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HomeMy WebLinkAbout2025.06.09 CCM STUDY6/09/25 1 MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION JUNE 9, 2025 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Acting Mayor Pro Tem Kris Lawrence-Anderson at 6:06 p.m. ROLL CALL Mayor Pro Tem Teneshia Kragness, Councilmembers Dan Jerzak, Kris Lawrence-Anderson, and Laurie Ann Moore. Also present were City Manager Reggie Edwards, Finance Director Angela Holm, Interim City Clerk Shannon Pettit, and City Attorney Siobhan Tolar. Mayor April Graves was absent and excused. CITY COUNCIL MISCELLANEOUS DISCUSSION ITEMS Councilmember Lawrence-Anderson asked if there were any questions on the agenda. Councilmember Jerzak asked two miscellaneous questions on some updates about the North Port Park, as they have received many emails regarding that. He understood that the contact information from the Parks and Recreation Department was given directly to the constituents so they could contact the Parks and Recreation Department with questions. City Manager Reggie Edwards responded that he would find out if the Parks and Recreation Department had given out their contact information so they could communicate directly with constituents and put it in the weekly newsletter. Councilmember Jerzak asked if what they were doing was effective. Dr. Edwards responded that they do not have the issues they had several years ago in their parks, but they do have some sporadic events that have happened, but nothing like they were three years ago. Councilmember Lawrence-Anderson asked the Council if everyone had received the email with photos of North Port Park, and everyone responded that they had. She stated that the images were similar to those of prior years. Dr. Edwards noted that he is referencing the numbers as being better, as they had a much larger volume of calls about multiple parks in previous years. They have received compliments about things happening in the parks as well. 6/09/25 2 Councilmember Lawrence-Anderson stated that North Port has not changed. Dr. Edwards agreed it had not changed and said he did not know if more than one event had happened in North Port, but he would find out that information. Councilmember Lawrence-Anderson stated her concern was that they are so early in the park season, and the neighbors have been traumatized for years. She concurred with Councilmember Jerzak that they are not being effective there and would like to find a new strategy for that park because what the Council is currently doing there is not working. Dr. Edwards stated that he did not hear Councilmember Jerzak say that what the Council is currently doing at North Port is not working. Councilmember Lawrence-Anderson asked Councilmember Jerzak to clarify because maybe she had misspoken. Councilmember Jerzak clarified that he thinks the Council should revisit whether they are being effective because of the volume of emails he has received with the same complaints. He stated he did not know what was happening in that park and wanted to follow up with the Council and find out. He said that maybe the volume of complaints is down, but if constituents are being driven out of their backyard two or three times instead of ten, it is still unacceptable, and he wanted to relay that to the Council. Dr. Edwards stated that he would communicate with Staff and compile a report on what had transpired. He will report back to the Council if they are being effective in their parks, especially regarding large gatherings. Councilmember Jerzak asked if Dr. Edwards could make sure that constituents have the contact information for Parks and Recreation. Dr. Edwards stated he would. Councilmember Moore stated to Dr. Edwards that in the newsletter received by all constituents last week, the special events permit process is on the second-to-last page. She would like to see if parties of over 100 are submitting their permit at least 45 days before the planned event. She also asked if there were sound ordinances in place for parties in the parks and if there was any follow- up by City Staff after a complaint was made by neighbors to check for damages and garbage. Dr. Edwards stated that he would communicate with Staff and prepare responses. He stated that he knows Staff does follow up, but he will report to what extent after complaints are made. Mayor Pro Tem Kragness stated that she remembered voting on the creation of the special events permits and distinguishing the number of their party, as well as deposits that had to be made by the party involved. Councilmember Jerzak stated his understanding was that the lease for liquor store #2 expires at the end of the month, and they had a Work Session at their last meeting about the direction that the store was going. He asked if, once the lease expires, the store is going to enter a month-to-month lease agreement with the owner and if there was any resolution to the issue. 6/09/25 3 Dr. Edwards stated that they would continue to negotiate on that, and he anticipates them coming back to the Council at the next Council meeting for an update on the end of the existing lease. He stated they could ask the Finance Director at that time if there was anything she needed to add. Ms. Holm stated that there has been discussion with the landlord on different options and is evaluating the cost. Councilmember Jerzak asked if they were willing to continue the lease on a month-to-month basis. Ms. Holm stated that the month-to-month is one of the options being evaluated. Mayor Pro Tem Kragness stated that at the last meeting, the Finance Director and Liquor Store Manager discussed that the property owner was not interested in doing a month-to-month lease and that it had to be all or nothing. Dr. Edwards stated that the property managers were not at the last meeting about the liquor stores, but they are in negotiations with the landlord at this time. Councilmember Lawrence-Anderson asked if they must give notice of non-renewal. Ms. Holm stated the lease ends on June 30, and we do not have to give notice of non-renewal; however, we need time to remove all of our stock and inventory from the building. She stated that the landlord is not interested in long-term month-to-month; however, if operations are discontinued at store #2, we could ask if they would be willing to do a short-term month-to-month in order to remove inventory and city possessions. Councilmember Lawrence-Anderson noted that in reading the minutes from the prior meeting, there were a lot of building updates that needed to be made, such as the HVAC system and flooring. She asked why it would be their responsibility if they were leasing the property. Ms. Holm stated that the HVAC would not be the responsibility of the city, and it would be built into the lease agreement, as well as flooring, tile, and painting. Mayor Pro Tem Kragness asked if Staff felt like they had enough time left to negotiate, as they were getting close to the deadline with no definitive answer. She also asked if an extension would be needed to give the Staff some more time. Ms. Holm stated that the city has had conversations with the landlord and expressed that there is a timeline involved and want to find a resolution quickly. The landlord offered two additional options which will be presented to council. Councilmember Jerzak stated he is feeling a sense of urgency because they have not gotten Staff direction yet on how to move forward with liquor store #2. He asked if they were going to have time to remedy this before the deadline. 6/09/25 4 Dr. Edwards stated that it is urgent, and at the last Council meeting, there were a few things the Staff still needed to negotiate with the landlord. Once those negotiations are done, staff will report to Council at the June 23rd meeting. Mayor Pro Tem Kragness reiterated that the Council did not have a consensus on closing liquor store #2 at the last meeting, but did not want this lease expiring to force their hand and have to close the store. Dr. Edwards stated that if the lease expires, the store will have to close, which has always been the case. He stated that the last meeting was about whether operations would continue at liquor store #2. At the next meeting, staff will report on the lease negotiations, and if the Council does not find those terms agreeable, then operations at liquor store #2 will not continue. Councilmember Jerzak concurred with Mayor Pro Tem Kragness that the Council was split on whether operations should continue at liquor store #2. He asked if there was any value in taking a poll with the Council now on how they felt. With a new lease, the Council would need to make new projections on profitability. He does not want to prematurely close the store if it can be profitable, but does not want to have to decide so close to the lease deadline either. Mayor Pro Tem Kragness noted that at the last meeting, liquor store #2 was projected to be profitable. Councilmember Lawrence-Anderson asked how they are in this position when they have two enterprise entities and continue losing money. Dr. Edwards stated that Finance Director Angela Holm could add input too, but at the last meeting, staff showed the Council a negative balance for 2025, but then a less than ten thousand profit, and moving forward, the store would generate a $40,000 profit a year. There would not be a prolonged deficit beyond a year, and it would not affect taxpayers because there is a reserve in the Liquor Store Fund that would absorb that deficit. The stores do generate money and do not have a negative effect on taxpayers. Mayor Pro Tem Kragness stated that the answer to Councilmember Lawrence-Anderson's question is that even though these enterprise entities are not generating as much money as they would prefer as a City, there is a reserve built in to help cushion a deficit. Councilmember Lawrence-Anderson asked where the reserves come from. Dr. Edwards referred to Finance Director Holms on that question, but stated that the Liquor Store Fund has its own reserve and does not draw from reserves of the City at large or from general funds. Finance Director Angela Holm noted that it is important to understand that the Liquor Store Fund operates as one enterprise fund, even though it has two stores. At the last meeting, they were attempting to parse out different business units, and that is where the apparent loss in liquor store #2 became obvious. Had they presented it as one enterprise fund, it would have only shown a profit since liquor store #1 covers liquor store #2 in profitability. She stated that she had discussed this 6/09/25 5 with Operations Manager Greg "Woody" Keehr, and it became clear that they needed to address the deficit at liquor store #2. They have already made staffing changes in liquor store #2 to make it more profitable. It is projected that by the end of 2025, these changes will result in a deficit of less than $1,000 or may not even result in a loss at all in profit. The liquor store has a solid, positive cash reserve, and even with a bond payment, they are still generating funds for their reserve. With new projections, she believes they will be able to cover their bond payment and build their cash balance. The Liquor Store Fund will not be able to contribute to the General Fund or tax levy until its bond payment is covered, which is $150,000 a year. Councilmember Lawrence-Anderson noted she was not at the last meeting but had read through the minutes thoroughly and still does not understand why liquor store #2 is being kept open even though it is not profitable and is only a mile away from liquor store #1, especially when liquor store #1 is so profitable. She stated she does not support keeping liquor store #2 open. Mayor Pro Tem Kragness replied that at the last meeting, the Operations Manager explained there were a lot of reasons why liquor store #2 was being kept open, even though liquor store #1 was carrying it. Having two stores open allows them to buy at bulk discount, and if liquor store #2 closed, liquor store #1 would not be as profitable. Councilmember Lawrence-Anderson stated that her background is in purchasing, and it is all in how you negotiate. She noted there may be merit to the bulk discount claims, but she is not convinced. Dr. Edwards stated that Finance Director Holms could follow up, but noted that liquor store #2 will make money with a projection of $40,000 a year moving forward and a projected deficit loss of less than $1,000. Mayor Pro Tem Kragness noted that the projected deficit would be $588 at the end of 2025. Dr. Edwards continued that liquor store #2 generates cash flow and will continue to do so as they move forward. Ms. Holm explained that the staffing changes they are making will start generating net income for both stores. Councilmember Lawrence-Anderson asked why they have not been implementing the staffing changes until now. Ms. Holm stated she does not want to blame anyone specifically, but it was business decisions that were made over the last eight years. Those decisions included building a new store, getting a bond, staffing decisions, and not aggressively pursuing bulk buying opportunities. The previous Liquor Manager only looked at gross profit instead of net income, and net income is impacted by low expenses and increased sales. Being on the State Auditor’s deficit list gave them the opportunity to parse out their issues, report them, and move forward with the enterprise. Mayor Pro Tem Kragness noted that the questions the Council had asked contributed to them 6/09/25 6 making a plan for profitability, and it seems like they are on their way to doing that. When she was on the Finance Commission, she did not recall hearing any specific plans on how the liquor stores would generate a profit, and it was just about surviving. Councilmember Moore asked if the only option was to sign a new 10-year lease if the Council decided not to close liquor store #2. Ms. Holm stated that is not the only option. The landlord brought two other options forward last Friday: a three-year lease or a five-year lease. Staff will outline those lease options with costs in their projections and show the Council at the next meeting. Councilmember Moore said she was happy to hear there was more than one option on a lease agreement. She asked how much money was in the reserve account for both stores. Ms. Holm responded that she did not know the exact number, but the last she knew, it was around $700,000. Councilmember Moore stated that was more than she anticipated and asked if, in the event the Council chose to close liquor store #2, they could use that reserve to pay off the bond payment for liquor store #1. Ms. Holm stated that would be an option. Councilmember Moore asked if the $700,000 in the reserve account could only be used within the Liquor Store Fund enterprise. Ms. Holm replied yes, there are opportunities, but they would have to look at debt services, months of operation, among other things, and there is a minimum that must be kept within the operation. If there was excess, she would not recommend draining the reserve account, but paying off the bond payment could be an option. Councilmember Moore stated she was not in total support of municipal liquor stores, in general, but now that she knows there is a reserve in the Enterprise Fund to pay the bond payment, it is becoming more enticing. She acknowledged that Mayor Pro Tem Kragness said there would be an effect on employees if the store closed, but there is an effect on the City regarding things happening statewide and nationally. She would like to discuss those issues further during the budget prioritization discussion, but for the record, she is in favor of closing liquor store #2. Councilmember Jerzak stated he is willing to listen to the new projections and lease proposals despite being uncomfortable keeping liquor store #2 open. He noted that the Council is currently at the consensus of closing liquor store #2. He asked if the liquor store Staff is comfortable with the short time frame to negotiate the lease, knowing that the Council was in favor of closing the store. He also stated that at the last meeting, the Operations Manager discussed the discounts for buying by the case, and he would like to see how much of an advantage there is with the cost compared to net profits versus gross profits. Mayor Pro Tem Kragness stated that she is not in favor of closing liquor store #2 and has confidence in the Staff and the projections. She thinks it would be premature to discuss closing liquor store #2 until the Council can see the new lease contracts and make an informed decision. Councilmember Lawrence-Anderson stated that this decision is getting down to the wire now, and she would be willing to give the liquor store #2 a one-year lease option to see if they could make 6/09/25 7 it work. She is more confident in the direction in which liquor store #2 is going, but the Council should push the landlord to make the lease shorter, as the Council is on the fence about liquor store #2 staying open. She also suggested making the HVAC and new flooring improvements part of the new lease agreement. She is trying to find a way to say yes to keeping the store open, but lease negotiations need to be aggressive; otherwise, her vote is to close it. Ms. Holm said she would ask for the one-year lease option and see if it is possible. Dr. Edwards stated he understood the direction the Council wants to go and will come back with numbers to show the Council. Councilmember Lawrence-Anderson said the Council has the power to make this lease negotiation go in its favor. She cited her previous experience in purchasing and suggested strong-arming the landlord to get the improvements and the length of the lease that the Council wants. She thanked Ms. Holm for all her efforts. Councilmember Moore commented that at the last meeting during the Open Forum, there was a request to adopt a pet store ordinance, and she would like to follow up on that. She noted that there have been a lot of questions about water restrictions and gardens, but after the newsletter came out, it was clarified at a neighborhood meeting that water restrictions do not apply in those cases. She pointed out that there is some conflicting information on the City’s website versus the newsletter, and she would like some clarification on that. Councilmember Moore asked if there was a time during the Council report when they could talk about upcoming meeting times and dates for viewers of the meetings, so they could get that information. She mentioned events like Night to Unite for community engagement, Random Acts of Kindness, and the joint Brooklyn Center and Brooklyn Park Juneteenth celebration. She said it would be nice to have reminders for these events for viewers instead of just reading proclamations at the meetings. Councilmember Moore asked Dr. Edwards about the legal services contracts. She also asked if the prosecution's legal services and cities have the same rates from 2010, as stated in the Council’s packets. If the rates have changed in the last 15 years, they need updated information. Dr. Edwards stated that the numbers in the contract in their packets are current and accurate and have been adjusted to show current-day rates. Councilmember Moore asked if they were charged any time someone asked the City Attorney a question. Dr. Edwards stated that is correct. Councilmember Moore asked if that pertains to community members, Staff, and Council as well. Dr. Edwards stated that the City Attorney does not engage in inquiries from community members. Councilmember Moore asked if everything else falls under legal services, such as the Mayor asking questions during a Council meeting, when they are being charged an hourly rate. Dr. Edwards explained that Council meetings have a flat fee that the City pays the City Attorney. If a question comes up outside of a meeting and they call the City Attorney, the clock starts, and the 6/09/25 8 City is charged an hourly rate for that call. Councilmember Moore asked if the City gets a breakdown of those calls and charges, and when the Council gets them. Dr. Edwards said it is in their contract; it shows per hour what the City is charged depending on the subject matter. Councilmember Moore asked if it is part of the City Attorney’s quarterly report on billed services, and Dr. Edwards confirmed it is. Councilmember Lawrence-Anderson asked if it was the consensus of the Council that certain constituents do not have access to the City Attorney. She noted there have been instances where residents have gone directly to the City Attorney instead of the proper Staff. Dr. Edwards suggested that it does not happen, and the City is not billed for those calls. If a constituent called the City Attorney, they would be told that the attorney could not help them, so it would not be necessary to make any changes. City Attorney Shiobhan Talor addressed the Council and said she is their City Attorney, so she represents Brooklyn Center and is counsel for City Staff and City Council. If she receives questions from constituents, she refers them to Dr. Edwards. Councilmember Jerzak asked if they could move on to the next miscellaneous item. He discussed how important community engagement is and described an event he attended at Palmer Lake, where there were thirty residents in attendance and another event where there were only six residents in attendance. He suggested having events at two, three, or four parks on the same night so people can get to know each other. He stated that he wants constituents to see that the Council is responsible with taxpayer dollars for these events. Councilmember Lawrence-Anderson concurred with Councilmember Jerzak and stated that her Orchard Lane neighborhood meets, but other nearby areas could be merged with hers to have one event at the same time. She thinks that merging different areas by regional location could be something they explore next year. Dr. Edwards respectfully asked the Council to design those regional location meet-ups so that they can be raised to the policy level and figure out other options, as opposed to telling the City Staff how this work should be done in regard to City engagement with the community. Councilmember Lawrence-Anderson apologized to Dr. Edwards and said she was not trying to indicate that she wanted to change any policies but was throwing out options for Staff to consider. She said the events that were being held were great events, but might have had better attendance if those events had been combined with other areas. She again apologized if it came across the wrong way. Mayor Pro Tem Kragness stated that Councilmember Moore had discussed earlier that these events needed more advertisement, and that may help with attendance levels. 6/09/25 9 Councilmember Moore asked if this was the first year that the departments made presentations to Council. Dr. Edwards stated that the departments have done presentations before, but they started last year and only got halfway through all the departments, so this year will be the first year that every department has presented. Councilmember Moore asked if, during those presentations, was the time to ask questions to the departments from a policy perspective, versus the Council having discussions about it during Council meetings. She said a few years ago, community engagement events were well attended, and the poor attendance now should be on Dr. Edwards' radar as well as the Directors and their designees to better utilize Staff during those events. Councilmember Jerzak concurred with Dr. Edwards' comments but noted that this is the third time he has discussed this, and nothing has changed. He brought it up to get a pulse from the Council and discussed it with Dr. Edwards, and if the departments come back and say that they will continue to operate this way because it works and it is what the citizens want, then that is okay too. His concern was purely the attendance levels. Dr. Edwards stated that City Staff thinks about community participation on a daily basis, so they are trying, and there are some things that they will explore to figure out what is working and what is not. Councilmember Lawrence-Anderson asked for clarification on 6e, the tax rule, and special assessments for Brooklyn Center ’s little league fields and wanted to confirm that they are not forgiving the past due balance but are trying to accommodate them and work out a payment plan over five years. Dr. Edwards confirmed that this is correct. Mayor Pro Tem Kragness called for a two-minute recess from 7:20pm until 7:22pm. Dr. Edward stated that before they go on a recess, he wanted to mention that Staff is doing a new process for 2026 with the legislature pertaining to a bonding request, so it will not only go through their Legislators, but also through a portal application process, and the deadline for 2026 is coming up on Friday, June 13. He intends to make applications for the bonding requests for this year to accommodate changes if they need to be made. Mayor Pro Tem Kragness agreed that those bond requests should get in. Councilmember Moore confirmed the bond requests were regarding the TIF, Central Garage, and infrastructure for the opportunity site. CITY MANAGER MISCELLANEOUS DISCUSSION ITEMS Dr. Edwards stated that the last item to discuss is the audit presentation on July 21, and the Staff will still have the audit available on June 30. The auditor is not available until July 21 to do the presentation, so he would like to set the date. 6/09/25 10 Councilmember Lawrence-Anderson asked if the audit would be distributed to the Council in advance, and if they have questions, they can call the auditor. Dr. Edwards stated he would not call the auditor as he was only available for the presentation as scheduled. Councilmember Lawrence-Anderson explained she was asking because the audit has a lot of material to go through, and she wants the opportunity to go through it thoroughly before the presentation. Dr. Edwards introduced the new City Clerk, Shannon Pettit. The Council congratulated Ms. Pettit and said they were happy to have her on board. Councilmember Moore asked if that means the Deputy City Clerk position is now open at this time. Dr. Edwards stated it is, and that position is still a part of the budget at this time. Posts and interviews have been made for that position. Mayor Pro Tem Kragness called for a two-minute recess before the Regular Session from 7:33pm until 7:35pm. BUDGET PRIORITIZATION DISCUSSION CCX BROADCAST OF STUDY SESSION Mayor Pro Tem Kragness stated they will move the Budget Prioritization Discussion and CCX Broadcast items to the next meeting. Councilmember Lawrence-Anderson said she would like to discuss those items after the Regular Session. Dr. Edwards stated they do not have a Work Session scheduled for this evening, so they have to create a Work Session now and discuss those two items there. Mayor Pro Tem Kragness asked if Councilmember Lawrence-Anderson wanted to discuss both items instead of going home. Councilmember Lawrence-Anderson stated she really wanted to discuss the budget prioritization schedule. Councilmember Moore made a motion and Councilmember Jerzak seconded to add Budget Prioritization Discussion to the Work Session agenda that will be held after tonight’s regular Council meeting. Motion passed unanimously. ADJOURNMENT Mayor Pro Tem Kragness adjourned the meeting at 7:10 p.m.