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HomeMy WebLinkAbout2024/07/15 - ADMIN - Minutes - City Council - Study SessionOfficial minutes City council special study session St. Louis Park, Minnesota July 15, 2024 The meeting convened at 7:01 p.m. Council members present: Mayor Nadia Mohamed, Tim Brausen, Sue Budd, Yolanda Farris, Lynette Dumalag, Margaret Rog Council members absent: Paul Baudhuin Staff present: City manager (Ms. Keller), city attorney (Mr. Mattick), deputy city manager (Ms. Walsh), community development director (Ms. Barton), administrative services director (Ms. Brodeen), finance director (Ms. Cruver), facilities superintendent (Mr. Eisold), public works director (Mr. Hall), engineering director (Ms. Heiser), building and energy director (Mr. Hoffman), police chief Kruelle, housing supervisor (Ms. Olson), interim fire chief Scott, human resources director (Ms. Vorpahl), park superintendent (Mr. Umphrey), parks and recreation director (Mr. West) Discussion items 1. Operating budget. Ms. Cruver presented the staff report. Council Member Rog asked about the placeholder for $200,000 and if the city were to shift personnel costs from the General Fund to another fund, would there be an expected correlation of a decrease in fund expenditures. Ms. Cruver stated yes, there would be a decrease in salary spending, but noted overall rates are also impacted by capital expenditures, which are going up. Council Member Rog asked if future councils would need to increase utility fees and how this would be reflected. Ms. Cruver clarified that because the city will see more capital projects over time, a shift in $200,000 will not have a large effect on rates. Council Member Rog asked if a future discussion about the boards and commissions program would include stipends for statutory boards. Ms. Keller clarified that stipends will be paid if the boards or commissions are eligible under state statute. Council Member Rog asked why arts and culture and neighborhood grants funds were moved from community development to administrative services. Ms. Cruver stated that outreach work is the basis of these grants. They are now handled by a full time administrative services employee whose focus is outreach. Council Member Rog asked why the arts and culture neighborhood grant program had been located with community development in the past. Ms. Keller recalled that when she started work with the city, administrative services was doing the work but the expenses were coming out of community development’s budget. Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23 Study session minutes -2- July 15, 2024 Council Member Budd asked if parks and recreation revenue increases will come from increasing participation rather than raising rates for community members. Ms. Cruver confirmed the increased revenue will be derived from increased participation. Council Member Budd asked for clarification on nine full time employees in the information technology division. Ms. Cruver explained that nine employees were added city-wide last year, not just in one department. Council Member Dumalag asked for more details about the community development fund under the ongoing general fund. She asked if $50,000 recommended in 2025 and an additional $100,000 simply translates to $150,000 in additional funds. Ms. Cruver confirmed this was correct and noted the additional recommendations in the staff report. Council Member Budd asked about the item showing $100,000 for housing; whether this amount is an increase and if so, how much. Ms. Cruver stated emergency rental assistance is between $80,000 and $100,000. Council Member Rog asked about the community development social services program and $150,000 designated for housing and senior services. She asked if this refers to monies currently allocated to the Lenox Community Center; what funds are going away and what funds are being proposed. Ms. Cruver stated the existing contracts would not be renewed automatically and the current funding recipients would apply through this program. She added the recipients are being expanded and those currently receiving city monies would now need to apply for it. Criteria will be established to award contracts. Council Member Rog asked if there is a current list of legacy partners. Ms. Barton stated the request for proposal would be sent to anyone to whom the city currently provides funding. Currently, this includes funding to STEP and Senior Community Services: the two primary organizations receiving ongoing funding. Council Member Rog asked if community education currently receives funding. Ms. Barton stated that they do not receive funding at this time but are eligible to apply based on the established criteria. Council Member Rog stated she is concerned about this shift as it poses a risk in how the city partners with some established relationships. She requested an equity lens in funding partnerships. She supports funding that has gone to sustain organizations that serve this community. Council Member Budd asked whether the new community development specialist full time employee position will interface with small businesses. Ms. Barton stated council had approved a full time position for a navigator. The position is contingent on state vouchers awarded to the city, expected in 2025. She clarified that the position is approved but not yet funded. The economic development specialist position did exist previously; funding was reallocated, and the position was reconfigured to focus solely on small business assistance. Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23 Study session minutes -3- July 15, 2024 Council Member Budd asked if $100,000 indicated for the affordable housing trust fund is included in the budget for the fund. Ms. Cruver confirmed it is included in the overall spending budget and is expanded and increased from the current budgeted amount. She added they will not ask for additional levy resources above and beyond the 2024 HRA levy because there will be new revenue to support the expanded programming. Council Member Rog referenced $65,000 for emergency rental assistance and stated this should be reviewed given these new revenues. She stated this feels like a new opportunity, especially since many have difficulty accessing the rental assistance programs. Council Member Rog asked about $375,000 and related expenditures in the Development Fund. Ms. Cruver stated $50,000 per year is spent on land and maintenance. She added the city also spends money on support for small businesses – not in the form of loans. Funds spent on zoning studies and analysis are necessary when there are updates on plans, averaging $100,000 per study. This cost will increase over time. Council Member Rog asked for clarification on the transportation tax revenue. Ms. Heiser stated the new aid that the city receives is called the Transportation Advancement Account, categorized as a Large Cities Assistance Account, and it will provide an additional $15,000 this year. She stated the monies have already been dedicated to the Louisiana Avenue and Cedar Lake Road project as a part of the funding package. Council Member Rog asked if this was an allocation by the city to housing. Ms. Heiser stated it is to be used for transportation purposes only. Though it will increase each year, it is not expected to be a significant amount of money. Mayor Mohamed asked for an estimate on the dollar amount each household in St. Louis Park might anticipate with an overall levy increase of 7.15%. Ms. Cruver stated she does not have that data yet and will come back to council with it. Council Member Dumalag asked for the breakdown for allocations to commercial and residential. Ms. Cruver stated this information will also be presented to the council at a future discussion. Mayor Mohamed asked if the one-time recommendations would go into the general fund. Ms. Cruver confirmed this is correct. Mayor Mohamed read Council Member Baudhuin’s comments related to the presentation. Council Member Baudhuin indicated he is in favor of all three policy considerations regarding the 2025 budget. He added staff has done a great job working through the accounting and have a solid plan to keep essential functions and programs funded and are also looking at levy increases the best that they can. He noted he is a strong believer that budgets are moral documents in that they speak to an entity’s values. He believes this budget reflects St. Louis Park’s values and strategic priorities – especially in terms of affordable housing. Council Member Farris stated staff did a wonderful job and the information was presented clearly. Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23 Study session minutes -4- July 15, 2024 Council Member Dumalag thanked staff for their work and she is happy to see the line-item breakdowns. She noted the social services special fund and asked if these funds can go to housing diversion programs. She is in favor of the RFP process and wanted to be sure staff is aware of this. Council Member Budd added she also supports all three policy questions, and she is a proponent of the relationship model with contracts which represent non-profit organizations. She stated anything that can help to make programs multi-year or more stable is appreciated. Council Member Rog stated she supports policy question #1 and believes this budget reflects the city’s strategic priorities, noting there is nothing extravagant included. She stated for policy question #2, it feels like there could be some flexibility for a levy adjustment since those funds in HRA are underspent. In policy #3, she agrees with Council Member Budd on contracts and relationships being really important to how the community functions. She stated STEP anticipates a higher partnership with the city than they ultimately receive, and if they do not receive the funding they expect, it will be a huge blow. She suggested staff look at multi-year or stepping down support and not having it be a one-year change, which would be a shock to the system, and allow for a two-year change. Council Member Brausen added he is also supportive of all three policy questions and thanked staff for their hard work. Mayor Mohamed stated she is in support of all three policy questions as well. She does share some of the concerns with partnerships in the community funding area. However, that this will allow others to join in partnerships with the city who may have not had an opportunity to do so in the past, which is exciting. Ms. Cruver stated she will do a deeper-dive presentation during the August 12, 2024, study session on the fund balance in major funds. 2. Pre-eviction notice ordinance Ms. Olson presented the staff report. Council Member Budd asked about the policy question of 30-day notice and if this is the question under consideration this evening. Ms. Barton stated that since no formal action has been taken by the council yet, staff is asking for affirmation to make sure this is the direction the council wants to pursue. Ms. Keller added this is reaffirming the direction council wants to go prior to the ordinance being brought to council for formal action. Council Member Rog shared confusion that council was being asked this question again when there have been two discussions on this already. Council Member Dumalag asked about the number of rental units and noticed they were consistent throughout three years. She also asked for clarification of methodology. Ms. Olson stated that data was taken directly from the Hennepin County Eviction Dashboard on July 8, 2024, and for each zip code that number did stay the same. Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23 Study session minutes -5- July 15, 2024 Council Member Dumalag asked if there is a breakdown based on number of units, noting there are a multitude of landlords, and the information varies. Ms. Olson stated that information is available on rental licenses, but staff did not have that information readily available for the council tonight. Council Member Dumalag also noted properties that may carry debt and there was no information included in the report on this. Ms. Olson confirmed staff does not track that information. Council Member Farris asked for clarification on a section on page 2 of the staff report. Ms. Olson stated during the COVID-19 pandemic, there was an eviction moratorium in place and on June 21, 2022 all of those programs were phased out. In 2022, St. Louis Park landlords were required to provide a 7-day notice, which had gone into effect in 2021. She noted that the city is providing filing and eviction rates for four zip codes, two of which include St. Louis Park and two of which include Brooklyn Center. Council Member Budd commented this policy speaks to Minnesota’s COVID-19 protections. Ms. Olson reiterated that the eviction moratorium was a state provision that was phased out in 2022. Council Member Rog stated there is frustration because of all the work the team has done on this. Her question is related to additional revenues from affordable housing from sales tax and if staff envisions utilizing these funds to pay multiple months of missing rent payments. Ms. Barton stated that is something staff had not discussed, and information from STEP and other non-profits showed that providing more than one month’s rent generally will not solve the problem for folks as that usually indicates a larger problem than can be solved by paying a couple of month’s rent. She added STEP requests $65,000 each year for their program for rental assistance and that is the amount the city provides them, adding they could request additional funds if they felt there is a larger need, but they are likely limited by their capacity to administer the program. Mayor Mohamed read Council Member Baudhuin’s comments on the discussion item. Council Member Baudhuin indicated he is in support of policy question #1 and feels the rental industry favors landlords and this is a good step to supporting renters. He is concerned about unintended consequences but feels the phrase is inaccurate. When it comes to eviction, outcomes are very much intended by landlords and if these consequences do occur, the blame should lie with the landlords and not the ordinance. He is not in support of policy question #2 and feels there should not be multiple notices. Landlords need to speak on specifics of the lease; however, he would like an ordinance with specific language around renters’ rights and resources, as well as landlords’ notices in English, Spanish and Somali. Mayor Mohamed stated she is not in favor of the 30-day notice and has been very clear about that. She pointed out that she has been a renter her entire life and stated she has dealt with increases in security deposits and credit criteria. She stated for those in Section 8 or Housing and Urban Development programs, there are protections for 30 days. After those protections expire, she shared that renters are at the whim of landlords. Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23 Study session minutes -6- July 15, 2024 Council Member Rog stated her views have not changed. She wants to impact a power balance between renters and landlords, and this is a small way to accomplish this. Having more time is something renters have asked for, adding renters typically do not have a voice in these scenarios. She noted that two additional weeks can increase the likelihood of stability, adding she sides with those who have so little power in housing. She recognized a potential for higher deposits and sometimes gathering documents is impossible to do in less than 30 days. Council Member Rog stated on policy question #2, the community input showed that the majority of landlords and renters were supportive. To her, that is listening to the people who are most impacted, both renters and landlords. She stated the form was not confusing and she supports its language. The form could have more person-centered language and still retain the urgency of the message and she would like to see a workgroup approach this goal. Council Member Dumalag shared that her thoughts have not changed since council last discussed the question. She wants long-term stability for residents and noted in the last census, St. Louis Park has 50,000 residents. Of those residents, 41% pay rent. There were some unintended consequences with the COVID-19 pandemic, and many landlords were in the red. She noted there are problems for both landlords and renters, adding that some folks are considered a risk. She does not want unintended consequences to result in rent increases or more short-term leases - in Minnesota, landlords can offer month-to-month leases. She stated her position has not changed and she is not in favor of the 30-day notice. Council Member Farris stated she is in favor of the 30-day notice because most people just need time. She pointed out that this language calls for just 16 more days, not 90 days or six months. People need time to access emergency assistance and no one should be homeless in the richest country in the world. She asked her fellow council members to consider the residents and people, and that she supports the 30-day notice, adding the council should not be having this conversation. Council Member Brausen stated he cares about this issue, is in favor of affordable housing, and noted policy changes in St. Louis Park since he was first elected to serve on the city council. He is proud of the work done to provide more affordable housing and wants to continue that work for the residents of St. Louis Park. However, he is opposed to the 30-day policy and stated the city should desire a market where landlords want to rent to residents, where landlords can get financing and where landlords can afford to maintain their properties. He pointed out this cannot be the case for many landlords if they lose two months’ rent from a tenant who does not pay on time. Council Member Brausen shared that in his experience in housing court, 16 days is not a significant factor because most landlords want to work with their tenant. The best outcomes involve a tenant who still has more time to pay while accessing resources. He shared that he has received emails from landlords who, should they go 60-90 days without payment, are in danger of losing their property. He observed that the city is worried about corporations buying up properties in St. Louis Park and if the independent landlords cannot survive, corporate- owned rentals will increase. He is in favor of providing more assistance for those in need, as the cost of rent is a crisis, but this 30-day notice policy is misguided. Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23 Study session minutes -7- July 15, 2024 Council Member Brausen added there is no data from the City of Brooklyn Center yet and for St. Louis Park to prejudge the outcome is short-sighted. He would like to see the city utilize the state statute and measure its outcomes before making any changes. He added he is also not in favor of a one-size-fits-all notice. Council Member Budd stated she supports the 30-day notice, as she has in the past. She has considered the communication she has received. There is a lot of frustration with a long process but an additional 16 days is warranted. She pointed out that STEP has communicated their position that additional time would be a huge improvement and 14 days is not an adequate amount of time. She added confusion is a terrible thing, and she feels the city needs to put together the best template possible but is not sure it should be required. Mayor Mohamed stated she appreciates the council’s comments and noted many pulled from personal experience, which is wonderful to have. She stated the 30-day notice will make it more difficult to find rental housing but noted the council has been clear on their intention. She recommends there be no form as it will cause more confusion. Council Member Farris stated she wants people to stay housed, and she supports the recommended form. Ms. Olson stated in the April 2024 report to council, there was a draft ordinance with specific language required in the notice. The state statute has specific language and requires a 14-day notice. Council Member Brausen asked if the city moves to a 30-day notice, will landlords need to send a 14-day notice separately. Ms. Olson stated with public housing, the city addresses the link to the city website and the city is subject to the state’s 14-day notice and the 30-day notice required by the Cares Act notice. She stated the city ordinance will include the specific language of the city ordinance and state statute. It will not include Cares Act requirements. Council Member Brausen stated he would then approve of the required form, so it is all laid out clearly for tenants. It was the consensus of the council to move forward with the 30-day notice ordinance and to create a form that will be required of St. Louis Park landlords. The meeting adjourned at 9:17 p.m. ______________________________________ ______________________________________ Melissa Kennedy, city clerk Nadia Mohamed, mayor Docusign Envelope ID: D2637EFC-BBBC-427A-BC6B-9F2108785D23