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HomeMy WebLinkAbout09-29-14 WSCITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES Monday, September 29, 2014 Mayor Little called the meeting to order at 5:30 p.m. in the Marion Conference Room, City Hall. 1. Roll Call: Members Present: Council Members Anderson, LaBeau, and Davis, and Mayor Little Absent: Council Member Swecker Staff Present: Allyn Kuennen, Interim City Administrator; Chris Petree, Public Works Director; Dave Olson, Community and Economic Development Director; Dennis Feller, Finance Director; Judi Hawkins, Deputy City Clerk 2. Citizen Comments None Ipava Avenue Pedestrian Study Chris Petree provided an update on the Ipava Avenue Pedestrian Study which was prepared by SRF. At the last work session Council directed staff to incorporate the results and recommendations of the study into the work of the School Road Safety Task Force and their established priorities, along with some policy recommendations. Staff was subsequently contacted by residents of a neighborhood west of Eastview Elementary School who were concerned that they were not informed of the September 22"1 work session topic. Petree stated it is standard practice to present study results to Council prior to holding a neighborhood meeting. Staff is asking for Council support in coordinating a meeting with the residents along Ipava Av. as well as Eastview Elementary school staff. Council Member LaBeau stated that she had also been contacted by a resident and sympathized with the neighborhood's frustration at not being kept informed. Anderson agreed that affected residents should be updated as projects progress. Kuennen will review the list of ongoing projects so notifications are not overlooked. Chris Petree will set up a neighborhood meeting in October. 3. Expiring Tax Increment Financing Districts Dave Olson introduced Mikaela Huot, CIPFA, EDFP, Vice President, Springsted. As the City's TIF advisor Ms. Huot researched the four Districts that are set to expire at the end of 2014. Council previously received information regarding estimated fund balances available from TIF Districts #3, #8, #9 and #17. Ms. Huot stated that the type of district and when it was created establish options for what can be done with any available increments. Districts established prior to 1990 have fewer restrictions on how the increment is spent; this applies to Districts #3, #8 and #9. Additional rules apply to the increment from District #17. • TIF District #3 was a 25 -year redevelopment district which included the Holyoke Avenue professional building now owned by Metro Equity and leased to the school district for Community Ed, and the Windsor Plaza senior housing CDA project. The estimated cash balance at the end of the year is $164,600. City Council Work Session September 29, 2014 Page -2- TIF District #8 is the Southfork Apartment project. Refinancing of the debt on this project resulted in the City receiving additional funds separate from the TIF District. This was an interest rate reductions program for the purpose of creating more affordable housing units. This TIF District also provided funding for Mainstreet Manor and redevelopment of properties across from LAAC. The estimated cash balance at year's end is $174,656. TIF District #9 was a 25 -year redevelopment district known as Argonne Plaza created in 1987. The purpose was to facilitate redevelopment of residential properties on Co. Rd. 50 which were zoned for commercial use. Some increments were captured and were used for the 2004 CR 50 improvements. Estimated cash balance is $99,835. TIF District #17 was a 15 -year renovation district which was done for DHY Company at Holyoke and CR 70. Currently Midwest Veterinary Supply occupies the building. The estimated cash balance is $255,000. This fund was created after 1990. Ms. Huot reviewed options and recommendations for distribution of increment revenues which would provide Council with the most flexibility. Eligible projects must be within the boundaries of the TIF District and/or the project area and can include projects such as acquisition, demolition, utilities, streets, sidewalks or general public improvements. Ineligible projects include parks, public works, and general governmental facilities. Springsted's review and recommendations for each TIF district's fund balances are detailed in their report dated September 29, 2014. Council directed staff to proceed with administrative decertification where appropriate and to place the item on an upcoming agenda for formal action as required. Staff will work with Springsted to initiate the necessary steps to process any modifications to these existing TIF Districts as directed by Council and complete the decertification process for these districts prior to December 31, 2014. 4. Park Dedication Fees Brett Altergott stated that Dan Licht of TPC recently completed a study of Park Dedication Fees, which was also reviewed by the Parks, Recreation and Natural Resources Committee, Planning Commission, EDC, and the City Council. The 2012 adopted report recommended a formula tying park dedication fees to land values. In 2013 there was a 38% reduction is Park Dedication fees, followed by a 2% reduction in 2014. Following the same formula and using data supplied by the Dakota County Assessor, the fee is set to increase by 9.2% in 2015. Council Member Davis stated that at the time the formula was adopted there was a downturn in the economy and fees were not keeping pace with decreasing land values. It was Council's intent that this formula would reflect a more equitable distribution of fees. LaBeau stated that she did not agree with the formula when it was adopted and does not believe it adequately reflects today's cost or value of land being acquired by developers, especially when bank mitigated properties are included in the average. The taxpayer is the one who ends up with the costs. She suggested applying the formula based on what was City Council Work Session September 29, 2014 Page -3- actually paid for a property. She doesn't believe the formula reflects a fair analysis of the market and opposes an increase in Park Dedication fees at this time. Feller stated that when the TPC report was presented, approximately 15 vacant parcels of property throughout the City were identified to provide a baseline for comparisons. Based on location, there were different rates of value per acre, as established by the County Assessor. In 2013 the values of all parcels were lowered by 2%; this year all values increased. These figures are established in the spring to provide an opportunity for developers to plan for the subsequent year. Due to Council's review of the Park Plan Update this spring, a decision to adjust the park dedication fees was postponed. Anderson asked if bank -owned land coming back into the property pool is impacting the values. Feller stated that the majority of values have increased by 6.2 to 8.3%; a 9.2% increase seems high. Anderson asked when developers are required to dedicate park land in lieu of cash. Altergott stated that anticipated future needs for the City's ultimate park build -out is the basis for determining the amount of land. LaBeau stated that because the Park Plan update is under review, it is not currently possible to know how much land will ultimately be needed. For that reason an increase in park land dedication from 10% to 12% is premature. Anderson stated that he respects the methodology for reaching the formula but feels like 9.2% is too much at this time. Feller agrees with Council Member LaBeau that values should be based on today's market, which is mostly clear of bank owned properties. In order to provide a better foundation for setting fees for 2015, staff will provide Council with additional comparable real estate sales from the last two years. Mayor Little stated that he supported adoption of a formula in order to avoid the annual debate regarding fee adjustments, and to use data from an objective third party, the County Assessor. Davis stated that as a Planning Commission member at the time, he believed it was an equitable method of setting the fees. Park Dedication fees significantly decreased at the time, but market values had also dropped. Even though 9.2% is higher than he would have expected, he agrees with continuing to use the methodology. LaBeau stated she is concerned with the burden of fees on future taxpayers and what will be sustainable. She doesn't believe 9.2% is a true depiction of current land values and suggested a partial increase this year and a partial increase in 2015. She also believes there is some frustration from the EDC, especially from Airlake, that increasing land dedication from 10 to 12 wasn't equitable. Altergott stated that the review and discussion of land dedication will be held at a future work session. The possible purchase of park land in the next few years will affect the park dedication fund and what other projects might be possible. Anderson asked how much revenue the 9.2% increase would generate and asked for a copy of the 2012 report. Staff stated that the increase per dwelling unit is $319, or approximately $90,000 based on projected growth. Kuennen stated that the calculations for park land could be adjusted if the new park plan shows a need for less acreage than the previous park plan. City Council Work Session September 29, 2014 Page -4- Altergott acknowledged Council's concerns regarding cost of maintenance for new and existing park land. 5. 2015 Preliminary Budget Feller stated that staff is looking for direction from Council about how to proceed with the decision-making process for the 2015 budget. Council Member LaBeau asked if there are areas where staff believes additional costs or savings will take place which might affect the tax levy. Feller stated that establishment of a new Operations and Maintenance division will have some initial costs and the temporary Police officer shortage will present some savings. The weather is always an unknown factor; heavy snows on weekends and holidays are costly in overtime. If gas prices drop below $3.00 per gallon, some savings could also be realized. Due to fluctuating gas prices throughout the year, calculations on City vehicles are done using May gas prices. Anderson asked if there is a more structured framework or process for budget review that would help Council to be more efficient. Kuennen suggested first looking at the mandates then prioritizing the remaining items on the list, eventually determining what items or positions can be funded and how much will be needed. In that way a preliminary budget can be established. LaBeau stated that her priorities are based on the amount of funds available and she needs the figures before she can prioritize. Feller stated that any cost savings in the 2015 budget can be taken into consideration with the 2016 budget. He recommends beginning with the budget items on which Council agrees, and then moving on to items that will require additional discussions. Little recommended that use of one-time savings should only be considered for non-recurring expenses, such as capital items, and not continuing expenses such as personnel. Staff had provided a list of questions for Council to consider. Anderson stated that roads are a high priority for him and his main concerns are park funding and the street reconstruction and water main replacement program in 2015. LaBeau would like to allocate TIF funds to road projects if possible. Davis believes a referendum might be necessary to fund the parks. He also agrees that additional staffing is needed in some areas. He is also concerned about the water main and the corrosive soils issue and what that means for the future. In response to the question of whether a portion of the tax levy should to go toward debt retirement, LaBeau stated that she prefers the City not incur more debt. There may be an opportunity to save by restructuring when a new city administrator is hired. Prior to filling new requested positions, the savings and pay -back should be calculated. Mayor Little stated that he is in favor of appropriating a portion of the tax levy to debt. The positions he would most like to fund are the assistant duty crew and fire chief and the HR City Council Work Session September 29, 2014 Page -5- assistant. The program he would like to add is the traffic enforcement unit. The HR assistant would support changes in health care laws and a wellness program. La6eau would like to see if the HR position would be self-supporting in health care premium savings. Davis would like to create a fund that would allow street reconstruction to be on a pay-as-you- go basis in order to reduce future tax levies. Little would also like the City to be in a healthier financial position instead of taking on more debt. Another question asked about changing the method of financing major maintenance projects. Little believes that delaying a project is similar to debt since it has to be paid for in the future. He doesn't want to continue to fall behind on maintenance and would like to use one-time revenues for major maintenance if staff believes it is fiscally responsible. Anderson believes it is important to support the health of the employees with wellness programs but thinks with the amount of support and information available from health care vendors, it is not necessary to add staff to implement or run a wellness program. Anderson asked about Liquor operations and if the planned growth will be adjusted due to the more competitive retail market. Davis stated that the Liquor Committee has studied past markets where the new competitor has come in, and there doesn't seem to be any long-term impacts. Feller stated that staff is working on the Utilities budget which will include information about water main replacement. A 4-4.5% utility rate increase is anticipated. Staff is also preparing 2015 Street Reconstruction information for Council. Soil testing will take place in the spring on reconstruction project areas planned for the next several years. Soil boring results will have implications for future debt and financing of that debt. Council has previously opposed utility franchise fees, but this might be an opportunity to set funds aside and restructure debt. Feller asked Council to consider this in the coming weeks. Franchise fees can be used to lower special assessments rather than reducing debt, in order to not over -burden property owners. The street reconstruction projects will cause per capita debt to increase annually. Franchise fees could help to build the framework to finance the debt. At the October 14 work session, Council will be asked to prioritize new staff positions; costs for the positions can then be added to the proposed budget. Anderson asked if there is an alternative to hiring an assistant fire chief, such as offering a stipend to a current firefighter. Chief Meyer will be asked to provide that information. Staff discussed park projects and recommended routine maintenance items not be included in a bond referendum. Funds should be set aside for regular upkeep and replacement costs, since anything funded through a park bond carries additional interest costs. Park dedication as well as a review of park maintenance costs will be presented to Council at the October 14 work session. Anderson would like to have a discussion on where park efficiencies might be realized, possibly examining policies such as whether to build trails on only one side of collector City Council Work Session September 29, 2014 Page -6- streets. Feller stated staff follows adopted written policies on trail construction. Current policy dictates that trails are built on both sides due to safety issues. Council may wish to revisit that and other policies over the winter. Little wants to focus on replacement of Land of Amazement and keeping it a premier destination park. LaBeau suggested corporate sponsorships could be requested. Feller stated that some of the TIF money could be used to begin a LOA fund which could grow over the next few years. Anderson would like to continue to look at community involvement. LaBeau has seen a great deal of use at both the Land of Amazement and the King Park playground. Staff inquired whether Council would support combining an inspector position with a Code Enforcement position; current revenues would sustain the position. Council members stated that they would consider this new position. LaBeau encouraged staff to have a succession plan in place for senior staff. She asked if Council could reserve Mondays through the end of the year for extra meetings. LaBeau also updated fellow council members on the progress of the Personnel Committee on narrowing the field of City Administrator candidates. After discussion by Council it was agreed to invite community leaders, department directors, advisory committee chairs, and Council to a "Meet the Candidates" forum which will be followed by feedback to the Personnel Committee. Little stated that the proposed extension of Patio hours should be voted on by Council before year's end. Council can consider the applicants' locations, zoning, and available options when making a decision. Council will add this to an upcoming work session for further discussion. 6. Adjourn Mayor Little adjourned the meeting at 8:15 p.m. Respectfully submitted, Ju i H wkins, Deputy Clerk Matt ittle, Ma r