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HomeMy WebLinkAbout2023/10/23 - ADMIN - Minutes - City Council - Study Session Official minutes City council study session St. Louis Park, Minnesota Oct. 23, 2023 The meeting convened at 6:30 p.m. Council members present: Mayor Jake Spano, Tim Brausen, Sue Budd, Yolanda Farris, Lynette Dumalag, Nadia Mohamed, and Margaret Rog Council members absent: none Staff present: City manager (Ms. Keller), community development director (Ms. Barton), race, equity and inclusion director (Ms. Guess), housing supervisor (Ms. Olson) Guests: Stacy Kvilvang and Jodie Zasbaugh, Ehlers; Shanique Williams Discussion items. 1. Annual Tax Increment Financing (TIF) update: TIF management and pooled TIF. Ms. Kvilvang and Ms. Zasbaugh presented the report. Council Member Rog remarked that she agrees on the school district impacts and how everything hinges on the “but-for” clause. She stated the Risor development next to Corsa did not ask for or receive any TIF and property taxes will be collected right away. In situations like this, the timing of when the school district benefits from captured tax base is nuanced. Mayor Spano asked if the city could define the use of trust funds for purchase as opposed to rental of affordable housing. Ms. Barton replied yes and added that money from the affordable housing trust fund can be used for down payment assistance though the first-time homebuyer program. Council Member Mohamed asked if this funding can also be used to preserve NOAH homes. Ms. Barton confirmed that the funds can be used for preservation of multi-family NOAH units. Council Member Budd asked about Park Commons and if those funds, which would not go into affordable housing trust fund, have to be used in the district. Ms. Kvilvang responded that funds do not have to be used in the district, though funds stay in the district until used on affordable housing projects. Choices for using the funds are limited to capital expenses, for specific affordable rental property, or for home ownership. Ms. Kvilvang noted funds can be used anywhere within the city project area and are considered with the district for accounting purposes. Council Member Budd asked whether decertified districts will be kept open. Ms. Kvilvang stated no and added the districts decertifying at the end of 2023 cannot remain open any longer. Those funds will be transferred over for affordable housing. She said if the city decertifies early, they cannot keep those dollars and they go back to the county for redistribution. DocuSign Envelope ID: CA4D344B-FA6C-40CB-9837-08DBB4E4AFFC Study session minutes -2- Oct. 23, 2023 Council Member Rog asked for thoughts on the likelihood that the legislature will extend the allowability of transferring money into the affordable housing fund. Ms. Kvilvang responded that many cities have been working on this. She added that the legislature had a 50-50 chance of extending or not extending, depending on tax revenue review. Cities will need to make a case for their own stewardship of funds and noted there is no guarantee of perpetuity for a legislative decision on the pilot program. Council Member Rog stated she is happy with what the city has done with the affordable housing trust fund. She said the decision to continue to put monies into affordable housing ought to benefit those burdened by those additional taxes. She referenced the recent Maxfield Housing report noting the city’s need for more senior housing and deeply affordable housing, citing the affordable trust fund investments as paying off. She is supportive of continuing to move these funds toward the affordable housing trust fund. Council Member Mohamed agreed with Council Member Rog’s observations of housing needs. When discussing TIF, the benefits from the investments made directly alleviate some of that burden for residents. She asked how the city’s housing needs can be tied to pooled TIF. She is supportive of the funds and expressed her thanks to staff and consultants for the report. Council Member Brausen stated he is supportive of the recommendations related to TIF. He stated the city has had success with TIF. He observed the nominal cost to the general revenue fund in that the city has leveraged less than $100 million in borrowed money over the years with 99% of it repaid by the beneficiaries of these loans. He pointed out that the value of the impacted properties had increased by almost 1200% over the years. Council Member Brausen said that promotion of development and housing has addressed some of the needs and without TIF, these projects would not exist or be financially feasible. He added these projects have increased the tax base while working on the city’s strategic initiatives, something the market alone does not do. He indicated he is in favor of pooling TIF, and the work done with the affordable housing trust fund has created multiple affordable units across the city. Council Member Brausen stated he agrees with Council Member Rog that some of the affordable housing trust funds could be redirected, but that is for another discussion. Council Member Dumalag stated she is also in favor of the recommendations from the consultants from Ehlers. She gave some feedback related to the report, and noted it was a bit confusing with a lot of information. Because this information is difficult to grasp and the council’s policy consideration does not give the public much time to review the information, she asked staff to take note. Council Member Dumalag stated she is a proponent of TIF adding the only reason for the city’s robust affordable housing trust fund is because the funds can be transferred. This situation is not always a guarantee regarding the legislature’s direction to cities. Referencing increased development, number of residencies and infrastructure, she stated she is in favor of the policy recommendations presented. DocuSign Envelope ID: CA4D344B-FA6C-40CB-9837-08DBB4E4AFFC Study session minutes -3- Oct. 23, 2023 Council Member Budd asked for an explanation of keeping the districts open until 2026 with a net effect of $12.2 million. Ms. Kvilvang described that by keeping districts open and opening additional districts, $12.2 million is the cumulative amount that will be in the affordable housing trust fund. Council Member Budd asked about returning $1.2 million to the county because it exceeded the statutory limit. Ms. Kvilvang stated when decertifying the districts, calculations must be done to see how much can be kept for affordable housing and whatever exceeds that must be sent back to the county for redistribution. Council Member Budd summarized that any difference between estimated and actual collection is not an issue of having too many districts open. Council Member Budd referenced a graph showing the city’s tax rate going down over time while value increased. She observed that the data will look good in the report for the state and that she supports the policy considerations presented. Council Member Farris stated she supports the recommendations presented as well. She concurred that the information is complex. Council Member Rog reiterated that a reason she is supportive of TIF is that the money is already being collected. She added when talking about the potential reduction of the tax burden on residents, she emphasized reduction. Funds collected have a specific purpose in the affordable housing trust fund. She stated the importance of targeting those funds for those experiencing the burden. She said the lower tax rate means the community is desirable, but also means the city is becoming more unaffordable because property values are higher, which can be a plus and a challenge. Council Member Dumalag observed that in this situation, the city can transfer pooled TIF into the affordable housing trust fund to help with home ownership affordability. Mayor Spano stated every community has different needs and different financing mechanisms available, and St. Louis Park has many options. He observed that in general, the Minnesota political climate is one of trying to figure out a way for everybody to do better. He appreciates this region and will be interested to hear more about affordability as decisions move forward. He noted he also supports the presented recommendations. 2. Eviction notice ordinance amendments. Ms. Olson and Ms. Barton presented the staff report. Council Member Mohamed noted she likes the concept of the pre-eviction notice and asked who the eviction prevention team members are. Ms. Olson stated she does not know the whole team, but stated Marilyn Klug and Barb Patterson are two representatives that staff worked with for the notice. Council Member Mohamed asked if they are renters or homeowners, explaining she wanted to know who may have been left out when the group was formed. Ms. Barton stated they are DocuSign Envelope ID: CA4D344B-FA6C-40CB-9837-08DBB4E4AFFC Study session minutes -4- Oct. 23, 2023 residents, and that the eviction prevention team is a grassroots organization, but she does not know the makeup of the team. Council Member Mohamed stated she supports the change to 14 days’ notice and asked which languages it will be translated into. Ms. Olson responded that Spanish, Russian and Somali are languages spoken in our city and other languages can be added in the future. Council Member Rog stated she used to work on this team before serving with city council. She stated the team goes door to door to meet with folks who have received eviction notices. The team works with folks regarding their barriers and are very imbedded in the process as volunteers. Council Member Rog noted a recent article about eviction published in the Star Tribune. She stated she would like to go further than what staff are proposing in the eviction process. When looking at the lived experience of people who have received these notices, the city has an opportunity to do better. She understands the intention to be aligned with state statute. Council Member Rog suggested a pilot program which requires property owners and landlords to use the city’s form, recommended to be titled the “pre-eviction notice.” The yearlong pilot program would examine any problems and outcomes for tenants and property managers. Council Member Rog pointed out that 275 residents have received eviction filings so far this year, and she supports staff recommendations. Council Member Rog asked for her colleagues’ thoughts on embarking on the pilot program and summarized her suggestion by saying that the City of St. Louis Park has always been a leader in supporting residents. Council Member Brausen stated he is supportive of both Council Member Rog’s proposal and the staff recommendations on the format of the notice. He said he also realizes owners and landlords may not know about the specific St. Louis Park form, which is required. He also pointed out landlords are required every three years to go through training on this process with the city and this can be made clear during this training. Council Member Budd stated she has strong feelings about this and shared her son has received two eviction notices in the last two months. She is supportive of the 14-day notice but thinks a 30-day notice is quite reasonable and other suburbs are also requiring more than the state minimum for notice. She pointed out that having eviction on a person’s record can make it difficult to find other housing – it can change a person’s life. She agreed with Council Member Rog on her proposal and would like a required standardized form. She asked the city to be a leader and take the step to make it better for folks who are behind on rent. Council Member Farris agreed with Council Member Rog’s proposal. She noted that receiving an eviction notice of 14 days is not enough time for people to utilize applications for assistance or obtain legal aid, especially if the person has a family to care for. She recommended 30 days as more reasonable and enough time to resolve the issue. She asked that the eviction notice word choice be easy to understand, including the amount owed and where to get help. Council Member Mohamed stated that she agrees on protecting the renter and added that owners are affected by the pace of the process as well. She shared she spoke with an elderly DocuSign Envelope ID: CA4D344B-FA6C-40CB-9837-08DBB4E4AFFC Study session minutes -5- Oct. 23, 2023 couple who were renting out their home. By the time the entire eviction process concludes after a 30-day notice, a landlord may lose two months of rent. She stated she has concerns about how this might impact both renters and owners within the community with a 30-day notice and wants to be sure to find the right balance. As a renter herself, she is in favor of protecting renters and looking at both sides of the rental relationship. Council Member Mohamed clarified that she supports requirement of a standardized form as proposed by staff. Ms. Keller reiterated that the question is whether the form will be encouraged or required, it will be customized regardless. Ms. Olson added that they are legally required to include certain language on the form. For public housing recipients, multiple forms or notices may be required. Ms. Keller clarified that if council supports this direction, next steps would be to consult with the city attorney. Council Member Dumalag stated she also is supportive of Council Member Rog’s proposal and agrees to making it a required and standardized form. She supports Council Member Mohamed’s perspective on renter/owner perspectives as well. However, she added she is leaning towards the 30-day notice to allow folks to get the help that they need. Council Member Brausen spoke against the 30-day notice based on experience. He stated at the time of a 14-day notice, the owner is already two weeks into the late rent payment. The eviction process is three to four weeks. If that notice were increased to 30 days, it may be two to three months before a landlord receives income on their property. He stated that there is time to access resources within 14 days of notice. Council Member Farris noted people do pay security deposits when renting, sometimes two to three months’ worth if their credit score is not high enough. As someone who works with renters, she noted that sometimes people cannot take a loss when living paycheck to paycheck. She added that if someone can afford to own a property, perhaps they can better afford to weather a loss. Mayor Spano stated he is trying to find the balance on this issue, noting he understands the changes proposed will create additional steps. He stated he is supportive of the requirements and a standardized form, but on the 14 days’ vs. the 30 days’ notice, he would like to know the practical implications of each option and make sure this is not confusing for renters. Council Member Rog pointed out that the place of privilege and culturally appropriate options in supporting the city’s strategic priority of race, equity and inclusion deserves further conversation and evaluation. Speaking to this comment, Council Member Budd thanked the eviction prevention team for their work and noted the email is also a helpful way to reach tenants who may not have reliable mail delivery or other challenges to written notice. Ms. Olson pointed out that many property managers use portals as their main point of contact, but that the state does require the city to mail an eviction notice. DocuSign Envelope ID: CA4D344B-FA6C-40CB-9837-08DBB4E4AFFC Study session minutes -6- Oct. 23, 2023 Council Member Mohamed added she would like to hear more about unintended consequences of the 14- vs. 30-day eviction notice. Ms. Olson noted the city has known about the state legislation for a long time and therefore did not do the same robust outreach that was done when the ordinance first came into effect. She also shared city staff does have a lot of empathy for people going through this and felt the 14 day was a significant change at the time. Mayor Spano summarized the council has interest in exploring more on the 30-day notice. He asked staff to take that back and create a timeline to bring this back for further discussion. Ms. Keller added this would also include adding a template and information on resources. She indicated the city attorney will need to weigh in on what happens if this does not happen by January 1 as well as what are the different paths forward. Council Member Brausen referenced the race equity written report and asked when cash vs. cashless restaurants and breweries will be discussed by council. Ms. Keller stated staff is working to bring this information before council. Written Reports. 3. Race, equity and inclusion system part 2 wrap-up. 4. Quarterly development update – 4th Quarter 2023. Communications/meeting check-in (verbal) The meeting adjourned at 8:30 p.m. ______________________________________ ______________________________________ Melissa Kennedy, city clerk Jake Spano, mayor DocuSign Envelope ID: CA4D344B-FA6C-40CB-9837-08DBB4E4AFFC