HomeMy WebLinkAboutAgenda Packets - 2024/04/01
CITY OF MOUNDS VIEW
CITY COUNCIL WORK SESSION AGENDA
MOUNDS VIEW CITY HALL
Monday, April 1, 2024
6:00 p.m.
ROLL CALL: Lindstrom, Cermak, Gunn, Meehlhause
Council Work Sessions are informal gatherings of the council at which no final
decisions are made, rather consensus discussion to direct staff on council
decision items.
AGENDA ITEMS DISCUSSED BY CONSENSUS
1. MNDOT Area Road Construction Projects Update for 2024-Kent Barnard
2. Twin Cities North Chamber of Commerce Update-John Connelly
3. City Commission Updates & Discussion:
A. Planning Commission-Dennis Farmer
B. Economic Development Commission-Jeff Moritko
C. City Council-Zach Lindstrom
4. SBM Capital Budget – Chief Retka
5. Care4All
6. Local Affordable Housing Funding Options Under the Metro Sales Tax-
Brian/Nyle
7. City/County/School District Collaborative – Mayor Lindstrom
8. Discussion on Priorities for the 2025 General Fund Budget – Gayle
PUBLIC COMMENT
Citizens may speak to issues not on tonight’s agenda. Before speaking, please share
your full name and address. Also, please limit your comments to three minutes.
NEXT COUNCIL WORK SESSION: Monday, May 6, 2024 at 6:00 pm
NEXT COUNCIL MEETING: Monday, April 8, 2024 at 6:00 pm
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The Mounds View Vision
A Thriving Desirable Community
Item No: 07
Meeting Date: April 1, 2024
Type of Business Council
Business
City Administrator Review
City of Mounds View Staff Report
To: Honorable Mayor and City Council
From: Brian Beeman, Assistant City Administrator
Item Title/Subject: Local Affordable Housing Options Under the Metro Sales
Tax
Introduction:
Local Affordable Housing Aid helps metropolitan local governments develop and preserve affordable
housing within their jurisdictions to keep families from losing housing and to help those experiencing
homelessness find housing. Aid will begin in 2024. Funds must be spent by December 31 of the fourth
year after the aid was received. Minnesota Housing plans to release a program guide with further details
on frequently asked questions and language clarification sometime in 2024.
Metro Cities has been discussing a webinar as a way for cities to share information with one another
on how they plan to spend their funds. Some cities are considering implementing the new tax with uses
including:
• Preserving affordable housing units
• Rental assistance
• Housing stability
• Providing down payment assistance for first time homebuyers
• Supporting homeless prevention programs
• Constructing new affordable units
• Allocating funds to existing HRA programs.
Use of Aid:
Funds distributed under this aid program must be spent on a qualifying project. Funds will be considered
spent if:
• A county or eligible demonstrates to the Minnesota Housing Finance Agency that the city or
county cannot expend funds on a qualifying project by the deadline below due to factors outside
the control of the city or county
• The funds are transferred to a local housing trust fund
If funds are transferred to a local housing trust fund, they must be spent on a project or household that
meets the affordability requirements described below under qualifying projects.
Qualifying projects include:
• Emergency rental assistance for households earning less than 80 percent of area median
income as determined by the United States Department of Housing and Urban Development
• Financial support to nonprofit affordable housing providers in their mission to provide safe,
dignified, affordable and supportive housing; and
• Projects designed for the purpose of construction, acquisition, rehabilitation, demolition or
removal of structures, construction financing, permanent financing, interest rate reduction,
The Mounds View Vision
A Thriving Desirable Community
refinancing, and gap financing of housing to provide affordable housing to households that have
incomes which do not exceed:
o For homeownership projects, 115% of the greater of state or area median income as
determined by the United States Department of Housing and Urban Development
o For rental housing projects, 80% of the greater of state or area median income as
determined by the United States Department of Housing and Urban Development
• Housing developed or rehabilitated with funds under this section must be affordable to the local
work force
Projects are prioritized that provide affordable housing to households that have incomes that:
• For homeownership projects, do not exceed 80 percent of the greater of state or area median
income as determined by the United States Department of Housing and Urban Development
• For rental housing projects, do not exceed 50 percent of the greater of state or area median
income as determined by the United States Department of Housing and Urban Development.
Priority may be given to projects that:
• Reduce disparities in home ownership
• Reduce housing cost burden, housing instability, or homelessness
• Improve the habitability of homes
• Create accessible housing
• Create more energy- or water-efficient homes
Gap financing is the difference between the costs of the property and either:
o The market value of the property upon sale; or
o The amount the targeted household can afford for housing, based on industry standards
and practices.
If aid received under this program is used for demolition or removal of existing structures, the cleared
land must be used for the construction of housing to be owned or rented by persons who meet the
income limits described above.
If an aid recipient uses the aid on new construction or substantial rehabilitation of a building containing
more than four units, the loan recipient must construct, convert, or otherwise adapt the building to
include:
The greater of:
• At least one unit
• At least 5% of units that are accessible units, as defined by section 1002 of the
current State Building Code Accessibility Provisions for Dwellings Units in
Minnesota, and include at least one roll-in shower
The greater of
• At least one unit
• At least 5% of units that are sensory-accessible units that include:
• Soundproofing between shared walls for first and second floor units
• No florescent lighting in units and common areas
• Low-fume paint
• Low-chemical carpet
• Low-chemical carpet glue in units and common areas
Beginning in 2025, aid recipients must submit a report annually, no later than December 1 of each year,
to the Minnesota Housing Finance Agency. The report must include documentation of the location of
any unspent funds distributed and of qualifying projects completed or planned with funds.
The Mounds View Vision
A Thriving Desirable Community
Discussion:
The Council to discuss the new program, local affordable housing needs, then determine how to direct
the funds into a local affordable housing program.
Strategic Plan Strategy/Goal:
Ensure the attraction of affordable housing opportunities across all demographics.
Financial Impact:
The Estimated Local Affordable Housing Aid to be distributed in 2024 is $129,940. Final amounts will
be released July, 2024.
Recommendation:
Staff recommends the City Council discuss and determine how to direct the metro sales tax into a local
affordable housing program, then direct staff accordingly.
Respectfully,
Brian Beeman, MPA, CMC
Assistant City Administrator
ATTACHMENT(S):
1) Preliminary Estimate of Aid to be received in 2024
Projected 2024 Local Housing Aid
Metro Cities Distribution
City 2021
Population
Cost Burdened
Units Distribution Factor Local Affordable
Housing Aid
ANDOVER 32,708 1,701 0.0058 $178,392
ANOKA 18,041 2,036 0.0069 $213,525
APPLE VALLEY 56,318 4,986 0.0169 $522,905
BLAINE 70,979 5,555 0.0188 $582,578
BLOOMINGTON 90,974 10,451 0.0354 $1,096,045
BROOKLYN CENTER 33,585 3,585 0.0121 $375,975
BROOKLYN PARK 86,106 8,984 0.0304 $942,193
BURNSVILLE 64,627 7,105 0.0241 $745,134
CHAMPLIN 23,786 2,145 0.0073 $224,956
CHANHASSEN 25,936 2,204 0.0075 $231,144
CHASKA 27,931 2,462 0.0083 $258,201
COLUMBIA HEIGHTS 21,859 2,480 0.0084 $260,089
COON RAPIDS 64,128 6,350 0.0215 $665,954
COTTAGE GROVE 39,605 2,232 0.0076 $234,080
CRYSTAL 23,083 2,366 0.0080 $248,133
EAGAN 69,086 6,251 0.0212 $655,571
EAST BETHEL 11,791 405 0.0014 $42,474
EDEN PRAIRIE 64,142 5,011 0.0170 $525,527
EDINA 53,572 6,320 0.0214 $662,808
FARMINGTON 23,654 1,773 0.0060 $185,943
FOREST LAKE 20,991 2,049 0.0069 $214,888
FRIDLEY 29,536 2,967 0.0101 $311,163
GOLDEN VALLEY 22,334 2,444 0.0083 $256,314
HAM LAKE 16,489 1,179 0.0040 $123,647
HASTINGS 22,303 2,142 0.0073 $224,641
HOPKINS 18,926 3,451 0.0117 $361,922
HUGO 16,071 1,059 0.0036 $111,062
INVER GROVE HEIGHTS 35,743 3,731 0.0126 $391,287
LAKE ELMO 12,655 666 0.0023 $69,846
LAKEVILLE 72,135 3,764 0.0128 $394,748
LINO LAKES 21,236 1,577 0.0053 $165,387
LITTLE CANADA 10,766 1,528 0.0052 $160,248
MAPLE GROVE 70,247 5,021 0.0170 $526,575
MAPLEWOOD 42,139 4,089 0.0139 $428,832
MENDOTA HEIGHTS 11,652 746 0.0025 $78,236
MINNEAPOLIS 434,346 59,676 0.2022 $6,258,497
MINNETONKA 54,704 5,972 0.0202 $626,311
6/13/2023
City 2021
Population
Cost Burdened
Units Distribution Factor Local Affordable
Housing Aid
MOUNDS VIEW 13,133 1,239 0.0042 $129,940
NEW BRIGHTON 23,705 2,687 0.0091 $281,798
NEW HOPE 21,870 3,020 0.0102 $316,721
NORTH ST PAUL 12,397 1,395 0.0047 $146,300
NORTHFIELD 20,547 1,619 0.0055 $169,792
OAKDALE 28,135 3,489 0.0118 $365,907
PLYMOUTH 81,184 6,681 0.0226 $700,667
PRIOR LAKE 27,832 2,139 0.0072 $224,327
RAMSEY 28,520 2,114 0.0072 $221,705
RICHFIELD 36,661 4,323 0.0146 $453,373
ROBBINSDALE 14,838 1,900 0.0064 $199,262
ROGERS 13,905 595 0.0020 $62,400
ROSEMOUNT 26,133 1,524 0.0052 $159,829
ROSEVILLE 36,440 3,674 0.0124 $385,309
SAINT LOUIS PARK 50,144 5,932 0.0201 $622,116
SAVAGE 32,516 2,777 0.0094 $291,237
SHAKOPEE 45,593 3,572 0.0121 $374,612
SHOREVIEW 26,967 2,309 0.0078 $242,155
SOUTH ST PAUL 20,745 2,501 0.0085 $262,291
ST PAUL 312,040 40,122 0.1359 $4,207,779
STILLWATER 19,464 1,726 0.0058 $181,014
VADNAIS HEIGHTS 13,080 1,414 0.0048 $148,293
VICTORIA 10,968 319 0.0011 $33,455
WACONIA 13,297 1,360 0.0046 $142,629
WEST ST PAUL 20,882 3,254 0.0110 $341,262
WHITE BEAR LAKE 25,067 2,908 0.0099 $304,975
WOODBURY 75,723 5,727 0.0194 $600,617
TOTAL
Projection provided by House Research staff. Analysis assumes $31.125 million available for city distributions
in 2024.
$31,124,996
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Item No. 8.
Meeting Date: April 1, 2024
Type of Business: Council Work Session
City Administrator Review: ______
City of Mounds View Staff Report
To: Honorable Mayor and City Council
From: Gayle Bauman, Finance Director
Item Title/Subject: Discussion on Priorities for the 2025 General Fund Budget
Finance has begun working on the details of the 2025 budget.
This item is placed on the agenda to give the City Council and residents the opportunity to provide input to staff
early in the process. Department Heads can then use this guidance as they work on the details of their proposed
budgets.
General Fund 2024 Budget by Type
Personnel 57.2% 5,760,400
Contractual services 21.1% 2,121,773
Supplies 4.1% 415,452
Capital outlays 1.2% 121,706
Fire debt service 0.8% 84,677
Contingency 0.2% 20,000
Transfers 15.4% 1,552,881
Total 100% 10,076,889
General Fund 2024 Budget by Function
Police 40.9% 4,117,845
Public Works 11.0% 1,106,099
Park and Recreation 6.6% 667,328
Fire (SBM)6.3% 639,247
Community Development 5.2% 525,613
Administration 4.5% 449,795
Central Services 3.6% 360,845
Finance 3.2% 324,554
Misc. Contracual Service 1.5% 153,109
Legislative 0.9% 94,896
Debt Service (Fire bonds)0.8% 84,677
Transfers to other funds 15.4% 1,552,881
Total 100% 10,076,889
General Fund 2024 Budget by Revenue Source
Taxes (property)68.33% 6,218,475
Other taxes (hotel, mfg home)0.96% 87,000
Intergovernmental 15.10% 1,374,677
Franchise fees 4.23% 385,000
Licenses and Permits 3.18% 289,522
Charges for Service 0.53% 48,025
Fines and Forfeits 0.39% 35,750
Investment earnings 1.10% 100,000
Miscellaneous 3.68% 334,983
Transfers In 2.50% 227,457
Total 100.00% 9,100,889
Key 2025 Budget Issues:
The February state budget forecast projects a surplus of $3.7 billion for the current biennium (July 1, 2023 thru
June 30, 2025), but spending is projected to exceed revenue through fiscal year 2027. Local Government Aid did
increase for the City. Our 2024 allocation is 19.8% greater ($169,610) than 2023. The City Council budgeted for
90% of anticipated LGA for 2024 to guard against any legislative cuts or economic weakness associated with the
state budget. Staff would recommend that we continue to decrease reliance on LGA and look at allocating more
of this revenue source to capital projects. The state has unalloted LGA in the past and if this happens again, we
would want to mitigate the impact to City daily operations.
Inflation still remains high and has increased slightly over the past two months. The City’s charter cap was recently
amended to give the City Council more flexibility to respond to the growing challenges the City faces. The charter
cap excludes debt service levies, voter approved levies, and capital project levies from inclusion in the cap
calculation. A 1% levy increase would generate an additional $68,847 in tax revenue. Property taxes account for
68.3% of General Fund revenues and operating transfers in. Ramsey County will provide preliminary 2025 values
and projections in late August.
The City has settled contracts with the two police unions and the public works bargaining group through 2025.
The Police Patrol contract provides for a 3.0% cost of living adjustment (COLA) in 2025, the Police Sergeants
contract provides for a 3.0% COLA and a market adjustment in 2025, and the public works bargaining group will
now be following the newly implemented pay grade and step program that became effective in 2024 for all non-
union employees. Due to the new grade and step program, the majority of employees are not at the top of their
range and will receive a minimum step increase of 2.75% in 2025, in addition to any COLA the council may approve.
The estimated impact on the General Fund with the approved Police contracts and assuming a 3% COLA for the
new grade and step program would be $136,330.
Health insurance premium increases are unknown at this time and are based on our experience (experience rated
premiums). We will receive our rate notice in September/October. The impact to the budget will depend upon
the size of the unknown rate increase. The City’s insurance contribution for 2024 was $1,245 per month compared
with $1,200 for 2023, which includes a $200 per month HSA contribution for employees claiming single insurance.
The City makes an additional $225 per month HSA contribution for families.
As far as we know, the employer’s share of PERA will remain at 7.50% for General plan members and 17.7% for
Police plan members. The PERA General rate has increased from 5.53% in 2005 to 7.50% in 2015 and the Police
PERA rate has increased from 9.3% in 2005 to 17.7% in 2020. The state legislature controls the resolution of the
underfunded pensions.
There are requests for increased staffing from departments for 2025. City Administration is looking to increase
their part time employee to 30 hours per week. This would make the position eligible for prorated insurance
benefits and could increase the General Fund budget by $33,500 or more. The Public Works department is also
looking to increase the hours of their part time Administrative Assistant and hire an intern in the engineering
division with the goal of this intern becoming a full time Storm Water Technician. Costs for this have not yet been
calculated.
It is anticipated that the Fire department will have an increase in operating costs and a higher capital outlay
expense for 2025. Our share has been mitigated somewhat by a switch to a fixed percentage formula going
forward and retirement of the SLP Equipment Note. (2023 – 15.5%, 2022 – 15.5%, 2021 – 15.5%, 2020 – 15.998%,
2019 – 16.373%, 2018 – 16.158%, 2017 – 15.819%)
Information technology costs (phones, computers, copiers, cameras, squad computers, network switches, desktop
services, virtual servers, internet, email, software, laserfiche, anti-virus, VPN connections, and facility WiFi) will
increase due to additional services and transition to a joint powers entity away from the City of Roseville. This
moves Roseville employees to the joint powers entity for long term stability and continuity. This continues to be
an excellent value for the City.
Fuel prices were budgeted at $3.25 unleaded and $4.00 for diesel for 2024. With the current economic conditions
staff is recommending the same amounts for 2025.
Overall most revenues that are tied to economic activity will be in flux depending on Federal Reserve rate
increases. Investment income will eventually increase as the city is able to recognize market value losses from
prior years. The franchise fee rate is at 4.00% with the revenue being split between the General fund and the
Street Improvement fund.
2023 General Fund unassigned fund balance is $5,273,021 and represents 60.4% of 2024 budgeted revenues and
transfers compared with 64.5% for the prior year. The General Fund also has Assigned fund balance for Levy
Reduction of $3,052,330, and $226,000 to balance the subsequent budget. It has been the Council’s policy to
draw down the levy reduction funds over time and the Council budgeted a $750,000 transfer out to other funds
in 2024 from Assigned fund balance. One of the City’s strategic goals is to develop a balanced budget and reduce
reliance on the Levy Reduction Assigned Fund balance by 5% to 8% for 2023 thru 2025. Based on very preliminary
projections, it appears the levy reduction funds could be fully drawn down by 2028.
Conclusion
Staff is looking for direction from the Council on priorities for the budget and property tax levy. The above items
are some of the issues that will drive the 2025 budget and are presented for your consideration.
Respectfully Submitted,
Gayle Bauman, Finance Director