06 21 21 Work Session MinutesCity Council Work Session June 21, 2021
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City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
City Council Minutes
Work Session Meeting
June 21, 2021
Northwood Conference Room
CALL TO ORDER The New Hope City Council met in work session pursuant to due call and notice thereof;
Mayor Hemken called the meeting to order at 6:30 p.m.
ROLL CALL Council present:
Kathi Hemken, Mayor
John Elder, Council Member (arrived at 7:50 p.m.)
Andy Hoffe, Council Member
Michael Isenberg, Council Member
Jonathan London, Council Member
Staff present:
Kirk McDonald, City Manager
Jeff Alger, Community Development Specialist
Vicki Holthaus, AEM
Tim Hoyt, Director of Police
Valerie Leone, City Clerk
Jeff Sargent, Director of Community Development
Bernie Weber, Director of Public Works
Stacy Woods, Assistant City Attorney
Also present: Bonnie Schwieger, AEM
2020 TIF
PROJECTIONS
Item 11.1
Mayor Hemken introduced for discussion item 11.1, Update on Tax Increment Finance
(TIF) 2020 cash flow projections.
Mr. Jeff Sargent, community development director, informed Council that AEM has
completed the annual analysis regarding the city’s active TIF districts. He stated the
analysis shows how TIF could be used to assist with future redevelopment efforts.
Ms. Bonnie Schwieger of AEM reviewed the active TIF districts (03‐1, 04‐1, 04‐2, 11‐1,
1615, 1616, 1617, 1618 and 1619) as well as the inactive districts (85‐1, 85‐2 and 86‐1).
Ms. Schwieger reported on cash positions. She stated TIF Districts are allowed to
charge up to ten percent for allowable administrative costs, and the current charge has
been approximately eight percent. She recommended close tracking of EDA staff time
and other internal resources used on TIF projects. She stated non captured
administrative costs total about $500,000. She explained that interfund loans are
recorded in most TIF Districts to cover cash deficits or costs associated with the
purchase and sale of redevelopment property. Ms. Schwieger commented that pre‐90
districts have begun generating excess increment and a portion of the interest earned
through interfund loans will be remitted annually to the county for redistribution. She
also stated the pre‐90 districts contain $4,090,983 to be spent (pooled) anywhere in the
city’s project area for TIF eligible costs.
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She reviewed proposed uses for the pooled resources:
Scattered site housing program, specifically demolition and land purchases.
TIF eligible costs (including land acquisition costs, demolition and
environmental remediation costs and on a limited basis eliminating deficit
balances in other TIF districts.
Other initiatives determined by the EDA’s strategic plan.
Ms. Schwieger stated cash is based on combining EDA funds and cash from TIF
districts. She noted the TIF district funds are more restrictive. Mr. Kirk McDonald, city
manager, commented on the loss of the CDBG funding traditionally utilized for the
scattered site housing program.
Ms. Schwieger and Ms. Holthaus responded to questions from Council regarding TIF
funding.
Council Member London suggested the TIF districts be named with an address that
would easily identify the location of the district instead of numbers.
Council Member London asked whether the effectiveness of districts is measurable.
He also requested the cash flow projection for Ironwood (District 11‐1) be shown
through 2044.
Director Sargent explained the process used before any TIF district is established. He
stated it must be proven that the funds are needed for the development. He stated
Ehlers reviews the proforma and makes recommendations on funding. He stated the
Council has discretion on approving funding.
Ms. Holthaus explained at the beginning stages of the projects there are certain
assumptions such as tax capacity and tax values that all relate to performance
measures. She stated AEM can review the original estimates and determine how the
districts are performing.
Council thanked Ms. Schwieger and Ms. Holthaus for the report.
SCATTERED SITE
HOUSING
PROGRAM
Item 11.2
Mayor Hemken introduced for discussion item 11.2, Update on city’s Scattered Site
Housing Program and funding options.
Mr. Kirk McDonald, city manager, reported on the importance of the city’s scattered
site housing program and the need to increase funding. He recommended reallocating
salaries that are currently budgeted to the EDA to the general fund to decrease
approximately $100,000 in costs. He also recommended establishing an HRA levy that
would result in $150,000 in annual taxes. He stated the levy would increase from 3.98%
to 4.84%. Mr. McDonald stated these two options would generate an additional
$250,000 resulting in an annual allotment for the program of $500,000.
Mr. Jeff Sargent, director of community development, and Mr. Jeff Alger, community
development specialist, presented information on the scattered site housing program
since it was reinstituted in 2014. Mr. Alger noted when a new home is built there is a
large market value increase and the tax revenue is deposited into the general fund, not
the scattered site housing program.
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Council Member London spoke in support of the program. He expressed uncertainty
regarding the HRA levy. He also reminded staff that he would like to see a private
developer undertake property redevelopment without city resources if possible.
Mr. McDonald stated staff will continue to review funding options and Council can
consider the matter again during budget discussions.
AGENDA ORDER Mayor Hemken asked that Council review Item 11.4 prior to Item 11.3.
POLICE VEHICLES
LEASING PROGRAM
Item 11.4
Mayor Hemken introduced for discussion item 11.4, Begin discussion regarding
implementing a leasing program through Enterprise Fleet Management for the
acquisition of police vehicles.
Ms. Vicki Holthaus, AEM, reviewed the financial considerations regarding a lease
program including elimination of large capital outlay, budget stability, purchasing
power through Enterprise, reduced maintenance costs and down‐time, and increased
trade‐in value. She stated the lease is considered an open lease that can be customized.
Ms. Holthaus stated the current central garage replacement schedule for police
vehicles is every 3 years for squad cars and every 6 years for unmarked vehicles. She
stated the lease program would cycle vehicles every 3‐5 years. Ms. Holthaus reviewed
the lease costs and the projected two‐year net cash savings (capital only). She indicated
the lease would start with eight vehicles for 2021 and six for 2022. The lease payment
is $1,055/month for each marked vehicle and $475‐$819/month for each unmarked
vehicle plus a $6/month maintenance fee per vehicle. The consignment fee is $500.
Ms. Holthaus reported other cities that are utilizing the leasing program include Inver
Grove Heights, Champlin, Hopkins, Rosemount and Stillwater.
Mr. Tim Hoyt, director of police, introduced Wong Nystrom of Enterprise Fleet
Management, Inc. Mr. Wong spoke of the financial benefits of leasing and stated he
works with over 55 communities. He noted the cities of Robbinsdale and Crystal
recently joined. Mr. Wong stated Enterprise is the largest buyer of vehicles in North
America.
Police Chief Hoyt reported it is necessary to order vehicles immediately to obtain
delivery in 2022. Chief Hoyt stated newer vehicles will provide safer environments for
officers.
Mr. Bernie Weber, director of public works, noted the city would obtain a higher resale
value through Enterprise compared to the K‐bid auction process.
Mr. Wong stated maintenance costs increase as vehicles age. He noted fuel economy is
also better for newer vehicles. He stated Enterprise is able to recapture equity by
reselling vehicles at the right interval.
Council Member Elder arrived at 7:50 p.m.
It was noted the city is still responsible for insuring the vehicles.
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Mr. Weber explained if a squad is totaled, Enterprise can quickly obtain a replacement
vehicle for the city. He noted the other cities that have entered into a leasing
arrangement have been pleased with the results.
Mr. Kirk McDonald, city manager, noted the lease is for 14 vehicles (not the entire fleet
at this time). Ms. Holthaus stated by starting small it provides an opportunity to
determine how well the lease arrangement works for the city.
Mr. Wong explained that mileage patterns provides maintenance and fuel data as part
of the analysis.
Council Members Elder and Hoffe expressed support for leasing vehicles.
Mayor Hemken thanked Mr. Wong for responding to Council’s questions.
Staff was directed to place the item on the June 28, 2021, Council Meeting agenda.
2022 BUDGET
Item 11.3
Mayor Hemken introduced for discussion item 11.3, Preliminary discussion on 2022
Budget.
Mr. Kirk McDonald, city manager, reported on the goals/priorities for 2022 budget
cycle. He briefly reviewed the budget schedule indicating a special meeting could be
held September 7 if necessary; he reported on local government aid, central garage
funding, PERA contribution rates, administrative charges, IT charges, election cost
increase, council salaries, employee compensation and insurance, park and street
infrastructure levies, the EDA levy, and debt service levies. Mr. McDonald also
recommended conducting a professional city survey by Morris Leatherman in 2022.
Mr. McDonald stated the budget notebooks will be distributed at the August work
session at which time the maximum levy will be reviewed. He stated a hearing will be
held on December 6 to consider adoption of the budget.
Mayor Hemken inquired if leasing police vehicles will impact the budget. Ms.
Holthaus stated some central garage figures could change.
Council Member London inquired regarding the funds the city received from the
federal government relating to the pandemic.
Mr. McDonald stated funds from the American Rescue Plan can be used for revenue
losses (pool, ice arena, permits). He stated staff will make a recommendation on the
use of the funding.
Ms. Holthaus commented that some CARE funds were recently transferred to the
temporary financing fund per Council’s direction.
NUISANCES
Item 11.5
Mayor Hemken introduced for discussion item 11.5, Discuss nuisances and other
related issues.
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Mr. Jeff Sargent, director of community development, explained at the April work
session, Council Member London asked that the city’s policies regarding responses to
nuisances be discussed at a future meeting.
Mr. Sargent explained reviewed the staff report regarding nuisances at residential
districts. He stated items or structures on properties are usually dealt with through
community development. He stated issues such as noise complaints are handled
through the police department. He noted the police department can act as a mediator
on neighbor issues.
Ms. Stacy Woods, assistant city attorney, explained the difference between public
nuisances and private nuisances. She stated a public nuisance affects the community
whereas a situation involving two properties affecting one owner is a private nuisance
and the city should not become involved with the dispute. She stated in most cases,
police officer intervention is successful.
Chief Hoyt spoke of the importance of allowing the police department try to mediate.
Discussion ensued regarding noise from car engines, weed complaints, and group
home occupants.
Council Member London indicated the city should be able to improve the tracking of
complaints to understand problem areas and address ongoing issues.
Director Sargent pointed out oftentimes the problem is an educational issue and can
be resolved once the resident understands city ordinances.
Director Sargent asked Council if it would like staff to prepare an ordinance
amendment to eliminate the “permit to exceed limitations” process based on action
taken at the June 14 Council Meeting. Mayor Hemken recommended review of
Crystal’s animal ordinance to determine if New Hope’s code should be similar.
ADJOURNMENT The meeting was adjourned at 9:03 p.m. as there was no further business to come
before the Council at its work session.
Respectfully submitted,
Valerie Leone, City Clerk