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09 21 20 Work Session MinutesCity Council Work Session September 21, 2020 Page 1 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 City Council Minutes Work Session Meeting September 21, 2020 Civic Center 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 Cedrick Frazier, Council Member Andy Hoffe, Council Member Jonathan London, Council Member Staff present: Kirk McDonald, City Manager Jeff Alger, Community Development Specialist Tim Fournier, Director of Police Vicki Holthaus, AEM Rich Johnson, Director of HR/Admin. Services Valerie Leone, City Clerk Susan Rader, Director of Parks & Recreation Jeff Sargent, Director of Community Development Bernie Weber, Director of Public Works Stacy Woods, Assistant City Attorney CONCEPT PLAN FOR C-AXIS INC. Item 11.1 Mayor Hemken introduced for discussion item 11.1, Discuss concept plan for C-Axis Inc. campus at 7100 27th Avenue North. Mr. Jeff Sargent, director of community development, explained over the last several months, staff has held multiple meetings with representatives of C-Axis Inc. in regards to the possible construction of a new industrial campus at 7100 27th Avenue North. C- Axis Inc. manufactures medical devices and has offices in Hamel, MN and Puerto Rico. The business is growing and in need of additional sp ace and has been evaluating potential sites inside and outside of Minnesota, including New Hope, for its planned expansion. City staff and representatives of C -Axis Inc. have met with the Minnesota Department of Employment and Economic Development (DEED), which is offering potential assistance to the business if it elects to build in New Hope. DEED provided C-Axis Inc. with information on the type of assistance that may be available, including the Minnesota Investment Fund (MIF), Minnesota Job Creation Fund (MJCF), and Minnesota Job Skills Partnership (MJSP). Phase one of the project would involve constructing a 20,000 square foot building that would open in January of 2022. C -Axis Inc. would relocate 60 employees to the facility and another 40 jobs would be added within three years. The preliminary design would allow for C-Axis Inc. to expand the building by an additional 20,500 square feet in the future. There are currently two buildings located at 5.21 -acre industrial site at 7100 27th Avenue North. C-Axis Inc. is proposing to add a third building to the site without City Council Work Session September 21, 2020 Page 2 subdividing the parcel, thus requiring approval of a variance or a Conditional Use Permit (CUP) for Planned Unit Development (PUD). There is a large, wooded area at the southwest corner of the lot that would accommodate the proposed building. Prior to committing to the site, making plans to relocate equipment and employees, and preparing a full set of plans, C-Axis Inc. requested a meeting with the City Council to gauge their level of support for the flexibilities that would be required in constructing on the site. C-Axis Inc. has prepared a conceptual plan for the New Hope site and a brief introduction on the business and its vision for the site, both of which are attached. C-Axis Inc. is also requesting that the city support the MIF and MJCF applications. It is required that a local municipality sponsor the MIF loan via resolution of support, and the local unit of government must hold a public hearing on the request. Funds are awarded to local units of government, who provide loans to assist expanding businesses. DEED does not provide money directly to businesses, it loans funds to a local unit of government. DEED and the local government unit enter into an agreement that specifies that the money must be used to assist the specified business. The funds are then loaned to the business by the local unit of government. The loan can either be forgiven (after the business meets its goals) or repaid to the local government agency. If repaid, the local government unit keeps 40% of the repayments, up to $100,000. If the local government unit elects to recoup the repayments, it must then create a revolving loan fund with the money retained from the repayment. The funds can only be administered to other businesses if the city follows the same project selection process and expenditure requirements that DEED utilizes when administering MIF loans. The city essentially serves as a pass through entity for the loan. In 2019, the City Council supported forgiving the portion of a MIF loan to Abel Conn that could be recouped by the city, though the project did not proceed. This practice is common amongst other cities and would make New Hope more competitive in its efforts to attract C-Axis Inc. as it evaluates potential locations for the project. Director Sargent stated Jared Haley of C-Axis, Inc. is available to address the Council. Mr. Sargent stated if the City Council supports the concept plan, staff will prepare a letter of support to be signed by Mayor Hemken. Mr. Jared Haley, vice president of operations for C-Axis, Inc. was recognized. He explained their family-owned business and growth opportunities. He asked for Council’s support for the construction of a campus at 7100 27th Avenue North. Mr. Jeff Alger, community development specialist, commented regarding the upfront costs required for expansion and the applicant’s request for conceptual support prior to submission of a formal land use application. He stated i f Council is supportive, a letter of support would be prepared. Council discussed the loan program, job creation, and land acquisition. Mr. Haley noted if approved, the company would relocate to New Hope and would remodel the Hamel property for different market. Mayor Hemken disclosed that she is friends with the Haley family and that she has no financial gain or conflict of interest by voting on the issue. City Council Work Session September 21, 2020 Page 3 The Council unanimously expressed support for the project. Mr. Sargent indicated the next step is the application process through the Planning Commission/City Council and approval of the DEED grant. Mr. Haley thanked the Council for its support. REDUCED PRESSURE ZONE DEVICE (RPZ) Item 11.2 Mayor Hemken introduced for discussion item 11.2, Discussion regarding reduced pressure zone device (RPZ) monitoring throughout the city. Mr. Jeff Sargent, director of community development, stated staff is exploring whether the city should hire a company to help with the monitoring of RPZs throughout the city. He explained the 2015 Minnesota Plumbing Code requires that all testable Reduced Pressure Zone devices (RPZs), or backflow prevention devises, be tested annually and the results submitted to the authority having jurisdiction. RPZs are required to ensure that water systems do not discharge pollution or contaminated water back into the drinking or city water supply. Currently, staff accepts and records permit applications for installing an RPZ and for testing/rebuilding one. Staff does not have monitoring program in place to guarantee the monitoring or testing of the private RPZs throughout the city takes place. This does not mean the RPZs haven’t been tested, only that the city has no record of it. In many cases, the testing company does not get a permit for testing, nor do they inform the city when the tests are performed. Most typically, RPZs are required for commercial and industrial uses, mostly for underground irrigation systems and boilers, however there are some residential irrigation systems that have RPZs as well. Just recently, there has been a larger push by the Minnesota Pollution Control Agency for cities to more closely monitor which properties have RPZs and whether or not they are being tested annually. Mr. Sargent stated staff has been approached by Brycer, LLC, a company who could help the city monitor the RPZ permits and testing throughout the city. Brycer would enter into a contract with the city and would be given the city’s information regarding the existing RPZ permits that have been issued. The company would then contact the permit holders and ask for any inspection records of the RPZs. If no testing has been conducted, Brycer would then require those inspections, on behalf of the city, and work with the testing agency to ensure the tests get complete. Brycer works directly with the testing agency and charges them for the testing results which are required by the state. The city benefits by obtaining the initial permit fee f or the RPZ and the compliance with state requirements to ensure that the RPZs get tested on an annual basis. Mr. Bernie Weber, director of public works, emphasized the need for RPZs to prevent contamination of drinking water. Council Member Elder noted Brycer has a good track record. Council Member London inquired whether the city is not in compliance with state statute. He also inquired if property owners could use other vendors. Mr. Weber stated property owners could utilize any licensed plumber. He noted the city could be found negligent if a backflow prevention device malfunctioned. City Council Work Session September 21, 2020 Page 4 Mr. Sargent commented that MPCA is encouraging cities to more closely monitor the need for RPZs and the annual testing. He stated the city does not have adequate st aff to dedicate to the process. The majority of Council expressed support for utilizing an outside company such as Brycer, LLC. Mr. Kirk McDonald, city manager, stated the city attorney reviewed the contract and found it to be in order. He stated staff will present additional information regarding the plumbing code and MPCA requirements. PERFORMANCE MEASUREMENT REPORT AND SMART GOALS Item 11.3 Mayor Hemken introduced for discussion item 11.3, Update on Performance measurement Report and SMART goals. Mr. Jeff Alger, community development specialist, reviewed the 2020 Performance Measurement Report and SMART goals document that contains data of 2016-2019. Mr. Alger requested Council’s approval to post the document on the city website. Council accepted the report and complimented Mr. Alger for his work. Council Member Elder recommended a one-page summary/fact sheet be included with utility bills to make residents aware of the report. Mayor Hemken noted she will also mention the report during her segment on CCX. ECONOMIC DEVELOPMENT REPORT Item 11.4 Mayor Hemken introduced for discussion item 11.4, Update on Economic Development Report. Mr. Jeff Alger, community development specialist, stated the report was developed in 2016 and is updated annually. He stated the economic development report highlights redevelopment projects throughout the city from the previous year and the tools that are in place to promote development activity. He stated the city’s EDA promotes and facilitates business development and housing redevelopment activities. He noted the report was utilized in 2017, when bonds were issued for the new police station/city hall construction project and again in 2019, when bonds were issued for the swimming pool complex. He noted the 2020 report highlights the following projects: IronWood, Windsor Ridge, City Hall/Police Facility, Now Mart, Automotive Concepts, Cooper High School, CubeSmart Self Storage, Hy-Vee Aisles Online (delayed), Holy Trinity Church, Arizona Taco Co., and AbelConn, LLC. Council discussed the effectiveness of the scattered site housing program. Council Member London encouraged staff to advertise the programs offered through CEE. Council accepted the report and supported posting it on the city’s website. FEMA AND CARES ACT FUNDING Item 11.5 Mayor Hemken introduced for discussion item 11.5, Discuss FEMA and CARES Act Funding for COVID-19 Pandemic Expenses. Mr. Kirk McDonald, city manager, explained the city is eligible for two types of funding reimbursements from federal agencies/programs: 1) FEMA (Federal City Council Work Session September 21, 2020 Page 5 Emergency Management Assistance), and 2) CARES Act funding or CRF (Coronavirus Relief Fund). Both programs have detailed regulations and reimbursement guidelines and require a significant amount of staff/consultant time to compile the appropriate documentation for submittal. The CRF funding requires that the city formally approve a plan regarding how the funds are spent and a reimbursement request has not been submitted to date. FEMA reimbursement requests do not require formal council approval and are more routine in nature. Mr. McDonald stated the city needs to develop a plan regarding how the CARES Ac t funds will be spent and the plan needs to be formally approved at a future council meeting. He stated $1,641,644 was allocated to New Hope for the CARES Act. He explained there are many regulations and reporting requiremetns that are labor intensive and a change order to AEM’s contract is recommended. He also noted the city has received funding requests from the YMCA and Seven Dreams Foundations. He noted it is not clear whether the city can directly allocate funds to non-profits. Ms. Vicki Holthaus, AEM, explained some of the guidelines including categories of eligible expenses. She noted public safety personnel is the city’s largest cost. Discussion ensued regarding public safety’s staffing during the pandemic for the police department and West Metro Fire Rescue District’s duty crew. Mr. McDonald stated if the duty crew costs are not eligible for federal funding, the costs will need to be shared between New Hope and Crystal. Mr. McDonald commented on budget shortfalls for revenues especially in Parks and Recreation Department due to COVID-19. He commented that New Hope phased employees back to work and opened doors to customers on June 1 which was ahead of other cities. Council discussed impending deadlines and possible duplication of funding to other agencies. The consensus of Council was not to distribute city -allocated funds to non- profit organizations or the school district. It was noted if the city does not utilize the full allocation, the funds must be returned to Hennepin County for a future redistribution. Council Member Frazier inquired if staff is aware of any cities that developed programs for housing funds to prevent landlords from evicting tenants. Ms. Holthaus stated she is unaware of any such city programs. Ms. Holthaus stated she will meet with the city’s auditor to review funding priorities to ensure they agree with the city’s allocation plan. Council supported placing a change order with AEM on the September 28 Council Meeting agenda. 2021 GENERAL FUND BUDGETS Item 11.6 Mayor Hemken introduced for discussion item 11.6, Discussion of 2021 general fund budgets with city manager and department heads. Mr. Kirk McDonald, city manager, stated the 2021 general fund budget is $15,936,977, which is an increase of $526,427 (3.4%) over the 2020. He reviewed the major changes City Council Work Session September 21, 2020 Page 6 in the budget. He stated the tax levy for the general fund is $1 0,879,465 which is a $368,034 or 3.5% increase over the 2020 general fund levy. The city manager and department directors reviewed major projects or changes planned for 2021 as outlined in the budget narratives:  Mr. McDonald reported on the proposed budgets for Mayor and Council, City Manager, Assessing, City Hall, Elections, and Fire Services.  Mr. Rich Johnson, director of human resources, reported on the proposed budgets for Human Resources, Finance, Communications, and IT.  Mr. Jeff Sargent, director of community development, reported on the proposed budgets for Planning, Inspections, Legal Services, and EDA.  Mr. Tim Fournier, director of police, reported on the proposed budgets for Police, Police Reserves, and Animal Control. He also reviewed recommended personnel changes.  Mr. Bernie Weber, director of public works, reported on the proposed budgets for Streets, Engineering, Street Infrastructure Fund, and Central Garage.  Ms. Susan Rader, director of parks and recreation, reported on the proposed budgets for Recreation, Parks, Swimming Pool, and Park Infrastructure Fund. Mr. McDonald advised Council the enterprise and utility fund budgets will be presented at the October 19 work session. Council thanked the department heads for their presentations. ADJOURNMENT The meeting was adjourned at 9:30 p.m. as there was no further business to come before the Council at its work session. Respectfully submitted, Valerie Leone, City Clerk