HomeMy WebLinkAboutCC MINUTES 06122001 Meeting Sheet
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Folder: CC MINUTES AND AGENDAS 2001
Document: CC MINUTES 06122001
01 CITY OF ST. ANTHONY
2 CITY COUNCIL STUDY SESSION
3 June 12, 2001
4 5:30 PM
5 Council Chambers
6 I. CALL TO ORDER.
7 The meeting was called to order by Mayor Cavanaugh at 5:38 p.m.
s II. PLEDGE OF ALLEGIANCE.
9 Mayor Cavanaugh invited the Council and the audience to join in the Pledge of Allegiance.
10 III. ROLL CALL.
11 Councilmembers present: Mayor Cavanaugh, Councilmembers Sparks, Thuesen and Horst,
12 and Hodson.
13 Councilmembers absent: None.
14 Also present: City Manager Michael Mornson.
15 IV. COMMUNITY FORUM.
16 Mayor Cavanaugh invited any members of the community to come forward and address the
17 Council. No one came forward.
018 V. BUDGET WORK SESSION ON FINANCIAL STRATEGIES -Jim Prosser, Ehlers and
19 Associates will be present.
20 Mike Mornson explained that developing a blueprint for the City's financial strategies was very
21 important, and introduced Jim Prosser to discuss the Financial Strategy and Process with the
22 Council.
23 Jim Prosser introduced Liz Diaz, a colleague of his from Ehlers and Associates. He distributed a
24 booklet to each Councilmember, which would assist him in walking the Council through the Key
25 Financial Strategies. Mr. Prosser stated that descriptions of the financial foundations and other
26 issues surrounding the project were contained in this booklet, identifying it as a key tool in the
27 process.
28 Mr. Prosser explained that the items that he would be discussing would be largely familiar to the
29 Council, with only a couple of new concepts. He stated that the Council needed to inform him of
30 anything that needed to be further explained, or initially considered, as he went along.
31 Mr. Prosser stated that one of the things that the Councilmembers needed to leave with tonight
32 was the ability to absorb the objectives of the Key Financial Strategies in order to be able to
33 communicate with the community regarding the project and respond to them regarding the things
34 that they identify in the community as priorities, as well as be comfortable in using the material
35 in the future meetings which will follow.
*36 Mr. Prosser reviewed the Key Financial Strategies Objectives:
37 1. Confirm and prioritize community goals.
38 2. Review your community's current financial position.
City Council Study Session Meeting Minutes
June 12, 2001
Page 2
1 3. Develop an inventory of capital needs beyond traditional Capital Improvement Plans.
2 4. Identify future capital funding requirements and operating needs.
3 5. Develop an inventory of financial resources.
4 6. Present options for financing needs.
5 7. Analyze the financial impact of each option.
6 8. Prepare an affordable, comprehensive financial plan.
7 9. Develop a framework to review future capital projects.
8 Councilmember Horst asked about prioritizing goals, and said that they are constantly changing.
9 Mr. Prosser indicated that the process really forces discussion of the goals on, at least an annual
10 basis, which will force them to maintain a focus, and continue to think of the process as the
11 dynamic, and on-going procedure that it is.
12 Mr. Prosser stated that every city has more needs and more potential discussion items than they
13 have time, or money. He added that it is important to forecast those needs and get them in a
14 plan, or program so that there is some institutional memory in what the intend to accomplish
15 throughout this process.
16Mr. Prosser went on to highlight the Key Financial Strategy Products:
07 1. Five Year KFS spreadsheet with capital and operating projections.
18 2. Customized strategies and timetables including development of financial policies,
19 revenue strategies, debt management and refined capital and operating plans.
20 Mr. Prosser stated that the key in this entire process is the strategies and timetables.
21 Councilmember Horst mentioned other cities, and that they did not have any sort of plan like this
22 in place. Mr. Prosser responded that few cities have a plan like this in place because of time, and
23 that the state legislative process puts an emphasis on inputs (i.e. taxes) with regard to budgeting.
24 He added that there is not a real focus on outcomes with the legislatures, and encouraged that the
25 Council take time to sit down and discuss the outcomes with the legislatures at the end of this
26 process.
27 Councilmember Thuesen asked about community surveys and do they want to consider them as
28 an option. Councilmember Sparks mentioned that intergenerational dialogue was a potential tool
29 as a way of gauging what residents value. Mr. Prosser stated that a survey would help the
30 Council to identify what the educational needs are by way of educating the public in terms of
31 choices.
32 Mr. Prosser added that this whole process is all about choices. He noted that the survey could
33 come into play early, or later in the process, and it will be the decision of the Council to
34 determine when it would be incorporated into the process.
35 Mr. Prosser continued by reviewing the General Guidelines of the Process. He added the need to
36 allow a focus on the primary objectives of the community. He stated that the both operational
37 and capital needs must be considered.
City Council Study Session Meeting Minutes
June 12, 2001
Page 3
1 Mr. Prosser stated that a common mistake in other communities regarding Financial Strategies is
2 when they take financial jumps, rather than building over time. He stated that the Council would
3 be wise to determine which outcomes they intend to achieve.
4 Mr. Prosser warned the Council not to expect to finish this process and have a perfect plan, and
5 indicated that it would take three to five years to feel comfortable with the plan.
6 Mr. Prosser stated it was the responsibility of the Council to determine the true hot topics within
7 the community, and to look at them subjectively.
8 Mr. Prosser continued by reviewing the Key Financial Strategies Process Outline, which was
9 broken down into four sessions. He informed the Council that it is a very intuitive process,
10 which is easier to describe than it is to process.
11 Mr. Prosser indicated that the mistake that the Council could make with the Financial Strategy is
12 to think that everything is contained within the binder that he had distributed to them, rather than
13 realizing that the community will provide many more issues than what is found on those pages.
14 Councilmember Horst stated that an issue for him was TIF financing for the future, particularly
05 the extensive work that may be planned for the Northwest Quadrant, and the possibility of
16 running out of money and needing public financing to bail out the project. Mr. Prosser stated
17 that was just the sort of thing that the session tonight is intended for, to bring up issues that need
18 to be addressed as part of this process.
19 Councilmember Thuesen stated that a hope of his was to establish what will be done with the
20 capital buildings, and the ways in which that will be accomplished.
21 Councilmember Horst stated it was important to him that the community becomes more
22 aesthetically appealing. Councilmember Hodson agreed, and indicated that the sidewalks were a
23 major concern.
24 Mayor Cavanaugh stated he has a concern with tax capacity and how that capacity plays out for
25 the operating expenses. He suggested that they build in a sense of capital reserve to the general
26 fund budget, rather than leave that to be determined at the end of the year. He suggested a
27 $250,000 figure for capital reserve.
28 Councilmember Sparks referred to the goals and action steps that the Council comprised earlier
29 in the year and expressed her hope that they be incorporated into the Strategy that was being
30 presented tonight.
31 Mr. Prosser highlighted the Comparative Analysis of Housing Data, Five-year Revenue
�32 Summary, Five-year Expenditure Summary, and Revenues, Expenditures and Fund Balance. He
33 indicated that the important piece in all of those things is to use them as an appropriate way to
34 "pay as you go", and to learn from history and incorporate it into the future.
City Council Study Session Meeting Minutes
June 12, 2001
Page 4
1 Mr. Prosser stated the need for a certain amount of income to be available, because the cash will
2 not be metered out as it has been in the past. He stated that the Council needed to be careful to
3 maintain a Fund Balance. He stated that, if the tax structure is changed, the ramifications can not
4 be determined until the changes run a full cycle (a year, or more).
5 While referring to the Key Financial Strategies Comparative Data,Mr. Prosser indicated that
6 they would like to see the City of St. Anthony get more commercial as a city to balance out the
7 Ratio of Total Net Tax Capacity Value, yet development needs to be tailored to the needs of the
8 community. Mr. Prosser added that, in general, balance is better than in-balance.
9 Mr. Prosser compared the 1995 Revenues to the 1999 Revenues, and the 1995 Expenditures to
10 the 1999 Expenditures. He highlighted Improvement Costs, as a significant difference in
11 expenditures from 1995 to 1999.
12 Mr. Prosser stated that it is really easy for a city to function, while forgetting about the Public
13 Works building, the City Hall,etc. by not putting money into them, and that they eventually need
14 attention, which can be an unforeseen problem.
15Mr. Prosser highlighted the KFS Initial Findings that included an aging infrastructure, unmet city
06 facility, and a stable growing tax base. He added that one of the key issues for the Council
17 would be how to prioritize things, as they do not have a lot of initial money. He added that they
18 are not digging themselves out of a very big hole, fortunately.
19 Mayor Cavanaugh thanked Mr. Prosser for coming.
20 Mike Mornson stated that the next meeting to discuss the process would be October 9, 2001, and
21 indicated that it was important for all five Councilmembers be present. Mr. Prosser indicated
22 that he would provide the Council with information for that meeting at least a week ahead of
23 time.
24 VI. DISCUSS STONEHOUSE PROPERTY-Jim Prosser, Ehlers and Associates will be
25 present.
26 Mike Mornson stated that tonight would be an informational discussion with the Council on the
27 Stonehouse, and indicated that Liquor Operations Manager, Mike Larson, was present.
28 Morrison indicated that developing a plan, or options for the Stonehouse property was identified
29 as Goal #2 for the City at their annual Goal Setting Retreat in 2001. He stated that this has been
30 concern of the city since 1990, because of the declining income from the operation of the
31 Stonehouse, as well as increasing building costs.
•32 Mornson paraphrased what he perceived to be the City Council's position on the Stonehouse as,
33 "continue keeping the operation open and seek ways to improve the operation, but do not spend a
34 lot of the City's money on the operation because of declining profits and increasing building
35 needs."
City Council Study Session Meeting Minutes
June 12, 2001
Page 5
1 Morrison wanted to review some of the operational information and a list of possible decisions,
2 issues, or concerns of which the Council needs to be aware.
3 Morrison highlighted a letter that he had received from Hennepin County that provided the City
4 with an appraisal of the property, stating the estimated value in the range between $500,000 and
5 $550,000.
6 Morrison provided the Council with a Stonehouse Staff Snapshot, which indicated that the
7 Stonehouse maintains a staff level of twenty to twenty-five employees.
8 Morrison illustrated that the Stonehouse makes money because of the charitable gambling, by
9 using a comparison between a Five-year Financial History for the Stonehouse Bar and Grill and a
10 Five-year Financial History, Profit from Operations.
11 Mornson showed that the Stonehouse Net Profits were significant to the City's General Fund in
12 1988, 1989 and 1990. He indicated that a review of City Council Meeting Minutes from years
13 past showed that the Council first became concerned with the Stonehouse in 1991 when the
14 profits dropped from $255,407 in 1990 to$176,135 in 1991.
05 Councilmember Sparks asked what happened after 1990 to cause such change. Mornson
16 indicated that the liquor laws changed, and competition increased in the Sports Bar Market, with
17 Champps, Applebee's, Joe Sensor's, etc. Mike Larson added that the Unysis building, and
18 buildings back in that area went through an extraordinary layoff process, and those employees
19 used to gather at the Stonehouse after work a lot.
20 Mayor Cavanaugh asked what happened to the Stonehouse profits from 1998 until now. Mike
21 Larson indicated that problems with equipment and building maintenance were the reason for the
22 profit decrease.
23 Morrison stated that this past year they had hired SEH to do an architectural Building Analysis of
24 the entire facility. The summary indicated that the entire building has outlived it's useful life,
25 and they recommended building new.
26 Morrison highlighted the Estimated Cost of Repairs and Improvements, which totaled$681, 750.
27 Morrison reviewed the Split Liquor Explanation which consisted of redeveloping the corner,
28 getting out of the on-sale liquor business, and staying in the off-sale operation because it was
29 making over$200,000 a year. He stated they would issue liquor licenses to certain restaurants to
30 come into the community. Morrison indicated that a referendum would be needed, unless they
31 got out of both the off-sale operation and the on-sale liquor operation. He indicated that they see
•32 the City as heading in the direction of Split Liquor Explanation.
33 Councilmember Horst asked if other liquor stores could come in and control the off-sale of
34 liquor. Morrison stated that they could not do so under the Split Liquor Explanation.
City Council Study Session Meeting Minutes
June 12, 2001
Page 6
1 Morrison stated that a community survey would be helpful in determining if the residents like the
2 fact that the City owns an on-sale restaurant.
3 Morrison mentioned building a new store, and having someone else operate it. He indicated that
4 it could not be done at this time. He stated that under the Operation of a municipal liquor store, a
5 city may not contract with a private corporation for the management and operation of a
6 municipal liquor store.
7 Mayor Cavanaugh asked Mr. Prosser what they should do, from a business perspective. Mr.
8 Prosser stated that it is a complicated issue. He indicated that they would like to come up with a
9 proposal that looks at the Stonehouse, and other buildings in the area where they would like to
10 see redevelopment take place.
11 He indicated that, essentially, there were three decisions to make:
12 1. Redeveloping the area.
13 2. Redeveloping the area with, or without a liquor store.
14 3. Redeveloping the area with, or without a restaurant selling liquor.
15 Mr. Prosser stated that, for comparative purposes, they would do a straight financial analysis,
•16 comparing what they think the establishment would be expected to produce on an annual basis
17 from that type of operation to the value of the sale of the land.
18 Mayor Cavanaugh asked about the point in which the business decision would be to shut it down.
19 Mr. Prosser indicated that an analysis factoring that option in would not be as accurate, but could
20 be done in order to revisit it later on. He stated that he did not have a comfort level that it would
21 be really clear, or not.
22 Councilmember Sparks asked how they would factor in the Sports Boosters in the whole process.
23 Mr. Prosser indicated that he could not answer that, but that it was a largely political decision.
24 Councilmember Hodson asked if they could re-construct part of the building without affecting
25 the Fire House. Mayor Cavanaugh stated that the Stonehouse is a short-term issue of cash flow,
26 and when they start putting capital into it, and realize that they are not going to recover it, what
27 are the alternatives to putting the capital into it. He added that the Sports Boosters create a
28 unique obligation for the Council to try and keep their funding source.
29 Councilmember Horst stated that he would like to see what potential offers they have received on
30 the property, so that they can have a true idea of what their options are.
31 Councilmember Thuesen stated that he would like to see figures and a plan for the Fire-Station, if
033
32 it is unable to be salvaged from the Stonehouse Property. Mayor Cavanaugh stated that he would
like to focus solely on the Stonehouse. Mayor Cavanaugh stated that the Stonehouse will
34 someday need$100,000 of capital money, and wanted to know what the Council would decide at
35 that point.
City Council Study Session Meeting Minutes
• June 12, 2001
Page 7
1 Councilmember Thuesen asked Mr. Prosser if they could get some type of tax figures
2 surrounding the Stonehouse property, and the different options that have been suggested. Mr.
3 Prosser stated that was very possible to do so.
4 Mayor Cavanaugh stated that a Rate of Return Analysis would need to stand up to the universal
5 model, in order to give them a sense of what needs to be produced, and if the current structure
6 can remain.
7 A member of the audience asked if there would need to be a hypothetical idea, in order to
8 promote this idea to other establishments, such as Applebee's, or Champps, and what type of
9 profit or revenue would need to be present. Mr. Prosser said they could address that.
10 Mr. Prosser stated that they could have something prepared for the Council within sixty days
11 now that he has a better idea of what the Council is looking for. He indicated that they would
12 defer to an outside source to determine some of the figures that have been requested.
13 Mayor Cavanaugh thanked Mr. Prosser for his time.
•14 Mayor Cavanaugh called for a three-minute recess.
15 Mornson concluded his presentation by stating that the on-sale operation of the property was
16 making money this year, and that they are in a much better financial position today, than they
17 were back in 1995.
18 John Fabian, the Administrator and Vice President for the Sports Boosters, came forward and
19 explained that his primary role is to oversee the charitable gambling at the Stonehouse. He stated
20 he would be happy to provide any figures regarding the charitable gambling for the Council, and
21 added that he wanted to continue to act as partners with the Council. Mr. Fabian stated that the
22 Sports Boosters does have a license for Charitable Gambling.
23 Mr. Fabian stated that Charitable Gambling formed in 1989, and since that time they have
24 donated an excess of $2,300,000 to the community. Mr. Fabian stated that, since April of 1999,
25 they have dispersed an excess of$230,000. From that money, he indicated that the Sports
26 Boosters received$60,000 to run their programs.
27 Mr. Fabian added that it is not only the Sports Boosters that benefit from the charitable
28 gambling, but the school district and the community at large, as well.
29 Councilmember Sparks asked for some example of how the charitable gambling has contributed
30 to the community. Mr. Fabian identified numerous examples. Among those examples-was
•31 computer equipment, band equipment, Villagefest Organization, Senior Overnight Committee,
32 wrestling and swimming equipment, and community concerts.
33 Councilmember Thuesen stated that there is no argument that charitable gambling has
34 contributed significant funds to the community. However, he wondered if there may come a
City Council Study Session Meeting Minutes
• June 12, 2001
Page 8
1 point that, in order to keep charitable gambling, they may need to keep a business that is not
2 profitable, and does that make any sense.
3 Sports Booster and Baseball Commissioner, George Zurbey, agreed with Councilmember
4 Thuesen. He stated that some of the issues that are considered Sports Booster issues really are
5 community and tax-payer issues, and that they need to be considered as such.
6 Councilmember Horst asked why some of the things that are connected to the Sports Boosters
7 would dry up, if they were to lose the Charitable Gambling. Mr. Fabian referred to the
8 increasing popularity of sports, and the increasing demands that are placed on the volunteers.
9 Mayor Cavanaugh asked if the$60,000 is the only money that the Sports Boosters are receiving
10 over the course of a year from charitable gambling. Mr. Fabian stated that they also receive
11 money from registration fees.
12 Mr. Zurbey stated that the in-house cost per child for the baseball team in the City of St. Anthony
13 was $55.00 compared to$180.00 per child in Roseville. Thus, illustrating the benefit of the
14 funding that Sports Boosters, and in turn the community, receive from charitable gambling.
•15 Mr. Zurbey stated that his purpose of being there tonight was, not to argue that the Stonehouse
16 stay open, but to show what the profits of Charitable Gambling do for various organizations
17 within the community.
18 Mr. Fabian stated that he realizes the difficult position that the Council is in with regard to the
19 Stonehouse, and that he hoped that it would continue to be a cooperative effort between the
20 Sports Boosters and the Council.
21 Mayor Cavanaugh stated that it is a difficult business decision for them, and that in two months
22 they will have better information from which to make some decisions.
23 Councilmember Hodson asked Mr. Larson if there was any information on any partners that the
24 Sports Boosters could work with. Mr. Larson stated that he has been receiving weekly e-mails
25 from the Executive Director of the Minnesota License Beverage Association and said that there
26 have not been any interested parties yet.
27 Councilmember Horst asked if there were any other franchises, such as Champps, that would
28 allow for some sort of charitable gambling. Mornson indicated that there are certain franchises
29 that permit Charitable Gambling, and that part of a negotiating package should allow room for
30 some sort of Charitable Gambling.
•31 Mr. Larson stated that gross sales in 2000 for the Stonehouse were $1,875,000.
32 Mr. Zurbey stated that the community needed to determine what type of restaurant they wanted
33 to have in the City of St. Anthony.
City Council Study Session Meeting Minutes
• June 12, 2001
Page 9
1 Councilmember Horst brought up the issue of a liquor-license. Mayor Cavanaugh stated that the
2 City has never received a proposal, contingent on a liquor license.
3 VII. ACTION ITEMS.
4 A. Presentation of Certificate of Appreciation to Colleen Kapsch.
5 Dale Gunderson, member of the Kiwanis Builders Club, reviewed the Kiwanis Builders Club,
6 who they are, and as well as provided a background on the contest that Colleen Kapsch won. He
7 discussed the way that the contest came about, and thanked the Council for acknowledging Ms.
8 Kapsch.
9 Mayor Cavanaugh asked what Ms. Kapsch had won. She indicated that she won the Builder's
10 Club International Orrhetorical Contest and that the prize was a trip to Washington,D.C., where
11 she will attend the International Key Club where she will have the chance to read her speech.
12 Mayor Cavanaugh stated he had heard her speech a few times, and was very moved by it's
13 content, and stated that she should be very proud. Mayor Cavanaugh concluded with a
14presentation of the plaque awarding the Certificate of Appreciation for outstanding community
05 service to Ms. Kapsch.
16 B. Consent Agenda.
17 Motion by Councilmember Thuesen to approve the Consent Agenda. Said Consent Agenda
18 consisted of:
19 1. Licenses/permits;
20 2. Claims: and
21 3. Resolution 01-065 re: Agreement with Hennepin County for road maintenance services.
22 Motion carried unanimously.
23
24 VIII. REVIEW ITEMS.
25 A. Update on 2001 Goals and objectives.
26 Mayor Cavanaugh indicated that he felt good about their goals, and that they are all being
27 worked on.
28 Mornson indicated that he was amazed with the progress that the Council has made on their list
29 of goals.
30 Mayor Cavanaugh asked if everyone was informed, and up-to-date on the Northwest Quadrant.
*1 They reviewed dates for the different projects and meetings with other committees.
32 B. Intergenerational Dialogue.
33 Councilmember Sparks indicated that she was pleased that Intergenerational Dialogue made it
34 into the City's Action Plan under goal#7. She indicated that she had been in touch with Sue
City Council Study Session Meeting Minutes
• June 12, 2001
Page 10
1 Gehr-a, who conducted the last intergenerational meeting for them a few years ago.
2 Councilmember Sparks indicated that the Council needed to determine what kind of information
3 they wanted to gather at the Dialogue, and the types of questions that would help them best
4 achieve those answers.
5
6 Mornson asked if there was any role that the staff were expected to play. Councilmember Sparks
7 indicated there was no formal role.
8
9 Councilmember Thuesen said that he would like to see what the objectives would be for the
10 Intergenerational Dialogue, in order to see if the City should financially support it.
11 Councilmember Sparks referred to a newspaper article that stated that Intergenerational Dialogue
12 is a way to accomplish increased community connectedness.
13 Councilmember Thuesen stated that increased community connectedness was not a significant
14 enough objective to him. Councilmember Sparks stated she thought it was a very important role
15 for the City to take on.
16 Mayor Cavanaugh stated that he was uncertain of what the product would be from an
•17 Intergenerational Dialogue session. He suggested that they spend some time with Mr. Prosser
18 and Ms. Gehrz in order to determine what they are looking for the community to decide, or
19 accomplish.
20 Councilmember Sparks pointed out to Councilmember Thuesen that he, along with the rest of the
21 Council, adopted a goal to build a sense of community by involving the City's diverse groups in
22 the on-going development of the City. She added that the Intergenerational Dialogue was one
23 way to accomplish that. Councilmember Thuesen responded that things do not always stay the
24 same, and that there was no formal voting on the adoption of the City's Goal, and that the City
25 needs to review these goals over time.
26 Councilmember Sparks reviewed the six Action Steps under the Goal for the City of St. Anthony
27 that had been established by the Council back in January of 2001.
28 Mayor Cavanaugh suggested that they progress the goal, and add Mr. Prosser to the equation.
29 Councilmember Sparks suggested that they call the meeting a Town Meeting, and that they
30 determine what they would like to garner from the meeting.
31 IX. INFORMATION AND ANNOUNCEMENTS.
32 Councilmember Thuesen commended Mike Morrison on the way he handled the sudden death of
33 a liquor store employee.
•34 Councilmember Horst received confirmation from Morrison that the fireworks display was in the
35 Budget.
36
37 The Council concluded that the July 10, 2001 Study Session be canceled.
City Council Study Session Meeting Minutes
• June 12, 2001
Page 11
1 Morrison highlighted the next several City Council meetings, and asked that all Councilmembers
2 be present for them.
3 X. ADJOURNMENT.
4 Motion by Mayor Cavanaugh to adjourn the meeting at 8:46 p.m.
5 Motion carried unanimously.
6 Respectfully submitted,
7 Courtney Seesz
8 TimeSaver Off Site Secretarial, Inc.
9 tK
•10 or
11 ATTEST:
12 City Clerk
•