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HomeMy WebLinkAbout08-24-20CITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES August 24, 2020 1. Mayor Anderson called the meeting to order at 6:30 p.m. Members present: Mayor Anderson, Council Members Hellier, Lee, Volk, Wheeler Members absent: None Staff present: Justin Miller, City Administrator; Allyn Kuennen, Assistant City Administrator; John Hennen, Parks & Recreation Director; Paul Oehme, Public Works Director; Zach Johnson, City Engineer; Brenda Visnovec, Liquor Operations Director; Jerilyn Erickson, Finance Director; Tamara Wallace, Deputy Clerk 2. Citizen Comments No citizen comments. 3. Duane Zaun Pioneer Plaza Application Staff has recently received an application to consider the induction of Duane Zaun into Pioneer Plaza. The award was established in 2010 and seeks to recognize Lakeville residents or business owners for their contributions and influence in the city. Mr. Zaun was instrumental within the community including his time teaching in the Lakeville Public Schools for seven years and participating in several county/ regional organizations. Mr. Zaun was also a founding member and past President of the Lakeville Jaycees, served on both the Planning Commission and Lakeville City Council, and was Mayor from 1983 - 2000 during which time he received the C.C. Ludwig Award from the League of Minnesota Cities. The Council unanimously supported inducting Duane Zaun into Pioneer Plaza; staff will bring forward a resolution to a future City Council meeting for formal approval. 4. Transportation Update Mr. Oehme provided a transportation update on the following construction projects: County Road 70 reconstruction, Dodd Blvd. three quarter access, mill & overlay on County Road 46, the 2020 Street Reconstruction project, 1701 Street improvements, 1791 Street, Ames Arena parking lot, and miscellaneous roadway projects. Staff recently responded to a watermain break at the intersection of Ipava and 165th Street - it was determined the pipe and approximately 450 feet of sidewalk would need to be replaced. City Council Work Session Minutes, August 24, 2020 Page 2 5. Lake Marion Elementary Traffic Study Staff presented the final report of the Lake Marion Elementary School (LME) & Lakeville North High School (LNHS) traffic assessment following a three-month study to analyze the travel shed bordered by Dodd Blvd., Kenwood Trail, Ipava Avenue, and Indiana Avenue. The goal of the study was to ensure the intersections were operating at appropriate levels of service and that the capital improvements being proposed would still meet the levels and needs of the community. The study evaluated thirteen intersections and used calibrated 2019 StreetLight Data as 2020 traffic counts could not be conducted due to COVID-19. The findings showed the following: all intersections operated at an acceptable level of service in existing/ forecasted conditions, existing intersections at Itea Avenue & County Road 50 were adequate for re-routed traffic, and the connecting road between Ames Arena & Lake Marion ES is not needed at this time but the land should be preserved in case intersection conditions change. The study also recommended that further monitoring be done at the LNHS entrance and CR 9/ 50 intersection. The Council clarified what it meant to preserve the land between Ames Arena & LME, how the study accounted for the additional traffic and students to LME given the building addition, and overall resident concerns regarding pedestrian and vehicle traffic in this area. 6. Keokuk Liquor Store Following a review of the building cost estimates and a ten-year budget review at the July work session meeting, the Council asked staff to provide additional information regarding the construction of a fourth liquor store location on Keokuk. Council questions included: construction costs showing the event/ tasting room as an alternate in the bid, ten-year budget estimates for three stores versus adding the fourth location, different bond rate scenarios, potential construction reductions, and how to relieve pressure on the other stores should a fourth store not be constructed. Should the event/ tasting room be an alternate bid option in the budget estimates, this would see an overall savings of $800,000 - $905,000, plus an additional $22,000 in the furniture and fixture budget. Potential additional savings include the elimination of store upgrades such as steel framing/ metal mesh wine racks and roller shades in all common area windows; however, it is staff s recommendation to keep the site plan and proposed upgraded fixtures to allow for future expansion/ other retailers, and to maintain the design aesthetic of a "flagship" store. Staff also presented a chart to depict the budget assuming a four -store versus a three -store operation for the years 2021 - 2030, and different bond rate scenarios for financing. The fourth store would allow the liquor department to purchase in larger quantities ensuring better prices, reduce pressure on other stores, maintain customer satisfaction, and improve employee safety. City Council Work Session Minutes, August 24, 2020 Page 3 Staff estimates the potential revenue from the construction of an event/ tasting room would bring in approximately $250,000 - $300,000 in revenue, with a total net gain of $75,000 - $80,000 annually. Staff has indicated that should the Council desire, the event/ tasting room could be eliminated at this time to reduce overall costs of the project. The Council discussed the departure of the current liquor operations director and who would lead the project, including the event/ tasting room as an alternate bid, and talked extensively about whether now was the right time to move forward with a fourth store. Motion made by Lee and seconded by Anderson to table this discussion until after item #7 on the agenda. Ayes: Wheeler, Anderson, Lee, Volk Nays: Hellier The Council reconvened this discussion after the 2021 Budget, Tax Levy, and CIP discussion. Mr. Kuennen clarified he already anticipated being the primary contact for the project and that the first step in the process would be to hire a construction manager whose job would be to analyze lead-time and construction costs. In addition, if the Council intended to move forward with the construction of the fourth store now or in future, the City would not relocate the Heritage location in the interim. However, if the Council decided not to move forward with a fourth store something would need to be done to relieve the strain on the other three stores. The Council clarified the historical profitability of the existing three liquor stores, and in a three to two majority vote (Lee, Volk, and Wheeler for; Anderson and Hellier against), agreed to move forward with the construction of the fourth liquor store. Break from 8:30 - 8:41 p.m. 7. 2021 Budget, Tax Levy, and CIP Ms. Erickson outlined the remaining areas of the CIP preview - facilities, equipment, and technology; and highlighted the major changes to the document following feedback at the July work session. The most prevalent change was reducing the tax levy/ bond funding on project 21- 03. Ms. Erickson also provided an overview of the proposed 2021 property tax levy, property tax supported funds, revenue & expenditure changes in the General Fund, and the impact on the median home and fund balance reserves. The 2021 property tax levy considers the City's growth, tax rate, inflation, personnel needs, commodities, replacement of vehicles, maintenance of facilities, and debt service; and is comprised of the general fund, street reconstruction, pavement management, building equipment, park and trail improvements, and debt service funds. The proposed 2021 tax levy is a 6.5% increase over the 2020 tax levy, reflecting a decrease in the estimated tax capacity rate of City Council Work Session Minutes, August 24, 2020 Page 4 0.5% from last year. The impact on the median home value would mean a property tax increase of approximately $42. The Council reviewed the preliminary tax levy and discussed why commercial land has been so volatile, funding allocation to the DBB, fund balance level, the City's growth, vehicle replacement guidelines, and debt load & debt per capita. The Council agreed to move forward with 6.5% increase in the preliminarily tax levy and thanked staff for their continued efforts to reduce the budget. The remaining steps in the budget/ CIP process are: • September 24: Planning Commission will review CIP for compliance with Comp Plan • October 5: Public Hearing and adoption of the CIP/ Street Reconstruction Plan • October 26: Budget review of Utility/ Liquor Funds • November 23: Final 2021 Budget Review/ 2020 Yearend preview • December 7: Public Budget Hearing (Truth in Taxation), adopt 2021 Budget & Tax Levy, and adopt fee schedule 8. CARES Funding Allocations At the July work session meeting, the City Council asked for an update on the City's Coronavirus Aid, Relief, and Economic Security (CARES) funds intended to help governments with the impacts of COVID-19. The City's allocated amount was $4,846,940 which was received on July 3, 2020 and must be used to offset public health emergency costs not accounted for in the City's most recent budget. The covered period is March 1 - November 15, 2020, funds must be spent by November 15, and cannot be used to recover loss of revenues. Following consult from the City's Auditor's, CliftonLarsonAllen, staff presented potential uses for the CARES funds broken down into three levels of confidence as to whether the expenses would qualify. Within the high confidence category was using the funds for the City's small business grant program. Mr. Olson provided an update on the program which has recently approved 29 applications. Also received were requests from Fairview Ridges Hospital, 360 Communities, the Lakeville Chamber of Commerce, and the Convention & Visitor's Bureau (CVB). Brady Folkstead, Lakeview Bank Wanted to advocate for a grant to be extended to the Lakeville Chamber as a network who has provided valuable support and resources to the community and businesses during this pandemic. The Chamber has not been eligible to receive any funds from other grant programs. Michael Budde, Chief Operator of Culvers in Lakeville City Council Work Session Minutes, August 24, 2020 Page 5 Wanted to advocate for a grant to be extended to the CVB who also has not been eligible to receive any other funds and has suffered as travel and hospitality are down substantially. These funds would be extremely beneficial to their long-term budget. Krista Jech, President of the Lakeville Chamber of Commerce The Chamber clarified they asked for less than their total loss for the year to allow an opportunity for other businesses to obtain grant dollars. Ms. Jech indicated that approximately $92,000 would reflect their total COVID-19 staff related expenses for 2020. Chris Erickson, 18971 Inland Road Brought attention to other businesses that may have been impacted such as painters, handymen, and other businesses operating out of their vehicles or homes; he asked that the city use the CARES funds to help as many people as possible. The Council discussed other ideas on how to use the funds including: internet assistance to households who cannot afford it during remote learning, support of domestic violence & mental illness, public safety, and recreation programming. The Council agreed to fully fund the eligible requests received through the small business grant fund, and approved the grant requests from 360 Communities, the CVB, and increasing the grant to the Chamber of Commerce by paying 100% of their estimated 2020 staff expenses associated with COVID-19 response. Staff will request additional information from Fairview Ridges, and reach out to The Open Door to discuss their needs. The Council will discuss potential amendments and expansion to the small business grant program at the special City Council meeting on Monday, August 31 following the Dakota County lottery which will be held Wednesday, August 26. 9. Long-term Financial Planning Model City staff worked with Tammy Omdahl of Northland Securities to establish the "Long-term Financial Management Plan" a document intended to guide the City through ongoing financial management, develop framework to determine the level of revenue needed to satisfy general government operations/ services, and project future annual City tax levy and tax rates. The document incorporates two policies - the Fund Balance and Financial Sustainability & Resiliency, and includes: necessary increases to the General Fund tax levy, a General Fund non -tax revenue increase, non -personnel costs for materials/ supplies/ other operating costs, personnel costs, taxable market value of property in the City, the four existing tax increment financing districts, bond issuance, and debt service. The document also considers growth of single-family homes, multi -family apartment units, as well as commercial and industrial valuation. Staff provided the Council with the current draft plan which includes the proposed 2021 Budget & Tax Levy, proposed 2021 - 2025 CIP, and proposed 2026 - 2029 Equipment, Facilities, and City Council Work Session Minutes, August 24, 2020 Page 6 Technology projects and findings. The document does not include the construction of a fourth liquor store or payroll/ utility billing technology costs associated with the upgrades. Ms. Omdal was on -hand to answer Council questions. Barry Fick, Chair of the Finance Committee Indicated the Finance Committee has worked closely on this document and feels it will serve as a great outline and tool for how the City navigates its financial management in the future. The Council reviewed the Long-term Financial Management Plan and clarified the strategy behind reflecting 2% growth, commended how well the document provides perspective on the debt, and preliminarily indicated an intent to bring this forward at the annual Council retreat. 10. Items for Future Discussion • Televising work session meetings. • City's overnight parking rules during non -winter months. 11. Committee/ City Administrator Updates Council Member Volk indicated the DCC made the presentation to the other city representatives for Dakota County to pick up either 50% or 100% of the fixed costs. Council Member Wheeler reported a new Arenas Manager, Joe Bergquist, has been hired. He comes to Lakeville from Ramsay County and has a lot of experience managing multiple ice rinks. Council Member Hellier indicated the Liquor and Personnel Committees agreed to create an Assistant Liquor Operations Director position but filling it will be put on hold until the Director position is hired. Mayor Anderson provided an update on the Lakeville Grove Cemetery, indicated that the Regional Council of Mayors will be meeting with DEED every two weeks to discuss COVID-19 related impacts to the business community, and reported the County recently received a grant to help mental health awareness and suicide prevention. 12. The meeting adjourned at 10:31 p.m.