes accordingly, as to how it affects the city as a whole, adding that every dollar
affects every other dollar.
Councilmember Rog stated it seems the city will have to increase taxes significantly, especially
as valuations in apartments are increasing to 13.6%. She noted these costs will burden folks
who own rental units, and the costs will be passed onto renters. She added she would like to
know the impacts on homeowners, seniors, and renters, but does not have enough information
at this point to support a 4.42% increase which is the 10 year average. She added there will also
be an increase due to the school levy and she feels the responsible thing to do is find out how
this will impact residents, before deciding.
Ms. Deno stated staff will be bringing more data to the council in the coming weeks, so they
can see all the requests, and city manager recommendations before making decisions.
Councilmember Brausen stated the council just accepted a financial report as to what was done
last year, and that is the baseline where the city should start. He stated if we want the same
level of services, then the council can start from there. He added historically St. Louis Park
residents have been willing to fund council's decisions, noting this is a progressive tax, and folks
continue to build wealth in their homes. Councilmember Brausen added staff department
directors review their budgets regularly, and he is willing to accept a 6% increase to higher, if
the council will commit to the goals.
Councilmember Mavity noted there will be significant impacts to renters and homeowners,
adding Minneapolis currently has a pilot program that if owners commit to long-term
affordability, they can have a tax deduction on their property. She noted this might be a
program that could be piloted in St. Louis Park, adding she would like to explore this.
Mayor Pro Tem Hallfin added the 75 -cent increase in franchise fees was an 18 percent increase
over last year. He stated this may be what is needed, without assessments, but also asked will
this be the city's trend.
Mr. Simon pointed out this increase was only every other year, but this will be re-evaluated,
and reassessed, in order to remain stable.
The meeting adjourned at 7:25 p.m.
Written Reports provided and documented for recording purposes only
3. France Avenue Sidewalk project update — project 4018-2000
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