HomeMy WebLinkAbout09-09-2019 Council Work Session MinutesCITY COUNCIL WORK SESSION
APPROVED
1 CITY OF LINO LAKES
2 MINUTES
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4 DATE September 3, 2019
5 TIME STARTED 6:00 p.m.
6 TIME ENDED 8:00 p.m.
7 MEMBERS PRESENT :Council Member Rafferty, Maher,
8 Manthey, Stoesz and Mayor Reinert
9 MEMBERS ABSENT None
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11 Staff members present: City Administrator Jeff Karlson; Public Safety Director John
12 Swenson; Community Development Director Michael Grochala; City Planner Katie
13 Larsen; Finance Director Sarah Cotton; Public Services Director Rick DeGardner;
14 Utilities Supervisor Justin Williams; City Clerk Julie Bartell
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16 Public Works Facility Financing — Finance Director Cotton noted that the City Council
17 and staff have been discussing the eventual replacement of the City's Public Work
18 Facility so staff thought it would be a good time to look at possible financing methods.
19 She introduced the City's financial consultant on the matter, Paul Steinman, of Baker
20 Tilly, to present information on financing possibilities. The information presentation is
21 based on a $6 million project.
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Mr. Steinman noted the City's option for financing improvements (current revenues,
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capital reserve or issuance of bonds) He specifically discussed general obligation and
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lease revenue bonds. Utilizing a PowerPoint presentation, he offered information on:
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- the City's authorization to sell bonds and types;
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- the requirements, limitations, etc. attached to the types of bonds;
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- estimated debt service for bonds, based on terms and type of bonds;
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- total cost estimates based on levy schedules (phased in with bonds coming off the
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books); Director Cotton explained how debt service could be covered with cash in
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order to keep a flat levy and still bring on the debt;
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- current rates on municipal bonds;
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Council Member Manthey asked about pros and cons of the different types of bonds.
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Mr. Steinman suggested that one difference that is usually discussed is that some bonds
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carry the referendum possibility.
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Mayor Reinert asked how many hours a day an average public service worker spends at
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the facility and Public Services Director DeGardner suggested they should be on the road
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pretty much all the time. Mayor Reinert noted his past comments about what the City
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would get with a new facility (and a big investment for it); he recognizes the importance
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of keeping equipment stored appropriately. He feels the discussion should be around the
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need associated with a facility and what the residents will get for their investment in one.
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CITY COUNCIL WORK SESSION
APPROVED
46 Director Cotton remarked that staff wanted to present information to the council. It's a
47 view to think about moving ahead.
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49 Mayor Reinert said the City need that he sees is for equipment storage and to update the
50 repair garage as needed. He also sees other important work that needs to be funded by
51 the City such as road work.
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53 Council Member Rafferty remarked that the facility cost was discussed around $4 million
54 but he hears now that soft costs bring that amount to $6 million and that is a big jump.
55 He understands that this is just a preliminary look.
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57 Council Member Stoesz remarked that school buses are parked outside.
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59 Council Member Maher said she is worried about future levies. She understands the
6o need to house equipment and wonders why pole barns wouldn't work. She isn't sure that
61 a nicer building wouldn't actually translate into better service for the residents.
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63 Council Member Rafferty concurred that this discussion involves looking toward the
64 future and therefore it's not possible to know all the facts.
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66 Council Member Maher asked if there is land near the current campus that could be
67 acquired and used for something like a pole barn.
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69 Mayor Reinert remarked that the scope of a project still needs to be studied. The
70 financing options are pretty clear. Deciding where such a project fits into the City's
71 priorities moving forward is an important discussion.
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73 Council Member Rafferty asked if trucks are stored outside all the time. Mr. DeGardner
74 said yes.
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76 Director Cotton suggested that staff will report back as part of the 2021 budget
77 discussion. Mayor Reinert again suggested more discussion on scope.
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81 3. MN Technology Corridor (35E) Update —Community Development Director
82 Grochala explained that the City has been working with Anoka County to increase
83 economic development efforts. Part of that discussion is the possibility of establishing a
84 technology corridor along Highway 35E. The City has many acres of land that is guided
85 correctly for that type of activity. The name brand suggested is "The Minnesota Tech
86 Corridor". A website is in place and interest is being seen. The goal is high value
87 technology projects. There is one site that is being promoted based on a large section of
88 land available. Mr. Grochala reviewed how the City is working the concept and
89 preparing for possibilities, as outlined in the written staff report.
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CITY COUNCIL WORK SESSION
APPROVED
91 Council Member Stoesz asked about a data center and sharing of heating and cooling;
92 he's experienced some negatives with that model. Staff hasn't specifically looked at the
93 concept but there is certainly discussion about water/cooling needs for technology
94 centers.
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96 Mayor Reinert asked for more information on Elmcrest and sharing costs with other
97 cities. Director Grochala remarked that having an appropriate agreement in place would
98 prevent a project coming forward and the cities getting bogged down for too long
99 working out their details. Mr. Grochala added that part of moving forward will be
100 looking at additional interconnect (utility).
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102 Staff would like to continue working on efforts in this area. Mayor Reinert said he
103 supports continuing the efforts.
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105 4. Tax Exempt Financing Guidelines — Finance Director Cotton noted that back in
106 2005 the City adopted these guidelines (associated with the YMCA development in the
107 city). In 2018 the City granted host approval on a couple of developments. At that time
108 the Council expressed the desire to update the policy as needed.
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110 Ms. Cotton noted that the City's bond counsel, Julie Eddington of Kennedy and Graven,
ill reviewed current policy and has made recommendations as noted in the written staff
112 report. She specifically pointed out the one percent administrative fee and how that has
113 translated into funds to the City in the past. Staff is not recommending any change in that
114 fee. She also noted that Lyngblomsten has expressed an interest in this type of financing
115 so staff would prefer to be prepared if an application were to come forward.
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117 Council Member Manthey suggested that if this is being considered to bring funds to the
118 City, shouldn't the percentage be higher with the understanding that it could be adjusted
119 downward. Ms. Cotton explained that the one percent is a figure consistent with other
120 communities in the area so raising it could result in no requests.
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122 Council Member Stoesz asked if the charges could be added to the City Fee Schedule so
123 the Council will see it each year. Director Cotton concurred.
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125 The council concurred that they would consider the new guidelines at the next council
126 meeting.
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128 5. 2020 Budget -
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13o Finance Director Cotton noted her staff report and updated gap analysis. She said the
131 only change from the council's last view is the budget cuts proposed by staff and the use
132 of $100,000 from the Closed Bond Fund. She noted that funds have been added back
133 into the Pavement Management fund. She stated that the changes would bring the levy
134 increase to 8.3 percent with a tax rate of 41.31 (a reduction from 2019). That would still
135 be a significant year over year change in the City levy. It was suggested that the use of
CITY COUNCIL WORK SESSION
APPROVED
136 surplus in previous years is a contributor to the gap situation. While expenditures are up
t37 2.9 percent, the use of reserves/surplus and debt service are the primary drivers of the
138 proposed increase.
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140 Council Member Manthey asked if the proposed budget has any impact on the next year.
141 Would there be another large increase anticipated? Ms. Cotton noted there isn't a large
142 debt service coming on; covering any surplus use would be a driver. She noted that the
143 council should plan on considering the preliminary levy approval at the second council
144 meeting in September.
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146 Mayor Reinert noted how much the City has come down through discussions. The
147 mayor discussed the amount of reduction it would require to bring the General Fund
148 increase to zero. Ms. Cotton explained that most of what remains are planned salary and
149 health insurance increases. The contingency remaining in 2019, barring unforeseen
150 expenses to that, is $40,000 but there is nothing to cover the rest of the year if that is
151 taken. The mayor said he'd be comfortable using that.
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153 Mayor Reinert suggested utilizing additional Closed Bond Funds in the amount of
154 $250,000. He requested that staff prepare that in writing and send it out to the council
155 for review. That should include information on anticipated future funds to the Closed
156 Bond Fund.
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158 Staff will put together options to get to the $320,000.
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160 Council Member Maher suggested setting up a time when the City Finance Director can
161 meet directly (or share by video) budget information with the public.
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163 The council will have the opportunity to review information that will be sent out. The
164 council will schedule a special budget session after the council meeting on September 9.
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166 Finance Director Cotton noted the idea of issuing capital equipment certificates when the
167 budget receives preliminary approval. Mayor Reinert suggested that's also a topic of
168 discussion for September 9"'.
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170 6. Council Updates on Boards/Commissions, City Council
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172 7. Monthly Progress Report - Administrator Karlson provided an update on plans to
173 fill vacant positions in the Public Safety Department,
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175 8. Review Regular Agenda
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177 The council requested that Item 1F be moved to discussion (Administration) in support of
178 additional attention for the Hope Fest.
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180 Item 6A, Otter Lake Animal Care Facility - City Planner Larsen explained that the request
CITY COUNCIL WORK SESSION
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t81 to amend a Conditional Use Permit to add to the existing building. No specific issues to
182 report after staff and Planning & Zoning Board review.
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184 Adjourn
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186 The meeting was adjourned at 8:00 p.m.
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188 These minutes were considered, corrected and approved at the regular Council meeting
189 held on September 23, 2019,
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194 JUliarfiie Bartell, Ciq Cler e
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