05 16 22 Work Session Minutes
City Council Work Session May 16, 2022
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City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
City Council Minutes
Work Session Meeting
May 16, 2022
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
Andy Hoffe, Council Member
Michael Isenberg, Council Member
Jonathan London, Council Member
Staff present:
Kirk McDonald, City Manager
Dan Boyum, City Engineer
Vicki Holthaus, Abdo
Tim Hoyt, Director of Police
Rich Johnson, Director of HR/Admin. Services
Sarah Larson, WMFR District Chief
Valerie Leone, City Clerk
Susan Rader, Director of Parks & Recreation
Jeff Sargent, Director of Community Development
Bernie Weber, Director of Public Works
Stacy Woods, City Attorney
WMFR DISTRICT
UPDATE
Item 11.1
Mayor Hemken introduced for discussion item 11.1, Update from West Metro Fire‐
Rescue District.
Ms. Sarah Larson, chief of West Metro Fire‐Rescue District, was recognized. She
reviewed the activities within the district for the first quarter of 2022 (food drive, clean
audit, staffing changes due to resignation of the assistant chief of operations). Chief
Larson also reported the preliminary 2023 budget is $3,031,190 which is $1,479,373 for
Crystal and $1,551,817 for New Hope. She stated the increase for New Hope is
$133,594.
Council Member London expressed concern regarding the increase of more than 9%.
Discussion ensued regarding the district’s staffing needs and calls for service.
Mr. Kirk McDonald, city manager noted the typical annual increase of New Hope’s
share is $70,000, but the anticipated increase was $140,000 due to the $70,000 lease for
a new fire engine. He also noted there is approximately $800,000 in the city’s fire capital
replacement fund, and the city can transfer money from the capital fund to the general
fund to offset the budget increase. Mr. McDonald stated both city councils must
approve the fire budget by the end of August.
City Council Work Session May 16, 2022
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Mr. McDonald asked if the Council desires to hold a joint meeting with the city of
Crystal on August 10. It was noted a decision must be made by the July fire board
meeting. The Council postponed a decision on the meeting until a response is made by
the city of Crystal.
Council thanked the fire chief for the update.
EMERALD ASH
BORER PROGRAM
Item 11.2
Mayor Hemken introduced for discussion item 11.2, Discussion of New Hope’s
Emerald Ash Borer program funding.
Mr. Bernie Weber, director of public works, stated $200,000 was funded in the 2022
budget for tree removal and replacement with a primary focus on public Ash trees. He
shared that there has been a substantial increase in Emerald Ash Borer infestations
throughout the city. He stated the average cost of tree and stump removal is $1,200 and
planting a new tree is $500. He recommended a transfer of $400,000 from the Street
Infrastructure Fund to the Streets Operating Fund.
Ms. Susan Rader, director of parks and recreation, reported on the Ash trees located in
parks, golf course and ice arena. She stated the parks budget contains $35,000 for tree
removal in 2022, and she recommended a transfer of $100,000 from the Parks
Infrastructure Fund to fund tree removal and replacement expenses.
Ms. Vicki Holthaus, Abdo, reported there is sufficient funds to support the transfers.
Council supported the fund transfers and directed staff to place the item on the May
23, 2022, agenda.
Discussion ensued regarding the Emerald Ash Tree Removal Program that started in
2010. It was noted that the trees are evaluated annually. Council recommended that
staff develop a long‐term plan. Council also requested information on past grant
requests and potential future grants.
LEASED VEHICLES
Item 11.3
Mayor Hemken introduced for discussion item 11.3, Discuss the leasing of seven city
vehicles through Enterprise Fleet Management.
Mr. Jeff Sargent, director of community development, asked Council to consider the
leasing of seven vehicles through Enterprise Fleet Management instead of purchasing
new vehicles. He stated last June Council approved the lease of 14 police vehicles. He
reported the vehicles that would be replaced include four community development
inspector vehicles and three public works vehicles. He stated a cost analysis indicates
the city would save $114,400 over a four‐year period by leasing rather than purchasing
the vehicles or $39,400 if the resale value of the vehicles is excluded. He stated the city
attorney has confirmed that the financing of leased vehicles falls under the
”cooperative purchasing” exception of the Uniform Municipal Contracting Law state
statute.
It was noted the key factors in making the leasing recommendation are the
maintenance savings and quick turnaround on maintenance, vehicle reliability, and
budget stability. In addition, the city has the option to end the lease at any time if
leasing proves to be cost prohibitive.
City Council Work Session May 16, 2022
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Mr. Wong Nystrom of Enterprise was recognized. He stated Enterprise is a large client
which enables them to obtain vehicles from manufacturers much sooner than other
customers. He stated Enterprise acts as the city’s fleet manager. He also noted if the
market on resale crashes, the city can retain vehicles longer than planned. Mr. Wong
also stated that by leasing vehicles, the city does not have a large cash outlay as it
would by purchasing vehicles.
Mr. Tim Hoyt, police chief, commented on the operational side of the police
department’s leased vehicles. He stated there is minimal down time with vehicle
maintenance. He noted the vehicles owned by the city are still serviced at the public
works facility. He indicated the relationship with Enterprise has been smooth;
however, it is too early to determine the actual cost‐savings.
Council Member Elder expressed support of the lease program.
Council Member London inquired of the maintenance tracking.
Ms. Vicki Holthaus, Abdo, indicated staff is working internally on maintenance
records to gauge the successfulness of the lease program.
Council directed staff to proceed with the lease of seven vehicles.
PARK & POOL
PROJECT UPDATES
Item 11.4
Mayor Hemken introduced for discussion item 11.4, Update on Pool/Civic Center
Park/City Hall Landscaping projects by Stantec Engineering (Improvement Project
Nos. 995/941/994).
Ms. Susan Rader, director of parks and recreation, updated Council on the status of the
projects and stated construction of the theater, picnic shelter, and skate park are
complete. She stated the aquatic park is complete and the closeout will be placed on
the May 23, 2022, agenda. She explained there have been some challenges with the
contract awarded to Sunram Construction for park amenities, parking lots and
landscaping for the city hall and park, and staff and the city engineer recently met with
the contractor and the punchlist items should be resolved by the end of June.
Ms. Rader recommended approving Addendum #4 with Stantec Engineering to cover
extra costs required for project management since May of 2020. She stated it is
estimated that $45,000 will cover the engineering construction management services
for the projects.
Mr. Dan Boyum, city engineer, reviewed the punchlist items (plantings, pavement
patch, fiber optics, flagpole, and turf restoration). Discussion ensued regarding the
obstacles the city would face to seek liquidated damages against Sunram Construction
as well as extra engineering and legal expenses. Ms. Rader noted the project
documentation and photographs captured by Stantec are invaluable.
Council directed staff to present Addendum #4 for project management by Stantec
Engineering on a future agenda for approval.
City Council Work Session May 16, 2022
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2021 ANNUAL
COMPREHENSIVE
FINANCIAL REPORT
Item 11.5
Mayor Hemken introduced for discussion item 11.5, Review 2021 Annual Financial
Report with Abdo.
Mr. Kirk McDonald, city manager, explained that Vicki Holthaus of Abdo is present to
review the audit with Council and that Bill Lauer of MMKR will attend a future
Council Meeting when Council is asked to accept the report. Mr. McDonald noted the
audit went well and there were no findings or deficiencies.
Ms. Vicki Holthaus, Abdo, provided financial highlights of the 2021 audit:
The assets of the city exceeded its liabilities by $96,073,515 at the close of the
year, of which $29,882,377 (unrestricted net position) may be used to meet the
city’s ongoing obligations to citizens and creditors.
Combined ending fund balances were $30,054,786, an increase of $2,599,535
compared to prior year. Approximately 22.1 percent of this total amount is
available for spending at the city’s discretion.
Unassigned fund balance of the General Fund was $8,624,063 or 51 percent of
total General Fund 2021 expenditures and transfers out. The city’s policy is to
maintain a 42 percent reserve.
The city’s total bonded debt decreased by $4,925,562 (9.1 percent) during the
current fiscal year. The key factor of the decrease was the scheduled principal
and interest payments.
Ms. Holthaus reported on fund balances and the American Rescue Plan Act (ARPA)
funding. She stated total general fund expenses were under budget by $773,618
primarily due to personnel changes in the police department and lower than
anticipated operating costs at the pool. She reviewed the fund balances of the street
and park infrastructure funds. She also reported on the enterprise fund balances and
noted the total net position of the funds (sewer, water, storm water, street lighting, golf
course, ice arena) increased by $2,840,485.
Ms. Holthaus stated the audit will be presented at a council meeting in June for formal
acceptance.
Council thanked Ms. Holthaus for the presentation.
ARPA FUND
TRANSFERS
Item 11.6
Mayor Hemken introduced for discussion item 11.6, Discuss American Rescue Plan
Act (ARPA) fund transfers.
Mr. Kirk McDonald, city manager, stated the city completed the Federal single audit
process in May, 2022, and an unmodified opinion was issued. In 2021, the city received
$1,142,382 in ARPA funding. He stated since the audit is complete, Abdo and staff
recommends the funds be transferred out of the general fund balance by transferring
$100,000 to the Economic Development Authority Fund for the Curbside Appeal
Program; $200,000 to the Information Technology Fund for a new police department
records management system; and the remaining $842,382 to the Public Works Facility
Fund for future facility improvements.
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Mr. McDonald stated it is anticipated that the city will be receiving a second ARPA
distribution of $1,106,158 in 2022, and it is recommended that those funds be
transferred to the Public Works Facility Fund upon receipt of the funds.
Council supported the recommendation and directed staff to place a resolution on the
May 23 Council Meeting agenda for approval.
PARK
INFRASTRUCTURE
FUND TRANSFER TO
ICE ARENA
OPERATING FUND
Item 11.7
Mayor Hemken introduced for discussion item 11.7, Discuss transfer from Park
Infrastructure Fund to Ice Arena Operating Fund.
Mr. Kirk McDonald, city manager, explained that staff is recommending Council
approve a $500,000 transfer from the park infrastructure fund to the ice arena fund for
ice arena debt service and capital improvements.
Ms. Vicki Holthaus, Abdo, stated the 2011A bonds will be paid off in 2028 at which
time it is assumed the transfer amount to the ice arena operating fund can be decreased.
Ms. Susan Rader, director of parks and recreation, indicated staff is trying to fully
implement a long‐term financing plan for all parks and recreation facilities/equipment.
Council supported the transfer and directed staff to place a resolution on the May 23
agenda for approval.
LABOR
NEGOTIATIONS
Item 11.8
Mayor Hemken introduced for discussion item 11.8, Resolution calling for a closed
meeting of the New Hope City Council authorized by Minn. Stat §13D.03 to discuss
and consider labor negotiations strategy.
RESOLUTION 2022‐61
Item 11.8
Council Member Elder introduced the following resolution and moved its adoption:
“RESOLUTION CALLING FOR A CLOSED MEETING OF THE NEW HOPE CITY
COUNCIL AUTHORIZED BY MINN. STAT §13D.03 TO DISCUSS AND
CONSIDER LABOR NEGOTIATIONS STRATEGY.” The motion for the adoption
of the foregoing resolution was seconded by Council Member Isenberg, and upon vote
being taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe,
Isenberg, London; and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted,
signed by the mayor which was attested to by the city clerk.
ADJOURNMENT The meeting was adjourned at 8:21 p.m. as there was no further business to come
before the Council at its work session.
Respectfully submitted,
Valerie Leone, City Clerk