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HomeMy WebLinkAbout1995 10-02 CCM Special Work Session MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL WORK SESSION OCTOBER 2, 1995 INN ON THE FARM CALL TO ORDER The Brooklyn Center City Council special work session was called to order by Mayor Myrna Kragness at 7 p.m. ROLL CALL Mayor Myrna Kragness, Councilmembers Kathleen Carmody, Debra Hilstrom, and Kristen Mann. Also present were Interim City Manager Cam Andre, Director of Finance Charlie Hanson, Director of Public Services Diane Spector, Community Development Director Brad Hoffman, Liquor Store Supervisors Jeanie Mueller and John LaChance, Earle Brown Heritage Staff Judith Bergeland, Mark Lynch and Steve Barrett, and Council Secretary Carla Wirth. Councilmember Barb Kalligher was absent. ADOPT AGENDA Councilmember Mann requested that Item 5, Discuss Labor Negotiator, be added to the agenda. EXECUTIVE SESSION ANNOUNCEMENT Councilmember Mann announced the Council will meet in Executive Session following adjournment of the meeting to discuss the new unit contract proposal. DISCUSSION ITEMS Liquor Store Study In response to Councilmember Mann, the Director of Finance explained the difference between cost of sales, revenues and expenses. He further explained if the City goes to private liquor, they would receive property tax plus $200 per store per year for the license fee. The Director of Finance reviewed which liquor store locations are owned or leased. The Council discussed the space needs of the Police Department and options for accommodating them at the current liquor store at the 69th and Humbolt location. The Director of Finance pointed out that space would then need'to be leased to relocate the liquor store which results in high cost as well as inefficiencies in operating part of the Police Department at a separate location. 10/2/95 - 1 - Councilmember Mann stated if Brooklyn Center is in the liquor business, then more of a profit should be made. She asserted that a $100,000 profit is not large enough given the investment and questioned how revenues could be increased. Net profit usually exceeds $100,000 per year. The Director of Finance advised the ross profit is 23 % -25 % of sales. Last year it was g P Y $139,000 and this year is projected to be $130,000 with $100,000 being transferred to the General Fund and the balance used for capital outlays. He speculated that after several more years when the cash position is better, the City could transfer more than $100,000. Jeanie Mueller, Liquor Store Supervisor, reported on the percentage of mark up on various inventory and that the municipal prices are competitive with the private sector. The Director of Finance explained the difference between mark up and gross profit, and estimated the City is receiving a 30% to 35% return on their investment. Mayor Kragness noted the Council needs to compare being able to sell the liquor operations for an estimated $400,000 and the ability of the liquor stores to generate $100,000 per year for the General Fund. She uestioned the type of advertisement being conducted and whether sales or q .P g special prices are offered. John LaChance, Liquor Store Supervisor, explained there are a lot of State stipulations regulating price advertisement for municipal liquor operations. He advised the Managers constantly consider what the competition is doing and he believes the municipal operation is competitive. I Mayor Kragness pointed out the question of municipal liquor has been put before the voters several times and they always vote to keep municipal liquor in Brooklyn Center. Discussion turned to the option of moving the liquor store operation from 63rd Avenue to 69th Avenue where traffic levels are 40% to 50% higher. The Director of Finance advised this will require more study to determine cost of building and /or lease, operation, added operating expense, etc. He stated he believes sales will be increased but not by 40% to 50%. Councilmember Hilstrom stated she is concerned because the Brooklyn Center liquor stores are showing a 50.5 % decrease in profits. She questioned the amount of remodeling required at the 63rd Avenue store. The Finance Director explained the building, constructed in 1958 or 1959, needs a new roof and furnace. The real expense will be with the Fire Department side because they want to change the layout, kitchen and bathrooms. The Director of Public Services provided details on the option of the Fire Department expanding into the Liquor Store area, resulting change in occupancy, and need to meet Code requirements. Councilmember Hilstrom stated she would like to go out for RFP's to determine what the costs would be. The Director of Finance stated that doing an RFP only estblishes the qualifications 10/2/95 - 2 - of an architect, getting a building cost estimate requires design work, for which there would be professional fees. Mayor Kragness stated she talked with Fire Chief Boman who estimated the remodeling, meeting Code requirements, and accommodating the female fire fighter would cost a minimum of $1 million. The Director of Public Services speculated it could be closer to $1.3 million. Councilmember Hilstrom questioned how the needs can be met if the bond is not approved. The Director of Public Services explained this depends on how the "needs" are defined - minor remodeling to adjust housing for the female fire fighter or an extensive addition to provide additional training space, upgraded kitchen, handicap accessibility, etc. Councilmember Hilstrom asked when results of the residents survey will be known. The Interim City Manager stated the formal report will be presented on October 16th as well as the overview of the CIP. He advised the preliminary indications shown are surprisingly favorable. Councilmember Hilstrom stated her belief that Fire and Police protection are the top priorities a City has and they must be provided for. She stated she would like to see the survey results to determine whether the Council needs to reallocate resources to provide for these priorities Councilmember Mann stated this seems to be a reasonable approach since the survey results are needed before a decision is made. Councilmember Carmody questioned Council action based on the survey results. Councilmember Hilstrom stated this will warrant further discussion and investigation to determine how the Council can best utilize the available resources to meet the basic needs the City has. She stated she would consider moving the liquor stores or selling them and the residents will tell the Council whether or not they are willing to pay for facilities the Fire and Police Departments need. Mayor Kragness pointed out the Council has agreed to no levy increase but there will be increases in salary and other departments. She noted the Liquor Stores generate $100,000 each year for the General Fund and if one is eliminated, how will the funds be replaced. Councilmember Hilstrom stated she is not implying the City does not need the income, but questioned where the $1 million will come from to upgrade the Fire Department facility. If the residents don't support funding through the bond, the Council needs to address space needs and currently there is no plan if the bond does not pass. Mayor Kragness noted it appears the residents are positive but the Council has taken a negative approach about the bond issue and people watching meetings on cable television are questioning why they should support the bond issue if the Council is negative about it. 10/2/95 - 3 - Councilmember Hilstrom suggested this matter be discussed after the survey is completed. Councilmember Carmody stated she may support moving the location of one store but is opposed to considering sale of the liquor operations because she does not see how the income can be made up. Councilmember Mann questioned how much the City will receive if the liquor operation is privatized and operating in the existing facilities. The Director of Community Development estimated a net tax of 5% or about $15,000. The Director of Finance estimated it will be closer to $10,300 for the City's portion of property taxes since only two of the stores are not currently paying taxes (one is rented and currently paying taxes). Consensus was reached to table further discussion to the October 16, 1995, Council meeting. Earle Brown Heritage Center Councilmember Mann stated she is concerned about staff's recommendation to close the Inn on the Farm. The Director of Community Development clarified that is not staff's recommendation but rather an option for Council's consideration. Councilmember Mann indicated she does not support the option to close the Inn and requested discussion on the scenario of adding eight rooms. She asked if this option would require additional staffing. Councilmember Hilstrom asserted that every time the Council has approved expanding an operation, it results in losing more money, such as with the water slide. She noted the Center was to be profitable within seven years but it is still over $100,000 in debt. Based on these two opening statements discussion ensued between the Council and Heritage P g g Center staff regarding the options as presented by staff and the Marquette Partners study indicating it is pessimistic that the Inn could ever break -even financially given the size of the Inn, the need to operate on a 24 -hour basis and comparable worth salaries. Mayor Kragness commented on the national reputation of the Center and Inn and the need to provide on -site rooms to be able to attract conventions. Councilmember Hilstrom noted the Inn's eight rooms are losing $100,000 and she will not consider the Center as a park nor support subsidizing it. She asserted that Brooklyn Center residents do not use the Inn. Steve Barrett, Inn on the Farm Inn Keeper, distributed a listing of clients indicating the Inn was used by 429 individuals from two Brooklyn Center zip codes and by 700 individuals if a third zip code is added. It was explained that staff works in cooperation with area hotels who are able to provide rooms for conventions, bridal groups, etc. Judith Bergeland, Earle Brown Heritage Center Manager, urged the Council to look at the number of people who patronize the Inn because it is not the typical hotel and often used by groups who are tired of using lower level hotel meeting rooms. Since Brooklyn Center is in the middle of an image campaign, Ms. Bergeland commented on the importance of corporate clients 10/2/95 -4- who use the facility and go away talking about the higher level of service and unique venue offered by the Inn. Councilmember Hilstrom indicated if every room of the Inn were fully booked during the year, there would still be a loss of $34.24 every time a room is rented. She stated the Council needs to look at how to better serve the community which is not subsidizing a bed and breakfast that is losing $100,000 renting eight rooms. Mr. Barrett clarified there are actually ten rooms. He concurred there is no argument the Inn is losing money and staff is very aware of this and worked to bring losses down considerably over the last three years by bringing occupancy up to 80% (industry norm is only 43% occupancy). He explained that due to fixed costs, adding eight rooms will solve this problem and bring the Inn to a break -even situation. Mr. Barrett urged the Council to look at the image of the entire facility and all viable options. Discussion concluded with Councilmember Hilstrom reiterating she will not vote to cover a $100,000 loss which is why she requested staff to present options. She commented on the importance of addressing the needs of the Police Department, Fire Department, streets, Code enforcement, etc. Mayor Kragness agreed the projections may have been too optimistic but believed the Inn and Center are a unique "gem ", and that staff is doing an excellent job in marketing and operation. She urged the Council to be patient in developing the Inn and determine what can be done to encourage its use. The Interim City Manager advised the City has a terrific investment that has been bonded, requiring careful consideration of the viable options. He expounded that while the Council probably does not have the choice of abandoning the Inn, they can consider changing the emphasis and developing a different program that generates more revenue. The Interim City Manager stated he will further explore options and give the Council the benefit of his view with the hope of developing an improved approach. Report on Adoption of Preliminary Property Tax Levy The Director of Finance reviewed that on September 13, 1995, the Council adopted a zero increase preliminary property tax levy and preliminary budget for the year 1996. He noted several errors occurred which have now been corrected. Councilmember Mann stated Council agreed with the need to raise an additional $20,000 in the Community Center Budget, but does not believe it was agreed it would specifically be done by raising admission fees. Mayor Kragness stated this was her understanding. Councilmember Carmody concurred and reviewed that the Council discussed it as Recreation Director Arnie Mavis' recommendation. 10/2/95 - 5 - i Councilmember Hilstrom requested a report from Community Center staff on the twenty -five cent admission increase versus an increase in other areas. The Director of Finance advised that between now and the end of the year, the Council can look at other revenue increase options. Councilmember Mann questioned whether new staff cars will be purchased or staff will use "recycled" police squad cars. The Director of Finance explained the error that occurred and that there is sufficient money in the Central Garage Fund so Council can choose to buy new cars or could continue to use old squad cars. Councilmember Mann indicated support for not changing methods and continuing to use old squad cars. The Director of Finance reviewed additional cuts the Council needs to make (Social Services, Data Processing Department, and Street Department). He explained that these decisions can be made in December but the appropriations for Project social service programs such as Project PEACE need to be done sooner. Council requested input from the Human Resources Commission regarding Social Services cuts for consideration at the end of October. Councilmember Carmody requested staff provide information regarding Joint Power Agreements terms, length of notice required, and potential impact of terminating them. Mayor Kragness declared a recess at 8:25 p.m. The meeting was reconvened at 8:38 p.m. Utility Rate Study The Director of Public Services reviewed the 1996 Utility Rate Study Summary, staff's recommendation for no increase in water, recycling or sanitary sewer rates for 1996, and requesting Council's direction in determining how capital expenditures are to be funded in the f sanitary sewer utility. Staff does recommend a small increase in the storm drainage utility to insure an adequate fund balance given the amount of capital projects for 1996. It was noted if the recommended rates are adopted, the annual utility bill of the average residential customer would increase less than one percent, or roughly $2 per year. The annual bill of the average senior would also increase by approximately one percent, or roughly $2 per year. Mayor Kragn reported e orted she has received questions from senior akin for recycling y � p ei ed ques s ro s asking y g to be cut back to once every other week. The Director of Public Services added that recycling is a matter of habit, making weekly pick up important. She explained how recycling just one can per week can make a large impact. Councilmember Carmody left the meeting at 9:50 p.m. and returned at 9:53 p.m. 10/2/95 - 6 - In response to Council's questions, the Director of Public Services reported the City can continue indefinitely with existing water wells and the current odd /even watering ban, unless a large water user were to locate in Brooklyn Center. Councilmember Mann indicated support for maintaining all rates the same as 1995, except for the connection fee. The Director of Finance advised if the rates are kept the same, the City will have enough money to operate in 1996. However, in 1997 the Council can expect to see rate increases to address inflation and other costs. He strongly recommended the Council consider making a $2 increase to storm drainage utility rates for 1996. Councilmember Mann questioned if residential storm drainage rates are based on size of the lot. The Director of Finance explained how they are calculated on a per lot fee to hold down administrative and accounting costs. Commercial /industrial rates are higher and based on the size of lot and the amount of building and parking lot areas which generate more run -off. Councilmember Mann expressed concern the City does not have a set plan on storm water drainage. The Interim City Manager indicated staff can develop a storm sewer drainage plan. The Director of Public Services advised the City does have a Local Water Management Phase I Plan but it does not include the level of detail to include costs. The Phase II detailed plans are developed as need arises. PRESENTATION - COMMISSIONER MIKE OPAT - HENNEPIN COMMUNITY WORKS Hennepin County Commissioner Mike Opat provided a brief but detailed presentation and explanation of the Hennepin Community Works Program, its goals and anticipated projects. Commissioner Opat commented on the importance of determining how to usher in the next generation of housing. Discussion ensured regarding the Brookdale pond concept and cooperative effort between Brooklyn Center and Minneapolis. Commissioner Opat stated his belief it is to Brooklyn Center's benefit to accept this offer. The Director of Finance explained once the ownership of Brookdale is settled, the Council can discuss this option and move forward with the pond. The Interim City Manager commented on the need for more accurate engineering data to better determine costs. Commissioner Opat explained before proceeding further, he would like to know whether the Council supports this Program. Mayor Kragness asserted residents need more information regarding what is actually planned and time lines. Councilmember Carmody concurred and added residents in this area were under the wrong impression about the City's ability to purchase houses in deteriorating neighborhoods. She 10/2/95 - 7- believed it is possible to build awareness in neighborhoods that something needs to happen and this Program is probably the only option. She added one of the biggest impediments is the School District. Councilmember Hilstrom raised questions regarding the impact on Brooklyn Center property, and what responsibilities and costs the City would have to assume. Commissioner Opat explained that this Program is in the concept phase and the answers to these questions will not be known until the study is completed. Councilmember Mann concurred with Councilmember Carmody that School District concerns are being expressed by residents. She stated her belief that this Program is workable but the Council needs to know how much of the City's resources will be involved. She indicated support for moving ahead with the study. Commissioner Opat emphasized the need for working out an agreement with receptive partners. He stated they will present the Council with a second resolution in January of 1996 before presenting the Program to the Legislature. He encouraged the Council to contact him at anytime for an update or additional information. Minute Format - 8/14/95 and 8/21/95 minutes - tabled at 9/11/95 meeting Councilmember Carmody questioned why a section of the August 14, 1995, meeting minutes were typed out in verbatim. Councilmember Hilstrom stated she requested the verbatim section for the August 14, 1995, meeting minutes and the August 21, 1995, special work session because she believed the conversation was inappropriate and should not have taken place. Councilmember Mann concurred and stated she does not believe the August 21, 1995, minutes contain enou detail or the flavor of what happened at the meeting. She asserted that Mayor Kragness could not control the meeting, that a Councilmember could not control herself, and the word "bar" was also used and should have been included in the meeting minutes. Mayor Kragness agreed she should not have allowed the audience to make comments at the work session and since then has discussed with the Interim City Manager the possibility of posting a sign that work sessions are open to the public but the public will not take part in the discussion. Councilmember Carmody stated she believes this is "knit picking" and wholly inappropriate when a resident starts screaming at the Mayor during a meeting. She asserted it comes down to whether the Council will back each other up to keep the meeting under control. Councilmember Hilstrom stated the August 21, 1995, meeting took place prior to Council direction to change the minute format and what actually happened should be included to emphasize what one of the Counci'lmembers is doing. She stated if a resident reads the minutes, 10/2/95 - 8 - she wants them to get a clear picture of what is taking place, and that is not the case with the August 21, 1995, meeting minutes. Councilmember Carmody agreed some things have been out of line, but to include them in the minutes is "playing politics ". Councilmember Mann stated while the minutes don't need to be verbatim, they should reflect what happened when the resident started asking questions and disrupted the meeting to the point where she made a motion to adjourn the meeting to stop it. A heated discussion ensued regarding activity at the meetings, interviews by the press, articles appearing in the Sun Post and on cable television. Mayor Kragness clarified the meeting minutes are to reflect the business going on and actions taken, not a verbatim quote. Councilmember Hilstrom asserted that the minutes have not been reflective of what has been going on at the meeting. Mayor Kragness suggested that the Council should then give different direction to the secretary. Councilmember Carmody noted that Councilmember Hilstrom is making it sound as if the secretary is making decisions on what to include and what not to include in the meeting minutes. The Interim City Manager suggested the meeting minutes only contain the action taken. Councilmember Hilstrom stated after the situation on August 21, 1995, with Nancy Carlson, she requested that entire section be typed in verbatim because she felt the behavior that took place was a problem and one way to address it is to include it in the minutes. Councilmember arm d C o y questioned how including it in the minutes helps it to be addressed. Councilmember Hilstrom stated she felt it would cause the issue to be addressed by the Council. Councilmember Carmody stated she does not understand where Councilmember Hilstrom is getting this "political flavor" in the minutes and that this is a perfect example of "snipping". She reviewed several incidents which she disagreed with but did not make an issue of. The Interim City Manager explained that the secretary can not possibly pick up everything at the meeting. The secretary further explained that at the August 21, 1995, meeting, the Recording Secretary did not have a tape recorder sufficient to provide a verbatim transcript, and staff was so informed the following morning. 10/2/95 -9 - Councilmember Mann requested a correction to the August 21, 1995, minutes, fourth paragraph of Page 2, to indicate Councilmember Mann requested a report on the use of staff vehicles (not Hilstrom). DISCUSS LABOR NEGOTIATOR Councilmember Mann indicated support for hiring Barna, Guzy & Steffen. She stated this is a first contract so it is important to have a well - respected law firm involved and available to back up the Interim City Manager, if needed. Mayor Kragness stated a preference for Labor Relations Associates, Inc. based on their long term background knowledge of Brooklyn Center. Councilmember Carmody stated she can not justify the expense of the Barna, Guzy & Steffen firm and preferred Labor Relations Associates, Inc. She stated she also supports Frank Madden & Associates because they are low -key and methodical in their approach. Councilmember Hilstrom indicated support for Barna, Guzy & Steffen based on their experience, willingness to take direction from Council and work with the Council on strategy. She believed they will arrive at a win /win situation and while they may be more expensive, may also be more efficient. She stated she has no objection with the Interim City Manager negotiating, but wants to make sure someone good is backing him up. The Interim City Manager emphasized that all firms are qualified and he initially suggested Labor Relations Associates because of their lower rate. He reviewed the procedure to be taken during the negotiating process. Councilmember Carmody suggested Frank Madden & Associates be considered as a compromise position. Following a short discussion, consensus was reached to hire Frank Madden & Associates, Inc. OTHER BUSINESS Councilmember Hilstrom stated she has several items she would like to bring up at an Executive Session. She pointed out the Council announced an Executive Session will follow adjournment and asked if the Council could do so. The Interim City Manager advised that this is not sufficient notice since Executive Sessions must be posted. He requested Councilmembers submit the items in writing for his review. Councilmember Hilstrom noted that Councilmember Mann will not be in attendance at the October 10, 1995, meeting and requested she receive an agenda in advance in case she would like to voice any concerns. 10/2/95 - 10- ADJOURNMENT Mayor Kragness adjourned the meeting at 10:50 p.m. De uty City Clerk Mayor Recorded and transcribed by: Carla Wirth TimeSaver Off Site Secretarial 10/2/95 -11-