08 21 23 Work Session MinutesCity Council Work Session August 21, 2023
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City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
City Council Minutes
Work Session Meeting
August 21, 2023
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:
Reece Bertholf, City Manager
Erin Enstad, Abdo
Vicki Holthaus, Abdo
Tim Hoyt, Director of Police
Valerie Leone, City Clerk
Jeff Sargent, Director of Community Development
Stacy Woods, City Attorney
Also present: Sarah Larson, WMFRD Chief
2023 TIF
PROJECTIONS
Item 11.1
Mayor Hemken introduced for discussion item 11.1, Update on Tax Increment Finance
(TIF) 2023 cash flow projections.
Mr. Jeff Sargent, community development director, informed Council that Abdo has
completed the annual analysis regarding the city’s active TIF districts. He introduced
Bonnie Schwieger of Abdo to review the cash flow projection analysis report and to
respond to any questions from Council.
Ms. Schwieger stated by using tax increment as an economic development tool, total
market value within the TIF districts has increased $234,054,065. She reviewed the
active TIF districts (03‐1, 04‐1, 04‐2, 11‐1, 1615, 1616, 1617, 1618 and 1619) and market
values within each active district. She also reviewed the inactive districts (85‐1, 85‐2
and 86‐1). She called attention to the available cash, outstanding obligations and
projected cash balance at the end of each district’s life. She stated the projected total
cash balance at the end of the districts’ life is $3,078,289 for the active districts and
$3,299,566 for the inactive districts.
Ms. Schwieger stated the largest cost is scattered site housing program with annual
cost of $500,000. She stated revenues are healthy with the tax levy and projected annual
5% increase. She stated many districts have interfund loans and as the loans are repaid
the cash available for pooling will increase.
Council Member London asked how the effectiveness of the TIF districts is estimated.
City Council Work Session August 21, 2023
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Ms. Schwieger indicated the additional market value is used for measurements. She
indicated goals are not always measurable in terms of numbers but indicated she will
consider ways to include additional reporting and benchmarks.
Director Sargent commented regarding the success of the scattered site housing
program. He also noted the strong interest from residents for the new curbside appeal
program.
Council thanked Ms. Schwieger for the report.
WMFRD 2024
BUDGET
Item 11.2
Mayor Hemken introduced for discussion item 11.2, Discuss West Metro Fire‐Rescue
District 2024 Budget.
Ms. Sarah Larson, West Metro Fire‐Rescue District Chief, stated there have been no
changes since the proposed fire budget was presented at the May work session. She
stated the total 2024 budget is $3,364,500, which is a $333,310 increase over the 2023
budget. The general operating budget increase is $183,310 or 7.5%, based on an
additional full‐time staff member, salaries, incentive pay for paid‐on‐call firefighters,
PERA, workers comp. insurance, medical exams, financial services and
communications. There is a $20,000 increase to the special revenue pension fund
contribution. The contributions to the budget from cities include a $103,600 lease
payment for the aerial truck (tower) and $150,000 lease payment for the new engines.
Chief Larson stated the costs of the budget are split between the two cities based on a
cost sharing formula that includes average number of calls over a five‐year period,
population, and taxable market value.
Council expressed support for the budget and directed staff to place the item on the
August 28 Council Meeting agenda for formal approval.
Chief Larson distributed a quarterly update through June 30, 2023. She reported on
calls for service, staff changes, and training. She stated the 25‐year anniversary event
on July 6 was well attended, Engine #2 was delivered on August 11, 2023, the overhead
garage doors and service doors have been painted, and the district received a $2,500
grant from CenterPoint Energy for the home safety survey program.
Discussion ensued regarding the leading causes of house fires. Council Member
London suggested educating the public regarding the fire risk by lithium‐ion batteries.
Mr. Bertholf reported positively on his observations of the fire district.
Chief Larson shared details regarding the upcoming live fire training scheduled for
October 7.
Council thanked Chief Larson for the update.
2024 PRELIMINARY
GENERAL FUND
BUDGET AND TAX
LEVY
Mayor Hemken introduced for discussion item 11.3, Discussion regarding 2024
preliminary budget and tax levy.
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Item 11.3
Mr. Reece Bertholf, city manager, advised Council the preliminary budget was arrived
at after meeting with department directors on several occasions. He stated the budget
meetings provided him the opportunity to learn the needs of the departments, and he
noted the service levels will be maintained with the proposed budget. He stated the
City Council must set the preliminary maximum tax levy for certification to the county
auditor by September 30. Staff recommends adopting the preliminary tax levy at the
September 11 Council Meeting. Directors will be invited to the September 18 work
session to review general fund budgets and to the October 16 work session to review
enterprise and utility fund budgets.
Ms. Erin Enstad, Abdo, stated the preliminary budget includes a total tax levy of
$20,075,245 which is an increase of 5.36% over last year. She stated the budget includes
a 5% levy increase for the street infrastructure fund, 5% levy increase for the park
infrastructure fund, and additional $300,000 in levies to fund three capital funds at
$100,000 each. She stated the budget increased by $601,767 to fund increases in
wages/benefits and $177,132 for the joint powers agreement with West Metro Fire‐
Rescue District.
Ms. Enstad stated the median home value in 2023 is $326,050 which is an 0.32% increase
from 2022. She noted the current estimated impact on residential homes based on the
5.36% increase in city tax levy is minimal ($1 to $4) and the tax burden is being shifted
to commercial and industrial properties. Mr. Bertholf pointed out the levy would have
been lower without the new capital levies totaling $300,000.
Council Member London emphasized the need for Council to be disciplined and
address adequately funding capital costs. Ms. Enstad indicated the capital funds are
included in the long‐term plan which will be reviewed this fall. She noted Council can
determine whether to increase future funding levels.
Council Member Isenberg inquired of the city manager’s opinion of the city’s budget
process compared to his former city. Mr. Bertholf stated New Hope’s budget process
is comprehensive and engages directors. He stated directors must justify any budget
increases. He commented regarding the city being fully developed with growth mainly
in the commercial sector. He indicated the statutory requirement to set a maximum
levy by September 30 is new to him. He acknowledged the need to forecast future
needs and strive to retain a strong financial position.
Council Member London inquired of the local government aid allotment for 2024. Ms.
Enstad stated it is $1,306,156 which is an increase of approximately $400,000 from last
year.
Mayor Hemken inquired how the city’s proposed 5.36% rate increase compares to
other cities. Mr. Bertholf stated other cities in the area are projecting an 8‐11% increase.
Council thanked staff for the presentation.
City Clerk Leone stated the Council will be asked to approve the preliminary budget
at its meeting of September 11, 2023.
City Council Work Session August 21, 2023
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ABDO CONTRACT
RENEWAL
Item 11.4
Mayor Hemken introduced for discussion item 11.4, Discussion regarding three‐year
contract renewal with Abdo for professional management services for years 2024‐2026.
Mr. Reece Bertholf, city manager, explained that representatives of Abdo are present
to answer any questions from Council regarding the contract renewal. He spoke
favorably on the level of service provided by Abdo and noted the contractual cost is
lower than the wages/benefits would be for an internal finance director.
It was noted the current cost is $137,250 annually and the three‐year proposal rates are
$156,500, $164,300, and $172,400. Ms. Erin Enstad, Abdo, stated the rate increase is 14%
the first year and 5% thereafter. Mr. Bertholf noted the cost of the long‐term plan
preparation is included in the contractual price rather than a separate project as it was
billed in previous years.
Council briefly reviewed the enterprise resource planning (ERP) system and timeline.
City Manager Bertholf pointed out the change will be a major undertaking, and Abdo
provided a quote of $28,500 for project management in year 2025.
Council supported the contract renewal with Abdo and directed staff to place the item
on a future council agenda for approval.
ADJOURNMENT The meeting was adjourned at 7:20 p.m. as there was no further business to come
before the Council at its work session.
Respectfully submitted,
Valerie Leone, City Clerk